Meeting September 19, 2012 Washington, D.C.

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### 1ENVIRONMENTAL PROTECTION AGENCY 

### 2- - - 

### 3 PUBLIC COMMENT HEARING REGARDING WAIVER REQUEST 

### 4FOR CALIFORNIA'S ADVANCED CLEAN CAR PROGRAM 

### 5- - - 

### 6 Docket No. EPA-HQ-OAR-2012-0562 

### 7 8 Room 154 

### 9 1310 L Street, N.W. 

### 10 Washington, D.C. 

### 11Wednesday, September 19, 2012 

### 12 13 The meeting was convened, pursuant to notice, at 

### 14 9:10 a.m., MARGO OGE presiding. 

### 15PANEL MEMBERS: 

### 16 MARGO OGE, Presiding Officer 

### 17JANET COHEN 

### 18 DAVID DICKINSON 

### 19 MICHAEL HOROWITZ 

### 20 21 22Meeting September 19, 2012 Washington, D.C.

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### 1P R O C E E D I N G S 

### 2(9:10 a.m.) 

### 3 MS. OGE: Good morning. Can you hear me? 

### 4I'd like to welcome you to this hearing. The 

### 5 purpose of the hearing is to receive oral testimony 

### 6 regarding EPA's consideration of whether to waive Clean 

### 7 Air Act preemption of California's Advanced Clean Car 

### 8 program. This is a package of regulations containing 

### 9 amendments to California's Low Emission Vehicle program, 

### 10 or as otherwise known, the LEV III program. These 

### 11 regulations address smog-forming pollutants, greenhouse 

### 12 gas emissions, and amendments to its Zero Emission Vehicle 

### 13 Program, or ZEV. 

### 14My name is Margo Oge. I'm the Director of the 

### 15 Office of Transportation and Air Quality, and I will be 

### 16 the Presiding Officer for today's hearing. On the panel 

### 17 with me, we have most of our members -- we are missing 

### 18 one. But let me introduce them: Janet Cohen on my right; 

### 19 Dave Dickinson. Both of them are with the Compliance 

### 20 Division. And when Michael Horowitz makes it -- I guess 

### 21 the trains are backed up today -- he is representing the 

### 22 Office of General Counsel and he will be a member of theMeeting September 19, 2012 Washington, D.C.

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### 1 panel. 

### 2We appreciate that a number of you, at least our 

### 3 California colleagues, have traveled from far away to 

### 4participate in the hearing today. We recognize the 

### 5 significance of the hearing today for the state of 

### 6 California. We recognize that other states are interested 

### 7 in this issue, as well as industry, environmental groups, 

### 8 and private citizens. So I'm pleased that we have wide 

### 9 representation of various stakeholders at the hearing 

### 10 today. 

### 11On June 27, 2012, the California Air Resources 

### 12 Board requested that EPA waive preemption of California's 

### 13 Advanced Clean Car program. Also, CARB seeks confirmation 

### 14 that its ZEV amendments are within the scope of the 

### 15 previously granted waiver by EPA. 

### 16 We are conducting this hearing in accordance 

### 17 with Section 209(b) of the Clean Air Act, and this hearing 

### 18 provides the forum for interested persons to submit oral 

### 19 presentations. 

### 20 We are having this hearing recorded and the 

### 21 transcript will be available for at the EPA docket, and 

### 22 you can find the specific information from one of myMeeting September 19, 2012 Washington, D.C.

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### 1 colleagues. 

### 2This hearing will be conducted informally and 

### 3 formal rules of evidence do not apply. However, as the 

### 4 Presiding Officer I'm authorized to strike from the record 

### 5 statements that I believe are irrelevant or needlessly 

### 6 repetitious and to enforce a reasonable time of the 

### 7 duration of any of the statements of any witness. 

### 8 So the witnesses are requested to state their 

### 9 names and affiliation prior to making their oral 

### 10 statement. When a witness has finished his or her 

### 11 presentation, members of this panel may ask questions of 

### 12 clarification for the record. 

### 13 At the conclusion of all oral presentations, 

### 14 CARB may respond briefly to oral statements of other 

### 15 parties. So that will take place at the end of all the 

### 16 oral presentations, if CARB feels that you need to do so. 

### 17So finally, I will remind people that our 

### 18 Federal Register notice announcing this hearing includes a 

### 19 docket along with how to access CARB's waiver request and 

### 20 the supporting documents that go along with the request. 

### 21 CARB -- in the same docket, also you will find CARB's 

### 22 plans to adopt a "deemed to comply" provision of theMeeting September 19, 2012 Washington, D.C.

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### 1 greenhouse gas standards. 

### 2With that, I'm going to call the California 

### 3 panel to testify. I have Mr. Tom Cackette and his 

### 4 colleagues. Tom, before you start, if you don't mind for 

### 5 the recorder to have the names of your colleagues. 

### 6 PRESENTATION OF THE CALIFORNIA AIR RESOURCES BOARD 

### 7MR. CACKETTE: I will do that. 

### 8 Good morning. Good morning and thank you very 

### 9 much for the opportunity to present our case for achieving 

### 10 a waiver of the Advanced Clean Car program. Usually we 

### 11 have one or two people here, but we thought we'd try to at 

### 12 least match you in numbers and we have a team of four 

### 13 people here today. 

### 14PRESIDING OFFICER OGE: That's a good match. 

### 15MR. CACKETTE: Here's the names of the people. 

### 16 I'm Tom Cackette. I'm the Deputy Director of the Air 

### 17 Resources Board, and I'm going to present an overview of 

### 18 the standards. Then Aron Livingston, our Assistant Chief 

### 19 Counsel, will talk about the criteria and framework for 

### 20 granting a waiver, and in particular will address the two 

### 21 first elements of the waiver, protectiveness and 

### 22 compelling and extraordinary conditions.Meeting September 19, 2012 Washington, D.C.

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### 1Then we'll turn it over to Paul Hughes from our 

### 2 Mobile Source Control Division, who will talk about the 

### 3 LEV III, which are the criteria and greenhouse gas 

### 4 emission standards that we're seeking the waiver for. 

### 5 Then Analisa Bevan, also from our Mobile Source Control 

### 6 Division, will talk about the amendments to the ZEV 

### 7 program; and finally, I'll just have a few concluding 

### 8 remarks. So we do a little shuffling here. 

### 9 Give me a second here while I get my computer 

### 10 going. 

### 11(Screen.) 

### 12MR. CACKETTE: This is a package of regulations 

### 13 that we're seeking a waiver for. I'll talk about this in 

### 14 three elements here. The first one is the LEV portion and 

### 15 that includes both the criteria pollutant standards that 

### 16 we've adopted and also the greenhouse gas emissions 

### 17 standards. 

### 18 (Screen.) 

### 19 The second part is the ZEV program. We've had a 

### 20 ZEV program for a long time. We've had waivers for it in 

### 21 the past and we've made amendments that increase the 

### 22 number of ZEVs that will be required to be produced inMeeting September 19, 2012 Washington, D.C.

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### 1 California over the next coming decade or so. It's a 

### 2 technology-forcing element, whereas the LEV program is 

### 3 much more in the area of revisions to conventional 

### 4 technologies. 

### 5(Screen.) 

### 6 The objective of the ZEV part is to get enough 

### 7 vehicles in the marketplace in order to achieve 

### 8 commercialization of these technologies, which we believe 

### 9 will be necessary for meeting our long-term goals. 

### 10 Finally, a third element is what's called clean 

### 11 fuel outlet. It's a regulation which I'm presenting here 

### 12 just as part of the package so you can see how they all 

### 13 work together. But it provides the fueling infrastructure 

### 14 necessary for the enhanced technology vehicles under the 

### 15 ZEV program. And we're not seeking a waiver for this 

### 16 because we don't need a waiver for this one. 

### 17(Screen.) 

### 18 We'll start out with what the goals are here. 

### 19 As you know, California still has serious air quality 

### 20 problems. It made tremendous progress, as you can see 

### 21 from the graph on the upper right-hand corner. In fact, 

### 22 in the past 20 years we have cut ozone concentrations by IMeeting September 19, 2012 Washington, D.C.

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### 1 think it's around 40 percent or so, and that's been 

### 2 despite the fact that we've had PMT and population growth 

### 3 in that time frame of about 25 percent. So this is a 

### 4 clear success story. 

### 5We've also focused a lot on reducing the 

### 6 localized exposure of penone and other toxics to people 

### 7 who live close to where vehicles congregate. 

### 8 Our objective is also to ensure 

### 9 commercialization of the ultra-clean vehicles because 

### 10 we're going to need those in the future in order to meet 

### 11 our greenhouse gas goals, which this Governor, Governor 

### 12 Brown, and our previous Governor Schwarzenegger have both 

### 13 adopted under executive orders directing the state to 

### 14 achieve an 80 percent reduction in greenhouse gas 

### 15 emissions by 2050. So this is a multi-pollutant set of 

### 16 packages oriented at achieving these two separate goals, 

### 17 but doing it in a coordinated manner. 

### 18 (Screen.) 

### 19 This is the standards that we've adopted for the 

### 20 LEV criteria pollutant portion of the regulation. You can 

### 21 see that the standards become more stringent every year 

### 22 between 2015, and in 2025 the standard is now a combinedMeeting September 19, 2012 Washington, D.C.

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### 1 standard of NMOG or what we call hydrocarbons and NOx. We 

### 2maintain the separate truck and passenger car -- passenger 

### 3 car standards, but as you can see they join in 2025 and 

### 4 everything at that point becomes what we call a SULEV, and 

### 5 this is about a 75 percent reduction in emissions. 

### 6 The significant amount of time here is in part 

### 7 to coordinate this, these standards, with the greenhouse 

### 8 gas standard so there can be a logical role-in of the new 

### 9 technologies. We've also recognized some of the interests 

### 10 of the car companies, who wanted to see a pooling concept 

### 11 used in the 177 states that follow these rules. I think 

### 12 there's like 13 or 14 states that follow California's 

### 13 program. This allows -- it's easier to comply, so you 

### 14 don't have a state by state compliance issue. Even though 

### 15 that's worked quite well in the past, it'll make 

### 16 compliance easier for the manufacturers. 

### 17We also extended the durability to 150,000 

### 18 miles. It goes along with being a SULEV, to help ensure 

### 19 that the vehicles actually maintain their emissions over 

### 20 their full life. 

### 21(Screen.) 

### 22For the proposed or the adopted standards thatMeeting September 19, 2012 Washington, D.C.

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### 1 we're seeking a waiver for, we already have 20 percent of 

### 2 all the vehicles offered in the state of California meet 

### 3 the 2025 standard. They're SULEVs today. Even SUVs can 

### 4meet them, as shown by the picture of the GM Traverse 

### 5 there. So we think this is clearly a technologically 

### 6 feasible standard, and we have again provided a long lead 

### 7 time to make sure that everybody can do this smoothly and 

### 8 do it in coordination with the greenhouse gas standards. 

### 9 (Screen.) 

### 10 We've also adopted PM standards, shown on this 

### 11 graph. The current PM standard is in red and you'll see 

### 12 that the new LEV III PM standards go down in two phases -- 

### 13 again, a long lead time -- a three milligram standard, 

### 14 2017, starting in 2017, and then a one milligram standard 

### 15 starting in 2025. The one milligram standard is designed 

### 16 to ensure that new and emerging technologies, such as a 

### 17 gasoline direct-injection engines, have emission levels 

### 18 that are no greater than the current port fuel injected 

### 19 and diesel engines. 

### 20 We are convinced that the final -- we're working 

### 21 with the manufacturers -- that the final standard even as 

### 22 far out as 2025 is going to be feasible, probably wellMeeting September 19, 2012 Washington, D.C.

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### 1 before then, and they have raised a number of issues 

### 2 about: you can't measure it, it's too small to be 

### 3 measured. We are working with the industry. I have to 

### 4 say -- I'd say we are probably between 75 and 90 percent 

### 5 there in terms of being able to measure the mass at one 

### 6 milligram per mile, which was the one barrier to effective 

### 7 implementation of the standard, but not until 2025. 

### 8 (Screen.) 

### 9 Now moving on to the greenhouse gas standards, 

### 10 this chart shows the fleet average standard and separate 

### 11 car and truck standards as they decline all the way from 

### 12 2010 through 2015. You could see the -- '16, actually. 

### 13 You could see the previously adopted rule, which is in 

### 14 line with the federal regulation, largely in line with the 

### 15 California program, and then the adopted regulation 

### 16 starting in 2017 and beyond. 

### 17You can see the gradual reduction there until we 

### 18 achieve a 34 percent reduction in GHG emissions compared 

### 19 to the currently adopted standards, and it's over 50 

### 20 percent quicker than the pre-control area before 2010. 

### 21We're using the footprint standards. This is a 

### 22 4.6 percent improvement per year, declining to 166 gramsMeeting September 19, 2012 Washington, D.C.

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### 1 per mile. This should look very familiar to you because 

### 2 these are the same greenhouse gas standards that EPA 

### 3 adopted in August. 

### 4(Screen.) 

### 5There are some differences in the California 

### 6 regulation from the final adopted EPA regulation. Just a 

### 7 couple of them are listed here. Most of them are minor. 

### 8 Upstream greenhouse gas emissions on some of the advanced 

### 9 technology vehicles, the ZEV-like technologies, are not 

### 10 included in determining compliance with the federal rule, 

### 11 but they are included in determining compliance with the 

### 12 California rule. 

### 13 There are some vehicle multipliers for advanced 

### 14 technology vehicles under the federal rule, which act as 

### 15 an incentive to introduce these vehicles. We did not 

### 16 include those in our rule because we have the ZEV program 

### 17 which provides a different kind of incentive for 

### 18 introducing those vehicles. 

### 19 There are minor differences in how the credits 

### 20 are earned for off-cycle and air conditioning 

### 21 technologies. Some of these were acknowledged up front. 

### 22 Other ones are because EPA changed their final rule fromMeeting September 19, 2012 Washington, D.C.

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### 1 the proposal and so there are minor differences here. 

### 2(Screen.) 

### 3 However, we've continued to deliver on our 

### 4promises to align this as much as possible. So, 

### 5 notwithstanding the differences, we've continued to work 

### 6 with both federal agencies and the auto industry. The 

### 7 rule as we have it now is very close and very closely 

### 8 parallels federal regulation adopted in August, and as a 

### 9 result we believe that it will have very similar 

### 10 effectiveness to our rule. 

### 11We therefore are following through on our 

### 12 commitment to adopt a "deemed to comply" provision. It's 

### 13 been proposed already and will be considered by our Board 

### 14 in November. What the "deemed to comply" provision means 

### 15 is that if an auto manufacturer chooses to comply with the 

### 16 federal rules, they send us a certificate and that will 

### 17 satisfy California rules. The California rules will still 

### 18 stay on the books and still be somewhat different. If a 

### 19 manufacturer wanted to comply with California rules, they 

### 20 could do that, but we don't really think that will happen. 

### 21But we want to be clear that we are not taking 

### 22 the steps to make the California rule look identical wordMeeting September 19, 2012 Washington, D.C.

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### 1 for word to what the federal rule is. But from the 

### 2manufacturers' standpoint, the "deemed to comply" will 

### 3 allow them to meet just one standard nationwide. 

### 4We also recognize the importance of the mid-term 

### 5 review that was agreed to as part of the negotiations on 

### 6 the federal rule and the California rule, and we are fully 

### 7 willing and set up to participate with the federal 

### 8 agencies to be part of that mid-term review. Some of the 

### 9 work is starting already, even though the review won't be 

### 10 done until 2018, and we will be there side by side with 

### 11 our partner the federal agencies to do that. 

### 12We also, by the way, are going to be doing a 

### 13 review of the ZEV program in the same time frame, 

### 14 California-unique, but again following through on our idea 

### 15 that this has to be a comprehensive and integrated 

### 16 approach to clean air for the future. 

### 17(Screen.) 

### 18 Skipping now to the ZEV amendments, this chart 

### 19 shows you how we've increased the requirements for ZEV, 

### 20 starting in 2018 all the way through 2025, again to 

### 21 provide a launch point in a commercialization that would 

### 22 allow ZEV technologies to become the dominant technologyMeeting September 19, 2012 Washington, D.C.

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### 1 of the future out towards 2050, because that simply is 

### 2 what will have to happen if we're going to meet out 

### 3 greenhouse gas goals. 

### 4This is based on the likely mix. We give 

### 5 different credits for ZEVs versus battery electric 

### 6 vehicles, than we do for fuel cells, than we do for plug

### 7 in vehicles, based on their environmental performance, and 

### 8 so we've taken guesses as to how manufacturers will meet 

### 9 this requirement and, as you can see, based on our guess 

### 10 as to the mix, about 15 percent or one out of seven or so 

### 11 vehicles sold in California in 2025 will be a ZEV-type 

### 12 vehicle. 

### 13 So, with that I'm going to turn it over to Aron 

### 14 Livingston, our Assistant Chief Counsel, and he's going to 

### 15 talk about the waiver criteria. Aron. 

### 16 (Screen.) 

### 17MR. LIVINGSTON: Thank you, Tom. 

### 18 I'm going to go over -- I'm going to go over the 

### 19 waiver criteria and the first two prongs of that, the 

### 20 protectiveness and the conditions justifying our program. 

### 21There are only three issues before EPA today in reviewing 

### 22 our request for the waiver. The first is theMeeting September 19, 2012 Washington, D.C.

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### 1 protectiveness prong, which is: Was California arbitrary 

### 2 and capricious in its determination that its program is at 

### 3 least as protective as the federal program? The second 

### 4prong is that California continues to have compelling and 

### 5 extraordinary conditions justifying our program, our motor 

### 6 vehicle program. Then the last, which is the traditional 

### 7 test and focus of these waiver proceedings, is the 

### 8 consistency with Clean Air Act Section 202(a), which 

### 9 focuses on technological feasibility and lead time, with 

### 10 consideration to costs. 

### 11As EPA reviews our submissions and others that 

### 12may come up today, the burden is on the opponents of our 

### 13 waiver to overcome the presumption that we've presented 

### 14 enough evidence to you to show that we indeed meet all 

### 15 those prongs. When EPA does that, they tend to give 

### 16 deference to California's judgments, especially as to 

### 17 policy matters and the cost effectiveness determinations 

### 18 that California makes. 

### 19 (Screen.) 

### 20 First on protectiveness, it requires clear and 

### 21 compelling evidence to the contrary to deny our waiver. 

### 22 So this is a high burden and we've provided more than aMeeting September 19, 2012 Washington, D.C.

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### 1 rational basis and enough to show EPA that we have 

### 2 slightly more stringent criteria standards coming up, we 

### 3 have a few California-federal differences that Tom pointed 

### 4 out that would make ours more stringent than the federal 

### 5 GHG standard if manufacturers decided to stick with our 

### 6 program and didn't do the opt-in to the "deemed to comply" 

### 7 rule. And we're slightly more protective as a whole even 

### 8 if all the manufacturers choose the national program 

### 9 option, because we do have the additional requirement for 

### 10 ZEVs in California. 

### 11(Screen.) 

### 12So the next and second prong is that, of the 

### 13 waiver analysis, is that California continues to have 

### 14 compelling and extraordinary conditions justifying our 

### 15 program. California has had a longstanding and continuing 

### 16 problem with the conditions that are conducive to air 

### 17 pollution, especially in the South Coast Basin. The 

### 18 topography, the number of vehicles, the population, the 

### 19 vehicle miles traveled, and now climate is exacerbating 

### 20 those effects. EPA did a very thorough analysis of this 

### 21 in the first GHG waiver approval back in July of 2009. 

### 22(Screen.)Meeting September 19, 2012 Washington, D.C.

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### 1Since that time, there has been increasing 

### 2 scientific certainty of the effects of global warming and 

### 3 its impact on rising temperatures and the consequent 

### 4 impact on ozone levels. So this slide shows that in the 

### 5 South Coast region in 2050 the orange and red areas could 

### 6 see levels 9 to 18 parts per billion higher due solely to 

### 7 global warming. 

### 8 So that helps to continue to establish the 

### 9 connection between the criteria pollutant reductions and 

### 10 also the greenhouse gas reductions that in turn contribute 

### 11 slightly to the overall reduction in temperatures and 

### 12 helps to lower ozone impacts that are exacerbated by 

### 13 global warming. 

### 14(Screen.) 

### 15Also, since 2009 we've also had more evidence of 

### 16 wildfire impacts also exacerbated by global warming, and 

### 17 in turn their impact on particulate emissions. This slide 

### 18 shows three fire regions in California on the right, with 

### 19 purple bars for total fires and the area under the red 

### 20 lines for total area burned. The largest particulate fire 

### 21 effects are in the already-burdened southern California 

### 22 region. A 46 to 76 percent particle increase and a 20 toMeeting September 19, 2012 Washington, D.C.

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### 1 27 percent carbon increase at mid-century is what's 

### 2 predicted, and ozone is also expected to rise a few parts 

### 3 per billion just due to wildfire effects. 

### 4The lower left photo there shows how quick and 

### 5 intense these fires are becoming. That one closed the 

### 6 main southern California to Las Vegas highway and forced 

### 7 1500 home evacuations. We're seeing more of these and 

### 8 more intense fires. 

### 9 (Screen.) 

### 10 Also, back to California's need for its own 

### 11 program: Some might argue that should our Board approve 

### 12 the proposed "deemed to comply" rule that there's really 

### 13 no need for the California program. That's not the legal 

### 14 test that EPA needs to apply, but this slide also shows 

### 15 that that's just factually not correct. California's 

### 16 separate ZEV program is needed to further clean the long

### 17 term light-duty vehicle fleet beyond what federal 

### 18 standards would require. 

### 19 These two graphs show on-road battery electric 

### 20 vehicles, fuel cell vehicles, and plug-in hybrid vehicles 

### 21 compared to on-road gasoline vehicles meeting the criteria 

### 22 and greenhouse gas standards presented to you earlier.Meeting September 19, 2012 Washington, D.C.

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### 1 Even on a life cycle basis, plug-in hybrids, battery 

### 2 electrics, and fuel cell vehicles, as shown in these two 

### 3 red boxes, are significantly lower emitting in both 

### 4 criteria pollutants and greenhouse gas emissions. So in 

### 5 addition this will remain an important backstop in the 

### 6 event the national program is weakened or terminated, 

### 7 which we don't expect. 

### 8 So, introducing the third prong of EPA's review 

### 9 of California's request, it is consistency with Section 

### 10 202(a). This is typically a two-prong test: 

### 11 technological feasibility, has California provided enough 

### 12 lead time for the technologies to develop over time and if 

### 13 there are little hurdles along the way, have they 

### 14 identified what those are and shown a feasible way for 

### 15manufacturers to get there. That's closer to the NRDC 

### 16 test, which is probably a little more applicable in this 

### 17 case because we're talking about fairly long-term 

### 18 standards, going out to 2025. 

### 19 We should note that it's slightly different for 

### 20 the ZEV, given the scope request for 2012 to 2017. But 

### 21 we've described the differences on that in our document 

### 22 that we originally submitted as the basis for the waiver.Meeting September 19, 2012 Washington, D.C.

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### 1Then the second prong, or the second part of the 

### 2 consistency test is the test procedure consistency and can 

### 3 the manufacturer meet the same requirements with the same 

### 4 test engine. We believe we've shown they can, and Paul 

### 5 will talk more about that. 

### 6 I will now turn the presentation over to Paul 

### 7 and Analisa, who will walk us briefly through the 

### 8 technological feasibility regarding these LEV III criteria 

### 9 pollutants and the GHG standards and the ZEV standards, 

### 10 respectively. So, Paul. 

### 11(Screen.) 

### 12MR. HUGHES: Good morning. 

### 13 The emission control technology has dramatically 

### 14 improved over the last decade and is well understood by 

### 15 the industry. This slide lists some of the technologies 

### 16 we expect manufacturers to employ on their vehicles in 

### 17meeting the three criteria pollutant requirements, all of 

### 18 them occurring or employed to varying extents on today's 

### 19 vehicles. 

### 20 (Screen.) 

### 21It seems I've gone too far. 

### 22(Screen.)Meeting September 19, 2012 Washington, D.C.

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### 1With further improvements in the technology and 

### 2 combined with an extended phase-in period, plus combined 

### 3 NMOG plus NOx standards, additional emissions standards, 

### 4 and significant compliance flexibility, the LEV III 

### 5 criteria pollutant requirements are clearly technically 

### 6 feasible. 

### 7I might add at this point that several 

### 8 manufacturers have indicated to us that they intend to 

### 9 certify LEV III vehicles beginning in model year 2014, 

### 10 which as you know starts in January of next year, 2013. 

### 11(Screen.) 

### 12We also have PM standards. They phase in at a 

### 13 different rate, coming in later than the other criteria 

### 14pollutants. These particulate matter standards present 

### 15 two challenges: first, meeting the standards -- and Tom 

### 16 alluded to that -- and second, measuring very low 

### 17 particulate matter levels, which also Tom alluded to. 

### 18 Concerning the first challenge, meeting the 

### 19 standard, our test data shows that current port fuel 

### 20 injection engines are already meeting the one milligram 

### 21 per mile standard. As Tom indicated earlier, GDI engines 

### 22 are the most challenged in achieving low particulateMeeting September 19, 2012 Washington, D.C.

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### 1matter emissions. However, as our test data also shows, 

### 2 some GDI engines are approaching one milligram per mile 

### 3 levels today. 

### 4With further refinements, such as improved fuel 

### 5 injectors and their placement in the cylinder head, we are 

### 6 convinced that technology can achieve the standard given 

### 7 the 15 years lead time that's been provided to 

### 8 manufacturers to incorporate needed technical improvements 

### 9 to their engines. 

### 10 I might also mention too that LEV III provides a 

### 11 relaxed in-use standard during the phase-in period for 

### 12manufacturers. So that's an additional flexibility that 

### 13 we're giving to the manufacturers. 

### 14Regarding the second challenge, measuring very 

### 15 low PM levels, we've already incorporated many of the 

### 16 practices of Part 1066, which is currently under 

### 17 development by the U.S. EPA, into our laboratory practices 

### 18 and would incorporate them into our test procedures when 

### 19 finalized by EPA. We also are working with EPA and the 

### 20 industry to further refine particulate matter test 

### 21 protocols. The work completed to date convinces us that 

### 22 the measurement procedure will not be a barrier toMeeting September 19, 2012 Washington, D.C.

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### 1 complying with the more stringent PM standard. 

### 2I might also add here again that one 

### 3 manufacturer has indicated to us that they will certify at 

### 4 least one test group to the three milligram per mile 

### 5 standard in a 2014 model year vehicle. So again, here 

### 6 we're talking about completing certification for that 

### 7 vehicle next year. 

### 8 (Screen.) 

### 9 Turning to the greenhouse gas element of LEV 

### 10 III, in the development of the greenhouse gas standard 

### 11 California participated in a joint technical evaluation 

### 12 with EPA and NHTSA. This joint effort examined the 

### 13 effectiveness and cost of a wide range of vehicle 

### 14 greenhouse gas technologies. Broadly, these technologies 

### 15 include: improvements in engines and transmissions; 

### 16 technologies that reduce vehicle energy loads, such as 

### 17 improved aerodynamics and weight reduction; more efficient 

### 18 accessories, such as electric water pumps and air 

### 19 conditioning systems; and the incorporation of hybrid and 

### 20 electric drive trains. 

### 21Similar to the criteria element of LEV III, the 

### 22 greenhouse gas requirements are phased in over an extendedMeeting September 19, 2012 Washington, D.C.

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### 1 period of time, which will assist manufacturers in 

### 2managing their resources in implementing program 

### 3 requirements. 

### 4(Screen.) 

### 5This slide lists some of the greenhouse gas 

### 6 technologies that are currently incorporated in vehicles 

### 7 in increasing numbers in response to current greenhouse 

### 8 gas requirements. As new greenhouse gas requirements 

### 9 phase in, these technologies will be employed to an even 

### 10 greater extent across the light duty fleet. 

### 11(Screen.) 

### 12Diesel vehicles also have a role in reducing 

### 13 criteria and greenhouse gas emissions. New and innovative 

### 14 emission control systems have been developed to reduce 

### 15 criteria emissions from these vehicles and manufacturers 

### 16 are working toward achieving SULEV emission levels for 

### 17 these also. 

### 18 (Screen.) 

### 19 Diesel vehicles inherently emit lower CO2 

### 20 emissions than their gasoline counterparts and with 

### 21 further improvements in diesel technology can achieve even 

### 22 lower greenhouse gas emissions levels.Meeting September 19, 2012 Washington, D.C.

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### 1(Screen.) 

### 2From a technology perspective, the California 

### 3 standards will push many off-the-shelf and emerging 

### 4 internal combustion technologies into the mainstream. 

### 5 These new low greenhouse gas technologies include new 

### 6 sophisticated valve trains, gasoline direct injection, 

### 7more downsized and turbocharged engines, transmissions 

### 8 with more gears and optimized dual-clutch controls, use of 

### 9 lightweight materials, low rolling resistance ties, 

### 10 sleeker aerodynamics, and greatly improved accessories. 

### 11Increasing use of the cleaner gasoline 

### 12 technologies is shown in blue on the slide here. In 

### 13 addition, greenhouse gas standards will also usher in the 

### 14 initial ramp-up of ultra-low greenhouse gas plug-in 

### 15 electric and fuel cell vehicles required by the ZEV 

### 16 regulations, shown in green here. That is critical to 

### 17 achieving California's climate goals beyond 2025. 

### 18 I'll now turn it over to Analisa to discuss the 

### 19 technology feasibility of the ZEV regulations as amended. 

### 20 (Screen.) 

### 21MS. BEVAN: Thank you, Paul. 

### 22I'll walk through the high-level amendments andMeeting September 19, 2012 Washington, D.C.

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### 1 technological feasibility of the ZEV regulation. We've 

### 2 narrowed the types of technologies that can be used to 

### 3 meet the ZEV regulation to three starting in 2018: 

### 4 battery electric vehicles, hydrogen fuel cell vehicles, 

### 5 and plug-in hybrids. 

### 6 Two other technologies that have been used in 

### 7 our program historically can continue to be used to comply 

### 8 with the regulations through 2017, but they've become 

### 9 fully commercial and we expect them to be used as 

### 10 compliance strategies in the LEV, GHG and LEV criteria 

### 11 pollutant programs. These include the advanced technology 

### 12 partial zero emission vehicles, or conventional hybrids, 

### 13 and the clean gasoline vehicles, the partial zero emission 

### 14 vehicles, PZEV. 

### 15In making these changes, we also adjusted the 

### 16 credit relationships between plug-in hybrids and ZEVs and 

### 17 so it's important that this waiver request is granted in a 

### 18 timely manner so that the adjustments can take effect so 

### 19 that the expected vehicle volumes are achieved. 

### 20 (Screen.) 

### 21Regarding technological feasibility, since 1990 

### 22 battery and fuel cell vehicles have made hugeMeeting September 19, 2012 Washington, D.C.

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### 1 technological achievements. No manufacturer has been out 

### 2 of compliance with the ZEV regulations since the beginning 

### 3 of the program, since its implementation started in the 

### 4mid-2000s, about 2005. Most have overcomplied, creating a 

### 5 bank of extra credits, and these credits give 

### 6 manufacturers flexibility when introducing new 

### 7 technologies in increasing numbers. Every regulated 

### 8 manufacturer has announced plans to market a ZEV or PHEV, 

### 9 plug-in hybrid, in the next three model years, in numbers 

### 10 that surpass the 2015 to 2017 model year requirements. 

### 11(Screen.) 

### 12As we brought these amendments to our Board in 

### 13 January, the car companies were no longer arguing the 

### 14 technologies were not ready for commercial launch. How 

### 15 could they? With all these cars already available to 

### 16 consumers now or announced to have production dates in the 

### 17 near term, two to three years, all the cars listed on this 

### 18 slide, a wide variety of plug-in hybrids, battery 

### 19 electrics, and fuel cell vehicles are here or on their way 

### 20 from all of the regulated manufacturers and several 

### 21 startups. 

### 22(Screen.)Meeting September 19, 2012 Washington, D.C.

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### 1An additional modification that we've made to 

### 2 the zero emission vehicle regulation is the inclusion of a 

### 3 new category called the range extended battery electric 

### 4 vehicle, or BEVx. We've added this new category, which is 

### 5 a battery electric vehicle equipped with a small engine 

### 6 for limited range extension. This is different from plug

### 7 in electric hybrids because they have very limited 

### 8 gasoline range, and we expect that they will have 

### 9 considerably increased zero emission miles driven. 

### 10 We're particularly interested in this because it 

### 11 provides flexibility for manufacturers as another 

### 12 compliance option and it has the potential to expand the 

### 13 BEV market beyond current market estimates by giving 

### 14 interested consumers an extra measure of confidence about 

### 15 vehicle range while achieving closer to 100 percent zero 

### 16 emission miles operation compared to a current plug-in 

### 17 hybrid. 

### 18 This amendment also needs a waiver approval to 

### 19 take effect, allowing introduction and appropriate 

### 20 treatment in this coming model year. 

### 21(Screen.) 

### 22We added another provision to increaseMeeting September 19, 2012 Washington, D.C.

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### 1 compliance flexibility while encouraging more rapid 

### 2 compliance with the GHG standards, what we're calling the 

### 3 GHG overcompliance provision. This supports manufacturers 

### 4 who have consistently or are consistently overcomplying on 

### 5 the greenhouse gas fleet average with credits that can be 

### 6 used to meet a portion of the zero emission vehicle 

### 7 requirement. The proposal was included in California's 

### 8 July 28, 2011, commitment letter for the national program. 

### 9 (Screen.) 

### 10 California is committed to commercializing zero 

### 11 emission vehicles far beyond the zero emission vehicle 

### 12 regulation. 

### 13 I'm struggling with this mike. 

### 14In March of this year, Governor Brown signed 

### 15 Executive Order B-16-2012, in which it sets the following 

### 16 goals: 1.5 million ZEVs on California roads by 2025, 

### 17 infrastructure to support 1 million ZEVs by 2020, and a 

### 18 requirement that state fleet purchases include 10 percent 

### 19 ZEVs by 2015 and 25 percent ZEVs by 2020. 

### 20 We also have a clean vehicle rebate program that 

### 21 provides $2,500 per zero emission vehicle and $1,500 for 

### 22 plug-in hybrids. As Tom mentioned, we have a clean fuelsMeeting September 19, 2012 Washington, D.C.

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### 1 outlet regulation which ensures infrastructure will be 

### 2 available for ZEVs, which is particularly important for 

### 3 hydrogen fuel cell vehicle commercialization. And we have 

### 4 several public-private partnerships with industry, 

### 5 nongovernmental organizations, and other government 

### 6 organizations in both the plug-in vehicle arena and the 

### 7 fuel cell arena. These are put together to build public 

### 8 awareness, community-level policies, and with a specific 

### 9 focus on expanding fuel infrastructure. 

### 10 (Screen.) 

### 11I'll turn now to a summary of a couple of items 

### 12 that cover the entire suite of programs. First, cost. 

### 13 All three programs, including the ZEV regulation, result 

### 14 in an incremental cost increase to the vehicle of $1,900 

### 15 or an increase of about 8 percent. However, we expect a 

### 16 payback due to fuel savings within three years, and the 

### 17 GHG regulation is responsible for the majority of that 

### 18 vehicle price increase. 

### 19 This is an appropriate consideration of costs, 

### 20 showing that they are not prohibitive for manufacturers, 

### 21 especially since the $1900 figure is for a 2025 model or 

### 22 2025 models on average and is much lower in the interimMeeting September 19, 2012 Washington, D.C.

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### 1 years. 

### 2(Screen.) 

### 3 Next, we've worked to reduce compliance burdens 

### 4 as much as possible. We worked with EPA to make the test 

### 5 procedures as consistent as possible. Manufacturers can 

### 6 use the same vehicle or engine to meet both federal and 

### 7 California requirements, using common test cycles and test 

### 8 procedures. And California will align its test procedures 

### 9 with any changes to current federal procedures if and when 

### 10 Tier 3 is finalized by EPA. In addition, we're working 

### 11 with EPA on our revisions to the test procedures for 

### 12 hybrid electric vehicles. 

### 13 With that, I'll turn it back to Tom. 

### 14(Screen.) 

### 15MR. CACKETTE: Let me wrap it up with a few 

### 16 slides to summarize what you just heard. We're convinced 

### 17 that the LEV III criteria pollutants, the NMOG plus NOx 

### 18 standards, are feasible today. That's because one in five 

### 19 new vehicles already complies. We give lots of lead time, 

### 20 12 years before everyone has to be a SULEV for the gaseous 

### 21 pollutant standards, 15 years for the one milligram PM 

### 22 standard, and the cost of compliance here is minimal,Meeting September 19, 2012 Washington, D.C.

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### 1 under $100. 

### 2(Screen.) 

### 3 With regard to the greenhouse gas program and 

### 4 standards, we've demonstrated the feasibility, in 

### 5 cooperation with you and the TAR, and this has been 

### 6 documented in separate ARB and EPA rulemakings. There 

### 7 really is no question regarding the feasibility of these 

### 8 standards. 

### 9 The cost is reasonable, certainly higher than 

### 10 for the LEV program, but the fuel savings payback far 

### 11 exceeds the costs, up-front costs, and is a net positive 

### 12 for the consumers who will be driving these vehicles. 

### 13 On the ZEV program, it's feasible because plug 

### 14 vehicles are being marketed today, both plug-in hybrid and 

### 15 battery electric vehicles, and a whole bunch more, as 

### 16 shown on the chart, coming. Fuel cell vehicles will be 

### 17 offered by five manufacturers in 2015 and another one in 

### 18 2016 as they introduce them in commercial, pre-commercial, 

### 19 or early commercial quantities in California. Overall, 

### 20 the ZEV program still provides reasonable costs, including 

### 21 the ZEV program when you put it all together. 

### 22(Screen.)Meeting September 19, 2012 Washington, D.C.

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### 1So in conclusion, the waiver criteria apply to 

### 2 California's program as a whole. The California program 

### 3 meets the waiver test now for LEV, both criteria and GHG, 

### 4 and the ZEV program. The "deemed to comply" program that 

### 5 we are considering in November is a fulfillment of our 

### 6 commitment, but it's not needed nor a requirement of the 

### 7 waiver. The mid-term review we believe we believe is a 

### 8 very useful step, and if there's any kind of midcourse 

### 9 corrections needed, working together with federal 

### 10 agencies, we'll be able to make those. 

### 11Because manufacturers are relying on some of the 

### 12 amendments to our regulations that apply in the 2014 model 

### 13 year, which is just around the corner -- it starts on 

### 14 January 1 -- we need EPA to act on this waiver this 

### 15 calendar year. 

### 16 That concludes our presentation, and if you have 

### 17 any questions or anything at this time that would be fine. 

### 18 PRESIDING OFFICER OGE: Thank you. Do you have 

### 19 any questions for the California team? 

### 20 MR. DICKINSON: I just wanted to make sure, to 

### 21 be clear for the record, that it was Tom Cackette, Aron 

### 22 Livingston, Paul Hughes, and Analisa Bevans, and then TomMeeting September 19, 2012 Washington, D.C.

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### 1 Cackette in closing. 

### 2MR. CACKETTE: We can repeat it again if you 

### 3 like. 

### 4MR. DICKINSON: No. 

### 5Let me thank all of you again for coming up and 

### 6 traveling through adverse weather. I know that there are 

### 7 some people that might be returning soon, so let me give a 

### 8 tacit acknowledgment of that and all the hard work that's 

### 9 been performed here at EPA and at CARB. 

### 10 I did have one specific question on the 

### 11 compelling and extraordinary condition prong. I don't 

### 12 expect an answer today, but if you could in your written 

### 13 comments as follow-up clarify whether EPA should be going 

### 14 under its traditional approach of looking at the need for 

### 15 the whole motor vehicle program, as opposed to a need for 

### 16 each individual standard in front of us today. 

### 17MR. LIVINGSTON: That's easy. The first. Yes, 

### 18 the whole program. 

### 19 MR. DICKINSON: Aron says the whole program, but 

### 20 I invite comment to that extent. Thank you. 

### 21MR. CACKETTE: We'll do that. It's on our 

### 22 slides just so you know what our position is. But we'llMeeting September 19, 2012 Washington, D.C.

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### 1 be glad to elaborate on that. 

### 2Do you want to point out that we sent a whole 

### 3 team of people here, not just to reward them for all their 

### 4 hard work, and they have to get other rewards other than 

### 5 flying to Washington, D.C., in thunderstorms, but because 

### 6 we consider this to be so important a step here in our 

### 7 progress towards trying to meet the federal clean air 

### 8 standards and greenhouse gas standards that we set in 

### 9 place. 

### 10 So we appreciate your consideration and your 

### 11 timely response to our request by the end of the year. 

### 12PRESIDING OFFICER OGE: Janet? 

### 13 MS. COHEN: No. 

### 14PRESIDING OFFICER OGE: Tom, I have one 

### 15 clarification. You have asked EPA to react this year. 

### 16 Could you elaborate a little bit on what happens starting 

### 17 January 2013 and the need that CARB is placing on EPA's 

### 18 prompt reaction this year? 

### 19 MR. CACKETTE: Well, as we pointed out, several 

### 20 of the revisions in our regulation involved credits or 

### 21 incentives for early compliance. As the speakers 

### 22 indicated, some of the manufacturers have alreadyMeeting September 19, 2012 Washington, D.C.

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### 1 indicated a desire to do things, for example early 

### 2 compliance with PM standards. There's provisions in the 

### 3 ZEV program that allow for flexibilities that have been 

### 4 added into the existing rules, the ones that go through 

### 5 2017. And all of these need to be covered by a waiver, 

### 6 and if we don't have a waiver arguably some of these 

### 7 flexibilities would not be available for manufacturers. 

### 8 So we would like to see you do that as soon as 

### 9 possible. Our standards, the basic standards for the LEV 

### 10 program, the criteria part start in 2015, and of course 

### 11 that means that vehicles can be produced as of 2014, which 

### 12means the manufacturers need to have assurance that they 

### 13 can go ahead and use these, and some of them want to start 

### 14 complying in 2013 as 2014 models. 

### 15So this program is knitted together in a way to 

### 16 provide lots of flexibility, to provide lots of phase-in, 

### 17 to let manufacturers move smoothly from one program to the 

### 18 next, and having the waiver not occur until afterwards 

### 19 gets rid of some of that smoothness and creates a 

### 20 choppiness that takes away the advantages that 

### 21manufacturers need to meet these challenging requirements. 

### 22PRESIDING OFFICER OGE: Thank you, Tom.Meeting September 19, 2012 Washington, D.C.

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### 1Clearly, the comment period closes October 19, 

### 2 2012. We have heard extensive testimony from the state of 

### 3 California. If there are any additional comments, the 

### 4 docket stays open for a number of weeks, so we would 

### 5 invite those comments to be submitted. 

### 6 Thank you. 

### 7MR. CACKETTE: Thank you very much. 

### 8 PRESIDING OFFICER OGE: Now we'll call -- 

### 9 continue with the statements and first we will call on our 

### 10 colleagues from NACAA, NESCAUM, and the Maryland 

### 11 Department of Environment. Please state your name, 

### 12 affiliation, and give your testimony. 

### 13 PRESENTATION OF NATIONAL ASSOCIATION 

### 14OF CLEAN AIR AGENCIES 

### 15MS. KRUGER: Good morning. 

### 16 PRESIDING OFFICER OGE: Good morning. 

### 17MS. KRUGER: I'm Nancy Kruger, Deputy Director 

### 18 of NACAA, the National Association of Clean Air Agencies. 

### 19 I'm here today to offer NACAA's strong support for full 

### 20 and prompt approval of California's request for a waiver 

### 21 of federal preemption for its Advanced Clean Car program. 

### 22California has traditionally led the nationalMeeting September 19, 2012 Washington, D.C.

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### 1 effort to reduce air pollution, dating back to 1963 when 

### 2 it adopted the nation's first motor vehicle emissions 

### 3 standards. Congress has consistently recognized and 

### 4 supported California's leadership role in the design of 

### 5 the Clean Air Act, which specifically authorizes 

### 6 enforcement of California-developed motor vehicle 

### 7 standards in California and other states as well. This 

### 8 provision has benefited greatly not only California, but 

### 9 the entire nation, in allowing states to serve as 

### 10 laboratories of innovation. 

### 11CARB has requested that EPA grant a waiver of 

### 12 federal preemption under Section 202(b) of the Clean Air 

### 13 Act to permit enforcement of the LEV III component of its 

### 14Advanced Clean Car program, and also that the agency 

### 15 confirm that the ZEV program revisions are within the 

### 16 scope of a previous waiver issued by EPA or, in the 

### 17 alternative, to issue a waiver for the ZEV revisions. 

### 18 As established by Congress and interpreted by 

### 19 EPA over the past 35 years, EPA's role in granting a 

### 20 waiver to California on a particular motor vehicle 

### 21 emissions rule is narrow and deferential. The agency must 

### 22 grant CARB's waiver request unless it can demonstrate thatMeeting September 19, 2012 Washington, D.C.

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### 1 the conditions of 209(b) are not met. 

### 2First, EPA must grant the waiver unless it can 

### 3 be shown that CARB acted in an arbitrary and capricious 

### 4manner when it determined that the Advanced Clean Car 

### 5 program did not render CARB's motor vehicle program, 

### 6 considered as a whole, less protective than the federal 

### 7 program. Given the fullness of the public process 

### 8 employed by CARB and the strength of the administrative 

### 9 record of support for CARB's decision, we believe there is 

### 10 no basis for EPA to determine that CARB's program and 

### 11 decisions were arbitrary and capricious. 

### 12Second, EPA must grant a waiver unless it 

### 13 determines that California no longer needs to maintain an 

### 14 independent motor vehicle emissions program. EPA has 

### 15 consistently determined, for example in 2003, '05, '06, 

### 16 '09, and as recently as 2011, that there are compelling 

### 17 and extraordinary conditions warranting a continuing 

### 18 California vehicle emissions program. 

### 19 We believe CARB has documented its continued 

### 20 struggles to reduce air pollution, particularly pollution 

### 21 attributed to motor vehicles. There is nothing to suggest 

### 22 any significant change in circumstance and certainlyMeeting September 19, 2012 Washington, D.C.

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### 1 nothing to support a determination that California no 

### 2 longer needs an independent motor vehicle program. 

### 3 Third, EPA must grant the waiver unless it 

### 4 determines that California's motor vehicle program is not 

### 5 consistent with the requirements of Section 202(a) of the 

### 6 Clean Air Act, which EPA has agreed concerns technological 

### 7 feasibility and lead time, with consideration of costs. 

### 8 Here again, CARB's feasibility analysis, based primarily 

### 9 upon studies conducted jointly with federal agencies, 

### 10 including EPA, are comprehensive and robust. 

### 11NACAA believes the LEV III program meets all the 

### 12 statutory conditions for a waiver. Further, we agree with 

### 13 CARB that the ZEV program revisions fall within the scope 

### 14 of a previously granted waiver by EPA and that EPA should 

### 15 confirm this. In the event EPA disagrees that the ZEV 

### 16 revisions fall within the scope of a prior waiver, the ZEV 

### 17 revisions also clearly meet the statutory conditions and 

### 18 EPA should grant a waiver for them. 

### 19 In the Clean Air Act, Congress finds that the 

### 20 reduction of air pollution, including that which may have 

### 21 an effect on climate and weather, is the primary 

### 22 responsibility of states and local governments. AlthoughMeeting September 19, 2012 Washington, D.C.

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### 1 the Act establishes a federal program to set minimum 

### 2 requirements to serve as a floor for state regulation, it 

### 3 specifically authorizes more stringent state regulation. 

### 4 While consideration of the potential adverse impact on 

### 5 commerce of many different state standards led Congress to 

### 6 preempt states other than California from adopting motor 

### 7 vehicle emissions standards, Congress does in Section 177 

### 8 of the Act provide that each state can decide whether to 

### 9 enforce the federal emission standards or the California 

### 10 standards for new motor vehicles sold in-state. 

### 11Over the years, numerous states have recognized 

### 12 the benefits of California's motor vehicle emissions 

### 13 standards, including the LEV, ZEV, and greenhouse gas 

### 14 emissions standards, and have adopted statutes or 

### 15 regulations that permit enforcement of California's 

### 16 regulations in their own states. These state programs and 

### 17 revisions to them cannot be enforced until and unless EPA 

### 18 grants CARB's request for a waiver. 

### 19 States that wish to continue to avail themselves 

### 20 of their statutory authority to approve CARB's -- I'm 

### 21 sorry -- to approve and adopt and enforce California's 

### 22 vehicle standards also look to CARB -- to EPA to approveMeeting September 19, 2012 Washington, D.C.

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### 1 CARB's request in a timely fashion, thus ensuring their 

### 2 rights to protect the health and welfare of their 

### 3 citizens. 

### 4While California has proposed a "deemed to 

### 5 comply" rule, where California would accept compliance 

### 6 with national program GHG standards, we believe CARB's 

### 7 request as submitted meets the conditions for a waiver and 

### 8 should serve as an important backstop in the event the 

### 9 national program is either unjustifiably weakened or 

### 10 terminated. 

### 11So in conclusion, CARB's Advanced Clean Car 

### 12 program and its request for a waiver and a scope-of-the

### 13 waiver determination are clearly in the public interest 

### 14 and fully consistent with the Clean Air Act, and NACAA 

### 15 urges EPA to approve CARB's request as quickly as 

### 16 possible. 

### 17Finally, I'd like to say I don't know, Margo, if 

### 18 this is your last official public hearing or your near 

### 19 last, but it's truly an honor to be testifying today at 

### 20 one of your final official acts, and it's been NACAA's 

### 21 privilege over the past years to work closely with you, 

### 22 and we will greatly miss you, but you have left yourMeeting September 19, 2012 Washington, D.C.

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### 1 indelible mark on this nation's clean air. So thank you 

### 2 very much. 

### 3 PRESIDING OFFICER OGE: Thank you. Thank you, 

### 4Nancy. 

### 5Any questions? 

### 6 (No response.) 

### 7MS. KRUGER: Thank you. 

### 8 PRESIDING OFFICER OGE: I understand that Matt 

### 9 Solomon from NESCAUM is here to testify. 

### 10 PRESENTATION OF NORTHEAST STATES FOR 

### 11COORDINATED AIR USE MANAGEMENT 

### 12MR. SOLOMON: Good morning. 

### 13 PRESIDING OFFICER OGE: Good morning. 

### 14MR. SOLOMON: My name is Matt Solomon. I am the 

### 15 Transportation Program Manager for the Northeast states 

### 16 for Coordinated Air Use Management. NESCAUM is an 

### 17 association of the air pollution control agencies of 

### 18 Connecticut, Maine, Massachusetts, New Hampshire, New 

### 19 Jersey, New York, Rhode Island, and Vermont. 

### 20 I'm speaking today in support of the request by 

### 21 the California Air Resources Board for waiver of the 

### 22 federal preemption for California's Advanced Clean CarMeeting September 19, 2012 Washington, D.C.

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### 1 program. CARB's May 2012 waiver support document provides 

### 2 a solid demonstration that the standards embodied in the 

### 3 Advanced Clean Car program meet relevant waiver criteria. 

### 4NESCAUM supports California's efforts to move forward 

### 5 with its standards and we ask EPA to expeditiously approve 

### 6 California's waiver request. 

### 7The criteria for granting or denying a waiver of 

### 8 federal preemption in accordance with Section 2 of the 

### 9 Clean Air Act are straightforward and CARB has done a 

### 10 systematic job of outlining and responding to those 

### 11 criteria in the current waiver request, as well as in 

### 12 numerous past requests. Rather than reiterate their 

### 13 arguments, I will briefly emphasize some of the ways in 

### 14 which the Advanced Clean Car program benefits 

### 15manufacturers, consumers, and the environment while at the 

### 16 same time supporting the waiver criteria. 

### 17The Advanced Clean Car program is more 

### 18 protective of public health and welfare than the 

### 19 applicable federal standards. As a result of the new 

### 20 requirements, criteria pollutant emissions will be reduced 

### 21 by 75 percent from 2010 levels. Moreover, the 

### 22 requirements for increased numbers of zero emissionMeeting September 19, 2012 Washington, D.C.

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### 1 vehicles will help to facilitate additional reductions 

### 2 both in criteria and greenhouse gas pollutants in future 

### 3 years, while putting states on a path towards energy 

### 4 independence. 

### 5California needs separate standards in order to 

### 6 meet compelling and extraordinary conditions. 

### 7 California's unique geographical and climatic conditions 

### 8 demand a higher degree of protection from motor vehicle 

### 9 emissions. Numerous waivers have been previously granted 

### 10 on this basis. 

### 11The Advanced Clean Car program incorporates long 

### 12 lead times in conjunction with flexibility mechanisms to 

### 13 facilitate manufacturer compliance. The amendments to the 

### 14 ZEV regulations provide manufacturers with a variety of 

### 15 compliance options. For example, credit requirements for 

### 16 intermediate volume manufacturers for model years 2015 

### 17 through 2017 have been reduced and limitations have been 

### 18 removed on the carrying of ZEV credits forward. The 

### 19 travel provision for battery electric vehicles has been 

### 20 extended through model year 2017 and manufacturers may now 

### 21 choose an optional compliance path that allows for pooling 

### 22 of credits earned from placement of plug-in hybrids fromMeeting September 19, 2012 Washington, D.C.

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### 1 2015 through 2021. 

### 2California has also provided additional 

### 3 compliance flexibility to facilitate achieving SULEV 

### 4 emission levels across the light-duty fleet. The separate 

### 5 NMOG and NOx emission standards have been replaced with a 

### 6 combined standard for these pollutants, allowing 

### 7manufacturers greater latitude while still ensuring 

### 8 reductions in smog-forming emissions. 

### 9 Implementation of the LEV III exhaust emission 

### 10 requirements for NMOG and NOx is phased in over an 11-year 

### 11 period and the accredited mechanism for meeting fleet 

### 12 average requirements is expanded to include a 5-year 

### 13 carryforward and a 3-year carryback mechanism. Small 

### 14manufacturers are given even greater flexibility in terms 

### 15 of stringency of the standards and the phase-in period. 

### 16 Finally, with regards to the evaporative 

### 17 standards under LEV III, manufacturers are allowed to 

### 18 phase in separate percentages of their fleets beginning 

### 19 with 60 percent in 2018, and the 100 percent requirement 

### 20 extended out to model year 2022. 

### 21Granting California the waiver -- excuse me. 

### 22 Granting the California waiver gives other states aMeeting September 19, 2012 Washington, D.C.

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### 1 critical option for reducing emissions to meet air quality 

### 2 goals. As you know, Section 177 of the Clean Air Act 

### 3 allows states to opt in to California's new motor vehicle 

### 4 emissions program. This option creates an opportunity for 

### 5 states to achieve additional reductions in criteria and 

### 6 greenhouse gas emissions in furtherance of their 

### 7 individual air quality goals. Seven of the eight 

### 8 states in the NESCAUM region have exercised this option, 

### 9 as have other states. Granting the waiver means that 

### 10 states will continue to have these flexibilities in 

### 11 crafting their air quality plans. 

### 12The Advanced Clean Car program will help 

### 13 facilitate deployment of advanced technology vehicles. 

### 14 This will expand consumer choice and provide attractive 

### 15 opportunities for citizens and businesses to send less of 

### 16 their money to overseas oil producers. Nearly every major 

### 17 automobile manufacturer has introduced or will be 

### 18 introducing production BEV and PHEV products within the 

### 19 next three years and consumers are responding. Year to 

### 20 date sales of the Chevy Volt have quadrupled from a year 

### 21 earlier, indicating a strong trend towards increasing 

### 22 consumer acceptance of advanced technology vehicles.Meeting September 19, 2012 Washington, D.C.

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### 1Moreover, the NESCAUM states have taken and continue 

### 2 to pursue measures to facilitate EV commercialization. 

### 3 The Advanced Clean Car program implemented in 

### 4 California and the Section 177 states, in conjunction with 

### 5 increasing consumer acceptance of these advanced 

### 6 technologies, will send positive market signals to the 

### 7 auto manufacturing industry, helping to mainstream these 

### 8 technologies. 

### 9 Customers in our region want to purchase 

### 10 advanced vehicles. A recent review by the Center for 

### 11 Climate and Energy Solutions found potential for strong 

### 12 growth in demand for plug-in vehicles nationwide and 

### 13 particularly in the Northeast region. Consumers in the 

### 14 region have been among the most receptive to advanced 

### 15 vehicle technologies. Total hybrid sales -- excuse me. 

### 16 Total hybrid vehicle sales in the Northeast region are 

### 17 comparable to those in California. Finally, a survey 

### 18 of consumer attitudes by the McKinsey Group found 

### 19 sufficient consumer demand for plug-in vehicles to 

### 20 comprise up to 16 percent of new vehicle sales in New York 

### 21 City by 2015. 

### 22In conclusion, we request expeditious approvalMeeting September 19, 2012 Washington, D.C.

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### 1 of CARB's request so that the citizens and businesses of 

### 2 California and the Section 177 states can continue to 

### 3 realize the economic and environmental benefits of this 

### 4 important program. 

### 5Thank you. 

### 6 PRESIDING OFFICER OGE: Thank you, Mr. Solomon. 

### 7Any questions? 

### 8 (No response.) 

### 9 MR. DICKINSON: Thank you. 

### 10 PRESIDING OFFICER OGE: Thank you. 

### 11Ms. Marcia Ways. Good morning. Give your name 

### 12 and affiliation, please. 

### 13 PRESENTATION OF MARYLAND DEPARTMENT OF ENVIRONMENT 

### 14MS. WAYS: Good morning. My name is Marcia Ways 

### 15 and I am the Program Manager for the Mobile Systems 

### 16 Control Program at the Maryland Department of the 

### 17 Environment. On behalf of the state of Maryland, I would 

### 18 like to thank you for the opportunity to testify today on 

### 19 CARB's request for a Clean Air Act waiver for California's 

### 20 Advanced Clean Car program. 

### 21The state of Maryland offers its strong support 

### 22 for full and prompt approval of California's request.Meeting September 19, 2012 Washington, D.C.

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### 1 While we are here today to discuss the specific request 

### 2made by the state of California under the Clean Air Act, 

### 3 this is really about a much broader underlying issue, 

### 4 whether or not we are willing to make the right choices 

### 5 and establish procedures that protect public health and 

### 6 the environment, promote sustainability, and enhance the 

### 7 quality of life, not only for us but for our children and 

### 8 grandchildren. 

### 9 Maryland is one of 13 states that have adopted 

### 10 the California motor vehicle emissions standards. These 

### 11 standards benefit Maryland in two important ways. They 

### 12 reduce emissions of the pollutants that not only cause our 

### 13 ozone nonattainment problems, but they also contribute 

### 14 significantly to nutrient pollution in the Chesapeake Bay. 

### 15There is perhaps no better place to discuss this issue 

### 16 than here, in a major city located in the heart of the 

### 17 Chesapeake Bay watershed. The bay is certainly a national 

### 18 treasurer that is absolutely vital to the economic health 

### 19 and cultural identity of Maryland. 

### 20 EPA has been an important partner in the bay 

### 21 restoration effort. Through approval of California's 

### 22 waiver request, EPA can make a further significantMeeting September 19, 2012 Washington, D.C.

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### 1 contribution to our joint federal-state restoration 

### 2 effort. 

### 3 The majority of Maryland citizens continue to 

### 4 live in ozone nonattainment areas. We are subject to some 

### 5 of the worst ozone east of the Mississippi River. 

### 6 Reducing emissions of nitrogen oxides, or NOx, is key to 

### 7 improving our air quality. Mobile sources are the leading 

### 8 contributor to NOx emissions in Maryland. They are twice 

### 9 the NOx emissions from power plants. An effective ozone 

### 10 reduction strategy that will assure attainment for the 

### 11 federal ambient air quality standard must address the 

### 12 number one source of NOx emissions, mobile sources. 

### 13 When fully implemented, the California standards 

### 14 will reduce the pollutants that form ground-level ozone by 

### 15 75 percent. Adoption of the California standard is a key 

### 16 component of Maryland's ozone attainment strategy. 

### 17 Reducing mobile source emissions of NOx is also vitally 

### 18 important to the Chesapeake Bay restoration effort. 

### 19 Atmospheric deposition of nitrogen is responsible for 

### 20 approximately one-third of today's nutrient pollution. 50 

### 21 percent of the atmospheric deposition of nitrogen is 

### 22 attributable to mobile source emissions. The newMeeting September 19, 2012 Washington, D.C.

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### 1 California standards will reduce nitrogen deposition to 

### 2 the bay. 

### 3 Maryland will also benefit from the zero 

### 4 emission vehicle provisions of the California standards. 

### 5 As you recall, the ZEV provisions require that the 

### 6 automobile manufacturers provide for sale in each state a 

### 7 certain percentage of low emission and zero emission 

### 8 vehicles. This guarantees that these vehicles will be 

### 9 available for sale in California and the other Section 177 

### 10 states like Maryland. 

### 11The ZEV provisions serve to advance the 

### 12 development of cleaner motor vehicle technologies. In 

### 13 2002 there were only three hybrid vehicles commercially 

### 14 available for sale in the United States. 10 years later, 

### 15 that number has grown to 38. In 2006 there were no plug

### 16 in electric motor vehicles commercially for sale in the 

### 17 United States. Now, only 6 years later, there are at 

### 18 least 13 different models. 

### 19 These advancements illustrate the importance of 

### 20 the California ZEV requirements, which have spurred the 

### 21 development of these new low and zero emission vehicle 

### 22 technologies. The transition to these advanced vehicleMeeting September 19, 2012 Washington, D.C.

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### 1 technologies will allow us to achieve our air quality 

### 2 goals and enhance our nation's energy seismic by reducing 

### 3 dependency on foreign oil. 

### 4The increasing availability of electric vehicles 

### 5 has provided the impetus for much needed investment in 

### 6 electric vehicle infrastructure. Maryland and other East 

### 7 Coast states are working collaboratively to ensure the 

### 8 development of a charging station network along the I-95 

### 9 corridor. In the past two years alone, Maryland has 

### 10 funded installation of more than 150 public charging 

### 11 stations. Together with privately funded installations, 

### 12 Maryland has made a commitment to ensuring the development 

### 13 of adequate charging infrastructure. The California ZEV 

### 14 requirements will ensure that the automobile manufacturers 

### 15 deliver electric vehicles to our state and the region. 

### 16 Finally, I would just like to briefly touch upon 

### 17 the legal merits of the California waiver request. Under 

### 18 Section 202(b) of the Clean Air Act, EPA can deny a waiver 

### 19 request only if California acted in an arbitrary and 

### 20 capricious manner when it determined its Advanced Clean 

### 21 Car program did not render California's mobile source 

### 22 program, when considered as a whole, less protective thanMeeting September 19, 2012 Washington, D.C.

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### 1 the federal program, if EPA determines that California no 

### 2 longer needs to maintain an independent program, or EPA 

### 3 determines under Section 202(a) that the program is not 

### 4 technologically feasible and that the lead time is 

### 5 insufficient, in consideration of costs. 

### 6 California's Advanced Clean Car program is based 

### 7 primarily on studies conducted jointly with EPA and other 

### 8 federal agencies. In addition, throughout the regulatory 

### 9 process California worked cooperatively with the 

### 10 automobile manufacturers in developing the standards. 

### 11 When these standards were signed in January of this year, 

### 12most of the major manufacturers expressed their support 

### 13 for them. 

### 14The robust record supporting the adoption of 

### 15 these new standards leaves no doubt that they are 

### 16 consistent with the technical feasibility and lead time 

### 17 provisions of 202(a) of the Clean Air Act and would not 

### 18 render the California standards less protective than the 

### 19 federal standards. Furthermore, EPA has consistently 

### 20 determined, as recently as 2011, that there are compelling 

### 21 reasons warranting a separate California program. In 

### 22 order to deny this waiver request, EPA will have toMeeting September 19, 2012 Washington, D.C.

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### 1 demonstrate there is compelling evidence a separate 

### 2 California program is no longer warranted. 

### 3 In closing, I would like to thank you for this 

### 4 opportunity to comment and reiterate that granting 

### 5 California's request for a waiver is clearly in the best 

### 6 interests of the public and states and is fully consistent 

### 7 with the relevant provisions of the Clean Air Act. 

### 8 And also, like Maryland, Margo, the state of 

### 9 Maryland would like to thank you for your many years of 

### 10 dedicated service. Your accomplishments are many and we 

### 11 wish you the best in all your future endeavors. 

### 12PRESIDING OFFICER OGE: Thank you. Thank you 

### 13 very much. 

### 14Any comments? 

### 15MR. DICKINSON: I do. David Dickinson. I have 

### 16 a comment as much as a question, or perhaps even a 

### 17 reminder. There has been some discussion here today about 

### 18 the "deemed to comply" provision that CARB is in the 

### 19 process of adopting. Section 177 has an identicality 

### 20 requirement so that states that are adopting California's 

### 21 regulations be identical to the California regulations. 

### 22 So just as a reminder, I would assume -- I don't know ifMeeting September 19, 2012 Washington, D.C.

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### 1 anyone wants to go on the record, but I would assume that 

### 2 the states would be in the process of adopting that 

### 3 provision to the degree they have to actively adopt it. 

### 4MS. WAYS: Yes. Maryland is and I believe the 

### 5 other 177 states are in the process also. 

### 6 MR. DICKINSON: Thank you. 

### 7PRESIDING OFFICER OGE: Thank you. 

### 8 Now, I'm going to call the next panel. Doug 

### 9 Greenhaus. Good morning, if you can state your name and 

### 10 your affiliation. 

### 11Unfortunately, we cannot have all of you sitting 

### 12 here like a typical public hearing. So it's one at a 

### 13 time. 

### 14PRESENTATION OF NATIONAL 

### 15AUTOMOBILE DEALERS ASSOCIATION 

### 16 MR. GREENHAUS: I'll try to have a little better 

### 17 luck with the microphone. We'll see what happens. 

### 18 My name is Douglas Greenhaus. I'm the Chief 

### 19 Regulatory Counsel for Environment, Health, and Safety of 

### 20 the National Automobile Dealers Association. Good 

### 21morning, everyone. I'm going to present a little 

### 22 different take on California's waiver application thanMeeting September 19, 2012 Washington, D.C.

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### 1maybe we've heard so far today. 

### 2I am pleased to present testimony in today's 

### 3 hearing. It's an important hearing. Let me just say by 

### 4 way of background that NADA represents the 19,000 

### 5 franchise automobile and truck dealerships who sell new 

### 6 motor vehicles across the country in virtually every 

### 7 state. We employ about a million people nationwide. 

### 8 Now, we're going to file by October 19th a full 

### 9 set of formal comments addressing both legal and practical 

### 10 issues raised by CARB's fuel economy and ZEV rules, 

### 11 including CARB's insufficient justification for the 

### 12 preemption waiver. That CARB has tended to bury its fuel 

### 13 economy rules within the Advanced Clean Car package is 

### 14 curious. However, for purposes of this preemption waiver 

### 15 process it is incumbent upon EPA to review those rules 

### 16 separately from CARB's so-called LEV III rules, just as it 

### 17 did last time. 

### 18 I'm here today because it's dealers, not 

### 19 manufacturers, who sell new vehicles to consumers and it 

### 20 is dealers and their employees, those one million plus 

### 21 employees, whose livelihood is at stake should CARB be 

### 22 granted preemption waiver for its fuel economy and ZEVMeeting September 19, 2012 Washington, D.C.

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### 1 rules. 

### 2Let me just make two points this morning: The 

### 3 law and good public policy require a national fuel economy 

### 4program, and I'll talk about that in a second; and 

### 5 secondly, the CARB fuel economy and ZEV rules are 

### 6 inherently flawed and offer no environmental benefits over 

### 7 and above the national program. 

### 8 Let's start off with the national, the need for 

### 9 a national consistent program. Only a single, well 

### 10 designed national standard can enhance new vehicle fuel 

### 11 economy performance. NADA has significant reservations, 

### 12 as I think some of you know, with respect to the 

### 13 structure, timing, and stringency of the 2017 to '25 

### 14program that was issued late last month in its EPA 

### 15 program. Yet we remain committed to it, as we have for 

### 16 over 30 years, to a national program designed to promote 

### 17 continuous fuel economy improvements that are both 

### 18 technologically feasible and economically practical. So 

### 19 the national nature of that program is very important. 

### 20 By way of contrast, a state by state approach to 

### 21 fuel economy regulation raises the real prospect of CARB 

### 22 state dealerships faced with unsold new vehiclesMeeting September 19, 2012 Washington, D.C.

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### 1 languishing on their lots. CARB's patchwork approach will 

### 2 require manufacturers to deliver to dealers separate and 

### 3 unique fleets in each CARB state. A patchwork will result 

### 4 because consumers buy different vehicles in different 

### 5 quantities in each state. Simply, CARB's rules will force 

### 6 manufacturers to deliver vehicles to dealers that their 

### 7 customers may not want, while rationing the vehicles they 

### 8 desire. 

### 9 Ironically, while dealer inventories will be 

### 10 constrained under CARB's approach, consumer choice may not 

### 11 be since compliance with CARB's rules are measured by what 

### 12manufacturers deliver for sale to the dealers, not by what 

### 13 retail customers actually buy and lease. Consumers unable 

### 14 to obtain new vehicles of choice from inventory

### 15 constrained CARB-state dealers will be free to purchase 

### 16 and are free to purchase vehicles from out-of-state 

### 17 dealers. 

### 18 The bottom line is -- so in effect, it's a 

### 19 program just full of holes. Bottom line, in-state dealers 

### 20 will lose sales without any environmental benefit for the 

### 21 CARB states or elsewhere. 

### 22Alternatively, consumers facing a CARB-Meeting September 19, 2012 Washington, D.C.

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### 1 constrained mix at their local dealers may elect to buy a 

### 2 CARB-exempted brand, to purchase a late model used 

### 3 vehicle, including out-of-state federal vehicles with more 

### 4 than 7500 miles, or to defer vehicle purchases altogether. 

### 5Again, to the extent that consumers choose one of these 

### 6 options no new regulatory benefits will be achieved. 

### 7The new NHTSA-EPA fuel economy program's high 

### 8 average per-vehicle compliance costs render it far from 

### 9 perfect. But, unlike what the fuel economy and ZEV rules 

### 10 CARB has submitted for Clean Air Act preemption waiver, 

### 11 the national program largely avoids the perverse 

### 12 interstate sales distortions of the CARB patchwork. 

### 13 All right, let's talk about the fact that these 

### 14programs are inherently flawed. The CARB approach to 

### 15 regulating new motor vehicle fuel economy and advanced 

### 16 technological is rife with flaws. Fundamentally, the CARB 

### 17 patchwork will result in numerous sets of state by state, 

### 18 manufacturer by manufacturer mandates. CARB has failed to 

### 19 analyze, let alone consider, the dramatic economic impacts 

### 20 these mandates will have on dealerships in California and 

### 21 in other CARB states. 

### 22In 2009, NADA testified on the EPA proposal toMeeting September 19, 2012 Washington, D.C.

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### 1 reverse its 2008 denial of CARB's last fuel economy rule 

### 2 waiver request. At that time the country, including 

### 3 California, perhaps more so than any other state, was in 

### 4 the depths of an economic recession that was having 

### 5 dramatic impacts on the companies that build new motor 

### 6 vehicles and on the dealers who sell them to consumers. 

### 7 For example, in 2009 NADA had some 19,000 members, but 

### 8 directly due to the recession there are some 2,000 fewer 

### 9 dealerships that exist today. Also, in 2009 new vehicle 

### 10 sales plunged from a high of 16 million to a low of less 

### 11 than 10. 

### 12Thankfully for the industry, but more 

### 13 importantly for the nation as a whole, pent-up consumer 

### 14 demand and increased consumer creditworthiness have caused 

### 15 new vehicle sales to increase to today's annualized rate 

### 16 of, last time I checked, more than 14 million. However, 

### 17 the economic recovery, as we all know, remains shaky and 

### 18 the recession's dramatic impacts still linger. This is 

### 19 perhaps nowhere more pronounced than in California, a 

### 20 state that saw hundreds of dealerships shutter their 

### 21 doors. 

### 22It is almost surreal to once again see CARBMeeting September 19, 2012 Washington, D.C.

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### 1 seeking a waiver for yet another modification to its long

### 2 suffering ZEV program. When will CARB learn that public 

### 3 policies must recognize and leverage consumer demand, not 

### 4 fight it. As was stated before, this is a technology

### 5 forcing program that has been amended numerous times 

### 6 because numerous times it has not worked. 

### 7After many years and numerous iterations, CARB 

### 8 continues to fail to see that a "build it and they will 

### 9 come" approach does not work for vehicles that offer 

### 10 compromised performance attributes at above-market prices. 

### 11Instead, CARB seems determined to continue to ignore 

### 12 customer needs and purchasing behaviors, unable to 

### 13 recognize, as dealers do, that new vehicle sales depend on 

### 14 consumer affordability and acceptability. Policies that 

### 15 attempt to force the manufacture and sale of vehicles 

### 16 shunned by consumers offer nothing but economic harm, not 

### 17 only for California but for all CARB states. 

### 18 Let me just say one of the things I didn't see 

### 19 in CARB's presentation which has worked really well is the 

### 20 HOV lane incentives, which I think some studies have shown 

### 21 have been a major contributor to the purchase of some of 

### 22 these new technology vehicles. So I would add that to theMeeting September 19, 2012 Washington, D.C.

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### 1 list. 

### 2But thank you very much. 

### 3 PRESIDING OFFICER OGE: Thank you. 

### 4Let me ask a couple of questions. Do you 

### 5 consider greenhouse gas emissions as air pollutants? 

### 6 MR. GREENHAUS: Well, we recognize that there 

### 7 was a Supreme Court ruling that says it's an air 

### 8 pollutant, and that's about as far as I'll go. 

### 9 PRESIDING OFFICER OGE: So today we're hearing 

### 10 testimony under the Clean Air Act provision of 209, am I 

### 11 right? 

### 12MR. GREENHAUS: Right. 

### 13 PRESIDING OFFICER OGE: And there is waiver 

### 14preemption language for California's air pollution 

### 15 standards -- 

### 16 MR. GREENHAUS: Right. 

### 17PRESIDING OFFICER OGE: -- for mobile sources; 

### 18 am I right? 

### 19 MR. GREENHAUS: That's correct. 

### 20 PRESIDING OFFICER OGE: Okay. So I heard two 

### 21major points that you're making. One was fuel efficiency. 

### 22 I just want to remind you and the rest of the participantsMeeting September 19, 2012 Washington, D.C.

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### 1 that what we're hearing today from California is a request 

### 2 for a waiver. They would be preempted, in other words, if 

### 3 we didn't give them the waiver, to establish under the 

### 4 Clean Air Act a clean car program based on air pollution 

### 5 needs. 

### 6 So I'm confused, and I understand the 

### 7 similarities between fuel economy and greenhouse gas 

### 8 emissions, but half of your testimony is about fuel 

### 9 economy, and I would tend to as Presiding Officer here, to 

### 10 take out both your oral and written reference to fuel 

### 11 economy standards because that's not the purpose of this 

### 12 hearing. 

### 13 MR. GREENHAUS: Well, I agree with you, Margo, 

### 14 we use "fuel economy" as a euphemism, if you will, for 

### 15 greenhouse gases. Besides the air conditioning, which is 

### 16 a major area we can control, but beyond controlling fuel 

### 17 economy, it's primarily a focus on managing fuel economy 

### 18 that manufacturers have to do for their fleet average. 

### 19 So yes, I could have written it "fuel 

### 20 economy/greenhouse gases" and I'll make a point of doing 

### 21 it that way in my written comments. And we clearly do not 

### 22 believe that CARB has satisfied the statutory criteria forMeeting September 19, 2012 Washington, D.C.

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### 1 justifying, as we said during the last waiver proceeding, 

### 2 its statutory burdens on greenhouse gas emissions. 

### 3 PRESIDING OFFICER OGE: One more. Since you 

### 4 were talking about fuel economy, I just got a quote from - 

### 5 - and this is for the record. This is a quote from an 

### 6 interview that Mr. Mulally, the CEO of Ford, did 

### 7 yesterday. This is the quote: "Most people agree that 

### 8 they'll pay more for fuel going forward, so fuel 

### 9 efficiency is the number one reason to buy." So that's 

### 10 the CEO of Ford quoted yesterday. 

### 11Your testimony is clearly consistent with the 

### 12 testimony that you gave to EPA when we were having our 

### 13 public hearing on the greenhouse gas emissions with our 

### 14 colleagues from NHTSA on fuel economy standards on the 

### 15 comprehensive program that the two agencies working with 

### 16 California established. And your testimony at that point 

### 17 and your testimony today consistently suggests that the 

### 18 consumer will not buy those vehicles that will be cleaner 

### 19 and more efficient, where the CEO of Ford as early as 

### 20 yesterday believes that that's not the case, and we have 

### 21 13 OEMs in this country, car companies that represent 90 

### 22 percent of sales in this country, that have supported thisMeeting September 19, 2012 Washington, D.C.

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### 1 program. 

### 2I will ask you, just to be consistent, the same 

### 3 question I asked your colleagues when you were testifying 

### 4 for EPA and NHTSA's national program: What do the dealers 

### 5 know that the OEMs don't know? Because both of you are in 

### 6 the same market. You want to sell more cars. Please go 

### 7 ahead. 

### 8 MR. GREENHAUS: What we have shown in our prior 

### 9 submissions during both the national program development 

### 10 as well as during prior waiver proceedings is that 

### 11 consumers care about fuel economy absolutely, especially 

### 12 when fuel prices are high, and that's why we have always 

### 13 supported efforts to improve fuel economy or, as you said, 

### 14 greenhouse gas emission improvements. 

### 15However, they have to be affordable and they 

### 16 have to be coming into the market without any significant 

### 17 compromises to at least important, or if not more 

### 18 important, vehicle attributes that people look at when 

### 19 they buy an automobile. And for certain vehicles that 

### 20 just is not the case. And we can, and I'll be happy to 

### 21 for the record, give you examples of that. I can also 

### 22 give you a new report from Ford Motor Company that cameMeeting September 19, 2012 Washington, D.C.

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### 1 out about a month ago that said unless it can pay off in 

### 2 four years it ain't going to make it. 

### 3 So there's -- they have to be affordable, they 

### 4 have to be affordable for the public at large. They can't 

### 5 just be niche vehicles, and that's sort of where the ZEV 

### 6 program in particular is focused. 

### 7We believe fuel economy is an important 

### 8 attribute, as we've said in our testimony time and time 

### 9 again. It's truly a matter of affordability and 

### 10 acceptability to the public that we're concerned about. 

### 11PRESIDING OFFICER OGE: I guess for the record, 

### 12 Mr. Cackette and his colleagues, the programs that they 

### 13 have proposed to EPA and to the Board have maintained 

### 14 every attribute of the vehicle, from safety to power to 

### 15 size. So again, if NADA has data such that these proposed 

### 16 standards from CARB, that again for the greenhouse gas 

### 17 emissions for the most part are consistent with the 

### 18 federal program, do not respect all the other attributes 

### 19 of vehicles, I would invite NADA to provide that data for 

### 20 the record. 

### 21MR. GREENHAUS: Thank you. We'll take advantage 

### 22 of that.Meeting September 19, 2012 Washington, D.C.

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### 1PRESIDING OFFICER OGE: Thank you. 

### 2MR. GREENHAUS: I appreciate that. 

### 3 PRESIDING OFFICER OGE: Now we'd like to invite 

### 4 Mr. Gillis, Jack Gillis. 

### 5Good morning. If you can give us your name and 

### 6 affiliation for the record. 

### 7PRESENTATION OF THE CONSUMER FEDERATION OF AMERICA 

### 8 MR. GILLIS: My name is Jack Gillis. I'm 

### 9 Director of Public Affairs for the Consumer Federation of 

### 10 America and author of "The Car Book," and I'm also here 

### 11 today with Dr. Mark Cooper, our Research Director. CFA is 

### 12 an association of over 280 consumer groups which is 

### 13 designed to advance the consumer interest in education and 

### 14 advocacy. We appreciate this opportunity. 

### 15We strongly urge the EPA to approve California's 

### 16 request for a waiver under the Clean Air Act to implement 

### 17 its Advanced Clean Car program. Tailpipe emission 

### 18 standards encourage the development of cars that go both 

### 19 farther on a gallon of gas and use alternative fuels. The 

### 20 result is cleaner, more efficient cars that reduce 

### 21America's vulnerability to oil and gas price shocks. 

### 22Consumers understand the benefits and haveMeeting September 19, 2012 Washington, D.C.

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### 1 consistently voiced support for California's leadership on 

### 2 clean car standards. In fact, in CFA's most recent poll 

### 3 we found that more than 70 percent of Americans support 

### 4 states being allowed to continue setting tailpipe 

### 5 standards that also increase motor vehicle efficiency. 

### 6 In a few moments I think you'll hear from 

### 7 Shannon Baker-Branstetter of Consumers Union, but I wanted 

### 8 to add that Consumer Reports also supported the survey 

### 9 research that we found, and that is 81 percent of 

### 10 Californians agree that the state should require 

### 11 automakers to significantly reduce the emissions of 

### 12 greenhouse gases. 

### 13 One of the things that I'd like to remind you in 

### 14 response especially to the recent comments from NADA is 

### 15 that a recent Deloitte study, an independent research 

### 16 study, found that 59 percent of 20 to 32-year-olds 

### 17 preferred alternative powered vehicles. This tells us 

### 18 that clean cars will likely be the choice of the majority 

### 19 of future consumers. By providing a waiver for 

### 20 California, EPA will be taking an important step in 

### 21 ensuring that this demand will be met. 

### 22Simply put, stronger emissions standards meanMeeting September 19, 2012 Washington, D.C.

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### 1 greater fuel economy. In spite of what Margo said, we 

### 2 want to separate the two issues, they are linked. And one 

### 3 of the great benefits of cleaner cars is lower gas prices. 

### 4Last year gas prices set a record high and this pushed 

### 5 household gas expenditures to a record $2850. Shockingly, 

### 6 gas eats up over 8 percent of the family's household 

### 7 income. 

### 8 California has played a critical role in 

### 9 stimulating the innovation in the auto market by striking 

### 10 the right balance between reducing pollution and setting 

### 11 achievable targets that push the automakers to employ new 

### 12 technologies. Many of those new technologies are already 

### 13 appearing in showrooms today. 

### 1414 states and D.C. have adopted the previous 

### 15 round of updates to California's clean car standards and 

### 16 are poised to do so again, which would dramatically 

### 17 increase the benefits of this waiver. In fact, the 15 

### 18 percent requirement for zero emission vehicles in the CARB 

### 19 proposal will play a central role in assuring that 

### 20 automakers reach the proposed national fuel economy 

### 21 standard of 54.5. 

### 22In order to achieve our nation's goals, electricMeeting September 19, 2012 Washington, D.C.

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### 1 vehicles will have to become a steadily increasing part of 

### 2 the vehicle fleet. The California Advanced Clean Car 

### 3 program will spur steady progress in both technology and 

### 4 consumer acceptance. With these efforts, electric 

### 5 vehicles will become as common as smart phones and 

### 6 tablets. 

### 7A decade ago when California first adopted the 

### 8 innovative LEV-ZEV standards that would require hybrid and 

### 9 electric vehicles, the automakers insisted that it 

### 10 couldn't be done. But California stood its ground and 

### 11 today, as you've heard earlier, there are 30 models 

### 12 available from all the major automakers and the Prius has 

### 13 become a best-selling and profitable vehicle. 

### 14Consumers are counting on California to lead 

### 15 America to a cleaner, more sustainable, more affordable 

### 16 future. Consumers across America join me in encouraging 

### 17 the EPA to grant the California Air Resources Board 

### 18 request for a waiver and begin implementing its Advanced 

### 19 Clean Car program. It's good for the environment, it's 

### 20 good for consumer pocketbooks, it's good for the auto 

### 21 industry, and it's good for our nation's independence. 

### 22Now I'd like to introduce my colleague, Dr. MarkMeeting September 19, 2012 Washington, D.C.

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### 1 Cooper. 

### 2DR. COOPER: I appreciate the opportunity to 

### 3 appear today. You've heard about the consumer benefits, 

### 4you've heard about the public support -- 

### 5PRESIDING OFFICER OGE: Would you please give us 

### 6 your name? 

### 7DR. COOPER: Oh, Mark Cooper, Director of 

### 8 Research, Consumer Federation of America. I thought Jack 

### 9 had taken care of that. 

### 10 So I want to emphasize something different. I 

### 11 won't repeat what Jack said or what others have said. For 

### 12 us, the clean cars program led by California has helped to 

### 13 set us on a path that will improve the performance of 

### 14 light-duty vehicles, cars and trucks by a greater amount, 

### 15 in a shorter time period, than ever accomplished in U.S. 

### 16 history. CFA believes that the direction set by 

### 17 California and the clean car states is a wonderful example 

### 18 of American federalism at its best, and this is in part a 

### 19 response to the NADA claim about having to have only 

### 20 national standards. 

### 21The clean cars program enjoys widespread support 

### 22 from consumers, automakers and suppliers, business groups,Meeting September 19, 2012 Washington, D.C.

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### 1 autoworkers, national defense experts, public health 

### 2 advocates, and environmentalists, and there are good 

### 3 economic reasons and environmental reasons and pocketbook 

### 4 reasons that it enjoys that support. But I want to stress 

### 5 the fact that there was a process here that is bipartisan, 

### 6 consensual, and I think the public really is yearning for 

### 7 that kind of policy process in America. 

### 8 Now, I emphasize the plural, "clean car states," 

### 9 for a simple reason. It is certainly true that the 

### 10 statutory language of the Clean Air Act gives California 

### 11 the lead role in developing a state-based alternative to 

### 12 federal standards. But we believe the adoption of 13 

### 13 additional states and jurisdictions is what really gave 

### 14 California clean cars program its clout. Combined, the 

### 15 clean car states represent the fifth or sixth largest auto 

### 16 market in the world. The collective wisdom of so many 

### 17 states gave the California standard a great deal of 

### 18 credibility and the size of the market gave it economic 

### 19 clout, and those two things have propelled the program 

### 20 forward. 

### 21So one of the great benefits of American 

### 22 federalism is to allow the individual states to act asMeeting September 19, 2012 Washington, D.C.

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### 1 laboratories, to discover better ways of accomplishing 

### 2 shared goals. The more eyballs looking at a problem, the 

### 3 more likely it is that a good solution will be found. 

### 4 By allowing the largest economy in the nation to develop a 

### 5 set of standards independently of the federal standards 

### 6 and allowing other states to adopt either the federal 

### 7 standard or the California standard, the Clean Air Act 

### 8 prevents fragmentation of 50 standards, but preserves the 

### 9 dynamic state-based process of innovation and 

### 10 experimentation, and that is what American federalism is 

### 11 about. 

### 12I do find it ironic that the dealers insist that 

### 13 we have a national standard for emissions and fuel 

### 14 economy, but when it comes to sales they insist on state

### 15 based laws, which prevent cross-state sales of 

### 16 automobiles. I would love to join with them in supporting 

### 17 a national approach to selling automobiles instead of 

### 18 state-based franchise laws. We've actually spent about 

### 19 ten years working on that. 

### 20 But this program went farther than the 

### 21 traditional federalism approach and that is important. By 

### 22 adding a layer of cooperation between the federal and theMeeting September 19, 2012 Washington, D.C.

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### 1 state agencies, an executive order of the Obama 

### 2 administration smoothed the process and increased the 

### 3 benefits of federalism dramatically. This was a 

### 4 coordinated effort of federal agencies recognizing federal 

### 5 law and state agencies tapping into grassroots public 

### 6 support. It has advanced federalism significantly. 

### 7So that cooperation has produced this remarkable 

### 8 outcome, the first long-term set of standards, both 

### 9 pollution and fuel economy, that the nation has ever had, 

### 10 to double the fuel economy of vehicle fleets in a little 

### 11 over a decade, a decade and a half, which has 

### 12 environmental, economic, national security, public health 

### 13 benefits. 

### 14So this is the outcome of a process that is 

### 15 really important. California took a leadership role, and 

### 16 you've heard about the market for hybrids, which would not 

### 17 have existed but for the clean car states. The current 

### 18 proposal nudges that market farther along. 

### 19 The automakers recognize the standards are good 

### 20 for them. In fact, virtually every stakeholder in the 

### 21 automotive market except the dealers recognizes that these 

### 22 standards are good for the industry.Meeting September 19, 2012 Washington, D.C.

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### 1We urge that you approve the waiver and continue 

### 2 this remarkable example of consensus, bipartisanship, and 

### 3 federalism. It's good for the country. 

### 4Thank you. 

### 5PRESIDING OFFICER OGE: Thank you, Mark. 

### 6 Any questions for Jack and Mark? 

### 7(No response.) 

### 8 PRESIDING OFFICER OGE: Thank you. 

### 9 MR. GILLIS: Thank you. 

### 10 PRESIDING OFFICER OGE: Now I'd like to call 

### 11 Shannon Baker-Branstetter. 

### 12PRESENTATION OF CONSUMERS UNION 

### 13 MS. BAKER-BRANSTETTER: Good morning. 

### 14PRESIDING OFFICER OGE: Can you give your full 

### 15 name and organization to the reporter. 

### 16 MS. BAKER-BRANSTETTER: Good morning. I'm 

### 17 Shannon Baker-Branstetter and I'm Policy Counsel for 

### 18 Consumers Union, the policy advocacy division of Consumer 

### 19 Reports. I appreciate the opportunity to convey Consumer 

### 20 Reports' support for California's waiver request for its 

### 21Advanced Clean Car program. I would like to make three 

### 22 points: First, Californians support this program; second,Meeting September 19, 2012 Washington, D.C.

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### 1 the standards are technologically feasible; and third, 

### 2 Californians needs these clean car standards. 

### 3 Consumer Reports conducts comprehensive tests of 

### 4 approximately 80 new vehicles every year, which we buy 

### 5 anonymously at retail. We provide consumers with 

### 6 objective comparative ratings about performance, safety, 

### 7 and reliability of these vehicles. We do not accept 

### 8 outside advertising and we have more than eight million 

### 9 subscribers. 

### 10 First, Californians do support these standards. 

### 11Last year Consumer Reports surveyed California residents 

### 12 to find out their views on key elements of the California 

### 13 clean cars program and we found overwhelming support. 81 

### 14percent of Californians agree that the state should 

### 15 require all automakers to reduce significantly the 

### 16 emissions of greenhouse gases from new vehicles. 75 

### 17 percent agreed that California should require automakers 

### 18 to build fleets that include increasing numbers of zero 

### 19 emission vehicles. 

### 20 Second, the standards are technologically 

### 21 feasible. Manufacturers are already offering plug-in 

### 22 hybrids and battery electric cars, with new modelsMeeting September 19, 2012 Washington, D.C.

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### 1 appearing all the time. California is committed to 

### 2 solving the chicken and egg problem by coordinating 

### 3 vehicle delivery and the alt-fuel infrastructure needed to 

### 4 support these vehicles. Automakers have also announced 

### 5 aggressive plans to mass produce plug-in hybrids, battery 

### 6 electric, and fuel cell vehicles to meet the ZEV 

### 7 requirement. 

### 8 Importantly, consumers seem very pleased with 

### 9 these new options. In our own satisfaction survey, lower 

### 10 emission in alt-fuel vehicles dominated the list. Chevy 

### 11Volt topped the list with 93 percent of buyers saying 

### 12 they'd definitely buy the car again. The Toyota Prius, 

### 13 Ford Fusion hybrid, and Volkswagen Golf TDI and Jetta TDI 

### 14 all rank at the top or near the top of class for customer 

### 15 satisfaction. 

### 16 Third, California needs the Advanced Clean Car 

### 17 program to protect the health and welfare of its citizens. 

### 18 The Clean Air Act expressly recognizes California's right 

### 19 to set vehicle emission standards that are stronger than 

### 20 the federal standards and the right of other states to 

### 21 adopt the California standards. 

### 22Thanks to the Clean Air Act, California and theMeeting September 19, 2012 Washington, D.C.

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### 1 nation have been able to improve air quality and reduce 

### 2 pollution over the last several decades. However, due to 

### 3 geography, population, and many millions of vehicles, 

### 4 California still has some of the worst air pollution in 

### 5 the country. California's prior iterations of the clean 

### 6 cars program have helped reduce emissions, but air is 

### 7 still unsafe in several regions of the state and people's 

### 8 lives depend on making the air cleaner. 

### 9 By 2025, California's LEV standards will reduce 

### 10 the average emissions of new light-duty vehicles by 

### 11 approximately 75 percent from 2010 levels. The new LEV 

### 12 rules will decrease greenhouse gas, particulate, and smog

### 13 forming emissions, which will reduce pollution-related 

### 14 illness and improve public health and the quality of life 

### 15 for California. 

### 16 California's ZEV standards are expected to 

### 17 deliver 1.4 million zero emission vehicles to the state. 

### 18 Because these vehicles do not require gasoline, the ZEV 

### 19 standards will reduce California's oil demand and need for 

### 20 refineries, reducing upstream emissions and delivering 

### 21 terrific consumer pocketbook savings. 

### 22In summary, California's Advanced Clean CarMeeting September 19, 2012 Washington, D.C.

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### 1 program is a practical and popular approach that is 

### 2 necessary to reduce some of the worst air pollution in the 

### 3 country. Allowing the program to go forward is in the 

### 4 state's best interest and the nation's. 

### 5Thank you for your time and considering our 

### 6 views. 

### 7PRESIDING OFFICER OGE: Thank you. 

### 8 Any questions? 

### 9 MR. DICKINSON: Thank you. 

### 10 MS. COHEN: I have two questions about the 

### 11 survey you alluded to. Are the results publicly 

### 12 available? 

### 13 MS. BAKER-BRANSTETTER: They are. 

### 14PRESIDING OFFICER OGE: I want to make sure it's 

### 15 loud for the reporter. 

### 16 MS. BAKER-BRANSTETTER: Yes, they are. The 

### 17 customer satisfaction survey? 

### 18 MS. COHEN: Yes. 

### 19 MS. BAKER-BRANSTETTER: Yes, they are. They're 

### 20 available on our web site. 

### 21MS. COHEN: And did the survey ask about 

### 22 purchase behavior on the part of consumers who supportedMeeting September 19, 2012 Washington, D.C.

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### 1more intense requirements for manufacturers for low 

### 2 emission vehicles? 

### 3 MS. BAKER-BRANSTETTER: I'm sorry. There are 

### 4 two separate surveys. There is the owner satisfaction 

### 5 survey about people being happy with their vehicles. 

### 6 That's available on Consumer Reports, etcetera. But if 

### 7 you're asking about the survey of Californians about 

### 8 support for green cars -- 

### 9 MS. COHEN: Yes. 

### 10 MS. BAKER-BRANSTETTER: -- that is part of the 

### 11 CARB comment period as part of their public record. 

### 12MR. DICKINSON: If you could submit both of 

### 13 those, if you'd like to, for the record, that would be 

### 14 helpful. 

### 15MS. BAKER-BRANSTETTER: Sure. 

### 16 PRESIDING OFFICER OGE: Thank you. 

### 17Ms. Ellen Kennedy. 

### 18 PRESENTATION OF CALVERT INVESTMENTS 

### 19 MS. KENNEDY: Good morning. 

### 20 PRESIDING OFFICER OGE: Would you state your 

### 21 name and your affiliation. 

### 22MS. KENNEDY: My name is Ellen Kennedy and I amMeeting September 19, 2012 Washington, D.C.

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### 1 the Manager of Environment and Climate Change Analysis for 

### 2 Calvert Investments. We manage approximately $12.3 

### 3 billion in a wide range of domestic and international 

### 4 offerings and we closely track regulatory developments 

### 5 that will affect our holdings. 

### 6 California's Advanced Clean Car program is one 

### 7 such development that will drive innovation, investment, 

### 8 and job creation, ensuring that the domestic auto industry 

### 9 retains global leadership in the years ahead. Thus, we 

### 10 strongly support the granting of California's request for 

### 11 a waiver of preemption under Section 209(b) of the Clean 

### 12 Air Act for the ACCP, both the LEV III program and the ZEV 

### 13 program. 

### 14We do so because worldwide the trend is clear. 

### 15 Customers want and in an increasing number of countries 

### 16 require cleaner cars and trucks, to go further on every 

### 17 gallon of gas, while cutting back on greenhouse gas 

### 18 emissions that contribute to climate change. Companies 

### 19 that fail to embrace relevant new technologies, from 

### 20 improving mileage for conventional internal combustion 

### 21 engines to developing hybrid, electric, and fuel cell 

### 22 vehicles, are putting themselves at risk. In contrast,Meeting September 19, 2012 Washington, D.C.

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### 1 the ACCP promotes investment in new technology. 

### 2The government Air Resource Board's LEV III 

### 3 program, which provides for smog reductions as well as 

### 4 carbon dioxide reductions that harmonize with the recently 

### 5 announced federal regulations, will have significant 

### 6 economic and environmental benefits. Further, granting 

### 7 the waiver request will promote development and deployment 

### 8 of ZEVs not only in California, but in Section 177 states 

### 9 that adopt the standards as well and pave the way for 

### 10 wider deployment. Promoting the deployment of ZEVs will 

### 11 advance the development of innovative technologies and 

### 12 reduce our dependence on oil, thereby protecting consumers 

### 13 and businesses from volatile oil price spikes. 

### 14The ACCP will provide the regulatory certainty 

### 15 needed to spur further investment in innovative 

### 16 technologies. There are already many examples of such 

### 17 investments based on current regulations. First, a report 

### 18 from the nonprofit, nonpartisan research group Next 10 

### 19 found that California attracted 69 percent of worldwide 

### 20 venture capital dedicated to electronic vehicle 

### 21 development in the first half of 2011. That's about $467 

### 22million.Meeting September 19, 2012 Washington, D.C.

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### 1Continental, a supplier of fuel-efficient 

### 2 turbochargers to Ford's 2014 Focus vehicle, is steadily 

### 3 pursuing electrification technologies and sees them as 

### 4 long-term investments. Ford is accelerating development 

### 5 of its hybrid and electric vehicles by bringing the design 

### 6 and production of key emissions-reducing components in 

### 7 house, a $135 million investment. The ACCP will 

### 8 serve to accelerate this trend. 

### 9 In sum, as investors we believe that the ACCP 

### 10 will benefit California and our nation as a whole by 

### 11 strengthening the nation's market for clean cars and clean 

### 12 car technologies. The ACCP will act as a tide that lifts 

### 13 all boats. It is good for investors, automakers, and the 

### 14American economy. 

### 15Thank you very much. 

### 16 PRESIDING OFFICER OGE: Thank you. 

### 17I have a question. You mentioned a couple of 

### 18 reports. I believe one of the reports that you mentioned 

### 19 is Next To 10? 

### 20 MS. KENNEDY: It's from Next 10. 

### 21PRESIDING OFFICER OGE: Next 10. 

### 22MS. KENNEDY: I can arrange to get that to you.Meeting September 19, 2012 Washington, D.C.

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### 1PRESIDING OFFICER OGE: If there is any record 

### 2 of those statements that you made, we would ask you to 

### 3 submit it for the record. 

### 4MS. KENNEDY: Yes. 

### 5PRESIDING OFFICER OGE: Thank you. 

### 6 Any other questions? 

### 7(No response.) 

### 8 PRESIDING OFFICER OGE: Thank you very much. 

### 9 Unfortunately, I have another meeting that you 

### 10 need to attend. So I'm going to ask my colleague Janet 

### 11 Cohen to take over. 

### 12Some of you mentioned, this is indeed my last 

### 13 public hearing. It was 33 years. Now you all know my 

### 14 age. I started here when I was a baby. But I want to 

### 15 express my honor and privilege at working with all of you, 

### 16 the states -- and we have them here today -- both the 

### 17 NACAA and specific states, local governments, car 

### 18 companies, suppliers, dealers, environmental, and consumer 

### 19 groups. Thank you very much. Continue your efforts for 

### 20 clean air. 

### 21(Applause.) 

### 22PRESIDING OFFICER OGE: And we apologize for ourMeeting September 19, 2012 Washington, D.C.

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### 1microphone, but it's behaving now. 

### 2MS. COHEN (presiding): Thank you, everyone who 

### 3 has testified so far. 

### 4Our next panel will be environmental and health 

### 5 organizations. I'd like to ask Mr. Paul Billings from the 

### 6 American Lung Association. Would you please state your 

### 7 affiliation for the record? Thank you. 

### 8 PRESENTATION OF THE AMERICAN LUNG ASSOCIATION 

### 9 MR. BILLINGS: Sure. Hi. I'm Paul Billings. I 

### 10 am Senior Vice President for Advocacy and Education for 

### 11 the American Lung Association. 

### 12Margo, before you go, I just want to say thank 

### 13 you very much on behalf of my daughters and 300 million 

### 14 other Americans who breathe clean air because of your 

### 15 efforts. We thank you for your service and we wish you 

### 16 well in your future endeavors, but we will miss you 

### 17 greatly. 

### 18 PRESIDING OFFICER OGE: Thank you, Paul. 

### 19 MR. BILLINGS: The American Lung Association 

### 20 advocates for clean and healthy air for all Americans. 

### 21 For decades we have advocated for the cleanup of pollution 

### 22 from motor vehicles. Despite much progress in CaliforniaMeeting September 19, 2012 Washington, D.C.

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### 1 and communities across the country, air pollution remains 

### 2 a major public health threat. Motor vehicle tailpipes 

### 3 continue to be a major source of air pollution. 

### 4The American Lung Association and our California 

### 5 charter association fully support the state of 

### 6 California's waiver request to implement its low emission 

### 7 vehicle and zero emission vehicle programs through 2025. 

### 8 Together they are known as the Advanced Clean Car 

### 9 programs. 

### 10 Motor vehicle emissions remain the leading 

### 11 source of harmful air pollution in California that can 

### 12 lead to hospitalization, emergency room visits, asthma 

### 13 attacks and other lung illness, heart attacks, strokes, 

### 14 and premature deaths. Californians continue to suffer 

### 15 from some of the most polluted air in the United States. 

### 16 According to our 2012 State of the Air report, nine of the 

### 17 ten most polluted metropolitan areas in the country are in 

### 18 California for ozone. 

### 19 Los Angeles tops the list, as it has for 12 out 

### 20 of the 13 years we've published the report. In the L.A. 

### 21metro area, there are more than one million adults with 

### 22 asthma and over 300,000 children with asthma who areMeeting September 19, 2012 Washington, D.C.

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### 1 routinely exposed to unhealthy levels of air pollution. 

### 2 In addition, California cities occupy the top five 

### 3 positions on both our annual and 24-hour particulate 

### 4matter most-polluted lists. 

### 5For decades, California's air pollution problem 

### 6 has placed an enormous health burden on its residents. 

### 7 Thanks to the leadership shown by California, air 

### 8 pollution levels in most of its cities continue to 

### 9 improve. However, getting better does not mean the air is 

### 10 safe to breathe. Pollution in California still kills. 

### 11 Progress must continue and the Advanced Clean Cars program 

### 12 is critical to continuing this success. 

### 13 In 2025, new cars in California will emit 75 

### 14percent less smog-forming pollution than the average new 

### 15 car sold today. The Air Resources Board estimates that by 

### 16 2035, when nearly the entire fleet will be compliant with 

### 17 the new standards, the critical components of ozone smog, 

### 18 reactive organic gases and nitrogen oxides, will be cut by 

### 19 21 percent and 36 percent respectively. PM 2.5 emissions 

### 20 will be cut by 11 percent. California needs these 

### 21 reductions to help attain and maintain compliance with 

### 22 national ambient air quality standards.Meeting September 19, 2012 Washington, D.C.

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### 1Under the Clean Air Act, California clearly has 

### 2 the right to sell these vehicles and to -- sorry -- to set 

### 3 these emission standards. EPA should approve the waiver. 

### 4The state clearly needs the Advanced Clean Car program to 

### 5 protect the health and welfare of its citizens. 

### 6 California has the unique authority because of 

### 7 its compelling and extraordinary history of fighting air 

### 8 pollution. The state has consistently demonstrated its 

### 9 commitment to act and to exercise a fundamental right to 

### 10 protect its citizens from air pollution. 

### 11The decision before the EPA is clear. We 

### 12 request that you promptly approve the California waiver 

### 13 request. 

### 14Thank you very much. 

### 15MS. COHEN: Thanks. 

### 16 I'd like to invite Megan Higgins from the Union 

### 17 of Concerned Scientists. 

### 18 PRESENTATION OF THE UNION OF CONCERNED SCIENTISTS 

### 19 MS. HIGGINS: Thank you for the opportunity to 

### 20 testify today. My name is Megan Higgins and I am the 

### 21 Senior Washington Representative for the Clean Vehicles 

### 22 Program of the Union of Concerned Scientists. UCS is theMeeting September 19, 2012 Washington, D.C.

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### 1 nation's leading science-based nonprofit, working for a 

### 2 healthy environment and a safer world. 

### 3 On behalf of UCS's more than 400,000 supporters 

### 4 and network of more than 18,000 scientists, we strongly 

### 5 urge the EPA to approve California's waiver request so 

### 6 that they can move forward with their amended low emission 

### 7 vehicle and zero emission vehicle standards. 

### 8 California continues to have the nation's worst 

### 9 air quality and vehicles are a significant source of this 

### 10 pollution. The Advanced Clean Cars regulatory package, of 

### 11 which LEV and ZEV are a part, is necessary for the state 

### 12 to meet its air pollution goals. Addressing both smog

### 13 forming and greenhouse gas emissions, the Advanced Clean 

### 14 Car program will clean the air, protect public health, and 

### 15 save the consumers money, approximately $22 billion 

### 16 through 2025 according to an analysis by the California 

### 17 Air Resources Board. 

### 18 The technology to achieve these standards is 

### 19 here today. It is already being used on cars throughout 

### 20 the fleet. These include not only electric and hybrid 

### 21 vehicles like the Chevy Volt, the Nissan Leaf, and the 

### 22 Toyota Prius, but also conventional models like the HondaMeeting September 19, 2012 Washington, D.C.

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### 1Accord, the Chevy Cruze, the Ford F-150, the Honda 

### 2 Odyssey, and the Toyota Siena, just to name a few. The 

### 3 Advanced Clean Cars regulatory package would ensure that 

### 4 cleaner technologies reach even more models of all vehicle 

### 5 types in the coming years. 

### 6 The Clean Air Act explicitly grants California 

### 7 the authority to set its own emission standards for most 

### 8 mobile sources if those standards are at least as 

### 9 protective as the federal standard and permits other 

### 10 states to opt into these standards. It is essential that 

### 11 California and any states that adopt California's 

### 12 regulation be able to retain this authority. This 

### 13 authority has driven innovation in the automotive sector 

### 14 and has resulted in dramatic reductions of emissions and 

### 15 healthier air, not just in California but throughout the 

### 16 entire nation. 

### 17Earlier this year, 161 scientists and engineers 

### 18 in California signed an open letter in support of the 

### 19 state's efforts to continue to reduce the impact of motor 

### 20 vehicle emissions. The reasons for their support were 

### 21many, from the fact that the longer we wait to bring down 

### 22 emissions the harder and more costly it will be, to theMeeting September 19, 2012 Washington, D.C.

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### 1 fact that we already have the solutions and technology to 

### 2 significantly reduce emissions; and finally, because the 

### 3 science on the causes and risks are clear. 

### 4In 2009, when California requested a waiver to 

### 5 enforce its greenhouse gas emission standards for motor 

### 6 vehicles covering model years 2012 to 2016, Administrator 

### 7 Jackson stated in granting the waiver that EPA, quote, 

### 8 "put the law and science first." The request submitted 

### 9 by the state of California and under consideration today 

### 10 clearly meets all the legal and technical requirements of 

### 11 a waiver. Therefore we are urging you to once again put 

### 12 the law and science first and grant this waiver without 

### 13 delay. 

### 14On behalf of UCS and all of our members and 

### 15 supporters, we thank you for all the good work you are 

### 16 doing to ensure a healthy environment and a safer world. 

### 17MS. COHEN: Thank you. 

### 18 Any questions? 

### 19 MR. DICKINSON: Thank you. 

### 20 MS. COHEN: Could I invite Ann Mesnikoff of the 

### 21 Sierra Club. 

### 22PRESENTATION OF THE SIERRA CLUBMeeting September 19, 2012 Washington, D.C.

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### 1MS. MESNIKOFF: Let's see if I can make this 

### 2 work well. 

### 3 My name is Ann Mesnikoff. I direct the Sierra 

### 4 Club's Green Transportation Campaign. Thanks for the 

### 5 opportunity to testify this morning. On behalf of our 1.4 

### 6 million members and supporters, including our 170,000 

### 7members and supporters of Sierra Club California, I 

### 8 strongly urge EPA to grant California's request for a 

### 9 waiver to implement its Advanced Clean Car program. This 

### 10 program includes new standards for smog-forming and other 

### 11 air pollutants, an updated zero emission vehicle program, 

### 12 and standards that continue to ratchet down greenhouse gas 

### 13 pollution. These new standards tackle critical issues for 

### 14 California and also have significant impacts beyond its 

### 15 borders. 

### 16 We'll submit more detailed comments for the 

### 17 record. 

### 18 Under the Clean Air Act, California can set air 

### 19 quality standards that are more stringent than federal 

### 20 standards so long as they address a compelling and 

### 21 extraordinary need, are stricter than federal regulations, 

### 22 and are technically and economically feasible. Over theMeeting September 19, 2012 Washington, D.C.

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### 1 past four decades, the EPA has granted waivers to 

### 2 California more than 50 times. CARB's June 27th request 

### 3 for a waiver to adopt the Advanced Clean Car program, 

### 4 including the ZEV program, clearly meets the legal and 

### 5 technical requirements of the Clean Air Act. Failure to 

### 6 grant the waiver would be arbitrary and capricious. 

### 7I was pleased to testify on behalf of California 

### 8 in 2009 in support of EPA's reconsideration of 

### 9 California's waiver request for its historic greenhouse 

### 10 gas emissions standards. In that testimony, I detailed 

### 11 the compelling legal case for granting California's 

### 12 waiver, including the specific climate impacts California 

### 13 was experiencing then and the significant greenhouse gas 

### 14 impact of motor vehicles in the state. 

### 15From drought to wildfires, California is on the 

### 16 front line of climate change and remains on the front line 

### 17 for air pollution. In 2009, we shared the more than 1,000 

### 18 photos submitted as part of our photo petition conveying a 

### 19 clear message to EPA: "EPA holds the keys to clean cars." 

### 20 That was true then with respect to the greenhouse gas 

### 21 standards under consideration in 2009 and continues to be 

### 22 true today as EPA considers the waiver for this full suiteMeeting September 19, 2012 Washington, D.C.

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### 1 of standards. 

### 2Air pollution from vehicles is a critical health 

### 3 issue in California, but also a significant economic issue 

### 4 as well. My colleague from Sierra Club California shared 

### 5 information regarding a study done a few years ago that 

### 6 the costs of not meeting federal air pollution standards 

### 7 in the San Joaquin Valley costs the region about $6 

### 8 billion annually and the South Coast Air Basin region 

### 9 about $22 billion. These costs include direct health 

### 10 costs -- emergency room visits, hospitalizations -- as 

### 11 well as costs associated with lost days at work and school 

### 12 and premature death. These air basins are the only two in 

### 13 the region that are ranked as in extreme nonattainment, in 

### 14part due to the large number of vehicles and their 

### 15 tailpipe pollution. 

### 16 A draft vision developed earlier this year by 

### 17 these air districts and others shows that moving toward 

### 18 zero and near-zero emission vehicles is essential to meet 

### 19 clean air standards wile also achieving substantial 

### 20 greenhouse gas reductions. The Advanced Clean Car program 

### 21 advances these goals. 

### 22California has also led the nation with its ZEVMeeting September 19, 2012 Washington, D.C.

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### 1 program. From moving the Prius to market or growing the 

### 2 number of electric -- or the growing number of electric 

### 3 vehicles today, the ZEV program continues to be central to 

### 4meeting the state's long-term health-based air pollution 

### 5 and climate change goals. 

### 6 The updated program, developed with input from a 

### 7 range of stakeholders including the states that have 

### 8 adopted this program, will continue to push innovation. 

### 9 Further, by displacing oil, the program has upstream air 

### 10 quality benefits as refinery emissions are reduced. 

### 11As CARB has documented, the revised program is 

### 12 technically feasible and there is ample lead time and 

### 13 flexibilities for the automakers to meet the requirements 

### 14 of the program in California as well as in the states from 

### 15 the Northeast to the Northwest that follow it. 

### 16 This Sunday, September 23rd, is the second 

### 17 National Plug In Day. Sierra Club is joining with other 

### 18 groups to hold events in California, with more than 60 

### 19 events nationwide. Today's electric vehicle owners, 

### 20 automakers, dealers, and others will have a chance to show 

### 21 off the best of today's technology. The ZEV program will 

### 22 help put technology on the road and sets a clear path forMeeting September 19, 2012 Washington, D.C.

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### 1 automakers, but also for states, as they plan for and 

### 2 prepare for these vehicles. 

### 3 According to the American Lung Association, more 

### 4 than four out of ten Americans live in areas that have 

### 5 received an F for unhealthy levels of ozone and 

### 6 particulate pollution. The Advanced Clean Car program 

### 7 will deliver benefits directly to those areas of 

### 8 California that received an F or a low grade in ALA's 

### 9 assessment, but also have benefits well beyond California. 

### 10 Approximately 96,627,673 Americans live in 

### 11 states that have adopted California's vehicle emissions 

### 12 program. Granting the waiver will enable these states to 

### 13 adopt and implement strong standards and continue, with 

### 14 California, to be leaders. 

### 15There's no question that California's Advanced 

### 16 Clean Car program offers greater air pollution reductions 

### 17 than the federal program. It is critical that EPA follow 

### 18 the guidance of the Clean Air Act in terms of granting the 

### 19 waiver California has requested. Sierra Club also urges 

### 20 EPA to move forward quickly with Tier 3 low sulfur fuel 

### 21 standards. 

### 22All Americans, whether they reside in the stateMeeting September 19, 2012 Washington, D.C.

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### 1 of California or those that follow its emissions program, 

### 2 deserve to breathe clean air. Tier 3 standards for 

### 3 vehicles will help ensure that they have that opportunity 

### 4 while also enabling the technologies that can help meet 

### 5 the national fuel efficiency and greenhouse gas standards. 

### 6 Further, a low sulfur fuel standard will slash sulfur 

### 7 levels -- that slashes sulfur levels in fuel sold 

### 8 nationally will have a tremendous impact on reducing ozone 

### 9 pollution from all vehicles on the road, even as vehicles 

### 10 with the latest emission control equipment phase into the 

### 11 fleet. 

### 12Given the important benefits to California, the 

### 13 177 states and the nation, Sierra Club urges EPA to grant 

### 14 the waiver California has requested while also pursuing 

### 15 strong standards for the nation. EPA indeed holds the 

### 16 keys to clean cars, clean air, and climate protection. 

### 17Thank you very much. 

### 18 MS. COHEN: I would just encourage you, as we 

### 19 have with others who testified and mentioned studies or 

### 20 reports that they cited, you talked about a California 

### 21 Sierra Club study that looked into the costs of failing to 

### 22meet standards. If you are able to, I would encourage youMeeting September 19, 2012 Washington, D.C.

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### 1 to send it in. 

### 2MS. MESNIKOFF: Yes. I'll just clarify. It was 

### 3 a study done by one of the state universities, but one 

### 4 that my colleague director of the California Sierra Club 

### 5 referenced to me yesterday. 

### 6 MS. COHEN: If you could include that with your 

### 7 comments, we'd appreciate it. 

### 8 MS. MESNIKOFF: Yes, right. Thank you. 

### 9 MS. COHEN: I invite Tomas Carbonell, 

### 10 Environmental Defense Fund, at this time. 

### 11PRESENTATION OF THE ENVIRONMENTAL DEFENSE FUND 

### 12MR. CARBONELL: Good morning. My name is Tomas 

### 13 Carbonell. I'm an attorney in the Climate and Air Program 

### 14 of the Environmental Defense Fund. I appreciate the 

### 15 opportunity to testify. 

### 16 On behalf of Environmental Defense Fund, our 

### 17more than 700,000 members nationwide, and our tens of 

### 18 thousands of members in California, I sincerely thank you 

### 19 for the opportunity to testify today on California's 

### 20 landmark Advanced Clean Cars program and request for 

### 21 waiver. The California program will help curb helpful 

### 22 smog-forming and particulate pollution and address theMeeting September 19, 2012 Washington, D.C.

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### 1 extensive climate-disrupting pollution from passenger 

### 2 vehicles. 

### 3 California's decades-long bipartisan leadership 

### 4 on cleaner cars has provided vital protection for public 

### 5 health and the environment for millions of Californians. 

### 6 California's motor vehicle control program is urgently 

### 7 needed to address compelling and extraordinary conditions, 

### 8 including the country's largest state population, its 

### 9 largest motor vehicle fleet, climate-sensitive resources 

### 10 ranging from imperiled water supplies that rely on Sierra 

### 11 snow pack, to the nation's largest agricultural base, to 

### 12 its 500-mile shoreline, and severe air quality problems 

### 13 that will be exacerbated by temperature increases that are 

### 14 caused by climate change, and it would be arbitrary for 

### 15 EPA to find otherwise. EDF urges EPA to approve the 

### 16 waiver without delay. 

### 17California has a legacy of adopting clean car 

### 18 standards that protect human health and the environment, 

### 19 advance low-pollution technologies, and are highly cost 

### 20 effective. California's leadership is rooted in a firm 

### 21 bipartisanship. Over 40 years ago, during the development 

### 22 of the Clean Air Act in 1967, it was Republican SenatorMeeting September 19, 2012 Washington, D.C.

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### 1 George Murphy of California who sponsored the pivotal 

### 2 legislative language guaranteeing California's continued 

### 3 leadership in establishing clean car standards. Senator 

### 4 Murphy won sweeping bipartisan support for California to 

### 5maintain its authority to protect human health and the 

### 6 environment from automobile emissions, pointing to 

### 7 California's serious air pollution challenges. 

### 8 The Senator said at the time: "I am 

### 9 particularly grateful for the recognition that the 

### 10 committee has given to the state of California by 

### 11 accepting an amendment offered by me which recognizes the 

### 12 state's unique problems and pioneering efforts by granting 

### 13 a waiver from the federal preemption for the state of 

### 14 California and thus ensuring that the state will be able 

### 15 to continue its already excellent program for the benefit 

### 16 of the people of that state." 

### 17California has continued to demonstrate 

### 18 bipartisan leadership in providing clean air protection 

### 19 for the state and our nation. The National Academy of 

### 20 Sciences examined California's time-tested leadership, 

### 21 finding that the Golden State has long been considered a 

### 22 laboratory for emission control innovation. CaliforniaMeeting September 19, 2012 Washington, D.C.

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### 1 also collaborated with the Environmental Protection 

### 2 Agency, the Department of Transportation, auto companies, 

### 3 the United Auto Workers, and numerous other states to 

### 4 forge a landmark national program reducing climate 

### 5 pollution from cars nationwide. The success of that 

### 6 collaboration is reflected in the broad support for the 

### 7 national program. 

### 8 We applaud California for its steadfast 

### 9 leadership in securing clean air, a healthier environment, 

### 10 and a stronger clean energy economy for millions of 

### 11 Californians. 

### 12EPA's review of California's waiver request is 

### 13 constrained by the narrowly circumscribed criteria set 

### 14 forth in Section 209(b) of the Act. The legislative 

### 15 history of Section 209, EPA's prior decisions on waiver 

### 16 requests, and court review of these decisions clearly 

### 17 establish that EPA's review must be highly deferential to 

### 18 California and that grounds for denial are very tightly 

### 19 constrained by the statutory factors. 

### 20 As the D.C. Circuit Court has noted: "Congress 

### 21 has decided to grant California the broadest possible 

### 22 discretion in adopting and enforcing standards for theMeeting September 19, 2012 Washington, D.C.

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### 1 control of emissions from new motor vehicles." 

### 2California's emissions standards are presumed to 

### 3 satisfy the waiver requirements and EPA may not disregard 

### 4 California's determination absent clear and compelling 

### 5 evidence to the contrary. 

### 6 The California's Advanced Clean Car program will 

### 7 reduce climate pollution from California fleet of cars by 

### 8 2 million tons, or 34 percent, in 2025. These reductions 

### 9 will provide a savings of $5 billion in operating costs in 

### 10 2025 for California drivers, which will rise to $10 

### 11 billion in 2030 when even more advanced cars are on the 

### 12 road. 

### 13 The emission reductions under this program are a 

### 14 critical part of the state's efforts to ward off the worst 

### 15 consequences of climate change, including the clear and 

### 16 present danger of rising sea levels. The grim impacts of 

### 17 climate change in California and the Southwest include 

### 18 that water supplies will become increasingly scarce, 

### 19 calling for tradeoffs among competing uses and potentially 

### 20 leading to conflict. Increasing temperature and drought, 

### 21 wildfire, and invasive species will accelerate the 

### 22 transformation of the landscape; and increased frequencyMeeting September 19, 2012 Washington, D.C.

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### 1 and altered timing of flooding will increase risks to 

### 2 people, ecosystems, and infrastructure. 

### 3 Climate change is also likely to harm 

### 4 California's economy by reducing the types of natural, 

### 5 non-irrigated vegetation available for livestock forage 

### 6 and the ability of forest ecosystems to store carbon 

### 7 dioxide. 

### 8 These impacts and many others associated with 

### 9 climate change impose a heavy price in California's public 

### 10 health, environment, and its prosperity. 

### 11While California's ingenuity and technology has 

### 12 brought significant progress in reducing harmful ozone

### 13 forming and particulate emissions from passenger cars and 

### 14 trucks, California continues to experience some of the 

### 15 worst air quality in the nation and needs additional 

### 16 reductions to protect public health and meet health-based 

### 17 air quality standards. 

### 18 The Advanced Clean Car program will help meet 

### 19 these needs by reducing statewide VOC emissions by 21 

### 20 percent, NOx emissions by 36 percent, and fine PM 

### 21 emissions by 11 percent in 2035. These estimated 

### 22 reductions are expected to avoid up to 530 prematureMeeting September 19, 2012 Washington, D.C.

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### 1 deaths by 2025 and will help ensure healthier, longer 

### 2 lives in target areas like the San Joaquin Valley and the 

### 3 South Coast Air Basin. 

### 4Further, the accompanying reductions of carbon 

### 5 pollution are essential to help secure these health 

### 6 quality benefits and ameliorate the serious risk of more 

### 7 dangerous high pollution days in California, that are 

### 8 exacerbated by a warming climate. 

### 9 We also respectfully urge EPA to build from the 

### 10 foundation forged by California's leadership and 

### 11 immediately propose national Tier 3 emissions and gasoline 

### 12 fuel standards for passenger vehicles. Such a rigorous 

### 13 program would have immediate and far-reaching health and 

### 14 environmental benefits for our entire country, reducing a 

### 15 cascade of harmful airborne contaminants, ensuring longer 

### 16 and healthier lives, and helping states and communities 

### 17 across our country restore healthy air. 

### 18 These critical health protections will be 

### 19 achieved through improvements in fuel quality standards 

### 20 that cost less than a penny a gallon, and timely 

### 21 finalization of these clean air standards would allow 

### 22manufacturers to efficiently align their technologyMeeting September 19, 2012 Washington, D.C.

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### 1 upgrades for nitrogen oxides and other pollutants with the 

### 2 recently finalized fuel efficiency and greenhouse gas 

### 3 emission standards, securing the suite of human health and 

### 4 environmental protections that are available from both 

### 5 standards through smart, optimized clean air investments 

### 6 for our children, our communities, and the nation. 

### 7In conclusion, EDF urges EPA to approve 

### 8 California's waiver without delay to secure vital clean 

### 9 air protections. 

### 10 Thanks. I will be submitting a copy of these 

### 11 remarks for the record. 

### 12MS. COHEN: Thank you. 

### 13 MR. CARBONELL: Sorry, but we don't have enough 

### 14 copies with us. 

### 15MS. COHEN: Any questions? 

### 16 MR. DICKINSON: Thank you. 

### 17MS. COHEN: Mr. Nathan Wilcox, Environment 

### 18 America. Good morning. 

### 19 PRESENTATION OF ENVIRONMENT AMERICA 

### 20 MR. WILCOX: Hello and thanks for the 

### 21 opportunity to testify today on this important topic. My 

### 22 name is Nathan Wilcox and I'm the Federal Global WarmingMeeting September 19, 2012 Washington, D.C.

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### 1 Program Director for Environment America. Environment 

### 2 America is the federation of 29 state-based, citizen

### 3 funded environmental advocacy organizations working for a 

### 4 cleaner, greener, and a healthier future. 

### 5Environment America and our state groups were 

### 6 actively involved in the push in California and 13 other 

### 7 states to see California's original clean cars program 

### 8 adopted and we wholeheartedly support California's waiver 

### 9 request to implement its low emission vehicle and zero 

### 10 emission vehicle programs through 2025. 

### 11Getting cleaner cars and trucks on the roads is 

### 12 absolutely critical to our effort to tackle global warming 

### 13 as only power plants produce more global warming pollution 

### 14 nationwide than do cars and light trucks. The past 12 

### 15months alone have offered numerous examples of why 

### 16 tackling global warming is essential to protecting our 

### 17 environment, our health, and our safety. From deadly heat 

### 18 waves and wildfires to devastating floods, recent extreme 

### 19 weather events offer even more proof that our climate is 

### 20 changing in dangerous ways and emphasize the need to cut 

### 21 emissions of the carbon pollution that is fueling the 

### 22 problem.Meeting September 19, 2012 Washington, D.C.

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### 1The LEV and ZEV programs are two of the best 

### 2 tools available to cut carbon pollution within the 

### 3 transportation sector. In fact, the California Air 

### 4 Resources Board estimates that by 2025 the LEV and ZEV 

### 5 programs would cut carbon dioxide emissions by almost 14 

### 6 million metric tons per year. The LEV program is also 

### 7 critical to cutting emissions of criteria pollutants that 

### 8 lead to smog and other dangerous air pollution problems. 

### 9 California's LEV and ZEV programs by tightening 

### 10 emissions for our cars and light trucks have also helped 

### 11 build a vehicle fleet that consumes less oil. From the 

### 12 rivers and coastlines that are devastated by oil spills, 

### 13 to the carbon pollution created by the burning of oil, to 

### 14 the pain that consumers feel at the gas pump because of 

### 15 our dependence on this finite resource, there are many 

### 16 important reasons why getting off oil is in our country's 

### 17 best interests. These standards help to push automakers 

### 18 to create cars that are part of the solution instead of 

### 19 exacerbating the problem. 

### 20 These clean car programs are important not just 

### 21 for California, but for the nation as a whole. For the 

### 22 past four decades, California and its standards haveMeeting September 19, 2012 Washington, D.C.

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### 1 served as a laboratory for advancing cleaner car 

### 2 technologies, and because of the adoption of these 

### 3 standards by other states and the support their adoption 

### 4 helped provide for the national clean cars program, the 

### 5 rest of the country has less pollution and cleaner air as 

### 6 well. 

### 7Finally, the Clean Air Act expressly recognizes 

### 8 California's right to set vehicle emissions standards that 

### 9 are stronger than the federal standards and the right of 

### 10 other states to adopt California standards. 

### 11California has clearly met all of the legal and 

### 12 technical requirements for its waiver request and EPA 

### 13 should therefore grant the state's request without delay. 

### 14Denying the request would be inconsistent with EPA's past 

### 15 actions, to say nothing of the threat it would pose to the 

### 16 ability of these standards to continue reaping benefits 

### 17 for California and the nation as a whole. 

### 18 Thanks again for the opportunity to testify. 

### 19 MS. COHEN: Thank you. 

### 20 Is there someone here from the Maryland Sierra 

### 21 Club wanting to testify? Yes? 

### 22Would you please provide your name andMeeting September 19, 2012 Washington, D.C.

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### 1 affiliation for the record? Thank you. 

### 2PRESENTATION OF THE MARYLAND SIERRA CLUB 

### 3 MR. TULKIN: Hello. I am someone from the 

### 4 Maryland Sierra Club. My name is Josh Tulkin. I am the 

### 5 Director of the Maryland Chapter of the Sierra Club. 

### 6 Thanks to the many qualified comments earlier, I 

### 7 can keep my comments fairly brief. I'm also speaking as a 

### 8 displaced Californian. I had the privilege of going to 

### 9 school in the smog belt of Los Angeles. But I will be 

### 10 speaking specifically about Maryland's interest in 

### 11 granting this waiver. 

### 12The Maryland Chapter of the Sierra Club has over 

### 13 30,000 supporters and we were strong advocates of 

### 14 Maryland's adoption of California's clean car standard, 

### 15 back I believe in 2007. There are specific benefits which 

### 16 come to Maryland from this program. About one-third of 

### 17 Maryland's emissions, particularly greenhouse gas 

### 18 emissions, come from automobiles, as someone mentioned, 

### 19 just second to our coal-fired power plants in the state, 

### 20 and the greenhouse gas reductions in this plan are part of 

### 21 Maryland's plan to meet its GGRA, its Greenhouse Gas 

### 22 Reduction Act goals. This is Maryland's goal to makeMeeting September 19, 2012 Washington, D.C.

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### 1 significant reductions, 20 or 25 percent, by the year 

### 2 2025. Second to power plants, clean cars makes one of the 

### 3 most significant reductions in greenhouse gases. 

### 4This year Maryland saw 26 code orange days. We 

### 5 currently have 11 states -- sorry -- 11 counties in 

### 6 nonattainment for particulate matter. So there are 

### 7 clearly clean air -- there are clearly air pollution 

### 8 problems that Maryland has, and one of its approaches was 

### 9 the adoption of the California clean car standard. This 

### 10 waiver would not only benefit California, as noted 

### 11 earlier, but would have benefits to Maryland in state, 

### 12 would have benefits to Maryland's impact on five 

### 13 surrounding states, which have been noted to have air 

### 14pollution transfer from Maryland, and for the other states 

### 15 upwind of us would definitely bring a downwind benefit. 

### 16 I think, given everything else, I'll just leave 

### 17 it at that. 

### 18 MS. COHEN: Thank you very much. 

### 19 MR. TULKIN: Thank you. 

### 20 MS. COHEN: Our next panelists represent 

### 21 industry. I'd like to ask Mr. Antonio Santos from MECA to 

### 22 testify.Meeting September 19, 2012 Washington, D.C.

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### 1PRESENTATION OF THE MANUFACTURERS OF 

### 2EMISSION CONTROLS ASSOCIATION 

### 3 MR. SANTOS: Good morning. Hi. My name is 

### 4Antonio Santos, Director of Special Projects at the 

### 5 Manufacturers of Emission Controls Association here in 

### 6 Washington, D.C. MECA and its member companies today 

### 7 would like to thank the U.S. EPA for allowing us to speak 

### 8 at this hearing. 

### 9 We, along with the Emissions Control Technology 

### 10 Association, ECTA, and the Advanced Engine Systems 

### 11 Institute, AESI, which you'll be hearing from later today, 

### 12 are pleased to provide comments in support of the 

### 13 California Air Resources Board's request that EPA grant a 

### 14 waiver for ARB's Advanced Clean Car program. This 

### 15 comprehensive program that includes future criteria 

### 16 exhaust and evaporative emission standards for light-duty 

### 17 and medium-duty vehicles, post-2016 light-duty greenhouse 

### 18 gas emission standards, and revisions to ARB's zero 

### 19 emission vehicle requirements, will reset the bar for 

### 20 state of the art exhaust and evaporative emission controls 

### 21 for light-duty vehicles through 2025. 

### 22MECA is a nonprofit association of the world'sMeeting September 19, 2012 Washington, D.C.

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### 1 leading manufacturers of emission control technology for 

### 2mobile sources. Our members have over 40 years of 

### 3 experience and a proven track record in developing and 

### 4manufacturing emission control technology for a wide 

### 5 variety of on-road and off-road vehicles and equipment, 

### 6 including extensive experience in developing exhaust and 

### 7 evaporative emission controls for gasoline and diesel 

### 8 light-duty vehicles in all world markets. Our industry 

### 9 has played an important role in the emission control 

### 10 success story associated with light-duty vehicles in 

### 11 California and has continually supported efforts to 

### 12 develop innovative technology-forcing emission control 

### 13 programs to deal with California's unique air quality 

### 14problems. 

### 15The experience of our industry over the last 40 

### 16 years clearly demonstrates the connection between vehicle 

### 17 emission regulation and economic development. Prior to 

### 18 1970, our industry did not exist. But with the enactment 

### 19 of the Clean Air Act in 1970, our industry has flourished, 

### 20 developing successive generations of technology to meet 

### 21 ever-tightening regulatory standards. 

### 22Since the introduction of the catalyticMeeting September 19, 2012 Washington, D.C.

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### 1 converter in 1975, more than 500 million light-duty 

### 2 vehicles have been sold in the U.S. equipped with exhaust 

### 3 and evaporative emission control technologies developed by 

### 4 our industry. This generated an estimated $250 to $300 

### 5 billion in economic activity since 1975. In 2010 alone, 

### 6 our industry generated $12 billion of economic activity 

### 7 and accounted for 65,000 jobs, mostly in manufacturing. 

### 8 ARB's Advanced Clean Car program will provide additional 

### 9 support for the continued development of a thriving U.S. 

### 10 industry focused on a wide range of technologies that can 

### 11 reduce vehicle criteria pollutant and greenhouse gas 

### 12 emissions. 

### 13 MECA provided detailed written comments to ARB 

### 14 in January of this year as part of their proposed 

### 15 rulemaking for the Advanced Clean Car program, which was 

### 16 officially approved by the ARB Board on January 27, 2012. 

### 17In those comments, MECA agreed with ARB staff's 

### 18 assessment that achieving the proposed LEV III exhaust and 

### 19 evaporative emission standards and associated emission 

### 20 reductions are both technically feasible and cost

### 21 effective. 

### 22This fact is clearly demonstrated by the moreMeeting September 19, 2012 Washington, D.C.

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### 1 than two million SULEV and PZEV-compliant light-duty 

### 2 vehicles that have been sold in the California market 

### 3 since these near-zero emission gasoline vehicles were 

### 4 first introduced more than ten years ago. The technology 

### 5 base of advanced three-way catalysts, exhaust hydrocarbon 

### 6 adsorber materials, high cell density substrates, emission 

### 7 system thermal management strategies, secondary air 

### 8 injection systems, advanced carbon canisters, advanced low 

### 9 fuel permeation materials, and air intake hydrocarbon 

### 10 adsorber materials that have already been commercialized 

### 11 for PZEV gasoline vehicle applications can be extended to 

### 12 and further optimized to allow all light, medium, and 

### 13 heavy-duty gasoline vehicles to achieve the exhaust and 

### 14 evaporative emission standards needed by vehicle 

### 15manufacturers to comply with the LEV III emission limits. 

### 16 In addition, advanced diesel emission control 

### 17 technologies, including diesel particulate filters, lean 

### 18 NOx adsorber catalysts, and selective catalytic reduction 

### 19 catalysts, will be combined with future advanced diesel 

### 20 engines to allow light-duty diesel vehicles to achieve the 

### 21 LEV III emission limits. 

### 22MECA also urged ARB in our previous testimony toMeeting September 19, 2012 Washington, D.C.

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### 1 include a mid-term formal review on their proposed one 

### 2milligram per mile light-duty vehicle PM standard to 

### 3 ensure that future gasoline vehicles that are introduced 

### 4 into the California market include the best available 

### 5 technologies for minimizing particulate emissions from 

### 6 these vehicles. MECA also supported ARB's changes to 

### 7 their light-duty vehicle on-board diagnostic requirements, 

### 8 noting that it is important for ARB to continue to 

### 9 encourage the development of commercial opportunities for 

### 10 particulate sensors for both light-duty and heavy-duty 

### 11 vehicle OBD applications. 

### 12MECA also fully supported ARB's post-2016 

### 13 greenhouse gas emission standards for light-duty vehicles. 

### 14Implicit in federal and state greenhouse gas emission 

### 15 analyses is the ability of these advanced powertrain 

### 16 options to meet the applicable criteria pollutant emission 

### 17 standards, such as for carbon monoxide, oxides of 

### 18 nitrogen, and non-methane organic gases. 

### 19 All of these advanced light-duty powertrain 

### 20 options combined with the appropriately designed and 

### 21 optimized emission control technologies can meet all 

### 22 current and future federal and state criteria emissionMeeting September 19, 2012 Washington, D.C.

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### 1 requirements. In this manner, advanced emission controls 

### 2 for criteria pollutants enable advanced powertrains to 

### 3 also be viable options for reducing greenhouse gas 

### 4 emissions. 

### 5A range of powertrain technologies, including 

### 6 engine turbochargers, exhaust gas recirculation systems, 

### 7 advanced fuel systems, variable valve actuation 

### 8 technology, advanced transmissions, hybrid powertrain 

### 9 components, and powertrain control modules, that could be 

### 10 applied to both light-duty gasoline and diesel powertrains 

### 11 to help improve overall vehicle efficiencies, also help 

### 12 reduce fuel consumption, both of which can result in lower 

### 13 CO2 exhaust emissions. 

### 14In many cases, the application and optimization 

### 15 of advanced emission control technologies on advanced 

### 16 powertrains can be achieved with minimal impacts on 

### 17 overall fuel consumption. Auto manufacturers will also 

### 18 take advantage of synergies between advanced emission 

### 19 control technologies and advanced powertrains to assist in 

### 20 their efforts to optimize their performance with respect 

### 21 to both criteria pollutant and greenhouse gas emissions. 

### 22In summary, there are significant opportunitiesMeeting September 19, 2012 Washington, D.C.

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### 1 to reduce both criteria pollutant and greenhouse gas 

### 2 emissions from the transportation sector through the 

### 3 design of fuel efficient powertrains that include advanced 

### 4 emission controls for meeting even the most stringent 

### 5 criteria pollutant standards that are included in ARB's 

### 6 Advanced Clean Car program. 

### 7MECA believes the advanced emission control 

### 8 systems have a critically important role in current and 

### 9 future policies that aim to reduce mobile source criteria 

### 10 pollutant and greenhouse gas emissions. These advanced 

### 11 exhaust and evaporative emission control technologies will 

### 12 allow all current and future high-efficiency powertrain 

### 13 options to comply with ARB's LEV III criteria pollutant 

### 14 standards, thus enabling these powertrains to be viable 

### 15 options for complying with existing and proposed ARB and 

### 16 EPA greenhouse gas pollutant standards. 

### 17MECA, ECTA, and AESI commend ARB for taking 

### 18 important steps through its Advanced Clean Car program to 

### 19 reduce criteria pollutant and greenhouse gas emissions and 

### 20 to improve fuel economy from light-duty vehicles in 

### 21 California. We ask EPA to grant ARB a waiver for this 

### 22 innovative regulatory program. We also urge EPA to bringMeeting September 19, 2012 Washington, D.C.

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### 1 forward their Tier 3 light-duty proposal, using ARB's LEV 

### 2 III program as a template, that will establish a national 

### 3 set of exhaust and evaporative standards for light-duty 

### 4 vehicles. 

### 5Our industry is prepared to do its part to 

### 6 deliver cost-effective advanced emission control 

### 7 technologies to the market. MECA will provide written 

### 8 comments on this waiver request before the close of the 

### 9 comment period. 

### 10 Thank you. 

### 11MS. COHEN: Thank you very much. 

### 12MR. DICKINSON: Thank you. 

### 13 MS. COHEN: Chris Hessler, Advanced Engine 

### 14 Systems Institute. 

### 15Good morning. 

### 16 PRESENTATION OF THE ADVANCED ENGINE SYSTEMS INSTITUTE 

### 17MR. HESSLER: Good morning. My name is Chris 

### 18 Hessler. I'm here today on behalf of the Advanced Engine 

### 19 Systems Institute. AESI was established to represent the 

### 20 companies that design, engineer and manufacture components 

### 21 that enable engines to operate more cleanly and 

### 22 efficiently. I'm going to pile on a little bit in favorMeeting September 19, 2012 Washington, D.C.

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### 1 of approval of the waiver petition, but also talk a bit 

### 2 about what we think is an important way to think about 

### 3 costs and technologies. 

### 4AESI strongly supports EPA approval of the 

### 5 waiver sought by the California Air Resources Board. 

### 6 ARB's waiver request is consistent with past approvals of 

### 7 California waivers. California is seeking permission to 

### 8 implement the third major version of its LEV program, 

### 9 which has been a vital component of California's strategy 

### 10 to manage some of the most difficult air pollution 

### 11 challenges in the nation. 

### 12There has been a lot of talk already about the 

### 13 three tests in Section 209 of the Clean Air Act, so I 

### 14 won't repeat them, but will address our views regarding 

### 15 how the petition meets -- how the standard meets those 

### 16 tests. 

### 17Regarding consistency, California's air remains 

### 18 stubbornly in nonattainment with the ozone and PM NAAQS. 

### 19 Nearly 80 percent of the state's ozone-forming NOx 

### 20 emissions and a third of its PM 2.5 emissions are from 

### 21mobile sources. So absent further tightening of the LEV 

### 22 emission standards, Californians have little hope that theMeeting September 19, 2012 Washington, D.C.

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### 1 air they breathe will ever meet federal standards. 

### 2Regarding arbitrary and capricious, the proposed 

### 3 revisions are entirely consistent with past standards 

### 4 crafted by the ARB and approved by EPA. Moreover, the ARB 

### 5 has fully documented its process for developing the 

### 6 standards, including the steps it's taken to ensure the 

### 7 standards are practical and achievable. 

### 8 Regarding stringency, clearly its more stringent 

### 9 than the federal standard. It represents a meaningful 

### 10 tightening of the current standards and it will drive the 

### 11 use of some of the latest technologies. 

### 12Given that the standard meet the three tests set 

### 13 forth in the law, the Administrator must grant the 

### 14petition. 

### 15Unfortunately, the federal government has fallen 

### 16 behind California in regard to vehicle emission standards. 

### 17And, worse, it has done so without explanation of any 

### 18 kind. Years have been spent developing a federal proposal 

### 19 that would, we are told, put the rest of the nation on par 

### 20 with California's LEV III standard, but the proposal 

### 21 appears to have been shelved. 

### 22Some have boldly asserted that a federal Tier 3Meeting September 19, 2012 Washington, D.C.

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### 1 standard would pose unbearable costs on our already 

### 2 weakened economy. My question would be, by what 

### 3 techniques has anyone managed to analyze the micro and 

### 4macro economic outcomes of a proposal that none of us in 

### 5 the public has yet seen? Perhaps we should see such 

### 6 assertions for the nonsense that they are, based at best 

### 7 on guesswork as to what is contained in the proposal. The 

### 8 federal government has no cause to conceal its work and 

### 9 its thinking on Tier 3 from the public. Let it be seen 

### 10 and let its merits and demerits be debated. 

### 11Whether we're talking about LEV III or Tier 3, 

### 12 casual assertions that reducing vehicle emissions is 

### 13 somehow inconsistent with economic growth flies in the 

### 14 face of four decades of evidence to the contrary. In 

### 15 1967, the city of Los Angeles made the cover of Time 

### 16 Magazine under a banner headline, "The Polluted Air." 

### 17 Many other cities were faced with choking smog that would 

### 18 shock and amaze those of us who have become accustomed to 

### 19 today's far better air quality standards. 

### 20 What has happened since that time provides us 

### 21 with incontrovertible evidence that emissions controls do 

### 22 not hamper economic development. They have enhanced andMeeting September 19, 2012 Washington, D.C.

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### 1 enabled growth and the mobility that is powered by ever

### 2 cleaner engines. Since that article appeared in Time, the 

### 3 miles driven by cars and trucks in this country have 

### 4 tripled, as has GDP. The volume of freight shipped around 

### 5 the country has quadrupled, and yet total emissions from 

### 6 mobile sources have shrunk to a quarter of what they were. 

### 7Automakers have produced cars that are more 

### 8 powerful, last longer, are driven more, and yet pollute 

### 9 far less. They have done that using the technologies 

### 10 developed and manufactured in this country by AESI members 

### 11 and their colleagues in other companies throughout the 

### 12 industry. 

### 13 If we had not controlled emissions from all the 

### 14 engines used to keep this country moving, much of the air 

### 15 in this nation would be poisonous and unbreathable. Of 

### 16 course, it's somewhat silly to think about that because 

### 17 Americans would never have tolerated such a wasteful 

### 18 destruction of the resource of clean air, and that's why 

### 19 Congress passed and repeatedly improved the Clean Air Act. 

### 20 That's why under the leadership of individuals like Margo 

### 21 Oge, whose tremendous public service is nearing its end, 

### 22 EPA has repeatedly adopted tighter emission standards, asMeeting September 19, 2012 Washington, D.C.

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### 1 has California, that have reflected the advances made by 

### 2 technologies. 

### 3 Are there costs associated with using emission 

### 4 control equipment? Absolutely. But the average emission 

### 5 control system costs less than a modern car audio system. 

### 6 Innovation is constantly driving costs down. Just this 

### 7month, a major automaker it will introduce on 2013 

### 8 vehicles a new catalytic converter that uses 22 percent 

### 9 less precious metals and costs 37 percent less than the 

### 10 converter it is replacing, while still complying with 

### 11 emission standards. 

### 12The technologies used to control emissions have 

### 13 proven highly cost-effective, while allowing us to reap 

### 14 the economic and social rewords of our mobility. Despite 

### 15 this tremendous progress, a third of the nation still 

### 16 lives in nonattainment areas still contribute 60 percent 

### 17 of the NOx emissions and a third of the PM 2.5 emissions 

### 18 in most of those places, and more in some. So unless 

### 19 folks are going to start driving less, we'd better 

### 20 continue making our cars and trucks cleaner. 

### 21Our industry continues its long and successful 

### 22 tradition of innovative and cost-effective technologies --Meeting September 19, 2012 Washington, D.C.

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### 1 of producing innovative and cost-effective technologies to 

### 2meet automakers' needs. All we ask is that EPA approve 

### 3 California's petition to implement its LEV III standard 

### 4 and that EPA release its own proposal for Tier 3 standards 

### 5 for public comment and discussion. 

### 6 Thank you for your time. 

### 7MS. COHEN: Questions? 

### 8 MR. DICKINSON: I have a question for you, 

### 9 Chris, and for Mr. Santos as well. Do either of you have 

### 10 anything you'd like to comment on in the LEV context? 

### 11MR. HESSLER: We are going to submit some more 

### 12 detailed written comments and I think in those we'll talk 

### 13 a bit more about ZEV technologies as well as greenhouse 

### 14 gas. But it will be in the context of what lessons we can 

### 15 draw from the emission control success and what that 

### 16 suggests about the market. 

### 17MR. DICKINSON: Thank you, Chris. 

### 18 Mr. Santos? 

### 19 MR. SANTOS: MECA back in January did not 

### 20 comment directly on ARB's previous rulemaking in January 

### 21 on the ZEV rulemaking directly addressing this criteria. 

### 22 But I'm sure we can probably come up with somethingMeeting September 19, 2012 Washington, D.C.

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### 1 appropriate. 

### 2MR. DICKINSON: Okay, at your pleasure. Thank 

### 3 you. 

### 4MS. COHEN: Thank you. 

### 5It is our practice at these waiver hearings to 

### 6 offer California the last chance to testify. But before 

### 7 we close, is there anyone else here who would like to 

### 8 present testimony today? 

### 9 (No response.) 

### 10 MS. COHEN: Would California like to present 

### 11 further testimony? 

### 12CLOSING PRESENTATION OF THE CALIFORNIA 

### 13 AIR RESOURCES BOARD 

### 14MR. CACKETTE: First of all, I'd like to thank 

### 15 all of the testifiers who were so incredibly supportive of 

### 16 the program. We really appreciate their response, and I 

### 17 think the diversity of them is quite impressive -- 

### 18 environmental groups, consumer groups, investors, states, 

### 19 and other local governments. So again, thank you very 

### 20 much for that. 

### 21I'll leave my one comment to the one testifier 

### 22 who was not supportive, which was NADA. There's fourMeeting September 19, 2012 Washington, D.C.

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### 1 points they made that I want to respond to. The first one 

### 2 is California's fuel economy program. I guess NADA is 

### 3 following the current political handbook, which says that 

### 4 if you say something and it's not true enough times people 

### 5 will believe it's true. 

### 6 The fact that we have a fuel economy program in 

### 7 California is not true. It's disingenuous for people to 

### 8 continue to say that. We only have emission standards. 

### 9 We're not allowed to have a fuel economy program. We 

### 10 don't want to have a fuel economy program and don't have 

### 11 one. So I hope the record will reflect that and perhaps 

### 12 Ms. Oge's comments that things that aren't true should be 

### 13 stricken from the record would be an appropriate response. 

### 14Regarding the patchwork and border sales issues, 

### 15 these are largely old information, something that's been 

### 16 again promoted by NADA and other people for a long time. 

### 17 We tried to respond to these and we have responded to 

### 18 them. We have pooling now so that in the LEV program 

### 19 there's pooling, in greenhouse gas there's pooling. That 

### 20 means that manufacturers do not have to have sales that 

### 21match the requirements in every single state, but they can 

### 22 pool stuff together. Even in the ZEV program, there areMeeting September 19, 2012 Washington, D.C.

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### 1 provisions to try to get at the same issue. 

### 2As regards to the there's no benefit above the 

### 3 federal program comment made by NADA, it's simply not 

### 4 supported or true. We can point to our whole program, 

### 5 which is in general more stringent than the federal 

### 6 program. We can point to the LEV III part for criteria 

### 7 pollutants, which is more stringent than the federal 

### 8 program. We can point to the greenhouse gas program with 

### 9 California's unique and separate regulation which is more 

### 10 stringent than the federal program, despite the fact that 

### 11 we're willing to accept the federal program for compliance 

### 12 in the case of greenhouse gases. And we can point to the 

### 13 ZEV program, which there is no counterpart at the federal 

### 14 level, and it's clearly more restrictive than the federal 

### 15 program. So again, a statement that I think is not true. 

### 16 Finally, on the fourth point, NADA made the 

### 17 comment that the ZEV program was amended a lot of times 

### 18 because it doesn't work. Let me give you the contrary 

### 19 assessment of that. I find the fact that it's been 

### 20 modified a lot of times to be a positive attribute, not a 

### 21 flaw. It shows that it's flexible and it's responsive as 

### 22 needed for when you have a true technology-forcingMeeting September 19, 2012 Washington, D.C.

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### 1 requirement such as this. I note that there was OEM, car 

### 2manufacturer, opposition to it for decades, and in the 

### 3 last amendments there was none. The manufacturers clearly 

### 4 recognize this is where technologies need to go and that's 

### 5 where they're going, and as a result they did not oppose 

### 6 the ZEV amendments, which, as I showed you, were a 

### 7 substantial strengthening of the program, moving out of 

### 8 kind of a niche program, again that NADA referred to, into 

### 9 an early commercialization stage. 

### 10 I'll also finally point to the fact that the ZEV 

### 11 program has a number of complementary policies and we 

### 12 wouldn't be putting these in place if it was a failing 

### 13 program and one that didn't work. We're investing money 

### 14 for incentives for people who buy ZEV vehicles. We're 

### 15 investing over $100 million in infrastructure improvements 

### 16 for providing a hydrogen fueling network. We're going to 

### 17 have about 18,000 electric chargers, public electric 

### 18 chargers, in California within the next four years to 

### 19 support expanded use of battery electric vehicles and 

### 20 plug-in hybrid electric vehicles. 

### 21These clearly would not be taken by our 

### 22 legislature and our governor if we were supporting aMeeting September 19, 2012 Washington, D.C.

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### 1 program that was limited to just niche with no future and 

### 2 one that didn't work. 

### 3 So those are the comments that I would offer. 

### 4 Thank you very much for the opportunity. 

### 5MS. COHEN: Thank you. 

### 6 Do we have any questions? 

### 7(No response.) 

### 8 MS. COHEN: If no other party wishes to bring 

### 9 testimony to this hearing panel, if there are no other 

### 10 comments -- 

### 11(No response.) 

### 12MS. COHEN: -- then we'll proceed to close this 

### 13 meeting, this hearing. As noted at the outset, the public 

### 14 comment period will remain open until October 19th and the 

### 15 full docket is also open for your review. We encourage 

### 16 you to submit comments, and I thank you all for your 

### 17 participation. 

### 18 This hearing is hereby closed. 

### 19 (Whereupon, at 11:43 a.m., the hearing was 

### 20 adjourned.) 

### 21 22