1   

         2   

         3   

         4   

         5   

         6   

         7   

         8   

         9   

        10                   PUBLIC HEARING REGARDING 

        11       PROPOSED HEAVY-DUTY ENGINE AND VEHICLE STANDARDS

        12      AND HIGHWAY DIESEL FUEL SULFUR CONTROL REQUIREMENTS

        13   

        14                     LOS ANGELES, CALIFORNIA

        15   

        16   

        17                          JUNE 27, 2000

        18   

        19                           10:20 A.M.

        20   

        21   

        22   

        23   

        24   

        25   

                                       1


         1                         PANEL MEMBERS

         2   

         3   MARGO OGE, PRESIDING OFFICER

         4   

         5   DEBORAH JORDAN, AIR DIVISION DIRECTOR OF EPA'S 

         6   REGIONAL OFFICE IN CALIFORNIA

         7   

         8   DAWN MARTIN, CHIEF OF STAFF OF EPA'S OFFICE OF AIR AND 

         9   RADIATION

        10   

        11   CHET FRANCE, DIRECTOR OF THE ASSESSMENT AND STANDARDS 

        12   DIVISION

        13   

        14   MICHAEL HOROWITZ, OFFICE OF THE GENERAL COUNCIL

        15   

        16   ROBIN MORIN

        17   

        18   

        19   

        20   

        21   

        22   

        23   

        24   

        25   

                                       2


         1                           I N D E X

         2   

         3   SPEAKERS:                                             PAGE:

         4   

         5   ALAN LLOYD                                              13

         6   NANCY SUTLEY                                            18

         7   WILLIAM FRICK                                           23

         8   MICHAEL WALSH                                           30

         9   STEPHANIE WILLIAMS                                      38

        10   ALBERT COHEN                                            43

        11   LARRY BARRON                                            45

        12   VALERIE LIESE                                           58

        13   DAVID BERRY                                             59

        14   JOE NIEYEZ                                              60

        15   ROBERTA BARBALACE                                       62

        16   ALBERT NUNES                                            65

        17   FRANK SMITH                                             67

        18   JUDY FOGEL                                              68

        19   REYNA VASQUEZ                                           73

        20   CHERYL LOVE-QUEEN                                       74

        21   RICHARD BARBERS                                         76

        22   DAVE FREEMAN                                            79

        23   CHUNG LIU                                               81

        24   SCOTT SHERMAN                                           87  

        25   ANGELO BELLOMO                                          89

                                       3


         1   SPEAKERS (Continued):                                 PAGE:

         2   

         3   RICHARD SHYU                                            91

         4   MR. LEGRE                                               95

         5   JULIE MASTERS                                           99

         6   GAIL RUDERMAN                                          102

         7   NADINE GARCIA                                          106

         8   BRUCE BERTELSEN                                        108

         9   JOHN MOONEY                                            112

        10   GARY HERWICK                                           113

        11   GLENN KELLER                                           114

        12   TERRY VAN HOOK                                         123

        13   BAHRAM FAZELI                                          129

        14   RON MILAN                                              131

        15   DR. DRAY                                               133

        16   NINA SOLOMON                                           134

        17   GREG VLASEK                                            135

        18   SILENE PARAMEDEZ                                       141  

        19   ERASMO FUENTES                                         141

        20   JULIA MUNOZ                                            142

        21   CRAIG MOYER                                            144

        22   CHAD TUTTLE                                            150

        23   DUANE BORDVICK                                         155

        24   AL CABODI                                              159

        25   GARY HERBERTSON                                        166

                                       4


         1   SPEAKERS (Continued):                                 PAGE:

         2   

         3   STEVE FARKAS                                           168

         4   CLARA ROSENTHAL                                        172

         5   DAN JACOBSON                                           175

         6   TODD CAMPBELL                                          177

         7   ANGIE FARLEIGH                                         185

         8   DAVID BARTLETT                                         190

         9   

        10   

        11   

        12   

        13   

        14   

        15   

        16   

        17   

        18   

        19   

        20   

        21   

        22   

        23   

        24   

        25   

                                       5


         1                          PROCEEDINGS

         2   

         3                MS. JORDAN:  Good morning.  Welcome to today's 

         4   public hearing.  I am Deborah Jordan, acting director of 

         5   the Air Division of the San Francisco office of the 

         6   Environmental Protection Agency.  We are here to receive 

         7   comments on a proposal for more stringent emission 

         8   standards for heavy-duty trucks and buses and new standards 

         9   for highway diesel fuel.

        10                Today we will briefly present the Agency's 

        11   proposed action.  Most importantly, we will hear your ideas 

        12   and concerns about efforts to reduce emissions from these 

        13   mobile sources.  There has been great progress in local, 

        14   state and federal efforts to control harmful levels of 

        15   ozone in recent years.  Yet the Western United States 

        16   continues to experience some of the most serious remaining 

        17   ozone and particulate matter problems in the country.

        18                This is reflected not only in the South Coast 

        19   but also in areas like the San Joaquin Valley, the 

        20   Sacramento Valley and Southeast Desert, where air pollution 

        21   levels have not been declining significantly over the past 

        22   half dozen years.  In these areas almost 5 million 

        23   residents are exposed to pollution levels that can cause or 

        24   contribute to asthma, acute respiratory problems, decreased 

        25   lung function and impaired immune systems.  California's 

                                       6


         1   Central Valley is also our nation's agricultural backbone, 

         2   and the continuing smog problems there inhibit 

         3   photosynthesis and suppress growth of crops and trees, 

         4   causing our economy millions of dollars.

         5                We need to ensure that we continue to apply 

         6   rigorous controls to industrial and commercial pollution 

         7   sources.  However, our remaining pollution problems are 

         8   increasingly dominated by mobile sources.  And with the 

         9   continued rapid growth in vehicle use in the West, we 

        10   believe that stringent motor vehicle controls are needed.

        11                I now would like to introduce Margo Oge, 

        12   Director of EPA's Office of Transportation and Air Quality, 

        13   who will provide an overview of the proposal, and will 

        14   describe the ground rules for the hearing.  

        15                MS. OGE:  Good morning.  On behalf of the 

        16   Environmental Protection Agency, welcome to today's hearing 

        17   and thank you for coming.  I am Margo Oge, director of 

        18   EPA's Office of Transportation and Air Quality.  I will 

        19   serve as the presiding officer for today's hearing.  Today 

        20   we will hear testimony on EPA's proposed rulemaking for 

        21   cleaner trucks and buses and cleaner diesel fuel.

        22                This is a historic proposal.  This proposed 

        23   program will achieve a dramatic reduction in air pollution 

        24   in the 21st Century.

        25                Last year we established a new program, called 

                                       7


         1   tier two, to dramatically reduce emissions from cars and 

         2   light-duty trucks, SUVs, minivans, and pickup trucks.  We 

         3   are now focusing much needed attention on heavy-duty trucks 

         4   and buses applying the same principles of addressing the 

         5   vehicles and the fuel as a single system.

         6                This proposed program would protect the public 

         7   health and the environment of all Americans by reducing the 

         8   sulfur content in highway diesel fuel by 97 percent to 

         9   provide the cleanest diesel trucks and buses in history.  

        10                This means that for the first time ever, 

        11   heavy-duty trucks and buses would be able to use pollution- 

        12   control devices to meet emission standards.  Just as 

        13   passenger cars have been doing for the last 25 years.       

        14                These devises are sensitive to sulfur and will 

        15   not work unless the amount of sulfur in the fuel is 

        16   dramatically reduced.

        17                Heavy-duty trucks and buses are largely 

        18   powered by diesel engines.  Diesel engines are more durable 

        19   and get higher fuel economy than gasoline engines, but they 

        20   also tend to pollute more.

        21                More than 100 million people live in areas 

        22   with unhealthy air quality.  For example, here in Los 

        23   Angeles heavy-duty trucks and buses contribute more than a 

        24   quarter of the NOx pollution and 14 percent of the PM 

        25   pollution from mobile sources

                                       8


         1                This pollution causes lung damage and 

         2   respiratory problems, and there is increasing evidence that 

         3   diesel exhaust may cause lung cancer in humans.

         4                The proposed program would have a substantial 

         5   impact on these emissions.  It is the clean air equivalent 

         6   of removing from air pollution generates by 13 million of 

         7   today's trucks.

         8                In 2007 we are proposing a particulate matter 

         9   emission standard for new heavy-duty engines of 0.01 grams 

        10   per brake-horsepower-hour.  This is a 90 percent reduction 

        11   from today's standard.  These standards would begin in 2007 

        12   and be fully phased in in 2010. 

        13                We're proposing standards for NOx of 0.20 

        14   grams per brake-horsepower-hour, a 95 percent reduction 

        15   from the current standard and we are proposing that, in mid 

        16   2006, sulfur levels in diesel fuel be limited to 15 parts 

        17   per million.  This is a 97 percent cut from the current 

        18   highway diesel fuel sulfur limit of 500 parts per million.  

        19                We estimate that the cost to produce and 

        20   distribute the low sulfur diesel fuel will be about four 

        21   and a half cents per gallon.

        22                We estimate that vehicle costs would increase 

        23   about $1,000 to $1,600, depending on the size of the 

        24   vehicle.  We designed this proposed program to include 

        25   significant lead time for the introduction of new, cleaner 

                                       9


         1   fuel into the marketplace.

         2                The proposal also discusses various flexible 

         3   phase-in approaches for the diesel fuel industry, including 

         4   potential provisions to address special needs of small 

         5   refiners and farmer cooperative refiners.  For engine 

         6   manufacturers, the proposed program allows phase-in of the 

         7   new engine standards over four years, from 2007 to 2010.    

         8                Before we start with today's testimony, I will 

         9   introduce the EPA panel and describe how we will conduct 

        10   this hearing.  With me on the panel today are Deborah 

        11   Jordan, Air Division Director of EPA's regional office here 

        12   in California.  Dawn Martin, Chief of Staff of EPA's Office 

        13   of Air and Radiation.  Chet France, Director of the 

        14   Assessment and Standards Division.  Michael Horowitz, from 

        15   the Office of General Council.

        16                This is one of five public hearings on the 

        17   proposal.  We expect to hear testimony from witnesses 

        18   offering a broad range of perspectives.

        19                Please keep in mind that, in addition to the 

        20   opportunity for oral comment at these hearings, the comment 

        21   period will remain open until August 14 to allow for 

        22   written comments.

        23                We are conducting the hearing in accordance 

        24   with section 307-D5 of the clean air act, which requires 

        25   EPA to provide interested persons with an opportunity for 

                                       10


         1   oral presentation of data, in addition to an opportunity to 

         2   make written submissions.  

         3                 Today we expect a large number of people.  We 

         4   will do our best to keep the process going slowly wanted we 

         5   will ask you for you help.  So that everybody that is here 

         6   to testify has the opportunity to do so, I would ask that 

         7   you to keep your comments to the maximum of ten minutes.  

         8   If you can do better than that we greatly appreciate it.

         9                If you are testifying -- Mike, standup -- 

        10   there is Mike.  Mike is an important person to help us move 

        11   the process forward.  He is sitting here on the front row 

        12   and he will help you keep track of your time by signaling 

        13   you before your ten minutes.  Please follow his direction.

        14                Because of the large number of witnesses who 

        15   will testify today, this hearing may go to the evening 

        16   hours, and we will work through lunch and dinner.

        17                I will conduct this hearing informally.  We 

        18   request that witnesses write their name and affiliation 

        19   prior to making their statement.  Please write your name 

        20   clearly on the paper provided and place it in front of you. 

        21   When a witness has finished her or her oral presentation, 

        22   the members of this panel may ask questions.  I would like 

        23   to remind the witnesses that any false statement or false 

        24   response to questions may be a violation of the law.

        25                If there are any members of the audience that 

                                       11


         1   wish to testify and they have not signed up, I would ask 

         2   you to please sign your name with the receptionist outside. 

         3   I would also ask that all of you, even if you are not 

         4   testifying today, please sign in at the desk.

         5                We are glad to see the court reporter 

         6   arriving.  Welcome.  We were getting a little concerned a 

         7   few minutes ago.  If you would like a transcript of this 

         8   proceeding, you should make arrangements directly with the 

         9   court reporter during one of the breaks.

        10                Also, I would like to let you know that all 

        11   the material, the transcripts of the hearing today, will be 

        12   available in the docket shortly after we are done with 

        13   these public hearings.

        14                Before we start with the first panel, we want 

        15   to know if there are any questions.  If not, I would ask 

        16   the first panel to take a seat.  We will start with the 

        17   first panel today.

        18                I will ask for Mr. Alan Lloyd to please come 

        19   forward.  Mr. Bill Frick, Mr. Michael Walsh, Ms. Stephanie 

        20   Williams, Reverand Al Cohen and Mr. Larry Barron.  Please 

        21   print the names on the card in front of you.

        22                Mr. Lloyd, let me ask you a clarification 

        23   question.  Are you testifying for the California Air 

        24   Resources Board and STAPPA/ALAPCO.  

        25               MR. LLOYD:  Yes.  I would like to give some 

                                       12


         1   time to ALAPCO.              

         2               MS. OGE:  That would be fine.  Michael will 

         3   provide additional time to Nancy Sutley to help out with 

         4   Mr. Lloyd.  

         5               MR. LLOYD:  I think this is keeping with your 

         6   statement, you want to proceed.  

         7               MS. OGE:  Thank you.  Welcome and good morning. 

         8               MR. LLOYD:  Good morning, Madam Chairman.  

         9   Again, I am very pleased to be here with my colleague, 

        10   Nancy Sutley, Deputy Secretary of the California EPA.  I am 

        11   Chairman for the California Air Resources Board and STAPPA 

        12   and ALAPCO.  I want to congratulate EPA on a major step 

        13   forward and I am delighted to be working with you and your 

        14   staff on this national problem because it is critical for 

        15   us in California to balance the environment energy and in 

        16   fact economic goals.  I also wanted to say some words on 

        17   behalf of STAPPA/ALAPCO.

        18                As some background, the first slide indicates 

        19   to us why, in fact, the most important source of remaining 

        20   emissions are from diesel engines.  You can see this will 

        21   be for 50 percent of the NOx emissions in 2010.  That's a 

        22   major amount into the ozone as well as some of the 

        23   secondary formation.  If you look also at how that's 

        24   partitioned, you have 45 percent of these emissions from 

        25   onroad diesels but 55 percent from offroad diesels.  I will 

                                       13


         1   say some more about that later.

         2                I think, as you all know, our concern for 

         3   protecting public health stems from the fact that the Air 

         4   Board identified diesel exhaust particulate as a toxic air 

         5   contaminant in 1998, and from that stemmed a whole bunch of 

         6   activity to clean up diesel exhaust.

         7                Based on a recent risk management work here, 

         8   our staff estimates that these particulates account for 

         9   roughly 70 percent of the cancer risks statewide.  These 

        10   are consistent with the numbers at South Coast.  Our top 

        11   priority is to reduce diesel emissions from NOx as a 

        12   particulate.  We are delighted to see the govenor's 

        13   leadership in this area where he is proposing $50 million 

        14   to clean up emission from school buses.

        15                We also have the Carl Myer's program, which is 

        16   another 50 million on a voluntary basis, and also the 

        17   governor has 50 million to address in the congestion 

        18   management, which we are looking at.

        19                In fact, we have a major commitment here, not 

        20   only to protect public health but to move ahead with these 

        21   programs to clean this up.  Also, I must say, having just 

        22   returned from a trip to EMA and several of the heavy-duty 

        23   manufacturers, I am, in fact, impressed by the spirit here 

        24   of addressing the problem to clean it up and maybe rather 

        25   than fighting about this we are moving ahead to address it 

                                       14


         1   so we can reduce these emissions and keep diesel in the 

         2   next year.

         3                 I would like to specifically comment on six 

         4   topics.  The heavy-duty engine standards, diesel fuel 

         5   sulfur.  I guess I don't need to read these.  I will go 

         6   directly to them here.  You can see the next graph shows 

         7   where we are and where we are going to, and you can see 

         8   major reductions in NOx, which is a dual role, role on 

         9   precursor and as well as fine particle precursor as well.  

        10   You have the particulate standard and nonmethane 

        11   hydrocarbon, which is not a major issue but is important as 

        12   well.

        13                You can see the next slide the numbers that 

        14   are being proposed are identical to those already adopted 

        15   for the California transit buses earlier this year.  ARB 

        16   supports the proposed NOx, PM and hydrocabron standards 

        17   strongly.  We would suggest you have a more stringent 

        18   formaldehyde standard, as a point of one.

        19                We had put in our transit bus rule it is not a 

        20   major issue.  Obviously formaldehyde is a potential 

        21   carcinogen as well as a precursor to ozone and other 

        22   things.  If you look at the implemention in the next 

        23   overhead, I think our recommendation there is that we 

        24   support the full PM standard implementation 2007.

        25                We feel that the more aggressive three-year 

                                       15


         1   plan should be adopted, that is 25 percent in model year 

         2   2007, 75 percent in model year 2008, and 100 percent in 

         3   model year 2009.  What that would result in is an almost 20 

         4   percent in 2010.  We feel that that is doable and necessary 

         5   to meet our requirements in California.

         6                If we look at the sulfur limits, obviously we 

         7   strongly support that as we did with our transit bus rule.  

         8   We support the nationwide 15 ppm sulfur standard and full 

         9   implemention on June 1, 2006.  We are hoping in California 

        10   maybe we can work cooperatively to reduce that number.

        11                Again, it is a great pleasure today, one of 

        12   the first times I have Stephanie Williams from the 

        13   California Trucking Association sitting side-by-side and we 

        14   are going to battle side-by-side, in fact, on this issue.  

        15   It is a real delight and hopefully it is a sign of the 

        16   times.

        17                I think, again, I wouldn't say I would define 

        18   this low sulfur fuel should be for offroad engines in the 

        19   same time frame.  Clearly, I think we are committed to do 

        20   that.  In terms of not to exceed the 1.25 federal test 

        21   proceeding emission standards from 55 to 95.  We agree with 

        22   that.  1.25 multiplier.  We understand the need for that.

        23                However, we also recognize you can get above 

        24   95.  We think we can go to 105.  That's particularly true 

        25   when you get in times of high ozone and the San Joaquin 

                                       16


         1   Valley where 95 may be a cool day.

         2                As we look at the crank case we feel that 

         3   proposal to eliminate the exemption which allowed crank 

         4   from two diesel engines, we support that exception very 

         5   strongly.  The combined dates we think could be moved up to 

         6   two years to model 2005 engines resulting in reduction of 

         7   toxic diesel particulates.  We have a major focus, as we 

         8   see coming before the Board in September of this year on 

         9   that focus.

        10                Anything that you can do to help us out there 

        11   is going to be much appreciated.  We also like the idea of 

        12   enduring existing innovative technologies.  We really like 

        13   your Blue Sky program.  We think that's very important to 

        14   be cooperative within the industry.

        15                We have a couple of suggestions there of how 

        16   you quantify that.  That you could require certified 

        17   emissions to be no more than 50 percent of emission 

        18   standards as one way, or you can look at early phase as 

        19   another way of trying to encourage that.  Both of those 

        20   were from technology.

        21                 We also support the Allerton Banking and 

        22   Trading Program because it provides flexibility and it 

        23   encourages the use of advanced technology.

        24                In summary, I think the proposal will result 

        25   in significant emission reductions and we strongly support 

                                       17


         1   the proposed rule that suggests strengthening in several 

         2   areas.  We feel that the key to success is the 15 ppm 

         3   diesel fuel sulfur phased in in 2006.  We feel that gives 

         4   adequate time for gearing up to that area.  If we look at 

         5   the rest of the world we can see the train going to low 

         6   sulfur fuel.  We feel this is critical for the 

         7   aftertreatment and, in fact, to keep diesel in the mix 

         8   there.  This is very important.

         9                Hopefully we can work with our colleagues in 

        10   California to accelerate that program to help us there.  We 

        11   also feel it is very important to extend that 15 ppm sulfur 

        12   limit to offroad vehicles.  55 percent of the NOx is due to 

        13   offroad.  That's a very important aspect of that.

        14                That officially concludes my statement on 

        15   behalf of the Resources board.  I would like to -- maybe 

        16   what I will do is turn it over to the secretary here to 

        17   make comments and I will come back.  

        18                MS. SUTLEY:  Thank you, Alan.  Good morning.  

        19   I am Nancy Sutley, Deputy Secretary to the California 

        20   Environmental Protection Agency on the behalf of the State 

        21   of California.  I would like to welcome you to Los Angeles 

        22   and express our appreciation for you coming here to hear 

        23   from us directly about an issue of great importance as to 

        24   all Californians.  I am going to echo a lot of what Alan 

        25   said, but let me start by describing the California 

                                       18


         1   Environmental Protection Agency.

         2                We oversee six state agencies, including the 

         3   Air Resources Board, the Department of Pesticide 

         4   Regulations, Department of Toxic Substance Control, Office 

         5   of Environmental Health Assessment and State Resources 

         6   Control Board and Waste Management Board.

         7                California's Environmental Protection Agency 

         8   is the environmental organization responsible for 

         9   overseeing these agencies and to improve environmental 

        10   quality to protect public health and the welfare of our 

        11   citizens.  I am pleased to be here to offer our comments in 

        12   support of U.S. EPA's proposed rule.

        13                I wanted to talk briefly, as Alan did, about 

        14   the importance of reducing diesel emissions to public 

        15   health in California.  As you can see from the slide, over 

        16   50 percent of the ozone precursor emissions from man-made 

        17   sources in California are from local sources.  The top two 

        18   pie charts illustrate the projected percentage of mobile 

        19   source emissions in the South Coast air base in 2010.

        20                As you can see for both the reactive organic 

        21   gases and the oxides of nitrogen, that onroad heavy-duty 

        22   vehicles account for a large proportion of the total mobile 

        23   source inventory.  You can also see that there's a large 

        24   contribution of offroad diesel emissions.  If you add 

        25   together the on- and offroad diesel emissions in 

                                       19


         1   conjunction with the existing emission standards, you can 

         2   see that these will contribute to a significant level of 

         3   reactive organic causes and NOx inventories here in 

         4   California.

         5                The bottom pie chart shows the distribution of 

         6   heavy-duty vehicles to diesel particulate matter that 

         7   onroad engines account for about a quarter of those 

         8   emissions and offroad engines account for about 75 percent. 

         9   Diesel particulate matter is responsible for about 70 

        10   percent of the known airborne toxic risk.  It is clear in 

        11   California heavy-duty emissions are a major part of the 

        12   emissions inventory and toxic risks and additional 

        13   reduction are needed.  Reducing diesel emissions is the top 

        14   priority for the California EPA and the Governor.

        15                Just to make some brief comments, California 

        16   EPA supports the reduced NOx, PM and formaldehyde standards 

        17   consistent with ARB's comments.  California EPA is strongly 

        18   supportive of the proposal of the diesel fuel and 

        19   California EPA encourages the EPA to extend the proposed 

        20   onroad, low sulfur diesel fuel to onroad applications.

        21                Let me just conclude by saying that we would 

        22   like to emphasize the importance of the proposed fuel 

        23   diesel sulfur standards with the significant amount of 

        24   oxides and nitrogen and particulate matter emissions that 

        25   can be reduced by new aftertreatment technologies.  It is 

                                       20


         1   imperative that the standard be approved as proposed.  In 

         2   doing so, U.S. EPA will help protect the health not only of 

         3   all Californians but everybody in the United States.  

         4                MS. OGE:  I would like to thank you both, 

         5   Mr. Lloyd and Ms. Sutley, for your testimony and welcome 

         6   Mr. Bill Frick.  Good morning.  Mr. Frick, just one second, 

         7   please.  Mr. Lloyd.  

         8                MR. LLOYD:  I think Mr. Becker has 

         9   a short presentation.

        10                MS. OGE:  You have one more testimony.  Please 

        11   go ahead.  

        12                MR. LLOYD:  I will go ahead.  

        13                MS. OGE:  Let's give Mr. Lloyd ten minutes or 

        14   less.  

        15               MR. LLOYD:  I will take less.  What I would 

        16   like to do, I am appearing in this case on behalf of 

        17   STAPPA, which represents air quality agencies, including 

        18   Air Resource Board of the States and on behalf of ALAPCO, 

        19   Association of Local Air Pollution Officials, which 

        20   represents air quality agencies, more than 150 major 

        21   metropolitan areas nationwide.  I am pleased to have this 

        22   opportunity to provide associations task on EPA recent 

        23   proposal to set more stringent emissions standards for 

        24   onroad emissions on all sulfur onroad diesel fuel.

        25                What I would like to do is read the major part 

                                       21


         1   of this into the record.  You can use that for the written 

         2   testimony and put it into the record.  I would like to pull 

         3   a few highlights here.

         4                On behalf of STAPPA and ALAPCO we would like 

         5   to comment for its continued leadership your promulgation 

         6   on last December due to motor vehicle emission standards 

         7   and the national low gas program, which are a remarkable 

         8   accomplishment to the benefit of the entire country.  This 

         9   month's heavy-duty engine and low sulfur diesel fuel 

        10   further demonstrates the Agency's committment to 

        11   efficiently and cost-effectively produce a wide variety of 

        12   mobile source-related emissions to achieve meaningful 

        13   movement in air quality across the nation.

        14                We applaud in this initiative and the system 

        15   which addresses both the engine and the fuel upon which 

        16   this is based.  I think what I would like to do is to skip, 

        17   in fact, to the last overhead there which highlights the 

        18   major points that we support STAPPA/ALAPCO.  This is of 

        19   vital importance nationwide.

        20                As indicated before, the emissions from 

        21   heavy-duty diesel engines bring with them adverse health 

        22   defects.  These are responsible for 125,000 cancers over a 

        23   life time.  Again, this is the STAPPA/ALAPCO estimate.  We 

        24   strongly endorse the emission standards the EPA has 

        25   employed and the ability to comply with the standards are 

                                       22


         1   dependent upon the availability of ultra-low sulfur diesel 

         2   fuel.  I would say low sulfur diesel as a personal opinion.

         3                We vigorously support the proposed 15 ppm cap. 

         4   We also recommend the adoption of similar engine standards 

         5   and sulfur cap offroad heavy-duty diesel vehicles.  That's 

         6   similar to my comments earlier.

         7                In the coming weeks STAPPA/ALAPCO will more 

         8   fully propose comments on the diesel engine rates.  STAPPA 

         9   and ALAPCO looks forward to working closely with the Agency 

        10   as it continues to define this extremely important program 

        11   on behalf of our association our continued cooperation and 

        12   partnership as you move ahead.

        13                Again, I would like to reiterate and again 

        14   congratulate you and your staff on a lot of the work and 

        15   the leadership you show and we are delighted to be working 

        16   with on you this program. 

        17                MS. OGE:  Thank you.  Mr. Frick.  Good 

        18   morning.              

        19                MR. FRICK:  Good morning.  My name is Bill 

        20   Frick.  I am vice president and general counsel and 

        21   secretary of the American Petroleum Institute, a national 

        22   trade association representing all aspects of the petroleum 

        23   industry, exploration, production, refining, transportation 

        24   and marketing.  We appreciate the opportunity to 

        25   participate in this.

                                       23


         1                Our members will be obviously significantly 

         2    effected by this rulemaking and we have submitted a 

         3   statement for the record.  I would like this morning to 

         4   emphasize five points for the panel and for the audience.

         5                First of all, this industry is not opposed to 

         6   reductions in sulfur.  We concur it will benefit air 

         7   quality.  We came forth when EPA began discussing it.  A 

         8   proposed to them a 90-percent reduction in sulfur in 

         9   diesel, which was EPA's original objective.  Sulfur levels 

        10   are going to come down.  The issue is how fast and how far.

        11                Two.  In considering how fast and how far, we 

        12   want the Agency to take into consideration that the 

        13   industry is facing some significant daunting challenges at 

        14   its refineries.  This rule cannot be looked at in 

        15   isolation.  We have got to look at all the other issues 

        16   that are facing the fuel system that is the part of the 

        17   nations economy and to the consuming public.

        18                Currently we are facing significant reduction 

        19   in gasoline sulfur.  Then, at this rulemaking there are a 

        20   number of boutique fuels that have been created throughout 

        21   the country in order to meet a number of clean air 

        22   requirements, reducing MTVE, and California knows this.

        23                To the extent that oxygenation continues to 

        24   be required, the use of ethanol represents significant 

        25   logistic and handling issues for the industry.  There 

                                       24


         1   will be very toxic regulations, face new source review 

         2   regulations, and finally the unical patent is also putting 

         3   a strain on the system as to how members prepare this mix 

         4   of fuels that we now have.

         5                Each of these affects the constituents of 

         6   fuel.  Whether it is gasoline or diesel.  Each of these 

         7   requirements does that.  It affects the amounts that can be 

         8   reduced at refineries.  This patchwork of fuels is very, 

         9   very challenging to our industry.  It is not just three 

        10   grades that are on the pump when people go to a gas 

        11   station.  We now have at least ten areas in the country 

        12   with different formulations.

        13                This puts a strain on all parts of the chain, 

        14   both production and also transportation and marketing.  It 

        15   also as we make all these changes we are soaking up capital 

        16   in a segment with very low return on capital.  It is also 

        17   a challenge to find the resources to install all of the 

        18   equipment that is going to be necessary as we do all of 

        19   this to make the changes necessary to comply with this mix 

        20   of requirements.  Finally, as I have said, the different 

        21   formulations put a strain on all parts of the chain of 

        22   relation of these fuels.

        23                There's a recent National Petroleum Council 

        24   study.  It is a group of industry and government officials 

        25   in response to requests of the Department of Energy asked 

                                       25


         1   to look at refining capacity given all these requirements.  

         2   DOE and EPA participated in that.

         3                That studies confirms the concerns that I have 

         4   addressed here.  "The National Joint Council concludes 

         5   that the refining and distribution industry will be 

         6   significantly challenged to meet the increasing domestic  

         7   product demand with the substantial changes in fuel quality 

         8   specifications recently promulgated and currently being 

         9   considered.

        10                The timing and size of the necessary refining 

        11   and distribution investments to reduce sulfur and 

        12   gasoline and diesel, eliminate MTVE, and make other product 

        13   specification changes, such as reducing toxic emission from 

        14   vehicles are unprecedented in the petroleum industry."

        15                The effect of all this is taking flexibility 

        16   out of the sytem.  Some of the recent concerns in the upper 

        17   Midwest, where the prices have gotten much higher, is due 

        18   to the inflexibility of the system when slight 

        19   interruptions take place.

        20                The third point I would like to make is that 

        21   I am speaking here on behalf of the entire industry.  There 

        22   are some companies, some refineries, which can make the 

        23   fuel that EPA has proposed.  However, the costs, we 

        24   believe, are much higher than EPA estimates.  They estimate 

        25   4 billion.  We think it is closer to 8 billion.  That comes 

                                       26


         1   on top of the 4 billion necessary to make the gasoline 

         2   sulfur reductions.

         3                There is also a significant ramp-up in cost as 

         4   you move from the 50 we propose to the 15 that the EPA has 

         5   proposed.  It is not a straight line but rather a step up. 

         6   The NPC study that I mentioned earlier confirms what I said 

         7   again about the strain on the system.

         8                "There is a significant risk of inadequate 

         9   supplies should on-highway diesel sulfur levels below 30 

        10   ppm be mandated."  This may be less of a challenge in 

        11   California which has severe requirements currently.

        12                When you look at the entire country, that is 

        13   what we are concerned about.  This is a nationwide rule.  

        14   We see a different story.  In some cases there may be some 

        15   refineries that will not make this fuel.  They will not be 

        16   able to justify the investment given their product slate in 

        17   the market.  That will tighten potential supplies in low 

        18   sulfur.

        19                There are already many fewer refineries than 

        20   there used to be.  They are larger, but they have to deal 

        21   with the multiple product slates that I mentioned.  It is a 

        22   more expensive and more complicated distributions.

        23                The fourth point is that the particularly 

        24   severe level that EPA has proposed, 15 rather than 50, is 

        25   being imposed in great part to accommodate what we believe 

                                       27


         1   is unproven technology.  The technologies they discuss, 

         2   they cannot confirm that they will, in fact, work.  There 

         3   is, however, other technology that is proven and in use 

         4   that is more sulfur-resistant.  Forcing severe changes to 

         5   the entire diesel system, speculation that some technology 

         6   will work, we think is unwarranted.

         7                The desire to have the fuel that would 

         8   accomodate light-duty diesels in the future is not a 

         9   sufficient reason to impose such an onerous requirment.  

        10   There is no evidence that that market is going to develop.  

        11   We believe about the level that the EPA has proposed is a 

        12   risk to the overall system that need not be taken.

        13                Fifth point, it really is not necessary from 

        14   an air-pollution perspective to reduce sulfur this low.  

        15   One of the terms I used when the joined the industry, you 

        16   have to focus on the delta.  What is the difference between 

        17   what we have talked about is doable and what EPA has 

        18   proposed.  We are not talking about going from current 

        19   levels down.

        20                The difference is between the 90 percent in 

        21   sulfur reduction we propose and the 97 percent they have.  

        22   As the engine manufacturers will point out, there is 

        23   already significant reductions from diesel emissions.  They 

        24   are much lower than previous regulations.

        25                The difference between the 50 cap and the 15 

                                       28


         1   cap due to the technologies that can be used is very small. 

         2   We believe the proven technologies can deliver equivalent 

         3   emission levels but at half the cost and without strains to 

         4   the fuel system.  Even a slightly less effective the 

         5   marginal increase in emissions is dwarfted with the high 

         6   marginal cost with strain on the fuel system.  EPA 

         7   documents the modest contribution of heavy diesel to total 

         8   inventories after these controls are in place and 

         9   confirming the very slight difference in total emissions 

        10   achieved by going to 15.

        11                In summary, these five points that are in our 

        12   written, I want to emphasize we are prepared to undertake a 

        13   limitation of the 90 percent reduction.  Even that will be 

        14   difficult, however, given all the other challenges.  This 

        15   proposal presents a serious risk of short falls in some 

        16   areas.  It is not necessary from a technological standpoint 

        17   as the air quality impacts are the same.

        18                This industry takes great pride in having a 

        19   good reputation providing high-quality products that are 

        20   highly available and work.  We don't want to endanger that 

        21   performance that the public expects and demands of us.  We 

        22   will certainly work with the Agency and others towards the 

        23   reductions.  We think it has to be looked at in the context 

        24   of what else is happening, taken into consideration what is 

        25   necessary to go that low that fast, given available 

                                       29


         1   technology and air quality benefits.

         2                If we can achieve equivalent benefits without 

         3   extra cost burden on the industry and the consumer, we 

         4   think we should take that path and not drain the system.

         5                I appreciate the opportunity to participate.  

         6                MS. OGE:  Thank you.  Mr. Walsh, good morning. 

         7                MR. WALSH:  Good morning.  Thank you very much 

         8   for the opportunity to be here with you today.  My name is 

         9   Michael Walsh.  I am an independent consultant in the field 

        10   of motor vehicle pollution control.  I am speaking here 

        11   today on behalf of the American Lung Association.  I will 

        12   summarize my statement in an effort to stay within the ten- 

        13   minute time frame.

        14                The American lung Association strongly 

        15   supports EPA's efforts to reduce emissions from large 

        16   diesel and gasoline trucks and buses.  We also strongly 

        17   support reducing sulfur and diesel fuel, both because we 

        18   believe it is necessary to enable the cleanup of new 

        19   engines and vehicles, but also because it will facilitate 

        20   state and local efforts to retrofit and cleaning up the 

        21   diesel vehicles, many of which will remain on the nation's 

        22   highways for many years to come.

        23                The emissions reductions from these 

        24   initiatives from our view are long overdue and are 

        25   necessary if we are ever to achieve healthy clean air 

                                       30


         1   across the United States.  I would like to focus on a few 

         2   special issues.

         3                First of all, diesel particulates we know is 

         4   especially last hazardous.  In 1998, as Dr. Lloyd pointed 

         5   out, and California concluded that diesel particulate is a 

         6   known human carcinogen.  It is a toxic material.  EPA has 

         7   referred a similar conclusion that it is a probable human 

         8   carcinogen several times.  The World Health Organization as 

         9   far back as 1988 also reached a similar conclusion and all 

        10   of these bodies are looking at more than 30 human 

        11   epidemiological studies that are done consistently finding 

        12   this effect.

        13                Diesel particulate is not only a concern 

        14   because of its constituents but also because it is admitted 

        15   very closely to the breathing zones of many people in our 

        16   urban areas and cleaning up heavy-duty vehicles is 

        17   especially critical.  Without the anticipated reductions 

        18   from these proposed standards there's a significant risk 

        19   that an appreciable number of current nonattainment areas 

        20   across the country for both ozone and particulate will 

        21   continue to be nonattainment for the foreseeable future.

        22                Because heavy-duty vehicles are such a large 

        23   emission source, it is impossible, I think, for many areas 

        24   to ever attain without the substantial reductions that this 

        25   package provides.  By 2007, EPA estimates a heavy-duty 

                                       31


         1   vehicles will account for 29 percent of the mobile source 

         2   NOx emission and 14 percent of mobile source PM emissions.

         3                As Dr. Lloyd pointed out, and this is true in 

         4   the other urban areas, the proportion in cities and 

         5   metropolitan regions is much higher.  In this case, 

         6   approximately 50 percent of the NOx in the South Coast.  In 

         7   addition, trucks and buses tend to aggregate in many of our 

         8   poorer urban sections, exposing the population in those 

         9   areas to very, very high levels of emissions.

        10                Finally, this goes to one of the points 

        11   Mr. Frick made.  The EPA estimates from the emissions from 

        12   the vehicles by your own admission is low.  There are 

        13   studies that have been carried out.  Most recently a study 

        14   done for EPA which shows large deterioration rates for 

        15   existing heavy-duty diesel engines.

        16                 EPA has indicated that they will account for 

        17   it in the final ruling, but it is not accountable for in 

        18   the current system.  The proposed heavy-duty vehicle and 

        19   engine emission standards along with the diesel fuel sulfur 

        20   standard would have a dramatic impact and probably a more 

        21   dramatic impact than estimated in producing these 

        22   emissions.  That there are complications as well in 

        23   analyzing the impact of these emissions on air quality.

        24                Just to highlight the one recent example, we 

        25   know that the science of ozone tells us that many of the 

                                       32


         1   chemical reactions that are part of the ozone-forming cycle 

         2   are sensitive to temperature and sunlight.  The federal 

         3   government just in the last week issued a major report, a 

         4   major congressionally mandated report, which indicates that 

         5   temperatures across the northeastern part of the country 

         6   are going to increase.

         7                If they do, that would indicate that for the 

         8   same amount of NOx and hydrocarbons we are going to have 

         9   higher level of ozone in our air.  This is just one of the 

        10   factors, along with the lower deterioration rates that we 

        11   use in the modeling, that indicate to us that the problemis 

        12   probably going to be worse rather than better than 

        13   estimated.

        14                I would like to highlight a few major points.

        15                One is that the control of emissions mandated 

        16   by this rule is necessary if the diesel engine is to remain 

        17   a primary power plant in this country.  Here in Southern 

        18   California we saw last week a significant move away from 

        19   the use of diesel engines.  In response to the serious 

        20   toxic risk which current diesel engines cause.  New York 

        21   City with its buses moved in the same direction just a 

        22   short time earlier.

        23                This is not limited to this country.  The 

        24   Governor of Tokyo in an active effort is on the way to 

        25   trying to back the use of diesels.  In the city of Beijing 

                                       33


         1   they have recently replaced 800 diesel buses with CNG.  The 

         2   supreme court of Dehli, the supreme court of India, has an 

         3   active effort underway to handle these buses and replace 

         4   them with CNG.  This is a worldwide phenomena in response 

         5   to the current toxic effect of diesels.

         6                The point is that current diesel engines 

         7   here in the U.S. and around the world are increasingly 

         8   considered hazardous and only substantial control along the 

         9   lines of their proposal will enable us to reap the full 

        10   advantages of diesel technology, especially with regard to 

        11   the very significant fuel economy advantages that this 

        12   economy contains.

        13                Unless we have clean diesels a suspect we will 

        14   have fewer diesels, and the converse is true.  If we have 

        15   clean diesels I think we will be able to take full 

        16   advantage of this very effective and useful powerplay.

        17                Secondly, the U.S. has become the laggard with 

        18   regard to control of emissions from heavy-duty vehicles, 

        19   not the leader in mobile source control that we have 

        20   traditionally been.  The U.S. has been the innovator that 

        21   has brought us catalytic convertors, on board diagnostics, 

        22   reformulated gasoline.  I could go on and on, especially 

        23   here in California.

        24                At this point one would have to say candidly 

        25   that Europe is well ahead of us in terms of controlling 

                                       34


         1   emissions.  The Euro-4 and Euro-5 standards, which were 

         2   adopted a year ago, will result in the installation of many 

         3   of the advanced technologies that we are talking about here 

         4   today.  At least will be installed in the 2005 to 2008 time 

         5   frame across Europe, if not earlier.

         6                Sweden has relied on diesel fuel for several 

         7   years, which has less than 10 parts per million.  And 

         8   Germany will have such fuel across the entire country in 

         9   2003.  I expect -- it is not on the books yet -- but I 

        10   expect that the European Parliament when it has an 

        11   opportunity to react to new fueling provisions later this 

        12   year, will mandate 10 parts per million as a maximal level 

        13   across Europe in this approximate time frame.

        14                As a result of the availability of these low 

        15   sulfur fuels at the present time, in places like Sweden, 

        16   they have successfully implemented a mandatory retrofit 

        17   program for trucks and buses, including most recently a 

        18   retrofit program for offroad vehicles which also use this 

        19   very low sulfur fuel.

        20                The mandatory introduction of fuels with 

        21   sulfur levels of 10 ppm or less and advanced particulate 

        22   and NOx controls are necessary if we are to regain our 

        23   preeminent role as the world's leader.

        24                The third point I would like to make is unless 

        25   low sulfur fuels of 15 ppm or less are mandated nationally 

                                       35


         1   we will see -- the very point that Mr. Frick pointed out -- 

         2   more and more of these boutique fuels.  If we don't want to 

         3   see each local region adopting their own fuel, we have to 

         4   provide them a clean natural fuel.  I am sure that many 

         5   areas will mandate these fuels on their own, unless we have 

         6   a national requirment.

         7                Fourthly, more than sufficient lead time, in 

         8   my view, exists for the technology to be available to 

         9   achieve these proposed emissions levels.  The manufacturing 

        10   new emissions control association has stated that, "They 

        11   believe the emission standards proposed for highway diesel- 

        12   powered heavy-duty engines standards can be achieved in a 

        13   cost-effective manner within the lead time provided, if 

        14   very low sulfur fuel is available."

        15                Others have reached a similar conclusion.  

        16   As we know at the time early, many new technologies, 

        17   especially for PM control are already being introduced in 

        18   Europe.  I want to particularly applaud several of the 

        19   diesel engine manufacturers who have stepped up to the 

        20   challenge in this proposal and have committed to, in the 

        21   words of the Engine Manufacturers Association "dramatically 

        22   reduce the emissions of the most fuel-efficient, reliable 

        23   and durable source of motive power available today and the 

        24   backbone of or nation's transportation and delivery 

        25   system."

                                       36


         1                International Truck and Engine Corporation is 

         2   to be especially commended for committing to commercialize 

         3   their green diesel technology within the next year as long 

         4   as clean fuel is available in certain localities.

         5                Let me conclude by saying that 15 parts per 

         6   million sulfur is the maximum that should be allowed 

         7   because it is technologically feasible and necessary.  We 

         8   have heard in Europe there's a movement that 15 ppm is 

         9   adequate.

        10                I would like to quote from the recent proposal 

        11   from the German government to the European Commission which 

        12   states that "A sulfur content of 10 ppm compared to 50 ppm 

        13   increases the performance and durability of oxidizing 

        14   catalytic convertors, de-NOx catalytic convertors and 

        15   particulate filters, and, therefore, decreases fuel 

        16   consumption."

        17                "There are also lower particulate emissions,

        18   due to lower sulfate emissions, with oxidizing catalytic 

        19   convertors.  For certain continuously regenerating 

        20   particulate filters, a sulfur content of 10 ppm is required 

        21   for the simple reason that otherwise the sulfate particles 

        22   alone would overstep the future European particulate 

        23   value."

        24                Thank you very much for an excellent 

        25   participation and for a package that I think will go a long 

                                       37


         1   way in cleaning up our air.  

         2                MS. OGE:  Thank you.  Miss Williams, good 

         3   morning.  

         4                MS. WILLIAMS:  Good morning.  I am Stephanie 

         5   Williams and I am here representing the California Trucking 

         6   Association.  The California Trucking Association has 

         7   nearly 2,500 members and we represent trucking companies 

         8   within California and companies that operate into and out 

         9   of California.  We are in complete support of this proposal 

        10   and have been on the road trying to convince other states 

        11   that this is the right thing to do.

        12                I don't want to duplicate the comments that we 

        13   have made in Manhattan where we talked about the need for 

        14   this proposal in SIPS, and when you look toward 2010 you 

        15   can see that more than half the states will need diesel 

        16   fuel reformulations, so it is the right time to do this 

        17   today.

        18                Also in Chicago we talked about the 

        19   maintenance debacle of going to a 15 ppm fuel which we are 

        20   opposed to was because of the addition of urea to the fuel 

        21   that would require our drivers to become chemists and add 

        22   an additional fuel at the time of fueling.  And that would 

        23   not be appropriate for the trucking industry and we hope 

        24   that 50 ppm is taken off the table.

        25                Today I am lucky to have with me some of our 

                                       38


         1   members.  Our member companies that will be affected by 

         2   this proposal.  We have a petroleum tank truck carrier.  

         3   Two interstate carriers, one a very large international 

         4   company that will tell us about boutique fuels and the 

         5   problems going from state to state, and also a smaller 

         6   interstate carrier that will also talk about that.

         7                We have the chairman of our environmental 

         8   policy committee who has helped develop policy of a 

         9   national fuel standard for California and the nation.  But 

        10   we actually would like to see that in 2004.  We believe 

        11   that the technology is closer than 2007.  We think 

        12   nationwide that will help with SIPS, and when you look and 

        13   evaluate the PM traps, I have my little picture here of the 

        14   PM trap of today's technology on the top.  That is the 

        15   exhaust test.

        16                In the middle I have the 15 ppm fuel.  You 

        17   can't see it because it is completely clear.  You also 

        18   can't see the bottom one because it is a clean filter.  I 

        19   think that by being able to test that, we know the 

        20   technology is there.  We see the PM traps out on the green 

        21   bus, the NOx absorbers are being used in the south and 

        22   other areas and on gasoline turbines.  We believe in 

        23   national, clean fuel standard as soon as possible is best 

        24   for the trucking industry and everyone else.

        25                With that said, there are two other local 

                                       39


         1   carriers that will speak to you today on the next panel.  

         2   People who live and work in Southern California only 

         3   delivery freight here and I am happy to see these people 

         4   coming in from other places, including Mexico, including 

         5   the bordering states.  And I am happy to compete on rates 

         6   on people who can use other fuels.  We have a nice mix of 

         7   the trucking industry here today.  You can hear the story 

         8   from their mouths.

         9                I would like to talk about first sulfur.  When 

        10   we say reduce sulfur to 90 percent versus 95, 97 percent, 

        11   sulfur isn't the issue here.  The issue is emissions.  How 

        12   much are they going to emit.  How low can you get PM and 

        13   how low can you get NOx.  You are not going to have the 

        14   same emission reduction with a 90 percent reduction as you 

        15   are with the proposal as it is today.  We would hope that 

        16   emissions are what you look at.  Not the level of sulfur.

        17                Also, the preemption issue.  That's what it 

        18   is.  When you hear patchwork fuels, patchwork fuels are a 

        19   problem for this nation.  Everyone wants to have clean air 

        20   but everyone wants to have low fuel prices.  What happened 

        21   is regional fuels, and we see this in California, and it is 

        22   a danger for our entire economy nationwide.  We see fuels 

        23   going into areas that aren't really that clean.

        24                Texas is considering adopting car fuel.  Why 

        25   won't Texas adopt this fuel standard.  If you are going to 

                                       40


         1   go in 2004 or 2003 or whatever the year is, to a fuel 

         2   standard that is not anywhere near as clean as this one, 

         3   you are going to put a strain on the system in Texas.

         4                Same with South Coast air quality transfer 

         5   district coming in and reformulating fuel now not in line 

         6   with EPA creates a regional fueling problem.  It creates 

         7   bad press.  It makes the fuel prices jack way up, and the 

         8   public thinks clean fuels cost a lot of money.  That is not 

         9   the case.  When we have one fuel nationwide, the cleanest 

        10   fuel possible, and we put it through the distribution of 

        11   today's pipelines, it is a seemless introduction.  We have 

        12   seen this in 1993.  The sulfur level federally went to 500 

        13   ppm, and there were a few glitches with the resistance, but 

        14   that had nothing to do with supply.

        15                In California, on the other hand, we 

        16   restricted supply with the regional fuel and had supply 

        17   issues.  On a number of occasions we have had supply 

        18   issues.  If we had a nationwide fuel, those supplies would 

        19   not be a problem.  We would not see fuel strikes.  He would 

        20   not see in Chicago $2.10 for gasoline because of a regional 

        21   fuel supply.  They are not getting a really clean fuel like 

        22   we could have with this proposal if we had a nationwide 

        23   fuel standard.

        24                We would like to see EPA preempt other states 

        25   from going to anything except this fuel standard.  In the 

                                       41


         1   best of all worlds move forward with the nationwide 

         2   standard quicker, bring the scale to the market so the 

         3   public gets clean air and a reasonable price of fuel.

         4               Also the capacity and distribution.  We believe 

         5   that the distribution system is fine for this fuel.  As the 

         6   trucking industry, we are hauling this product and we have 

         7   a petroleum carrier to tell you about it.  We have got 

         8   gasoline in the system right now.  We have got all kinds of 

         9   different fuels, specialty fuels, that go through the 

        10   pipeline.  And this is not going to be an issue.

        11                We are going to have a different order in 

        12   which the fuel goes through the pipeline or is distributed, 

        13   but it is not going to be a disruption to supply.  Believe 

        14   us, the industry can get it to market.  The market system 

        15   will handle these problems.

        16                Also, unproven technology.  That is something 

        17   that I want to really concentrate on because this 

        18   technology is here.  You have the test that shows the PM 

        19   traps.  California has been key in forcing technology.  We 

        20   have electric vehicles, we have had different things that 

        21   force technology.

        22                This time we have the technology sitting on 

        23   the tables, sitting on a bus outside, working in the air 

        24   districts on stationary equipment.  The technology is here. 

        25   It is just a generation moving at the fourth generation of 

                                       42


         1   the diesel engine.  The generation where we have the 

         2   aftertreatment controls that cars have where the trucking 

         3   industry gets an engine just as clean as a car and we can 

         4   go back to doing what our specialty is, moving freight to 

         5   retail outlets, to grocery stores, keeping this country 

         6   moving.  That's what we want to do with clean technology.

         7                I would like to say one thing in closing.  

         8   There's a delta involved in this.  But I don't know how 

         9   many of you realize this, but the delta is the California 

        10   trucker.  Because California, Manhattan, many of these 

        11   other big cities need this fuel to keep trucks clean.  But 

        12   the difference is the delta, who is going to be hauling 

        13   freight in these places.  The California trucker wants to 

        14   be put in the mix.  We believe we are the delta.  Thank 

        15   you.  

        16                MS. OGE:  Thank you, Stephanie.  I would like 

        17   to ask for Reverand Al Cohen to testify.  Good morning.  

        18                MR. COHEN:  Good morning.  Thank you.  I would 

        19   like to change the mood here and take a larger view.  We 

        20   are in support of the EPA suggestions.  My name is Albert 

        21   Cohen.  I am Executive Director of the Southern California 

        22   Ecumenical Council, which is a regional church agency 

        23   representing 19 denominations plus other religious 

        24   partners.  We have been active in environmental affairs 

        25   since 1971 and have been represented at all of the United 

                                       43


         1   Nations environment conferences beginning in Stockholm in  

         2   1972.  Furthermore, I drive a Honda EV plus electric 

         3   vehicle.

         4                I am speaking for thousands of church people 

         5   who understand pollution of the environment as a moral and 

         6   ethical issue.  We accept the scientific conclusions that 

         7   the atmosphere of the earth is being severely damaged and 

         8   that serious questions have been raised about the viability 

         9   of life on the planet as we know it.

        10                In November, 1997 the Ecumenical Patriarch 

        11   Bartholomew said in an address in California, "To commit a 

        12   crime against the natural world is a sin and for humans to 

        13   degrade the integrity of the earth by causing changes in 

        14   its climate, for humans to contaminate the earth's waters, 

        15   its land, its air and its life with poisonous substances, 

        16   these are sins."

        17                We know perfectly well that the internal 

        18   combustion engine juggernaut drives a substantial part of 

        19   the economic system and diesel fuel contributes to that 

        20   momentum.  On the other hand, is life itself and the future 

        21   of our children to be held hostage by the success of 

        22   current technology or is it incumbent upon responsible 

        23   people of our generation to make the hard choices.  People 

        24   who can chart human DNA can reinvent transportation and 

        25   power production so that human DNA has a future.

                                       44


         1               We believe it is appropriate to ask forgiveness 

         2   for our sins and then to go out and behave differently.  

         3   The Patriarch, a practical man, said in his same address: 

         4   "It is appropriate for us to seek ethical, legal recourse 

         5   in matters of ecological crimes."

         6                I would urge the EPA to use its authority to 

         7   restrict the use of diesel fuel, to change the composition 

         8   of diesel fuel, and to impose whatever regulations are 

         9   necessary to clean up the air.  There are alternative 

        10   sources of power available now in production today.  A 

        11   modest investment in research and development will broaden 

        12   the field of choices for us in the years ahead.  Let's 

        13   stop doing the same old thing and be creative with new 

        14   opportunities.

        15                Thank you for this opportunity to participate 

        16                MS. OGE:  Thank you.  Good morning, 

        17   Mr. Barron.

        18                MR. BARRON:  Good morning.  Thank you.  My 

        19   name is Larry Barron.  I am vice president for the western 

        20   sales region for International Truck and Engine Company, 

        21   which many of you may know was formerly called Navistar.  

        22   I am here today on behalf of Patrick Charbonneau who is 

        23   vice president of Engine Engineering at International to 

        24   discuss EPA's proposed model year 2007 emission standards 

        25   for heavy-duty engines as well as the Agency's proposed 

                                       45


         1   onroad diesel fuel quality requirements.

         2                At the outset International commends the EPA 

         3   for its landmark proposal to address heavy-duty engine 

         4   emissions through a "systems approach" involving both fuel 

         5   quality and engine technology.  There is no question that 

         6   diesel engine technology is making dramatic strides in 

         7   emissions control.

         8                As we know, the availability of ultra-clean 

         9   diesel fuel is a prerequisite toward meeting the 

        10   challenging new emissions standards beginning in model year 

        11   2007.  With clean diesel fuel, we can count on the advanced 

        12   NOx and PM aftertreatment technologies needed to achieve 

        13   unprecedented emissions reductions.  For that reason, we 

        14   are pleased that EPA is mandating fuel that will enable 

        15   these advanced technologies to be used on all heavy-duty 

        16   engines.

        17                International is investing hundreds of 

        18   millions of dollars in the development of new technologies 

        19   for all the markets where our engines are sold.  We are 

        20   reinventing all of your engine lines through revolutionary 

        21   engine redesign and development of advanced aftertreatment 

        22   technologies.  Our technological breakthroughs will allow 

        23   us to achieve unparalleled emissions reductions.  Indeed, 

        24   we are developing green diesel technology that with clean 

        25   fuel, has already demonstrated the capabilities of 

                                       46


         1   particulate filter technology to reduce hydrocarbon and PM 

         2   emissions to levels that are at or below EPA's proposed 

         3   standards.

         4                In that regard it is important to note that 

         5   progressive oil companies already are making 15 parts per 

         6   million diesel fuel commercially available.  These oil 

         7   companies have earned recognition and applause for their 

         8   efforts to bring clean diesel fuel to the marketplace 

         9   early.  With this ultra-clean fuel available so soon, 

        10   International will commercialize its green diesel engine 

        11   technology next year and thus achieve EPA's proposed model 

        12   year 2007 hydrdocarbon and PM emissions standards six years 

        13   ahead of schedule.

        14                We have outside a school bus today that has 

        15   this technology using 15 ppm fuel if you would like to 

        16   take a look at it.  It is right outside the front door.  

        17   The tailpipe faces the street, so if you go to look at it 

        18   please be careful.  That has been in service for six months 

        19   and the tailpipe has no soot in it.  This is just one 

        20   example of the impressive environmental benefits that 

        21   accrue from a symptoms approach involving both clean fuel 

        22   and clean engine technologies.

        23                I also commend the Agency for its willingness 

        24   to phase-in the proposed NOx standards.  We strongly 

        25   support a NOx system and approach which underscores the 

                                       47


         1   challenges facing in meeting NOx control targets EPA 

         2   proposal goes far in addressing these categories.  We 

         3   believe that even more can be done without compromising 

         4   important environmental objectives.  In that regard, I am 

         5   pleased to say that in your International along with EMA 

         6   soon will be presenting to EPA a new NOx phase-in proposal. 

         7                Under this proposal, there would be a single 

         8   NOx emission standard for all the engines in model year 

         9   2007.  The NOx model standard for 2007 would be 

        10   significantly below the NOx standard applied to the model 

        11   year 2006 engines.  Then in 2010, the NOx standards will be 

        12   stepped down to a new and significantly tighter NOx 

        13   standard.

        14                Importantly this proposal will meet and 

        15   perhaps exceed the Agency's NOx reduction targets in this 

        16   rulemaking, while at the same time providing manufacturers 

        17   with needed flexibilty to meet those targets.  For these 

        18   reasons, we believe that the Agency will find this proposal 

        19   to be a win-win for consumers and the environment alike, 

        20   and look forward to discussing it in greater detail.

        21                In closing, I wish to reiterate 

        22   International's strong support for EPA's proposal to reduce 

        23   diesel fuel sulfur levels which will enable the use of the 

        24   NOx and PM aftertreatment technologies needed to achieve 

        25   the Agency's objectives.  we look forward to discussing in 

                                       48


         1   our written comments these and other technical details of 

         2   the EPA's proposed rule.

         3                I thank you for giving me and International 

         4   the opportunity to present International's views today and 

         5   I would be happy to answer any questions you have 

         6   concerning my testimony

         7                MS. OGE:  I would like to thank all the 

         8   panelists for their testimony.  

         9                 Mr. Barron, let me make clear that I 

        10   understand your testimony fully.  What you are saying is 

        11   that with clean diesel fuel, 15 parts per million, the 

        12   aftertreatment technologies that we envision to deliver 

        13   cleaner emissions will be commercially available and you 

        14   are not calling them unproven technologies?

        15                 MR. BARRON:  No, ma'am.  We propose to 

        16   release that bus that is outside with a couple more 

        17   modifications commercially next summer particularly for the 

        18   California market and for wherever the fuel is available 

        19   that will enable that technology to work which is 15 ppm 

        20   diesel fuel. 

        21                 MS. OGE:  Mr. Frick, I am somewhat at a loss 

        22   with your statement that these technologies that we are 

        23   proposing will be unproven.  Do you want to comment?  

        24                MR. FRICK:  I don't know what technology he 

        25   is referring to.  When you look at technology that is 

                                       49


         1   currently being used in Europe.  If you go down to NOx and 

         2   others we think the verdict is still out.  They have 

         3   demonstrated and your record basically says the same thing. 

         4   If that's what he is talking about, then we will look at 

         5   that record.

         6                MS. OGE:  Do you have any response to that?  

         7                MR. BARRON:  I would prefer to have 

         8   Mr. Charbonneau address those comments with the exact 

         9   numbers.  I would not like to quote those numbers off the 

        10   top of my head.  There is significant reduction in both NOx 

        11   and particulates below the levels that are proposed.  

        12                MS. OGE:  Mr. Frick, obviously one of our most 

        13   challenging issues in this regulatory program is the 

        14   appropriate level of sulfur and diesel.  In our view, we 

        15   have stated in our proposal the difference between a 90- 

        16   percent reduction that your industry has suggested and a 

        17   97-percent reduction.  The delta is a significant loss on 

        18   public health protection.

        19                As we have stated in our proposal, we will be 

        20   left with the 50 parts per million problem in place.  You 

        21   can only achieve 20 percent reduction so the public health 

        22   won't be affected.  That's the dilemma we have here.

        23                In your testimony, both written and oral 

        24   comments, you have suggested that there are other 

        25   technologies that are more proven and they are sensitive to 

                                       50


         1   sulfur that they can get us this same end results as far as 

         2   public protection.  Could you elaborate about those 

         3   technologies?  

         4                MR. FRICK:  That's correct and we have advised 

         5   you and I believe your testimony in New York you received 

         6   additional information on that.  It is not only a 20 

         7   percent, but you can be in the 85 to 90 percent reductions 

         8   from the SCR and other technologies that are available.  So 

         9   your assumption of 20 percent, we disagree with there are 

        10   technologies out there.  

        11                MS. OGE:  So the technologies that you are 

        12   referring to is the urea SCL technology?  

        13               MR. FRICK:  I agree.  The issue is the 

        14   emissions.  The sulfur is merely a mechanism to get this to 

        15   those emissions.  That's why we are saying that we believe 

        16   there are technologies out there as at a higher level will 

        17   get essentially the same level.  

        18                MS. OGE:  EPA's proposal, so I understand, 

        19   your proposal is for us to move forward with an SCR type of 

        20   technology in order to achieve the NOx reduction.  

        21                MR. FRICK:  As you know, the Agency sets the 

        22   emission standards and the industry will decide what 

        23   technology it wants to use.  We believe that that 

        24   technology can be implemented without the problems that the 

        25   lower level present to achieve the emission reductions.  

                                       51


         1   What ultimately the trucks choose to use would dictate that 

         2   we only feel one is available.  

         3                MS. OGE:  I would like to ask Ms. Williams to 

         4   respond to this.  

         5                MS. WILLIAMS:  Why would you want to shift the 

         6   burden to small companies like trucking.  Here we have a 

         7   proposal that says we will have either a clean fuel to get 

         8   the emissions or we are going to have a dirty fuel with 

         9   duct tape and a couple of bandadesdates.  That's not fair 

        10   to us.

        11                The California truckers have already taken the 

        12   brunt at this fuel reformulation in 1993.  We have been 

        13   operating in a noncompetitive environment and they made all 

        14   the money.  I think it is fair that it is our turn to be 

        15   first.  You looked at them in '93.  Put us first this time.

        16                We want 15 ppm.  In Europe we already know 

        17   what happens with 15 ppm sulfur.  It is 10 percent 

        18   maintenance failure on the traps.  That means our guys have 

        19   to take the trucks off the road and figure out how to fix 

        20   thing.  I don't think that is a fair thing to ask small 

        21   businesses to do.  And I do not believe that technology 

        22   that they are requesting gets you down as far as 15 ppm.  

        23   When you have the industry asking for something clean and 

        24   you have the suppliers fighting over which technology to 

        25   use, I think that you should divert the industry and go for 

                                       52


         1   what is clean and easy.

         2                We are not chemists.  We are truckers.  We 

         3   don't want to put a hazaradous waste -- we are going to 

         4   take ammonia and have a truck driver putting it into a 

         5   truck.  What is the regulatory of that.  What is the 

         6   liability to the trucking company.  It is not fair.

         7                MR. FRICK:  If you don't mind, she said 50.  

         8   90 percent reduction is dirty.  That's a huge reduction.  

         9   You are talking about ultra-clean.

        10                MS. OGE:  I would like to ask for, Mr. Walsh, 

        11   your experience with Europe because some of the European 

        12   countries are considering SCR.              

        13                MR. WALSH:  Thank you.  First of all --  

        14                MS. OGE:  Will you please state your name 

        15   before you speak.

        16                MR. WALSH:  This is Michael Walsh for the 

        17   American Lung Association.  I won't repeat the quotation 

        18   that is in my written testimony from the German government 

        19   on the difference between 15 ppm and 10 ppm in terms of how 

        20   much it allows different fuels and different emission level 

        21   to be achieved by different technology.

        22                With regard to SCR threat I will he say a 

        23   number of things.  One, I hope and hope and I am optimistic 

        24   that SCR will find some applications.  I think it is an 

        25   encouraging technology, but only so far I think in fleet 

                                       53


         1   applications where you have a centrally fueled environment 

         2   and not going across the entire country in one move that we 

         3   heard earlier from going from the East Coast to the West 

         4   Coast or vice versa.

         5                Secondly, the experience in urea with SCR is, 

         6   of course, in a limited prototype stage and is not 

         7   achieving the NOx levels that are being proposed by EPA.

         8                Thirdly, I think that the Europeans are still 

         9   wrestling with and have not yet solved the problem with 

        10   infrastructure.  We have not cost it out and I don't know 

        11   anyone who has yet cost it out what it would entail to put 

        12   a urea infrastructure across the entire country.  I think 

        13   that's a very difficult challenge.

        14                I think you have an issue that I am interested 

        15   if Ms. Williams wanted to comment it on it from a trucking 

        16   standpoint, but the European solution that is being talked 

        17   about and the problem of refilling is the urea tank after 

        18   50,000 kilometers, is a difficult one.  What they are 

        19   planning, at least in some cases -- and this is the only 

        20   solution they have been able to come up with so far -- is 

        21   to have a mechanical and electrical system that will die 

        22   between the engine when the urea runs out and basically 

        23   force the trucker to limp home to some facility where he 

        24   can put the urea in.

        25                It will not completely shutdown the vehicle 

                                       54


         1   but it will not be a very useful vehicle other than just to 

         2   get to some place.  I am not sure how the trucking industry 

         3   in this country will react to such a solution.

         4                Finally, the whole issue of toxics.  Again, 

         5   Ms. Williams made reference to it, but it is not limited 

         6   just to ammonia.  Ammonia is an issue.  But there are other 

         7   toxics which have not been fully characterized from the SCR 

         8   that will need to be characterized, as we learned recently 

         9   with another fuel additive, that we have to look carefully 

        10   at fuel additives to make sure we are not creating more 

        11   problems when we solve one problem.

        12                To the extent there's an ammonia slip the 

        13   solution does seem to be to put an oxygen catalyst after 

        14   the SCR system if you do not have to worry about what is 

        15   the implementation of the sulfur on that oxygen catalyst 

        16   that is after the SCR system.

        17                Finally, with regard to that, if you have to 

        18   add that your oxygenation catalyst lowers the ammonia, 

        19   oxygen catalyst can increase NOx emissions again.  If you 

        20   are trying to get down reliably in use over the lifetime of 

        21   heavy duty vehicles to these very low levels, it seems to 

        22   me that there are very substantial challenges that make it 

        23   difficult to see how in the short term if in the long-term 

        24   we are going to be able to see this as a mainstream 

        25   technology.  I hope that answers your question.             

                                       55


         1              MS. OGE:  Thank you.  Mr. Lloyd, I have a 

         2   statement here -- I am reading from Mr. Frick's testimony.  

         3   "I also note that CARB, which has adopted a program to 

         4   reduce urban bus emissions that involves cleaner diesel 

         5   formulations, has indicated that it can be flexible 

         6   if EPA decides against a 97-percent reduction."

         7                I was wondering if you can elaborate for us 

         8   what does that mean, being flexible if you decide against a 

         9   15 parts per million.  Were you planning to go higher or 

        10   lower or is this an accurate statement?  

        11                MR. LLOYD:  Are you talking about the transit 

        12   bus rule?  

        13                MS. OGE:  I have no idea.  Maybe Mr. Frick can 

        14   elaborate.  The first page of your testimony.  

        15                MR. LLOYD:  Are you talking about South Coast 

        16   or ARB?  

        17                MS. OGE:  I don't know.  I am reading from 

        18   Mr. Frick's testimony.  

        19               MR. LLOYD:  I got some clarification from 

        20   executive officer.  I think what that was referring to was 

        21   that we clearly in our rule we were looking at 15 ppm 

        22   sulfur diesel.  I think the issue here is that if, in fact, 

        23   EPA didn't come in close to that we would your degree to 

        24   some flexibility.  That flexibility, however, would not 

        25   exceed going above 20 ppm sulfur, certainly not as high as 

                                       56


         1   15 ppm.  We didn't want to quibble over a small amount.  My 

         2   original testimony stands.  We strongly support the 15 ppm 

         3   or lower.              

         4                MS. OGE:  I was wondering if any of the other 

         5   EPA panel members have questions or clarifications?  No 

         6   additional statements from the panel members before we 

         7   close.  Mr. Lloyd?  

         8                MR. LLOYD:  The only statement I would make 

         9   to Mr. Frick's comment here is one of the things we are 

        10   fortunate to see these days is that with the development of 

        11   technology we are seeing a whole menu of technology which 

        12   can also use a huge diversity of fuels.  We are fortunate 

        13   in saying not only do we have the low sulfur diesel we have 

        14   all the fuels that can play a role.

        15                Just a reminder that was the industry that 

        16   came forward in response to methanol, natural gas, which is 

        17   stepping forward.  We have propane, we have obviously 

        18   ethanol and the electric vehicle.  We have electricity.  If 

        19   we get into the fuel cell, that can use a whole variety of 

        20   fuel cells.  While understanding some of the constraints 

        21   the beauty is that we are entering a whole new area.  We 

        22   have a much greater menu than we had before.  

        23                MR. OGE:  I would like to thank you all of 

        24   your testimony.  Now I would like to call the following 

        25   individuals to please come forward.

                                       57


         1                Ms. Valerie Liese, Mr. John Nieyes, Mr. Dave 

         2   Berry, Mr. Al Nunes, Mr. Frank Smith and Ms. Roberta 

         3   Barbalace.

         4                Ms. Liese, we will start with you.             

         5                MS. LIESE:  My name is Valerie Liese.  I am 

         6   the president of Jack Jones Trucking, Incorporated in 

         7   Chino.  I have got 104 employees and 48 of them are 

         8   drivers.  We operate directly in the Southern California 

         9   area from San Diego up to Santa Barbara.  I commend the EPA 

        10   for everything they are doing to protect the future of 

        11   California.  California Has always led the rest of the 

        12   states in various ways and with clean air being top 

        13   priority at this time.  We are all for it.

        14                I would do anything in the world to protect 

        15   the future of this state.  I am going to use whatever fuel 

        16   is mandated by the State.  But we want an equal playing 

        17   field.  We need to be able to compete with the trucking 

        18   companies that operate from other states.  We have a very 

        19   thin bottom line of how we can operate and make a profit.  

        20   We do have lower rates than a lot of other trucking 

        21   companies to be able to pay for the higher cost of fuel in 

        22   this state for the high cost of insurance and many other 

        23   costs.  It is well worth it.

        24                I just want to let you know that we are going 

        25   to do what it takes to make sure that we survive in this 

                                       58


         1   industry too.  I have got a lot of competition out there.  

         2   I have to deal with a male-dominated industry and being 

         3   just a little guy on the end of the totem pole.  We have a 

         4   lot of wolves on our hands, but I just commend all of you 

         5   for what you are doing to help us too.  That's all I have 

         6   got.  

         7                MS. OGE:  Thank you.  Mr. Berry, good morning. 

         8                MR. BERRY:  Good morning.  I am Dave Berry 

         9   with Swift Transportation.  We also support the EPA's 

        10   proposed rule.  Swift Transportation is the nation's third 

        11   largest truckload carrier.  We have operations throughout 

        12   the United States and we have very significant operations 

        13   here in California.  We are sometimes the person that is 

        14   referred to as from out of state.

        15                We also very strongly support the clean fuel 

        16   concept nationally.  Our concern is that if we end up with 

        17   this patchwork quilt of boutique fuels across the United 

        18   States, that there will be no one viable fuel and then how 

        19   do we conduct and better serve interstate customer.  Two, 

        20   we have 50 different tanks on the truck and the driver 

        21   switches the valve when he is from state to state.  So we 

        22   very strongly endorse the concept of one nation fuel.

        23                We also recognize that many of the 

        24   nonattainment areas around this country are having to come 

        25   up with state implemention plans that are due before this 

                                       59


         1   had become a regulation, before 2007.  So we are concerned 

         2   about this boutique fuels coming up as a strategy to deal 

         3   with these nonattainment areas prior for 2007.  That is, we 

         4   wholeheartedly endorse this proposal and I am really very 

         5   excited about what it can do for our engines and the air.  

         6                MS. OGE:  Thank you.  Mr. Nieyez.  Good 

         7   morning.  

         8                MR. NIEYEZ:  Good morning.  Thank you very 

         9   much for having me here.  My name is Joe Nieyez and I am 

        10   President of Quikway Trucking Company.  Quikway Trucking 

        11   Company came into existence in 1946 when my dad started the 

        12   company right after the Big One.  I was also president of 

        13   the California Trucking Association in 1998.  I am here to 

        14   show my support for the EPA's proposed 15 parts per million 

        15   fuel standard.

        16                I have three concerns and as a native 

        17   Californian -- and I think I am going to be staying here 

        18   for the rest of my life.  My number one concern is the 

        19   health factors for the State of California.  There's no 

        20   question in any mind that 15 parts per million helps toward 

        21   the health of California citizen or of anyone in 

        22   California.

        23                Number two concern is a level playing field.  

        24   We are in a business what we call an assembly and 

        25   distribution business, whereas we assemble freight and it 

                                       60


         1   is goes out of state, outside of California.  We also 

         2   distribute freight that comes in from out of state.  

         3   Truckload carriers are very competitive and they are my 

         4   direct competitors because they can go out and make five or 

         5   six deliveries that my company makes on a local basis.

         6                As it is right now, I am paying a higher cost 

         7   for car fuel, whereas the out of state trucks are not and 

         8   they are operating in the same air that I am operating in.  

         9   The other area of level playing field is from the oil 

        10   companies.  My belief is that the oil companies, whatever 

        11   they do I am going to end up paying for that plus some, and 

        12   I am going to try and pass that onto my customers.  I pass 

        13   through the costs that are going to be borne by us from the 

        14   oil companies.

        15                Third concern is a strategy known in business 

        16   today that needs to have some sense of structure in how to 

        17   plan for the future.  With the EPA's 15 parts per million 

        18   standard, that gives us a road to go down.  However, AQMD 

        19   is also pushing for a 15 parts per million standard but 

        20   they want it tomorrow, whereas the EPA has set a date of 

        21   the year 2006.  This is very concerning to me and it should 

        22   be concerning to the business community and to the 

        23   consumers of goods.

        24                Just kind of in closing, my company will 

        25   support and I am sure the California Trucking Association 

                                       61


         1   will support anything that significantly reduces emissions 

         2   into the air.

         3                Thank you very much for having me here today.  

         4                MS. OGE:  Thank you for your testimony.  

         5   Ms. Roberta Barbalace.  Good morning.  

         6                MS. BARBALACE:  Good morning.  I am Roberta 

         7   Barbalace.  I represent Onyx Environmental Services, which 

         8   is a division of Gavendi.  We are an interstate tranporter 

         9   approximately 350 diesel vehicles and approximately 237 of 

        10   which are apportioned.  We have terminals in 23 states.

        11                While many of our vehicles are domiciled in 

        12   states that will likely have state-enforced sulfur limits 

        13   diesel fuel within a few years, at least a third of them 

        14   are located in states that will likely not fall under any 

        15   state regulations in 2007.  As an environmental firm, Onyx 

        16   Environmental Services recognizes our role in protecting 

        17   the quality of the air, not only in the neighborhoods in 

        18   which we work and live, but in everybody's neighborhoods.  

        19   Even in area of the carcinogenic effects of diesel fuel 

        20   exhausts on respiratory problems.  It can likely be 

        21   attributed to exposure to diesel exhaust.

        22                As an asthmatic and class-A truck driver, I 

        23   can attest to the effects of diesel fuel exhaust on my 

        24   condition.  Fortunately, my symptoms are completely 

        25   controlled by medication.  Others are not so lucky.  

                                       62


         1                The trucking industry must be very careful not 

         2   to follow in the steps of the tobacco industry.  As such, 

         3   denial would only lead to deepen the gap between the 

         4   trucking industry and the general public.  I think people 

         5   can see here today, in fact, that the trucking industry is 

         6   very concerned.  We are certainly willing to take the steps 

         7   that are necessary to improve the environmental situation.

         8                Regionalized fuel formulation is unfair to the 

         9   trucking companies and to the public as well.  California 

        10   is a good example.  Reformulated low diesel fuel, car fuel, 

        11   was mandated in 1993.  Other states continue to use 

        12   nonreformulated fuel.  Interstate drivers from outside of 

        13   California fuel up with a cheaper fuel before coming into 

        14   California and they do their business in California and 

        15   leave without ever purchasing the reformulated fuel.

        16                The cost of keeping the environment clean in 

        17   California falls upon the California trucker and not by 

        18   other people coming into the state.  The cost -- if we 

        19   don't have reformulated fuel across the country as 15 parts 

        20   per million type of fuel -- the cost of reformulated diesel 

        21   fuel will remain high and fluctuation in costs will be 

        22   greatly influenced by availability.

        23                In the end, the individual state regulations 

        24   will do very little to reduce the diesel exhaust pollution. 

        25   Our interstate will have even more problems.  Predomiciled  

                                       63


         1   states require that particulate tracks will have a 

         2   tremendous maintenance expense.  Tanks will clog up when 

         3   diesel fuel with sulfur of greater than 15 percent is used.

         4                In addition, fuel efficiency is greatly 

         5   reduced when interstate vehicles fitted with particulate 

         6   tracks need to be refueled in states where they only have 

         7   nonreformulated fuel.  The costs of vehicles will increase 

         8   significantly or maintenance of the vehicles will increase 

         9   significantly while the fuel efficiency and performance 

        10   will be compromised.

        11                It will also be difficult for us to transfer 

        12   our vehicles from one terminal to another because some will 

        13   be equipped with particulate traps and others will not be.  

        14   A 7 percent increase in diesel fuel across the country, 

        15   then the 40 percent gallon increase that some of California 

        16   trucking companies faced in 1999.

        17                Interstate truckers from all over the country 

        18   pick up and deliver goods in the metropolitan areas that 

        19   are being penalized for excessive pollution.  Why should 

        20   they not pay their fair share.  Even your interstate 

        21   drivers in rural states frequently transport the products 

        22   that are made from materials originally coming from the 

        23   metropolitan areas of the transport of materials from Los 

        24   Angeles or New York City or some other metropolitan area 

        25   results in diesel fuel pollution in those cities.  People 

                                       64


         1   living in Montana, Maine, North Dakota use countless 

         2   products made in Los Angeles and New York.  They distribute 

         3   to diesel exhaust pollution in these cities.

         4                Everyone that contributes to pollution should 

         5   pay their fair share of the cost of reducing pollutants in 

         6   the environment.  Proposal to mandate a national fuel 

         7   standard of 15 parts per million sulfur diesel fuel is both 

         8   fair and environmentally sound.  Environmental Services 

         9   supports the proposal and applauds EPA for taking such a 

        10   stand.  Thank you.  

        11                MS. OGE:  Thank you.  Mr. Al Nunes.  Good 

        12   morning.  

        13                MR. NUNES:  My name is Albert Nunes, President 

        14   of A.C. Trucking in Monteca, California.  I am a carrier 

        15   that has many diversities.  We do freight from interval to 

        16   interstate.  We do all kinds of different products and/or 

        17   involvement.  We have about 40 some trucks and about 50 

        18   some employees.  We are not one of the large companies but 

        19   we are a part of this trucking organization.

        20                Also, I am this year's chairman of the 

        21   California Trucking Associations Environmental Policy 

        22   Committee.  That committee is one that reviews and works on 

        23   environmental issues within our state.  We have been 

        24   working with the car and other regulatory agencies over the 

        25   last couple of weeks to try to come to some equitable ways 

                                       65


         1   of solving the environmental problems that we face.

         2                My colleagues up here all talk about the 

         3   different things that happen to them and the other issues 

         4   that are taking place that are important to us.  As I 

         5   mentioned about the trucks that come from out of state, 

         6   50 percent of the trucks on California highways are from 

         7   out of state, and in most cases are not burning the 

         8   automobile sulfur or car diesel.

         9                What good is all the work that we have done as 

        10   California truckers to help clean up the air.  It is all 

        11   for nought because we do not have a one-nation fuel.  Our 

        12   committee started early on to work with our national 

        13   organizations that proposed the nationwide low sulfur 

        14   diesel.  We didn't have the exact numbers that we have 

        15   today that the EPA is proposing, but we are working around 

        16   30 parts per million.  Our committee supports the 15 parts 

        17   per million regulation from most ultra-low sulfur diesel.  

        18   We feel that it is the fairest way to accomplish the goal 

        19   of clean air.  Thank you.  

        20                MS. OGE:  Thank you.  Mr. Smith, good morning. 

        21                MR. SMITH:  Good morning.  I would also like 

        22   to thank the board for allowing us to speak here.  My name 

        23   is Frank Smith, Interstate Claims, third generation company 

        24   that hauls all the gasoline -- not all of it -- but much of 

        25   the gasoline or diesel in the L. A. Basin.  We have a total 

                                       66


         1   of 72 trucks.

         2                We support the EPA regulation of the 15 parts 

         3   per million.  We believe that the distribution system of a 

         4   nonroad heavy-duty diesel fuel will be seeing one type of 

         5   fuel sold nation-wide.  Replacing the current diesel 

         6   fuels with ultra-low sulfur diesel fuel will be the most 

         7   cost-effective approach to introducing fuel.  A minimal 

         8   investment will be required in the distribution system of 

         9   trucking.  Retail stations would carry the same efficiency 

        10   and no incremental cost to replace the current fuel and 

        11   distribute a cleaner product.

        12                I disagree with the assumptions related to the 

        13   trucking contained in the cost impacts of low sulfur fuel 

        14   submitted by the EPA on February 23, 2000.  Clean products 

        15   like gasoline are currently moving through the pipelines 

        16   and efficiently transported to market.  Introduction of low 

        17   sulfur diesel fuel nationwide would have a long-term 

        18   positive economic impact as it would prohibit the use of 

        19   boutique fuels which will be a long-term problem.

        20                The nationwide cost associated with higher 

        21   than 15 parts per million places the cost burden on truck 

        22   owners with the fuel spills emission controls.  The 

        23   environmental benefit of the rule is sacrificed to a 15 

        24   part for level and the distribution is that a real concern 

        25   of the market behavior upon introduction of the 50 parts 

                                       67


         1   per sulfur fuel which like this is a complete replacement 

         2   for a existent product proved there were already 

         3   distributions.  Only when products are introduced.  A 

         4   regional setting, such as CARB 1093 and CARB reformulated 

         5   gas in '96 is a distribution concern because economics and 

         6   scale are lost and alagapolies are created with a handful 

         7   of suppliers.  The recommendation is to introduce so the 

         8   distribution system and supply centers can be economically 

         9   addressed.  Thank you.  

        10                MS. OGE:  Thank you.  Ms. Fogel, good morning.

        11                MS. FOGEL:  Good morning.  Can you hear me?  I 

        12   am a teacher with L.A. Unified and I have a couple of 

        13   visuals.  Can we use that overhead?  I am Judy Fogel.  I am 

        14   a first-grade teacher with L.A. Unified.  I wanted to share 

        15   with you today.  I am grateful you are here.

        16                I wanted to share with you a little bit of our 

        17   reality of 1,200 children of what it has been like at our 

        18   school.  Last September I started hearing about that diesel 

        19   was a carcinogenic component and I looked out my classroom 

        20   window and I have 23 diesel buses outside my classroom and 

        21   my little children, some of them have asthma.  We have 55 

        22   asthmatics at our school.

        23                I started calling around and asking my people 

        24   and the buses were idling and the kids are walking through 

        25   this gray smoke.  I invited the man from the ADOT to speak 

                                       68


         1   to our faculty and he said you are creating what is known 

         2   as a line source of pollution.  It is like a factory you 

         3   put across from your school.  This is four feet from play 

         4   equipment.

         5                I started at the time looking into the 

         6   possibility of moving the buses away from the school yard, 

         7   and you would think my principal would be happy and giving 

         8   me some kind of a service award for realizing these health 

         9   concerns.  She called me in and put my transfer papers in 

        10   front of me and she said, "You need to move on to another 

        11   school."  I was stunned and I said after a minute, "If I 

        12   promise not to say anything about these diesel buses, can I 

        13   stay at this school?"  And she said we will think about it.

        14                That's what my year has been like having 

        15   asthmatic children breathing.  The buses are still in front 

        16   of our classroom.  Some of them are 25 years old.

        17                I am excited that International and these 

        18   other companies are coming up with other technologies.  The 

        19   reality is we are living with the old technology and will 

        20   for some years to come.  We have been writing Governor 

        21   Davis to ask for clean buses.

        22                One little girl said to me when we heard that 

        23   the EPA was passing a rule of making cleaner buses, she 

        24   said, "When I am 13 that's when we will get the cleaner 

        25   buses."  That's the reality of children's lives.  30 

                                       69


         1   teachers at our school signed a letter to Dr. Lloyd asking 

         2   if they could include buses.  We will see what help we can 

         3   get.

         4                I was saying to myself, if I call my school 

         5   district and I said a carcinogenic contaminant was buckling 

         6   up out of the school yard they would close the school.  It 

         7   is buckling out of these buses four feet from the play yard 

         8   where the children are and no one does a thing about it.

         9                When I call the school and say can we possibly 

        10   by cleaner buses, they say we don't have the money.  This 

        11   is after our L.A. District just built the most expensive 

        12   high school in the history of our nation, $200 million.  

        13   And I walked away from it.  You can see the waste and 

        14   corruption.  Possibly at a local level.  That's why we need 

        15   federal groups like yours to come in and help set 

        16   standards.

        17                My husband was telling me about Pacific 

        18   Electric.  We had in Los Angeles a rapid transit system at 

        19   one time called the Blue Line that was beautiful.  You 

        20   could get from Mt. Wilson to L.A. Harbor quite rapidly 

        21   anywhere around the city and three corporations came in and 

        22   bought it up.  I believe it was Standard Oil, Goodyear 

        23   Tires and General Motors.

        24                They did this all across the nation.  They 

        25   bought all these rapid transit systems and they dismantled 

                                       70


         1   them.  Our government sat by and watched.  It did nothing 

         2   except built more freeways and taxed the fuel that those 

         3   cars and those tires use up where I do see our government 

         4   stepping up to the bat.  Our local ADOT stepped in on the 

         5   local issue where the Mayor was going to buy old diesel 

         6   buses and they spoke up and the Mayor changed his mind.

         7                I am told, I don't know that this is true, in 

         8   August they are prepared to vote for these low sulfur rules 

         9   and our air resources board and our governor is not willing 

        10   to back them up on it.  That's what I am being told by 

        11   them.  I find that frightening and I hope someone at a 

        12   federal level can help us.

        13                Also, in the '60s on Channel 5 there was a 

        14   broadcaster named Pete Roberts.  In the '60s he had a man 

        15   on who was head of a refinery.  This is almost 40 years ago 

        16   who said we know our sulfur content is too high and we are 

        17   killing people and we are going to really work on this.

        18                My husband is an engineer and he knows all 

        19   this.  Nothing has happened.  This is an old, old fight, 

        20   the sulfur content in the fuel.  I hope you can reduce it.  

        21   Someone up here said from one of trucking groups that truck 

        22   diesel engines are efficient.  I guess it was someone from 

        23   the EPA that said how efficient diesel trucks are.

        24                I will tell you what are efficient, trains.  

        25   If this happened backwards that I told you you can put all 

                                       71


         1   these trucks on rails where there's less drag, hundreds of 

         2   cars with only five men working them, there's less drag and 

         3   you only need two diesel engines.  We have this great new 

         4   technology, let's try it out and you say great, but it     

         5   happened in reverse.  We have gone back to these little 

         6   individual chinzy trucks on the road creating all this 

         7   pollution.  We are killing ourselves.

         8                At one point there was a move to put big 

         9   trucks on trains and move them between the more common 

        10   routes in New York and Los Angeles.  Some dimwit said no, 

        11   we can't do that because we will lose jobs. Instead of five 

        12   men working one train we have all these people being 

        13   employed killing us.

        14                I want my student to come up.  She has asthma. 

        15   Do you want to tell them what it feels like to have asthma. 

        16   Maybe her mom would talk.  She had a pretty scary incident 

        17   that happened.  I was surprised to hear about it.  No.  Do 

        18   you want to show them a picture of a bus.  She drew a 

        19   pretty picture of a bus and wrote a letter.

        20                She wrote to Mayor Reardon:  "Thank you for 

        21   making clean buses because some people like me have asthma 

        22   and can die."  Do you want to tell her about her experience 

        23   with the paramedics?  

        24                MS. OGE:  Could you please state your name?

        25                MS. VASQUEZ:  Reyna Vasquez.  My daughter is 

                                       72


         1   Sylvia Barcabalo.  There is nothing more scary than being 

         2   at work and being called that your daughter is really sick 

         3   and getting there and not be able to see her because the 

         4   paramedics are working with her.  I would like to see that 

         5   this things that happen to me, it won't happen to anybody 

         6   else that has kids.  It is very scary.  It happened to me 

         7   like three days, five days in a week.

         8                30 days I have to be with her in the hospital 

         9   giving her treatments and all kinds of stuff.  People who 

        10   don't have asthma, they don't know what being scared is 

        11   about your daughter is not going to make it.  I was even 

        12   able to teach my 13 year old to drive my car so in case I 

        13   have to give her breathing so she can make it to the 

        14   hospital.  I would like to see that they do something about 

        15   it so it won't happen to other kids and other families with 

        16   low income like me.  Thank you very much.  

        17                MR. OGE:  Thank you for coming and bringing 

        18   your daughter forward.  We would also like to thank all the 

        19   panel members for taking the time to share your views with 

        20   us.  Thank you very much.

        21                We would like to move to the next panel.  I 

        22   would like to call Ms. Cheryl Love-Queen, Professor Scott 

        23   Sherman, Dr. Richard Barbers, Mr. Dennis Firestone, 

        24   Mr. Reggie Latham, and Mr. Ron Benson.  If you could place 

        25   the names on the cards in front of you.  Given the fact 

                                       73


         1   that we are running late and we don't have a full panel, I 

         2   would like to call members from the 11:45 panel.

         3                Mr. Angelo Bellomo, Mr. Richard Shyu, 

         4   Mr. David Freeman, Mr. Jim Cameron, Ms. Elaine Chang.  We 

         5   have Mr. Liu.  Please print the names on the cards in front 

         6   of.  

         7                Ms. Love-Queen, we will start with you.  Good 

         8   morning.

         9                MS. LOVE-QUEEN:  My name is Cheryl Love-Queen. 

        10   I am the owner of a small consultant business.  We train 

        11   trainers and the best practices for school districts.  We 

        12   also represent community coalition for change, which is a 

        13   service planning area which some of you are familiar with 

        14   through the county.  This area covers South Central, 

        15   Compton, Long Beach and Paramount, and I am also a child 

        16   advocate.

        17                The Los Angeles County is one of the 25 most 

        18   ozone polluted counties with pediatric asthma affecting 

        19   137,128.  Excuse me, with children under 14 affected by the 

        20   rate of 2,146,031, according to the Lung Society.  A major 

        21   hospital in South Central reported that asthma is one of 

        22   the top two reasons for hospital visits or being in the 

        23   hospital for children in the clinics.  And adding insult to 

        24   injury studies indicate that while asthma has become a 

        25   major public health problem affecting Americans of all 

                                       74


         1   ages, race, and ethnic groups children have been 

         2   particularly severely affected.  It is most severe among 

         3   low income and minority children.

         4                In many areas of America you can find child- 

         5   care facilities close to large intersections on every 

         6   freeway.  However, I am zoning in today on one particular 

         7   one in Willowbrook.  That is an area close to Los Angeles 

         8   and it is on Imperial.  This child-care center sits at the 

         9   bottom of the 105 freeway, the Century Freeway, and is 

        10   nine-tenths of a mile from the Alameda corridor.

        11                Diesel trucks, buses and trains pollute the 

        12   front, back and sides of this tiny facility.  Where you 

        13   have children and adults playing as usual and having no 

        14   idea what virtual health hazard trap they are involved in.  

        15   Imagine if you had a child or grandchild who had to work or 

        16   play in that area.

        17                In order to protect children are our future we 

        18   must require drastic reduction in pollution from diesel 

        19   buses, trucks, and cars post-haste.  In addition, the oil 

        20   industry and engine manufacturers have done very little to 

        21   curb this pollution.  In fact, they have cheated in their 

        22   emissions in the past resulting in an extra 1.3 million 

        23   tons of pollution each year.  However, because high sulfur 

        24   fuel will poison the new diesel cleanup technology, we must 

        25   ensure that all diesel fuel is fully cleaned up and readily 

                                       75


         1   available before trucks are required to cleanup.

         2                Therefore, in order to ensure that all cleaner 

         3   trucks, buses and cars will have access to clean fuel 

         4   necessary to run them, CCC, which is the Community 

         5   Coalition for Change, which I represent, urges the EPA to 

         6   require diesel sulfur levels for onroad and offroad 

         7   vehicles with a cap of no more than 15 ppm sulfur 

         8   nationwide by 2003.

         9                There should be no phase-in period for 

        10   reduction in smog-forming pollution.  In addition the EPA 

        11   should take measure to ensure that big trucks are meeting 

        12   the emission standards on the road, not just during the 

        13   engine test.  These provisions are necessary to prevent our 

        14   future generation of children's health and at school and at 

        15   home, such as I indicated in my earlier testimony.  We ask 

        16   that you include them in your final rulemaking.  Thank you. 

        17                MS. OGE:  Thank you, Dr. Barbers.  Good 

        18   morning.             

        19                MR. BARBERS:  Good afternoon.  

        20                MS. OGE:  Yes, it is afternoon.

        21                MR. BARBERS:  I want to thank the EPA for 

        22   having this hearing today as well as allowing me to have a 

        23   chance to speak today.  My name is Richard Barbers and I am 

        24   a Professor of Medicine at the University of Southern 

        25   California Tech School of Medicine.  I am also the current 

                                       76


         1   Governor for the American College of Chest Physicians for 

         2   the Southern California region.  I am also a member of the 

         3   Trigos (phonetic) society of Los Angeles and a volunteer 

         4   member of the American Lung Association.

         5                I am here to ask you to adopt the common-sense 

         6   approach to clean up the heavy-duty trucks and buses and 

         7   also for air pollution in the city of Los Angeles.  

         8   Nationwide 40,000 people die prematurely each year from 

         9   breathing soot pollution.  Diesel soot pollution has been 

        10   linked to cancer and has been published in over 37 

        11   scientific journals.

        12                In addition, there are several scientific 

        13   studies on the effects of soot pollution on airway health.  

        14   There are also several studies that indicate that diesel 

        15   air pollution may effect allergic individuals.  Diesel 

        16   vehicles contribute more than their fair share to the air 

        17   pollution problem.  In fact, here in Los Angeles when the 

        18   proposed standards go into effect in 2007, heavy-duty 

        19   trucks and buses will be responsible for an estimated 26 

        20   percent of the smog-forming pollution and estimated 14 

        21   percent of the soot produced by all the cities' vehicles.

        22   As a commuter who travels about 25 miles each way from my 

        23   home, I am aware and have personally experienced the 

        24   effects of diesel soot pollution.

        25                I agree with your proposal to protect public 

                                       77


         1   health by drastically cleaning up big trucks and buses.  

         2   Also, since high sulfur fuel poisons new pollution-control 

         3   equipment, it makes sense that you are proposing to produce 

         4   sulfur to reduce levels of sulfur fuel in 97 percent in 

         5   2006 before the vehicle standards go into effect.

         6                I urge you not to weaken this provision by 

         7   allowing an extended time line of higher sulfur levels.  If 

         8   the newer, cleaner trucks do not have reliable access to 

         9   15 ppm sulfur, we will not be able to meet the necessary 

        10   pollution reductions.  Furthermore, these newer, cleaner 

        11   trucks should be required to meet the newer emission 

        12   standards as soon as possible.

        13                We are already going to have to wait until 

        14   2007 before we see any major reductions in soot pollution.  

        15   We should not have to wait until 2010 until we can get 

        16   relief from smog-forming pollution from these trucks and 

        17   buses.

        18                Finally, cleaning up existing diesel makes 

        19   sense for our health and environment.  By replacing diesel 

        20   with cleaner technologies makes even more sense.  

        21   Therefore, you should provide incentives to increase the 

        22   use of technology for buses and trucks.  The health of Los 

        23   Angeles citizens depend on our efforts.  Thank you.

        24                MS. MARTIN:  Thank you.  Appreciate you being 

        25   with us here today.  We can now hear from Mr. David 

                                       78


         1   Freeman.      

         2                MR. FREEMAN:  My name is Dave Freeman.  I am 

         3   presently the general manager of the Los Angeles Department 

         4   of Water and Power.  I served as an energy adviser to 

         5   President Jimmy Carter.  I was present at the creation of 

         6   the EPA in the White House and remember the wonderful 

         7   feeling we had about creating this Agency and independent 

         8   -- completely independent -- of pressures for money and 

         9   polluters.

        10                I served as the Chairman of the Tennessee 

        11   Valley Authority under President Carter.  I have been a 

        12   fighter in the clean air fight from the very beginning.  I 

        13   remember when the electric power industry said we didn't 

        14   know how to build scrubbers.  The EPA said, damn it, figure 

        15   out how, and we did.

        16                I think that I would say very candidly as a 

        17   friend of the EPA, you are much too timid.  You are not 

        18   asserting the public interest with the fierceness and 

        19   dedication and focus with which this Agency was begun.  

        20   2007 is a long time off for these asthmatic children.  

        21   There is technology that could be developed and implemented 

        22   sooner than that that would get us off of oil.  I think the 

        23   EPA should remember.  It is part of the United States 

        24   Government which needs to have a crisper energy policy.

        25                We are over 50 percent dependent on imported 

                                       79


         1   oil and we need to learn that there is and can be life 

         2   after oil in this country.  We need to get onto alternative 

         3   fuels that are both cleaner and domestically produced.  It 

         4   seems to me that there's a lack of focus and concern and 

         5   crises that exists, especially in Southern California, and 

         6   nowadays in Houston and other places as to air qualify.

         7                While these proposals that you have are 

         8   absolutely necessary as a step, they are wholely 

         9   insufficient.  You ought to take your lead from the South 

        10   Coast Air Quality District and remember that EPA got 

        11   started because of the grassroots effort here in California 

        12   to create an Environmental Protection Agency.

        13                I think you ought to take a few steps back and 

        14   ask yourselves, are you doing everything within your 

        15   statutory power to provide cleaner air for America sooner.  

        16   I think the answer is no at the moment.  This rule 

        17   basically says that we can live indefinitely with the 

        18   oxymoronic phrase of cleaner diesel when your own 

        19   publications make it clear that diesel in any form is 

        20   spewing out cancer-causing particles.

        21                We need to develop the fuel cell faster and 

        22   get vehicles powered by the fuel cells.  Natural gas is a 

        23   fuel that can be used.  There are other domestic fuels.  

        24   Let us have a rule from EPA that gets us off of diesel by 

        25   2007.  Thank you.  

                                       80


         1                MS. MARTIN:  Thank you very much.  I think we 

         2   will take your lead by now asking the South Coast Air 

         3   Quality Management District, Mr. Liu, to testify.  Thank 

         4   you.              

         5                MR. LIU:  I have a few slides here, actually.  

         6   My name is Chung Liu.  I am the Deputy Executive Officer 

         7   for the South Coast AQMD.  The District is very honored to 

         8   have the opportunity to be here to present our positions  

         9   at this time on EPA's proposed rules.  In general we 

        10   support EPA's approach.  The proposed rules go a long way.

        11                We would also ask to expedite the schedule as 

        12   Ms. Freeman just mentioned, that air quality can be 

        13   improved faster, and we have shown that in the past and the 

        14   EPA knows the technology is here and we need to work 

        15   together to see if we can speed it up.

        16               Also, I want to suggest to expand the proposal 

        17   to include nonroad engine emissions.  There are three 

        18   principal concerns in terms of air quality from diesel 

        19   emissions.  The diesel engines contribute significantly to 

        20   the nitrogen oxide emissions, which is a precursor for our 

        21   ozone problems here nationwide.  Also nitrogen oxide 

        22   emissions contribute significantly to our fine particulate 

        23   matter as well as directly needed particulate matter.

        24                Lastly, the concern is air toxics.  70 percent 

        25   of air conditioning systems caused by air pollutants are 

                                       81


         1   contributed by diesel emissions.  We need to work on all 

         2   three.

         3                Any technology in any fuel can only address 

         4   part of the problem, not all the problems, and they are 

         5   clean and green.  They are just now telling the truth.  I 

         6   want to present some good news.  South Coast has gone a 

         7   long way in the past 20, 30 years.  The next slides we show 

         8   that we do sometimes have very clean air in our areas.  

         9   This is not a computer-generated picture.  It is a real 

        10   picture.

        11                This is a number of first-stage ozone 

        12   episodes.  Number of episodes first stage in our basin 

        13   every year.  As you can see, nobody can argue, we made a 

        14   quantum move.  I think it is partially the answer to some 

        15   of the questions why South Coast always moves fast.  The 

        16   results speak for yourself.  We can challenge most of 

        17   the urbanized areas in the United States that may be 

        18   nationalized standards cannot achieve as much as localized 

        19   efforts.  There's a local government in play here.

        20                I challenge Houston or any other of those 

        21   areas that can have this kind of fast reduction in 

        22   episodes.  We don't want to make other cities look bad.  

        23   But as a matter of fact, last year Houston took lead over 

        24   from us.  We feel pretty very good about it.  We are very 

        25   nervous about it because we are riding the borderlines of 

                                       82


         1   first-stage episodes.  This year we are looking very 

         2   closely.  We had some high concentrations, but we still 

         3   maintain lower than Houston so far.

         4                Some of you drive on the freeway close to Los 

         5   Angeles International Airport that know this wall on the 

         6   Highway 405 indicates "From Smog to Fog" is the commercial 

         7   by Air New Zealand.  Actually you have to fly to London if 

         8   you want to escape smog.  We want to escape from this image 

         9   and we will are getting there.

        10                What is the problem from our South Coast point 

        11   of view.  As you can see.  This slide has been shown by 

        12   Dr. Alan Lloyd from ARB.  NOx emissions principally 

        13   contributing to our basin by mobile sources.  The red part 

        14   is onroad diesel.  The yellow part is offroad diesels.  

        15   That's the reason we ask you to also consider your proposal 

        16   to extend to offroad category as soon as possible.

        17                In terms of proposed EPA standard of PM 2.5 15 

        18   microgram per cubic meters, we have almost our entire basin 

        19   in violation of that standard by a long shot.  Also, the 

        20   red part indicates our calculation.  The contribution from 

        21   diesel source to that composition.  We need a significant 

        22   restriction from both VOC and NOx in order to meet the 

        23   future in air quality standards promulgated by EPA.  If the 

        24   eight-hour ozone standard and 2.5 ppm we need even higher 

        25   emission reductions.  We are really struggling at this.

                                       83


         1                As you can see, the picture is probably 

         2   getting worse when you look at the most recent development. 

         3   We understand we significantly underestimated NOx emissions 

         4   and we need more reductions to meet the goal.  Also, the 

         5   most recent settlement, probably years ago, the settlement 

         6   between the major engine companies, EPA, Department of 

         7   Justice and ARP really dealing with the engine skills did 

         8   not go back to really cut down the initial emission costs, 

         9   and we have come out short on those.

        10                I want to concentrate a little on the air 

        11   toxics, which is the main driving force between the 

        12   efforts, and also the environmental justice issues and the 

        13   next slides will show why this is an A.J. issue to us.  As 

        14   you can see, this picture depicts the diesel toxic effect, 

        15   the cancer risk, in our basin from air emissions.  This 

        16   picture does not include the contribution from diesel.

        17                This is the one with diesel.  As you can see 

        18   the highest risk level is always associated with major 

        19   transportation artery, the freeways, the airports and the 

        20   sources of diesel emissions are very obvious.

        21                The left side of the pie chart indicates the 

        22   cancer risk of 400 some from emissions other than diesel.  

        23   The right pie chart included diesels.  I want to dramatize. 

        24   Benzine contributed a lot in the past when we don't deal 

        25   with diesel toxicities.  In California we have gone a long 

                                       84


         1   way in reducing Benzine.  It is clear the next one is 

         2   diesel.

         3                Very quickly, with the implementation we know 

         4   how to do it by 2010.  With our implementation our air 

         5   quality management plans we can significantly reduce the 

         6   cancer risks, but diesel contributions are still in there.  

         7   Our current strategy really doesn't deal with the cancer 

         8   risk of diesel very effectively.

         9                How can the region come into compliance with 

        10   the air quality standards.  We need to implement the 

        11   technology.  We know how.  We also want to promote the 

        12   technology advancements.  The transportation factor we have 

        13   to factor into our significant gross factor population and 

        14   travel.  Also, we have to consider heavy-duty vehicles 

        15   really stay on the road for a long, long time.  20 years 

        16   most of the time.

        17                I want to jump to two more slides.  I think 

        18   EPA and DOE knows very well the data from the study 

        19   that indicates very clearly at this juncture the U.S. 

        20   understanding and the technology indicates that in order to 

        21   achieve 85 percent PM removal, we need 15 ppm sulfur.  That 

        22   doesn't consider the problem of nitrous oxide.  If you 

        23   consider that you need even more.

        24                Basically we come to our recommendations.      

        25   Second is probably the most important one.  That we know 

                                       85


         1   there is a volunteer program in terms of retrofit.  We 

         2   still want to consider EPA to consider retrofit part.  

         3   That's a portion of our problems and they will stay on the 

         4   roll for a long period of time.

         5                This slide outlined why the South Coast has to 

         6   move faster.  We need to meet our mandated time schedule 

         7   to meet ozone standards.  We don't know how to do it 

         8   completely.  Also, there's no emission benefit from this 

         9   proposed rule for us.  We need PM standard by 2006.

        10                Lastly, we need to reduce all the exposure as 

        11   possible.  In our rulemaking process in the last several 

        12   months and made it amply clear the technology is there.  

        13   The Los Angeles County MTA actually during the process 

        14   asked their staff to come out to the plant to implement by 

        15   retrofit by 2001.  If retrofit can be done done on buses 

        16   why cannot it be done on engines.

        17                And also the City of Los Angeles by 2001 to 

        18   retrofit all their diesel engines.  It clearly can be done. 

        19   We want to propose to EPA not only consider the typical 

        20   testing cycle.  You got to consider the emissions 

        21   significant differences.  We are talking about real 

        22   exposure, real toxicity here.

        23               The next one.  A lot of heavy-duty trucks in 

        24   urban areas have different transportation cycles.  Those 

        25   communities, for example, school buses, transit buses, 

                                       86


         1   refuse haulers, they are quite a different cycle going 

         2   through and they stop and go a lot.  The temperature change 

         3   a lot.  The performance of those PM trap technology really 

         4   needs to have a close look on this testing cycle.  A 

         5   typical cycle just won't do.

         6                The last slide, this is why we are doing it 

         7   partially.  The trucks stay on the road for a long time.  

         8   We want to do something which will move fast.  Thanks.  

         9                MS. OGE:  Thank you.  Mr. Sherman, good 

        10   afternoon.  

        11                MR. SHERMAN:   Good afternoon.  My name is 

        12   Scott Sherman.  I currently teach at UCLA.  Over the past 

        13   decade I have taught environmental courses at UC Berkeley 

        14   and at the University of Michigan before coming to UCLA.  

        15   One of the things that I found is that the statistics that 

        16   my colleagues here have been reading are very powerful.  

        17   But my students always react much more to a personal story 

        18   because statistics don't lead.  You don't see the human 

        19   effects of these statistics.  And, Dr. Barbers, you started 

        20   off your speech with a statistic.  Can you state it again?  

        21   About 40,000 people in Los Angeles?  

        22                MR. BARBERS:  With asthma are you talking 

        23   about?                  

        24                MR. SHERMAN:  Yes.  

        25                MR. BARBERS:  Yes.  

                                       87


         1                MR. SHERMAN:  40,000 Think about this in terms 

         2   of the Big One, the big earthquake that we are all afraid 

         3   of here in Los Angeles.  The earthquake, if it were to hit 

         4   today, if it were to hit right now, we would declare a 

         5   state of emergency.  We would immediately race to resolve 

         6   the problem.  Everybody would take action.

         7                But in an earthquake, I have lived through 

         8   several of them here in Los Angeles, in the average 

         9   earthquake far fewer people are killed or injured than are 

        10   killed or injured every single year by air pollution, by 

        11   soot, by diesel pollution, by unclean air.

        12                Think about if a jumbo jet were to crash at 

        13   LAX this afternoon.  Tonight on the news everybody would be 

        14   talking about how a jumbo jet crashed killing perhaps 300 

        15   aboard.  But every year the equivalent deaths that occur 

        16   just in Los Angeles alone is equivalent to one of these 

        17   jumbo jets crashing approximately every couple of days.

        18                That's why I urge that when we look at these 

        19   rules -- I agree with my colleague Mr. Freeman here -- I 

        20   applaud the EPA for those proposed rules.  I think they are 

        21   wonderful.  But I think we need to expedite them.  I don't 

        22   think there is time to wait.

        23                If you are in these communities where the 

        24   children are suffering from asthma.  I grew up in the San 

        25   Fernando Valley.  This is a place where you don't have to 

                                       88


         1   die to go to hell.  The pollution there is out of control.  

         2   Thanks to Mr. Liu and his colleagues, it is definitely 

         3   improving, but the situation is bad.  People cannot 

         4   breathe.

         5                I have read studies that showed that living in 

         6   Los Angeles is the equivalent of smoking several packs a 

         7   day of cigarettes.  Every single one of us is going through 

         8   that.  The problem is that this is not an emergency 

         9   situation, or at least we don't perceive it to be an 

        10   emergency situation.  You can't breathe or you don't see 

        11   all this diesel pollution in an air conditioned ballroom 

        12   in the Hyatt Regency Hotel.  Of course, there's indoor 

        13   pollution but we will have save that for another EPA 

        14   hearing.

        15                We need to take this as an emergency.  We need 

        16   to expedite the process.  We cannot wait until 2007, 2010.  

        17   We can't satisfy ourselves with levels of 50 parts per 

        18   million.  We have to have as clean air as possible and as 

        19   soon as possible.  Thank you. 

        20                MS. OGE:  Thank you.  Mr. Angelo Bellomo.  

        21   Good afternoon. 

        22                MR. BELLOMO:  Good afternoon.  My name is 

        23   Angelo Bellomo.  I've stepped in recently on an interim 

        24   basis to work with the L.A. Unified School Districts.  And 

        25   I say that because when I walked in the door I was hearing 

                                       89


         1   some stories about Belmar and some past decisions which the 

         2   District has made which clearly I have been on the outside 

         3   lobbing my own share of criticism on the District.

         4                I am here today because I really believe this 

         5   is an area, and it has been adequately stated by my 

         6   colleagues.  It is a problem that is long overdue in terms 

         7   of a solution.  I think that the comparisons to earthquakes 

         8   and jumbo jets were good, but we can look for something a 

         9   little closer.  And that is, the manner which we regulate 

        10   other forms of environmental pollution.

        11                Our drinking water standards aren't set 

        12   anywhere near the levels of excess cancer risks.  Even our 

        13   best efforts would achieve with regard to diesel exposure.  

        14   When we go to clean up hazardous waste sites or chemical 

        15   contaminants, we are looking at reduction of risks to the 

        16   point where we are less than one in a million.  The numbers 

        17   that we see up on the board here, I am looking at thousands 

        18   and hundreds.  It was really appauling when you think about 

        19   it.

        20                I really applaud David Freeman's comments 

        21   about what your Agency was first put into effect to do.  I 

        22   think we really have to get back to recognizing here that 

        23   the date that we are in with regard to diesel has more to 

        24   do with just the successful lobby that has existed for 

        25   many, many years and less to do with our ability to address 

                                       90


         1   this problem.  We have to move aggressively to do that.

         2                I encourage the efforts you made on this 

         3   proposal.  Please don't weaken and it don't back up.  Those 

         4   of us in our respective areas will do our best to make sure 

         5   that these laws are complied with and that we are all doing 

         6   our share.  Please stay aggressive on this one.  

         7                MS. OGE:  Thank you.  Mr. Richard Shyu.  Good 

         8   afternoon.   

         9                MR. SHYU:  Good afternoon.  My name is Richard 

        10   Shyu.  Executive Engineer for Government Technical Affairs 

        11   at Freightliner Corporation.  I am here today on behalf 

        12   of Daimler-rysler, AG Powertrain Business Unit, 

        13   manufacturer of Mercedes Benz heavy-duty diesel engine.

        14                My testimony will concentrate on the aspects 

        15   of proposed emission standards and new test procedures 

        16   affecting heavy-duty diesel engines.  We will also be 

        17   submitting written comments for the record at a later date 

        18   and I ask that they be considered in a final rulemaking.

        19                First and foremost, Daimler-Chrysler applauds 

        20   the Agency's recognition that fuels and technologies go 

        21   hand in hand in reducing emissions.  Fuel should not limit 

        22   technologies.  Fuel should enable technologies.  The 

        23   Agency's proposal is an enabling step toward improving 

        24   quality across the Nation.  It is with regard to EPA's 

        25   latest proposal that Daimler Chrysler would like to make 

                                       91


         1   this oral comments.

         2                Specifically, Daimler Chrysler has worked 

         3   diligently with the EPA and other regulatory agencies to 

         4   develop and bring to the market the best, technologically 

         5   feasible emission control technologies available for 

         6   heavy-duty diesel engines.  Daimler-Chrysler intends to 

         7   continue this commitment to work with the EPA and other 

         8   concerned party in a context of this most recent rulemaking 

         9   effort.  There are, however, certain aspects of the 

        10   proposed rule on which Daimler-Chrysler would like to 

        11   comment.

        12                As the Agency stated in the NPRM manufactures 

        13   need ultra-low sulfur diesel fuels and lube oils to enable 

        14   NOx absorber and PM trap technologies to achieve the 0.2O 

        15   NOx and 0.01 PM proposed emission standards for model year 

        16   2007 heavy-duty diesel engines.  The Agency also 

        17   acknowledged that the metallic ash content of the lube oils 

        18   may cause plugging of particulate traps.

        19                While the Agency proposed to regulate sulfur 

        20   content for diesel fuels, it failed to do the same for lube 

        21   oils.  Instead, the Agency proposed a voluntary program.  

        22   Daimler-Chrysler believes that once the Agency has 

        23   recognized the critical impact of fuels and lube oils on 

        24   the proper operation of the emission control equipment, it 

        25   is not appropriate to leave such factor to voluntary 

                                       92


         1   programs.

         2                Voluntary programs have the potential to 

         3   adversely affect not only the significant investments in 

         4   technologies, but also the air quality benefits expected by 

         5   the EPA, the states and the general public.  Accordingly, 

         6   we will request that specific sulfur content for the lube, 

         7   oil be regulated as well.

         8                The Agency did not propose to regulate the 

         9   ash, that is the sulfated ash of the lube oils.  Daimler- 

        10   Chrysler data indicated that ash-plugging problems are 

        11   severe.  Trap removal and mechanical blowoff of ash may be 

        12   required at an interval of every 100,000 to 150,000 

        13   kilometer of operation if this issue is not addressed.

        14                When the ash blowoff schedule was not adhered 

        15   to an increase in exhaust backpressure and consequently 

        16   in fuel consumption will occur in combination with 

        17   insufficient regeneration of the trap.  Daimler-Chrysler is 

        18   not advocating elimination of the ash-forming compounds, 

        19   which provide necessary antiwear and detergent/dispersant 

        20   properties of engine oil.

        21                Therefore, it is necessary to seek a 

        22   compromise between performance of the oil, including drain 

        23   intervals, and the aftertreatment device interaction.  We 

        24   recommend that the Agency investigate this issue further 

        25   and look to existing data concerning a proper balance of 

                                       93


         1   the two factors.

         2                For example, European Automobile Manufacturers 

         3   Association test sequences for engine oils and Mercedes 

         4   Benz specifications for engine oils already recommend 

         5   certain balances of sulfated ash for new technology 

         6   engines.  We will provide more detailed comments with 

         7   supporting data with these and previously mentioned effect 

         8   of ash in written comment to the Agency by the close of the 

         9   commentary.

        10                With regards to Daimler-Chrysler's second 

        11   concern, the Agency proposed not-to-exceed limit of 1.25 

        12   time federal transient test procedure standards under all 

        13   ambient conditions, without clearly defined test 

        14   procedures.  For model year 2007, the proposed PM standard 

        15   on FTP is 0.01 g/bhp-hr. based on averaged weighted 

        16   composite cycle.  This means, a PM measurement accuracy 

        17   required to comply with NTE limits may not be achievable 

        18   under current prevailing regulations.

        19                Section 202b(2) of the Clean Air Act requires 

        20   that EPA to develop test procedures and measurement 

        21   techniques for the emission regulations promulgated.  We 

        22   urge EPA to develop NTE test procedures and PM measurement 

        23   techniques adequate for the proposed standards without 

        24   further delay.  We stand ready to cooperate with the Agency 

        25   in developing such procedures and techniques.

                                       94


         1                I appreciate the opportunity to testify on 

         2   behalf of Daimler-Chrysler AG, manufacturer of Mercedes- 

         3   Benz heavy-duty diesel engines.  Thank you.   

         4                MS. OGE:  Thank you, Mr. Shyu.  I would like 

         5   to thank all the panel members with coming forward with 

         6   your testimony.  I would suggest that we take not more than 

         7   10-minutes break.  The court reporter would like to have a 

         8   break of a few minutes and we will be back in 10 minutes.  

         9   I would suggest by 10 of 1:00 for the next panel to be 

        10   here.  Thank you.

        11                (Recess ensued)

        12                MR. OGE:  Mr. Legre, good afternoon.  We will 

        13   start with you.  

        14                 MR. LEGRE:  Thank you very much, Madam 

        15   Chairman.  Good afternoon to the panel.  We take this 

        16   opportunity to welcome you to the City of Los Angeles and 

        17   to report that rather dramatic improvements have been made 

        18   in air quality in this city over the past 20 years.  We 

        19   also take this opportunity to register the point that we 

        20   realize much more needs to be done and we are committed to 

        21   that both locally and we presume you are nationally.

        22                I am here today to speak unequivocably in 

        23   support of the EPA's proposal for more stringent national 

        24   standards for heavy-duty vehicles.  The City of Los Angeles 

        25   recently completed its first round of public hearings on 

                                       95


         1   the very issue of diesel impacts on air quality in the 

         2   South Coast Basin.

         3                As Chair of the City Council's Environmental 

         4   Quality and Waste Management Committee, I heard through the 

         5   course of several hearings from engine manufacturers, fuel 

         6   providers, fleet operators of the environmental community, 

         7   educators and activists alike as well as concerned citizens 

         8   of whom you will obviously hear from today.

         9                If one message was clear from that testimony, 

        10   it was that everyone believes that clean air must be 

        11   achieved and that to do so it will require leadership, 

        12   innovation, and perhaps more importantly, commitment.  From 

        13   those hearings it was clear that a City policy needed to be 

        14   adopted on this issue.

        15                Earlier this month, the Los Angeles City 

        16   Council did indeed adopt a clean fuel policy which included 

        17   support for programs and regulations that promote clean 

        18   and efficient vehicle technologies.  Based on this newly 

        19   adopted policy, the City Council desired and did 

        20   demonstrate leadership by supporting not only the South 

        21   Coast Air Quality Management District's first three clean 

        22   fleet rules, but also committed to retrofitting all of the 

        23   existing diesel trucks with particulate traps and low 

        24   sulfur diesel fuel.

        25                An important component of that decision, you 

                                       96


         1   might say, is the recognition that in order to address 

         2   nonstationary air quality issues in the Los Angeles basin 

         3   where interstate diesel trucks are abundant, strong state 

         4   and federal standards are needed.  Therefore, the City of 

         5   Los Angeles, again, strongly supports the EPA's proposed 

         6   heavy-duty vehicle standards and the sulfur control 

         7   requirements for diesel fuel.

         8                We take this opportunity to urge you to adopt 

         9   such standards, reducing NOx by 95 percent below the 

        10   current standards and particulate matters is fundamentally 

        11   an important proposal worth our celebrating for those who 

        12   most need protection from air pollution, specifically 

        13   children, the elderly, and those with asthma and other 

        14   respiratory illnesses.

        15                To further encourage municipalities, like that 

        16   of Los Angeles, unique though Los Angeles may be.  To 

        17   encourage us to accelerate the purchase of new and use of 

        18   new, clean vehicle technologies in advance of new standards 

        19   taking effect, it would be my request that we consider 

        20   having the EPA develop a financial incentive program, such 

        21   as grants or a revolving loan program, or whatever else may 

        22   be available to you in that considerable pool of resources 

        23   at your disposal.

        24                Early adopters of advanced clean vehicle 

        25   technologies, such as the City of Los Angeles must overcome 

                                       97


         1   significant uncertainty about vehicle performance, 

         2   reliability and durability which frequently results in 

         3   higher costs, which obviously is discouraging and would 

         4   essentially impose a significant impediment to our 

         5   accomplishing our stated goals and/or objectives.

         6                Demonstration and testing of these new 

         7   technologies are vital to ensuring that the technology is 

         8   feasible.  We have got to know that it works.  The downside 

         9   of it not working is not what any municipality, 

        10   particularly the City of Los Angeles is willing to endure.  

        11   While the City Council is not adverse to facing the 

        12   challenges that may be a precedent in making and it would 

        13   be essentially on a true commitment partnership on behalf 

        14   of the EPA if, in fact, we can begin an earnest 

        15   conversation about how this assistance could or should take 

        16   place or how it might then be provided.

        17                Once again, I would like to thank you for the 

        18   opportunity to speak during the day and for holding one of 

        19   your hearings, one of five, next to the last hearing here 

        20   in the City of Los Angeles.  We appreciate it very much.  

        21                MS. OGE:  Thank you.  Ms. Masters, good 

        22   afternoon.

        23                MS. MASTERS:  Good afternoon.  My name is 

        24   Julie Masters.  I am an attorney with the natural resources 

        25   defense council, which is an national nonprofit 

                                       98


         1   environmental advocacy organization.  I will be sharing our 

         2   time slot today with Gail Ruderman.  On behalf of our more 

         3   than 400,000 members nationwide I would like to thank you 

         4   for this opportunity to comment.  I would also like to note 

         5   that we did submit written testimony at the New York 

         6   hearing.

         7                In our view, particulate matter and NOx 

         8   emissions from diesel exhaust are probably the most 

         9   serious air pollution threat facing many Americans today, 

        10   particularly in Los Angeles and other urban areas.  

        11   Although diesel vehicles make up only 2 percent of all 

        12   vehicles on the road today, they make greater than 50 

        13   percent of a demiparticulate matter and nearly one-third of 

        14   all the smog-forming NOx in urban areas throughout the 

        15   country.

        16                We, therefore, applaud EPA for this ambitious 

        17   proposal to remove sulfur from diesel fuel and to clean up 

        18   the Nation's trucks and buses.  The reasons for concerns 

        19   about diesel exhaust are clear.  Diesel particulates along 

        20   with 40 other chemicals found in diesel exhausts are listed 

        21   with toxic air contaminants by the State of California.

        22                Indeed, diesel exhaust is known to cause a 

        23   vast array of illness, including cancer, heart attacks, 

        24   asthma attacks, and other respiratory problems and it is 

        25   responsible for over 15,000 premature deaths every year.  

                                       99


         1   Los Angeles faces some of the worst health risks from 

         2   diesel exhaust.  The South Coast Air Quality Management  

         3   District recently concluded in its comprehensive two study 

         4   that over 70 percent of the cancer risk in the South Coast 

         5   Air Basin comes from diesel particulates.  L. A. has been 

         6   found to rank first in estimated cancer cases caused by 

         7   lifetime exposure to diesel exhaust.

         8                These proposed regulations if fully 

         9   implemented will have a profound effect throughout the 

        10   country and particularly in urban areas, such as Los 

        11   Angeles, in reducing smog, soot, and the negative health 

        12   impacts caused by dirty diesel exhaust.  Some industry 

        13   representatives have argued that this rulemaking should be 

        14   delayed because they need more time.  But the proposed 

        15   rules already have a seven-year delay built in and six-year 

        16   delay built in for the sulfur trap 2006 and 2007 before the 

        17   industry must comply with stricter standards.

        18                Moreover, technologies that require low sulfur 

        19   diesel fuels exist today and are being commercialized and 

        20   used in Europe and elsewhere.  Every year of delay on 

        21   industry's part means only more avoidable asthma 

        22   emergencies and more avoidable cancers.  As for the 

        23   substance of the proposed rules, first strongly supports 

        24   a national sulfur cap of 15 ppm in mid 2006.  We would 

        25   strongly oppose any level above that cap.

                                       100


         1                Just as lighter gasoline was a barrier to 

         2   cleaner cars the late 1970s, today's high sulfur diesel 

         3   fuel prevents the use of advanced emission control 

         4   technologies.  Nevertheless, Some oil companies still argue 

         5   for a higher 50 ppm sulfur cap citing as reasons the 

         6   potential unavailability of ultra-low sulfur diesel and 

         7   inability to handle the costs associated with producing 

         8   low-sulfur fuel.

         9                These companies claim that the same emissions 

        10   reductions can be achieved with this higher cap.  These oil 

        11   companies represent a very small minority.  First, not all 

        12   oil companies feel that way.  PB and company enforce the 

        13   rule and announce that it will have sufficient quantities 

        14   to sell its 15 ppm sulfur fuel in California next year at 

        15   an incremental cost of only five cents per gallon.  That is 

        16   without the economies of scale benefits of the nation-wide 

        17   sale of fuel.

        18                Moreover, both the engine manufacturers and 

        19   emission controls manufacturers are arguing for a lower 

        20   sulfur cap of 5 ppm because they believe only a lower 

        21   sulfur fuel will ensure the emission reductions that they 

        22   need to comply with the rules.  The California Trucker's 

        23   Association supports the 15 ppm cap because California 

        24   currently has more stringent sulfur requirements and a 

        25   national cap will level the playing field.

                                       101


         1                As for the cost of compliance to the oil 

         2   companies, America's largest oil companies reported nearly 

         3   $12 billion in profits in the first quarter of 2000 alone.  

         4   The cost of the rule are estimated to be $4 billion over 

         5   the entire ten-year span of the rule.  More importantly, we 

         6   are talking about oil companies paying for the cost of 

         7   remedying the harms that their products have caused.  It is 

         8   a cost they can bear and cost they should bear.

         9                As for the cost to the consumers, some oil 

        10   companies said you could not take the lead out of gasoline 

        11   because consumers would never be able to handle the costs.  

        12   They were wrong.  The price of diesel is expected to 

        13   increase only three to four cents per gallon.  This 

        14   increase will not substantiually effect our nation's strong 

        15   economy.  Following, this cap should not be implemented any 

        16   later than by 2006.  Implementation by 2006 is feasible and 

        17   will ensure an adequate supply of fuel by the time the 

        18   emission standards kick in in 2007.  

        19                 MS. RUDERMAN:  Good afternoon.  I am Gail 

        20   Ruderman.  I am a senior attorney with the National 

        21   Resources Defense Council.  First I want to emphasize, as 

        22   Julie did, that we commend EPA for all the work you have 

        23   done in developing this rule and proposing the rule that is 

        24   before us today.

        25                What I would like to focus on in the remainder 

                                       102


         1   of our time are the areas where we strongly recommend that 

         2   you strengthen the rules to help further protect the 

         3   communities and many of these have been pointed out by 

         4   subject of the earlier panels.  

         5                First is we urge you to implement all of the 

         6   portions of the rule no later than 2007.  You have proposed 

         7   a PM standard for 2007, but the NOx levels you have 

         8   proposed are to be phased between 2007 and 2007, and we 

         9   strongly urge you to implement that portion of the rule by 

        10   2007.  This weakens, as you know, our ozone attainment 

        11   level is 2010.  We will have no benefits of your NOx 

        12   portion of the rule by 2010 if the first time -- we won't 

        13   have some sufficient impact of that if it is only phased-in 

        14   from 2007 to 2007 to 2010.  If it fully implemented in 2010 

        15   it will make a big difference in this area.

        16                We believe that the engine manufacturers can 

        17   bring you clean engines that achieve those NOx limits by 

        18   2007.  The Air Resources Board has adopted a rule governing 

        19   transit buses which implements the stringent .2 gram NOx 

        20   cap by 2007.  We believe that if California can do it, the 

        21   nation can do it, and that only covers transit buses.  Our 

        22   hope is that all heavy-duty vehicles will have to comply 

        23   with this limit.

        24                The second has to do with formaldehyde.  The 

        25   Air Resources Board earlier raised with you that their 

                                       103


         1   recommendations to reduce the formaldehyde standard to .01 

         2   grams per brake-horsepower-hour instead of .016.  We too 

         3   join in this recommendation because formaldehyde is a very 

         4   troubling toxic air contaminant and we urge you to reduce 

         5   these levels.

         6                The third issue is in-use compliance, another 

         7   areas that greatly concerns the environmental community.  

         8   Our concern is that you will have these wonderful standards 

         9   designed to protect the community, but under reality if 

        10   those levels are not achieved there will not be the 

        11   significant air protections you would otherwise would have.

        12                And history tells us we have something here 

        13   serious to worry about.  There are significant concerns 

        14   about the deterioration of heavy-duty vehicles in ashtma, 

        15   are greater than the certified emissions.  Also, a variety 

        16   of duty cycles.  We are very concerned that the current 

        17   duties cycle does not accurately reflect that urban transit 

        18   cycle or trash truck cycle or central business district 

        19   cycle.  We were strongly encourage you to implement a 

        20   number of these use elements, including on-board 

        21   diagnostics.  It is a requirement for cars.  It should be a 

        22   requirement for heavy-duty vehicles.

        23                In-use testing.  There already are some tests 

        24   that have been done in-use which would give you a more 

        25   accurate reading of what the real world emissions are and 

                                       104


         1   we would urge you strongly to make that compliant with your 

         2   rule.  The third part is to develop duty cycles which more 

         3   accurately reflect heavy-duty bus and truck emissions and 

         4   various specific duty cycles.

         5                The fourth has to do with offroad vehicles.  

         6   We strongly urge you, as have many others, to extend 

         7   your low sulfur limits of 15 parts per million to operate 

         8   vehicles.  The oil refineries will have to retool their 

         9   operations to create a low sulfur fuel.  We have these 

        10   benefits in the onroad sector.  We should have them in the 

        11   offroad sector as well.

        12                Lastly, fifth, is we strongly urge you to put 

        13   in provisions that push alternative fuel technologies as 

        14   well.  In this region we need more than just cleaner 

        15   diesel.  We also need alternative fuels and we need it now 

        16   because we have very serious toxic problems and very 

        17   serious particulate and ozone problems.  And we encourage 

        18   you to include provisions to have other incentives to push 

        19   alternative fuels.

        20                In conclusion, this is a critical moment in 

        21   history.  You have an opportunity, you have the 

        22   environmentalist, the public health community, the public 

        23   teachers, you have the truckers, you have the control 

        24   manufacturers association, you have them all lined up on 

        25   one side saying go ahead with this proposal and a few oil 

                                       105


         1   companies on the other side saying slow down.  Please don't 

         2   slow down.  Move ahead and adopt the rule.  My time is up.  

         3   We hope that you go ahead and strenghten the rule to 

         4   protect our common Agency.  Thank you.  

         5                MS. OGE:  Thank you.  Miss Garcia, good 

         6   afternoon.  

         7                MS. GARCIA:  Thank you for the opportunity to 

         8   speak to you to today.  My name is Nadine Garcia and I am a 

         9   member of the American Lung Association.  One year ago on 

        10   July 7, 1999 I received a new left lung and with it a new 

        11   lease on life.

        12                Before I had my lung transplant, my condition 

        13   was so bad I can't catch my breath enough even to brush my 

        14   teeth.  I would not have been able to breathe enough to 

        15   come to talk to you today.  Because I know first-hand what 

        16   it is like to gasp for air, I am here to ask you to clean 

        17   up dirty trucks and buses.

        18                I have emphysema caused by a lifetime of 

        19   smoking.  After I was diagnosed with the disease, I spent 

        20   nine years trying to catch my breath.  For a person with 

        21   lung disease, air pollution makes breathing even more 

        22   difficult, if not impossible.  I know that many of my 

        23   friends in the Better Breathers Club suffer terribly when 

        24   the air is bad outside.  Some even have to be rushed to the 

        25   emergency room.

                                       106


         1                If you have never been able to breath, you 

         2   don't know what it's like.  You can't imagine the terror a 

         3   person feels when they open their mouth and still can't get 

         4   any air.  It is a feeling that I hope I would never 

         5   experience again.

         6                But even with my new lung I notice that on bad 

         7   air days I feel the effects.  I have to be careful and stay 

         8   inside if it is real bad.  When a big truck or bus goes by 

         9   I try to avoid breathing in the black smoke because I know 

        10   what it does to the lungs.

        11                Now that I have my new lung I want to protect 

        12   it.  I want to live to see my 14 grandchildren grow up and 

        13   have families of their own and not die prematurely because 

        14   of air pollution.  I want my friends who suffer from lung 

        15   disease to have hope that one day they, too, will be able 

        16   to breathe again.

        17                We breathe some of the worst air in the 

        18   country here in Los Angeles.  We have almost 160,000 

        19   children with asthma.  350,000 adults with asthma.  480,000 

        20   who suffer from chronic bronchitis and 55,000 with 

        21   emphysema.  Even healthy people feel shortness of breath or 

        22   a burning sensation in their chest when the air is 

        23   polluted.  We need to make diesel trucks and buses as clean 

        24   as cars.  Please do not back away from your commitment for 

        25   a low sulfur fuel and new cleaner engines.  If anything, I 

                                       107


         1   urge you to consider moving up your schedule.  Some of us 

         2   don't have seven to ten years to wait for cleaner air.  

         3   Thank you for your time and God bless you.  

         4                MS. OGE:  Thank you for coming and taking time 

         5   from your schedule today to share your views with us.  I 

         6   want to thank you for your patience.  I understand you have 

         7   a medical appointment that you are putting off to come here 

         8   and testify.  Thank you very much.

         9                Mr. Bruce Bertelsen and John Mooney.  Good 

        10   afternoon.  

        11                MR. BERTELSEN:  Good afternoon.  My name is 

        12   Bruce Bertelsen.  I am the executive director of the 

        13   Manufacturers of Emission Controls Association.  MECA is 

        14   pleased to present testimony in support of EPA's proposed 

        15   heavy-duty engine and vehicle standards and highway diesel 

        16   sulfur control requirements.  We believe an important 

        17   opportunity exists to significantly further reduce 

        18   emissions from highway heavy-duty diesel engines by 

        19   utilizing an engineered systems approach that incorporates 

        20   and combines advanced engine designs, advanced emission 

        21   control technology and very low sulfur diesel fuel.

        22                EPA's regulatory initiative recognizes the 

        23   importance of promoting the systems approach and the 

        24   Agency's proposal constitutes a carefully crafted and 

        25   balanced program.  If the program is finalized, it will 

                                       108


         1   result in substantial cost-effective emission reductions.  

         2   Indeed EPA's initiative will bring about the age of the 

         3   truly clean diesel engine.

         4                MECA is a nonprofit association made up of the 

         5   world's leading manufacturers of motor vehicle emission 

         6   controls.  Our member companies have over 30 years of 

         7   experience and a proven track record in developing and 

         8   commercializing exhaust control technologies for motor 

         9   vehicles.

        10                Today I will briefly summarize MECA's position 

        11   on EPA's proposed initiative.  We plan to submit more 

        12   detailed written comments prior to the end of the comment 

        13   period.  I would like to focus my comments on two items.  

        14   First, the technological feasibility of the heavy-duty 

        15   diesel engine standards.  And second, the critical need for 

        16   very low sulfur diesel fuel to meet those standards.

        17                First with regard to the technological 

        18   feasibility.  We believe the emission standards proposed 

        19   for heavy diesel powered heavy-duty engines can be achieved 

        20   in a cost-effective manner and within the lead time 

        21   provided if low sulfur fuel is available.  EPA in it's 

        22   proposal identified two primary candidate technologies for 

        23   meeting the proposed emission limits.  Catalyst-based 

        24   diesel particulate filters for PM control and NOx absorber 

        25   technology for NOx control.

                                       109


         1                Catalyst-based diesel particulate filters are 

         2   commercially available today.  The only remaining 

         3   engineering effort is to optimist the filter systems for 

         4   the specific engine to which they will be applied.  

         5   Worldwide over 20,000 PM filters have been equipped on 

         6   diesel engines in a wide variety of applications.  The 

         7   control efficiency performance and durability of filter 

         8   systems has been demonstrated.

         9                Catalyst-based diesel particulate filters used 

        10   on engines operated on very low sulfur diesel fuel can 

        11   achieve PM and toxic hydrocarbon emissions well in excess 

        12   of 90 percent.  When very low sulfur diesel fuel is 

        13   utilized, the level of particulate emissions is so low that 

        14   it is almost unmeasurable.  Where diesel fuel containing 

        15   less than 10 ppm sulfur has been used, filter technologies 

        16   has demonstrated impressive durability.

        17                Indeed, in some applications filters have 

        18   continued to provide excellent particulate removal after 

        19   600,000 kilometers of vehicle operation.  Development and 

        20   optimization of NOx absorber technology is progressing at 

        21   a rapid rate and our members fully expect with the 

        22   availability of very low sulfur technology, this 

        23   technologys will be commercialized in 2007 for diesel 

        24   engines.

        25                Indeed, the prospect that EPA will require 

                                       110


         1   very low sulfur diesel fuel in a 2006 time frame has 

         2   already stimulated an increased commitment to bring about 

         3   their technology and to apply it to diesel engine 

         4   applications.  Our members see no barriers to this 

         5   technology, again, provided very low sulfur fuel is 

         6   available.  Rather the challenges are engineering in 

         7   nature.

         8                Our members are making the substantial 

         9   financial investment in this technology because they 

        10   believe it will be commercially available.  With regard to 

        11   the need for very low sulfur fuel, meeting a .2 NOx 

        12   standard and .01 PM standard over the full useful life of 

        13   an onroad heavy duty diesel engine as certified on a 

        14   combined transcient steady state certification test 

        15   procedures not to exceed emission standards will be 

        16   challenging.

        17                As previously stated, however, we believe 

        18   these challenges will be met and the ultimate goal of the 

        19   truly clean diesel engine is possible.  But, again, very 

        20   low sulfur diesel fuel will be needed.  While we continue 

        21   to recommend that EPA establish a sulfur cap of 5 ppm, our 

        22   members believe that with a sulfur cap of 15 ppm, emission 

        23   control strategies can be developed to meet the proposed 

        24   emission limits.

        25                Specifically with a 15 ppm cap, our members 

                                       111


         1   are extremely confident that all catalyst-based filter 

         2   technologies will be designed to help meet the .01 PM 

         3   standard, and that NOx absorber technology will be 

         4   optimized to help meet the .2 NOx standard.  At levels 

         5   above 15 ppm sulfur we doubt that the proposed standards 

         6   can be met.

         7                In closing I would like to commend the Agency 

         8   again for its thoughtful and comprehensive proposal.  I 

         9   want to indicate our commitment that if the standards are 

        10   finalized and if EPA adopts the sulfur requirements as 

        11   proposed, our industry is prepared to do our part to ensure 

        12   that the technology will be there to meet the desired 

        13   emission reductions.  Thank you. 

        14                MS. OGE:  Thank you.  Mr. Mooney.  

        15                MR. MOONEY:  Good afternoon.  My name is 

        16   John J. Mooney.  I am the Director of Technology 

        17   Development and Business Systems for the Environmental 

        18   Technologies Group of Engelhard Corporation.  Engelhard 

        19   Corporation appreciates the opportunity to testify at 

        20   today's hearings and fully supports the testimony of the 

        21   Manufacturers of Emission Controls Association.

        22                For 40 years Engelhard corporation has been a 

        23   leading developer and marketer of exhaust emission control 

        24   technologies for on- and offroad, light-duty and heavy-duty 

        25   vehicles, and other mobile and stationary source 

                                       112


         1   applications.  Engelhard Corporation is the inventor of the 

         2   monolithic catalytic convertor and three-way catalyst, both 

         3   of which are the key components of light-duty vehicle 

         4   emission control systems.

         5                More recently Engelhard invented catalytic 

         6   system for hand-held two stroke engines used in environment 

         7   equipment and as well the premier catalytic system that is 

         8   applied to onroad vehicle radiator surfaces which destroyed 

         9   ground level ozone.

        10                For diesel engine emissions control, Engelhard 

        11   Corporation makes and sells diesel oxidation catalysts, 

        12   catalytic soot filters and ceramic coatings for diesel 

        13   engine parts.  Under intense development over the past 

        14   several years is our DPX product line, that is the 

        15   catalytic soot filter and catalytic-based NOx emission 

        16   control technologies, which include lean NOx catalysts and 

        17   NOx adsorber catalysts.

        18                Engelhard Corporation believes that the 

        19   technological challenges posed by the US EPA heavy-duty 

        20   diesel engine 2007 rule proposal can be met.  All that is 

        21   required is to provide a low sulfur diesel fuel with a 

        22   maximum 15 part per million sulfur cap.  I thank you.  

        23                MR. OGE:  Thank you.  Mr. Herwick, good 

        24   afternoon.  

        25               MR. HERWICK:  Good afternoon.  My name is Gary 

                                       113


         1   Herwick.  I am with General Motors Corporation.  I 

         2   appreciate the opportunity to speak to you this afternoon 

         3   on behalf of the Alliance of Automobile Manufacturers.  The 

         4   Alliance is a coalition of car and truck manufacturers who 

         5   sell more than 90 percent of the vehicles in this country.  

         6   Alliance members are in the transportation business and our 

         7   interest in this rulemaking is to preserve diesel engines 

         8   as a power source option for the light-duty market.

         9                As EPA recognizes, diesel engines have 

        10   inherent advantages with higher fuel economy, lower 

        11   greenhouse gas emissions, and a lower evaporative and CO 

        12   emissions.  Diesel is one of the key technologies of the 

        13   future.

        14                Considering concerns about fuel supplies that 

        15   have surfaced in this rulemaking, EPA should also consider 

        16   the potential overall fuel savings that would accrue if the 

        17   automakers are successful in introducing more fuel- 

        18   efficient vehicles.  The PNGV program, Partnership for a 

        19   New Generation of Vehicles Program, estimates that its 

        20   advanced diesel technologies can achieve at least a 40- 

        21   percent gain in fuel economy over today's gasoline 

        22   vehicles.

        23                Our members are working hard to advance the 

        24   state of the art in fuel-efficient diesel technology so it 

        25   will meet the tier two standards adopted last year 

                                       114


         1   knowledge. But the most critical factor in this endeavor is 

         2   the quality of the fuel and especially sulfur.  That is why 

         3   we applaud EPA for taking this crucial first step toward 

         4   enabling the next generation of diesel technology.

         5                First, EPA treated the vehicle and fuel as a 

         6   system for both the existing and future use of fleets.

         7   This perspective is essential for today's sophisticated 

         8   vehicles.

         9                Second, EPA proposed to dramatically reduce 

        10   sulfur to enable the new exhaust aftertreatment technology. 

        11   Numerous research programs are showing how clean diesel can 

        12   be.  Recent bus demonstration programs have diesel buses 

        13   with aftertreatment controls and clean diesel fuel are 

        14   proving as clean or cleaner on buses running on compressed 

        15   natural gas.  This is truly a remarkable achievement.

        16                Third, EPA proposed to introduce a new fuel 

        17   on a nationwide basis with a common deadline and very 

        18   limited exceptions.  This approach is necessary to prevent 

        19   any high sulfur fuel from contamining the sensitive new 

        20   aftertreatment devices that will be used and it will help 

        21   ensure the diesel-powered trucks will continue to be able 

        22   to deliver their goods across the country.

        23                Fourth, EPA proposed introducing the cleaner 

        24   fuel before the new aftertreatment technology must be used 

        25   on heavy-duty vehicles.  To the extent the new cap leads to 

                                       115


         1   early introduction of near zero sulfur fuel, it will 

         2   encourage automakers and suppliers to continue developing 

         3   and investing in this light-duty vehicle option.

         4                As much of a stretch as the tier two standards 

         5   will be for gasoline-powered vehicles, they will be even 

         6   more so for diesel engines.  The fundamental problem as EPA 

         7   recognizes is getting the vehicle's system to meet both the 

         8   NOx and the PM emission standards at the same time.  Fuels 

         9   must be essentially sulfur free to allow diesel vehicles to 

        10   operate their cleanest throughout their useful life.

        11                That is why automakers and engine 

        12   manufacturers from around the world have endorsed this 

        13   level in their recently updated worldwide fuel charter 

        14   which we have submitted for the record and which is also 

        15   available on our website.  The charter defines sulfur-free 

        16   as between five and ten parts per million sulfur.  Our 

        17   development data to date sports these levels.

        18                Data from the Department of Energy and the API 

        19   and Engine Manufacturers Associations continuing DECSE 

        20   Control Program, Diesel Emission Control Sulfur Effects 

        21   program, also supports this definition of sulfur-free 

        22   fuels.  The Manufacturers of Emission Controls Association, 

        23   which we just heard from, also continues to recommend 5 

        24   ppm.  Notwithstanding its support for the proposed 15 ppm 

        25   sulfur cap.

                                       116


         1                Many people are assuming that the 15 ppm cap 

         2   may lead to an average sulfur level of as low as seven 

         3   parts per million with most of the fuel having less than 10 

         4   ppm due to the respected compliance margin.  We are less 

         5   certain of this outcome.  Rather we expect refiners may 

         6   learn how to shrink their compliance margins as our 

         7   manufacturers have done in new submissions compliance.

         8                This could lead to more fuel above the 10 ppm 

         9   level which could seriously poison the new aftertreatment 

        10   devices.  In addition to sulfur, EPA should also adjust 

        11   other fuel properties as recommended in the worldwide fuel 

        12   charter.  We will discuss these issues further in our 

        13   written comments.

        14                We think five to ten parts per million is 

        15   doable.  After all, refiners are making this fuel today in 

        16   Sweden and elsewhere, as others have certified throughout 

        17   the hearing process.  Other countries are moving quickly to 

        18   ultra-low sulfur fuels.  Just last year, Germany adopted a 

        19   tax incentive program to encourage fuels with less than 10 

        20   ppm sulfur by 2003.

        21                In May the European union announced it intent 

        22   to study a revision of its 2005 sulfur regulation to 10 

        23   parts per million for all of Europe.  The key point is that 

        24   refiners know how to make clean diesel fuel.

        25                At this point I would like to recognize Tosco 

                                       117


         1   for its support of EPA's proposed sulfur limit, and I'd 

         2   also like to recognize ARCO and Equilong for manufacturing 

         3   smaller quantities of this fuel for demonstration programs. 

         4   Proper incentives and market demand will bring this fuel to 

         5   market even faster than public estimates predict.

         6                We are at GBA to focus on its incentive 

         7   package to encourage to marketplace the make the new 

         8   cleaner fuel widely available as soon as  possible.  We 

         9   have heard concerns expressed about the business risks and 

        10   the potential supply shortages.  We believe we understand 

        11   the business risks associated with increasingly stringent 

        12   mobile source emission regulations.

        13                Indeed, we believe the new technology forcing 

        14   tier two standards constitute an even greater business risk 

        15   for a industry.  We believe that fuel supplies will be 

        16   driven more by profitability and other factors and not 

        17   simply by the cost of this regulation.

        18                We have come a long way in the debate over 

        19   sulfur.  Just two years ago automakers petitioned EPA to 

        20   reduce the sulfur content of gasoline to the levels in 

        21   California or even lower.  Today just about everyone 

        22   accepts the critical role that fuels and sulfur play in our 

        23   national environmental policy.  The issue is no longer 

        24   whether to reduce sulfur.  It is not even that near zero 

        25   sulfur fuels will eventually be needed.  Rather, it is when 

                                       118


         1   they will be available to enable a new technology.

         2                For our part Alliance members want to bring 

         3   advanced technologies, such as the turbo-charged 

         4   direct-injection engine and hybrid-electric diesel vehicles 

         5   that are described in our new brochure, Advanced 

         6   Technologies, that you can all take a look at in our media 

         7   room just around the corner to the point where they can 

         8   operate cleanly and meet consumer demands.

         9                The proposed 15 ppm cap on diesel sulfur is an 

        10   essential step forward and will provide incentive to 

        11   continue developing and investing in clean diesel 

        12   technology to make it one of our key options for the 

        13   future.  Thank you.

        14                MR. OGE:  Thank you.  Mr. Keller.  Thanks for 

        15   you patience. 

        16                MR. KELLER:  Good afternoon.  My name is Glenn 

        17   Keller and I am the Executive Director of Engine 

        18   Manufacturers Association.  Among EMA's members are the 

        19   principal manufacturers of the truck and bus engines 

        20   covered by today's proposal.  Up front I want to make it 

        21   completely clear that EMA supports EPA's proposal as it 

        22   prescribes a path for achieving clean diesel technology.

        23                As we sit here today, we are on the verge, the 

        24   critical turning point, of something spectacular.  We have 

        25   within our grasp the potential to dramatically reduce the 

                                       119


         1   emissions of the most fuel-efficient, reliable and durable 

         2   source of motor power available today that serves as the 

         3   backbone of our nation's transportation and delivery 

         4   system.  The diesel engine can be as clean as, if not 

         5   cleaner than any other power source.  It is capable of 

         6   meeting, emission standards significantly below today's 

         7   levels.  And let me remind everybody that the emissions 

         8   from today's diesel engines already have been reduced by 

         9   over 90 percent.  Yet we recognize that more, much more, in 

        10   fact, can and should be done to clean up diesel engines.

        11                The key to accomplishing this feat is to 

        12   greatly reduce the sulfur content of the diesel fuel.  

        13   Further reductions in diesel engine emissions are going to 

        14   require much more than new engine designs and technologies. 

        15   As EPA appropriately recognizes, future remission 

        16   reductions require a systems approach involving the engine, 

        17   aftertreatment and the fuel to support them.  In a sense 

        18   the future of clean low-emitting trucks and buses rests on 

        19   a three-legged stool.  The stool will fall without all 

        20   three legs in place.  One of those legs, fuel qualify, 

        21   enables the technology necessary to make the other two legs 

        22   stand.

        23                Without removing essentially all sulfur from 

        24   diesel fuel, advanced NOx aftertreatment devices will not 

        25   be feasible.  Advanced PM aftertreatment will be 

                                       120


         1   prematurely poisoned, and engines will be exposed to 

         2   excessive wear, increased maintenance costs, and impaired 

         3   durability.  I cannot emphasize enough the critical 

         4   importance of ultra-low sulfur fuel as the enabler for 

         5   achieving substantial NOx and PM reductions.  Improved 

         6   diesel fuel also has a role in responding to potential 

         7   health effects concerns.

         8                Ultra-low sulfur fuel lowers the total mass of 

         9   particulate from not just from the new engines but from the 

        10   entire fleet, and it enables the retrofit of known 

        11   aftertreatment technologies, such as oxidation catalysts 

        12   and catalyzed particulate filters, which can reduce the 

        13   organic and carbonaceous components of PM emissions.  

        14   Moreover, limiting the sulfur compounds emitted into the 

        15   air provides direct benefits in reducing the inventory of 

        16   harmful fine particles of sulfate in the air we breathe. 

        17   Sulfur and fuel is a poison.  It ends up compromising our 

        18   air and also acts to compromise the performance of these 

        19   advanced aftertreatment devices we see.

        20                We applaud EPA for recognizing the critical 

        21   role of fuel sulfur.  We strongly support the need for a 

        22   uniformed nationwide low sulfur fuel standard with a hard 

        23   cap on sulfur content.  Regional differences in sulfur 

        24   content will not allow the systems approach necessary to 

        25   meet EPA's very stringent NOx and PM emission levels.  

                                       121


         1   Further, a hard cap on sulfur is critical.  Averages simply 

         2   will not work.  They are difficult and impractical to 

         3   enforce.  Moreover, the engine and aftertreatment legs of 

         4   the stool must be assured of never being exposed to high 

         5   sulfur fuel.

         6                In our view, EPA's proposal for a 15 ppm limit 

         7   does not go far enough.  And fuel improvements should not 

         8   only be limited to trucks and buses.  Nonroad fuels must 

         9   also be improved.  We are aware of the various arguments 

        10   raised by the oil industry against improving fuel quality.  

        11   They don't want to reduce sulfur to even 15 ppm, let alone 

        12   to lower levels.  Nation-wide ultra-low sulfur fuel can -- 

        13   no, must -- be achieved and it can be done cost effectively 

        14   without economic harm to either the oil industry or to the 

        15   trucking industry, the users of both our engines and the 

        16   oil industries fuel.  We will provide detailed comments 

        17   on the need for ultra-low sulfur fuel in our written 

        18   submission.  

        19                So today we are enthusiastic, excited and 

        20   very hopeful about the future of the diesel engine and our 

        21   industries' ability to produce reliable, durable, fuel 

        22   efficient, high-performing diesel engines that also are as 

        23   clean or cleaner than any other power source.  There are 

        24   issues which will require a great deal of work by 

        25   manufacturers and the Agency.  But it is no longer a 

                                       122


         1   question of if.  Give us fuel improvements, sufficient 

         2   time, compliance flexible and testing certainty, and 

         3   tremendous emission reduction can be achieved.

         4                If you have any questions, I would be pleased 

         5   to answer them.  

         6                MS. OGE:  I have two questions for Mr. Gary 

         7   Herwick.  In an effort to move forward, because we are 

         8   running late, I would appreciate it if you could submit any 

         9   written comments that you have for the record.  You made 

        10   two statements that I wanted to follow-up.  One had to do 

        11   with addressing other parameters with the fuel with sulfur. 

        12   We would encourage the Alliance to provide any data that 

        13   you have that will suggest the environmental benefits and 

        14   the effects of aftertreatment technology.

        15                The second issue that you mention in your 

        16   testimony is for the Agency to consider incentives in order 

        17   to see that cleaner fuels are introduced in the marketplace 

        18   earlier than 2006 time frame.  We would appreciate any 

        19   specific recommendations that you have on this issue.  

        20   Thank you.                 

        21                MR. HERWICK:  You are not asking me to respond 

        22   now.  You would like written comments on those?  

        23                MS. OGE:  Please.  Any questions for the 

        24   panel?  I would like to thank you all for coming forward 

        25   and also for being extraordinarily patient.  We have more 

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         1   people coming forward to testify than we had planned.  We 

         2   are willing to go through our lunch and our dinner as long 

         3   as it takes to listen to everybody who has a statement to 

         4   make for the record.  Thank you very much.

         5                I will call the next panel.  We are about an 

         6   hour behind schedule.  I hope that we can pick up some 

         7   speed here.  I would like to call Reverand Terry Van Cook. 

         8   Mr. Ron Milan, and I believe he is accompanied by Ms. Nina 

         9   Solomon.  Ray Edrasian.  Bahram Fazeli.  Mr. Greg Vlasek.  

        10   Dr. Kirk Murphy.  Miss Vanessa Lynn.  Miss Cynthia Rojas.  

        11   And also I would like to call the following individuals if 

        12   they are still here, please come forward.  Mr. Bob Massman, 

        13   Mr. Mike Williams and Mr. Bill Burgemaster.  Please print 

        14   the names on the cards placed in front of you.

        15                Reverand Van Cook, welcome and good afternoon.

        16                MR. VAN HOOK:  I am Dr. Terry Van Hook, Pastor 

        17   of the Culver-Palms United Methodist Church in Culver City, 

        18   California.  I am here both as a private individual but 

        19   also as someone who represents a large group of individuals 

        20   concerned about this issue.  I do want to thank you all, 

        21   especially the EPA, for the 30 years of hard work work to 

        22   clean up the air the other 

        23   areas of pollution and for coming and meeting us here in 

        24   Los Angeles.

        25                I remember the years here in L.A. when the 

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         1   smog season was in force and it seemed like the San Gabriel 

         2   Mountains had been mysteriously moved away for the summer.  

         3   Those days are fewer.  We heard testimony on that earlier.  

         4   I thank God for that.  And also I thank God for your 

         5   working for the State of California and for all the people, 

         6   the enumerable people, who have worked for over 30 years to 

         7   wrestle with these environmental issues.

         8                I also remember that it took a child choking 

         9   in an airplane for me to wake up and see what was going on.

        10   In the days before the airliner's smoking ban, a man 

        11   smoking a cigar in coach put a nearby child into an 

        12   asthmatic fit.  But the tearful mother did not get through 

        13   to him to have him somehow stop or even move.  He was 

        14   completely unconcerned over the consequences and refused to 

        15   extinguish his cigar.  The mother's tearful plea had no 

        16   effect.  He saw nothing wrong.  He didn't feel that he 

        17   wanted to waste the money he had spent.

        18                Finally, a very courageous flight attendant 

        19   came and confronted a man with a sick child sitting behind 

        20   him, and that finally resulted in the cigar being 

        21   shamefully put out.  Your Agency has taken on the role of 

        22   being such a courageous public servant, and I thank you 

        23   again for that.

        24                Today the issue is sulfur and the other 

        25   pollution in diesel fuels that are before us.  I ask you to 

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         1   look simply beyond being that public watch dog and to see 

         2   instead the larger picture of what we are engaged in.  A 

         3   hundred years ago when the internal combustion engine was 

         4   new and exhaust gases were just invisibly mixed with the 

         5   dust that followed with the wait behind the car or truck, 

         6   there was no knowledge of the immense damage to lungs and 

         7   health that such pollution would cause.

         8                Yet even then anyone living would have been 

         9   morally appauled as someone came and proposed that had we 

        10   start an industry that would end up dumping 3 million tons 

        11   per year of dangerous particulate matter through our air as 

        12   a result of their business.  This, as we have learned, is 

        13   what the current diesel engines, as improved as they have 

        14   been -- and I do recognize that as well -- contribute to 

        15   our atmosphere today.

        16                Such a proposal like that would be shamefully 

        17   laughed out of town, especially when we learned that a high 

        18   percentage of those particulates end up in our children's 

        19   lungs.  It would be as if we lit up 20 cigars in a closed 

        20   cabin of coach in an airline.  We have made great strides 

        21   in undoing the damage that we ourselves have done over the 

        22   last hundred years.  But the final goal will still elude us 

        23   if we continue to think only of the economic cost to the 

        24   producers of the oil and the economic cost of the refining 

        25   and other processes that go into reducing sulfur.

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         1                If we ignore the economic and human and even 

         2   spiritual cost to the consumers of this pollution, and, 

         3   yes, there are consumers of pollution.  We can easily call 

         4   everyone, the men, women and children, who have to follow 

         5   along behind the particulate-generating engine, an 

         6   unwitting consumer of pollution.  We can easily call those 

         7   who live alongside the roads that particulate-generating 

         8   engines travel unwitting consumers of pollution.

         9                We can easily call those who play and work 

        10   downwind, sometimes miles downwind from the highways and 

        11   byways of the particulate-generating race on unwitting 

        12   consumers of pollution.  All these sources of pollution 

        13   often seem uneffected by the waste stream that they leave 

        14   in their wake and would rather save a few pennies per mile 

        15   than be morally responsible for their actions.

        16                The unwitting consumers of pollution are all 

        17   the unseeing human beings of greath worth that pay the cost 

        18   of those few pennies with their health.  The reality of the 

        19   big picture is that every engine, every industry that has 

        20   an exhaust pipe or has a smoke stack or some other way of 

        21   venting pollution to the air, is using the air we breathe 

        22   as their free garbage dump.  They continue to take 

        23   advantage of the fact that no one owns the air.  They are 

        24   exploiting a God-given resource as a cheap and inexpensive 

        25   way to expose of their unwanted chemicals.  It is only fair 

                                       127


         1   that we ask this to stop.

         2                I know you know this.  We all know this.  It 

         3   is just that we lose sight of it at times.  I hope that 

         4   what we do here today and in the continuing efforts of the 

         5   EPA to return to a common agreement, a common sense 

         6   conclusion that we are in this all together, we are a 

         7   community together.  Not a group of individuals that need 

         8   to be policed or coerced into doing the right thing.

         9                That we are a nation seeking to live in peace 

        10   and justice in respect and dignity for each other.  That 

        11   whether we are young or old, rich or poor, none of us 

        12   should be required to breathe the byproducts of someone 

        13   else's industrial process and, therefore, pay a personal 

        14   cost of disposing of the waste that they create.  That's 

        15   the bigger picture before us today.

        16                As members of the EPA, you have the power to 

        17   set the policies to hold us to the goals and dreams of 

        18   clean air, not just partially clean air.  To have the 

        19   picture of the use of each other completely in our past and 

        20   to have the picture of the use of nature as places to dump 

        21   our byproducts eradicated.

        22                I know that God weeps when God sees us using 

        23   each other in such disrespectful and destructive ways.  I 

        24   ask you and all who are here today to remember our sacred 

        25   words from God and our honorable covenant as Americans, to 

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         1   take each other into account, to care for each other as our 

         2   nation has tried to do in its whole history.  I ask to you 

         3   work hard to restore not just our land and air water, but 

         4   to restore our morals, spiritual and physical health as 

         5   well.

         6                That is the higher calling of the EPA.  It may 

         7   not be written in your mission statement but it must be 

         8   written on your hearts.  We can be moral leaders as well as 

         9   political leaders.  The two are not exclusive.  I know you 

        10   know this.  Don't lose your focus.  Don't let us down.  

        11   Thank you very much.  

        12                MS. OGE:  Reverand Van Cook, thank you very 

        13   much.  I would like to call Mr. Bahram Fazeli.

        14                MR. FAZELI:  Good afternoon.  My name is 

        15   Bahram Fazeli.  I am representing Communities for a Better 

        16   Environment.  Communities for a Better Environment is a 

        17   state-wide environmental health and justice organization 

        18   that relies on organizing legal advocacy and technical 

        19   research to assist communities in voicing their demands 

        20   and influencing policies that influences their health.  

        21                We belong to a rapidly growing local, 

        22   national, and international movement that demands corporate 

        23   responsibility.  The majority of our members who living in 

        24   lower-income communities of color have become increasingly 

        25   aware that they are carrying more than their fair share of 

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         1   pollution in their communities.  People of color and lower- 

         2   income communities have become increasingly aware that they 

         3   are targeted by stationary and mobile sources of pollution, 

         4   with diesel being among the worst of these toxic air 

         5   components.

         6                Particularly children, pregnant women, elderly 

         7   and people with poor health who live along the Alameda 

         8   Corridor in the South Coast Basin have and will continue to

         9   suffer the increasing effects of pollution, especially 

        10   diesel traffic, infecting them with acute and chronic 

        11   circulatory and respiratory illnesses.  There's a section 

        12   in the City of Highland Park where our offices are located 

        13   that the district the people refer to as Asthma Town 

        14   because there are proportionately high rates of asthma 

        15   among the children.

        16                People of color in lower-income communities 

        17   and especially children continue to suffer because we as a 

        18   society rely on an economic model of growth that is  

        19   polluter-friendly.  The regulatory vision of those who set 

        20   public policy has long been distorted by an obsolete model 

        21   of growth that neglects the respects of the responsible 

        22   growth on the health of humans and the environment.

        23                We are yet to see the implementation of the 

        24   model that internalizes the real cost of pollution.  A 

        25   model that emphasizes prevention over last-minute district 

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         1   measures secure, and a model that emphasizes welfare of 

         2   human health over rights of polluters to expand.  Too long 

         3   we have lived by the motto of expand now and breathe later. 

         4   And too long communities of color and especially children 

         5   of these communities have become the yellow canaries of bad 

         6   economic habits of polluters that seem to only profit a 

         7   few.

         8                We are glad to see that EPA is taking a series 

         9   of steps in improving the health of our communities.  We 

        10   commend the EPA for what we consider the first of steps in 

        11   a series of steps that needs to be taken to improve the 

        12   quality of air in our communities.  We support the 

        13   amendments that were proposed by National Resources Defense 

        14   Council and other environmental groups to strengthen the 

        15   rule and we urge EPA to implement the rule without delay.  

        16   Thank you.  

        17                MR. OGE:  Thank you.  Mr. Ron Milan, welcome.  

        18                MR. MILAN:  My name is Ron Milan.  I am the 

        19   Executive Director of the Los Angeles County Bicycle 

        20   Coalition.  We are a coalition of cyclists throughout L. A. 

        21   County working to make the streets safer and more enjoyable 

        22   for people to ride a bike, both as an alternatives means of 

        23   transportation and as a means of recreation.  Oftentimes 

        24   they are both recreation and transportation.

        25                We are working really hard to make the streets 

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         1   safe for cycling and we are really thrilled about this 

         2   proposal.  We support it.  And we are supporting it because 

         3   cyclist bear a brunt of this problem of fuels as well.  I 

         4   can speak on behalf of cyclists.  I work downtown and 

         5   there's nothing worse than biking on the streets and being 

         6   behind one of the diesel-spewing buses of the MTA.  I play 

         7   a little game.  I ride behind it and I try really, really 

         8   fast to get ahead of the bus and I then I have some fresh a 

         9   for I little bit, and sometimes the bus gets ahead of me 

        10   and I have to be behind the bus again.  It is dreadful.

        11                We are working to make the streets not only 

        12   safe for cycling, but the fewer buses we have that are 

        13   polluting, the more people we think will get out there and 

        14   bicycle and not use any fuel at all.  Once cyclists have to 

        15   sit behind the buses and also in general the air quality 

        16   make it tough for cycling.  Biking on a day that has too 

        17   much smog, too much air quality problems is not fun either, 

        18   and it keeps a lot of people indoors.

        19                We believe that L.A. County has a lot of 

        20   potential being a great place to bike.  We have flat 

        21   terrain and great weather year round.  Too often the air 

        22   quality is no good and being behind buses is no good.  We 

        23   applaud your proposal.  We think it can be strengthened and 

        24   we agree with NRDC who has put forth some other suggestions 

        25   and amendments.  So not only should we pass this proposal 

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         1   with the amendments, but let's implement it and we would 

         2   like to help you implement it.

         3                Thank you so much for doing all this.  If I 

         4   have any time left, I think there's a Nina Solomon.  I 

         5   would like to donate my time to her.  

         6                 MS. DRAY:  Hello.  Good afternoon.  My name 

         7   is Dr. Rae Dray (phonetic) and I am a toxicologist and 

         8   biologist.  I am actually speaking on behalf of a 

         9   Neighborhood Association.  We call ourselves Neighbors for 

        10   a Safe Environment, NASE.  We would like to take this 

        11   opportunity to bring to the attention of the EPA about a 

        12   situation in our residential community.

        13                This is in the west side of Los Angeles.  

        14   There is an oil and gas drilling site in the midst of this 

        15   residential area.  In fact, the facility is within hundreds 

        16   of feet of four schools, so it is a neighborhood where 

        17   there's a great concentration of children, there's a great 

        18   population of the elderly, and it is a walking community.  

        19   There are a lot of people that traverse the streets.

        20                This oil company, Briper Energy Company, has 

        21   filed an EIR and is proposed to expand their facilities.  

        22   And their guise of expansion is basically in terms of what 

        23   they are calling a modernization.  In fact, they are using 

        24   a diesel-powered rig which is on a mobile platform to do 

        25   their oil drilling and maintenance work.  They want to get 

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         1   rid of this diesel rig and transform it into an electric 

         2   rig.

         3                However, in the process they are going to be  

         4   going to a 365-day a year schedule so that there will be 

         5   lots of diesel trucks that are coming into the facility and 

         6   adding this diesel pollution to the area.  We definitely 

         7   applaud what the EPA wants to do in terms of cleaning up 

         8   the diesel.  If this diesel rig that they currently have 

         9   could be cleaned up, they would probably not have to do 

        10   this expanded operation.

        11                The other point that we need to bring to your 

        12   attention is that even though the EPA has categorically 

        13   stated up front that this is a major polluting facility and 

        14   has urged the local agencies to enforce and issue permits, 

        15   the local agencies do not because it falls through the 

        16   cracks.  Since this is a mobile unit, it is not permanent, 

        17   The AQMD does not have a rule.  The EPA is not being 

        18   forceful enough, we feel, in demanding that the local 

        19   agencies make rules to, in fact, enforce these types of 

        20   facilities.

        21                I would like to ask Nina Solomon to give you a 

        22   few more remarks.

        23                MS. SOLOMON:  The only thing that I wanted to 

        24   add is that there is often a conflict between local 

        25   government and business.  In our case, there's a perceived 

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         1   notion that you need to appear to be pro-business in Los 

         2   Angeles, and as a result we have suffered greatly because 

         3   of that.  We are hoping along with your proposal will come 

         4   enforcement.

         5                One of the major issues always is enforcement, 

         6   and in this case this particular facility is considered 

         7   both stationary and nonstationary.  I think it is unique, 

         8   perhaps, the concept is unique.  As a result it falls 

         9   through all the cracks for enforcement.  We are hoping that 

        10   you will look at that aspect as well.  

        11               MR. OGE:  I would like to thank you both of 

        12   you.  If you could give your names and phone number to the 

        13   receptionist, I will have our regional staff that are 

        14   responsible for the State of California to call up both of 

        15   you.  Thank you.

        16                Mr. Greg Vlasek, good afternoon.

        17                MR. VLASEK:  Thank you.  Good afternoon.  I 

        18   am Greg Vlasek.  I represent the California Natural Gas 

        19   Vehicle Coalition in Sacramento.  We are an advocacy 

        20   coalition of 35 fuel providers, light-duty vehicle 

        21   manufacturers, fleet users of natural gas vehicles, and 

        22   heavy-duty engine manufacturers and technology companies.

        23                We are here today in the house on the debate 

        24   over diesel to support the proposed EPA diesel sulfur 

        25   reduction and heavy-duty engine standards as proposed and 

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         1   the like many of the prior speakers we see opportunities to 

         2   actually strengthen and improve upon these proposed 

         3   regulations.

         4                The Natural Gas Vehicle Industry is here 

         5   because these new future engine standards level the playing 

         6   field for other maturing technologies that can compete with 

         7   diesel.  That includes natural gas engines and trucks and 

         8   future technologies, such as fuel cells, hybrid 

         9   technologies, and so on.

        10                We are talking about leveling the playing 

        11   field in two ways that have already been touched on.  One 

        12   is geographically.  California is already committed to 

        13   starting down this path to clean diesel fuel and cleaner 

        14   trucks.  From a competetive standpoint from our trucking 

        15   industry, it is very important that this become a national 

        16   program because we do have so many trucks coming in from 

        17   other parts of the country, and if the standards are not 

        18   equalized at some point, there is no hope whatsoever that 

        19   California nonattainment areas will be able to achieve 

        20   attainment in the time frame required.

        21                The other leveling effect is in the area of 

        22   technology.  There has been a big debate here and that 

        23   debate will continue over what is the appropriate sulfur 

        24   content of diesel fuel in order to be able to apply these 

        25   new technologies.  Should it be 50, should it 20, 15, 10, 

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         1   5, where should it be.  I even heard 5 to 10 ppm sulfur 

         2   characterized as sulfur-free diesel fuel for the first 

         3   time.  I am not sure exactly where that leaves natural gas.

         4                Natural gas in commercial pipeline grade that 

         5   ranges from about two to four ppm sulfur.  That is with no 

         6   incremental processing cost to either the fuel provider or 

         7   ultimately to the consumer.  What that does is it enables 

         8   natural gas technologies to take advantage of all these 

         9   diesel aftertreatment technologies that are being discussed 

        10   and to do so in a way that is very cost effective.

        11                That is appropriate because currently natural 

        12   gas engines and trucks have such a very minute fraction of 

        13   the market.  There in no way that we can develop those 

        14   technologies separately without the diesel engine 

        15   manufacturers stepping up to do the development.  But 

        16   anything that they do to improve on diesel engines is going 

        17   to be transferrable to natural gas engines and make them 

        18   cleaner as well.

        19                Along with ARB and the California Trucking 

        20   Association and South Coast AQMD, we would agree that we 

        21   ought to be really talking about inclusion of all diesel 

        22   fuel, not just onroad truck fuel.  As the ARB pointed out 

        23   at the beginning of the day today, up to 55 percent of the 

        24   NOx inventory is from offroad sources.  So why when we have 

        25   the opportunity in a seven-year lead time to effect new 

                                       137


         1   fuel standards and new technology standards, why would we 

         2   not be looking at agricultural engines, construction 

         3   engines, locomotive engines, marine engines, and so on that 

         4   all contribute very dramatically to the inventory in 

         5   California and other nonattainment areas, particularly in 

         6   the Central Valley where I come from.

         7                We would also support the concept of a more 

         8   aggressive phase-in schedule.  These new engines and new 

         9   fuel are needed sooner rather than later for health 

        10   reasons.  We believe in too much stock is currently being 

        11   placed, particularly here in California, in the possibility 

        12   of low sulfur diesel retrofit technologies.  While some of 

        13   those things do appear to show promise, we have very strong 

        14   concerns about how well those things will perform in use 

        15   when there is no engine manufacturer to back up the 

        16   combined engine and aftermarket retrofit technology being 

        17   properly integrated.  We don't see anybody stepping up to 

        18   fill that void to make sure that the retrofit technologies 

        19   really do work in use.

        20                The Engine Manufacturer's Association 

        21   testified here today and testified elsewhere that diesel 

        22   engines can be as clean or cleaner than any other power 

        23   source.  I presume that to include natural gas 

        24   technologies, fuel cells and the like.  I think those 

        25   familiar with engine certification data and in-use 

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         1   emissions data as opposed to lab data know that diesel 

         2   engines have a long way to go and natural gas is the clear 

         3   leader in heavy-duty engines emissions technology.

         4                If the EPA says that diesel manufacturers can 

         5   be cleaner than natural gas and fuel cells, let's hold them 

         6   to it with these regulations and give them the fuel they 

         7   need to achieve that.  The petroleum industry's argument 

         8   seems to be reducing public cancer risk is not worth the 

         9   cost of retooling their infrastructure to supply that clean 

        10   fuel.  And the vehicle control technologies might not work 

        11   anyway.  They seem to have very little confidence in the 

        12   advanced diesel technologies.

        13                If that's true, it is all the more reason for 

        14   EPA to adopt these new standards and to encourage heavy- 

        15   duty engine manufacturers to accellerate their 

        16   commercialization of natural gas engines and other 

        17   technologies that can delivery the results and can deliver 

        18   the clean fuel.  Remember I said natural gas is already 

        19   below any proposed standard for sulfur and diesel.  Three 

        20   ppm with no added cost to the provider or the consumer.

        21                Finally, I would like to interject some 

        22   caution on the selective catalytic reduction technology 

        23   that has been discussed as a heavy-duty truck emission 

        24   strategy.  CTA, California Trucking Association, hinted 

        25   earlier at some of the practical problems associated with 

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         1   this.  Selective catalytic reduction technology, that is 

         2   using ammonia or urea as a reagent in the catalyst process 

         3   to reduce NOx has been used in stationary engine 

         4   applications by California gas utilities for nearly 20 

         5   years.  About as long as I have knowledge in the natural 

         6   gas industry.

         7                You need for watch this very closely and to 

         8   talk with your stationary technology people about this 

         9   because this is a very, very sensitive technology that 

        10   requires extremely careful control that is hard to achieve 

        11   in the real world and very hard to achieve with a transient 

        12   mode engine.  The predictive modeling for proper injection 

        13   is very hard to maintain.  We found that even on stationary 

        14   engines that do have predictable load shifts, unlike a 

        15   diesel truck or a bus, as was testified earlier, this 

        16   technology can actually quite easily, if not properly 

        17   managed or monitored, can result in increases in the 

        18   emissions of toxins and NOx, aside from the practical 

        19   problems of using that kind of material.

        20                Again, in-use compliance associated with that 

        21   technology is an issue of very large concern because of the 

        22   reasons mentioned.  That's all I have.  I appreciate your 

        23   time.  I would be happy to answer any questions you might 

        24   have about natural gas technology.  

        25                MS. OGE:  Thank you for coming.  I would like 

                                       140


         1   to welcome Silene, Julia and Erasmo.  Good afternoon.  One 

         2   of you will speak or all of you?  If you can state your 

         3   name for the record and you can proceed.  

         4                MS. PARAMEDEZ:  Good afternoon.  My name is 

         5   Silene Paramedez.  I represent Beaumont High School 

         6   Environmental Club.  By being in an environmental club we 

         7   are trying to make a difference in our community by getting 

         8   involved in as many activities as we can.  Today we found a 

         9   problem which is air pollution.  Air pollution is caused by 

        10   power plants and multiple usage of cars.

        11                The one way we can prevent air pollution is 

        12   there are a lot of people that use cars so we can use 

        13   carpool cause there's a lot of people that live near each 

        14   other and it will make a difference if we carpool.  We key 

        15   share in carpool together.  Why have more pollution if we 

        16   can travel to one place together.  We are trying to tell 

        17   people that air pollution is not healthy and we should make 

        18   a difference and try to prevent it.  

        19               MR. OGE:  Thank you, Silene.  

        20               MR. FUENTES:  Good afternoon.  My name is 

        21   Erasmo Fuentes and I am also a Belmont Student and also a 

        22   member of the Environmental Club.  As you all know, I would 

        23   like to thank you, the EPA for giving me the chance to 

        24   speak here today.  Pollution is a big problem in your 

        25   community.  Everyday children with asthma are being sent to 

                                       141


         1   the emergency room because of severe asthma attacks.

         2                I know because I had experienced a couple of 

         3   asthma attacks in the past.  One of the reasons the doctors 

         4   gave my parents was because of the high smog and the 

         5   pollution in the air.  I would like all of you to make 

         6   stricter regulations in the pollution because it is needed. 

         7   It is no fun having asthma.  I would also like to thank the 

         8   EPA for trying to make the difference in the lives of 

         9   asthmatics.  

        10               MR. OGE:  Thank you, Julia.  Good morning.  

        11               MS. MUNOZ:  Good afternoon.  My name is Julia 

        12   Munoz from Belmont High School.  I represent not only 

        13   myself but also I represent the future.  In other words, if 

        14   pollution continues, there's practically no future.  Many 

        15   of you have experiences that extremely heat has been 

        16   increasing, that is given to the air pollution and all 

        17   that.  It changes our climate.  It not only changes our 

        18   climate now but will eventually change the future.  I 

        19   would love to be in the future and I am planning for it.

        20                However, the air pollution has prevented me 

        21   for doing so.  I would also like to talk about have you 

        22   ever experienced being in the back of a school bus.  When 

        23   the school bus takes out it bursts out a lot of gas and 

        24   contamination out of its pipes.  Once when I was a little 

        25   girl I was in the back of a bus and it was a bad 

                                       142


         1   experience.

         2                In the future that's how we are all going to 

         3   be breathing.  Imagine yourself being in the back of a 

         4   school bus breathing that air.  Basically in the future the 

         5   way I see it as is wearing gas masks all the time when we 

         6   go out.  Even to go out like we say now to breathe some 

         7   little air, we have to grab our gas mask and go outside.

         8                In programs such as the environmental program 

         9   at our school and also AOP is trying to make a difference.  

        10   However, we still need stricter laws.  We all enjoy the 

        11   car.  I do enjoy my car and I don't really enjoy walking.  

        12   However, if we don't start doing something about it, we 

        13   have to realize we are destroying it.  We are destroying 

        14   our environment.  But we might think we are that doing bad 

        15   to ourselves, but we actually are.  We are not making a 

        16   future.

        17                Thanks a lot for us all of us who are trying 

        18   to make a difference.  I know I will be trying to make a 

        19   difference as well in the future.  Thanks a lot for hearing 

        20   me.  

        21               MS. OGE:  Thank you Julia and thank all the 

        22   panel members.  You are the reason we came to Los Angeles 

        23   and we are not holding this public hearing in Washington.  

        24   We are traveling across the country to get the views of all 

        25   affected.  Especially concerned citizen like yourselves.  

                                       143


         1   Thank you for coming forward.  We will start with our next 

         2   panel.

         3                Mr. Craig Moyer, Mr. Alan Cabodi, Mr. Chad 

         4   Tuttle, Mr. Steve Farkas, Dr. Gary Herbertson, Duane 

         5   Bordvick, Dan Jacobson, Clara Rosenthal and George White.  

         6                If you can state your name and affiliation, we 

         7   can start with you.  

         8                MR. MOYER:  Craig Moyer with the law firm of 

         9   Demetriou, Del Guercio, Springer and Moyer in Los Angeles.  

        10   I am speaking today as the general counsel and executive 

        11   director of the Western Independent Refineries Association. 

        12   We have on this panel four WIRA members and I want to 

        13   support their comments and try to coordinate so we didn't 

        14   have repeats on here.  But there's no federal rulemaking 

        15   that is more significant to small refiners today.

        16                WIRA a trade association representing the 

        17   interests of the 11 small refiners still operating on the 

        18   West Coast.  WIRA is a trade association of those small and 

        19   independent refiners who have been long-recognized as an 

        20   important competitive force in the refining sector.  The 

        21   small and independent sector of the refining industry is 

        22   integral to maintaining competition.

        23                In addition, small and independent refiners 

        24   also supply other petroleum products not otherwise 

        25   available in certain areas.  For example, small refiners 

                                       144


         1   manufacture 100 percent of California's grade aviation 

         2   fuel, allophatic solvents and JP4 jet fuel.  Small refiners 

         3   also manufacture 100 percent of the asphalt produced in 

         4   Southern California and most of the offroad diesel.

         5                Congress and many agencies, including United 

         6   States EPA and the California Resources Board have long 

         7   recognized the importance of the independent refining 

         8   sector to maintaining a competitive market for petroleum 

         9   products.  There are five West Coast small refiners that 

        10   are currently today making onroad diesel fuel.  Diesel fuel 

        11   is a very important product to small refiners.

        12                There is substantial precedent I would like to 

        13   remind you of for small refiners separate treatment, 

        14   including the diesel fuel acid rain credits and the Clean 

        15   Air Act Amendment of 990.  I would like to recall the 

        16   gasoline rulemaking here in California in 1991 to analyze 

        17   the implications of a major fuels reformulations on the 

        18   ability of small refiners to survive.

        19                The point is to consider not only the impact 

        20   on small refiners, but also on the competitiveness in the 

        21   marketplace.  The California Attorney General recently 

        22   found that the elimination of several small refiners from 

        23   the gasoline market during the 1990s in California 

        24   contributed to the lack of competition and increased the 

        25   price spikes that we have seen in gasoline here in 

                                       145


         1   California.

         2                I would like to begin the substantive comments 

         3   by expressing WIRA's complete and utter support for your 

         4   proposal on engine emission standards.  Additionally 

         5   because it appears that ultra-low sulfur diesel fuel is 

         6   necessary for engine manufacturers to be able to meet those 

         7   standards, WIRA supports the need to dramatically reduce 

         8   the sulfur content of diesel fuel.

         9                Today we are proposing a 30 ppm average sulfur 

        10   content for diesel fuel.  That is a reduction of 94 percent 

        11   from today's standards.  As compared to 15 ppm, we believe 

        12   that a 30 ppm average sulfur content is more appropriate 

        13   balance between diesel fuel production capabilities and 

        14   sulfur impacts on engine emission control technologies.  We 

        15   believe there's a need to push engine manufacturers.

        16                Lowering the sulfur to an average of not less 

        17   than 30 ppm is critical to refiners, especially small 

        18   refiners, to avoid substantial reduction in diesel fuel 

        19   production.  Below the break point of 25 to 35 parts per 

        20   million sulfur, costs increase dramatically and production 

        21   declines dramatically.

        22                As compared to 15 ppm a sulfur of 30 ppm 

        23   appears to result in almost no measurable difference in 

        24   fuel economy or the ability of the technology to meet 

        25   emission standards.  An observation would be if Navistar 

                                       146


         1   can meet the standards today with 15 parts per million why 

         2   stifle technology and suggest that no further development 

         3   is necessary.

         4                The sulfur content of 15 ppm will reduce the 

         5   volumes substantially simply by lowering end point.  The 

         6   base case, that is, will reduce the routine volume of 

         7   production.  Perhaps more importantly, a sulfur content of 

         8   15 parts per million creates an untenably fragile system 

         9   for production.  There is simply no margin for error.  

        10   There are minor process variations would create offspec 

        11   batches that are going to have to be reprocessed.

        12                Other members of this panel will be speaking 

        13   to that issue substantially more.  The bottom line is that 

        14   EPA's proposal will not only reduce the overall diesel 

        15   production capacities but also create a system so 

        16   susceptible to upset and batch loss that spot shortages and 

        17   their resulting price spikes will become common place.

        18                There's no question that 15 ppm sulfur diesel 

        19   fuel can be made.  The question is how much of it, how 

        20   consistently can it be made and at what cost.  The 

        21   requirement for 15 ppm sulfur diesel fuel also establishes 

        22   an untenably fragile system for engine manufacturers.  It 

        23   seems to me dangerous for engine manufacturers to design a 

        24   system so sensitive to sulfur that exposures to anything 

        25   more than 15 parts per million will create problems.  This 

                                       147


         1   is an extraordinarily low level.

         2                Let me then turn to the small-refiner 

         3   perspective, specifically having to do with some of the 

         4   issues requested that you asked for specific comments.  

         5   WIRA did participate in your Sabrifa process.  

         6   Unfortunately, this Sabrifa process did not meet the legal 

         7   requirements of section 609 because no one during the 

         8   Sabrifa process, including EPA, focused upon a goal of 15 

         9   parts per million sulfur.  That rulemaking is fatally 

        10   flawed and subject to challenge.

        11                However, during that process there was a 

        12   breakpoint for J-curve on sulfur reduction that was 

        13   demonstrated to be at 25 to 35 parts per million.  We 

        14   demonstrated that as to small refiners the low 30 ppm costs 

        15   increased dramatically and production declines.  We do 

        16   appreciate EPA's recognition at the convening of the 

        17   Sabrifa panel and your understanding of the peculiar and 

        18   extraordinary challenges that are facing small and 

        19   independent refiners.

        20                EPA recognizes that it will cost small 

        21   refiners 50 percent more to achieve the same sulfur 

        22   reductions.  We think actually this estimate is low.  The 

        23   key point is that small refiners need an menu of options to 

        24   choose from to reduce the negative implications.  There is 

        25   no one solution that the help every small refiners.

                                       148


         1                You did request some specific comment on some 

         2   specific options.  Of those three options for which EPA 

         3   seeks specific comment, WIRA supports the ability to 

         4   sell 500 ppm segregated onroad diesel fuel.  This option is 

         5   not particularly helpful, but it may be of some limited 

         6   value to some small retainers and better for West Coast 

         7   refiners than the other options.

         8                We also support a 30 ppm average even if EPA, 

         9   incorrectly we believe, chooses to pursue a 15 ppm for all 

        10   other refiners diesel fuel.  EPA could also establish a 

        11   mandatory exchange program for ultra-low diesel fuel.  

        12   A hardship extension is not helpful because all West Coast 

        13   refiners either make no gasoline or already make ultra-low 

        14   sulfur gasoline.  The tier-two gasoline standards have no 

        15   effect on small refiners on the West Coast.

        16                A couple of additional final points.  EPA 

        17   needs to prohibit dumping into the offroad market, ala the 

        18   antidumping provisions of gasoline in the gasoline 

        19   standards of the early '90s.  Finally, we need your help to 

        20   advocate financial support for small refineries.  Small 

        21   refineries will and already are laying the groundwork for 

        22   legislation for investment tax credits to cover the capital 

        23   and increased operating costs associated with these rules 

        24   and the disproportionate implications of those rules on 

        25   small refiners.  We would ask for your support for those 

                                       149


         1   financial changes.  Thank you.  

         2               MS. OGE:  Thank you.  Mr. Tuttle, good 

         3   afternoon.  

         4               MR. TUTTLE:  Thank you.  Good Afternoon.  My 

         5   name is Chad Tuttle of Kern Oil and Refining Company.  As a 

         6   small business refiner, my comments today will focus on the 

         7   diesel fuel sulfur standards.  Please note that these 

         8   comments are presented from the perspective of a small 

         9   business excessive, which has made extensive financial and 

        10   commercial investments to enable it to comply with Federal 

        11   and California fuel regulations.

        12                Kern echos the prior comments of Western 

        13   Independent Refiners Association and other small business 

        14   refiners speaking to this matter Kern supports EPA's 

        15   proposal on heavy-duty diesel engine emission standards.  

        16   Kern further supports and acknowledges the need for diesel 

        17   sulfur reduction to accomplish the required engine emission 

        18   reductions.  Kern does not agree with EPA's proposed level 

        19   of sulfur at 15 parts per million.

        20                The diesel sulfur reduction to a near zero 

        21   level is not practical.  As a point of reference I will 

        22   briefly ilustrate Kern, for example, must consistently 

        23   process its untreated diesel fraction distilled from crude 

        24   oil with a beginning sulfur level of 5000 ppm.  Please note 

        25   that the current diesel sulfur limit of 500 ppm alone 

                                       150


         1   represents greater than a 90-percent reduction.

         2                The proposed limit of 15 ppm sulfur represents 

         3   a reduction of 99.7.  Kern believes that accomplishing such 

         4   a severe diesel sulfur reduction on a consistent industry- 

         5   wide basis is unworkable.  Kern cannot meet a 15 ppm 

         6   standard with our existing desulfurization equiment 

         7   installed in 1993 to meet the 500 standard.

         8                The 15 ppm standard would require Kern to 

         9   basically start over.  This includes a second larger high- 

        10   pressure diesel hyddrotreater hydrogen plant expanded 

        11   sulfur recovery and supporting equipment.  This carries a 

        12   price tag of approximately 35 million and is far out of 

        13   Kern's financial reach.

        14                We also reviewed modifications to our existing 

        15   hydrotreater and based on our findings, diesel production 

        16   capacity would be reduced by over half.  Such a severe 

        17   reduction is also unworkable.  This production imbalance 

        18   will force Kern out of business due to an already limited 

        19   and shrinking offroad diesel market.  If Kern suffers a 

        20   production shortfall, including possible shutdown, 

        21   California will endure further increased diesel costs in 

        22   the San Joaquin Valley.  California would also lose 

        23   critical Kern gasoline production in the tightly balanced 

        24   market as well.  

        25                 Kern proposes a diesel sulfur limit average 

                                       151


         1   of 30 ppm representing a very difficult but technically 

         2   feasible reduction of 99.4 percent.  As compared to 15, 30 

         3   ppm diesel sulfur content is a more appropriate balance 

         4   between diesel fuel production capabilities and sulfur 

         5   impacts on engine emission control technologies.  Refiners 

         6   have been pushed to the limits as well as engine 

         7   0manufacturers.  We recognize we must continue to push 

         8   harder.

         9                Average diesel sulfur limit of 30 ppm is 

        10   critical to avoid substantial losses in production.  As 

        11   compared to 15, 30 ppm diesel sulfur content represents an 

        12   almost no measureable difference in fuel economy or the 

        13   ability of the technology to meet emission standards.  The 

        14   difference between 30 ppm and 15 is little different from 

        15   the amount of sulfur that may enter a diesel engine as a 

        16   result of lube oil.

        17                Kern is a small independent refinery in 

        18   Bakersfield, California.  Kern is the only small 

        19   independent refiner in Central California currently 

        20   producing significant volumes of onroad diesel, which meets 

        21   both California and Federal specifications.  Kern has spent 

        22   millions of dollars to upgrade its refinery as a result of 

        23   the 1993 EPA diesel sulfur regulations.  Kern is also the 

        24   only small refiner producing both federal reformulated 

        25   gasoline and California cleaner burning gasoline.  Kern 

                                       152


         1   employs 107 people and has supplied petroleum product for 

         2   65 years.

         3                Diesel is Kern's livelihood.  It is important 

         4   to note that Kern markets diesel to both the independent 

         5   and branded marketing secctors in the San Joaquin Valley, 

         6   High Desert and Central Coast, and as a small independent 

         7   refiner in Central California, Kern plays a significant 

         8   role in leveling the market's economic and supply playing 

         9   fields, particularly in the Southern San Joaquin Valley.

        10                The other only other significant producer 

        11   in the San Joaquim Valley is the major oil company 

        12   refinery.  At peak season produces over 8,000 barrels per 

        13   day or 39 percent of the San Joaquin Valley market.  Kern 

        14   is clearly a powerful pro-competitive force.  For Kern 

        15   diesel production is the largest part of our business and a 

        16   fundamental and necessary component of producing onroad 

        17   diesel has included the largest single refinery investment 

        18   and modification in our companies 65-year history.  This, 

        19   of course, was EPA's diesel sulfur reduction effective in 

        20   late 1993 and concurrently california low aromatic diesel 

        21   regulations.

        22                Kern has spent the last four months focusing 

        23   on how to feasibly achieve comliance with the newly 

        24   proposed EPA diesel sulfur regulations.  This work has 

        25   included researching the available technology and reviewing 

                                       153


         1   potential cruid oil input changes.  A diesel sulfur limit 

         2   of 15 ppm will substantially and negatively impact Kern up 

         3   to and including possible shutdown.

         4                We have reviewed diesel sulfur reduction 

         5   scenarios from 50 to 15 ppm.  Our work shows that an 

         6   average limit of 30 ppm is workable, with modest production 

         7   losses.  15 is not.

         8                Kern strongly agrees with the EPA's findings 

         9   and the advanced notice of produced rulemaking published 

        10   in the May 13, 1999 federal register which states:  

        11   "Desulfurization of diesel fuel to very low levels is 

        12   expected to involve substantial investments and added 

        13   operating expenses by petroleum refiners."

        14                Small business refineries like Kern will face 

        15   more severe solution scenarios compared to major oil 

        16   companies.  Small refiners operate under different less 

        17   flexible processes than do larger refiners.  It is 

        18   important to note that small refiners also face additional 

        19   restraints to secure financing from major projects.  This 

        20   is cumulative when compared to the other issues of 

        21   planning, engineering, permitting, purchases of equipment, 

        22   construction and start-up.

        23                Kern requests that EPA formally support 

        24   economic incentive for small business refiners including 

        25   but not necessarily limited to investment tax credits, 

                                       154


         1   excise tax relief, accelerated depreciation or expensive 

         2   qualified environmental expenditures and acid-rain credits 

         3   to help cover capital and increased operating expenses.

         4                In closing, Kern concurs with EPS'a proposed 

         5   heavy-duty diesel engine emission standards.  Kern supports 

         6   the need to reduce sulfur in diesel.  Kern strongly opposes 

         7   15 ppm diesel sulfur limit.  Kern supports a 30 ppm average 

         8   diesel sulfur limit.  Keep in mind for us there are 

         9   enormous differences between a 99.7 percent reduction.  

        10                Kern requests that EPA formally and publically 

        11   advocate and endorse small business economic assistance.  

        12   Possibly through excise tax credits, investment tax 

        13   initiatives and/or other options so that small business 

        14   refiners can absorb greater than 50 percent cost of 

        15   compliance that we have estimated we will incur.

        16                California's economy is dependent on the 

        17   element of competition that Kern and other small refineries 

        18   provide.  Thank you.                            

        19                MS. OGE:  Thank you.  Mr. Duane Bordvick.  

        20   Good afternoon.  

        21                MR. BORDVICK:  I am Duane Bordvick.  I am 

        22   Senior Vice President for Safety Health and Environment for 

        23   Tosco Corporation.  Thank you for this opportunity here 

        24   today.  Tosco is not a small refiner.  Maybe once we were, 

        25   but now we are not.  We are a large refiner.  We are not a 

                                       155


         1   major oil company.  Not an integrated oil company.  We have 

         2   no production, but as a refiner I believe we now are third 

         3   in the nation for refining capacity and one of the major 

         4   suppliers of diesel fuel in the United States.

         5                Tosco supports EPA's basic proposal of one 

         6   standard 15 parts per million.  One time 2006 for all 

         7   refiners for all the country.  As a major supplier of 

         8   gasoline and diesel fuel to the public Tosco believes that 

         9   we must continually improve these product to make them 

        10   environmentally acceptable.  For this reason, Tosco has 

        11   supported a number of similar measures, such as rapid phase 

        12   oou of EMTV, lowering the gasoline sulfur 30 parts per 

        13   million, and now this ultra-low sulfur diesel proposal.

        14                Making clean fuels we believe is our mission.  

        15   We believe at the important.  We are in this business.  We 

        16   want to stay in this business.  We want to be able to have 

        17   a fuel that competes with any other clean fuel.  For that 

        18   reason and many others we believe it is the right thing to 

        19   do.

        20                The standard will indeed, as you heard today, 

        21   pose some significant costs on the refining industry, and I 

        22   can assure you that includes Tosco.  I have heard some 

        23   speculate that Tosco is taking this position because we are 

        24   in some special circumstance or we have an ability to meet 

        25   the standard today without spending large sums of money.  

                                       156


         1   This isn't true.  It is not so.

         2                We have looked at the cost of pleading the new 

         3   standard.  It is in the range of what EPA has predicted.  

         4   We don't believe we have any special circumstances.  We do 

         5   have some California refineries.  About 25 percent of our 

         6   capacity is in California.  In California as well we have 

         7   to make significant investments.

         8                For the purpose of our business, making clean 

         9   products, for the same purposes that you have proposed for 

        10   the health of our country, we are pleased to strongly 

        11   support your proposal.  I would like to add some comments 

        12   on some of the other measures that you have asked for 

        13   comments on.

        14                The alternative program options is one of 

        15   them.  We do have some serious concerns about that.  I 

        16   believe you have raised many of those concerns in the staff 

        17   report and we think you correctly identified many, if not 

        18   all of those concerns, that we believe it is not 

        19   appropriate or will not do anyone any good, necessarily, to 

        20   have a phase-in approach.

        21                In our own company we have asked our marketing 

        22   people, asked distribution people, commercial people, 

        23   refiner people is this good, will this help, do you want 

        24   this.  No.  Across the board the answer was no.  In some 

        25   you can see some benefit.  To others we for a short time.  

                                       157


         1   In the long term we don't believe it will provide any 

         2   benefit, and it carries a lot of risks which you identifid. 

         3    Misfueling, et cetera.

         4                One of the big risks may be the impact that it 

         5   has possibly on supply.  I think our industry works best 

         6   when you have some certainty.  When you have to make it you 

         7   know what to do.  Our industry should be pretty proud.  We 

         8   have done a lot.  We have met the challenges and I think we 

         9   can meet this challenge.  When you put in some alternatives 

        10   and put in some phase-ins, there is now uncertainty of who 

        11   is going to be making the fuel win, I think that will 

        12   increase the risk of supply.

        13                And as API mentioned this morning, supply is a 

        14   serious concern.  We are concerned about that as well.  I 

        15   think it has to be seriously considered, and we believe, I 

        16   think we are optimistic, certainly our company and our 

        17   industry, that we will, given the six and a half years that 

        18   we have to meet this, we will do it.

        19                I will also comment on another provision, the 

        20   small refiner.  You have heard some already.  Generally we 

        21   don't support any special provisions for our industry.  

        22   There may be special cases.  I think my only comment there 

        23   would be to be very careful to have any provision be as 

        24   narrow and specific as possible so you don't fall into some 

        25   of the problems that might be associated with the phase-in 

                                       158


         1   and certainly with supply inequities.

         2                I will say that we can go along with certain 

         3   very carefully, very narrow provisions to help certain 

         4   segments of our industry, but be very careful.  In 

         5   conclusion, again, I want to reiterate our strong support 

         6   for your proposal, 15 parts per million.  One time, 2006.  

         7   The dual fuel, the phase-in we think is very dangerous and 

         8   unworkable.  Go with your straight-forward proposal.  We 

         9   are ready to do it with you.  It will mean that, we hope, 

        10   diesel fuel will be around for a very, very long time and 

        11   protect the length of our folks, and frankly we think it is 

        12   the right thing to do.  Thank you.

        13                MS. OGE:  Thank you for the support.  Mr. Al 

        14   Cabodi, good afternoon.  

        15                MR. CABODI:  My name is Al Cabodi.  I am vice 

        16   president of manufacturing for U.S. Oil and Refining 

        17   Company.  We are a small independent 45,000 barrel a day 

        18   refinery in Tacoma, Washington, which is about 30 miles 

        19   south of Seattle.  We are not a Tosco.  We don't have a 

        20   million barrels of capacity.

        21                However, small refiners like U. S. Oil are 

        22   important to the national economy and security.  U.S. Oil 

        23   supplies 45 percent of the asphalt products in Western 

        24   Washington.  We supply approximately 100 percent of the 

        25   military JPA to McCord Air Force Base, which is one of the 

                                       159


         1   premier Air Force Bases in the United States.  We supply 

         2   relatively small amount of diesel, but that's still a 

         3   couple 100,000 gallons a day of diesel on the onboard 

         4   market primarily.

         5                We are a family owned business.  We care for 

         6   the community and we care for the people around us and we 

         7   want to be a good environmental neighbor.  However, we want 

         8   to stay in business.  USO participated in the Sabrifa 

         9   panel, one of 22 small refiners producing diesel in the 

        10   United States.  We do support the proposal on engine 

        11   emissions standards.  We do support EPA's dramatic 

        12   reduction in sulfur, however not to the 15 ppm level.

        13                As we see it, an onroad diesel sulfur content 

        14   of 15 ppm maximum creates a very fragile system for 

        15   productions, and it is going to result in some problems.  I 

        16   am going to go into a little more detail on these problems 

        17   as I see it.  You will have unnecessary product cost 

        18   increases.  To go from a 30 average to a 15 will be a 

        19   significant operating and capital investment cost.  We 

        20   think it will be at least five cents a gallon higher than 

        21   the 30 ppm average.

        22                You will have lower fuel economy, reduced 

        23   diesel volumes and reduced jet fuel volumes.  Let me 

        24   elaborate on these points because some of those points have 

        25   not been made before or they have been in very cursory 

                                       160


         1   remarks.

         2                First off you have very little margin in error 

         3   when you are producing ultra-low sulfur diesel.  Minor 

         4   process variations, changes in raw materials will create 

         5   offspec batches and most people won't have the capabilities 

         6   to reprocess those.  If you have a problem in your 

         7   operation and you have a tank that is off specification, 

         8   you will have a tough time just continuing your operation 

         9   to continue on making an ultra-low sulfur product.

        10                So many of these will probably be dumbed into 

        11   an offroad diesel market or used as cutters.  That will 

        12   pull volume out of the offroad diesel fuel.  Refinery 

        13   diesel production are more limited in gasoline.  It results 

        14   in a lower flexibility to control and blend sulfur to such 

        15   low levels.  Light cycles, sulfur distillates will be 

        16   eliminated by many people from the onroad sulfur fuel.  

        17   This is a significant effect.

        18                These sulfur components are extremely 

        19   difficult to get out and that will require even a higher 

        20   investment than the normal hydrotreating investment.  The 

        21   choice is going to be do I put this investment in on the 

        22   front end thinking I am going to get some economic benefit 

        23   for doing it.  I am not sure people are going to do that 

        24   because what is going to happen they will say there is go 

        25   to have to be a price increase to support this.  I will see 

                                       161


         1   a little later.  You are talking about a significant 

         2   percentage of the diesel fuel.

         3                The crudes that presently run sometimes 

         4   especially for products like asphalt, specialty products 

         5   are extremely high sulfur, very difficult crudes to handle. 

         6   We presently take the distillates from these and turn them 

         7   down to less than 500 ppm and put them onto the onroad 

         8   diesel fuel.  That is not going to happen if this action 

         9   goes to 15 ppm.

        10                The reason is you are dealing with unusual 

        11   crudes.  You are dealing with crudes that are Canadian 

        12   crudes that are pumped out of the ground using huff and 

        13   puff methods.  They get down there and burn the crudes, 

        14   make them come out of the ground and cut them back and put 

        15   them into a marketplace, and you have variations as of 

        16   sulfur compounds that you can't count on getting out.  We 

        17   couldn't dare take the chance to run these crudes anymore.  

        18   The heavier portion of the diesel fuel, which has sulfur 

        19   compounds that are more difficult to get out.

        20                One of the ways you can go ahead and go down 

        21   to the 15 parts per million is cut out of heavy portion of 

        22   diesel so it is no longer in the fuel.  It is no longer an 

        23   onroad market.  You cut a chunk of that out.  You can do an 

        24   easier job to the 15 ppm.  That's volume.  The other thing 

        25   is the fuel efficiency is primarily from the heavier 

                                       162


         1   components in diesel.  Those are based on pounds per 

         2   gallon.  Which have more pounds and more PBDU.

         3                If you start cutting those out to eliminate 

         4   the sulfur compound your miles per gallon go down, and that 

         5   is totally contrary to what the truckers are thinking.  

         6   They keep thinking this is great to get the sulfur down, 

         7   the emission controls work a little easier and the 

         8   efficiencies are better and you will get more efficiency 

         9   out of the engine.  If you cut out the heavy components you 

        10   will have less pounds per gallon and you will get lower 

        11   miles per gallon.

        12                One more point, if you start cutting -- let's 

        13   go conversely to cutting out the back end.  You start 

        14   taking the back end of jet fuel, which is a lighter 

        15   product, which has easier sulfur compound to remove, put it 

        16   into the diesel fuel, you now have a little bit more onraod 

        17   diesel that you have made up some volume, but you have 

        18   pulled it out of the jet market.  The jet market is a tight 

        19   market many times.  That can cause some problems there.

        20                I believe that for the aforementioned reasons 

        21   that if you go to a 15 ppm max ultra-low diesel supplies 

        22   will be extremely tight and any incidents in productions at 

        23   refineries will result in supreme reductions and price 

        24   spikes.  Supply and demand economics will be felt.

        25                As I mentioned for the above reasons, we 

                                       163


         1   support a 30 ppm average.  That's a 94 percent reduction 

         2   from today's standards.  I think we need to put a little 

         3   bit of pressure on the engine control manufacturers.  Why 

         4   should the public pay for an easy-out.  If they can do 15 

         5   now, why don't we let them put a little investment in and 

         6   save the public money instead of the public having to spend 

         7   a much lower sulfur than they have to to get the same 

         8   emission standards.  I think they can develop in the next 

         9   few years better controls.

        10                We appreciate the EPA's recognition of the 

        11   challenges facing the small refiners.  To remain a viable 

        12   operation we have to have a menu of options.  We support 

        13   the authority to sell 500 ppms segregated onroad diesel.  

        14   That's not saying you need a nationwide two-tiered system.  

        15   That won't happen.  For the few small refiners that may be 

        16   able to use this, something where they may be able to get 

        17   some local distributors to keep the older vehicles running 

        18   500 ppm and take a portion of the fuel and relieve some of 

        19   their strain.  That may be workable.  Leave the option in 

        20   there.  It probably means nothing to U. S. Oil but it might 

        21   help some other people.

        22                The hardship extension doesn't do anything for 

        23   U. S. Oil.  I will list a few other options I would like 

        24   you to consider.  We propose a mandatory diesel exchange 

        25   program if you continue to go with a 15 ppm max.  It would 

                                       164


         1   work something like that this.  Small refiners would have 

         2   the option to produce and sell 500 ppm sulfur diesel into 

         3   offroad or marine markets either directly or in exchange 

         4   with majors.

         5                EPA would then make available ultra-low sulfur 

         6   onroad diesel barrel for barrel.  We pay a premium for that 

         7   diesel equal to the differential between the operating 

         8   costs of the low sulfur and the ultra-low sulfur diesel.  

         9   This is a win-win situation because you are going to have a 

        10   contribution of a 500 ppm or less low sulfur diesel into 

        11   the offroad market early and some small refiners may have a 

        12   capability and put 100 percent into that offroad fuel which 

        13   will lower emissions, but we need to the right to get 

        14   ultra-low sulfur diesel to be able to supply our customers, 

        15   otherwise we will be out of business.

        16                You must prevent dumping of high sulfur diesel 

        17   components into the offroad diesel market because that will 

        18   deteriorate the environment and at the same time create an 

        19   offroad price collapse.  Finally, the EPA needs to help 

        20   small refiners in endorsing and obtaining financial 

        21   support.  This was mentioned, but we really need help on 

        22   this.  We can look at income or excise tax credits, 

        23   accelerated depreciation, loan guarantees, and that may 

        24   help us to supplying the ultra-low diesel problem.  Thank 

        25   you for the opportunity to present my comments. 

                                       165


         1                MS. OGE:  Thank you, Mr. Cabodi.  I would like 

         2   to call for Mr. Gary Helbertson.  Good afternoon.         

         3                MR. HERBERTSON:  Good afternoon.  I represent 

         4   the Institute for Global Solutions, the North American 

         5   Coalition for Religion and Ecology and the Earth Day, Earth 

         6   Week Global Green Ribbon Pledge Campaign.  I am honored to 

         7   have the opportunity to speak at this crucial life or death 

         8   hearing on diesel fuel emission standards.

         9                I speak in the context of being one of the 

        10   founding staff members of the  United Nations Environment 

        11   Program assisting in the planning and coordination of 

        12   citizen participation in the first UN World Conference on 

        13   the environment health in Stockholm in '72, and organizing 

        14   the owning nongovernmental section of the UN Earth Submit 

        15   in Rio in '92.

        16                "Where there is no vision the people perish." 

        17   And "You shall know the truth and the truth shall make you 

        18   free."  Are two prophetic statements which have likely 

        19   significant relevance for this life or death hearing on 

        20   diesel fuel emission standards.  It is absolutely wrong, 

        21   immoral and intolerable that in the U.S.A. alone every year 

        22   smog and particulate matter account for 15,000 premature 

        23   deaths, one million respiratory problems, 400,000 asthma 

        24   attacks, and thousands and thousands of cases of aggravated 

        25   asthma.  Air company pollution near ground level and acid 

                                       166


         1   precipitation are already causing widespread injury to 

         2   humans, forests and crops.  We must bring environmentally 

         3   damaging activities under control to restore and protect 

         4   the integrity of the earth systems we depend on.

         5                A great change in our stewardship of our earth 

         6   and the life on it is required if vast human misery is to 

         7   be avoided and our global home on this planet is not to be 

         8   irretrievably mutilated.  Clearly have warned thousands of 

         9   the most distinguished scientists on your planet, including 

        10   104 Nobel Prize Laureates.  The evidence is in.  Diesel 

        11   fuels are a life or death issue which we must deal with an 

        12   on a emergency basis within our nation and for the future 

        13   of all life residing on your common planet earth.

        14                To end totally unnecessary deaths we must take 

        15   action to make drastic reductions from diesel fuel killing 

        16   pollution from heavy-duty buses and trucks.  Diesel fuels 

        17   are an eco-justice issue.  Poor communities are polluted.

        18                I strongly urge you to take leadership for 

        19   life and against death by reducing diesel sulfur levels to 

        20   no more than 15 ppm nationwide for both on- and offroad 

        21   diesels nationwide by 2006.  Require all big trucks and 

        22   buses to be cleaned up by at least 90 percent by 2007.  

        23   Ensure that all heavy-duty diesel fuel vehicles meet strict 

        24   emission standards when they are moving over our 

        25   environmentally damaged planet earth.  Not just when they 

                                       167


         1   have their engine tests.

         2                Leadership for life and against death also 

         3   requires the immediate creation and use of diesel fuel 

         4   alternatives, such as electric and fuel cell vehicles.  

         5   Diesel fuel is a life or death mortal crises.  It was Dante 

         6   who said "The hottest fires in hell burn most brightly for 

         7   those who remain neutral in a moral crisis."  Only those 

         8   who commit themselves to solutions, the diesel fuel 

         9   destruction of life on earth, will end this unnecessary 

        10   hell on earth process.

        11                Please fulfill your life or death 

        12   responsibility to end our diesel fuel crisis in accord with 

        13   the earth charter pledge.  We, the people of the earth, 

        14   join together in a global partnership pledge to respect 

        15   earth and all life, care for the community of life and all 

        16   its diversity.  Strive to build free, just, participatory, 

        17   sustainable and peaceful societies.  Secure Earth's 

        18   abundance and beauty for present and all future 

        19   generations.  Good luck for the future of life on earth.  

        20                MS. OGE:  Thank you.  Mr. Steve Farkas.  

        21                MR. FARKAS:  Good afternoon.  I am Steve 

        22   Farkas.  I am the general counsel at Paramount Petroleum 

        23   Corporation.  I wanted to echo the comments made by the 

        24   other small refiners sitting at the table, but also wanted 

        25   to add a little bit of insight into the importance of 

                                       168


         1   independent small refiners.  The word independent means 

         2   something, especially in this day in age of consolidate oil 

         3   allogapolies.

         4                We in the last ten years have had many battles 

         5   with our large brethren exhibited by them that was strange 

         6   to understand unless there was some ulterior motive based 

         7   on potentially eliminating competition and profiting 

         8   thereby.  I am not alleging that.  I am kind of guessing 

         9   what was maybe at the root of it.

        10                We have spent ten years meeting with 

        11   California Resources Board who accepts the importance of an 

        12   independent refiner.  We have met with California Energy 

        13   Commission.  Bill Alkper told me I wish I could figure out 

        14   a way to get more competitors in this state to keep oil, 

        15   gas prices under control.  Even the AQD, in the very last, 

        16   in their recent 431.2 proposal had a small refiner 

        17   exemption, following your lead, but that was the first time 

        18   we had ever seen anything like that before.

        19                It is pretty important to understand the place 

        20   and role that small independent refiners play.  We have the 

        21   largest asphalt producer in the Western United States.  

        22   When a car of formulated gasoline was proposed and enacted 

        23   we stopped making gasoline, eliminating 20,000, 30,000 

        24   brrels a day out of the market.  I don't think prices go 

        25   down when that happens.  I only took the first level course 

                                       169


         1   of economics.

         2                When we were competing with the Federal Trade 

         3   Commission -- this is kind of an interesting off the 

         4   subject but kind of important to note -- trying to express 

         5   to them the importance of small refiners, discussing the 

         6   ARCO/BP merger, we made the point that a small refiner like 

         7   Paramount actually set the crude oil price for Alaskan 

         8   crude.

         9                They did their investigation and found out 

        10   that there was some truth to that because the market dried 

        11   up in that major supply themselves and they supply others 

        12   on the long-term contracts.  And when you look at what is 

        13   the open market it is rather sparse.  When a small refiner 

        14   like Paramount comes in and bids on the price of ANS crude 

        15   it ends up setting the market price which impacts the price 

        16   of gasoline in the U.S.  ARCO helped themselves and the 

        17   merger was approved.

        18                I want to point out that the AQD itself I 

        19   think understands the slim balance they are trying to 

        20   propose their 431.2 and in a meeting with them last week 

        21   they suggested to me that they think there's adequate 

        22   supply, at least the L. A. area, of diesel because they 

        23   believe production is hundred -- they believe that demand 

        24   at the time 2003, 2004, will be 120,000 barrels a day and 

        25   that supplies 116,000 barrels a day.

                                       170


         1                Paramount produces 8,000 barrels a day, and 

         2   at 15 ppm we won't be able to do that.  That leads to the 

         3   presumption that there will be a shortage, at least if the 

         4   AKE rule is enacted prior to the EPA rule in Los Angeles.  

         5   Again, just like what was said by representative from Kern, 

         6   it is in excess of $30 million to do that.

         7                The other thing I think I part a little from 

         8   the other people, although cognisance of the need for small 

         9   refiner exemption, even in the guise of 500 ppm segregated 

        10   system, is good, the end result is it won't have much 

        11   impact because in Los Angeles and in California those other 

        12   systems of distribution are controlled by the majors.  I 

        13   don't know if they will be doing us much much of a favor.  

        14   I guess that's the point on that.

        15                What we really do need is a 30 ppm average.  

        16   It allows us based on the engineering to make diesel, a 

        17   small refiner diesel, low sulfur diesel, at a cost that is 

        18   one that we can withstand.  Probably need a little extra 

        19   time to do it.  But I just wanted to make the point of the 

        20   need and the importance of the independent refiner in the 

        21   State of California.  That's all.  

        22                MS. OGE:  Thank you.  Ms. Clara Rosenthal.  

        23   Welcome.  

        24                MS. ROSENTHAL:  Thank you so much.  My name is 

        25   Clara Rosenthal and I am the Vice President, Director of 

                                       171


         1   Health Education for the Los Angeles Tenth District PTA.  

         2   The Los Angeles Tenth District runs through East L.A., 

         3   North L. A., South L.A. from San Pedro at the way north to 

         4   the Pacific Palisades.  We are also part of the California 

         5   State PTA and the National PTA.

         6                I want to thank you for giving me this 

         7   opportunity to speak on behalf of the Los Angeles Tenth 

         8   District PTA and particularly to thank the EPA for their 

         9   years of work in prevention.  I was very happy to see the 

        10   students from Belmont here.  The first thing they did say, 

        11   and I was going to say that is "Our children are our 

        12   future."

        13                What are we mouthing here.  Are we mouthing 

        14   words that are meaningless just to give lip service.  You 

        15   heard from the children themselves that we have many more 

        16   cases of respiratory illness, children are not being able 

        17   to attend school, and once they miss out or lose out, it 

        18   is very hard for them to continue their education, so, 

        19   therefore, we have a lot of dropouts.

        20                I want for tell you that Los Angeles Tenth 

        21   District as well as the entire PTA, the National PTA with 

        22   over 7 million members does a lot more than most people 

        23   think PTA is all about.  Cookies, serving cake, no.  We 

        24   have a very strong legislative platform that we have had 

        25   since the beginning for 100 years plus two.  Two years ago 

                                       172


         1   we celebrated the one hundredth anniversary of the national 

         2   and local and state PTAs.

         3                We have people that work in Sacramento -- when 

         4   I say people, these are members of our PTAs that work in 

         5   Sacramento that work with all legislative issues affecting 

         6   children.  I want to give you some little insight as to 

         7   what we call a resolution in the state convention that 

         8   occurs once a year we have resolutions from the local 

         9   schools.  They have everything to do with the health of the 

        10   children, the well-being of children and youth, and 

        11   encouraging education on subjects of major importance to 

        12   society.

        13                We recommend maximum acceptable safe levels of 

        14   01 parts per million oxidant in the air and exceeded in all 

        15   urban areas of California wherein children's school 

        16   activities expose them to the adverse affects of polluted 

        17   air and vigorous coordinated and sustained efforts should 

        18   be made to remove the possibility of long-term adverse 

        19   effects on the health of children and the community.

        20                Therefore, be it that the state PTA convention 

        21   reaffirm the statement on environmental pollution adopted 

        22   by the State PTA Board of Managers in September, and be it 

        23   further that all communities whose air quality does not 

        24   meet prescribed standards, especially oxidant level, be 

        25   urged to enact uniform alert levels at which school 

                                       173


         1   districts undertake measures to protect students from 

         2   adverse effects, and be it further that each school 

         3   district is urged to establish a policy of curtailing 

         4   physical education and related activity when the alert 

         5   level is attained.  Which means that the kids have to go 

         6   in, it interrupts their schooling.  You heard all the 

         7   figures of the escalating respiratory ailments and 

         8   illnesses that we have.

         9                I remember four years ago on our Board of 

        10   Directors for the Tenth District PTA where there were six 

        11   women that were battling cancer.  These are women in the 

        12   prime of life, mothers.  Three of them have passed away.  

        13   We cannot continue this kind of to me hypocracy.  Either we 

        14   value children's lives or we don't.

        15                I know time is short here.  I just want to 

        16   read you one more issue from our environmental projects.  

        17   Clean air, 1997.  It was a resolution.  This was our last 

        18   resolution.  We up it every year.  We recognize that air 

        19   pollutants, such as carbon dioxide, carbon monoxide, lead, 

        20   nitrogen oxides, ozone particulates, sulfur flouride, 

        21   sulfur dioxide have detrimental effects on children's 

        22   health.

        23                We call for constituent organizations to 

        24   support environmental awareness programs and right to know 

        25   legislation and regulations addressing air qualities.  And 

                                       174


         1   from what I heard today, we have so many groups that are 

         2   like us, that once to help children live and be concerned 

         3   citizen that I really am happy in one way, but I hope that 

         4   we will be stronger forces together, banding together, to 

         5   really know that our children are our future.  Thank you.   

         6               MS. OGE:  Thank you, Mr. Dan Jacobson.  Good 

         7   afternoon.  

         8               MR. JACOBSON:  Good afternoon and thank you 

         9   very much for allowing me to testify here today.  My name 

        10   is Dan Jacobson.  I am senior staff person for California 

        11   Research Group Calper.  They are in strong support of the 

        12   standards that you are proposing for a number of reasons.  

        13   I think you guys have done a great job today just being 

        14   able to listen to all the testimony you have heard.  Today 

        15   you have heard from a lot of the religious leaders and 

        16   community leaders, teachers, students, health experts.  

        17   Their will be a number of additional speakers that you will 

        18   hear from.

        19                It is not unusual that when people come to 

        20   California that one of the main concerns they hear about is 

        21   clean air.  It almost seems apropos that today is a smog 

        22   alert day that we are talking about this where we are 

        23   actually saying that the air isn't good to breathe today 

        24   and we need to be doing something about it and we applaud 

        25   your efforts to be trying to do everything you can on this 

                                       175


         1   issue.

         2                In California the air is still unhealthy to 

         3   breath on a number of days.  That's why we need the EPA to 

         4   stands strong on this rule.  The big trucks and buses are 

         5   among the biggest polluters.  In the past they cheated on 

         6   tests that have allowed them to continue to emit smog- 

         7   forming pollution into our atmosphere.  In order to protect 

         8   the public health, we have to require drastic reductions in 

         9   pollution from these large trucks and buses.  However, 

        10   because high sulfur fuel will hurt these new diesel cleanup 

        11   technologies, we must be sure that all diesel fuel is 

        12   cleaned up by the time that these new technologies are 

        13   ready.

        14                Therefore, in order to insure that all the 

        15   cleaner trucks will have access to these clean fuels at 

        16   Calper we are urging the EPA to require that the diesel 

        17   sulfur levels for onroad and offroad vehicles with a cap of 

        18   more than 15 ppms.  Cleaning up these things are going to 

        19   be incredibly important.  You have heard from health 

        20   experts and scientists and business leaders from across the 

        21   state who are saying we are in a predicament here.  We need 

        22   your help.

        23                They are not only asking that diesel be 

        24   cleaned up, but across the state they are asking if a 

        25   number of different steps be taken.  At the federal level 

                                       176


         1   this is a strong system step we are asking for.  The state 

         2   level we are asking to continue the zero emission program 

         3   to start in by 2003.  There's a lot that people here in 

         4   California need to do to clean up their area.  This is an 

         5   important first step to do it.  We are urging you to please 

         6   take it step.  Thank you very much for that time.  

         7               MS. OGE:  Thank you very much.  I would like 

         8   to thank all of you.  The interested representatives, the 

         9   concerned citizens, the environmental and public health 

        10   groups.  Thank you for taking the time to share with us 

        11   your testimony.  We will take your comments into 

        12   consideration as we are moving forward in finalizing this.  

        13   We are making great time.  We are a half hour late.  I will 

        14   call the 2:45 panel.  

        15                Mr. Steve Campbell, David Bartlett, Angie 

        16   Farleigh, Professor Williams Hines and Mr. John Dewitt.  

        17   Please print your name on the card in front of you. 

        18                MS. OGE:  Mr. Campbell, good afternoon and 

        19   welcome.  

        20   *             MR. CAMPBELL:  My name is Todd Campbell, 

        21   policy director for the coalition for clean air.  I 

        22   apologize that you have to eat lunch while I speak so 

        23   late, but that seems like an everyday lifestyle for an 

        24   environmentalist like myself.  The Coalition for Clean Air 

        25   on behalf of your members throughout the State and for 

                                       177


         1   breathers who breathe up hill though air daily applaud the 

         2   United States for our EPA in bringing forth what should be 

         3   considered and what this organizations believes one of the 

         4   most important national roots to be heard this day.

         5                The federal government has the power to 

         6   relieve our nation's ailments that place the air we breathe 

         7   and diesel exhaust should be viewed very high on the EPA's 

         8   pollution list because diesel significantly impacting our 

         9   communities, our neighborhoods or our children and 

        10   grandparents and friends and even ourselves.  It's health 

        11   invocations are numerous, significant and serious.

        12                The state of health of California is in 

        13   serious crisis with regards to diesel exhaust pollution.  

        14   Two percent of California's onroad vehicles are diesels, 

        15   yet they constitute over 30 percent of the smog-forming 

        16   emissions of NOx and 70 percent of the particulates from 

        17   California mobile source inventories.

        18                Over 97 percent of the particles that come out 

        19   of diesel exhaust are ultrafine particles which have been 

        20   linked to many respiratory diseases like asthma.  In 

        21   California, an estimated 500,000 children are suffering 

        22   from asthma alone and this state leads the nation with over 

        23   2 million people diagnosed with asthma and an increased 

        24   prevelance rate of 75 percent in the last 15 years.

        25                Asthma, unfortunately, is not the only problem 

                                       178


         1   associated with exhaust.  Join the ranks of the National 

         2   Institute of Occupational Safety and Health among other 

         3   notorious health agencies.  The California Environmental 

         4   Protection Agency's diesel exhausts is a toxic component.  

         5   That is diesel particulates in 1998, August of 1998, and 

         6   prior the listing of 40 other compounds, listing on and on 

         7   known to the state to either cause cancer or reproductive 

         8   harm. 

         9                In the South Coast Basin alone over 70 percent 

        10   of the air pollution is directly attributable to diesel 

        11   soot, according to the local air quality management 

        12   district.  And as you heard earlier, STAPPA/ALAPCO 

        13   estimates that over 125,000 cancer cases will be directly 

        14   linked to the current diesel exahust levels nationwide, but 

        15   in the Los Angeles metropolitan area alone, 16,250 access 

        16   cases are predicted.  That's 13 percent of this estimate 

        17   nationwide.

        18                Why is that?  For one, we have a lot of the 

        19   nation's trade by having two of the largest and busiest 

        20   ports, Long Beach and Los Angeles.  They require both 

        21   diesel trains and trucks to haul thousands of freight tons 

        22   to destinations as far as the State of Maine.  We are also 

        23   a burgeoning population.  The Southern California 

        24   Association of Governments estimates that this region will 

        25   reach a populus of 20 million by 2020.  That's like adding 

                                       179


         1   two cities of the size of Chicago on top of what already 

         2   exists.

         3                It is no surprise that our communities of the 

         4   Alameda Corridor and other well diesel-traveled routes are 

         5   at higher risks than most communities.  Unfortunately, 

         6   there are more communities that are at greater risk from 

         7   diesel throught this great state and beyond.  The cities of 

         8   RIchmond, Oakland, Stockton, San Leandro, Sacramento, and 

         9   even San Diego to name just a few, including the Central 

        10   Valley suffer from crank diesel exhaust levels.

        11                The only way we are going to address the small 

        12   owner/operator question is getting to those operators that 

        13   actually buy their vehicles and are not large fleets in 

        14   ports, harbors and airports, is through tighter stands 

        15   for the fuels we use and engines we design.  But more 

        16   importantly, we owe it to these communities that bear the 

        17   brunt of our Nation's trade and provide the level of 

        18   prosperity that we all enjoy, to return the air quality 

        19   that breathe to a safe and healthy level.

        20                Everyone is entitled to a bill of rights for 

        21   clean air and these people are being cheated everyday.  

        22   What we need is a fuel that will move us forward and that 

        23   is ultra-low sulfur diesel.  Low sulfur at 15 parts per 

        24   million is a tremendous first step from 500 ppm, but 

        25   California is already infusing this fuel into the 

                                       180


         1   california refinery system today.

         2                15 parts per million sulfur diesel is being 

         3   made available through countless commitments and 

         4   testimonies made by BP, Amoco, Texaco and Chevron 

         5   representatives throughout the state.  In fact, the 

         6   technology is here in 2000 to achieve levels even lower 

         7   than 15 parts per million as BP, Amoco, and then ARCO 

         8   announced its first sulfur fuel that sat around ten parts 

         9   per million over a year ago.

        10                Furthermore, the Europeans are way ahead of us 

        11   on ultra-low sulfur diesel by producing low sulfur diesel 

        12   at the level of five to 10 parts per million.  We need to 

        13   get back on track fast and furious.  My question for this 

        14   regulatory agency is if we have the technology to meet 15 

        15   parts per million, why wait six years to implement this 

        16   action.

        17                Furthermore, why not give engine manufacturers 

        18   the fuel that will optimize engine performance by setting 

        19   the target at 5 parts per million.  Under the current rule 

        20   this gives industry six years to figure out the way to get  

        21   sulfur levels down an additional 10 parts per million.

        22   If the problem is residual sulfur in the pipelines, provide 

        23   a phase-in in the sulfur level starting at 15 parts per 

        24   million in 2006, 10 ppm in 2007 and 5 ppm in 2008.  However 

        25   you choose to do it, get these sulfur levels down.  Like 

                                       181


         1   lead in gasoline, sulfur is a deterrent for diesel to reach 

         2   cleaner levels.

         3                Bottom line, either we are serious about 

         4   public health or we are not.  The oil companies first 

         5   quarter, furthermore, their profits of $11 billion plus 

         6   could pay for this whole rule alone.  Fewer refiners, as it 

         7   was mentioned earlier, means bigger and wealthier refiners. 

         8   If this industry wants to rid itself from boutique fuels, 

         9   it should clean up its act.

        10                The other thing that we need is cleaner 

        11   engines sooner, not later.  We need cleaner engines 

        12   yesterday.  What you are talking about is seven years 

        13   before we begin to even realize the change in current 

        14   conditions, and this is not even 100 percent allocation.

        15                The rule proposes incremental market phase-in 

        16   of 25 percent that in reality drags out until the end of 

        17   this decade.  That's too long, too late.  Our lungs can't 

        18   wait ten years.  We need clean engines today.  Our 

        19   communities cannot continue to carry the pollution subsidy 

        20   allowed to this industry any longer.  At a very minumum, 

        21   you should require or need to require 100 percent 

        22   implemention of the clean engines proposed by 2007 or you 

        23   need to start looking at cleaner alternative routes like 

        24   the South Coast has opted to do to address its diesel 

        25   problems.

                                       182


         1                This industry should be put on notice, the 

         2   diesel industry that is, to either clean up its act or make 

         3   way for cleaner technologies like fuel cells.  We just 

         4   can't wait any longer for what is proposed on the books 

         5   before us.  We also would like to agree with the air 

         6   resources board in strengthening the formaldehyde standard 

         7   to 2.01 from the .06 proposal.  We feel that toxics at 

         8   least in the Southern California are significant area of 

         9   threat to our human health, and we encourage that you 

        10   tighten this standard.

        11                In addition to better in-use vehicle emission 

        12   tests and toxicity protocols are extremely necessary.  I 

        13   cannot emphasize enough the need for better testing for 

        14   in-use vehicle emissions or accurate evaluations of 

        15   toxicity from engine exhausts.  We need to better 

        16   understand when our vents from mobile sources on and off 

        17   the road really are.  We also need to understand what is 

        18   toxic and by how much.

        19                Although I do feel some relief by this Agency 

        20   in setting formaldehyde standards and soot reductions that 

        21   some level of toxicity will be reduced in diesel exhaust, 

        22   no one to date can authoritatively state the reduction of 

        23   diesel exhaust soot is equal to .01 gram particulate matter 

        24   standard will reduce the standard of toxicity.

        25                We need EPA and other health base agencies to 

                                       183


         1   tackle this important problem and give us a way to tackle 

         2   the toxicity associated with diesel natural gas in whatever 

         3   field we might choose to transfer people or goods in the 

         4   future.  Interim steps I am going to talk about briefly.

         5                I think we should extend low sulfur fuel by 15 

         6   parts per million available today to the entire country no 

         7   later than 2004 in allowing local districts throughout the 

         8   nation, especially those in Houston, to apply particulate 

         9   traps if they are proven to you be workable.  We also 

        10   strongly support the Blue Skys program.  We need to 

        11   recognize that cleaner technologies drive diesel and other 

        12   dirty air fuels to zero.

        13                Electric bus and also we should look and zero 

        14   emission technologies that are here today like electricity 

        15   and fuel cell.  I have many, many things to share with you, 

        16   but I would beg you to consider an optional zero emissions 

        17   standard.  When you are talking about the Blue Sky 

        18   standards, think of an optional zero emission standards.  

        19   Finally, apply the sulfur level fuels to offroad vehicles.  

        20   They need it.  It is an inventory that we are overlooking 

        21   significantly.  Thank you.  

        22               MR. OGE:  Thank you, Mr. Campbell.  

        23   Ms. Farleigh, good afternoon.  Mr. Campbell and all of you, 

        24   if you have written testimony, we would be glad to put that 

        25   into the record.  

                                       184


         1                 MS. FARLEIGH:  Thank you for giving me 

         2   the opportunity to comment today on a rule that has 

         3   important and far-reaching implications, our Nations' air 

         4   quality.  My name is Angie Farleigh.  I work with U.S. 

         5   PIRG, which is the national lobby office for Cal PIRG.  

         6   California Public Interest Research Group.

         7                There is a daily reality for Americans living 

         8   in urban areas to experience thick black clouds of toxic 

         9   diesel pollution and suffer the short-term discomfort and 

        10   often the long-term health effects that are a direct result 

        11   from breathing this exhaust.  Our canvassers consistly hear 

        12   this story from the millions of Americans they talk to at 

        13   their doors each year.  And as a former director of Cal 

        14   PIRG's office, I know that this pollution effects not only 

        15   children and elderly, but healthy young adults who spend 

        16   time outdoors.

        17                We actually had several canvassers here 

        18   earlier this morning but had to leave before they could 

        19   testify.  So I would like to deliver written comments.  

        20   They wrote these before they left.

        21                From Vanessa Lynn, Ryan Bjornstad, Yuri 

        22   Patamura and Sabrina Para Garcia, which I will give to you 

        23   after my testimony.  It is obviously common sense that 

        24   cutting the pollution from heavy-duty vehicle will result 

        25   in enormous public health benefits and will vastly improve 

                                       185


         1   the quality of life in our cities and suburbs.  Common 

         2   sense in the case of diesel pollution is confirmed time and 

         3   time again by the health studies showing that exposure to 

         4   diesel pollution can lead to a range of symptoms from 

         5   asthma attacks to premature death and lung cancer.

         6                Based on over 30 epidemiological studies we 

         7   know that exposure to diesel exhaust can increase the risk 

         8   of lung cancer by as much 89 percent.  It is to prevent 

         9   these and other health impacts that U.S. PIRG strongly 

        10   supports the proposed standards to reduce heavy-duty bus 

        11   and truck pollution.  Three key pieces form the cornerstone 

        12   of the proposed standards.

        13                First of all 15 parts per million cap on 

        14   diesel fuel by 2006.  The second is the .01 grams per 

        15   brake-horse power-hour particulate standard effective in 

        16   2007.  And finally the standards for NOx and hydrocarbons.  

        17   I would like to comment on a few specific details related 

        18   to these provisions.

        19                First of all, clean diesel fuel is essential. 

        20   U.S. PIRG supports the EPS proposal to cap diesel fuel 

        21   sulfur levels at 15 parts per million effective in 2006.  

        22   It would be an expensive exercise in futility to spend the 

        23   next 10 years phasing in advanced afterburner pollution 

        24   controls for heavy-duty vehicles only to allow these 

        25   controls to be poisoned and rendered ineffective by the 

                                       186


         1   presence of sulfur in the fuel.

         2                Given the abilities of refiners to remove 

         3   sulfur from the diesel fuel, we need to clean them up as 

         4   soon as possible.  Other observers have suggested 

         5   alternative caps and averaging systems.  For example, the 

         6   American Petroleum Institute suggests that a cap of 15 

         7   parts per million would be sufficient.

         8                However, the consequences of setting a cap 

         9   higher than 15 ppm include increased incidence of 

        10   particulate filter failure, deterioration of engine 

        11   performance, and poisoning of the NOx catalyst.  For the 

        12   public, this means more pollution, more asthma attacks, 

        13   more hospitalizations, more premature deaths and more 

        14   cancer.  We urge EPA to reject this alternative.

        15                We do not support alternative proposals that 

        16   would allow refiners to continue producing fuel at a level 

        17   of 500 parts per million sulfur for a fraction of their 

        18   total highway diesel fuel volume.  This approach or any 

        19   other scenario that would allow two or more other grades of 

        20   diesel fuel to remain in the market is sorely impractical 

        21   due to the reliability in misfueling implications.

        22               To the extent that these alternative proposals 

        23   are designed to be provide flexibility to small refiners, 

        24   we believe this additional flexibility is unwarranted given 

        25   the extremely long time of six years.  Furthermore, these 

                                       187


         1   flexibility measures severely compromise the environmental 

         2   benefits of the proposed standards placing too high a 

         3   burden on the breathing public.

         4                Secondly, the proposed nitrogen oxide standard

         5   should apply to all new engines in 2007 not 2010.  We 

         6   believe that this unnecessarily delays the smog reduction 

         7   benefits of the rules, prolonging the chronic smog problems 

         8   faced by more than 132 million Americans who live in the 

         9   likely ozone nonattainment areas across the nation.

        10                The urgency of our need to reduce smog-forming 

        11   emissions can not be overstated.  Over half of the nation's 

        12   ozone monitors have a three-year average above the 

        13   eight-hour ozone standard.  Moreover, according to a 1999 

        14   study by ABT Associates, smog was the cause of more than 6 

        15   million asthma attacks, 150,000 emergency room visits and 

        16   50,000 hospital admissions in a single summer of 1997.

        17                We believe that all new engines should be able 

        18   to meet the .2 grams per brake-horse power-hour by 2007.  

        19   As Mr. Bertelson stated earlier, the manufacturers of 

        20   emissions controls association is an association of 

        21   companies who are most directly involved in producing the 

        22   technology to achieve the standards, agree that the 

        23   technologies to meet the NOx standard will be available in 

        24   2007.

        25                Again, this hinges on the availability of 

                                       188


         1   clean sulfur fuel.  Thus we urge EPA to eliminate 

         2   unnecessary delay and apply the .2 standard to all engines 

         3   in 2007.  Short of this, we urge to you at least shorten 

         4   the phase-in period to a length of no more than two years.

         5                Third, a technology review is unnecessary and 

         6   counterproductive.  U.S. PIRG urges the EPA to reject the 

         7   suggestion by some to include a technology review for the 

         8   2003 time frame.  We believe that the review would be 

         9   unnecessary, given the high degree of competence that clean 

        10   fuels will enable rapid development of NOx emission control 

        11   technology.

        12                Moreover, we see the proposed technology 

        13   review as a disincentive to actually develop cleaner 

        14   engines, giving the industry an opportunity to escape from 

        15   the new standards contingent on their own lack of future 

        16   progress in developing NOx control technologies is far too 

        17   much like the fox guarding the hen house.  It should be 

        18   remembered that this industry has a history of illegal 

        19   actions to escape from pollution standards.

        20                In addition, one could read this technology 

        21   review as little more than opportunity to take advantage of 

        22   the changing political landscape under a new administration 

        23   and one that may not be as committed to protecting the 

        24   public health.

        25                To the extent that you do find a technology 

                                       189


         1   review is warranted we urge you to ensure that it allows 

         2   equally for the strengthening of the standards as for their 

         3   relaxation.  Finally, an advanced heavy-duty technologies 

         4   should be encouraged.  While diesel engines are known as 

         5   the work horse of present day transportation system, it is 

         6   important to acknowledge that far cleaner technologies are 

         7   being commercialized.

         8                The promotion of these technologies, including 

         9   fuel cells, hybrid and electric propulsion systems can 

        10   lead to critical additional public health and environmental 

        11   benefits.  We strongly support the inclusion of the Blue 

        12   Sky program to define a set of propulsion technologies 

        13   and/or a set of lower emissions standards for vehicles to 

        14   be designated for receipt of incentive under subsequent 

        15   local state or federal programs.  Thank you

        16               MS. OGE:  Thank you.  Mr. David Bartlett.  Good 

        17   afternoon.  

        18                MR. BARTLETT:  Thank you.  Good afternoon.  My 

        19   name is David Bartlett.  I am here on behalf of the Diesel 

        20   Technology Forum.  The Forum is a new group that is working 

        21   to enhance public dialog with a wide-range of stakeholders 

        22   including the EPA, other government agencies, and other 

        23   interested parties to explore a wide range of opportunity 

        24   to reduces emissions from both existing and from new diesel 

        25   engines, while recognizing the inherent benefits of diesel 

                                       190


         1   technology.

         2                Diesel power systems, that is the engines, 

         3   fuels and aftertreatment systems that are the subject of 

         4   today's hearing power our economy from package delivery 

         5   trucks that you see on the street everyday to tractor/ 

         6   trailers delivering fresh produce from the fields to the 

         7   neighborhood grocery store.  They are the very centerpiece 

         8   of our Nation's supply and distribution network.  But they 

         9   are also much more.

        10                With the age of the Internet and E-commerce, 

        11   diesel power systems have taken on an even more important 

        12   role facilitating the greatest economic expansion this 

        13   country has ever seen.  They are doing more work, moving 

        14   more goods, and helping more businesses and people than 

        15   ever before.

        16                This proposal to reduce emissions and require 

        17   cleaner fuels in new diesel trucks and buses starting in 

        18   2007 marks yet another milestone in the continuing 

        19   improvement of diesel technology.  New diesel engines 

        20   powered with today's fuels emit less than one-eighth the 

        21   emissions of engines built just over 12 years ago.  If 

        22   adopted, the proposal currently under consideration by the 

        23   EPA could result in as much as a 90-percent reduction in 

        24   emissions beginning in 2007, and that's on top of 

        25   improvements already on line for 2002 to 2004.

                                       191


         1                We support the direction of the EPA's proposed 

         2   rule that will result in lower diesel emissions and cleaner 

         3   diesel fuel in 2007.  We are especially pleased that for 

         4   the first time EPA has used the systems approach in setting 

         5   fuel and engine standards.  An approach that recognizes 

         6   that engines and fuel are both parts of an integrated 

         7   diesel power system.

         8                A systems approach is more important than 

         9   ever because for the first time engine manufacturers, the 

        10   companies that manufacture exhaust and aftertreatment 

        11   equipment, and fuel refiners all will have important rolls 

        12   to play in order to achieve the significant reductions in 

        13   emissions that EPA has proposed.

        14                Whatever the outcome of the debate over how 

        15   much sulfur should be allowed in diesel fuel, everyone 

        16   agrees that lowering sulfur content coupled with advances 

        17   in diesel engine technology will help improve air quality.  

        18   While this hearing is focused on future reductions in air 

        19   pollution, we should not lose site of the tremendous 

        20   progress that has been made in the past here in California 

        21   and indeed across the entire nation.

        22                For example, here in Los Angeles there has 

        23   been tremendous progress in reproducing air pollution from 

        24   all sources.  During the period of 1994 to 1999, Los 

        25   Angeles had over 54 percent fewer ozone exceedence days 

                                       192


         1   than in the period 1987 to 1992.  With only three 

         2   exceptions, the number of days of unhealthy air uniformally 

         3   declined from Sacramento to San Diego to the South Coast 

         4   and San Joaquin to San Francisco Air Basins.

         5                In many cases there were significantly fewer 

         6   days of unhealthy air, as many as 88 percent fewer days in 

         7   1999 compared to previous years.  What is most encouraging, 

         8   we think, is that on a national basis overall criteria 

         9   pollutant emissions have declined by 34 percent from 1970 

        10   to 1997.  This reduction has taken place during the same 

        11   time period that the U. S. population has increased by 31 

        12   percent, and the economy has more than doubled in size.

        13                The gross national product has increased 114 

        14   percent in that same time period.  How has pollution 

        15   declined at the same time that we have seen massive 

        16   increases in manufacturing, construction, transportation, 

        17   agriculture, and all the other activities that constitute 

        18   economic growth.  The answer is that these activities have 

        19   become cleaner at the same time that Americans are 

        20   demanding more and more of them.

        21                We see the future of diesel power systems in 

        22   both these trends.  Diesel power systems have become much 

        23   cleaner and through continuous improvement, they will 

        24   become cleaner still.  This continues to prove that we can 

        25   have economic growth, increasing the use of diesel 

                                       193


         1   technology and cleaner air.  These are consistent goals we 

         2   would submit.

         3                Diesel power systems are an essential part of 

         4   the quality of life that we all enjoy today, providing the 

         5   most efficient, economical and reliable power for whatever 

         6   the need.  It is a technology that is defined by innovation 

         7   and continuous improvement meeting the ever-increasing 

         8   needs of the customer, whatever the application and 

         9   whatever the need.

        10                Make no mistake about it.  This proposal 

        11   represents a significant technological challenge for the 

        12   engine manufacturers, the exhaust aftertreatment suppliers 

        13   and fuel refiners, all of whom are members of the diesel 

        14   technology forum.  However, we are confident that together 

        15   we can build on our past progress and produce the cleanest, 

        16   most economical and reliable diesel power systems ever.

        17                The proposal under consideration today deals 

        18   with new technology going forward.  There are many 

        19   opportunities to address some important issues in the 

        20   existing fleet.  Let me say a word about excessive smoke 

        21   from diesel trucks and buses.

        22                When properly maintained, diesel engines do 

        23   not smoke.  For over ten years California has been a leader 

        24   in the development and implementation of diesel smoke 

        25   emissions inspection programs.  These programs have proven 

                                       194


         1   benefits in identifying and eliminating excessive smoke 

         2   emissions.  And, frankly, we wonder why only 13 states have 

         3   implemented such programs today.

         4                We challenge the other states to consider 

         5   adoption of smoke-testing programs.  We have the tools and 

         6   resources available to assist in that effort.  This March 

         7   EPA issued a challenge to retrofit 10,000 engines in the 

         8   next two years and the Forum is pleased to be working along 

         9   side the EPA.  We are bringing together resources to 

        10   identify engines of all types in a wide variety of 

        11   applications to determine the feasibility of lowering 

        12   emissions by adding exhaust aftertreatment systems, 

        13   modifying engine emissions controls, and/or using cleaner 

        14   diesel fuel.

        15                We are encouraged by the possibilities for 

        16   success for this program, which will include engines in a 

        17   wide-range of applications from marine vessel to highway 

        18   trucks.  In conclusion, the members of the diesel 

        19   technology forum while not taking a position on specific 

        20   fuel sulfur levels or other issues on debate today, support 

        21   EPA's decision to take a systems approach to reducing 

        22   diesel emissions.

        23                However the specifics of this debate are 

        24   resolved, diesel power systems are poised to deliver more 

        25   of the efficient, reliable and economical power demanded by 

                                       195


         1   the American people.  As leaders in the technology and 

         2   innovation of diesel, members of the Forum are committed to 

         3   working with the EPA with state governments and with other 

         4   interested parties to continue the improvements in diesel 

         5   emissions and to take meaningful steps now to address 

         6   concerns in the existing diesel fleet.

         7                Thank you and I would be happy to answer your 

         8   questions. 

         9                MS. OGE:  Thank you, Mr. Bartlett.

        10                (Whereupon, Kathleen Cagney relieved 

        11   Stephanie Gustave as the court reporter at 3:30 p.m.)

        12                              * * *

        13   

        14   

        15   

        16   

        17   

        18   

        19   

        20   

        21   

        22   

        23   

        24   

        25   

                                       196


         1   

         2   

         3   

         4   

         5   

         6   

         7   

         8   

         9   

        10   

        11                     REPORTER'S CERTIFICATE

        12   

        13                I, Stephanie Gustave, a Certified Shorthand 

        14   Reporter in the State of California, in Los Angeles County, 

        15   do hereby certify that the foregoing proceeding was written 

        16   by me in stenotype and transcribed into typewriting; and 

        17   that the foregoing is a true and correct copy of my 

        18   shorthand notes so taken.

        19   

        20   

        21   

        22                               _____________________________
                                           Stephanie Gustave
        23                                 California CSR No. 8680
             
        24

        25

                                       197


                            U.S. ENVIRONMENTAL PROTECTION AGENCY

                           HEARING ON PROPOSED HEAVY-DUTY  ENGINE

                        AND VEHICLE STANDARDS AND HIGHWAY DIESEL FUEL

                                 SULFUR CONTROL REQUIREMENTS

                                   LOS ANGELES, CALIFORNIA

                                        JUNE 27, 2000

                                  Volume II, Pages 198-285

                                 Taken at the Hyatt Regency

                                    711 South Hope Street

                                Los Angeles, California 90017
                                                                            1


         1        APPEARANCES:

         2

         3        E.P.A. COMMITTEE:

         4

         5        Chairperson:

         6        Margo Oge, (Director, E.P.A. Office of

         7                   Transportation and Air Quality)

         8

         9        Committee Members:

        10        Robin Morin

        11        Chet France

        12        Dawn Martin

        13        Michael Horowitz

        14

        15

        16

        17

        18

        19

        20

        21

        22

        23

        24

        25
                                                                           199


         1                            INDEX OF SPEAKERS

         2                                                             PAGE

         3        WILLIAM HINES (U.C.L.A. Professor)                   202

         4        JIM STEWART, Ph.D. (Southern California              205

         5             Council on Environment and Development)

         6        KENNETH BALLARD (Los Angeles 10th District P.T.A.)   211

         7        LELAND STEWART (Unity-and-Diversity World Council)   213

         8        MONICA BENITEZ (Mexican-American Legal Defense       215

         9             and Educational Fund)

        10        JEFF YANN (Sierra Club and Hacienda Heights          217

        11             Improvement Association)

        12        JOHN DUERR (Detroit Diesel Corporation)              223

        13        MARIE VALENTINE (DaimlerChrysler Corporation)        228

        14        JASON MARK (Union of Concerned Scientists)           233

        15        LAWRENCE WEICK (Syntroleum Corporation)              239

        16        RONG LU (U.C.L.A. Research Scientist)                244

        17        JERILYN LOPEZ MENDOZA (Environmental Defense)        246

        18        JACQUELINE DOMAC (Venice High School Teacher)        249

        19        NICHOLAS ECONOMIDES (Hart/IRI Fuel Information       254

        20             Service)

        21        DAN MUHTAR (U.C.L.A. Student, CALPIRG)               262

        22        CATHY CHANG (U.C.L.A. Student, CALPIRG)              264

        23        MARTIN SCHLAGETER (Sierra Club)                      266

        24        LAWRENCE LEBOWSKY (American Lung Association)        269

        25        TIM MORALES (American Lung Association)              272
                                                                           200


         1                            INDEX OF SPEAKERS (Continued)

         2                                                             PAGE

         3

         4        ANDREA VAN HOOK (American Lung Association)          274

         5        KARYN IHARA (U.C.L.A. Student)                       278

         6        SMITHA GOTTIMURKALA (U.C.L.A. Student, CALPIRG)      280

         7

         8

         9

        10

        11

        12

        13

        14

        15

        16

        17

        18

        19

        20

        21

        22

        23

        24

        25
                                                                           201


         1             LOS ANGELES, CALIFORNIA, TUESDAY, JUNE 27, 2000

         2                         APPROXIMATELY 3:40 P.M.

         3                                  -o0o-

         4

         5                 MS. CHAIRMAN:  Thank you, Mr. Bartlett.

         6                 Professor William Hines, good afternoon.

         7                 MR. HINES:  Thank you.

         8                 Good afternoon.  My name is William Hines.  I'm

         9        a professor at the U.C.L.A. School of Public Health in

        10        the Department of Environmental Science.  I've been a

        11        researcher studying airborne particles or aerosols for

        12        more than 30 years.  I've published more than 80 articles

        13        on this topic including the textbook which has become the

        14        standard textbook in this field.  I am a member of the

        15        E.P.A. Southern California Particulate Matter Center and

        16        coprincipal investigator of the E.P.A. supersite for

        17        Southern California.

        18                 These are major multidisciplinary research

        19        efforts sponsored by E.P.A. to characterize particulate

        20        matter in the Los Angeles basin and its relationship to

        21        human health.

        22                 I support the proposed rule on heavy-duty

        23        engines and diesel fuel.

        24                 Airborne particles are a major problem in the

        25        Los Angeles basin.  They are associated with demonstrated
                                                                           202


         1        increases in mortality and increases in hospital

         2        admissions.  They contain many cancer-causing materials.

         3        They exacerbate asthma, and they affect lung development

         4        in children.  In terms of diesel emissions -- in terms of

         5        particulate emissions, diesel vehicles are inherently

         6        dirtier than equivalent gasoline-powered vehicles.

         7                 During the past three decades, we've made great

         8        strides in controlling emissions from gasoline-powered

         9        vehicles and industrial sources but have failed to

        10        control those from diesel-powered vehicles to the same

        11        level.  Consequently, diesel vehicles now account for

        12        nearly two-thirds of all particulate emissions from

        13        mobile sources from the Los Angeles area.  Diesel

        14        vehicles also release significant amounts of gases and

        15        vapors that cause the formation of secondary particles or

        16        photochemical smog in the Los Angeles basin.

        17                 Currently, diesel engines are an essential power

        18        plant for heavy-duty transportation because of their

        19        durability, their longevity, their fuel efficiency, and

        20        their low life-cycle cost.  Because of their longevity,

        21        they will continue to be widely used for many years.

        22        Thus, timely reduction of diesel emissions will require,

        23        in addition to the proposed control measures discussed

        24        here, the development of after-market equipment for

        25        retrofitting control technology to existing diesel
                                                                           203


         1        vehicles.

         2                 Incentives to do this need to be built in to the

         3        proposed control requirements.  We know from our

         4        experience in controlling emissions from gasoline

         5        vehicles that both new emission control technology and

         6        fuel reformulation are needed to cost effectively control

         7        diesel vehicle emissions.  Improved combustion in diesel

         8        engines requires advances in diesel engine design and

         9        clean diesel fuel.  Catalytic aftertreatment requires

        10        technological development and clean diesel fuel.  Thus,

        11        clean diesel fuel is a requirement for an effective

        12        control strategy for diesel vehicles.

        13                 The proposed measures are essential to protect

        14        the health of the people in the Los Angeles basin and to

        15        permit the continued air quality in this region.

        16                 I strongly support these measures and urge the

        17        E.P.A. to implement them as soon as possible.

        18                 Thank you.

        19                 MS. CHAIRMAN:  Professor Hines, thank you for

        20        your testimony.

        21                 I'd like to thank the other panelists for taking

        22        the time to come and share with us your views about this

        23        very important proposal.

        24                 Thank you.  I would suggest a 15-minute break.

        25                 We have, I think -- oh, we have a new reporter,
                                                                           204


         1        wonderful, but I need a break for about 15 minutes, and

         2        it would be wonderful.

         3                 So we will be back five minutes after 4:00 to

         4        start with our next panel.

         5                 Thank you.

         6                 (Brief recess in the proceedings.)

         7                 MS. CHAIRMAN:  Mr. Steven Gallegos, Ken

         8        Ballard, Leland Stewart -- Dr. Jim Stuart and Monica

         9        Benitez, Leland Stewart and Mr. Herley Jim Bowling.

        10                 MR. STEWART:  Not all of them are here.

        11                 MS. CHAIRMAN:  We will start with you.  Welcome

        12        to this panel, and we will start with you, Mr. Stewart.

        13                 MR. J. STEWART:  Thank you.

        14                 Well, I certainly want to complement you on this

        15        amazing, wonderful outreach, and the breadth of the

        16        proposal is excellent.  Of course, my understanding is is

        17        that if we could get it down to five parts per million,

        18        then things would really be clean.  But that would be our

        19        request.

        20                 Now, you've heard already this morning the

        21        report from the MATES-II Study and, of course, you're

        22        well familiar with that, and there are two tables in the

        23        MATES-II Study.  One says that diesel is 71 percent of

        24        the toxic risk, and another says that it's 82 percent of

        25        the toxic risk.  And I want to emphasize we should be
                                                                           205


         1        using the 82 percent because that is properly weighted

         2        according to toxicity.

         3                 Then the other thing that is important, I think,

         4        in the MATES-II Study is the sources of diesel

         5        particulates.  So I have -- I put on every one of your

         6        places there this.  It says, "Jim Stewart Presentation,"

         7        you know, "E.P.A. Presentation" at the top.  So inside it

         8        talks about the sources of diesel particulates according

         9        to the MATES-II Study.  This, I actually had to pull out

        10        of the MATES-II Study and just go through and present the

        11        numbers in a clearer form than is in there.  But it's the

        12        same numbers as the MATES-II Study.

        13                 What you notice is that 49 percent is, as we

        14        expected, the heavy-duty diesel trucks.  The 34 percent

        15        mobile equipment is the shocker.  I mean this is -- we

        16        are talking about, you know, the kinds of construction

        17        equipment, right, the bulldozers, and all that sort of

        18        thing.  So this makes it very clear that in terms of the

        19        South Coast Air Quality Management District we could not

        20        even consider having duel-fuel tracks.  I mean we've got

        21        to get that mobile equipment down to exactly the same

        22        level as the main diesel trucks, and so that you can't

        23        even consider if you want to clean up the diesel issue in

        24        our region having anything other than everybody having

        25        the 15 parts per million.  Is that clear?
                                                                           206


         1                 Okay.  The second thing, of course, we want to

         2        point out here is the ships.  And that -- I mean, I don't

         3        know how you guys are going to do that.  If we can't get

         4        these ships -- I mean if you turn over to the other page,

         5        you see that this is the map that shows, of course, what

         6        the air quality -- and, of course, it was nicer, I guess,

         7        this morning in color -- but what is so dramatic is that

         8        huge tongue going out to sea from San Pedro and L.A.

         9        ports there.

        10                 There's this huge tongue of black diesel soot

        11        heading out to sea, and that is, of course, the ships.

        12        And that 11 percent, a good portion of our diesel

        13        particulates across this whole region is coming right out

        14        of that harbor there.  So you guys have got to clean up

        15        ships.  I mean there's just no choice.  I mean you are

        16        right now -- I mean inaction is killing the people in our

        17        harbor area.  As you well know that's the reports of the

        18        death and illnesses in the San Pedro area.

        19                 You think, right, that we should be having nice

        20        clean air from the ocean, but it's not the case because

        21        of that huge amount of diesel soot coming out of those

        22        ships.

        23                 Then, if you turn back to my pie chart, you see

        24        that the next sources here are what you'd expect, a

        25        little bit from cars and light trucks, a little bit from
                                                                           207


         1        the trains -- and I certainly want to encourage you guys

         2        to clean up the trains -- and then we have a little less

         3        than two percent of the manufacturing and industrial

         4        sources which, of course, are the only sources of diesel

         5        soot that the Air Quality Management District can control

         6        except for urban diesel buses.  And, of course, we're all

         7        thrilled about the fact that A.Q.M.D. has made the rule

         8        that we're not going to have any more diesel fleet buses

         9        in our area.

        10                 But, look, right now, with primarily urban

        11        diesel buses in our region, it's .2 percent.  You can't

        12        even see on this chart how the thin line that is coming

        13        from buses.  It's primarily all from other sources.

        14                 So here's our issue:  Our issue is is that

        15        A.Q.M.D. can control two percent, the manufacturing and

        16        industrial, and the other 98 percent is up to you guys at

        17        E.P.A.  So this is it.  We've got to have it, and if you

        18        want to look at the actual numbers, it's on the very

        19        back, and that's the actual numbers in pounds per day

        20        that came out of the MATES-II Report, the heavy-duty

        21        diesel trucks -- yeah, right -- the 22,000 pounds per

        22        day, you know.

        23                 And then the next one this awful mobile

        24        equipment is about 16,000.  And then way down at the end,

        25        we have urban diesel buses at only a 115 pounds per day
                                                                           208


         1        from all of the buses that are running around the whole

         2        South Coast Air Quality Management Region.

         3                 The second issue, of course, that we need to

         4        talk about is environmental justice, and I'm pleased that

         5        the environmental defense people talked to you earlier

         6        today.  But if you go back to the map, you can see that

         7        the big, heavy-polluted areas are right in the same,

         8        essentially, as the heavily minority areas of

         9        Los Angeles.  The center of Los Angeles, South Central

        10        Los Angeles, which is over 90 percent black and Hispanic,

        11        Southeast Los Angeles, that finger going off to the right

        12        there are 90 percent Hispanic and black.  So as long as

        13        we do not clean up the diesel, we are causing terrible

        14        environmental injustice here.

        15                 Then my final point's a little off the topic,

        16        but I do want to mention that none of this work on

        17        cleaning up diesel is going to address the issue of

        18        global warming, and I want to stress that we are all

        19        concerned about the issue of global warming, and that the

        20        only thing I can see to tie global warming in to this

        21        issue today relative to diesel is we need full cost

        22        accounting.

        23                 In other words, the issue is is that right now

        24        we are essentially subsidizing the nonrenewable -- in

        25        other words -- the fossil fuel, burning fossil fuels,
                                                                           209


         1        adding CO2, raising the sea level, flooding the coasts of

         2        the country.  Of course, in a few years we'll probably be

         3        losing the southern half of Florida, but the issue is is

         4        that we're not including that in the pricing.  The

         5        pricing of diesel is well -- well, it's just the price of

         6        what it costs to pull it out of the ground and refine it.

         7        What's the cost to Florida?  I mean I would say that, you

         8        know, it's probably a few trillion dollars to -- if you

         9        flood the whole coast of -- the southern half of Florida.

        10                 So the issue is is do we want to really

        11        address -- this is not the purpose of this thing, but I

        12        just wanted to mention to you guys from E.P.A. that it's

        13        time that we begin to continue to look at the full cost

        14        accounting of what burning fossil fuels is causing right

        15        now in terms of the rising sea level, the dangers

        16        relative to the whole issue of storms and the increasing

        17        temperatures right now.  I mean, it looks like in

        18        California like we're going to be losing our snow pack

        19        which means we're going to be losing our water supply,

        20        and we're going to be in really terrible trouble.

        21                 I guess then my final point is really simple,

        22        and I'm sure you've heard this earlier today is that the

        23        truckers and the guys who are driving the bulldozers on

        24        this construction equipment don't want to be killing

        25        people.  They'd like to be driving clean trucks, so do
                                                                           210


         1        the right thing.

         2                 Thank you.

         3                 MS. CHAIRMAN:  Thank you, Mr. Stewart,

         4        appreciate your comments.

         5                 Mr. Ballard, good afternoon, welcome.

         6                 MR. BALLARD:  Thank you for giving us the

         7        opportunity to present our various opinions.

         8                 I'm representing L.A. 10th District P.T.A. which

         9        is 30,000 members of P.T.A. south of the Santa Monica

        10        Mountains in the L.A. Unified School District.  I gave

        11        you a two-page outline of what I wanted to say.  I'm

        12        going to give you the short form however.  I'm sure

        13        you'll be happy to hear that.

        14                 One is that the P.T.A., both state and national,

        15        has had a long history, at least back to 1973, of asking

        16        for clean-air studies, and full information to the

        17        public, and cleaning up the air.  We recommend that

        18        school buses be included in all regulations relating to

        19        cleaner exhaust partly because in Los Angeles it looks as

        20        if we're going to be having busing for a long time,

        21        unfortunately, and the students, because they are not

        22        air-conditioned buses, are sitting in these diesel buses

        23        which really emit a lot of visible smoke, never mind the

        24        things that you can't see, and it's grossly unfair that

        25        the children should be exposed to that sort of thing.
                                                                           211


         1                  The third point is the P.T.A. is concerned that

         2        the criteria that you use in measuring improvements in

         3        vehicle exhaust give the reality of increased safety and

         4        not just the appearance.  And your web-posted rulemaking

         5        documents and facts sheets, chapter 2, pages 79 through

         6        76 address this issue very well.

         7                 The issue loosely is there is a temptation when

         8        competing technologies go to the public to say "Well, our

         9        engine produces half as many pounds of particulate matter

        10        as this engine over here," and it doesn't take into

        11        account the very complex nature of the issue which has to

        12        do with particle size, where those particles go in your

        13        lungs, how much surface area has material that's the

        14        result of incomplete combustion on them, and what are

        15        those chemicals that are on the particles because

        16        absorbed particles of vapors which are absorbed do not

        17        leave your alveoli, the end ducts of your lungs, as

        18        quickly as they would if they would if they stayed as a

        19        gas.

        20                 Most of the explanations, perhaps of research

        21        necessity, that I've read tend to express parts per

        22        thousand, parts per million, but not in a biological

        23        sense.  I'm a pharmacist, and I have a pharmacy

        24        background.  The question is how do these things go into

        25        the body?  How long do they stay, and what are the
                                                                           212


         1        effects?  And I don't know how you can take a complex

         2        issue like this -- although it's well represented in your

         3        website and presented to the public -- but my concern is

         4        those who have not solved the technical problems will try

         5        to use arguments which are not biologically significant

         6        to express the advantages of their system over competing

         7        systems.

         8                 Finally, we support strongly any movement toward

         9        cleaning up the air.  It doesn't have to be perfect.  It

        10        should be technology-driven with serious consideration as

        11        to the cost.  But by cost, I agree with my colleague

        12        here.  It's the true cost, namely, all of us are

        13        breathing this stuff, and it's critical that we remove it

        14        from the air as soon as possible.

        15                 Thanks again for the opportunity to present.

        16                 MS. CHAIRMAN:  We thank you.

        17                 I believe it's Reverend Leland Stewart.

        18                 Good afternoon.

        19                 MR. L. STEWART:  Good afternoon.

        20                 I come with a somewhat different orientation to

        21        most of you who are here, and so the leave the technical

        22        details to the environmentalists to give that part of

        23        it.  I did want to call attention, however, to two people

        24        that have spoken here who are not only friends of mine

        25        but also who represent the religious interests that I
                                                                           213


         1        have.

         2                 The first one is Reverend Al Cohen with the

         3        Southern California Ecumenical Counsel.  That represents

         4        main-line Protestantism primarily, which is his

         5        orientation, and we used to share the same headquarters

         6        which was very close to here for many years.  Then the

         7        other person is Dr. Gary Herbertson who spoke earlier.

         8        Gary is on our board.

         9                 The organization that I'm with is called the

        10        Unity-and-Diversity World Council which represents two

        11        kinds of organizations.  We do a great deal of interfaith

        12        work.  The difference between Al Cohen in terms of who I

        13        represent is that the work that we're doing represents

        14        religions rather than denominations.  In other words, we

        15        work with Christians, Jews, Muslims, Hindus, Buddhists,

        16        and many others including a number of modern spiritual

        17        movements.  So we have interfaith celebrations every

        18        month.  So we represent something like 50 different

        19        religious and spiritual groups.

        20                 On the other hand, as the name implies, we not

        21        only work with religious groups and spiritual groups but

        22        also with many other kinds of groups, United Nations

        23        Association, World Federalists, and a huge number of

        24        groups.  And the environmental issue is very important to

        25        us.  Gary on our board is our environmentalist, but
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         1        there's also one other member who's very much into

         2        environmental concerns.  So in our counsel we have a

         3        general assembly once a month to deal with these social

         4        issues, and Gary is at many of the meetings.  Tony

         5        Blackstone is very much the environmentalist.  So we come

         6        from a large number of both religious and other kinds of

         7        groups in our work.

         8                 So I would just like to say that we are very

         9        concerned to improve the climate here in Los Angeles and

        10        the air pollution.  I've been here personally for 45

        11        years, since 1955, and I remember these issues being

        12        discussed way back then, and I know there's been some

        13        improvement, and but there's a lot more room for

        14        improvement.  So we definitely want to see as much as the

        15        E.P.A. can do to improve it.

        16                 I was talking with Jim on the way down, who is a

        17        personal friend and who spoke at one of our recent

        18        meetings, and I'd like also to see five percent rather

        19        than 15, if that can be done.

        20                 Thank you very much.

        21                 MS. CHAIRMAN:  Thank you.

        22                 Ms. Monica Benitez, welcome.

        23                 MS. BENITEZ:  Thank you.  Thank you for having

        24        me here.

        25                 On behalf of the Mexican-American Legal Defense
                                                                           215


         1        and Educational Fund, I urge you to adopt tough emission

         2        standards for trucks and buses as soon as possible.  The

         3        number of diesel trucks that go through the Los Angeles

         4        residential neighborhoods is a significant concern

         5        especially to our organization.

         6                 A group of U.C.L.A. students conducted a focus

         7        group in the Boyle Heights area.  This is the part of the

         8        graduate studies in urban planning.  And what they did is

         9        they monitored traffic for two half-hour time periods

        10        between 2:00 to 3:00 p.m. which is the exact time when

        11        elementary schools get out, and what they found was that

        12        a total of 123 diesel vehicles passed through that

        13        particular area.

        14                 Now, this is a big concern for obvious reasons

        15        because of all of the toxins and particulate matter that

        16        can trigger respiratory problems in children.  And this

        17        is primarily this area, the Boyle Heights area, as well

        18        as, I believe, somebody had previously mentioned these

        19        areas that have the most minority children, minority

        20        families, are the areas that have to face these highly

        21        contaminated toxic air polluted areas.

        22                 Not only air pollution, we're talking about all

        23        sorts of kinds of pollution, soil pollution.  But it is

        24        these inner city children and families that are the most

        25        affected by diesel pollution.  70 percent of the Latino
                                                                           216


         1        children live in areas that exceed the ozone standard

         2        compared to 51 percent of white children.  And,

         3        unfortunately, these are the people that live in poverty

         4        and cannot afford to move out and, also, people that rely

         5        on public transportation.

         6                 L.A., without a doubt, needs more buses, but it

         7        is just as important to have buses and transportation

         8        vehicles that don't pollute the community and that don't

         9        make people sick.

        10                 And I just want to end with one last comment in

        11        that I think that it's time that we really start

        12        investing in the children that are the most vulnerable,

        13        the neediest, and the poorest in our country.  I hope

        14        that you consider the testimony here today in your final

        15        decision-making, and that you really do adopt the

        16        toughest possible standards to reduce pollution.

        17                 Thank you.

        18                 MS. CHAIRMAN:  Thank you, Ms. Benitez.

        19                 Mr. Jeff Yann, good afternoon.

        20                 MR. YANN:  Thank you for your patience and

        21        perseverance.

        22                 My name is Jeff Yann.  I am environmental chair

        23        of the Hacienda Heights Improvement Association which is

        24        a mutual-benefit corporation that represents 55,000

        25        residents in our unincorporated community.  I'm also a
                                                                           217


         1        member of the Sierra Club's air quality committee.

         2                 Hacienda Heights sits in a crucial position in

         3        the South Coast air basin.  We're essentially where the

         4        funnel starts that conveys the off-shore breezes over

         5        San Gregornio pass every afternoon.  In addition, we're

         6        just downwind of the 605 Freeway, and the Pomona Freeway

         7        bisects our community.  The Pomona is among the busiest

         8        in the basin for traffic from the harbors to the

         9        Interstates 10, 15, 40, and points in the eastern United

        10        States.

        11                 Plans are being developed right now for a

        12        dedicated truck lane which will likely parallel the

        13        Pomona Freeway to haul traffic from the Alameda Corridor

        14        to the east.  In addition, we have the nation's second

        15        largest landfill immediately up-wind of our community

        16        which generates over 4,000 vehicle trips per day.  Most

        17        of those vehicles are trash trucks powered by diesel

        18        engines.

        19                 We were delighted to see South Coast A.Q.M.D.

        20        take strong steps toward requiring diesel buses and trash

        21        truck fleets to clean up their act by moving to compress

        22        natural gas and alternative fuels along with installing

        23        particulate traps for existing engines.  We ask E.P.A. to

        24        take even stronger steps toward eliminating the severe

        25        health impacts that diesel engines pose to our community
                                                                           218


         1        and, in fact, to the whole Los Angeles basin.

         2                 When I started my career as an engineer in the

         3        electric utility business, power plants had thermal

         4        efficiencies around 40 percent, poured sulfur fumes and

         5        high NOx out their stacks.  When I worked in the field,

         6        our cars were covered with yellow spots of sulfur

         7        corrosion spots at the end of the day.  When I left the

         8        business 31 years later, it was a very different

         9        industry.

        10                 Before I retired, I was project engineer on a

        11        project to repower one of these older facilities using

        12        two new gas turbines in a combined-cycle mode.  Each of

        13        the gas turbines was more efficient, larger, and cleaner

        14        than the whole power station they were repowering.  Their

        15        hot gases could generate enough steam to fully run the

        16        existing steam turbine.  The result was a power plant

        17        with three times the output for twice the fuel -- a 50

        18        percent efficiency increase with nine parts per million

        19        NOx and no sulfur.

        20                 At the same time, the conventional units were

        21        being equipped with selected catalytic reduction.  Though

        22        the utilities complained a great deal when that was

        23        imposed, ultimately technology developed led to those

        24        installations being installed at a fraction of the cost

        25        that were initially proposed.  These innovations allowed
                                                                           219


         1        the industry to point with justifiable pride with what we

         2        were able to accomplish.  And why?  Because regular

         3        authorities set the standards that forced us to make this

         4        remarkable progress.  Cleaning up our air basin has

         5        spawned new technologies, created new jobs, and you can

         6        now see the mountains occasionally during the summer.

         7                 I urge the E.P.A. to continue these same

         8        incentives for the diesel industry and help prevent

         9        40,000 premature deaths that result from soot pollution

        10        nationwide by adopting strong regulations to reduce

        11        sulfur, NOx, and particulate releases from diesel trucks.

        12        It is well documented that a direct relationship exists

        13        between fine particulate pollution in the air and

        14        hospitalization for respiratory ailments.

        15                 I'm a firm believer in capitalism as a means for

        16        driving economic progress, but I also believe that

        17        subsidies impede that progress.  Subsidizing polluters by

        18        letting the health industry bear the costs, bear the

        19        economic impacts is the worst kind of subsidy.  E.P.A.

        20        certainly knows this firsthand.  Right here in the

        21        San Gabriel River Aquifer, E.P.A. is conducting an

        22        evaluation of how to prevent health impacts in a Super

        23        Fund Site that used to be one of the best groundwater

        24        aquifers that we have in the basin.

        25                 The message of that pollution is clear.  Once
                                                                           220


         1        the pollutants are released into the environment, there

         2        is no easy way to get them back or prevent their impacts.

         3        The same is true of diesel emissions.  The only way to

         4        control these toxic and carcinogenic emissions is to keep

         5        them out of the exhaust pipe.  Your proposed regulation

         6        is the right step.  Let this technology pay the cost to

         7        clean up the problems they create for the rest of us who

         8        breathe the air in Los Angeles.  Only on that basis can

         9        we then decide if clean diesel is still the way to go or

        10        what other -- some other technology that has already paid

        11        these clean-up costs can do the job better, electric

        12        technologies, compressed natural gas, other technologies

        13        have been mentioned that can move freight around this

        14        country.

        15                 As Jim mentioned, these technologies not only

        16        cut emissions of criteria pollutants but of greenhouse

        17        gases as well.  This is not an issue of jobs versus the

        18        environment.  It is simply a question of a technology

        19        bearing the cost burden necessary to keep from putting

        20        people at risk.  Although much is made of negative

        21        impacts upsetting environmental standards, these

        22        standards do not cause jobs to go down.  Instead they

        23        promote new technologies and the workers to bring those

        24        new technologies into production.

        25                 Often technology is developed to reduce smog in
                                                                           221


         1        Los Angeles spread throughout the country and even the

         2        world as other regions face the same problems that we

         3        face creating even more jobs.  As a result, those workers

         4        and all of us can live healthier, more productive lives.

         5        It's not the job of E.P.A. to figure out what these

         6        technology developments will be or how industry will go

         7        about meeting them.

         8                 Just as with putting catalytic converters on

         9        automobiles as with getting the lead out of gasolines, as

        10        with putting S.C.R.s on utility boilers, let the industry

        11        that say this can't be done put their wisdom instead into

        12        figuring out the best way to do it.  We simply need to

        13        make sure the standards are high enough that when they do

        14        finally get the job done, those of us in Hacienda

        15        Heights, the basin, and the world can live better,

        16        healthier lives.

        17                 I urge you to adopt the proposed reductions for

        18        diesel emissions.

        19                 Thank you.

        20                 MS. CHAIRMAN:  Thank you, Mr. Yann.

        21                 I'd like to thank all the panel members for

        22        caring enough about this issue to come share your views

        23        with us.  Of course, we will consider all your comments

        24        seriously as we're moving forward towards the end of the

        25        year to finalize this problem.  Thank you again.
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         1                 I will call the next panel:  Mr. John Duerr;

         2        Mr. Jason Mark; Ms. Marie Valentine; Ms. Jerilyn Lopez

         3        Mendoza; Ms. Gladys Mead; Mr. Larry Weick; Mr. Rong Lu;

         4        and Ms. Jaqueline Domac.

         5                 I have seen a number of you around since the

         6        morning, so I appreciate your patience in staying until

         7        late afternoon to testify.

         8                 So we'll start with you, Mr. Duerr.  Good

         9        afternoon.

        10                 MR. DUERR:  Good afternoon.

        11                 My name is John Duerr, and I'm here to today

        12        representing Detroit Diesel Corporation.  Detroit Diesel

        13        is a major manufacturer of diesel engines including

        14        heavy-duty on-highway engines which are the subject of

        15        today's rulemaking.  Detroit Diesel is pleased to have

        16        this opportunity to present our views on this important

        17        rule.  At the outset, let me say that Detroit Diesel is a

        18        member of the Engine Manufacturers Association and the

        19        Diesel Technology Forum, and we support the statements

        20        made by both of those organizations earlier today.

        21                 Detroit Diesel wants to congratulate the Agency

        22        in adopting a systems approach in this rulemaking by

        23        proposing substantial fuel quality improvements in

        24        support of the extremely challenging new engine emissions

        25        standards.  Heavy-duty highway engines have been
                                                                           223


         1        regulated since the early 1970s, and, since that time,

         2        there have been remarkable reductions in engine

         3        emissions.  By the time the 2004 emission standards take

         4        effect, NOx and particulate emissions will have been

         5        reduced by approximately 90 percent.  Carbon monoxide,

         6        hydrocarbon, and smoke emissions from diesel engines have

         7        also been reduced substantially and today stand at levels

         8        that are roughly 10 percent of the current standards.

         9                  For the most part, these impressive emission

        10        reductions have been achieved through improvement in

        11        engine design.  Although this approach has been

        12        successful in the past, I believe I can state without

        13        fear of contradiction that the 2004 standards are very

        14        close to the limits of what can be achieved with engine

        15        modifications alone.  Any substantial emission reductions

        16        beyond those reflected in the 2004 standards will require

        17        the use of exhaust aftertreatment.  Efficient and durable

        18        exhaust aftertreatment systems depend on the availability

        19        of very low-sulfur diesel fuel.  Thus, Detroit Diesel not

        20        only supports E.P.A.'s approach of considering diesel

        21        fuel quality and engine emission standards together in

        22        this rulemaking, we believe this is the only viable path

        23        for achieving significant reductions of significant

        24        magnitude.

        25                 While Detroit Diesel believes that reductions in
                                                                           224


         1        diesel fuel sulfur levels are key to achieving the next

         2        level of emission standards, we are not certain if the

         3        NOx standard that E.P.A. has proposed will be feasible

         4        even with fuel meeting a 15-ppm sulfur cap.  The proposed

         5        0.2 grams per horsepower-hour NOx standard will require

         6        the development and use of an aftertreatment system with

         7        over 90 percent effectiveness over an extremely broad

         8        range of engine operating conditions.  Detroit Diesel is

         9        not aware of any systems that have demonstrated this

        10        level of effectiveness in the laboratory, let alone meet

        11        the requirements of a production feasible system with

        12        minimal deterioration in effectiveness over the full

        13        435,000 mile useful life period.  We're continuing to

        14        review and analyze the available data and will provide

        15        more detailed information regarding the feasibility of

        16        the proposed NOx standard and adequacy of the 15-ppm

        17        sulfur cap before the end of the comment period.

        18                 On a related issue, the preamble to the proposed

        19        rule indicates that supplemental Not-To-Exceed and

        20        steady-state provisions which are yet to be finalized as

        21        part of the still-pending 2004 rulemaking will apply to

        22        the proposed 2007 standards.  It is further noted that a

        23        number of modifications to these provisions are expected

        24        relative to the proposal that was released in October of

        25        1999.  These provisions have a very significant impact on
                                                                           225


         1        the stringency and feasibility of the proposed standards.

         2                 Since we have not, as yet, seen these finalized

         3        provisions, we cannot assess their impact or comment

         4        meaningfully on how these provisions affect the technical

         5        feasibility of the proposed standards.  Because of the

         6        extreme importance and complexity of these provisions,

         7        E.P.A. must provide assurance that there will be adequate

         8        time in this rulemaking for comment on the technical

         9        feasibility of this proposed rule after the 2004

        10        rulemaking has been finalized and the supplemental

        11        provisions have been made available for public review.

        12                 Detroit Diesel appreciates E.P.A.'s intent to

        13        provide flexibility by proposing an optional phase-in for

        14        NOx, N.M.H.C., and formaldehyde standards.  While this

        15        approach has been successful in managing the transition

        16        to the new standards for light-duty vehicles, we believe

        17        this program will be unworkable for heavy-duty engines

        18        because customer preferences, cost factors, competition

        19        between engine manufacturers, and issues related to truck

        20        design will make it impossible for engine manufacturers

        21        to manage sales to meet the proposed phase-in schedule.

        22        As an alternative, we suggest that two-step

        23        implementation for the substantial reduction in the NOx

        24        plus N.M.H.C. standard applicable to all heavy-duty

        25        diesel engines in 2007 and the second large reduction in
                                                                           226


         1        2010.

         2                 We believe a two-step implementation will avoid

         3        the problems associated with managing engine sales is

         4        more aligned with technology readiness and can achieve

         5        emission reductions that are equivalent to E.P.A.'s

         6        proposed phase-in schedule.

         7                 One aspect of the proposed rule that Detroit

         8        Diesel finds troublesome is that the Agency did not

         9        include any changes to the emission test procedures.  The

        10        emission test procedures that manufacturers are required

        11        to use in certifying and auditing engines were developed

        12        in the early 1980s and were first applied when NOx and

        13        particulate standards were 10.7 and 0.6 grams per

        14        horsepower-hour respectively.  These procedures were

        15        never designed to provide reliable measurements at the

        16        extremely low emission levels represented by the proposed

        17        standards.  Testing programs conducted jointly by E.P.A.

        18        and industry show that the emission measurement

        19        variability using these procedures is approximately the

        20        same magnitude as the proposed standards.  With testing

        21        variability of this magnitude, it will simply not be

        22        possible to reliably determine if the proposed standards

        23        are being met.  Clearly, substantially improved test

        24        procedures and equipment need to be developed.

        25                 Further, the procedures must be developed with
                                                                           227


         1        sufficient lead-time to allow manufacturers to obtain and

         2        install the necessary equipment to upgrade their

         3        laboratory facilities and complete the development of

         4        compliant engines before the new standards take effect.

         5        Because of the --

         6                 MS. CHAIRMAN:  Mr. Duerr, you may want to take a

         7        short break and get a glass of water.  We can wait.  We

         8        can be here late in the evening.

         9                 MR. DUERR:  I just have a little bit more.

        10                 MS. CHAIRMAN:  Okay.

        11                 MR. DUERR:  Because of the magnitude and time

        12        criticality of this task, we believe E.P.A. must take

        13        immediate action to convene a group of Agency and

        14        industry experts to begin the important work of

        15        developing improved emission tests procedures.

        16                 Again, Detroit Diesel appreciates this

        17        opportunity to present our views on this important

        18        rulemaking.  We will follow up with more detailed

        19        comments on a number of issues before the end of the

        20        comment period.

        21                 Thank you.

        22                 MS. CHAIRMAN:  Thank you.

        23                 Ms. Valentine, good afternoon.

        24                 MS. VALENTINE:  Good afternoon.

        25                 My name is Marie Valentine.  I am here to speak
                                                                           228


         1        on behalf of DaimlerChrysler on the subject of the

         2        E.P.A.'s proposal to modify heavy-duty vehicle emission

         3        control regulations and on-highway diesel fuel

         4        requirements.

         5             DaimlerChrysler is a vehicle manufacturer of

         6        light-duty and heavy-duty vehicles that operate on

         7        gasoline and diesel fuels.  DaimlerChrysler is a

         8        demonstrated leader in the development of environmentally

         9        sound vehicle technologies.  This is evidenced by our

        10        commitment to support the pursuit of tough emission

        11        performance goals.

        12                 Reducing heavy-duty emissions will aid in

        13        achieving the nation's air quality emissions goals, and

        14        we stand ready to do our part.  This is a logical

        15        follow-up to the Tier 2 light-duty vehicle emission

        16        regulations adopted last December.  We agree that E.P.A.

        17        needs to look at all pollution sources when determining a

        18        comprehensive emission reduction plan.

        19                 In our opinion, the combination of the

        20        low-sulfur on-highway diesel program with feasible,

        21        stringent new emission standards for heavy-duty engines

        22        and vehicles will assist in improving air quality

        23        nationwide.  We congratulate E.P.A. for continuing to

        24        link vehicles and fuels as was recently done in the Tier

        25        2 regulations.  This system approach is the only way to
                                                                           229


         1        achieve the emission reduction envisioned.

         2                 We commend E.P.A.'s initiative to propose a

         3        15-ppm sulfur cap for the on-highway diesel fuel.  This

         4        critical first step will enable the continued development

         5        and advancement of diesel emission control technology

         6        that is necessary if the heavy-duty industry is to meet

         7        the new proposed standards which reflect a 90 percent

         8        reduction in NOx and PM.

         9                 Sulfur is a poison that blocks the use of

        10        aftertreatment technology by rendering the hardware

        11        inoperable at today's 500-ppm level.  The developers of

        12        the aftertreatment technologies have indicated that a

        13        very low level of sulfur in diesel fuel is critical for

        14        future development of these devices.  The lower level

        15        will permit catalyst-based control strategies to be

        16        optimized for maximum emission reduction efficiencies.

        17                 Recent data indicate that sulfur-free diesel

        18        fuel is the enabling requirement for the use of NOx

        19        absorbers, Continuing Regenerating Technology systems,

        20        and Selective Reduction Catalysts due to their

        21        sensitivity to sulfur.  Further information on this will

        22        be included in our written comments.

        23                 The world's engine manufacturers have defined

        24        sulfur-free diesel fuel, as specified by the "World-Wide

        25        Fuel Charter," as the correct fuel to enable the use of
                                                                           230


         1        NOx and PM aftertreatment technologies where stringent

         2        emission standards are required.  Therefore, the sulfur

         3        level in diesel fuel must be reduced to allow the use of

         4        aftertreatment technology as an emission control strategy

         5        for diesel vehicles as has been so successful for

         6        gasoline vehicles.

         7                 Let me emphasize that the proposed sulfur cap is

         8        only the first step needed for diesel fuel.  A sulfur-

         9        free diesel fuel with a minimum cetane of 55 and a

        10        maximum 15 percent aromatic limit is ultimately

        11        necessary.  This fuel composition would support the use

        12        of diesel fuel in the light-duty vehicle market and

        13        provide the benefits of reduced emissions and increased

        14        fuel economy -- another goal of the current

        15        administration -- while also maintaining customer

        16        satisfaction.

        17                 A diesel powertrain is an important option for

        18        passenger vehicles.  Diesel vehicles could have a

        19        significant role in the reduction of fuel consumption by

        20        offering a 40 percent fuel economy advantage over

        21        gasoline vehicles on a miles-per-gallon basis.  The

        22        sophisticated diesel vehicles currently in the European

        23        market have higher endurance, reliability, and torque,

        24        which is a desirable performance attribute.  On the

        25        emission side, diesel vehicles have inherently low
                                                                           231


         1        hydrocarbon and carbon monoxide emissions, no evaporative

         2        emissions, and have long-term stability of emissions,

         3        which will be further reduced with aftertreatment, but

         4        the enabling fuel is necessary.

         5                 We applaud the incentives by some oil companies

         6        to deliver clean diesel fuel to some localized markets in

         7        advance of the regulations.  The lesson learned is that

         8        cleaner fuel can be made available, and it is being done

         9        at an affordable price.

        10                 Should a phase-in of clean on-highway diesel

        11        fuel be found necessary, we encourage E.P.A. to have it

        12        start in 2004.  The oil industry has previously

        13        challenged E.P.A. to make all known changes in one step,

        14        not two separate steps so capital investment strategies

        15        can be optimized.  Therefore, the 2004 suggested start

        16        date would link diesel with the gasoline sulfur control

        17        required by Tier 2, and allow light-duty clean diesel as

        18        a viable powertrain.

        19                 In conclusion, let me restate the key points of

        20        our message:

        21                 First, E.P.A.'s proposal of a reduced sulfur

        22        diesel fuel for on-highway is a great first step.

        23                 Second, clean fuel packaged with feasible

        24        emission standards is the correct path to enable further

        25        reduction in emissions.
                                                                           232


         1                 DaimlerChrysler believes that the diesel fuel as

         2        specified in the "World-Wide Fuel Charter" is necessary

         3        to enable low emissions and fuel-efficient technologies.

         4                 DaimlerChrysler is continuing to review the

         5        proposal and plans to submit written comments addressing

         6        other issues in the N.P.R.N. and expands further on our

         7        diesel fuel position.

         8                 Thank you for the opportunity to speak to you.

         9                 MS. CHAIRMAN:  Thank you.

        10                 Mr. Jason Mark, finally.  You've been here the

        11        whole day.  Thank you for your patience.

        12                 MR. MARK:  Well, thank you very much, and I

        13        thank you for your patience as well.  I think you've

        14        experienced a real outpouring of support from concerned

        15        citizens in the Los Angeles area.  I think it's probably

        16        an experience you've had all around the country, and it

        17        suggests that we really have a significant challenge

        18        ahead of us, and everyone is very exited about it.

        19                 My name is Jason Mark.  I am the transportation

        20        codirector of the Union of Concerned Scientists, and I

        21        want to share with you a couple of thoughts, and I've got

        22        a couple slides in just a second.  But I recently did an

        23        interesting -- what I found actually surprising --

        24        back-of-the-envelope calculation and just try to put this

        25        diesel solution issue in perspective.
                                                                           233


         1                 It turns out that the average diesel truck on

         2        the road, on the highways today in America emits three

         3        times more smog-forming pollution and three times more

         4        soot than the average coal-fired power plant per unit of

         5        energy burned.  In other words, in terms pounds per BTU,

         6        NOx with hydrocarbon was three times higher for the

         7        average diesel truck than the average coal power plant in

         8        the United States and three times higher for cities, as

         9        well.

        10                 It sort of, I think, helps us puts in

        11        perspective that what we're really talking about here are

        12        smoke stacks on wheels rolling through our neighborhoods,

        13        our urban centers, and on our highways.  Fortunately,

        14        over the course of a number of regulatory proceedings in

        15        California, both in the Los Angeles area and statewide

        16        over the last year, we've heard proof-positive from the

        17        industry that they've got the technology that will bring

        18        diesel in line, hopefully, with coal power plants and

        19        much, much cleaner over time.

        20                 If I could just show a few slides here, three

        21        short ones, and then I'll be out of your hair, one of the

        22        pieces, obviously, that is quite critical for EPA to rule

        23        is developing strong engine standards as soon as

        24        possible.  We certainly encourage you to accelerate or

        25        eliminate the phase-in for the for the NOx standards.
                                                                           234


         1        I -- also, on the diesel fuel issue near-zero sulfur is

         2        clearly an absolute priority.  In my perspective, there

         3        is really -- you left yourself no room for bargaining

         4        when it comes to sulfur levels.  You can't go any higher

         5        technologically.  It's an absolute priority to hold the

         6        line, no room for bargaining, per se, with the oil

         7        industry on this issue.

         8                 Then I want to spend the bulk of the -- just a

         9        couple minutes talking about real-world emissions.  I see

        10        this as a critical issue, one that we have to address

        11        right now before we get into a situation, at least in

        12        California, where we're dealing with a smog check program

        13        that is in substantial financial and political difficulty

        14        as well as creating emissions losses for the state.

        15                 And there I think while history has shown that

        16        cars in the real world are much dirtier than they are

        17        during an emissions test, either administrated by the

        18        E.P.A. or the California Air Resources Board, the

        19        conventional wisdom is then that diesel trucks don't have

        20        a real-world emissions problem.  I think that

        21        conventional wisdom changed -- if I may have, I think, on

        22        the next slide -- conventional wisdom changed when there

        23        are a series of testings that suggested the number of

        24        engines -- a number of engines were having troubles with

        25        this defeat device.
                                                                           235


         1                 In consulting the consent decree is based on

         2        E.P.A.'s estimates on per-mile emissions rates for

         3        noxious hydrocarbons for the 1998 model engine, and the

         4        next bar would be the emissions a, quote, unquote, legal

         5        truck.  By E.P.A.'s own estimates, those emissions

         6        increased by 70 percent per mile as a result of defeat

         7        devices.  And then this, there's the final bar in

         8        California estimates is from the yet-to-be-finalized

         9        Amfac (phonetic) 2000 analysis, but it suggests that in

        10        reality the increase from defeat devices is well over a

        11        factor of two.

        12                 It suggests that the world is changing, that, in

        13        fact, when we didn't have to worry about deterioration

        14        and any of these problems in the past, now we do.  I

        15        would suggest that that situation is only going to get

        16        worse as we consider exhaust control technology, that, at

        17        least in the light-duty sector, is clearly demonstrated,

        18        had some kinks worked off that took us several decades to

        19        get substantial progress.

        20                 I certainly applaud the engine -- excuse me --

        21        the auto industries and the exhaust control manufacturers

        22        for really beginning to seriously address the emission

        23        problem for automobiles.  Let's make sure we don't create

        24        a similar problem from heavy-duty vehicles.

        25                 So the next chart, please.  This is your
                                                                           236


         1        U.C.S.'s more on-the-back-of-the-envelope calculation

         2        estimating the impact deteriorations could have on the

         3        E.P.A.'s projected benefits.  As was noted earlier,

         4        E.P.A. projects for the year -- these are emissions

         5        results for the year 2030, assumes that engines starting

         6        in the year 2007 don't deteriorate whatsoever, that

         7        despite the fact even E.P.A.'s modeling suggested 2004

         8        engines will deteriorate.

         9                 The assumption is that magically deterioration

        10        goes away in the year 2007 as a result of this rule.

        11        Clearly I would suggest that the history, if passes any

        12        prologue, that perhaps that it's not a fair assumption.

        13        What we've done is looked at a couple different

        14        scenarios.  What if, for example, heavy-duty engines

        15        deteriorate just at historic rates, the same rate you

        16        assume the emissions deteriorate for model year 2004

        17        engines?  What if that continues for the next 30 years?

        18        Turns out that emissions for particulates, for example,

        19        would double in the year 2030.

        20                 Now, what if we assume that because we're

        21        including exhaust control equipment that may be prone to

        22        failure in the real world, in real-world driving

        23        conditions, that the historic deterioration rate actually

        24        doubles, perhaps deterioration because of malfunction.

        25        Then, all of the sudden, particular emissions quadruples
                                                                           237


         1        compared to E.P.A.'s projected benefit.  What that

         2        suggests is that while we may be assuming we're going to

         3        get a 90 percent reduction for smog-forming pollutants

         4        and particulate matter as a result of the E.P.A. rule,

         5        those benefits could be substantially eroded.  In fact,

         6        they could perhaps be cut in half as a result of

         7        deterioration of malfunctioning engines.

         8                 We clearly think that advanced technology has an

         9        important role to play here by providing an intrinsically

        10        clean technology that may not be prone to deterioration

        11        or which the technology has much less of a burden placed

        12        upon it.  That, you can deal with that.  And that's what

        13        the final bar on this chart suggests is that aggressive

        14        introduction of advanced technology can help mitigate the

        15        impacts of real-world pollution.

        16                 If we can go back to the first chart, just to

        17        summarize.  We certainly feel that in-use tests, on-board

        18        diagnostics, Not-To-Exceed limits are absolutely vital in

        19        your 2004 goal.  The incentive for inherently cleaner

        20        technologies, however, is the prudent pathway.  It's the

        21        diversified, no-regret strategy for dealing with an issue

        22        that I think we have yet to really grapple with in the

        23        regulatory community and the public health community the

        24        fact that heavy-duty engine technology is, in fact, much

        25        dirtier in the real word than it is during the
                                                                           238


         1        laboratory-like Federal tests.

         2                 Thank you.

         3                 MS. CHAIRMAN:  Thank you.

         4                 Mr. Larry Weick, welcome.  The microphone should

         5        be on.

         6                 MR. WEICK:  Is it on.

         7                 MS. CHAIRMAN:  Yes.

         8                 MR. WEICK:  Okay.  Very good.

         9                 Good afternoon, Madam Chairman, and members of

        10        the committee.  My name is Larry Weick, and I'm the

        11        vice-president of business development for Syntroleum

        12        Corporation.  My company has developed a commercial

        13        process to convert natural gas into ultraclean fuels,

        14        this fuel here, and is a leading licensor of this

        15        technology in the oil and gas business.  Of specific

        16        interest of this hearing is that Syntroleum has developed

        17        a paraffinic, high-cetane synthetic diesel.  My comments

        18        will focus on the impact synthetic diesel can have on the

        19        U.S. transportation industry.  Syntroleum strongly

        20        believes that blending this synthetic fuel in the present

        21        diesel fuel can assist refiners in meeting the 10-cap-15

        22        diesel sulfur requirement by 2007.

        23                 Synthetic diesel has been developed and tested

        24        by Syntroleum and others, and they meet or exceed all the

        25        properties of the ASTM D975 and are highly suitable for
                                                                           239


         1        conventional and advanced compression ignition systems in

         2        both North American and the European markets.

         3                 Additionally, Syntroleum synthetic diesel has

         4        been demonstrated to be viable for fuel cells.  So it's a

         5        bridging fuel.  Synthetic is psychically similar to

         6        petroleum-based diesel, but it has superior combustion

         7        emission characteristics containing no sulfur, no

         8        aromatics, no olefins, and no metals.  Just as

         9        significant, it's compatible with the existing fuel

        10        distribution infrastructure from the refinery tank all

        11        the way to the pump.

        12                 Syntroleum has recently submitted a petition to

        13        the Department of Energy requesting that the secretary

        14        initiate a rulemaking to add these synthetic fuels to the

        15        list of alternative fuels under EPAct.  Syntroleum

        16        synthetic fuel has the qualities which make an ideal fuel

        17        for assisting refiners in blending this 10-cap-15 limit.

        18        As part of the EPAct process, Syntroleum has independent

        19        testing that compared the engine emissions from this fuel

        20        with conventional E.P.A. Number 2 California CARB spec

        21        diesel, and Swedish City diesel.  CARB diesel and Swedish

        22        City diesel, as you know, are the cleanest diesel

        23        fuels currently commercially available.  Under a variety

        24        of test conditions that are part of the written

        25        testimony, Syntroleum synthetic diesel reduced the
                                                                           240


         1        criteria pollutants, NOx and particulate emissions range

         2        from 11 to 38 percent.  These are significant percentage

         3        reductions.  These benefits can also be realized

         4        immediately because synthetic diesel can be used in

         5        existing conventional diesel engines incorporating

         6        advanced sulfur exhaust treatment technologies that we

         7        heard about earlier today.

         8                 Moreover, it's a relief and a pleasure to point

         9        out to the E.P.A. and the American public and,

        10        particularly Californians, that this synthetic diesel

        11        under discussion has a very low solubility in water.

        12        Additionally, laboratory testing indicates that this fuel

        13        has significantly lower toxicity than conventional diesel

        14        and is much more biodegradable.

        15                 As large trucks and SUVs continue to grow in

        16        popularity, including in California, the shift from

        17        gasoline to diesel engines is growing each year as

        18        evidenced by a 12 percent growth rate for the two-year

        19        period '96-'98, and a 44 percent growth rate for '97-'98.

        20                 Of particular interest to this hearing is the

        21        need for clean diesel fuel to meet Tier 2 standards.  The

        22        demand for diesel in U.S. transportation sector is

        23        growing.  This is diesel is growing three times faster

        24        than gasoline.  If this growth and diesel demand

        25        continues, an additional 100,000 barrels a day of
                                                                           241


         1        incremental diesel fuel will be needed each year just to

         2        keep pace.  The available synthetic diesel will help the

         3        industry meet this growth.  Synthetic diesel will enable

         4        the refining industry to have more flexibility to blend

         5        and meet the anticipated increased demands for diesel.

         6                 This fuel is a proven technology-neutral fuel

         7        that has the potential to revolutionize the

         8        transportation fuels and reduce emissions.  But meeting

         9        the 2007 deadline for 15-ppm diesel is not the only

        10        consideration of this hearing.  There is the issue of how

        11        to refiners will meet increased demand.  World clean

        12        diesel production will need to increase in the face of

        13        well-documented deteriorating fuel quality, oil quality,

        14        as evidenced by the increasing -- steadily increasing

        15        sulfur content and increasing oil gravity.  The expected

        16        increase in competition between the U.S. and the EU and

        17        and elsewhere for these high-grade crude oils as a

        18        strategy for making low-sulfur fuels will not help.

        19        There's not enough clean oil to go around.

        20                 If production of ultra clean diesel was

        21        dependent only on conventional feedstock, the task would

        22        be daunting indeed.  However, the production of synthetic

        23        fuels and synthetic diesel changes the equation.  These

        24        synthetic fuels are the future.  The potential resource

        25        of natural gas for synthetic fuel production worldwide is
                                                                           242


         1        a very large and, as accounted for by some, larger than

         2        the present world oil reserves.  It may take a decade

         3        before total synthetic fuel production exceeds a million

         4        barrels a day.

         5                 However, synthetic fuel production is expected

         6        to grow exponentially as technology improvements continue

         7        to lower production costs and increase returns on project

         8        investments.  During the next 10 to 15 years, blending of

         9        conventional diesel with synthetic diesel would be an

        10        effective means of upgrading lower quality diesel fuels

        11        and meeting expected growth.

        12        By the end of the decade, we believe any synthetic fuels

        13        will be well on their way to becoming a significant

        14        component of this world fuel pool.

        15                 In conclusion, the broader use of these

        16        synthetic fuels will bring significant environmental and

        17        energy security benefits to the U.S. during the next

        18        decade and beyond.  Syntroleum strongly believes that the

        19        expected increased availability of these fuels will

        20        dramatically assist refiners in meeting the 10-cap-15

        21        targets by '07 by blending the in-place fuel streams and

        22        augmenting refining capacity that will be economically

        23        challenged by required reduced sulfur production.

        24                 Thank you, again, for this opportunity to

        25        speak.
                                                                           243


         1                 MS. CHAIRMAN:  Thank you.

         2                 Mr. Rong Lu, good afternoon.

         3                 MR. LU:  Thank you for the opportunity for me to

         4        speak.

         5                 My name is Rong Lu.  I'm a research scientist at

         6        the University of California in Los Angeles.  I have

         7        studied the air quality problem for many years.  The

         8        greater Los Angeles area is still the most polluted area

         9        in the whole nation.  Toxic gases and the fine particles

        10        in the air have a very harmful effect on public health

        11        and welfare.  I'm here to urge you to adopt the toughest

        12        possible standard to reduce the emissions of toxic gases

        13        and particulate matter, especially those from the diesel

        14        exhaust.

        15                 I'd like to show one slide here.  Here, I want

        16        to show one.  Based on recent scientific research, the

        17        average cancer risk in the Los Angeles basin is about

        18        1,400 per million people.  And that means that the

        19        individual person who stayed in the Los Angeles basin

        20        for 70 years and have 1,400 per million chance -- in a

        21        million chance of contracting cancer.  Mobile sources

        22        include cars, trucks, trains, ships, and aircraft with

        23        the greatest, largest contributors.

        24                 However, it's obvious that about 70 percent of

        25        the risk is attributed to the fuel particulate matter
                                                                           244


         1        emissions.  So, in other words, diesel particulate

         2        emissions lead to one in a thousand chance of contracting

         3        canister.

         4                 In order to protect the public health, we must

         5        require the dramatic reduction of the pollutant

         6        emissions, especially the diesel emissions from these

         7        large trucks and buses as soon as possible.  I strongly

         8        support the E.P.A. proposal to significantly reduce the

         9        emissions from heavy-duty engines and vehicles.  Based on

        10        advanced technology, such as the highly efficient

        11        catalytic converters and low-sulfur fuels, the approach

        12        could be the most cost-effective way to reduce emissions

        13        of ozone precursors and particulate matters.

        14                 Specifically, I urge you to reduce the diesel

        15        sulfur level to no more than 15 parts per million

        16        nationwide for both on- and off-road diesel engines by

        17        2006 and also clean up all the big trucks and engines,

        18        and ensure that the big trucks to meet the emission

        19        standard on-road, not only just during the test.

        20                 Finally, I urge you to increase the use of

        21        diesel alternatives such as clean fuel, electric, and

        22        fuel cell buses.

        23                 These measures are critical to protection of

        24        public health and environment.  I hope you seriously

        25        consider them in your final decision-making.
                                                                           245


         1                 Thank you.

         2                 MS. CHAIRMAN:  Thank you.

         3                 Ms. Jerilyn Lopez Mendoza, good afternoon.

         4                 MS. LOPEZ MENDOZA:  Good afternoon.  Thank you

         5        for the opportunity to speak to you today.  Sorry, the

         6        mike is having trouble.

         7                 My name is Jerilyn Lopez Mendoza.  I'm a staff

         8        attorney in the Los Angeles office of Environmental

         9        Defense.  Our office in Los Angeles is dedicated to

        10        environmental justice issues.  We have three main areas

        11        of focus.  The first is alleviating exposure to toxins.

        12        The second is promoting the equity in transportation.

        13        And the third is increasing the amount of green space,

        14        clean and green, schools, parks, and playgrounds for the

        15        children of Los Angeles.

        16                 I know it's the end of the day.  I'm going to

        17        try to be as brief as possible.  I do have written

        18        comments that I brought that I believe you have before

        19        you.

        20                 Two main points I want to make:  First of all,

        21        our office is very much in favor of the new standards

        22        that you have before you that you are considering.  We

        23        are very much in support of any new regulations that will

        24        decrease the amount of particulate matter, NOx, toxicity,

        25        and other carcinogens that in the air in Los Angeles.
                                                                           246


         1        However, the second point I want to make -- and it's the

         2        only big point I want to make -- I do want to import to

         3        you a sense of urgency about these issues.

         4                 Everyone is talking about the MATES-II Study

         5        that the A.Q.M.D. has done.  I think all of us have drawn

         6        from their report in bringing up various matters, one I

         7        will bring up to your attention is on page 2 of my

         8        written comments.  We know that the areas that are most

         9        impacted by air toxins in the Los Angeles region are

        10        South Central and Southeast Los Angeles.  What we have

        11        done is put together census data -- admittedly from 1990,

        12        however, we don't think the demographics have changed

        13        very much -- just to show that who is impacted by air

        14        toxins in the Los Angeles region.

        15                 If you look at the numbers, over 60 percent of

        16        people living in South Central Los Angeles live below the

        17        poverty line.  Over 90 percent of the people who live in

        18        South Central are African- American or Hispanic.  In

        19        Southeast Los Angeles, over 40 percent of people living

        20        in that community are living below the poverty line.

        21        And, again, over 90 percent of the people in that region

        22        are also African-American or Hispanic.

        23                 The most vulnerable areas of our communities are

        24        being the most impacted by air toxins, and this is true

        25        of a lot of areas throughout the country where there's
                                                                           247


         1        environmental injustice and where the people living in

         2        low-income communities are doubly impacted because they

         3        do not have access to the decision-making process, and

         4        they bear the brunt of the environmental degradation of

         5        their community.

         6                 For these reasons, we are urging you as quickly

         7        as possible to enforce these standards.  Seven to 10

         8        years down the line is simply too long to wait,

         9        especially for people living in these communities who

        10        bear the brunt of these problems.  Human health and air

        11        quality are affected every day.  It's getting worse every

        12        day.  It's to promote cleaner air for all of us in

        13        Los Angeles, to improve human health, to bring the entire

        14        region closer to attaining of public health standards,

        15        relieve the burden on low income and communities of

        16        color, overall to just achieve environmental equality for

        17        all of us living in Los Angeles.

        18                 We really urge you to move as quickly as

        19        possible to enforce the strongest standards available to

        20        try to decrease the amount of toxins that our communities

        21        are being exposed to every day.

        22                 Thank you very much.

        23                 MS. CHAIRMAN:  Thank you, Ms. Mendoza.

        24                 And our final person in the panel -- is it

        25        Ms. Jacqueline Domac.  Good afternoon.
                                                                           248


         1                 MS. DOMAC:  Thank you.  Hi.  My name is

         2        Jacqueline Domac, and I'm a high school health teacher at

         3        Venice High School, and I'm happy to be here.  Thank you.

         4                 When I was first asked to testify here, I was

         5        very stressed about knowing all the facts and making sure

         6        as an educator I would be able to convince you about the

         7        statistics and about how many people are dying and how

         8        horrible it is and the pollutants.  I realized that I

         9        really didn't need any facts to be here.

        10                 I'm sure there was a time when people sat at

        11        tables like this and debated whether or not there should

        12        be slavery or whether people actually had the right to be

        13        free.  And there is also a time when people sat at tables

        14        like this debating whether or not women have the right to

        15        vote.  And, to me, there just doesn't need to be any

        16        statistics for that.  Clean air seems to be a right, and

        17        I don't think that it is debatable.

        18                 My students have a really tough life, and I have

        19        to face many problems with them every day from their back

        20        grounds that they come from.  It is not uncommon for me

        21        to hear that their friend was shot on the corner and

        22        their head blown off and now they're dead.  It's not

        23        uncommon for me to hear of students who can't have their

        24        permission slips signed because they land in so many

        25        foster homes, they don't know who now is their legal
                                                                           249


         1        guardian, and just simple economic necessities, just the

         2        burdens placed upon them just to get to school every day

         3        and to have food in their bodies so they are able to

         4        learn.

         5                 As a teacher of health, I tell them there's a

         6        lot of things not in their control, and I would like to

         7        be able to tell them that at least their air quality, the

         8        air that they breathe every day, is in their control and

         9        that they will not be doomed, and that the E.P.A. is

        10        doing something about that to help their environment,

        11        because where I teach is a polluted area, and a lot of

        12        them come from severe economic back grounds, and, as the

        13        previous speakers have said, those people are being

        14        affected the most.

        15                 I grew up in Pacific Grove, California, where

        16        the air was very, very clean by Carmel and Pebble Beach,

        17        and I went to Berkeley which was then at least clean air

        18        up in the area, and I'm really saddened to be in

        19        Los Angeles teaching where the air is really, really

        20        gross.  I'll be giving a lecture in class and have a

        21        diesel truck go by, and all the fumes come into the

        22        classroom, and it's disgusting.

        23                 At least when pot comes in through the windows,

        24        there's something I can do about it.  I can call the dean

        25        and have that removed and alleviate the situation.  But
                                                                           250


         1        we look upon you to do something about the diesel fuel

         2        emissions, because there is little someone can do at this

         3        level other than to pressure you to do that for us.  And

         4        since we are facing so many other problems in schools

         5        right now, this is the very least that you can do is to

         6        provide clean air for our students to breathe and for the

         7        animals and for the plants and the little lizards outside

         8        my house.

         9                 Everything deserves to have some clean air, and

        10        I hope that you will pass the strictest possible laws and

        11        do it in the most efficient manner as possible.

        12                 Thank you.

        13                 MS. CHAIRMAN:  Thank you.

        14                 Mr. Duerr, I have one question.  I know it's

        15        late in the day.  Probably my colleagues are saying,

        16        "What is she doing?"  Well, this morning and, actually,

        17        during this whole day today and the other hearings that

        18        we have had on this very important proposal, we have

        19        heard very positive, actually amazingly positive support

        20        from the companies that are going to make those

        21        technologies, and this morning you heard the

        22        representative of the Association and Mr. John Mooney

        23        from Engelhart (phonetic) with the positive support that

        24        they have given us that indeed those technologies if

        25        they're not here today, they're going to be here by the
                                                                           251


         1        time that these standards are required.

         2                 So my question to you is in your testimony, both

         3        your oral testimony and your written testimony -- and I'm

         4        reading it -- it says that Detroit Diesel is not certain

         5        if the NOx standard that the E.P.A. suggests will be

         6        feasible even with the fuel meeting the

         7        15-parts-per-million sulfur cap.  And I wanted to ask

         8        you, first of all, are you going to be able to provide

         9        more definitive input to the record, because indeed we're

        10        going to be making decision by the end of the year?  And,

        11        obviously, we're talking about six, seven years' time

        12        frame, and what is your view, optimism or lack of

        13        optimism, as far as the ability of your company to exceed

        14        those standards given the time -- today, the colleagues

        15        in your industry and the aftertreatment technology

        16        manufacturers?

        17                 MR. DUERR:  I hope we can provide some more

        18        definitive information, although, I'm sure our crystal

        19        ball is not going to become totally clear before this

        20        rulemaking is concluded.  One of our concerns -- and I

        21        tried to express it here -- is that we have not yet seen

        22        the final regulations regarding the supplemental test

        23        procedures.

        24                 And I think as the Agency is well aware, that is

        25        a concern of not only Detroit Diesel but manufacturers as
                                                                           252


         1        a whole.  And we certainly recognize that that will have

         2        impact on the feasibility of the standards.  And, in

         3        addition, you know, we can look at the particulate side,

         4        and we can look at the NOx side independently and maybe

         5        get some optimism that those standards can be

         6        individually achieved.  But then it's the issue of can we

         7        integrate systems in such a way that both standards can

         8        be met and be met through the extended useful life that

         9        that equipment needs to perform?  We just don't have all

        10        that knowledge yet.  We're trying to build that

        11        knowledge, and hopefully we can be more optimistic.

        12                 MS. CHAIRMAN:  I appreciate your comments.

        13                 Again, what strikes me throughout this public

        14        hearing process is the positive feedback that we're

        15        getting through these public hearings from all the

        16        colleagues, many of your colleagues, in the industry and

        17        especially the aftertreatment technology companies that

        18        obviously, as you heard this morning, are spending

        19        millions of dollars in developing those technologies.

        20                 So we all need to continue the dialogue

        21        including your company and those companies that are going

        22        to be providing those aftertreatment technologies.  After

        23        all we're talking about seven, 10 years' time frame, and

        24        we're hearing from other members of this panel that

        25        seven, 10 years is too long.
                                                                           253


         1                 Thank you very much.  I want to thank especially

         2        the concerned citizens for taking time in coming forward

         3        to testify on this important proposal and your comments

         4        will fully be considered as we're moving forward to

         5        finalize this.

         6                 Thank you.

         7                 We will proceed with our next panel:

         8        Mr. Nicolas Economides, Jim Morales -- Tim --

         9        Mr. Lawrence Lebowsky, Martin Schlageter, Cathy Chang,

        10        Ms. Mary Edie, Dan Muhtar, and Andrea Van Hook.

        11                 Please forgive me if I didn't pronounce your

        12        names properly.

        13                 Mr. Economides, we'll start with you.  Good

        14        afternoon.

        15                 MR. ECONOMIDES:  Good afternoon.

        16                 MS. CHAIRMAN:  Definitely I'm pronouncing your

        17        name correctly.

        18                 MR. ECONOMIDES:  I'm comfortable with that.

        19                 MS. CHAIRMAN:  Okay.

        20                 MR. ECONOMIDES:  Good afternoon.

        21                 My name is Nick Economides, and I am the

        22        director of refining and reformulated fuels at Hart Fuel

        23        Information Services.  For almost 20 years, Hart has

        24        provided quality information, consulting services, and

        25        analysis to the worldwide refining and automotive
                                                                           254


         1        industries as well as the state, federal regulatory and

         2        legislative officials and public policy makers.

         3                 As part of these overall efforts, we feel we

         4        have a unique perspective on the individual and

         5        collective needs of the industry, and we're happy to be

         6        here today to discuss a little bit more of the refining

         7        economics of the proposal particularly as it pertains to

         8        the synthetic diesel aspects that you heard a little bit

         9        about earlier from Syntroleum Corporation which develops

        10        and licenses a cost-effective process based on Fisher

        11        Drokes (phonetic) technology from clean natural gas.

        12                 Understandably most of the testimony you

        13        received here today and in the previous hearings held in

        14        the past week involved the feasibility, necessity, cost

        15        effectiveness, and economic implications of producing a

        16        cleaner, conventional -- that is based on petroleum

        17        refining -- diesel fuel.

        18                 We applaud your efforts to address the

        19        significant pollution contribution the diesel sources

        20        represent.  We're comfortable that the proposed maximum

        21        of 15 parts per million is not only technologically

        22        feasible but also necessary to propel us into the next

        23        generation of cleaner diesel fuels.  Such fuels will

        24        undoubtedly be needed as we struggle to meet the

        25        greenhouse gas emission targets that lie ahead of us.
                                                                           255


         1                 It is already widely recognized that diesel

         2        provides a substantially more fuel efficient fuel than

         3        gasoline and is generally more reliable and easier to

         4        maintain.  Your action or your proposed action will drive

         5        the last remaining aspect of diesel marketability in our

         6        view, and the one that has suffered the most up to today,

         7        that is environmental performance.

         8                 Diesel can be made cleaner.  In fact, diesel can

         9        and should be made clean enough to compete with

        10        alternative fuels for similar operations.  E.P.A.'s

        11        action ensures that this long overdue change is finally

        12        under way.

        13                 From the synthetic fuels perspective, the debate

        14        over the cost impacts of your proposal in conventional

        15        refining is only a small piece of the picture, and,

        16        although presently the loudest, it is certainly not the

        17        one with the longest term strategic implications from the

        18        national energy policy and the global environmental

        19        significant standpoint.  Rather, we believe that the

        20        wide-scale introduction of such technology holds the

        21        potential to profoundly affect the oil and gas

        22        industries, as you heard earlier, and to fundamentally

        23        change the way we approach the challenges of cleaner

        24        fuels that lie ahead of us such as the low-sulfur diesel

        25        fuel requirement.
                                                                           256


         1                 You've heard about the technical aspects in the

         2        strategic significance of the process already in the

         3        previous panel, so I'm not going to dwell on that.  What

         4        I do want to talk about is the opportunities that this

         5        process provides us within the context.  This process can

         6        be applied effectively both at the oil well to unlock

         7        what we call "stranded natural gas resources" or to allow

         8        the development of oil resources that would otherwise not

         9        be produced unless the associated gas that you typically

        10        get when you explore for oil is handled in an economic

        11        and environmentally friendly manner.

        12                 More importantly in the context of this

        13        rulemaking, it be can used to produce superior synthetic

        14        fuel that can be used directly as finished diesel or

        15        introduced in the conventional refining schemes as clean

        16        blend stock components that can extend the volume of

        17        clean diesel that any refiner of conventional fuel can

        18        produce.

        19                 The diesel products of the Syntroleum process

        20        are totally free of sulfur, as you heard, nitrogen,

        21        metals, cetanes, aromatics, and all the other

        22        undesirables that are typically found in traditional

        23        hydrocarbon products derived from crude oil.

        24        Furthermore, it's almost exclusively paraffinic with few

        25        or no complex cyclic hydrocarbons or oxygenates that
                                                                           257


         1        would require further separation processing before a

         2        finished product can be obtained.

         3                 Therefore, the environmental attractiveness of

         4        Fisher Drokes diesel standards beyond the fact that it is

         5        sulfur-free the synthetic diesel is also of exceptional

         6        cetane and, of course, aromatic quality.  Prospects for

         7        diesel among the strictest in the world require emissions

         8        performance equivalent to a reference fuel with a cetane

         9        value of 48 while Syntroleum's diesel product in cetane

        10        value nexus of 70.  Similarly, the maximum aromatic

        11        specification of car diesels reference fuel is 10 volume

        12        percent.  As you heard, this synthetic has no detectable

        13        aromatics.

        14                 The combined impact of the absence of sulfur,

        15        nitrogen, and aromatics coupled with the high cetane

        16        value yields a substantially improved emissions

        17        performance for this fuel.  This, in turn, makes it a

        18        prime candidate to be used as a dilution blend stock to

        19        enable refiners to accommodate substantially inferior

        20        blend stocks in their fuel while meeting the

        21        progressively stricter standards that we have in front of

        22        us today.

        23                 The Naptha portion that is produced in the

        24        Syntroleum process is also completely paraffinic and also

        25        making it suitable for further processing in a
                                                                           258


         1        conventional refining scheme.  In fact, the C6 plus the

         2        Fisher Drokes Naptha could represent the valuable

         3        dilution of blend stock for the existing refinery pool of

         4        aromatics and olefins, particularly if it's octane that

         5        can be accommodated in an integrated refinery scheme,

         6        for example, one where we are planning on using a

         7        combination of down-stream methanol blending.

         8                 Lastly, we have the transportation advantages of

         9        Fisher Drokes which enable us to move the products in the

        10        conventional scheme, in other words, the same ships and

        11        the same pipelines that are used to use move conventional

        12        fuel are the ones that will be used to move the synthetic

        13        products.  All of these advantages, however, the strong

        14        favorable environmental characteristics, and so on, are

        15        pointing an increasing application of gasoline

        16        (unintelligible) technology for the years to come.

        17        However, the marketplace has taught us a clear lesson

        18        that none of this would have -- would come to pass if the

        19        economics did not walk side by side with all the rest of

        20        us.

        21                 And what I'm here to emphasize for you is that

        22        this technology's potential from an economic standpoint

        23        is every bit as attractive as it is from an environmental

        24        standpoint.  There are some five trillion cubic feet of

        25        worldwide gas reserves, according to the "Oil and Gas
                                                                           259


         1        Journal."  Approximately half of that gas is stranded,

         2        in other words, without any ready application.

         3                 Given a ratio of conversion of 10 to 1, that gas

         4        could be converted to 250 million barrels of synth fuels

         5        which is almost equivalent to all the estimated oil

         6        reserves of Saudi Arabia.  I mean we are talking about

         7        tremendous volumes of material, clean fuel that can be

         8        produced in this range.

         9                 Now, what will that mean?  Let's say, in a

        10        recent study that was done actually by the Arthur

        11        Andersen Company, we found that by unlocking enough gas

        12        to make 100,000 barrels of Fisher Drokes' products, a

        13        company of the size of Texaco, for example, could

        14        increase its price and its earnings per share by

        15        approximately 26 percent assuming the same PE multiple.

        16                 This would result just by reducing depreciation,

        17        depletion, and amortization on a per-barrel basis as the

        18        DBNA pool is spread over a larger reserve base.  And this

        19        will be -- in addition to that, we would have substantial

        20        economic benefits accruing from the Fisher Drokes' plant

        21        itself.

        22                 And what are these benefits?  We have been

        23        conducting a number of refinery linear model simulation

        24        runs at Hart/IRI to see what the value of these products

        25        are in the conventional refining scheme.  We have found
                                                                           260


         1        them to be in the vicinity of five to 10 dollars per

         2        barrel over conventional diesel in a low-sulfur

         3        environment.  These economics are driven not only by

         4        increased clean product values, but also by economics as

         5        it appears that refiners with access to this material as

         6        a blend stock component will be able to increase crude as

         7        well as process a more economical crude slate.

         8                 As you might expect, the highest value scenarios

         9        are those involving refiners processing heavier crude,

        10        such as local California crudes, Mexican crudes, and so

        11        on, with limited hydrocarbon processing and little

        12        dearomatization capability.  New markets requiring the

        13        strictest new standards, again, such as the ones we have

        14        here in California.

        15                 And I will conclude by saying that the proposed

        16        rule to reduce sulfur content is, again, the necessary

        17        first step on the road to tomorrow's cleaner fuels, and

        18        we applaud the Agency for its initiative.  We're

        19        confident that the future holds even more promise for the

        20        environmental performance of the diesel engine and fuel

        21        system, and we look forward to the combined advent of

        22        superior diesel fuels and the engine advances that will

        23        undoubtedly accompany them.

        24                 It makes little sense for us to dwell on the

        25        fact that 15-ppm sulfur spec versus the 30-ppm average
                                                                           261


         1        spec while the market forecloses on diesel.  Let's

         2        concentrate on taking diesel to the next level of

         3        environmental performance as quickly as possible.  We

         4        have a lot of ground to make up and a lot of impatient

         5        folks, as we heard out there, who have been waiting for

         6        us to step up to the plate for quite some time now.

         7                 Thank you very much for the opportunity to speak

         8        today.

         9                 MS. CHAIRMAN:  Thank you, Nicholas.

        10                 Mr. Dan Muhtar, good afternoon.

        11                 MR. MUHTAR: Good afternoon.  My name is

        12        Dan Muhtar.  I'm a student at U.C.L.A. and a member of

        13        CALPIRG.  I was asked to read a statement from Mary Ann

        14        Garvey.  She's the president of the Los Angeles 10th

        15        District P.T.A.

        16                      She says:  "I regret that I'm unable to

        17            attend the E.P.A. (unintelligible) public hearing

        18            on June 27th in Los Angeles.  I am instead

        19            representing Los Angeles 10th District P.T.A. at

        20            the national P.T.A. convention in Chicago.

        21            However, I do want to commend you for the E.P.A.

        22            proposal that will require engine makers to meet

        23            tight particulate and carbon monoxide tailpipe

        24            limits and require the oil industry to remove

        25            sulfur from diesel fuel.  Reducing particulate
                                                                           262


         1            matter by 90 percent and nitrogen oxide by 95

         2            percent as well as reducing the sulfur component

         3            of diesel fuel by 97 percent will go a long way

         4            to improve the quality of air in Los Angeles.

         5                       "As early as 1973, the California

         6            State P.T.A. adopted a resolution on air

         7            pollution with the result that continuing

         8            encouragement could be given to legislative

         9            policies which would promote solutions for the

        10            existing problems of air pollution.  Thus, I

        11            encourage you to adopt a strong diesel fuel

        12            policy.  In 1997 the national P.T.A. adopted a

        13            clean-air resolution which is recognizing -- that

        14            air pollution such as nitrogen oxide, and

        15            particulate matter, sulfur dioxides, and other --

        16            others have a detrimental affect on children's

        17            health.

        18                      "(Unintelligible) College based

        19            organizations to support regulations addressing

        20            air quality.  The 10th District P.T.A. supports

        21            this strong E.P.A. regulation.  Since diesel

        22            vehicles emit at least 50 percent of the

        23            dangerous soot particles in Los Angeles, nearly

        24            one-third of the smog-forming nitrogen oxides.

        25                      "Los Angeles needs cleaner air.  Most
                                                                           263


         1            of the driving I do on the freeway -- is on the

         2            freeways, and the emissions from buses and trucks

         3            is most noticeable.  However, last week I was

         4            driving on a surface street and came upon a

         5            school bus that was spewing clouds of black

         6            exhaust.  I immediately rolled up my window and

         7            switched lanes to avoid the pollution.  People on

         8            the street do not have this option.  In fact,

         9            while I was planning to turn on a to a particular

        10            street, I elected not to because the school bus

        11            was making the same turn.  Instead, just to avoid

        12            traveling behind the bus, I chose a different

        13            route.

        14                      "Diesel exhaust is dangerous for

        15            everyone to breathe.  It is a particular health

        16            risk for children and the elderly.  I urge the

        17            E.P.A. to act with stringent regulations.  Let's

        18            clean up the air in Los Angeles and the rest of

        19            the nation.

        20                      "Sincerely, Mary Ann Garvey."

        21                 MS. CHAIRMAN:  Thank you.

        22                 Miss Cathy Chang, welcome.

        23                 MS. CHANG:  Good afternoon.

        24                 My name is Cathy Chang.  I am a student at the

        25        University of Los Angeles -- University of California,
                                                                           264


         1        Los Angeles, and I'm also a representative of the

         2        organization of CALPIRG, and I was asked today to share

         3        with you a short letter from the Wilmington North

         4        Neighborhood Association.

         5                 And the letter reads:  "Dear Administrator

         6            Browner, on behalf of our 120 members of

         7            Wilmington North Neighborhood Association, we

         8            urge the E.P.A. to adopt tough new emission

         9            standards for heavy-duty trucks and buses as soon

        10            as possible.

        11                     "Our community of Wilmington is adjacent

        12            to the Port of Los Angeles.  We suffer the abuse

        13            of thousands of container trucks daily spewing

        14            their diesel exhaust fumes whether traveling or

        15            just idling their motors waiting for a load.

        16            This is in addition to open storage of petroleum,

        17            coke, and an open storage pile of sulfur.

        18                     "We have elementary schools that are

        19            just blocks away from container traveling and

        20            idling trucks that ply our streets daily, and,

        21            what with the expansion of the Port of

        22            Los Angeles and adjacent Port of Long Beach, it

        23            will continue to get worse.

        24                     "Won't you stop and listen to the

        25            affected persons who, with increasing health
                                                                           265


         1            problems, are trying to tell you something?

         2            Passenger cars had to comply with the rules.  You

         3            should have had the trucks and buses comply at

         4            the same time.  Is it going to be too late for

         5            anything to be done before more people have to

         6            suffer with continuing health problems?

         7                     "W.N.H.A. urges you to act as soon as

         8            possible to rectify this health problem.

         9                     "Sincerely, Gertrude Schwab, president

        10            of the Wilmington North Neighborhood

        11            Association."

        12                 Thank you for your time.

        13                 MS. CHAIRMAN:  Thank you, Miss Chang.

        14                 Mr. Martin Schlageter, good afternoon.

        15                 MR. SCHLAGETER:  Good afternoon.  Thank you.

        16                 My name is Martin Schlageter, and I am here

        17        representing the Sierra Club and its 60,000 members in

        18        Los Angeles and Orange County welcoming you to

        19        Los Angeles, and I'm very pleased that you are not only

        20        undergoing this process but that you came to visit us

        21        here today.  I also want to appreciate that you've had a

        22        long day, and I do have copies of my testimony, so I'll

        23        be brief.

        24                 Because you've come all the way to Los Angeles,

        25        let me tell you a little bit about what's happening here,
                                                                           266


         1        and I apologize if I'm repeating something.

         2                 The City of Los Angeles has recently affirmed

         3        its commitment to a clean-air policy and its support for

         4        alternatives to diesel fuel.  It's also beginning to look

         5        into how it could retrofit diesel with cleaner

         6        technology.

         7                 The Metropolitan Transportation Authority here

         8        has, again, rejected diesel in favor of purchasing

         9        cleaner alternative-fuel buses.  It has a longstanding

        10        policy for this, and it, too, has begun to look toward

        11        retrofitting the existing dirty diesel buses with cleaner

        12        technology.

        13                 In Orange County, the transportation authority

        14        has also rejected dirty diesel buses in favor of

        15        purchasing cleaner buses.

        16                 Private fleets and operators, as you may have

        17        heard from today, have begun -- albeit somewhat slowly --

        18        have begun to move towards alternative fuels and cleaner

        19        technology.  And, most recently, the A.Q.M.D., the Air

        20        Quality Management District, has set a strict regulation

        21        that effectively bans the purchase of diesel buses in --

        22        for new additions to public streets.  It not only will

        23        encourage alternative fuels, but it is beginning, then,

        24        also to look towards retrofitting some of the old fleet

        25        vehicles with cleaner technology.
                                                                           267


         1                 Now, all of this is just what's happened within

         2        the last month, so you can see that there is a lot of

         3        momentum to go in the direction you're going, and that

         4        momentum here locally has affirmed what the Sierra Club

         5        and other environmentalists believe, and that's there is

         6        no going back to dirty, deadly diesel.

         7                 So all more reason for you to be here today.  We

         8        appreciate what you have in front of you.  We appreciate

         9        the process you're undertaking.  I do want to encourage

        10        you to go as quickly as possible and as strictly as

        11        possible to reduce the sulfur content to as near to zero

        12        as possible certainly by no later than 2006, to reach a

        13        90 percent emissions reduction as quickly as possible,

        14        certainly no later than 2007, and to keep in your rules

        15        strong incentives for alternative fuels and the

        16        advancement of cleaner technology.

        17                 We can't live literally with diesel, and so we

        18        are relying upon your rulemaking here to allow us to

        19        breathe easier.  And, in the end, if you don't clean up

        20        diesel aggressively enough, we're going to be looking at

        21        how to eliminate diesel.  So the chance is in front of

        22        you today to act with conviction, to act with urgency and

        23        immediacy, and to act with firmness on behalf of public

        24        health and the environment, and then at the same time

        25        then avoid a more difficult conflict later, a more
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         1        difficult choice later.

         2                 So I appreciate your time and your commitment to

         3        this, and I thank you for the chance to take a little bit

         4        of that time.

         5                 MS. CHAIRMAN:  Thank you.

         6                 Mr. Lawrence Lebowsky, welcome.

         7                 MR. LEBOWSKY:  Thank you.

         8                 Again, thank you for the opportunity to address

         9        you here today.  My name is Lawrence Lebowsky, and I'm a

        10        lawyer in private practice here in Los Angeles, and I'm

        11        also the immediate past chair of the American Lung

        12        Association of Los Angeles County.

        13                 Today I'm speaking to you on behalf of our board

        14        of directors and the thousands of children with asthma

        15        and the people with lung disease whom we serve.  We have

        16        made great strides in cleaning up our air here in Los

        17        Angeles.  We worked hard at cleaning up cars, paints, and

        18        other solvents, dry-cleaning plants, and industry.

        19                 On June 16th, our Air Quality Management

        20        District took the bold step of adopting rules requiring

        21        public fleets to make the switch to alternative-fuel

        22        vehicles.  In the South Coast air basin, I believe it is

        23        safe to say that we are leaders in the fight for clean

        24        air.

        25                 We have to be leaders because our air pollution
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         1        problem is huge.  We breathe some of the worst air in the

         2        nation here in Los Angeles.  We consistently rank Number

         3        1 in ozone smog pollution.  The A.Q.M.D. Zone Study shows

         4        that 70 percent of our cancer risk from the air we

         5        breathe is due to diesel exhaust, and this means a

         6        thousand cases of cancer per one million people, and that

         7        is why we are serious about cleaning up our air.

         8                 At the American Lung Association, we have

         9        witnessed an explosion in pediatric asthma rates over the

        10        last 15 years.  Between 1982 and 1995, the asthma

        11        prevalence rate, the rate per thousand persons, among

        12        children increased over 86 percent.  We do not know all

        13        of the reasons for this result.

        14                 We do know that air pollution significantly

        15        affects children with asthma.  These children miss 100

        16        million school days annually because they cannot breathe.

        17        Through our pediatric asthma programs, we warn parents to

        18        watch the air quality index and not to allow their

        19        children to play outside on bad air days.  The A.Q.M.D.

        20        sends out warnings to schools and coaches telling them to

        21        keep all children inside during health advisories.  We do

        22        so much to protect our children, and yet every weekday,

        23        these same children go to school on a bus that emits

        24        thick, black clouds of asthma-inducing diesel exhaust,

        25        and this must stop.
                                                                           270


         1                 Diesel trucks and buses have been getting a free

         2        ride for too long.  Since the 1970 Clean Air Act, diesel

         3        vehicles have actually been getting dirtier while cars

         4        are getting cleaner.  We cannot allow diesel trucks to

         5        undo all the good work we are already doing to clean up

         6        our air.  These trucks must be required to have the same

         7        emissions as cars.

         8                 The American Lung Association is pleased to

         9        support the proposed rules regarding a low-sulfur diesel

        10        fuel and new diesel engine standards.  We strongly

        11        support the low-sulfur diesel fuel provisions and view

        12        the cap at 15 parts per million on sulfur as critical so

        13        that the pollution controls can indeed work.

        14                 We would urge the E.P.A. to consider

        15        implementing these rules earlier than proposed

        16        particularly with regard to the nitrogen oxide standard

        17        in 2010.  We believe it is desirable from the viewpoint

        18        of public health and feasible from an engineering

        19        standpoint to have the new nitrogen oxide standards go

        20        into effect in the same year as does the particulate

        21        standard in 2007.

        22                 Through the adoption of these rules and though

        23        the adoption of these rules would make history, the fact

        24        is that we will not see the benefits immediately in terms

        25        of a reduction of ozone air pollution.  That is why we
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         1        are urging you to move up the schedule.  We must start

         2        eliminating dirty diesel now and not in seven to 10

         3        years.  Our lungs and our children's lungs deserve it.

         4                 I thank you for your attention.

         5                 MS. CHAIRMAN:  Thank you.

         6                 Mr. Tim Morales.

         7                 MR. MORALES:  Thank you very much.

         8                 I am the director of the Mexican-American

         9        Community Foundation.  I'm also a board member of the

        10        American Lung Association.  I'm here to ask you to adopt

        11        your common-sense approach to cleaning up heavy-duty

        12        trucks and buses.  Mexican-American Community Foundation

        13        administers 22 child care and Head Start centers

        14        throughout the state of California primarily in urban

        15        centers such as East Los Angeles.

        16                 East Los Angeles has the most minority

        17        neighborhoods in the U.S., bears more than its fair share

        18        of the air pollution burden.  We have in our community

        19        more industrial plants and more freeways which means we

        20        have more diesel trucks rumbling through our communities.

        21        African-American, Hispanic, and Asian-American children

        22        are disproportionately represented in areas of high ozone

        23        pollution.

        24                 Almost 70 percent of Hispanic children live in

        25        areas like East Los Angeles that regularly exceed Federal
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         1        ozone standards.  Due to this disparity, we are

         2        experiencing in our community and our child care centers

         3        an increase in respiratory diseases such as asthma and

         4        bronchitis.  This is why we need the E.P.A. proposal as

         5        not only a clean-air issue but environmental justice and

         6        quality-of-life issue.

         7                 I'm here to today to support your proposal to

         8        protect the public health by looking at big trucks and

         9        buses.  It makes sense that you are proposing to reduce

        10        sulfur levels in diesel fuel by 90 percent by 2006 before

        11        other vehicle standards go into effect.  I urge you not

        12        to weaken this provision by allowing an extended time

        13        line or higher sulfur levels.  If the newer, cleaner

        14        trucks do not have the 15-parts-per-million sulfur cap,

        15        we will not have the necessary pollution reductions for

        16        healthier life in our centers.

        17                 We need to also make sure that new trucks and

        18        buses are meeting the emission standards on the roads not

        19        just during the engine testing.  Furthermore, these

        20        newer, cleaner trucks should be required to meet the

        21        emission standards as soon as possible.  We're already

        22        going to have to wait until 2007 before we see any major

        23        reductions in pollution.  We should not have to wait

        24        until 2010 before we can get relief from smog-form

        25        pollution from these trucks and buses.  Instead, emission
                                                                           273


         1        standards should sense for smog-forming pollution should

         2        be firmly implemented in 2007.

         3                 Finally, improving existing diesels makes sense

         4        for our health and environment but also replacing them

         5        with cleaner technologies makes more sense.  Therefore,

         6        you should consider providing incentives to increase the

         7        use of advanced technology vehicles such as fuel cell,

         8        electric buses and trucks.

         9                 We need to push the engine manufacturers, oil

        10        industry, and the transportation industry further to

        11        develop these new technologies because our children's

        12        lungs depend upon it.

        13                 Thank you very much for your time.

        14                 MS. CHAIRMAN:  Thank you.

        15                 Ms. Andrea Van Hook, welcome.

        16                 MS. VAN HOOK:  Thank you.

        17                 My name is Andrea Van Hook.  I am a staff member

        18        with the American Lung Association of Los Angeles county.

        19        We asked several of our children who are in our pediatric

        20        asthma classes -- we teach these classes in the public

        21        schools -- to write letters to you about what they think

        22        about the proposed new rule, and I have these letters to

        23        give to you today.  I just want to briefly read you a few

        24        of them so you sort of now what the kids are thinking.

        25                      "Dear E.P.A.:  I am so glad that you
                                                                           274


         1            people are protecting us people with asthma,

         2            because in a decade over 12,000 people die of

         3            polluted air (read it in an article.)  I mean why

         4            did the trucking corporation know that the

         5            smokestacks on trucks would make people stay

         6            inside, children will miss school, adults will

         7            miss work.  And when I was first diagnosed as

         8            asthmatic, I felt like I should move to Hawaii

         9            because of the fresh air and clean water.

        10                     So on the first day I knew I had asthma,

        11            I wanted to carry an oxygen tank stuck on my

        12            mouth and covering my nose.  So my mom told me

        13            about the E.P.A., and told me the E.P.A. will

        14            protect you.  And, now, what do you know?  I'm

        15            writing the letter to the E.P.A.," exclamation

        16            point, exclamation point, exclamation point.

        17            Sincerely, Christian, age nine of Alhambra,

        18            California"

        19                     "Dear E.P.A.:  I would like to thank you

        20            for your appreciation and for caring so much

        21            about us kids that have asthma.  I really

        22            appreciate your work and consideration.  You are

        23            really good people.  Yours Truly, Sarah, age 10

        24            of Los Angeles."

        25                     "Dear E.P.A.:  Please clean those trucks
                                                                           275


         1            that have smoke for kids like us that have

         2            asthma.  Your Friend, Byron."  Byron wasn't sure

         3            if he was eight or nine, so he finally settled on

         4            nine.  So he's nine.

         5                     "Dear E.P.A.:  We deserve cleaner air.

         6            Why I think so is because if we don't, more

         7            people will get sick because of the polluted air.

         8            One cause are those big dirty trucks.  We should

         9            get rid of them.  Lots of people have asthma

        10            including myself, and if our air keeps getting

        11            polluted, our asthma will keep getting worse.  So

        12            help us to create a cleaner air.  Ashlee, age 11

        13            of Long Beach."

        14                     One more, "Dear E.P.A.:  Thank you for

        15            helping us and doing your job.  Arica, age eight

        16            of Long Beach."

        17                And we have more for you from children as young

        18        as five.  They all know that trucks pollute because

        19        they can see it, they can smell it, and they can taste

        20        it, and they want you to do something about it.  Please

        21        keep the 15-parts-per-million cap on sulfur and develop

        22        a program for checking in-use emissions.

        23                 We also ask you to seriously consider moving

        24        up the nitrogen oxide standard to 2007, as that will

        25        most directly help our smog levels in L.A.  We also
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         1        urge you to provide incentives for advanced

         2        technologies so that research and development of

         3        cleaner, zero-emission transportation is encouraged.

         4                 By 2010, all of these children will be in

         5        their late teens, and they will have grown up breathing

         6        some of the dirtiest air in the U.S.   But if you push

         7        forward with this proposal, then for their children,

         8        things will be a lot different.  The air will be

         9        cleaner, and the skies will be blue.

        10                 Thank you.

        11                 MS. CHAIRMAN:  Thank you, Ms. Van Hook.

        12                 Obviously the testimony from these children is

        13        a reminder of why we are here today and what we are

        14        trying to do which is to protect the public health of

        15        everyone, especially our children.  Thank you very

        16        much.

        17                 I'd like to thank you all for your testimonies

        18        and taking the time to come and share with us your

        19        views about this very important proposal.  Now, I'm

        20        told that there are some additional individuals here to

        21        testify so I will call the names.

        22                 Thank you.

        23                 Richard Rolfe, Smitha Gottimurkala, Joan

        24        Holmes (phonetic), Danielle Misolik (phonetic), Gene

        25        Krisher (phonetic), and Karyn Ihara.
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         1                 If there is anybody else here in this room,

         2        there are a few people left, if you're interested in

         3        testifying, please come forward.

         4                 MS. IHARA:  Hello, my name is Karyn Ihara.  I

         5        am a student here at U.C.L.A.  I am here today because

         6        I strongly support proposals calling for tighter fuel

         7        and engine standards across the nation.  I think that

         8        replacing dirty diesel with clean diesel is important

         9        for everyone but especially for people with respiratory

        10        problems.

        11                 I have asthma, and I can't fully describe how

        12        relieved I'd be if I could actually breathe clean air

        13        all the time.  Although I moved down here to go to

        14        school, I used to live in Sacramento.  In the summer

        15        when it gets really hot, we sometimes get an inversion

        16        layer.  That's when the air in the valley all gets

        17        trapped in.  All the pollutants get trapped in, also,

        18        and the P.S.I. gets really high.

        19                 When the P.S.I. finally reaches 100 or so,

        20        people with respiratory problems are encouraged to stay

        21        inside all day.  On those days, I stay at home if at

        22        all possible because I don't want to get an asthma

        23        attack.  Compared to diseases like cancer and Aids,

        24        asthma seems pretty harmless, but having an asthma

        25        attack is a really miserable experience.  It can even
                                                                           278


         1        be fatal.  Just imagine trying to breathe by taking

         2        breaths that are only a quarter as deep as normal.  Not

         3        only is it exhausting, it's scary.

         4                 Fortunately Sacramento's air only gets really

         5        bad in the summer.  And I now live in Westwood where

         6        the air is also generally safe to breathe.  However,

         7        even when the air in Sacramento is only marginally

         8        unhealthy, it can still make it difficult for me to

         9        breathe.  And, since I often need to travel to places

        10        outside of Westwood, I often have to breathe unhealthy

        11        air.

        12                 If you're still not convinced of the damaging

        13        effects of dirty diesel on public health, I just want

        14        to remind you that the number of people with asthma and

        15        with other respiratory diseases has increased

        16        dramatically.  Not only does dirty diesel exasperate

        17        (sic) respiratory problems, it also creates them.

        18                 By replacing dirty diesel with clean diesel,

        19        we can take a small step towards making the air across

        20        the nation healthier to breathe.  Clean air is not just

        21        something that would be nice to have.  For some of us,

        22        it's a matter of life or death.

        23                 Thank you for your time.

        24                 MS. CHAIRMAN:  Thank you, Ms. Ihara.

        25                 And Miss Smitha -- if you would, pronounce
                                                                           279


         1        your name.

         2                 MS. GOTTIMURKALA:  Yes.  My name is Smitha

         3        Gottimurkala, and I'm actually a representative of

         4        CALPIRG, and I was a campus organizer at U.C.L.A. this

         5        past year.  And for the last three weeks, I have had

         6        the opportunity to work with a lot of the community

         7        members, the doctors, the lawyers, also the

         8        environmental interest organization to come out to

         9        testify today.

        10                 In the interest of time -- I know that you

        11        guys have had a very, very long day -- I thank you for

        12        your time and your patience and also extreme

        13        attentiveness, like, throughout the entire day.

        14                 So I'm going to simply say that the varied and

        15        the very, very passionate testimony that we've heard

        16        all day from all these individuals, I fully, fully

        17        support as a comprehensive whole.  And in addition, I

        18        also am fully supportive of the E.P.A.'s proposal.

        19                 And so -- I hate to do this to you -- but my

        20        father is an invasive cardiologist, and he made me

        21        promise, promise, promise to read his letter into

        22        testimony.

        23                 MS. CHAIRMAN:  Please do that.

        24                 MS. GOTTIMURKALA:  So I'm going to go ahead

        25        and read that on his behalf.
                                                                           280


         1                 MS. CHAIRMAN:  Please.

         2                 MS. GOTTIMURKALA:  He states:  "Dear Members

         3            of the Board:  My name Dr. Marthi (phonetic) V.

         4            Gottimurkala, and I've been a practicing

         5            cardiologist for the past 13 years.  Thank you

         6            for giving me the opportunity to voice my

         7            concerns regarding health hazards of air

         8            pollution due to diesel exhaust and to support

         9            clean air.

        10                     "As a practicing cardiologist, I have

        11            seen many patients with lung disease and

        12            congestive heart failure who live in inner-city

        13            neighborhoods and close to highways where there

        14            is increased air pollution.

        15                     "These patients are generally elderly

        16            with heart and lung problems with very poor

        17            functional reserve.  These patients have acute

        18            exacerbation of asthma and they feel breathless

        19            when exposed to polluted air with particulate

        20            matter and other toxic substances which are

        21            irritant and carcinogenic.

        22                     "Several scientific studies have

        23            indicated there are increased incidents of lung

        24            cancer and decreased longevity in patients who

        25            live in areas with increased air pollution due to
                                                                           281


         1            diesel exhaust.  This was documented not only in

         2            this country and in Europe, but in urban areas

         3            and India as well.

         4                     "The prevalence of asthma is on the rise

         5            in the United States as well as an increased

         6            death rate due to asthma by 118 percent."  And I

         7            think that we heard from a lot of people today

         8            that that is the case.  "Young children and older

         9            adults who work and breathe an increased volume

        10            of polluted air and those patients with advanced

        11            lung disease and congestive heart failure are a

        12            lot more vulnerable.

        13                     "In order to protect public health, you

        14            must require a drastic reduction in pollution

        15            from large buses and trucks powered by diesel

        16            fuel.  We must act now to prevent disease,

        17            suffering, and death.

        18                     "I was disappointed to learn that the

        19            E.P.A. has proposed waiting until 2010 before

        20            implementing clean-up measures.  Large trucks and

        21            buses are among the biggest source of air

        22            pollution.  These must be cleaned up to protect

        23            public health.

        24                     "I urge the E.P.A. to reduce diesel

        25            sulfur levels to no more than 15 ppm nationwide
                                                                           282


         1            for all on- and off-road diesel vehicles

         2            nationwide by 2006.

         3                     "Secondly, to clean up all trucks and

         4            buses by at least 90 percent by 2007.

         5                     "Third, we must make sure that the big

         6            trucks are meeting the emission standards on the

         7            roads, not just during the engine tests.

         8                     "And finally, I strongly urge to

         9            increase the use of diesel alternatives such as

        10            in fuel cell buses and those that run by

        11            electricity.

        12                     "The above measures will prevent human

        13            suffering and protect the environment, and I hope

        14            you give serious consideration to the above

        15            issues in your final decision-making process.

        16                     "Thank you very much for your time.

        17            Sincerely, Marthi V. Gottimurkala."

        18                He's never done anything political or written

        19        any sorts of letters of testimony in his life, so he's

        20        quite proud of this.

        21                 MS. CHAIRMAN:  And we're honored to have his

        22        testimony.

        23                 Thank you very much, and this concludes our

        24        fourth public hearing in this beautiful city of

        25        Los Angeles.
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         1                 Thank you.

         2                 I'm reminded we're committed to keep this open

         3        to 6:30, so we will be here until 6:30.

         4                     (AT APPROXIMATELY 6:30 P.M.,

         5                      THE HEARING PROCEEDINGS CONCLUDED.)

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         6                        REPORTER'S CERTIFICATE

         7

         8                   I, Kathleen P. Cagney, a Certified

         9        Shorthand Reporter in the State of California, with

        10        principal office in Los Angeles County, do hereby

        11        certify that the foregoing proceeding was written by

        12        me in Stenotypy and transcribed into typewriting;

        13        that the foregoing is a true and correct copy of my

        14        shorthand notes so taken.

        15

        16

        17

        18                                ____________________________
                                          California CSR Number 10850
        19

        20        Dated: _____________________

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        25