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- DEPO 1 1 2 HEARING ON CARB'S REQUEST FOR EPA AUTHORIZATION OF ITS 3 OFF
-ROAD COMPRESSION IGNITION IN
-USE FLEETS REGULATION 4 5 6 Wednesday , April 1 4 , 2010 7 10:16 a.m. 8 9 10 11 12 13 14 15 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 16 1310 L Street, N.W. 17 Washington, D.C. 18 19 20 21 22 23Alderson Reporting Company 1
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- DEPO 2 PARTICIPANTS 1 JON CLOUD 2 WILLIAM DAVIS 3 DAVID DICKINSON 4 NICK GOLDSTEIN 5 MICHAEL HOROWITZ 6 MICHAEL KENNEDY 7 ANTHONY MICHAELS 8 TIMOTHY POHLE 9 GUY PRESCOTT 10 ANTONIO SANTOS 11 KARL SIMON 12 MICHAEL TERRIS 13 ERIK WHITE 14 15 16 17 18 19 20 21 22 23Alderson Reporting Company 1
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- DEPO 3 P R O C E E D I N G S 1 MR. SIMON: Good morning, and welcome. 2 On behalf of the EPA and the Office of 3 Transportation and Air Quality, I would like to welcome 4 you to this public hearing on the California Air 5 Resources Board request for EPA authorization of its 6 off
- road compression ignition in
-use fleets regulation , 7 otherwise known as the off
- road fleets regulation . 8 My name is Karl Simon, the Director of the 9 Compliance and Innovative Strategies Division within 10 EPA's Office of Transportation and Air Quality. I will 11 be the presiding officer for today's hearing . 12 On the panel today with me are David 13 Dickinson, an attorney- advise r within this division , 14 and Michael Horowitz, from the Office of General 15 Counsel. 16 EPA previously held a public hearing in 17 Washington on October 27, 2008, based on CARB's initial 18 authorizati on for its off
- road fleets regulation. The 19 written comment period for CARB's initial authorization 20 request remained open until December 19, 2008. On 21 March 12th of this year , EPA published an additional 22Alderson Reporting Company 1
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- DEPO 4 Federal Register notice announcing today's hearing. 1 That notice was based on CARB' s February 11 , 2 2010, letter to EPA in which they requested that their 3 additional amendments to its off
- road fleets regulation 4 be considered by EPA. As EPA noted in its March 12, 5 2010, Federal Register notice, the new written comment 6 period will close on May 18, 2010. 7 E PA plans to consider all comments received 8 since it opened the comment period on October 7, 2008 , 9 through to the close of the current comment period , 10 which again is May 18, 2010. All comments received 11 either through EPA's two hearings or through written 12 comment will be treated equally within the context of 13 the agency's authorization criteria. This includes all 14 written comments received after the close of the first 15 comment period and before the re opening of the current 16 comment period. 17 We are conducting this hearing in accordance 18 with Section 209(e) of the Clean Air Act under which 19 EPA provides interested persons with the opportunity 20 for oral presentation of views and arguments, as well 21 as the opportunity to make written submissions relating 22Alderson Reporting Company 1
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- DEPO 5 to the determination to be made by the Administrator; 1 in this case, on California's off
- road compression 2 ignition in
-use fleets requirements. This hearing 3 provides the forum for those oral presentations. 4 The Administrator's determination regarding 5 the action to be taken with respect to California's 6 regulation will be based upon the testimony of this 7 hearing and the testimony received at the prior EPA 8 hearing, information submitted by California, relevant 9 written submissi ons, and other information deemed 10 relevant. 11 The hearing will be conducted informally, and 12 formal rules of evidence do not apply. However, as 13 presiding officer, I am authorized to strike from the 14 record statements which are deemed irrelevant or 15 needlessl y repetitious and to enforce reasonable limits 16 on the duration of statements of any witness. 17 Witnesses will be allowed to make oral 18 statements, which they may later expand in writing for 19 the record. Witnesses are requested to state their 20 names and affil iation prior to making their oral 21 statements. And if you do have a written copy, we ask 22Alderson Reporting Company 1
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- DEPO 6 that you provide it to the panel, but also to the court 1 reporter as well. When a witness has finished his or 2 her presentation, members of the panel may ask the 3 person questions regarding the issues raised in the 4 testimony. 5 This morning, we have received requests to 6 present oral testimony from the California Air 7 Resources Board, the Associated General Contractors of 8 America, and Local 3 of the International Union of 9 Operating Engineers, the Manufacturers of Emission 10 Control s Association, the Southern California 11 Contractors Association, the American Road and 12 Transportation Builders Association, and the Air 13 Transport Association of America. 14 If any other party in attendance wishes to 15 present oral testimony at this hearing, let us know now 16 or when we get to the last presentation would be fine . 17 At the conclusion of all oral presentations, CARB may 18 respond briefly to the oral statements of other 19 parties. 20 As you duly noted, we are having this hearing 21 recorded, and the transcript will be available for 22Alderson Reporting Company 1
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- DEPO 7 public inspection and copying in the EPA's Air and 1 Radiation Docket at Docket Number EPA
-HQ
-OAR
- 2008
- 0691. 2 The transcript will also be available for Internet 3 access on the Regulations.gov Web site. Anyone wishing 4 to purchase a copy of the transcript may do so directly 5 from the court reporter and should make individual 6 arrangements with the court reporter. 7 The purpose of today's hearing is to hear 8 comments on California's request for authorization of 9 its off
- road compression ignition in
-use fleets 10 regulation. Interested parties are particularly 11 requested to comment on California's request regarding 12 the following issues . 13 With regard to California's off
- road 14 compression igni tion in
-use fleets regulations, we ask 15 whether, A, CARB's determination that its standards 16 are, in the aggregate, at least as protective of public 17 health and welfare as applicable Federal standards is 18 arbitrary and capricious ; B, California needs separate 19 standards to meet compelling and extraordinary 20 conditions ; and, C, California's standards and 21 accompanying enforcement procedures are consistent with 22Alderson Reporting Company 1
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- DEPO 8 S ection 209 of the Clean Air Act. 1 Are there any questions? 2 [No response.] 3 MR. SIMON: Okay. Let's get started then, 4 and we'll start with the California Air Resources 5 Board. Please. 6 MR. TERRIS: Good morning, panel. It's nice 7 to be back in Washington. 8 I'm Michael Terris, and I'm here with Erik 9 White. We're representing the California Air Resources 10 Board and the State of California in this hearing 11 today. 12 I'll be discussing the criteria EPA is 13 required to consider when reviewing a request for a 14 nonroad engine authorization from California . I know 15 that you all are very familiar with the issues, and I 16 gave a similar presentation in October 2008. 17 I'll then describe California 's in
-use off
18 road regulation as recently amended, followed by an 19 evaluation of why the regulation meets the conditions 20 for granting California 's authorization request. 21 The in
-use off
- road regulation is the second 22Alderson Reporting Company 1
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- DEPO 9 in
-use nonroad authorization considered by EPA, the 1 other being the Airborne Toxic Control Measure for 2 Transport Refrigeration Units, otherwise known as the 3 TRU ATCM. EPA's granting authorization of the TRU ATCM 4 to California was recently upheld by the Court of 5 Appeals for the District of Columbia. 6 The regulation before you addresses emissions 7 from in
-use off
- road diesel
- fueled vehicles 25 8 horsepower and greater. CARB adopted the in
-use off
9 road regulation under the authority granted to it by 10 the California Health and Safety Code to adopt all 11 feasible measures to address criteria pollutants 12 affecting the State's health and welfare and to adopt 13 airborne toxic control measures to address pollutants 14 identified as toxic air contaminants. 15 CARB has found diesel particulate matter to 16 be a toxic air contaminant. Under California law, CARB 17 is required to make every effort to achieve maximum 18 possible reductions in public exposure to the 19 identified air toxic using best avail able control 20 technology. 21 Also, under California and Federal Clean Air 22Alderson Reporting Company 1
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- DEPO 10 Acts, California is under a mandate to meet State 1 emission standards and National Ambient Air Quality 2 Standards . The in
-use off
- road regulation is intended 3 to address these legal requ irements. 4 CARB approved the regulation in July 2007, 5 and after being formally adopted, the regulation was 6 approved by the California Office of Administrative Law 7 on May 16, 2008. In January and July 2009, CARB 8 approved amendments to the regulation intended to 9 provide additional flexibility and relief during the 10 recession to affected fleets. I will describe these 11 amendments in more detail after I discuss the primary 12 issues concerning authorization. 13 CARB submitted this request for authorization 14 to EPA on August 12, 2008, and has filed supplemental 15 comments on June 12th and December 29, 2009, and 16 February 11, 2010. The authorization would allow CARB 17 to begin to enforce the in
-use performance standards 18 and associated enforcement provisions of the 19 regulati on. 20 Section 209(e)(1) expressly preempts all 21 States, including California , from adopting emission 22Alderson Reporting Company 1
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- DEPO 11 standards for new locomotive and new locomotive engines 1 and new engines under 175 horsepower primarily used in 2 farm and construction. Section 209(e)(2) establishes 3 an implied preemption that further prohibits States 4 other than California from adopting their own emission 5 standards and other emission
- related control 6 requirements for other new and in
-use nonroad engines. 7 California , however, has been vested by 8 Congress with the right to adopt emission standards for 9 these other nonroad engines, but must obtain 10 authorization from EPA. EPA must grant California 's 11 authorization request, unless it can make specific 12 findings set forth in Section 209(e)(2). 13 First, California , in adopting the nonroad 14 emission requirements, must make a finding of 15 protectiveness that its standards are, in the 16 aggregate, at least as stringent
-- at least as 17 protective of the public health and welfare as 18 applicable Federal standards. S ection 209(e)(2) 19 directs the Administrator to grant the authorization 20 request unless she finds that CARB, in making its 21 protectiveness finding, acted arbitrarily and 22Alderson Reporting Company 1
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- DEPO 12 capriciously. 1 The Administrator may also deny authorization 2 if she finds that California does not need its emission 3 program to meet compelling and extraordinary 4 conditions. 5 Finally, the Administrator may deny 6 authorization if the California standards and 7 accompanying enforcement procedures are inconsistent 8 with Section 209. EPA has long he ld that consistent 9 with 209 means the regulation does not conflict with 10 Section 209(a), (b)(3), and (e)(1). The D.C. Circuit 11 in the TRU ATCM decision recently confirmed that it 12 also includes consistent with Section 209(e)(2)(B), the 13 right of States other than California to elect to adopt 14 California 's nonroad emission standards after obtaining 15 authorization from EPA. 16 It is also well established that EPA may also 17 consider
-- may only consider the three aforementioned 18 criteria set forth in Section 209(e)(2) , that EPA shall 19 give substantial deference to California 's policy 20 judgments, and that the burden is on those who oppose 21 the granting of the authorization to show why it should 22Alderson Reporting Company 1
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- DEPO 13 not be granted. 1 I would now like to briefly describe the in
2 use off
- road dies el
- fueled vehicle regulation and its 3 current status. As I stated earlier, the in
-use off
4 road regulation was originally approved in July 2007. 5 In our presentation to EPA at the October 2008 hearing 6 and in our written submittals, CARB described in detail 7 the specific provisions of the adopted regulation. 8 In brief, the regulation established in
-use 9 performance requirements for off
- road diesel
- fueled 10 vehicles to achieve NOx and PM emission reductions from 11 off
- road diesel vehicles. It applies to large flee ts, 12 fleets with more than 5,000 total horsepower, starting 13 in 2010; medium fleets, those fleets with total 14 combined horsepower greater than 2,500, but less than 15 or equal to 5,000 horsepower, starting in 2013; and 16 small fleets, those fleets having 2,50 0 or less 17 combined horsepower , starting in 2015. 18 The fleet averages become increasingly 19 stringent over a 10
- year period, and the alternative 20 BACT requirements require annual fixed actions by 21 fleets to upgrade their vehicles to be cleaner 22Alderson Reporting Company 1
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- DEPO 14 operating for NOx and PM. 1 The regulation provides a number of different 2 options for fleets to meet the fleet average and BACT 3 options and provide numerous other flexibility 4 provisions, including various exemptions from having to 5 meet the in
-use performance requirements. 6 The Surplus Off
-Road Opt
- In for NOx, 7 otherwise known as the SOON program, is aimed at 8 getting more NOx reductions in nonattainment air 9 basins. For SOON to be effective in a region, an air 10 district's governing board must opt in to the program 11 and provide incentive funding to fleets that fall under 12 the program. To date, only the South Coast Air Quality 13 Management District has chosen to opt in. 14 CARB has amended the regulation twice since 15 2007. The first changes were approved in January 2009 16 and , most signif icantly , provide extended double 17 credits for fleets that take early compliance action. 18 In July 2009, pursuant to California budget 19 resolution AB 8 2X, CARB adopted emission amendments to 20 the regulation, which
-- I'm sorry
-- adopted 21 amendments to the regulation, which provided economic 22Alderson Reporting Company 1
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- DEPO 15 relief to fleets affected by the present economic 1 recession. The amendments provide credits to fleets 2 that have experienced drops in operational activity 3 and/or that have reduced their fleet size by selling or 4 retiring vehicles. 5 Under the amendments, fleets can delay 6 meeting the regulations in these performance 7 requirements in 2010, 2011, and beyond. The amendments 8 also allow all fleets, regardless of whether they have 9 reduced activity or vehicle retirements, the option of 10 reducing their compliance obligations in 2011 and 2012. 11 The amendments are presently operative under 12 California law. 13 In July 2009, CARB also approved additional 14 amendments above and beyond AB 8 2X to provide fleets 15 with credits that encourage them to take early action 16 to install retrofits and repower vehicles with cleaner 17 engines. These amendments have not yet completed 18 California 's administrative review process and will be 19 submitted to EPA for consideration after final approval 20 by the California Off ice of Administrative Law. 21 Now I would like to walk through how the 22Alderson Reporting Company 1
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- DEPO 16 regulation meets the criteria for authorization. The 1 board made its protectiveness finding in Resolution 07
- 2 19 at its July 2007 board hearing and has subsequently 3 confirmed its findings in January and July 2009, 4 finding that the adopted in
-use standards for off
- road 5 diesel
- fueled vehicles in the aggregate were at least 6 as stringent as applicable Federal emission standards 7 for comparable vehicles. 8 As recognized by the D.C. Circuit in it s 1996 9 decision in Engine Manufacturers Association v. EPA 10 and, more recently, by the court in the TRU ATCM 11 decision, Congress has not granted EPA authority to 12 adopt emission standards for in
-use nonroad engines. 13 And by providing that California is the on ly State that 14 may obtain authorization from EPA to adopt standards 15 for in
-use nonroad engines, Congress has effectively 16 provided that California is the only government agency 17 with independent authority to adopt and enforce its own 18 emission standards and other requirements for these 19 engines. 20 While other States may opt to adopt 21 California standards, they may do so only after 22Alderson Reporting Company 1
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- DEPO 17 California has received authorization, and the 1 standards must be identical to those adopted by 2 California . 3 EPA has long held that " compelling and 4 extraordinary conditions " refers to the factors that 5 tend to cause pollution, the unique geographical and 6 climate conditions of the State, combined with the high 7 numbers and concentration of mobile sources. 8 California continues to have the worst air quality of 9 any of the 50 States. The D.C. Circuit in the TRU ATCM 10 reaffirmed past decisions that statutory language, as 11 well as the detailed legislative history of the Clean 12 Air Act, affords California broad discretion in 13 assessing the State's regulatory needs. 14 The South Coast and San Joaquin Valley Air 15 Basins continue, even in the midst of the present 16 serious economic recession, to have numerous 17 exceedances of the ozone and PM2.5 State and Federal 18 standards. 19 The regulation conflicts with neither Section 20 209(a) nor Section 209(e)(1). It does not attempt to 21 regulate new motor vehicles or engines, new locomotives 22Alderson Reporting Company 1
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- DEPO 18 or locomotive engines, or new off
- road engines unde r 1 175 horsepower used in farm and construction vehicles 2 and equipment. As to the l ast group of engines, the 3 regulation does not apply to agricultural vehicles and 4 equipment. The regulation also does not adopt emission 5 standards for new off
- road engines primarily used in 6 construction vehicles and equipment. 7 To the extent that the regu lation requires 8 BACT for NOx, the regulation does not establish 9 emission standards for new engines used in cleaner 10 vehicles. These standards have been previously adopted 11 by EPA and CARB in other rules. Additionally, the in
12 use off
- road regulation does not require turnover of 13 any vehicle less than 10 years old or any engine 14 primarily used in construction vehicles or equipment be 15 retrofitted with a PM retrofit device until 5 years 16 after the vehicle or piece of equipment has been 17 manufactured. 18 Nothing in the regulation conflicts with 19 Section 209(e)(2)(B). It does not force other States 20 to adopt California 's regulation, nor does California 21 seek to enforce the regulation against vehicles that do 22Alderson Reporting Company 1
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- DEPO 19 not operate in the State. 1 The regulation meets the first prong of the 2 Section 202(a) test in that it is technically feasible 3 and provides significant lead time and flexibility. 4 CARB, in 2007, fully considered the cost s of compliance 5 and found the requirements to be cost effective and 6 affordable for most fleets. And in response to the 7 severe economic recession, the amendments adopted in 8 2009 only relaxed the regulation by providing 9 compliance credits and delays. 10 As initially adopted, the regulation provided 11 sufficient lead time and compliance flexibility. 12 Pending authorization, the requirements commence in 13 2010 for large fleets and are phased in over many 14 years. For example, fleet averages are gradually 15 phased in over a 10
- year period. And for fleets that 16 cannot meet the fleet average PM targets, they will be 17 al lowed to limit phase
- in of retrofit devices over the 18 first 5 years after implementation starts. 19 Those that cannot meet the NOx fleet average 20 requirements may limit turnover to cleaner vehicles to 21 just 8 percent of the fleet for the first 5 years and 22Alderson Reporting Company 1
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- DEPO 20 10 percent thereafter. 1 Fleets may choose among many compliance 2 options
-- retrofitting their vehicles' exhaust systems 3 with verified diesel emission control devices, 4 otherwise known as VDECS ; replacing the engine in 5 existing vehicles with cleaner engines, otherwise known 6 as repowering; replacing older higher
- emitting vehicles 7 with newer vehicles equipped with cleaner engines; 8 retiring higher
- emitting vehicles; and/or designating 9 the higher
- emitting vehicles as low use, those that 10 operate less than 100 hours per year. 11 Compliance with the regulation is possible 12 using existing technology. For example, the PM fleet 13 average is phased in gradually and does not require all 14 vehicles to be equipped with VDECs immediately. Fleet 15 owners are only required to install the highest
- level 16 VDECs available for purposes of meeting the annual PM 17 BACT requirements. If VDECs are not available or 18 cannot be safely installed on certain vehicles, fleet 19 owners are exempted from complying with those 20 requirements. 21 The stringency of the NOx fleet average is 22Alderson Reporting Company 1
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- DEPO 21 also phased in over time and requires that fleets meet 1 the emission requirements only through the use of 2 existing certified off
- road engines. In the early 3 years, the fleet average can be met by phasing out the 4 use of Tier 0 and Tie r 1 engines and upgrading the 5 fleets with Tier 2 nonroad certified engines. Only in 6 later years will Tier 3 and Tier 4 engines be needed to 7 meet the fleet average requirements. Fleets are not 8 required to upgrade to Tier 3 or Tier 4 engines if the 9 engines are not available. 10 The SOON program is also feasible. It 11 affects few fleets and utili zes incentive monies. As 12 stated , only the South Coast Air Quality Management 13 District has chosen to participate in the program. 14 The regulation will push fleets to upgrade to 15 newer engines and vehicles. In the Initial Statement 16 of Reasons and Technical Support Document , CARB fully 17 described the state of technology for compliance with 18 both the NOx and PM requirements. The Tier 3 engines 19 are available now, and interim Tier 4 engines started 20 to become available in 2008 for some horsepower groups. 21 And final Tier 4 engines will begin to be available 22Alderson Reporting Company 1
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- DEPO 22 for some horsepower groups in 2013. 1 There are currently 10 Level 3 PM retrofit 2 devices verified for off
- road use. Level 3 systems can 3 reduce PM emissions by up to 85 percent
-- by at least 4 85 percent. Since the regulation was adopted, the 5 technology has been developing , and new choices are 6 available for fleets that were not available in 2007. 7 When I last spoke to EPA regarding 8 authorization in 2008, there were only six Level 3 9 devices. Now there are 10. While there were no 10 passive devices verified before the regulation was 11 adopted, there are now five. 12 The regulation includes numerous provisions 13 that provide fleets with flexibility in complying with 14 the in
-use performance requirements. For example, 15 small fleets do not need to begin to reduce emissions 16 until 2015 and are exempt from the NOx fleet average 17 and BACT requirements. Similarly, fleets in counties 18 that current ly are in attainment with the National 19 Ambient Air Quality Standards and public fleets that 20 reside in rural counties with low populations do not 21 have to comply with the regulation's NOx performance 22Alderson Reporting Company 1
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- DEPO 23 requirements. 1 As a result of the AB 8 2X amendments, many 2 large fleets have accumulated significant credits that 3 will allow them to be in compliance through the 4 regulation's first years. To date, approximately 50 5 percent of large fleets have claimed fleet reduction 6 credits and that fleets on average have downs ized 7 active vehicles by approximately 35 percent, which will 8 allow them to delay PM retrofitting of vehicles for 2 9 years and upgrading of vehicles for NOx reductions for 10 up to 4 years. 11 The regulation also exempts from in
-use 12 performance requirements low
-use vehicles that operate 13 less than 100 hours per year, emergency vehicles, 14 vehicles engaged exclusively in agricultural 15 operations, as well as other types of vehicles. 16 Finally, the regulation allows compliance 17 extensions if there are manufacturer delays in making 18 retrofits or new vehicles or engines available. 19 The regulation exempts the following vehicles 20 from the NOx turnover requirements
-- vehicles less 21 than 10 years old, specialty vehicles for which no used 22Alderson Reporting Company 1
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- DEPO 24 equipment or repowers are available, and vehicles 1 equipped with interim and final Tier 4 engines. The 2 regulation, as adopted in 2007, does not require fleets 3 to turn over vehicles that have been retrofitted with 4 the best available PM retrofit technology within the 5 past 6 years. 6 And the board in July 2009 amended the 7 regulation to provide a lifetime exemption from 8 turnover for vehicles that install retrofits early. 9 That amendment will be forwarded to EPA for 10 consideration after final approval of the amendments in 11 California. 12 Similar exemption s from the PM retrofit 13 requirements exist for the following engines
-- engines 14 in vehicles less than 5 years old, engines for which 15 there is no retrofit available or for which a retrofit 16 cannot be safely installed, new engines that come with 17 an original equipment manufacturer diesel particulate 18 filter, and engines that have been previously 19 retrofitted with the best available VDECS at the time 20 of installation. 21 In summary, the regulation is technically 22Alderson Reporting Company 1
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- DEPO 25 feasible and provides significant compliance 1 flexibi lity. 2 As the regulation was being developed, 3 stakeholders raised concerns that some exhaust 4 retrofits could present safety hazards by impairing 5 operator visibility. Therefore, the regulation 6 provides an exemption for vehicles that cannot be 7 retrofitted safely. The California Division of 8 Occupational Safety and Health, Cal/OSHA, is currently 9 in the process of developing more detailed standards 10 for retrofit impacts on the operator's view to the 11 front, rear, and sides of vehicles. 12 CARB and Cal/OSHA staff have been working 13 together to quantify the extent to which the 14 alterations to a vehicle may impair operator 15 visibility. Cal/OSHA intends to incorporate this data 16 as it updates standards for retrofit visibility, which 17 plans
-- and plans to present its propos als to its 18 board later this year. 19 To avoid conflict with a future Cal/OSHA 20 regulation, CARB has committed that while the final 21 regulation is pending, it will not require fleets to 22Alderson Reporting Company 1
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- DEPO 26 install retrofits that cannot be installed without 1 impairing visibility. CARB has stated that it will 2 accept safety determinations from State and Federal 3 agencies that have authority to interpret and apply 4 vehicular or worksite safety laws, including the 5 Federal Aviation Administration. At its July 2009 6 hearing, the CARB board approved amendments to broaden 7 the applicability of the regulation's safety exemption. 8 These amendments are also going through the California 9 regulatory process right now and will be submitted to 10 EPA once that is completed. 11 As indicated in previous sli des, sufficient 12 lead time exists to permit manufacturers of engines and 13 retrofit devices to develop the technology necessary to 14 meet the standards and other requirements, giving 15 appropriate consideration to the cost of compliance. 16 The reference to "cost o f compliance" in the Clean Air 17 Act, Section 202(a), refers to the economic costs of 18 motor vehicle emission standards and accompanying 19 enforcement procedures and the timing of a particular 20 emission control regulation rather than to its social 21 implications. 22Alderson Reporting Company 1
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- DEPO 27 EPA has applied the same analysis to new and 1 in
-use nonroad engines. In the context of in
-use 2 regulations, the crux of the analysis is whether 3 sufficient lead time exists for development of the 4 technology by manufacturers that would allow fleet 5 operator s to comply with the regulation. 6 Thus, the costs passed on to purchasers by 7 manufacturers have been largely subsumed in the initial 8 consideration of the costs to manufacturers when ARB 9 and EPA adopted its new engine rules. EPA and CARB 10 have respectively determined that manufacturers of off
11 road engines will be able to comply within the time 12 provided for compliance. 13 CARB has further considered as part of the 14 regulation the costs of complying with the PM retrofit 15 requirements and found that the requirements are 16 technologically feasible for VDEC manufacturers to 17 produce their products, given appropriate consideration 18 to costs. Additionally, CARB, in adopting the 19 regulation in 2007, considered whether such costs could 20 then be passed on by fleet operators to their customers 21 and determined that fleets would largely be able to 22Alderson Reporting Company 1
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- DEPO 28 absorb or pass on the costs. 1 As discussed below, to the extent that the 2 recession has intervened since 2007, the California 3 legislature and CARB have addressed and will continue 4 to address the compliance affordability of the 5 regulation. 6 Cost was one of the issues that CARB 7 carefully considered and analyzed during development 8 and adoption of the in
-use off
- road regulation in 2007. 9 Staff conducted a 3
- year - long public process 10 discussing various proposals for the regulation in over 11 a dozen public workshops and held two specific 12 workshops that focused solely on how the cost of the 13 regulation was estimated and whether compliance was 14 affordable. 15 Moreover, the January and July 2009 16 amendments have provided fleets with significant 17 compliance credits that will allow fleets to 18 significantly reduce their compliance costs in the 19 early years of the regulation. 20 When the regulation was adopted in 2007, CARB 21 estimated that the total cost of the regulation to be 22Alderson Reporting Company 1
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- DEPO 29 $3 billion to $3.4 billion, which we recognize is 1 significant. But the regulation is expected to result 2 in thousands of lives being saved and numerous other 3 health benefits , as well as billions of dollars in 4 health and premature death cost avoidance. We 5 determined that most fleets would be able to comply 6 without significantly impacting profitability. 7 There is no dispute that we are in the midst 8 of the most serious economic recession since the Great 9 Depression, but this should not change the analysis 10 that EPA applies when considering CARB's authorization 11 request. First, there is no dispute that the 12 technology to comply presently exists in the timeframe 13 provided for compliance. 14 Second, the objective compliance costs per 15 vehicle and engine has not changed. What has changed 16 is the financial wherewithal of some companies to 17 afford the cost of compliance, the size of fleets that 18 have responded to the recession by downsizing through 19 retirement or parking of vehicles, and because of the 20 smaller active vehicle inventory, fewer total emissions 21 from the off
- road fleet as a whole. 22Alderson Reporting Company 1
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- DEPO 30 Questions of how best to address the impact 1 of the recession on off
- road fleets and how to 2 delicately balance the health and welfare needs of the 3 State against the financial costs of the regulation and 4 the ability of fleets to do business in California are 5 best left for the State to decide. 6 The recession and its economic impacts raise 7 social cost concerns as opposed to technological 8 feasibility questions. The impact of the recession on 9 the total costs of the regulation and its effect on the 10 emissions inventory are questions related to cost 11 effectiveness, a question that EPA has long deferred to 12 California 's judgment. 13 As previously stated, EPA has long deferred 14 to Cali fornia 's economic policy judgments. Quoting 15 from former Administrator Ruckelshaus, "The issue of 16 whether a proposed California requirement is likely to 17 result in only marginal improvement in California air 18 quality not commensurate with its cost is otherwi se an 19 arguably unwise exercise of regulatory power
-- or is 20 otherwise an arguably unwise exercise of regulatory 21 power is not legally pertinent to my decision under 22Alderson Reporting Company 1
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- DEPO 31 Section 209. " 1 In a similar vein, former Administrator Train 2 stated, "The structure and his tory of the California 3 waiver provision clearly indicate both a congressional 4 intent and an EPA practice of leaving the decision on 5 ambiguous and controversial public policy to 6 California 's judgment." 7 Here, California has made a public policy 8 determinati on that the State must achieve reductions in 9 the toxic air contaminant diesel PM as expeditiously as 10 possible in order to reduce the public health risk to 11 its citizens. The State has also determined that it 12 must come into compliance with the National Ambi ent Air 13 Quality Standards for PM2.5 and ozone in the timeframes 14 prescribed by the Federal Clean Air Act. 15 California has determined that compliance 16 with these mandates and the costs associated with 17 compliance are necessary and cost effective. EPA 18 should defer to California 's policy judgments and not 19 disturb the findings. 20 The second prong of the EPA adopted test for 21 consistency under Sections 209(b)(1)(C) and 202(a) 22Alderson Reporting Company 1
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- DEPO 32 requires that Federal and State test procedures be able 1 to use the same test unit or engine. This test for 2 consistency is satisfied because there is no issue as 3 to whether the same in
-use engine can meet both Federal 4 and State procedures since Federal regulations for in
5 use nonroad engines do not exist. 6 To the extent that new engines are us ed to 7 meet fleet average or BACT requirements, the State 8 certification test procedures are set forth in a 9 different regulation for which authorization has been 10 granted and are in basic alignment with Federal new 11 engine test procedures. 12 In summary, CARB f irmly believes that the 13 Administrator is required under Section 209(e)(2) to 14 grant the authorization. There should be no dispute 15 that the three guiding criteria for denial of an 16 authorization cannot be met. Protectiveness has been 17 clearly established. California 's compelling and 18 extraordinary need for its own in
-use off
- road 19 emissions program is unquestionable. Finally, as 20 discussed above, the regulation is consistent with 21 Section 20 9 and is technically feasible. 22Alderson Reporting Company 1
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- DEPO 33 Accordingly, California requests that E PA act 1 expeditiously to grant the authorization. Delay has 2 caused uncertainty for stakeholders who would be 3 required to comply with the regulation, as well as for 4 retrofit manufacturers, both of which need certainty to 5 make business plans and decisions. I think that the 6 D.C. Circuit's affirmance of the TRU ATCM authorization 7 this month was a big step forward toward providing 8 certainty that California may adopt in
-use regulations 9 requiring retrofits and accelerated upgrading of 10 engines and that EPA's quick action here would build on 11 that certainty to the benefit of all stakeholders. 12 That concludes our presentation, and we're 13 more than happy to take questions. 14 MR. SIMON : Thank you, Mr. Terris. 15 I had one question. Earlier, about midway 16 through your presentation, you talked about exemptions 17 and flexibilities here, and you talked about emergency 18 vehicles. Can you tell me how you define "emergency 19 vehicle" in this context? 20 MR. TERRIS: Basically, it's defined in the 21 California Vehicle Code, and we spec ifically apply that 22Alderson Reporting Company 1
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- DEPO 34 in this vehicle code. So it's for specific types of 1 vehicles that are considered to be emergency. 2 MR. SIMON: Okay. 3 MR. DICKINSON : I have one question. You 4 mentioned that there were a series of amendments in 5 2009 to the regulation, including a set of amendments 6 from July 2009 that have not yet been finalized by your 7 State Office of Administrative Law. And I think , just 8 for the record, you stated that you would submit those 9 to the EPA once they were approved. Is that correct? 10 MR. TERRIS: That's correct. 11 MR. DICKINSON : Similarly, I would assume 12 that most people in the audience and I are aware that 13 California is continuing to look at these regulations , 14 and any subsequent amendments that happen this year or 15 any other future model years or calendar years would 16 also be submitted to the EPA and that, therefore, you 17 are really just taking the current law as it exists 18 today and asking EPA to take action on it? 19 MR. TERRIS: Correct. We've issued a notice 20 just the other day that the re is going to be a hearing 21 on April 22nd , and we are further going to be looking 22Alderson Reporting Company 1
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- DEPO 35 at the question of the emissions inventory for off
- road 1 engines. We're going to be looking at the question of 2
on - road trucks, in
-use on - road trucks and vehicles. 3 We're looking at the question of where we stand with 4 the State implementation plan. 5 And basically, it's not a rulemaking. The 6 board is going to decide how it's going to proceed. 7 We're anticipating that there will be a board hearing 8 to address further needed amendments around the 9 September timeframe. And yes, of course, what we 10 believe , if there is any action that is going to be 11 taken, it will be to provide additional relief and 12 flexibility to both the on - road in
-use trucks program 13 and also the off
- road in
-use program. 14 And we believe that by providing relaxation 15 and flexibility and not creating more stringent 16 standards, that those changes, if EPA were to grant the 17 authorization before those amendments could be 18 finalized, that they would be submitted to you for 19
consideration. 20 MR. DICKINSON : Thank you. 21 MR. SIMON : Okay. Thank you. 22Alderson Reporting Company 1
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- DEPO 36 Why don't have
-- let's see, we have Michael 1 Kennedy and
-- oh, Jon Cloud and Guy Prescott come on 2 up from AGC and Local 3. 3 [Pause.] 4 MR. SIMON : When you're ready. 5 MR. PRESCOTT: Thank you. 6 My name is Guy Prescott. I'm currently the 7 Executive Director for the Employee Assistance Program 8 for Operating Engineers Local Union Number 3. Prior to 9 that, I was the Director of S afety for Operating 10 Engineers Local 3. 11 I'm a 25
-plu s year safety and health 12 professional. I've worked with Sandia National 13 Laboratories, part of the Department of Energy. I've 14 owned my own consulting firm, Common Sense Safety , 15 Inc. , working with numerous construction and general 16 industry clients. And I' ve had the privilege of being 17 an instructor with the University of California 18 Occupational Safety and Health facility, as well as 19 with the University of Washington and the University of 20 Michigan. 21 I am here today on behalf of Operating 22Alderson Reporting Company 1
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- DEPO 37 Engineers Local Uni on Number 3. I have recently been 1 appointed by Governor Schwarzenegger to the Cal/OSHA 2 Standards Board, which Mr. White mentioned earlier. 3 But I am here today on Operating Engineers' behalf, not 4 on the standards board's behalf. I wanted to make that 5 clear. 6 Local 3 represents over 37,000 members. 7 These are the men and women who operate this what is 8 being called off
- road heavy equipment every day. Not 9 only do we represent the operators themselves, but the 10 surveyors, the grade checkers, and the mechanic s who 11 work on the ground and on this equipment around it 12 while it is operating. 13 The safety and health of these members is 14 imperative to Operating Engineers. Every working man 15 and woman has a right to go home to their families at 16 the end of the day. That's the bottom line for 17 occupational safety, and we are seeing major problems 18 with that being capable of being done because of these 19 filters. 20 According to the U.S. Department of Labor, 21 over 500 construction workers lost their lives every 22Alderson Reporting Company 1
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- DEPO 38 year to " struck
-by " accidents. This has been since 1 1992 when I've been looking at statistics. It has been 2 as high as 600 in one year in that timeframe. These 3 accidents have also caused operators to suffer from 4 post traumatic syndrome. We lose almost as many 5 operators as we lose people on the ground. 6 When somebody has had the unfortunate ability 7 of operating a piece of equipment when they have run 8 over someone, the traumatic effects are such that 9 rarely are we able to get that person back into the 10 controls of that equ ipment again. 11 The obstruction of the operator's line of 12 sight is almost always a contributing, if not a primary 13 cause of these fatalities. This is very large 14 equipment. It has a lot of heavy metal on it, and it 15 does, even though the manufacturers try their best to 16 give us as much visibility as they can, structurally, 17 this isn't always possible. 18 It isn't possible to have 100 percent 19 visibility, but the manufacturers are working forward 20 in maximizing visibility for the operator's seat. 21 There has been a tremendous amount of effort put in by 22Alderson Reporting Company 1
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- DEPO 39 the manufacturers over the years to improve our 1 visibility, and we are very fortunate that our 2 manufacturers are working with us in this area. 3 California 's off
- road rule threatens to take 4 this away. It's going to s end us in the opposite 5 direction. This rule requires fleet owners to install 6 PM filters on equipment that was never designed to have 7 these filters placed on it. It reduces the operator's 8 visibility from the operator seat in the overwhelming 9 majority of installations that we have seen. 10 These rules will create additional 11 fatalities. It is not a matter of if it will happen. 12 It is a matter of when it will happen. And gentlemen, 13 I feel if it had not been for the downturn of the 14 economy, I would probably have fatalities to show you 15 today. 16 In late 2006 and early 2007, Local 3 sought 17 to meet with the CARB staff to talk about the worksite 18 hazards that its retrofit program would require. The 19 staff canceled the first three meetings on us. The 20 staff member showed up over 2 hours late to our fourth 21 meeting. We were literally locking the doors when he 22Alderson Reporting Company 1
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- DEPO 40 showed up. 1 The staff then proceeded to tell us that they 2 had already completed the rule that they were going to 3 present to their board , and they would not be ma king 4 any additional changes to that time. Safety was never 5 considered in this rule. You cannot consider 6 feasibility without considering safety of the final 7 application. 8 Local 3 then was forced to launch an all
- out 9 safety campaign. I brought in our safety -- I brought 10 in our director from our political branch. I brought 11 in all of our political power, and we started an all
12 out I will call it a war to get safety brought to the 13 front page of this issue. 14 CARB ultimately did agree that filter 15 installation should not violate OSHA standards but 16 refused to make any reference to visible and reserved 17 the right to decide for itself what would be unsafe. 18 CARB does not have safety professionals on its site. 19 Yet they are the ones who are going to make, by their 20
rule, the determination of what is and is not safe. 21 CARB also insisted that retrofits would 22Alderson Reporting Company 1
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- DEPO 41 remain a centerpiece of its off
- road rule and continues 1 to pressure fleet operators to err on the side of 2 creating a hazard. Currently, they have extended the 3 two - for
- one credit on mounting these filters on 4 equipment already. Buy one, get the second one free as 5 far as your emission standards. And in doing so, this 6 continues to encourage employers who are under 7 financial pressure to go forward with retrofits, even 8 though they may be unsafe. 9 CARB's approach falls way short, and the rule 10 continues to threaten construction workers. CARB does 11 not have either the expertise or the legal authority to 12 determine what is and is not a hazard to construction 13 workers, and CARB is extremely biased in favor of 14 retrofits and incapable of making a decision in regards 15 to the hazards presented to the working men and women. 16 This rule may exempt individual pieces of 17 equipment from retrofits if they are unsafe. However, 18 it continue s to count that piece of equipment in the 19 inventory. The horsepower and the emissions stay with 20 that fleet. The standard for granting or denying a 21 limited exemption for even an individual piece of 22Alderson Reporting Company 1
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- DEPO 42 equipment has, to date, not been established. There is 1
no establishment within CARB that I can apply for an 2 exemption to date. The policy does not exist. They 3 haven't written it. 4 Even if they did exempt a piece of equipment, 5 the owner still has to account for the horsepower and 6 the emissions it does. This leaves them eventually a 7 very small fleet to make very major changes with. It 8 once again destroys the feasibility of getting to where 9 they want to be. 10 In August of 2008, Local 3 petitioned the 11 Cal/OSHA Standards Board to clarify the Cal/OSHA 12 standards and specifically address the hazards inherent 13 to retrofitting off
- road equipment with PM filters. 14 This petition was filed jointly with the AGC of 15 California and Operating Engineers Local 3. 16 Gentlemen, I talked with the executive 17 officer of the board, and she told me that when that 18 petition hit the floor, that you could hear jaws drop, 19 the fact that you saw Local 3 and the AGC's logos on 20 the same piece of paper, requesting the same identical 21 wording to be changed. Never before in history have 22Alderson Reporting Company 1
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- DEPO 43 those two agencies joined in such an effort. 1 In November 2008, the Occupational Safety and 2 Health Standards Board anonymously granted the petition 3 to move forward towards a new rulemaking . CARB was at 4 that hearing. They opposed our petition. And since 5 that standard board granted it, CARB has continuously 6 interfered with the board's decision
-making process, 7 which has delayed and postponed this rulemaking. This 8 rule still has not been yet made. 9 After that hearing in November, one of CARB 's 10 staff was upset about the board's decision, talking on 11 her cell phone at the airport, ranting back and forth 12 and said, while standing in front of Dr. Fri sch , a 13 seated member of the California Occupational Safety and 14 Health Standards Board, "We will not let this penny15 ante board stop us," referring to the Occupational 16 Safety and Health Standards Board. A penny- ante board. 17 The constant belligerent denial of safety has 18 been something we have been fighting for years. In 19 October of '09, Governor Schwarzenegger was finally 20 forced to step in between two bickering agencies and 21 brought to a halt the retrofits that impair visibility 22Alderson Reporting Company 1
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- DEPO 44 and directed CARB to do what it should have done long 1 ago, which was undertake a study of the feasibility of 2 the safe install ation of PM filters on off
- road 3 equipment that this rule covers. 4 CARB has yet to report the results of such a 5 study. Indeed, it has yet to produce any evidence that 6 fleet owners can safe l y retrofit their equipment to 7 anywhere near the extent that the rule contemplates. 8 The Governor made a 6
-month stay back in mid
-October. 9 That's up this month. 10 The other thing that was done by this that I 11 don't have here is the Governor also, in doing this, 12 told the Cal/OSHA Standards Board that we could not go 13 forward with rulemaking for the 6
-month period of time. 14 Local 3 remains extremely concerned in 15 regards to the safety of our membership. As noted 16 earlier, CARB has no expertise in construction safety 17 or health, and it remains biased in favor of the 18 retrofits that lie at the heart of its off
- road rule. 19 The very fact that CARB did not conduct such a study 20 that they are now supposed to be conducting during the 21 rulemaking processes raises enormous questions about 22Alderson Reporting Company 1
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- DEPO 45 its understanding of construction work and the safety 1 required in construction wor k. 2 Safety has always been and must continue to 3 be a fundamental part of any discussion as to the 4 technology and its feasibility and/or the lead time 5 that the Clean Air Act requires EPA to consider. We 6 cannot call something feasible when it is going to kill 7 people. 8 If California is not provided enough time for 9 equipment manufacturers and/or others to develop the 10 technology necessary to safely retrofit the off
- road 11 equipment in the construction industry, then EPA must 12 deny California 's request for Federa l approval to 13 enforce its rule. Retrofits must be safe. Otherwise, 14 they are and should be unacceptable. 15 This regulated equipment ranges from as small 16 as 25 horse to over 1,000 horsepower, from a few pounds 17 to several tons. It can travel from mere feet per 18 minute to over 45 miles an hour. It is not an industry 19 that one shoe fits all will ever be appropriate 20 technology. It is not for CARB to study a few pieces 21 of equipment and say that this is typical of what the 22Alderson Reporting Company 1
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- DEPO 46 industry has. Such limited research cannot begin to 1 justify broad consideration of the feasibility of 2 compliance with the off
- road rule. We can't look at 3 four or five different pieces of equipment. I can't 4 even take the same exact piece of equipment, gentlemen, 5 and say that it will be operated in the same manner on 6 five or six different jobs. 7 This equipment is very diverse, very 8 specialized, and can be ultimately put to service in 9 many different ways. CARB and the EPA also have to 10 account for the many different applications that I'm 11 talking about that this equipment has to go through. 12 There is different attachments that can be put on or 13 removed from the equipment. The list goes on and on. 14 I've brought some photographs, as a picture 15 says 1,000 words, of some of the different equipment 16 that we're talking about. These are 988 CATs. They 17 are front loaders. On front and just outside of the 18 picture there to the right is a large scoop, which will 19 pick up material. 20 This piece of equipment will then back up, 21 turn, move forward to a dump truc k or other conveyance, 22Alderson Reporting Company 1
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- DEPO 47 unload that material into it, back up again, turn, go 1 back to the pile, and repeat this operation. It's used 2 for loading. You will see that the one on the right 3 has been retrofitted with the CARB
- required filters, 4 while the one on the left is standard. From this 5 distance and angle, it doesn't look like it's that big 6 of a deal. 7 From the driver's seat, however, the retrofit 8 on the right, you can barely see the individual through 9 the exhaust system who you can clearly see standing on 10 the left. From going from this vehicle having about a 11 50
- foot blind spot behind it, which is a tremendous 12 kill zone, it has gone to well over 120 feet because of 13 the filter installation. For a piece of equipment that 14 spends as much time in reverse as i t does forward, this 15 will kill someone. 16 The current OSHA regulations in both Federal 17 and State require that you do not block visibility in 18 any way, shape, or form to the forward or sides of the 19 equipment. Neither the Federal OSHA or Cal/OSHA has 20
ever considered the rear vision because nobody has ever 21 tried this before. 22Alderson Reporting Company 1
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- DEPO 48 This is a rubber
- tired dozer. Once again, a 1 vehicle that spends a fair amount of time in reverse, 2 not probably as much as it does forward, but 3 nevertheless, probably 25, 30 percent of i ts time in 4 reverse. You can see the tremendous blockage that 5 these filters have done once again to that rear 6 visibility. 7 This is just absolutely unacceptable from 8 safety and makes this absolutely unfeasible 9 technically. Just because of the fact that they work 10 on the workbench in a test laboratory does not make it 11 feasible to put them to work in reality. This is not 12 feasible, gentlemen. 13 If you notice
-- let's see if this pointer 14 works
-- on this instrumentation here is the 15 acknowledging system, the el ectronics for those 16 filters. It has been placed right on top of the 17 instrument panel, right in the operator's line of 18 visibility, b locking visibility forward and to the side 19 as well as the filters out the side window there. 20 This is in current violation of both 21 California and Federal OSHA. This would be cited as a 22Alderson Reporting Company 1
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- DEPO 49 violation of OSHA. Yet, here again, with the early 1 credits, the Moyer funding, et cetera, these are being 2 installed. 3 This is a scraper. We have maintenance on 4 this equipment, a lot of maintenance. This ladder 5 access up here, as you see without the filters, is so 6 that you can walk across this area to maintain all of 7 this hydraulics. As you notice where the filters are 8 now, my access is blocked to the maintenance area. If 9 those filters are recycling at the time somebody does 10 maintenance
-- and when these filters cycle, the 11 equipment is parked. It can't be run during this time. 12 I have personally measured the outside of those cans 13 to hit over 1,200 degrees Fahrenheit during recycling. 14 You put it right in the middle of a walkway, 15 when this thing is parked is when somebody is going to 16 want to do maintenance on that. We can't have it sit 17 to recycle, then sit to do maintenance later on. This 18 equipment has to move , or it doesn't make money. And 19 quite frankly, if it's not moving, our members don't 20 have jobs. 21 Another issue not thought of by the 22Alderson Reporting Company 1
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- DEPO 50 installers or CARB as a fact that this does destroy, 1 making fall hazards, trip hazards, burn hazards, not 2 only visible hazards. Here again, side vision being 3 blocked. This violates current OSHA standards. 4 However, once again, it is being done. You can see the 5 tremendous blockage there to the side. 6 This particular piece of equipment can travel 7 up to 45 miles an hour and makes turns at those speeds. 8 This side blockage can be extremely dangerous as well. 9 Heat and high
-pressure hydraulic lines is not 10 something you want to mention. These hydraulic lines 11 that you see in this photograph on the left here are in 12 the 3,000 to 5,000 psi range. A pinhole l eak in one of 13 those is going to put a fine mist of highly aerated 14 combustible material across a canister that can be up 15 to 1,200 degrees Fahrenheit. We have completed the 16 fire triangle. We will have ignition. 17 On the picture to the left, and I apologize 18 for the poor lighting here, this is part of the HUSS 19 installation, which needs fuel to be taken to it for 20 when it afterburns. They've used an automotive
- grade 21 T, and this particular pipe that's in the hand here is 22Alderson Reporting Company 1
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- DEPO 51 actually a plastic, not a reinforced pipe to run that 1 fuel line over. And this sits in the engine 2 compartment of a large piece of equipment. 3 I seriously doubt under regular operation 4 that T and pipe will last 18 months before you have 5 fuel leakage in the engine compartment from this 6 retrofit, another fire hazard to the people operating 7 this equipment, people on the ground around it. 8 Just here again, people are working on this 9 equipment who are not familiar with it, who have no 10 idea what it takes to safely operate this equipment so 11 that our members can go home to their families at the 12 end of the day. 13 Additional installation hazards, here we've 14 cut through the metal to make a groove to run the 15 wiring for the instruction . This structural metal is 16 part of this upper deck walking surface. It now 17 fluctuates when you walk on it. Eventually, that will 18 fatigue. It's not a big enough piece of structure 19 that's going to cause the piece of equipment to break 20 in half, but it will create maintenance problems, costs 21 that aren't associated for , and could be a safety 22Alderson Reporting Company 1
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- DEPO 52 hazard down the road as well. 1 This installation was actually done by the 2 filter manufacturer themselves. This is the hand rail 3 used for when you're walking around servicing the piece 4 of equipment. They cut right through it and mounted 5 the filters. If somebody, once again, is maintaining 6 that piece of equipment while those are recycling, 7 where my hand used to go, there i s now 1,200 degrees 8 Fahrenheit. 9 Even if those are cold, early morning , and 10 I'm walking around that piece of equipment to do oil, 11 equipment checks, I no longer have something to hold 12 onto when my feet could be muddy, wet, covered in dirt, 13 whatever. A safety hazard once again because of lack 14 of knowledge of what this equipment is required to do. 15 There is no evidence that i t is feasible to 16 safely install these PM filters on off
- road 17 construction equipment to the extent that the CARB off
18 road rule is contemplating. CARB is predicting more 19 than 100,000 of these retrofit filters out there. 20 There is abundant and undeniable evi dence existing that 21 retrofits can easily pose a grave risk of severe bodily 22Alderson Reporting Company 1
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- DEPO 53 harm and death to employees. 1 In addition to the risk that a piece of 2 equipment will strike a construction worker from these 3 retrofits blocking visibility, there is increased risk 4 of falls, burns, and may even risk the structural 5 failure of a piece of equipment because of the way 6 these retrofits are being installed. 7 Operating Engineers Local 3 urges the EPA to 8 deny California 's request for Federal authority to 9 enforce its off
- road rule. This is the only way to 10 protect the men and women working in California 's 11 construction industry from a new and grave risk of 12 injury and even death. Not even in the name of the 13 environment and protecting the environment should EPA 14 or anyone consider putting working men and women at 15 risk to the nature that these filters will incorporate 16 to our membership. 17 Once again, I thank you for your time, and on 18 behalf of the 37,000 members of Operating Engineers and 19 their family, I hope that you do deny this so that they 20 can go home safely. This is not feasible. 21 Thank you. 22Alderson Reporting Company 1
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- DEPO 54 MR. SIMON : Thank you, Mr. Prescott. 1 It would be helpful maybe in your written 2 comments, your supplemental comments, you talked about 3 standards from both the Federal and California OSHA in 4 terms of sight line and visibility, if you could 5 provide those as well? 6 MR. PRESCOTT: I can do that, yes. As I 7 said, the 6
-month stay that the Governor gave is up 8 this month. I do know the Cal/OSHA Standards Board is 9 meeting tomorrow. I'm flying back this evening to be 10 there, and I do know that this is going to come up as a 11 subject there tomorrow, too. 12 I do hope that they will press forward in 13 making changes to this. But at this point in time, the 14 politics have been extremely difficult in moving 15 forward and doing what is right, which is why we, once 16 again, request that you deny this waiver so that we can 17 move on safely. 18 Thanks. Any other questions, gentlemen? 19 MR. SIMON : I think we're good. 20 MR. DICKINSON : Building on Karl's request, 21 to the extent that it's not already in the record, if 22Alderson Reporting Company 1
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- DEPO 55 you can submit any information relating back to your 1 petition to California in August of 2008, as well as 2 more of the background of the Governor's action in 3 October of last year, it would probably be helpful. 4 MR. PRESCOTT: I would be glad to summarize 5 that and send it to you. 6 MR. DICKINSON : As well as your presentation 7 today. 8 MR. PRESCOTT: Yes . I think you have a copy 9 of this already. Correct? No? I will get that to 10 you. 11 MR. DICKINSON : I have a copy of
-- 12 MR. PRESCOTT: Okay. We will drop a copy 13 off. 14 MR. SIMON : All right. Thank you. 15 Mr. Jon Cloud, come on down. 16 MR. CLOUD: Good morning , gentlemen . Thank 17 you for the opportunity of being able to speak to you. 18 First, I've got to tell you, your city is 19 absolutely beautiful. It's my first time to 20 Washington, D.C., and just by a fluke, I happened to be 21 here this week with my daughter's eighth grade class on 22Alderson Reporting Company 1
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- DEPO 56 a civics tour that we did on the east coast. It 1 started in Boston, New York , Philadelphia, and D.C. 2 She and her 75 classmates got put on the 3 plane on Friday and
-- or on Monday, and I stayed a 4 couple of extra days to be able to do this hearing. 5 MR. SIMON : It would have been nice to have 6 them here. We could have shown them c ivics in action. 7 [Laughter.] 8 MR. CLOUD: Maybe so. Sorry about that. 9 MALE SPEAKER : I hope they saw the cherry 10 blossoms. 11 MR. CLOUD: All right. First off, good 12 morning. My name is Jon Cloud . I'm t reasurer of our 13 family
- owned business named J. C loud
-- called J. 14 Cloud, Inc . We started the family business in 1993 15 with my father, Joel; my brother Joel; my brother 16 James, and myself, Jon. So it's J. Cloud, Inc. 17 We've been in business since 1993. My father 18 has been in heavy construction in one way or another 19 for over 50 years and at 71 years old is still the 20 hardest
-working man that I know. 21 Over the years, our company has become a 22Alderson Reporting Company 1
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- DEPO 57 leading supplier of recycled concrete and asphalt . If 1 there is a demolition job and someone tears down an 2 office bu ilding, a parking lot, or some type of a 3 structure, we take the broken asphalt and concrete and 4 recycle it, and we make rock
-based materials out of it 5 that we sell to the community, to operators including 6 AGC members, and we construct, as I said , road
-based 7 materials. We do a lot of water, sewer, and pipeline 8 jobs and things of this sort. 9 Our company is a relatively small company . 10 It has annual sa les of approximately $3 million. We 11 have 18 employees. I t is, however, big enough to 12 recycle approximately 200,000 tons of concrete and 13 asphalt that would otherwise find itself in San Diego 14 County's landfills. We are, indeed, a very green 15 business, and we've been doing what we've been doing 16 since '93, and we've got heavily into recycling about 8 17 years ago and actually have done a few innovations in 18 southern California as far as recycling is concerned. 19 I am here today to speak on behalf of the 20 Associated General Contractors, which has been and 21 remains strongly opposed to California's request for 22Alderson Reporting Company 1
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Federal approval to enforce its off
- road rule. Our 1 firm is a member of the Associated General Contractors , 2 and I am pleased to tell you that I'm actually on the 3 board of the San Diego Chapter. 4 AGC was founded in 1918 at the express 5 request of President Woodrow Wilson . It currently 6 represents more than 33,000 firms and has over 100 7 chapters in the United States. Among the association's 8 members are approximately 7,500 of the Nation's leading 9 general contractors and more than 12,500 specialty 10 contractors, and more than 13,000 material suppliers 11 and service providers are members of the AGC. 12 These firms engage in the construction of 13 both public and private works, from infrastructure 14 including highways, roads, bridges, transit systems, 15 airports, office buildings, your kids' schools, the 16 hospitals you go to when you're sick. And more than 17 likely , an AGC member more than likely built this 18 building that we're sitting in. It's a pretty strong 19 force. AGC members also prepare home sites for 20 install ation of utilities in hous ing development s where 21 basically people live . 22Alderson Reporting Company 1
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- DEPO 59 Like my firm, most AGC members , believe it or 1 not, are family
- owned businesses , and many of them 2 across the Nation are vested heavily in off
- road 3 equipment. So this is a very, very big issue to us. 4 AGC has already provided the EPA with 5 detailed comments on California's request for approval 6 to enforce its off
- road rule. AGC wrote two letters to 7 the EPA in October of 2008 and made an extremely 8 detailed, 183
-page report in December of the same year. 9 AGC wrote the EPA again in March and August of 2009, 10 and in January of this year. Included in several of 11 these submissions are sworn statements and other 12 evidence of fact that California request s the EPA to 13 consider. 14 In advance of the May deadline, AGC will als o 15 provide written comments and additional evidence for 16 the record of the current proceedings. AGC continues 17 to research California's original emissions inventory 18 and other unde rpinnings of the off
- road rule. The CARB 19 board will entertain proposals for further amendments 20 of that rule later this month . The results of both the 21 research and the board's next meeting are among the 22Alderson Reporting Company 1
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- DEPO 60 many factors that EPA can and should consider. 1 Today, I will try to emphasize the AGC's 2 central reasons for asking the EPA to del ay or deny 3 California's request for Federal authorization and then 4 try to provide some context of what these rules are 5 going to do and show you that, indeed, they will affect 6 real people, real families, and businesses. And we 7 counting, California is count ing on the Federal EPA to 8 make the right decision in this choice. 9 First, I would like to emphasize that the 10 off
- road rule is not yet ripe for Federal review, 11 meaning it has been and remains a moving target. And 12 this rule is a highly moving target. AGC has filed two 13 petitions to amend the rule, and as of today, the 14 California Air Resources Board has neither granted nor 15 denied either of them. 16 Since August of 2008, when it had made its 17 request for Federal approval to enforce the rule, 18 California has revi sited the rule on three separate 19 occasions and has twice amended it . In apparent 20 response to the petitions that AGC filed, the 21 California Air Resources Board has also made it clear 22Alderson Reporting Company 1
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- DEPO 61 that other amendments are on the way. Yet they still 1 want the waiver. 2 Just over a month ago, the board held another 3 public hearing on the rule, gathering additional facts 4 for the better part of the day. Two experts and 5 several construction contractors spoke on behalf of the 6 AGC. I happened to be one of them. Thirty
- seven 7
others also testified , including me . 8 The board and staff confirmed that they were 9 already making plans to provide additional regulatory 10 relief to the construction industry. The rule is not 11 passed. Yet they are telling us, "Just trust us. 12 We'll pass the rule. Then we'll fix it." This has 13 been going on for the better part of 3 years. 14 In this regard, it is one thing to accept 15 that California might amend a particular rule at some 16 point in the future and quite another point to know 17 that things, as I said , it's a moving target and they 18 will make a change after the rule is in effect. Why 19 don't we have the change before , and let's review the 20 rule? That kind of information provides a clear and 21 sound basis for EPA to defer any action on the 22Alderson Reporting Company 1
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- DEPO 62 California reques t for Federal authorization and, 1 indeed, would be imprudent for the EPA to disregard it. 2 Second, the State's emissions inventory, 3 which served as the starting point for the off
- road 4 rule , there are some issues with it. The State 5 emissions inventory has proven to be wide of f the mark. 6 New and better data collected in 2009 and new research 7 into the emissions that California
-- reveal that 8 California simply does not need the rule in any form 9 approaching
-- in any way approaching its current form. 10 The new data reveals that the population of 11 off
- road equipment is both smaller
-- and when I say 12 "smaller," meaning the fleet is at least 45 percent 13 smaller than was anticipated when CARB set up the rules 14

-- and is also newer. CARB anticipated that there was 15 a l ot more older fleet in the inventory, and it is 16 certainly newer than the S tate believed at the time it 17 developed the rule . 18 In addition, in a recently published article, 19 two professors at UC
-Berkeley have demonstrated that 20 California's computer model is i rreconcilable with the 21 historical data on diesel fuel consumption
-- maybe 22Alderson Reporting Company 1
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- DEPO 63 later on, I'll touch on that in a bit, in a minute
-- 1
and therefore requires adjustment. While AGC is still 2 waiting for final results of its own research, the 3 association is already confident that the PM and NOx 4 emissions from California's construction industry are 5 well within and will remain under CARB's set targets 6 for the emission rules. 7 Third, the cost of compliance is clearly 8 excessive. And I've got a note here someplace. I n 9 CARB's report talking that
-- stating that they believe 10 that companies can basically absorb the cost, to be 11 honest with you, they haven't a clue as to what it is 12 actually going to cost us, particularly in this market. 13 In April of 2007, when it issued the Initial 14 Statement of Reasons, the S tate conceded that the cost 15 had reached "the economic limit of what industry could 16 bear." That statement was made in 2007 based off of 17 historical information from the strength of our 18 industry from 2005 and 2006, well before California 's 19 construction industry, quite frankly, is in a 20 depression. 21 So , in 2007, the statement was made that they 22Alderson Reporting Company 1
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- DEPO 64 had already reached the limit of which the industry 1 could bear. When it comes to profits, when it comes to 2 volume, we are basical ly in a depression compared to 3 those numbers. 4 At the same time, the California construction 5 industry has gone into the worst depression in the 6 memory of anyone still in business can remember. As I 7 said, my father has been in heavy construction for over 8 50 years, and I know some people in San Diego County 9 who have been in it over 65 years, and this is the 10 worst they've seen it. Over the last 4 years, one 11 third of California's construction industry has 12 completely disappeared. Those who are still there are 13 somewhat hanging on a thread. There are some areas in 14 which people are doing well, but they are few and far 15 between. 16 In the record at the hearing that California 17 held on March 11 th , the EPA will find abundant evidence 18 that the S tate's construction contractors cannot 19 generate the earnings that they would need to self
20 finance this. And as far as going to a bank and 21 borrowing the money? Very, very thin options in doing 22Alderson Reporting Company 1
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- DEPO 65 that. Basically, nonexistence. 1 California adopted the rule in April of 2007, 2 and the first of several deadlines for compliance of 3 that rule, the fleet average requirements, came and 4 went in March of 2010 . As the lead time expired, the 5 technology necessary to comply with anything 6 approaching an affordable cost has yet to be developed . 7 Retrofits, repowers, replacements remain economically 8 infeasible. 9 For most contractors, the only opt ion was to 10 downsize their fleet and then limit their earning 11 capacity to basically working their way out of a hole . 12 Particularly when you have old equipment, like our 13 company does, that's paid for, and you have to downsize 14 and get rid of it, and then you're going to get hit 15 with the burden of retrofits in the future, you're 16 going to do that with what money? You've already lost 17 a large part of your capital because , in our instance, 18 we had to downsize. 19 Fourth, the cost of compliance remains only 20 one of several reasons for questioning the technology. 21 When it adopted the rule, California acknowledged that 22Alderson Reporting Company 1
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- DEPO 66 the rule would ultimately require fleet owners to 1
re trofit more than 100,000 pieces of equipment. By 2 March of 2010, only 1 , 000 such units had been 3 retrofitted. The goal was 100,000, and they basically 4 got 1,000 March of this year. 5 To this day, the technical feasibility of 6 installing verified devices, it hasn't been done, and 7 the regulated equipment remains a great unknown. You 8 saw the HUSS filters up there. Those that are able to 9 be installed, there is all kinds of problems with them, 10 and I doubt that anyone from the CARB staff has ever 11 run a 988. 12 We have pieces of equipment that run from 13 skiploaders to that size of equipment, and I run them 14 from time to time when I'm filling in for somebody. 15 And I'm telling you, as pointed out, the sight distance 16 visibility, when it used to be 55 feet, and now you 17 j ust -- it's out to the point of over 120 feet of a 18 blind spot, someone is going to get hurt or killed in 19 this industry based off of those filters. 20 Fifth, the fleet owners have to retrofit 21 their off
- road equipment far more carefully than CARB 22Alderson Reporting Company 1
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- DEPO 67 anticipated. As Cal / OSHA has discovered, the 1 technology on which the rule so heavily depends can 2 impair visibility and create other risks in the 3 construction industry as you saw . AGC continues to 4 support incentives for contractors to voluntarily 5 retrofit their equipment or otherwise reduce their 6 emissions. 7 The off
- road rule is, however, so broad and 8 aggressive that it is nearly certain to put 9 construction workers at risk of injury or death. By 10 CARB's own admission, appropriate safety standards 11 would threaten the viability of major portions of the 12 rule. 13 On a personal note, our own company -- I 14 touched on this
-- could not even begin to afford the 15 retrofits on this, and at one point, we actually 16 thought we were safe because we have a lot of Tier 0 17 equipment. And we thought we were safe within the 18 limits that CARB set for the fleet sizes. And then in 19
our equipment at Tier 0, there is not verified, 20 certified T
-- we ll , I still call them T backs , but the 21 diesel particulate filters that are certified for the 22Alderson Reporting Company 1
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- DEPO 68 Tier 0 fo r the type of work that we do. 1 As the first deadline approached to register 2 your equipment , our only option in dealing with the 3 rul e was to downsize our fleet. And when I say 4 downsize it, it gets interesting in that rule Section 5 209, the word was mentioned "arbitrary and capricious." 6 I was sitting in an audience wondering, what exactly 7 does arbitrary and capricious mean when it comes to 8 this rule? Because at one point in time, CARB had a 9 large fleet set at 10,000 horsepower. When the fleet 10 was 10,000 horsepower, I'm sitting in the audience 11 going, wow, well, the crosshairs aren't on me. I'm 12 kind of safe here. I'm doing all right. 13 And then overnight, I say overnight, about 4 14 months later, there was anothe r meeting in California 15 that I went to, and CARB staff, just like basically 16 saying they're changing a light bulb from a 100
-watt 17 light bulb to a 75
-watt light bulb , in that meeting 18 said, oh, by the way, we reduced the fleet, large fleet 19 to 7,500 horsepower. Well, a whole bunch of people 20 that weren't captured at 10,000 horsepower got captured 21 at 7,500 horsepower , and we started thinking, "What's 22Alderson Reporting Company 1
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- DEPO 69 going on here?" Why, it had been set at 10,000 for so 1 long, and arbitrary and capricious. 2 A couple of months later, we're at another 3 meeting, and CARB says, by the way, the new floor for a 4 large fleet is 5,000 horsepower. Well, that got my 5 attention because we weren't 10,000 horsepower, and we 6 weren't 7,500. But we were well over 5,000 horsepower. 7 So our fleet of equipment that a lot of it is 8 old. It's paid for. Well, it's not paid for. I t's 9 certainly not as expensive as the new equipment, I'll 10 tell you that, but it is financed. Basically, we're a 11 large fleet. So now we're subject to a rule that the 12 Granite Constructions , the Vulcans, and the Hansons and 13 the big boys are subject to, so now the crosshairs are 14
on us. 15 And I've got to tell you, it had been trying 16 to figure out why CARB staff had dropped the cap from 17 10,000 to 7,500 to 5,000, been trying to figure it out 18 for a while. And just so happens to be last month, I'm 19 glad I went to the meeting in Sacramento because the 20 answer came out. 21 It was pointed out that there was a study 22Alderson Reporting Company 1
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- DEPO 70 written by a Profe ssor Harley from UC
-Berkeley. He 1 actually did an update last year, but his first report 2 was written in the year 2000. It's a 12
-page repo rt 3 that basically goes through
-- and he is from UC
4 Berkeley, and I happened to talk to him Tuesday , 2 5 weeks from yesterday. Put a call into him. He 6 returned my call, and we talked for 47 minutes. We 7 went over both o f his reports. 8 You don't have to be a rocket scientist to 9 figure out that his first report that was written in 10 the year 2000, he has the implication box in the lower 11 left
-hand corner. His implication box states of CARB's 12 off
- road regulations, "Implicati on : The contribution 13 of off
- road diesel equipment to the total emissions of 14 NOx and PM may be lower than suggested by current 15 emissions inventories. As a consequence, the control 16 of these sources may not lead to the air quality 17 benefits that are as large as expected." 18 Do you think maybe that's the reason they 19 dropped the cap from 10,000 horsepower to 7,500 and to 20 5,000? The reason why it was dropped is to actually 21 capture more people to have more benefit. The problem 22Alderson Reporting Company 1
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- DEPO 71 is, as Professor Harley points out in his report, our 1 industry, where CARB had originally anticipated it 2 being 25 percent of the problem, his calculations are 3 that we're 10 percent of the problem. 4 Fact of the matter is, you can regulate us 5 out of business, you're only going to fix 10 percent of 6 the NOx problem. That's a problem. So the question 7 comes up, what percentage of the problem are we in our 8 industry? Are we 10 percent of the problem? Are we 7 9 percent of the problem? 10 And I would venture to say if we're 10 to 7 11 percent of the problem, we're probably getting 40 12 percent of the burden. Is that fair to our industry? 13 I know fair has nothing to do with this. 14 One of you talked about bringing my daughter 15 here for a civics lessons. It would be interesting to 16 see, particularly since we just spent time in 17 Philadelphia at Freedom Hall. 18 Our company
-- keep in mind " arbitrary and 19 capricious. " I would like to know if those changes 20 actually touch on that. We have absolutely no reason 21 to believe that the technology necessary to come into 22Alderson Reporting Company 1
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- DEPO 72 compliance will be anything approaching affordable cost 1 or is going to be developed in the little time 2 remaining. And as I stated earlier, CARB hadn't a clue 3 as to what this is really going to cost us. 4 I am reminded at a meeting
-- I don't need a 5 script for this. I was reminded at a meeting the first 6 time that I was blessed with Mr. Erik White's presence 7 at a meeting in San Diego County. It's about 2 and 1/2 8 years ago, maybe 3. We were talking about the cost of 9 compliance, and I mentioned at that meeting in front of 10 somewhere between 275 and 300 angry operators and 11 business owners that the cost of compliance was going 12 to be excessive to us. 13 Mr. White looked at me, looked at the 14 audience , and said, "Some of you will just have to go 15 out of business and find something else to do." I find 16 that comment abhorrent. I find it callous. And I find 17 it rather flippant. 18 Many people, including me, have a dream in 19 this country to do things, to build things. My dad 20 built a company that he wanted his sons to j oin. We 21 did so. And to have a regulator be so callous as to 22Alderson Reporting Company 1
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- DEPO 73 look at people like me who have an investment of my 1 life in this and say some of you will have to go out of 2 business and find something else to do, Erik, I'll ask 3 you again, and do what? Become a State regulator and 4 find another industry to run out of California ? That 5 was a callous comment, and I will remember it forever. 6 In closing, let me join AGC in urging the EPA 7 also to hold hearings in California. The vast majority 8 of the affected cons truction suppliers simply cannot 9 come here to testify. I told you guys I just happened 10 to be here on a fluke because of my daughter's trip, 11 and it was quite a lesson. 12 At some point, maybe I put a little bit of a 13 face to this, you will see the need and the fear of 14 those of us and the frustration in this industry that 15 this is really going to cost real people a lot of time, 16 a lot of money, and a lot of energy. And the cost of 17 compliance, I will say once again the State of 18 California hadn't a clue as to what it would be. 19 And we would look at the Federal EPA in 20 helping the State of California . We know you can't 21 protect them from themselves. But there are some of us 22Alderson Reporting Company 1
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- DEPO 74 out there as king for protection from them. And before 1 I close, I just want to make a coupl e of comments off 2 my written ones. 3 When we were in Philadelphia, we were walking 4 through where the Liberty Bell is, and we walked 5 through the Freedom Hall, signing of the Declaration of 6 Independence and the Constitution. And it was very 7 interesting in l ooking at what was there, and the kids 8

-- I mean, I'm somewhat of a history buff and have 9 never been out here to the east coast. But I wondered 10 what the Founders were thinking when they wrote, "We 11 the people of the United States, in order to form a 12 more perfect union, establish justice, ensure domestic 13 tranquility, provide for the common defense, promote 14 the general welfare, and secure the blessings of 15 liberty to ourselves and our posterity, do ordain and 16 establish this Constitution." 17 It made me think " to secure the blessings of 18 liberty to ourselves and our posterity. " Did liberty 19 include my right to use the equipment that we've paid 20 for? Does it include my right to a dream of building 21 the dream for my family that my kids can join? 22Alderson Reporting Company 1
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- DEPO 75 Because I'll tell you what, my children and 1 my nephews, they're not going to come to the 2 construction industry. They're going to have to find 3 something else to do because it's basically unbearable 4 to be able to do it. 5 And I also wondered if the Founders would 6 think " to se cure the blessings of liberty to ourselves 7 and our posterity, " would they consider a statement 8 from a regulator like Mr. White , "Some of you will just 9 have to go out of business and find something else to 10 do," would they consider that a taking? But I have 11 protection from that. It's an interesting thought. 12 Before I close up, to this bill, to me, their 13 regulations are a dream killer because they're 14 basically killing not only my family's American dream, 15 but many other people in California 's American dream. 16 It's going down the tubes with this. 17 One other thing. Cost of compliance. Not 18 sure if someone is going to bring this up again, but it 19 was stated by CARB that the cost of compliance was a $3 20 billion to $3.4 billion problem. Interesting thing is 21 since I've been involved in this for over 3 years, the 22Alderson Reporting Company 1
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- DEPO 76 industry has been telling the State that this isn't a 1 $3 billion problem. It's a $9 billion to $12 billion 2 problem. 3 And the State puts out a number, and at one 4 of the meetings, it was the second meeting that we had 5 in San Diego that was in Mission Valley, and they came 6 up with a $3 billion problem. And they said your 7 industry kills 1,300
-- diesel emissions kill 1,300 8 people a year. What's a life worth to you guys? 9 Now I just find that statement incredulous. 10 What's a life worth to you guys? And the reason why 11 they balance the $3 billion number against the State 12 for 1,000 or 1,300 people's death, they balance it at 13 $3 billion as opposed to taking a more realistic number 14 at $9 billion to $12 billion is because they can say 15 it's not costing you guys that much. 16 But if they took the real number of $9 17 billion to $12 billion, at some point in time, you've 18 got to start weighing things out. And, quite frankly, 19 they haven't a clue as to how many people die from 20 diesel emissions. As far as I'm concerned, it's a 21 made
-up number, and in closed rooms, they would 22Alderson Reporting Company 1
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- DEPO 77 probably say so. 1 Let me just close with this, I will say this. 2 As far as them not knowing what it is, and I'm not 3 sure if Mr. Kennedy is going to touch on this, but I 4 hope I don't steal any of his thunder. California 5 Department of Transportation, CALTRANS, has its own 6 fleet of equipment. CARB told CALTRANS that that fleet 7 of equipment was going to cost $60 million to retrofit. 8 When CALTRANS got the report and went through 9 their inventory of equipment, the actual calculation 10 that CALTRANS came up with is not $60 million. It's 11 $260 million. Now take $60 million to $260 million, 12 and then you take them telling us that it's a $3 13 billion problem, and we have been saying it's a $9 14 billion to $12 billion problem, the ratios are about 15 the same. Their cost is off by probably a factor of 16 four, if not greater. 17 And I've said "lastly" twice, and I apologize 18 for this, but let me tell you guys this. I would hope 19 that someone on this board would take the time to 20 Google his name, like I did 2 weeks ago, and put a 21 phone call into Professor Harley from UC
-Berkeley. 22Alderson Reporting Company 1
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- DEPO 78 The gentleman was gracious enough to call me 1 back, and we ended up having a 45
-minute conversation, 2 47 minutes actually. And at the end of a 47
-minute 3 conversation, we wrapped it up as following. He said, 4 "Jon, I can tell you this. The way I did the reports I 5 can't tell you it's the only way to do it, and I can't 6 tell you that it's the best way to do it. But it's far 7 more accurate than the way CARB has done the reports." 8 And I brought up the issue, well, I think 9 CARB is just far more comfortable with having an on
10 staff, mail
- order guy with a Ph.D. to review the 11 reports than actually having a real sc ientist like you. 12 And he said, "Well, I don't really want to get into 13 the politics of that, but it would seem to be the 14 case." 15 But I would ask you or how he finished our 16 conversation in a nutshell, he said the problem with 17 CARB's reports are this. I actually use real numbers. 18 CARB has a black box for their model, and within that 19 black box, their black box , there is at least four 20 factors in that black box that are wrong. One of them 21 is the inventory of the fleet that we know is over 22Alderson Reporting Company 1
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- DEPO 79 exaggerated by at l east 45 percent. 1 The other is the actual fuel that's burned in 2 the State of California that Dr. Harley anticipates is 3 overestimated by at least 360 percent. The number 4 might be 270, depending on how you base it, but it's 5 2.7 times to 3.6 times over exaggerated. 6 The engine use rate when it comes to load 7 factor is overestimated by at least 80 percent, and the 8 hours of operations are overestimated by at least 40 9 percent. So Dr. Harley wrapped up and he said, "Jon, 10 do you know what happens when you multip ly an 11 exaggerated number by an exaggerated number by an 12 exaggerated by an exaggerated number? You come out 13 with an exponentially wrong answer." 14 He said, "I can't tell you the way I did my 15 calculation is the only way or the best way, but it's 16 certainly better than the way that CARB did them." And 17 I would ask you guys from the EPA to pick up the phone 18 and call the man. It would be greatly appreciated. 19 Thank you for your time. 20 MR. SIMON : Thank you, Mr. Cloud, for your 21 testimony, and I can assure you we will be looking at 22Alderson Reporting Company 1
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- DEPO 80 all the record on the ground. 1 MR. CLOUD: Thank you, gentlemen. 2 MR. SIMON : Thank you very much. 3 And I will note for the record we do 4 understand and appreciate the emotion that's involved 5 in this particular authorization. So we 'd like to 6 focus in on the record that you all are presenting to 7 us today. 8 Thank you. 9 Mike, are you going to speak? 10 MR. KENNEDY: I'm not. 11 MR. SIMON : You're not going to speak. Okay. 12 Tim Pohle and Anthony Michaels, you guys are 13 up next. 14 MR. POHLE : Good morning. 15 I'm Tim Pohle from the Air Transport 16 Association of America. With me is Anthony Michaels , 17 Tony, from Bever idge & Diamond. They are our outside 18 counsel on this issue. 19 The Air Transport Association, ATA, is the 20 principal trade and service organization representing 21 the country's major airlines. Together, our members 22Alderson Reporting Company 1
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- DEPO 81 account for about 90 percent of passenger and cargo 1 carried in the United States . ATA represents our 2 members on types of issues before you today on a 3 regular basis, and we're glad to be able to do it 4 today. 5 Our interest in the rule is that it regulates 6 airport ground service equipment, or GSE, and that's 7 basically all the stuff you see running around the 8 tarmac to service aircraft as they are coming in
-- 9 after they've come in, as they're preparing to go out. 10 They are catering trucks, drinking water trucks, 11 fueling trucks, baggage tows, cargo loaders, all of 12 those types of equipment. 13 These pieces of equipment are really critical 14 to air travel. You just think of air travel as coming 15 in on an aircraft, getting off the aircraft, and don't 16 reall y notice what else is going on. But coming in, 17 getting out in a timely, efficient way is re ally 18 critical to our business. 19 You read about delays all the time. You read 20 about some of the problems the air transport system 21 incurs from time to time. A lot of that is the result 22Alderson Reporting Company 1
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- DEPO 82 of delays rippling through the system. So being able 1 to get aircraft in, get them out, and serviced properly 2 is very important to the smooth operation of the 3 system. 4 GSE is incredibly specialized. I think that 5 if my numbers are correct, we account for about 1 6 percent of the population of vehicles that are 7 regulated under this rule. So ARB's estimate, I 8 believe, is that we've got about 1,400 pieces of 9 equipment out there. 10 Within that, we've got about 30 different 11 types of equipment, highly specialized equipment, as 12 I've already gone through. So we've got a very small 13 market. It's really a niche within a niche for each 14 type of equipment to try to get the retrofits and try 15 to get all the things that we would need to comply with 16 this rule. 17 I want to emphasize from the beginning that 18 ATA has always supported the emissions reductions 19 targets at issue here. We do not believe that CARB has 20 the authority unde r law to regulate us in the manner 21 that it is regulating us. But we've always supported 22Alderson Reporting Company 1
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- DEPO 83 the targets. We've worked with them cooperatively, and 1 the thing that we've really taken issue with is the 2 mechanisms that they've chosen to deploy to try to 3 reach these targeted reductions. 4 So my role today, I'm just going to go 5 through some introductory remarks and general 6 observations, and then Tony really is the guy who 7 really understands the Clean Air Act. He actually was 8 counsel to the other ATA there, the Ame rican Trucking 9 Association in the TRU case that you heard about 10 somewhat today. So he's the real expert. 11 I want to give you a little bit of background 12 on the commercial aviation industry and talk about our 13 emissions record, and our emissions record to j ust give 14 you some context of our contribution to the economy 15 vis
- a -vis the contribution to the emissions 16 inventories. Keep in mind that this is really
-- most 17 of our emissions, obviously, come from aircraft. But 18 on the national stage, the recent greenhou se gas 19 inventory from EPA shows that our emissions are 10 20 percent below 1990 levels already , and it's less than 2 21 percent of those emissions. 22Alderson Reporting Company 1
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- DEPO 84 And obviously, emissions are
-- greenhouse 1 gas emissions are a function of fuel burn. So, and NOx 2 is a very, ve ry, very small portion of what is produced 3 by aircraft engines. So we're below 1990 levels. 4 We're less than 2 percent of the greenhouse gas 5 emissions, and we drive about 5.6 percent of GDP in the 6 United States , generating about $1.3 trillion, about 12 7 mi llion jobs. And we carry about 27 percent of the 8 value of mercantile trade in this country, exports and 9 imports. 10 The trends are also consistent with what's 11 happening in California . Our emissions are actually 12 below 1990 levels when you include interstate, 13 intrastate, and international operations out of 14 California . We're 11 percent below the 1990 levels 15 according to California 's own inventory. And we there 16 drive about 4.6 percent of the GDP, account for about 1 17 million jobs, and about 50 percent of the value of the 18 State's export trade. 19 So it's just the juxtaposition between our 20 lowering emissions and the contribution between
-- to 21 the economy and the fact that certainly from 1990, 22Alderson Reporting Company 1
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- DEPO 85 we're carrying far more passengers, far more cargo, and 1 at the same time have experienced an absolute reduction 2 in emissions. I think it's a rather impressive record 3 and one that I've wanted to highlight here. 4 And I just want to also say that we haven't
- 5

- we're not planning on resting on those laurels. 6 We've made a lot o f aggressive, have a lot of 7 aggressive targets for further improving our emissions 8 profile. But as I said, the focus here is on GSE, and 9 we've been proactive on the GSE front as well, 10 investing in a lot of new equipment, particularly 11 electric. There's a lot of penetration of electric 12 equipment, GSE in the south coast where California I 13 know needs it the most. 14 And you should also know that we are very 15 proactive early on, entering a memorandum of 16 understanding with ARB to voluntarily reduce emissions 17 befo re the regulations started coming out of ARB, which 18 when that happened , the MOU just went by the wayside. 19 We've been actively involved with CARB throughout this 20 process, working with them, and CARB has made a number 21 of improvements to the rule throughout this process, 22Alderson Reporting Company 1
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- DEPO 86 which they've gone through, and we've been appreciative 1 of their willingness to listen to us in certain 2 respects. 3 And we appreciate that, but we still have 4 some major concerns about the rule. I think they've 5 really boiled down to two major concerns, and one is 6 that the emissions, every indication is that the 7 emissions are really far below the projected levels 8 that are put out in justification of this rule. The 9 recent Berkeley study has been alluded to. I don't 10 want to run through the resu lts of that. But it 11 suggests that the models are overstating the emissions. 12 I'd also point out that CARB projected growth 13 in our GSE from 2000 to 2009 that it would be about 21 14 percent, that our fleet would grow by that much. We 15 don't have specific figures on the GSE equipment as 16 yet, and we hope to develop that for not only this 17 proceeding, but for the further proceedings at CARB. 18 But juxtaposed with that 21 percent projection of 19 growth, and I'm not denigrating CARB here because, in 20 that time period , people would have thought there would 21 be growth. But there's a projection of 21 percent 22Alderson Reporting Company 1
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- DEPO 87 growth. Our analysis shows that our emissions have or 1 our operations have actually declined in that period. 2 At LAX, for instance, from LAX's own data 3 shows that, and it's obviously one of the largest 4 airports in the country, the largest in California . 5 Certainly, it dwarfs operations in the south coast. 6 But it declined 29 percent operations from 2000 to 7 2009. Cargo
-- passengers are down 19 percent. Cargo 8 is down 25 percent from 2000. 9 So it's just juxtaposed with the growth that 10 was projected and the reality that we're facing today. 11 I think this is especially true in the areas that are 12 most in need of the reductions, and I think everybody 13 knows that the south coast is one of the most affected 14 areas in the country, and we understand that. 15 Here, I've got a little bit of a different 16 figure because we've got data from 2000 to 2008. And 17 over that period, CARB projected that our growth would 18 be about 19 percent from 2000 to 2008, but the south 19 coast or -- I'm sorry, the Southern California 20 Association of Governments data shows that our aircraft 21 movements are down about 15 percent in the south coast 22Alderson Reporting Company 1
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- DEPO 88 in the airports that are part of the south coast, and 1 our passenger levels are down 8 percent and cargo down 2 18 percent, respectively. 3 So this is, again, juxtaposing the projected 4 growth with the reality on the ground. I think it's 5 particularly important when you look at the SOON 6 program that was mentioned, and that component which, 7 again, the south coast has opted into is the only 8 place, the only air district that has opted into that 9 program. We don't believe that the SOON program is 10 necessary, at least as to our equipment because our 11 emissions not only are nowhere near where they were 12 projected to be, they're below
-- they've probably 13 actually contracted. 14 So the bottom line is that juxtaposition 15 between the projected growth and the actual contraction 16 of the industry. And keep in mind that even as we've 17 been contract ing, our fleet has gotten cleaner. We 18 have gotten more electric equipment into the State, and 19 we've been investing in cleaner equipment over this 20 period. Just the natural progression of replacing 21 equipment over that time would have reduced or cleaned 22Alderson Reporting Company 1
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- DEPO 89 up the fleet. 1 So the apart from the emissions just being 2 much lower than were projected, our main concern and 3 the concern that is a second main concern and one that 4 we've been talking about for a very long time is that 5 ARB's approach to this rule, it just remains flawed. 6 Here, we just think it's unnecessarily complicated. 7 There are these ever
- changing targets, and the rule is 8 very intrusive in the way that it goes about trying to 9 achieve the reductions. 10 And you've heard a lot about retrofits, we 11 have many of the same concerns. I am not aware of 12 retrofits being used on ground support equipment in 13 California for purposes of complying with this rule. I 14 know on the much larger pieces of equipment, it is 15 extremely difficult for us to find manufacturers 16 willing to invest the time and the effort to look at 17 the niches within the niches to make the retrofits work 18 with our particular pieces of equipment. 19 You've heard references to the huge 20 temperatures that are generated by this equipment. We 21 have hydraulic lines, too. We also have aviation fuel 22Alderson Reporting Company 1
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- DEPO 90 around the area as well, and visibility is an issue for 1 us as well. So we have many of the same concerns, and 2 I don't want to over emphasize that, but to kind of 3 build on what the construction folks were talking about 4 before. 5 There is this other issue about the shifting 6 annual requirements. It's a function not only of the 7 fleet that you have and the changes that might be made 8 to accommodate the various vagaries of the airline 9 industry, but also the manufacturers of the engines 10 that we use to comply with the rule, we're not always 11 sure exactly what the horsepower is going to be for a 12 particular application. So it's difficult to plan and 13 deploy equipment in a manner that makes compliance with 14 the fleet averages a reali stic option. 15 Another big problem that we face is what we 16 call " double control, " the idea that we've got to 17 retrofit equipment or buy the best equipment that's 18 available at a certain stage of the rule only to be 19 told that within long before the useful life of that 20 piece of equipment is gone
-- is over that we've got to 21 reinvest and deploy new equipment to reach the various 22Alderson Reporting Company 1
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- DEPO 91 requirements. 1 In terms of the retrofits, I did want to 2 mention that CARB, they talked about that the rule does 3 not require deployment of technology that does not 4 already exist. Well , these retrofits may exist on a 5 shelf, but for us, it means being able to take that off 6 the shelf and put it on our specific types of 7 equipment, finding folks that are willing to make the 8 investments to help us do that, and it's just not 9 happening, to be honest with you. It's just that 10 existing technology on the shelf is not being deployed, 11 does not exist in the reality that my members operate 12 in. 13 Turning to this proceeding and our main 14 concern about this proceeding, I think it's that we 15 feel that it is premature for you all to really be 16 considering whether to grant authorization of this 17 rule. I think the principal issue here is the need, 18 the supposed need for this rule at this time. 19 Again, we've supported the emissions 20 reductions, but that's in a context of actually needing 21 the emissions reductions. ARB itself is undergoing
-- 22Alderson Reporting Company 1
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- DEPO 92 is reviewing what the emissions levels are and, as you 1 heard, in the coming months will be considering again 2 essentially whethe r this rule is needed because it 3 relates to the level of emissions that actually exist. 4 And as we understand it, that is an issue 5 that's still in question and that ARB is still 6 questioning. So we question the need or we question 7 whether, as it was put e arlier, that issue is ripe for 8 your consideration , to use a lawyer's word. 9 So, in conclusion for me, we're going to 10 continue working with CARB, and we're looking forward 11 to understanding what they might envision for further 12 modifications to this rule. We'll continue doing what 13 we've been doing, which is showing up, providing the 14 information that they ask for, trying to help out as 15 much as we can while trying to ensure that this is a 16 reasonable approach. 17 As of now, as you've heard from me, we don't 18 thin k that this is a reasonable approach. We think the 19 targets were reasonable. We don't think the approach 20 is reasonable. The other major point is that we just 21 don't think it's appropriate for you all to be making 22Alderson Reporting Company 1
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- DEPO 93 this decision at this time, given the flux on the 1 emissions issue that I talked about. 2 My colleague Tony is going to take over now 3 and really run through some of the more, shall we say, 4 nitty
- gritty issues around the three compliance or the 5 three criteria that you're here to consider today. 6 MR . MICHAELS: Thanks, Tim. 7 As Tim mentioned, I'm Tony Michaels of 8 Bever idge & Diamond, outside counsel to the Air 9 Transport Association. 10 Picking up on something that Tim just 11 mentioned, one of the reasons why I think the errors in 12 the emissions model and the emissions projections that 13 CARB had made may be very relevant to what EPA is doing 14 in its role as deciding whether to authorize the rule 15 is that it does seem that CARB is starting to come 16 around to recognizing that their model is very wrong 17 and also starting to come around to the reductions in 18 emission s that have occurred through the recession and 19 some other issues. 20 And so, when they say they're planning some 21 changes, they may relax or make the rule more flexible. 22Alderson Reporting Company 1
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- DEPO 94 So I understand that CARB has said this, and I don't 1 think it's changed, that they're opening the thing up 2 completely to any kind of change in the approach. It's 3 not, as far as I understand it, limited to, well, let's 4 see if we delay the thing by a few months or something 5 like that. 6 So as you're considering the record and the 7 comments today, there are some very serious 8 authorization issues that be raised by the rule as 9 currently written. It may be that the rule that's 10 final doesn't pose those issues at all. And so, from 11 EPA's perspective, it may very well not make sense at 12 all to at this point, a couple of years after the 13 initial request, delve in and make its determination 14 and wade through all these issues, when 4 months from 15 now, in August, CARB has said they plan to be done. 16 They pl an to go through workshops over the next couple 17 of months and propose a revision for August. 18 If that's changed and if CARB is not
-- is no 19 longer planning to do that or is no longer considering 20 any options that may be out there, it would be 21 incumbent on CARB to tell us that, but that's not my 22Alderson Reporting Company 1
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- DEPO 95 understanding is that's what's going to happen. And 1 we're looking forward to
-- ATA is looking forward to 2 hopefully meeting with staff and coming up with ways to 3 achieve the same emission reductions from GSE, but in a 4 way that's a bit more efficient and more compatible 5 with the industry. And I'm sure the construction 6 industry and other industries affected are, too. 7 So turning to the rule as it's written that's 8 before you now. ATA submitted very detailed written 9
comments in December of 2008. We plan to submit 10 supplemental comments next month in writing, and those 11 will go into much more detail. 12 Today, I wanted to touch upon just a few of 13 the issues, particularly technical feasibility, useful 14 life, which is part o f the consistency with Section 15 202(a), and need. So that's two of the three criteria, 16 the need and the consistency. 17 With respect to technical feasibility, I 18 think it's very critical not to lose sight
-- and from 19 CARB's presentation today, they've clearl y lost sight
- 20

- of the fact that technical feasibility includes 21 installation of the technology, a s Tim alluded to, and 22Alderson Reporting Company 1
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- DEPO 96 it's in the statute. 202(a) refers to the technical 1 feasibility needed for the "the development and 2 application of the requisite technol ogy and 3 application." 4 It's not enough that a retrofit maker has 5 developed a nice filter. It needs to be integrated 6 into the vehicle . And not only has CARB not made any 7 determinations on that with respect to the real cost 8 burden, lead time needed, parti cularly for GSE, but 9 they've conceded that. And the rule doesn't
-- 10 provides really no consideration of that either, and 11 CARB has said it expects the end
-user to figure that 12 out. To figure out whether or not it's technically 13 feasible to install the retro fits upon which this rule 14 depends. And that's a real issue. 15 In terms of the experience recently, as 16 others have alluded to, there are about 180,000 17 vehicle s projected to be subject to this rule. GSE is 18 probably less than 1 percent of that, but that's the 19 State
-wide total. About 100,000 of those were soon to 20 be retrofit by CARB in adopting this rule that that's 21 how they would achieve compliance and that by this 22Alderson Reporting Company 1
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- DEPO 97 year, 35,000 would be successfully retrofit. As we 1 understand it from CARB, the number is 1, 000 to date 2 that have been successfully retrofit. Many through 3 demonstration pro jects. None of those are GSE. 4 No GSE, to our knowledge, has ever been 5 successfully retrofit with a Level 3 filter of the kind 6 that CARB is requiring. And airlines have tri ed. 7 They've tried in the past, and they've tried leading up 8 to this rule, and it's simply not been found to be 9 possible or feasible. 10 We understand that at least two of those 11 installations have already caused fires that destroyed 12 the equipment. That's 2 out of 1,000. And as you can 13 appreciate, nobody wants that equipment under their 14 fully fueled aircraft when they're sitting on the 15 tarmac. It's just not
-- it's not going to work for 16 any industry, if that's the case, but certainly for 17 aviation that's not feasible. And I completely agree 18 with Mr. Prescott's point that feasibility has to 19 include safety. It's not feasible if it catches on 20 fire. That's got to be part of the technical 21 feasibility criteria. 22Alderson Reporting Company 1
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- DEPO 98 And as I mentioned, CARB has said that 1 verificat ion, this is a quote, verification "does not 2 address the feasibility of installation." And CARB has 3 identified a number of the issues that would have to be 4 addressed. They've identified them and left it for the 5 end
-user to try to address them. CARB hasn 't made any 6 attempt to address them. 7 The rules does, as CARB mentioned, there are 8 10 now, 10 Level 3 verified filters, 5 of which are 9 passive. The active ones require you to pull over and 10 maybe take the filter out and put it in the oven or do 11 something else where you actively burn out the soot 12 that builds up. The passive ones burn it out 13 installed, which is what I think Mr. Prescott again was 14 referring to the 1,200
- degree temperature that these 15 can reach. That's because they burn off the soot as 16 instal led on the vehicle. They don't have to be taken 17 off. Those are the passive ones. 18 But the CARB verification doesn't mean 19 anything about whether that unit is technically 20 feasible to be installed on any particular vehicle at 21 all. That's just they have admitted that as well. The 22Alderson Reporting Company 1
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- DEPO 99 verification process has nothing to do with that. It's 1 mounted on a test engine, and what they test is 2 durability and whether the exhaust emission s are 3 removed or not to the level specified. 4 But the rule requires installation based on 5 what's verified, subject then to this after the fact 6 potential for exemption, which is problematic in many 7 respects, and we've addressed some in the written 8 comments and others have addressed some of the issues 9 with it. But I would say, and there are a number of 10 legal problems with that approach. 11 One is that the exemption is limited to where 12 the retrofit cannot be safely installed or operated. 13 It's an impossibility standard, which is not the same 14 as the technical feasibility with consideration o f cost 15 that the agency must consider. It's technical 16 feasibility within economic parameters is the test 17 under
-- for authorization. 18 But another problem with that, obviously, is 19 it assigns to CARB that determination. That's your 20 determination. That's E PA's assignment under the 21 statute. You have to determine is this rule consistent 22Alderson Reporting Company 1
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- DEPO 100 with Section 209, which incorporates the technical 1 feasibility criteria. CARB can't reserve that to 2 itself, and it certainly can't reserve it to itself to 3 do later on a case
-by
- case basis. 4 In addition, as others have pointed out, CARB 5 does not have safety expertise, and certainly not on an 6 airport environment. And they've again attempted to 7 give themselves the authority to determine is that safe 8 or not? What does that mean? Zero risk? We don't 9 know what CARB would think safety means. 10 Others have mentioned the visibility issue. 11 That's one issue that came up after the rule was 12 finalized and that CARB has tried to
-- spent a year 13 trying to deal with. And as a policy matter, they've
- 14

- for the time being, they have, I guess, exempted in 15 the sense of they've said they're not going to enforce 16 against , as a matter of enforcement discretion , people 17 who if the retrofit would cause any visibility 18 impairment. So it's sort of a zero standard. 19 But that's not necessarily going to be the 20 final standard, and that's not in the rule that you're 21 being asked to review. You've got to review this rule 22Alderson Reporting Company 1
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- DEPO 101 as it's written, and there's no visibility provisions 1 in there at all. I mean, we don 't know what the final 2 provisions are going to be, and Cal/OSHA doesn't 3 necessarily have jurisdiction over GSE even if it does 4 over construction equipment. 5 Moreover, the exemption, as others have 6 mentioned, it doesn't really do anything. It exempts 7 that unit and that VDECS . The end
-user is expected to 8 go through what has been characterized I believe 9 previously as an engineering application exercise for 10 each one. It's going to take some time. And 11 obviously, it could have costs associated with it even 12 i f it fails, and we would expect it to fail for GSE. 13 But even if you get to the end of that and 14 you can have the documentation you might need to get 15 the exemption from CARB, and they're limited, limits on 16 that as well, what does that get you? It just means 17 you don't have to retrofit that unit. Well, you didn't 18 have to anyway. You have to retrofit 20 percent. It's 19 up to you to pick. So now you just have to go to the 20 next one. You don't get any extra time. 21 CARB's verifying units on an ongoing basis 22Alderson Reporting Company 1
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- DEPO 102

are going to continue to do that. If there is a new 1 one that comes out, you have 10 months you have to 2 install it, and that's it. That's the lead time. CARB 3 hasn't taken into account this trial and error 4 approach, how much time that's going to take, and it 5 certainly hasn't taken into account the cost of that. 6 The exemption doesn't take into account any 7 other operational deficiencies that could result. For 8 example, you mentioned for the retrofits the need to 9 regenerate them. For passive, it does require the 10 vehicle to stop in the middle of its job. And for some 11 applications, that may be okay. But at an airport, 12 they've got to be ready when the plane lands, and it 13 doesn't a lways land exactly on time. 14 And particularly for, just as an example, the 15 cargo loaders that load and unload the cargo planes, if 16 you're talking about an overnight delivery, absolutely 17 positively has to be there overnight. They've got to 18 be ready immediately. They've got to work through the 19 3
-hour cycle of loading and unloading this heavy cargo. 20 They can't hold up the whole operation to wait for 21 that, and it does have safety implications for the 22Alderson Reporting Company 1
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- DEPO 103 national air space system if there is a wait. 1 As Tim alluded to, it's a key cornerstone of 2 the system is to make sure
-- is to try to avoid 3 wherever possible compressing the schedule. You don't 4 want to have an instance where you need to bring in for 5 a landing a larger number of planes in a shorter period 6 of time. It's pushing the risk envelope. FAA doesn't 7 want that to happen. 8 And if there is GSE that has to sit there and 9 regenerate and all the planes have to wait or the plane 10 has to wait, that means that it delays the planes all 11 down the queue, and it can cause real issues for the 12 system. So
-- 13 MR. POHLE : Just to be clear, those are 14 generally
-- those are economic and efficiency issues. 15 I can assure you that we'd never operate unsafely. 16 The one that is our core mission , to provide safe air 17 transportation. So I can tell you we are not going to 18 deploy anything on our GSE that's going to compromise 19 safety, and we're not going to do anything that would 20 lead to any kind of unsafe operation of any sort. 21 MR. MICHAELS: Certainly. And that's
-- 22Alderson Reporting Company 1
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- DEPO 104 safety does have to be part of technical feasibility. 1 These are the reasons why it's not technically feasible 2 to install these units, particularly for GSE, and 3 that's our focus. 4 I also wanted to make the point that in our 5 view that the Clean Air Act doesn't allow imposing 6 technology
- forcing regulations on the end
-user, and 7 this is a technology- forcing regulation because the 8 installation has not been done. It's not been proven, 9 demonstrated how it's going to be done. It's yet to be 10 figured out. 11 There are a number of technical issues that 12 will exist that would have to be addressed in doing 13 that. And so, while the filter exists, what the end 14 product is is a filter successfully installed into a 15 vehicle , and that technology doesn't exist yet. And 16 the end
-user is expected to do that under this rule. 17 In our view, that runs counter to the 18 statutory scheme as a whole. And when you are applying 19 a technical feasibility standard to this rule, you've 20 got to interpret in the context of the statute as a 21 whole as to what that means. In the Sierra Club v. EPA 22Alderson Reporting Company 1
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- DEPO 105 case, the court made clear that Title II, which is the 1 whole mobile source scheme, is directed towards having 2 technology
- forcing standards imposed on vehicle 3 manufacturers, not owners. 4 Interestingly, CARB elected in 2003 not to 5 adopt a Tier 3 particulate matter standard for these 6 engines, apparently because it found it not technically 7 feasible to make the OEMs do that, the original engine 8 manufacturers. They've not come out with any formal 9 public explanation for that decision. We've tried to 10 get documents related to it, and they've said they're 11 confidential. 12 But if that's the case, it's not clear how 13 CARB can say it's technically feasible now to ask 14 someone who happens to own a piece of equipment to do 15 what the engine maker couldn't do in designing it into 16 the new equipment, which is what the statute really 17 contemplates. We're seeing the results of a lot of 18 these issues now with very few successful retrofits. 19 Briefly, two other quick
-- 20 MR. SIMON : Tony, I would ask you to kind of 21

-- 22Alderson Reporting Company 1
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- DEPO 106 MR. MICHAELS: Okay. The useful life 1 requirement of 2 02(a), which is also part of the 2 consistency criteria. It's the same section that has 3 technical feasibility in it, requires that standards be 4 applicable to vehicle s and engines for their useful 5 life. The useful life of these
-- the equipment 6 subject to the rule is 10 years or 7 years depending on 7 horsepower. The rule requires changes well before that 8 and violates that useful life requirement. 9 Tim alluded to the need criteria, and I do 10 think it's
-- CARB is reassessing the need for this 11 rule right now. To me, it doesn't really make sense 12 for EPA to even try to make that determination right 13 now. But if it were to try to do it, it's unclear how 14 they could reach that conclusion if CARB isn't sure. 15 So, basically, given the serious issues that 16 are presented by the rule as it's written, it seems to 17 make sense to focus on the rule as it is going to 18 actually be and, in fact, to notice and comment and 19 have a hearing about the rule as it's going to actually 20 be in place. Now, EPA can legally act on this rule, 21 but it just may not end up being relevant , considering 22Alderson Reporting Company 1
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- DEPO 107 if the rule changes, then you've wasted your time. 1 If there are any questions, I'm happy to
-- 2 MR. SIMON : Gentlemen, thank you both for 3 your testimony. I look forward to your written 4 comments. 5 MALE SPEAKER : Thank you. Appreciate it. 6 MR. SIMON : Next up is William Davis from the 7 Southern California Contractors Association. 8 MR. DAVIS: This must be the short person's 9 microphone. 10 [Laughter.] 11 MR. DAVIS: I had written "good morning," but 12 good afternoon. And thanks for the time to talk with 13 you fellows. 14 I am Bill Davis . I'm the executive vice 15 president of the Southern California Contractors 16 Association, which represents the interests of union
17 signatory heavy construction contractors in the 12 18 counties of s outhern California . It's served by Local 19 12 of the Operating Engineers, and their members are 20 also concerned about the visibility and safety issues 21 that were presented so ably by Mr. Prescott. 22Alderson Reporting Company 1
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- DEPO 108 Our trade area is a land area that's large r 1 than all the New England States combined, and our 2 contractors serve the highway, road, bridge, and other 3 infrastructure needs of about 18 million citizens in 4
our area. 5 I am also a member of the Board of Directors 6 of the Construction Industry Air Qualit y Coalition , 7 which SCCA helped to form in 1989 to promote the 8 adoption and implementation of emission reduction 9
measures which are cost effective and efficient while 10 minimizing unacceptable impacts on its construction and 11 building industry members. 12 This coalition is comprised of several major 13 construction and building industry groups in 14 California. In addition to SCCA, CIAQC's membership 15 includes the Associated General Contractors of 16 California and of San Diego, the Building Industry 17 Association of Southern California, the General 18 Engineering Contractors Association, the Engineering 19 and General Contractors Association, Engineering and 20 Utility Contractors Association, Construction and 21 Industrial Materials Association, the California Rental 22Alderson Reporting Company 1
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- DEPO 109 Association, and the California Dump Truck Owners 1 Association. In all, CIAQC represents several thousand 2 construction and home
-building companies that perform 3 work, operate equipment in California. 4 SCCA requests that the U.S. Environmental 5 Protection Agency postpone any action on the State of 6 California's request for waiver of Federal preemption 7 of s tandards for off
- road diesel emission in in
-use 8 fleets
-- whew, what a bunch
-- submitted by the 9 California Air Resources Board until several conditions 10 are met, including you guys having hearings in our 11 S tate, CARB producing a final and feasible version of 12 the regulation, and the underlying science and public 13 health questions related to the regulation are 14 revisited. 15 SCCA and the construction industry has been 16 disappointed that EPA has yet to schedule a hearing on 17
a waiver for the off
- road rule in California. We've 18 requested it since your first waiver hearing notice 19 came out. This CARB rule affects only contractors in 20 California and working fleet operators in California 21 li ke the airline folks, which are actually less than 22Alderson Reporting Company 1
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- DEPO 110 0.1 percent of the total fleet. 1 For most of those businesses , it is 2 impossible or burdensome to travel the 3,000 miles from 3 California to Washington
-- my arms are still s ore from 4 the flight yesterday
-- and to discuss a strictly 5 California rule. We find it more than ironic that EPA 6 staff was able to schedule a hearing in California on 7 the proposed new nationwide ozone standard this 8 February in Sacramento but remains insistent that 9 California contractors travel here. 10 We hope if it's a question of finance, we can 11 work out some arrangement to pay your airfare. But is 12 there any other reason why you guys won't come to our 13 State and hold a hearing? That's a question. 14 MR. SIMON : Keep going. 15 MR. DAVIS : Okay. That's an answer. 16 California contractors and fleet owners 17 recognize the impact that the CARB off
- road regulation 18 will have on the construction industry and its ability 19 to remain viable in the future. In fact, it's calling 20 into question our abili ty to remain viable in the 21 present. 22Alderson Reporting Company 1
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- DEPO 111 This point has been repeatedly demonstrated 1 at each of the three CARB hearings where the o ff
- road 2 regulation was before the board where several hundred 3 contractors and equipment owners attended the meetings 4 and provided testimony. If EPA truly wishes to fully 5 hear from those that will be impacted by this 6 regulation, it should schedule at least three waiver 7 hearings in California
-- we're a large S tate -- north, 8 central, and s outh. 9 We find this particularly important, given 10 the special nature of the California regulation as a 11 possible solution for other nonattainment areas in the 12 United States under the Clean Air Act. We do 13 understand this rule has impact beyond our borders. So 14 it's important you really understand the rule from on 15 the ground from the real people involved. 16 There are many other problems inherent with 17 this rule. We'd like to focus on a few that we believe 18 are relevant to your consideration of the waiver. 19 First, the rule is in flux , as we have heard . There is 20 going to be a hearing next Thursday that we're going to 21 get to hear from Erik and his compatriots on the 22Alderson Reporting Company 1
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- DEPO 112 investigation that they've done about the impact that 1 the economy has had on California 's diesel fleets, both 2
on - road and off
- road. 3 Even the portable rule, which is still 4 pending a waiver from you guys is still in flux and has 5 been amended again and will be amended probably an 6 additional time before it's ready for prime time. It 7 will be several months before CARB completes the review 8 of this . We think, what, August, September, maybe 9 you'll be back? You've talked about workshops this 10 summer. You've talked about going to a special board 11 meeting in August to consider additional changes to the 12 regulation. 13 Our friends at AGC brought petitions forward 14 to the agency twice. Their most recent petition has 15 made the very significant points concerning the 16 emissions modeling and the actual emission s of the 17 industry that would require severe changes in this 18 regulation. And we think it's inappropriate for you 19 guys or , hopefully , you'll find yourselves unwilling to 20 grant a waiver to a rule that's still not ready for 21 prime time. We would recommend that you not grant a 22Alderson Reporting Company 1
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- DEPO 113 waiver until the rule is final and complete once and 1 for all. 2 Second, there is insuf ficient technology 3 available for contractors to comply with this rule. 4 CARB has argued that if a device is not available to 5 install on a specific equipment, the rule does not 6 require it . However, it does require the owner of that 7 equipment to keep going through his fleet until he 8 finds out either there is something available, there is 9 nothing available for their entire unit. 10 The logic forces every contractor into what's 11 called the best available control technology compliance 12 path. It eliminates other compliance options that are 13 available under the rule . It is a circular argument at 14 best. It's very cleverly written to force retrofitting 15 in the shortest time possible. 16 CARB has failed in their promise to have an 17 adequate number of particulate filters o r traps 18 verified and available to provide retrofit options for 19 contractors. One only needs to look at the results of 20 the CARB
- sponsored Diesel Retrofit Showcase program in 21 which contractors have volunteered 177 pieces of 22Alderson Reporting Company 1
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- DEPO 114 equipment for retrofits. Any devi ce may be used 1 whether or not it is verified under the CARB standards. 2 Millions of dollars are available for the 3 installation. In nearly 3 years, only 35 vehicles have 4 been retrofitted in this program. 5 The rule calls for, well, I think on the 20 6 percent rule on 180,000 pieces of equipment , about 7 32,000 units were supposed to be retrofit every year 8
over the next 5 years. As you've heard already, that 9 number is at 1,000 for the first year and is unlikely 10 to gain any traction with the variety of relief 11
measures that are already in place. 12 The safety issues that are well before you , 13 and the fact that the equipment, while verified, has to 14 be specifically engineered for every single piece of 15 equipment that it's put on. It's not like a car, where 16 you've got one size filter fits one model of car. 17 Construction equipment is almost universally unique in 18 its operation. 19 In previous comments to EPA, SCCA and CIAQC 20 have outlined several challenges to contractors facing 21 compliance with the regulation. These also include 22Alderson Reporting Company 1
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- DEPO 115 issues surrounding the requirement to install retrofit 1 devices that were not originally designed to 2 accommodate them. And s ince October 20, 2008, our 3 letter , that last letter to you, these concerns have 4 not been resolved , still represent a significant 5 barrier. 6 And to reiterate the concerns, we ask that 7 you consider this. The dramatic downturn in 8 California's construction sector has affected the 9 revenue required to pay for retrofits and equipment 10 upgrades necessary to comply with the regulation. 11 People have just called it a construction depression. 12 People have called it the "great recession." 13 Here is the reality in our industry right 14
now. Construction activity is down 50 percent from 15 where it was in 2005, mostly because of the housing 16 bubble. In 2005, we built 155,000 housing units in the 17 State of California . This past year, we built fewer 18 than 40,000. That is a horrendous drop. 19 And what has happened is that it's forced all 20 the contractors that were involved in the residential 21 construction industry into the only other segment 22Alderson Reporting Company 1
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- DEPO 116 that's still active, and that's public works 1 construction, the building of highways and bridges and 2 roads, the money that came from the stimulus and that 3 sort of thing. Instead of having 2 to 5 bidders on a 4 highway project in California , we now have 20 to 30 . 5 I nstead of those projects coming in or near what are 6 known as engineer's estimates of cost, which CALTRANS, 7 the Transportation Department, provides, they're coming 8 in between 25 and 40 percent below engineer's 9
es timates. 10 And CALTRANS every quarter backs their 11 engineer's estimates down. They're still coming in 20 12 to 40 percent below those engineer's estimates. Our 13 industry is literally on its knees. Unemployment , in 14 the construction industry in California in 2 005, there 15
were 942,000 construction workers. Good jobs, too. 16 You know, the union jobs like the operating engineers, 17 when you're in good times, they make $100,000, $125,000 18 a year. 19 Currently, the unemployment level or the 20 employment level in California 's construction industry 21 is 613,000. That means we've lost a full third of the 22Alderson Reporting Company 1
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- DEPO 117 industry. That also means that those employers have 1 lost the ability to keep those workers gainfully 2 employed and, consequently, don't have the money to 3 operate their business es and to meet the requirements 4 of this regulation. 5 In addition, even if they are an active and 6 effective contractor, this rule will require the 7 purchase of new equipment to meet the standards. Tier 8 3 equipment that's available now. Tier 4 equipment, 9 from your standards, which will not truly be available 10 until 2014, '15, and later, they'll have to borrow the 11 money. 12 Have any of you been to a bank lately? 13 They're not loaning money for construction equipment. 14 They are, in fact, one of the almost prohib ited loans 15 has been for these diesel retrofit devices because they 16 are not something
-- they're an add
- on product. 17 They're an after
-market product. They're not 18 collateral that the banks will recognize for financing 19 purposes. 20 The diesel emission control strategies 21 technology is much more expensive to purchase and 22Alderson Reporting Company 1
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- DEPO 118 install than the agencies anticipated, and the 1 availability of these products is irregular at best. 2 We actually had an experience where a salesman for one 3 of the diesel retrofit companies appeared before the 4 Air Resources Board at the meeting in I think it was in 5 July of 2007. The meeting where they adopted this 6 rule? And promised them that they had fully available 7 equipment for any product in our marketplace. 8 That was very good of him to do so. However, 9 we found out later that he was operating out of a 10 garage in Palm Springs, and he had no equipment 11 available for our industry. And this was one of the 12 world's largest manufacturers of this equipment. And 13 they plain
- out lied to the agency about the 14 availability of these products. 15 It brings up a piece, and that is that I 16 don't consider Erik or
-- I'm sorry ? 17 MR. TERRIS: Mike. 18 MR. DAVIS: Mike. We've met, but I couldn't 19 remember
-- to be evil or even arrogant, except Erik's 20 way too cute for most people's taste. But they were 21 misinformed about these products. They bought the idea 22Alderson Reporting Company 1
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- DEPO 119 that these products would provide solutions, and we 1 have demonstrated over the last 2 years that these 2 things are simply not what they were advertised to be. 3 I've worked with the agency as a member of a 4 thing called their off
- road implementation advisory 5 group. This discussion about VDECS has been a part of 6 virtually every single meeting that that organization 7 has had with CARB staff. I think you guys are much 8 better informed about the nature of these products and, 9 hopefully, when in the measure of fullness of time, the 10 technology catches up with the promises, it will be 11 something that will benefit us all, agency and 12 industry. 13 We also believe that the S tate -wide fleet has 14 shrunk to meet the compliance requirements and that the 15 device manufacturers will continue to abandon the off
16 road equipment marketplace as more equipment becomes 17 available on OEM solutions, original equipment 18 manufacturer solutions . I know from personal 19 experience. I talked with the vice president of 20 Caterpillar this last fall. They're spending 60 21 percent of their R&D money on developing Tier 4 engines 22Alderson Reporting Company 1
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- DEPO 120 for their heavy equipment. They haven't got it solved 1 yet. 2 And until mighty Caterpil lar gets this issue 3 solved and meets your standards, it's impossible to 4 expect our industry to
-- our owners of this equipment, 5 the people that will ultimately have to purchase this 6 equipment , to meet a compliance standard which isn't 7 resolvable until peop le can find a way to make 8 emission s of both NOx and PM lower than they are today 9 with the Tier 3 machines. 10 Finally, we need to bring to your attention 11
some serious flaws in the science underlying this rule. 12 I know that you guys essentially are almost prohibited 13 from considering cost in relation to public health 14 benefit. We 've discovered that the lead author of the 15 CARB science review, one Hien Tran, deliberately 16 falsified his credentials to perform the work required, 17 claiming a doctorate from UC
- Davis when, in fact , he 18 could only produce a mail
- order Ph . D. from a UPS store 19 in New York City. 20 "Dr." Tran 's report was used as the 21 scientific justification for public health reasons on 22Alderson Reporting Company 1
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- DEPO 121 both the off
- road and on
- road diesel regulations in 1 California. Then, on February 26th at a CARB
- sponsored 2 scientific symposium, we discovered that the health 3 effects claimed for particulate matter has no 4 scientifically provable consequences in California, 5 based on three different studies from two different 6 scientists
-- one pa id by the agency
-- with real 7 credentials , real Ph.D.s . Clearly, more effort needs 8 to be made before ordering the replacement of the 9 entire California construction equipment fleet. 10 For these reasons, SCCA believes the EPA 11 should not approve the CARB request for a waiver on the 12 off
- road regulation or the portable regulation at this 13 time. EPA should also provide the opportunity for 14 interested parties to orally comment on the off
- road 15 regulation by scheduling public hearings in southern, 16 central, and northern California. And to provide for 17 this, if the May 18 th comment deadline s need to be 18 extended, SCCA would make that recommendation as well. 19 Now there were a few statements during the 20 CARB presentation that I took note of that are not part 21 of my formal remarks. But the question of worst air 22Alderson Reporting Company 1
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- DEPO 122 quality in America came up. And as you all know, from 1 your own studies, that's only because we keep 2 tightening down the air quality standards. 3 Actually, California 's air quality is 85 4 percent better than it was when the Clean Air Act was 5 enacted under the Nixon administration. Only 2 of the 6 State's 58 counties, or 2 areas involving the State's 7 58 counties are severe nonattainment areas in 8 California . 9 That's the San Joaquin Valley, which is a 10 prisoner of its geography. It's surrounded by 11 mountains. It's a bowl filled up with the pollution 12 from Sacramento and San Francisco and L.A. Poor 13 farmers there and their cows are about the only 14 activity that could generate any kind of emission s in 15 San Joaquin . 16 And the other is the massive South Coast Air 17 Quality Management District, which includes Los Angeles 18 and Orange and Riverside and San Bernardino Counties, 19 where those 18 million people we talked about live. 20 Even there, even there, our air quality is much better 21 today than it was when the Clean Air Act was originally 22Alderson Reporting Company 1
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- DEPO 123 envisioned, passed, and is continuing to get better on 1 an ongoing basis. 2 The second piece, and this has been one 3 that's been ongoing on every rule that CARB has adopted 4 in the last several years, is their cost 5 considerations. They are simply laughable. The 6 industry estimates of cost, as Jon pointed out, are 7 around
-- well, it's actually $12.9 billion. 8 This agency has no concept of the economics 9 of operating businesses, and that $12.9 billion doesn't 10 come out of the bid that a contractor makes on a 11 project. It comes out of the profit that's left after 12 the project is done. And that's in an industry like 13 ours right now where there is virtually no margin, 14 there is no ability to financially address thes e 15 requirements of this regulation. It is not financially 16 feasible. 17 We honestly think that, and we said this, 18 I've been involved in this thing since 2003. We have 19 told the agency during that period of time and continue 20 to make this case that our industry will, in fact, and 21 does and is, in fact, cleaning up its emission s at a 22Alderson Reporting Company 1
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- DEPO 124 rapid pace, but it's entirely dependent on the OEM 1 manufacturers who have to meet your standards. 2 And we think that the Tier 4 machines, if 3 they can be officially developed, and you guys would 4 know better than we are where they are on that, but we 5 see an announcement every day or so about Komatsu has a 6 Tier 4 interim, and John Deere has a Tier 4 for one 7 tiny segment of their engine families. When those are 8 fully available, we think that this agency and our 9 industry can cooperatively demonstrate that the 10 emission s from our equipment will be reduced to the 11 levels required by this rule within a period that's 12 maybe 5 years beyond what the current rule standard is. 13 We've said that all along. We still believe 14 2025 to be the deadline for our industry to meet these 15 requirements, and we think it's doable. We don't think 16 this depression is going to continue forever, but we do 17 know that the housing industry is not going to engage 18 in another bubble. And so, it will be a long, slow 19 climb out of this hole. 20 Any questions, guys? 21 MR. SIMON : A couple of comments maybe. 22Alderson Reporting Company 1
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- DEPO 125 MR. DAVIS : Sure. 1 MR. SIMON : And maybe a question. Thank you 2 for your testimony, Mr. Davis. 3 In response to your first question on the 4 hearings in California , we did note
-- I just want to 5 note, and I don't know if you've got a copy through 6 CIAQC or not, but we did send a letter back last week 7 to CIAQC and I think a number of other companies that 8 are represented
--- organ izations that were looking for 9 a hearing in California . 10 Really don't think it's practical or needed. 11 So I think our decision right now currently is that 12 this will be the hearing for the waiver. So you should 13 get a copy of that letter, and we're happy to talk 14 about that. But as of right now, we're having this 15 here. So we did
-- I didn't want to leave you hanging 16 on that one. 17 MR. DAVIS : Larry, did you get a copy of 18 that? 19 MALE SPEAKER : Yes. 20 MR. DAVIS : Okay. We'll talk later then. 21 MR. SIMON : And then, secondly, on the Tier 4 22Alderson Reporting Company 1
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status, I note that that is coming, and it is coming. 1 I mean, we certainly think it's
-- 2 MR. DAVIS : We firmly believe that it's 3 coming. We just think it's going to
-- as with many of 4 your regulations, they do compel the manufacturers to 5 meet the standards. It's just unfortunate that the 6 burden for compliance in the California case is not 7 placed on the manufacturers, but placed on the end
8 users. And those end
-users do not have the capability 9 of meeting the requirement s on their own. They 10 absolutely depend on the manufacturers to supply the 11 products. 12 MR. SIMON : Thank you. 13 MR. DAVIS : Thank you. 14 MR. DICKINSON : Mr. Davis, you made a comment 15 about EPA's consideration of the portable equipment? 16 MR. DAVIS : Yes. 17 MR. DICKINSON : I would invite you to submit 18 separate comment on that. 19 MR. DAVIS : We'll be happy to. 20 MR. DICKINSON : So we can keep the record 21 straight on each. 22Alderson Reporting Company 1
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- DEPO 127 MR. DAVIS : Right. 1 MR. DICKINSON : Also, with regard to the cost 2 estimates of compliance with the rule overall, whether 3 it's $3 billion or $12 billion, and this comment goes 4 to the other people that have testified today. It 5 would be helpful to understand how that cost
-- 6 MR. DAVIS : The financial underpinnings? 7 MR. DICKINSON : Well, whether that
-- the 8 financial underpinnings, thank you. 9 MR. DAVIS : We can supply that data. 10 MR. DICKINSON : Whether that's the economic 11 burden or whether that's a cost per unit or whatever 12 the underpinnings are of that. 13 MR. DAVIS : We can absolutely supply that 14 data. We actually hired a real Ph.D. from UC
- Davis , 15 who developed that information, and we'll be glad to 16 provide it to you. 17 MR. DICKINSON : Thank you. Great. 18 MR. DAVIS : A card or some person that I can 19 address things to? 20 MR. SIMON : Thanks. While we're doing this, 21 next up is Antonio Santos from MECA. 22Alderson Reporting Company 1
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- DEPO 128 [Pause.] 1 MR. SANTOS: My name is Antonio Santos. Once 2 again, Director of Special Projects at the 3 Manufacturers of Emission Controls Association, based 4 here in Washington, D.C. 5 Just wanted to extend apologies from Joe 6 Kubsh , Executive Director of MECA, who wanted to be 7 here but is traveling in Detroit this week, meeting 8 with the EPA actually as it is. 9 The presentation today will cover, once 10 again, from the technical perspective gene rally 11 retrofit emission controls for off
- road diesel engines. 12 MECA in the past has provided comments to ARB 13 regarding their off
- road rulemaking, both early on, 14 before 2007, as well as comments last year when they 15 did the amendment process. Once again, the summary 16 here basically is that MECA supports ARB in its waiver 17 request, and hopefully, after this presentation, you 18 get a better sense of the technologies that are 19 available and that they are feasible and safe. 20 Just a quick who we are. Many of you 21 probably already know about MECA and its member 22Alderson Reporting Company 1
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- DEPO 129 companies. MECA does represent the world's leading 1 manufacturers of emission control technology. So we're 2 talking, of course, here about Level 3 verified 3 devices, encompasses many of the MECA members. They 4
represent catalyst manufacturers, substrate 5 manufacturers which the catalyst goes on, other exhaust 6 component manufacturers, as well as the integrators 7 that bring all of these technologies together. 8 MECA members have extensive experience, both 9 technical and manufacturing and installation wise , for 10 the application of emission control technologies for 11 both on
- and off
- road vehicle s and equipment. And MECA 12 members have verified many of the on
- road and off
- road 13 technologies listed by EPA, ARB, and also in Europe, 14 the VERT process in Switzerland. 15 Just a quick comment, too, about ARB. I 16 mentioned earlier about the number of verified devices 17 that are available and the change over the past couple 18 of years. Obviously, one of the concerns is about the 19 number of available off
- road technologies. As I will 20 note in the presentation, there are currently 10 21 available retrofit technologies, which is an increase 22Alderson Reporting Company 1
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- DEPO 130 from when the rule was first proposed of about 6 back 1 in 2007. And that number, although it seems small, is 2
not insignificant. The process and the cost that's 3 involved with verifying technologies or, in some cases, 4
re -verifying technologies is not a small number. We're 5 talking upwards of some $500,000 to $1 million, 6 depending on the type of technology that you' re going 7 after. 8 So in the same way that the other industries 9 have been affected by the current economic climate, in 10 the same way, MECA members have as well. And as ARB 11 pointed out in their presentation, MECA does look for 12 in its members that regulatory certainty that comes 13 from establishing a rulemaking with definitive 14 timelines. And in turn, of course, the MECA members 15 have jobs , as well as economic benefits, as well as the 16 health benefits that come from promulgating the 17 rulemaking. 18 So the next coupl e of slides we're just going 19 to quickly go through. Obviously, we've talked about 20 this stuff in a broad brush from other presentations 21 about the nature of the different technologies that are 22Alderson Reporting Company 1
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- DEPO 131 available, the Level 3 technologies that are available 1 for off
- road. This slide just points out that wall
2 flow diesel particulate filters offer the highest PM 3 reduction efficiency. These are ARB Level 3 devices, 4 meaning greater than 85 percent PM reduction. 5 They also get large reduction in air toxics 6 from the catal yzed DPFs in the same way that DOCs also 7 get high reductions in toxics, the catalyzing action 8 gets the large reduction in toxics as well, in addition 9 to PM. Greater than 250,000 retrofits already 10 worldwide. Greater than 6 million OE applications, and 11
as we've noted, this is the same technology that's 12 currently on on
- road model year 2007 and newer trucks. 13 So a large experience base here with the effectiveness 14 of DPFs. 15 In this case, specifically for this slide, 16 talking about passive DPFs, which use catal ysts and the 17 available heat coming out of the engine to burn the 18 captured soot. Of course, in order for that to work, 19 you need these specified exhaust temperature 20 requirements coming out of the engine, a certain duty, 21 a certain time , and temperature in order to burn off 22Alderson Reporting Company 1
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- DEPO 132 that soot. And as we noted earlier, the number of 1 verified technologies. Currently, there are five 2 passive DPFs verified by ARB for off
- road. 3 Just the next few slides just have a couple 4 of pictures of some passive DPF installations. 5 Obviously, we saw earlier some similar installations 6 that had safety issues , which I'll talk a little bit 7 more in detail later. But this just points out at 8 least pictures of successful installations that have 9 been done. 10 Here you have an excavator, a drill , two 11 drills. I think all of these were in New York for
-- 12 we'll talk a little bit about this Croton water 13 treatment project. But once again, pointing out that 14 we're well aware of the policy currently going on in 15 California in terms of their interim po li cy for safety 16 with Cal/OSHA. 17 Obviously, some of these, given the current 18 interim policy, may not actually be allowable now 19 because of the zero masking that's being allowed 20 currently. But the point here is showing that in the 21 past, all of these technologies were installed and were 22Alderson Reporting Company 1
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- DEPO 133 done safely and successfully over a certain defined 1 period of time for these retrofit projects. 2 Same here, more passive DPF installations

– 3 rubber
- tired loader, a Caterpillar excavator, and a 4 wheel loader as well. 5 Besides pa ssive DPFs, there are also active 6 DPFs, typically suited for off
- road applications or on
7 road as well with low exhaust temperatures or very high 8 PM out. There are typically two kinds right now that 9 are available out there. There is catalyzed wall
- flow 10 fi lter with electrical regeneration and uncatalyzed 11 wall
- flow filters with fuel burners for regeneration. 12 The catalyzed wall
- flow with electrical 13 regeneration is one of the newer ones that just got 14 verified within the past few months. Once again, there 15
are five DPFs, active DPFs currently verified by ARB 16 for off
- road engines. 17 And just some installations here as well. 18 This is fo r klifts, cranes, bulldozers, a cherrypicker
19 type piece of construction equipment, all installed 20 with the active DPFs. Go ahead. Sorry. 21 MR. HOROWITZ : I'm just wondering, can you 22Alderson Reporting Company 1
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- DEPO 134 point that
-- do you have a pointer? Can you point 1 them out? 2 MR. DICKINSON : Yes, just point at the screen 3 with it. 4 MR. SANTOS: Oh, here. You have one here. 5 Here, down in here. Typically, these are -- the 6 original muffler may have been in there, the 7 replacements. 8 Also, you have NOx and PM combined integrated 9 solutions emerging as well. One currently verified by 10 ARB, the DPF Lean NOx Catalyst by one of the MECA 11 members was verified in the past year for at least 25 12 percent NOx reduction. Nothing yet for DPF plus SCR, 13 which would get greater than 70 percent NOx reduction, 14 but there are MECA members currently in the process of 15 looking to verify technologies, off
- road devices, 16 integrated devices for DPF and urea SCR. 17 Here are a couple here as we ll. Here. 18 There. Here. Here, these three here are all lean NOx 19 catalysts plus DPFs. This here is an SCR plus DPF. 20 All as part of demonstration projects. 21 Once again, the issue of safety and 22Alderson Reporting Company 1
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- DEPO 135 visibili ty is something here that would need to be 1 discussed. Obviously, MECA believes as part of what's 2 going on in the current process, the Cal/OSHA and ARB 3 and MECA is also involved in that, that some level of 4 masking should be allowed. In fact, some internat ional 5 standards like ISO 5006 allows for the use of mirrors 6 and/or cameras to consider to be safe. 7 So, at the end of the day, of course, MECA 8 will have to adhere to whatever comes out of that 9 process. And as it stands right now, any level of 10 masking is not currently acceptable, and we understand 11 that. But it's part of the discussions that are going 12 on and the measurements that are going on, we believe 13 that some level of masking is still considered to be 14 safe. 15 The next slide just touches on some of the 16 construction retrofit experience that is out there. 17 MECA member companies have extensive experience with 18 the construction retrofit project. Really just put 19 this one up here to show that these two projects, the 20 Boston "big dig" project demonstration and NESCAUM/MECA 21 off
- road were done in the late '90s. So the Boston big 22Alderson Reporting Company 1
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- DEPO 136 dig only used DOCs. The NESCAUM/MECA one did do DOCs, 1 active DPFs, and passive DPFs. But the point being 2 that this was done in the late '90s. So the volume of 3 experience that has been accumulated by MECA members in 4 terms of retrofitting construction equipment. 5 More currently, the New York City local law, 6 which requires use of low
- sulfur diesel and best 7 available control technology for off
- road equipment 8 used in all city construction projects. This New York 9 City Croton construction project , which some of those 10 pictures showed, falls under this. 11 It's a $1.5 billion water treatment plant in 12 the north Bronx. Twenty
- five to 30 off
- road pieces of 13 equipment were retrofitted, mostly Tier 2 and Tier 3 14 engines, all with ARB or EPA verified retrofits
-- 15 passive, active DPFs, as well as the DPF plus SCR 16 system. As well as overall some of these projects in 17 Manhattan down at Ground Zero, as well as around 18 Manhattan in general is another 118 Tier 1 and Tier 2 19 engines have been retrofit with DPFs. 20 As talked about earlier, sort of in a 21 negative context, but the off
- road showcase program. 22Alderson Reporting Company 1
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- DEPO 137 There are a number of vehicle s that were planned to be 1 retrofit. Currently, they have not retrofit all of 2 them. But once again, it is yet another piece of a 3 target for retrofit experience. As well as LAX, 73 4 vehicle s retrofitted with Level 3 devices, both passive 5 and active DPFs . 6 Texas , new technology research development 7 funding, just to point out that there are other 8 construction retrofit experience, things going on that 9 are not directly tied to PM, which is what's driving 10 the California rule. Three manufacturers were funded 11 to demonstrate retrofit PM plus SCR systems for on
- and 12 off
- road applications. 13 And in Europe as well, as we noted a MECA 14 member as having verified technology in Europe. There 15 is an online database of over 7,000 pieces of 16 construction equipment that have been fitted with DPFs 17 showing little to no safety or other issues. 18 This slide ba sically talks about the 19 challenges for off
- road retrofits. Obviously, what's 20 been brought up today talks a lot about the comparison 21 of retrofit technologies both for on
- road versus off
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- DEPO 138 road , and it's an obviously conclusion that off
- road 1 retrofits pose mo re challenges for retrofit vendors 2 when it comes to installing them on pieces of 3 equipment. First and foremost, obviously, if you're 4 talking about some of these Tier 0 pieces of equipment, 5 higher emissions for off
- road engines
-- off
- road 6 engines especial ly before 1996, when the Tier 1 7 standards kicked in
-- higher engine PM out obviously 8 will cause more issues. 9 More diverse equipment and equipment 10 applications than on
- road, yet another clear and 11 obvious point about the nature of construction 12 equipment. More older equipment. You get wide 13 horsepower ranges. As small as 50 horsepower, up to 14 greater than 1,000 horsepower. Obviously, the bigger 15 the horsepower, the bigger the engine. You might need 16 multiple filters. So that, obvi ously, will increase 17 the cost. 18 Obviously, by putting on some of these pieces 19 of equipment, you do run into issues of equipment 20 stability. Emissions profile can change with the 21 application. Obviously, on a given project, you might 22Alderson Reporting Company 1
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- DEPO 139 data log a vehicle and it has a certain emission s 1 profile for that application or for that project, and 2 then that same piece of equipment has a different duty 3 cycle for a different project, it can change the 4 emission s profile. And that's another issue that has 5 to be taken into account. So that DPF that might have 6 been appropriate for that current project might not be 7 appropriate for a different project. 8 Just in general, of course, more rigorous 9 operating environment. I don't know if anybody's ever 10 been on a construction site
-- vibrations, dust, uneven 11 surfaces. Obviously are going to require use of high
12 grade vibration isolators, especially with track drive 13 equipment like bulldozers, which obviously could 14 increase the cost as well. 15 And then packaging constraints, which is 16 probably the number
- one thing that's been brought up 17 today in terms of maintaining driver visibility and 18 safety, and I have a couple of slides after this that 19 will touch on that more specifically. 20 And then equipment operators can vary by day. 21 This sort of just ties into the whole potential 22Alderson Reporting Company 1
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- DEPO 140 training issue. So you have one piece of equipment 1 that on one given day or a given week or a given 2 project might be one person operating that piece of 3 equipment who understands that there is a control 4 technology installed, but then somebody else on another 5 project or another week or another day comes on and 6 does not quite understand that. 7 So there has to be a level of understanding 8 and training and for every end
-user about how the 9 emission control technology works on the piece of 10 equipment. 11 So retrofits can be installed safely. 12 Obviously, once again, as we've talked about many times 13 already today for many of the speakers, as well as from 14 ARB, safety is a big issue when it comes to retrofit 15 technology and even more so when we're talking about 16 off
- road. 17 Just wanted to point out clearly that , to 18 date, we've talked specifically about off
- road 19 retrofits , to date that there has been an excellent 20 safety record. The pictures that I have showed you 21 earlier or even the ones that you saw earlier from 22Alderson Reporting Company 1
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- DEPO 141 other presentations, there have been no record of any 1 specific death or fatality or injury due to a poor 2 installation for off
- roads, for off
- road technologies. 3 And retrofit manufacturers, our members, the 4 installers, the companies that are under MECA member 5 companies who actually install the technologies, of 6 course, are using best engineering judgment, 7 installation practice to ensure the safe installation 8 of devices. Most of these things listed out here are 9 pretty common that you would find on any instruction, 10 per instruction manual when installing a retrofit on an 11 off
- road piece of equipment. 12 Number one obviously a big one. Do not 13 obstruct operator line of sight. Do not obstruct the 14 equipment operation, operator access, mounting on 15 safety cages . I think that was potentially considered 16 as a way to potentially install a retrofit as to 17 elevate it above so that the line of sight of the 18 driver could see straight through, and you elevate it 19 high enough, you could see through. Obviously, if 20 you're go ing to do something like that, that the mount 21 can actually support the weight of the emission control 22Alderson Reporting Company 1
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- DEPO 142 device. 1 Heat shields, that was also brought up as 2 well. Obviously, heat is a very important issue when 3 it comes to installation of these new technologi es. A 4 lot of the studies that have been done by MECA not just 5 for diesel vehicle s and DPFs, but other emission 6 control technologies have shown that the heat that 7 comes from the emission control device is the same, if 8 not lower, than the original muffler that it replaced. 9 And if not, obviously, you would want to 10 measure this in advance. You can use proper heat 11 shields to help with diminishing the heat exposure. 12 And of course, last, inspect per 13 manufacturer's instructions on a regular basis. So 14 after you've installed the piece of equipment, on a 15 regular basis you're going out into the field and 16 checking that the retrofit is operating as it was 17 installed. 18 And once again, ARB's current regulation 19 provides for this process for retrofit safety 20 oversight, and as we're all well aware now that ARB is 21 currently in the midst of discussions with Cal/OSHA to 22Alderson Reporting Company 1
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- DEPO 143 come up with some sort of amendments that will address 1 what is considered to be safe. Once again, MECA 2 believes that some level of masking should be allowed 3 when we're talking about the sides or the front or the 4 back and that mirrors could be used to help address 5 this. But at the end of the day, of course, whatever 6 comes out of that process MECA will abide by. 7 And this is just my last slide. Retrofits 8 have been proven for off
- road applications. I think 9 partly what we're talking here today a lot about, are 10 these retrofits technically feasible in some sort of 11 theoretical. I think we're trying to state here that 12 not just in California , but outside of Califo rnia and 13 the U.S. where retrofits are not mandated, that there 14 has been experience installing retrofits on off
- road 15 pieces of equipment. 16 These technical considerations for successful 17 off
- road retrofit projects basically applies to all 18 retrofits. But jus t as important, if not more 19 important on the off
- road side, the application 20 engineering up front, matching the right technology to 21 the specific vehicle or piece of equipment. This is 22Alderson Reporting Company 1
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- DEPO 144
the data logging that's done up in advance to ensure 1 that when you look at this piece of equipment, does it 2 run hot enough to allow for you to use that passive 3 DPF , or does it require an active DPF? 4 A lot of the times when you see a lot of 5 these or hear about stories about failures, whether it 6 be in the off
- road or on
- road arena, it's not due to 7 the technology itself, which is sound, it's more about 8 the installation of it itself. Was there
-- did 9 somebody not do the work up front to know that the duty 10 cycle of this vehicle did not allow it to get hot 11 enough to be able to burn off the soot so that DPF 12 would work properly? 13 So application engineering very important up 14 front to determine whether or not what retrofit device 15 can go on or even if one should be put on that vehicle. 16 And then, of course, having that proper professional 17 installation. A lot of the MECA member companies 18 themselves manufacture the devices, but there are other 19 companies out there who actually do the installation. 20 So, obviously, having not a fly
-by
-night type of person 21 to go out there to install these devices, but somebody 22Alderson Reporting Company 1
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- DEPO 145 who's certified and does it correctly. 1 On
-vehicle monitors as well. So after the 2 device has been installed, any Level 3 device will come 3 with a monitoring kit for both back pressure and 4 temperature. So it's very important that those are 5 installed correctly. They provide important user 6 feedback on performance. 7 And then maintenance. This is not like DOCs 8 in the past, where you install it and forget about it. 9 You cannot forget it. Once you decide to go down this 10 route of installing a Level 3 device, a diesel 11 particulate filter, active or even a Level 2, there is 12 some level of maintenance that needs to be done and 13 followed through with. So all of these vehicle 14 equipment and retrofit devices require some level of 15 frequent inspection and maintenance. 16 And then just last, the successful retrofits 17 require a cooperative effort between fleet owners, 18 operators, and technology providers. At the end of the 19 day, it's not just about the device itself. You have 20 to get understanding and coope ration between the fleet 21 owner, the end
-user and operator themselves, and the 22Alderson Reporting Company 1
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- DEPO 146 technology providers. Up front, you have to have the 1 discussions to understand what your fleet looks like 2 and what emission control devices are appropriate. 3 And just last, MECA strongly supports ARB's 4 waiver request. We in the past, like I said, have 5 supported ARB in its other ATCMs, in
-use ATCMS, not 6 just for off
- road, and we'll be providing more written 7 and detailed comments by the May 18th deadline. 8 MR. SIMON : Thank you, Mr. Santos. 9 Appreciate your testimony, and we look forward to your 10 written comments as well. 11 Nick Goldstein? 12 MR. GOLDSTEIN: Good afternoon. I am Nick 13 Goldstein, the assistant general counsel for the 14 American Road and Transportation Builders Association , 15
or ARTBA. ARTBA represents more than 5,000 members 16 nationwide involved in all sectors of the U.S. 17 transportation design and the construction industry. 18 I 'd like to begin my statement by thanking 19 the U.S. Environmental Protection Agency for the 20 oppo rtunity to speak at today's public hearing 21 regarding the consideration of the Ca lifornia Air 22Alderson Reporting Company 1
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- DEPO 147 Resources Board's request for a Federal waiver from the 1 EPA allowing the implementation of ARB's regulations 2 for in
-use off
- road diesel vehicles. 3 ARTBA's many Ca lifornia members rely heavily 4 on off
- road construction equipment to perform core 5 business functions and would be directly impacted by 6 ARB's in
-use off
- road diesel equipment regulation. 7 Similarly, if ARB's regulation is eventually adopted by 8 other S tates, ARTBA's members nationwide would also be 9 impacted. 10 The Clean Air Act grants special status to 11 California due to the S tate's unique air quality 12 problems, allowing California to set its own air 13 quality standards in many areas, subject to Federal 14 approval. If approved, this Clean Air Act then gives 15 other S tates the choice to either stay with existing 16 Federal standards or opt in to those passed by 17 California. 18 Tran sportation improvement projects often, by 19 necessity, involve moving construction equipment across 20 S tate lines. A patchwork approach to S tate regulation 21 could lead to a scenario where equipment becomes usable 22Alderson Reporting Company 1
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- DEPO 148 on one portion of a project, but prohibited in another. 1 The Clean Air Act does not give California complete 2 authority to enact its own standards. There are 3 limitations. 4 Among these limitations, California may not 5 set its own standards or impose other emission
- related 6 requirements for new engines which are used in 7 construction equipment or vehicles or used in farm 8 equipment or vehicles which are smaller than 175 9 horsepower. This preemption lasts throughout the 10 useful life of the equipment. 11 The ARB regulations would apply to apply to 12 all in
-use off
- road diesel construction equipment with 13 a rating of 2 4 horsepower or more and are thus not 14 al lowed by the Clean Air Act . Further, the Clean Air 15 Act states that any proposed California standards must 16 be "at least as protective of the public health" as 17 those on the Federal level. 18 Protecting the public health is a commendable 19 objective and one shared by ARTBA. EPA, however, must 20 be cognizant of the impact that ARB's proposed 21 standards would have on public hea lth both within 22Alderson Reporting Company 1
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- DEPO 149 California, as well as any other S tates that chose to 1 opt in to the standards if they are enacted. Due to 2 the enormous expen se of replacing the affected in
-use 3 off
- road construction equipment
-- in some cases, more 4 than $1 million for each machine
-- the cost of sorely 5 needed transportation and infrastructure improvement 6 projects will likely increase. This means that either 7 fewer roads, schools, housing , and levees will be built 8 or project owner s will have to spend more. 9 For those projects that go forward, the pace 10 at which they can be completed could be significantly 11 slowed because the pool of construction equipment
-- of 12
construction firms, I'm sorry, with the proper 13 equipment to do the jobs will likely be diminished. 14 Further, nearly 36,000 people die each year 15
on the U.S. highways, and many federally funded highway 16 improvements in these S tates are designed specifically 17 to address safety issues. As such, allowing ARB's rule 18 to go forward could lead to highway improvements being 19 denied and , in turn, delaying needed safety 20 enhancements that would improve the public health. 21 Also, the Clean Air Act states that 22Alderson Reporting Company 1
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- DEPO 150 California's s tandards should not be adopted if 1 California's public health protectiveness determination 2 for the ARB rule is "arbitrary and capricious" or if 3 "California does not need such standards to meet 4 compelling and extraordinary conditions." 5 In considering whether or not ARB's rule is 6 arbitrary and capricious, ARTBA respectfully submits 7 that ARB's failure to cons ider collateral negative 8 public health impacts of the off
- road diesel rule make 9 the public health protectiveness determination 10 arbitrary and capricious. While ARTBA is very 11 supportive of both the EPA and ARB's goal of reducing 12 particulate matter and NOx emissions, ARTBA does not 13 believe that ARB has considered fully some of the air 14 quality improvements already occurring in California 15 and the Nation. Thes e improvements in air quality 16 undercut the need for a measure as severe as the ARB 17 proposal. 18 EPA should recognize that reductions in PM 19 and NOx levels will occur as a direct result of 20 existing Federal regulations. Dramatic improvements in 21 emissions leve ls will come from implementation of 22Alderson Reporting Company 1
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- DEPO 151 regulations on sulfur levels in gasoline, as well as 1 measures affecting heavy
- duty diesel engines and 2 highway vehicles. 3 In fact, regulations took effect in 2006 4 requiring refiners to meet a 30 parts per million 5 average sulfur leve l for gasoline with a cap of 80 6 parts per million. This fuel will enable vehicles to 7 use emissions controls which are projected to reduce 8 tailpipe emissions of NOx by 77 percent from passenger 9 cars and as much as 95 percent from pickup trucks, 10
vans , and sports utility vehicles. When fully 11 implemented, these regulations will have the effect of 12 removing 1 64 million cars from our Nation 's roadways. 13 In addition, the EPA will continue 14 implementation of its rule to make heavy
- duty trucks 15 and buses run cleaner. Pollution from heavy
- duty 16 highway vehicles will be reduced more than 90 percent, 17 resulting in an additional reduction in NOx levels of 18 2.6 million tons per year, while PM will be reduced by 19 110,000 tons per year. 20 EPA has also begun implementation of its rule 21 to regulate emissions from nonroad diesel engines by 22Alderson Reporting Company 1
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- DEPO 152 integrating engine and fuel controls as a system to 1 gain the greatest emission reductions. This is 2 estimated to result in an additional reduction of 3 738 ,000 tons of NOx per year. 4 All of these reductions, coupled with EPA's 5 own findings that between 1980 and 2008, gross domestic 6 product ion increased 126 percent, vehicle miles 7 traveled increased 91 percent, energy consumption 8 increased 34 percent , population increased 29 percent, 9 whil e at the same time, emissions of all 6 principle 10 air pollutants, including NOx and particulate matter, 11 decreased by 54 percent, show that the air quality is 12 significantly improving across the Nation and in 13 California without the ARB rule. 14 Finally, the Cl ean Air Act requires that 15 California standards comply with the "feasibility 16 constraints" when implementing its rule. ARTBA has 17 serious concerns, many of which have been gone over 18 already today, regarding the specifics and feasibility 19 of ARB's off
- road die sel rule. 20 ARB's regulation requires the use of 21 technology which, in some cases, may not available for 22Alderson Reporting Company 1
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- DEPO 1 53 purchase until 2014. Further, where technology is 1 available, the sudden increase in demand caused by the 2 ARB rule could cause supplies to be exhausted. 3 Contractors simply may not be able to purchase the 4 necessary equipment and could be barred from continuing 5 their work. 6 If ARB's rule is fully implemented, there 7 could be profound, negative impacts on California's 8 infrastructure rebuilding efforts, the health of the 9 S tate's construction industry, and its overall economy. 10 Instead, ARB must allow technology to catch up to its 11 regulatory goals by allowing industry more t ime to 12 develop equipment clean enough and available enough to 13 meet the standards mandated by the demand created by 14 its regulation. 15 Many of California's larger construction 16 companies have already begun the process of repowering 17 or retrofitting their fleets in anticipation of these 18 regulations. However, smaller companies with less than 19 five employees, which make up 55 percent of 20 California's industry, will be severely hampered by the 21 costs of repowering and retrofitting equipment that, in 22Alderson Reporting Company 1
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- DEPO 154 some cases, are the sole assets of their family
- owned 1 businesses. 2 Additionally, many of these smaller companies 3 simply do not have the resources or access to capital 4 to repower or retrofit their engines and may be forced 5 to park the equipment, ultimately costing jobs and 6 revenue to the State 's economy. 7 Under the annual emission reduction targets 8 required in the ARB regulation, many contractors will 9 be required to first repower or retrofit an engine, 10 only to have to turn around a few years later and 11 replace the entire piece of equipment when the 12 technology to do the job right finally hits the 13 marketplace. 14 In conclusion, ARB's rule does not satisfy 15 the requirements of the Clean Air Act because it 16 attempts to regulate equipment below 175 horsepower , 17 could lead to public health concerns, and is arbitrary 18 and capricious. EPA should recognize this and deny 19 ARB's request for a Federal waiver. 20 ARTBA looks forward to continuing to work 21 with both the EPA and ARB in encouraging voluntary 22Alderson Reporting Company 1
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- DEPO 155 diesel retrofitting at an attainable pace, rather than 1 maintaining retrofits at a pace many companies will not 2 be able to meet. 3 Thank you very much. 4 MR. SIMON : Thank you, Mr. Goldstein, for 5 your testimony. Appreciate it. Thank you. 6 Anyone else wishing to testify? We've heard 7 from pretty much everybody in the room. 8 Given that California is
-- as we have in 9 previous waiver practice, California is given the 10 opportunity , if they so choose, to make any closing 11 remarks or
-- 12 I'm saying California is given a chance to, 13 if they would choose, they have a chance to come and 14 make any closing remarks, and it's completely optional . 15 MR. WHITE: Yes. We would like to make a 16 couple responses. 17 MR. SIMON : Okay. Please, come on up. 18 MR. TERRIS: Again, this is Michael Terris 19 and Erik White, representing CARB. 20 We'd like to just make a couple responses to 21 some of the comments that were made today. First, with 22Alderson Reporting Company 1
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- DEPO 156 regard to Mr. Prescott's comments and his statement 1 that CARB has no experience in dealing with the 2 construction industry and safety and that it shouldn't 3 be making determinations regarding safety. The way the 4 regul ation is drafted, the decisions, basically CARB 5 will have a review process, but will accept statements 6 and comments from, first, the installers and the 7 retrofit manufacturers as to whether the equipment can 8 be safely installed on a specific application. 9 Second, the end
-user, the contractor, can 10 submit other documentation to the executive officer to 11 consider in making his determination after evaluating 12 all the facts from comments, documentation from engine 13 manufacturers, from equipment manufacturers, from 14 independent laboratories. All of that will be 15 evaluated by the executive officer. And if there is 16 disagreement with the executive officer's decision, 17 there is an entire appeals process that can be gone 18 through to make a final determination. 19 And third, CARB has made it very clear that 20 it will accept any determination by any Federal or 21 State agency that is responsible for making safety 22Alderson Reporting Company 1
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- DEPO 157 determinations, including the Federal Aviation 1 Administration and as well as Cal/OSHA, the Mining 2 Administrations, and any determination by them that the 3 retrofit installation would violate their rules or 4 regulations CARB would accept. 5 Second thing with regard to Mr. Prescott made 6 the point that present Cal/OSHA rules do not consider 7 rear visibility issues. CARB has basically agreed with 8 Cal/OSHA that rear visibility should be a factor and 9 considered, and in CARB's interim period where it's 10 looking at visibility impairment and whether or not a 11 retrofit should be installed is taking that into 12 consideration. And if rear visibility is impaired, 13 there is no requirement that it be installed at this 14 point. 15 With regard to Mr. Cloud's statement and the 16 AGC petitions, I just wanted to clarify that AGC did 17 file a petition in December 2008 basically asking for 18 CARB to review the rule and to repeal it. At AGC's 19 suggestion, the petition was put into abeyance. It's 20 an agreement between the parties and that neither party 21 to date has exercised the condition of the abeyance 22Alderson Reporting Company 1
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- DEPO 158 agreement to give 2 weeks' notice to sort of revive the 1 petition and have it addressed. 2 Regarding the January 2009 petition, AGC 3 requested that there be a 2
- year delay in implementing 4 the fleet average requirements of the regulation. CARB 5 did respond to that petition, granting it in part, 6 denying it in part. The granting of it basically said 7 that CARB would review its regulations and hold an 8 executive officer fact
- finding hearing, which it did 9 hold in March of this year, and that it would present 10 its findings to the board at the April hearing. 11 One of the big issues that was raised by just 12 about all the commenters is the technical feasibility 13 of VDEC S , and we want to make it
-- it was basically 14 set forth in our previous submittals to EPA and it was 15 restated today. The regul ation provides for an 16 exemption. When a VDEC is unavailable, then there is 17 no requirement that it be installed. The same is true 18 for Tier 3 and Tier 4 engines and vehicle s. If they 19 are not available, they do not have to be installed. 20 The ATA
--- I'm sorry, yes, ATA basically 21 indicated that that is not -- should not be considered 22Alderson Reporting Company 1
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- DEPO 159 by EPA in granting, making its tech feasibility 1 considerations. And I just want to basically state 2 that in the International Harvester, the court 3 recognized that a regulation can be extremely stringent 4 so long as there is an escape clause, escape hatch 5 available to the industry. 6 We believe that an exemption, which is one of 7 the examples given by the court in that case, is such 8 an escape hatch and that a second escape hatch would be 9 that CARB's continuing review of the regul ation. And 10 that CARB will be able to address issues that if they 11 come up in appropriate amount of time to allow the 12 industry to fully comply with the regulation, without 13 being in violation of it. 14 And basically, another point that I want to 15 mention lastl y is the mention of the recession. The 16 recession, as we stated today in our initial opening 17 presentation, is real. We don't deny that, and we are 18 continuing to look at it. We just believe that for 19 decisions that deal with how best to address the 20 busines s in California that EPA should defer to the 21 policy judgments of the State. 22Alderson Reporting Company 1
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- DEPO 160 And lastly, with regard to the recession, I 1 just in the flight out here yesterday, I was reading 2 about the recession and impact on CSX railroad company, 3 and basically, they menti on that they had a significant 4 downturn over the last several years. But in the past 5 quarter, their business is up 6 percent. So although 6 this is a severe economic recession, things do rebound, 7 and that's a consideration that the CARB will be 8 considering . 9 Erik? 10 MR. WHITE: I think Mike hit on
-- this is 11 Erik White with the Ai r Resources Board. Mike hit on, 12 I think, many of the issues that were raised today 13 regarding the technical feasibility surrounding 14 retrofits, and I think that as you look at that , I 15 think we've seen many examples of successful retrofits, 16 not only in California , but nationwide and around the 17 world, particularly in Europe. 18 And one of the things that wasn't mentioned 19 here is there was a lot of focus about retrofits that 20 necessarily need to happen on the outside of the 21 vehicle . What wasn't mentioned is one of the things 22Alderson Reporting Company 1
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- DEPO 161 we're seeing is that as issues with safety have been 1 raised by the regulated industry and as the retrofit 2 industry has looked to respond to our regulatory 3 requirements, what we've seen is a significant amount 4 of innovation in terms of where those devices can be 5 mounted. 6 And what we're beginning to see is a 7 significant number of those being installed under the 8 hood, where there are no visibility impacts, issues 9
around heat exposure to workers are eliminated because 10 they are under the cowling. So I think, as we've 11 looked at the technical feasibility of our rule, what 12 we have seen is that not only have the number of 13 retrofits that have been verified greatly expanded from 14 what was available when the rule was first approved by 15 our board, is that you're seeing a greater variety in 16 terms of the ability to retrofit these vehicle s. 17 And in fact, the OEMs are involved, whether 18 it's the Caterpillars, whether it's the John Deeres who 19 have taken and looked at this rule and seen an 20 opportunity to upgrade older equipment to provide more 21 useful life to that for the end
-user and are working 22Alderson Reporting Company 1
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- DEPO 162 with the retrofit industry to provide workable, safe 1 retrofit solutions for their products. 2 I just wanted to add that to Mike's comments. 3 The other comment I wanted to make is in 4 regards to cost because I think we've heard a lot about 5 the significant costs associated with this regulation. 6 And throughout its development and throughout the 7 board 's consideration of this, there was a clear 8 recognition that this is a very expensive regulation. 9 In fact, as the board debated and evaluated 10 the need for this, cost was certainly one of the most 11 important considerations, along with the air quality 12 needs or benefits that it provided , a s it looked for 13 and ultimately made that policy decision. That while 14 an expensive regulation was clearly a needed regulation 15

-- and during the development , certainly there was a 16 great deal of evaluation of ARB's cost number s. And in 17 fact, ARB did look at many of the cost numbers that 18 were developed, including the one that was cited today 19 about a $12.9 billion cost and held a special workshop 20 specifically to look at and address that matter. 21 And as we looked at those cost e stimates, 22Alderson Reporting Company 1
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- DEPO 163 what we found is that they were significantly biased to 1 the high side and that they presumed activities that 2 were not required under the regulation or they looked 3 at not necessarily the least cost compliance option 4 available to fleets and not taking advantage of the 5 full amount of flexibility that the regulation 6 requi red. 7 So, again, even after doing that, ARB 8 presented to the board and the board accepted the 9 numbers that Mike talked about earlier, the $3 billion 10 to $3.6 billion as, in fact, the direct regulatory 11 costs associated with this regulation. 12 Now, clearly, I think we all recognize the 13 world has changed since 2007. And I think the 14 California Air Resources Board has shown a clear 15 willingness to relook at the requirements and the 16 economic impacts on that, whether that's through direct 17 action of the Air Resources Board or through direct 18 action of the California legislature, to look at 19 opportunities to still meet our clean air goals, but do 20 it in a way that provides greater flexibility, 21 addi tional time, lower cost to end
-users. And in fact, 22Alderson Reporting Company 1
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- DEPO 164 that work continues to go on. 1 But because of that, I think it's very clear 2 that California feels very strongly that those types of 3 decisions should
-- are best left to California to make 4 and working directly with affected stakeholders in 5 California to understand how what relief is appropriate 6 to balance the economic impacts of the regulation 7 relative to the environmental benefits that the 8 regulation provides. 9 While we spent a lot of time today talking 10 about the needs to meet National Ambient Air Quality 11 Standards, what we haven't discussed a lot is the need 12 to meet State Ambient Air Quality Standards as well, as 13 well as to address the needs to meet California 's 14 diesel risk reduction plan, which targets significant 15 and early emission reductions of directly emitted 16 diesel PM. 17 So as we look at the benefits of the rule, I 18 think we need to remain mindful that we need to look 19 broadly in that while National Ambient Air Quality 20 Standards are certainly one impo rtant aspect and goal 21 of the environmental benefits that the regulation will 22Alderson Reporting Company 1
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- DEPO 165 provide, they are not the only environmental benefit 1 that California is looking to achieve with this 2 regulation. 3 So, with that, we will close our comments. 4 MR. SIMON: Great. Thank you. 5 Given that, then I will declare this hearing 6 closed. 7 As we noted at the outset, the public comment 8 period will remain open until May 18,2010. All 9 interested parties are encouraged to provide their 10 written comments on CARB's authorization request and 11 any comments, information, data, and evidence presented 12 by persons who testify at today's hearing, these 13 written comments should be submitted in accordance with 14 the March 12, 2010, Federal Register notice. 15 And I thank everyone for coming, and your 16 testimony today I think has been very helpful from our 17 perspective. 18 Thank you, and good day. 19 [ Whereupon, at 1:34 p.m., the meeting was 20 concluded. ] 21 22