CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

AIR RESOURCES BOARD

STAFF REPORT: INITIAL STATEMENT OF REASONS

PROPOSED AMENDMENTS TO THE EXHAUST EMISSION STANDARDS FOR 2007-2009

MODEL-YEAR HEAVY DUTY URBAN BUS ENGINES AND THE FLEET RULE FOR

TRANSIT AGENCIES

Date of Release: July 29, 2005

Scheduled for Consideration: September 15-16, 2005

This report has been reviewed by the staff of the California Air Resources Board and

approved for publication. Approval does not signify that the contents necessarily reflect the

views and policies of the Air Resources Board, nor does mention of trade names or

commercial products constitute endorsement or recommendation for use.
State of California

California Environmental Protection Agency

AIR RESOURCES BOARD

PROPOSED AMENDMENTS TO THE EXHAUST EMISSION STANDARDS FOR 2007-2009

MODEL-YEAR HEAVY DUTY URBAN BUS ENGINES AND THE FLEET RULE FOR

TRANSIT AGENCIES

Staff Report

July 29, 2005
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TABLE OF CONTENTS

EXECUTIVE SUMMARY ......................................................................................1

I. INTRODUCTION ...........................................................................................1

A. Background................................................................................................1

1. ARB's Regulations Affecting Transit Agencies .......................................2

2. SCAQMD Rule 1192...............................................................................3

3. Amendments to be Considered by the Board.........................................4

a. Amend the Statewide Urban Bus Emission Requirements .................4

b. Alternative Fuel Path Mandate for All Transit Agencies in the District 5

B. Regulatory Authority...................................................................................5

C. Current Regulations and Voluntary Programs ........................................6

1. Federal Regulations ...............................................................................6

a. Current Standards...............................................................................7

b. 2007 and Later Standards...................................................................7

2. California Regulations.............................................................................8

a. General New Heavy-Duty Engine Regulations ...................................8

b. General In-Use Heavy-Duty Engine Regulations ..............................10

c. In-Use Urban Bus and Transit Fleet Vehicle Regulations .................11

3. Local Regulations .................................................................................13

a. General Air District Authority.............................................................13

b. Specific South Coast Air Quality Management District Authority ......13

4. Voluntary and Incentive Programs........................................................14

a. Federal Incentives.............................................................................14

b. State Incentives ................................................................................15

c. Local Funding ...................................................................................15

II. PUBLIC OUTREACH...................................................................................16

A. Environmental Justice ..............................................................................17

B. Outreach Efforts .......................................................................................18

1. Amend the Statewide Urban Bus Emission Requirements...................18

2. Alternative Fuel Path Mandate for all Transit Agencies in the District ..19

III. NEED FOR EMISSION REDUCTIONS....................................................20

A. Ozone ......................................................................................................21

B. Particulate Matter (PM) ............................................................................21

IV. NEED FOR A POLICY DECISION BY THE BOARD TO AMEND ARB’S

CURRENT REGULATIONS................................................................................21

A. Amend the Statewide Urban Bus Emission Requirements ......................22

B. Alternative Fuel Path Mandate for All Transit Agencies in the District......22

V. ASSESSMENT OF THE POLICY DECISION TO BE PRESENTED TO THE

BOARD ...............................................................................................................24

A. Amend the Statewide Urban Bus Emission Requirements ......................24

B. Alternative Fuel Path Mandate for All Transit Agencies in the District......26

VI. Inventory of Urban Buses and Emissions.................................................27

A. Inventory of Urban Buses.........................................................................27

B. Emission Inventory for Urban Buses ........................................................28
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VII. SUMMARY OF THE CONTROL MEASURES TO BE CONSIDERED BY

THE BOARD.......................................................................................................30

A. Scope and Applicability ............................................................................31

B. Amend the Statewide Urban Bus Emission Requirements ......................31

C. Alternative Fuel Path Mandate for All Transit Agencies in the District,

Amend Section 1956.2 ....................................................................................32

D. Comparison of ARB’s Fleet Rule for Transit Agencies and Rule 1192 .32

VIII. ENGINE TECHNOLOGY AND AVAILABILITY ........................................33

A. Current Engine Availability .......................................................................33

1. Diesel Fueled Engines..........................................................................33

2. Alternative Fuel Engines.......................................................................34

B. Mid-term Future Engine Availability (2007 – 2009) ..................................34

1. Diesel Fueled Engines..........................................................................34

2. Alternative Fuel Engines.......................................................................34

C. Long Term Engine Availability (2010 and beyond) ...............................35

IX. END-USER EXPERIENCE: ALTERNATIVE FUELS ...............................35

A. Description of the Survey .........................................................................35

B. End-User Experience with Alternative Fuels ............................................36

1. Propane................................................................................................36

2. Compressed and Liquefied Natural Gas (CNG/LNG)...........................36

a. Fueling ..............................................................................................36

b. Maintenance Shop Modifications for Alternative Fuel Vehicles.........36

c. Maintenance and Down Time for Alternative Fuel Vehicles ..............37

d. Training Staff for Alternative Fuel Vehicles: ......................................37

3. Conclusion............................................................................................37

X. REGULATORY ALTERNATIVES ................................................................37

XI. ECONOMIC IMPACT...............................................................................38

A. Legal Requirement...................................................................................38

B. Affected Businesses.................................................................................39

C. Potential Impact on Businesses............................................................39

D. Potential Impact on Business Competitiveness ....................................39

E. Potential Impact on Employment..............................................................40

F. Potential Impact on Business Creation, Elimination, or Expansion ..........40

G. Estimated Costs to Local Transit Agencies ..........................................40

1. Cost Estimates for Statewide Alignment...............................................41

2. Cost Estimates Associated With the Alternative Fuel Path Mandate for

All Transit Agencies, Statewide ...................................................................41

3. Cost Estimates Associated With the Alternative Fuel Path Mandate for

All Transit Agencies in the District ...............................................................41

XII. ENVIRONMENTAL IMPACTS AND COST-EFFECTIVENESS ...............41

A. Benefits within the District and Statewide.................................................41

1. Impacts on the Air Quality Management Plan.......................................42

2. Emission Benefits .................................................................................42

a. Statewide Alignment .........................................................................45

b. Alternative Fuel Path Mandate for All Transit Agencies, Statewide ..45
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c. Alternative Fuel Path Mandate for All Transit Agencies in the District

48

B. Cost and Cost-Effectiveness....................................................................49

1. Amend the Statewide Urban Bus Emission Requirements...................49

a. Statewide Alignment .........................................................................49

b. Alternative Fuel Path Mandate for All Transit Agencies, Statewide ..49

2. Alternative Fuel Path Mandate for All Transit Agencies in the District ..50

C. Toxics from Diesel and Alternative Fueled Engines .............................51

XIII. ISSUES....................................................................................................53

A. Statewide Alignment ................................................................................53

B. Alternative Fuel Path Mandate for All Transit Agencies, Statewide..........53

C. Alternative Fuel Path Mandate for All Transit Agencies in the District ..54

D. Issues Related to Federal Clean Air Act Waiver of Preemption............55

E. Waiver Process Will Delay Rule Implementation and Reduce Benefits

Achieved .........................................................................................................56

XIV. STAFF CONCLUSION.............................................................................57

XV. REFERENCES.........................................................................................59

XVI. AVAILABILITY OF TECHNICAL SUPPORT DOCUMENT.......................61

TABLE OF FIGURES

Figure 1. NOx Emissions – Original Estimate and Current Estimate................44

Figure 2. PM Emissions – Original Estimate and Current Estimate .................44

Figure 3. NOx Emissions – Comparison of Options .........................................47

Figure 4. PM Emissions – Comparison of Options...........................................47

TABLE OF TABLES

Table 1. Federal Emission Standards for New Heavy-Duty Trucks and Buses.6

Table 2. California Emission Standards for New Heavy-Duty Trucks and Buses

9

Table 3. California Optional, Low NOx Emission Standards for New HeavyDuty Trucks and Urban Buses ............................................................................10

Table 4. Fleet NOx Average Requirements for Transit Agencies (g/bhp-hr)...12

Table 5. Fleet Diesel PM Reduction Requirements for Transit Agencies........12

Table 6. Workshop Locations and Times........................................................19

Table 7. Transit Agencies in the SCAQMD.....................................................26

Table 8. Reported California Urban Bus Inventory as of January 1, 2005, by

the Selected Fuel Path of the Transit Agency .....................................................28

Table 9. NOx Statewide Diesel Emissions Inventory (tpd)..............................30

Table 10. PM Statewide Diesel Emissions Inventory (lbs/day)......................30

Table 11. Diesel Versus Alternative Fuel Path NOx Fleet Averages for

Agencies in the District (g/bhp-hr).......................................................................42

Table 12. NOx Emission Benefits (tpd) in the District - Mandatory Alternative

Fuel Path 48

Table 13. Emission Comparison - Diesel Bus vs Natural Gas Bus................52
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TABLE OF APPENDICES

APPENDIX A: PROPOSED REGULATION ORDER

APPENDIX B: URBAN BUS SURVEY

APPENDIX C: INVENTORY AND EMISSIONS MODELING

APPENDIX D: COST ANALYSIS METHODOLOGY
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EXECUTIVE SUMMARY

The following provides a summary of policy decisions to be considered by the Air

Resources Board (ARB or the Board). The modifications, as described herein,

are consistent with the California authority to control emissions from mobile

sources.

What vehicles would be impacted?

Staff has developed amendments to the regulations that affect emissions from

urban buses owned or operated by transit agencies.

What regulations currently apply to these vehicles?

The ARB has two programs specifically designed to reduce emissions from

urban buses. One program establishes emission standards that new urban

buses must meet. The other program affects emissions from in-use urban buses

that are already in service. In addition, the South Coast Air Quality Management

District (SCAQMD or the District) has adopted its own rule related to new transit

bus purchases.

Long-term emission reductions are achieved through establishing more stringent

new engine standards. California has adopted standards that affect new urban

buses which are more stringent than federal new engine standards for urban

buses and heavy-duty trucks.

For nearer-term emission reductions, the ARB Fleet Rule for Transit Agencies is

designed to reduce emissions from in-use urban buses by increasing turnover

and through the application of retrofit particulate filters.

The District has adopted various fleet rules, one of which, Rule 1192, “Clean OnRoad Transit Buses,” applies only to transit agencies operating in the South

Coast air district. Rule 1192 dictates that transit agencies may only acquire

alternative-fuel buses when procuring or leasing buses. The rule applies to

government agencies and private companies under contract to government

agencies.

What regulatory changes are staff requesting the Board consider?

Staff has identified two policy decisions for the Board’s consideration, and has

developed proposed regulatory amendments to support decisions the Board may

make. First, staff is presenting three options for the Board to consider regarding

the appropriate emission standards for new urban bus engines in 2007 through

2009. The three options are: 1) keep the current new urban bus emissions

standards as they are, 2) change the oxides of nitrogen (NOx) emission standard
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for 2007 through 2009 model year new urban buses from 0.2 grams per brake

horsepower-hour (g/bhp-hr) to 1.2 g/bhp-hr, which would align it with the

equivalent model year heavy-duty truck NOx emission standard, and 3) require

all transit agencies to purchase/lease only alternative fuel buses.

The second policy decision for the Board’s consideration is whether to require

that all transit agencies operating in the South Coast Air Quality Management

District follow the alternative-fuel compliance path, as defined in ARB's

regulations. Under ARB's current regulations, transit agencies made a

non-revocable election to follow either the diesel fuel path or the alternative-fuel

path, as of January 1, 2001. Of the 17 transit agencies in the District, 11 chose

the alternative-fuel path, and six chose the diesel path. If the Board adopts the

new requirement, the six transit agencies in the District currently on the diesel

fuel compliance path would be required to change to the alternative-fuel path

effective January 1, 2006. This change would lock these transit agencies into

purchasing alternative-fuel engines through 2015, consistent with the District's

Rule 1192.

FIRST POLICY DECISION: Whether to revise the emission standards

for new urban buses

California’s current 2007 and beyond NOx requirement for new urban bus

engines is 0.2 g/bhp-hr. The California and national heavy-duty truck new engine

standard for 2007, which includes urban buses for all but California, is also

0.2 g/bhp-hr, but flexibilities in the heavy-duty truck rule, result in the option of

certifying all engines to an average NOx standard of 1.2 g/bhp-hr between 2007

and 2009. This is what engine manufacturers have stated they plan to do, so it is

unlikely that diesel engines meeting California’s urban bus NOx standard will be

available.

Staff Assessment

Staff has assessed urban bus engine availability based on the current 2007-2009

standard versus what could be available if the Board modifies the standard to

align with the current 2007-2009 model year heavy-duty truck standards.

Without alignment, there are essentially three scenarios that could occur. The

first is that manufacturers could certify both diesel and alternative-fuel engines for

sale in California in time to meet the standard of 0.2 g/bhp-hr NOx in 2007.

Discussions with diesel engine manufacturers, however, have convinced staff

that this scenario is highly unlikely.

The second scenario is that manufacturers make only alternative fuel engines

available to meet the 0.2 g/bhp-hr NOx standard in 2007. Multiple manufacturers

have stated publicly that they intend to produce alternative fuel urban bus

engines that meet the California 2007 standard. Staff has reviewed development

plans for these engines and agrees these engines will be available in 2007 if all
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goes as planned. Therefore, staff believes that there is a reasonable likelihood

that one or more urban bus engines using alternative fuels will be commercially

available by 2007, although there is some risk that these engines will be delayed

or will not be certified and marketed because development of the new technology

engines is not complete at this time.

The third scenario is that there will be no diesel or natural gas engines available

for California urban buses for 2007-2009. In this case, California transit agencies

would not be able to purchase new engines until 2010, at which time staff

expects both diesel and alternative fuel engines will meet the 2010 heavy-duty

truck NOx standard of 0.2 g/bhp-hr. As noted above, staff’s assessment is that

no diesel urban bus engines will be available in 2007 through 2009, but is likely

alternative fuel urban bus engines will be available.

There are 76 transit agencies statewide that report to ARB under the Fleet Rule

for Transit Agencies. The 28 agencies on the alternative fuel path will continue

to purchase complying engines in 2007 through 2009, because staff believes

complying engines will be available. However, if the current 2007 urban bus

emission standards are not modified, the 48 agencies on the diesel path will not

be able to purchase new diesel buses until 2010. These diesel path transit

agencies operate 62 percent of the California urban buses, and if they continue

on the diesel path the result is that these agencies will keep their older diesel

buses longer or repower their buses. Emission reductions staff anticipated from

the original rule due to fleet turnover will not be realized from diesel path transit

agencies.

Staff expects that manufacturers will certify diesel urban bus engines that meet

the 1.2 g/bhp-hr NOx level if the Board relaxes the NOx standard to that value for

2007-2009. Staff also expects that, even with Board adoption of alignment,

some manufacturers will produce alternative fuel engines that meet the 0.2

g/bhp-hr NOx level in 2007 and that transit agencies on the alternative fuel path

will purchase these engines because of their lower emissions and the potential

for the availability of incentive funds for the lower emitting engines.

How would the three options impact emissions?

The impact on emissions depends on the emission level of the engines

purchased and replaced, and in scenarios where diesel engines are not

available, if purchases are deferred or foregone. Staff has concluded that no

diesel engines will be available for purchase in 2007 to 2009, and that alternative

fuel engines meeting a 0.2 g/bhp-hp NOx standard will be available. For transit

agencies required to purchase alternative fuels (those on the alternative fuel

path), staff assumes they will purchase these engines. For diesel path agencies,

staff assumes they will purchase diesel engines in 2007 to 2009 if the NOx

standard is changed to 1.2 g/bhp-hr. If the NOx standard is kept at the current

0.2 g/bhp-hr, staff assumes the diesel path agencies will not buy any engines in
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2007-2009, and that they will make up for these deferred purchases in 2010-

2012, when diesel engines are again available.

Compared to the option 1 (no change in the standards), option 2 (revise the NOx

standard to 1.2 g/bhp-hr) provides emission reductions in each year 2007

through 2010, reaching about 1.6 tons per day (tpd) in 2009. This occurs

because 1.2 g/bhp-hr new engines replace higher emitting older engines,

whereas in option 1 no new engines are purchased by diesel path agencies until

2010 or later, and higher emitting buses remain in operation. However, once the

deferred purchases are made in 2010 and beyond, no change option 1 provides

slightly greater reductions than option 2 from 2012 on, reaching up to about

1.2 tpd. This occurs because by deferring purchases until 2010 or after, all

purchases are 0. 2 g/bhp-hr engines, whereas the buses purchased in 2007-

2009 (option 2) have higher emissions (1.2 g/bhp-hr). Staff estimates that by

2025, there will be no difference in emissions because all engines remaining in

the fleet are 0.2 g/bhp-hr (i.e. any 1.2 g/bhp-hr engines are over 15 years old and

have been replaced).

Option 3 (require all diesel path agencies statewide to switch to the alternative

fuel path) provides the lowest emissions. Compared to option 1, option 3

provided emission reductions in each year 2007 through 2011, reaching about

2.6 tpd in 2009. This occurs because staff assumes all agencies will purchase

alternative fuel engines emitting at 0.2 g/bhp-hr beginning in 2007, and no

deferred purchases will occur. It should be noted that agencies previously on the

diesel path will have to invest in new alternative fuel infrastructure, and this could

result in deferred or forgone purchases, which would reduce the emission benefit

of this option. Compared to option 2, option 3 will provide lower emissions until

2025, reaching a maximum of about 1.0 tpd in 2009. This occurs because

option 2 allows for 1.2 g/bhp-hr engines to enter the fleet during 2007 through

2009. However, staff estimates that by 2025, there will be no difference in

emissions because all engines remaining in the fleet are 0.2 g/bhp-hr (i.e. any

1.2 g/bhp-hr engines are over 15 years old and have been replaced).

Staff estimates that by 2025, the statewide NOx emissions will be equivalent

under all three options because all engines remaining in the fleet will meet a

0.2 g/bhp-hr NOx standard.

What are the costs associated with modifying the statewide urban

bus emission requirements as outlined in staff’s three options?

Staff has determined there is no additional cost of the option to revise the new

urban bus engine emission standards to align with the current truck standards.

This option will allow purchase of diesel engines by diesel path agencies in 2007-

2009, and may reduce operating and maintenance costs by replacing older

engines. If the current standards are retained, diesel path agencies are

expected to defer purchases until 2010 and beyond. These engines will cost
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more than the engines that could be purchased in 2007-2009 if the standards are

aligned.

If the Board chooses to adopt a statewide alternative-fuel purchase mandate,

capital and operations and maintenance costs would be increased for those

engines now on the diesel path. The Federal Transportation Administration

(FTA) provides 80%-83% of the capital cost of new buses, so transit agencies

must fund the remainder. As a conservative estimate, staff assumed a 20

percent transit agency share of capital costs, in addition to operation and

maintenance costs associated with the bus, fueling facilities, labor and training.

Thus, staff estimates a typical incremental total cost of $76,517 per bus funded

by the local transit agency.

In order to determine cost-effectiveness, ARB took the typical total incremental

cost of the buses to be purchased, with FTA funding, and divided by the total

NOx emission reductions for the life of the regulation. These values were based

on NOx emission reductions only. The expected cost-effectiveness ratio is

$119,030 per ton ($59.51 per pound). These values are much higher than other

mobile source regulations, which typically have cost-effectiveness values of

$10,000 per ton, or less.

SECOND POLICY DECISION: Whether to mandate the alternative-fuel

path for transit agencies operating in the South Coast Air Quality

District?

Shortly after the District adopted its fleet rules, including Rule 1192.2, the Engine

Manufacturers Association and the Western States Petroleum Association sued

the District regarding its authority to adopt these rules. On April 28, 2004, the

United States Supreme Court ruled that the purchase requirements in the District

rules were an emission standard that required a waiver of federal preemption

prior to implementation. The Court returned the case to the federal district court

for further proceedings consistent with its decision. In response to this decision,

the District requested that ARB submit the District's rules to the United States

Environmental Protection Agency (U.S. EPA) for a waiver of preemption pursuant

to section 209(b) of the Clean Air Act. On October 1, 2004, ARB requested

public comment on the District's request. ARB staff completed a thorough review

of the comments submitted in response to the notice, and consulted with the

U.S. EPA regarding the legal requirements for obtaining a waiver of a rule

adopted by a local government.

Based on ARB review, staff concluded that these fleet rules, as written and

adopted by the District, would not receive a Section 209(b) waiver because these

rules have not been adopted by the ARB as state regulations (applicable in the

South Coast). For this reason, staff has initiated a state rulemaking process to

cover some of the fleets subject to the District rules. This process requires a new
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public record that updates relevant information on the effectiveness and costs of

these rules.

Meanwhile the federal district court has continued its proceedings on the District

rules. On May 5, 2005, the federal district court ruled that the District’s authority

is not preempted under the market participant doctrine for the aspects of the

District fleet rules that relate to purchasing decisions made by state and local

governments. Most transit agencies are considered local government. The

order, however, noted that it did not address whether other aspects of the District

rules may still be subject to preemption.

If the Board chooses to amend the ARB’s Fleet Rule for Transit Agencies to

mandate that the six diesel path transit agencies in SCAQMD switch to the

alternative fuel path, the state rule would achieve the alternative fuel objectives of

the District’s Rule 1192. The ARB’s adoption of a unique fleet requirement for

the transit agencies in the District would address concerns that the Court’s

decision may change or weaken.

Staff has developed amendments that the Board may adopt if the Board wishes

to assure that alternative fuel urban transit buses are purchased throughout the

District, and determines it wise to provide a backstop to the current District

Rule 1192 in case litigation overturns the District rule.

How will the alternative-fuel mandate for transit agencies in the

District impact emissions?

Eleven of the transit districts in the District have chosen the alternative fuel path

under the ARB transit fleet rule, and this decision in not revocable. Thus the

Board’s decision affects the remaining six transit districts, who operate

10 percent of the transit buses in the SCAQMD. If the SCAQMD prevails in legal

challenges, alternative fuel buses will be purchased by the six transit districts

regardless of ARB’s action, and no federal waiver would be needed. However, if

the SCAQMD’s rule is invalidated, several outcomes are possible.

Five of the six transit districts have been planning alternative fuel bus purchases

notwithstanding their election of the diesel path under ARB’s fleet rule. Thus one

outcome is they could continue to purchase alternative fuel buses in the absence

of a SCAQMD or ARB rule.

Another outcome is they could also decide to purchase diesel fuel buses. In

2007-2009, these diesel buses would have higher emissions than available

alternative fuel buses. (Beyond 2009, emissions of diesel and alternative fuel

bus engines are expected to be equivalent.) Note however that purchase of

diesel buses in 2007-2009 would only be possible if the Board also acts to align

the statewide emission standard for buses. If it chooses not to do this, no diesel

buses will be available for purchase in 2007.
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To quantify the emission benefit of mandating the six transit agencies change to

the alternative fuel path, staff assumed the SCAQMD rule is invalidated, the

Board aligns the statewide standard for new bus engines so that diesel engines

are available for purchase, and all six transit agencies choose to purchase diesel

engines in 2007-2009. Adoption of the ARB rule requiring alternative fuel

purchase would prevent purchase of diesel engines by these districts, and staff

assumed they would purchase alternative fuel engines in 2007-2009 instead.

NOx emissions would be reduced by a small amount - up to 0.02 tons per day.

There would be no impact on PM emissions because all engines meet the same

PM standard from 2007 on.

What is the cost-effectiveness of the District alternative-fuel path

mandate option?

Staff expects that the six transit providers affected by this option will be able to

obtain fuel from facilities that are already, or will soon be, available, based on

staff’s survey of transit agencies. Most transit agencies that plan to purchase

compressed natural gas (CNG) buses have already either built a fueling station

or have one planned and financed. In addition, transit agencies that are

purchasing gasoline hybrid-electric buses (HEBs) will use existing facilities. Staff

based the cost-effectiveness analysis on estimates of expected emissions

reductions and costs for implementation of an alternative fuel mandate. In order

to determine cost-effectiveness, ARB used the typical incremental cost of the

buses to be purchased, including FTA funding, and divided by the total NOx

emission reductions for the life of the regulation. These values were based on

NOx emission reductions only as there is no PM benefit from this option. The

cost-effectiveness is $67,837 per ton ($33.92 per pound).1

 These values are

much higher than other mobile source regulations, which typically have

cost-effectiveness values of $10,000 per ton, or less.

 

1

 Actual cost-effectiveness values could be higher if the transit agencies choose to purchase

alternative fuel buses during 2007 through 2009 with NOx emissions higher than 0.2 g/bhp-hr

thereby decreasing the emissions benefits.
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I. INTRODUCTION

The Air Resources Board (ARB or Board) seeks to provide clean, healthful air to

the residents of California. ARB is the state agency responsible for protecting

public health and the environment from the harmful effects of air pollution. ARB

oversees all air pollution control efforts in California, including the activities of 35

independent local air districts, and works in cooperation with the districts and the

U.S. Environmental Protection Agency (U.S. EPA) on strategies to attain State

and federal ambient air quality standards and to reduce air toxic emissions.

The South Coast Air Quality Management District (SCAQMD or District) is the

local governmental agency primarily responsible for air quality assessment and

improvement in the South Coast Air Basin and the desert portion of Riverside

County in the Salton Sea Air Basin. The South Coast Air Basin, which includes

Orange County and the non-desert portions of Los Angeles, Riverside and San

Bernardino Counties, is designated as a serious nonattainment area for

particulate matter (PM10 - particulate matter under 10 microns) and an extreme

nonattainment area for ozone. The Coachella Valley, located in the desert

portion of Riverside County, is classified as a serious nonattainment area for

PM10 and a severe nonattainment area for ozone.

A. Background

Public transportation has important societal benefits, including providing access

to work and education, reducing traffic congestion, and meeting the mobility

needs of the public, including the elderly and disabled. California’s transit

agencies are responsible for providing basic transportation services for the

public. Transit agencies provide both fixed-route service within urban places,

such as traditional urban bus and neighborhood routes, and between urban

places such as commuter routes, and non-fixed-route services such as

paratransit, dial-a-ride and charter services.

Most types of public transportation, however, are also sources of polluting engine

exhaust emissions. Significant amounts of both particulate matter (PM) and

oxides of nitrogen (NOx) are emitted from mobile sources, including urban buses.

NOx and hydrocarbons (HC) contribute to the atmospheric formation of ozone

and fine particles. NOx is a reactive, oxidizing gas that contributes to the

atmospheric formation of ozone and fine particles, and causes respiratory illness

and impaired lung function. Carbon monoxide (CO) is a colorless, odorless gas

that reduces the ability of the body to transport oxygen to cells. Diesel PM is

classified as a toxic air contaminant (TAC) because it is a cancer-causing

pollutant that also has significant short- and long-term negative cardiovascular

impacts.
2

Following the identification of diesel PM as a toxic air contaminant, ARB staff

spent two years working with stakeholders to determine the best control

measures for diesel PM. The result was the “Risk Reduction Plan to Reduce

Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles” (Diesel

Risk Reduction Plan, or DRRP), which was approved by the Board in September

2000 (ARB 2000a). This plan directs staff to develop measures to reduce diesel

PM emissions from all new and in-use diesel-fueled engines and vehicles.

Included are, “new retrofit requirements for existing on-road, off-road, and

stationary diesel-fueled engines and vehicles where determined technically

feasible and cost-effective.”

The ARB adopted the 2003 State and Federal Strategy for the California State

Implementation Plan (SIP) for ozone in September 2003. Most of the existing

near-term SIP measures have been adopted, along with additional controls to

reduce emissions. The baseline emission inventory in the 2003 SIP reflects the

benefits of State and federal measures adopted since the 1994 ozone SIP.

1. ARB's Regulations Affecting Transit Agencies

The ARB has adopted two programs specifically designed to reduce emissions

from urban buses. One program affects emissions from new urban buses and

the other program affects emissions from in-use urban buses operated by transit

agencies (Fleet Rule for Transit Agencies). Long-term emission reductions are

achieved through establishing more stringent new engine standards. California

has adopted standards that affect new urban buses, which are more stringent

than federal new engine standards for urban buses and heavy-duty trucks.

In February 2000, the Board adopted a fleet rule for transit agencies operating

urban buses, and more stringent emission standards for new urban bus engines

and vehicles (ARB 1999; ARB 2000b). The rules were designed to reduce

emissions of NOx and PM by setting fleet emission reduction requirements that

require the purchase of cleaner engines and the retrofit of existing engines. By

January 1, 2001, transit agencies were required to make a non-revocable

decision to follow either a diesel path or an alternative-fuel path, which

established purchasing requirements for the transit agencies through 2015.

The rule also promoted advanced technologies by adopting requirements for

zero-emission bus (ZEB) demonstrations and acquisition that are applicable to

larger transit agencies. New, more stringent mid- and long-term emission

standards were also adopted that apply to new urban bus engines, and the rule

encourages the purchase of diesel hybrid electric buses from 2004 through 2006

by diesel path agencies. On February 24, 2005, the Board amended the fleet

rule for transit agencies to reduce emissions from buses and vehicles not

covered by the original fleet rule for transit agencies.
3

In 2000, the SCAQMD adopted various fleet rules, including Rule 1192, “Clean

On-Road Transit Buses” (adopted on June 16, 2000). Rule 1192 requires that

public transit agencies with 15 or more public transit vehicles or urban buses

operating in the SCAQMD may only acquire alternative-fuel vehicles when

procuring or leasing these vehicles (SCAQMD 2000). The rule applies to

government agencies and private companies under contract to government

agencies. Despite this rule, six transit agencies in the SCAQMD chose the diesel

path under ARB's fleet rule for transit agencies.

As a result of the ARB and SCAQMD rules, many transit agencies have made

significant changes in their operations to incorporate natural gas and other

alternative-fuel buses into their fleets. They have installed natural gas refueling

infrastructure and purchased alternative-fuel urban buses; repowered old diesel

engines to engines meeting cleaner exhaust emission standards; installed diesel

particulate filters on diesel engines; and experimented with developing

technologies, such as hybrid-electric buses, NOx aftertreatment systems and

cleaner fuels. Many of California’s transit agencies consider themselves to be

innovators and incubators for advanced technologies.

2. SCAQMD Rule 1192

Under its Clean Fleets Program, the District adopted seven fleet rules during

2000 and 2001. The rules were developed to gradually shift public agencies and

certain private entities to lower emission and alternative-fuel vehicles whenever a

fleet operator purchases or leases a vehicle for replacement or addition to a fleet.

The District adopted these rules based on legislative authority [Health & Safety

Code (HSC) section 40447.5(a)], which restricts the scope of any rules to public

and certain commercial operators of fleets of 15 or more vehicles. The adopted

rules apply to transit buses, school buses, refuse collection vehicles, airport

shuttles and taxis, street sweepers, light and medium-duty publicly owned

vehicles, and heavy-duty publicly owned vehicles.

As noted above, one of the fleet rules adopted is Rule 1192 - Clean On-Road

Transit Buses. The Rule was developed in an effort to reduce public exposure to

air pollution emitted from transit buses, including toxic particulates and ozone

precursor emissions. Many of these fleets emit pollutants, including air toxics,

into heavily urbanized areas, where improvements in air quality are critical given

environmental justice and other concerns.

Shortly after the District adopted its fleet rules, including Rule 11922, the Engine

Manufacturers Association and the Western States Petroleum Association sued

the District regarding its authority to adopt these rules. On April 28, 2004, the

United States Supreme Court ruled that the purchase requirements in the District

rules were an emission standard that required a waiver of federal preemption

prior to implementation. The Court returned the case to the federal district court

for further proceedings consistent with its decision. In response to this decision,
4

the District requested that ARB submit the District's rules to EPA for a waiver of

preemption pursuant to section 209(b) of the Clean Air Act. On October 1, 2004,

ARB requested public comment on the District's request. ARB staff completed a

thorough review of the comments submitted in response to the notice, and

consulted with the U.S. EPA regarding the legal requirements for obtaining a

waiver of a rule adopted by a local government.

Based on ARB review, staff concluded that these fleet rules, as written and

adopted by the District, would not receive a Section 209(b) waiver because these

rules have not been adopted by the ARB as state regulations (applicable in the

South Coast). For this reason, staff has initiated a state rulemaking process to

cover some of the fleets subject to the District rules. This process requires a new

public record that updates relevant information on the effectiveness and costs of

these rules.

Meanwhile the federal district court has continued its proceedings on the District

rules. On May 5, 2005, the federal district court ruled that the District’s authority

is not preempted under the market participant doctrine for the aspects of the

District fleet rules that relate to purchasing decisions made by state and local

governments. Most transit agencies are considered local government. The

order, however, noted that it did not address whether other aspects of the District

rules may still be subject to preemption.

3. Amendments to be Considered by the Board

The amendments presented in this report modify the ARB rules that affect urban

buses owned or operated by transit agencies. Staff has identified two policy

decisions to be considered by the Board and has developed proposed regulatory

amendments to support decisions the Board may make.

a. Amend the Statewide Urban Bus Emission Requirements

Staff is presenting three options for the Board to consider regarding the

appropriate emission standards for new urban bus engines in 2007 through

2009. The three options are: 1) keep the current new urban bus emissions

standards as they are, 2) change the NOx emission standard for 2007 through

2009 model year new urban buses, from 0.2 g/bhp-hr to 1.2 g/bhp-hr, which

would align emission standards with the equivalent model year heavy-duty truck

NOx emission standard, and 3) require all transit agencies to purchase/lease

only alternative fuel buses.

The amendments provided in this report (set forth in the proposed regulation

order in Appendix A) set forth the language necessary to implement the option of

aligning the urban bus standards with the heavy-duty truck standards beginning

with the 2007 model year. Should the Board favor the option to keep the urban

bus standards as they are, no regulatory changes are necessary. Should the
5

Board decide that all transit agencies statewide should be required to purchase

alternative fuel, a 15-day modification to ARB’s Fleet Rule for Transit Agencies

would be needed to accomplish this (and no change to the urban bus emission

standards would be necessary).

b. Alternative Fuel Path Mandate for All Transit Agencies in the District

Staff has also developed an option to mandate that all transit agencies operating

in the District be required to follow the alternative-fuel compliance path, as

defined in title 13, CCR, section 1956.2. 2 Under the current regulations, transit

agencies made a non-revocable election to follow either the diesel fuel path or

the alternative-fuel path, as of January 1, 2001. Of the 17 transit agencies in the

District, 11 chose the alternative-fuel path, and six chose the diesel path. Under

the new option being presented to the Board for consideration, transit agencies in

the District currently on the diesel fuel compliance path would be required to

change to the alternative-fuel path effective January 1, 2006. This change would

lock these transit agencies into purchasing alternative-fuel engines through 2015.

The scope of this option overlaps with the District’s Rule 1192, and ARB has

worked closely with the District to craft the amendments. The District has

assisted ARB staff in the information gathering process and with other logistics

such as stakeholder meetings, identification of affected fleets, and understanding

the current District rules. Great efforts have been taken by ARB staff to obtain

current, objective information on the challenges, cost-effectiveness, and emission

benefits from the various technology options.

B. Regulatory Authority

The California Legislature enacted the California Clean Air Act of 1988, which

declared that attainment of state ambient air quality standards is necessary to

promote and protect public health, particularly the health of children, older

people, and those with respiratory diseases. The Legislature directed that these

standards be attained by the earliest practicable date.

The Federal Clean Air Act grants California, alone among the states, the

authority to adopt more stringent controls of emissions from new mobile sources.

The California Clean Air Act establishes the ARB as the state agency that sets

standards for mobile sources. The California Legislature also granted ARB the

authority to identify TACs and establish airborne toxic control measures (ATCMs)

to reduce risk.

 

2

 The existing Fleet Rule for Transit Agencies is located with engine emission standards in

title 13, CCR, sections 1956.2-1956.4. At the February 2005 hearing, the Board approved staff's

proposal to move the existing sections for the Fleet Rules for Transit Agencies to new sections

which cover rules for controlling diesel emissions from existing in-use engines or fleets. As a

result, upon final approval by the Office of Administrative Law, section 1956.2 will be moved to

section 2023.1.
6

C. Current Regulations and Voluntary Programs

Both the Federal government and the State of California have adopted rules that

reduce PM and NOx, among other pollutants, from on- and off-road vehicles. The

following sections briefly describe the existing federal, state, local and voluntary

programs that currently apply to diesel-fueled engines and vehicles operating in

California.

1. Federal Regulations

Standards for smoke emissions from on-road heavy-duty diesel vehicles were

first set by the United States Environmental Protection Agency (U.S. EPA) in

1970. New engines were subject to PM and NOx exhaust emission standards

beginning with model year 1988 (Table 1). Over the years, more stringent

emission standards have paralleled improvements in control technology. Recent

amendments to the on-road standards regulate the heavy-duty vehicle and its

fuel as a single system, including diesel-fuel sulfur content requirements.

Table 1. Federal Emission Standards for New Heavy-Duty Trucks and

Buses

Emissions Standards (g/bhp-hr)

Model Year Heavy-Duty Truck Urban Bus

NOx PM NOx PM

1988 10.7 0.6 10.7 0.6

1990 6.0 -- 6.0 --

1991 5.0 0.25 5.0 0.25

1993 -- 0.25 -- 0.1

1994 -- 0.10 -- 0.07

1996 5.0 -- 5.0 0.05 (c)

1998 4.0 -- 4.0 --

October 2002 2.2 (a) -- 2.2 (a) 0.05 (c)

2004 2.2 (a) -- 2.2 (a) --

2007 1.2 (b) 0.01 1.2 (b) 0.01

2010 0.2 (b) -- 0.2 (b) --

a. Nominal NOx value of 2.2 g/bhp-hr is based on emission standards of 2.4 g/bhp-hr for NOx

plus non-methane hydrocarbons (NMHC) or 2.5 g/bhp-hr NOx plus NMHC with 0.5 g/bhphr NMHC cap, which took effect in October 2002 for those engines subject to the U.S. EPA

Consent Decrees and the California Settlement Agreements. The Consent Decreecomplying engines had to comply with 2004 standards by October 1, 2002.

b. Between 2007 and 2009, U.S. EPA requires 50 percent of heavy-duty diesel engine family

certifications to meet the 0.2 g/bhp-hr NOx standard. Averaging is allowed, and it is

expected that most engines will conform to the fleet NOx average of approximately 1.2

g/bhp-hr.

c. In-use standard or 0.07 g/bhp-hr.
7

a. Current Standards

The current federal heavy-duty vehicle standards apply to 2004 and subsequent

model years. The current federal PM engine emission standard for new on-road

heavy-duty diesel truck engines is 0.1g/bhp-hr and the current federal PM

emission standard for new urban transit bus engines is 0.05 g/bhp-hr. The

current NOx emission standard for both new on-road heavy-duty diesel truck and

new urban transit bus engines is 2.4 g/bhp-hr for NOx plus non-methane

hydrocarbons (NMHC) or 2.5 g/bhp-hr NOx plus NMHC with 0.5 g/bhp-hr NMHC

cap. Only engines subject to the U.S. EPA Consent Decrees signed in 1998 had

to comply with this 2004 standard in October 2002; for all the rest the

requirement began with the 2004 model year engines.

On April 23, 1993, the U.S. EPA finalized the Urban Bus Retrofit/Rebuild

Program to reduce the ambient levels of diesel PM in urban areas. The program

was limited to 1993 and earlier model year urban buses operating in metropolitan

areas with 1980 populations of 750,000 or more, whose engines are rebuilt or

replaced after January 1, 1995. Approximately 40 urban areas are affected.

Operators of the affected buses were required to choose between two

compliance options: Program 1 set PM emissions requirements for each urban

bus engine in an operator's fleet which is rebuilt or replaced; Program 2 was a

fleet averaging program that establishes specific annual target levels for average

PM emissions from urban buses in an operator's fleet.

Other than the Urban Bus Retrofit/Rebuild Program, no other federal regulations

mandate reducing emissions from in-use urban buses or other heavy-duty

engines.

b. 2007 and Later Standards

The particulate standard that takes effect with 2007 model year heavy-duty diesel

engines is 0.01 grams per brake-horsepower hour (g/bhp-hr), which is a 90

percent reduction from the existing standard. That standard is based on the use

of high-efficiency exhaust emission control devices or comparably effective

advanced technologies. Because these devices are less efficient when used

with the current formulation of diesel fuel, refiners are also required to reduce the

level of sulfur in highway diesel fuel by 97 percent to 15 parts per million by

weight (ppmw) by mid-2006.

The NOx standard in 2007 for new heavy-duty diesel engines, both trucks and

buses, is 0.2 g/bhp-hr. However, between 2007 and 2009, U.S. EPA requires

that only 50 percent of the heavy-duty diesel engine family certifications to meet

this standard; the remaining 50 percent may meet the applicable 2006 model

year engine standard. Through the use of the federal averaging provision, the

result is a nominal NOx standard of 1.2 g/bhp-hr from 2007 through 2009. Some

engine manufacturers will meet this by producing all or most of their engines to a
8

NOx standard of 1.2 g/bhp-hr; others will use averaging to produce engines

certified to levels both above and below this NOx standard.

Beginning in 2010, there is a family emission limit cap of 0.5 g/bhp-hr NOx.

Engines will be required to meet the 0.2 g/bhp-hr standard for all engines

produced, however some manufacturers may have accumulated credits in prior

years, resulting in some engines being certified above this standard, to as high

as the family emission limit cap.

2. California Regulations

California is the only state granted the authority in the Federal Clean Air Act to

set standards for new motor vehicles. While its passenger car standards are

more stringent than federal standards, in the area of new heavy-duty diesel

engines California has generally harmonized with federal rules since 1988.

a. General New Heavy-Duty Engine Regulations

For new engines, long-term emission reductions are achieved through

establishing more stringent new engine standards. California has adopted

standards that affect new heavy-duty vehicles and urban buses (Table 2).
9

Table 2. California Emission Standards for New Heavy-Duty Trucks and

Buses

Emissions Standards (g/bhp-hr)

Model Year Heavy-Duty Vehicles Urban Bus

NOx PM NOx PM

1988 6.0 0.6 6.0 0.6

1990 6.0 -- 6.0 --

1991 5.0 0.25 5.0 0.1

1993 -- 0.25 -- 0.1

1994 -- 0.10 -- 0.07

1996 5.0 -- 4.0 0.05 (c)

1998 4.0 -- 4.0 --

October 2002 2.2 (a) -- 2.2 (a) 0.01 (f)

2004 2.2 (a) -- 0.5 (d), 2.2 (e) --

2007 1.2 (b) 0.01 0.2 0.01

2010 0.2 (b) -- 0.2 --

a. Nominal NOx value of 2.2 g/bhp-hr is based on emission standards of 2.4 g/bhp-hr for NOx

plus non-methane hydrocarbons (NMHC) or 2.5 g/bhp-hr NOx plus NMHC with 0.5 g/bhphr NMHC cap, which took effect in October 2002 for those engines subject to the U.S. EPA

Consent Decrees and the California Settlement Agreements. The Consent Decreecomplying engines had to comply with 2004 standards by October 1, 2002.

b. Between 2007 and 2009, U.S. EPA requires 50 percent of heavy-duty diesel engine family

certifications to meet the 0.2 g/bhp-hr NOx standard. Averaging is allowed, and it is

expected that most engines will conform to the fleet NOx average of approximately 1.2

g/bhp-hr.

c. In use standard of 0.07 g/bhp-hr.

d. Standard applies to urban bus equipped with diesel-fuel, dual fuel, or bi-fuel engines.

e. Standard applies to urban bus equipped with alternative-fueled engines. Nominal expected

NOx level of 2.2 g/bhp-hr is based on ARB emission standards of 2.4 g/bhp-hr NOx plus

NMHC or 2.5 g/bhp-hr NOx plus NMHC with 0.5 g/bhp-hr NMHC.

f. Standard applies to urban bus equipped with diesel-fuel, dual fuel, or bi-fuel engines.

Urban bus equipped with alternative fueled engines may certify to optional standard of

0.03, 0.02, or 0.01 g/bhp-hr.

California also has optional low-emission standards for new heavy-duty vehicles

and urban buses. In general, vehicles that are eligible for incentive funding have

been certified to an optional low-emission standard (Table 3).
10

Table 3. California Optional, Low NOx Emission Standards for New HeavyDuty Trucks and Urban Buses

Model Year Optional Standards

(g/bhp-hr)

Increment (g/bhp-hr)

2000 2.5-0.5 0.5

October 2002 1.8-0.3(c) 0.3

2004-2006 (a,b) 1.8-0.3(c) 0.3

a. For urban buses, emission standards apply only to alternative fueled engines.

Diesel-fuel, dual fuel and bi-fuel engines may not exceed 0.5 g/bhp-hr.

b. For urban buses, engine manufacturers may sell diesel hybrid-electric buses certified at 1.8

g/bhp-hr standard to diesel path transit agencies with approved NOx offset plans.

c. Optional emission standards of 1.8 – 0.3 g/bhp-hr are for NOx plus non-methane

hydrocarbons (NMHC). Engines certified to the optional NOx standard are excluded from

participating in the Averaging, Banking, and Trading (ABT) program.

ARB has adopted regulations to ensure compliance with smoke standards, or

visible emissions. California’s Heavy Duty Vehicle Inspection and Periodic

Smoke Inspection Programs reduce excessive smoke emissions and tampering

with diesel-fueled vehicles over 6,000 pounds gross vehicle weight rating

(lbs GVWR) traveling within California. The regulations impose limits on the

opacity of smoke from diesel engines when measured in accordance with a

snap-acceleration test procedure, and have been in effect since 1991, with

amendments adopted in 1997.

b. General In-Use Heavy-Duty Engine Regulations

In recent years, California has adopted regulations for in-use buses and trucks

operated by transit agencies, in-use solid waste collection vehicles (collection

vehicles), transportation refrigeration units and portable engines. California has

also developed guidelines establishing criteria for the purchase of new school

buses and retrofits of existing school buses called the Lower-Emissions School

Bus Program. Emission reductions are achieved through retiring or retrofitting

the existing engines or repowering with a newer cleaner engine.

California has also adopted idling limits for buses and heavy-duty trucks.

California’s school bus idling requirements became effective July 16, 2003.

California limits school bus idling and idling by heavy-duty diesel trucks at or near

schools to only when necessary for safety or operational concerns. A driver of a

transit bus or other commercial motor vehicle is prohibited from idling more than

five minutes at each stop within 100 feet of a school. Idling limits applicable to all

other buses and heavy-duty trucks were effective February 1, 2005 and restrict

idling, in most cases, to no more than 5 minutes. Examples of some exemptions

include buses while passengers are on board and trucks doing work that requires

the engine to be idling.
11

c. In-Use Urban Bus and Transit Fleet Vehicle Regulations

California has adopted specific fleet rules that impact transit agencies. In 2000

the Board adopted the Fleet Rule for Transit Agencies to reduce emissions from

urban buses. At the February 24, 2005 hearing, the Board amended the Fleet

Rule for Transit Agencies to include transit fleet vehicles.

Statewide Fleet Rule for Transit Agencies - Urban Bus Requirements

The urban bus part of ARB's statewide Fleet Rule for Transit Agencies regulates

urban buses that are owned or leased by public transit agencies and meet the

definition of an urban bus. An urban bus is a bus that is normally powered by a

heavy heavy-duty diesel engine, or of a type that would normally be powered by

a heavy heavy-duty diesel engine. These buses are generally 35 feet in length

or longer and weigh more than 33,000 lbs GVWR. Urban buses usually operate

on a fixed route consisting of frequent stops and starts as passengers are

routinely picked up and delivered to their destinations. A transit agency is a

public entity responsible for administering and managing transit services.

California's urban bus fleet rule has fleet-wide requirements for urban buses

applicable to each transit agency, requiring each transit agency to consider its

urban bus fleet as a whole to meet emission reduction goals. Each transit

agency was required to select a non-revocable compliance path – either the

“diesel” path or the “alternative-fuel” path – by January 1, 2001. Path selection

establishes the fuel type for new urban bus purchases or leases through model

year 2015 and is a non-revocable election. Transit agencies on either path were

required to achieve a maximum NOx fleet average of 4.8 g/bhp-hr as of October

1, 2002. The requirement was typically met by retiring older buses or bus

engines.

The rule has a multi-step PM emission reduction requirement that is being met by

replacement of older buses and bus engines and retrofit of diesel engines with

particulate filters. Additionally, the Fleet Rule for Transit Agencies requires ultra

low sulfur fuel to be used in urban buses beginning July 1, 2002 to facilitate the

use of particulate filters. For the larger transit agencies, 15 percent of their future

bus purchases must be zero-emission buses (ZEBs). Large diesel path agencies

are also required to conduct a demonstration of ZEBs prior to implementation of

the purchase requirement.

Statewide Fleet Rule for Transit Agencies - Transit Fleet Vehicle

Requirements

On February 24, 2005, the Board amended the Fleet Rule for Transit Agencies to

expand its scope.3

 Per the amendments, a transit fleet vehicle is defined as an

 

3

 This rule amendment has not been finalized as of the date of this staff report.
12

on-road vehicle greater than 8,500 lbs GVWR powered by a heavy-duty engine

fueled by diesel or alternative-fuel, owned or operated by a transit agency, and

which is not an urban bus. These vehicles include small buses and trolleys,

paratransit, dial-a-ride vehicles, large commuter buses, and non-revenue

generating trucks. A commuter service bus is defined as a bus that would

otherwise meet the definition of an urban bus except that its operations include

very little of the stop-and-go operations of an urban bus. Gasoline-powered

vehicles operated by transit agencies are not subject to the amendments.

The amendments establish a fleet average NOx standard and PM emission

reduction requirement for transit fleet vehicles owned or operated by transit

agencies. The rule requirements implement in two steps. For the fleet average

NOx standard, transit agencies must meet an average of 3.2 g/bhp-hr NOx by

December 31, 2007 and 2.5 g/bhp-hr by December 31, 2010 (Table 4). Transit

agencies will likely meet the fleet average NOx standards through fleet turnover,

purchasing alternative-fuel vehicles, repowering older trucks, or retrofitting with a

verified diesel emission control strategy (DECS) that reduces NOx.

Table 4. Fleet NOx Average Requirements for Transit Agencies (g/bhp-hr)

Fleet Type Compliance Date

October 1,

2002

December 31,

2007

December 31,

2010

Urban Buses 4.8 --- ---

Transit Fleet Vehicles --- 3.2 2.5

A transit agency is also required to reduce diesel PM emissions from its transit

fleet vehicles by 40 percent as of December 31, 2007 and 80 percent as of

December 31, 2010, compared to total emissions as of January 1, 2005 (Table

5). Transit agencies will achieve these reductions by purchasing new, cleaner

transit fleet vehicles, retrofitting with a particulate filter, or repowering with a

cleaner engine.

Table 5. Fleet Diesel PM Reduction Requirements for Transit Agencies

Fleet Type Percent Reduction From Baseline Baseline Year

2004 2005 2007 2009 2010

Urban Buses

 Alternative

Path

2002 20 40 60 851 ---

Diesel Path 2002 40 60 851 --- ---

Transit Fleet

Vehicles

2005 --- --- 40 --- 801

1. In the final year of compliance and beyond the transit agency can meet a fleet average of

0.01 g/bhp-hr times the number of vehicles in the fleet.
13

3. Local Regulations

Local Air Pollution Control Districts and Air Quality Management Districts (air

districts) have authority to regulate stationary sources and some area wide

sources, but also participate in programs to reduce emissions from mobile

sources.

a. General Air District Authority

Air districts participate with local transportation agencies to develop and

implement transportation control measures aimed at reducing vehicle activity and

emissions. Some air districts have developed model ordinances to reduce idling

of trucks and buses, to encourage the purchase of low-emission vehicles for

public fleets, and to require public agency contracting that is "green." Other air

districts have reduced the number of smoking vehicles by mailing letters to the

registered owners to request that the vehicle be repaired.

Air districts also have programs to distribute revenue to cities and counties to

fund transportation-related projects that reduce air pollution. Funds are also

available for the air districts to distribute to private business and public agencies

that use heavy-duty vehicles to defray the costs of new lower emission

technologies for diesel engines. These monies are available to projects, such as

cleaner transit buses, trash trucks, school buses, and street sweepers, that go

beyond established regulatory requirements.

Public outreach is an important component of the air districts’ programs to reduce

emissions from mobile sources. Public outreach can include forums to present

new technologies, programs, and opportunities to reduce emissions. These

opportunities might also include encouraging bicycle use and exchanging

gasoline lawn mowers for electric lawn mowers, in addition to programs that

provide funding for purchases of cleaner engines and vehicles.

b. Specific South Coast Air Quality Management District Authority

The District implements many of the programs identified above. Additionally, to

reduce both toxic and smog-forming air pollutants, the Legislature granted the

District special authority to adopt fleet rules, as was discussed earlier, in Health

and Safety Code Section 40447.5. Based on this authority, the District adopted

seven fleet rules during 2000 and 2001. The rules were developed to gradually

shift public agencies and certain private entities to lower emission and

alternative-fuel vehicles and apply whenever a fleet operator with 15 or more

vehicles purchases or leases a vehicle for replacement or addition to its fleet.

The District defines alternative fuels slightly differently in each of its rules, but

generally follows the definition adopted by ARB, in its fleet rule for transit

agencies. In Rule 1192 for transit buses, alternative fuel is defined to include
14

“compressed or liquefied natural gas, liquefied petroleum gas, methanol,

electricity, fuel cells, or other advanced technologies that do not rely on diesel

fuel.” A more detailed description of the Rule 1192 is provided in Section IV.B of

this report.

There is variation among the District fleet rules due to the different functional

demands and accompanying circumstances for each type of fleet vehicle. For

light and medium-duty vehicles and commercial airport ground access vehicles,

the fleet rules require the acquisition of low-emitting gasoline or alternative-fuel

vehicles. For transit buses and sweepers, the fleet rules specify the acquisition

of alternative fuel vehicles only. For refuse collection vehicles, the rules provide

the choice of acquiring alternative-fuel, pilot ignition, or for a limited time frame,

dual-fuel vehicles. For heavy-duty public fleet vehicles, the rule provides the

option of acquiring alternative-fuel, dual-fuel, or dedicated gasoline vehicles. For

school buses, many compliance options are available depending on the fleet

size, bus type, and availability of funding.

It is critically important to note that each rule also provides specific exemptions

and alternative compliance or offsetting options. For several rules, the

requirements also vary depending on the availability of incentive funding.

Additionally, each fleet rule has alternative compliance provisions for cases in

which the requirements are demonstrated to be technically infeasible.

4. Voluntary and Incentive Programs

Voluntary efforts play a key role in helping to achieve air quality goals. Incentives

can induce vehicle owners to reduce vehicle emissions prior to compliance

deadlines or to reduce emissions beyond regulatory requirements. Owners and

operators of transit buses, collection vehicles, school buses, and street sweepers

are eligible for available funding for vehicles that go beyond the established

requirements.

a. Federal Incentives

On the federal level, the U.S. EPA established a Voluntary Diesel Retrofit

Program in 2000 to address pollution from diesel construction equipment and

heavy-duty on-highway vehicles. This program allows fleet operators to choose

appropriate, U.S. EPA-verified technologies that will reduce the emissions of the

vehicles and engines in their fleets and identify potential funding sources to

assist air quality planners and fleet operators as they create and implement

retrofit programs. The program assists air quality planners in determining the

number of State Implementation Plan credits produced by their retrofit projects.

The U.S. EPA has also established a program to fund school bus retrofits and

replacements from penalty revenues.
15

Additionally, the Federal Transit Administration (FTA) pays 80 to 83 percent of

the purchase cost of a new urban bus. The remaining cost can be made up from

local and state transportation funds.

b. State Incentives

In 1998, the Governor and Legislature appropriated $25 million to implement the

Carl Moyer Memorial Air Quality Standards Program (Carl Moyer Program.)

Administered by the ARB and the local air districts, the program provides grants

to local air districts to fund the extra capital cost of cleaner-than-required dieselpowered heavy-duty vehicles and equipment. During the first five years, the Carl

Moyer Program received budget appropriations totaling $153 million.

In 2000, the Legislature approved new funds to reduce emissions from school

buses. The ARB, in coordination with the California Energy Commission and the

local air pollution control districts, established guidelines for the Lower-Emissions

School Bus program. The goal of this incentive program is to reduce the

exposure of school children to both cancer-causing and smog-forming

compounds. This program utilizes two strategies to attain these goals: pre-1987

model year school bus replacement and in-use controls for later model year

diesel-fueled school buses. Over fiscal years 2000/2001 and 2001/2002,

program funding was $66 million total.

Voters approved Proposition 40, the California Clean Water, Clean Air, Safe

Neighborhood Parks, and Coastal Protection Act of 2002, which granted

additional funding to reduce diesel emissions. The measure provides about $50

million over two years to ARB, 20 percent of which is to be spent for the

acquisition of “clean, safe, school buses for use in California’s public schools.”

The remainder is allocated to the Carl Moyer Program.

In 2004, the Governor and the Legislature approved Assembly Bill (AB) 923 that

provided up to $140 million a year of long-term incentive funding. The bill also

modified requirements governing the funds to include:

• Expanding pollutants from NOx-only to include particulate matter (PM) and

reactive organic gases (ROG).

• Adjusting Smog Check, tire, and Department of Motor Vehicle (DMV) fees to

provide an ongoing source of funding through 2015.

• Including fleet modernization, light-duty vehicle projects, and an expanded

agricultural assistance program as projects eligible for incentive funds.

c. Local Funding

The revenue that air districts distribute to cities, counties, public agencies, and

businesses to fund projects that reduce air pollution comes from DMV fees and

the incentive programs previously discussed. State law authorizes districts to
16

impose a registration surcharge of $4 dollar per vehicle upon adoption of a

resolution that provides for both the fee and the program to reduce air pollution

from motor vehicles and for related planning monitoring, enforcement and

technical studies. The DMV collects the fees at the request of the district.

AB 923 allows some local districts to vote to approve an additional $2 dollar per

vehicle fee in addition to the $4 dollar per vehicle DMV fee. These funds can be

used for Carl Moyer Program projects, Lower-Emission School Bus Program

purchases, accelerated vehicle scrap, and some agricultural projects.

The SCAQMD has imposed the $4 dollar per vehicle fee (as provided under

AB 2766) and adopted the additional $2 dollar per vehicle fee (as provided in

AB 923) for the south coast air district. In the South Coast, the $4 dollar per

vehicle fee is distributed 30 percent to the district’s general fund, 40 percent to

cities and counties, and 30 percent to the Mobile Source Reduction Review

Committee (MSRC) to contribute a funding match towards qualifying projects.

MSRC has funded $42 million dollars for school buses, transit buses, street

sweepers, and refuse trucks since the 1995-1996 fiscal year. The cities and

counties portion of the DMV fees has funded some infrastructure needs for

alternative-fuel school buses.

The SCAQMD anticipates $22 million dollars annually from the $2 dollar increase

in DMV fees in the South Coast district. Over the next 18 months (to the end of

calendar year 2006), the district has designated $14 million dollars for Clean OnRoad School Buses, $4 million dollars for accelerated vehicle scrap, $11 million

for Carl Moyer projects, and $4 million for agricultural sources. The SCAQMD

has distributed approximately $28 million dollars of Carl Moyer funding to transit

buses, refuse trucks, and street sweepers. The Carl Moyer Program has not

been a significant source of funding for school buses due to the very low mileage

of those vehicles contributing to a higher cost effectiveness. Funding for

alternative school buses, cleaner diesel school buses, and diesel school bus

particulate trap retrofits have come from the Lower-Emissions School Bus

Replacement Program and the SCAQMD Governing Board school bus initiatives.

South Coast Rule 2202 - Air Quality Investment Program (AQIP) allows

employers with 250 or more employees to participate in an air quality investment

program in order to meet their emission reduction target. An employer may elect

to participate in the program by investing annually $60 per employee or triennially

$125 per employee into an AQMD administered restricted fund. Since 2000,

over $1.6 million dollars from AQIP has funded alternative fueled street sweepers

and refuse trucks.

II. PUBLIC OUTREACH

The ARB is committed to ensuring that all California communities have clean,

healthful air by addressing not only the regional smog that hangs over our cities
17

but also the nearby toxic pollution that is generated within our communities. The

ARB works to ensure that all individuals in California, especially the children and

elderly, can live, work and play in a healthful environment that is free from

harmful exposure to air pollution.

A. Environmental Justice

On December 13, 2001, the Board approved Environmental Justice Policies and

Actions,4

 which formally established a framework for incorporating environmental

justice into the ARB's programs, consistent with the directives of State law and

policy (ARB 2001). “Environmental justice” is defined as the fair treatment of

people of all races, cultures, and incomes with respect to the development,

adoption, implementation, and enforcement of environmental laws, regulations,

and policies. These policies apply to all communities in California, but

environmental justice issues have been raised more in the context of low-income

and minority communities because of past land use policies and the cumulative

impact of a concentration of emitting facilities in some neighborhoods.

To achieve this ambitious goal, the ARB established a Community Health

Program and emphasized community health issues in our existing programs. To

provide people with the basic tools and information needed to understand and

participate in air pollution policy planning, permitting, and regulatory decisionmaking processes, ARB has published “The Public Participation Guide to Air

Quality Decision Making in California.”5

In addition, at its April 28, 2005, public meeting, the Board adopted the "Air

Quality and Land Use Handbook: A Community Health Perspective"

This document was developed to provide technical information to local land use

and transportation agencies for considering impacts of local sources of air

pollution in the land use decision-making process.

The Environmental Justice Policies are intended to promote the fair treatment of

all Californians and cover the full spectrum of ARB activities. Underlying these

Policies is a recognition that we need to engage community members in a

meaningful way as we carry out our activities. People should have the best

possible information about the air they breathe and what is being done to reduce

unhealthful air pollution in their communities. The ARB recognizes its obligation

to work closely with all stakeholders; communities, environmental and public

health organizations, industry, business owners, other agencies, and all other

interested parties to successfully implement these Policies. Our outreach efforts,

described below, facilitate this objective.

 

4

 Complete information for these programs can be found at http://www.arb.ca.gov/ch/ej.htm. 5

 Complete information on this program can be found at

http://www.arb.ca.gov/ch/public_participation.htm
18

The amendments presented in this report for the Board’s consideration may

provide air-quality benefits by reducing NOx and diesel PM emissions from urban

buses that operate in neighborhoods in the District. NOx emissions contribute to

respiratory impacts in children, to the formation of fine particulate matter, and to

the formation of ozone, a criteria pollutant, as discussed in Section III.A. Diesel

PM has been identified as a TAC and is discussed in Section III.B. The actions

we have taken in applying these policies in our rulemaking reflect the Board’s

commitment to the fair treatment of all people throughout California.

B. Outreach Efforts

Consistent with ARB's environmental justice policy for strengthening our outreach

efforts in all communities, staff utilized many avenues to engage stakeholders in

the rulemaking effort.

1. Amend the Statewide Urban Bus Emission Requirements

Staff conducted six public workshops and additional focused meetings to discuss

modifying the statewide urban bus emission requirements (Table 6). Those

workshops held in Sacramento were webcast for individuals who could not travel

to the meeting locations. Notices for the workshops were mailed to more than

3,700 individuals and companies and were posted to ARB’s Public Transit

Agencies web site6

 and e-mailed to subscribers of ARB’s electronic listserves

related to this item.

 

6

 http://www.arb.ca.gov/msprog/bus/bus.htm
19

Table 6. Workshop Locations and Times.

Date Location Time Topics

Discussed

December 2, 2003 El Monte 1:30 – 3:00 PM Statewide

Rule

December 3, 2003 Sacramento 1:30 – 3:00 PM Statewide

Rule

March 29, 2004 Sacramento 1:30 – 3:00 PM Statewide

Rule

March 30, 2004 El Monte 1:30 – 3:00 PM Statewide

Rule

April 7, 2005 El Monte 1:30 – 4:00 PM Statewide

Rule/

District Rule

April 27, 2005 Sacramento 1:00 – 4:00 PM Statewide

Rule/

District Rule

Attendees of the workshops included representatives from environmental

organizations, transit agencies, engine manufacturers, bus manufacturers, air

pollution control districts, cities and counties, the California Association for

Coordinated Transportation, Regional Council of Rural Counties, Manufacturers

of Emission Control Association, Engine Manufacturers Association, California

Department of Transportation, California Natural Gas Association, California

Energy Commission, consultants, and other parties interested in urban bus

emissions.

Staff also met with a number of stakeholders in focused meetings throughout the

rulemaking process to get feedback on modifying the current emission

requirements. These stakeholders included manufacturers of engines and

buses; natural gas advocates; and environmental organizations. Staff attended

and made presentations at the California Transit Association conference in

November 2003 and 2004 and the California Association for Coordinated

Transportation conferences in April and September 2004, and April 2005.

2. Alternative Fuel Path Mandate for all Transit Agencies in the District

In October 2004, ARB posted a request for public comment concerning the

District’s fleet rules on its website. We requested comment on whether ARB

should submit the District’s fleet rules to U.S. EPA for a waiver of preemption,

pursuant to section 209(b) of the Clean Air Act.

ARB received thousands of comments, including over 4,800 electronic

submittals. After a thorough review of the comments and consultation with

U.S. EPA, staff made a decision to pursue a new rulemaking process for some
20

fleet rules, as discussed earlier, with the generation of a new public record that

would update relevant information on the effectiveness and costs of these rules.

Staff generated a webpage dedicated to the rulemaking effort. 7 On this

webpage, ARB provided notice of the rulemaking process with relevant

background and contact information. Then staff generated a list serve from all

those who had provided electronic comments. Along with those on ARB’s mobile

sources listserve, over 5,700 emails were sent to inform stakeholders of the

rulemaking activity.

Staff conducted one public workshop in El Monte and one in Sacramento to

discuss urban bus fleet requirements in the South Coast Air Basin (see Table 6

above). These workshops also covered modifying the statewide urban bus

emission requirements. Notices for these workshops were mailed to more than

2000 individuals and companies and were posted to ARB's Fleet Rules for the

South Coast Air Basin web site, as well as e-mailed to over 5,000 list serve

subscribers.

With regard to the requirement that all transit agencies operating in the District be

required to follow the alternative-fuel compliance path, staff also met with over

fourteen stakeholders in focused meetings throughout the rulemaking processl.

These stakeholders included manufacturers of engines and buses and natural

gas advocates. In addition, staff conducted telephone interviews with the transit

agencies operating in the District to discuss the amendments presented in the

report and obtain specific fleet information.

To generate additional public participation and to enhance the information flow

between ARB and interested persons, staff made all documents, including

workshop presentations, available via the Public Transit Agencies web site

and/or the Fleet Rules for the South Coast Air Basin web site. In addition, these

web sites provide background information and serve as portals to other web sites

with related information.

III. NEED FOR EMISSION REDUCTIONS

Many regions of California have serious to severe problems with air quality. In

particular, the South Coast Air Basin, which includes Orange County and the

non-desert portions of Los Angeles, Riverside and San Bernardino Counties, is

designated as a serious nonattainment area for PM10 (particulate matter under 10

microns) and a severe nonattainment area for ozone. The Coachella Valley,

located in the desert portion of Riverside County, is classified as a serious

nonattainment area for PM10 and a severe nonattainment area for ozone.

 

7

 http://www.arb.ca.gov/msprog/scfleet/scfleet.htm
21

A. Ozone

Ground-level ozone is created by the photochemical reaction between NOx and

reactive organic gases (ROG). Breathing ozone can trigger a variety of health

problems including chest pain, coughing, throat irritation, shortness of breath,

and congestion. It can worsen bronchitis, emphysema, and asthma. Ozone can

also reduce lung function and inflame the linings of the lungs. Repeated

exposure may permanently scar lung tissue. The elderly, children, and people

with compromised respiratory systems are among those persons who may be

most affected by exposure to ozone.

Ground-level ozone also damages vegetation and ecosystems. It leads to

reduced agricultural crop and commercial forest yields, reduced growth and

survivability of tree seedlings, and increased susceptibility to diseases, pests,

and other stresses such as harsh weather. Ground-level ozone also damages

the foliage of trees and other plants, affecting the landscape of cities, parks and

forests, and recreational areas.

B. Particulate Matter (PM)

PM emissions result primarily from incomplete combustion of fuel in the cylinder

and lubrication oil that has entered the cylinder incidentally. Secondarily

produced diesel PM is formed as a result of atmospheric reactions with diesel

NOx emissions. The majority of diesel PM, approximately 98 percent, is smaller

than ten microns in diameter. Diesel PM is a mixture of materials containing over

450 different components, including vapors and fine particles coated with organic

substances. More than 40 chemicals in diesel exhaust are considered TACs by

the State of California.

Diesel PM has been linked to a wide range of serious health problems. Particles

that are deposited deep in the lungs can result in lung cancer, increased hospital

admissions; increased respiratory symptoms and disease; decreased lung

function, particularly in children and individuals with asthma; alterations in lung

tissue and respiratory tract defense mechanisms; and premature death. Longterm ambient concentrations of PM10 are associated with increased risks of all

natural-cause mortality in males, mortality with any mention of nonmalignant

respiratory causes in both sexes, and lung cancer mortality in males (Abbey, et

al., 1999; McDonnell, et al., 2000).

IV. NEED FOR A POLICY DECISION BY THE BOARD TO AMEND ARB’S

CURRENT REGULATIONS

Public transportation has important societal benefits, providing access to work

and education, reducing traffic congestion, and meeting mobility needs of the

public. However, this service is generally performed by heavy-duty urban buses

that run on diesel fuel and make multiple trips with frequent start/stop operation
22

through residential and business communities. Since diesel exhaust has been

identified as contributing to both toxic PM and ozone-generating NOx emissions

it remains in society's best interest to reduce diesel emissions to the maximum

feasible extent.

A. Amend the Statewide Urban Bus Emission Requirements

One of the major strategies used to reduce emissions of both NOx and PM from

urban buses is the acceleration of bus replacement with newer buses. While

transit agencies may receive funding to replace urban buses once they are 12

years old, staff has found that transit agencies will keep these buses in the fleet

years longer. Fleet turn over – that is, transit agencies replacing their older

buses with new buses using cleaner engine technologies – reduces emissions.

The California market for new urban bus engines is small, and meeting the

California 2004 and 2007 NOx urban bus engine exhaust standards proved to be

technologically challenging for diesel engines. In addition, the U.S. EPA adopted

new heavy-duty engine standards for trucks and urban buses that were less

stringent than the urban bus standards previously adopted by ARB. As a result,

diesel engine manufacturers decided not to attempt to comply with California’s

new urban bus engine standards but instead to work towards achieving the less

stringent, but still technologically challenging, national heavy-duty truck engine

standards.

At the time the Board adopted California’s rule, engine manufacturers told ARB

they would not certify engines to meet the 2006 engine exhaust emission

standards. In response, the Board adopted an alternative strategy that transit

agencies could use to purchase urban bus engines certified to the 2002 emission

standards so long as they reduced fleet NOx emissions as if they had purchased

engines certified to 0.5 g/bhp-hr NOx. Only seven transit agencies completed

the application process and qualified for the “alternative NOx strategy

exemption.”

In June 2004, staff, with concurrence of the Board, postponed a decision on a

staff proposal to align the urban bus engine standards with the California 2007

heavy-duty standard because of an ongoing evaluation of available 2007 urban

bus engine technology. Of particular interest to the Board was if natural gas

engines would comply with the 2007 urban bus NOx emission standard.

B. Alternative Fuel Path Mandate for All Transit Agencies in the District

On June 16, 2000, the SCAQMD adopted Rule 1192 - Clean On-Road Transit

Buses. Rule 1192 requires public transit fleets operating in the SCAQMD to

acquire alternative-fuel vehicles when procuring or leasing transit fleet vehicles.

The rule applies to government agencies and private companies under contract

to government agencies, with fleets of 15 or more public transit vehicles or urban
23

buses that are providing passenger transportation services including intra- and

intercity shuttle services. The scope of the rule includes: 1) vehicles having a

GVWR of at least 14,000 pounds but no greater than 33,000 pounds, that are

used for the express purpose of transporting passengers; and 2) buses having a

GVWR greater than 33,000 and defined by ARB as "urban buses." Paratransit

vehicles, as defined in Sections 226 and 462 of the California Vehicle Code, are

excluded from Rule 1192.

SCAQMD defines an alternative-fuel heavy-duty vehicle as one that uses

compressed or liquefied natural gas, propane, methanol, electricity, fuel cells, or

other advanced technologies that do not rely on diesel fuel, and meets the

emission requirements of title 13, CCR, section 1956.1, as adopted

February 24, 2000. Rule 1192 does not consider diesel-based hybrid-electric

and dual-fuel vehicles that use diesel fuel to be alternative-fuel vehicles.

Fleet operators of 15 or more transit vehicles or urban buses, except for

municipal or included municipal operators with fewer than 100 transit vehicles or

urban buses, were required to meet the requirements of Rule 1192 beginning

July 16, 2000. This implementation deadline was July 1, 2001, for fleet operators

that are considered municipal operators or included municipal operators with 15

or more, but less than 100 transit vehicles or urban buses. SCAQMD allowed

additional lead time for the smaller fleets to identify funding sources as well as to

construct the necessary infrastructure to support the operation of alternative-fuel

transit vehicles. SCAQMD also provided an exemption for vehicles for which

purchase or lease contracts existed prior to June 16, 2000.

In this rulemaking, the Board will have the option of amending the ARB’s Fleet

Rule for Transit Agencies to mandate that the six diesel path transit agencies in

SCAQMD switch to the alternative fuel path, in order to have the state rule

achieving the alternative fuel objectives of the District’s Rule 1192. The ARB’s

adoption of a unique fleet requirement for the transit agencies in the District

would have the effect of addressing the Court’s decision regarding preemption

while reflecting the Legislature’s intent that SCAQMD be authorized to establish

an alternative fuel fleet rule for transit districts within the District.

The Board may adopt the District fleet requirement presented in this report if the

Board wishes to assure that alternative fuel urban transit buses are purchased

throughout the District, and determines it wise to provide a backstop to the

current District Rule 1192 in case litigation overturns the District rule.
24

V. ASSESSMENT OF THE POLICY DECISION TO BE PRESENTED TO

THE BOARD

This report presents two policy decisions to be considered by the Board.

A. Amend the Statewide Urban Bus Emission Requirements

Staff has assessed urban bus engine availability based on the current 2007-2009

model year standard versus what could be available if the Board modifies the

standard to align with the current 2007-2009 model year heavy-duty truck engine

standards. There are essentially three scenarios that could occur. The first is

that manufacturers could certify both diesel and alternative-fuel engines for sale

in California in time to meet the standard of 0.2 g/bhp-hr NOx in 2007.

Discussions with diesel engine manufacturers, however, have convinced staff

that this scenario is unlikely. Since 2001 the Engine Manufacturer’s Association

(EMA) has been warning ARB that the major urban bus engine manufacturers

would not meet California’s 2007 NOx standard of 0.2 g/bhp-hr and requested

that ARB align its 2007 urban bus standards with the federal 2007 standards,

adopted in 2001. More recently, the engine manufacturers have reiterated their

position in verbal and written comments at the various public workshops for this

rulemaking. Engine manufacturers have informed ARB that they plan to produce

diesel engines nationwide that meet a nominal 1.2 g/bhp-hr NOx standard and

that they do not plan to produce diesel engines meeting the 0.2 g/bhp-hr NOx

standard until 2010.

The second scenario staff assessed is that manufacturers will make alternative

fuel engines available to meet the 0.2 g/bhp-hr NOx standard. Multiple

manufacturers have stated publicly that they intend to produce natural gas or

other alternative fuel urban bus engines that meet the California 2007 standard

(CalNGV News 2004; Cummins-Westport 2005). Therefore, staff believes that

there is a reasonable likelihood that one or more urban bus engine will be

commercially available by 2007 for users of alternative fuels. There is some risk

that these engines will be delayed or will not be certified and marketed, as these

are all engines that require new technology.

The third scenario is that there will be no diesel or natural gas engines available

for California urban buses for 2007-2009. In this case, California transit agencies

would not be able to purchase new engines until 2010, at which time staff

expects all engines, both diesel and alternative fuel, will meet the 2010

heavy-duty truck NOx standard of 0.2 g/bhp-hr. As noted above, staff’s

assessment is that no diesel urban bus engines will be available in 2007 through

2009, but it is likely alternative fuel urban bus engines will be available.

There are 76 transit agencies statewide that report to ARB under the Fleet Rule

for Transit Agencies. The 28 agencies on the alternative fuel path will still

continue to purchase complying engines in 2007 through 2009, because staff
25

believes complying engines will be available. However, if the current 2007 urban

bus emission standards are not modified, the 48 agencies on the diesel path will

not be able to purchase new diesel buses until 2010. These diesel path transit

agencies operate 62 percent of the California urban buses, and if they continue

on the diesel path the result is that these agencies will likely keep their older

buses longer or repower their buses until complying diesel buses are available in

2010. Emission reductions staff anticipated from the original rule will not be

realized from diesel path transit agencies.

There is the potential that, with no diesel buses available in 2007 through 2009, a

transit agency on the diesel path could purchase alternative fuel engines.

However, based on their workshop comments and purchasing practices as

reported to ARB annually, most agencies are unlikely to voluntarily replace their

existing diesel buses with alternative-fuel engines for two reasons. The first is

that the diesel path agencies expect there to be diesel engines available no later

than 2010, and they have stated that they have the ability to forgo purchasing

new buses until 2010. The second reason is that switching to alternative fuel

requires a significant investment in infrastructure, training, and modifications to

facilities. Transit agencies are unlikely to make these investments and changes

in order to purchase buses for a short, three-year period. Therefore, it is unlikely

that leaving the 2007 through 2009 model year urban bus NOx standard at

0.2 g/bhp-hr would cause diesel path transit agencies to switch to the alternative

fuel path.

Staff expects that manufacturers will certify diesel urban bus engines that meet

the 1.2 g/bhp-hr NOx level if the Board relaxes the NOx standard for 2007

through 2009 model years. Staff also expects that, even if the Board changes

the NOx standard to 1.2 g/bhp-hr for 2007, some manufacturers will offer

alternative fuel engines that meet the 0.2 g/bhp-hr NOx level in 2007. Staff

believes this to be the case because these manufacturers profess to have the

technology to meet the 0.2 g/bhp-hr level, and will be required to meet this level

by 2010. Thus, to avoid another design cycle and to capture sales resulting from

incentive funds available for early-introduction engines, it is likely that some

manufacturers will instead opt to produce 0.2 g/bhp-hr engines early.

Within these various scenarios, staff believes the most likely outcome for the

2007 through 2009 model years is that there will be 0.2 g/bhp-hr NOx alternative

fuel engines available, and that transit agencies on the alternative fuel path will

purchase these engines. By aligning the 2007 through 2009 model year NOx

standard to the heavy-duty truck standard, diesel path agencies will also be able

to purchase new engines in 2007 through 2009. If a requirement were adopted

that required all transit agencies to follow the alternative fuel path, staff believes

transit agencies would be forced to purchase alternative fuel engines in 2007 and

later.
26

B. Alternative Fuel Path Mandate for All Transit Agencies in the District

As discussed earlier, there are 17 transit agencies that fall under Rule 1192 in

the District (Table 7). All but one of these transit agencies operates urban buses

and is subject to ARB’s Fleet Rule for Transit Agencies. One transit agency,

Commerce, has fewer than 15 buses and is therefore not subject to Rule 1192,

but is subject to ARB's current transit fleet rule.

Of the 17 transit agencies in the District subject to ARB’s Fleet Rule for Transit

Agencies, eleven are on the alternative fuel path and under current state law

must continue to purchase alternative fuel buses through 2015. These agencies

represent 90 percent (4120 buses) of the transit buses in the District. Under

ARB's Fleet Rule for Transit Agencies, the six transit agencies on the diesel path

have the ability to purchase diesel engines, although Rule 1192 prohibits them

from doing so.

Table 7. Transit Agencies in the SCAQMD

Transit Agency Urban Buses1

Commerce2 9

Culver City 46

Foothill Transit 306

Gardena Municipal Bus Lines3 47

Glendale 26

Long Beach Transit3 191

Los Angeles County MTA 2473

Los Angeles DOT 142

Montebello3 72

Norwalk3 30

Omnitrans 176

Orange County Transportation Authority 612

Pasadena4 0

Riverside Transit Agency 114

Santa Clarita Transit3 64

Santa Monica Big Blue Bus 174

Sunline Transit Agency 42

Torrance Transit System3 53

Total 4577

1 Based on annual reports to ARB and March 2005 survey of SCAQMD transit agencies.

2

Commerce’s fleet is below the 15 bus limit and is thus not subject to Rule 1192.

3 Agencies on the diesel compliance path.

4

Pasadena operates no urban buses; all of its buses are transit fleet vehicles regulated

under ARB’s February 24, 2005, amendments to the Fleet Rule for Transit Agencies.

In February and March of 2005, staff contacted each transit agency in the District

on the diesel path to determine their future purchasing plans. Based on the
27

survey, staff estimates that all but one transit agency, Torrance, plans to

purchase alternative-fuel buses (CNG or gasoline hybrid-electric).

Gardena expects to complete a new facility with a CNG refueling station by the

end of 2006, but is currently purchasing gasoline hybrid-electric buses (gHEB).

Santa Clarita has contracted to purchase 14 CNG buses, but obtained a waiver

from the SCAQMD for purchasing diesel-fueled commuter buses.

Long Beach Transit and Montebello are purchasing gHEBs and neither agency

intends to upgrade its facility to handle CNG. Norwalk is purchasing gHEBs, and

may update its facility to accommodate CNG in the future. Both Montebello and

Norwalk are interested in diesel hybrid-electric buses, however under Rule 1192

they cannot be purchased.

Thus, staff expects that without Board adoption of an alternative fuel requirement

in the District, five of the six agencies on the diesel path will purchase alternative

fuel buses, regardless. However, these agencies would have the ability to

purchase diesel buses, and therefore staff's analysis assumes that, without an

alternative fuel mandate in the District, all six of these transit agencies will

purchase diesel buses if available.

VI. Inventory of Urban Buses and Emissions

This section discuses the inventory for urban buses and their emissions.

A. Inventory of Urban Buses

As part of the Fleet Rules for Transit Agencies, transit agencies must submit an

annual report to ARB listing all their urban buses, including fuel use. Based on

these reports, the statewide 2004 population was 9,845 urban buses, of which

3,764 were operated by transit agencies on the alternative-fuel path and 6,081

were operated by transit agencies on the diesel fuel path (Table 8). Note that

alternative-fuel path agencies operate diesel buses, which are mostly older

diesel. Also, some diesel path agencies operate alternative-fuel buses; these are

mainly transit agencies located in the District. Most of the electric buses are

operated by San Francisco MUNI, which is on the diesel path.
28

Table 8. Reported California Urban Bus Inventory as of January 1, 2005, by

the Selected Fuel Path of the Transit Agency

Fuel Type Statewide SCAQMD

Alt Fuel

Path

Diesel

Path

Alt Fuel

Path

Diesel

Path

Diesel 1947 3758 1321 452

LNG 269 0 269 0

Propane 175 2 41 0

CNG:H2 2 0 2 0

CNG 3378 55 2477 0

Electric 5 366 0 0

Gasoline HEB 19 0 2 0

Diesel HEB* 2 4 2 2

Total 5657 4187 4114 454

*Operating with an urban bus engine or with an experimental permit, not certified as an

HEB.

The major manufacturers of urban bus engines currently in operation are

Cummins and Detroit Diesel, although Caterpillar and John Deere have also

recently begun to enter the urban bus market. ARB provides a website to obtain

information on California certified engines for use in urban buses. For the current

2005 model year, the web address is:

http://www.arb.ca.gov/msprog/onroad/cert/mdehdehdv/2005/2005.htm

B. Emission Inventory for Urban Buses

The California on-road vehicle emission inventory data consists of two elements:

emissions-related and activity-related. The emissions-related data reflect new

vehicle testing information and the latest vehicle registration data from the DMV.

The activity-related data are updated by the regional transportation agencies that

estimate of the daily vehicle miles of travel, the distribution of travel by speed,

and the number of starts per vehicle per day by year. The on-road emission

inventory is then derived using the EMFAC model (Appendix C).

ARB staff calculated the urban bus emission inventory using a model developed

from EMFAC specifically incorporating the turnover rates from their reports and

emission factors for urban buses. Gasoline vehicles were not included in the

emissions analysis.

Under California’s current urban bus emission standards from 2004 through

2009, staff assumed urban bus turnover in most diesel path transit agencies to

be almost non-existent. Transit agencies that repower existing diesel buses will

use engines meeting the same engine standards as the existing engine. The
29

consequence of this mismatch between California’s urban bus engine exhaust

emission standards and the statements by the major urban bus engine

manufacturers is that emissions from California’s urban buses will remain high for

many years. Transit agencies on the diesel path are unwilling to purchase

alternative fuel buses to turn over their old diesel buses, but instead are waiting

to purchase new, cleaner emission diesel urban buses in 2010.

At the June 24, 2004, and February 24, 2005, hearings, the Board adopted

modifications to the standards for diesel HEBs. The modifications enabled

manufacturers to certify diesel HEBs for 2004 through 2006. With prior approval

from the executive officer, these buses are available for purchase or lease to

transit agencies on the diesel path. Seven agencies have already qualified for

the "alternative NOx strategy exemption" and a total of ten diesel path agencies

have applied to purchase a total of approximately 190 diesel HEBs for 2006.

These diesel HEB buses will meet a standard of 1.8 g/bhp-hr NOx and

0.01 g/bhp-hr PM. In addition, approximately seventeen ISE Corporation (ISE)

gasoline HEBs are on order for Central California transit agencies, and

approximately 70 are on order for South Coast fleets.

Modeling these assumptions suggests that California’s urban bus engine exhaust

emission standards for 2007 through 2009 have the unintended consequence of

keeping urban bus emissions artificially high. The predicted emission reductions

as a result of the 2000 rule are unlikely to be achieved. Staff estimates that there

will be a shortfall between the NOx reductions expected if engine manufacturers

had produced diesel urban bus engines meeting California’s standards from

2004 through 2009 of 2.06 tpd in 2010; 1.31 tpd in 2015; and 0.72 tpd in 2020

(Table 9). For particulate matter (PM), the predicted emission reduction shortfall

is 80 pounds per day (lbs/day) in 2010; 30 lbs/day in 2015; and 24 lbs/day in

2020 (Table 10). The baseline emissions for urban buses gradually decline over

time because of turnover from dirtier engines to cleaner engines, along with the

NOx and PM reductions mandates in the Fleet Rule for Transit Agencies. See

Appendix C for an explanation of the emissions inventory methodology.
30

Table 9. NOx Statewide Diesel Emissions Inventory (tpd)

2010 2015 2020

2000 Regulation Projected 5.87 2.41 0.65

Current Estimate – No Turnover1 7.93 3.72 1.37

Shortfall -2.06 -1.31 -0.72

1

 Assumes no turnover of diesel engines from 2004-2009.

Table 10. PM Statewide Diesel Emissions Inventory (lbs/day)

2010 2015 2020

2000 Regulation Projected 240 112 76

Current Estimate – No Turnover1 320 142 100

Shortfall -80 -30 -24

1

 Assumes no turnover of diesel engines from 2004-2009.

VII. SUMMARY OF THE CONTROL MEASURES TO BE CONSIDERED BY

THE BOARD

Staff has identified two policy decisions for the Board’s consideration and has

developed proposed regulatory amendments to support these decisions the

Board may make. First, staff is presenting three options for the Board to

consider regarding the appropriate emission standards for new urban bus

engines in 2007 through 2009. The three options are: 1) keep the current new

urban bus emissions standards as they are, 2) change the NOx emission

standard for 2007 through 2009 model year new urban buses from 0.2 to

1.2 g/bhp-hr, which would align it with the equivalent model year heavy-duty truck

NOx emission standard, and 3) require all transit agencies to purchase/lease

only alternative fuel buses. The rulemaking documents prepared in connection

with this report contain amendments to title 13, CCR, sections 1956.1, 1956.8

and 2023.1 (Appendix A), and set forth the following:

• Language to implement the option to align the 2007 and later emission

standards for new urban buses with the 2007 and later emission

standards that apply to new heavy duty trucks (for NOx this results in an

average level of 1.2 g/bhp-hr in 2007 and 0.2 g/bhp-hr in 2010);

• Language to require that transit agencies operating within the jurisdiction

of SCAQMD follow the alternative-fuel compliance path under Title 13,

CCR, Section 2023.1.

The amendments provided in this report (set forth in the proposed regulation

order in Appendix A) set forth the language necessary to implement the option of

aligning the urban bus standards with the heavy-duty truck standards beginning

with the 2007 model year. Should the Board favor the option to keep the urban
31

bus standards as they are, no regulatory changes are necessary. Should the

Board decide that all transit agencies statewide should be required to purchase

alternative fuel, a 15-day modification to ARB’s Fleet Rule for Transit Agencies

would be needed to accomplish this (and no change to the urban bus emission

standards would be necessary). The language modifying the fleet rule for transit

agencies applies to the purchase of urban buses by transit agencies operating in

the District, and assures that alternative fuel transit buses are purchased

throughout the District.

A. Scope and Applicability

Staff is requesting the Board to consider regulatory amendments that affect

urban buses and transit agencies. California's standards for urban buses are set

forth in title 13, CCR, section 1956.1 and the fleet requirements for urban buses

are covered under Fleet Rules for Transit Agencies - Urban Bus Requirements

title 13, CCR, sections1956.2 – 1056.4 [to be recodified as 2023.1, per Board

action on February 24, 2005].

B. Amend the Statewide Urban Bus Emission Requirements

Staff is presenting three options for the Board to consider regarding the

appropriate emission standards for new urban bus engines in 2007 through

2009. The three options are: 1) keep the current new urban bus emissions

standards as they are, 2) change the NOx emission standard for 2007 through

2009 model year new urban buses from 0.2 to 1.2 g/bhp-hr, which would align it

with the equivalent model year heavy-duty truck NOx emission standard, and

3) require all transit agencies to purchase/lease only alternative fuel buses.

Should the Board favor the first option, to keep the current standards as they are,

no regulatory changes are needed.

Should the Board favor the second option, to align the California urban bus

engine exhaust emission standards with the current California truck engine

exhaust emission standards for the 2007 through 2009 model years, the

corresponding urban bus regulations and heavy-duty truck regulations will need

to be modified. The truck engine regulations include standards for NOx, PM,

carbon monoxide and non-methane hydrocarbons. Currently the standards for

urban buses are located in title 13, CCR, section 1956.1. Specifically, the 2007

and later model year standards for urban buses are provided in subsection

(a)(12). The heavy-duty engine and vehicle standards are located in title 13,

CCR, section 1956.8. Paragraph (a)(12) of section 1956.1 would be deleted.

Section 1956.8 would concurrently be modified to include urban buses for the

2007 and later model years. Thus, 2007 and later model year urban bus engines

would be certified as heavy-duty engines.
32

Should the Board decide that all transit agencies statewide should be required to

purchase only alternative fuel buses, language would need to be included into

the ARB’s Fleet Rule for Transit Agencies (section 1958.2) mandating this

requirement. The requirement would mandate that 85 percent of a transit

agency's annual purchases must be alternative fuel through 2015.

C. Alternative Fuel Path Mandate for All Transit Agencies in the District,

Amend Section 1956.2

As discussed earlier, there are currently 17 transit agencies operating in the

District that are subject to ARB’s Fleet Rule for Transit Agencies (see Table 7).

The amendments developed by staff are designed to increase the number of

alternative-fueled urban buses operating in the District by requiring all of the

transit agencies on the diesel path to change to the alternative-fuel path. This

requirement mandates that 85 percent of a transit agency's annual purchases be

alternative fuel through 2015. Those six transit agencies on the diesel fuel path

must change to the alternative-fuel compliance path effective January 1, 2006.

Multiple manufacturers have stated that they intend to have alternative fuel buses

available in 2007 that meet a 0.2 g/bhp-hr level for NOx. Therefore, staff

believes that this requirement will likely result in the purchase of buses meeting a

0.2 g/bhp-hr NOx level beginning in 2007 by the six transit agencies on the diesel

path. However, because of the alignment option outlined above, alternative fuel

buses meeting a 1.2 g/bhp-hr NOx level or higher may also be available.

D. Comparison of ARB’s Fleet Rule for Transit Agencies and Rule 1192

While SCAQMD's Rule 1192 and ARB's fleet rule for transit agencies, for the

most part, affect the same set of vehicles, there are some differences between

them. Pasadena's fleet is not subject to ARB's Fleet Rule for Transit Agencies

because Pasadena does not operate any urban buses, although it is subject to

the new requirements for transit fleet vehicles. Pasadena does, however, have a

large enough fleet of buses over 14,000 pounds GVWR that it falls under the

authority of Rule 1192. Commerce, which is on the alternative-fuel path under

ARB's rule, is not included under Rule 1192 because it has fewer than the fleet

minimum of 15 vehicles.

In addition, Rule 1192 only affects vehicles at or above 14,000 pounds GVWR.8

The Board amended the Fleet Rule for Transit Agencies on February 24, 2005,

to expand its scope to all heavy-duty buses and vehicles (greater than 8,500 lbs

GVWR) owned or operated by a transit agency. ARB’s rule also includes

vehicles not included in Rule 1192, such as paratransit and non revenue

producing vehicles. As a result, over 35 additional fleets operating in the District

 

8

 SCAQMD adopted an additional rule, Rule 1191, "Clean On-Road Light- and Medium-Duty

Public Fleet Vehicles" which includes requirements for transit fleets operating trucks and buses

below 14,000 pounds GVWR.
33

are subject to ARB's fleet rule. These fleets, consisting primarily of non-urban

buses, would not be subject to the alternative-fuel purchase requirement.

VIII. ENGINE TECHNOLOGY AND AVAILABILITY

This section discusses the current and expected availability of engines for urban

buses. The information was obtained from engine manufacturers and other

published sources. We have omitted information that engine manufacturers have

indicated is confidential. A more in-depth discussion is included in the Technical

Support Document for this rule. Information on how to access the Technical

Support Document for this rule making can be found at the end of this report.

Conventional diesel engines use compression-ignition to generate power,

whereas engines that operate on an alternative fuel, such as compressed natural

gas (CNG), liquefied natural gas (LNG), and liquid petroleum gas (LPG), are

typically spark-ignited. In the heavy-duty engine market, CNG and LNG are the

most commonly used alternative fuels. Diesel hybrid-electric, dual fuel and bifuel trucks and buses are not considered to be alternative-fueled, although they

can have significantly lower emissions than a straight diesel engine. Alternativefueled engines are typically certified to lower engine exhaust emissions than

same model year diesel-fueled engines, although a diesel engine equipped with

exhaust aftertreatment may have emissions comparable to an alternative-fuel

engine.

A. Current Engine Availability

Manufacturers have been able to meet the current heavy-duty truck engine

exhaust standards without the use of aftertreatment technologies, relying instead

on modifications to engine and combustion-related components. Engine

modifications include such changes as improved electronic controls, improved

turbocharger systems, and improved exhaust gas recirculation. Combustion

modifications include improved engine timing, improved fuel injection systems,

and improved cylinder design.

1. Diesel Fueled Engines

California has no urban bus diesel engine certified to its standards of 0.5 g/bhphr NOx and 0.01 g/bhp-hr PM for the 2004 to 2006 model year. California

regulations provide for an exception to this standard for the seven transit

agencies that applied for and received a so-called “alternative NOx strategy

exemption.” Engine manufacturers can certify urban bus diesel engines to the

standards for 2003 in the 2004 to 2006 model year for sale to those transit

agencies only. There is one diesel urban bus engine family, the Caterpillar C9

that is certified to 2.3 g/bhp-hr NOx + NMHC and 0.004 g/bhp-hr PM, via the

alternative NOx strategy exemption.
34

In 2004 California adopted new engine standards of 1.8 g/bhp-hr NOx and 0.01

g/bhp-hr PM for diesel hybrid-electric buses (dHEB), applicable only to the 2004

to 2006 model year. Transit agencies on the diesel path were allowed to apply

for permission to purchase these buses, subject to certain requirements. Based

on conversations with manufacturers, the staff expects that there will be one or

more engine families certified and available for purchase in 2006, thus providing

some transit agencies with an additional option for a diesel engine purchase.

2. Alternative Fuel Engines

For urban buses, there are currently two natural gas engine families certified by

Cummins, two certified by DDC, and one certified by John Deere.

The outlook for natural gas urban bus engine availability in 2006 is the same as

for 2005. However, Deere is currently involved in a demonstration project with

U.S. DOE's National Renewable Energy Laboratory (NREL) and the SCAQMD to

certify an oxidation catalyst equipped engine for use in urban buses to the

1.2 g/bhp-hr NOx standard. Deere intends to have this product available by

October 2005.

B. Mid-term Future Engine Availability (2007 – 2009)

The California diesel urban bus engine particulate emission standard is 0.01

g/bhp-hr, which applies to engines produced after October 1, 2002. Urban buses

equipped with alternative fuel engines may certify to optional standards of 0.03,

0.02, or 0.01 g/bhp-hr. However, beginning in 2007, these engines must also

meet the particulate standard of 0.01 g/bhp-hr. All alternative fuel urban bus

engines currently are certified at a 0.01 g/bhp-hr level. The current NOx

standard for urban bus engines is 0.2 g/bhp-hr for 2007 and beyond.

While most manufacturers have released details about their 2007 engines, some

have not. Thus the information that follows is necessarily incomplete and

includes general information where specifics are unavailable for publication.

Staff’s evaluation includes both publicly available and confidential information.

1. Diesel Fueled Engines

As mentioned above, manufacturers have indicated that they do not intend to

make diesel urban bus engines available that meet the 0.2 g/bhp-hr NOx level

until 2010. It is also unlikely that any dHEB would be able to meet this standard.

2. Alternative Fuel Engines

Two engine manufacturers, Cummins, through its joint partnership with Westport

Innovations, Cummins Westport Inc.; and John Deere plan to offer alternative

fuel urban buses that meet the 2007 emissions standards of 0.2 g/bhp-hr NOx
35

and 0.01 g/bhp-hr PM. John Deere intends to produce a 250-325 horsepower,

9 liter natural gas engine. Cummins Westport Inc. has partnered with NREL to

develop a lower emission version of the L Gas Plus (8.9 L) natural gas engine.

This engine is scheduled to be commercially available in early-2007. The

SCAQMD is also currently sponsoring a project with Cummins to commercialize

the C Gas Plus engine (8.2 L) to 0.2 g/bhp-hr NOx by 2007.

C. Long Term Engine Availability (2010 and beyond)

In 2004, U.S. EPA published its second review outlining the status and progress

of engine and vehicle technology toward meeting the federal 2007 standards for

heavy-duty diesel vehicles (U.S. EPA 2004). In its report, U.S. EPA concluded

that manufacturers will meet the 2007 and 2010 standards in a two step process

and that “engine manufacturers' 2007 compliance plans are a building block for

the technology package they plan to use to meet the 0.20 g/bhp-hr NOx standard

in 2010." Thus, it is likely that selective catalytic reduction (SCR) and NOx

adsorbers for NOx reduction, along with further improvements in engine

technology, such as Clean Diesel Combustion, will play a large role for diesel

technology in 2010 and beyond. Additional information on long-term engine

availability is found in the Technical Support Document for this rule.

IX. END-USER EXPERIENCE: ALTERNATIVE FUELS

In March 2005, ARB staff surveyed maintenance managers of all 11 transit

agencies in the District that operate all or a portion of their fleets on alternative

fuel and that are subject to the ARB's Fleet Rule for Transit Agencies. The

survey collected information on the experiences transit agencies have had to

date with buses operating on alternative fuel. The cost data collected by this

survey was used in the cost analysis and is discussed in Appendix D. Electric

buses were not included in this survey.

A. Description of the Survey

Questions 1 through 4 were designed to elicit specific information on the number

of buses in the fleet by fuel type, how long various fuels had been used, and

whether the ability existed to re-fuel buses in the field. Questions 5 through 9

dealt with issues of maintenance and maintenance facilities for alternative fuel

vehicles and additional staff training that might be needed to deal with

maintenance of these vehicles. Question 10 was open-ended, asking for any

additional comments the respondent wanted to make in connection with topics

mentioned or not mentioned in the survey. A copy of the survey can be found in

Appendix B.
36

B. End-User Experience with Alternative Fuels

Transit agencies rely mainly on three types of alternative fuels to power their

buses: CNG, propane, and LNG. Many transit agencies will be purchasing

gasoline HEBs that are arriving in 2005 through 2007. Since the gasoline HEB is

a new technology, there was no in-use experience available at the time of the

survey.

1. Propane

Only one transit agency in the survey was using propane or liquefied petroleum

gas (LPG) to fuel their buses. Of their 189 buses, only 45 met the definition of

urban bus. The transit agency contracts out for fuel and therefore had no

experience with the maintenance or cost of the fueling equipment. The transit

agency did not express any concerns or issues and plans to purchase over 50

more buses in the next 3 years.

2. Compressed and Liquefied Natural Gas (CNG/LNG)

In-use experience with alternative fuels, primarily CNG, was initiated in the mid1990's. Of those surveyed, experience with CNG ranged from 3 to 11 years and

LNG five years.

a. Fueling

Nine of the eleven transit agencies maintain their own fueling stations on site, of

which four are expanding their fueling sites. Fueling times are based on the

equipment available. On-site operations can “quick fill” a bus in 8 to 15 minutes,

or choose to slow fill a bus over night (6 hours). One facility uses an off-site

station operated by the city, where fueling can take up to an hour per bus. The

operator uses this time to clean the vehicles while waiting for the vehicle to fuel.

Another facility contracts to private operations to provide their fuel.

Of the nine transit agencies with fueling stations, four reported that fuel storage

was more complex and expensive with alternative fuel. One transit agency

reported that CNG storage took six times the space as diesel, but one transit

agency reported that fuel storage for diesel and CNG were about the same.

b. Maintenance Shop Modifications for Alternative Fuel Vehicles

Transit agencies must upgrade their maintenance facilities when working with

gaseous or "lighter than air" fuels to meet fire code and safety regulations. These

facilities require modification of the structure to prevent "pockets" where gases

can pool, installation of sensors to detect buildup of gas and fire alarm systems,

and up-grading air circulation systems. Specialized tools are also required for

working on alternative fuel vehicles. Facilities that do not modify repair shops
37

must work on alternative fuel vehicles outside in the open air or send them to

other repair facilities. Eight of the 11 agencies have modified their facilities; the

other three contract out their maintenance work.

c. Maintenance and Down Time for Alternative Fuel Vehicles

Seven of the 11 transit agencies reported increased maintenance time and

downtime with alternate fuels (six with CNG; one with LNG). Two transit

agencies reported 15 to 20 percent increases in maintenance time. One transit

agency stated that by increasing the maintenance schedules, downtime was

close to what they experienced with diesel buses. Two transit agencies reported

no difference between CNG and diesel. One transit agency experienced

significant breakdowns with CNG buses. Two transit agencies stated that CNG

technology has improved over the years to be equivalent to diesel buses.

As a result of increased maintenance, two transit agencies stated that they

maintain a higher spare parts and bus ratio. Four transit agencies reported that

parts for CNG fueled buses were more expensive.

d. Training Staff for Alternative Fuel Vehicles:

Nine of the 11 transit agencies that use alternative-fuel buses said staff must

receive special training to operate and/or service these vehicles. Mechanics

must be certified every 3 to 5 years. Drivers require specific training on alarms

and manual shut off systems. One transit agency that contracts out for the work

requires a demonstration of experience with CNG. Five of the 11 transit

agencies reported ongoing training annually.

3. Conclusion

Strong opinions exist regarding the use of alternative fuels. For those transit

agencies that have embraced the technology, they consider any increased

maintenance or costs as marginal or a part of doing business and have adjusted

their practices to meet any operational changes. Engine reliability issues

appeared to be focused on older engine models, where the newer models are

more reliable. For fueling and maintenance facilities, all the transit agencies

consider diesel easier and less expensive.

X. REGULATORY ALTERNATIVES

Staff has provided three options for the Board’s consideration regarding

potentially amending the statewide urban bus emission requirement. Therefore

staff has not evaluated any additional alternatives for the Board to consider.

With regard to the District specific fleet rule staff evaluated an alternative to not

require transit agencies in the District to follow the follow the alternative-fuel path.
38

This alternative, in conjunction with Board adoption of statewide alignment of the

urban bus and heavy-duty truck emission standards, would allow transit agencies

on the diesel path, including the six in the District, to purchase diesel engines in

2007 through 2009. If the SCAQMD Rule 1192 were to be invalidated, the six

transit agencies on the diesel path located in the District would be able to

purchase diesel urban buses. There is some benefit associated with this

alternative because of the turnover of older diesel engines to new, cleaner

engines. However, this alternative would not provide the additional benefit in the

District of mandating the purchase of alternative fuel buses for the six transit

agencies currently on the diesel fuel path. It is worth noting that staff expects

that without Board adoption of an alternative fuel requirement in the District, five

of the six agencies on the diesel path will likely purchase alternative fuel buses,

regardless. However, these agencies would have the ability to purchase diesel

buses, and therefore, staff's analysis assumes that, without an alternative fuel

mandate in the District, these transit agencies will eventually purchase diesel

buses if available.

It should also be noted that this alternative is only viable if the Board chooses to

also adopt the statewide alignment of the urban bus emission standards with the

heavy-duty truck emission standards. If the Board chooses to leave the state

urban bus standards as they are, or if the Board chooses to require all transit

agencies statewide to follow the alternative fuel path, then Board adoption of a

specific alternative fuel purchase requirement in the District is not necessary.

XI. ECONOMIC IMPACT

Staff is presenting to the Board for its consideration a requirement that transit

agencies operating in the jurisdiction of the SCAQMD be mandated to follow the

alternative-fuel compliance path, under section 2023.1, title 13, CCR. Six transit

agencies operating in the District are currently on the diesel compliance path,

and therefore would be required to change to the alternative-fuel compliance

path.

In addition, staff is presenting to the Board for its consideration amendments that

would modify the urban bus new engine standards or require the use of

alternative fuel buses statewide.

Staff believes that the regulatory amendments presented here for Board

consideration would cause no noticeably adverse impacts in California

employment, business status, or competitiveness.

A. Legal Requirement

Sections 11346.3 and 11346.5 of the Government Code require state agencies

proposing to adopt or amend any administrative regulation to assess the
39

potential for adverse economic impact on California business enterprises and

individuals. The assessment shall include consideration of the impact of the

proposed regulation on California jobs; on business expansion, elimination, or

creation; and on the ability of California businesses to compete in other states.

State agencies are also required to estimate the cost or savings to any state or

local agency or school district in accordance with instructions adopted by the

Department of Finance. This estimate is to include nondiscretionary costs or

savings to local agencies, and the costs or savings in federal funding to the state.

B. Affected Businesses

Businesses that may be affected as a result of the regulatory amendments

presented in this report include manufacturers of diesel urban bus engines and

alternative fuel technologies such as CNG, LNG, dual-fuel and hybrid-electric

urban bus engines, manufacturers of urban buses, alternative fuel providers, and

distributors and installers of bus engines. Most manufacturers of buses, trucks,

and engines are located outside of California. One manufacturer of

hybrid-electric systems is located in California. There is at least one company in

California that specializes in conversions of standard diesel buses to alternative

fuel buses.

C. Potential Impact on Businesses

The statewide alignment option should have a positive impact on engine and bus

manufacturers by allowing them to certify and sell their products in California in

2007 through 2009. This regulatory modification does not impose a mandate but

would open up the market for diesel and diesel hybrid-electric urban buses,

benefitting engine manufacturers, bus manufacturers, and system integrators.

The statewide alternative fuel mandate option could impact engine

manufacturers that only produce diesel engines. These manufacturers would

need to produce alternative fuel buses or risk losing urban bus engine sales in

California. Currently, only one manufacturer that certifies engines for use in

urban buses, Caterpillar, does not produce alternative fuel engines for urban

buses. Caterpillar is headquartered outside of California.

Should the Board elect to require the alternative fuel path for all transit agencies

in the District the amendment is expected to have a positive impact on the

alternative fuel engine and bus manufacturers. Any negative effect on the sales

volume of diesel engines would be negligible.

D. Potential Impact on Business Competitiveness

The regulatory options presented in this report would have no significant impact

on the ability of California urban bus engine and vehicle manufacturers to
40

compete with manufacturers of similar products in other states. This is because

all manufacturers that produce urban bus engines and vehicles for sale in

California are subject to the emission requirement regardless of their location.

Furthermore, all of the engine manufacturers, and most of the vehicle

manufacturers, are located outside of California.

E. Potential Impact on Employment

The statewide alignment option is expected to benefit manufacturers, who will be

able to produce and sell diesel urban buses outside of the District in 2007

through 2009.

The statewide alternative fuel mandate option could impact engine

manufacturers that only produce diesel engines. These manufacturers would

need to produce alternative fuel buses or risk losing urban bus engine sales in

California. Currently, only one manufacturer that certifies engines for use in

urban buses, Caterpillar, does not produce alternative fuel engines for urban

buses. Caterpillar is headquartered outside of California.

Should the Board elect to require the alternative fuel path for all transit agencies

in the District there may be some impact on employment for those transit

agencies currently following the diesel compliance path in the District, however

the impact is expected to be small. Five of the six agencies currently on the

diesel path are already intending to purchase alternative-fuel vehicles. In

addition, any added costs are expected to be recovered through appropriate fare

increases.

F. Potential Impact on Business Creation, Elimination, or Expansion

The regulatory options presented in this report are expected to have no impact

on business creation, elimination or expansion.

G. Estimated Costs to Local Transit Agencies

This section discusses the costs that transit agencies may occur as a result of

the regulatory options presented in this report.
41

1. Cost Estimates for Statewide Alignment

Staff has concluded that there are no significant adverse fiscal impacts on any

state or local agencies. The statewide alignment option should have a positive

impact on transit agencies outside the District by allowing the purchase of new

diesel buses in California in 2007 through 2009 that are typically cheaper than

comparable alternative-fuel buses. Therefore this option should result in a cost

savings to a transit agency.

2. Cost Estimates Associated With the Alternative Fuel Path Mandate for

All Transit Agencies, Statewide

This requirement would impact the 48 transit agencies currently on the diesel

path. These agencies will be required to purchase or lease alternative fuel buses

in place of diesel buses. The higher cost of alternative fuel buses along with

costs associated with infrastructure modifications may result in a decreased

budget for other operations.

3. Cost Estimates Associated With the Alternative Fuel Path Mandate for

All Transit Agencies in the District

This requirement would have some impact on the six transit agencies operating

in the District that are currently following the diesel fuel compliance path. These

agencies will be required to purchase or lease alternative fuel buses in place of

diesel buses. The higher cost of alternative fuel buses may result in a decreased

budget for other operations. However, since five of the six affected transit

agencies are already planning to purchase alternative fuel buses, the impact of

this amendment will be minimal.

XII. ENVIRONMENTAL IMPACTS AND COST-EFFECTIVENESS

Described in this section are the air quality benefits and the cost-effectiveness of

the regulatory options staff is requesting the Board to consider.

A. Benefits within the District and Statewide

The implementation of California's existing new engine standards and urban bus

fleet requirements has resulted in a drastic decrease in the state and local fleet

average NOx levels. On January 1, 2001, the statewide and the District median

urban bus fleet average NOx emissions were 5.16 and 5.28 g/bhp-hr,

respectively. As of January 1, 2005, the statewide and the District median urban

bus fleet average NOx emissions have dropped to 3.63 and 3.53 g/bhp-hr,

statewide and in the District, respectively. This represents a decrease in the

statewide and District urban bus fleet average NOx emissions of 30% and 33%,

respectively.
42

1. Impacts on the Air Quality Management Plan

Staff's analysis shows that the weighted average NOx fleet levels of agencies on

the diesel-fuel compliance path are much higher (well over 1.0 g/bhp-hr higher)

than those on the alternative-fuel compliance path (Table 11). Therefore, there

has been an emission benefit associated with having fleets comply using the

alternative-fuel path.

Table 11. Diesel Versus Alternative Fuel Path NOx Fleet Averages for

Agencies in the District (g/bhp-hr)

Rule Path Ave.

1192 Alt. Fuel 3.01

Diesel 4.26

ARB (Includes more Alt. Fuel 3.14

Transit Agencies) Diesel 4.26

2. Emission Benefits

The emission benefits of the policy decisions staff is requesting be considered by

the Board are discussed in this section.

When the emission standards for new urban bus engines were adopted in 2000,

staff believed diesel engines meeting these standards would be available for

purchase. For NOx, the standard dropped from 2.4 g/bhp-hr HC+NOx (about 2.2

g/bhp-hr NOx) to 0.5 g/bhp-hr NOx in 2004-2006, and to 0.2 g/bhp-hr NOx in

2007 and beyond. As discussed earlier, engine manufacturers are not offering

for sale diesel urban buses that meet the 2004-2006 standards, and will not offer

diesel engines that meet the 0.2 g/bhp-hr standard until 2010. Thus no diesel

engines have been available for purchase, and will not be available until 2010.

As a result, little or no fleet turnover has occurred for diesel path transit agencies.

(Seven agencies received an exemption to buy higher emitting diesel engines

through 2006, and have been doing so. These agencies took other steps to

reduce their fleet average NOx emissions).

Figures 1 and 2 show the urban transit emissions of diesel path agencies9

 staff

expected as a result of the original rule, and an updated analysis that reflects the

unavailability of diesel engines for purchase. Emissions are higher than had

been expected, and will remain so even after purchases of diesel engines

resumes in 2010.

 

9

 The following four figures show emissions for only those transit agencies on the diesel path.

Staff assumes that transit agencies on the alternative fuel path will continue to purchase

alternative fuel engines.
43

Staff has also estimated the emissions of the diesel path agencies should the

board decide to change the statewide requirements and/or require the six

SCAQMD diesel path agencies to switch to the alternative fuel path.
44

Figure 1. NOx Emissions – Original Estimate and Current Estimate

Diesel NOx Emissions - Statewide

0

2

4

6

8

10

12

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

20182019

2020

TPD

Orig. Est.- 2000 Rule Current Est.

Figure 2. PM Emissions – Original Estimate and Current Estimate

Diesel PM Emissions - Statewide

0

50

100

150

200

250

300

350

400

450

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Lbs/Day

Orig. Est.- 2000 Rule Current Est.
45

a. Statewide Alignment

This option relaxes the NOx standard in 2007-2009 to align with the current

diesel trucks standard. This will result in the availability of diesel bus engines in

2007-2009 that emit at 1.2 g/bhp-hr NOx. As a result purchases of diesel bus

engines will resume in 2007, replacing older, dirtier engines. Emissions will be

lower by up to about 1.6 tpd NOx and 80 pounds per day PM in 2009, compared

to retaining the current 0.2 g/bhp-hr NOx standard.

In determining the emissions resulting if the Board does not change the current

emission standard, staff assumed that funds that would have been used to

purchase diesel buses in 2007-2009, had diesel engines been available, will be

saved and deferred purchases will be made, in addition to normal purchases,

beginning in 2010. Thus all new purchases of diesel buses will comply with the

0.2 g/bhp-hr NOx standard, whereas if the standards are aligned in 2007, some

buses purchased in 2007-2009 will emit 1.2 g/bhp-hr. As a result, the no change

option results in greater NOx emission reductions beginning in 2012 (by up to

about 1.2 tpd NOx). Staff estimates that by 2025, emissions will be the same for

both scenarios because the 1.2 g/bhp-hr NOx engines from the alignment option

have been retired. Figures 3 and 4 illustrate these findings.

b. Alternative Fuel Path Mandate for All Transit Agencies, Statewide

Staff analyzed the emissions benefit of requiring diesel path transit agencies

statewide to follow the alternative fuel path. This option would result in slightly

lower tons per day NOx emissions than the option to align the standards.

Emissions will be lower by up to about 1.0 tpd NOx 2009. This occurs because

transit agencies would be purchasing buses that meet a 0.2 g/bhp-hr NOx

standard beginning in 2007, as opposed to a 1.2 g/bhp-hr NOx level under the

alignment option. This emissions benefit will continue, past 2020, until the entire

fleet of 1.2 g/bhp-hr engines are turned over to new engines meeting the

0.2 g/bhp-hr level. However, should the Board decide to require that all transit

agencies follow the alternative fuel path, some agencies currently on the diesel

path may defer replacing their diesel engines while they prepare fueling

infrastructure. If this occurs, there would be a short-term emission disbenefit to

this option as compared to the alignment option until these engines are replaced.

In the short-term this option would also result in lower emissions than if the Board

decides to retain the current urban bus standards. Emissions will be lower by up

to about 2.5 tpd NOx and 80 pounds per day PM in 2009. This occurs because if

the current standards are retained, diesel path agencies would defer purchasing

new buses until 2010, thereby keeping older, more polluting buses in their fleet.
46

However, after 2010, once the engines whose replacement was deferred are

replaced, the emissions associated with these two options will be similar.
47

Figure 3. NOx Emissions – Comparison of Options

Diesel NOx Emissions - Statewide

0

2

4

6

8

10

12

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

20182019

2020

TPD

Current Est. Alignment All Alt. Fuel

Figure 4. PM Emissions – Comparison of Options

Diesel PM Emissions - Statewide

0

50

100

150

200

250

300

350

400

450

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Lbs/Day

Current Est. Alignment All Alt. Fuel
48

c. Alternative Fuel Path Mandate for All Transit Agencies in the District

Small emission reductions of NOx will be achieved if the six transit agencies on

the diesel path purchase cleaner, alternative fuel buses beginning in 2006

(Table 12). This assumes that the District cannot implement its current

Rule 1192, and the six agencies would have switched to purchasing dirtier

diesels in the absence of an ARB rule forcing them onto the alternative fuel path.

If the District rule can be implemented, as now appears to be the case, no

additional emission reductions would be achieved from adopting this

requirement.

Several manufacturers have stated that they intend to have alternative fuel buses

available in 2007 that meet a 0.2 g/bhp-hr level for NOx. Staff believes it is very

likely that transit agencies on the alternative fuel path will purchase these

engines. Therefore, staff's emission analysis assumed that the District

alternative fuel requirement will result in the purchase of buses meeting a

0.2 g/bhp-hr NOx level beginning in 2007 by the six transit agencies currently on

the diesel path. The benefits presented here are the incremental benefits of

requiring the purchase of alternative fuel buses, assumed to meet a 0.2 g/bhp-hr

NOx level, instead of purchasing diesel engines meeting 1.2 g/bhp-hr NOx level

(as would be allowed with alignment and no District rule were in place) for the six

transit agencies.

Table 12. NOx Emission Benefits (tpd) in the District - Mandatory

Alternative Fuel Path

Year Baseline Alt. Fuel

Mandate

Reduction

2010 7.37 7.36 0.01*

2015 5.86 5.84 0.02*

2020 3.34 3.34 0

*If the Board adopts the statewide alignment option, and if the six transit agencies chose

to purchase alternative fuel buses that meet the 1.2 g/bhp-hr NOx level during 2007

through 2009, there would be no benefit associated with purchasing alternative fuel

buses over diesel buses. Therefore, actual benefits could range between zero and the

tons per day shown here.

Requiring transit agencies in the District to switch to the alternative fuel path will

result in NOx benefits, but will not result in any change in PM emissions. A PM

emission standard of 0.01 g/bhp-hr for diesel urban bus engines has been in

effect in California for engines produced after October 1, 2002, all current

alternative fuel urban bus engines are certified at a 0.01 g/bhp-hr level.
49

B. Cost and Cost-Effectiveness

The following section discusses the cost-effectiveness associated with each

decision the Board may consider.

1. Amend the Statewide Urban Bus Emission Requirements

Staff is proposing three options for the Board to consider. There is no cost

associated with the option to keep the emissions standards as they are. The

other two options have been analyzed separately, and presented below.

a. Statewide Alignment

Staff has determined there is no additional cost of the option to revise the new

urban bus engine emission standards to align with the current truck standards.

This option will allow purchase of diesel engines by diesel path agencies in 2007-

2009, and may reduce operating and maintenance costs by replacing older

engines. If the current standards are retained, diesel path agencies are

expected to defer purchases until 2010 and beyond. These engines will cost

more than the engines that could be purchased in 2007-2009 if the standards are

aligned.

b. Alternative Fuel Path Mandate for All Transit Agencies, Statewide

This option would mandate that at least 85 percent of a transit agency's annual

purchases be alternative fuel through 2015. This requirement should have no

cost impact on those transit agencies already on the alternative fuel path.

However, transit agencies on the diesel path will be required to switch to

alternative fuel. The additional cost to these transit agencies would include the

incremental cost increase of alternative fuel bus compared to a diesel bus as well

as the cost to upgrade infrastructure.

Staff estimated the incremental cost of this option by determining the difference

between the capital and operations and maintenance costs of diesel urban buses

and alternative-fuel urban buses. Staff estimates the total per bus cost increase

to be $76,517. A discussion of the cost breakdown follows.

The FTA provides 80%-83% of the capital cost of new buses, so transit agencies

see only a portion of the per-bus additional capital cost. As a conservative

estimate, staff assumed a 20 percent transit agency share, although the cost to

society is the full incremental cost difference. Thus, staff estimates a typical

incremental purchase cost of for a CNG bus is $10,000 funded by the local

transit agency.

If a transit agency does not already have an alternative fuel fueling facility, this

option may make it necessary for the transit agency to upgrade its fueling facility
50

to handle alternative fuel. Staff assumed that half of the natural gas fueling

facilities constructed would be L/CNG stations (gasification) at a cost of $25,000

per bus and that half would be CNG (compression) stations at a cost of $36,712

per bus. Upgrades to bus maintenance facilities for handling CNG buses are

also required at the cost of $23,870 per bus.

Staff believes that maintenance costs for natural gas buses are likely to be

somewhat higher than for diesel buses. Staff estimates the extra maintenance

costs to be about $4,300 per year. In addition, there are cost associated with the

maintenance of fueling facilities at a cost of $2,245 per bus per year.

Labor costs for natural gas buses and gasoline HEBs are expected to increase

modestly over typical diesel bus costs. Initial training costs, and ongoing training

associated with regular recertification of technicians for natural gas maintenance,

are primarily responsible for expected minor increases in labor costs of about

$18 per year per bus.

The estimated incremental bus cost does not include any costs associated with

the difference between the cost of alternative fuel versus diesel fuel. Fuel cost

differences are economically highly uncertain over the life of the regulation.

Although at present natural gas is less expensive than diesel, it is impossible to

be certain about fossil-fuel market conditions between now and 2020. To explore

the sensitivity of fuel cost, staff analyzed both a lower and higher natural gas fuel

cost relative to diesel. The result is that purchase incremental per bus costs

could range from $28,227 (low cost) to $107,141 (high cost) per bus.

In order to determine cost-effectiveness, ARB took the typical total incremental

cost of the buses to be purchased, with FTA funding, and divided by the total

NOx emission reductions for the life of the regulation. These values were based

on NOx emission reductions only. The expected cost-effectiveness ratio is

$119,030 per ton ($59.51 per pound).

2. Alternative Fuel Path Mandate for All Transit Agencies in the District

As with the option to mandate alternative fuel statewide, for the option to require

the District agencies to switch to the alternative fuel path, staff based the costeffectiveness analysis on estimates of expected emissions reductions and of

costs for implementation of this option.

Staff estimated the incremental cost of this option by determining the difference

between the capital and operations and maintenance costs of diesel urban buses

and alternative-fuel urban buses. Staff estimates the total per bus cost increase

to be $26,745. This cost is different than the per bus incremental cost given

above for the statewide alternative fuel mandate for the following reasons.
51

Staff surveyed the six transit fleets on the diesel path and requested their

purchasing plans for 2005 to 2009. The results showed that a majority of the

buses that would be purchased would be gasoline HEBs. Staff estimates that

gasoline HEBs have an incremental purchase cost of $24,546.

In addition, staff expects that the six transit providers affected by this option will

be able to obtain fuel from facilities that are already, or will soon be, available,

based on staff’s survey of transit agencies. Most transit agencies that plan to

purchase CNG buses have already either built a fueling station or have one

planned and financed. In addition, transit agencies that are purchasing gasoline

HEBs will use existing facilities. Therefore, this analysis does not include capital

costs of new fueling facilities.

In order to determine cost-effectiveness, ARB took the typical incremental cost of

the buses to be purchased, with FTA funding, and divided by the total NOx

emission reductions for the life of the regulation. These values were based on

NOx emission reductions only. The expected cost-effectiveness ratio is $67,837

per ton ($33.92 per pound)10

C. Toxics from Diesel and Alternative Fueled Engines

Historically diesel engines were perceived as having higher PM emissions and

other deleterious compounds known to have adverse health effects than similar

natural gas engines. Natural gas engines were typically thought of as “low

emission”, as emitting less PM and NOx, than their diesel counterparts (Ahlvik et

al 2000; Clark et al 1995; Clark et al 1999; Ayala et al 2002). However, with the

advent of aftertreatment technologies such as diesel oxidation catalysts and

diesel particulate filters, and the fact that vehicle exhaust is a complex

composition of many compounds, not just PM and NOx, the assumption that

natural gas engines are inherently less polluting than diesel equipped with

aftertreatment was called into question.

To this end the ARB led a multi-agency research effort to compare emissions

from diesel and natural gas engines. The study evaluated natural gas (NG) and

diesel bus engines with and without exhaust aftertreatment. Summarized in

Table 13 is a comparison of emissions based on this study. For NOx, natural

gas engines are cleaner until 2010 (assuming a 0.2 g/bhp-hr NOx engine is

certified in 2007). Beginning in 2002, diesel bus engines were equipped with a

particulate filter, and natural gas engines utilized an oxidation catalyst. As a

result, PM emissions are equivalent. Since both the oxidation catalyst and the

diesel particulate filter oxidize most toxic compounds, natural gas bus engines

since 2002 have roughly equivalent toxic emissions as diesel engines.

 

10 Actual cost-effectiveness values could be higher if the transit agencies choose to purchase

alternative fuel buses during 2007 through 2009 with NOx emissions higher than 0.2 g/bhp-hr

thereby decreasing the emissions benefits.
52

Table 13. Emission Comparison - Diesel Bus vs Natural Gas Bus

Bus Emission

Standards

(g/bhp-hr)

Natural Gas, Compared to

Diesel, Is Typically:

Model

Year Bus

NOx PM NOx PM Other

Toxics

Mid-1990s

to 2002

(diesel w/o

filter and

NG w/o

catalyst)

4 0.05 50%

cleaner

40%

cleaner

Varies

Today

(2003 -

2006)

(diesel w/

filter and

NG w/o

catalyst

~2.21 0.01 25%

cleaner

Same Same

2007

(diesel w/

filter and

NG w/

catalyst

1.2 0.01 80%

cleaner2

Same Same

2010

(diesel w/

filter +

absorber

and NG w/

3-way

catalyst

0.2 0.01 Same Same Same

1) NOx standard applies to alternative fuel engines and diesel engines available to seven transit

agencies that provided NOx offsets. In 2004 through 2006, for transit agencies without an

offset plan, the bus NOx emission standard is 0.5 g/bhp-hr - no diesel bus engines have been

certified to this level.

2) Several natural gas bus engines are expected to comply with the 2010 0.2 g/bhp-hr NOx

standard by 2007, in which case they would be about 80% cleaner. For other natural gas bus

engines the NOx emissions will likely be the same as diesel.
53

XIII. ISSUES

Over the course of development of the regulatory options presented in this

report, staff has met many times with various stakeholders and received written

and verbal comments. Although staff has considered each comment, not all

issues could be resolved. The following is a discussion of major outstanding

issues.

A. Statewide Alignment

Staff has included an option for Board consideration to change the NOx emission

standard for new urban bus engines from it current 0.2 g/bhp-hr to align it with

the California new diesel truck engine standard of 1.2 g/bhp-hr. The benefit of

this change is diesel engines will become available for purchase. Without this

change diesel engines will be unavailable until 2010. Changing the standard will

allow new diesel engine purchases and retirement of older, higher emitting

engines, during these years, thus agencies on the diesel path favor this option.

During the public process, staff received comments from environmentalists and

natural gas providers that ARB should keep the current standard. They stated a

relaxation of the standard would send a signal that California did not want or

value natural gas engines. As a result investment in developing a 0.2 g/bhp-hr

CNG engine for 2007 might be in jeopardy. Their position also seemed to be

based on a belief that in the absence of new diesel engines being available for

purchase in 2007-09, transit agencies on the diesel path would choose to

purchase natural gas engines, resulting in greater emission reductions than if the

Board aligned the standards. However, as discussed previously, information

provided to staff by transit agencies on the diesel path indicates they are

prepared to forgo purchases of new buses until 2010 if the only bus engine

available is alternative fueled. In 2010 diesel engines meeting the current

standard will be available.

Regarding whether investment in low emission natural gas engine development

will continue, staff points out that transit districts on the alternative fuel path

account for nearly 60% of all California transit buses, and they will provide a

continuing demand for natural gas and other alternative fuel engines through at

least 2015.

B. Alternative Fuel Path Mandate for All Transit Agencies, Statewide

Another option for the Board’s consideration is to require all transit agencies,

including those currently on the diesel path, to purchase alternative fuel buses.

Transit agencies currently on the diesel path, particularly those in the Bay Area,

strongly oppose this option because they believe the use of alternative fuel buses

results in less reliable service, and diesel buses that are as clean as alternative

fuel buses will be available in 2010 for purchase. They also point out they were
54

allowed to make a choice of fuel type when the ARB Fleet Rule for Transit

Agencies was adopted in 2000, and they should not be forced to change now at

great cost and disruption, for little air quality benefit. Smaller transit agencies in

less urbanized areas have expressed concern about the cost of alternative fuel

engines, and the lack of alternative fuel availability. Proponents of alternative

fuel strongly favor this approach because it creates a growing demand for their

products and a strong incentive to develop new engines.

C. Alternative Fuel Path Mandate for All Transit Agencies in the District

The Board is also being asked to consider requiring the six transit agencies in the

SCAQMD to switch from the diesel path to the alternative fuel path. This action

would assure that the goal of District Rule 1192 is implemented regardless of the

outcome of pending court actions.

Staff received comments from transit agencies that the ARB rules should be

uniform statewide. Commenters suggested that requiring transit agencies in the

SCAQMD to purchase alternative fuel is not fuel neutral, a policy they suggest

the state has and should continue to practice. They also suggested that

purchasing alternative fuel buses is not the most cost effective expenditure of

transit district funds.

Staff points to legislation authorizing the district to implement rules requiring the

use of alternative fuel vehicles as an important consideration. The effect of ARB

adoption of a unique fleet requirement for the transit agencies in the District has

the effect of addressing the Court’s decision while remaining true to the

Legislature’s intent. Staff acknowledges that at this point in the court process, it

appears that the District has the authority to implement Rule 1192 because the

affected agencies are all local governments and the court has ruled that the

District may impose requirements that affect local government purchasing

choices. Although ARB adoption would remove any uncertainty regarding the

final outcome of legal action, it does bring with it a new uncertainty regarding

obtaining a waiver of federal preemption from U.S. EPA.

Regarding fuel neutral policy, it is true that most ARB regulations are

performance based and do not favor one fuel over another. There are

exceptions, however. In the past special light-duty vehicle emission standards

were adopted for diesel engines. The ZEV mandate clearly favors electricity and

hydrogen over petroleum fuels. Recommendations in the AB 2076 “Reducing

Petroleum Dependency” report to the legislature suggest greater use of

alternative, non-petroleum fuels has benefits for California. Given these

examples, staff does not believe there is a hard fast rule that dictates no

regulation should favor a specific fuel, and believes that the Board should look at

each situation and the objective being sought in deciding whether fuel neutrality

should be a guiding consideration.
55

One final consideration is, of the 17 transit agencies in the District, 16 are using

and/or purchasing alternative fuel buses, including five of the six agencies on the

diesel path. This is a result of ARB’s fleet regulations and District Rule 1192.

Thus the adoption of this regulatory amendment will have little affect on the

status quo, and will serve mainly as a backstop to prevent any of the six

agencies from purchasing higher emitting diesel engines during 2007 through

2009 should the District’s authority be invalidated.

D. Issues Related to Federal Clean Air Act Waiver of Preemption

Some workshop commenters challenged California’s authority to adopt and

enforce fleet regulations in the SCAQMD based on federal statutory preemption.

Federal Clean Air Act (CAA) section 209(a) preempts states and localities from

adopting or enforcing any standard relating to the control of emissions from new

motor vehicles or new motor vehicle engines. Notwithstanding this general

preemption of state authority for new engines and new vehicles, CAA section

209(b) expressly authorizes the U.S. EPA’s Administrator to waive the

preemption for California.

One challenge is based on the view that ARB will not be able to obtain a waiver

of preemption for state standards under CAA section 209(b) because the Board’s

regulations are subject to the requirements of CAA section 202(a)(3)(C). Section

202(a)(3)(C) requires that in adopting standards, U.S. EPA’s Administrator is to

provide specified periods of lead-time and stability to classes or categories of

new heavy-duty vehicles or engines. As the text of the provision itself dictates,

the provision is not applicable to California:

Any standard promulgated or revised under this paragraph and applicable

to classes or categories of heavy-duty vehicles or engines shall apply for a

period of no less than 3 model years beginning no earlier than the model

year commencing 4 years after such revised standard is promulgated.

[Italics added for emphasis.]

The text states that “standards promulgated or revised under this paragraph,”

that is, under CAA section 202(a), must provide the specified lead-time and

stability. In the person of the Administrator, U.S. EPA prescribes standards

under 202(a). Clearly the provisions apply to U.S. EPA.

California, however, does not promulgate its standards under the grant of

authority in section 202(a). California promulgates vehicular emission standards

under grants of authority in state law11 and under the waiver of federal

preemption of state standards contained in CAA section 209(b). Since section

202(a)(3)(C) is only applicable to standards promulgated under section 202(a)

and since California does not promulgate its standards under 202(a), the

 

11 California Health & Safety Code Division 26.
56

provision does not apply to California. And, if the provision does not apply, its

specified lead-time and stability requirements do not apply to California.

The inapplicability of CAA section 202(a)(3)(C) to the standards that California

promulgates is also consistent with the legislative history of the CAA and the

waiver of federal preemption. The legislative history of the waiver provision has

emphasized that California is to have “the broadest possible discretion in

selecting the best means to protect the health of its citizens.” H.R.REP No. 95-

294, at 302-02, quoted in Motor and Equipment Manufacturers Association, Inc.

v. Environmental Protection Agency.12 Other courts have also frequently noted

that Congress consciously chose to permit California to blaze its own trail.13

A second challenge is based on the view that U.S. EPA will need to grant

waivers of preemption under CAA section 209(b) prior to the enforcement of any

aspect of the proposals. ARB already has waivers of preemption for all of the

types of emissions and categories of new engines and new vehicles to which the

proposed regulations would apply. For this reason, any new waiver would be

needed only for those aspects of the regulations for which California has never

before been granted a waiver of preemption. For any aspect of the regulations

for which waivers have already been granted, ARB’s practice has been to

request confirmation that the regulations are within the scope of the previous

waivers and to pursue enforcement against new engines and vehicles already

covered by the waiver of preemption. For those aspects of the proposal that

apply to in-use engines and vehicles, no waiver of preemption is needed since

the preemption applies only to new vehicles and new vehicle engines.

E. Waiver Process Will Delay Rule Implementation and Reduce Benefits

Achieved

When the U.S. Supreme Court ruled that a purchase requirement is in fact an

emission standard under the federal Clean Air Act, implementation of the District

rule required a waiver of federal preemption. The ARB determined that only the

state can request a waiver of federal preemption, and that the rule subject to the

request must be adopted by the state. This is the principle reason for this

proposal being brought before ARB for consideration.

Stakeholders have pointed out that it can take several years following board

adoption before a waiver is received from U.S. EPA. This does not usually create

a problem because most requests for a waiver involve a regulation that includes

 

12 627 F.2d 1095, at 1110 (D.C.Cir. 1979).

13 Ford Motor Co. v. EPA, 606 F.2d 1293, at 1297 (D.C.Cir. 1979); Engine Manufacturers

Association v. U.S. EPA, 88 F.3d 1075, at 1080 (D.C.Cir. 1996), Motor and Equipment

Manufacturers Association, Inc. v. Nichols, 142 F.3d 449, at 463 (D.C.Cir. 1998).
57

lead time to develop new knowledge and will be implemented in three to four

years. In the case of the District rule outlined in this report, the benefits of the

rule accrue only from now until the end of 2009. If the waiver process takes

several years, much of the benefit of the rule will be lost.

The ARB staff believes the rule qualifies as "within the scope" of a previous

waiver. In such instances, ARB can implement the rule immediately. However,

the Engine Manufacturers Association disagrees with the staff's position, and

may challenge our waiver request. Discussions with U.S. EPA also have not

resulted in a definitive picture of how it will approach ARB's waiver request.

Thus, there is uncertainty regarding when the rule, if adopted, can be

implemented, and any substantial delay will reduce the emission reductions

achieved.

XIV. STAFF CONCLUSION

Staff has identified two policy decisions for the Board’s consideration and has

developed proposed regulatory amendments to support these decisions. First,

staff is presenting three options for the Board to consider regarding the

appropriate emission standards for new urban bus engines in 2007 through

2009. The three options are: 1) keep the current new urban bus emissions

standards as they are, 2) change the NOx emission standards for 2007 through

2009 model year new urban buses from 0.2 to 1.2 g/bhp-hr, which would align it

with the equivalent model year heavy-duty truck NOx emission standard, and

3) require all transit agencies to purchase/lease only alternative fuel buses. The

amendments provided in this report (set forth in the proposed regulation order in

Appendix A) set forth the language necessary to implement the option of aligning

the urban bus standards with the heavy-duty truck standards beginning with the

2007 model year. Should the Board favor the option to keep the urban bus

standards as they are, no regulatory changes are necessary. Should the Board

decide that all transit agencies statewide should be required to purchase

alternative fuel, a 15-day modification to ARB’s Fleet Rule for Transit Agencies

would be needed to accomplish this (and no change to the urban bus emission

standards would be necessary).

Staff has also developed for the Board’s consideration a new requirement that all

transit agencies operating in the District follow the alternative-fuel compliance

path, as defined in ARB's regulations. Under this new requirement, the six transit

agencies in the District currently on the diesel fuel compliance path would be

required to change to the alternative-fuel path effective January 1, 2006. This

change would lock these transit agencies into purchasing alternative-fuel engines

through 2015, consistent with the District's Rule 1192.

If the Board wishes to assure that alternative fuel urban transit buses are

purchased throughout the District, and determines it wise to provide a backstop

to the current District Rule 1192 in case litigation overturns the District rule, the
58

amendments provided in this report (set forth in the proposed regulation order in

Appendix A) include regulatory language that would amend ARB’s Fleet Rule for

Transit Agencies to require diesel path transit agencies in SCAQMD to switch to

the alternative fuel path.
59

XV. REFERENCES

1.Abbey, David E., Nishino, Naomi, McDonnell, William F., Burchette, Raoul J.,

Knutsen, Synnove F., Beeson, W. Lawrence, Yang, Jie X. 1999. "Long-term

Inhalable Particles and Other Air Pollutants Related to Mortality in Nonsmokers."

Am J Respir Crit Care Med. 159:373-382.

2.Ahlvik, P.J.E., Brandberg, A.R.L. 2000. “Relative Impact on Environment and

Health from the Introduction of Low Emission City Buses in Sweden,” SAE Tech.

Paper 2000-01-1882.

3.ARB 1999. Staff Report: Initial Statement of Reasons, Proposed Regulation for

a Public Transit Bus Fleet Rule and Emission Standards for New Urban Buses,

December 10, 1999. http://www.arb.ca.gov/regact/bus/bus.htm

4.ARB 2000a. Risk Reduction Plan to Reduce Particulate Matter Emissions from

Diesel-Fueled Engines and Vehicles, October 2000.

http://www.arb.ca.gov/diesel/documents/rrpapp.htm

5.ARB 2000b. Final Statement of Reasons for Rulemaking, including Summary

of Comments and Agency Responses, Public Hearing to Consider Adoption of a

Public Transit Bus Fleet Rule and Emission Standards for New Urban Buses,

December 8, 2000. http://www.arb.ca.gov/regact/bus/bus.htm

6.ARB 2001. Policies and Actions for Environmental Justice.

http://www.arb.ca.gov/ch/ejpolicies_121301.pdf.

7.Ayala, A., N.Y. Kado, R.A. Okamoto, B.A. Holmen, P.A. Kuzmicky, R.

Kobayashi, and K.E. Stiglitz 2002. “Diesel and CNG Heavy-duty Transit Bus

Emissions over Multiple Driving Schedules: Regulated Pollutants and Project

Overview.” Journal of Lubricants and Fuels, SAE Transactions, Vol. 111, pp.

735-747 (Also SAE Tech. Paper 2002-01-1722)

8.CalNGV News 2004. The newsletter of the California Natural Gas Vehicle

Coalition, March 22, 2004. 3 pp.

9.Clark, N. N., Gadapati, C. J., Kelly, K., White, C. L., Lyons, D. W., Wang, W.,

Gautam, M., and Bata, R. 1995 “Comparative Emissions from Natural Gas and

Diesel Buses.” SAE Tech. Paper 952746.

10.Clark, N. N., Gautam, M., Rapp, B.L., Lyons, D.W., Graboski, M.S.,

McCormick, R.L., Alleman, T.L., and Norton, P. 1999. “Diesel and CNG Transit

Bus Emissions Characterization By Two Chassis Dynamometer Laboratories:

Results and Issues.” SAE Tech. Paper 1999-01-1469.
60

11.Cummins-Westport 2005. News Release: Cummins-Westport, DOE, and

NREL Partner to Deliver Next Generation Natural Gas Engine Three Years

Ahead of U.S. Regulations. February 09, 2005.

12.McDonnell, William F., Nishino-Ishikawa, Naomi, Petersen, Floyd F., Chen,

Lie Hong, Abbey, David E. 2000. "Relationships of mortality with the fine and

coarse fractions of long-term ambient PM10 concentrations in nonsmokers."

Journal of Exposure Analysis and Environmental Epidemiology. 10: 427-436.

13.SCAQMD 2000. Staff Report: Proposed Rule 1192 - Clean On-Road Transit

Buses, June 2000.

14.U.S. EPA 2004. United States Environmental Protection Agency,

Assessment and Standards Division, Office of Transportation and Air Quality.

Highway Diesel Progress Review Report 2. EPA420-R-04-004, March 2004.

http://www.epa.gov/otaq/regs/hd2007/420r04004.pdf
61

XVI. AVAILABILITY OF TECHNICAL SUPPORT DOCUMENT

An electronic version of the technical support document for this report is available

at http://www.arb.ca.gov/regact/sctransit/sctransit.htm. If you would like a hard

copy of these documents please fill out this form and mail or fax it to:

Public Information Office

California Air Resources Board

P.O. Box 2815

Sacramento, CA 95812

Fax: (916) 445-5025

Please send or fax the TECHNICAL SUPPORT DOCUMENT: PROPOSED

REGULATION FOR THE PROPOSED SOUTH COAST AIR QUALITY

MANAGEMENT DISTRICT FLEET RULES to:

Name:_____________________________

Address:___________________________

__________________________________

__________________________________