2007 HEAVY-DUTY DIESEL PUBLIC HEARINGS
        
        
        
        
                     CHICAGO, ILLINOIS
        
        
        
                      JUNE 20TH, 2000
        
        
        
                Record of Proceedings had before, Ms. Marge Oge, Presiding
       Officer, reported by Geanna M. Iaquinta, CSR, at the Rosemont
       Convention Center, Rosemont, Illinois, on the 20th day of June, 2000,
       commencing at 10:00 o'clock a.m.
        
                             MR. MATHUR:  I think we'll start.  If everybody could take their
       seats.  Good morning.  My name is Bharat Mathur, and I'm the director of
       the Air and Radiation Division for EPA's Region 5 here in Chicago.  On
       behalf of the Agency and the regional office, in particular, welcome to
       Chicago and this public hearing.
                        The Agency's proposal, which is the subject of today's hearing,
       addresses emission standards for heavy-duty trucks and buses together
       with the low sulfur requirement for diesel fuel.
                        Heavy-duty vapors contribute to the health and welfare benefits
       -- effects, I'm sorry, of several air pollutants, including ozone, particulate
       matter, oxides of nitrogen and sulfur, and volatile organic compounds that
       include toxic pollutants such as formaldehyde.
                        In the Chicago area alone, it is our estimate that heavy-duty
       diesel vapors contribute more than 180 tons of nitrogen oxide or NOx
       emissions per day.  This represents about 39 percent of the total mobile
       source NOx inventory, while only making up a little more than six percent
       of the vehicle mix.
                        The proposed program would have a substantial beneficial
       impact on the reductions of these types of emissions.  It will reduce
       smog-causing nitrogen oxides by 95 percent and harmful particulate matter
       by 90 percent.
                        Every American who has driven behind buses or heavy-duty
       trucks is very familiar with the smell of diesel fuel and the clouds of thick
       exhaust emissions. Such air pollution is not just dirty and annoying, it is a
       threat to our health.
                        I would like to thank you all for attending this hearing today and
       for your participation in this very important rulemaking.  It is now my
       pleasure to introduce Margo Oge, director of EPA's Office of
       Transportation and Air Quality, who will be presiding over today's
       proceedings.  Margo. 
                   MS. OGE:  Thank you, Bharat. Good morning.  On behalf of EPA,
       I'd like to welcome you to this public hearing.  I can see some familiar
       faces that were with us yesterday in New York City.  Yesterday, we held
       our first of the five public hearings, and we are in Chicago today for our
       second hearing.
                        My name is Margo Oge.  I'm the director of the Office of
       Transportation and Air Quality for EPA, and I will serve as the presiding
       officer for today's hearing. Today we'll hear testimony on the EPA's
       proposed rulemaking for cleaner trucks, buses, and cleaner diesel fuel.
                        We believe that this is a historic proposal.  This program that
       we have proposed will exceed dramatic reductions in air pollution in the
       21st century, the air equivalent of eliminating air pollution from 13 million
       of today's trucks on the road.
                        Last year, we established a new program called the Tier 2
       program to  dramatically reduce emissions from cars and light-duty trucks,
       like SUVs, minivans, pickup trucks, and cleaner gasoline fuel. We are now
       focusing much needed attention on heavy-duty trucks and buses, applying
       the same principles in addressing the vehicle and the fuel as a single
       system.
                        This proposed program would protect the public health and
       environment of all Americans by reducing the sulfur level in highway
       diesel fuel by 97 percent to provide the cleanest diesel trucks and buses in
       history.
                        This means that for the first time, heavy-duty trucks and buses,
       that is, diesel trucks and buses, would be able to use pollution control
       devices to meet emissions standards just as passenger cars have been
       doing over the past 25 years.  These devices are extremely sensitive to
       sulfur and will not work unless the amount of sulfur in the fuel is
       dramatically reduced.
                        Heavy-duty trucks and buses  are largely powered by diesel
       engines. These engines are more durable and get higher fuel economy than
       gasoline engines, but they also tend to pollute more.  Over a hundred
       million people across the country today breathe unhealthy air.  Trucks and
       buses contribute significantly to this problem as Bharat mentioned in his
       introductory remarks.
                        Diesel trucks and buses contribute 26 percent of the mobile
       source emissions of NOx in the city of Chicago and 16 percent particulate
       matter emissions. This pollution causes lung damage and respiratory
       problems, and there is increased evidence that diesel exhaust is linked to a
       human line of cancer.
                        The program that we have proposed will have a significant
       impact on these emissions.  In 2007, we're proposing a PM standard that
       will be 90 percent less than today's PM standards for those trucks.  .
                        We're proposing NOx  standards starting in 2007 and phasing
       into the 2010 time frame for diesel trucks that will be 95 percent cleaner
       than the current standard, and, finally, we're proposing that in 2006 the
       diesel sulfur fuel be limited at 15 parts per million.  That is a 97 percent
       reduction of sulfur and diesel from the current level of 500 parts per
       million.
                        We estimate that the cost to produce and distribute the low
       sulfur diesel fuel will be about four cents per gallon, and we estimate that
       the cost for the engines will be $1,000 to $1,600, depending on the size of
       the vehicle.
                        We designed this program to include significant time for the
       introduction of both the new diesel fuel and the new diesel trucks and
       buses.  Also, this program discusses a number of flexible approaches for
       both the diesel fuel and the diesel engines.
                        Before we start with today's testimony, I'd like to introduce all
       the panel members and describe how we will  conduct this hearing.  With
       me today, you met Bharat Mathur, who is the Air Division director of
       EPA's internal office here in Chicago.  Thank you for coming, Bharat.
                        Next to me on my right is Chet France.  He's the director of our
       Assessment and Standards Division.  Next to me on my left is Dawn
       Martin.  She's the chief of staff of the Office of Air and Radiation, and
       next to Dawn is Michael Horowitz, our lawyer from the Office of General
       Counsel.
                        This is, as I mentioned earlier, the second of the five public
       hearings on this proposal.  Today, we expect to hear testimony from
       witnesses offering a broad range of perspectives.
                        Please keep in mind that in addition to the opportunity for oral
       statements during those hearings, we will keep the public comment period
       open until August 14th to allow for written comments to this proposal.
                        We are conducting this  hearing in accordance with Section
       307-35 of the Clean Air Act, which requires EPA to provide interested
       persons with an opportunity for an oral presentation of data and views in
       addition to written submissions.
                        We are pleased to have received a large number of requests to
       testify.  We'll do our best to accommodate everyone, and we ask the
       witnesses to limit their testimonies to ten minutes.
                        As you're testifying, there are two ladies in the front.  Marion
       Hoyer, may you stand up?  Thank you.  And Robin? Thank you.  These
       two ladies are very critical to running this public hearing very smoothly. 
       They're going to be signaling you before the ten minutes is up.  I would
       very much appreciate it if you respect their directions and conclude your
       remarks within ten minutes.
                        I will conduct this hearing formally.  We request that the
       witness state their names and affiliation prior to making  their statement. 
       Please write your name clearly on the paper provided and place in front of
       you.  When a witness has finished his or her presentation, the members of
       the EPA panel may ask questions concerning the testimony.
                        Witnesses are reminded that any false statement or false
       response to questions may be a violation of the law.  If there are any
       members of the audience who wish to testify who have not already signed
       up, please submit your name to the receptionist outside and we will do our
       best to have you come forward and testify.
                        Because of the large number of witnesses who will testify today,
       this hearing may go to the evening hours.  We are prepared to stay here as
       long as it takes for the last person to testify.  Also, we may have to move
       forward -- work during our lunchtime and breaks if we need to.
                        If you'd like a transcript of this proceeding, you should make
       arrangements direct with the court reporter  during one of the breaks, and
       the transcript of this hearing will be available in the docket shortly after we
       receive them from the reporter.
                        Before we begin the testimony, I'd like to know if there are any
       questions.  If not, I will introduce the first panel of today's public hearing. 
       No questions.  So let's proceed with our first panel.  If I can call Mr. David
       Cugell,
       Mr. Randy Trembly, Kalpana Kotgal, Mr. Jed Mandel, Mr. Charles
       Lagges, and Ms. Stephanie Williams.
                        Please print the names on the cards in front of you, and also I
       would like to ask for Ms. Danielle Estler to come forward.  Mr. Cugell,
       we'll start with you. Good morning.
                   MR. CUGELL:  Good morning.  I'm David W. Cugell, a professor
       of pulmonary diseases at Northwestern University Medical School.  I'm
       pleased to present testimony on behalf of the American Lung Association
       of metropolitan Chicago.  I've been on the  association's board of directors
       for 32 years.  Diesel exhaust is more than just annoying, it's dangerous.
                        Composed of a hazardous stew of chemicals, diesel exhaust can
       cause airway inflammation and asthma attacks, decrease breathing
       capacity, and increase susceptibility to infection and allergic reactions. 
       Diesel exhaust also contains potential cancer-causing agents.
                        Scientific research demonstrates that diesel exhaust contributes
       to the three major air pollution problems facing nearly every metropolitan
       area in the nation.  They are, one, ozone smog pollution.  Ozone is a strong
       respiratory irritant linked to over six million asthma attacks during the
       summer of ozone season. Including 300,000 in Illinois.
                        Two, fine particle or soot pollution:  Fine particles are so small
       that they are easily inhaled and retained deep within the lungs.  These fine
       particles aggravate asthma, bronchitis, emphysema, and  heart disease. 
       Studies suggest it is responsible for more than 40,000 premature deaths
       annually, including roughly 3,000 in Illinois.
                        The third major factor is toxic air pollution.  The toxins in
       diesel exhaust alone have been linked to 125,000 lifetime cancer cases. 
       Diesel exhaust contributes to an air pollution problem that places us all at
       risk, but none more than those who live near heavy truck traffic. Scientific
       studies find that in children who attend school or live near heavy truck and
       car traffic are more likely to develop asthma, have asthma attacks, and be
       hospitalized for asthma.
                        The urgency of dealing with this problem in metropolitan
       Chicago is heightened by the fact that this is the nation's freight
       transportation hub.  As a result, the entire region is effectively a dirty
       diesel hot spot.
                        Last year, the American Lung Association of metropolitan
       Chicago  released a report that identified areas facing the greatest health
       risk from diesel exhaust.  The report entitled Dirty Diesel Hot Spots, The
       Top Communities in Metropolitan Chicago, Exposure to Dangerous
       Levels for Diesel Exhaust, identifies areas within a half mile of highways,
       streets, intermodal transfer stations, and tollbooths with the most truck
       traffic in metropolitan Chicago.
                        For example, the report included limited access expressways
       that carry in excess of 15,000 heavy-duty diesel vehicles per day and
       arterial routes that carry more than 2,000 heavy-duty diesel vehicles each
       day.  Such truck traffic volumes are among the highest in the nation for
       highways and local roads.  More than 1.6 million people, including at least
       100,000 with asthma, live in the worst of the area's dirty diesel hot spots.  I
       am submitting a copy of the report for the record.
                        While we have made significant progress in cleaning up 
       passenger cars, the same cannot be said about diesel trucks and buses.  The
       national fleet of heavy-duty diesel vehicles emitted 17 percent more
       dangerous soot and 12 percent more smog-forming nitrogen oxides in
       1997 than it did in 1970 when Congress passed the Clean Air Act.
                        During the same time, particulate emissions from
       gasoline-powered vehicles decreased 66 percent.  Diesels are only two
       percent of all registered vehicles in the U.S., yet they produce roughly 27
       percent of smog-forming nitrogen oxides and two-thirds of the soot
       emitted by the nation's entire vehicle mix.  One diesel truck can emit as
       much air pollution and soot as 150 cars.
                        For these reasons, we support the proposed diesel engine and
       diesel fuel standards with the following enhancements:  One, although
       EPA's proposed schedule for requiring cleaner, low-sulfur fuel in 2006 is
       adequate, we would like this provision to commence sooner; two, new 
       trucks should be required to meet your proposed tighter limits on
       smog-forming emissions of nitrogen oxides by 2007, not 2010; three, it's
       not enough to require new trucks to be cleaner.  Given the long life of
       diesel engines, EPA should also establish an in-use compliance program to
       commence in 2004; four, EPA's program should provide incentives for the
       use of advanced technologies that are cleaner alternatives to diesel.
                        Those who oppose our position on the basis of its economic
       impact overlook the fact that there are very real costs associated with the
       lung diseases that result from air pollutants, particularly those due to
       vehicle emissions.
                        On behalf of the Lung Association, we urge you to include these
       provisions in your final program in order to protect public health.  Please
       listen to the medical and health community on this crucial public health
       issue.  Thank you.
                   MS. OGE:  Thank you.  Mr. Randy  Trembly.  Good morning. 
       You may start.
                   MR. TREMBLY:  Thank you.  Good morning.  My name is
       Randall Trembly.  I am the vice-president of the National
       Petroleum -- National Petrochemical and Refiners Association and a
       member of the executive committee of that organization.
                        The NPRA is a trade association of virtually all the large and
       small United States refiners and petrochemical producers.  I am also
       executive vice-president of Crown Central Petroleum Corporation.  Our
       company owns and operates two refineries in the state of Texas, and we
       move refined petroleum products through multiple distribution channels
       including pipelines, truck transport, through our product terminals, and
       retail service stations.
                        This morning, I'm here representing the National Petroleum
       Refiners Association, and I would just like to say that we are deeply
       concerned about the new diesel sulfur rule being proposed by the 
       Environmental Protection Agency.  The refining industry does not believe
       that we will be able to meet the proposed rule without spending
       substantially more than has been represented by the Environmental
       Protection Agency.
                        I'd like to emphasize that NPRA is not objecting to a significant
       reduction in diesel sulfur.  We favor a plan that will reduce the current 500
       parts per million diesel sulfur cap to 50 parts per million.  This is a 90
       percent reduction in regulated sulfur limits, and it's a significant
       commitment by our industry. It's a very expensive plan, one we are
       committed to, at an estimated cost of about four billion dollars, and it will
       enable diesel engines to meet particulate matter standards sought by EPA
       and it will achieve significant NOx reductions.  We believe that this level
       of diesel sulfur reduction is sustainable and affordable for many refiners.
                        Unfortunately, the Agency  appears unwilling to make the major
       changes in its proposal which are needed to avoid supply problems and
       resulting price volatility.  The EPA rule will be more expensive than has
       been represented for several reasons.
                        First, the cost to retrofit existing plants and build new capacity
       has been underestimated.  The technology available to produce low-sulfur
       diesel requires a significantly higher investment for retrofits of existing
       desulfurization plants because the equipment design pressures, capacity
       shutdowns for maintenance and catalyst changes, and costs associates with
       disposing of spent catalysts.
                        There will be a strain on the industry's capital availability due to
       competing needs for other environmentally-related projects, including the
       eight billion dollars required for ultra-low sulfur gasoline manufacture that
       will be overlapping with the proposed diesel sulfur  requirements.
                        Limitations in the distribution system will tax our ability to
       move and segregate an ultra-low sulfur diesel fuel through the nation's
       pipelines and retail supply network without this product becoming
       contaminated, and, last, permitting and engineering and additional energy
       requirements will impact the contemplated construction requirements to
       meet these standards.  I will elaborate more on these limitations as I
       explain our concerns regarding the proposed specifications.
                        First, I had mentioned the cost and technology of producing
       low-sulfur diesel.  One of our members, CITGO Petroleum, has facilities
       at the LYONDELL-CITGO refinery in Houston, Texas.  The EPA has
       referenced this particular plant as having desulfurization technology
       capable of producing ppm sulfur diesel.
                        Based on actual operating experience at that plant, the capital
       and  operating costs are more than twice as high as the 15 ppm sulfur cap
       that has been claimed in the EPA proposal, and the ability of the
       technology to consistently produce 15 parts per million diesel has been
       problematic.
                        The actual capital cost for retrofitting this process unit was $86
       million, almost three times higher than the $30 million revamp cost for a
       typical refinery as stated by EPA.  A simple retrofit is not possible on most
       units because the entire process is underdesigned with respect to pressure
       requirements and require support facilities such as high purity hydrogen,
       fractionation systems, storage, and other hardware are typically inadequate
       to support such conversions.  In the real-world example at
       LYONDELL-CITGO, 17 million of the $86 million expended was just for
       supporting facilities.  The company found that even with a substantial
       upgrade, they have had to exclude many feedstocks to consistently meet
       ultra-low sulfur levels. 
                        The last piece I will mention regarding this
       LYONDELL-CITGO example is that in retrofitting their unit to
       accomplish the deep desulfurization, it was necessary to add reactor
       volume to increase the catalyst quantity in the process from 40,000 pounds
       to 1.7 million pounds.
                        Another item I mentioned that was leading to the underestimate
       of cost was the capital availability.  During the 1990s, the refining industry
       was also called on to make massive environmentally related investments,
       totaling more than the actual book value of the entire industry. At this
       same time, the average rate of return on capital in the industry was two
       percent.  We know what happens when proposed investments offer a
       return that is lower than banks pay on passbook savings.  The investments
       aren't made, shortages develop, product costs escalate, and consumers
       suffer.
                        As a result of this  crushing burden on refineries and fuel
       distributors, we are now seeing signs of stress in the system.  Increasing
       stringency of fuel specification makes it more difficult to produce and
       distribute the products.  The impact of unforeseen situations, such as a
       refinery outage, a pipeline destruction, or even weather magnifies the
       problems.  We experienced disruptions in the supply of home heating oil
       and diesel last winter.
                        Currently, logistical and supply problems in the RFG markets of
       St. Louis, Milwaukee, and here in Chicago have resulted in high gasoline
       costs.  This situation occurs just as the industry is implementing changes
       to a new grade of reformulated gasoline with more stringent requirements. 
       These occurrences are usually temporary, but they will probably occur
       with increasing frequency as we produce ever cleaner fuels.  This situation
       is also addressed in a report published this year by the Brattle Group.  The
       report, The  California Conundrum, written by Phil Verleger, draws
       analogies between the sharp increases in gasoline in California -- the sharp
       increases in gasoline prices in California in the years 1996, '97, and '99,
       and claims that these spikes are analogous to heating oil price spikes on
       the east coast during recent cold periods.
                        Although some refineries may be able to meet the new
       specifications for diesel, many will be unable to make the large
       investments necessary to produce this product and will be forced to limit
       or forgo participation in the highway diesel market. They must find other
       uses or markets for their current diesel output, which will reduce the
       supply of highway diesel fuel available and will create volatility in prices. 
       It could take as long as four years for the industry to respond to these
       market factors.  Some refineries will likely go out of business.
                        The proposed 15 parts per million diesel plan has been
       estimated to  cost the refining industry between eight and ten billion
       dollars.  This amount comes on top of the eight billion dollars in costs the
       industry is already incurring to implement EPA's gasoline sulfur program
       in the very same time frame.
                        A study to be released this week by the National Petroleum
       Council, a joint industry government body, concluded refiners will not
       have the capability to make these investments within this time frame and
       that additional time is required for the low-sulfur diesel investments.
                        The refining industry is facing 12 major regulatory actions over
       the next ten years.  Deep desulfurization requires more fired heaters and
       more energy consumption overall.  The proposed diesel desulfurization
       requirements will be coming at a time when refiners are trying to reduce
       both the quantity and quality of emissions from fired heaters.  The
       proposed NOx reductions from fired heaters will impose refining
       limitations that will compete  directly with efforts to obtain permits to
       build more heaters for deep diesel desulfurization.
                        I'm going to skip a couple paragraphs in the information
       supplied to comply with my limitation.  I'd just like to finally comment,
       the NPRA urges the Agency to discard their approach in favor of a more
       practical and sustainable 50 parts per million diesel sulfur cap, which the
       refining industry advocates.  Thank you again for this opportunity.  I'll be
       glad to respond to any questions.
                   MS. OGE:  Thank you.
                        Ms. Kalpana Kotgal.  Good morning.
                   MS. KOTGAL:  I am Ms. Kalpana Kotgal.  I am a concerned
       citizen, and I want to thank you for giving me the opportunity today to
       comment on a rule with important and far-reaching implications for our
       nation's air quality.
                        Most Americans living in urban and suburban areas encounter
       thick  black clouds of noxious diesel pollution and suffer the foul-smelling
       taste, itchy eyes, sneezing, coughing, wheezing, and long-term health
       effects that are a direct result from breathing this exhaust.  It's common
       sense that cutting the pollution from these trucks will result in enormous
       public health benefits and will vastly improve the quality of life in our
       cities and suburbs.
                        This common-sense notion was supported by 87 percent of
       people in a recent commission -- in a recent poll commissioned by the
       American Lung Association.  Common sense in the case of diesel
       pollution is confirmed time and again by health studies showing that
       exposure to diesel pollution can lead to a range of symptoms from asthma
       attacks to premature death and lung cancer.
                        Based on over 30 epidemiological studies, we know that
       exposure to diesel exhaust can increase the risk of lung cancer by as much
       as 89 percent.  Earlier this spring, an  association of state regulators
       estimated that more than 125,000 cases of cancer in the U.S. are the result
       of breathing diesel pollution.  Add to these 125,000 cases of cancer
       following health impacts, thousands of American lives cut short annually
       due to fine particulate pollution, thousands of hospitalizations and
       emergency room visits annually for asthma and other respiratory disease,
       and millions of days of restricted activity annually for vulnerable
       populations.
                        It is to prevent these health impacts that I strongly support the
       proposed standards to reduce heavy-duty bus and truck pollution.  Three
       key pieces form the cornerstone of the proposed standard and must be
       preserved at all costs if the program is to be effective.  The first is the 15
       parts per million cap on diesel fuel sulfur content effective by 2006.  The
       second is the .01 grams per brake horsepower-hour particulate standard
       effective in 2007, and, finally, the third  is the .2 grams per brake
       horsepower-hour standard for NOx and hydrocarbons.
                        I support EPA's proposal to cap diesel fuel sulfur levels at 15
       parts per million effective in 2006.  It would be an expensive exercise in
       futility to spend the next ten years phasing in advanced engine and
       afterburner pollution controls for heavy-duty engines only to allow these
       controls to be poisoned and rendered ineffective by the presence of sulfur
       in fuel.
                        Given the ability of refiners to remove sulfur from diesel fuel as
       evidenced by the recent statement of support for the standard by two major
       oil companies, there is no reason to tolerate the scenario in which dirty
       diesel fuel damages or destroys the pollution controls.
                        Other observers have suggested alternative caps averaging
       systems.  For example, the American Petroleum Institute suggests that the
       cap of 50 parts per million would be sufficient.  However, the
       consequences of setting a cap higher than 15 parts per million include,
       first, increased evidence of particulate filter failure; second, deterioration
       of engine performance, and, third, poisoning NOx catalysts.  For the
       public, this means more pollution, more asthma attacks, more
       hospitalizations, more premature mortality, and more cancer.  I urge the
       EPA to reject this alternative.
                        Similarly, I do not support alternative proposals which would
       allow refiners to continue producing fuel at a level of 500 parts per million
       sulfur for a fraction of their total highway diesel fuel volume.  This
       approach or any other scenario that would allow two or more grades of
       diesel fuel to remain in the market is basically impractical.  It would be
       nearly impossible to ensure that the two grades of fuel would remain
       completely segregated throughout the distribution and refueling process.
                        Inevitably, under this  scenario, trucks equipped with sensitive
       NOx and PM controls will fuel up with dirty diesel fuel that currently
       damage or destroy the pollution control systems.  To the extent that these
       alternative proposals are designed to provide flexibility to small refiners,
       we believe this additional flexibility is unwarranted given the extremely
       long lead time of six years.
                        Furthermore, these flexibility measures severely compromise
       the environmental benefits of the proposed standards.  Placing too high a
       burden on the breathing public.  The EPA proposal holds all new engines
       to a particulate matter standard of .01 grams per brake horsepower-hour in
       2007, but allows a four-year phase-in period of the nitrogen oxide NOx
       standards, delaying full implementation until 2010.
                        I believe that this unnecessarily delays the smog-reduction
       benefits of the rules, prolonging the chronic smog problems faced by the
       more than  117 million Americans who live in ozone nonattainment areas
       across the country.  The urgency of our need to reduce smog-forming
       emissions cannot be overstated.  At the end of 1999, smog monitoring data
       was compiled from every monitor across the nation.  What was found was
       that the health standard for smog had been exceeded more than 7,000
       times.  Moreover, according to a 1999 study by ABT Associates, smog
       causes more than six million asthma attacks, 150,000 emergency room
       visits, and 50,000 hospital admissions in a single summer in 1997.
                        I believe that all engines should be able to meet the .20 grams
       per BHP-hour by 2007.  The Manufacturers of Emission Controls
       Association and association of companies who are most directly involved
       in providing the technology to achieve the standards agree that the
       technologies to meet the NOx standard will be available in 2007.  Again,
       this hinges on the availability of clean fuel. 
                        In a recent letter from MECA to Administrator Browner, the
       director of our organization stated, and I quote, we strongly believe that
       the NOx absorber technology will be commercially available in 2007, and
       any current engineering challenges involved with this technology will be
       addressed provided that very low sulfur fuel is available, end quote.
                        Thus, I urge EPA to eliminate unnecessarily -- unnecessary
       delay and apply the .20 standard to all engines in 2007.  Short of this, I
       urge you to shorten the phase-in period to a length of no more than two
       years.  I urge the EPA to reject the suggestion by some to include a
       technology review for the 2003 time frame. I believe that the review would
       be unnecessary given the high degree of confidence that clean fuels will
       enable rapid development in NOx emission controls technologies.
                        Moreover, I see the proposed technology review as a
       disincentive  to actually develop cleaner engines.  Giving the industry an
       opportunity to escape from new standards contingent or their own lack of
       future progress in developing NOx control technologies is far too much
       like the fox guarding the hen house.  In addition, one could view this
       technology review as little more than an opportunity to take advantage of
       the changing political landscape under a new administration and one that
       may be less committed to protecting public health.
                        To the extent that you find this technology review is warranted,
       I urge you to ensure that it allows equally for the strengthening of the
       standards as for their relaxation.  While diesel vehicles -- diesel engines
       are known as the workhorse of our present-day transportation system, it is
       important to acknowledge that far cleaner technologies are being
       commercialized.  The promotion of these technologies, including fuel
       cells, hybrids, and electric propulsion systems can lead to critical
       additional public health and environmental benefits. 
                        I strongly support the inclusion of a blue sky program, to define
       with that propulsion technologies, or set lower emission standards for
       vehicles to be designated for receipt of incentives under subsequent local,
       state, or federal incentive programs.
                        Thank you.  I'm actually going to yield the remainder of my
       time to Danielle Estler.
                   MS. OGE:  Good morning.
                   MS. ESTLER:  Good morning. Thank you for the opportunity to
       speak to you all today.  My name is Danielle Estler. I'm a concerned
       citizen, and I'm here today to urge you to adopt the toughest possible
       standards to reduce pollution from heavy-duty vehicles.
                        Here in Illinois, smog sends more than 7200 people to
       emergency rooms each year and causes more than 310,000 asthma attacks. 
       Making matters worse, a study by local air pollution control officials
       estimates that diesel exhaust is  responsible for 125,000 cases of cancer in
       the United States.
                        I'm a resident of the city of Chicago, and as such, I rely
       primarily on public transportation to get everywhere.  At the bus stop
       every morning, it is not unusual to see a lot of people going to work. 
       However, during the school year, you also see a lot of children taking the
       bus to school or standing on the corner waiting to cross the intersection on
       their way to school.
                        Every morning while I'm waiting at the bus stop, I find myself
       holding my breath as these heavy-duty trucks and buses drive past.  While,
       you know, holding my breath may not be an effective solution to the diesel
       exhaust that I'm exposed to every day, I'm sure I'm not the only one here
       that developed this reflex every time I see these dirty vehicles.
                        So I strongly agree with the proposal to protect the public health
       by cleaning up big trucks and buses by over 90  percent by 2007.  Also,
       since high-sulfur fuels poison new pollution control equipment, it makes
       sense that you're proposing to reduce sulfur levels in diesel fuel by 97
       percent in 2006 before the diesel standards go into effect.  I urge you not to
       weaken this provision by allowing an extended time line or higher sulfur
       fuels. If the newer, cleaner trucks do not have reliable access to 15 parts
       per million sulfur, they will not be able to meet the necessary pollution
       reductions.
                        Furthermore, these newer, cleaner trucks should be required to
       meet the emission standards as soon as possible. The availability of
       low-sulfur fuel will allow for soot and smog-forming pollution from
       diesels to be reduced to 90 and 95 percent, respectively, by the year 2007.
                        However, the EPA is proposing to wait until 2010 to clean up
       smog-forming pollution, and we are already going to have to wait until
       2007 before we see any major reduction in soot pollution.  We should not
       have to wait until 2010 before we can get any relief from smog-forming
       pollution from these trucks and buses. Instead, the emission standards for
       both soot and smog-forming pollution should be fully implemented in
       2007.
                        Finally, cleaning up existing diesels makes sense for a healthy
       environment.  Replacing diesel with cleaner technologies makes even
       more sense. Therefore, you should provide incentives to increase the use
       of advanced technology vehicles such as fuel cell and electric buses and
       trucks.  These measures are critical to the public -- to the protection of the
       public health and the environment, and I hope you seriously consider them
       in your final decision-making, and I thank you for allowing me to speak
       here.
                   MS. OGE:  Thank you.  Mr. Mandel, good morning.
                   MR. MANDEL:  Good morning, Margo.  Good morning members
       of the panel.
                        My name is Jed Mandel, and  I'm here today on behalf of the
       Engine Manufacturers Association.  Among EMA's members are the
       principal manufacturers of truck and bus engines covered by today's
       proposal.
                        As we sit here today, we are on the cusp, the critical turning
       point, of something spectacular.  We have within our grasp the potential to
       dramatically reduce the emissions of the most fuel efficient, reliable, and
       durable source of motive power available today and the backbone of our
       nation's transportation and delivery system.
                        The diesel engine can be as clean, if not cleaner, than any other
       power source.  It is capable of meeting emission standards significantly
       below today's levels, and let me remind everyone that the emissions from
       today's diesel engines already have been reduced by over 90 percent.  Yet,
       we recognize that more, much more, in fact, can and should be done.  The
       key, of course, is to greatly reduce the  sulfur content of diesel fuel.  Future
       reductions of diesel engine emissions are going to require much more than
       new engine designs and technologies.
                        As the EPA appropriately recognizes, future emission
       reductions require a systems approach involving the engine, aftertreatment,
       and fuel.  In a sense, the future of clean, low-emitting trucks and buses
       rests on a three-legged stool, and the stool will fall without all three legs in
       place.  One of those legs, fuel quality, enables the technologies necessary
       to make the other two legs stand.
                        Without removing essentially all sulfur from diesel fuel,
       advanced NOx aftertreatment devices will not be feasible; advanced PM
       aftertreatment will be poisoned, and engines will be exposed to excessive
       wear, increased maintenance costs, and impaired durability.  I cannot
       emphasize enough the critical importance of ultra-low low sulfur fuel.  It
       enables substantial NOx and PM emission reductions, it provides  direct
       PM emissions reductions, and it provides benefits, not just from new
       engines, but from the entire fleet of diesel fuel engines.
                        Improved diesel fuel also has a role in responding to potential
       health effects concerns.  Ultra-low sulfur fuel lowers the total mass of
       particulate from the entire fleet and enables the use of known
       aftertreatment technologies, such as oxidation catalysts and catalyzed
       particulate filters, which can reduce the organic and carbonaceous
       components of PM emissions, can reduce hydrocarbon emissions, and
       enables technologies to reduce NOx which, in turn, will reduce secondary
       PM.
                        We will applaud EPA for recognizing the critical role of fuel
       sulfur.  We strongly support the need for a uniform, nationwide low-sulfur
       fuel standard with a hard cap on sulfur content.  Regional differences in
       sulfur content will not allow the systems approach necessary to meet
       EPA's very stringent NOx and PM emission levels. 
                        Further, a hard cap on sulfur is critical.  Averages simply will
       not work.  They are difficult and impractical to enforce.  Moreover, the
       engine and aftertreatment legs of the stool must be assured of never being
       exposed to high sulfur fuel.  In our view, 15 ppm does not go far enough,
       and fuel improvement shouldn't only be limited to trucks and buses. 
       Nonroad fuels also must be improved.
                        We are aware of the various arguments raised by the oil industry
       against improving fuel quality.  They don't want to reduce sulfur to even
       15 ppm, let alone to lower levels.  Nationwide, ultra-low sulfur fuel can --
       no, must be achieved, and it can be done cost-effectively without undue
       economic harm to either the oil industry or to the trucking industry, the
       users of both our engines and the oil industry's fuel.  We will provide
       detailed comments on the need for ultra-low sulfur fuel in our written
       submission. 
                        So today, we are enthusiastic, we're excited, and we're hopeful
       about the future of the diesel engine and our industry's ability to produce
       reliable, durable, fuel-efficient, high-performing diesel engines that also
       are as clean or cleaner than any other power source.
                        There are issues which require a great deal of work by
       Manufacturers and the Agency, but it is no longer a question of if.  Give us
       fuel improvements, sufficient time, compliance flexibility, and testing
       certainty, and tremendous emission reductions can be achieved.
                        Thank you for allowing me to testify.  If you have any
       questions, I will be pleased to answer them.
                   MS. OGE:  Thank you.  Mr. Charles Lagges.  Good morning.
                   MR. LAGGES:  Good morning.  My name is Charles Lagges.  I'm
       the director of the Cook County Department of Environmental  Control
       here in the Chicago area, and I'm a past president of ALAPCO, the
       Association of Local Air Pollution Control Officials, and this Agency
       represents my own agency as well as more than 165 other local air
       pollution control agencies across the country.  I'm here also on behalf of
       STAPPA, the State and Territorial Air Pollution Program Administrators,
       which represents the Air Pollution Control Agencies in states and
       territories.  I'm pleased to have this opportunity to provide the
       Association's testimony on EPA's recent proposal to set more stringent
       emission standards for on-road heavy-duty engines and vehicles and to
       reduce levels of sulfur in the on-road diesel fuel.
                        On behalf of STAPPA and ALAPCO, I would like to commend
       EPA for its continued leadership in reducing air pollution from the mobile
       source sector. Your final promulgation last December of Tier 2 motor
       vehicle emission standards and a national low sulfur gasoline program was
       a  remarkable accomplishment that will benefit the entire country.  This
       month's heavy-duty engine and low-sulfur diesel proposal is a further
       demonstration of your Agency's commitment to efficiently and
       cost-effectively reduce a wide variety of mobile source-related emissions
       and achieve meaningful improvements in air quality across this nation.
                        We applaud this initiative and the systems approach upon which
       it is based which addresses both the engine and the fuel.  We are especially
       pleased that the proposed heavy-duty engine and diesel sulfur programs
       reflect the key recommendations made by my STAPPA and ALAPCO
       over the past year and a half.  This program is of vital importance to our
       members, and for this reason, our Association adopted with overwhelming
       support a resolution calling upon EPA to establish a stringent low-sulfur
       diesel fuel cap and enable the introduction and effective operation of
       advanced technologies, such as lean NOx  catalysts and absorbers and
       particulate filters.  We have placed the highest priority on participating in
       the rule-development process, and we're very proud that EPA has
       concluded that the most appropriate strategy so closely mirrors that for
       which we have advocated.
                        As the officials with the primary responsibility for achieving
       and maintaining clean and healthful air across the country, the state and
       local agencies are keenly aware of the need to aggressively pursue
       emission reductions from a heavy-duty mobile source sector, which
       contributes substantially to a variety of air pollution problems.  As EPA
       acknowledges in its proposal, by 2007, when the proposed engine
       standards would take effect, the on-road heavy-duty diesel engines and
       vehicles will account for 29 percent of the mobile sources and NOx
       emissions, 14 percent of the mobile source PM emissions.
                        Under the control strategy EPA has proposed, however, by
       2030, the  on-road heavy-duty vehicle NOx emissions would be reduced
       by 2.8 million tons and PM emissions by approximately 110,000 tons.
       These emission reductions as well as others that the proposed rule would
       affect will play a pivotal role in addressing an array of significant
       environmental problems that continue to pose health and welfare risks
       nationwide, including those associated with ground-level ozone, coarse
       and fine particulate matter, sulfur oxides, air toxics, visibility impairment,
       acid rain, and global warming.
                        Based on the substantial contribution of the heavy-duty vehicle
       emissions to air pollution and very serious public health and
       environmental problems, we have no alternative but to impose greater
       controls on these sources and on their fuels and to do so in a truly
       meaningful way. Further, because many of these vehicles constantly travel
       back and forth across this country, their emissions are ubiquitous, and for
       this reason, regulation of the  heavy-duty mobile source sector and of the
       fuels used by these sources must be done on a national basis as EPA has
       proposed.
                        In the coming weeks, STAPPA and ALAPCO will be providing
       more comprehensive written comments on the complete proposal, but
       today I would focus my comments on few fundamental issues related to
       heavy-duty diesels and the fuel.
                        The air pollution that comes from the large diesel buses and
       trucks is not only among the most visible there is, it is also among the
       most offensive.  What is worse, however, is that the exhaust from these
       vehicles brings with it adverse health impacts that can be dire.
                        It poses a serious threat to public health nationwide.  Perhaps,
       the greatest risk posed by heavy-duty diesels comes from toxic emissions. 
       Diesel exhaust contains over 40 chemicals listed by EPA and California as
       toxic air contaminants, known human carcinogens, probable human
       carcinogens, reproductive toxicants, or  endocrine disrupters.  In 1998,
       California declared particulate emissions from diesel-fueled engines a
       toxic air contaminant based on data that supported links between diesel
       exposure and human cancer.
                        Further, last fall, the South Coast Air Quality Management
       District released a draft report, the Multiple Air Toxics Exposure Study in
       the South Coast Air Basin or MATES-II, which included an analysis that
       cancer risk in the region from exposure to diesel particulate.  Based on this
       analysis, South Coast concluded that the cancer risk posed by air pollution,
       70 percent is attributable to diesel particulate emissions with mobile
       sources being the dominant contributor.
                        STAPPA and ALAPCO were alarmed by the South Coast
       findings.  So, this past spring, based on a tailored, more conservative
       version of MATES-II, we sought to extrapolate the evaluation of cancer
       risk from diesel particulate to other cities  across this country and to
       estimate how many cancers nationwide were the result of exposure to
       diesel particulate.  We found that on a nationwide basis, diesel particulate
       may be responsible for 125,000 cancers over a lifetime.
                        Let me be clear, this is not a precise number.  Instead, it's an
       approximation of a potential national impact of exposure to diesel
       particulate that highlights the need for swift and certain regulatory. 
       Further, it allows us to estimate that EPA's proposal, which includes a 90
       percent reduction in particulate emissions for on-road heavy-duty diesels
       could prevent 35,000 of these cancers.  We just cannot afford to forgo this
       opportunity, and EPA, much to its credit, has issued a proposal that
       ensures that we will not.
                        STAPPA and ALAPCO congratulate EPA for responding to a
       serious environmental problem with an equally serious strategy that
       establishes rigorous  emission standards for on-road heavy-duty diesels
       and a commensurately low cap on sulfur in diesel, all within the time
       frame that will allow us to reap the benefits of this program beginning
       with the 2007 model year, and although there are several aspects of the
       proposal with which we have concerns, we will offer recommendations to
       address these in our written comments.  The fact remains that the key
       components of this proposal are rock solid, and we do support them.
                        With respect to the emission standards, we strongly endorse the
       levels EPA has proposed; a particulate matter standard of .01 grams for
       brake horsepower-hour and a NOx standard of .2 grams for brake
       horsepower-hour, which are 90 and 95 percent cleaner than today's
       standards respectively.  Although, we are very pleased that the PM
       standard will take full effect in 2007, we do have concerns regarding the
       four-year phase-in period that's proposed for the NOx standard, and, 
       again, we'll offer these in our written comments.
                        Inextricably linked to the proposed engine standards is the issue
       of low-sulfur diesel fuel.  The ability of the heavy-duty diesels to comply
       with the stringent engine standards that EPA has proposed is directly
       dependent on the timely and nationwide availability of diesel fuel with
       ultra-low levels of sulfur.  Without this fuel, technologies capable of
       achieving the low emission standards will be rendered inoperable, and for
       this reason, STAPPA and ALAPCO vigorously support the 15 part per
       million cap of sulfur and diesel fuel to take full effect across the country in
       mid-2006 with no phase in.
                        This provision of the proposal is absolutely essential, and while
       an even lower cap may prove to be necessary, it is crucial that the final
       rule include a fully effective, nationwide cap of no higher than 15 parts per
       million.
                        While nonroad diesel  engines are not addressed by this
       proposal, STAPPA and ALAPCO view the control of nonroad diesels to
       be just as critical as onroad diesels, and we firmly believe that the
       technological advances that will occur in order to meet the onroad
       heavy-duty diesel standards will eventually carry over to nonroad
       equipment.  We're extremely concerned, however, that EPA may not be
       proceeding as quickly or aggressively to develop nonroad diesel engine
       and fuel requirements that are commensurate with the enormous
       contribution these engines make. We recommend that EPA adopt engine
       standards and a sulfur cap for the nonroad diesel engines that are
       equivalent to those for onroad diesel engines and within the same time
       frame.
                        In conclusion, I thank you for this opportunity to provide the
       associations' preliminary perspectives on this important proposed
       rulemaking, and, again, we applaud you for seizing the opportunity to take
       another enormous step  toward cleaning the air.  We commend your
       leadership in developing a technologically, economically, and
       environmentally credible approach for addressing this problem and
       preserving the integrity of the framework that you have proposed is
       imperative to the viability of this program.
                        On behalf of our associations, I offer you our continued
       cooperation and partnership as you move ahead.  Thank you.
                   MS. OGE:  Thank you.  Thank you very much.  Stephanie
       Williams.
                   MS. WILLIAMS:  I'm Stephanie Williams from the California
       Trucking Association.  We represent 2500 companies operating into and
       out of California.  More than half of our membership are interstate
       carriers.
                        California has a unique approach to diesel fuel.  We support
       EPA's proposal in its entirety and would urge them to move ahead in 2004
       rather than 2006. We're taking our quest for low sulfur diesel  fuel on the
       road.  We attended the hearings in New York and will be attending all the
       hearings.  This is one of the most important proposals for the trucking
       industry that's ever been proposed.
                        Let me explain to you why. Diesel technology is very important
       to this country and every country.  Fuel standards are not new.  We're
       talking about 15 ppm fuel.  This is something that's been in Sweden and
       Denmark for a number of years. The European communities are now --
       they have 2005 reformulation to 15 ppm and recently have decided to
       re-evaluate that because lower than 15 is feasible and something they want
       to move towards.  So the sky isn't falling here, it's just not.
                        California reformulated its diesel fuel in 1993 to what falls
       between 120 and 160 parts per million, and hanging around in Chicago
       this week, I kind of noticed your fuel is a lot higher than ours.  So the fuel
       price and the fuel quality do not seem to be connected.  We had  similar
       problems in California with fuel prices upon the introduction of low
       sulfur -- it's low -- we call it by-product low sulfur because of
       hydrodraining.  So we ended up with a low aromatic, low sulfur fuel, and
       the California Trucking Association sent many letters to legislators and to
       our governor to investigate oil company price gouging, and we believe the
       biggest danger to this country is the regional fuel supplies.  Regional fuel
       supplies provide different fuels to different regions.  California has a
       regional fuel supply.  We paid up to 40 to 50 cents a gallon more in '93
       and '96 because of one thing, because we had regional fuel supply.  We
       didn't have the economies of scale that come with a national fuel supply.
                        Some of the oil companies in our region have gone into Texas
       and gone into Arizona advocating regional fuels.  Why would they do this? 
       Stock prices, profit margins.  If you can limit supply, the price  will be
       higher.  This is the biggest danger to the trucking industry, the diesel users'
       industry in this nation, high prices without the benefits of low sulfur clean
       diesel fuel.  If we're going to pay more for fuel, shouldn't we get something
       cleaner out of it?  The California Trucking Association members believe
       yes, we should.  We don't have a choice other than changing the Federal
       Clean Air Act to move ahead with these standards.  Air quality is a zero
       sum game.
                        In California, we've moved a little farther ahead than some and
       missed some of our strict attainment dates.  The San Joaquin Valley didn't
       meet its standards for 1999.  It's going to be bumped too severe. 
       Sacramento has gone to the legislature asking for $75 million because our
       highway funds have been blocked in Sacramento because we have not
       failed to demonstrate that we can meet the 2005 standards.  I don't know
       how many people have been to L.A. lately, but the 2010  standards have
       never really looked very feasible.  This brings problems to our region,
       problems where air districts, for example, come in, like the South Coast
       Air Quality Management District did Friday and banned diesel fuel in
       garbage trucks and buses in the four county region of Riverside, L.A.,
       Orange, and San Bernardino.
                        The price of a natural gas garbage truck is astronomical.  The
       citizens of Los Angeles, a very diverse area, cannot afford to have
       alternative technologies that don't provide the maintenance costs and even
       air quality benefits of diesel because these standards far surpass natural gas
       technology.  These gasoline standards today will take the pressure off the
       trucking industry.  We don't make engines.  We don't make fuel.  We
       move freight.  We bring food to the grocery stores.  We bring goods to
       market.  That is our function.  We should be using the cleanest and safest
       technology available.
                        Fuel prices will be  higher.  Reformulating the 15 ppm standard
       is a maximum of price and product.  What I mean by that is if you go from
       15 to 30, you increase the fuel penalty.  That's us.  When we drive a truck
       using the 15 ppm standard with the technology they talk about today, we
       get a certain fuel economy, and right now we're getting about eight miles
       per gallon in a heavy-duty semi.  If the fuel standard is up to 30, that's a --
       we get a penalty of one percent in fuel economy, a penalty.  If it goes up to
       50, that is a higher penalty. So by accepting the higher fuel standard, you
       are putting more cost on the end user in the form of fuel economy.  So
       you've got price on one end and you've got efficiency on the other end. 
       That is something that has to be evaluated, and that is something our
       members feel very strongly about.  The fuel penalty hit is important, just
       as price.
                        One of the most important things that we talked about today is
       maintenance cost.  How would you like to buy  a car that you had to
       change the catalytic converter, you know, every 30 days?  That's not
       reasonable.  The cleanest fuel possible provides us with a product where
       we drive the truck, not spend all of our time fixing the truck.  Our job is to
       move freight, not keep vehicles that are not in well maintenance.  The
       elements of sulfur, sulfur is a poison.
                        If sulfur is in the fuel, then the -- what is similar to the catalytic
       converter in a car, the NOx absorber, the continuous particulate
       regenerator, which are the favorite technologies of the trucking industry
       because they're low maintenance, will be spoiled.  If they're spoiled, who
       ends up with the price?  Who ends up with the cost at the end?  The
       trucker.  The trucker wants a maintenance-free vehicle, clean,
       maintenance-free, and a fuel price that's reasonable as well as economies
       of scale within the efficiency of the engine.
                        So we're asking today that  EPA look at all of these things, look
       at the end user, the maintenance, the fuel economy, efficiency, price,
       which 15 ppm provides the best of all.  The threat to this nation of
       reasonable diesel fuels, a fuel in the northeast that looks only at sulfur, a
       fuel in California that looks only at air matter, a fuel in Texas that looks at
       whatever they feel like looking at, we want a national clean 15 ppm diesel
       fuel so we can continue to move freight and bring goods to market for the
       public.  Thank you.
                   MS. OGE:  Thank you.  I have a question for Ms. Williams.  You
       stated that your preference or the associations' preference is 2004?
                   MS. WILLIAMS:  Yes.
                   MS. OGE:   Could you please elaborate the importance of 2004 for
       your association?
                   MS. WILLIAMS:  Many of the states -- I think if other states were
       to look at their SIP attainment plans, we'd see that 2005 is actually a better
       date for a  national fuel standard and for some of these clean -- especially
       for NOx technology to come forward.  We believe the technology is
       feasible.  NOx absorbers have been used on gasoline turbines for a number
       of years. That's the best available control technology.  Technology pricing
       rules are how we got to where we are in this country today with cars. 
       Pushing towards the electric vehicle brought cars to a cleaner place, and
       we believe that 2004 is feasible.
                        Many of the oil companies in California are producing 15 ppm
       fuel today.  We have a rule on the books that says garbage -- not garbage
       trucks, transit buses must use it starting next year, I believe.  It's produced
       quantities statewide for transit buses.  That California Air Resources board
       is coming out with some more rules for the needs assessment on diesel
       listing as a toxic air contaminant and they will push probably sooner for
       national fuel standards.  So retrofit and different  technologies can be used
       to clean the air, but we cannot meet a 2005 Sacramento deadline with a
       2006 fuel reformulation, and most of the states, if you look at Atlanta, and
       some of the other major metropolitan areas, California, we're not even
       number one in dirty air anymore.  We're just more used to the process of
       SIPs and what it means to the independent companies, and we believe that
       2004 would be preferable.
                   MS. OGE:  Thank you.  I have a question for Mr. Trembly.  Thank
       you for your testimony.  Obviously, one of the most significant issues that
       we are dealing with in this rule is the level of the sulfur in the diesel fuel,
       and we have proposed to cap it at 15 parts per million in order to enable
       aftertreatment technologies that we allow for very significant NOx and PM
       reductions, 90 to 95 percent reductions.
                        We accept the oil industry's proposal of 50 parts per million,
       however, we clearly articulated in the proposal that such a sulfur level, 50
       parts  per million, will severely impact aftertreatment technologies, both
       PM and NOx.  In our analysis, in 50 parts per million sulfur and diesel, we
       allow only for 20 percent reduction in NOx and PM.
                        In your testimony, you are referring to significant NOx
       reductions and PM reductions if we go forward with 50 parts per million. 
       Could you elaborate how you envision those reductions to take place?
                   MR. TREMBLY:  I believe that -- I believe that the 50 parts per
       million diesel we do meet the particulate standard, and that for the NOx
       standard, the standard that EPA had selected, was lower than a standard.  I
       think the words in the commentary was an arbitrarily low number, lower
       than is even being used in Europe and Japan and it didn't think it was
       necessary to go that low.  I don't think we were saying that at ppm you
       could actually meet that number, and I think also we are not certain of the
       technology on these aftertreatments.  I think some of the  statements this
       morning by different members were that they expected this technology to
       be available.
                   MS. OGE:  So your testimony refers to particulate standards, that
       your association believes that 50 parts per million could exceed the .01
       PM standard, but not the NOx standards?
                   MR. TREMBLY:  That's right.
                   MS. OGE:  Okay.  Mr. Mandel, could you give us the assessment
       of your association about this aftertreatment technology both for PM and
       NOx catalyst, what your members are telling you as far as their capability
       of meeting the standards that we are proposing based on the 50 parts per
       million?
                   MR. MANDEL:  We won't be able to make it.  With respect to the
       particulate standard, sulfur is a poison.  It will poison the aftertreatment
       technology that will be required to get the additional 90 percent reduction
       in PM.  In addition, sulfur is a particulate itself, which is  emitted through
       the engine as sulfate, and just as the pure conversion of sulfur to sulfate
       will exceed the particulate standard or the 50 ppm level.
                        So on two fronts, your particulate standard will not be
       achievable.  The technologies -- the aftertreatment technologies will be
       poisoned.  That will not last the life requirements that the customer as well
       as the Agency would like to see, and the absolute particulate levels itself
       will not be achieved with the sulfur to sulfate conversion.
                        With respect to NOx emissions, as we've testified and as you've
       heard from others and will hear today, low sulfur fuel enables the
       aftertreatment technologies for NOx without the very, very low sulfur
       levels that we're advocating, the technologies that will be required, the
       new aftertreatment technology required to reduce NOx, simply will not be
       able to function on the engine, and with in-cylinder type  controls, which is
       the way that emissions have been controlled to date in diesel, and I might
       say to a significant degree, as you know, engine manufacturers have been
       able to achieve remarkable reductions within the engine itself, 90 percent
       reductions, but those reductions while, perhaps, can be marginal
       improvements without aftertreatment technologies will never achieve the
       additional lower levels that the Agency is seeking.
                   MS. OGE:  Thank you.
                        Ms. Williams, I have a question for you.  In Europe, there has
       been significant experience with catalyzed traps, and based on our analysis
       of data that we have, with 50 parts per million sulfur level, the failure of
       those catalyzed traps is about ten percent.
                        Could you tell us what are your members willing to accept as
       far as competence of this technology's durability and percent failure?
                   MS. WILLIAMS:  Some of those  tests were using 30 ppm fuel. 
       It's a mix in Europe.  You've got some of Italy and I think some of the
       southern countries using 50, and you have a mix of 30.  In Sweden, they're
       using five ppm in the cities, in Denmark also, I believe, for the commercial
       trucks.  So you have no problem in Sweden and Denmark, zero, which is
       just to give you an idea where our members will stand on this.
                        We passed a law in 1993 in California that said that the
       government couldn't have a test with any false failures, zero false failures. 
       We were successful in passing that legislation, which set down our
       inspection and maintenance program for four years.  So maintenance
       failures, false testing, any of that kind of thing we have a very strong
       position on.
                        It's just not right to do that to the end user because they are
       driving their trucks, not here at this hearing evaluating their sulfur control
       of  their fuel, evaluating how often they're going to have to change their
       particle trap, and the technology spoken of by the oil companies is a
       different trap than is favored by the trucking industry.
                        We prefer the continuous regeneration particulate trap, and 50
       ppm fuel will not, not may, will plug that trap.  The reason we prefer that
       trap is because we stay away from it.  It continuously regenerates, burns
       off, and it's a safer way to go.  As the director of environmental affairs, I
       also have the petroleum carriers tank conference that I manage and the
       waste haulers conference, and this urea ammonium waste is a stream that
       for our industry we are not rocket scientists like some of the oil company
       and engine manufacturer scientists.  We're truckers.  We move freight and
       to have hazardous waste on site, we try to minimize that, to minimize our
       exposure to that.  We prefer a less or more benign particulate trap. 
                   MS. OGE:  Thank you.  I'd like to thank all the panelists for taking
       the time to meet with us this morning and offer your testimonies.  Thank
       you very much.
                        I'd like to ask for the next panel.  We have a group of students
       and I believe a teacher from Lyons Township High School with us this
       morning.  I don't know if you have signed in already.  If you are, please
       come forward.  Also, Ms. Barbara Flynn Currie, if you're here, please
       come forward.  We'd like to ask you to please print your names on the
       cards placed in front of you before we start.
                        Good morning.  Could you please state your names for us and
       we can start.
                   MS. SULLIVAN:  Linda Sullivan.
                   MS. THULLEN:  Angela Thullen.
                   MS. OGE:  Good morning.
                   MS. SULLIVAN:  Three years ago, Angela was a student in my
       U.S. history class.  At the end of the year, she and I and several of my
       students formed the Social  Action Club of Lyons Township High School
       with the idea that we would bring improvements to our community.
                   MS. THULLEN:  Our major project that year was working with the
       American Lung Association on collecting data on diesel truck exhaust in
       our community.  We used the visual opacity reading procedure, which is
       on page two of our testimony, set forth by the Illinois Pollution Control
       Board in 1992 and measured the diesel exhaust at eight community sites
       following the same process at each test site.
                        First, we only tested trucks that came to a complete stop.
       Second, we did not measure the initial compounded black cloud of exhaust
       expelled from the diesel smokestack, but only the exhaust after the initial
       burst.
                        Third, we compared the exhaust from the diesel trucks to the
       exhaust emissions chart provided by the American Lung Association and
       in accordance with the Illinois Pollution Control Board  guidelines, and,
       fourth, we kept tallies of the trucks as either dirty or clean, depending on
       the opacity of the exhaust.
                        In the end, the Social Action Club measured close to 250 diesel
       trucks and buses, nearly half of which failed to meet the standard set by
       the Illinois Pollution Control Board.  Our actual calculations, as it says up
       there, were that 44.58 percent of diesel trucks in our community failed. 
       On the map of the area that we have up there, we have marked out with a
       yellow triangle, those are our testing sites.
                   MS. SULLIVAN:  We also have a map.  The second page shows
       the map, and we have all of the thing marked on the map.
                   MS. THULLEN:  Actually, the green triangle isn't there, but those
       are our testing sites.  The little red house is our schools in our area, and the
       blue cross is the hospital of the area.  As you can see, the testing site that
       produced these results are all within proximity to our  schools, which is of
       great concern to us due to the fact that truck traffic intensity and the
       concentration of emissions measured close to schools have been found to
       be significantly associated with chronic respiratory symptoms, specifically
       asthma, and, furthermore, proximity of a child's residence to a major road
       is linked to hospital admissions for asthma, and of the nearly 4,000
       students who attend Lyons Township High School, many live quite close
       to our testing sites or in similar areas, which are all equally affected by
       truck pollution.
                        As you can see, if and when our students are hospitalized for
       asthma, even at the hospital they would not escape from truck pollution. 
       LaGrange Memorial Hospital is surrounded by testing sites where trucks
       failed to meet the Illinois Pollution Control Board standards.
                   MS. SULLIVAN:  And I wanted to say that this is a very personal
       thing to me.  I've had students in my classroom  who've suffered from
       asthma.  Four years ago, I had a student by the name of Brittany Groves
       who, right in my history class, had just a terrifying attack.  One minute she
       was learning about the world wars, and the next minute she was gasping
       for air, and she absolutely appeared to -- as if she were drowning in front
       of us.  She was obviously terrified.  So was I.  So was every student in that
       class.  I pushed the button for the emergency nurse, and it seemed like an
       hour until she came, and I'm sure it was minutes.  We were watching this
       girl just struggling for her life in front of us.
                        Eventually, the nurse came.  Eventually an ambulance came for
       her.  Her parents missed work, of course, that afternoon as they rushed to
       meet her at the hospital, and it wasn't the first time for them that they had
       to do that, of course.  I had another student by the name of Maling Keck
       who I knew through the Social Action Club who had to go on a respirator
       three times a day to preserve her life,  and in grade school she had been
       hospitalized for asthma for a week, and as I understand it, she almost died.
                        Childhood asthma accounts for 10.1 million missed days of
       school in the U.S. each year.  The estimated cost of treating childhood
       asthma each year is $3.2 billion.  We would like to thank you for tackling
       this issue, and we think you've written some good rules that we hope you
       go through with.
                        There's three things that we're asking you to consider though. 
       One is that we feel that new trucks should be required to meet the limits on
       smog-forming emissions of nitrogen by 2007, not 2010.  As I was on my
       way here and trucks were billowing smog in my face, I was thinking how
       great it would be when these emission rules went into effect, and then I
       was thinking, oh, that's ten years from now. I'm going be retired and old by
       that time.
                        Also, we think it's not enough just to require that new trucks are 
       cleaner.  We're asking that by 2004 the EPA should also establish a
       program for checking emissions on used trucks, and also we hope that the
       EPA will provide incentives for the use of advanced technology.  My
       students stood on busy street corners on a cold day in December.  They
       could have been home playing video games or studying for school or
       shopping for Christmas gifts.  Instead, they were testing trucks because
       they care about pollution.  This is an important thing for our community.
                        We know you care about pollution, too, and we're asking you to
       pass the strongest regulations possible.  Thank you.
                   MS. OGE:  Thank you.
                        Ms. Flynn.  Good morning.
                   MS. FLYNN:  Good morning.  My name is Barbara Flynn Currie. 
       I'm a state representative, and I'm also the majority leader of the Illinois
       House of Representatives, and I am here today to applaud the
       Environmental Protection  Agency's proposals to require cleaner diesel
       fuel in 2006 and strict limits on particulate pollution from new trucks in
       2007.  Diesel fumes contribute to the smog problem right here in Illinois. 
       Diesel particulate matter is directly connected to long-term heart and
       respiratory illnesses among our citizens.  Although the diesel-powered
       trucks account for only two percent of highway traffic, they're responsible
       for nearly 30 percent of the nitrous oxides that contribute to ozone, and
       they're responsible for more than 60 percent of the soot, and it is the soot
       of the particulate pollution that contributes to large numbers of premature
       deaths, approximately 3,000 a year in Illinois.
                        So it isn't just that I get cranky calls from my constituents,
       particularly after they've taken their gas-fired cars through the emissions
       checkpoint, they come home and they call immediately to let me know that
       they were following after that exercise a nasty  burning sooty car, truck, or
       bus.  It isn't just that they're cranky about it, the reality is that there are
       reasons to be concerned about the nasty stuff that is currently being
       emitted by those very diesel machines, and my understanding is that your
       proposals would reduce particulate matter by approximately 90 percent
       and the nitrogen oxide emissions by even more.  These measures would
       certainly go a long way towards ensuring a healthier Illinois, and I applaud
       you and support the proposals you make.
                        We, in the Illinois General Assembly, under the strong
       leadership of House Speaker Michael J. Madigan, have already been at
       work with standards and enforcement efforts that we hope will protect our
       citizens from diesel pollution. Illinois law today provides for annual
       emissions testing for most diesel-powered vehicles that weigh 16,000
       pounds or more and are registered in our federal nonattainment areas,
       Metro East and the  Chicago metropolitan area.  Awaiting the governor's
       signature is a measure that would in addition, and I think this is very
       important, give the Illinois State Police the authority in those
       nonattainment areas to perform nonscheduled tests for any truck that meets
       the weight requirement no matter where it's registered if the truck emits
       smoke that is visibly opaque.  Clearly, the USEPA's current proposals for
       new trucks would set a higher standard than applies under Illinois law
       today.  We support the proposals.
                        We think our enforcement program offers some security that
       should the USEPA rules go into effect for new trucks, we will be prepared
       to make sure that strong standards continue to apply as trucks age. I know
       Speaker Madigan is committed to cleaner diesel fuels and a reduction in
       diesel particulates, and I know he is committed to do an effective
       enforcement program for older trucks that apply to Illinois roads.  Thank
       you for your time and  attention.  I'm happy to answer any questions,
       although nothing technical, please.
                   MS. OGE:  We thank all of you, and obviously this is a public
       hearing. We're traveling across the country because we are extraordinarily
       interested in hearing from everybody affected, we're interested, but most
       especially we're interested in hearing from the general public and the state
       representatives of this beautiful state of yours.  So thank you very much.
                        We're going to go to our third panel, and I'd like to call for
       Mr. John Deaton, Ms. Maureen and Kyle Damitz, and it's Maureen Damitz
       and her son Kyle, Warren Slodowske, Mr. Bruce Bertelsen, and Jura
       Scharf.  We'll start with Mr. John Deaton.  Good morning.
                   MR. DEATON:  Good morning.  I'd like to have Mr. Remster
       speak first.
                   MS. OGE:  Okay.  That is fine. Could you please state your name
       and affiliation for the reporter? 
                   MR. REMSTER:  Thank you.  Good morning.  My name is John
       Remster.  I am a farmer from Northwest Indiana.  I farm 700 acres of corn
       and soybeans, and I also raise 50 head of beef cattle.  I'm here to share my
       concerns about the proposal to lower the amount of sulfur in diesel fuel as
       a farmer and member of the local cooperative.
                        I'm a third generation farmer/producer farming the farms where
       both my grandfathers farmed.  I have been a farmer member and owner of
       a local cooperative all of my career, and the local cooperative has been a
       supplier of refined petroleum products for 73 years in our community.  My
       local cooperative is a member/owner of Countrymark Co-Op, a regional
       refining and distribution cooperative in Mt. Vernon, Indiana.  As a side
       note, our refinery operates on 100 percent U.S. crude oil pumped from the
       Illinois basin down in Southern Illinois and Southern Indiana and
       Kentucky.
                        Countrymark supplies  approximately 60 percent of the farmers
       in Indiana with Super Diesel X4 gasoline and other petroleum products
       used to run tractors, combines, trucks, and irrigation equipment 12 months
       of every year.  We need the refinery to continue to operate -- to be able to
       continue to operate to supply these products to the farmer.  The past three
       years have been financially difficult for producers, and operating
       efficiently has become a way of life on my farm.  Part of that efficiency
       comes because I know I will always have quality diesel fuel and other
       petroleum products delivered in a timely manner and at a competitive and
       fair price to my farm from the Countrymark refinery. For producers like
       myself who continue to receive quality diesel fuels and other fuels,
       Countrymark must operate at a profit.  Operating profitably can happen
       only if there are not unreasonable restrictions put on our refinery in regards
       to lowering sulfur levels in diesel fuel and gasolines.  Neither
       Countrymark, my local  cooperative, or I have the extra money to invest in
       all that will be needed at our refinery under these proposed regulations.
                        Currently, I own four diesel-powered tractors.  The range in age
       on these tractors is 27 years for the oldest to 12 years for the newest.  In
       addition, the combine I use to harvest crops is eight years old.  All this
       equipment is used throughout the year and is in good working condition. 
       These engines were manufactured in an era when higher rates of sulfur
       were used because sulfur gives better lubrication to the internal parts of a
       diesel engine.  I am concerned that an extreme reduction of sulfur would
       disrupt supplies of fuels to my farm, raise prices, and increase maintenance
       costs, and also lead to expansive retrofitting to adapt to extremely low
       levels sulfur.
                        I am not aware of all the technical problems concerning sulfur
       phase down, but John Deaton, who is vice-president of refinery operations
       for Countrymark,  Incorporated, is here with me and will make comments
       in that regard.  He has many years of refining experience and is highly
       regarded in the refinery industry.  Thank you very much.
                   MS. OGE:  Mr. Remster, thank you.  Mr. John Deaton, good
       morning.
                   MR. DEATON:  Good morning.  Can you hear me okay?
                   MS. OGE:  Yes, we can.
                   MR. DEATON:  I'm going to read excerpts from my written
       comments.  My name is John Deaton, and I'm the vice-president of
       refinery operations and the refinery manager at Countrymark Cooperative
       in Mt. Vernon, Indiana.  I am a chemical engineer by education.  I've been
       in the oil refining business for 26 years.  Countrymark Cooperative,
       Incorporated is owned by 118 local cooperatives who are owned by
       approximately 200,000 farmers in Indiana and Ohio.  Coutrymark operates
       a 24,000 barrel per day petroleum refinery located in Mt. Vernon, Indiana. 
       Countrymark Co-Op is a  small refinery as defined by the Small Business
       Administration and by EPA.
                        Countrymark's refinery provides over 60 percent of any items
       agricultural fuel needs.  Our refinery feedstock is low sulfur crude oil
       obtained 100 percent from the Illinois basin. Countrymark's capital cost
       estimate to produce onroad diesel is as much as $21 million.  This cost
       estimate includes $16 million for a diesel hydrotreater and $5 million for a
       sulfur recovery unit.  These estimates are based on preliminary proposals
       and discussions with two engineering companies, Howe-Baker
       Engineering Company and IFP.  We estimate that it will require 15 percent
       more capital to construct a desulfurization unit to meet a 15 parts per
       million sulfur cap versus a 50 sulfur -- ppm sulfur cap, and in our case,
       this amounts to over $2 million.  In our opinion, cost versus benefit has
       not weighed heavily in EPA's proposed rulemaking.
                        Countrymark will also have  to spend as much as $10 million to
       desulfurize gasoline.  Our capital cost estimate is based on estimates from
       four technology vendors, CDTECH, IFP, Phillips Petroleum Company,
       and Universal Oil Products, also known as UOP.  Novel technologies are
       still developing for both diesel and gasoline desulfurization and it would
       be premature for a small company like Countrymark to invest until the
       technology in mature.  In addition to the capital cost, there will be ongoing
       operating costs which EPA itself has estimated to be four cents per gallon
       and which would increase Countrymark's annual operating cost by
       approximately $7.6 million per year.
                        Constructing these units within a short period of each other will
       strain the human resources of small and cooperative refiners.  We simply
       need more time for permits, engineering, construction, and, most
       importantly, time to select a
       new -- to select and train new employees from a limited rural labor pool. 
       We are  concerned about the safety risk in our small, rural refinery if we
       are pushed too far too fast.
                        In conclusion, Countrymark, other small refiners, and other
       cooperative refiners asks for your consideration for all of the following
       four recommendations.  Our first recommendation, we recommend that
       EPA delay issuing the proposed rulemaking on onroad diesel sulfur until
       three criteria are met.  The first criteria, until more is known about the
       effectiveness and cost of various new processes now in development. The
       second criteria, until more is known about the level of diesel sulfur
       reduction needed for the aftertreatment technologies, and the third criteria,
       until EPA includes their intended sulfur reduction for offroad diesel and
       home heating oil in the same rulemaking.
                        Our second recommendation, if EPA cannot delay a rulemaking
       on the onroad diesel sulfur, then we recommend that EPA set the onroad
       diesel sulfur cap at 50  parts per million.  This will reduce the capital
       needed for small refiners and will reduce Countrymark's capital required
       by over $2 million.
                        Our third recommendation, if smaller refiners construct diesel
       desulfurization units within the time frame of the proposed rulemaking,
       then we recommend that EPA grant small refiners at least two more years
       extension for the construction of gasoline to desulfurization units.  This
       would be in addition to the two-year extension that has already been
       granted to small refiners.  This will allow small refiners a longer time over
       which to secure and pay back capital, obtain engineering services and
       permits, and safely complete construction and start-up.
                        Our fourth recommendation, we request that EPA recommend
       to the administration and to Congress that some level of tax relief or
       guaranteed loans be provided to smaller refiners and cooperative refiners
       for the construction of diesel and  gasoline desulfurization facilities.  This
       will preserve a vital part of the petroleum industry and the mostly rural
       economies in which many small refiners and cooperative refiners are
       located.  Countrymark Cooperative appreciates the opportunity to testify in
       these important hearings, and we are ready to answer any questions now or
       in the future.  Thank you.
                   MS. OGE:  Thank you.  I'd like to welcome Ms. Damitz and your
       son Kyle. Good morning.
                   MS. DAMITZ:  Good morning.  Kyle will go first.
                   MR. DAMITZ:  Hi.  My name is Kyle Damitz.  I have come here
       today to tell you how our bad air affects kids like me with asthma.  The air
       pollution is worse in the summer on ozone days.  During these ozone days,
       I will almost always have an asthma attack if I go outside.  On a good day,
       I take two pills in the morning and three pills at bedtime.  I do an IV
       treatment every two weeks. 
                        On a bad asthma day, I take four pills in the morning, more at
       lunch, and, again, more at bedtime.  I have to do breathing treatments with
       my nebulizer every three hours and do 15 puffs of inhalers. Having asthma
       puts a lot of limits on my life.  I can't go outside a lot of the time.  I can't
       go near pets with fur.  I can't swim at my grandma's on days with bad
       pollution.  I have to go to the doctor and get allergy shots.
                        I came here today to help make breathing -- to ask you to help
       make breathing for kids with asthma easier.  By making some changes in
       the laws, you can make the air cleaner.  By making the air cleaner, you are
       giving asthmatics a chance to breathe easier.  If our air was cleaner, I
       would be able to take less medicine, be able to play outside more.  If you
       make our air cleaner, I will be able to live longer.
                   MS. OGE:  Thank you, Kyle.
                   MS. DAMITZ:  I've come here today to tell you why the new diesel 
       guidelines up for consideration are so important.  My name is Maureen
       Damitz.  I have lived in Chicago all my life. Currently, my husband is an
       employee of the city.  So, therefore, we are restricted to living within the
       city.  I have three children with asthma, two sisters with asthma.  I, myself,
       have asthma.  I have one niece and two nephews with asthma.  I'm here to
       represent all of them and the many other families living with this disease.
                        Living with asthma has been a very difficult challenge in our
       lives.  It is not just a little difficulty breathing. It is a disease that reaches
       out to so many areas in the family.  Two years ago, my husband switched
       jobs for insurance reasons.  Kyle had, at the age of nine, used up $500,000
       on our existing medical coverage, which had a lifetime cap of one million.
                        Before you, this pile of papers in this bag is our medical bills
       since Kyle was born.  While instituting new  guidelines is going to cost
       some money, asthma and lung disease are costing us all plenty.  This is the
       medical bills for one family with asthma.  There are 17,000 Americans in
       this country living with this disease.  Asthma has both direct and indirect
       costs, and its indirect cost is costing this country billions each year. There
       have been great strides over the last ten years in the management of
       asthma. There are new drugs developed each year to help all asthmatics
       live much fuller lives. There are products that develop that help us
       maintain much cleaner, dust-free homes. There are bigger and better air
       filters available to help us keep the air in our homes cleaner for better
       breathing.  The one
       problem we cannot clean up is the air our kids breathe every time they go
       outside the door.
                        Kyle will spend much of the next three months indoors while
       many of his friends are outside playing.  I have learned through education
       and trial and error how  best to keep Kyle's indoor environment healthy,
       but I cannot change the outdoor air he breathes in.  It is one area of asthma
       that many parents struggle with.  You have the power and ability to change
       the outdoor air for Kyle and other children like him. Kyle's life is very
       limited by his disease, but despite that, Kyle has learned to excel beyond
       his limitations.  Kyle has always maintained a high B average in school. 
       He has always been on sports teams and has even been had a spot on a
       traveling soccer league the last two years, but despite all his efforts to
       succeed, our air quality has interfered in so many ways in his life.
                        Many a day, Kyle is kept home from school because the air
       quality has been too poor for him to safely leave the air-conditioned house
       and go to an unair-conditioned school.  Many times Kyle has had to be
       pulled out of a soccer game to use his inhaler because the air pollution that
       day was too much for him.  Many days Kyle has had to skip soccer all
       together  because there are ozone warnings posted for the day that do not
       permit him to go out.
                        Children with asthma live a difficult life.  They live a life of
       pain, needles, shots, tests, X-rays, and IV treatments.  They lead a life of
       looking at summer from the safety of their homes watching out the
       windows at other children playing.  They lead a life of frustration. I hope
       when you make your decision on whether or not to institute the new
       guidelines, you remember Kyle and all the other children like him.  They
       live in America, the land of freedom, but because of our air quality, their
       freedom has been taken away.  Give them back their freedom. Give them
       back their lives.  Give them back the cleaner air so that they can lead a life
       they have a right to.  We have made some great strides in cleaning the air
       in the last ten years.  Unfortunately, we have a ways to go.  We have a
       responsibility to the children of America.  We need to clean up our country
       so that our children have a  future.  I can control so many areas of our
       homes, lives, and Kyle's future, but I cannot control the outside air he
       breathes. You can.  We can pass the standards before you.  You can help
       asthmatics everywhere breathe a sigh of relief.  Thank you.
                   MS. OGE:  Thank you.  Mr. Warren Slodowske, good morning.
                   MR. SLODOWSKE:  Again, good morning.  My name is Warren
       Slodowske.  I am Manager of Environmental Staff for the Engine Group of
       International Truck and Engine Corporation, which, as many of you know,
       formally was known as Navistar.
                        I am here on behalf of Patrick Charbonneau, vice-president of
       Engine Engineering for International, to discuss EPA's proposed model
       year 2007 emission standards for heavy-duty engines as well as the
       Agency's proposed onroad diesel fuel quality requirements.
                        At the outset, International commends EPA for its landmark
       proposal to address heavy-duty engine emissions through  a systems
       approach involving both fuel quality and engine technology.  There is no
       question that diesel engine technology is making dramatic strides in
       emissions control.  As we know, the availability of ultra-clean diesel fuel
       is a prerequisite towards meeting the challenging new emission standards
       beginning in 2007.  With clean diesel fuel, we can count on the advanced
       NOx and PM aftertreatment technologies needed to achieve unprecedented
       emissions reductions.  For that reason, we are pleased that EPA is
       mandating fuel that will enable these advanced technologies to be used on
       all heavy-duty engines.
                        International is investing hundred of millions of dollars in the
       development of new technologies for all the markets where our engines are
       sold.  We are reinventing all of our engine lines through revolutionary
       engine design and the development of advanced aftertreatment
       technologies.  Our technological breakthroughs will allow us to achieve 
       unparalleled emissions reductions.  Indeed, we are developing green diesel
       technology that, with clean fuel, has already demonstrated the capabilities
       of particulate filter technology to reduce hydrocarbon and PM emissions to
       levels that are at or below EPA's proposed standards.
                        In that regard, it is important to note that progressive oil
       companies already are making 15 ppm diesel fuel commercially available. 
       These oil companies have earned recognition and our applause for their
       efforts to bring clean diesel fuel to the marketplace early.
                        With this ultra fuel available so soon, International will
       commercialize its green diesel engine technology next year and thus
       achieve EPA's proposed model year 2007 hydrocarbon and PM emission
       standards six years ahead of schedule.  This is just one example of the
       impressive environmental benefits that accrue from the systems approach
       involving both clean fuel and clean engine  technologies, and we have an
       example of that green diesel technology in a school bus out front, and we
       invite you all to come out, to see, and smell.
                        I also commend the Agency for its willingness to phase in the
       proposed NOx standards.  We strongly support a NOx phase-in approach,
       which underscores the challenges facing the industry in meeting NOx
       control targets.  EPA's proposal goes far in addressing these technological
       challenges, but we believe that even more can be done without
       compromising important environmental objectives.  In that regard, I'm
       pleased to say that International, along with EMA, soon will be presenting
       to EPA a new NOx phase-in proposal.
                        Under this proposal, there would be a single NOx emission
       standard for all engines in 2007.  The NOx standard in 2007 would be
       significantly below the NOx standard applying to model year 2006
       engines.  Then, in 2010, the NOx standard would be stepped down to a
       new and  significantly tighter NOx standard. Importantly, this proposal
       will meet, and perhaps, exceed the Agency's NOx reduction targets in this
       rulemaking, while at the same time providing manufacturers with needed
       flexibility to meet these targets. For these reasons, we believe that the
       Agency will find this proposal to be a win-win for consumers and the
       environment alike, and we look forward to discussing it in greater detail.
                        In closing, I wish to reiterate International's strong support for
       EPA's proposal to reduce diesel fuel sulfur levels which will enable the
       use of the NOx and PM aftertreatment technologies needed to achieve the
       Agency's emission reduction objectives.  We look forward to discussing in
       our written comments these and other technical details of EPA's proposed
       rule. Thank you for giving me the opportunity to present International's
       views today, and I welcome any questions.  Thank you.
                   MS. OGE:  Thank you for your  testimony.  Mr. Bruce Bertelsen,
       good morning.
                   MR. BERTELSEN:  Good morning. Thank you very much.  For
       the record, my name is Bruce Bertelsen.  I'm the executive director of the
       Manufacturers of Emission Controls Association.  MECA is pleased to
       present testimony in support of EPA's proposed heavy-duty engine vehicle
       standards as well as the highway diesel sulfur control requirements.  We
       believe an important opportunity exists to significantly further reduce
       emissions from highway heavy-duty diesel engines by utilizing and
       engineered systems approach that incorporates and combines advanced
       engine designs, advanced emission control technology, and very low sulfur
       fuel.
                        EPA's regulatory initiative recognizes the importance of
       promoting a systems-type approach, and the Agency's proposal constitutes
       a carefully crafted and balanced program.  If finalized, it will result in
       substantial cost-effective  emission reductions.  Indeed, EPA's initiative
       will bring about the age of the truly clean diesel engine.  MECA is a
       nonprofit association made up of the world's leading manufacturers of
       motor vehicle emission controls.  Our members have over 30 years of
       experience and a proven track record in developing and commercializing
       exhaust control technologies for motor vehicles.  These technologies have
       made an enormous contribution to efforts to clean up this country's air
       quality.
                        Today, I will briefly summarize MECA's position on EPA's
       proposal.  We submitted a somewhat more detailed statement to the panel,
       and we will be following up with written comments before the close of the
       comment period, but today I would like to focus on two items.  First, the
       technological feasibility of the diesel heavy-duty engine standards and,
       secondly, the critical need for very low sulfur diesel fuel to meet these
       standards.  With regard to technological feasibility, we believe the 
       emission standards proposed for highway diesel powered heavy-duty
       engines can be achieved in a cost-effective manner and within the lead
       time provided if very low sulfur diesel fuel is available.
                        EPA, in its proposal, identified two primary candidate
       technologies for meeting the proposed emission limits, catalyst-based
       diesel particulate filters for PM control and NOx absorber technology for
       NOx control. Catalyst-based diesel particulate filters are commercially
       available today.
                        The only remaining engineering effort is to optimize the filter
       systems for the specific engines to which they will be applied. 
       Worldwide, there are over 20,000 engines equipped with filters, and I
       think it's important to know that in areas in Europe where diesel fuel with
       a sulfur level of less than ten ppm is available, filters equipped on engines
       have been operating for extended periods with no problems. 
                        In fact, some of these vehicles have achieved mileage
       accumulation rates in the hundreds of thousands of miles and the filters
       continue to provide excellent PM control performance. Development and
       optimization of NOx absorber technology is progressing at a rapid rate,
       and our members fully expect that with the availability of very low sulfur
       fuel, this technology will be commercialized in 2007 for diesel engines. 
       Our members believe there are no barriers to this technology and that the
       challenges are engineering in nature.  Indeed, these companies are making
       a substantial R & D investment development because they believe the
       technology will be commercialized.
                        The fact that EPA proposed a 15 ppm sulfur cap has had a very,
       very significant positive impact on the rate of effort to commercialize this
       technology. Turning to the need for very low sulfur fuel, meeting a .2 NOx
       and a 0.1 PM standard over the full useful life of an onroad  heavy-duty
       diesel engine as certified over a combined transient and steady state
       certification test procedure not to exceed limits will be very challenging.
                        As previously stated, however, we believe these challenges can
       and will be met, and the ultimate goal of a truly clean diesel is possible,
       but, again, very low sulfur diesel fuel will be needed.
                        While we continue to recommend to EPA that it establish a
       sulfur cap of five ppm, our members believe that with a sulfur cap of 15
       ppm, emission control strategies can be developed to meet the proposed
       emission limits.
                        Specifically, with a 15 ppm cap, our members are extremely
       confident that all catalyst-based filter technologies will be designed to help
       meet levels of .01 PM, and that NOx absorber technology will be
       optimized to help meet the .2 NOx standards.  At levels above 15 ppm, we
       doubt these proposed standards can be met.
                        In closing, I would like to  take the opportunity to commend the
       Agency for its comprehensive and balanced proposal.  It certainly presents
       challenges, but we believe these challenges can and will be met, and our
       industry is prepared to make the necessary commitment to ensure that if
       the standards are adopted and if low sulfur fuel is available, we'll develop
       the technologies to get to that goal.  Thank you very much.
                   MS. OGE:  Thank you for your testimony.  I'd like to welcome Ms.
       Jura Scharf.  Good morning.
                   MS. SCHARF:  Good morning.  For the record, my name is Jura
       Scharf.  I am the executive director of the Chicago Asthma Consortium,
       and I do welcome this opportunity to provide testimony on an issue of
       great importance to my organization and the people of Chicago.
                        You've heard from individuals who have had experience with
       asthma here in the Chicago area, and I'm hoping that my testimony will at
       least begin  to show you that these are not isolated incidents, but a part of
       an alarming pattern that is happening not just here in Chicago, but across
       the country.
                        The Chicago Asthma Consortium was formed in January of
       1996 as a joint project of the American College of Chest Physicians and
       the American Lung Association of Metropolitan Chicago in response to
       the asthma crisis facing us here in Chicago.  The purpose of CAC was and
       remains to reduce morbidity and mortality and enhance the quality of life
       of persons with asthma.  We do this by bringing together in an organized
       fashion many of the important players in the field of asthma, institutions,
       organizations, individuals, researchers, educators, persons with asthma and
       their caregivers.
                        Separately, each of these, obviously, has firsthand knowledge of
       asthma, but only by bringing together all of these people can we begin to
       synthesize our knowledge as a way of addressing the runaway  rates with
       which we're faced in the Chicago area.  In the brief four years since our
       formation, we have brought together a great deal of data from the field
       through all our various members and collaborators, and I think that we
       have a couple of things that might be instructive to understand just exactly
       what is going on.
                        We know from research available that while asthma is a
       complicated disease, it is much influenced by environmental factors.  A
       great deal needs to be done in terms of basic research, but it's become clear
       from all the studies that have been going on for a great many years that
       high ozone levels and particulate matter, particularly particulate matter in
       diesel exhaust as well as secondhand cigarette smoke, leaves, and that kind
       of thing, are definite triggers of asthma attacks.  There is no question about
       it.  We also have data from the Illinois Health Care Cost Containment
       Council that shows that the number of hospitalizations for asthma in 
       Illinois has grown over the last three years in all parts of the state, rural as
       well as urban, with a great increase in the Chicago Metro region.
                        Now, I've heard some, you know, some discussion here about
       EPA's cost should take into account cost benefit analysis.  Several hundred
       million dollars are spent on hospitalizations alone for persons with asthma
       in Illinois.  I'm quite sure that given the population of the state if you
       multiply that by 50 states in the union, you're talking about a very, very
       major investment in dollars, both public dollars and private insurance
       dollars, that, quite frankly, do not need to be spent if asthma could be
       controlled, if we could do away with some of the triggers of these asthma
       attacks.
                        Over the last six years, the city of Chicago has seen an increase
       in the number of community areas where much higher than average
       asthma hospitalizations. Attached to my testimony are maps that show  the
       track of those increases.
                        The very interesting thing about this is that the most effective
       zip codes track very, very closely with the diesel hot spots identified by the
       study that was shared with you by the teacher and her student in the last
       panel.  The study, Dirty Diesel Hot Spots:  The Top Communities in
       Metropolitan Chicago for Exposures to Dangerous Levels of Diesel
       Exhaust.  Now, given what we know, no child should ever die of asthma,
       and yet in less than ten years in the city of Chicago, 69 children have died
       of asthma.  That's in the city alone.  We also have estimates from various
       researchers that ozone smog causes more than 300,000 asthma attacks
       during an average Illinois summer.  I could go on citing more statistics that
       our members and our organization have pulled together, but I think the
       picture is very clear.  We have to do something to turn that situation
       around, and first and foremost we have to begin to curb sources of known
       triggers for asthma  attacks.
                        As Representative Barbara Flynn Currie said, you know, Illinois
       has had strict maximum allowable emission limits for heavy-duty diesel
       vehicles since 1992, but it's only last year that advocates were finally
       successful in requiring trucks register in Metro Chicago and Metro East St.
       Louis to undergo an annual diesel exhaust test.  This is quite a step
       forward, but we really need to have a federal plan to ensure that all trucks,
       not just those registered in Illinois, become cleaner over time, and the time
       really needs to be as short as possible, particularly for us in Illinois
       because Illinois has the second highest truck traffic load in the entire
       country, 7.7 billion miles every year, which makes us second only to
       California.  A federal standard is absolutely necessary to safeguard the
       health of our citizens.
                        We believe very strongly that not only should the EPA stick to
       its schedule for requiring cleaner diesel fuels,  but we believe that it is
       imperative that tighter limits on emissions for new trucks joining fleets be
       pushed forward.  We support the American Lung Association's proposal of
       2007 rather than 2010 as the target date.
                        It's also critical that the EPA and the federal government go
       beyond mere standard setting, but also establish a program for checking
       in-use emissions, especially for used trucks which, of course, fall outside
       the requirements for newly manufactured vehicles.  It took Illinois nearly
       eight years to put inspection mechanisms into place.  During that same
       time period, uncontrolled exacerbated asthma has been on the rise.  Illinois
       citizens, especially those with asthma and other respiratory problems can't
       wait to breathe easier.
                        I appreciate the opportunity to provide this testimony.
                   MS. OGE:  Thank you.  I'd like to thank all the panelists, especially
       Kyle,  for sharing your views with us.  Thank you very much.
                        I would like to call the next panel.  Please come forward, Ms.
       Kathy Schubert, Ms. Lloyd Eagan, Mr. Mark Bishop, and Ms. Jane
       Friedman.  If you can please print your name on the cards placed in front
       of you.
                   MS. EAGAN:  Hello.  I'm very happy to be here.  My name is
       Lloyd Eagan, and I am the director for the Bureau of Air Management for
       the Wisconsin Department of National Resources, and before I get into my
       testimony, I want to say I was very moved by the previous panel, and Kyle
       in particular. His childhood was my childhood, and it had something to do
       with motivating me to work on air quality in my adult life.
                        So good morning, and I thank you very much for the
       opportunity to address you about the long awaited and much anticipated
       proposed federal regulations to address heavy-duty vehicle emissions
       through an integrated approach. 
                        I would like to recognize the federal administration and the U.S.
       Environmental Protection Agency for their leadership in this issue.  I also
       want to point out why this legislation is important for the federal
       government to do.  The states need the emission reductions, but we don't
       have the appropriate authority, and we don't want to see a patchwork of
       state and local regulations on this particular issue.
                        I am appearing at this hearing because I believe that the
       integrated approach of the proposed regulations will go a long way
       towards improving air quality by reducing pollutants emitted from
       heavy-duty vehicles and their effect on public health and welfare.  These
       regulations will also help states achieve their air quality goals and meet
       federal air quality standards for ground level ozone and particulate matter,
       otherwise known as soot.  A comparison of the cost of the proposed
       regulations with the emission reductions that they are estimated to  achieve
       indicates that these standards are a cost-effective way to reduce pollution.
                        Heavy-duty diesel engines are significant contributors to air
       pollution.  Nitrogen oxide emissions from diesel engines are primary
       precursors to the formation of ground level ozone.  It is estimated that by
       2010 more than half of nearly eight million tons of nitrogen oxide
       emissions nationwide for mobile sources will be coming from diesel
       engines.  One-third of this is attributed to onroad heavy diesel vehicles.  In
       Wisconsin, it is estimated that by 2007, annual nitrogen oxide emissions
       from highway vehicles will be nearly 158,000 tons.  The proposed
       regulations would reduce smog-causing nitrogen oxide emissions from
       those vehicles by 95 percent.  This amounts to a reduction of 2.8 million
       tons each year when the program is fully implemented in 2030. Diesel
       engine emissions are a threat to public health.  They generate particulate
       matter or soot emissions which account for  20 percent of direct PM10
       emissions.
                        The projection is that by 2010 nearly 70 percent of the 600,000
       tons direct PM10 emissions from mobile sources will be contributed by
       diesel engines.  In Wisconsin, we project that by 2007, annual PM10
       emissions from heavy-duty vehicles will be about 4,460 tons.  Heavy-duty
       diesel engines are also a major source for fine particulate matter, which
       contributes to a variety of respiratory health problems.
                        The proposed regulations would reduce soot emissions from
       these vehicles by 90 percent, which is estimated to be about 110,000 tons
       of reduction each year by the year 2030.  Diesel engine emissions are a
       hazardous mixture of toxic air pollutants such as benzene and
       formaldehyde and other toxic substances, which are known human
       carcinogens or probable human carcinogens.  Reducing diesel exhaust
       emissions will result in a reduction of 33,000 tons of toxic air pollutants
       each year. 
                        Finally, reducing diesel engine emissions will significantly
       improve other environmental impacts, including regional haze, acid rain,
       and global warming.  The stringent diesel engine emission standards
       proposed in the regulations would require the broad application of
       advanced high efficiency emission control technologies, which are very
       sensitive to sulfur in diesel fuel. The proposal for reduction of sulfur in
       diesel fuel to 15 ppm, a 97 percent reduction, will allow the application of
       these advanced emission control technologies to achieve the stringent
       emission standards.  In addition, low sulfur diesel fuel will also provide
       emission and maintenance benefits in the existing fleet of highway diesel
       vehicles.  Overall, the projected cost impacts of the proposed regulations
       as an integrated clean vehicle-clean fuel approach are small when
       considered with the lifespan of heavy-duty engines which remain in
       operation for a  considerable length of time and mileage.  We also believe
       that the proposal allows for adequate lead time and flexibility for the
       industry to meet the new vehicle emission standards and diesel fuel sulfur
       levels.
                        In conclusion, I would like to reiterate Wisconsin's support for
       the proposed regulations.  We believe that this integrated approach to
       address the harmful emissions from highway heavy-duty engines is very
       cost-effective and will ensure cleaner and healthier air for all Americans. 
       Again, Id like to thank you greatly for the opportunity to testify before you.
                   MS. OGE:  Thank you, Ms. Eagan. I'd like to welcome Ms. Kathy
       Schubert. Good morning.
                   MS. SCHUBERT:  Good morning. Since I'm speaking on behalf of
       the Chicagoland Bicycle Federation, I want to tell you what we stand for. 
       The mission of the Chicagoland Bicycle Federation is to improve the
       bicycling environment and thereby the quality of life in the region.  The
       Federation does this by promoting bicycle safety, bicycle education, and
       bicycle facilities, and by encouraging the use of the bicycle as an
       energy-efficient, economical, and nonpolluting form of transportation, and
       as a healthful and enjoyable form of recreation.  In other words, we're out
       there in the street right behind those dirty trucks.
                        Like many others in Chicago, I often ride my bicycle instead of
       driving my car, for business purposes, for personal errands, and just for
       pleasure.  I cycled over 5,000 miles last year, and my 11-year-old car just
       topped 50,000 last month.  So that's a whole lot less than I ride my bike. 
       While I still enjoy riding in traffic for the exercise I get and the money I
       save on gasoline or bus and train fare, I'm increasingly annoyed and
       concerned by clouds of black soot from passing trucks and buses, and
       especially when they start up at the stoplight.
                        On a typical day, at least  20 of these vehicles pass me by
       spewing this smelly and unhealthy mix of pollution.  In the winter, the
       exhaust from the buses is enough to warm the air.  It feels good for a
       while, but then I remember that I can't take the heat without getting the
       pollutants with it.  There's a host of other reasons to worry about the
       damage that this pollution is doing to my health.
                        I'm sure you all know well air pollution from diesel trucks and
       buses has been declared cancer causing by the state of California.  Diesel
       exhaust also contain tiny particles that are known to shorten the lives of
       tens of thousands of Americans each year.  Diesel vehicles also contribute
       to ozone commonly known as smog. For otherwise healthy individuals, the
       effects of ozone exposure is often described as a sunburn on the lungs
       leading to shortness of breath, chest pain when inhaling deeply, wheezing,
       and coughing. Cyclists with asthma or other lung diseases, older riders,
       and children can fare worse. 
                        It's ironic, given that physical activity such as cycling is
       beneficial to asthmatics, as exercise strengthens the lungs and increases
       resistance to infection, physical activity also increases cardiovascular
       health in the elderly, and cycling is a healthy activity for our increasingly
       overweight youths and also overweight adults, but what we gain from the
       exercise is wiped out by the loss from pollutants.
                        So, while I need the exercise I get from my riding, one might
       think I might be better off sitting in a car or on a bus instead, but, then
       again, air inside a car is often more polluted inside the vehicle than
       outside.  So there really is no escape from these noxious clouds.
                        Leaving me only the choice of deciding where I breathe harmful
       fumes is not a choice that I or any other resident of the Chicago area
       should have to make.  In reality, it's not a choice at all.  We deserve clean
       air, and cleaning up diesel  trucks and buses is one positive step towards
       that goal.  I urge the EPA to greatly reduce the pollution emitted by diesel
       trucks and buses by instituting this rule and by ensuring that trucks and
       buses are cleaned up as soon as possible.  This program is needed to make
       our city and the entire country a healthier place to breath and a better place
       to ride a bike.
                   MS. OGE:  Thank you.  I'd like to thank both of you for coming
       forward and offering your testimony.  We have two additional individuals
       that have been scheduled to testify at 12:30.  The good news is that we are
       ending early actually. Mr. Mark Bishop and Ms. Jane Friedman, are you
       here?
                        Basically, what we will do, we'll take a break for 15 minutes
       and we will come back at 12:30 to see if Mr. Bishop and Ms. Friedman are
       here, and from there on we'll take a lunch break and come back for 1:45 --
       1:15 for additional organizations and individuals.  So let's break for 15 
       minutes.
                          (Break taken.)
                   MS. OGE:  Can you print your name on the card in front of you. 
       Why don't you let the receptionist know that if Ms. Jane Friedman comes
       in to please come forward.
                        Good morning.  I'm Marge Oge.  I'm the presiding officer of this
       hearing, and we're allowing ten minutes to each speaker.  So please state
       your name and your affiliation and you can testify.
                   MR. BISHOP:  My name is Mark Bishop.  I'm director of
       communications at Meandaur Internet, and today I'm here representing
       myself and my views that I express today are all my own.  I live in
       Chicago, Illinois, and I am a registered voter.  I am here today to testify in
       favor of EPA's proposal to reduce emissions from diesel engines.  As a
       resident of Chicago and a former of St. Louis, Missouri, I am all too
       familiar with environmental regulation and how it affects the everyday 
       consumer's life.  We are in a position where we have to decide whether a
       clean, healthy environment is worth a potential economic cost.  From
       personal experience, I answer this with a resounding yes.
                        To date, cleaning our air has meant the creation of a list of
       environmental controls, most of which are too technical and too small in
       scale for your average citizen to understand, myself included.  However, I
       am acutely aware of the efforts to reduce emissions from cars on the road,
       including the annual emissions test, cleaner burning gasoline, and tax
       breaks for using public transportation. Consumers have been doing their
       part to clean their automobiles, while diesel engines have been left out of
       this mix.  As my tax dollars fund reductions in automobile emission, diesel
       engines continue to belch thick toxic smoke throughout the environment.
                        It is time that they clean up their emissions just as the rest of us 
       have done.  As a resident of Chicago, I enjoy spending my time outdoors. 
       I am a runner.  You can find me five or six days a week running to or from
       my Wicker Park neighborhood.  On cold days, I can bundle up, but on hot,
       polluted days, I contemplate even staying indoors.  I can prepare for the
       weather and for my environment.
                        However, one thing I can't prepare for is the diesel engine
       traffic. When I run past a truck or bus, which is filling the air with toxic
       diesel fumes, I can't help but hold my breath, stop running, and hope a
       breeze will pass by before I am forced to take a deep breath and then
       cough and gag from the belching smoke.  Diesel smoke is unbearable, and
       it must be cleaned up.  Besides healthy people like myself, there are
       children, elderly, and people with chronic lung conditions who are
       severely affected by diesel exhaust.  There are real medical and social
       costs associated with air pollution.
                        The EPA's proposed schedule  for requiring cleaner, low-sulfur
       fuel is an important step to providing a healthy and enjoyable environment
       for everyone. Although six years might seem like more than an adequate
       time frame, sooner would be better.  Technology has always supported
       environmental advancements, and there's no reason why this won't
       continue.  New requirements for trucks to meet tighter limits on nitrogen
       oxides should also be phased in a shorter time frame, possibly along a
       similar time period to that of the cleaner gasoline.
                        Finally, diesel engines should, at minimum, have the same
       requirements as consumers' automobiles do, cleaner emission standards,
       cleaner fuel, and emission testing to make sure the diesel engine fleet we
       have is a clean fleet. Thank you.
                   MS. OGE:  Thank you.  Thank you very much.  Ms. Jane
       Friedman, good morning.
                   MS. FRIEDMAN:  Good morning or afternoon.  Can you hear me? 
                   MS. OGE:  Yes, I can.
                   MS. FRIEDMAN:  I'm very pleased that the Environmental
       Protection Agency's plan for cleaner low-sulfur diesel fuel is what brings
       us here today, rather than a need to convince the Agency that diesel fuel
       particulates and nitrogen oxides emitted by trucks and buses are dirty,
       ugly, smelly, and dangerous to all who breathe, particularly those who are
       elderly, have asthma or allergies, cardiac, pulmonary, or respiratory
       problems.  Thank you for eliminating any need on my part to present the
       reams of corroborating, disturbing scientific data that the USEPA proposal
       implicitly acknowledges and accepts.
                        Chicago is a large, lively city continually traversed by
       diesel-fueled buses and trucks.  In the last two years, two northside
       Chicago community organizations I represent have doggedly sought
       accurately designed and implemented scientific studies to evaluate the
       impact of a 300-bus Chicago Transit Authority diesel  bus garage on the
       air quality of a newly built high school.  The school, which opened in
       August 1999, is located several hundred yards from the bus garage, and its
       athletic fields abut the bus garage.
                        Two studies were conducted by the Chicago Board of Education
       environmental consultants, but experts from the University of Illinois
       School of Public Health and the Illinois EPA found both studies seriously
       flawed in design and assessment, consequently, invalidating the Board of
       Education's conclusion that air outside the school and on the athletic fields
       posed no hazard.  Today, a third, and potentially well-designed study
       stands stalled since January 2000 because USEPA Region 5 has not
       responded to official requests for assistance and guidance in determining
       its protocol.
                        While today's hearing focuses on much needed long-term diesel
       cleanup I ask you to make an impact today by urging Region 5 officials to
       act now so an  air quality test at the garage and the school can be
       accurately conducted and evaluated.  Thank you.
                   MS. OGE:  Thank you.  Thank you very much for coming forward. 
       We will take a break, and we will get back at 1:15.
                          (Break taken.)
                   MS. OGE:  Good afternoon.  We will start the proceedings for
       1:15.  I'd like to call for Nat Silverman to please come forward, Jane
       Clougherty, and Paul Ruedinger.  These are the three names that have been
       given to me of individuals interested in testifying between 1:15 and 1:45. 
       If anybody else is here and is interested in testifying that has signed in,
       please come forward.
                        I would like for you to place -- sign your name.  There's a card
       placed in front of you.  Print your names and state your name and your
       affiliation.
       Mr. Nat Silverman, good afternoon.  We'll start with you.
                   MR. SILVERMAN:  Good afternoon.  Thank you for taking my
       testimony.  My name is Nat Silverman.  I'm vice-president of Metro
       Seniors in Action, which is a seniors group in the city of Chicago.  I
       represent around 10,000 seniors, and I'm here to speak in favor of these
       higher standards of air quality.
                        Seniors are particularly vulnerable to contaminants in the air,
       and you all know and you've all heard on the radio or TV we have days in
       the year, you know, where seniors, among others, are advised to stay in the
       house, stay -- do not go outside because the air quality is injurious to your
       health, and we don't want to be confined because of things likes that.  We
       want to be able to go out and join the rest of the population outside
       enjoying what can otherwise be fine weather and fine conditions.  We'd
       like to be out there and to be able to breathe without worrying about our
       next breath what we're going to be taking into our lungs, and so we
       approve highly of the higher standards of air  quality, which the EPA is
       demanding, and that's really all I have to say.
                        I mean, I certainly can sympathize with the asthmatics who, you
       know, find it especially hard to breathe, but for us, just the noxious fumes
       are frequently too much for us to bear, and so, again, I thank you for the
       opportunity to testify, and I certainly hope that you will be able to impose
       these standards.
                   MS. OGE:  Thank you for coming forward and giving us your
       testimony.
       Mr. Paul Ruedinger, good afternoon.
                   MR. RUEDINGER:  Good afternoon.
                   MS. OGE:  Please state your name and your affiliation.
                   MR. RUEDINGER:  I'm Paul Ruedinger Associated with
       Farmland Industries in Kansas City, Missouri.  I'd like to thank you for the
       opportunity to appear before you today.  I am Paul Ruedinger, as I said
       before.  I'm a dairy farmer from Fond du Lac, Wisconsin, and a former
       board member of my local cooperative,  Agriland Co-Op in Wisconsin and
       its regional affiliate, Farmland Industries of Missouri. As a farmer, I would
       like to state that we are committed to improving the overall quality of our
       environment.  Also, we appreciate the EPA's recognition of the unique
       structural challenges of farmer-owned cooperative refiners and their
       willingness to work with our representatives on this important issue. 
       However, we are deeply concerned about the potentially adverse
       consequences this proposed rule might have on American agriculture and
       rural Americans.
                        Cooperatives and petroleum: Since the early part of this past
       century, farmers, through the cooperative system, invested in petroleum
       refining and distribution infrastructure to ensure adequate, affordable
       supplies of petroleum products to rural America.  Approximately, 40
       percent of the farm fuel needs are supplied by the farmer-owned
       cooperative system.  Farmland entered the petroleum  business in 1929 as
       a distributor of petroleum products to the under-served rural market of
       Kansas, Missouri, and Oklahoma. In the 1930s, Farmland built its first
       refinery in rural Kansas.  Since then, Farmland has expanded several times
       and recently established a joint venture refining alliance with a
       neighboring cooperative refinery.  However, compared to the rest of the
       petroleum industry, Farmland's 95,000 barrels-per-day facility in
       Coffeyville, Kansas, is relatively small.  Combined with our partner,
       National Cooperative Refinery Association in McPherson, Kansas, the
       total production capacity is 175,000 barrels per day.
                        Our concerns:  The EPA proposal to lower sulfur in diesel to 15
       ppm would potentially create supply disruptions.  It could precipitate local
       price spikes, and it could threaten the viability of farmer-owned refineries. 
       It also could impose major costs to farmers and rural Americans,
       precipitating greater  consolidation on, therefore, less competition in the
       petroleum market.
                        It could also threaten fuel security due to the cumulative effect
       of implementing several rules at one time, and, lastly, it could create
       disruptions in the gasoline market.  For these concerns, it is essential for
       the EPA to give substantial consideration to the implementation of the
       proposed rule.
                        The first would be start -- first starting at the refining level,
       Farmland's refining operation can reduce sulfur levels in diesel fuels to 50
       ppm. This is a 90 percent reduction in sulfur while avoiding the potential
       to precipitate supply disruptions.  This reduction could have substantial
       costs to the cooperative. However, it will not be as severe as a reduction to
       the 15 ppm.
                        Second, as a former director of Farmland and Agriland
       Cooperative, I understand the decisions that need to be made by my
       successors and how  best to invest the equity of our farmer-owners. 
       Through our cooperatives, we own refineries, pipelines, terminals, tanks,
       delivery trucks, and convenience stores, all of which will have substantial
       costs for the cooperative.
                        Third, cooperatives have a unique problem in resolving the
       capital-intensive challenges this rule creates.  Unlike other petroleum
       companies which can issue stock and debt, farmer-owned cooperatives
       only have two primarily sources of capital.  Either farmers can invest their
       own money or the cooperative can borrow from the bank.  The latter
       option is the main road of choice for cooperatives.  However, many
       cooperatives do not have the flexibility to make a substantial capital
       investment of this nature without risking the value of the organization.
                        Fourth, some refineries may choose to sell their facilities rather
       than implement the rule, thereby contributing to greater consolidation in
       the petrochemical  industry, in which case, farmers and rural Americans
       will be left at the hands of fewer players, who, unlike their cooperatives,
       have little intrinsic interest in the success of rural America.
                        Fifth, the cumulative effect of this rule and the gasoline
       desulfurization rule will contribute substantially to the financial stress of
       farmer-owned refining operations, and, finally, as a farmer and cooperative
       member, we will be the ones who will pay the price for additional fuels
       and fuel upgrades. Farmers like me will pay for this through reduced
       patronage from the cooperative system and higher costs at the pump.
                        What should the EPA do? Set a petroleum industry cap of 50
       ppm for sulfur and highway diesel fuel in order to achieve major
       environmental benefit and avoid extreme cost.  Provide maximum
       compliance flexibility.  This includes allowing more time for
       implementation and flexibility on gas and diesel  desulfurization efforts.
                        Provide some form of financial assistance in recognition of the
       unique financial structure and clientele of farmer-owned cooperatives and
       their role in serving rural America.  Do not require, and I repeat, do not
       require a phase-in of this rule.  A phase-in period will have substantial cost
       to the local cooperatives for additional tanks and pumps.
                        In conclusion, adequate fuel supplies at affordable prices have
       always been very important to the farmers of rural America.  Because of
       the special needs of farmers and their cooperatives, we ask that you
       consider these items as you finalize the rule.  We look forward to working
       with the EPA and state voters to develop a final rule that is compatible
       with the continued economic viability of American agriculture and
       environmental progress. Thank you.
                   MS. OGE:  Thank you.  Ms. Jane Clougherty. 
                   MS. CLOUGHERTY:  Thank you.  I am here to represent two
       organizations today.  The first is the Center for Neighborhood Technology
       and the second is the Chicagoland Transportation and Air Quality
       Commission.  Again, thank you, for the opportunity to speak today.
                        On behalf of the Center for Neighborhood Technology, I am
       here to voice our support for EPA's proposed regulations on diesel engines
       and heavy-duty trucks. CNT is a Chicago-based nonprofit agency
       dedicated to sustainable urban development with a focus on improving
       environmental health in urban communities.  We are particularly
       concerned with diesel buses and trucks because, as mobile sources, they
       travel through urban neighborhoods every day releasing dangerous
       emissions in much closer proximity to sidewalks, parks, schools, and other
       community spaces than do most stationary sources, including power
       plants.
                        In the aim of protecting public health and in decreasing the
       7200  smog-related visits to Illinois emergency rooms and the 310,000
       asthma attacks suffered in Illinois annually, we urge EPA to enact strict
       controls on all diesel engines, both new and existing. Additionally, we
       urge EPA to create strong incentives for the development and
       implementation of diesel alternatives, including electric and fuel cell
       buses.
                        We strongly support EPA's proposal to achieve the following: 
       To reduce diesel fuel sulfur levels to 15 ppm nationally; to reduce NOx
       emissions from all trucks and buses to .2 grams per billion
       horsepower-hour by, at the latest, 2007; to encourage the deployment of
       cleaner fuel alternatives in the development of advanced clean air
       technologies; and to require all states to implement the new diesel
       regulations simultaneously in order to establish a common standard for
       diesel fuels and recognizing that trucks continually cross state borders
       relying upon uniform nationwide fuel supplies. 
                        Opponents of cleaner diesel regulation have argued that tighter
       emissions control may mean exorbitant prices for diesel fuel and
       retrofitting.  The costs, however, were urge must be put into perspective. 
       The cost for retrofitting a bus for NOx control is approximately 1,000 to
       $1600, which is equivalent to one-third of one percent of the $3,000
       average cost for a city bus.  As pointed out by other clean air proponents,
       the $12 million profit that Exxon cleared in last quarter alone is higher
       than the estimated cost of compliance for this entire rule nationwide.
                        California has already taken bold and admiral steps to
       protecting the public health and the environment, including last Friday's
       South Coast Air Quality Management District decision, requiring large
       metropolitan fleets to purchase only fuel alternative trucks and buses.  The
       District's decision demonstrates the feasibility of implementing cleaner
       technologies today, significantly decreasing  exhaust from diesels in urban
       areas.  EPA's proposed regulations and California's example serve to urge
       other metropolitan areas to prioritize public health by investing in cleaner
       technologies.  Again, thank you for the opportunity to speak today, and we
       look forward to working with you further in this effort, and, again, I have a
       second testimony to read from another organization that's asked me to
       speak today.  May I continue with that now?
                   MS. OGE:  Yes.  If you can just state the name of both the
       organization and you have something in writing?
                   MS. CLOUGHERTY:  Certainly.
                   MS. OGE:  Great.
                   MS. CLOUGHERTY:  The second organization that I represent is
       the Chicagoland Transportation and Air Quality Commission.  On behalf
       of CTAQC, I am here, again, to voice our support for EPA's proposed
       regulations on diesel engines and heavy-duty trucks.  CTAQC is a regional
       coalition of over 140 widely varied  organizations working together to
       promote compact urban development, the integration of land use and
       transportation planning, and citizen participation in the planning process.
                        We are particularly interested in brown field redevelopment and
       the maximization of use of urban space rather than development on
       agricultural areas.  CTAQC is dedicated to improving quality of life and
       public health for all residents, and it's particularly concerned for the health
       of seniors and children. With these concerns in mind, CTAQC continues
       to advocate the development of cleaner transportation alternatives,
       including alternative fuel, and believes that the transportation of
       intermodal freight, that's so important to our economy, can certainly be
       achieved in better ways.
                        CTAQC strongly supports the EPA's proposal to achieve each
       of the following:  Reducing diesel fuel sulfur levels by 97 percent;
       reducing NOx emissions  from all trucks and buses by 95 percent by the
       year 2007; to ensure that engines are meeting these standards on the road
       as well as under controlled testing conditions; to encourage the
       deployment of cleaner fuel alternatives; and to require all states to
       implement these new regulations simultaneously.
                        CTAQC urges EPA and state regulators to following
       California's lead prioritizing public health and the environment as
       evidenced by the South Coast Air Quality Management District decision
       requiring large metropolitan fleets to purchase only alternative fuel trucks
       and buses.  EPA's proposed regulations and California's example will
       greatly help CTAQC and other concerned organizations to advocate for
       these available clean air technologies and wiser use of fuel in our
       metropolitan area.
                        Again, thank you for the opportunity to speak.  We commend
       your attention to this issue, and we look forward  to working with you
       further.  Thank you.
                   MS. OGE:  Thank you.  I'd like to thank all the panelists for
       coming forward with your testimonies.  I'd like to ask the next panel, Ms.
       Diane Brown, Mr. Ed Murphy, Mr. Jake Dumelle, Ms. Marie Valentine,
       Mr. Paul Rogers, and Mr. Allen Schaeffer.  Please print your name on the
       cards placed in front of you.  We'll start with Ms. Diane Brown.
                   MS. BROWN:  Thank you.  Thank you for the opportunity to
       testify today. My name is Diane Brown, and I am the executive director of
       the Illinois Public Interest Research Group, Illinois PIRG. Illinois PIRG is
       an environmentally consumer protection advocacy organization with over
       20,000 members across the state.  I'm here today on behalf of Illinois
       PIRG to urge you to adopt tough new emission standards for heavy-duty
       trucks and buses as soon as possible.  I also have with me and I will leave
       to submit to the record comments, written comments, from over 30
       individuals  in the Chicagoland area that are also deeply concerned about
       this issue and they wanted to have their testimony reflected.
                        I know you all have heard a number of different statistics this
       morning.  I just wanted to reiterate a couple of them that I think are of
       utmost concern to us and why this is an issue that we're really pleased that
       the EPA is working to address and then just sum up with four points that
       reflects our organization's basic requests to the EPA on this issue.
                        First, summer smog pollution in Illinois is estimated to trigger
       as many as 310,000 asthma attacks, causes as many as 7200 emergency
       room visits, and 2400 hospitalizations.  We heard about the study from the
       local air pollution control officials that estimates that diesel soot exhaust is
       responsible for 125,000 cases of cancer in the United States.  This, again is
       of utmost concern to us.
                        We're also concerned because heavy-duty trucks and buses 
       currently account for 34 percent of the smog-forming nitrogen oxides and
       56 percent of the particulate pollution emitted by all vehicles on the road
       in Illinois.  Although big trucks and buses are among the biggest pollution
       sources, the oil industry and engine manufacturers have done very little to
       curb this pollution.
                        In order to protect public health, we must require drastic
       reductions in pollution from these large trucks and buses.  However,
       because high sulfur fuel will poison the new diesel cleanup technologies,
       we need to ensure that all diesel fuel is fully cleaned up and readily
       available before the trucks are required to clean up.
                        Illinois PIRG urges the EPA to do four things on this issue. 
       First is to make sure that low-sulfur diesel fuel is available nationwide.  In
       order to achieve the necessary emission reductions, it is necessary to run
       the engines on cleaner fuels.  We've heard a number of people  testify to
       that effect today.  We also believe that to be the case.  In order to ensure
       that all cleaner trucks will have access to the clean fuel necessary to run
       them, the EPA should require diesel sulfur fuels both for onroad and also
       for offroad vehicles with a cap of no more than 15 ppm sulfur nationwide
       by 2006.
                        Second, we need to clean up big trucks and buses as soon as
       possible. The EPA must cut smog-forming pollution by 95 percent in 2007
       and soot pollution by 90 percent in 2007.  We feel that waiting ten years
       for the people of Illinois and for the people across the country is too long
       to wait, and we believe that there should be no phase-in period for
       reductions in smog-forming pollution.
                        Third, we want to make sure that you all ensure that big trucks
       are meeting emission standards on the roads, not just during the engine
       test.  Both in-use and on-board diagnostic equipment should be required
       for all heavy-duty trucks by 2007,  and, fourth, we want to see that there's
       an increase in the use of advanced technology vehicles.  The EPA should
       include a provision in the heavy-duty rule that would increase the use of
       these cleaner, efficient diesel alternatives throughout the heavy-duty fleet. 
       We believe that these are the provisions that are necessary to protect
       public health, and we ask that you will work to help implement them in
       your final rulemaking.  Thank you.
                   MS. OGE:  Thank you.  Mr. Ed Murphy, good afternoon.
                   MR. MURPHY:  Good afternoon. Thank you very much.  I'm
       happy to be here. My name is Edward Murphy.  I'm the downstream
       general manager of the American Petroleum Institute, which is a trade
       association representing petroleum companies in all sectors of the oil and
       natural gas industry.
                        I'm going to depart, if you will, from my written comments,
       which I have provided a copy of.  Let me preface my  remarks by saying
       that we are, I think you should know, very, very supportive of the efforts
       and of the direction and the goals of the heavy-duty emission standards.
                        We have some strong concerns and strong objections about
       aspects of that proposal, and, particularly, we think what you have
       proposed is more than is needed to achieve the goal, and our proposal
       could achieve those goals at a much lower cost.  We have a number of
       problems with it on the technical side, whether or not you, in fact, get
       environmental benefits from going to such a low level as opposed to the
       level we proposed.
                        I want to focus today, if you will, on an issue that I think has
       been given almost no attention by the Agency, and I think it seriously
       needs to be considered by the Agency, and that's the ultimate affect on
       consumers.
                        We are convinced -- we are very concerned that this is going to
       be a fuel which is not able to be produced by all  companies in the
       industry.  We have looked at what's happened in California, for instance. 
       We've seen the reductions in the number of refineries in California to a
       point now where there are no small refineries in California.
                        California is a very tightly constrained market.  We've seen
       some of the initial type of reactions, if you will, in the last couple of weeks
       here in Chicago.  As best as we can tell, coming into the Midwest, it was
       probably somewhere on the order of about 200,000 a day short on supply
       gasoline coming into the Midwest on a roughly 2500 barrel-per-day
       market.  I think it's something around seven percent.  You saw -- and that
       seven percent was, I think, recognized as a shortfall, which was due to a
       number of factors, all of which were relatively temporary, most of which
       were relatively temporary.
                        We think and are very concerned that the result of the diesel
       proposal as it's now written will result in  a minimum 20 percent fall of
       diesel supplies.  So to the extent we're correct, and we are quite sure and
       quite confident we are, frankly, what's happened in the last couple of
       weeks in Chicago is going to look like it's very minor, and you're going to
       see much more and of much more severity than we just saw in the gasoline
       market in Chicago.
                        So we are very concerned because we don't think the proposal is
       realistic in terms of what it can achieve. Ultimately, I think the Agency is
       going to be faced with a situation of having translators and thus would be
       severely constrained in the inability to achieve the goals of the program.
                        The average rate of return we find in marketing over the last ten
       or 15 years is on the order of about three and a half, four percent.  We
       know that all refineries in the country are facing major investments, if they
       want to continue their refineries, and facing major investments to  reduce
       the sulfur content in gasoline, to reduce sulfur content in diesel, and also
       facing major developments on toxics in a number of different areas, all of
       which are hitting them in pretty much the same period of time.
                        To expect that a -- to not expect that a substantial number of
       refineries, particularly smaller refineries, are going to leave the market, I
       think, is unrealistic.  As you know, we have proposed a study to look at
       this, to quantify the effect of certainty.  We've asked EPA to participate
       with us in that study, and we should be able to come up with some firm
       data on that in the next couple of months. We know that all refineries are
       not going to be able to do it.
                        We know that some refineries are going to choose to do it for a
       portion of their diesel stream, to minimize the cost, to get something like a
       60 or 70 percent of the existing diesel output consistent with the very low 
       standard, and the rest will be sold to the export market.  So even on those
       that makes it incremental, some investment, to make the additional -- to
       make the low sulfur diesel, we're going to lose some volumes.
                        We know that some refineries are going to make major
       investments, major investments, to produce all their diesel to a lower
       sulfur.  To the extent they do that, the incremental cost to them to produce
       -- to shift some of that production from diesel to gasoline is relatively
       small.  So that even those refineries that choose to make the investment to
       try to produce all their diesel to the very low sulfur spec, ultimately what's
       going to happen is some of that diesel will be converted to gasoline. So,
       again, we're going to lose some volume from even those refineries.
                        Add those together and we're looking at, at a minimum, as I
       said, at least a 20 percent reduction in the supply.  That is going to have
       major impacts  on the consumer, and it's going to have major impacts on
       the public's willingness to support this program, and it's going to have
       major impacts on the economy.
                        This is obviously a fuel that's vitally dependent, and you're
       hearing that, of course, from numerous different panel speakers, vitally
       dependent, vitally important to the business sector, the farmer sector, and
       disruptions of that magnitude would have a significant affect on the
       economy and our consumers.
                        From that perspective alone, aside from the technical issues of
       whether or not that, in fact, would -- let me focus on that one point.  I'm
       really not talking about cost here because, frankly, there were some
       misleading statements made in the last several weeks by members of this
       administration on what the rationale was for price increases.
                        Price increases occurred because supply was short, not because
       costs were high.  It's because supply was  inadequate to meet the demand
       at the lower prices.  What's going to govern the impact on the consumers,
       if this will rule comes about, is not the higher cost, whether that be 10 or
       14 cents a gallon, it is going to be the shortfall supply bouncing up against
       the demand, which includes the very substantial price increases which,
       frankly, would be far out of proportion to the costs that we've been talking
       about.
                        So I urge you carefully, on top of the other issues, when you
       look at this, to look at the supply impacts, look at the public's reaction to
       what's happened most recently, and ask, is this a cost that we can bear?  I
       think the answer to that is no.  I encourage you to look more deeply at it.
                   MS. OGE:  Thank you very much for your testimony, Mr. Murphy. 
       I will ask Mr. Jacob Dumelle to please testify.  Good afternoon.
                   MR. DUMELLE:  Good afternoon. My name is Jacob Dumelle. 
       I'm a member of  the board of directors of the American Lung Association
       of Metropolitan Chicago.
                        Let me abstract from my testimony.  I'm a registered
       professional engineer in Illinois.  I've got a B.S. in mechanical engineering
       and an M.S. in public engineering administration from IIT here in
       Chicago.  In 1970, I was appointed to the first Illinois Pollution Control
       Board by then Governor Richard Ogilvie, and then in successive years, I
       was reappointed and made chairman by Governor Dan Walker and
       continued on as chairman under Governor Thompson.  I was chairman for
       a total of 15 years, and at the end of '91, under Governor Edgar, I retired
       from the board after 21 and a half years of service there, and the board, as
       you may know, is an all media board.  It handles air, water, land, and
       noise, all of those things.
                        In 1990, I was able to have the board agree to initiate inquiry
       hearings into the possible opacity standards for diesel truck exhausts, and
       at that time,  there were, perhaps, 11 or 12 states that had such regulations
       and such testing, but some were not completely in force.
                        Then after I retired
       in '92, the Illinois Board adopted the standards which came out of those
       hearings, a total of four hearings, two inquiry and two merit hearings, and
       these became the basis for the present new Illinois statute requiring annual
       tests of diesel trucks in the Chicago and East St. Louis Metropolitan areas.
                        So let me repeat for you, because I think this is very pertinent to
       this regulation, some of the major points of that 1990-91 testimony which,
       of course, if you want, I'm sure you could get from the Illinois Board or
       from the Lung Association, at that time, diesel exhaust was thought to be a
       possible carcinogen, and now everybody is saying that it is a proven
       carcinogen with four different chemical formulas in it.  The Association of
       Diesel Engine Manufacturers, who are present here today I  know, said in
       our hearings that diesel engines need not smoke.  This is a terribly
       important point, and that much of the smoke from the engines was due to
       deliberate mistuning, whatever you want to call it, by either the truck
       driver or the mechanic to disable the time delay so they could make faster
       acceleration and then have to wait for the toker charger to get up to speed
       to pumping up air and to burn the fuel, and so the only way to catch
       something like that is with an off the road spot-check.
                        You can't do it on a scheduled check basis because everything
       will be fine if that is still occurring, and I'm talking from nine and ten
       years ago, and then you're never going to solve the problem of smoke from
       diesels.
                        So let me just summarize and say I endorse the proposal you
       have here, but you should speed up the timetable for existing diesels. 
       Don't wait 20 years for them to be replaced, and you have to either require
       the states or set up a  federal program to get on-the-spot testing to catch the
       disabling that at that time was going on.  Now, whether it's going on today,
       I don't know.
                        So I'll just point out in testimony, I guess, you received this
       morning from the Diesel Technology Forum, they say when properly
       maintained, diesel engines do not smoke.  They're saying that now.  So I'll
       just give that for your consideration.
                   MS. OGE:  Thank you.  Ms. Marie Valentine, welcome.
                   MS. VALENTINE:  Good afternoon. My name is Marie Valentine,
       and I'm here to speak on behalf of DaimlerChrysler on the subject of
       EPA's proposal to modify heavy-duty vehicle emission control regulations
       and on-highway diesel fuel requirements.  DaimlerChrysler is a vehicle
       manufacturer of light-duty and heavy-duty vehicles that operate on
       gasoline and diesel fuels.  DaimlerChrysler is a demonstrated leader in the
       development of environmentally  sound vehicle technologies.  This is
       evidenced by our commitment to support the pursuit of tough emission
       performance goals.
                        Reducing heavy-duty emissions will aid in achieving the
       nation's air quality goals, and we stand ready to do our part.  This is a
       logical follow up to the Tier 2 light-duty vehicle emission regulations
       adopted last December.  We agree that EPA needs to look at all pollution
       sources when determining a comprehensive emission reduction plan.
                        In our opinion, the combination of a low sulfur on-highway
       diesel fuel program with feasible stringent new emission standards for
       heavy-duty engines and vehicles will assist in improving air quality
       nationwide.  We congratulate EPA for continuing to link vehicles and
       fuels as was recently done in the Tier 2 regulations.  This systems
       approach is the only way to achieve the emission reductions envisioned. 
                        We commend EPA's incentive to propose a 15 ppm sulfur cap
       for the on-highway diesel fuel.  This critical first step will enable the
       continual development and advancement of diesel emission control
       technology that is necessary if the heavy-duty industry is to meet the new
       proposed standards which reflect at least 90 percent reduction in NOx and
       PM.
                        Sulfur is a poison that blocks the use of aftertreatment
       technology by rendering the hardware inoperable at today's 500 ppm level. 
       The developers of the aftertreatment technologies have indicated that a
       low sulfur diesel fuel is critical for the future development of these
       devices.  The lower level will permit catalyst-based control strategies to be
       optimized for maximum emission reduction efficiency.
                        Recent data indicates that sulfur-free diesel fuel is the enabling
       requirement for the use of NOx absorbers, continuous regenerating
       technology systems,  and selective reduction catalysts due to their
       sensitivity to sulfur.  Further information on this will be included in our
       written comments.
                        The world's engine manufacturers have defined sulfur-free
       diesel fuel as specified by the World-Wide Fuel Charter as a correct fuel to
       enable the use of NOx and PM aftertreatment technologies where stringent
       emission standards are required.  Therefore, the sulfur level in diesel fuel
       must be reduced to allow the use of aftertreatment technologies as an
       emission control strategy for diesel vehicles as has been so successful for
       gasoline vehicles.
                        Let me emphasize that the proposed sulfur cap is only the first
       step needed for diesel fuel.  A sulfur-free diesel fuel with a minimum
       cetane of 55 and a maximum 15 percent aromatic limit is ultimately
       necessary.  This fuel composition will support the use of diesel fuel in the
       light-duty vehicle market and provide the  benefits of reduced emissions
       and increased fuel economy, another goal of the current administration,
       while also maintaining customer satisfaction.
                        A diesel powertrain is an important option for vehicle -- for
       passengers.  Diesel vehicles could have a significant role in the reduction
       of fuel composition by offering 40 percent fuel economy over gasoline
       vehicles on a miles-per-gallon basis.  The sophisticated diesel vehicles
       currently in the European market have higher endurance, reliability, and
       torque, which is a desirable performance attribute.
                        On the emission side, diesel vehicles have inherently low
       hydrocarbons and carbon monoxide emissions, no evaporative emissions,
       and have long-term stability of emissions which will be further reduced
       with aftertreatment, but the enabling fuel is necessary.
                        We applaud the incentives by some oil companies to deliver
       clean  diesel fuel to some localized markets in advance of the regulations. 
       The lesson learned is that cleaner fuel can be made available and is being
       done at an affordable price.
                        Should a phase-in of the clean on-highway diesel fuel be found
       necessary, we encourage EPA to have it start in 2004.  The oil industry has
       previously challenged EPA to make all changes in one step, not two
       separate steps, so capital investment strategies can be optimized.
       Therefore, the 2007 suggested start date would link diesel with the
       gasoline sulfur control required by Tier 2 and allow light-duty clean diesel
       as a viable powertrain.
                        In conclusion, let me restate the key points of our message.
       First, EPA's proposal to reduce sulfur on highways -- EPA's proposal to
       reduce sulfur fuel for on-highway is a great first step. Second, clean fuel
       packaged with feasible emission standards is the correct path to  enable
       further reductions in emissions.
                        DaimlerChrysler believes that the diesel fuel as specified in the
       World-wide Fuel Charter is necessary to enable low emissions and
       fuel-efficient technologies.  DaimlerChrysler is continuing to review the
       proposal and plans to submit written comments addressing other issues in
       the NPRM and expand further on our diesel fuel position.  Thank you for
       the opportunity to speak to you.
                   MS. OGE:  Thank you, Ms. Valentine. Our next person to testify in
       this panel is Mr. Paul Rogers.  Good afternoon.
                   MR. ROGERS:  Good afternoon to you.  As chief operating officer
       for Voss Companies, I am deeply involved in our day-to-day operations of
       the truck stops that we operate here in the Midwest, and I've been involved
       in the truck stop industry for over 20 years.  I'm here today on behalf of
       NATSO, the trade association representing America's travel plaza and
       truck stop industry. 
                        We appreciate the opportunity to comment today on the
       Environmental Protection Agency's Notice of Proposed Rulemaking
       concerning the heavy-duty engine standards and control requirements of
       the sulfur content of highway diesel fuel.
                        As the primary retailer of onroad diesel fuel, the truck stop
       industry is a vital link in the transportation of goods and services
       throughout our country. If I need to call anyone's attention to it, look
       around.  Everything you have on you or sitting in or ate today was brought
       to you by a truck.  The vast majority of our nation's products are delivered
       by diesel-powered vehicles, everything from the clothes we wear to the
       food we eat.
                        Our nation's travel plazas and truck stops are a critical link in
       the movement of goods providing the fuel needed to keep these trucks and
       our economy running smoothly.
                        While our industry supports  efforts to improve our nation's air
       quality, we have serious concerns with the EPA's proposed rule and the
       affect it will have on the nation's energy supply, and the delivery system
       will be taxed even more severely. These concerns and objections center on
       two aspects of the EPA's proposal, the first being EPA's continued
       consideration of a phase-in approach to the introduction of this reduced
       sulfur diesel fuel; the second being the extreme level of sulfur reduction
       being proposed.  In an effort to improve air quality, EPA has proposed
       sharp reductions in emissions from heavy-duty truck engines in the year
       2007, through the use of advanced catalytic emission control devices,
       which will require a reduced sulfur diesel fuel to operate.  EPA had
       proposed that the sulfur content of all highway diesel fuel sold to
       consumers be reduced from its current level of 500 parts per million to 15
       parts per million beginning June 1st of 2006.  This being the case, EPA's
       proposal continues to consider and request additional  comment on various
       phase-in schemes that would gradually introduce the new ultra-low diesel
       fuel into the market over time, temporarily resulting in two separate grades
       of highway diesel.
                        Our association, NATSO, is strongly opposed to a phase-in
       scheme which would result in the temporary manufacture, delivery, sale,
       and use of two separate grades of highway diesel and continues to urge the
       EPA to adopt a single-fuel approach which would switch to the new
       ultra-low fuel at one time, thereby maintaining a single grade of highway
       diesel and preserving the integrity of the nation's diesel fueling
       infrastructure.
                        The entire diesel fuel delivery system, from refinery to retail, is
       currently handling a single grade of highway diesel fuel.  The presence of
       two different grades could have disastrous effects on our energy delivery
       system, including reduction in the supply of diesel, huge spot outages,
       price spikes, tremendous cost increases, and  fuel cross-contamination.
                        Because the travel plaza and truck stop industry is configured to
       carry a single grade of highway diesel, the introduction of a second
       separate grade would force the truck stop industry to make tremendous
       capital investment to carry both products at retail.  Moreover, the cost
       associated with upgrading a truck stop to provide both grades of highway
       diesel would prove to be an unrecoverable expense as the use of the two
       fuels would only be a very short temporary period of time.
                        A recent survey of NATSO member truck stops illustrates these
       points.  When asked, would your truck stop's current fueling infrastructure
       allow you to offer an additional grade of diesel fuel in addition to your
       current offering at no additional expense, over 95 percent of the
       respondents answered, no.  This same survey confirmed the costs
       associated with revamping a truck stop to carry an additional grade of
       highway diesel would be  tremendous.  When asked to estimate the cost
       which would be required for each additional location to carry an additional
       grade of onroad diesel, 45 percent answered that it would cost over
       $100,000 per location. Additionally, over 30 percent indicated it will cost
       their location in excess of 50,000.
                        Now, this doesn't seem like much when we hear about the
       billions that Exxon and other manufacturers and refiners are making, but
       you must remember that the majority of truck stops are still privately and
       family-owned organizations that have required investment of everything
       that they can put into it and putting everything on mortgage.
                        These tremendous expenses would result from the need to
       repurchase additional -- to purchase additional storage tanks, to segregate
       the secondary diesel, and the need to tear up concrete for additional tank
       installation and the requisite, repiping, and remanifolding the  tank lines;
       the purchase of new pumps and monitors, as well as the additional
       compliance expenses which result from the presence of two highway
       diesel fuels, not to mention the increased cost to acquire the product.
                        These costs will be extremely prohibitive, unrecoverable due to
       the temporary use of two fuels in the market, and would need to be borne
       by an industry which largely consists of small independent
       owner/operators who are still recovering financially from the 1998
       underground storage tank upgrades.  The introduction of a second grade of
       highway diesel could therefore force many truck stop operators out of
       business and have the additional effect of further reducing diesel fuel
       supply.
                        It is important to note that the entire distribution chain for diesel
       would face increased costs and expenses under a phase-in, further
       exacerbating our industry's ability to  easily acquire and sell diesel fuel at
       the retail level.  Refineries, pipelines, bulk plants, distributors, and
       marketers, the entire diesel fuel distribution chain, have all stated their
       concerns with, and opposition to, phase-ins, which would result in two
       grades of highway diesel.
                        Make no mistake about it, the introduction of a second grade of
       onroad diesel under a phase-in would seriously call into question the very
       success and viability of the entire proposal, thereby resulting in no gain for
       air quality or the environment.
                        Let me explain.  The distillate market is very tight with little or
       no additional supply available.  Adding an additional grade of highway
       diesel would further stretch the supply to very dangerous levels and could
       result in the overall supply shortage of diesel fuel.  Likewise, the increased
       costs associated with reducing distributing and selling two grades of fuel
       may cause some to stop distributing or carrying diesel altogether, further
       reducing  the supply and availability.  Furthermore, two grades of highway
       diesel also lead to a much higher price for the new ultra-low sulfur fuel
       than if that fuel was the only highway diesel in the market, as would be the
       case if the entire diesel fuel pool was switched at one time with no
       phase-in allowed.
                        As a result of those serious market-oriented questions
       concerning supply and the price of ultra-low sulfur diesel under a phase-in
       approach, it is quite likely that many fleets and the independent drivers
       would decline to purchase more expensive 2007 model year vehicles with
       the emission control devices. These vehicles would also require much
       more expensive fuel under a phase-in approach. Thus, the fleet operators
       and independent drivers would prefer to make their purchase earlier, such
       as buying more vehicles in the 2005 and 2006 model year and/or
       rebuilding current vehicle engines in an effort to wait and avoid entering
       what would be a very  uncertain market supply.
                        Accordingly, under a phase-in and the market uncertainty which
       you will produce, even if some ultra-low sulfur supply is somehow
       guaranteed, there is no guarantee that a sufficient demand will exist in
       either the 2007 model year vehicles or the ultra-low sulfur fuel needed to
       power them.  This fact calls into serious question the ability of this
       proposed rule to succeed under a phase-in and consequently whether or not
       any significant environmental benefit would be achieved.
                        Compounding these serious issues surrounding the EPA's
       consideration of the phase-in for the introduction of the ultra-low sulfur
       fuel are the extreme cuts the EPA has proposed in the level of sulfur in
       highway diesel.  EPA has proposed a 97 percent reduction in the sulfur
       content of onroad diesel fuel.  The travel plaza and truck stop industry has
       serious concerns that this deep cut will have the effect of reducing the
       overall supply of diesel and  lead to spot outages and severe, severe price
       hikes.
                        Furthermore, it does not appear that it provides any compelling
       technical justification to cut this.
                        In conclusion, I would like to reiterate the travel plaza and truck
       stop industry's support of the efforts to improve air quality without placing
       our nation's energy supply and delivery systems in jeopardy.  In order for
       this proposed rulemaking to achieve those important goals, it must not
       damage our nation's diesel fuel supply.  The travel plaza industry and the
       truck stop industry, a critical link in the movement of goods and services
       of our nation, will be hurt tremendously by these phase-in schemes, and
       urges the EPA to reject further considerations in favor of a single fuel
       approach.
                        On behalf of the entire travel plaza industry and truck stop
       industry, I thank you for your opportunity to comment today on the EPA's
       Notice of  Proposed Rulemaking.
                   MS. OGE:  Thank you for your testimony.  Mr. Allen Schaeffer,
       good afternoon.
                   MR. SCHAEFFER:  Good afternoon. My name is Allen Schaeffer,
       and I'm here on behalf of the Diesel Technology Forum, and I've been
       involved in diesel and air quality issues for over 15 years.  The forum is a
       new group working to enhance public dialogue with a wide range of
       stakeholders, including EPA, other government agencies, and interest
       parties to explore a wide range of opportunities to reduce emissions from
       both existing and new diesel engines while recognizing the inherent
       benefits of diesel technology.
                        Diesel power systems, that is, engines, fuels and aftertreatment
       systems, that are the subject of today's hearing, power our economy, from
       package delivery trucks to tractor trailers delivering fresh produce from the
       fields to the neighborhood grocery store.  They are  the very centerpiece of
       our nation's supply and distribution network, but also much more.  In the
       age of the Internet and e-commerce, diesel power systems have taken on
       an even more important role, facilitating the greatest economic expansion
       this country has ever seen, doing more work, moving more goods, and
       helping more businesses and people than ever before.
                        This proposal to reduce emissions and require cleaner diesel
       fuels in new diesel trucks and buses starting in 2007 marks yet another
       milestone in the continuing improvement of diesel technology.  New
       diesel engines made today emit less than one-eighth the pollution of the
       same engines built just over 12 years ago today.  If adopted, the proposal
       currently under consideration would reduce by as much as 90 percent
       emissions beginning in 2007, and that's on top of improvements already on
       line for 2002 and 2004.
                        We support the direction of EPA's proposed rule that will result
       in  lower diesel emissions and cleaner fuel in 2007.  We're especially
       pleased, like others here today, for the first time EPA has used a systems
       approach in setting future fuel and engine standards, indeed recognizing
       that engines and fuel are both parts of an integrated diesel power system.
                        Whatever the outcome of the debate over how much sulfur
       should be allowed in diesel fuel or when it is required, everyone agrees
       that lowering sulfur coupled with advances in diesel engine technology
       will help improve air quality, and while this hearing is focused on future
       reductions in air pollution, we should not lose sight of the tremendous
       progress that has been made in the past in Illinois and the entire Midwest
       and, in fact the, nation.
                        For example, Illinois has had significant improvements in air
       quality.  Statewide, total emissions of criteria pollutants declined by 52
       percent during the 26-year period from 1970 to  1996.  In fact, just last
       summer that had 22 days with temperatures of 90 degrees and higher, the
       city never exceeded the federal ozone standard.  Just nine years ago in
       1991, Chicago had 30 days of 90-degree temperatures and exceeded the
       ozone standard on seven days.  This incredible progress in improving
       Illinois air quality occurred while the state's economy grew by 60 percent
       from 1970 to 1996.
                        What is most encouraging is that on a national basis, overall
       criteria of pollutant emissions have declined by 34 percent from 1970 to
       1997.  This reduction has occurred at the same time that the population has
       increased by 31 percent and the economy has more than doubled in size.
       The gross domestic product will increase by 114 percent in the same
       period.
                        How has pollution declined at the same time we have seen
       massive increases in manufacturing, construction, transportation,
       agriculture, and all the other activities that constitute economic  growth? 
       The answer is that these activities have become cleaner at the same time
       that Americans are demanding more and more of them.  We see the future
       of diesel-power systems in both these trends.  Diesel-power systems have
       become much cleaner, and through continuous improvement, they will
       become cleaner still, and as it becomes cleaner still, it will continue to do
       more work powering more trucks to deliver more goods than ever before. 
       We can, in fact, have cleaner air quality, a growing economy, and
       increased use of diesel technology.
                        Diesel-power systems are an essential part of the quality of life
       we enjoy today, providing the most efficient, economical, and reliable
       power for whatever the need.  It is a technology that is defined by
       innovation and continuous improvement, meeting the ever-increasing
       needs of the customer, whatever the application, whatever the need, but
       make no mistake about it, this proposal represents a significant
       technological challenge for the  engine manufacturers, exhaust
       aftertreatment suppliers, and fuel refiners that are the members of the
       diesel technology forum. However, we are confident that together we can
       build on our past progress to produce the cleanest, most economical,
       reliable diesel-power system ever.
                        While this proposal addresses new technology going forward,
       there are many opportunities to address some important issues of the
       existing fleet.  We congratulate the state of Illinois for their recent
       adoption of a new smoke program to require -- a new program to require
       smoke testing.  A previous panelist, Mr. Dumelle, and I had the
       opportunity to meet back in the early '90s during the development of this
       program.  When properly maintained, diesel engines do not smoke, and,
       frankly, the Diesel Technology Forum wonders why only 13 states have
       these kind of programs today.  We challenge other states to consider the
       adoption of the smoke testing programs, and we have the tools and 
       resources to assist in that effort.
                        This March, EPA issued a challenge to retrofit 10,000 engines
       -- diesel engines in the next two years.  The Forum is pleased to be
       working alongside the EPA in that effort.  We are putting together the
       resources to identify engines of all types in a wide variety of applications
       from naval vessels to school buses to determine the feasibility of lowering
       emissions by adding exhaust aftertreatment systems, modifying engine
       emission controls, and/or using cleaner diesel fuel.  We are encouraged by
       the possibilities for the success of this program, which will include
       engines in a broad range of applications.
                        In conclusion, members of the Diesel Technology Forum, while
       not taking a position on specific fuel sulfur levels or other issues under
       debate today, support EPA's decision to take a systems approach to
       reducing diesel emissions. However the specifics of the debate are
       resolved, diesel-power systems are poised to  deliver more of the efficient,
       reliable, and economical power demanded by the American people.
                        As leaders in technology and innovation, members of the Forum
       are committed to working with EPA, state governments, and other
       interested parties to continue the improvement in diesel emissions and to
       take meaningful steps now to address concerns in the existing fleet.  It may
       be a gloomy day outside today, but it's a bright future for diesel
       technology.  Thank you very much.
                   MS. OGE:  Thank you for coming forward to testify.  I will go
       ahead and call the names and see if the 2:45 panel is here.  Brian Smith,
       Ellen Shapiro, Ed Kahn, John Duerr, and Sid Bild.
                        Great.  Please come forward.  Print your name on the cards
       placed in front of you, and we will start with the 2:45 panel.  We'll start
       from the left with Mr. John Duerr.  Good afternoon.
                   MR. DUERR:  Good afternoon.  My  name is John Duerr, and I'm
       here today representing Detroit Diesel Corporation. Detroit Diesel is a
       major manufacturer of diesel engines, including heavy-duty on-highway
       engines, which are the subject of today's rulemaking.  Detroit Diesel is
       pleased to have this opportunity to present our views on this rule.  Detroit
       Diesel is also a member of the Engine Manufacturers Association and the
       Diesel Technology Forum and supports the comments of both of those
       organizations that were made earlier today.
                        Detroit Diesel wants to congratulate the Agency in adopting a
       systems approach in this rulemaking by proposing substantial fuel quality
       improvements in support of the extremely challenging new engine
       emission standards. Heavy-duty highway engines have been regulated
       since the early 1970s, and since that time, there have been remarkable
       reductions in engine emissions.  By the time the 2004 emission standards
       take effect, NOx and particulate emissions will have been  reduced by
       approximately 90 percent.  Carbon monoxide, hydrocarbon, and smoke
       emissions from diesel engines have also been reduced substantially and
       today stand at levels that are roughly ten percent of the current standards.
                        For the most part, these impressive emission reductions have
       been achieved through improvements in engine design.  Although this
       approach has been successful in the past, I believe I can state without fear
       of contradiction that the 2004 standards are very close to the limits of what
       can be achieved with engine modifications alone.  Any substantial
       emission reductions beyond those reflected in the 2004 standards will
       require the use of exhaust aftertreatment systems.
                        Efficient and durable exhaust aftertreatment depends on the
       availability of very low sulfur diesel fuel.  Thus Detroit Diesel not only
       supports EPA's approach in considering diesel fuel quality and engine
       emission standards  together in this rulemaking, but we believe this is the
       only viable path for achieving future emission reductions of significant
       magnitude.
                        While Detroit Diesel believes that reductions in diesel fuel
       sulfur are key to achieving the next level of emission standards, we are not
       certain if the NOx standards that EPA has proposed will be feasible even
       with fuel meeting a 15 ppm sulfur cap.  The proposed 0.2 grams per
       horsepower-hour NOx standard will require the development and use of an
       aftertreatment system with over 90 percent effectiveness over an extremely
       broad range of engine operating conditions.
                        Detroit Diesel is not aware of any systems that have
       demonstrated this level of effectiveness in the laboratory, let alone meet
       the requirements of a production feasible system with minimal
       deterioration and effectiveness over the full 435,000 useful life period. 
       We're continuing to review and analyze available  data and will provide
       more detailed information regarding the feasibility of the proposed NOx
       standard and the adequacy of the 15 ppm sulfur content -- sulfur cap
       before the end of the comment period.
                        On a related issue, the preamble to the proposed rule indicates
       that supplemental not-to-exceed and steady-state provisions, which are yet
       to be finalized as part of the still pending 2004 rulemaking package, will
       apply to the 2007 standards. It is further noted that a number of
       modifications to these provisions are expected relative to the proposal that
       was released in October of 1999.  These provisions have a very significant
       impact on the stringency and feasibility of the proposed standards.  Since
       we have not as yet seen these finalized provisions, we cannot asses their
       impact or comment meaningfully on how these provisions impact the
       technical feasibility of the proposed 2007 standards.  Because of the
       extreme importance and complexity of these  provisions, EPA must
       provide assurance that there will be adequate time in this rulemaking for
       public review and comment on the supplemental provisions after the 2004
       rule has been finalized.
                        Detroit Diesel appreciates EPA's intent to provide flexibility by
       proposing an optional phase-in for the proposed NOx, NMHC, and
       formaldehyde standards.  While this approach has been successful in
       managing the transition to new standards for light-duty vehicles, we
       believe this program will be unworkable for heavy-duty engines because
       of customer preferences, cost factors, competition between engine
       manufacturers, and issues related to truck design that will make it
       impossible for engine manufacturers to manage sales to meet the proposed
       phase-in schedules.
                        As an alternative, we suggest two-step implementation for the
       substantial reduction in the NOx plus hydrocarbon standards applicable to
       all  heavy-duty diesel engines in 2007 and a second large reduction in
       2010.  We believe a two-step implementation will avoid the problems
       associated with having to manage engine sales is more aligned with
       technology readiness and can achieve emission reductions that are
       equivalent to the EPA's proposed phase-in schedule.
                        One aspect of the proposed rule that Detroit Diesel finds
       troublesome is that the Agency did not include any changes to the
       emission test procedures. The emission test procedures the manufacturers
       are required to use in certifying and auditing engines are currently codified
       in the Code of Federal Regulations.  These procedures were developed in
       the early 1980s and were first applied when the NOx and particulate
       standards were 10.7 and .6 grams per horsepower-hour respectively. 
       These procedures were never designed to provide reliable measurements at
       the extremely low emission levels represented by the proposed  standards.
                        Testing programs conducted jointly by EPA and industry show
       that the emission measurement variability using these procedures was
       approximately the same magnitude as the proposed standards.  With
       testing variability of this magnitude, it will simply not be possible to
       reliably determine if the proposed standards are being met.
                        Clearly, substantially improved test procedures and equipment
       need to be developed.  Further, the improved procedures must be
       developed with sufficient lead time to allow manufacturers to obtain and
       install the necessary equipment to upgrade their laboratory facilities and
       complete the development of compliant engines before the new standards
       take effect.  We believe this is a major undertaking and one that calls for
       immediate initiation of a large-scale cooperative effort between the
       Agency and the industry.
                        Again, Detroit Diesel  appreciates this opportunity to present
       our views on this important rulemaking.  We will follow up with more
       detailed comments on a number of issues before the end of the comment
       period.  Thank you.
                   MS. OGE:  Thank you.  Thank you very much.  Ms. Shapiro, good
       afternoon. Welcome.
                   MS. SHAPIRO:  Good afternoon. Thank you very much for
       allowing the opportunity to speak here today.  My name is Ellen Shapiro,
       and I'm the director of automotive fuels at the Alliance of Automobile
       Manufacturers, which is a coalition of car and light-truck manufacturers. 
       We sell more than 90 percent of the light-duty vehicles in this country.
       The Alliance's main interest in this rulemaking is to preserve diesel as an
       option for the light-duty market because, as EPA recognizes, they have
       inherent advantages in terms of fuel economy, reduced greenhouse gas
       emissions, and lower evaporative emissions, and I would also  point out
       some commentors have noted possible impacts on supply, some concerns
       about the impact on the supply of fuel, and if we are able to introduce
       better fuel economy vehicles into the market, that will also have an impact
       on the demand side of the equation, and I would suggest we also need to
       look at that part of the picture.
                        We heard DaimlerChrysler mention a potential 40 percent
       improvement in fuel economy.  Well, that can translate into a pretty good
       impact on the demand down the road.  Our members are working hard to
       advance the state-of-the-art in diesel technology so it will meet the Tier 2
       standards adopted last year, but the most critical factor in this endeavor is
       the quality of the fuel, especially sulfur. That is why we applaud EPA for
       taking this crucial first step toward enabling the next generation of diesel
       technology.  EPA has done several things right with this proposed
       rulemaking.  First, we treated the vehicle and fuel as an integral system,
       both for the  existing and future diesel fleet.  Second, EPA proposed a
       dramatically reduced sulfur to enable the new aftertreatment technology. 
       Numerous research programs are showing just how clean diesel can be.
       Recent bus demonstration programs have diesel buses with aftertreatment
       controls and clean diesel fuel proving that they can be as clean or cleaner
       than buses running on compressed natural gas.  There was a demonstration
       outside today which shows a very clean diesel bus.  This is nothing short
       of remarkable.
                        Third, EPA has proposed to introduce the new fuel on a
       nationwide basis with a common deadline and very limited exceptions. 
       This approach is necessary to prevent any high sulfur fuel from
       contaminating the sensitive new aftertreatment systems that will be used,
       and it will help ensure that trucks will continue to be able to deliver their
       goods across the country.  Fourth, EPA proposed introducing the cleaner
       fuel before the new  aftertreatment technology must be used on heavy-duty
       vehicles, and to the extent that the new cap also leads to early introduction
       of near zero sulfur fuel, automakers are still developing their Tier 2
       technologies. It will encourage the continued development in the light-duty
       market.
                        Does this proposal go far enough for Tier 2 diesel vehicles? 
       Not quite.  More needs to be done.  As much of a stretch as the Tier 2
       standards will be for gasoline vehicles, it will be even more so for diesel
       engines.  The fundamental problem, as EPA has recognized, is getting the
       vehicle to meet both NOx and PM standards at the same time.  Sulfur-free
       is the level that will allow all diesel vehicles to operate at their cleanest
       throughout their useful life.  That is why automakers from around the
       world, as well as EMA, have endorsed this level in a recently updated
       World-Wide Fuel Chart, which we are submitting for the record, and it's
       also available on our web site for those who  would like to look for it
       there.
                        The Charter defines sulfur-free as between five and ten parts per
       million to be defined further as more data becomes available.  In this
       country, the stringent emission standards justify adopting the lower limit. 
       Emerging data from DOE's DECSE program supports this view.
                        The Manufacturers of Emission Controls Association also
       recommends five parts per million in support of 15 parts per million
       notwithstanding.  We note that MECA and EPA assumes that a 15 ppm
       cap will lead to an average of about seven ppm, implying that most of the
       fuel will be under ten parts per million.  This is due to the expected
       compliance margin that will accompany implementation.
                        We are less certain of this outcome, however, and we expect
       that refiners will learn how to shrink this compliance margin so that there
       will be more fuel at the higher end of the range.  This  sulfur level closer to
       15 is definitely too high to enable the new aftertreatment devices.  In
       addition to sulfur, EPA should also adjust other fuel properties as
       recommended in the chart, especially cetane aromatics and distillation. 
       We will discuss this further in our written comments.
                        Is our position realistic? Are we asking too much?  We think a
       five part per million cap is doable.  After all, refiners are making this fuel
       today in Sweden and other countries as we heard earlier.  Other countries
       are moving quickly to ultra-low sulfur levels.  Just last year, Germany
       adopted a tax incentive program to encourage fuels with less than ten parts
       per million by 2003.  The EU announced its intent to pursue this course for
       all of Europe.  The key point is that refiners know how to make clean
       diesel fuel.  Proper incentives and market demand will bring this fuel to
       market even faster than public estimates predict.  We urge EPA to focus
       on its incentive package and encourage the  marketplace to make the new
       cleaner fuel available, widely available, as soon as possible.
                        We understand the concern about supply, but we believe that
       fuel supply will be driven by profitability and demand, as I mentioned, not
       simply cost.  To the extent that maintaining low sulfur levels throughout
       the distribution system becomes a challenge, we believe in the collective
       problem solving capability of the free market system.
                        So where does that leave us?  We've come a long way in the
       debate over sulfur.  Just two years ago, automakers petitioned EPA to
       reduce sulfur in gasoline to California levels or lower, and today everyone
       accepts the important role that sulfur plays in our national environmental
       policy.  The issue is no longer whether to reduce sulfur, it is not even that
       near zero sulfur fuels eventually will be needed, rather it is when will they
       be available to enable the new technology. 
                        For our part, Alliance members want to bring advanced
       technologies such as the turbocharged direct injection engine and hybrid
       electric diesel vehicles to the point where they can operate cleanly and
       meet consumer needs.  The proposed 15 part per million cap on diesel fuel
       sulfur is a very strong step toward providing incentives to continue
       investing in this clean diesel technology.  With diesel fuel quality on a par
       with the World-Wide Fuel Charter, however, will actually make this
       technology one of our keep options for the future.  Thank you.
                   MS. OGE:  Thank you, Ellen.
                        Mr. Bryan Smith, welcome. Thank you.
                   MR. SMITH:  Good morning.  I thank you for the opportunity to
       speak to you today about a very important and necessary proposal to adopt
       new tough emission standards for heavy-duty buses and trucks.
                        My name is Bryan Smith, and  I am the environmental health
       educator for the Oak Park Department of Public Health. The village of
       Oak Park is a community of approximately 53,000 individuals just west of
       Chicago about seven miles from the Loop. This proposal really affects the
       Oak Park community because the Eisenhower Expressway, a major
       expressway in the Chicagoland area, cuts right through our community. 
       The USEPA's proposal is very important to our community for several
       reasons.
                        Foremost, Oak Park is ranked number six on a list of 12 suburbs
       in the metropolitan Chicago area as a dirty diesel hot spot.  I'm going to
       just define for you what a dirty diesel hot spot is if you're not familiar with
       it.  Hot spots are in areas within one half mile of highways, streets,
       intermodal transfer stations, and tollbooths with the most traffic in
       metropolitan Chicago.  This includes expressways that carry more than
       15,000 heavy-duty diesel vehicles per day or arterial routes that carry over
       2,000  heavy-duty diesel vehicles per day.
                        Heavy-duty diesel vehicles release thick black diesel smoke that
       can cause airway inflammation and asthma attacks, decrease lung
       performance, and increase susceptibility to infection. Diesel exhaust is
       also a probable cancer-causing agent.  It is estimated that 17,709, about
       one-third of the population of Oak Park, lives in a dirty diesel hot spot.
       That doesn't include the tens of thousands of people throughout the
       Northwest Indiana and the Chicago metropolitan area that also live along
       dirty diesel hot spots.  It is estimated in our community alone that almost a
       thousand people with asthma live within a dirty diesel hot spot.
                        Asthma has become a great concern for our health department
       over the past several years.  School and public health nurses in our
       community have noted an increase in the prevalence of asthma,
       particularly in schools that are within the dirty diesel hot spot.  We're
       talking rates  of over ten percent in some schools, and we all know that
       asthma is an underreported disease as it is.
                        Asthma is a very serious lung diseases that causes about 5,000
       deaths nationwide each year.  Asthma costs Americans up to an estimated
       $11.3 billion annually with over $5 billion of the total cost for direct
       medical costs alone.  Asthma is not the only health problem that can be
       attributed to diesel exhaust.
                        A study by Harvard researchers has indicated that people living
       in areas with high particulate matter survive an average of one to two years
       less than those that live in cleaner areas.  The USEPA in 1998 indicated
       that exposure to even low levels of diesel exhaust is likely to pose a risk of
       lung cancer and respiratory impairment.  Finally, the Illinois Pollution
       Control Board fund -- excuse me.
                        The Illinois Pollution Control Board found in 1991 that diesel 
       exhaust was responsible for numerous acute and chronic health effects,
       changes in neurological behavior, and vital organ changes as well, gene
       mutations, and it may also be linked to reproductive or developmental
       effects.
                        We cannot undermine the health of our community and others
       like it simply because some members of the oil industry, trucking industry,
       and engine manufacturers do not want to spend the time or money to curb
       pollution.  In order to protect the public's health, we must require drastic
       reductions in pollution from these large trucks and buses.  Cleaning up
       diesel fuel by 97 percent will allow the EPA to cut smog-forming pollution
       by 95 percent and soot pollution by 90 percent in 2007, and there's also
       been some talk about a proposal waiting until 2010 to fully clean up
       smog-forming pollution on these vehicles, but this proposal will mean
       Americans will have to wait ten years before all new trucks are cleaned up. 
                        Do we really want to wait this long and expose our families and
       friends to contaminants that have a drastic effect on our health?  There
       should be no phase-in period for reductions in smog-forming pollution. 
       The EPA must take measures to ensure that these trucks are meeting the
       emission standards on roads and not just during the emissions testing.
                        Finally, the EPA should include a provision in the heavy-duty
       vehicle rule -- heavy-duty diesel vehicle rule that will provide incentives to
       introduce more of these cleaner, efficient diesel alternatives into the
       heavy-duty fleet that have been talked about earlier today.
                        Therefore, I respectfully ask this committee to seriously
       consider the testimony that you have heard here today on behalf of the Oak
       Park Department of Public Health.  These provisions are necessary to
       protect public health, and we ask you to include them in your final
       rulemaking.  Thank you.
                   MS. OGE:  Thank you, Mr. Smith. Dr. Sid Bild, good afternoon
       and welcome.
                   DR. BILD:  Thank you, Madam Chairman.  I appreciate this rare
       opportunity to be on a panel with two people who represent major
       polluters to our environment as well as the representative from the Oak
       Park Department of Public Health whose words I greatly appreciated.
                        My name is Sidney Bild. I'm the chairman of the health
       committee of Metro Seniors in Action.  Our organization represents over
       15,000 seniors in Chicago and over 130 clubs throughout the area.  I'm a
       retired physician with a low tolerance for those who threaten our public
       health with their desire for financial gain or just plain ignorance.  Metro
       Seniors in Action believes that the state of the nation's public health is
       synonymous with national security.  As a nation, we are, however, full of
       contradictions.  We have the world's highest per capita health care
       expenditures  of each, 5800 per year, and at the same time, after spending
       that money, we have over 45 million Americans without health insurance,
       and the number is growing.
                        The costs of air pollution must be included in the stupendous
       sum of $1.6 trillion, which will be spent on health care in the year 2000. 
       Air pollution is a major factor in health and lung disease, according to the
       Centers for Disease Control, and it cites these conditions as two of the four
       leading causes of death in its December 17th Morbidity and Mortality
       Weekly Report.  A major victory in the efforts to control air pollution from
       all types of internal combustion vehicles in addition to restricting the use
       of diesel fuel would be to successfully fund the purchase of newer and less
       polluting buses by the CTA, the Chicago Transit Authority, and to increase
       service to both the central city and suburbs.
                        That would significantly cut into the use of personal cars now
       deemed  necessary by many citizens.  Mass transit has been shoulder to
       side in recent times by aggressive attempts to privatize our transportation
       system.  Metro Seniors in Action vigorously opposes the privatization of
       the CTA and has joined with the Capital Budget Group in Chicago to form
       the Campaign for Better Transit, known as CBT, to organize and energize
       the city of Chicago to make the Chicago Transit Authority a world class
       mass transit system like New York City.
                        A major part of the work of the CBT is to work for a cleaner
       environment.  I want to thank you for this opportunity to contribute to this
       very worthy fight.
                   MS. OGE:  Thank you.  I'd like to thank all the panelists for
       coming forward and offering your testimony.  Thank you very much.  Is
       Mr. Ed Kahn here?  Okay. Excuse me.  If you just could take your seats
       one second.  One of the EPA
       panelist members has a question for you. 
                   MR. HOROWITZ:  This is for John Duerr.  You raised some
       questions about the technical procedures.
                        I just want to find out will you be elaborating in your written
       comments about solutions, possible suggestions of how to deal with the
       problems you raised?
                   MR. DUERR:  I'm not sure how far we will be able to go with
       solutions.  I think we've identified the problem.  I think the steps to
       solutions are things that we're going to have to work on together.  I'm sure
       we'll have some ideas, but it is going to be a cooperative effort.
                   MS. OGE:  Thank you.  I would like to proceed with the next
       panel.
                        Mr. Mike Roach, Lila Drebushenko, James Cavallo.
                   MR. SILVERMAN:  Can I make a very short statement?  I'm just
       delighted to see so many people from the fuel and engine industries
       testifying in favor of these new rules.  I was quite surprised and definitely 
       pleased.
                   MS. OGE:  Mr. Cavallo, we're ready when you're ready.  Good
       afternoon. We're ending about an hour early.  This is unusual.
                   MR. CAVALLO:  Well, then I should talk slow?
                   MS. OGE:  No, no.
                   MR. CAVALLO:  I'm very pleased to testify.  Today, I'm speaking
       as a concerned citizen in support of the American Lung Association's
       position on reducing pollution from diesel exhaust.  I feel that requiring
       cleaner diesel fuel vehicles is an urgent environmental task and that it's a
       feasible and a manageable task.  The proposed regulations will
       significantly lower heavy vehicle pollution and will remove a major
       impediment to extending the use of more energy efficient diesel engines.
                        Also, air pollution is a worldwide concern, and by stimulating
       production and use of cleaner diesel  vehicles in the U.S., I feel the
       proposed regulations will result in cleaner vehicles being used in other
       parts of the world as well.
                        My interest in a swift movement to cleaner engines doesn't stem
       solely from a general wish for a cleaner environment.  Actually, two
       people very close to me suffer from asthma, which is aggravated by the
       coarse and fine particulate matter found in diesel exhaust, and they are my
       sister and my mother-in-law, who both have asthma.  My sister has
       suffered from asthma for more than five years.  She lives here in Chicago. 
       Her home is less than 100 yards from a major truck route, and she lives
       within a mile of an expressway with a lot of diesel truck traffic.  Her
       asthma episodes occasionally cause her to miss work.  It's painful for us in
       the family to see her leave a birthday party or other holiday celebration and
       know that she needs to lay down and rest to recover her strength. 
                        My mother-in-law has had asthma for as long as I've known her,
       22 years.  She is now unable to leave her home because she can't catch her
       breath after walking just short distances.  She has lived in the same house
       for 50 years.  She lives on the outskirts of Detroit, and her house is about
       200 yards from a major truck route, and she lives within a mile of a major
       expressway.
                        In addition to these two very close family members, my
       daughters have two close friends who are asthmatic, both are 11 years old
       and require medication regularly.  When either visits our house for an
       afternoon of play or a sleepover, their parents bring their inhalants and
       other medication and give my wife and myself instructions on how to
       administer it, and their parents are never quite able to be at ease when
       they're away from the kids, and so they're frequently checking in.
                        I want to say that I'm disappointed that we have to wait until
       2007  for the proposed particulate matter reductions to be imposed, and the
       regulations -- I'm also disappointed that the regulations will only affect
       new heavy-duty vehicles.  According to EPA's own estimates, the
       additional hardware and life-cycle operating cost will be modest with
       respect to the cost of heavy-duty vehicles.  Between now and 2007,
       particulate matter pollution from diesel engines will continue to aggravate
       and debilitate children, working-aged adults, and older Americans.  It
       would seem reasonable to me to push forward the timing of the
       implementation of these regulations and to require that retrofit -- requiring
       retrofits of existing heavy-duty vehicles as part of normal maintenance.
                        I'd also like to offer a thought relating to the benefits of the
       proposed rule.  In reading through material, I didn't notice, and perhaps it's
       my oversight, but I didn't notice a mention of benefits accruing to the
       position of these  rules occurring for worldwide air pollution.  Improved
       air quality is a worldwide concern and pollution that comes from the
       tailpipes of one part of the world impacts the environment to some extent
       on all other parts of the world.  Though particulate matter doesn't travel far
       from the source, greenhouse gas emissions do.
                        Diesel engines are a dominant supplier of public transportation
       and trucking throughout the world, though fuel consumption of diesel
       engines in developing nations have reduced -- have been reduced by 15
       percent over the past 20 years, and emissions have been reduced by 90
       percent, further improvements are needed, and this regulation will help. 
       By creating a higher standard in this country for clean diesel, the trucks
       and buses in other parts of the world will be improved as they purchase
       U.S. vehicles from U.S. manufacturers.  That's my statement.  Thank you
       very much.
                   MS. OGE:  Thank you very much.  Thank you for coming forward
       and taking time from your schedule today to testify.  Thank you.
                        I'd like to call Rebecca Stanfield and Ms. Susan Schaub to
       please come forward.
                   MS. STANFIELD:  Thank you again for the opportunity to
       comment on a rule that's going to definitely have very important and very
       far-reaching implications for our air quality.  My name is Rebecca
       Stanfield.  I am a clean air advocate of U.S. Public Interest Research
       Group, which is the national lobby office for the state PIRGs, and state
       PIRGs are consumer and environmental groups that are active in 28 states.
                        On behalf of our half a million members around the country, I
       would like to express our strong support for EPA's proposal to clean up
       heavy-duty diesel vehicles.  We know that a daily reality for most of our
       members and most Americans living in urban and suburban areas to be 
       faced with thick black clouds of noxious diesel pollution and to suffer the
       foul smell and taste, itchy eyes, sneezing, coughing, wheezing, and the
       long-term health effects that are a direct result from breathing this
       pollution.
                        In the time that I've been with the PIRGs, we've talked to more
       than four million people at their doors about air pollution, and the question
       we get back time and time again is how are we going to get these diesel
       buses and trucks cleaned up. So it's common sense that cutting the
       pollution from diesel buses and trucks are going to have enormous and
       long-lasting benefits to public health and to the quality of our lives in our
       cities and suburbs. This common-sense notion was recently supported by
       87 percent of people polled in a recent poll by the American Lung
       Association, and the common sense of cleaning up diesel pollution is also
       borne out time and time again in health studies that show that our exposure
       to diesel  pollution can lead to a range of symptoms all the way from
       asthma attacks, premature dealt, and to lung cancer.
                        There are 30 epidemiological studies that show that diesel
       exposure can increase the risk of lung cancer by as much as 89 percent. 
       Earlier this spring, the Association of State Air Regulators estimated that
       125,000 cases of cancer in the United States are a result of breathing diesel
       pollution.  Add to these cases of lung cancer the following health impacts;
       thousands of American lives cut short annually; thousands of
       hospitalizations and emergency room visits annually; and millions of days
       of restricted activities for kids like Kyle who spoke earlier.  So it's really to
       prevent these health impacts that we are working to support the
       rulemaking.
                        We think that there are three key pieces that are a cornerstone in
       the rulemaking and that need to be preserved.  The first is the 15 parts per
       million cap on diesel fuel sulfur content  effective by 2006.  That was the
       first.  The second is the .01 grams brake horsepower-hour particulate
       standard effective in 2007, and the third is the .2 grams per brake
       horsepower-hour standard for NOx and hydrocarbons.  I want to
       emphasize that clean diesel fuel is an essential part of the rulemaking, and
       that the 15 parts per million cap effective in 2006 is, in our opinion,
       absolutely necessary to meeting the goals of the program.  Other observers
       have suggested alternative caps and averaging systems.  We urge you to
       reject these systems.  The 50 -- in particular, the 50 parts per million cap
       suggested by API would result in increased incidence of particulate filter
       failure, deterioration of engine performance, and poisoning of the NOx
       catalyst, and this, of course, for the public means more pollution, more
       asthma attacks, more illnesses, hospitalizations, premature mortality, and
       cancer.
                        Similarly, we do not support alternative proposals that would 
       allow refiners to continue producing at levels of 500 parts per million for a
       fraction of the total highway diesel fuel volume.  This approach or any
       other scenario that would allow two or more grades of diesel fuel to
       remain in the market is very impractical as we heard earlier.  So to the
       extent that these alternative proposals are designed to provide flexibility to
       small refiners, we believe that additional flexibility is unwarranted given
       the extremely long lead time of six years and that they severely
       compromise the environmental benefits of the proposal placing the burden
       on the breathing public.
                        I'd like to add to what was said earlier by a gentleman regarding
       the phase-in of the NOx standards.  We think that the NOx standards
       should be applicable to 100 percent of the fleet in 2007, as is the case with
       the PM standards, and that's based on a high degree of confidence by the
       Manufacturers of the Emissions Control said that the technology is going
       to be there,  and, again, contingent on the availability of the clean fuel. 
       We believe that the technolgoy review that has been -- that you're
       requesting comment on is unnecessary and would be counterproductive.
                        First of all, again, there's a high degree of confidence that the
       technology will be available.  Secondly, we believe that the technology
       review could be a disincentive for developing the technologies on
       schedule.  Again, giving the industry an opportunity to escape new
       standards contingent on their own lack of future progress in developing
       NOx controls technologies is a lot like the fox guarding the hen house.
                        Finally, to the extent that you do find a technology review is
       warranted, I guess it goes without saying that the technology review
       should be designed to allow equally for a tightening of the standards as a
       weakening of the standards if there are -- if in that time frame there are
       advanced technologies  available, and that leads to my last point, which is
       that there are advanced heavy-duty engine technologies that are nondiesel
       technologies being commercialized today that have additional very
       important public health and environmental impacts, including the curbing
       of global warming, and so we would hope that you'd use this rulemaking
       to create incentives to further commercialize those vehicles and
       commercialize them faster, and these would include fuel cells, hybrids,
       and electric propulsion systems.
                        So we support the inclusion of the Blue Sky Program as a first
       step, and we look forward to working with you to figure out exactly how
       to define what would be eligible for incentive programs, subsequent
       incentive programs at the local, state, or federal level under that program.
       Thank you very much.
                   MS. OGE:  Thank you.  I would suggest a ten-minute break, and
       then we'll come back and see if we can pick up some of the people that
       were going to testify at  2:45 and were not here and then at 3:45, and then
       we will move to the 4:00 o'clock panel.  So a ten-minute break, especially
       for the reporter.
                          (Break taken.)
                   MS. OGE:  Let's see if Mr. Kahn is here, Mike Roach, Lila
       Drebushenko, John Moore, John Skorburg, Lionel Trepanier. Somebody is
       supposed to be here representing the American Lung Association of
       Michigan and Mr. Kurt McIntosh.
                        If you can print your name on the cards placed in front of you.
                        Mr. Skorburg, we'll start with you.
                   MR. SKORBURG:  Thank you very much.  I know that it's been a
       long probably two days for the committee, and luckily the comments I
       have are fairly short.  My name is John Skorburg.  I'm a senior economist
       with the American Farm Bureau Federation, and for those of you who
       don't know the American Farm Bureau, we're the nation's largest general
       farm organization, and we  have members in all 50 states and Puerto Rico,
       and actually we're the largest farm organization in the world.
                        The first thing I'd like to say is that our members support clean
       air accomplishments, and the biggest concern they have is not really on the
       reduction in the particulate matters or the reduction in the pollutants, it's in
       fuel concerns and how those fuel concerns are going to impact on rural
       America.
                        The specific concerns that are members have told us about
       would be, number one, the threat of supply disruptions, particularly in
       rural America, with the reformulated fuels; the potential for more costly
       fuel for farm and other off-highway uses; and also the economic viability
       of farmer-owned refineries, and at a time when reformulated gasoline
       prices have already skyrocketed, especially here in the Chicago area, above
       even what was economically expected, our members do not want to see
       this type of pattern duplicated  concerning diesel fuel.
                        Therefore, the suggestions that our members have made is to set
       the onroad diesel fuel sulfur cap at 50 parts per million, which would be a
       90 percent reduction from the current level, and then also to maintain this
       higher level for the off-highway diesel fuel standard in order to minimize
       the cost to farmers and provide refiners with maximum flexibility to
       produce diesel fuel, and at the same time, our association looks forward to
       working with the Agency to achieve a final rule that is compatible with
       continued economic viability in American agriculture and environmental
       progress.
                        Just as our members need and want cleaner air, they also require
       reliable and affordable fuel supplies.  So the challenge that we have is to
       keep air clean and to get those clean air benefits, but also to balance those
       more with the diesel costs.  Thank you.
                   MS. OGE:  Thank you. 
                        Mr. Moore.
                   MR. MOORE:  Thanks.  I'd like to flick on the overhead.
                        Thanks for allowing us the opportunity to testify today.  I'd like
       to thank both the EPA and the American Lung Association for organizing
       this event.  The Environmental Law and Policy Center of the Midwest, or
       the ELPC, is the Midwest's leading environmental advocacy and eco
       business innovation organization.  One of our basic premises is that
       environmental progress in economic development can go hand-in-hand.
                        Today's diesel truck and fuel proposal is consistent with that
       premise because, among other things, it will dramatically improve public
       health, clean up our communities, and foster competition in the truck, fuel,
       and engine industries to produce cleaner, more efficient products.
       Therefore, in principle, we strongly support EPA's rule.
                        I want to briefly address  three points today.  First, the diesel
       trucks and buses are rolling smokestacks. They are a serious health
       problem, and they need to be cleaned up quickly.  Second, that the
       proposed sulfur standard for diesel fuel is both achievable and essential. 
       Third, we believe that EPA must take additional steps to promote cleaner
       alternatives to diesel vehicles.  Although, we've made much progress
       cleaning up the air in the last 30 years, tens of millions of Americans
       continue to breathe unhealthful levels of pollution.  Diesel fuel vehicles
       are major sources of pollution, especially in urban areas.
                        Each year, trucks and buses emit millions of pounds of soot,
       carbon monoxide, sulfur dioxide, nitrogen oxides, and other pollutants. 
       Their emissions are disproportionately large compared to their numbers on
       the roads.  Incredibly, diesel trucks emit three times as much pollution as
       coal-fired tar plants per energy units consumed.  That's according to the
       Union of  Concerned Scientists.  Diesel truck pollution is especially bad in
       the Midwest, which is the crossroads of the nation's freight transportation
       system.
                        I might also add personally that this diesel pollution does not
       necessarily have to occur in urban areas. My mother, who lives in
       Pittsburgh, lives right at the intersection of a bus line on the outskirts of
       town, and because it's on an uphill, intersection, all the buses must stop
       and then accelerate, and so her house is constantly filled with diesel soot,
       despite our best efforts to clean it up, and, of course, it affects her
       respiratory system and makes it very difficult for her to breathe and
       sometimes even to talk to me on the telephone.
                        Others at this hearing have spoken more directly and
       compellingly than I about the toxic effects of diesel exhaust. I think my
       mother could testify to that as well.  I simply note the following major
       health impacts.  As we've already heard  several times, STAPPO has
       estimated that diesel fuel exhaust is responsible for at least 125,000 cases
       of cancer, including more than 13,000 cases in the major metropolitan
       areas of the Midwest. According to recent medical studies, even moderate
       levels of diesel exhaust and other particulate may trigger heart attacks and
       arrhythmias in susceptible persons.  To quote a top EPA scientist reacting
       to these studies, and this was in the L.A. Times, for air pollution to have
       such a substantial impact on public health and have it show up so
       consistently is remarkable, and as you also know, diesel exhaust contains
       dioxin, which just last week EPA formally determined is both a carcinogen
       and is more harmful to human health than previously believed.
                        Diesel exhaust is a major problem, even in areas classified as
       attainment by EPA for particulate matter and other pollutants.  The tiniest
       particles of diesel soot are the most dangerous and the current PM10
       standard largely failed to  control these small particles.  Thus, the fact that
       nearly all of the Midwest is an attainment for PM10 is little comfort,
       indeed, to those of us who live or work near truck yards, railways, and
       other sources of diesel exhaust.
                        EPA's proposal will also help to close the enormous emissions
       gap between diesel trucks and cars.  The disparity is dramatic as we've
       already heard, and I will not repeat all of the statistics.
                        The point is that even after the year 2004 emission standards are
       in place, diesel trucks will still emit nearly 400 times as much soot as
       passenger cars and 31 times as much smog-forming compounds.  Let me
       turn to the diesel fuel sulfur standard.  We support, at a minimum, the
       proposed 15 ppm fuel level sulfur for several reasons.
                        First, it is a fact that low sulfur fuels substantially lowers
       particulate emissions even without using PM  filters, and several studies
       support this. Second, as you can see on the charts, sulfur poisons and
       incapacitates particulate matter and NOx controls.  For example, according
       to one study in the DEXI evaluation of the effects of sulfur on PM and
       NOx controls, PM filters are more than 90 percent efficient at three ppm,
       70 percent efficient at 30 ppm, and virtually useless at 150 ppm. Sulfur is a
       similarly damaging NOx catalyst.
                        In other words, the 50 ppm level backed by the American
       Petroleum Institute simply is not enough and could increase emissions by
       25 percent or more compared even to the 15 ppm standard.  We support a
       sulfur fuel level no greater than 15 and even lower sulfur fuel that will
       maximize pollution control, and I think there's very little doubt of that as
       the engine -- as most of the engine companies and the Emission Control
       Association folks will tell us.
                        I also note that low sulfur fuel is superior because it improves
       fuel  economy, reduces engine wear, and lowers maintenance costs.  These
       savings will at least partially offset the higher cost, if any, of low sulfur
       fuel.  As you know, some of the oil companies are fighting the proposed
       sulfur standard.  They claim they won't have enough time to comply with
       the rules and that a low sulfur requirement will drive the fuel prices to
       unacceptable levels.  We believe that the reality suggests otherwise.  First,
       as we know, BP Amoco already is offering 15 ppm fuel in California to
       urban bus fleets, and that, I understand, is at a cost of four to five cents
       more than the standard diesel fuel price.  Second, BP Amoco is selling
       gasoline with an average content of 30 ppm in several U.S. cities four
       years ahead of the EPA deadline.  TOSCO Corporation, the largest
       independent refiner marketer of oil products in the U.S., strongly supports
       the 15 ppm standard, and we're happy to see that.
                        The auto manufacturing industry, both here and abroad, is
       clamoring  for ultra-low sulfur fuels.  As more truck and bus fleets retrofit
       their existing vehicles with aftermarket treatment, the demand for low
       sulfur fuel will grow even more.  I think that's a very important point.
                        As we've already heard, worldwide the situation is better in
       Sweden, Germany, and other countries in Europe, and zero or low sulfur
       fuel is also available in Japan.  The technology already exists to remove
       sulfur from diesel fuel by and large.  So relatively little additional research
       and development technology investment is necessary.  We don't think that
       the current issue with ethanol and TBE in reformulated gasoline in the
       Chicago area is directly applicable to this situation. The technology to
       clean sulfur from the gas and the diesel fuel is already there. Although, the
       new standard may require oil refineries to invest in some additional
       equipment, those costs can be passed on -- and those may be passed on to
       the consumer  at the pump, the increases will be insignificant compared to
       the fluctuations in fuel prices caused by other factors, and, as we've
       already heard, oil companies will not be able to plead poverty as a defense
       to compliance with these regulations because the 11 large oil companies
       reported 12 million in profits for the first quarter of 2000, which has
       tripled or more some projections of the total course, reducing the sulfur
       levels of diesel fuel over the next six and a half years.
                        Finally, we think EPA can take additional measures.  While
       EPA's role is a major step in the right direction towards cleaner air, I've
       identified at least three different -- three additional measures.  First, most
       directly, new trucks subject to the rule should be required to meet tighter
       limits on NOx no later than 2007 rather than 2010 as proposed.  Second,
       we support a low sulfur standard for all diesel fuels.  Sulfur limits
       currently range up to 5,000 ppm for nonroad engine  applications.  Since
       low sulfur fuel produces much less toxic soot than high sulfur fuel, the
       uniformly low standard will improve air quality at a relatively low added
       cost, and I might add many of these nonroad applications occur in urban
       areas such as construction activities, trains for urban and mass transit, and
       diesel-power generator sets.  Third, more needs to be done to clean up
       trucks already on the road.  Old trucks, obviously, are much dirtier than
       new trucks.  Low sulfur fuel will help, but it is not enough.  We'd
       recommend the following measures to clean up dirty trucks:  First, expand
       the urban bus NOx and PM retrofit program to include truck fleets. 
       Second, targeted enforcement initiatives to improve industry compliance
       with existing laws.  Third, better monitoring of smog particulate matter in
       urban areas and truck corridors.  Fourth, lobby for tax incentives to scrap
       dirty trucks and invest in clean fuel vehicles, such as hybrid electrics and
       fuel cell. 
                        In conclusion, we believe that EPA's regulations are a good step
       in the right direction.  You have amassed overwhelming evidence that
       diesel exhaust is toxic and that diesel trucks and buses emit far too much
       pollution.  Immediate action, therefore, is necessary to improve our
       nation's air quality and reduce the disease and death caused by diesel
       exhaust.  EPA, therefore, should adopt strong final regulations without
       delay.  Thank you very much.
                   MS. OGE:  Thank you.  I'd like to thank both of you for coming
       forward and testifying today.  Is Mr. Ed Kahn here? Also, for the 3:45
       panel, I have Mike Roach and Lila Drebushenko.  They're not here. Lionel
       Trepanier, Kurt McIntosh, Diane Bailey, Peter Oris, Susan Schaub, Ross
       Firestone, Dick Stone, Jack Derrin, and
       Jane -- oh, she already testified.  Jane Clougherty already testified,.
                        Is anyone here planning to testify today that I haven't called
       your  name?  Why don't you come forward?  Please state your name and
       your affiliation and have a seat.  There is a card in front of you.  Please
       print your name.
                   MR. BARNETT:  My name is Daniel Barnett, and I'm here with
       the Little Village Environmental Justice Organization. Can you hear me? 
       Great.
                        Again, my name is Daniel Barnett, and I'm here with the Little
       Village Environmental Justice Organization. I live here in Chicago.  I'd
       like to thank you for giving me the time to speak.  This will be very brief. 
       I'd like to give my support for clean air.  I'm here as -- everyone has really
       noted that smog is plaguing Chicago, responsible for over 7200 citizens
       going to the emergency rooms and may be possible for 310,000 asthma
       attacks here in Illinois.  To make matters worse, 30 health studies link
       diesel pollution to lung cancer.  I work as a community health educator in
       Little Village, and I work with the Little Village Environmental Justice 
       Organization.  The organization was founded in 1995 as a nonprofit
       community-based organization of people to protect residents of Little
       Village, which is also known as South Lawndale in Chicago, from air
       pollution and associated lung disease.
                        Statistics from a 1998 school screening by Cook County
       Hospital Health Center suggests a prevalence of pediatric asthma up to 15
       percent, and this is in Little Village.  In addition to this, Little Village's
       environment is affected by airborne particulates, involved organic
       compounds emitted by industries which dominate the local economy.
                        In 1995, more than 30 million pounds of criteria air pollutants
       were released at 30 industrial sites in Little Village.  In addition to this,
       Little Village is titled as a dirty diesel hot spot by the American Lung
       Association due to traffic emissions on the major highways through the
       area as well as major trucking routes to these industrial sites.  As a 
       personal note, I've been working this whole spring with the class -- with
       two classes of seventh and eighth graders, and I've noted a pediatric
       asthma prevalence.  Each one of these kids could speak to the prevalence
       of asthma in Little Village and each child knew an asthmatic.  When we
       start talking to children about what might be aggravating their asthma
       attacks, they spoke very strongly to the buses and trucks that literally ran
       right past Little Village Academy on 26th Street or on 26th and Lawndale,
       and so clearly this is only anecdotal evidence, but the diesel emissions
       from buses and trucks are a source of concern not only for myself and the
       health educators, but also the children of Little Village.  So big trucks and
       buses are a big pollution source, and they must be cleaned up to protect the
       public health.
                        Therefore, I would urge EPA to reduce diesel sulfur levels to at
       least 15 part per million nationwide for both onroad and offroad diesels,
       clean up big  trucks and buses by at least 90 percent by 2007, and this is at
       the latest, ensure big trucks are meeting the emission standards on the
       roads and not just during emission tests.  Again, thank you for your time.
                   MS. OGE:  Thank you.  Thank you for coming.  Anyone else in the
       audience that either has signed to testify or wishes to testify?  If not, the
       panel here will step outside and we will bring in people as they come in to
       testify, but I congratulate all of you for just staying around this afternoon. 
       Thanks for keeping us company.
                          (Break taken.)
                   MR. FRANCE:  Diane Bailey and Ross Firestone, if you could
       come up to the table, please.  If you could write your names and
       affiliations on the cards in front of you, please.
                        Diane Bailey, why don't the you beginning.
                   MS. BAILEY:  Hi.  My name is Diane Bailey.  I'm with Citizens
       for a Better Environment.  I'll try and make this  quick.  I just have one
       page of comments that I want to go through.
                        Just about everyone is familiar with the black plumes of smoke
       coming out of exhaust pipes on buses and trucks, construction equipment,
       trains, or really any diesel engine that's out there, and these dirty plumes
       are all over the place, but that doesn't mean that they're safe.  The exhaust
       from diesel engines is anything about safe.
                        USEPA has listed 40 separate substances in diesel exhaust as
       hazardous air pollutants, as you probably all know, and 15 of these are also
       listed by the International Agency for Research on Cancer, or IARC, either
       as carcinogens or as probable or possible human carcinogens. It's no
       surprise then that the California Air Resources Board recently identified
       soot or the particulate emission portion from diesel-fueled engines as a
       toxic air contaminant.  The toxics in diesel exhaust tend to stick to the soot
       particles.  So  that finding is particularly relevant.
                        These toxics include carcinogens like acetaldehyde, benzene,
       beryllium, DHP, which is used as a plasticizer, dioxins, which are
       infamous, formaldehyde, nickel, polycyclic hydrocarbons, like
       benzopyrenes, and styrene.  There are other toxics as well like lead and
       mercury.
                        This year, diesel exhaust particulates were listed for the first
       time as substances that are reasonably anticipated to be human
       carcinogens.  This was in the ninth report on carcinogens, which is
       published by the U.S. Department of Health and Human Services.  A
       causal link between lung cancer and occupational diesel exhaust exposure
       has been shown in more than 30 epidemiological studies.  On average, the
       risk of lung cancer increases from long-term occupational exposure by
       about 40 percent, which is significant.  Even though diesel exhaust is in
       that range as a known carcinogen, its cancer potency factor is  estimated to
       be roughly ten times higher than that for benzene.  Diesel fuel and the
       exhaust that it creates should be regulated to the same extent as regular
       gasoline.  The burning of diesel creates up to 200 times more soot than
       gasoline.  Most of these soot particles are of the size range easily inhaled
       and trapped in the lungs bringing with them the many toxic substances
       also found in diesel exhaust.  A recent study shows that diesel exhaust
       from newer or cleaner fuel has the same toxic air contaminant in older,
       dirtier fuel.  So cleaning the diesel fuel alone is not enough.
                        Clean diesel, namely lowering sulfur, however, is necessary for
       more sophisticated pollution control equipment to work on the diesel
       engines. Because of this, it is important that the proposed regulation on
       diesel require both cleaner diesel fuel and stricter emission standards at the
       same time.  CBE believes that the extra 1,000 to $1600 cost for new 
       diesel vehicles and the four cent increase in the diesel fuel are well worth
       the enormous health benefit that EPA's proposed diesel rules will bring. 
       Not only will the proposed emission reductions of 90 percent or more
       greatly improve public health, they will also reduce smog formation
       helping ozone nonattainment areas to reach compliance with federal air
       quality standards.
                        A recent study also shows that children living near high-traffic
       streets have a higher risk of developing childhood cancer.  There's little
       doubt that the exhaust from diesel trucks plays a crucial role in this
       problem.
                        We believe that the health of sensitive groups, especially
       children, will improve as a result of EPA's proposed diesel regulations. 
       Citizens for a Better Environment strongly supports these new rules, and
       we also hope to see similar rules in the near future for offroad diesel
       equipment as well.  Thank you. 
                   MR. FRANCE:  Thank you.  Ross Firestone.
                   MR. FIRESTONE:  Yes.  I'm here as a concerned citizen.  I was
       asked to come here from the American Lung Association, but I have
       nothing at all whatsoever to do with the Little Village Environmental
       Justice Organization, which I'm listed as being a representative of on this
       list.  I'm going to keep my remarks personal and short, as I see you've had
       a busy day.
                        I'm almost 70 years old, and about four years ago, I took up
       bicycling as an exercise.  One day when I was out riding, I happened to be
       by a diesel truck just as it was starting up.  I was covered with black
       smoke, I coughed, sneezed, my eyes turned red, I retched.  It was a very
       unpleasant and, I believe, unhealthy experience.
                        I didn't realize that I was that sensitive to diesel emission
       because when I had my automobile, I got behind one of these coal burners,
       and I would just turn  the recycling on, and I'd forget no more about it, but
       now as a bicyclist, I bicycle every day, and I keep an eye out for these, and
       if I see them, I avoid them because it's just a very unpleasant experience.
                        Now, I know from previous experience -- and you may have
       noticed that I have a Ph.D., and that's in material science, I used to work at
       IIT Research Institute.  In the 1960s, with the Department of Energy
       backing, I had a number of projects for cleaning up diesel emissions, and
       at that time, it was technically feasible to do so.  For various reasons, it
       wasn't introduced, but that was 30 years ago, and certainly now it must be
       even more feasible to do it.  So I can't believe it can't be cleaned up if
       there's a will and a political movement to clean it up.
                        I think it's very unfair that the automobiles have been taxed
       between one and $2,000, I understand, for air pollution requirements, for
       over 30 years  while the trucks have got away Scot-free, and so the cost
       that's been estimated of the same magnitude, 1,000, $2,000 to clean up
       diesel, I think it's only fair that the trucks should also bear the burden.
                        Also, in the same period when I was working on these exhaust
       cleanups, we lived in the city, and we could tell, my wife and I, when the
       rush-hour started because we'd get very strong diesel odors filtering into
       our apartment.  We lived on a bus line, and the buses would come every
       ten, 15 minutes.  The buses, of course, are particularly hazardous because
       they run in the inner city.  They run through canyons of buildings, and so
       the exhaust collects and doesn't dissipate easily, and I was surprised to see
       that you're planning less strict requirements for bus exhaust rather than for
       trucks. Perhaps, I'm wrong, but I think they should be the same or better.
                        Finally, at one time, I lived in Pittsburgh, and, again, we had 
       problems with trucks, especially climbing the hills.  You get a tremendous
       cloud of diesel soot coming out, and this would just fill the valleys up, and
       it would be very unpleasant.  There's enough sulfur in it that things would
       be packed by acid, and this was after the steel mills had been closed down
       and after the automobiles had their converters on them.  So that's probably
       the only thing it was.
                        So I urge you to pass regulations and clean up this diesel fuel
       and the sooner the better.  I don't really want to wait until 2010.  I'm nearly
       70 years old, and, you know, I may not last that long.  I'm breathing the
       stuff every day if I'm out bicycling, if I'm unlucky, and I should hope that
       you should be able to move more rapidly.  Thank you.
                   MR. FRANCE:  Thank you.  Just one comment, our proposal does
       treat buses and trucks the same.
                   MR. FIRESTONE:  Oh, they do. Thank you.  Glad to hear that. 
                   MR. FRANCE:  Thanks for coming out.  Is there anybody else in
       the audience that wants to testify?
                        We're on another break.
                          (Break taken.)
                   MR. FRANCE:  The record is closed.
                          (Whereupon, the proceedings                     were adjourned at
       6:30 p.m.)
                 STATE OF ILLINOIS  )
                          ) SS.
       COUNTY OF C O O K  )
        
         
                     I, GEANNA M. IAQUINTA, CSR, do hereby state that I am a
       court reporter doing business in the City of Chicago, County of Cook, and
       State of Illinois; that I reported by means of machine shorthand the
       proceedings held in the foregoing cause, and that the foregoing is a true
       and correct transcript of my shorthand notes so taken as aforesaid.
        
        
                          ______________________________
                           Geanna M. Iaquinta, CSR                     Notary Public, Cook
       County, IL                     Illinois License No. 084-004096
        
        
        
       SUBSCRIBED AND SWORN TO
       before me this_____day
       of_______, A.D., 2000.
        
       _______________________
            Notary Public