1 

 2 

 3 

 4 

 5 

 6 SAN FRANCISCO PUBLIC HEARING

 7 EPA/NHTSA PROPOSED

 8 STANDARDS FOR GREENHOUSE GASES AND FUEL ECONOMY

 9 FOR LIGHT-DUTY VEHICLES IN MODEL YEARS 2017-2025

 10

 11

 12

 13

 14 JANUARY 24, 2012

 15 SAN FRANCISCO, CALIFORNIA

 16

 17

 18

 19

 20

 21 REPORTED BY:

 Deborah E. Taggart

 22 CSR No. 5942, RPR

 23 And

 24 Cheri Winter

 CSR No. 12792

 25

 1 
 1 TRANSCRIPT OF THE SAN FRANCISCO PUBLIC

 2 HEARING, EPA/NHTSA PROPOSAL, STANDARDS FOR GREENHOUSE

 3 GASES AND FUEL ECONOMY HEARING, held at the Hyatt at

 4 Fisherman's Wharf, 555 North Point Street, San

 5 Francisco, California, commencing at 10:04 A.M., on

 6 January 24, 2012, heard before the Government Panel of

 7 EPA/NHTSA, reported by Deborah E. Taggart, Shorthand

 8 Reporter, CSR No. 5942, for the State of California and

 9 Cheri Winter, CSR No. 12792 for the State of

 10 California.

 11

 12

 13

 14 EPA PANEL MEMBERS:

 15 Margo Oge

 16 Chet France

 17 Robin Moran

 18

 19 NHTSA PANEL MEMBERS

 20 Ron Medford

 21 Jim Tamm

 22 Steve Wood

 23

 24

 25

 2 
 1 SAN FRANCISCO, CALIFORNIA; TUESDAY, JANUARY 24, 2012.

 2 10:04 A.M.- 6:42 P.M.

 3 

 4 P R O C E E D I N G S

 5 

 6 MS. OGE: Good morning. I'd like to welcome

 7 you to this public hearing today here in San

 8 Francisco -- the beautiful city of San Francisco. My

 9 name is Margo Oge. I'm the director of the Office of

 10 Transportation and Air Quality with the U.S.

 11 Environmental Protection Agency. With me on my right is

 12 my colleague Ron Medford from NHTSA. Ron and I will be

 13 the presiding officers for today's hearing.

 14 Now, we have over 140 individuals and

 15 representatives of various organizations that have

 16 signed up to speak today. And I want to thank each one

 17 of you for taking the time to participate in this very

 18 important process.

 19 Today we will be hearing testimony on a

 20 proposal to establish greenhouse gas emissions and fuel

 21 economy standards for light-duty vehicles for model

 22 years 2017 through 2025. The proposal standards that

 23 we issued last November would achieve 163 grams per

 24 mile of CO2 equivalent. Vehicles were to meet this

 25 standard, all using fuel-economy improvements. The

 3 
 1 163 grams per mile would be equivalent to 54.5 miles

 2 per gallon in 2025 time frame.

 3 This program's projected to save about

 4 4 billion barrels of oil in 2025 and 2 billion metric

 5 tons of greenhouse gas emissions. This is over the

 6 lifetime of vehicles sold in the years 2017

 7 through 2025.

 8 The higher cost of new vehicle technology

 9 will add on an average $2,000 for the consumer that

 10 buys a vehicle in 2025. However, this consumer will

 11 save an average of up to $6,600 in fuel savings for a

 12 net life saving of $4,400. And for this analysis, we

 13 assume that gasoline prices will be approximately the

 14 same level in 2025 as they are today.

 15 The proposal builds on the success of the

 16 first phase of the national program for model years

 17 2012 through 2016. Those standards were finalized in

 18 April 2010. Continuing the national program makes sure

 19 that all manufacturers can continue building a single

 20 fleet of vehicles that will satisfy requirements of

 21 both federal agencies, NHTSA and EPA, as well as the

 22 California program.

 23 President Obama announced support for

 24 continuing the national program last July, and NHTSA

 25 and EPA issued a Notice of Intent last August outlining

 4 
 1 basically our plans for the proposal that we're seeking

 2 comments today.

 3 The State of California and 13 auto

 4 manufacturers representing over 90 percent of the U.S.

 5 vehicle sales provided letters of support for the

 6 program. The United Auto Workers and many, many

 7 nongovernmental organizations also supported our

 8 announcement and proposal last November.

 9 The program covers a wide range of light-duty

 10 vehicles including cars, light-duty pickup trucks, SUVs

 11 and minivans. The agencies have designed the proposed

 12 standards to preserve consumer choice. That is, the

 13 proposed standards will not affect consumers'

 14 opportunity to purchase the size of the vehicle with

 15 the performance, utility and safety features that meet

 16 their needs. This is because the standards are

 17 structured so as not to create incentives to

 18 manufacturers to produce vehicles of any particular

 19 size. So, for example, there's not an incentive, based

 20 on these proposed standards, to downsize vehicles.

 21 Today's hearing allows interested parties to

 22 provide comments on the proposal in person. As I

 23 mentioned earlier, this is our third public hearing.

 24 The first public hearing was in Detroit, the second in

 25 Philadelphia last week, and this is the third public

 5 
 1 hearing in San Francisco. In addition, there is a

 2 written comment period that will remain open until

 3 February 13th. The comment period was originally

 4 scheduled to end on January 30th, but was extended to

 5 provide some additional time for the public to comment.

 6 The agencies expect to take final action on this

 7 proposal in late summer of this year.

 8 And I would like to introduce my colleagues

 9 representing EPA with me. On our panel today is Chet

 10 France. He's the Director of the Assessment and

 11 Standards Division. And Robin Moran, she's the senior

 12 advisor to Chet.

 13 At this time, I'd like to turn it over to my

 14 colleague from NHTSA, Ron Medford who's going to make a

 15 statement and introduce his team.

 16 MR. MEDFORD: Thank you, Margo. Good morning

 17 everyone.

 18 As Margo indicated, my name is Ron Medford,

 19 the Deputy administrator for the National Highway

 20 Traffic Safety Administration, and on behalf of NHTSA

 21 and the Department of Transportation I'd like to thank

 22 you for taking your time today out of your busy

 23 schedules to come here today and express your views on

 24 the proposed fuel economy and greenhouse gas emissions

 25 regulations.

 6 
 1 First, I'd like to introduce the panel

 2 members from NHTSA who are sitting with me. On the

 3 right is Jim Tamm, who is the Chief of the Fuel Economy

 4 Division, and Steve Wood, who is Assistant Chief

 5 counsel.

 6 Today's hearing provides an opportunity for

 7 the public to present oral comments regarding the

 8 agency's proposed 2017 light-duty vehicle greenhouse

 9 gas and fuel economy standards.

 10 On November 16th, the EPA and NHTSA issued

 11 joint agency documents relating to the -- related to

 12 the proposed rulemaking. They included a preamble of

 13 two preliminary regulatory impact analysis documents,

 14 one from each agency and a Technical Support Document.

 15 These documents described the proposed regulations and

 16 the supporting information and analysis related to the

 17 proposal.

 18 In addition, NHTSA issued a Draft

 19 Environmental Impact Statement for the proposed fuel

 20 economy regulations. The draft EIS compares the

 21 environmental impacts of the proposed fuel economy

 22 regulations with those of the regulatory alternatives.

 23 Today's hearing provides opportunity for the

 24 public to comment on both the NPR and the draft EIS.

 25 The written document period -- written comment period,

 7 
 1 as Margo indicated, for the EIS is January 13th, and

 2 the written comment notice period closes for the

 3 rulemaking February 13 -- January 31st. Excuse me.

 4 Today's hearing is scheduled to run until

 5 about 7:00 p.m., but we will be here as long as it

 6 takes to allow everyone the opportunity to provide

 7 their views.

 8 We will be using panels to speed up the

 9 process. The list of preregistered panel members and

 10 group order is provided with the agenda at the

 11 reception table. We request that each person keep

 12 their testimony to five minutes or less, and we have a

 13 timer, which will sound like a doorbell when it goes

 14 off to let you know when your time expires.

 15 If anyone here wishing to testify has not

 16 already signed up, please do so at the reception table.

 17 Whether or not you testify, we would like everyone

 18 attending today to please sign in. We plan to go

 19 straight through the panels, except we may call for one

 20 or two breaks during the day.

 21 After today, the official record of the

 22 hearing will be kept open for 30 days for any speaker

 23 wishing to comment, submit rebuttals or make any

 24 corrections to the remarks for the record.

 25 If you would like a transcript of today's

 8 
 1 proceedings, you should make arrangements with either

 2 the court reporter or the desk -- reception desk.

 3 We'll also make the transcripts available on a website

 4 in the public docket for rulemaking.

 5 This hearing will be conducted informally and

 6 formal rules of evidence will not apply. Presiding

 7 officers, however, are authorized to strike the

 8 statements from the record which are deemed irrelevant

 9 or needlessly repetitious and enforce reasonable limits

 10 on the duration of statements of any witness.

 11 Before we bring up the first panel, I want to

 12 ask that each panelist please state his or her name and

 13 affiliation, speak as slowly and as clearly as you can

 14 so our court reporter can record these proceedings

 15 accurately.

 16 If your comments are directed to NHTSA's

 17 draft EIS, we request that you mention that before you

 18 begin your comments. There's no need to identify your

 19 comments if they are directed towards the proposal. We

 20 will assume that all comments are directed to the NPRM

 21 unless you tell us otherwise.

 22 When the witnesses on the panel have finished

 23 their presentation, the government panel will have the

 24 opportunity to ask questions related to the testimony.

 25 Witnesses are reminded that any false statements or

 9 
 1 false responses to questions may be a violation of law.

 2 So I think we're ready to call up the first

 3 panel. And we will ask the first panel to come up and

 4 get started. And if you don't mind, please write your

 5 name on the blank cards and put it in front of you so

 6 it will help the court reporter identify who's

 7 speaking.

 8 The first panel, Mr. Cackette, Mr. Brune,

 9 Mr. O'Brien, Mr. Modlin, Mr. Lloyd, Mr. Greene, Busch,

 10 Professor Dempsey and Mr. Barrett.

 11 Mr. Cackette, as soon as you're ready, you

 12 can begin.

 13

 14 TESTIMONY BY TOM CACKETTE

 15 MR. CACKETTE: Ron, Margo, thank you very

 16 much for the opportunity to testify here today. As you

 17 know, at the President's request -- do I need the mic?

 18 I guess I do.

 19 As you know, at the President's request, CARB

 20 participated in the development of the greenhouse gas

 21 standards that you are considering today. We shared

 22 our knowledge developing the nation's first greenhouse

 23 gas standards which were adopted back in 2004 and

 24 became effective in California and 10 other states with

 25 the 2009 models. We contributed to new studies that

 10
 1 form some of the technical underpinnings of the EPA

 2 proposal and co-authored with the federal agencies the

 3 Technical Assessment Report that was issued in

 4 late 2010. We continue to work with the federal

 5 agencies to ensure that the proposed EPA greenhouse gas

 6 standards could be used as an alternative to

 7 California's standards and result in a unified set of

 8 regulations that would allow vehicle manufacturers to

 9 produce a single vehicle model that would meet state

 10 and federal greenhouse gases and federal fuel economy

 11 standards. We believe your proposal is consistent with

 12 these objectives.

 13 Two days from now, CARB will hold a hearing

 14 in Los Angeles to consider approving its Advanced Clean

 15 Car regulation. Staff issued this proposal in December

 16 of 2011. This proposal includes new greenhouse gas

 17 standards that benefited from our cooperative efforts

 18 over the past two years.

 19 Our proposed greenhouse gas standards are

 20 nearly identical to what you are proposing. Our

 21 analysis of the costs and benefits draws from the many

 22 hours of discussion we had with your staff on the best

 23 information and the latest analytical techniques to use

 24 in our respective regulatory documents.

 25 As you know, the results of our efforts

 11
 1 reveal the enormous benefits of the proposed greenhouse

 2 gas standards. Greenhouse gas emissions of 2025 models

 3 will be a third lower than those of 2016. Fuel savings

 4 will be so substantial that the total cost of owning

 5 and operating a low greenhouse gas vehicle will be less

 6 than it is today, despite the higher initial cost of

 7 the vehicle. And the fuel savings means money that

 8 would have gone overseas to produce petroleum will stay

 9 in our country where it will be spent and create new

 10 jobs for Americans. This is truly a win-win proposal

 11 that will benefit America.

 12 As part of our effort to ensure a national

 13 program, CARB has committed to accept compliance with

 14 the EPA greenhouse gas standards as compliance with our

 15 state standards. For this to become a reality, EPA

 16 needs to finalize its standards largely as currently

 17 proposed. Once this occurs, hopefully by this summer,

 18 CARB will hold another hearing to consider a regulatory

 19 provision to formalize our commitment allowing

 20 compliance with EPA standards to fully satisfy the

 21 states' regulation. This is the same process and

 22 sequence of events we followed to allow EPA's

 23 compliance with 2012 to 2016 greenhouse gas standards

 24 to satisfy CARB standards for those years. Our intent

 25 is clear from our proposal and it will be memorialized

 12
 1 in a formal resolution that would go before our board

 2 later this week.

 3 We remain committed to work with you to

 4 ensure the successful implementation of the greenhouse

 5 gas standards. This includes new studies, reviews, and

 6 the formal midterm review that's included in your

 7 proposal.

 8 In addition to the greenhouse gas standards,

 9 CARB's Advanced Clean Car proposal includes new exhaust

 10 and evaporative emission standards for hydrocarbons,

 11 oxides and nitrogen and particulate matter starting

 12 with 2015 models. These standards will reduce the said

 13 emissions by roughly 75 percent by the 2025 models with

 14 similar reductions in particulate conditions.

 15 These reductions will help our urban areas

 16 meet the more stringent health-based ambient air

 17 quality standards that are forthcoming. And the costs

 18 of achieving these standards is low and the technology

 19 is readily available. We have tailored the

 20 implementation schedule of these standards to be

 21 compatible with the gradual tightening of greenhouse

 22 gas standards, so that the greenhouse gas, smog-forming

 23 and soot-emission reductions can be addressed in an

 24 efficient manner by the development engineers of the

 25 car companies.

 13
 1 We know that EPA is nearing completion of its

 2 Tier 3 proposal to address these same pollutants from

 3 passenger vehicles. We know this because we shared

 4 with you our assessment of the feasible standards and

 5 the implementation schedule, and we've worked together

 6 to reach a common understanding of the many testing and

 7 compliance details.

 8 We urge you to propose and finalize this

 9 Tier 3 regulation as soon as possible. It will benefit

 10 the vehicle manufacturers in that they'll be able to

 11 build one car that meets California and EPA standards.

 12 And it will benefit California and our partner states by

 13 assuring that federally certified new cars that

 14 subsequently operate in our states will be as clean as

 15 those sold here and purchased by our citizens.

 16 Our Advanced Clean Car package also includes a

 17 proposal to strengthen the ZEV mandate. Ten other

 18 states and the District of Columbia have adopted this

 19 program which collectively account for a little more

 20 than a quarter of all sales of passenger vehicles in the

 21 nation. By 2025 we are proposing that 15 percent of all

 22 passenger vehicles sold in California and its partner

 23 states be ZEVs, which include battery, hybrid and fuel

 24 cell vehicles.

 25 Do you want me to stop or do I --

 14
 1 MR. MEDFORD: Yeah, you have a second to wrap

 2 up, if you have a few more.

 3 MR. CACKETTE: We point this out because the

 4 extremely low or nonexistent greenhouse gas emissions

 5 of these zero-emission vehicles will count towards

 6 compliance with the national standards. As you know,

 7 the analysis of the proposed federal standards

 8 indicates a significant number of ZEVs will not be

 9 needed to achieve compliance with the federal rules.

 10 Thus, placement of ZEVs in California and its partner

 11 states to meet the California ZEV mandate provides the

 12 emission reduction credits that reduce the reductions

 13 that must be achieved from the remainder of a vehicle

 14 manufacturer's fleet. This, of course, is only a side

 15 benefit of strengthening the ZEV mandate whose main

 16 objective is to push technology onto a sustainable

 17 pathway that will take us to an 80 percent reduction in

 18 greenhouse gas emissions by 2050.

 19 So I want to thank you, again, for the

 20 opportunity to testify today. And also for Ron and

 21 Margo, it's been a great honor to work with you over

 22 the past couple of years to help develop the standards

 23 you're proposing today.

 24 MR. MEDFORD: Thank you, Tom.

 25 Mr. Brune.

 15
 1 TESTIMONY BY MICHAEL BRUNE

 2 MR. BRUNE: Good morning, everyone. To our

 3 panel members, welcome to California.

 4 I'm Michael Brune, executive director for the

 5 Sierra Club. The Sierra Club is our nation's largest

 6 grassroots environmental organization. We were founded

 7 by John Muir nearly 120 years ago to both defend

 8 Yosemite National Park and expand its protection.

 9 Today, about 120 years later, we find that Yosemite

 10 National Park, throughout the Sierra Nevada range and

 11 almost every ecosystem in our country, is imperiled by

 12 climate change. That's just one reason why these

 13 standards are so important.

 14 I want to thank EPA and NHTSA for the

 15 opportunity to testify today. I also appreciate the

 16 incredible amount of work that you all have done, the

 17 time that you put in with the California Air Resources

 18 Board to make these historic standards possible. Thank

 19 you.

 20 I'm here today because our dangerous

 21 addiction to oil is threatening our quality of life by

 22 draining our wallets at the gas pump, polluting our air

 23 and devastating our climate. Every day we're sending

 24 nearly a billion dollars overseas for foreign oil,

 25 wasting money that would be better spent investing in

 16
 1 American innovation and investment in growing

 2 industries like clean energy. Our oil addiction fuels

 3 the climate disruption that is increasing the number

 4 and intensity of severe droughts and devastating

 5 storms. It also puts our troops at risk around the

 6 world and our families' health and security at risk

 7 here at home. That's why these new fuel-efficiency and

 8 carbon pollution standards for new cars and light

 9 trucks are such a big deal.

 10 President Obama's proposal to double the

 11 efficiency of Americas's cars and light trucks is the

 12 single biggest step that we've ever taken to move

 13 America beyond oil. It's the single biggest thing that

 14 we've ever done to move our country beyond oil. In

 15 2025, American families will get to buy cars and light

 16 trucks that average 54.5 mpg and emit no more than

 17 163 grams per mile of carbon pollution. This is a huge

 18 win for all Americans.

 19 Just to put this in perspective, the average

 20 family buying a new car in 2025 will save more than

 21 $3,500 at the pump. That's after paying for all the

 22 new technologies embedded in those vehicles. In 2030,

 23 Americans will use 1.5 million fewer -- 1.5 million

 24 fewer barrels of oil per day, the same amount of oil

 25 that we imported from Saudi Arabia and Iraq in 2010.

 17
 1 At the same time, we will cut enough carbon pollution

 2 that's the equivalent of 72 coal-fired power plants

 3 every year.

 4 The shift that we've seen over the past few

 5 years in the auto industry is also worthy of our

 6 recognition. The United Auto Workers, which is the

 7 backbone of the American manufacturing industry,

 8 strongly support these standards, as do most major auto

 9 makers. The industry is already enjoying a rebound

 10 with new jobs in Michigan across the Midwest. By 2030,

 11 these standards will help create nearly half a million

 12 jobs around the country. These are good, union-paying

 13 jobs.

 14 Here in California, we've been paving the way

 15 for cleaner cars for nearly a decade. I'm proud to

 16 live in a state that's led the country in cutting

 17 pollution from cars from pollution that compromises our

 18 health and/or right to breathe healthy air to the

 19 pollution that threatens our climate. It was

 20 California that first pioneered the first ever tailpipe

 21 standards for greenhouse gases, putting its authority

 22 in the Clean Air Act to work. It's taken years of

 23 litigation, more than a dozen states to join in on an

 24 effort before we finally created the momentum to create

 25 national standards, standards that were stuck in the

 18
 1 '70s for far too long.

 2 For more than 20 years, the Sierra Club and

 3 its members have been pushing for stronger

 4 fuel-efficiency standards to help move our country

 5 beyond oil. We have already had more than a hundred

 6 Sierra Club members testify at your hearings in Detroit

 7 and in Philly. And you'll hear from more Sierra Club

 8 members today. We've had 20,000 of our members send in

 9 their comments so far, and we will continue to work to

 10 do whatever we can to make sure that Americans have

 11 more and better transportation choices and make walking

 12 and biking safe, and increase our access to transit.

 13 Last thing I want to say is that, as the

 14 father of two young children, I'm relieved to know that

 15 the cars that they drive in the years to come will use

 16 less oil, produce less greenhouse gas emissions and will

 17 make our air and water safe. These rules are strong.

 18 But let's be clear that we need to make rules that are

 19 even stronger. We need to do all that we can. We need

 20 to lean into the challenge of moving our country beyond

 21 oil. This is a good start, but we shouldn't finish

 22 here. The reason, as everybody in this room knows, is

 23 that dirty air, it pollutes our water, it pollutes our

 24 air, it pollutes our atmosphere. And as we've seen over

 25 the last couple of election cycles, dirty oil and

 19
 1 big-oil money pollutes our politics. I urge you to

 2 finalize these standards, to strengthen these standards

 3 whenever possible, and to do all that you can do make

 4 sure we're breaking our oil addiction.

 5 Thank you for the opportunity to testify, and

 6 thank you for all your hard work.

 7 MR. MEDFORD: Thank you. Great timing,

 8 Mr. O'Brien.

 9 

 10 TESTIMONY BY MICHAEL O'BRIEN

 11 MR. O'BRIEN: Thank you, Margo and Ron,

 12 especially for your agencies' work in terms of clean

 13 air and greenhouse gas reduction. We appreciate that

 14 very much.

 15 My name is Michael O'Brien, and I'm the vice

 16 president of product and corporate planning for Hyundai

 17 Motor of America. It's an honor to be here to provide

 18 our perspective on this very important rulemaking. We

 19 appreciate the significant effort on the part of the

 20 agencies and the difficult task of developing peaceable

 21 and harmonized national greenhouse gas and CAFE

 22 standards.

 23 Before discussing the proposal, I'd like to

 24 take a few moments to talk about Hyundai's thoughts on

 25 fuel efficiency and our efforts and successes in this

 20
 1 area.

 2 Hyundai is one of the industry's most

 3 fuel-efficient automakers. We're on track this year to

 4 surpass the government industry fuel economy target of

 5 35.5 mpg for the 2016 model year. Currently, four

 6 Hyundai models, the Sonata hybrid, Elantra, Veloster and

 7 Accent, achieve EPA highway fuel economy ratings of

 8 40 mpg. We are the only auto maker who provides

 9 fleet-wide fuel economy performance in our release of

 10 monthly sales figures, and these 40 mpg models accounted

 11 for over one-third of our U.S. sales at 2011. That's

 12 over 218,000 vehicles sold with 40 mpg or better, more

 13 than other manufacturers that have a full range of

 14 hybrid vehicles.

 15 In 2010, we publicly pledged to reach our

 16 50 mpg plus for our fleet by 2025, and in our

 17 discussions with the agencies on this rulemaking, we

 18 have consistently supported a standard in excess of

 19 50 mpg. We continue to support the agencies on this

 20 rulemaking. We believe that it's the right thing to do

 21 for the environment and for the nation's energy

 22 security.

 23 Hyundai agrees with many of the flexibilities

 24 and credits provided in the proposal. We support the

 25 credit and banking provisions and continued application

 21
 1 of off-cycle credits for technologies whose benefits

 2 cannot be accounted for on the city and highway cycles.

 3 Hyundai believes off-cycle technology is an area that is

 4 ripe for innovation and can provide important gains in

 5 real-world fuel economy. Now that the agencies have

 6 quantified the value of various off-cycle technologies

 7 in a menu format, Hyundai asks that EPA and NHTSA allow

 8 the menu technologies to be used in the 2012 to 2016

 9 model years as well. However, we recommend that the

 10 agencies eliminate the 10-gram cap on the menu

 11 technologies. We understand that EPA plans the caps

 12 because the menu technology credits are based on limited

 13 data. However, Hyundai agrees with the agency that the

 14 credits offered are conservative and thus, the cap is

 15 not necessary.

 16 Hyundai also appreciates that there are a

 17 number of flexibilities in the proposal that address

 18 OEMs' different strategies for creating a fuel efficient

 19 fleet. For example, some OEMs are focusing resources on

 20 electric vehicles, and they are receiving credit

 21 multipliers for expanding that technology. Others are

 22 improving fuel efficiency of cargo-carrying larger

 23 pickup trucks and the agency is providing incentives to

 24 improve those technologies. Some OEMs plan to focus on

 25 fuel efficiency leadership of gasoline vehicles, and

 22
 1 CARB's proposing to allow those OEMs to offset part of

 2 the zero emission vehicle mandates for a limited time by

 3 overcomplying with these challenging greenhouse gas and

 4 CAFE standards. We appreciate the government's

 5 recognition of these varying OEM strategies by providing

 6 a variety of incentives to maximize performance in each

 7 area.

 8 Finally, Hyundai appreciates a substantial

 9 lead time for these regulations which will provide

 10 stability for long-term product planning. Hyundai

 11 supports the midterm evaluation because it provides an

 12 opportunity to ensure that details of the program are

 13 appropriate. Although, we believe the proposed

 14 requirements are feasible, Hyundai recognizes that it is

 15 difficult to perfectly predict out to the 2025 time

 16 frame the technologies, the costs and consumer

 17 acceptance of these technologies that will be necessary.

 18 The midterm review will help ensure the requirements are

 19 sound closer to the time of the implementation.

 20 This concludes my remarks. We will also be

 21 submitting written comments to the docket on an

 22 additional aspect of the proposal. Thank you for the

 23 opportunity to comment today.

 24 MR. MEDFORD: Thank you very much.

 25 Mr. Modlin.

 23
 1 TESTIMONY BY REGINALD MODLIN

 2 MR. MODLIN: Good morning. I'm Reginald

 3 Modlin, Chrysler's Director of Regulatory Affairs. I

 4 appreciate the opportunity to comment today on EPA and

 5 NHTSA's proposed national greenhouse gas and fuel

 6 economy rules.

 7 Chrysler recognizes the benefit for the

 8 country of continuing the national program to address

 9 fuel economy and greenhouse gases. EPA and NHTSA began

 10 this program in 2009 with standards for model years

 11 2012 through '16, and now the agencies are continuing

 12 for model years 2017 through '25.

 13 The challenge of meeting the proposed

 14 standards must not be underestimated. We believe it's

 15 important to observe that reaching the projected

 16 overall average of 163 grams per mile of carbon dioxide

 17 by model year 2025 will have to be achieved within 13

 18 years or roughly two product cycles.

 19 We at Chrysler appreciate the opportunity to

 20 offer brief comments concerning the proposed national

 21 greenhouse gas and fuel economy program. Chrysler

 22 supports the goals of the program. Sergio Marchionne,

 23 our CEO, is also the CEO of Fiat S.p.A., which is the

 24 industry's fuel economy leader in Europe. He

 25 understands and endorses these commitments and is

 24
 1 determined to pursue the product actions necessary for

 2 Chrysler to meet these standards.

 3 Chrysler strongly supports a single,

 4 harmonized national greenhouse gas and fuel economy

 5 performance standard that allows manufacturers to offer

 6 what customers want to buy and at a price they can

 7 afford. Chrysler will support the final rules if they

 8 reflect the commitments and foundational principles of

 9 the foundation agreement.

 10 The foundation principles are: (1) strong

 11 performance requirements, (2) a midterm review to

 12 assess customer acceptance, and (3) a broad use of

 13 incentives to encourage technology innovations and

 14 early integration into production vehicles.

 15 We believe the midterm review is critical to

 16 determining whether the customer's buying, and will

 17 continue to buy the technology packages needed to

 18 comply with the standards year over year. Efforts to

 19 search for parameters that measure potential customer

 20 acceptance must not lose sight of the most important

 21 question: Are they buying the product? Measuring 

 22 whether consumers will buy what we offer next year is

 23 already challenging. Speculating as far as 13 years in

 24 the future holds significant uncertainty and risk. A

 25 midterm assessment of the underlying rulemaking

 25
 1 assumptions provides a critical and equitable mechanism

 2 to adjust standards for future consumer and technology

 3 uncertainties and is a primary reason Chrysler supports

 4 this program.

 5 I'd like to offer comments on a couple of

 6 other provisions of the rule. First, Chrysler agrees

 7 with setting the truck performance requirements based

 8 on the underlying physics of these types of vehicles.

 9 We believe the proposed 2017 through 2025 standards

 10 support this premise and correct the deficiencies in

 11 the 2016 model year rule, which overlooked these

 12 factors. The 2017 to 2025 truck standards are

 13 challenging while respecting the utility of these

 14 vehicles and their importance to the nation's economy.

 15 Secondly, Chrysler supports the additional

 16 detail proposed for catching off-cycle fuel economy and

 17 greenhouse gas improvements. The agency's built on

 18 this facet of the 2012 through '16 model year

 19 regulation that recognizes improvements in fuel economy

 20 and greenhouse gases that are not captured in

 21 laboratory tests but do have real-world reductions.

 22 And finally, there are references to minimum

 23 penetration levels in various aspects of the proposed

 24 rule. These thresholds are unnecessary and will serve

 25 as potential disincentives to investing in new

 26
 1 technologies. We propose that all actions be

 2 recognized, as they have been historically, on a

 3 per-vehicle-so-equipped basis. This is an equitable

 4 approach where every vehicle built with the required

 5 technology for our customers is acknowledged.

 6 In conclusion, I reiterate Chrysler's support

 7 for a single, harmonized national standard for fuel

 8 economy and greenhouse gas emissions. We look forward

 9 to continuing to work with the agencies throughout the

 10 rulemaking process and after the final rule is

 11 published later this year.

 12 Thank you for your attention.

 13 MR. MEDFORD: You thank.

 14 Mr. Lloyd.

 15

 16 TESTIMONY BY ALAN LLOYD

 17 MR. LLOYD: Good morning. It's a pleasure to

 18 address EPA and NHTSA this morning. My name is Alan

 19 Lloyd, and I'm president of International Council of

 20 Clean Transportation. Previously, I was secretary of

 21 California EPA and also chairman of the Air Resources

 22 Board. And I'm happy to present comments on the

 23 proposed standards on behalf of ICCT, supporting those

 24 provided by John German last week. We will also be

 25 providing written comments.

 27
 1 My testimony will focus on two areas:

 2 Historical context and cost estimates.

 3 My last act as Chairman of the California

 4 Resources Board was to preside over the 2004 board and

 5 meeting to adopt the regulations required by AB 1493.

 6 This historic regulation and legislation was made

 7 possible by the vision, fortitude and commitment to the

 8 environment by Senator Fran Pavley, together with the

 9 support of Governor Davis and Governor Schwarzenegger.

 10 At the national level, you, working together

 11 with the California Air Resources Board and the

 12 automobile manufacturers, then passed the rule

 13 requiring fleet-wide reductions in greenhouse gas

 14 emissions for the 2012 to 2016 time period. This was

 15 an excellent example of the provisions of the Clean Air

 16 Act in operation. The regulation to control the

 17 greenhouse gases from vehicles was passed in

 18 California, adopted by the Section 177 states, and

 19 subsequently at the national level.

 20 This cooperation shows that the

 21 California/EPA relationship working exactly as planned

 22 in the California -- in the Clean Air Act, and this is

 23 continuing today with the proposed rule for the 2017 to

 24 2025 time period.

 25 I want to congratulate you and the staff of

 28
 1 EPA, as well as the California Resources Board, NHTSA,

 2 for building on the earlier rule and aggressively

 3 setting the stage so that the U.S. can not only catch

 4 up but surpass countries in the world in the desire to

 5 improve fuel economy, reduce greenhouse gases and

 6 reduce dependence on fossil fuels.

 7 I also applaud federal policy in identifying

 8 the positive role of electric vehicles as critical

 9 technology to address urban and greenhouse gas

 10 pollution, fuel economy and reduced dependence on

 11 fossil fuels. Electric drive technologies are

 12 inherently clean with zero tailpipe emissions, and

 13 coupled with renewables, they are capable of zero

 14 well-to-wheel emissions and will be necessary to reach

 15 2050 greenhouse gas targets of over 80 percent.

 16 On cost, last week, John German included some

 17 comments, and I would like to reiterate some of those

 18 and expand on a few.

 19 The ICCT agrees that the best way to derive

 20 direct technology to cost estimate is to conduct

 21 real-world tear-down studies. Not only is this likely

 22 to be more accurate than supplier and manufacturer

 23 estimates, but the results are public, greatly

 24 increasing the transparency of the cost information.

 25 The ICCT also agrees with EPA's assessment of indirect

 29
 1 cost that specifically addresses the factors that

 2 increase the retail price compared to the direct costs

 3 and generally -- and the general approach of assigning

 4 technologies to several complexity classes for

 5 determining the indirect cost multipliers. The use of

 6 generic retail price equivalency markup to cover a wide

 7 range of factors that are not consistent over different

 8 technologies often results in overestimating those

 9 costs. And we would recommend the Agency to scrap the

 10 sensitivity analysis conducted using the RPE markups.

 11 In our work, as well as the work conducted by 

 12 the EPA and CARB, the issue of light weighting of

 13 vehicles has proven to be one of the most exciting and

 14 fertile areas for improving fuel economy without

 15 incurring exorbitant costs or jeopardizing safety. As

 16 Mr. German stated, previous lightweight material cost

 17 studies did not assess part interactions and secondary

 18 weight reductions.

 19 Studies in progress by Lotus and FEV are

 20 using highly sophisticated simulation models to

 21 optimize part materials and design. The results of

 22 these studies will be far more accurate for future

 23 designs and must be used to assess weight reduction for

 24 the final rule. We believe that these studies will be

 25 available for inclusion in the final rule. They are

 30
 1 likely to show costs of lightweighting to be lower than

 2 envisioned in the proposed NPRM as well as in the final

 3 2012 to '16 rule.

 4 Another area where costs included in the draft

 5 are too high are those for the parallel or P2 hybrid.

 6 The P2 systems evaluated by FEV for EPA assumed no

 7 reduction in IC engine size, no reduction in battery

 8 size, and did not account for the cost savings due to

 9 removing automatic transmission torque converter. The

 10 ICCT is presently engaged in an exercise to evaluate the

 11 cost of P2 systems with these issues in mind, and we

 12 expect, at least, that the updated P2 costs will be

 13 lower than the agency estimates. These updated costs

 14 should be included in the final rulemaking.

 15 These are but two examples where we feel that

 16 the costs of the proposal are likely to be too high.

 17 And we feel fully confident that the technology benefits

 18 representative of another 13 years of development will

 19 result in costs much lower than $2,000. From my

 20 experience as chairman of the California Air Resources

 21 Board, actual rule implementation costs seen by the

 22 consumer are much less than those predicted by the

 23 regulated community when standards are adopted. This

 24 trend continued with my testimony during the Board

 25 hearing for AB 1493, during which the industry predicted

 31
 1 $3,000 increase per vehicle. Actual costs, as you have

 2 found in the 2012 to 2016 rulemaking, were lower than

 3 $950.

 4 In summary, I want to applaud you and the

 5 staff, in addition to California Air Resources Board,

 6 NHTSA, and the automobile manufacturers, for setting

 7 these national standards and laying out a clear path for

 8 the future. Through your efforts and the strong

 9 administration support, you have created a dynamic in

 10 which all parties are working together, and excitement,

 11 and jobs are being created again. Finalizations of this

 12 proposed rule would catapult the U.S. to a global

 13 leadership role in addressing fuel economy, climate

 14 change and reduction in fossil fuels. We applaud your

 15 great efforts. I know personally, this is extremely

 16 taxing and stressful work. And as Thomas Friedman said,

 17 "This is a big deal."

 18 MR. MEDFORD: Thank you.

 19 Mr. Greene.

 20

 21 TESTIMONY BY LARRY GREENE

 22 MR. GREENE: Good morning. My name is Larry

 23 Greene, and I'm the co-chair of the Global Warming

 24 Committee of NACAA, the National Association of Clean

 25 Air Agencies. NACAA is an association of air pollution

 32
 1 control agencies in 50 states and territories and over

 2 165 metropolitan areas across the nation. I'm also the

 3 Executive Director of the Sacramento Metropolitan Air

 4 Quality Management District. On behalf of NACAA, thank

 5 you for the opportunity to testify today.

 6 NACAA's very pleased to support this

 7 proposal. We note that there is a broad group of

 8 stakeholders that supports the agencies' actions to

 9 continue and build upon the national program adopted in

 10 2010 to reduce greenhouse gas emissions from and

 11 improve the fuel economy of model year 2011 through

 12 2016, light-duty vehicles.

 13 The estimated benefits of this proposal

 14 include a reduction in oil consumption of

 15 4 billion barrels and a reduction in greenhouse gas

 16 emissions of 2 billion metric tons, fuel savings on the

 17 order of 347 to $444 billion, at a monetized net

 18 benefit to society in the range of 311 to $421 billion.

 19 The co-benefits to be derived from such a

 20 program extend far beyond climate change, and include:

 21 Reduced fine particulate and nitrogen oxide

 22 emissions;

 23 Mitigation of disproportionate adverse health

 24 impacts on environmental justice communities affected

 25 by emissions from high traffic and located near

 33
 1 gasoline refining and distribution facilities;

 2 Reduced adverse health impacts near roadways

 3 due to the increase in cleaner vehicles;

 4 Reduced risk of accidental spills of crude

 5 oil due to a proportional reduction in oil imports;

 6 Buffering against gasoline price volatility

 7 for consumers and a hedge against rising fuel prices

 8 due to increased use of domestic and alternative fuel

 9 sources;

 10 Economic growth and the creation of

 11 high-quality jobs across the country due to the need

 12 for innovative automotive technologies upon which the

 13 standards rely;

 14 And reduced hydrocarbon emissions due to

 15 lower fuel throughput at retail distribution outlets.

 16 I would like to offer some additional

 17 comments on three specific issues. My written

 18 testimony provides more details and offers comments on

 19 other issues.

 20 First, we understand that EPA and NHTSA are

 21 proposing that passenger cars have an average rate of

 22 improvement of 5 percent for years 2017 to 2025.

 23 However, light-duty trucks will start with an average

 24 rate of improvements of 3.5 percent for 2017 through

 25 2021, which increases to 5 percent for 2022 through

 34
 1 2025. These proposed rates of improvement are

 2 envisioned to result in an average CO2 emissions rate

 3 of 163 grams per mile with an average fleet performance

 4 of 54.5 miles per gallon, if every manufacturer

 5 incorporates enhanced engine technologies. In

 6 addition, the proposal provides only a conditional

 7 approval of the NHTSA standards for 2022 through 2025

 8 vehicles.

 9 NACAA supports the agencies' goal of a

 10 fleetwide performance that will result in 54.5-miles- 

 11 per-gallon efficiency. We are concerned, however, that

 12 the approach taken in the proposal may undermine

 13 achievement of this goal. In fact, in a recently

 14 published study, researchers at the University of

 15 Michigan consider whether allowing a more lenient

 16 3.5 percent rate of improvement for larger vehicles

 17 creates an incentive for the manufacture of larger

 18 vehicles, thus undermining the goal of the 54.5-mile- 

 19 per-gallon fuel economy standard. Accordingly, we urge

 20 EPA and NHTSA to ensure that the full measure of the

 21 envisioned reductions is achieved.

 22 Further, once this program is in place, it is

 23 critical that the agencies closely track progress in

 24 meeting the standards. In particular, the agencies

 25 should determine at the midterm evaluation whether

 35
 1 credit use is allowing the production of a greater

 2 number of vehicles that do not need -- that do not meet

 3 the 5 percent rate of improvement requirement.

 4 Second, EPA projects the cost of new

 5 technology will add, on the average, about $2,000 to the

 6 price of 2025 vehicle. We recognize that consumers will

 7 recoup this cost in fuel savings. However, greater

 8 market penetration in early years of vehicles equipped

 9 with the technologies needed to meet your 2025 emissions

 10 and fuel economy requirements should bring down vehicle

 11 cost in later years of the program and also reduce

 12 criteria pollutant emissions as well as greenhouse

 13 gases.

 14 Third, we recognize that this program is a

 15 vehicle tailpipe emissions control program. As such, it

 16 is appropriate to assign a tailpipe emissions level of

 17 0 grams per mile CO2 for all electric vehicles, plug-in

 18 hybrid, electric vehicles and fuel cell vehicles, as EPA

 19 does in early years of the program with per-company

 20 cumulative sales cap for 0 grams per mile in later

 21 years.

 22 We also believe that EPA accurately portrays

 23 the status of upstream emission in the proposal, and

 24 that it is appropriate to encourage the initial

 25 commercialization of advanced technology while

 36
 1 monitoring the status of upstream emissions.

 2 Once again, we are pleased to express our

 3 support of this important proposal and appreciate this

 4 opportunity to provide our testimony. Thank you.

 5 MR. MEDFORD: Thank you.

 6 Mr. Busch.

 7 

 8 TESTIMONY BY CHRIS BUSCH

 9 MR. BUSCH: Thank you.

 10 Good morning, distinguished members of the

 11 panel. Thank you for the opportunity to comment today.

 12 My name is Chris Busch, and I'm the policy director of

 13 the BlueGreen Alliance, a national partnership of labor

 14 unions and environmental organizations.

 15 BGA commends the Obama administration for its

 16 outstanding leadership on this critical issue. The

 17 California Air Resources Board and Brown administration

 18 also deserve praise for working constructively with the

 19 federal government to develop this proposal.

 20 We strongly support the proposed vehicle

 21 standards, which are a great example of how we can

 22 achieve simultaneous progress on our economic and

 23 environmental challenges. The proposed standard offers

 24 the opportunity to create quality manufacturing jobs,

 25 to reduce our reliance on imported energy, to reduce

 37
 1 our vulnerability to crude oil price volatility, to

 2 clean the air and reduce the accumulation of

 3 heat-trapping gases in the atmosphere, and to improve

 4 our energy security and national security.

 5 Crucially, the proposed standard will help to

 6 create many thousands of jobs through net consumer

 7 savings on fuel, as well as spending on higher

 8 performing vehicles. An initial assessment of the job

 9 impact by the University of California Professor David

 10 Roland-Holst finds that the proposed standard will

 11 create more than 200,000 jobs by the year 2025 in

 12 California alone.

 13 This standard will give Americans more

 14 advanced vehicle choices, which in turn will help

 15 consumers save money at the pump. By making it less

 16 expensive to drive, by covering the same ground but

 17 using less fuel, consumers will have more money left

 18 over to spend or invest in other economically

 19 beneficial ways.

 20 In addition to the direct savings for those

 21 purchasing new cars and light trucks, the proposed

 22 standard will also put downward pressure on gasoline

 23 prices by reducing demand. Simple demand-supply logic

 24 suggests that the standard will put downward pressure

 25 on the transportation fuel prices by putting downward

 38
 1 pressure on the demand for transportation fuels. All

 2 drivers will benefit through lower gas prices than

 3 would be expected otherwise.

 4 Some of the fuel savings created by the

 5 standard will go to cover the modest incremental cost

 6 of higher performing vehicles. This diversion of

 7 spending from fuel to vehicle improvements also has the

 8 effect of boosting job creation. This is because

 9 vehicle manufacturing is more labor intensive per

 10 dollar spent.

 11 The American auto industry is a great success

 12 story. We're seeing billions of dollars in investments

 13 in America to retool and expand factories. Smart,

 14 supportive government policy deserves some credit for

 15 this. Approximately 40,000 U.S. jobs have been

 16 preserved and created since 2009 through programs like

 17 the Advanced Technology Vehicles Manufacturing Loan

 18 Program. The Center for Automotive Research in Ann

 19 Arbor predicts that the auto industry will see a surge

 20 in over 200,000 employed by 2015. Meanwhile, a new

 21 Consumer Reports survey finds that 77 percent of

 22 consumers want more energy-efficient vehicles.

 23 Automakers are already pushing energy innovation in

 24 response to the historic 2012 to 2016 standards as well

 25 as growing consumer demands. For automakers, the

 39
 1 proposed standard will provide greater certainty over

 2 the shape of the future market and greater confidence

 3 that energy innovation will be rewarded.

 4 While job creation is a paramount concern, we

 5 should not discount the other benefits that the

 6 proposal will consider. If we are ever to make

 7 meaningful progress on our imported energy dependency

 8 and avoid accelerated climate destabilization, we will

 9 need well-conceived policies such as these.

 10 We look forward to continuing our engagement

 11 with your agency and other stakeholders working to

 12 implement a strong standard that will maximize oil

 13 savings and reductions of heat-trapping pollution,

 14 strengthen the U.S. auto industry and create more

 15 opportunity for American workers. Thank you very much.

 16 MR. MEDFORD: Thank you.

 17 Professor Dempsey.

 18

 19 TESTIMONY BY DAVE DEMPSEY

 20 MR. DEMPSEY: Thank you very much for the

 21 chance to testify this morning. I predict you have a

 22 long day ahead of you.

 23 I'm Dave Dempsey, a professor of meteorology

 24 at San Francisco State University. I'm trained in

 25 atmospheric dynamics and computer model building. I've

 40
 1 been teaching science of climate change for about 11

 2 years now.

 3 I know that the proposed standards are based

 4 on -- in part on the science of climate change, and I

 5 wanted to take this opportunity to confirm the validity

 6 of that science.

 7 Probably the single most exhaustive and

 8 credible source of information about climate change is

 9 the Intergovernmental Panel on Climate Change, which

 10 issued its fourth report in 2007 based on research

 11 through 2005. They won a Nobel Peace Prize for its

 12 work that year. It represents a consensus perspective

 13 of somewhere between 3,000 to 4,000 climate scientists

 14 from around the world, as well as government

 15 representatives. Because it's a consensus document,

 16 it's relatively conservative.

 17 In 2010, the Congress asked the National

 18 Research Council, which is another distinguished group

 19 of scientists who advise Congress and other parts of

 20 the federal government, to update the 2007 IPCC report

 21 and offer advice about how to respond to climate

 22 change. That 2010 report concluded after looking at

 23 the evidence -- well, as new evidence that came out

 24 since 2005. I quote: A strong and credible body of

 25 scientific evidence shows that climate change is

 41
 1 occurring, is caused largely by human activities, and

 2 poses significant risks for a broad range of human and

 3 natural systems.

 4 In particular, the IPCC report and the

 5 National Research Council report and other reports by

 6 credible groups since then all confirm that carbon

 7 dioxide emissions from burning of fossil fuels is the

 8 single largest driver of global warming and climate

 9 change that results from that.

 10 The IPCC produces reports every six years.

 11 The next one is due out next year. They have been

 12 busily working on updating the science since the 2007

 13 report. Last month at the American Geophysical Union

 14 conference here in San Francisco, attended by something

 15 like 20,000 geoscientists from around the world,

 16 there's some preliminary results from some of the 19

 17 modeling groups, climate modeling groups that have been

 18 updating and refining their models and looking at

 19 projections for the future. And those projections, 

 20 early reports show the same results that the 2007

 21 report reported or perhaps slightly worse. So the

 22 evidence that the climate science is presenting to us

 23 about what's going to happen to the climate in the

 24 future is very consistent. It's getting stronger.

 25 It's mounting. It's very clear what's going on.

 42
 1 Climate change is global. Its causes are

 2 global, but the effects, the impacts tend to be local.

 3 And here in California, the state established in 2005 a

 4 climate action team to become kind of a California

 5 IPCC. In 2009, they issued a report on what the likely

 6 impacts of climate change might be in California and

 7 documented the damage to agriculture and forestry and

 8 water resources, coastal energy -- coastal areas,

 9 rather, energy production and public health as a result

 10 of rising sea levels and increased frequency and

 11 strength of heat waves and melting snow pack, and so on

 12 and so forth.

 13 I understand that economic projections are

 14 quite a bit less certain than climate projections.

 15 Climate projections are getting better and better. The

 16 science is pretty clear. But the economic projections

 17 they made were that the costs of climate change in

 18 California might run to tens of billions of dollars a

 19 year under some scenarios. It's going to be expensive

 20 and painful.

 21 We face a dilemma with trying to mitigate

 22 climate change because the effects of climate change

 23 lag behind the causes by several decades. The carbon

 24 dioxide we put into the air now won't have its full

 25 impact for another 10, 20, 30 years down the road.

 43
 1 That makes it hard for free market mechanisms to put a

 2 price on the true cost of carbon today, since people

 3 don't respond to it. The several ways to try to

 4 overcome that, like -- include putting a tax on carbon,

 5 putting caps on carbon, and those are not politically

 6 acceptable. The next best thing is going to be

 7 standards like those that are being proposed. And I

 8 support that.

 9 Thank you for your time.

 10 MR. MEDFORD: Thank you very much.

 11 Mr. Barrett.

 12

 13 TESTIMONY BY WILLIAM BARRETT

 14 MR. BARRETT: Good morning, and thank you for

 15 the opportunity to speak to you this morning. My name

 16 is Will Barrett, policy manager for the American Medical

 17 Association in California. I'm here representing the

 18 6 million California residents with lung disease and the

 19 tens of millions that desire to breathe clean air in

 20 their communities.

 21 The American Lung Association in California

 22 applauds the collaborative effort put forth by the Obama

 23 administration, the State of California, automakers and

 24 environmental stakeholders to develop this proposal that 

 25 we believe will have a lasting impact on improving

 44
 1 public health. The American Lung Association in

 2 California encourages the administration to pursue

 3 strong, clean air programs to improve the health and air

 4 of not only Californians, but all Americans.

 5 Increasing fuel economy standards to 54.5

 6 miles per gallon in 2025 and tightening emissions

 7 standards to halve greenhouse gas emissions by 2025

 8 compared to today has the potential to transform our

 9 nation's vehicles into a cleaner, more efficient fleet

 10 that will reduce our addiction to oil, save consumers at

 11 the pump, provide expanded choices in cleaner vehicle

 12 technologies, and at the same time, cut harmful

 13 emissions that endanger the public's health.

 14 The American Lung Association's annual State

 15 of the Air Reports continue to demonstrate that

 16 California dominates the list of the most polluted

 17 cities in America. The 2011 report found that

 18 California had eight of the top 10 most ozone-polluted

 19 cities in America. And, again, the city of Los Angeles

 20 and the Los Angeles region had some of the most

 21 challenging ozone pollution in the country. Our report

 22 found that half the nation, over 154 million Americans,

 23 continue to live in areas with dangerous levels of smog

 24 or particulate pollution.

 25 Dirty air in California contributes to 9,200

 45
 1 premature deaths, tens of thousands of hospitalizations

 2 for respiratory and cardiac illnesses, hundreds of

 3 thousands of asthma attacks and millions of lost school

 4 and workdays each year. The health and medical costs

 5 for air pollution-related illnesses add up to billions

 6 of dollars in health costs for families and place huge

 7 burdens on our healthcare providers and infrastructure.

 8 We know that higher levels of death and

 9 illness from pollution exposures are experienced by our

 10 most vulnerable individuals and communities, including

 11 those with asthma or other respiratory and cardiac

 12 illness, the elderly, our children, low-income

 13 communities, communities of color, and people living

 14 near pollution hot spots, including heavily traveled

 15 roadways.

 16 Without strong action to reduce greenhouse

 17 gases, rising temperatures due to climate change will

 18 lead to even higher suffering from increases in ozone

 19 pollution, pollen production, expanded heat waves,

 20 devastating wildfires and accompanying wildfire smoke

 21 exposures. These will also impact our most vulnerable

 22 communities the hardest.

 23 The new greenhouse gas and fuel economy

 24 standards are an important milestone in the fight

 25 against climate change, air pollution and the serious

 46
 1 public health impacts of our petroleum dependency and

 2 consumption.

 3 Recent polling by the American Lung

 4 Association and other organizations that you've heard

 5 about today suggest widespread support for decreasing

 6 harmful emissions across America and increasing the fuel

 7 economic standards.

 8 The list of supporters for the proposed rule

 9 extend across party lines and include small businesses,

 10 energy security experts, public health community,

 11 conservation groups and many, many others. Americans

 12 want more choices in their vehicle technology, greater

 13 efficiency, energy independence and cleaner air.

 14 While we know that these standards alone will

 15 not solve climate change, continued technological

 16 advances spurred by the Clean Air Act are vital to

 17 building momentum and protecting the public's health.

 18 Because of existing standards, we're already seeing

 19 cleaner cars, including zero-emission vehicles on the

 20 roads today. And these new standards will serve to

 21 further push the market for clean-vehicle options over

 22 the next decade as automakers invest in new advanced

 23 technologies and consumers experience savings and other

 24 benefits.

 25 Therefore, we urge you to implement strong

 47
 1 rules that will withstand any attempts to undermine

 2 these goals, as well as to whether any midterm program

 3 review that may be viewed by some as an opportunity to

 4 weaken the standards previously agreed upon. The

 5 midterm review may have ramifications for the State of

 6 California and the programs in place here. It will

 7 align with the national standards, and it must remain

 8 clear that California maintains its own Clear Air Act

 9 authority to enact our own rules more stringent than the

 10 federal rules due to our extreme air quality challenges.

 11 We urge you to move forward with the stronger

 12 rules and ensure that they are implemented as planned

 13 and on schedule for 2025. As the rulemaking process

 14 moves forward, we look forward to working with you to

 15 engage in the implementation and the evaluation of these

 16 rules being discussed today, protect public health, air

 17 quality and the environment from the worst effects of

 18 climate change.

 19 We also look forward to dealing with you in

 20 your future efforts to update and strengthen the current

 21 criteria emission standards for vehicles. Just last

 22 week, the American Lung Association, in coordination

 23 with six other leading public health organizations,

 24 wrote to the EPA administrator, Lisa Jackson, to request

 25 that she move forward with Tier 3 vehicle emissions and

 48
 1 fuel standards and that the EPA finalize those standards

 2 as soon as possible.

 3 So in closing, thank you very much for your

 4 time and the opportunity to comment on these historic

 5 standards, and we urge you to move forwarded to protect

 6 the public health. Thank you.

 7 MR. MEDFORD: Thank you.

 8 Any of my colleagues have questions?

 9 I'd like to thank all of you for taking your

 10 time today and providing excellent testimony.

 11 (short recess taken)

 12 MS. OGE: Are you ready to start the second

 13 panel?

 14

 15 TESTIMONY BY JOHN CABANISS

 16 MR. CABANISS: Good morning. My name is John

 17 Cabaniss. I'm director of environment and energy for

 18 the Association of Global Automakers. Global

 19 Automakers represents international motor vehicle

 20 manufacturers, original equipment suppliers and other

 21 automotive-related trade associations.

 22 Our association and our members have always

 23 endorsed a comprehensive and harmonized national

 24 approach to reducing greenhouse gas emissions and

 25 improving fuel economy. The alternative of having a

 49
 1 patchwork of state requirements would add significant

 2 costs with no corresponding environmental or energy

 3 benefits.

 4 We've been working with the agencies, EPA,

 5 NHTSA and the California Air Resources Board to create

 6 a program that meets our national and environmental

 7 energy objectives while providing manufacturers with

 8 the flexibilities and lead time necessary to design and

 9 build advanced technology vehicles that will provide

 10 consumers a full range of vehicle choices. This

 11 proposal brings us another step towards our goal of a

 12 long-term, single national program.

 13 The standards proposed are extremely

 14 stringent and are based on a large number of

 15 suppositions about technology and the auto market over

 16 the next 14 or so years. By extending the standards

 17 for many years into the future, the agencies provide

 18 us -- the manufacturers, that is -- with substantial

 19 lead time, but this long time frame involves

 20 substantial uncertainties, especially in the later

 21 years.

 22 For this reason, we support strongly the

 23 proposed midterm review to reassess the stringency of

 24 the standards, including technology penetration rates,

 25 fuel costs, the availability of alternative

 50
 1 refrigerants, and most importantly, the consumer

 2 acceptance, as has been noted before.

 3 We also support the flexibility mechanisms

 4 and credits that the agencies proposed to make

 5 available. These provisions enhance the ability of

 6 manufacturers to meet market demand while maintaining

 7 the benefits of the program.

 8 They also provide another means of dealing

 9 with the uncertainties associated with the out years

 10 especially. The various credits are all employed in

 11 one way or another. The credit banking and trading

 12 program itself, the off-cycle credits, the advanced

 13 technology credits, the air-conditioning system credits

 14 are all important features that are essential to the

 15 program.

 16 We also support the credit-based compliance

 17 option for methane and nitrous oxide standards, as well

 18 as the new upward adjustment approach to allow these

 19 standards to be included with carbon dioxide emissions.

 20 However, we would like to see more flexible -- more

 21 flexible compliance options and will be addressing that

 22 in more detail in our written comments.

 23 With regard to the testing of many nitrous

 24 oxide emissions in model year 2017, we urge the EPA to

 25 reconsider this requirement. The quantities of these

 51
 1 emissions is quite low, and we see no indication that

 2 they will become an important factor in climate change

 3 in the future.

 4 Additionally, Global Automakers supports the

 5 case-by-case small-volume manufacturers' approach as

 6 well as harmonization of the definitions for

 7 small-volume manufacturers. The case-by-case approach

 8 allows the flexibility that this small segment of the

 9 industry needs while maintaining requirements necessary

 10 to control greenhouse emissions.

 11 Finally, while we understand fuel-related

 12 issues are not within the scope of this proposal, we

 13 continue to support a systems approach for both fuels,

 14 technologies and fuel -- vehicle technologies and fuel

 15 quality, both being of paramount importance. Lower

 16 sulfur gasoline, for instance, will be instrumental to

 17 automakers in introducing advanced technologies needed

 18 to comply with these standards. Also, a number of

 19 advanced technologies involve significant

 20 infrastructure issues. We look forward to working with

 21 the agencies on these issues under the upcoming EPA

 22 Tier 3 regulations and other forums, including the

 23 midterm review.

 24 And as Mr. Cackette noted, harmonization on

 25 the criteria pollutant side will also provide

 52
 1 additional significant benefits on which we will focus

 2 in the Tier 3 rulemaking. We're continuing to analyze

 3 the proposed regulations. We will address greater

 4 detail in written comments.

 5 Let me just restate our strong support, and

 6 appreciate the opportunity to speak today.

 7 MS. OGE: Thank you.

 8 Mr. Forrest McConnell. Good morning.

 9 

 10 TESTIMONY BY FORREST McCONNELL

 11 MR. McCONNELL: Good morning. On behalf of

 12 the National Automobile Dealers Association, I thank

 13 you NHTSA and EPA for holding today's hearing. I'm

 14 also president of McConnell Honda & Acura in

 15 Montgomery, Alabama.

 16 Totaling the administration's final and

 17 proposed fuel economy mandates results in an average

 18 vehicle cost increase of at least $3,200, a substantial

 19 amount that every new car buyer will have to pay up

 20 front. As Don Chalmers explained last week, NADA

 21 believes that the actual total increase will be even

 22 higher. Thus, customers who come into my showroom

 23 in 2025 will face vehicles that, as a result of these

 24 rulings, are dramatically more expensive than they are

 25 today.

 53
 1 Some tout that the cost of the proposal is

 2 essentially free because of fuel savings. But before

 3 any fuel savings can be realized, customers must have

 4 the ability to buy. For over 90 percent of Americans,

 5 the purchase of a new vehicle is contingent on getting

 6 approved for a loan or a lease. If they don't qualify,

 7 they can't buy. They can't buy, they can't save money

 8 on fuel.

 9 So as someone who works every day to secure

 10 financing for my customers, I'm unaware of anybody who

 11 will fund auto loans based on the promises of fuel

 12 savings. Loan qualification is based mainly on the

 13 income of the customer and on the vehicle price.

 14 What's clear is this proposal will make it harder for

 15 many customers to obtain financing, eliminating their

 16 ability to realize any fuel savings.

 17 Specifically, NADA is preparing an analysis

 18 that conservatively estimates that about 7 million

 19 licensed drivers will be priced out of the new car

 20 market entirely when this proposal is fully

 21 implemented. But this consequence is not limited to

 22 those motorists who can only afford the most

 23 inexpensive vehicle. Let's talk about the family

 24 buyer. For example, our study also estimates that over

 25 7 million licensed drivers would no longer qualify for

 54
 1 financing to buy the lowest cost family vehicle, such

 2 as the Dodge Journey, which accommodates more than five

 3 people or more than two child passenger safety seats.

 4 This will be devastating for large families or families

 5 with small children that would like to carpool. And

 6 the burden of this rule is not even spread evenly.

 7 California, the most populous state, will see 662,000

 8 of its citizens no longer able to qualify for a new car

 9 loan. In Tennessee, 5 percent of licensed drivers will

 10 be shut out of the new car market.

 11 Moreover, the U.S. Energy Information

 12 Administration finds that this proposal will regulate

 13 out of existence the most affordable cars on the market

 14 today. Adjusting for inflation, the Energy Economic

 15 Information Administration claims that in 2025, there

 16 will no longer be new vehicles on the market costing 

 17 $15,000 or less. These are the vehicles I sell to

 18 smart frugal buyers, college students and working

 19 families. How can a rule that eliminates the most

 20 affordable new cars on the market be pro-consumer?

 21 You're right; it's not.

 22 The total cost of the administration's three

 23 fuel economy rules is approximately 210 billion. To

 24 put this figure into perspective, that's more than

 25 twice the amount of total government aid to the auto

 55
 1 industry in 2009 and '10. The $157 billion proposal is

 2 by far the costliest auto regulation ever, and comes on

 3 the heels of the 2010 record-setting $51 billion fuel

 4 economy rule. I always have to remember that a billion

 5 is a thousand million.

 6 And of course, these new regulatory costs

 7 will be borne by customers. And they exclude the

 8 billions of dollars in other new regulations you and

 9 California regulators have planned. No one in the

 10 government seems to be looking at the bigger picture of

 11 what all this regulatory activity is doing to the

 12 affordability for the average American.

 13 No fuel economy proposal has ever been

 14 finalized this far in advance, largely in recognition

 15 of critical hard-to-forecast factors such as future

 16 fuel prices and consumer preferences. By waiting two

 17 or three years, you would better know what the auto

 18 market can bear in 2017. Apparently, one reason why

 19 this proposal is some three years early is because

 20 California regulators threatened to implement what EPA

 21 director, Lisa Jackson, has called a patchwork of state

 22 standards. NADA strongly believes that the issues and

 23 goals involved in this rulemaking are national in

 24 scope, and that California regulators should not be

 25 dictating national policy or setting fuel economy

 56
 1 standards. We all want fuel economy, but it's not

 2 free. By adding $3,200 to the cost of a car, over

 3 seven million Americans will be priced out of the

 4 market, fleet turnover will be reduced and global

 5 warning benefits will be delayed.

 6 Now, finally, America's auto dealers support

 7 continuous improvement to fuel economy. Instead of

 8 fighting the customer, we urge the administration to

 9 act in a measure [sic] that will leverage consumer

 10 demand, maximize fleet turnover and ensuring maximum

 11 feasible fuel economy increases.

 12 Thank you for listening. I'll be happy to

 13 answer any questions you may have.

 14 MS. OGE: Thank you.

 15 Mr. Jack Gillis. Good morning.

 16

 17 TESTIMONY BY JACK GILLIS

 18 MR. GILLIS: Good morning. My name is Jack

 19 Gillis. I'm director of public affairs for the

 20 Consumer Federation of America and author of The Car

 21 Book.

 22 CFA is an association of nearly 280 nonprofit

 23 consumer organizations working on research, consumer

 24 education and advocacy. We greatly appreciate the

 25 opportunity to testify on what we believe is an

 57
 1 historic landmark in U.S. energy policy. The proposed

 2 standards will deliver major economic security, air

 3 quality benefits to consumers and the nation while

 4 putting the U.S. auto industry back on the path to

 5 global success.

 6 We are not alone in the support of this

 7 standard. Consumers, automakers and autoworkers

 8 recognize the important need for achievability of more

 9 fuel-efficient vehicles.

 10 It is remarkable that 13 of the 16 major car

 11 manufacturers support these standards. Clearly, they

 12 know they can manufacture the vehicles that meet the

 13 standard, and they understand it's what their consumers

 14 want and will pay for.

 15 The only major opponents of this

 16 consumer-backed policy are the car dealers. Their

 17 opposition shows what I believe to be an

 18 incomprehensible reaction to the desires of their

 19 customers, the capability of manufacturers that they

 20 sell the cars for, and the critically important need to

 21 reduce our dependency on foreign oil. So we appreciate

 22 the opportunity to respond to our good friends in the

 23 auto dealers community.

 24 And let me just submit for the record some

 25 very specific responses to their concerns, but I'd like

 58
 1 to highlight a few points that were recently raised.

 2 The car dealers say that fuel economy

 3 performance is typically not high on the consumer's

 4 list of priorities. If this were, in fact, true, why

 5 do we see so many car companies advertising fuel

 6 economy as a selling point. The car manufacturers who

 7 spend millions of dollars studying consumer behavior

 8 obviously disagree with their dealers. Fuel economy is

 9 the very top priority for consumers looking to purchase

 10 a new car. In fact, Consumers Union, the publishers of

 11 Consumer Reports, determined that fuel economy was the

 12 number two reason why consumers would change their

 13 brands of vehicle.

 14 The NADA has said that just because vehicles

 15 can be built doesn't mean that they will be bought.

 16 Actual sales data, however, is very clear. Consumers

 17 want and will pay for more fuel-efficient vehicles.

 18 And the manufacturers supporting this new standard have

 19 agreed to make them. Consider Ford, for example. The

 20 combined sales of their two new fuel-efficient cars,

 21 the Fiesta and the Focus, in May 2011 are up 74 percent

 22 in one year.

 23 Car dealers have expressed concern about jobs

 24 and dealerships, implying that the standards might

 25 further hurt them. Yes, the -- like everyone in the

 59
 1 economy, car dealers are reeling from the financial

 2 setbacks. The reduction in the cost of driving from

 3 these new standards, however, will cause more autos to

 4 be sold and over 100,000 jobs to be created. More jobs

 5 and vehicles that are less expensive to drive means

 6 more consumers, not less, will be buying cars.

 7 And in closing, I'd like to respond directly

 8 to the points that we just heard: Concern about the

 9 consumer's pocketbook.

 10 Right now, gasoline prices are at a record

 11 high, averaging $3.53 a gallon. Last year, household

 12 gasoline expenses set a record reaching over $2,800 per

 13 year. That's 40 percent higher than the expenditures

 14 on all home energy for consumers. That's electricity,

 15 natural gas and heating.

 16 Ten years ago, they were 13 percent lower.

 17 Ten years ago, the cost of owning a vehicle was the

 18 largest single component of the cost of driving, about

 19 three times as high as the cost of gasoline. Last

 20 year, for the first time, the cost of gasoline will

 21 equal or exceed the cost of car ownership. And that's

 22 why the Consumer Federation of America believes very,

 23 very strongly that the car dealers are wrong.

 24 Consumers are desperate for more fuel-efficient

 25 vehicles. Consumer pocketbooks are hurting and more

 60
 1 fuel-efficient vehicles will drive more and more

 2 consumers into the showroom. Right now, there are not

 3 enough fuel-efficient vehicles on the market to meet

 4 consumer demand.

 5 So we are not worried about the increase in

 6 price associated with the technology because that

 7 increase in price will be paid back to the consumer who

 8 takes a typical five-month [sic] loan out during that

 9 very first month [sic]. The past 16 years, automobiles

 10 have increased an average of $500 a year. So this is a

 11 small price to pay for extra fuel economy and extra

 12 savings. Thank you very much.

 13 MS. OGE: Thank you.

 14 Ms. Barbara Nocera. Good morning.

 15

 16 TESTIMONY BY BARBARA NOCERA

 17 MS. NOCERA: Yes, good morning. We

 18 appreciate the opportunity to offer comments on behalf

 19 of Mazda North American Operations, headquartered in

 20 Irvine, California, and its parent company, Mazda Motor

 21 Company.

 22 We fully agree with and support the comments

 23 provided separately by the Alliance of Automobile

 24 Manufacturers. Our detailed technical views will be

 25 represented in the Association's written comments that

 61
 1 will be filed before the February 13 deadline.

 2 Mazda's committed to developing and

 3 introducing technology to significantly reduce

 4 greenhouse gas emissions in our vehicles. We believe

 5 that the best approach to achieve real-world greenhouse

 6 gas reductions is to develop technology that can be

 7 applied across our product line and made available to

 8 all of our customers at an affordable price. To that

 9 end, Mazda's SKYACTIV TECHNOLOGY includes new 

 10 high-compression gasoline and clean diesel engines, new

 11 six-speed automatic and manual transmissions with

 12 improved efficiencies over previous designs, and newly

 13 designed vehicle chassis and suspension components

 14 focused on improving performance and reducing weight.

 15 The first vehicle being introduced in the U.S.

 16 incorporating many components of the SKYACTIV TECHNOLOGY

 17 is the 2013 model year CX-5 SUV available at Mazda

 18 dealerships next month, which has a highway fuel economy

 19 rating as high as 35 miles per gallon, the best in class

 20 for a crossover SUV, and that includes hybrid SUVs.

 21 The 2012 Mazda3, which went on sale last fall,

 22 was the first use of new SKYACTIV gasoline engine and

 23 transmission. It sees a 7-mile-per-gallon jump in

 24 highway fuel economy to 40 miles per gallon, up from

 25 33 miles per gallon in the previous version.

 62
 1 As one of the 13 auto makers that signed the

 2 letter of commitment, Mazda welcomes the opportunity to

 3 be a partner in helping to advance a continued,

 4 harmonized national program on fuel economy and

 5 greenhouse gas emissions for the 2017 to 2025 model

 6 years. While offering manufacturers the certainty of

 7 knowing the fuel economy targets for many years into the

 8 future, the proposed standards do represent an extreme

 9 technical challenge for the auto industry, and

 10 especially for smaller automakers, such as Mazda, who

 11 have more limited resources to develop and market

 12 advanced technology vehicles. Nonetheless, we are

 13 committed to making our best efforts to meet the

 14 proposed targets. However, we'd like to comment on one

 15 technical issue in the proposed regulation.

 16 Mazda fully supports the proposed extension of

 17 the availability of off-cycle credits for model years

 18 2017 to 2025. Additionally, we support providing

 19 equivalent fuel consumption and CO2 credit values

 20 towards both the greenhouse gas and CAFE programs,

 21 helping to further harmonize one of the many remaining

 22 differences between the two regulations. We agree that

 23 continuing the off-cycle credit program provides an

 24 incentive to manufacturers to introduce new technologies

 25 that produce concrete environmental and fuel consumption

 63
 1 benefits, provides flexibility toward meeting the

 2 increasingly stringent standards, and encourages

 3 investment into technologies that will have a payoff

 4 over the longer term.

 5 While we strongly support the concept of a

 6 predefined list of off-cycle technologies, we urge the

 7 agencies to eliminate the proposed 10 percent minimum

 8 penetration rate. Requiring a minimum penetration rate

 9 would discourage companies from offering a new

 10 technology on a limited basis to test the technology and

 11 gauge consumer acceptance before launching it more

 12 broadly.

 13 Moreover, new technologies are typically added

 14 when a model is redesigned or updated. To give a

 15 specific example, adding one of the off-cycle

 16 technologies on the predefined list to either the

 17 Mazda2, Mazda5 or the Miata models would result in no

 18 credit because they each account for less than

 19 10 percent of our fleet. The 10 percent minimum

 20 penetration threshold or any other minimum penetration

 21 rate may well have the unintended consequence of

 22 encouraging manufacturers to postpone technology

 23 application until a model that accounts for the acquired

 24 percentage is redesigned rather than installing it

 25 earlier on a lower volume model.

 64
 1 Thank you for the opportunity to provide

 2 Mazda's views.

 3 MS. OGE: Thank you.

 4 Mr. John Holtzclaw. Good morning.

 5 MR. FLEMING: Good morning. My name is

 6 Payton Fleming, and I'm the senior director at CERES.

 7 MS. OGE: Just a second.

 8 Do we have John Holtzclaw?

 9 MR. HOLTZCLAW: Yes. Welcome to San

 10 Francisco.

 11 MS. OGE: Thank you.

 12

 13 TESTIMONY BY JOHN HOLTZCLAW

 14 MR. HOLTZCLAW: I'm John Holtzclaw. I am the

 15 volunteer lead in the Sierra Club's Green

 16 Transportation Campaign. And our campaign is a broad

 17 campaign, a comprehensive campaign, both in the types

 18 of modes and in the coverage; national, state and

 19 local, all parts of the campaign.

 20 Part of our campaign is reducing the amount

 21 that people have to drive, reducing the VMT and

 22 driving. In order to do that, you have to make

 23 convenient neighborhoods, so that people have short

 24 trips, so that they can walk and bike those trips, so

 25 that they can take transit. And to do that, you need

 65
 1 higher density so that there are more things nearby,

 2 modify some of the zoning laws that say you can't have

 3 a market or restaurant or a cafe or job-creating area

 4 in residential neighborhoods. We need to reform those

 5 zoning laws.

 6 It also means creating streets that are

 7 friendly for people who walk or bike: Wider sidewalks,

 8 bike lanes, things like that, shorter streets, short

 9 streets so that the traffic is more calm and you have

 10 more places to cross the street. It also means -- and

 11 that's called complete streets. And HUD is doing a

 12 great job of trying to implement complete-streets

 13 measures.

 14 It also means improving public transit. So

 15 that for those longer trips, you do have a transit

 16 option so that you don't have to drive. It means

 17 pricing auto use, pricing parking so we don't subsidize

 18 people's driving. We encourage them to find other

 19 means.

 20 Modes of getting around: It also means car

 21 sharing, which increases people's options if they have

 22 to drive. I personally got rid of my car in 1978, a

 23 third of a century ago. And I did it for a number of

 24 reasons: One is I wasn't using it very much because I

 25 live in a convenient area, a mile to the south of here.

 66
 1 I also did it because of activity and health. I walk

 2 more. I bicycle.

 3 And you feel better and you're healthier. It

 4 helps keep your weight down. Also for social. When

 5 you walk or when you bike or when you take transit, you

 6 meet other people. You can flirt; you can talk. It's

 7 very enjoyable. Don't try that while driving.

 8 Also reducing the angst of, you know, traffic

 9 congestion, where I left my car, things like that. And

 10 reducing pollution, global warming gases, particulates

 11 and ozone precursors.

 12 And all over this city and New York City and

 13 others like that, there are a lot of people who have

 14 given up their cars or who drive much less, have

 15 learned to drive much less. And they are doing their

 16 share for the planet. And when they do their share,

 17 they look at the polluting cars and the 1 percent that

 18 designed those polluting cars, and they say: Why don't

 19 you do your job? Why don't you do your share?

 20 So we strongly support this round of measures

 21 to reduce the amount of pollution emissions per mile,

 22 and we also look forward to the next round of

 23 standards. In Europe, auto manufacturers already have

 24 to meet a 47-mile-per-gallon standard. It's only 7.5

 25 more miles per gallon, and they have 13 years to make

 67
 1 it. So we're competing over there. We should be able

 2 to compete here and make the standards that you set up 

 3 very easily.

 4 Thank you very much. And we're looking

 5 forward to the next round.

 6 MS. OGE: Thank you.

 7 Mr. Henry Hugo. Good morning.

 8 

 9 TESTIMONY OF HENRY HOGO

 10 MR. HOGO: Good morning. My name is Henry

 11 Hogo. I'm the assistant deputy executive officer for

 12 Mobile Source Division at The South Coast Air Quality

 13 Management District. Thank you for the opportunity to

 14 speak today on the proposed rule. The South Coast AQMD

 15 staff supports overall the proposed greenhouse gas

 16 emissions standards and timeline. The proposed 

 17 emissions standards and companion fuel economy

 18 standards will result in a significant reduction in

 19 greenhouse gas emissions, as well as provide crucially

 20 important co-benefits in reducing criteria emissions in

 21 support of attainment of federal and state air quality

 22 standards for ozone and particulates.

 23 Over 25 percent of the nation's exposure to

 24 the federal eight-hour ozone standard occurs here in

 25 the South Coast Air Basin, while over 50 percent of the

 68
 1 nation's annual PM-2.5 exposure occurs in the South

 2 Coast Air Basin as well. There are over 10 million

 3 registered light-duty vehicles in the South Coast Air

 4 Basin. Reductions in fuel use associated with the

 5 proposed standards will therefore have a direct and

 6 tangible benefit in terms of public health and welfare

 7 in our region.

 8 Relative to the proposed rule, I would like to

 9 express the South Coast AQMD staff support of the

 10 comments provided by the National Association of Clean

 11 Air Agencies. In addition, we want to emphasize that

 12 additional assurances are needed to ensure that the

 13 overall fleet performance of 5 percent is met. The

 14 proposal rule allows light-duty trucks produced in 2017

 15 to 2021 to improve at a rate of only 3.5 percent. If

 16 sales of light-duty trucks during this time period

 17 exceeds expectations, then the overall fleet performance

 18 will be further reduced.

 19 In addition, the use of early credits may lead

 20 to the production of light-duty vehicles that do not

 21 necessarily have to meet the 5 percent improvement rate.

 22 To help alleviate these concerns, the South

 23 Coast AQMD staff strongly supports incentives for the

 24 purchase of light-duty vehicles that are cleaner than

 25 the applicable standards in as early as possible time

 69
 1 frame. Increasing the penetration of cleaner vehicles

 2 will not only provide additional assurances that the

 3 fleet performance will be met, but also help reduce the

 4 overall cost of the cleaner vehicles in future years.

 5 This South Coast AQMD staff welcomes the opportunity to

 6 work with U.S. EPA and NHTSA on mechanisms to

 7 incentivize greater penetration of cleaner vehicles,

 8 especially zero and near-zero emission and alternative

 9 fuel vehicles.

 10 While the focus of the proposed rule is on

 11 greenhouse gas emissions, we urge U.S. EPA to move

 12 forward with proposals to set criteria pollutant

 13 tailpipe emissions standards as soon as possible.

 14 As Mr. Cackette mentioned earlier, the

 15 California Air Resources Board will be considering

 16 amendments to the California's Low Emission Vehicle

 17 Program and Zero Emission Vehicle Regulation on

 18 January 26th, which cover greenhouse gas emissions and

 19 criteria pollutant emissions for model years 2017 to

 20 2025 light- and medium-duty vehicles. The South Coast

 21 AQMD staff believes that the U.S. EPA/NHTSA proposed

 22 rule and the Air Resources Board proposed amendments are

 23 important actions that will provide additional criteria

 24 pollutant reductions needed for our region.

 25 Lastly, we urge U.S. EPA to begin analysis to

 70
 1 set criteria and greenhouse gas emissions standards for

 2 vehicles produced after 2025. It is critically

 3 important, given that many areas in the U.S. must meet

 4 the new eight-hour ozone standard and the potential for

 5 ever tighter ambient air quality standards.

 6 In summary, we strongly urge U.S. EPA and

 7 NHTSA to finalize the proposed rule as early as

 8 possible. Thank you for the opportunity to speak.

 9 MS. OGE: Thank you. Mr. Paul Monroe.

 10 Actually, Major General Paul Monroe. Good morning.

 11

 12 TESTIMONY BY PAUL MONROE

 13 GENERAL MONROE: My name is Paul Monroe. I'm 

 14 a retired major general and a former adjunct general of

 15 the California National Guard. I also represent the

 16 Truman National Security Project, and we support the

 17 proposed fuel standards. Thank you for this

 18 opportunity to speak on this program.

 19 We heard a lot of risks that we face if we

 20 fail to take action. Let me tell you how the

 21 military's evolved.

 22 Some years ago I was a battalion commander, I

 23 thought gas was just something you put in the tank to

 24 make aircraft vehicles and generators go. Our main

 25 training area was located some 225 miles from our home

 71
 1 station. We would convoy in military vehicles to the

 2 training site. We also brought with us a 5,000-gallon

 3 tanker to refuel the vehicles during the course of the

 4 convoy. It was common for battalion-size units to

 5 possess 5,000 tankers.

 6 And then I was directed by my superiors to

 7 turn in our tankers, position equipment we would need

 8 for training at the training site, and our soldiers

 9 would be bussed from home station to the training area.

 10 This eliminated a valuable part of our training.

 11 Military units need to know how to organize and execute

 12 a road march.

 13 When I asked why the change in policy, I was

 14 told that fuel's becoming too expensive. I was also

 15 informed that the most -- that most of the fuel we

 16 consume was imported from countries that may or may not

 17 be friendly to the United States. That got my

 18 attention. We all modified our training and attempted

 19 to reduce our dependence on fossil fuels, imported or

 20 not.

 21 However, at that time there was no national or

 22 service policy on how to approach the amount of fuel we

 23 consume. Then, in 2010, the Department of Defense

 24 included a fuel policy in its Quadrennial Defense

 25 Review. This report identified our dependence on

 72
 1 imported oil as a national security threat. This is not

 2 a threat that will happen if we don't take action. It's

 3 happening right now. The fuel we depend on to secure

 4 Afghanistan is constantly interdicted by attacks on our

 5 fuel convoys.

 6 So what can we do? Well, quite a bit,

 7 actually. The military has set ambitious goals to

 8 diminish the amount of fuel we consume, reduce emissions

 9 and use a greater percentage of renewable energy. The

 10 Navy's developing a biofuel that will power its

 11 aircraft. The Navy's Great Green Fleet is scheduled to

 12 sail in 2016. The Marines have developed a solar power

 13 generator to power their command post. The Army will

 14 reduce energy consumption, increase energy efficiency

 15 and increase use of renewable energy. The Air Force

 16 also has an ambitious energy savings program.

 17 But it is not only the military's use of

 18 imported fuel that makes us vulnerable. We as civilians

 19 are also contributing to the security threat to our

 20 nation. Automobile manufacturers have agreed to the

 21 proposed fuel standards; however, our direct action

 22 needs to be reduction of personal use of energy. We

 23 send money to our enemies and others who do not share

 24 our values or have our best interests in mind.

 25 This is a perfect opportunity for this

 73
 1 administration to show us leadership, as our military

 2 leaders have done. To keep America safe, we must adopt

 3 strong fuel efficiency standards.

 4 Thank you.

 5 MS. OGE: Thank you. Payton Fleming. Good

 6 morning.

 7 MR. FLEMING: Hi. I'll try again.

 8 MS. OGE: Okay. Second will be better.

 9 

 10 TESTIMONY BY PAYTON FLEMING

 11 MR. FLEMING: As I said, I'm Payton Fleming,

 12 senior director at Ceres, a national coalition of

 13 investors and public interest groups working with major

 14 companies to address the sustainability challenges such

 15 as climate change. Ceres also coordinates the Investor

 16 Network on Climate Risk, a network of 100 institutional

 17 investors, mostly in the United States, who

 18 collectively manage about $10 trillion of assets. And

 19 this network is focused specifically on the business

 20 risks and opportunities of climate change.

 21 I'm here today to speak in support of the

 22 strongest possible mileage and emissions standards.

 23 Ceres' July 2011 report, "More Jobs Per Gallon: How

 24 Strong Fuel Economy/Greenhouse Gas Standards Will Fuel

 25 American Jobs," found that a 54.5 mpg standard will

 74
 1 create about 484,000 economy-wide new U.S. jobs,

 2 including 43,000 in the auto industry alone and net job

 3 gains in 49 of the 50 U.S. states. National gross

 4 economic output would rise by tens of billions of

 5 dollars. And it's very important to note that the

 6 higher the standard, the greater the economic gain.

 7 This is from the report that we put out last summer.

 8 A second report we collaborated on last year

 9 with Citi Investment Research, a bank in New York,

 10 found that stricter fuel economy standards will bring

 11 economic benefits to auto manufacturers, especially the

 12 Detroit 3 and their suppliers. The report shows that

 13 strong standards will improve the competitive

 14 positioning of U.S. automakers and provide the

 15 regulatory certainty needed to promote innovation and

 16 investment in the industries of the future.

 17 Strong standards will also serve to mitigate

 18 climate change risks and the very significant economic

 19 as well as environmental and human disruption that a

 20 changing climate will likely cause -- and, in fact, is

 21 already causing. Strong standards will reduce America's

 22 and California's dependence on foreign oil, save vast

 23 amounts of money for consumers at the gas tank and as

 24 well as money for businesses and bolster America's

 25 world-class vehicle technology companies, many of them

 75
 1 based right here in California.

 2 It's important to stress that an extremely

 3 diverse group of stakeholders took part in shaping these

 4 standards that you're considering. Labor, U.S.

 5 automakers, the California Air Resources Board and

 6 federal agencies all came to agreement that these

 7 standards are the best path to American's future.

 8 So we hope you'll stand firm in support of

 9 strong standards with no loopholes. America's global

 10 competitiveness is at stake. We need the jobs strong

 11 standards will create, and we have to address climate

 12 change urgently and now, not at some future date.

 13 Thank you, and I greatly appreciate the

 14 opportunity to be here.

 15 MS. OGE: Thank you.

 16 Ms. Susan Frank, good morning.

 17

 18 TESTIMONY BY SUSAN FRANK

 19 MS. FRANK: Thank you for the opportunity to

 20 testify today in support of the administration's

 21 proposed fuel efficiency and emissions standards for

 22 light-duty vehicles.

 23 My name is Susan Frank, and I'm here today on

 24 behalf of California Clean Cars campaign, a coalition

 25 of public health leaders, consumer groups, businesses,

 76
 1 local governments, elected officials, organized labor,

 2 faith groups, environmental organizations and other

 3 diverse constituencies that support the strongest

 4 possible standards for California's groundbreaking

 5 Clean Cars program. The support for strong emissions

 6 standards is far-reaching here in California, as

 7 evidenced by the hundreds of businesses, organizations

 8 and individuals who have endorsed our campaign. I have

 9 a list of our endorsers, which I've provided to the

 10 staff up front as well. And many of the people who are

 11 addressing you on this panel today or are in the

 12 audience are also supporters of our campaign.

 13 Our supporters believe that these standards

 14 will make America less reliant on fossil fuels, save

 15 consumers money at the pump, reduce greenhouse gas

 16 emissions and air pollution, thus saving lives, create

 17 high-quality U.S. jobs and strengthen our economy

 18 through innovation and investments in advanced vehicle

 19 technologies.

 20 You've heard many statistics today. I'll

 21 throw out a few more. According to Consumer Reports,

 22 81 percent of Californians believe that all automakers

 23 should be required to reduce significantly greenhouse

 24 gas emissions from new cars, light-duty trucks and

 25 SUVs.

 77
 1 According to a Small Business Majority poll,

 2 87 percent nationwide and 80 percent of California

 3 small businesses believe it's important to increase

 4 fuel efficiency in cars and light trucks.

 5 Across party, age, gender and religion,

 6 there's tremendous support for requiring automakers to

 7 reduce greenhouse gas emissions from new cars.

 8 In addition to benefiting consumers' public

 9 health and air quality here in California, this is very

 10 much about innovation. Strong national standards

 11 coupled with Californians' own standards, will drive

 12 that innovation and fuel our economy. You've heard

 13 about many studies today. I wanted to reference also

 14 that same study I think I mentioned earlier, the Next

 15 10 study, that found that proposed national fuel

 16 economy and emissions standards could create hundreds

 17 of thousands of jobs and increase our Gross State

 18 Product while reducing emissions. This is a win-win

 19 for our state and for the nation.

 20 And so we applaud the Obama administration,

 21 the agencies and all the stakeholders for coming

 22 together to develop these proposed national standards.

 23 Here in California, we're looking forward to adopting

 24 our own Clean Car standards later this week in Los

 25 Angeles and to continue to work together to ensure the

 78
 1 cleanest possible cars in California and across the

 2 country.

 3 Thank you very much.

 4 MS. OGE: Thank you. Jessica Zenk, good

 5 morning.

 6 

 7 TESTIMONY BY JESSICA ZENK

 8 MS. ZENK: My name is Jessica Zenk, and I am

 9 the transportation policy director for the Silicon

 10 Valley Leadership Group. Thank you for coming to the

 11 Bay Area and allowing us the opportunity to weigh in

 12 this morning.

 13 The Silicon Valley Leadership Group is a

 14 member-driven organization representing over 350 of the

 15 most innovative companies in California and roughly a

 16 third of the private-sector employment in Silicon

 17 Valley. We have long supported efforts to green our

 18 transportation options overall in many ways, among them

 19 greater fuel efficiency. We do this because of the

 20 environmental improvements, the public health

 21 improvements, the actions to reduce our greenhouse gas

 22 emissions as well as our dependency on foreign oil.

 23 But you've heard about that from others, and

 24 so I wanted to dive a little more deeply into what

 25 Payton and Susan have both brought up, which is that

 79
 1 we're fostering a new economy here. We're building

 2 long-term, sustainable, new technologies that are

 3 driving innovations because of regulations like the

 4 ones that you propose today. This allows for many of

 5 our member companies and others throughout the nation,

 6 but particularly here in California, to put forward a

 7 business model that's sustainable that people are

 8 willing to invest in, and that will change the way we

 9 can drive our cars in the future.

 10 A substantial, and importantly, the fastest

 11 growing portion of our membership at the Silicon Valley

 12 Leadership Group are in the fields of clean and green

 13 technology, including renewable energy, electric

 14 vehicles and related charging infrastructure,

 15 batteries, smart-grid applications and other

 16 alternative fuels.

 17 So this is a future of our economy in Silicon

 18 Valley, California and the nation. The direction you

 19 proposed in your rulemaking is the right one, and we

 20 thank you for your leadership and the groundbreaking

 21 collaborations that you forged.

 22 MS. OGE: Thank you.

 23 Any questions for the panel?

 24 MS. MORAN: I wanted to make one

 25 clarification.

 80
 1 Ms. Nocera, I appreciate your comments on the

 2 off-cycle credits and the off-cycle technology menu.

 3 You mentioned in your testimony that you're

 4 disappointed that there's no way to get credit if you

 5 don't meet the 10 percent minimum penetration rate for

 6 sale.

 7 And I did want to clarify that the EPA/NHTSA

 8 proposal does allow a process to do that. If you don't

 9 meet the 10 percent minimum sales threshold, we've

 10 proposed a streamlined 60-day process where you can

 11 come to the agency and propose a credit. And there is

 12 a process in there for you to take advantage of. So I

 13 hope you'll take a look at that as well. Thank you.

 14 MS. NOCERA: Thank you. I'm aware of that.

 15 We were just speaking to the predefined list because we

 16 think that's really the best opportunity to get credit

 17 for these types of -- adding these types of

 18 technologies.

 19 MS. MORAN: Okay.

 20 MS. OGE: Next panel.

 21 (short recess taken)

 22

 23 TESTIMONY BY WAIDY LEE

 24 MS. LEE: My name is Waidy Lee, and I live in

 25 the town of Los Altos, California. And thank you for

 81
 1 giving me the opportunity to testify.

 2 I have been an EV driver for over 20 years,

 3 and I own two battery electric vehicles. I drive

 4 approximately 12,000 miles a year. I'm in the PG&E

 5 time-of-use program, paying nine cents for kilowatt

 6 hour.

 7 So my EV driving averages 4 1/2 miles per

 8 kilowatt hours, just highway and city combined. So my

 9 yearly cost of my driving is approximately $240. My

 10 yearly cost of maintaining of the battery electric car

 11 is approximately $150. That includes all my 10 years

 12 of wear and tear, like changing the tires several

 13 times, brake and brake pad, something like that.

 14 So if I were to drive a 20-miles-per-gallon- 

 15 gas car at $3.50 a gallon, it would cost me $2,100 a

 16 year in gas saving and approximately $800 a year in

 17 maintenance.

 18 In conclusion, the difference of driving a

 19 zero-emission car versus a gas car is $390 a year

 20 versus $2,900 a year or zero emission, which is 600

 21 gallons per year of fossil fuel.

 22 So the 200 -- $2,500 per year savings that I

 23 have covers all my utility, like all my phone bill, my

 24 cable, my Internet, my water, my garbage, and several

 25 months of housecleaning. Since I'm already a

 82
 1 net-energy producer, so I don't have to pay any

 2 electricity, and my house does not connect to any gas

 3 because I don't use any fossil fuel, so pretty much, my

 4 life is paying the property tax, federal tax, state

 5 tax, and I enjoy.

 6 So this is -- you would be for lower -- if

 7 you asked the manufacturer to make a standard of

 8 54 miles per gallon, it would make a lot of citizen

 9 happy. So I thank you very much for giving me the

 10 opportunity to speak today, and I'm happy to answer any

 11 question. And I'm sorry, I have to excuse myself. I

 12 do have a meeting after this. And I'm happy to answer

 13 any questions.

 14 MR. MEDFORD: Thank you, Ms. Lee, for coming

 15 in. I think you got everyone's attention when you said

 16 your housekeeping bill was taken care of by what you

 17 recovered in energy savings.

 18 Thank you very much.

 19 Mr. Holycross.

 20

 21 TESTIMONY OF BOB HOLYCROSS

 22 MR. HOLYCROSS: Thank you. Good morning.

 23 I'm Bob Holycross, manager of environmental and energy

 24 planning for Ford Motor Company. It's a pleasure to be

 25 here today to provide our perspective on this very

 83
 1 important rulemaking.

 2 Just over two years ago, we were standing in

 3 the same position, commenting on the first nationally

 4 harmonized greenhouse gas and fueling economic

 5 regulation, and encouraging the continuation of

 6 harmonized requirements beyond 2016. We applaud the

 7 combined efforts of the EPA, NHTSA and CARB. This

 8 proposal provides our industry both a single program

 9 moving forward, as well as a regulatory framework that

 10 enables manufacturers to plan and invest for the future

 11 with confidence. We are committed to working with you

 12 to finalize these regulations.

 13 The standards proposed are aggressive, but so

 14 are the demands from our customers for greater fuel

 15 efficiency. As a result, we are continually investing

 16 in our product strategy to improve the fuel economy and

 17 reduce the greenhouse gas emissions of our fleet.

 18 Starting this year, one-third of our vehicle lineup

 19 will offer a model that achieves at least 40 miles per

 20 gallon. In addition to the Transit Connect Electric

 21 sold by Azure and introduced in 2010, last year we

 22 delivered our first, all-new Ford Focus electric

 23 vehicle. Later this year we will start production on

 24 our C-Max Energi plug-in hybrid. And just last week,

 25 we announced and unveiled our next-generation 2013

 84
 1 Fusion hybrid and an all-new 2013 Fusion plug-in

 2 hybrid. You'll continue to see us offer more great

 3 products with advanced, innovative technologies to

 4 improve the fuel efficiency of our vehicles and to

 5 deliver outstanding quality and features that our

 6 customers desire.

 7 The key is to ensure that the proposed

 8 targets do not outpace consumer demand or the

 9 affordability of the technologies needed for

 10 compliance. As a full-line manufacturer, we are

 11 challenged to meet a broad range of customer wants,

 12 such as function, performance, comfort and convenience,

 13 safety and fuel economy. And all these attributes need

 14 to come together in a line of vehicles that consumers

 15 can afford. After all, attainment of our national

 16 goals for CO2 reduction and energy security cannot be

 17 met by niche products and technologies. It does little

 18 good to produce vehicles with improved fuel efficiency

 19 unless those vehicles are actually purchased by a wide

 20 range of American consumers. Further, the technologies

 21 must be self-sustaining in the marketplace and not

 22 dependent on long-term government subsidies.

 23 We must also acknowledge that market success

 24 is dependent upon many factors outside of our control,

 25 such as the price of fuel, the state of the economy or

 85
 1 the availability of affordable technologies and

 2 materials. The further we look into the future, the

 3 more difficult it is to predict these factors with

 4 accuracy. The proposed rules extend through the 2025

 5 model year, which is an unprecedented time frame in the

 6 context of fuel economy regulations. This presents a

 7 significant challenge for manufacturers. While the

 8 establishment of longer-term standards provides

 9 manufacturers with targets for future product planning

 10 and investment, the longer time frame leads to greater

 11 risk that the assumptions underlying the standards do

 12 not come to fruition. For example, if the lack of

 13 adequate infrastructure hinders the introduction of new

 14 fuel-saving technologies, or if fuel prices turn out to

 15 be substantially lower than anticipated, it might be

 16 necessary to change the standards in order to avoid

 17 damage to American auto jobs and the U.S. economy.

 18 This is why the proposed midterm evaluation 

 19 of the 2022 to 2025 standards is so vital to this joint

 20 proposal. As proposed, the midterm evaluation

 21 provisions require EPA to make a fresh determination

 22 regarding the appropriateness of the post-2021 model

 23 year standards after considering a variety of factors

 24 and soliciting public comments. This process will take

 25 place concurrently with NHTSA's process for setting

 86
 1 final standards for the 2022 to 2025 model years. The

 2 midterm evaluation is an essential checkpoint to ensure

 3 that the standards for these model years are consistent

 4 with evolving market conditions. The existence of a

 5 robust, meaningful midterm evaluation process is

 6 critical to Ford's support for this rulemaking package.

 7 Turning now to the more specific elements of 

 8 the rulemaking, we support the relative manner in which

 9 the car and truck targets have been set to reflect

 10 their respective capabilities to improve fuel economy.

 11 This is based primarily on the agencies' updated

 12 analysis of full-sized trucks from the 2012 to 2016

 13 rulemaking. In particular, EPA acknowledged it had

 14 underestimated the impact of the different pickup truck

 15 model configurations in the model year 2012 to 2016

 16 rule. They further acknowledged that the "very largest

 17 light trucks have significant load-carrying and towing

 18 capabilities that make it particularly challenging for

 19 manufacturers to add fuel economy-improving

 20 technologies in a way that maintains the full

 21 functionality of those capabilities." We concur with

 22 the agencies' analysis and conclusions.

 23 Once again, we appreciate the opportunity to

 24 provide our testimony on this important rulemaking. We

 25 plan to provide detailed, written comments aimed at

 87
 1 achieving and finalizing regulations consistent with

 2 the commitment that all parties have made to this

 3 national program. Thank you.

 4 MR. MEDFORD: Thank you.

 5 Mr. Goodrich.

 6 MR. GOODRICH: Thank you for this

 7 opportunity. I do apologize; I have an appointment

 8 immediately afterwards. So with the panel's blessing,

 9 I'd like to request a leave afterwards.

 10 MR. MEDFORD: Of course.

 11

 12 TESTIMONY BY TIM GOODRICH

 13 MR. GOODRICH: My name is Tim Goodrich, and

 14 I'm a veteran of the United States Air Force. During

 15 my enlistment I deployed to the Middle East on three

 16 separate occasions: Once in support of the no-fly

 17 zones over Iraq; once in support of operations over

 18 Afghanistan; and once again in support of the pre-war

 19 bombing of Iraq.

 20 During my time in the military, I never

 21 thought about how much fuel we used on a daily basis

 22 despite the generators, aircraft and flight line

 23 vehicles and constant activity around me. However,

 24 after my enlistment, I began to see reports that showed

 25 the number of service-member deaths resulting from

 88
 1 providing fuel on the battlefield. At that point, I

 2 realized there must be a better way. Fortunately,

 3 there is a better way, and the military has realized

 4 this as well.

 5 The Marines have started fueling [sic]

 6 flexible solar panels to supply service members with

 7 power that would otherwise be provided by fuel

 8 transported over dangerous supply routes. The Navy is

 9 planning to utilize domestically produced biofuels to

 10 power their ships and aircraft.

 11 My branch of service, the Air Force, is in on

 12 this too. I recently took a tour of Los Angeles Air

 13 Force Base just a few miles from my home. What I found

 14 there was amazing. Solar panels were everywhere, and a

 15 large portion of the base is being fueled by renewable

 16 energy. The base is also receiving dozens of electric

 17 vehicles to replace their current fleet of

 18 gasoline-powered cars.

 19 I used to drive a vehicle that got 19 miles

 20 per gallon but recently purchased an all-electric

 21 vehicle. When considering this purchase, I realized

 22 the technology to reduce fuel consumption is already

 23 being implemented rapidly and extensively by the

 24 military. Basically, if it was good enough for the Air

 25 Force, it's good enough for me.

 89
 1 I feel good knowing that I'm promoting our

 2 national security by not sending gasoline profits to

 3 foreign countries that sometimes provide money to

 4 terrorists. I also feel good knowing that the money I

 5 spend on electricity to fuel my new car is kept right

 6 here in the U.S. economy and helps to create jobs.

 7 For these reasons I wholeheartedly support

 8 increasing the fuel efficiency standard to 54 1/2 miles

 9 per gallon. Doing so will provide the American

 10 consumer with greater choice and the ability to play a

 11 role in promoting national security for us and our

 12 children. Thank you.

 13 MR. MEDFORD: Thank you very much.

 14 Mr. O'Connell.

 15

 16 TESTIMONY BY DAIRMUID O'CONNELL

 17 MR. O'CONNELL: Thank you very much. My name

 18 is Dairmuid O'Connell and I'm vice president for

 19 corporate and business development at Tesla Motors.

 20 Thank you very much for the opportunity to speak here

 21 this morning.

 22 We are largely supportive of the effort to

 23 increase vehicle efficiency and to reduce greenhouse

 24 gas emissions, and I thank you for your work in this

 25 sector.

 90
 1 A little bit about Tesla Motors: The effort

 2 was founded in 2004 by several engineers who were

 3 familiar with the properties of lithium ion as an

 4 energy storage technology. They commenced an effort

 5 which they hoped would catalyze a new generation of

 6 electric vehicles. Happily, we've made a lot of

 7 progress along the way.

 8 The mission of Tesla Motors, largely

 9 speaking, is just that: To catalyze a mass market for

 10 electric vehicles. We are, in our own way, supporting

 11 this effort in a couple of respects. First and

 12 foremost, is the development and sale of our own

 13 branded vehicles, the first of which was the Tesla

 14 Roadster, a vehicle which demonstrates some of the

 15 unique and attractive properties of an electric

 16 vehicle, no small part, acceleration. But most

 17 importantly, achieved 245 miles of range on a single

 18 charge. And this year we'll be introducing a sedan at

 19 roughly half the price point of our first product that

 20 will achieve over 300 miles of range on a single charge

 21 and perhaps, more importantly for the vast car-buying

 22 public, transport many more folks than a two-seat Tesla

 23 Roadster, a five-plus-two configuration, in fact.

 24 Less well known is the fact that we are also

 25 defining and manufacturing power-train systems for some

 91
 1 of the leading auto manufacturers in the world.

 2 Daimler, for whom we have developed a battery-charging

 3 system for a new generation of smart EVs, some of which

 4 will be introduced in the market in San Diego just this

 5 year in the U.S. They have already been successful in

 6 Europe. So, too, the Mercedes A Class, very popular in

 7 Europe.

 8 Of more immediate salience, Tesla is

 9 developing and manufacturing a full power-train system,

 10 so inclusive of battery, motor, power, electronics and

 11 all the associated software systems, to make possible a

 12 new generation of the Toyota RAV4, a vehicle which is

 13 slated for introduction in the U.S. in this model year.

 14 Perhaps the third way that we are inspiring

 15 movement within this sector is by -- is by competitive

 16 imitation. It's fair to say that the Roadster and some

 17 of Tesla's larger efforts have inspired other

 18 automakers to take on the challenge of developing their

 19 own electric vehicles. And so we are very gratified to

 20 see competition in the marketplace as exemplified by

 21 the Nissan Leaf, the Mitsubishi i-MiEV, the Ford Focus,

 22 and to a degree, in a slightly altered state, the Chevy

 23 Volt.

 24 A little bit about the technology: First of

 25 all, the point that we like to make is that the EVs are

 92
 1 viable technology right now. This is exemplified in

 2 the commercial marketplace. The Tesla Roadster has

 3 been so successful, that, in fact, we've sold out of

 4 the vehicle in the U.S., and we only have a couple

 5 hundred vehicles left to sell in foreign markets. But

 6 even if one takes into account the sales of the Leaf

 7 and the Chevy Volt, as well as some of the other

 8 vehicles in the marketplace in the past year, not

 9 withstanding some of the politically inspired rhetoric

 10 that suggests that EVs have been a failure, it's

 11 notable to point out that the sales of these vehicles

 12 are roughly double the first-year sales of the

 13 first-generation Toyota Prius. Fast-forward to today

 14 when the Prius is selling over a million units a year.

 15 I think this is notable.

 16 Cost is not a barrier. Lithium ion

 17 technology is, even today, accessible, and energy

 18 density and price points are on an impressive

 19 downslope. I'm sorry, energy density on an upslope and

 20 cost on a downslope. Thus, while we applaud EPA and

 21 NHTSA's proposal, we believe that it represents a good

 22 start, but it doesn't properly -- that it doesn't fully

 23 take into account the full potential of EV technology.

 24 And so we believe that standards could, indeed, be much

 25 higher.

 93
 1 The benefits of EV technology are manifest:

 2 Zero emissions at point of use. Some of the prior

 3 testaments have spoken to the national security

 4 implications of reduction of foreign oil. But too

 5 little is said of the economic benefit of a transition

 6 away from the oil monopoly and transportation, notably

 7 the fact that 300 billion a year spent on foreign oil,

 8 and this represents about half of our trade deficit.

 9 It's worth imagining what that money would do if

 10 recycled in our own economy. It's also a testament --

 11 EV technology, as it's currently being developed, is a

 12 testament to how American innovation is driving a

 13 number of positive developments in national security

 14 and economics, but also in job creation. Tesla Motors

 15 now employs just about 2,000 folks. And as we ramp up

 16 the production, we will be increasing several hundred

 17 more in this calendar year.

 18 Just a couple of notes about the

 19 technology -- about the provisions, and I'll conclude

 20 very rapidly. We applaud the use of inter-tradability

 21 of credits. They support very critically the rollout

 22 of first-generation technology. And second, with

 23 respect to the consideration of upstream emissions, we

 24 believe that if this were to -- number one, it's

 25 adequately covered under Title V of the Clean Air Act.

 94
 1 Moreover, pursuing this, this provision, could result

 2 in double counting. But in any event, if this were

 3 pursued, that we would encourage the agency to consider

 4 methodology on a well-to-wheel basis as opposed to

 5 simply stopping at the point of generation.

 6 Thank you very much.

 7 MR. MEDFORD: Thank you very much. Let's see,

 8 I think Mr. Patterson.

 9 

 10 TESTIMONY BY DAVID PATTERSON

 11 MR. PATTERSON: Good morning. I'm Dave

 12 Patterson. I'm chief engineer for Regulatory Affairs

 13 and Certification on Mitsubishi Motors R&D of America.

 14 And we appreciate the opportunity to provide public

 15 testimony on EPA and NHTSA's proposal for the national

 16 greenhouse gas and fuel economic standards for

 17 lightweight vehicles, model years 2017 through 2025.

 18 Mitsubishi Motors applauds the efforts of the

 19 Obama administration and agency staff to follow through

 20 on their commitments to continue one national program

 21 on the federal level for these model years.

 22 Similarly, Mitsubishi Motors is appreciative

 23 of the inclusive process that led to the publication of

 24 this NPRM. Mitsubishi Motors stands committed to

 25 continuing the development of the national program

 95
 1 based on technical, economic and consumer realities in

 2 the United States' light-duty automotive market. To

 3 ensure these realities are fully considered in setting

 4 fuel economy and greenhouse gas standards for these

 5 later model years included in this rulemaking, a

 6 midterm evaluation is critical to this process.

 7 Additionally, alternative fuel availability

 8 and quality and infrastructure must be considered.

 9 Mitsubishi Motors urges the agency to work with

 10 stakeholders well in advance of the midterm evaluation

 11 to develop sound review process and framework.

 12 Although our environmentally conscious --

 13 excuse me. Along with our environmentally conscious

 14 industry partners, Mitsubishi Motors has recognized the

 15 need for our company to consider the environment while

 16 at the same time designing an affordable, safe vehicle

 17 that's fun to drive.

 18 To that end, in 2009, Mitsubishi Motors

 19 developed specific corporate environmental policy

 20 commitments that is included in our Environmental

 21 Vision 2020. Those stated goals in that vision include

 22 that by the year 2020, Mitsubishi Motors will have

 23 reduced our greenhouse gas emissions by 50 percent

 24 compared to 2005. This goal also includes the sales

 25 target of 20 percent of our vehicles worldwide will be

 96
 1 electric drive. That includes battery, electric and 

 2 plug-in hybrid vehicles.

 3 Mitsubishi Motors' light-duty vehicle sales

 4 account for approximately 6 percent -- or .6 percent of

 5 the U.S. market. Our vehicles compete in the compact

 6 market -- compact sedan market segment of the passenger

 7 car category and the compact crossover and midsized

 8 segments of light-duty truck category, some of the most

 9 price-competitive market segments. As a company with

 10 more limited resources than others in the U.S. market,

 11 adding advanced technologies to all of those vehicles

 12 simultaneously is not feasible or practical. But like

 13 many of the large vehicle manufacturers, incorporating

 14 advanced technologies into our ICE vehicles and

 15 concentrating on the introduction of electric vehicles,

 16 these are the areas that we will be leaders and

 17 pioneers. Our EV research and development started in

 18 the late 1960s, and the first EV was developed in 1971.

 19 Through the '80s, we developed a series of EVs based on

 20 lead acid batteries. And in the mid 1990s, we

 21 developed lithium ion battery technology in our EVs.

 22 Mitsubishi Motors continued that investment

 23 in EV technology and battery research that led to the

 24 global launch in 2009 of the i-MiEV, Mitsubishi's

 25 innovative electric vehicle, our award-winning battery

 97
 1 electric vehicle.

 2 In the United States, the i-MiEV was unveiled

 3 at the Los Angeles auto show in November of 2010. The

 4 i-MiEV is an OEM quality vehicle with a lithium ion

 5 battery pack, 16-kilowatt hours. It seats four, and

 6 has a maximum speed of 80 miles an hour and a driving

 7 range of 62 miles.

 8 Mitsubishi Motors is also honored to be the

 9 top of EPA's list of fuel economy leaders for the 2012

 10 model year with this vehicle that has 112 miles

 11 mile-per-gallon equivalent.

 12 But important to all of this is the charging

 13 infrastructure. That availability is the key to the

 14 customer's decision to purchase an EV. In 2009,

 15 Mitsubishi Motors became a founding member of the

 16 CHAdeMO Association, a private industry association

 17 that aims to increase the EV infrastructure worldwide

 18 and to internationally standardize the CHAdeMO protocol

 19 for DC quick charging of electric vehicles.

 20 To date, there's a handful of these public

 21 chargers here in the United States, specifically in

 22 California. Please note: We believe that most

 23 charging is going to be done in the home or in the

 24 workplace, but public charging infrastructure is going

 25 to be key to the success of these vehicles.

 98
 1 Automotive OEMs have little control over the

 2 source of electricity. Therefore, like was said

 3 before, they should not be subject to arbitrary

 4 emissions regulations on electric vehicles. These need

 5 to be accounted for in separate regulations of those

 6 regulated industries. And in absence of comprehensive

 7 national energy policy, Mitsubishi Motors recognizes

 8 the challenges and the associated risks of developing 

 9 practical federal and fuel economy and greenhouse gas

 10 standards for light-duty vehicles. Mitsubishi Motors

 11 believes continued inclusive process to develop fuel

 12 economy and greenhouse gas standards is a realistic

 13 goal.

 14 As stated before, we look forward in working

 15 with the agencies to finalize this rulemaking, and we

 16 stand committed to comply with one national standard.

 17 Moreover, we stand committed to our community,

 18 environment and, most importantly, our customers.

 19 Thank you.

 20 MR. MEDFORD: Thank you.

 21 Lacey Plache.

 22

 23 TESTIMONY BY LACEY PLACHE

 24 MS. PLACHE: Hi, good morning. Good

 25 afternoon, I guess it is now. My name is Lacey Plache,

 99
 1 and I am the chief economist for Edmunds.com, the

 2 leading automotive information website for consumers.

 3 I'm here today to testify on Edmunds' assessment of the

 4 positives and negatives for consumers of the latest

 5 proposed CAFE standards for 2017 to 2025.

 6 I'd like to first note that the Edmunds.com

 7 agrees with the motivation behind the proposed CAFE

 8 standards; that is, we agree it is necessary for the

 9 government to intervene in the market in order to

 10 significantly reduce vehicle emissions and increase

 11 reliance on foreign oil. We have been closely

 12 following the CAFE rulemaking process, and we feel this

 13 process needs to better incorporate the consumer point

 14 of view.

 15 Many parties involved in the CAFE process

 16 have asserted why the proposed rules should make sense

 17 for consumers, why consumers should embrace these

 18 rules, how consumers should benefit from these rules,

 19 despite higher vehicle prices, and so on. The problem

 20 is that while they purport to represent consumers,

 21 these parties typically do not represent consumers. In

 22 our view, it's better to go straight to the source,

 23 rather than to presume to know what is best for a

 24 particular group.

 25 So we appreciate the opportunity that these

 100
 1 hearings offer to provide our perspective on how

 2 consumers could respond to the proposed standards.

 3 Edmunds.com is in a unique position to offer a genuine

 4 consumer perspective because we track shopping behavior

 5 by some 18 million unique consumers who visit our site

 6 each month, many of whom are in the market for a

 7 vehicle. We also track transactions. This information

 8 allows us to offer insight on how consumers make

 9 decisions, based on real data about the decisions they

 10 make in the marketplace. Our shopping behavior

 11 analytics and our models of vehicle purchases

 12 throughout the U.S. market illuminate contradictions in

 13 what the experts say consumers should want to buy

 14 versus what they actually do buy, including with

 15 respect to fuel economy.

 16 So based on our understanding of consumer

 17 decision-making with respect to the vehicle purchases,

 18 here are three key ways in which we see the proposed

 19 standards affecting consumers.

 20 First of all, the improved fuel economy

 21 results for the proposed CAFE standards for 2017 to

 22 2025 are based on production forecasts and do not

 23 account for how consumer demand for and willingness to

 24 pay for fuel economy will keep pace with the more

 25 fuel-efficient fleet built. To date, consumers have

 101
 1 demonstrated relatively little preference for

 2 high-mileage vehicles, and then usually just for brief

 3 periods during high gas prices. If reality differs

 4 significantly from key assumptions used in these

 5 forecasts, for example, if gas prices drop and consumer

 6 demand for fuel efficiency then decreases, a disconnect

 7 could arise between what consumers want and what

 8 automakers supply under the proposed standard. This

 9 has the potential to result in more limited choice,

 10 higher prices, and decreased auto sales.

 11 Our second point is that, by their nature,

 12 the proposed CAFE standards force automakers to focus

 13 their efforts on improving fuel economy. This dictates

 14 the nature of competition. Automakers focus on fuel

 15 economy rather than letting consumer preferences

 16 determine on what basis they compete. This focus on

 17 fuel economy for all automakers limits competition in

 18 other dimensions, such as safety, comfort, performance,

 19 design and electronics. In fact, the focus on fuel

 20 economy could limit the innovation of these other

 21 features, especially for automakers that have fewer

 22 resources or that need to work relatively harder to

 23 meet their fuel economy target. Moreover, the proposed

 24 rules have the potential to limit innovation of fuel

 25 economy itself by offering favored status to certain

 102
 1 technologies via special credits, which could then

 2 deter automakers from developing other technologies.

 3 Decreased competition or innovation of any

 4 features, including fuel economy, poses the risk that

 5 vehicles will be less differentiated, and thus offer

 6 decreased utility to certain consumers, especially

 7 those who strongly value the affected features. This

 8 could decrease new car sales, if consumers are less

 9 motivated to replace their cars as frequently and/or if

 10 consumers turn to used cars. Given the sizable

 11 contribution of auto sales to the U.S. economy, any

 12 slowdown in auto sales has the potential to generate

 13 significant adverse effects in other parts of the

 14 economy as well.

 15 Our third point is that the multiple measures

 16 of MPG that have emerged from the rulemaking process

 17 add excessive complexity to the consumer

 18 decision-making process, making it harder, not easier,

 19 for consumers to assess fuel economy, compare vehicles,

 20 and decide which vehicle works best for them.

 21 To address these issues, we would make the

 22 following changes to the proposed standards:

 23 First, the current proposal needs to address

 24 the potential consequences of mandated increased focus

 25 on fuel economy for competition and innovation in the

 103
 1 automotive industry. The proposed rules need to more

 2 fully explore how such consequences could force

 3 consumers to make sacrifices to get the desired

 4 emissions results.

 5 Secondly, the current proposal needs to

 6 demonstrate a fuller understanding of consumer demand

 7 for vehicles and how adding higher prices, decreased

 8 innovation and choice, and excessively complex

 9 information could affect consumer decision-making on

 10 new vehicle purchases and potentially result in lower

 11 auto sales.

 12 We encourage the EPA and NHTSA to consider

 13 these issues, and we are happy to answer any questions

 14 that you have. Thank you, again, for the opportunity

 15 to testify.

 16 MR. MEDFORD: Thank you very much.

 17 Linda Weiner.

 18 MS. WEINER: Good morning, welcome to San

 19 Francisco.

 20 MR. MEDFORD: Thank you.

 21

 22 TESTIMONY BY LINDA WEINER

 23 MS. WEINER: My name is Linda Weiner, and I'm

 24 representing myself as a concerned citizen; although,

 25 as way of background, I am on the executive committee

 104
 1 of the San Francisco Sierra Club and was a former

 2 director of the Air Quality Advocacy for the American

 3 Lung Association in California. And I'm here today to

 4 support proposed standards and grateful to EPA and

 5 NHTSA for putting this forth.

 6 There are many credible reasons to support

 7 these standards, and I'm sure you've heard all of them.

 8 You'll hear more today. The scale of benefits far

 9 outweighs any opposition: Reducing reliance on foreign

 10 oil, saving American families thousands of dollars in

 11 gas, cutting pollution, creating jobs and revitalizing

 12 the American auto industry as an engine of economic

 13 growth and innovation, as you heard. Clearly, in

 14 California, we are one of the leaders in the United

 15 States of innovation and investment in energy-efficient

 16 cars.

 17 I want to focus my few minutes on other

 18 critical benefits: Health impacts, carbon pollution

 19 reductions, and the possible weakening of the

 20 standards.

 21 As for health impacts, when we talk about

 22 cutting pollution, we're also talking about decreasing

 23 the costly negative health impacts from this pollution,

 24 and in many cases hitting low-income communities,

 25 communities of color. In plain words, this means less

 105
 1 people will become sick. And having previously worked

 2 for the American Lung Association, I can attest to the

 3 national and international studies that show the direct

 4 connection between tailpipe pollution and disease:

 5 Asthma, lung cancer, heart disease and bronchitis. And

 6 again, hurting those communities that can least afford

 7 it. The less gas we use, the less pollution, the less

 8 health impacts, the less strain on the health system.

 9 In relation to carbon pollution, the

 10 reduction of carbon pollution by implementing these

 11 standards, as you well understand, is another

 12 significant benefit. Cutting carbon pollution by

 13 2 billion metric tons is equivalent to the annual

 14 emissions from 474 coal-fired power plants. And as I'm

 15 sure you are aware, coal-fired power plants are very

 16 high makers of carbon pollution. This is a

 17 considerable reduction of a dangerous greenhouse gas.

 18 The reality, as we know, is that global efforts in

 19 reducing climate change have been slow. But as you

 20 also know, there's a bright spot in California with the

 21 Global Solutions Act of 2006. And that's why we're so

 22 glad that this has come out, in addition to other

 23 reasons, that it will give California a larger pool of

 24 cleaner cars from which to choose.

 25 I also want to emphasize the importance of

 106
 1 not weakening these standards. We certainly express

 2 gratitude for the automakers in helping develop and

 3 support these standards. But looking at the background

 4 in terms of historical context, it has occasionally

 5 happened that automakers have opposed technologies and

 6 innovation, going back to catalytic converters, seat

 7 belts, air bags, there has been opposition. So we ask

 8 that the midterm review be vigilant, and there should

 9 not be an opportunity to delay full compliance or, as

 10 has occurred occasionally in history, to dismiss part

 11 of the program. But we look at the mid-reviews to

 12 strengthen the compliance.

 13 Additionally, in the early years of the

 14 proposed standards, pickup trucks are not required to

 15 improve with the same rate as passenger cars, but there

 16 are incentives for manufacturers to apply advanced

 17 technologies to pickup trucks. So it's critical that

 18 the efficiency of the trucks not lag behind cars. And

 19 equally important, the cap on electric vehicles should

 20 be strong so automakers cannot produce less efficient

 21 vehicles in other parts of their fleet yet still meet

 22 overall standard. Not that it would happen, but we

 23 want to make sure that no one games the system. In

 24 other words, it's important that the auto -- it's also

 25 significant, I'm sorry, that agencies develop new,

 107
 1 precise test procedures that actively calculate the

 2 true mileage and not an overestimation, as has happened

 3 before.

 4 In closing, I would just say that we

 5 shouldn't let opposition dilute the many and clear

 6 benefits to these proposed standards, benefits to the

 7 country and to the residents. And at the risk of

 8 sounding cliche, I would say probably one of the most

 9 important things is that we need a political will in

 10 Washington to sustain these efforts. Thank you.

 11 MR. MEDFORD: Thank you very much.

 12 Mr. John Laitner.

 13

 14 TESTIMONY BY JOHN A. "SKIP" LAITNER

 15 MR. LAITNER: Good afternoon. My name is

 16 John A. "Skip" Laitner. I'm director of the economic

 17 social analysis program for the American Council for an

 18 Energy-Efficient Economy, a nonprofit organization that

 19 acts as a catalyst to advance energy efficiency

 20 policies, programs, technologies, investments and

 21 behaviors. And on behalf of ACEEE, I'm here to

 22 actively support the role of productive investments in

 23 more energy-efficient technologies as they might

 24 positively improve the robustness of the U.S. economy.

 25 In particular, we applaud the U.S. Environmental

 108
 1 Protection Agency, the National Highway Traffic Safety

 2 Administration, the administration more generally, and

 3 the State of California for taking steps that will

 4 improve the fuel economy of our nation's light-duty

 5 vehicles.

 6 On a personal note, I want to commend the

 7 quality of the work and the stamina and good humor

 8 you've all shown throughout this difficult process in a

 9 fairly dynamic and incredible way. Thank you.

 10 We concur with the agencies' assessment that

 11 in order to thrive in the global automotive market,

 12 domestic manufacturers will need to invest consistently

 13 in technologies to improve fuel efficiency. We believe

 14 that the standards now proposed can help achieve that

 15 outcome. And in our testimony, we make three points:

 16 First, that there is a huge potential for

 17 cost-effective investments in energy efficiency

 18 improvements across all sectors of the economy.

 19 Second, fuel economy standards are a critical

 20 first step in capturing the full economic potential.

 21 And third, promoting these standards will be

 22 good for jobs, even as the fuel economy improvements

 23 will save household consumers and businesses money that

 24 almost immediately will be respent in the broader

 25 economy.

 109
 1 So what is that potential for cost-effective

 2 efficiency improvements? In a report we released two

 3 weeks ago titled, The Long-Term Energy Efficiency

 4 Potential; What the Evidence Suggests, we show that by

 5 investing in greater levels of energy productivity, we

 6 can slash the nation's energy use by 40 to 60 percent

 7 by the year 2050 as we create nearly 2 million more

 8 jobs and save the equivalent of $2600 per household

 9 annually across all sectors of the economy.

 10 How do fuel standards then become a critical

 11 step in that economic performance? Anytime we can

 12 promote cost-effective alternatives to the current

 13 pattern of technologies and services, the productivity

 14 of the economy is improved. And the evidence here

 15 suggests that improved fuel economy provides a

 16 significantly improved alternative to the purchase of

 17 gasoline. Drawing on data from EPA/NHTSA, we estimate

 18 that in constant 2009 dollars that efficiency might

 19 cost on the order of 50 cents to $1.20 per gallon of

 20 gasoline equivalent compared to the 4, 5 or 6 dollars

 21 per gallon of gasoline we may have to pay in the year

 22 2025.

 23 But more importantly, by redirecting the

 24 investment in fuel efficiency savings into other

 25 sectors of the economy, we support the increased number

 110
 1 of jobs. How might that be? Tapping into the

 2 evidence, the economic accounts for the U.S. turns out

 3 that, directly and indirectly, the total jobs supported

 4 by a million dollars of the purchase of gasoline sales

 5 supports only 11 jobs per million dollars. But the

 6 sale and manufacturing of automobiles, 17 jobs, and in

 7 the economy as a whole, 17 to 18 jobs. So anytime we

 8 cost-effectively redirect resources away from gasoline

 9 purchases into those sectors, we support a net gain of

 10 six to seven jobs. Using that logic but in a more

 11 sophisticated modeling exercise, we estimate these

 12 standards will provide, on average over the period 2017

 13 to 2025, about 300- to 400,000 jobs for the larger

 14 economy.

 15 We're going to update those in about a month,

 16 but, in effect, the evidence shows that efficiency and

 17 improved fuel economy provides more jobs per gallon

 18 equivalent. At the same time, this kind of savings

 19 will put a downward pressure on the price of all

 20 petroleum products. If that holds, then fuel economy

 21 standards might generate, we estimate, an additional

 22 $25 billion in price-related fuel savings. That means

 23 even if you're not driving a new car, but if you're

 24 heating your home with fuel oil, or if you're using

 25 petroleum as a chemical feed stock, or if you're flying

 111
 1 from San Francisco to Washington, D.C., you're

 2 benefiting from a lower price of oil or gasoline, and

 3 that benefits everyone.

 4 One important question, clearly: What will

 5 the higher cost per vehicle do to car sales? This

 6 effect can be challenging to predict. But recent

 7 evidence from new polls and industry trends suggest a

 8 growing demand for fuel economy by consumers. And

 9 there, moreover, appears to be a strong link between

 10 consumer confidence and the purchase of new cars. So

 11 by enacting the proposed standards, EPA and NHTSA could

 12 positively influence consumer confidence, pushing it

 13 up, and by ensuring that we are moving in a positive

 14 direction with our energy use, they are likely to

 15 stimulate consumer spending in highly positive ways

 16 which, in turn, would result in greater gains from the

 17 proposed fuel economy standards. And equally critical,

 18 that would drive the positive job and other financial

 19 benefits to the U.S. economy.

 20 Equally interesting, there's a growing

 21 consensus around the idea that consumers place some

 22 value on fuel economy in ways it did not previously.

 23 And there's some evidence that the market is, indeed,

 24 moving in that direction. For example, a new survey by

 25 Deloitte indicates there's evidence of an early

 112
 1 consumer shift in preferences as the 80 million adults

 2 in Generation Y population -- those between 19 and 31

 3 years of age -- will be, quote, the generation that

 4 leads us away from traditional gasoline-powered

 5 vehicles. They tend to focus on total cost, not just

 6 the first cost -- price of a new car.

 7 So in sum, the rule, we think, will drive

 8 further gains in gasoline vehicles and begin to pull

 9 advanced technologies into the market. Cost-effective

 10 investments in more fuel-efficient vehicles resulting

 11 from this rule should accelerate and optimize benefits,

 12 whether jobs, cleaner air and a more robust economy,

 13 especially when we take recent consumer interest in

 14 fuel economy into account.

 15 With that, we thank you very much. Happy to

 16 answer questions, as helpful.

 17 MR. MEDFORD: Thank you very much.

 18 Mr. Simon Mui.

 19

 20 TESTIMONY BY SIMON MUI

 21 MR. MUI: Good afternoon. It's an honor and

 22 pleasure to be here and testify before you today. My

 23 name is Simon Mui, and I'm a scientist working for

 24 Natural Resources Defense Council on clean vehicles and

 25 fuels. I'm pleased to be here on behalf of NRDC's

 113
 1 1.3 million members and activists, 250,000 of whom are

 2 Californians and most of whom drive cars.

 3 The proposed standards are a giant step

 4 forward. The standards are good for the environment,

 5 for consumers, for our economy. The standards are

 6 shown to save our economy half a trillion dollars in

 7 fuel savings from 2017 to 2030. That's $500 billion.

 8 That's half a trillion that doesn't go overseas to pad

 9 the profits of OPEC, other oil-exporting countries and

 10 the oil industry. We can invest and we will invest

 11 that half a trillion back into our economy and create

 12 almost 500,000 new jobs with it, while cutting carbon

 13 pollution by the equivalent of 76 coal-powered plants.

 14 And consumers win under the proposed

 15 standards with increased choices of fuel-efficient

 16 products that will save them, on average, $4400 over

 17 the life of their vehicles. Importantly, for most

 18 consumers that finance their vehicles, the net savings

 19 will be brought home immediately from the fuel savings.

 20 The fuel savings are partly why an overwhelming,

 21 80 percent -- 80 percent of consumers have expressed

 22 their support for these standards in independent

 23 surveys in California as well as nationally.

 24 These overwhelming environmental energy and

 25 economic benefits are why the standards have resulted

 114
 1 in very broad support for these. And you've heard a

 2 lot of testimony today showing that broad support

 3 almost across the entire auto industry, prominent

 4 Republicans as well as Democrats, consumer advocacy

 5 groups, national security groups, economists, business

 6 leaders, the United Auto Workers, individual dealers

 7 and environmental organizations.

 8 Unfortunately, we're now hearing from the

 9 National Automobile Dealers Association, NADA, which

 10 appears to be the lone group still opposing and asking

 11 to delay these standards. We are also aware that NADA

 12 at both the Detroit hearing, as well as other auto

 13 shows and in the media, continues to reference an

 14 extremely high unsubstantiated cost number. The only

 15 thing we are able to confirm about NADA's estimate is

 16 that there's no study available from them and that not

 17 a single, independent peer-reviewed study supports

 18 NADA's cost claims.

 19 And in my testimony, I have a graph that

 20 shows NADA's estimates versus every other estimate we

 21 were able to find that's peer-reviewed and independent.

 22 NRDC has performed a review of this literature, and its

 23 cost claims, it turns out, are two times higher than

 24 any of the available studies, including ones conducted

 25 by the National Academy of Science, the Massachusetts

 115
 1 Institute of Technology, the University of Michigan,

 2 consulting groups such as Boston Consulting Group, in

 3 addition to the studies conducted by the agencies.

 4 NADA has the right to express their concerns,

 5 but they need to get the facts right on the benefits

 6 and costs of this program. We hope NADA can turn the

 7 page and join in partnership with everyone to support

 8 this standard instead of trying to throw out

 9 unsubstantiated cost claims.

 10 And those that have turned the page are

 11 reaping the rewards. Here in California, these

 12 standards are helping to attract investments and create

 13 jobs in our state. Over the past two years, California

 14 companies developing hybrid and plug-in electric

 15 vehicle technologies and components attracted over

 16 60 percent of the entire global venture capital

 17 investment. That's $1.3 billion in this space. That's

 18 60 percent of the entire global venture capital

 19 investment. These standards are helping put the bright

 20 minds of California's and also America's best

 21 scientists, their engineers and entrepreneurs to work

 22 and encouraging high-tech technologies to lay down

 23 their roots here.

 24 And across the U.S., the story is similar. A

 25 recent report from the investor group, Ceres, estimates

 116
 1 that the proposed standards would generate nearly half 

 2 a million jobs across the country with California

 3 gaining nearly 60,000 jobs. In the report, Supplying

 4 Ingenuity, that NRDC conducted with the United Auto

 5 Workers and the National Wildlife Federation, we found

 6 that over 150,000 workers currently employed in 300

 7 automotive supply companies currently are making

 8 fuel-efficient technologies.

 9 In conclusion, these standards will result in

 10 half a trillion being invested here in the U.S. It

 11 will promote innovation, jobs, protect the environment,

 12 and help consumers save. The agency should forge ahead

 13 and keep the model year 2017 to 2025 standards strong

 14 and make them final this summer.

 15 Thank you for your attention and your hard

 16 work on this.

 17 MR. MEDFORD: Thank you very much.

 18 Lance Tunick.

 19

 20 TESTIMONY BY LANCE TUNICK

 21 MR. TUNICK: Hello. My name is Lance Tunick,

 22 and I'm here on behalf of Aston Martin, Lotus and

 23 McLaren. Each of these companies is a very

 24 small-volume manufacturer and produces a very limited

 25 number of high-performance cars. We all fully support

 117
 1 the EPA and NHTSA proposal.

 2 We present here the viewpoint of small-volume

 3 manufacturers, specifically as regards EPA's proposal

 4 to establish 2017 to '25 GHG standards. All three

 5 manufacturers understand the need to control CO2 and we

 6 support the regulatory efforts of EPA. The three

 7 companies further believe that small, even small-volume

 8 manufacturers must do their fair share to reduce GHG.

 9 By "fair share," we mean things like the development

 10 and use of lightweight materials, such as carbon fiber,

 11 aerodynamics, advanced transmissions, hybrids, gasoline

 12 direct injection, engine downsizing and turbocharging.

 13 EPA has correctly explained the circumstances

 14 facing the small-volume manufacturer. Number one,

 15 SVM's only produce a few vehicle models and, thus, they

 16 have limited product lines across which to average. 

 17 Number two, incorporating new technologies into vehicle

 18 design costs the same or more to small-volume

 19 manufacturers, yet the costs are spread over

 20 significantly smaller volumes.

 21 We also agree with the reasoning behind EPA's

 22 proposed small-volume manufacturer policy. Number one,

 23 it is important to establish standards that will

 24 require SVMs to continue to innovate to reduce GHG

 25 emissions. And number two, most significantly, EPA

 118
 1 considered a variety of approaches and believes that a

 2 case-by-case approach for establishing SVM standards is

 3 appropriate. We agree.

 4 We urge EPA to promulgate the proposed

 5 mechanism that would set small-volume manufacturer GHG

 6 standards on an SVM-by-SVM basis. Adopting the

 7 case-by-case mechanism would align EPA with NHTSA under

 8 the CAFE law, the European Union and with CARB, thus

 9 furthering the desirable objective of harmonization.

 10 The proposed case-by-case SVM mechanism is

 11 fair and equitable and meets the important goal of

 12 reducing GHG. The SVM provisions should be promulgated

 13 by EPA, as proposed, with an optional early opt-in

 14 starting in model year 2015. Thank you.

 15 MR. MEDFORD: Thank you. Thanks to all the

 16 panelists. And do my colleagues have questions or

 17 comments?

 18 MS. OGE: I do. I have a question for -- is

 19 it Miss Lacey Plache?

 20 MS. PLANCH: Planch.

 21 MS. OGE: Thank you for your testimony. Let

 22 me ask you a question.

 23 You stated for the record that Edmunds.com

 24 understands the consumer; is that accurate?

 25 A. Yes.

 119
 1 Q. So can you explain to me, does Edmunds.com

 2 know better what the consumer wants than the 13 car

 3 companies, some of them represented in this panel, that

 4 agree with your overall proposal?

 5 A. So what we're saying is that we have data from

 6 consumers based on the purchase that they make where we

 7 see what types of features they select and what types of

 8 preferences they put on the different features. And

 9 what we find is that fuel economy is not typically

 10 ranked at the highest.

 11 Q. I understand that. My question was

 12 specifically: Do you know better than the OEMs where

 13 they need to invest and the attributes that they believe

 14 the consumers want than them? Simple question.

 15 A. Well, I think that the OEMs have a select

 16 group of information on consumers. They certainly know

 17 who is buying their cars and what features are being

 18 purchased. They don't see the entire market in the way

 19 that we do, because they are each individually looking

 20 at their own consumers. But certainly, I would not --

 21 certainly, I would agree that they have insight into

 22 consumers as well.

 23 Q. So my question is: Does Edmunds.com have

 24 information that the OEMs do not have? Because the

 25 OEMs, 90 percent of the market, companies that sell

 120
 1 vehicles in the U.S., agree with the overall proposal.

 2 So do they lack data that you have that would make them

 3 take a different position on the standards?

 4 A. Yes. Well --

 5 Q. They do?

 6 A. -- I don't know all the data that they have.

 7 But what we have is we have data on consumer shopping

 8 patterns that we collect from our own website. And this

 9 is not data that the OEMs have. This is our data. And

 10 we see what consumers are shopping for, what they are

 11 configuring.

 12 We also have transaction data that, you know,

 13 we've gathered from dealers throughout the U.S.

 14 marketplace. So in that sense, we do have, you know, a

 15 wider array of data than might be available to

 16 individual OEMs.

 17 Q. So you're saying, for the record, that the

 18 OEMs that have agreed to support this program, that they

 19 are going to invest billions of dollars in providing

 20 these advanced technologies, they are making a mistake

 21 because they don't have the sufficient data, and you

 22 know better than them?

 23 A. I think what we are saying is that there are

 24 things to be considered. And certainly --

 25 Q. There are things to be considered? Such as?

 121
 1 Can you explain?

 2 A. Such as how consumer demand -- you know, what

 3 kind of features consumers demand and what the impact

 4 might be of investing in fuel economy first and foremost

 5 without consideration what might happen to other

 6 features along the way.

 7 And given that consumers have a high

 8 preference for these other features, this is just

 9 something we need to take into consideration when

 10 considering these rules. Because, certainly, in the

 11 current moment, automakers have been very successful in

 12 combining achievements or advances in fuel economy with

 13 advances in technology, in comfort, performance. But at

 14 some point, there may be, you know, as we move up the

 15 curve, and higher and higher demands on fuel-economy

 16 improvements are required, it may come to the point

 17 where there are tradeoffs between which types of

 18 features get the research dollars. And I think

 19 that, you know, this is just something to take into

 20 account.

 21 Q. Okay. Let me ask you: Have you read the

 22 regulation, the proposal?

 23 A. Yes, I have.

 24 Q. Is there anything in the proposal that would

 25 make you suggest, for the record, that safety or other

 122
 1 attributes of vehicles would be sacrificed?

 2 A. No. My point is that they are not considered

 3 to the extent the innovation in the competition for

 4 these features could be more considered in the proposal.

 5 And I understand that safety is considered in

 6 the proposal. But I'm just saying: What about

 7 innovation, and what about competition? You know,

 8 automakers, to date, have a wide range of differentiated

 9 products, and the way they differentiate these products

 10 are by focusing on different features.

 11 So if we take the market in a direction where

 12 we're saying: Okay, the main feature that we'll be

 13 focused on is fuel economy, first of all, what happens

 14 to the ability of automakers who haven't been the

 15 leaders in fuel economy to compete? If they can no

 16 longer put the investment that they did into, say,

 17 electronics or performance because they are now putting

 18 those investment dollars into fuel economy, how does

 19 that impact the marketplace? Does that decrease

 20 competition?

 21 And the same thing with innovation.

 22 Automakers operate under a limited budget. And at some

 23 point, there will be a constraint on where they can

 24 throw those dollars and what types of innovation --

 25 MS. OGE: Let me make one more statement.

 123
 1 We have had the consumer groups, the actual

 2 consumer groups supporting this proposal. And for the

 3 record, you're saying you're a consumer group. Just

 4 for the record, your own website said you're paid by

 5 automakers and dealers, just for the record.

 6 Thank you. No more questions.

 7 MR. MEDFORD: Mr. Laitner, you testified about

 8 some economic modeling work that you conducted.

 9 MR. LAITNER: I'm having trouble hearing.

 10 MR. MEDFORD: I'm asking you about the

 11 economic modeling information that you provided, which I

 12 think is interesting and valuable to us. You also

 13 indicated you intend to update it in a month or so.

 14 Will you be providing that as a part of your

 15 organization's formal response to the proposal for our

 16 benefit?

 17 MR. LAITNER: We'd very much like to do that,

 18 yes.

 19 MR. MEDFORD: Thank you very much. Anybody

 20 else have any questions? Okay, that's it. Thank you,

 21 everyone, for coming.

 22

 23 (Whereupon the proceedings were

 adjourned for lunch at 12:41 p.m.)

 24

 25

 124
 1 JANUARY 24, 2012 AFTERNOON SESSION 1:17 P.M.

 2 MS. OGE: We're ready to start with the fourth

 3 panel. We will start with Mr. John Walker. Good

 4 afternoon.

 5 

 6 TESTIMONY OF JOHN WALKER

 7 MR. WALKER: Good afternoon. I appreciate the

 8 opportunity to testify today at today's public hearings.

 9 By way of introduction, my name is John

 10 Walker. I'm the vice president of sales, North America,

 11 for Tesla Motors. In this role, I'm responsible for all

 12 vehicle sales issues in the United States and Canada.

 13 As my colleague, Dairmuid O'Connell, has already

 14 testified, Tesla Motors's mission is to bring

 15 high-performance, highly capable electric vehicles to

 16 the market at ever-decreasing price points. We have

 17 developed a premium product line that demonstrates to

 18 consumers that electric vehicles can be exciting, fun to

 19 drive, practical, versatile and with the driving range

 20 that meets all their driving needs.

 21 Recently there has been concern expressed

 22 about consumer demand for electric vehicles, stories in

 23 the press that mention the lack of demand and question

 24 the commercial viability of these vehicles. While I

 25 cannot speak directly to the experience of other

 125
 1 companies, I can tell you about our experience, an

 2 experience that demonstrates not only a robust demand

 3 for our vehicles but demand that, in our opinion, is

 4 only increasing.

 5 First and foremost, I'd like to tell you a

 6 little more about our retail strategy. We are not a

 7 traditional automobile manufacturer that relies on

 8 independent dealers to sell our products. Instead,

 9 Tesla owns and operates 100 percent of our retail

 10 locations and sales galleries throughout the United

 11 States and Canada. This is a way to ensure a positive

 12 experience for all our customers by enabling a direct

 13 communication to the corporate organization through our

 14 store employees. When they speak to someone in our

 15 stores, they are talking to Tesla. With a core of 10

 16 established stores in the U.S., we recently began

 17 opening what we call New Design Stores last April.

 18 These New Design Stores, modeled after other successful

 19 Silicon Valley operations like Apple, encourage

 20 customers to learn about Tesla EV technology in general,

 21 and Tesla products in particular. This model promotes

 22 an interactive experience in the environment that not

 23 only allows customers to learn about Tesla, but to learn

 24 about EV technology generally.

 25 Based on this concept, we are seeing

 126
 1 significant traffic on a day-in-and-day-out basis

 2 throughout our stores and sales galleries.

 3 We are expanding our brand and securing

 4 advance reservations for our next vehicle, what we call

 5 a Model S, a premium high-performance, all-electric

 6 sedan capable of up to 300 miles of range and the

 7 capacity to seat five adults and two children.

 8 We have sold out of our first groundbreaking

 9 car, the Tesla Roadster, in North America. In fact, we

 10 produced a limited edition of 80 cars during 2011 in

 11 part to satisfy excess market demand. The Roadster

 12 Tesla is a two-seat, all-electric sports car with a zero

 13 to 60 acceleration time of 3.7 seconds and up to a range

 14 of 245 miles on one single charge.

 15 Demand for our Roadster has been robust from

 16 our introduction in 2008 to end of program in the United

 17 States in 2011. In fact, we have sold over 2100

 18 Roadsters throughout the world, exporting our Roadster

 19 to over 30 countries. In fact, many have questioned why

 20 we discontinued our program. Even today, we are getting

 21 a lot of inquiries from the market, customers wanting to

 22 buy this vehicle, even though we are no longer producing

 23 for the U.S. market. Simply put, the Roadster was

 24 really always a limited production run, and we are ready

 25 now to move to our next vehicle and vehicles. The

 127
 1 Roadster was proof that an exciting and uncompromising

 2 EV was both possible and fun to drive.

 3 With the Model S, we are now optimizing the

 4 vehicle around our all-electric power train and moving

 5 up to the next level. We plan deliveries on the Model S

 6 no later than July of this year.

 7 The demand for the Model S is very strong,

 8 ahead of expected release. To break it down into a

 9 little more detail, our advance reservation numbers are

 10 large and are growing. These reservations, please note,

 11 are fully refundable, and each carries a minimum of a

 12 $5,000 payment to reserve a spot in line for the

 13 Model S. As of the end of last year, 2011, we have

 14 booked over 8,000 Model S reservations. That equates to

 15 our production of 2012 and well into the production of

 16 2013, Quarter 1. It is interesting to note that even

 17 before -- basically none of our reservations owners have

 18 actually driven the car yet. So that's quite

 19 interesting to know we have received a substantial

 20 amount of reservations, in our opinion.

 21 In addition, these reservations have continued

 22 to increase over each quarter. During Quarter 4, we

 23 reserved over 1500 new reservations, and that was an

 24 appreciable increase over the 1150 reservations bought

 25 in the third quarter.

 128
 1 As we continue to roll out more information,

 2 we announced the options weeks ago, our reservations

 3 actually increased. The Model S Signature will be a

 4 premium version of the Model S with a 300 range and a

 5 full panoply of options and features. In fact, the

 6 model was so high from the Model S signature series,

 7 that often we sold out, we have had to start a waiting

 8 list.

 9 In addition, we have opened five new of our

 10 New Design Stores and one gallery in the United States

 11 during 2011. Four actually opened in Quarter 4. These

 12 five New Design Stores and one gallery in December alone

 13 had over 299,000 customers in the month of December

 14 alone. That's quite a considerable number in our

 15 opinion, 299,000. This incredible traffic shows our

 16 vehicles have a broad appeal.

 17 Our story doesn't end there. We plan on

 18 moving forward with our New Design Stores in 2012. We

 19 have nine locations, including Los Angeles, Miami and

 20 New York to name a few.

 21 In conclusion, we believe that the demand has

 22 not only been high, but it's been growing and it

 23 continues to grow. Thank you very much.

 24 MS. OGE: Thank you.

 25 Professor Sudip -- I'll let you pronounce

 129
 1 your last name for the record.

 2 

 3 TESTIMONY BY SUDIP CHATTOPADHYAY

 4 MR. CHATTOPADHYAY: Chattopadhyay.

 5 Thank you for giving me the opportunity to

 6 testify for the proposed CAFE standard. My name is

 7 Sudip Chattopadhyay. I'm a professor and chair of the

 8 economics department at San Francisco State University.

 9 I also represent the Union of Concerned Scientists

 10 today. And we signed on -- I'm one of the economists

 11 who signed on the 2011 economist letter on clean car

 12 standards and oil dependence. In that letter we urged

 13 the Obama administration and California officials to set

 14 strong global warming and fuel efficiency standards for

 15 new cars and light trucks through 2025. The letter can

 16 be found on the website of Union of Concerned

 17 Scientists. As an economist, I believe that this is a

 18 groundbreaking initiative in transforming the American

 19 society towards energy independence.

 20 Pushing the frontiers of technology through

 21 innovation is in the fabric of American economic

 22 prosperity, and there's no better time than now to steer

 23 our auto industry in that direction. When 2.6 billion

 24 people in China and India are entering a phase of

 25 economic prosperity, global oil demand will continue to

 130
 1 rise, and so will oil price. This will severely hurt

 2 our economic well-being unless our addiction to oil is

 3 contained.

 4 The 54.5-miles-per-gallon standard by 2025

 5 will be a game changer for the American auto industry.

 6 Foreign car companies are already investing in new

 7 technologies for the next generation of fuel-efficient

 8 cars. We have the know-how and we can do it.

 9 The proposed policy is a no-risk investment in

 10 the technology of the future and will make the American

 11 auto industry globally competitive, help it regain the

 12 position of leadership, bring new manufacturing jobs to

 13 the country, reduce dangerous dependence on foreign oil,

 14 and promise our current and future generations hope,

 15 prosperity and an environmentally sustainable future.

 16 Thank you.

 17 MS. OGE: Thank you.

 18 Mr. Paul Gillespie. Good afternoon.

 19

 20 TESTIMONY BY PAUL GILLESPIE

 21 MR. GILLESPIE: Thank you very much and thank

 22 you for coming to San Francisco and welcome to San

 23 Francisco. I hope by the time that you're here, you'll

 24 get a chance to ride in a hybrid taxi.

 25 My name is Paul Gillespie. I'm the former

 131
 1 president of the San Francisco Taxi Commission and the

 2 founder of lowcarbontaxis.org, which is just founded

 3 this month, actually, to become a national/international

 4 advocacy group for the adoption of low-carbon vehicles

 5 in the national/international private for-hire vehicle

 6 fleets.

 7 I have a statement that I'm going to submit,

 8 but I'd like to speak to you sort of off the cuff about

 9 some of our practical experiences in the last 10 years

 10 and being really on the front lines of adopting clean

 11 vehicles in America.

 12 We were the first city in America to adopt a

 13 really large fleet of natural-gas vehicles, starting in

 14 1999. We're the first city in America to adopt a fleet

 15 of hybrid taxis, starting -- we had our first hybrid

 16 taxi in 2003 and our first fleet in 2004. About the

 17 week after the Ford Escape hybrid went on sale, we were

 18 using it as a taxi in San Francisco.

 19 I'm sure we made a lot of people in Dearborn

 20 and Toyota nervous, by the way, by our early adoption of

 21 hybrid vehicles because we really put these vehicles

 22 through their paces. And I have to say I believe that

 23 this is a great American industrial success story that

 24 we've had out here in San Francisco in our taxi fleets.

 25 Most of our vehicles have lasted over 300,000 miles,

 132
 1 Ford, Toyota and a lot of the other manufacturers have

 2 learned a tremendous amount about how to build an

 3 electrified vehicle, the kind of wear and tear that goes

 4 on in San Francisco.

 5 But I'd like to get back to something that I

 6 did as a taxi commissioner in 2007, which was to write a

 7 resolution to reduce, offset and eliminate greenhouse

 8 gases in the San Francisco taxi fleet. At that time, it

 9 was a pretty audacious goal. It was very difficult for

 10 me to even find people who even knew how to measure

 11 carbon, much less to give me any kind of advice about

 12 how I, as a taxi commissioner, would write a law to go

 13 about it.

 14 In the end, we were able to find real

 15 consensus in our industry to work together with the

 16 industry, with the drivers and the city, to write a law

 17 that required a 20 percent reduction in greenhouse gas

 18 emissions below 1990 levels by 2012. Extremely good

 19 news that we're going to announce in about two weeks

 20 with the mayor and lieutenant governor is that we have

 21 met the goal of this legislation, not only met it, but

 22 exceeded it a year early. We have cut our greenhouse

 23 gas emissions in the San Francisco taxi fleet from about

 24 110,000 tons per year to about 50,000 tons per year in

 25 three years. We put thousands of dollars in the pockets

 133
 1 of really hard-working, working-class people, who I

 2 think have become probably the greatest ambassadors of

 3 hybrid and electrified technology in America.

 4 If you really look at it, between the

 5 thousands of hybrids in the San Francisco taxi fleet and

 6 4,000 or 5,000 in the New York taxi fleet, probably more

 7 people have had their first experience in a hybrid

 8 vehicle in a taxi than anywhere else. So we're really

 9 proud of that, being on the front lines of this in the

 10 last 10 years.

 11 I think this proposed rule is just really a

 12 great idea. It's going to continue to provide us with a

 13 variety of vehicles to use. And I look forward to the

 14 San Francisco fleet continuing to be on the front lines

 15 of really testing and proving that, not only is it

 16 feasible, but it's really the right thing to do.

 17 And so thank you, again, for being here today.

 18 And I hope we'll get a chance to ride in a hybrid cab

 19 when you're here.

 20 MS. OGE: I think I did coming from the

 21 airport, coming here on a hybrid taxi. So thank you.

 22 Mr. Mark Gruberg, good afternoon.

 23

 24 TESTIMONY OF MARK GRUBERG

 25 MR. GRUBERG: Thank you. Thank you for

 134
 1 holding this hearing and inviting me.

 2 I am a manager at Green Cab of San Francisco.

 3 We are a small, but growing cab company utilizing a

 4 fleet of hybrid vehicles.

 5 And just let me say for starters, I've been

 6 here listening to this testimony, and the degree of

 7 consensus on a subject as complex as this should really

 8 be an object lesson for some of our political leaders to

 9 show us that these kind of things can be done.

 10 Our company started off dedicated to being an

 11 environmentally responsible taxi service company. We

 12 began in 2007 even before San Francisco's clean-air taxi

 13 rules went into effect, and we have been a pioneer in

 14 this area in the fact that all of your regular fleet are

 15 hybrid cabs, and we also voluntarily purchase carbon

 16 credits to reduce our net carbon emissions to zero. And

 17 we want and plan to stay a step ahead of an industry

 18 that is already far ahead of most any other place in the

 19 country.

 20 And to do that, we need the vehicles. Give us

 21 the vehicles, and we will employ them. There are some

 22 practical problems at this point with the use of

 23 electric vehicles, and plug-ins as taxis, questions of

 24 range and questions of charging time. So we hope to see

 25 advances in those areas. And in the meantime, we will

 135
 1 continue to use the hybrids. And as the standards go

 2 up, we expect that the rising tide will raise the

 3 standards for hybrids as well, and we will be able to

 4 perform more efficient and economical taxi service.

 5 This is a tremendous boon to the drivers. In

 6 San Francisco, as almost everywhere in this country,

 7 taxi drivers pay for gasoline out of their own pockets.

 8 And the fact that we're able to use the hybrids has been

 9 a tremendous savings to a low-income population. And

 10 you can expand and extrapolate from that. These savings

 11 are going to have a ripple effect through the economy.

 12 There's no question there will be more money in people's

 13 pockets to do other things. So there are many good

 14 reasons to go ahead with this, and we applaud the

 15 initiative and are eager to see it put forward.

 16 And then just let me say on a personal note.

 17 I live in the city of Richmond, across the Bay, very

 18 close to a Chevron refinery. And I understand that we

 19 need these facilities, and we're going to have them for

 20 a long while. And I don't want to denigrate Chevron's

 21 efforts to run a safe and health-conscious facility.

 22 But to the extent that we can reduce the role of these

 23 kinds of facilities in our society, we will improve our

 24 communities and the health and quality of life of those

 25 who live in them. So thank you very much.

 136
 1 MS. OGE: Thank you.

 2 Mr. Don Anair.

 3 

 4 TESTIMONY BY DON ANAIR

 5 MR. ANAIR: Good afternoon, thank you.

 6 My name is Don Anair. I'm here today on

 7 behalf of the Union of Concerned Scientists and our more

 8 than 350,000 supporters.

 9 UCS strongly supports the model year 2017

 10 through 2025 standards for greenhouse and fuel economy,

 11 and applauds the work of the U.S. EPA, NHTSA, and the

 12 California Air Resources Board for their collaboration

 13 and the development of these standards. We also greatly

 14 appreciate the multiple opportunities that the agencies

 15 have provided for public input, including the hearing

 16 today. We also applaud the agencies for their

 17 transparency and their reliance on independent technical

 18 analysis in developing the standards. UCS urges the

 19 agencies to finalize strong vehicle standards that will

 20 deliver the expected benefits to consumers, our nation's

 21 energy security and our environment.

 22 Based on UCS's own analysis, we estimate these

 23 standards would reduce global warming pollution by as

 24 much as 290 million metric tons in 2030, equivalent to

 25 shutting down 62 coal-fired power plants in that year.

 137
 1 The proposed standards will also deliver significant

 2 reductions in U.S. oil consumption by as much as

 3 1.5 million barrels per day in 2030. That's equivalent

 4 to the 2010 U.S. imports from Saudi Arabia and Iraq

 5 combined.

 6 These reductions in greenhouse gas emissions

 7 and oil consumption from the proposed standards and

 8 those previously adopted for 2012 through 2016 represent

 9 the most significant step the federal government has

 10 taken to address our oil dependence and the threat of

 11 climate change.

 12 Automakers have the technology to make all new

 13 light-duty vehicles cleaner and more fuel efficient.

 14 Conventional improvements, such as more efficient

 15 engines, smarter transmissions, better materials, can

 16 deliver significant fuel efficiency improvements and

 17 greenhouse gas emission reductions throughout the fleet.

 18 In addition, the expanded use of hybrid electric drive

 19 trains will deliver even greater gains. By 2025,

 20 Americans will continue to have a wide choice of

 21 vehicles that offer the same or better utility and

 22 safety as those offered today but will spend less at the

 23 gas pump.

 24 To achieve our long-term climate energy goals,

 25 however, we need to move beyond vehicles powered by

 138
 1 petroleum. Climate change is the most serious long-term

 2 environmental threat facing our nation and the world.

 3 Climate science tells us we must cut global warming

 4 emissions at least 80 percent by mid-century to help

 5 avoid the worst consequences of global warming.

 6 Advanced technologies, such as plug-in

 7 hybrids, battery electric and fuel-cell vehicles have

 8 the potential to achieve zero or near-zero emissions and

 9 are expected to become available to consumers over the

 10 time period of the proposed standards.

 11 But the standards themselves alone are not

 12 sufficient to propel these technologies from the small

 13 market that they currently have today to the mass market

 14 success that they must become over the next four years

 15 in order to meet our long-term public health and climate

 16 change goals.

 17 This is why policies like California's

 18 Zero-Emission Vehicle program are an important

 19 complement to the proposed greenhouse gas and fuel

 20 economy standards being discussed here today. The

 21 Zero-Emission Vehicle program helps ensure that

 22 investments in research, development and deployment of

 23 advanced vehicle technologies continue.

 24 UCS applauds the agencies for proposing

 25 standards that represent historic progress. For the

 139
 1 standards to deliver the benefits, as promised, we ask

 2 the agencies to address key areas to ensure the

 3 integrity of the program, including preventing the

 4 erosion of benefits to the possible shifts from cars to

 5 trucks. For example, under scenarios examined by the

 6 Air Resources Board, the overall program benefits to

 7 California could be reduced as much as 16 percent as a

 8 result of vehicle footprint increase, size increase, as

 9 well as larger percentage of truck sales than

 10 anticipated. Certain vehicle types, in particular, the

 11 crossover vehicle segment, present an opportunity for

 12 gaming unless appropriate protections are put in place.

 13 We thank the agencies for developing these proposals and

 14 urge the finalization of strong standards.

 15 In addition, we urge the EPA to move forward

 16 expeditiously with the next round of criteria pollutant

 17 standards -- the Tier 3 emissions and gasoline standards

 18 for passenger vehicles -- and to finalize these

 19 protections by the summer of 2012. A rigorous Tier 3

 20 program would have immediate and far-reaching health and

 21 environmental benefits: Reducing harmful airborne

 22 contaminants, ensuring longer and healthier lives, and

 23 helping states and communities across our country to

 24 restore healthy air. These vital health protections

 25 will be achieved at an extremely modest cost. Timely

 140
 1 finalization of Tier 3 standards would allow

 2 manufacturers to efficiently align technology upgrades

 3 with the proposed 2017 through 2025 fuel efficiency and

 4 greenhouse gas emissions standards.

 5 Thank you very much.

 6 MS. OGE: Thank you.

 7 Ms. Celia Canfield. Good afternoon.

 8 

 9 TESTIMONY BY CELIA CANFIELD

 10 MS. CANFIELD: Good afternoon. My name is

 11 Celia Canfield, and I'm a clean energy business advisor

 12 for a group called Small Business Majority, and I'm also

 13 a board member. Small Business Majority is a

 14 nonpartisan small business advocacy organization founded

 15 and run by small business owners. We represent the

 16 28 million Americans who are self-employed or own small

 17 businesses up to 100 employees. Our organization uses

 18 scientific opinion and economic research to understand

 19 and represent the interests of small businesses across

 20 America. We are an organization that really goes out

 21 and researches what small business owners think, what

 22 entrepreneurs, freelancers and the self-employed need in

 23 order to understand and compete in today's global

 24 marketplace. So I'm bringing you their voices today.

 25 I'm also a serial entrepreneur myself. I

 141
 1 started and grew a successful Internet agency in the

 2 '90s, and I created another consulting business in 2006

 3 to support entrepreneurs who are creating clean energy

 4 economy solutions and businesses.

 5 So what I'm going to do today is, I hope,

 6 challenge some of the conventional wisdom that some have

 7 said about where small business falls out on this topic.

 8 Because the solutions to today's economic malaise can

 9 certainly be found within small businesses. But the

 10 government must support them if we are to harness their

 11 power as job creators. Small businesses have the

 12 potential to stimulate the economy to even greater

 13 recovery, but they need policies to help them do so,

 14 such as stronger fuel-efficiency standards. By

 15 concentrating their efforts on raising requirements the

 16 automakers must meet, legislators can help entrepreneurs

 17 save money and give them the boost they need to rebuild

 18 America. And we know this from our research.

 19 So we wanted to find out how strong fuel

 20 efficiency standards could help small businesses

 21 stimulate the economy, and we fielded a poll in 2011,

 22 September of 2011. And I have to tell you that the

 23 breakdown of the poll was 41 percent Independents, a

 24 mere 25 percent is Democrats, the rest is Republican.

 25 So this is not a biased poll by any stretch of the

 142
 1 imagination. And what we found was that 87 percent of

 2 small business owners believe that it's important for

 3 the U.S. to take actions now to increase fuel efficiency

 4 in cars and light trucks. 59 percent of those surveyed

 5 described this as "very important." Moreover, small

 6 business owners in the influential automotive states, in

 7 Michigan, Ohio and California, demonstrated equally

 8 strong support for more stringent standards.

 9 Our survey found that 71 percent of small

 10 business owners believe American car companies do not

 11 innovate enough, and 73 percent believe that the federal

 12 government should do more to help them become leaders in

 13 the industry for innovation and produce the appropriate

 14 vehicles for the economic times we live in. Therefore,

 15 it wouldn't be surprising that 80 percent of business

 16 owners polled support requiring the auto industry to

 17 increase fuel efficiency to 60 miles per gallon by 2025,

 18 an even higher standard than the 54.5 miles per gallon

 19 the Obama administration proposed in November.

 20 Small business owners know they will benefit

 21 from strengthened fuel economy standards. The proposed

 22 rules are right on par with what entrepreneurs told us

 23 they want: Improved fuel standards that have the power

 24 to cut long-term business costs. Stronger standards are

 25 a surefire way to help small business owners save money

 143
 1 on fuel, which will allow them to invest in their

 2 companies and hire more employees.

 3 Of the employers we polled, the rising cost of

 4 doing business came in as their top concern and included

 5 rising fuel costs. This will help explain why so many

 6 small business owners believe stronger fuel economy

 7 standards have the potential to boost their bottom line.

 8 And, in fact, 87 percent of small business owners agree

 9 that improving innovation and energy efficiency are a

 10 good way to increase prosperity for small business. If

 11 lawmakers are going to meet these entrepreneurs' needs,

 12 raising fuel economy standards is a great way to start.

 13 Through higher standards, the money small

 14 business owners don't have to spend on higher fuel costs

 15 can be reinvested in their business. Small business

 16 customers who spend less on buying fuel are much more

 17 likely to spend money patronizing the businesses in

 18 their communities. We support raising fuel economy

 19 standards because they will be a boon to our small

 20 businesses and to our economy. We thank you.

 21 MS. OGE: Just in time. Thank you.

 22 Mr. Frankie Ridolfi. Good afternoon.

 23

 24 TESTIMONY BY FRANKIE RIDOLFI

 25 MR. RIDOLFI: Good afternoon. My name is

 144
 1 Frankie Ridolfi, and I am an owner of Climate Earth,

 2 also vice president of marketing for the company, and

 3 we're based in Berkeley, California.

 4 Climate Earth provides environmental business

 5 intelligence systems to help companies become aware of

 6 the carbon emissions and other environmental impacts

 7 their company is having -- impacts they have some

 8 influence over. Our goal is to raise their

 9 consciousness so they become smarter, cleaner and

 10 greener, reduce their footprint and improve their

 11 business in the process. Therefore we support raising

 12 fuel-efficiency standards because it addresses our

 13 company's primary focus, which is managing resource use

 14 in a financial context.

 15 We look at this issue from a complete supply

 16 chain point of view. Applying higher standards for fuel

 17 efficiency affects the entire system. It is a positive,

 18 multiplying influence, and it incentivizes innovation

 19 within and between companies, which is the real fuel for

 20 a thriving business sector.

 21 Raising fuel efficiency standards is a smart

 22 strategy that lawmakers should enact into policy

 23 immediately, for the sake of small businesses and our

 24 economic recovery.

 25 Higher fuel standards can help entrepreneurs,

 145
 1 like me, save money. We can use that money to grow our

 2 businesses and do our part to create jobs for the

 3 14 million Americans who are unemployed.

 4 I recently saw a survey from the Small

 5 Business Majority that found that 80 percent of

 6 California's small business owners believe it is

 7 important for the U.S. to take action now to increase

 8 fuel efficiency in light cars and trucks. 56 percent of

 9 California owners said it's very important to raise

 10 these standards.

 11 Small Business Majority's poll also revealed

 12 just how strong small business owners would like to see

 13 fuel standards become over the next few years. Four in

 14 five California small business owners said they'd

 15 support raising requirements to 60 miles per gallon by

 16 2025, an even higher standard than the 54.5, that rule

 17 President Obama proposed in November. With 60 percent

 18 of California's entrepreneurs saying American car

 19 companies do not innovate enough and 79 percent agreeing

 20 the federal government should do more to make them do

 21 so, now is the time for California to lead the way in

 22 making sure these standards are met.

 23 If some of this sounds familiar it's because

 24 we're on the same page.

 25 Small business owners have a strong economic

 146
 1 reason to favor bold fuel standards. Small Business

 2 Majority's poll found that California entrepreneurs see

 3 the rising cost of doing business as one of their

 4 primary business concerns. It is also for Climate

 5 Earth. That includes the cost of fuel. Improved fuel

 6 economy standards have the power to cut long-term

 7 business costs.

 8 82 percent of California owners agree that

 9 improving innovation and energy efficiency are good ways

 10 to increase prosperity for small firms like mine. This

 11 helps explain why so many small business owners, like

 12 me, believe stronger fuel economy standards have the

 13 potential to boost our bottom lines and advance the

 14 broader economic recovery.

 15 In the final analysis, higher fuel standards

 16 will help Climate Earth. Anything that causes companies

 17 to manage and reduce their resource use is good for our

 18 business and theirs. It honors the time-tested virtue

 19 of "waste not, want not," and it creates an important

 20 nudge. The proposed fuel economy standards are a

 21 win-win for Californians and all Americans. Thank you.

 22 MS. OGE: Thank you.

 23 Mr. Minsk.

 24 ///

 25 ///

 147
 1 TESTIMONY BY RONALD E. MINSK

 2 MR. MINSK: Thank you very much. I'm here

 3 representing Securing America's Future Energy, a

 4 nonpartisan organization that advocates for policies to

 5 enhance the nation's energy and economic security by

 6 reducing its dependence on oil. We enlist the support

 7 of prominent business leaders and retired military

 8 officers to overcome policy stalemates. Our advisory

 9 board is comprised of business executives and retired

 10 military leaders, co-chaired by General P.X. Kelley,

 11 Retired Commandant of the Marine Corps and Frank Smith,

 12 the CEO, founder and chairman of the board of FedEx

 13 Corporation.

 14 Since our inception, we have advocated

 15 strongly for increases in fuel economy and were deeply

 16 involved in the debate that led to increasing fuel

 17 economy standards in EISA 2007.

 18 We strongly support the agreement reached last

 19 summer between the administration and automakers and its

 20 embodiment in the proposed regulation because of the

 21 amount of the oil savings that it will achieve.

 22 I would, however, like to take some time to

 23 offer some thoughts to help improve the proposal.

 24 For two days in Detroit and in Philadelphia,

 25 we heard witness after witness talking about the

 148
 1 importance of this rule because of its ability to reduce

 2 our dependency on oil. But to be honest, we think many

 3 of them actually misunderstood the nature of that

 4 dependence.

 5 There's no question that using less oil is

 6 better than using more oil, especially for the

 7 environment. And these standards are an important tool

 8 to help us achieve that goal. But from an

 9 energy-security perspective, this rule is really

 10 requiring simply to maintain our current level of

 11 security. It's often overlooked that our dependence on

 12 oil arises not from how much oil we use but from how

 13 much we spend on oil, the volatility of that total

 14 expenditure, and the effect of volatility on the

 15 economy.

 16 The price of oil is set in a dynamic global

 17 market, and our reduced use of several million barrels

 18 per day over a period of 15 years is just as likely to

 19 result in lower production as it is to result in higher

 20 prices. As we all know, growing demand from the

 21 developing world is increasing upward pressure on oil

 22 prices.

 23 And, in fact, just yesterday, the EIA posted

 24 on its website the early release of the 2012 Annual

 25 Energy Outlook, which is calling for oil prices to reach

 149
 1 up to $146 per barrel in 2010 dollars by the end of the

 2 forecast period. In fact, if you look at the chart

 3 which I handed out and we'll stick in the record, what

 4 you can see here is, even if the energy intensity of the

 5 economy is improved over the past several decades, the

 6 actual percentage of our economy that we are spending,

 7 the percentage of GDP that we're spending on oil is

 8 actually increasing, which goes directly to the question

 9 of oil dependence.

 10 The only way to address this price volatility,

 11 which is a threat of our nation, we believe, is to stop

 12 using oil.

 13 We have been promoting plug-in vehicles for

 14 four reasons: First, the fuel that is used to power

 15 them is domestic; second is a diverse portfolio for

 16 fuels; third, the price of power is much more stable

 17 than the price of oil; and fourth, electricity has the

 18 potential to be much cleaner in the long term.

 19 In short, electricity has the potential to

 20 address a giant set of problems for our nation that no

 21 other fuel can address. Yet, for many years, the cost

 22 of this technology is going to be more expensive.

 23 That the plug-in vehicles offer these great

 24 benefits to the nation justifies the incentives for this

 25 rule. The multiplier for EVs, for instance, will be an

 150
 1 important incentive. We believe, however, it should not

 2 be phased down, as proposed. 10 years after entering

 3 the market the, 2.1 -- 1.9 million hybrid vehicles on

 4 the road represent about 2.1 of the new-car market. Yet

 5 if they are getting an average of 35 to 45 miles per

 6 gallon, they are saving the nation about 15- to

 7 25,000 barrels a day out of the diet of 19 million

 8 barrels a day.

 9 Plug-in vehicles have an opportunity to make a

 10 much greater contribution than traditional hybrids, but

 11 they are going to need some incentives in the meantime

 12 so that consumers can overcome their concerns about

 13 them, help bring demand up, get to economies of scale

 14 and bring the price down.

 15 Secondly, we believe the upstream emissions

 16 should not be attributed to the plug-in vehicles. Until

 17 this proposal, cars had always been responsible for what

 18 comes out of the tailpipe, not the fuel that goes into

 19 the car. If automakers are held responsible for

 20 upstream emissions, they'll be unique in the economy as

 21 compared to manufacturers of other power-consuming

 22 appliance, such as air conditioners, well pumps or

 23 electric ovens. They cannot control upstream emissions,

 24 which will, in any event, vary from region to region,

 25 from consumer to consumer and over time. And in

 151
 1 regulating total emissions, it will make it infinitely

 2 more difficult to later have a cap and trade program

 3 that incorporates emissions without endangering the

 4 whole count.

 5 If, however, you do decide to regulate

 6 upstream emissions, they should be regulated for all

 7 vehicles, including petroleum-powered vehicles.

 8 Finally, I can't stress enough, as others have

 9 already said, the importance of a real midstream review.

 10 The fuel economy regulations have never been issued so

 11 far in advance and asked so much of automakers. We

 12 don't know where oil prices are going to be. We don't

 13 know where battery prices are going to be. And these

 14 are critical factors in trying to see what can happen.

 15 And just like it's possible that the rules may not prove

 16 cost-effective, it's possible that we may find that

 17 tightening is also inappropriate. So we stress the

 18 importance of having a real review.

 19 Thank you very much.

 20 MR. MEDFORD: Thank you very much.

 21 Is there a Mr. Bignell?

 22 MR. BIGNELL: Over here, sir.

 23 MR. MEDFORD: Well, I have you on the list.

 24 How about Jim Castelaz?

 25 We'll get you in the next round.

 152
 1 TESTIMONY BY JIM CASTELAZ

 2 MR. CASTELAZ: Hello. First, I want to say

 3 thank you, again, for coming to San Francisco.

 4 MR. WOOD: Thank you for having us here.

 5 MR. CASTELAZ: Definitely. So my name's Jim

 6 Castelaz. I'm an entrepreneur. While the rest of my

 7 colleagues are making Web 2.0 games, I'm here and

 8 working on technology for electric vehicles,

 9 specifically heavier vehicles, trucks.

 10 And I think -- well, for one, I wanted to

 11 definitely compliment you on making the switch to grams

 12 per mile for these standards. I see that we have been

 13 talking a lot about MPG, but I want it to be noted that

 14 what you write is really in grams per mile, and I think

 15 that's good. We get a more universal language.

 16 We are in Detroit 1902 here. I mean, it is

 17 really a revolution in the vehicle industry. And I

 18 think focusing on miles per gallon and some of the old

 19 metrics, we can kind of miss that point.

 20 So what I do take issue with -- so we build

 21 heavier vehicles, shuttle buses, trucks, all electric,

 22 zero tailpipe emissions. And on Page 3 of the

 23 announcement, there's a sentence here at the bottom: In

 24 recognition of manufacturers' special challenges in

 25 improving the fuel economy in GHG emissions in full-size

 153
 1 pickup trucks -- and I don't know who told you guys

 2 that, but I take issue with it.

 3 If any of you want to -- my company's called

 4 Motive Power Systems, we're in Foster City -- come down

 5 this afternoon, and I'll give you a ride in an

 6 all-electric shuttle bus. We can drive you around in

 7 it. 100 miles range. The technology's out there.

 8 There's nothing special about trucks.

 9 There definitely should be some sort of

 10 normalization as vehicles get larger. You get a lot

 11 more utility out of them. So great, normalize. And you

 12 guys do that with a footprint, square feet. And the

 13 bigger the footprint, the lower the -- the higher the

 14 grams per mile that are allowed. That's all right.

 15 That's a start. The problem with that is just because

 16 the vehicle's bigger, doesn't actually mean it has more

 17 utility. And so I think that's a problem.

 18 I know everybody's been very positive. Maybe

 19 it's just the entrepreneur in me. There's people all

 20 agreeing with each other. Either we're behind the curve

 21 or something else is going on.

 22 So -- but I think this is a great step in the

 23 right direction, but I think that looking into how we

 24 actually measure utility of these large vehicles so that

 25 fleets and manufacturers just don't make bigger vehicles

 154
 1 for the sake of having bigger vehicles, but there's a

 2 measure of utility beyond just footprint would be great.

 3 I also think that these fuel standards are a

 4 very important piece of the puzzle along with incentive

 5 for funding for new technologies. We have been

 6 supported by the California Energy Commission. We

 7 haven't had any direct federal support to date, although

 8 we have been looking for it. I think that's another

 9 important piece of puzzle.

 10 So I want to commend you guys for great work

 11 that you're doing, and I think this is a good first

 12 step, but there's definitely more to be done. So thank

 13 you.

 14 MR. MEDFORD: Thank you.

 15 Panelists have any questions?

 16 I'd like to thank everybody for your

 17 testimony, and I think we're ready for the next panel.

 18 (short recess taken)

 19 MR. WOOD: Our staff wanted to remind you that

 20 you have five minutes from when the doorbell goes off.

 21 We'd like you to wrap up as quickly as you could,

 22 please.

 23 Let's start with Ms. Jensen.

 24 ///

 25 ///

 155
 1 TESTIMONY BY CHERIEL JENSEN

 2 MS. JENSEN: I'd like to, first of all, thank

 3 President Obama, and I'd like to thank the EPA for doing

 4 this because it's way overdue. We have needed this so

 5 long. But then I'm going to say it's not enough. It

 6 would really have to deal with this.

 7 First of all, let me remind you of the weather

 8 extremes we've had. We have never before in our history

 9 seen the kind of extremes that keep coming day after day

 10 throughout the world and throughout this country. The

 11 oceans are acid, fine. We have lost the dependency of

 12 our weather. I remind people of the spill in the

 13 Gulf -- that was our hunt for more oil -- and the damage

 14 that can be done by it. We're just about to lose the

 15 Arctic because we're allowing drilling in the Arctic,

 16 and we have no way of cleaning that up ever once it

 17 happens.

 18 And I would like to pose another thing that

 19 very seldom gets mentioned. But as the melt water from

 20 the glaciers rise the oceans, we'll have more and more

 21 earthquakes, and so even the stability of our landscape

 22 will be lost.

 23 Now, I have been all through forests

 24 throughout the Northwest, throughout the coast range and

 25 into Canada, and I have seen the whole forest where

 156
 1 maybe less than half the trees are still alive. This is

 2 all due to climate change. We have to change what we

 3 are doing.

 4 Now, on a lighter note, the Royal Automobile

 5 Club in Great Britain sponsors a future car challenge.

 6 This last year, they sponsored a race that had teams

 7 from Volkswagen, BMW, Mercedes and Peugeot, but Gordon

 8 Murray walked away the winner. The T-27, an

 9 all-electric vehicle with a lightweight composite

 10 chassis won this challenge, completing a 57.3-mile

 11 course between Brighton and London on less energy than

 12 its fellow competitors. Carrying two occupants, the

 13 T-27 consumed only seven kilowatts of electricity, which

 14 is about equivalent to 350 miles per gallon. According

 15 to the company, the total energy bill came to 64 pence

 16 or about $1.03. This is what it looks like

 17 (indicating).

 18 Second place went to an electrified Jaguar, E

 19 type, from Germany, which consumed 8.3 kilowatt hours.

 20 Tesla Roadster, Nissan Leaf and the unoccupied Citroen

 21 and the Honda Insight and a few other diesels also

 22 competed.

 23 Murray, who is the inventor of this little

 24 car, noted that the race car designer whose cars won

 25 world championships at the Brannam and McLaren is on the

 157
 1 quest to get cars to lose weight by swapping out steel

 2 components for parts made from structurally strong

 3 plastic or composites. Car manufacturers can

 4 dramatically increase mileage without impacting

 5 performance. Less weight, after all, leads directly to

 6 better fuel efficiency and acceleration.

 7 The T-27, for example, can go 100 miles on a

 8 charge, the same as the Nissan Leaf or Mitsubishi MiEV.

 9 The T-27, however, only supports a 12-kilowatt-hour

 10 battery pack, which is about half the size of the

 11 battery in the other two cars. The smaller battery

 12 means a quicker charging time and, potentially, a lower

 13 sticker price. Last year the Murray T-25 -- a T-27 was

 14 a gas engine beat the electric cars in the race with

 15 about an 80-mile-per-gallon rating.

 16 Bright Automotive in the U.S. is making

 17 similar concepts with a lightweight delivery truck.

 18 Composite cars can also be cheaper to produce. Instead

 19 of steel stamping mills and painting for rustproofing,

 20 manufacturers really need to invest in software for

 21 injection molding.

 22 Murray's car company does not plan on

 23 producing cars. Instead, it will license its

 24 intellectual property. I deal with established

 25 manufacturers. There it is. It's right out there.

 158
 1 It's here for us. They already have invented it, and we

 2 can do it. And they will license it, and we can build

 3 them here right now. 350 miles per gallon equivalent.

 4 And so let me just say a little -- a few

 5 personal notes here. In 1970, I had dissolved a little

 6 business I had, and I had $1200 in my pocket. And I

 7 drove by the Honda Motor Company. And in those days,

 8 all we knew about Honda was that they made motorcycles.

 9 And here's this little car at the Honda dealer. And I

 10 drove in and I bought it.

 11 Well, this little car got 44 miles to the

 12 gallon at a time, 1970, when our car manufacturers said

 13 they could not meet the California 1975 standards. This

 14 car was meeting those standards. I had it tested. And

 15 I went to an event where they were testing, and I know

 16 that that's the case.

 17 Well, my husband who -- typical male -- wants

 18 things a little bit beefier, I told him I had to have

 19 him -- I had to pick him up to have him help me get this

 20 car home. He said: Well, can you take it back? And I

 21 said: No, I paid for it. I'm going to have it.

 22 Well, 1972 came, people were standing in line

 23 shooting each other over gas. Well, all of a sudden, it

 24 became his car, and he was driving all his friends

 25 around in it.

 159
 1 And so we're talking about here whether or not

 2 there's a receptive consumer audience. Well, it

 3 depends, you see. It depends on the circumstances

 4 entirely. And when gas becomes $10 to $20 a gallon,

 5 we're all going to want these little 350-miles-per- 

 6 gallon cars. And a lot of us want these right now. In

 7 fact, if I could get that little Honda back, I would buy

 8 it now.

 9 Well, okay, going to the present.

 10 MR. WOOD: Could you wrap up, please?

 11 MS. JENSEN: I decided I'd buy a Prius five

 12 years ago. I had no idea that my daughter, who was

 13 almost 40 years old, at that time was going to get

 14 married. And I didn't have an idea that I would have a

 15 grandchild. And she lives in San Francisco and I live

 16 in Saratoga. But because I have the Prius, that means

 17 that I can come and tend to her two days a week. So

 18 that makes the whole difference. And my husband didn't

 19 want to buy that Prius either, but he --

 20 MR. WOOD: It's clear he should be listening

 21 to you more.

 22 MS. JENSEN: Thank you.

 23 MR. WOOD: Thank you very much. I think for

 24 the ease of going down and identifying the panelists,

 25 we'll just go straight down, and you can identify

 160
 1 yourself and your affiliation, please.

 2 Mr. Bignell.

 3 

 4 TESTIMONY BY BARRY BIGNELL

 5 MR. BIGNELL: Good afternoon. My name is

 6 Barry Bignell. I'm with the first green limo company in

 7 America called PlanetTran. We started the company

 8 approximately seven years ago to address the business

 9 travel market. And when we could give the customer, our

 10 clients, less expensive, less carbon-intensive -- and

 11 get around without sacrificing service or comfort.

 12 Our whole hybrid fleet, which consists of some

 13 70-odd cars, average about 40 miles to the gallon. They

 14 are predominantly Priuses, a couple of Camrys and

 15 Highlanders, but they are all hybrids. And this is a

 16 tremendous advantage, and we pass that savings along to

 17 our customers, about a 30 percent savings.

 18 We also use the latest technology for our

 19 reservations and electronic billing system. So it's all

 20 done electronically with text, et cetera. So we cut out

 21 the paper issue as well as many of us go through the

 22 paperless bank accounts, et cetera.

 23 We provide mostly in the business-travel

 24 market corporations, institutions and using only the

 25 fuel-efficient hybrid vehicles. Since we've operated

 161
 1 the Prius, it has proven a remarkable car from a safety,

 2 economy and reliability point of view.

 3 Basically, I don't know if you know how a

 4 hybrid works. Typically, it has dual sources of power;

 5 whereby, when it takes off, you use battery power. When

 6 it needs more energy, it will then kick in the gas

 7 engine. And when you stop, conversely the gas engine

 8 will stop. And usually when I get a new driver, they

 9 drive it for the first time, they think the engine

 10 stalled, and they expect somebody to be honking from

 11 behind. The advantage, of course, it not only saves

 12 gas, it saves noise pollution as well.

 13 Generally, pure hybrids are very easy to

 14 maintain. They've proven their reliability over the

 15 years now. And we really are behind the EPA initiative

 16 of getting better fuel economy overall.

 17 In 2011, for example, the average typical

 18 American household spent a record $4,155 for the gas

 19 tank, which is the highest share of median family income

 20 since 1981. Adopting a fuel efficiency and emissions

 21 performance equivalent of 54.5 miles per gallon by 2025

 22 will save consumers approximately $6,600 in fuel costs

 23 over the life of a model year 2025 compared to a 2010

 24 model.

 25 With the innovation of higher fuel economy

 162
 1 standards, American manufacturers develop new

 2 technologies that will indeed spur investment, research,

 3 development and competitiveness of U.S. manufacturing

 4 and to enhance, indeed, our exports to nations with a

 5 growing demand.

 6 It incentivizes the introduction of new and

 7 advanced technologies and increases, of course, our U.S.

 8 independence on foreign oil and spurs the deployment of

 9 electric and hybrid vehicle technologies to the

 10 light-duty fleet, which saves fuel costs for individual

 11 consumers and, indeed, businesses with fleets.

 12 How these standards will reduce greenhouse

 13 emissions, I know there's numbers pouring out all over

 14 the place. Your head's probably swirling as much as

 15 mine. But basically they will reduce dependence on oil

 16 by 4 billion barrels, which will slash approximately

 17 2 billion metric tons of greenhouse emissions.

 18 And next time you arrive at San Francisco

 19 Airport, please consider a green limousine. Thank you

 20 for your time.

 21 MR. MEDFORD: Thank you for your testimony.

 22 Mr. Bailey.

 23

 24 TESTIMONY OF GARY BAILEY

 25 MR. BAILEY: Thank you very much for the

 163
 1 opportunity to speak to you today. I'm Gary Bailey. I

 2 live in Sunnyvale, California. It's near the southern

 3 end of the San Francisco Peninsula. So I spent an hour

 4 on the train and half hour on the bus to get here today

 5 to tell you that I strongly support the proposed

 6 increases in fuel economy standards and the proposed

 7 limits on greenhouse gas emissions.

 8 I support them strongly because they will

 9 make this country a better place and the world a better

 10 place for my children and grandchildren and for their

 11 children and grandchildren; better because there will

 12 be less health-damaging pollution in the air, air

 13 pollution, resulting in fewer illnesses and deaths from

 14 air pollution; better because we will dramatically

 15 reduce our dependence on oil, which will be a boost to

 16 our economy, as you've heard already, and a dramatic

 17 help to our national security. Maybe we will even have

 18 fewer wars in the future.

 19 It will be better because it will have a

 20 dramatic reduction in earth-damaging greenhouse gas

 21 emissions which are already causing major human

 22 suffering in many places and are sure to cause a lot

 23 more human suffering in the coming decades.

 24 Only one example is the millions of people in

 25 the over 40 low-lying island nations that are going to

 164
 1 be watching their homelands disappear beneath rising

 2 sea levels caused by climate change and greenhouse gas

 3 emissions, not to mention the other low-lying places

 4 like Bangladesh. And in a few decades, maybe most of

 5 Florida and a lot of Louisiana where I went to high

 6 school and college will be disappearing below sea level

 7 if we don't make some changes.

 8 And I just wanted to point out that a recent

 9 study by the United Auto Workers, the National Wildlife

 10 Federation, and the Natural Resources Defense Council

 11 has shown that the fuel economy standards that are

 12 adopted for 2012 to 2016 have already created or saved

 13 150,000 jobs building cars and components for them,

 14 with over 300 companies and 43 states busily at work 

 15 developing new technologies to help auto manufacturers

 16 meet those standards. So that is a big boost to our

 17 economy, and these new proposed standards will be an

 18 even bigger boost to the economy.

 19 So just in closing, I'd like to point out

 20 that when a proposal, like this, is supported by the

 21 industry and by labor, by civic and nonprofit groups

 22 and scientific consensus, there can be no legitimate

 23 reason for not adopting it.

 24 Thanks for listening, and thanks for working

 25 to make the country and world a better place.

 165
 1 MR. WOOD: Thanks for your testimony. Thanks

 2 for taking public transportation.

 3 I can't see the next tent card.

 4 

 5 TESTIMONY OF ALISSA KENDALL

 6 MS. KENDALL: My name is Alissa Kendall. I'm

 7 an assistant professor at U.C. Davis in the Department

 8 of Civil and Environmental Engineering and a faculty

 9 affiliate of their Institute of Transportation Studies.

 10 And I'd like to start by thanking the

 11 officials and the staff that organized this and

 12 permitted us to speak today.

 13 I'd also like to state my support for the

 14 rulemaking or proposed rulemaking and offer praise for

 15 all the in-depth research that's already happened.

 16 I hope my comments today will demonstrate that

 17 the EPA should continue advancing research by extending

 18 its scope of analysis from the tailpipes to the life

 19 cycle, including upstream impacts of materials and

 20 vehicle technology.

 21 Previous life cycle assessments of passenger

 22 vehicles estimated use-phase emissions constitute 85 to

 23 95 percent of life cycle greenhouse gas emissions. So

 24 standards that address fossil fuel consumption through

 25 fuel economy standards or CO2 from the tailpipe have

 166
 1 functioned to successfully limit or reduce life cycle

 2 emissions and will probably do so in the near future as

 3 well.

 4 However, two trends suggest that tailpipe-only

 5 standards could miss important tradeoffs in technology

 6 and design decisions in the future. The first trend is

 7 that many technologies that reduce greenhouse gas

 8 emissions during operation increase emissions during

 9 production. This has been shown for advanced materials

 10 used in mass production and also electric power train.

 11 The second trend is that when we use reduced greenhouse

 12 gas emissions during vehicle use, the relative

 13 importance of production-related emissions increases.

 14 These trends have been highlighted previously including

 15 in the NHTSA draft Environmental Impact Statement and a

 16 recent CARB report for their advanced Clean Cars

 17 program.

 18 EPA's greenhouse gas emission standards and

 19 NHTSA'S CAFE standard are performance-based, allowing

 20 for flexibility in how vehicle producers achieve

 21 compliance. They can select from an enormous range of

 22 technologies and innovations, each of which have unique

 23 upstream burdens associated with them. This means that

 24 among future vehicles, there may be significant

 25 differences in upstream emissions. And if upstream

 167
 1 emissions are significant enough, there's a potential

 2 for vehicles with lower tailpipe emissions but higher

 3 life cycle emissions to be favored.

 4 We undertook research to address these issues.

 5 The research was funded by the AISI and the World Auto

 6 Steel organization and with additional support from U.C.

 7 Davis, the U.C. Davis Institute of Transportation

 8 Studies. A summary of our research and findings is

 9 currently undergoing peer review in a scholarly journal.

 10 Using a case study approach, we undertook a

 11 streamlined LCA for a future vehicle and tested

 12 whether tailpipe-only standards could result in the

 13 preference for vehicles with lower use-phase emissions

 14 but higher life cycle emissions. We used a vehicle

 15 designed -- developed in Lotus Engineering 2010 report,

 16 a model year 2020 [sic] Toyota Venza. Lotus redesigned

 17 the Venza for improved fuel economy while meeting

 18 predefined cost constraints and targets for equivalent

 19 consumer performance. They did this through

 20 light-weighting and power train actions such as

 21 hybridization. The high-development vehicle described

 22 in Lotus's report was the basis for our model.

 23 To perform the LCA, we connected the bill of

 24 materials generated by computer-aided engineering

 25 software to life cycle inventory data. Life cycle

 168
 1 inventories characterize the upstream emissions

 2 associated with material production and forming

 3 processes. Using this approach, we found the use phase

 4 responsible for 71 to 76 percent of life cycle

 5 emissions, which aligns with many previous studies of

 6 advanced power train vehicles.

 7 We also performed a variation on the analysis

 8 where we altered Lotus's high-development vehicle by

 9 replacing the lightweight body structure with one that

 10 was 100 kilograms heavier. This was referred to as the

 11 low-development structure in the Lotus report. This

 12 heavier body structure eliminated some carbon-intensive

 13 lightweight materials, primarily magnesium and some

 14 aluminum. These materials were replaced with mild and

 15 advanced high-strength steel. The change in vehicle

 16 weight led to a decrease in fuel economy of 3 miles per

 17 gallon, which in turn increased CO2 emissions during

 18 operation. Despite these increased emissions during

 19 vehicle use, the new design reduced total life cycle

 20 emissions by a significant amount, which approximated to

 21 10 to 20 grams of CO2 equivalent per mile, depending on

 22 vehicle service life.

 23 To put this in perspective, the difference in

 24 emissions between the two designs is greater than any of

 25 the off-cycle credit provisions and similar in magnitude

 169
 1 to many of the air-conditioning credits that the EPA has

 2 already considered in its rulemaking.

 3 Our research process also demonstrated that by

 4 using the detailed bill of materials generated in

 5 computer-aided engineering software, we could produce a

 6 streamlined LCA quite efficiently. Since computer-aided

 7 engineering tools are widespread in the automotive

 8 industry, conducting LCAs may be less burdensome than

 9 anticipated.

 10 To summarize, our analysis suggests that there

 11 is a potential for a tailpipe-only CO2 standard to favor

 12 vehicles with higher life cycle emissions over those

 13 with lower life cycle emissions, shifting greenhouse gas

 14 emissions from the tailpipe to production sites.

 15 Continued research in tracking of upstream emissions for

 16 future vehicles may help manage the risk of selecting

 17 vehicle design and technologies where upstream emissions

 18 overwhelm use-phase savings. In addition, including

 19 upstream emissions in the standard could provide vehicle

 20 producers with an additional degree of flexibility to

 21 achieve CO2 production.

 22 Thank you.

 23 MR. WOOD: Perfect timing. Thank you.

 24 Ms. Morehouse.

 25

 170
 1 TESTIMONY BY ERICA MOREHOUSE

 2 MS. MOREHOUSE: My name is Erica Morehouse,

 3 and on behalf of the Environmental Defense Fund and our

 4 more than 700,000 members nationwide and the numerous

 5 members here in California, I sincerely thank you for

 6 the opportunity to testify in support of this landmark

 7 proposal which addresses extensive climate disrupting

 8 pollution from passenger vehicles. These standards

 9 will provide consumers with nearly double the fuel

 10 efficiency of today's cars and light trucks and save

 11 hard-earned dollars at the gas pump.

 12 We applaud the collaboration between the

 13 Environmental Protection Agency, the Department of

 14 Transportation, auto companies, the workers that forge

 15 cleaner cars and the State of California in building

 16 this landmark proposal, together through tough

 17 negotiations and an abiding commitment to a common good

 18 for our nation. The success of this collaboration is

 19 reflected in the broad support for this rule, from

 20 small businesses, consumers, veterans, national

 21 security experts and many more. And we applaud

 22 California for its leadership in spurring cleaner cars

 23 through its extraordinary world-class expertise.

 24 California's leadership is rooted in a firm

 25 bipartisanship. Over 40 years ago, during the

 171
 1 development of the Clean Air Act in 1967, it was

 2 Republican Senator George Murphy of California who

 3 sponsored the pivotal legislative language guaranteeing

 4 California's continued leadership in establishing clean

 5 car standards. Senator Murphy won sweeping bipartisan

 6 support for California to maintain its authority to

 7 protect human health and the environment from

 8 automobile emissions pointing to the very seriousness

 9 of air pollution.

 10 California has continued to show bipartisan

 11 leadership in driving our state and our nation toward

 12 cleaner cars and trucks. The National Academy of

 13 Sciences examined California's time-tested leadership,

 14 finding that the Golden State has long been looked at

 15 as laboratory for emissions control innovations.

 16 California's continued collaboration with EPA and DOT

 17 to establish protective fuel economy and greenhouse gas

 18 emission standards will again mean cleaner cars and

 19 trucks for our nation and the world.

 20 The proposed rule under consideration today

 21 will help to provide energy security, economic security

 22 and climate security for our nation. Increasing the

 23 efficiency of our passenger fleet is one of the single 

 24 most effective solutions we can employ to reduce our

 25 dependence on oil, and will likely be President Obama's

 172
 1 greatest climate and energy security legacy.

 2 With respect to the energy security, when

 3 combined with Phase 1 clean car standards, the proposed

 4 rule's fuel economy and emissions standards will cut

 5 our oil consumption by over 2 million barrels a day,

 6 more than we import from the Persian Gulf.

 7 With respect to economic security, combined

 8 again with the Phase 1 standards, the proposed rule

 9 will provide families with more than $8,000 in fuel

 10 savings over the lifetime of the new vehicle for a

 11 total of 1.7 trillion in national fuel savings over the

 12 life of the program.

 13 With respect to climate security, the

 14 combustion of oil in our nation's fleet of passenger

 15 vehicles accounts for about 20 percent of U.S.

 16 greenhouse gas emissions. Together with the

 17 first-phase standards, the proposed standard under

 18 consideration will cut heat-trapping carbon dioxide

 19 pollution by over 6 million metric tons.

 20 These emission reductions are an important

 21 part of a national and global effort to ward off the

 22 worst consequences of climate change. The U.S. Global

 23 Change Research Program has found that climate change

 24 is already affecting water, energy, transportation,

 25 agriculture ecosystems and health.

 173
 1 In California and the Southwest, water

 2 supplies will become increasingly scarce, calling for

 3 tradeoffs among competing uses and potentially leading

 4 to conflict. Increasing temperature, drought, wildfire

 5 and invasive species will accelerate the transformation

 6 of the landscape. Increased frequency and altered

 7 timing of flooding will increase the risk to people,

 8 ecosystems and infrastructure. And according to a

 9 peer-reviewed study published in the scientific

 10 journal, Climate Change, climate change is also likely

 11 to harm California's economy by reducing the types of

 12 natural nonirrigated vegetation available for livestock

 13 forage and ability of forest ecosystems to store carbon

 14 dioxide.

 15 These impacts do not come at a small price.

 16 Natural disasters in 2011 wielded the costliest toll in

 17 history, a massive 380 billion worth of losses from

 18 earthquakes, floods, tornadoes, hurricanes, wildfires

 19 tsunamis and more. That figure does not include the

 20 expenses associated with the sickness or injuries

 21 triggered by the disaster.

 22 The collaboration that helped develop the

 23 proposed rule demonstrates the best practices of our

 24 government. At the same time California is moving in

 25 parallel with EPA and DOT to establish criteria for

 174
 1 pollutant and greenhouse gas emission standards. The

 2 state is developing these standards to complement the

 3 program and will help reduce the harmful oxides of

 4 nitrogen, particulate matter and volatile organic

 5 compound pollution from light-duty vehicles,

 6 strengthening vital protections against deadly

 7 particulates and the key ingredients in smog.

 8 We respectfully urge EPA to build from the

 9 foundation forged by California's leadership and

 10 immediately propose Tier 3 emissions and gasoline fuel

 11 standards for passenger vehicles and to finalize these

 12 protections by the summer of 2012. Such rigorous

 13 programs would have immediate and far-reaching health

 14 and environmental benefits.

 15 In conclusion, the Environmental Defense Fund

 16 is proud to be among the manufacturers, the auto

 17 workers, the economists, and health and environmental

 18 advocates, the states, the national security groups and

 19 small businesses and consumer groups that all agree

 20 that cleaner, more efficient vehicles are a step

 21 forward for American families and businesses. Thank

 22 you.

 23 MR. MEDFORD: Thank you very much.

 24 Dr. Corcoran.

 25

 175
 1 TESTIMONY OF DR. RICHARD CORCORAN

 2 DR. CORCORAN: Hello. My name is Dr. Rick

 3 Corcoran, and I'm a retired eye doctor from Santa Cruz,

 4 California. I'm here to testify today on behalf of the

 5 proposed standards for the 54.5-miles-per-gallon fuel

 6 economy by 2025.

 7 My wife and I own a Chevrolet Volt and a

 8 Nissan Leaf. I applaud the Obama administration for

 9 encouraging the adoption of this new technology by

 10 giving us tax credits on both cars, and for the State of

 11 California to give us a rebate on the Leaf. Without

 12 such rebates, the adoption of these new cars would make

 13 it difficult for the average American consumer to buy

 14 these cars.

 15 We have owned the cars for about six months

 16 now and our driving miles are about the same as the

 17 average American, at roughly 1,000 miles per each

 18 vehicle. My wife's mpg is, of course, infinity. Mine

 19 is 120 miles per gallon. Let me say that again. It's

 20 120 miles per gallon. And I consider the Volt to be

 21 just a transitional technology.

 22 Realizing that you want a 54.5 average fleet

 23 mpg in 14 years seems to be easily doable even today

 24 based on our experience with existing technology. Who

 25 knows what we will be capable of in 2025.

 176
 1 The major concern by those against these

 2 proposed standards is cost to the consumer. The EPA's

 3 estimate, I believe, is about 3,200 per car. The

 4 National Automobile Dealers Association's worried that

 5 it might cost up to $5,000 per car. I believe it's been

 6 shown that the savings in gasoline costs over the 

 7 lifetime on the car is about $4,000. Obviously, the

 8 cost is paid for in gas savings.

 9 My emphasis here today, though, is on electric

 10 and gas electric hybrid technology. I'd like to show

 11 you how much it costs us to own our electric Leaf.

 12 Let's use some simple math and simple assumptions.

 13 First, I'll use an average fleet mpg today of 25. My

 14 wife drives her car 1,000 miles a month. This equates

 15 to 40 gallons of gasoline she doesn't have to buy. If

 16 you'll allow me an average cost of $5.00 per gallon over

 17 the next eight years, that comes out to $200 a month

 18 she's saving in gas costs alone. In that year, that's

 19 $2400. Remember, that she would have needed two oil

 20 changes in that year, saving an additional $100. That's

 21 $2,500 a year total. You see, electric cars are a dream

 22 maintenancewise. They need no oil or filter change.

 23 They have no transmission, no radiator, no exhaust

 24 system, no air cleaner. You get the idea. Even the

 25 brakes are supposed to last longer due to regenerative

 177
 1 braking.

 2 Back to our cost analysis. The car battery

 3 and drive system is warrantied for eight years or

 4 100,000 miles. So in eight years, she will have saved

 5 $20,000 on gas and oil alone. Now, the car cost 32,500,

 6 we got a tax credit of $7,500, bringing it to 25,000.

 7 California threw in an additional $5,000 rebate, taking

 8 the grand total for car of $20,000. The car cost

 9 20,000. We saved 20,000. I guess the car was free.

 10 Now, you may say the electricity to charge the

 11 car still costs money. To defray the electricity cost,

 12 we put in a solar panel system. And after six months

 13 our electric bill is zero. The solar panel system did

 14 cost after rebates and tax credits about $5,000. I

 15 would argue that after eight years, we could probably

 16 sell the Leaf for 5,000. So, again, the car was free,

 17 and we got a solar panel system, which will last about

 18 25 years.

 19 Part of my emphasis here today is that not

 20 only do we dramatically decrease our need for oil, but

 21 we also spur the residential use of solar panels.

 22 Imagine having your own fuel station at home. Not only

 23 is the fuel free after initial up-front costs, but it's

 24 as clean as it gets, and from a completely 100 percent

 25 sustainable source. As my wife and I like to say, we

 178
 1 fill our cars with sunshine.

 2 Because we're at the forefront of the new

 3 technology, I would contend that the cost of cars and

 4 solar PV systems will also decline over time so that

 5 credits and rebates would no longer be necessary. Solar

 6 PV systems have already declined by 65 percent in the

 7 past ten years, and solar panels are now a commodity

 8 item, generally purchased from China.

 9 Besides, if we can give subsidies to oil

 10 companies, the most profitable companies in the world,

 11 surely we can help a burgeoning new technology, which

 12 will create jobs here in America and a whole new product

 13 to export to the world, rather than us continuing to

 14 import oil. If we don't do it, China will. Thank you.

 15 MR. MEDFORD: Thank you.

 16 Mrs. Corcoran.

 17

 18 TESTIMONY BY KATHY CORCORAN

 19 MRS. CORCORAN: Good afternoon, and thank you

 20 for the opportunity to testify today.

 21 My name is Kathy Corcoran, and I'm a native of

 22 California. I currently live in Santa Cruz, and I grew

 23 up in Silicon Valley. I've been a public schoolteacher

 24 for 32 years. I'd like to begin by saying that I

 25 applaud the Obama administration for proposing historic

 179
 1 fuel economy and greenhouse gas standards that will

 2 reduce our dependence on oil and cut carbon pollution.

 3 I too am doing my part as an individual in

 4 ending my dependency on oil and am working to reduce my

 5 carbon footprint while behind the wheel of an

 6 automobile. As my husband has told you, I'm the proud

 7 owner of a 2011 Nissan Leaf, the first that were out

 8 there, the all-electric vehicle. And I would like to

 9 share with you how I came to make the decision to

 10 purchase this car.

 11 First was energy security. I have three

 12 children, 20, 25, and 29, and I watched as many of

 13 their friends volunteered to serve their country and

 14 were shipped off to Iraq or Afghanistan. I've seen

 15 firsthand the damage that this war has caused.

 16 I chose to purchase and drive a Leaf as a

 17 statement to everyone who sees me that I am no longer

 18 connected to Big Oil. I do not want to see the

 19 students who are sitting in their desks today going off

 20 to a war for oil.

 21 Concerning the production of oil, I'd like to

 22 share with you a startling fact that I just learned.

 23 It takes less electricity to drive my car 100 miles

 24 than to drive a gas-powered car 100 miles because of

 25 the electricity consumption to refine the gasoline.

 180
 1 I drive an electric car that is powered by

 2 our personal solar system, thus cutting my dependency

 3 on oil. As a teacher, I find it hard not to share this

 4 reason with anyone who will listen. My captive

 5 audience of sixth graders may not remember where to 

 6 place a comma in a sentence, but they know all about

 7 why I drive an electric car. I'm doing my part.

 8 Speaking of children, their future is the

 9 biggest reason I decided to buy my car. Kids get it.

 10 They know all about global warming and the importance

 11 of reducing carbon pollution and want to do something

 12 about it. In my teaching of U.S. history and current

 13 events, it is very obvious to my students that the

 14 United States is a world leader and sets examples

 15 throughout the world. They are also aware that the

 16 U.S. consumes a lot of the world's energy. Their

 17 confusion comes when they notice, as a nation, we are

 18 not taking a leadership role in being responsible with

 19 our consumption.

 20 So I bought my car to be a role model for

 21 them and anyone else I find who will listen to me. It

 22 is my strong opinion that the United States must be

 23 setting an example for the world. We must be the

 24 energy-efficient nation. As a nation, we must begin to

 25 repair our economy with the new technologies that are

 181
 1 available. As a nation, we must take our

 2 responsibility for energy consumption seriously, drive

 3 more efficiently and protect our world for our

 4 children's children. Please do all that you can to

 5 educate the public and not allow excessive loopholes

 6 and auto industry giveaways to undermine the

 7 President's oil savings and emission reductions goal.

 8 Thank you very much.

 9 MR. MEDFORD: Thank you. Both you and your

 10 husband made Ms. Jensen smile down at this end of the

 11 table. Very good.

 12 Next, Mr. Swain.

 13

 14 TESTIMONY BY GALEN SWAIN

 15 MR. SWAIN: I'd like to welcome the panel to

 16 California. Good afternoon. My name is Galen Swain.

 17 It is my honor to give testimony to this distinguished

 18 panel.

 19 I'm an United States Air Force veteran who

 20 served honorably in peacetime for six years under

 21 Presidents Carter and Reagan.

 22 I'm a Motor City son, born on the banks of

 23 the Detroit River and our nation's border with Canada.

 24 I am a former General Motors employee who has lived the

 25 economic devastation of an industry that failed to 

 182
 1 recognize the weaknesses of its business model.

 2 Lobbying governments for favorable treatments is not a

 3 business plan; it is a tactic. Nor will it isolate a

 4 business from the externalities of disrupted energy

 5 resources.

 6 I'm also the father of a teenage daughter who

 7 committed suicide with a vehicle in a garage, on prom

 8 night. One only needs to look at my daughter's example

 9 to conclude that emissions are certainly harmful.

 10 I'm not here to make a personal case for

 11 increased fuel efficiency and emissions standards. I'm

 12 here to make a business case and a national security

 13 case for why we, as a nation, must change our energy

 14 policy and recognize the perils, should we all fail to

 15 do so. It is important for our government to provide

 16 the leadership on these risks that somehow the private

 17 sector has seemed to ignore.

 18 I graduated high school from Fowlerville,

 19 Michigan in between two oil embargoes 35 years ago. So

 20 it seems to me that the automotive industry should have

 21 known all that it needed to know about its business

 22 future going forward, particularly the plan for -- the

 23 need for a Plan B because Plan A presented considerable

 24 risks to the business model, the risk further

 25 compounded by off-shore business competitors who did

 183
 1 not -- who did recognize the risks. Their decisions to

 2 bring products to market that customers were

 3 increasingly making conscious economic decisions on

 4 paid off.

 5 To the American automotive industry, I say

 6 the failure to plan in the 1970s was a plan to fail,

 7 three decades in the making. We now have a history as

 8 our example. I repeat: Lobbying governments for

 9 favorable treatment is not a business plan; it is a

 10 tactic. More importantly, it should not suffice for a

 11 sound business plan.

 12 I've lived and worked in Silicon Valley for

 13 15 years, mostly in the semiconductor industry. It was

 14 years ago that I told my father who, with my mother,

 15 raised six children and made a living in the automotive

 16 industry, that Silicon Valley was the Motor City of

 17 this millennium. That is our vision for the future,

 18 our ethos. Our ethos was all about energy efficiency.

 19 You couldn't squeeze the efficiency of an electron any

 20 tighter than in any other industry than in the

 21 semiconductor industry.

 22 We are fast approaching the atomic physical

 23 limitations. But, you know, I still believe in

 24 innovations yet unknown. In Silicon Valley, we are

 25 absolutely clear on one thing: Disruptive technologies

 184
 1 are constant.

 2 The vision and ethos should have entered the

 3 business calculations in Detroit decades ago. I'm sure

 4 it would be a much more vibrant community than what we

 5 see today.

 6 Now I'd like to turn our attention to the

 7 case for national security. Offshoring of American

 8 wealth does not enhance national security. It weakens

 9 it. When I graduated high school, the United States

 10 produced 60 percent of its oil domestically and

 11 imported 40 percent. Today those figures are closer to

 12 30 percent domestic and 70 percent imported, with

 13 imported rate increasing at a rate of 1 percent per

 14 year. This trend must stop, as it suggests that we

 15 have three more decades left before we offshore

 16 100 percent of our wealth for most of our energy needs.

 17 That is wrong and dangerous.

 18 There is plenty of media coverage about the

 19 Straits of Hormuz these days, and it's manifesting

 20 itself at the gas pumps this week. Additionally, we

 21 have vulnerabilities to major oil refinery facilities

 22 right around the corner from the Straits of Hormuz.

 23 Just like the automotive industry, our nation is not

 24 isolated from the risks of disruption. One only needs

 25 to extrapolate the calculations of 5 percent to

 185
 1 10 percent global oil production being taken offline.

 2 Imagine the challenges of a heavily dependent Navy and

 3 Air Force that has to project power protecting oil

 4 shipping lanes. The global economy would sacrifice to

 5 do so, and yet it is that very same economy that

 6 provides economic means to project power. To use a

 7 metaphor, it's like a snake eating its tail. Imagine

 8 the civil unrest around the world because of the

 9 disparity of economic circumstances.

 10 Lastly and briefly, broad sections of the

 11 scientific community have concluded that the amount of

 12 CO2 emissions in the atmosphere are at levels that

 13 threaten ecosystems and has human fingerprints on it.

 14 It is insulting to think that anyone wants to argue

 15 that tailpipe emissions aren't harmful to the

 16 environment. The ecosystems threatened include food

 17 chains, coastal populations. If we didn't have big ice

 18 cubes at the North and South Pole, we'd have over

 19 50 meters of sea level rise.

 20 The insurance industry and the Department of

 21 Defense are already planning for an increase. I would

 22 recommend the same planning for the Environmental

 23 Protection Agency. Increasing energy efficiency and

 24 emissions standards in vehicles is a no-brainer when it

 25 comes to economic security and national security.

 186
 1 I support targets for increasing miles per

 2 gallon. The American automotive industry should want

 3 to do it, if for no other reason than to differentiate

 4 their product line from all others. That would

 5 demonstrate pride and vision. I thank the panel.

 6 MR. WOOD: Thank you very much.

 7 Mr. Danker.

 8 

 9 TESTIMONY BY MERVYN DANKER

 10 MR. DANKER: Thank you very much indeed for

 11 the opportunity to speak at this joint hearing for the

 12 Environmental Protection Agency and the National Highway

 13 Transportation Safety Administration.

 14 I'm here today on behalf of AJC's San

 15 Francisco regional office and on behalf of AJC national

 16 and it's more than 175,000 members and supporters to

 17 urge that your agency safeguard and further strengthen

 18 the fuel economy standards agreed upon in July 2011

 19 between the automakers and the Obama administration.

 20 AJC strongly believes that these standards are a

 21 critical element of the U.S. commitment to decreasing

 22 dependence on foreign oil through enhancement of

 23 vehicular efficiency.

 24 As you well know, pursuant to the announcement

 25 made last July fuel economy standards are to be raised

 187
 1 to 54.5 miles per gallon for cars and light trucks

 2 between 2017 and 2025, and standards are to be issued

 3 for the first time for medium-duty and heavy-duty

 4 vehicles. This improvement in fuel efficiency for

 5 passenger vehicles marks an important step forward in

 6 ending U.S. dependence on imported oil. And

 7 importantly, even as we are convinced that we, as a

 8 nation, must be prepared to incur additional costs in

 9 the cause of reduced dependence and enhanced security,

 10 any increased costs associated with making our vehicles

 11 more fuel efficient will be offset by the overall

 12 savings on gasoline that will come from operating more

 13 fuel-efficient cars.

 14 Each day, the United States sends $1 billon

 15 overseas to pay for the needs of a transportation sector

 16 that is 95 percent dependent on petroleum-based fuels.

 17 A quarter of our oil imports come from the Middle East

 18 and Venezuela, nations whose interests are inimical to

 19 our own. Our nation's expenditures on imported oil fund

 20 the very same nations whose radical movements and

 21 unstable regimes pose significant threats to America's

 22 national security. Raising fuel economy standards sends

 23 a clear signal that America's on the path towards ending

 24 its oil addiction and flow of petro-dollars to the

 25 coffers of these regimes.

 188
 1 AJC has long called for the United States to

 2 set as a primary national goal a comprehensive energy

 3 policy aimed at substantial reduction in U.S. dependence

 4 on imported oil. Toward that end, AJC has unveiled a

 5 national energy strategy that would reduce total current

 6 U.S. imports of petroleum and petroleum products by a

 7 minimum of 2.75 to 3.25 million barrels a day by 2020.

 8 Increasing fuel economy standards is an essential

 9 element of that strategy, even as it is far from the

 10 last step to be taken.

 11 We urge you and the Obama administration to

 12 continue this important effort by working to ensure that

 13 our nation's vehicle fleets continue to be held to the

 14 highest feasible standard and by looking for

 15 opportunities to further raise fuel economy standards,

 16 as well as by expanding the availability and variety of

 17 alternative fuel vehicles through open fuel standard,

 18 electrification and enhanced use of natural gas.

 19 I thank you very much, again, for providing us

 20 the opportunity to express our views. Thank you.

 21 MR. WOOD: Thank you very much.

 22 My colleagues have any questions?

 23 No. Well, I thank each of you for your

 24 thoughtful testimony this afternoon. We're going to

 25 take a 15-minute break. We're going to change court

 189
 1 reporters, and we will be back in just 15 minutes.

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 190
 1 MS. OGE: We'll start with Mr. Boesel,

 2 John. Good afternoon.

 3 TESTIMONY BY JOHN BOESEL

 4 MR. BOESEL: Thank you, distinguished

 5 members of the panel. I really appreciate this

 6 opportunity to present. I have submitted written

 7 testimony, and having been here for the previous

 8 panel, I think what I will do is try to keep it very

 9 short so you can get back to the hotel at some point

 10 tonight.

 11 Just in brief, CALSTART is a nonprofit

 12 organization that works with industry to try to help

 13 develop the clean transportation technology

 14 industry. Of our 140-plus member companies, we have

 15 car and truck manufacturers, startups, utilities,

 16 fleets, equipment suppliers, venture capitalists,

 17 banks, and many others.

 18 We are fuel and technology neutral. We

 19 think there are many paths to the future and we have

 20 been in existence for almost 20 years now. And we

 21 view these rules as at least a portion of what we've

 22 been able to accomplish that automotive technology

 23 over the last 20 years has really improved

 24 dramatically, and yet I think we've just begun to

 25 see how quickly this technology can improve.

 191
 1 I think we're on a trajectory that will see

 2 a ramp up, a significant ramp up in the adoption and

 3 development of clean and energy efficient automotive

 4 technology. We are going to be benefitting from

 5 developments in nanotech space, greater computer

 6 controls and sensors and improved energy storage

 7 technology.

 8 So we are just at the beginning of a very

 9 interesting and very positive period. I believe

 10 that these regulations -- and we've shared this with

 11 members of Congress -- are good for business.

 12 These regulations will help drive

 13 investment in the United States industry and in

 14 companies here, and that's both for startups as well 

 15 as established component suppliers and OEMs.

 16 We believe that these standards are very

 17 feasible and achievable. They will focus

 18 engineering resources on the priorities that are

 19 significant for the nation. They will push and

 20 encouraged innovation, but they will not overreach.

 21 I believe that there is an 85- to

 22 90-percent probability of success that these

 23 regulations would be adopted at a cost that will not

 24 have any significant negative impact on the American

 25 economy. If anything, I think the standards could

 192
 1 be higher, could be stronger, could be toughened,

 2 and that's why we will be working and presenting

 3 testimony to the California Air Resources Board on

 4 Thursday of this week, because we think it will be

 5 important to continue to push the envelope here in

 6 California.

 7 And I just want to say a few closing

 8 comments, which is that other nations have even

 9 tougher, more demanding vehicle efficiency

 10 standards. So to comply with rules in other

 11 countries, the OEMs will have to develop these

 12 technologies.

 13 The question is, will we implement these

 14 rules as detailed today so that technology has to be

 15 applied to our unique set of circumstances and our

 16 unique people population here in the United States.

 17 So I think as written today there is a lot

 18 of flexibility in the rules. I think the OEMs can

 19 comply with this and I think it will drive

 20 investment in the United States and help companies

 21 with advanced clean vehicle technology to go grow

 22 here in the United States. Thank you.

 23 MS. OGE: Thank you. Mr. Tom Wenzel?

 24 TESTIMONY BY TOM WENZEL

 25 MR. WENZEL: Good afternoon. My name is

 193
 1 Tom Wenzel. I'm a Research Scientist at Lawrence

 2 Berkeley National Laboratory. I appreciate the

 3 opportunity to provide comments on the NPRM for this

 4 joint rulemaking today. My comments today are mine

 5 alone, and I do not represent the views of the U.S.

 6 Department of Energy, the Berkeley Lab, or the

 7 University of California.

 8 For the last two years I have been under

 9 contract with DOE to assist NHTSA and EPA in their

 10 analysis of the effect of vehicle mass reduction on

 11 safety.

 12 My work has resulted in two studies: an

 13 assessment of NHTSA's 2011 regression analysis of

 14 U.S. fatality risk per vehicle mile traveled (or

 15 VMT), and my own regression analysis of casualty

 16 risk per police-reported crash. All three of these

 17 studies are available in the public docket with this

 18 rulemaking.

 19 My studies agree with NHTSA's conclusion,

 20 that the effect of mass reduction on U.S. fatality

 21 risk is small and is statistically significant only

 22 for lighter-than-average cars.

 23 For lighter-than-average cars, the

 24 regression models suggest that a 100-pound reduction

 25 in mass would increase U.S. fatalities per vehicle

 194
 1 mile traveled by less than 2%.

 2 These results are much smaller than those

 3 NHTSA estimated in earlier studies in 1998 and 2003.

 4 Other variables that NHTSA included in their

 5 regression models have a larger effect on fatality

 6 risk than a reduction in vehicle mass.

 7 My analysis by vehicle model indicates that

 8 on average, U.S. fatality risk does tend to increase

 9 as vehicle mass decreases, except for full-size

 10 pickups; societal risk actually decreases as

 11 full-size pickups get heavier. This is because of 

 12 the high risk that full-size pickups impose on

 13 drivers of other vehicles.

 14 Although risk increases as mass decreases

 15 for other types of vehicles, there is very little

 16 correlation between risk and mass for individual

 17 vehicle models, even after accounting for

 18 differences in other vehicle attributes, driver age

 19 and gender, and crash times and locations.

 20 Police-reported crashes can be used to

 21 estimate four types of risk: fatality and casualty

 22 risk, either per vehicle mile traveled or per crash.

 23 Casualty risk includes fatalities plus serious or

 24 incapacitating injuries.

 25 My analysis found comparable results in

 195
 1 terms of casualty risk per crash to those from

 2 NHTSA's analysis of fatality risk per VMT; in most

 3 cases, mass reduction resulted in an even lower

 4 effect on risk in my analysis than in NHTSA's

 5 analysis.

 6 I isolated the two components of fatality

 7 risk per VMT: the number of crashes per VMT (or

 8 crash frequency), and fatality risk per crash (or

 9 crashworthiness).

 10 Crash frequency consistently increases as

 11 vehicles get lighter for all types of vehicles.

 12 However, mass reduction has only a small effect on

 13 fatality risk once a crash has occurred.

 14 In conclusion, the three new analyses

 15 suggest the effect of mass reduction on risk is much

 16 smaller than NHTSA previously estimated and

 17 statistically significant only for

 18 lighter-than-average cars.

 19 The agencies should keep in mind that the

 20 regression models in the three analyses are not

 21 exactly estimating the effect of mass reduction on

 22 risk; rather, they are estimating the recent

 23 historic relationship between mass and risk after

 24 accounting for most measurable differences between

 25 vehicles, drivers, and crash times.

 196
 1 In essence, the models are comparing the

 2 risk of a 2600-pound Dodge Neon with that of a

 3 2500-pound Honda Civic after attempting to account

 4 for all other differences between the two vehicles.

 5 The models are not estimating the effect of

 6 literally removing 100 pounds from the Neon.

 7 Reduced mass does not inherently decrease

 8 vehicle safety; it all depends on where and how the

 9 mass is reduced; in short, how mass production is

 10 incorporated into the overall vehicle design.

 11 Finally, the agencies should recognize that

 12 the results of the three new studies are based on

 13 relationship of vehicle mass and footprint on risk

 14 for recent vehicle designs. These relationships may

 15 or may not continue into the future as manufacturers

 16 utilize new vehicle designs and incorporate new

 17 technologies, such as more extensive use of strong,

 18 lightweight materials and specific safety

 19 technologies. Thank you.

 20 MS. OGE: Thank you. Mr. Bruce Klafter?

 21 MR. KLAFTER: Yeah, Klafter is correct.

 22 MS. OGE: Good afternoon.

 23 TESTIMONY BY BRUCE KLAFTER

 24 MR. KLAFTER: Good afternoon. My name is

 25 Bruce Klafter. I'm here in two capacities this

 197
 1 afternoon: I'm one of four chairs of the California

 2 Clean Cars Campaign which is a broad-based coalition

 3 of public health officials, environmental

 4 organizations, businesses, faith groups, local

 5 governments and others, all of whom support

 6 implementation of the highest possible clean car

 7 standards in California and who carry the belief

 8 that doing so will bring manifold benefits to not

 9 only the state, but to the nation.

 10 I'm principally here this afternoon as head

 11 of Corporate Responsibility and Sustainability at

 12 Applied Materials in Santa Clara, California.

 13 Applied is a multinational company. We employ

 14 13,000 individuals in 21 countries around the world.

 15 Our principal lines of business are to

 16 provide equipment, capital equipment, services and

 17 software to the semiconductor display and

 18 photovoltaic industry. Our mission really is to

 19 enable the innovation in various industries, and

 20 it's our belief that the creation of a robust clean

 21 car economy in the United States is absolutely

 22 critical, and we're hopeful that we can contribute

 23 somehow to that.

 24 But we are very supportive of the proposal

 25 that's being reviewed today; the NHTSA and EPA

 198
 1 proposal, and we applaud the Obama Administration

 2 for proposing these historic fuel economy and

 3 greenhouse gas emission standards.

 4 Applied Materials was an early and strong

 5 supporter of the California Global Warming Solutions

 6 Act. We also are very appreciative of the fact that

 7 there has been such an effort made to harmonize

 8 these standards with California standards, because

 9 we think that's going to be critical to achieving

 10 success ultimately and making the implementation

 11 much smoother.

 12 Now, the key thing that I would like to

 13 leave with you today -- I do have a number of

 14 remarks that probably echo what many of the speakers

 15 have stated -- but I think from our experience as,

 16 again, an enabler of industries, we believe that

 17 sound public policy can be a critical accelerator

 18 for industrial development, and we think that's

 19 embodied in this current proposal.

 20 The reasons that we hold that view are as

 21 follows: No. 1, we do believe that sound

 22 science-based standards can drive innovation. We

 23 think that's the story of Silicon Valley; it's the

 24 story of our company. And we think that we're just

 25 now beginning to see that sort of development emerge

 199
 1 from entrepreneurs and others in terms of clean car

 2 development.

 3 Our own company is in a partnership with

 4 several companies and working under a Department of

 5 Energy grant on advanced battery manufacturing

 6 techniques, so we hopefully can contribute in that

 7 area but also probably in advanced electronics.

 8 We think that the standards as proposed are

 9 achievable. They will foster ingenuity of all

 10 kinds. I know a number of speakers have stated that

 11 really the solutions are probably unknown today. We

 12 think that that's not a pipe dream; that's probably

 13 a very real expectation because that's the story

 14 again of this Valley and the state.

 15 But it's also very clear that at the

 16 present time we're already seeing quite a bit of

 17 direct and indirect economic development ranging

 18 from the manufacturing facility established by Tesla

 19 in Fremont, but also the indirect development that's

 20 associated with that.

 21 When that plant, the NUMMI plant, shut

 22 down, one of the terrible consequences was that all

 23 the indirect employment withered away. We think as

 24 we start to innovate in the clean car economy, we're

 25 going to see that indirect development get

 200
 1 stimulated again and come back in not only this area

 2 but in many other parts of the country.

 3 We echo the support and the comments made

 4 regarding savings for consumers. We think those are

 5 going to be very real. And we think that it's very

 6 important from a security standpoint, as several

 7 speakers have stated, as well.

 8 Fuel and energy costs are very important

 9 critical factors for businesses today. It's become

 10 much more critical from a risk management

 11 standpoint, and anything that the administration can

 12 do to alleviate some of those concerns, we are very

 13 supportive of.

 14 Lastly, again, in terms of industrial

 15 development, we're very supportive of the mile per

 16 gallon standard and we believe it's important that

 17 there be a domestic industry in this sector as well.

 18 And we think that while this is going to be a global

 19 effort, it's going to lead to our domestic industry

 20 being stimulated as well.

 21 The last thing I'd point out is that in

 22 reviewing what other parts of the world are doing

 23 and comparing it to this standard, I noted that in

 24 the European Union, they've already achieved roughly

 25 the same gram per mile per standard as proposed

 201
 1 here, so I would certainly suggest it's achievable

 2 on that basis. So thank you for your attention this

 3 afternoon.

 4 MS. OGE: Thank you. Mr. Don Siefkes?

 5 TESTIMONY BY DON SIEFKES

 6 MR. SIEFKES: Yeah, Siefkes. If you can

 7 turn to Slide 1 of that packet I gave you, I'm going

 8 to go through the first five slides.

 9 My name is Don Siefkes, Executive Director

 10 of the E100 Ethanol Group. The E100 Ethanol Group

 11 fully supports the objectives of this program as

 12 evidenced by the White House graphic released last

 13 July.

 14 Our group has two major concerns, though.

 15 The amount of crude oil savings the plan envisions

 16 and the dependence of the plan on credits for

 17 electric cars.

 18 If fully implemented, this plan would save

 19 12 billion barrels of crude oil over the 14-year

 20 period between 2012 and 2025. This represents only

 21 26 percent of our crude oil imports for that time

 22 period. Thus, it is not possible to achieve crude

 23 oil independence by increasing CAFE alone.

 24 You can go to Slide 2. Depending on

 25 electric cars to meet the program's objectives is a

 202
 1 quote "big bet; a huge bet," end of quote. That is

 2 a direct quote from Bill Ford, Jr., Chairman of the

 3 Ford Motor Company at a talk that he gave at the

 4 Commonwealth Club here in San Francisco last October

 5 27 about his agenda.

 6 Current lithium ion battery vehicles are

 7 not selling. Only 17,345 of the almost 13 million

 8 light-duty vehicles sold in 2011 were Chevy Volts

 9 and Nissan Leafs, a little more than one-tenth of

 10 1%. The Volt base price is $40,000 and the Leaf's

 11 is $36,050 after their large price increase in

 12 December.

 13 Comparably-sized and equipped gasoline

 14 versions of these vehicles, the Chevy Cruz and

 15 Nissan Versa, are at least $20,000 less than the

 16 price of the electrics.

 17 So the question becomes, will millions of

 18 consumers spend $20,000 up front to save the $8200

 19 over the life of the proposed standards? The

 20 answer, we believe, is clearly not.

 21 Nissan wants to manufacture and sell

 22 150,000 Leafs per year in this country. Even if

 23 they could do that, it would be only 1.5 million

 24 vehicles after 10 years. We have 250 million

 25 light-duty vehicles running around this country

 203
 1 burning gasoline. 1.5 million vehicles will not

 2 make a significant dent in the amount of gasoline or

 3 crude oil used 10 years from now.

 4 To make a difference, we have to replace

 5 millions of vehicles, not just thousands, tens of

 6 thousands, or even hundreds of thousands.

 7 Please don't hear me that our group doesn't

 8 like electric vehicles. We do. I worked at General

 9 Motors for 24 years as we worked on the Volt. It's

 10 exciting, it's fun, it's new, it's fresh.

 11 Tremendous acceleration. It's a gas to drive.

 12 We have the utmost respect for GM, Nissan,

 13 Mitsubishi, Tesla, and people like the Corcorans and

 14 the Jensens on the last panel that drive these

 15 vehicles as statements. Nevertheless, absent a huge

 16 increase in energy density for the batteries -- and

 17 I mean a 1500-percent increase in energy density --

 18 electric vehicles are not a viable strategy for

 19 making the United States independent of imported oil

 20 in any sort of reasonable time sphere.

 21 Slide 3. What would be a viable strategy

 22 to make the U.S. independent of imported oil? E100

 23 flex-fuel vehicles optimized to run on ethanol, not

 24 gasoline, are the most straightforward ways to do

 25 this.

 204
 1 Brazil did something similar to this

 2 several years ago and is now a net crude oil

 3 exporter, not an importer. The picture in front of

 4 you is of a pump at a Shell gas station in Sao

 5 Paulo, Brazil I took last April. Two grades of

 6 gasoline, regular and premium, and one grade of

 7 straight ethanol, no gasoline.

 8 75 percent of the millions of light-duty

 9 vehicles in Brazil can burn this gasoline-free

 10 ethanol.

 11 Go to Slide 4. We use 140 billion gallons

 12 of gasoline per year. Roughly half, 66 billion

 13 gallons, come from imported crude oil. So to make

 14 the United States independent of imported oil, we

 15 need to replace 66 billion gallons of gasoline.

 16 The fastest, lowest cost way to do this is

 17 to make ethanol a primary motor fuel in the United

 18 States, not a blend with gasoline, but a primary

 19 motor fuel for just half of all new vehicle

 20 inventory, 50 percent. E100 vehicles could still

 21 burn gasoline, but since ethanol would cost less

 22 than gasoline at the pump and since mileage would be

 23 better, consumers would flock to these vehicles.

 24 E100 engines are applicable to all size

 25 vehicles, not just small ones. Cost may be $100

 205
 1 more per vehicle. The industry could easily be

 2 making 6.5 million such vehicles per year by January

 3 1st, 2017. 10 years of doing this and now we have

 4 65 million vehicles not burning gasoline, that makes

 5 a tremendous dent in the problem.

 6 This ethanol will come from waste cellulose

 7 or municipal solid waste, not corn. The Department

 8 of Energy published a report that incontrovertibly

 9 proves that there is a billion tons of waste

 10 cellulose accessible every year in the Unites

 11 States.

 12 Yield is 100 gallons per ton so we could

 13 make 100 billion gallons of ethanol without

 14 interfering with food production or agricultural

 15 exports. This is more than enough to provide crude

 16 oil independence. So for this and carbon already

 17 above ground to make this ethanol, not bringing up

 18 new carbon from underground, the net addition of CO2

 19 in the atmosphere with E100 is zero.

 20 Turn to Slide 5. In conclusion, our

 21 proposal: These standards for 2017-2025 are very

 22 strong and they are exceptionally well-written. We

 23 want to compliment the people who wrote the

 24 standards. So let's keep them in place exactly as

 25 written but apply them to only 50 percent of new

 206
 1 light-duty vehicles.

 2 For the other 50 percent, mandate E100

 3 flex-fuel vehicles with strict mileage requirements.

 4 And we give you a few suggestions on the slide.

 5 Taking these two steps will assure complete

 6 independence of imported crude oil for the United

 7 States and lower greenhouse gas emissions far below

 8 the 2017 to 2025 standards. I thank you for your

 9 attention.

 10 MS. OGE: Thank you. Mr. Roger Lake? Good

 11 afternoon.

 12 TESTIMONY BY ROGER LAKE

 13 MR. LAKE: My name is Roger Lake. I have

 14 no technical perspective on all this. I thank you

 15 for my opportunity to be a citizen here.

 16 I was invited to come by an environmental

 17 group that I send money to. The perspective I have

 18 is that I spent a career as a family therapist

 19 dealing with addictions. When we talk about

 20 addiction to oil, we talk about something that's

 21 really profound from my perspective.

 22 The addiction, if you look at it from the

 23 perspective of the individual, the family, the

 24 community, is the dysfunctional regulation of

 25 resources.

 207
 1 And my concern about the public

 2 conversation that we're having here has to do with

 3 the idea that when people become overinvolved in

 4 trying to sort of pursue a particular issue of their

 5 own and become emotionally caught up in the dilemma

 6 of sort of supporting the legalization of the kinds

 7 of things that we talk about in addiction, we lose

 8 the perspective that the mind is capable of

 9 generating about what's really going on.

 10 What happens to addicts is they can't see

 11 the forest for the trees. What happens to

 12 policymakers around addiction is we have the same

 13 problem. And I'm just inviting you to reflect on

 14 what seems to me the only cure that we have for

 15 addiction, which is to understand that it distorts

 16 our ability to regulate the resources that we have

 17 to develop the future.

 18 In my mind, it is the children who are the

 19 future. The environment is where my children and

 20 grandchildren are growing up, and we have to keep

 21 our eyes on that particular prize.

 22 And the public conversation around this, it

 23 seems to me, is a bit over the top in pursuing

 24 particular goals, particular stakeholders, as it

 25 were, and the ability to stand back, to use a

 208
 1 broader perspective to think through the issues to

 2 see down the road are what I would like you to be

 3 doing.

 4 I would like to see the Environmental

 5 Protection Agency functioning in that way as the

 6 grownups in the room sorting through different kinds

 7 of perspectives. That's all I have to say. Thank

 8 you.

 9 MS. OGE: Thank you. Ms. Quinn? Good

 10 afternoon.

 11 TESTIMONY BY COLLEEN QUINN

 12 MS. QUINN: Yeah, thank you. Good

 13 afternoon. Thank you very much for this invitation.

 14 My name is Colleen Quinn, and I am the Vice

 15 President for Government Relations and Public Policy

 16 at Coulomb Technologies.

 17 Coulomb is headquartered in Campbell,

 18 California. It was founded in 2007 with the mission

 19 to support electric vehicles so no one will hesitate

 20 to purchase a vehicle because they don't have a way

 21 to charge.

 22 We manufacture charging stations and

 23 develop the smart charging services that have

 24 enabled adoption of electric vehicles.

 25 Coulomb supports the proposed standards not

 209
 1 only as good and important public policy, but quite

 2 frankly, for purely business reasons. These

 3 policies will help our company grow. These policies

 4 will move us towards greater oil independence,

 5 cleaner air, and cheaper transportation for

 6 consumers.

 7 We applaud the Obama Administration for

 8 proposing historic fuel economy and greenhouse gas

 9 standards that will reduce our dependence on oil and

 10 cut carbon pollution.

 11 I have a couple of points I want to make

 12 about the proposed standards: First of all, they

 13 are achievable, and most importantly to our company,

 14 they will drive innovation.

 15 Automakers are already showcasing models.

 16 Many of them have testified, I saw today, such as

 17 the Chevrolet Volt. Folks in the audience are

 18 testifying to their ownership of those vehicles and

 19 the Nissan Leaf.

 20 More vehicles are targeted in the market in

 21 2012, including models from Fisker, Toyota, BMW and

 22 Ford. My company has developed the infrastructure

 23 and services to support the EV driver. We have

 24 leveraged the innovation of Silicon Valley's

 25 networking capabilities to create an exciting new

 210
 1 market.

 2 We currently have the largest network of

 3 publicly available charging stations. We have the

 4 largest collection of drivers with over 800

 5 companies providing charging via our network, the

 6 ChargePoint Network.

 7 Today ChargePoint stations are dispensing

 8 over 280 megawatt hours of electric fuel each month,

 9 which is an annual equivalent of 700,000 gallons of

 10 gas avoided and 10 million pounds of CO2 emissions

 11 prevented.

 12 Drivers plug in to a ChargePoint station

 13 more than 1,500 times every day. Over 5,000

 14 nonresidential charging spots are up and running,

 15 serving drivers while they are away from their home

 16 garages.

 17 50 percent of EV drivers in the U.S. use

 18 our ChargePoint card. We have over 30,000 mobile

 19 app downloads using the ChargePoint Network. This

 20 is what I'm talking about when I say innovation.

 21 Secondly, these standards will make our

 22 auto industry more competitive and will create jobs.

 23 Coulomb has grown from a startup company in 2007 to

 24 over 200 employees today. In addition, for every

 25 charging station we deploy in a community, three

 211
 1 people go to work. There are manufacturing jobs as

 2 well as jobs for local electricians and contractors.

 3 California is becoming the global center

 4 for electric vehicle innovation and jobs. Other

 5 companies besides Coulomb, from small electric drive

 6 manufacturers, are also growing very rapidly. Many

 7 have doubled their workforces or even grown faster

 8 this year.

 9 Thirdly, the new standards will not only

 10 create the significant policy objectives that I

 11 alluded to, but they will give companies like

 12 Coulomb the direction and certainty needed to

 13 continue to invest in these technologies.

 14 As you may or may not know, venture capital

 15 is targeted on the EV industry and we need to keep

 16 that going. Businesses in the State of California

 17 collected $467 million dollars in electric venture

 18 capital investment during the first half of this

 19 year. That equates to 69% of the global total.

 20 There was a study done by a nonprofit

 21 called Next 10, which is a Silicon Valley nonprofit.

 22 California is now tied with Michigan, the

 23 traditional center of U.S. auto industry, in the

 24 number of patents filed for electric vehicle

 25 technologies. Both states generated 300 patents for

 212
 1 EV technology from 2008 to 2010.

 2 So my purpose today is to demonstrate how

 3 important and effective the federal standards have

 4 been to a company like Coulomb. The administration

 5 should issue strong final standards in July and

 6 ensure that the EV industry can benefit from and

 7 leverage job growth, economic development, as well

 8 as energy security and environmental benefits.

 9 On the specific issue of electric vehicles,

 10 I want to endorse the statement that was made by my

 11 colleague, Mr. Minsk, from the Electrification

 12 Coalition, that the proposed end of zero emission

 13 treatment in 2021 puts electric vehicles at a

 14 disadvantage relative to other vehicles.

 15 And, also, if you are going to count

 16 upstream emissions, then you should count them for

 17 all vehicles. Thank you very much.

 18 MS. OGE: Thank you. Ms. Rose Braz? Good

 19 afternoon.

 20 TESTIMONY OF MS. ROSE BRAZ

 21 MS. BRAZ: Good afternoon. My name is Rose

 22 Braz, and I am with the Center for Biological

 23 Diversity, our climate law institute. And thank you

 24 very much for having this hearing and having us

 25 here. I'm speaking today on behalf of our over

 213
 1 300,000 members and supporters nationwide, and we

 2 will be submitting more technical written comments.

 3 We really appreciate the effort of the EPA

 4 in the sense that it should be ruled, and it's a

 5 laudable effort. We also do believe, though, the

 6 rules are not good enough. They are certainly not

 7 good enough when you look at the scale of the

 8 problems we face; and they are also not good enough

 9 when you look at what is technologically feasible

 10 and what is going on around the world.

 11 And so while we really appreciate the fact

 12 that the rule is willing to increase fuel

 13 efficiency, we don't believe they do so fast enough,

 14 and they leave the U.S. far behind fuel efficiency

 15 standards in the European Union, Japan and China.

 16 Rather than promoting technological

 17 innovations, these rules rely on small improvements

 18 in existing technology. And, also, rather than

 19 pushing industry to make more efficient smaller

 20 vehicles, these rules create what we're calling an

 21 SUV loophole by incentivizing industry to build more

 22 trucks and SUVs that won't have to increase their

 23 fuel efficiency standards at the same rate as

 24 passenger vehicles. And those are our three very

 25 big points of concerns for us in these rules.

 214
 1 And the result of these problems with the

 2 rules are they actually could end up with an

 3 increase in overall greenhouse gas emissions from

 4 our transportation center rather than a decrease.

 5 So in regards to what we would like to see

 6 done in the final rule, we would like to see these

 7 rules significantly strengthened.

 8 One of our main concerns is the fact that

 9 the proposed rules allow light-duty trucks and SUVs

 10 to increase their fuel efficiency at a much slower

 11 rate and pace than cars, and for many years this

 12 problem has caused automakers to build bigger

 13 vehicles so they could take advantage of these

 14 weaker standards that have caused our efficiency to

 15 stagnate behind the efficiency across the world.

 16 And we should not make the same mistake

 17 twice; we should strengthen those standards for

 18 light-duty trucks and put them on a par with cars,

 19 and we can't afford to skew the rules in favor of

 20 more gas-guzzling SUVs and light trucks.

 21 Secondly, all but one of the alternative

 22 standards discussed in the rules would allow overall

 23 greenhouse gas emissions from cars and light trucks

 24 to increase in 2025. And given the climate crisis,

 25 we don't believe we can afford this, and so we would

 215
 1 look at pushing for fuel efficiency standards in the

 2 range of 60 miles per gallon rather than 54, which

 3 is the current proposal, and real world looks more

 4 like something like 49.

 5 And we also know that this can be done.

 6 Several speakers have testified about standards

 7 across the world and noted that the technological

 8 innovation as reached for in these rules is very,

 9 very achievable, very doable. And currently,

 10 looking at what's being done around the world, we

 11 know that to be the case.

 12 So we fear that putting these standards,

 13 which are a step forward and we appreciate the

 14 effort in place for the next 13 years until 2025,

 15 would still leave the U.S. behind what's happening

 16 in the EU, China and Japan instead of putting it as

 17 a forefront.

 18 Clearly, the transportation sector is the

 19 low hanging fruit here and I realize a lot can be

 20 done here, a lot is being done, and we appreciate

 21 that effort, but we hope that you will look at

 22 strengthening these rules because of the gravity of

 23 the crises we are facing when you issue the final

 24 rule. Thank you very much.

 25 MS. OGE: Thank you. Mr. Tom Kramer?

 216
 1 TESTIMONY BY TOM KRAMER

 2 MR. KRAMER: Thank you. My name is Tom

 3 Kramer, and I'm speaking today as a citizen, also a

 4 member of Environment California, a members-based

 5 environmental group.

 6 Thank you for continuing to provide your

 7 attention to the various thoughts that are being

 8 described. I'm going to give just a point of view

 9 as a Leaf owner. And having purchased one last

 10 September, I've now driven about 4,000 miles with

 11 it, and that's approximately 1200 kilowatts.

 12 And calculating that at about a 10 cent per

 13 kilowatt, I can get as low as six cents with my

 14 overnight charging. I spent about $120 driving my

 15 car around, which I've been overhearing the Leaf

 16 conversations, and they have been surprisingly

 17 enjoyable miles to drive around.

 18 Compared to my 2002 Passat Wagon which gets

 19 20 miles to the gallon, had I driven those same

 20 4,000 miles, I would have spent about $750 to do

 21 that same thing. And over the course of a year,

 22 that's about a $2,000 difference.

 23 And as an individual, I can't really afford

 24 to do that. And as a society and as a country, we

 25 can't afford to be spending that much money on fuel.

 217
 1 We need to do everything that we can to reduce those

 2 costs.

 3 And, interestingly, that same Passat Wagon

 4 driven in 2009 in England was getting 55 miles to

 5 the gallon on the highway and easily getting 45 all

 6 over town as a diesel.

 7 So it's clear from my own experience that

 8 it's possible for us to set high standards and that

 9 those standards can be met.

 10 And as a sort of final note, I find that as

 11 individuals, as a society, and as a government, we

 12 do our best when the goals are achievable but high.

 13 So whenever we can say, let's go do

 14 something that at least on the face of it looks

 15 pretty difficult where I sit, however it calculates

 16 out, 55 miles to the gallon or 60, I wouldn't be

 17 opposed to having 60, that looks daunting from here.

 18 But that's when we always do our best work; that's

 19 when we find ways to innovate, find ways to do

 20 something new. And California and America has

 21 always been great at that.

 22 So I applaud having the standards that will

 23 help us be the best that we can be. So thank you

 24 again for your time and attention.

 25 MS. OGE: Thank you. Tes Welborn? Good

 218
 1 afternoon.

 2 TESTIMONY BY TES WELBORN

 3 MS. WELBORN: Hello. My name is Tes

 4 Welborn. I'm here as a citizen. Thank you for

 5 holding one of these precious few hearings here in

 6 California. We in California are particularly

 7 concerned about climate change and economic issues.

 8 And California, of course, has led the nation in

 9 various ways like reducing the use of limited

 10 natural resources. So thank you for being here.

 11 I live here in San Francisco, drive and

 12 walk and ride public transit. I applaud the rules

 13 to increase average mileage to about 55 miles a

 14 gallon. And after hearing other testimony, say why

 15 not 60? Why not 65?

 16 These standards, even as you are proposing

 17 it, though, they will help reduce oil imports and

 18 maybe even make U.S. cars more competitive which

 19 could mean more U.S. jobs and will cut greenhouse

 20 gases.

 21 I also want to comment that I grew up in

 22 Hawaii, and I'm concerned about the climate change

 23 threat to islands, island nations and low-lying

 24 parts of many nations. And also our nation has many

 25 flood-prone areas that will be endangered. Some of

 219
 1 them are important crop growing areas as well as

 2 cities.

 3 I encourage you to make sure that the

 4 standards are as strong as they can be and that they

 5 are strengthened over the next nine years. Fix the

 6 loophole around SUVs and pickup trucks, please. We

 7 don't need anymore of those.

 8 We do need to radically reduce the use of

 9 fossil fuels throughout all industrialized nations

 10 by applying standards like these and taking

 11 additional steps such as travel and shipping by fast

 12 train and increase public transit.

 13 Most Americans support these standards. We

 14 can't afford not to move forward. While we all

 15 don't own or operate vehicles, we all breathe the

 16 air, we all pay the taxes for unbudgeted foreign

 17 military adventures and pollution cleanup.

 18 I would also like to say that I support the

 19 use of waste cellulose, but I would not support the

 20 use of cropland for growing ethanol.

 21 And, remember, that electric vehicles do

 22 have pollution generation at the source. I worked

 23 for a utility company for many years as well. So

 24 thank you very much.

 25 MS. OGE: Thank you. Ms. Annemarie -- is

 220
 1 it Donjacour?

 2 MS. DONJACOUR: Oh, I was waiting for you

 3 to say my name. Donjacour.

 4 MS. OGE: Donjacour. Thank you. Welcome.

 5 TESTIMONY BY ANNEMARIE DONJACOUR

 6 MS. DONJACOUR: Thank you very much. I'm

 7 an assistant adjunct professor at UCSF, a basic

 8 scientist, a teacher, a parent, and although I'm not

 9 dressed that way today, an Occupy Wall Street

 10 activist.

 11 I really appreciate the opportunity to

 12 participate in this process and to applaud

 13 regulation in the comfort of a hotel as opposed to

 14 protesting environmental destruction, destruction of

 15 our democracy, in the rain facing the police.

 16 This is a relatively last minute decision

 17 on my part to be here, and I've heard just wonderful

 18 technical details and other fantastic comments by

 19 other speakers, so I'm going to limit that part of

 20 my remarks. Though I will also add a caveat; I

 21 really do think ethanol production warps American

 22 agriculture. I'm very active in the sustainable

 23 agriculture movement. And I would also encourage

 24 additional, more ambitious standards. 

 25 So you've heard about scientific evidence

 221
 1 of global warming. It's really an urgent human

 2 caused problem. You've heard about the ways that

 3 more efficient vehicles will increase national

 4 security and help avoid wars over oil.

 5 And I mainly want to explain and testify to

 6 the political will that is out there to make these

 7 kinds of changes in general in the parks, in the

 8 streets, now in the small storefronts and people's

 9 homes. There is a lot going on in this regard.

 10 There is a lot of energy going towards making these

 11 kinds of changes.

 12 I think that the young people have it as a

 13 given that we have to do this. It's not if, it's

 14 when, and how far are we going to go. And I think

 15 that the willingness to address this as a society is

 16 very much out there, and this federal regulation is

 17 a positive move to mitigate climate change and

 18 resource overuse.

 19 I would also say that failure to act on

 20 these reasonable changes in the right direction will

 21 seriously hurt the credibility of this agency and

 22 this administration and only reinforce the notion

 23 that corporations and people who want to drag their

 24 feet are controlling our government.

 25 The people on the streets, myself included,

 222
 1 are really tired of shortsighted solutions and are

 2 very excited about the long-term solutions and the

 3 positive change that we're hearing here today, and

 4 certainly supportive of these regulations that work

 5 for the common good for long-term environmental

 6 change.

 7 Not implementing these regulations will

 8 certainly be perceived as just another betrayal by

 9 this newly awakened and very large group of active

 10 citizens in the Occupy movement, and it will be seen

 11 as something done in favor of special interests.

 12 I'm encouraged by all the support I'm

 13 hearing for these regulations and more ambitious

 14 standards and really look forward to the

 15 implementation. Thank you very much.

 16 MS. OGE: Thank you. Any questions from

 17 the panel? I have a question for Mr. Siefkes.

 18 MR. SIEFKES: Yes.

 19 MS. OGE: So your recommendation basically

 20 would suggest that we finalize a program that 50% of

 21 the mandate will be mandating 100% ethanol fuel?

 22 MR. SIEFKES: Correct.

 23 MS. OGE: So given the fact that today less

 24 than 1% of E85 vehicles is fueled with 85% ethanol,

 25 does your organization have any thoughts as to how

 223
 1 you deliver infrastructure across the country to

 2 fuel 100% ethanol vehicles starting in, I would

 3 suspect, 2025?

 4 MR. SIEFKES: Very good question. E85

 5 doesn't sell because you're putting 104 octane fuel

 6 into a 9:1 compression ratio gasoline engine.

 7 It's very unfortunate that alcohol even

 8 burns in a gasoline engine. If E85 got the same

 9 mileage of gasoline, we would have switched over to

 10 it long ago, but it doesn't and it can't because

 11 it's going into a gasoline engine.

 12 Over the last two years since our groups

 13 have been formed, we've interviewed 40 to 45 retail

 14 gasoline service stations. These people do not want

 15 to buy E85 because they know it doesn't sell.

 16 If, however, the ethanol is put into an

 17 engine optimizer, which the automobile companies can

 18 do practically tomorrow, the situation reverses

 19 itself.

 20 Most gasoline stations in the United

 21 States, in fact all of them -- BP doesn't own a

 22 single station in the United States; they are all

 23 franchises. So the franchisee, the private business

 24 owner, owns those tanks in the ground. Most

 25 stations have three to four tanks. One tank of

 224
 1 premium, the rest is all regular. The second or

 2 third tank is available to put ethanol into it.

 3 We've had detailed conversations with the

 4 largest owner of E85 stations in the United States,

 5 Meijer. It's a local retail store system in

 6 Michigan, Indiana and Ohio. They converted 72 of

 7 their mid-grade pumps to E85, and they are totally

 8 unhappy with the amount of E85 that they sold.

 9 They're not going to take them out. The conversion

 10 cost for each station was less than $30,000.

 11 Once a decision is made to mandate the

 12 engine to burn ethanol efficiently, the ethanol

 13 industry will ship this ethanol to these resale

 14 service stations, directly bypassing the price of

 15 the mechanism of the oil company. For the first

 16 time, there will be competition for motor fuel at

 17 the retail level.

 18 The $25- to $30,000 investment for a retail

 19 service station is a small investment. A typical

 20 station costs $2.4 million, but they don't want to

 21 shut off $25- to $30,000. So the total cost of

 22 change is $25- to $30,000.

 23 We're already making 14 billion gallons of

 24 ethanol and shipping it in tank cars, tank trucks,

 25 and barges all over the country. So we really only

 225
 1 have to make 52 billion gallons more, which we can

 2 do.

 3 All the research, the money, the effort

 4 that you read in all the journals is on renewable

 5 fuel. Renewable fuel standards set 36 billion

 6 gallons by 2022, I think. I may be a little off on

 7 the number.

 8 The emphasis should be on changing that

 9 engine. Once the engine is available, the fuel will

 10 just come. And these retail gasoline station guys,

 11 I'm telling you, they are America firsters; they

 12 will buy this stuff.

 13 MS. OGE: So the issue is not the mandate.

 14 What you're saying is that if today companies

 15 calibrated their engines for E85 vehicles to do

 16 better, you would get the benefits and you would get

 17 more to the market. That's what you're saying?

 18 MR. SIEFKES: Yes. Well, an E100 engine

 19 can also burn E85. It can burn anything.

 20 MS. OGE: But you are saying if the E85

 21 engine was calibrated, there would be more E85

 22 stations --

 23 MR. SIEFKES: Oh, sure, but you don't need

 24 the 15-percent gasoline. Take it out of there.

 25 Basically what we're saying is at least

 226
 1 mandate 50 percent of the vehicles run on straight

 2 ethanol; the other 50 percent continue with electric

 3 cars, fuel cells and everything.

 4 We shouldn't just settle on gasoline and

 5 electric. It's too dangerous to put all our eggs in

 6 one basket.

 7 MS. OGE: Thank you.

 8 MR. MEDFORD: Thank you very much. I think

 9 we're ready for the next panel.

 10 MR. MEDFORD: Dr. Pepper, as soon as you're

 11 ready, you may begin.

 12 TESTIMONY BY DR. DAVID PEPPER

 13 DR. PEPPER: Okay. Thank you for having

 14 me. It's a pleasure to be here. I'm here on behalf

 15 of the American Lung Association. I'm a family

 16 doctor. I ran an asthma program in the Central

 17 Valley of California, and I was here for the last

 18 two panels. And a part of my comments, or a good

 19 part of my comments, are about public health which

 20 these standards will support.

 21 The ALA is in strong support of these. I

 22 think 60 miles a gallon would be better. But one

 23 thing to realize is the huge burden commonly faced

 24 by all of us when we breathe, and the reality is

 25 whatever the car is that's in front of you is what

 227
 1 you are breathing.

 2 So for every car in front of you that's

 3 getting twice the mileage or every electric

 4 vehicle -- ethanol is also cleaner -- you will be

 5 breathing less. That equates to somewhere between

 6 $5- to $10 billion dollars in terms of asthma,

 7 cardiovascular health, heart attacks, strokes, lung

 8 disease.

 9 So there is a part of me that's a physician

 10 that speaks to that piece, and I think these are

 11 standards that will help us to move forward. There

 12 is a part of me that's a scientist; I also have a

 13 master's in science and I work on clean air because

 14 I believe the future is there.

 15 The transportation sector; I'm also a

 16 bicyclist and I'm glad to see this is here. I think

 17 NHTSA spends about 1% of its budget on anything

 18 other than cars.

 19 I was trying to figure out the carbon

 20 emissions per mile; obviously, it's a lot smaller.

 21 And I would, on a personal level, encourage NHTSA to

 22 include not only motor vehicles, but obviously

 23 transit and bicycle.

 24 You know, the fuel, again, as they come out

 25 of the tailpipe are carbon, which is a greenhouse

 228
 1 gas; carbon dioxide, carbon in all forms, but also

 2 VOCs, NOx, sulfur dioxides. I think the ethanol is

 3 quite a bit cleaner. I don't know the specifics of

 4 that. But obviously electric vehicles are the

 5 cleanest.

 6 All of these sources and all of this

 7 technology moving towards tighter and more stringent

 8 standards will assist in public health and assist in

 9 a cleaner and better future for ourselves and our

 10 children. I thank you.

 11 MR. MEDFORD: Thank you very much for

 12 coming. Theodore Hadzi-Antich?

 13 TESTIMONY BY THEODORE HADZI-ANTICH

 14 MR. HADZI-ANTICH: My name is Ted

 15 Hadzi-Antich. I'm attorney with the Pacific Legal

 16 Foundation in Sacramento, California. We're a

 17 not-for-profit organization dedicated to protecting

 18 individual rights and freedom as well as property

 19 rights and support a balanced approach to

 20 environmental regulation.

 21 I'm here today on behalf of four clients:

 22 Delta Construction Company, Dalton Trucking Company,

 23 Southern California Contractors Association, and

 24 California Dump Truck Association.

 25 I just have two points that I would like to

 229
 1 make, the first of which I'm afraid to say raises an

 2 inconvenient truth with regard to these regulations

 3 and all of the greenhouse gas regulations thus far

 4 either proposed or promulgated by the Environmental

 5 Protection Agency.

 6 In order to understand this inconvenient

 7 truth, I think we need to go back to December 2009

 8 when the EPA, as you know, made the endangerment

 9 finding, finding that greenhouse gas emissions posed

 10 a danger to human health and welfare. One of the

 11 biggest problems with that finding is that EPA

 12 missed a step.

 13 The Science Advisory Board is an

 14 organization that's been created by statute. It's

 15 been on the books since 1979, and as you know, it's

 16 a blue ribbon panel of the top scientists,

 17 approximately 40 or so scientists that are the cream

 18 of the crop in their individual disciplines.

 19 Well, unfortunately, when EPA promulgated

 20 the endangerment finding in December of 2009, it

 21 utterly neglected to send the proposed endangerment

 22 finding to the Science Advisory Board for

 23 statutorily-mandated peer review.

 24 That was a violation of the law. And based

 25 on the endangerment finding, the first light-duty

 230
 1 vehicle regulation was promulgated shortly

 2 thereafter, and that regulation did not go for peer

 3 review to the Science Advisory Board.

 4 After that, the first heavy-duty vehicle

 5 regulation was promulgated, again regulating

 6 greenhouse gas emissions, and that regulation did

 7 not go to the Science Advisory Board. The Pacific 

 8 Legal Organization on behalf of its clients

 9 challenged each one of these findings for only one

 10 reason; that is, the failure of EPA to send the

 11 regulation for peer review to the Science Advisory

 12 Board.

 13 And the main reason I'm here today is to

 14 ask you folks who are the policymakers in connection

 15 with these light-duty vehicle regulations Phase 2 to

 16 please send this regulation, this proposed

 17 regulation before it's promulgated to the Science

 18 Advisory Board for mandated peer review under the

 19 statute.

 20 If you do that, we won't be forced to sue

 21 you, and we don't want to sue you. We want good

 22 policy; we want good policy based on sound science.

 23 That's the purpose of the Science Advisory Board.

 24 And one of the interesting things that I

 25 keep scratching my head about is this: Before

 231
 1 December of 2009, for virtually any regulation

 2 promulgated by EPA under the Clean Air Act, it sent

 3 those regulations consistently to the Science

 4 Advisory Board.

 5 But starting in December of 2009, with the

 6 first greenhouse gas regulation, it did not send

 7 that to the Science Advisory Board for mandated peer

 8 review. So I'm here to ask you, please send this

 9 regulation to the Science Advisory Board.

 10 And the only other point I would like to

 11 make, as I'm sure all of you are well aware, the

 12 Clean Air Act has detailed procedural requirements

 13 for rulemaking. And what I ask you is, unlike the

 14 endangerment finding, unlike the LDVR Phase I,

 15 unlike the HDVR regulation, please, again, comply

 16 with the detailed procedural requirements set forth

 17 in the Clean Air Act itself before you promulgate

 18 this LDVR-2 regulation. And that is all.

 19 MR. MEDFORD: Thank you. Mr. Brown?

 20 TESTIMONY BY NORMAN BROWN

 21 MR. BROWN: Yes. Good afternoon.

 22 MR. MEDFORD: Good afternoon.

 23 MR. BROWN: My name is Norm Brown. I'm a

 24 second generation owner of a family construction

 25 company in California that was started by my father,

 232
 1 which you might call me a 48-year research scientist

 2 in how to stay in business; that's how long I have

 3 been doing this.

 4 Currently, we have no debt, but I haven't

 5 taken a salary for the past four years because of

 6 the economic conditions. I'm trying to keep my key

 7 employees to keep my company alive. We had more

 8 than 40 percent unemployment in construction. Our

 9 volume has been cut by 80 percent from 2006 to 2010

 10 and remains flat.

 11 Now, when you have owned assets with low

 12 debt, this will carry you through recessions.

 13 Trucks and equipment that are paid for can be parked

 14 until the economic condition has returned at which

 15 time you can get started again.

 16 This has all changed due to recent

 17 regulation in California. CARB, California Resource

 18 Board, particulate matter regulations has destroyed

 19 the value of my used diesel assets by making them

 20 illegal to use or sell in the state of California at

 21 some near point in the future.

 22 The light-duty vehicle regulations are

 23 scheduled to come into place about the same time

 24 that your promulgated regulations will come into

 25 place. So I must put very expensive filters on

 233
 1 some, repower the balance and eventually sell or

 2 destroy regardless of condition. The filter cost

 3 exceeds the value of the trucks. The cost of

 4 logistics preclude repowering older vehicles or

 5 staying the same with sale or destroyed.

 6 My financial statement has been destroyed

 7 as owned trucks and equipment are now liabilities,

 8 not assets, to support the financial statements.

 9 The loss of my net worth has damaged my borrowing

 10 power and bonding necessary to replace equipment and

 11 survive as a contractor.

 12 The new proposed greenhouse gas regulations

 13 add considerably to the costs of replacement trucks

 14 as the manufacturers struggle to meet the mandates.

 15 These combination regs can only be

 16 described as a perfect storm at the most inopportune

 17 time. California destroys my existing fleet and you

 18 raise the cost of new.

 19 The current economic conditions mandate

 20 downsizing, not replacing assets, and return

 21 investment does not pay the cost to replace it.

 22 Small and medium-sized contractors and truckers will

 23 close the doors as existing trucks and equipment

 24 cannot be used and the new will be too expensive to

 25 replace.

 234
 1 And no new small businesses will be

 2 starting up in California either because they need

 3 the used equipment to get started. You can't go out

 4 and start a business and buy all new stuff; the

 5 stuff is too expensive. Unemployment will soar

 6 higher than it is, raising the cost to local and

 7 national governments while at the same time lowering

 8 tax collection due to closed businesses.

 9 The U.S. government is already spending

 10 twice what it takes in, and that cannot continue.

 11 And this regulation will guarantee the failure of an

 12 economic recovery.

 13 Surviving large businesses will pass the

 14 increased cost along to the consumer. This will end

 15 up being a regressive tax on those that least could

 16 afford it; those on fixed incomes whose income has

 17 been devastated by a nonexistent return on assets

 18 and investments while cost of fuel and groceries

 19 continue to increase. Oh, but they're not on the

 20 CPI, so you can't see it.

 21 This is not a solution to the problem

 22 facing our country. Our problem is excessive

 23 spending by government along with a lack of

 24 available employment and a tax base necessary to

 25 support the government.

 235
 1 This regulation will only exacerbate our

 2 very serious condition in what can only be called a

 3 phantom menace while at this time unemployment is

 4 the real menace to our health and prosperity.

 5 I can guarantee you that my firm in the

 6 69th year, and thousands of other construction and

 7 trucking firms, will not survive the combination of

 8 these regulations outlined above and will close the

 9 doors, laying off the balance of my employees.

 10 I recently visited my aunt who is in a rest

 11 home at 101. The rest home recommended that I

 12 consider putting her on hospice. Not being familiar

 13 with the term, I asked.

 14 They said hospice is the term used to

 15 describe someone who has a terminal disease and

 16 within six months of the end of their life or is

 17 failing to thrive.

 18 That is the condition of our economy today.

 19 We are failing to thrive. We are on hospice. We

 20 need no more regulations. Thank you very much.

 21 MR. MEDFORD: Thank you, Mr. Brown. Mr.

 22 Rolleri.

 23 TESTIMONY BY TERRY ROLLERI

 24 MR. ROLLERI: Good afternoon. My name is

 25 Terry Rolleri. I'm just a citizen of San Francisco

 236
 1 here and I'm here to speak in support of the

 2 regulations.

 3 As you might have surmised from my helmet

 4 here, I ride a bicycle. I don't actually own an

 5 automobile, and so why would I really care about

 6 fuel efficiency?

 7 Well, I breathe the air. And when you ride

 8 a bicycle, that's what powers your vehicle is clean

 9 air. And these regulations will produce cleaner

 10 air, so I'm obviously in support of them.

 11 The other issue I will bring up and finish

 12 briefly here is the strain that our oil dependence

 13 puts on our foreign policy here in the United

 14 States.

 15 It's been currently in the news that the

 16 Iranians are trying to build a nuclear weapon. No

 17 one is certain. But they get a good deal of their

 18 income from oil, while at the same time they

 19 recently threatened to close the Strait of Hormuz,

 20 where one-fifth of the world's oil travels through.

 21 And a few days ago in the news, I saw that one of

 22 our aircraft carriers has arrived at the Strait of

 23 Hormuz.

 24 Clearly, our oil dependence is problematic

 25 for our country and our foreign policy, and if we

 237
 1 are going to get the oil monkey off our back, we've

 2 really got to move forward with reducing our use of

 3 oil. Thank you very much.

 4 MR. MEDFORD: Thank you very much. The

 5 next speaker is -- I can't see your name.

 6 Mr. Rosenthal?

 7 TESTIMONY BY DANIEL ROSENTHAL

 8 MR. ROSENTHAL: Good afternoon. My name is

 9 Daniel Rosenthal. I'm a citizen of San Francisco

 10 and thank you for holding this here.

 11 I wanted to go through a quick hundred

 12 years of personal history. It starts with my great

 13 grandfather. In the 1890s he came over to this

 14 country from somewhere in eastern Europe; Russia,

 15 Lithuania, who knows.

 16 For a few years, he drove a cart from

 17 Trenton, New Jersey to New Haven, Connecticut. It

 18 was a dry goods cart. Along the way, he saw this

 19 cart had solid rubber tires. Those were the tires

 20 they used in those days for the early car, and he

 21 would pick them up on his return trips and he

 22 collected them.

 23 After a few years of collecting them, he

 24 built a rubber recycling factory, and for many years

 25 that was the basis of a sustainable middle class

 238
 1 lifestyle for my father's family.

 2 For the last 30 years the factory has been

 3 boarded up. It is, as far as I know, a Superfund

 4 site.

 5 My grandfather was an Air Force officer, a

 6 World War II vet. And while he was stationed in

 7 Europe, he was in a factory fire that exacerbated

 8 his chronic asthma. He took early retirement and he

 9 and my grandmother traveled around the West looking

 10 for a clean, dry place for him to settle so that he

 11 could breathe.

 12 Everywhere they went -- this would have

 13 been in the early '70s -- they encountered smog,

 14 automobile smog, and it was life-threatening to him

 15 at that time.

 16 When they got to Reno, Nevada, it turned

 17 out that the air was clean. He could breathe, he

 18 said, for the first time in two months. Then winter

 19 came after they had already moved and bought their

 20 house and the inversion layer trapped all the smog,

 21 and he spent the next two months in the hospital.

 22 After that, every winter they would leave

 23 Reno, and on the Air Force DANTES, they would travel

 24 around the world seeking clean air. In 1995, he

 25 died on an operating room table because of

 239
 1 contraindications with his prednisone, which he took

 2 for asthma.

 3 I was born in Washington D.C. in 1973, and

 4 my father was an attorney in the antitrust division

 5 of the division of the Justice Department, and he

 6 taught me three things which I think are somewhat

 7 relevant to these regulations and this issue.

 8 The first thing is that markets are not

 9 smart. Markets, in the absence of regulation, can't

 10 be depended upon to determine the best course of

 11 action. People have biases, they work in their own

 12 self-interest, and they don't have the long view.

 13 And that's what the rule is for; that's

 14 what we have given our authority to you for, and I'm

 15 glad that you are here using it.

 16 The second thing he taught me was that

 17 corporations serve their shareholders, that's what

 18 they're supposed to do, that's what they are

 19 intended to do and I'm glad they do that. That's

 20 not your job; your job is to work for us, and I'm

 21 glad that you do that.

 22 In 1983, dissatisfied with the direction of

 23 his job in government, my father quit and moved us

 24 to Hawaii, and I attended school just over the

 25 mountains. It was pretty close, about 15 miles

 240
 1 away, but because of traffic on that small island, I

 2 had to leave at 6:00 a.m. to get to school by 8:00

 3 a.m., and I had to leave at 4:00 p.m. to get home by

 4 6:00 p.m.

 5 I was pretty well-educated and consider

 6 myself as being pretty lucky. But when people say,

 7 wow, it must have been great to grow up in Hawaii.

 8 Well, opinions differ. I mostly remember the

 9 blinking red taillights, the sitting in traffic, the

 10 roar of engines and the smell of exhaust. That's

 11 what I associate with island paradise.

 12 My conclusion is just this: If we can

 13 bring the people who planned our automobile economy

 14 in the early 19th Century forward 100 years to

 15 witness what we've got now, I think that they would

 16 go back in time and make different decisions then

 17 they made.

 18 Many of the decisions they made were not

 19 decisions at all. They were abdications of their

 20 authority or their responsibility, and I am very

 21 happy to see that you are not abdicating, as they

 22 did. And thank you very much for your time.

 23 MR. MEDFORD: Thank you very much. Ms.

 24 Kishimoto?

 25 TESTIMONY BY YORIKO KISHIMOTO

 241
 1 MS. KISHIMOTO: Yes. My name is Yoriko

 2 Kishimoto, and I'm here to strongly support the

 3 policies that are the subject of today's hearing.

 4 I wear several hats. I'm a

 5 first-generation American. I serve on the Regional

 6 Open Space board currently. But I'm here mostly to

 7 speak as a former mayor of Palo Alto.

 8 About four or five years ago as mayor of

 9 Palo Alto, I put out the call to action which was to

 10 build a green economy through innovation. And the

 11 challenge I put out was to both the businesses and

 12 the residents of our community; how can we achieve

 13 both a sustainable innovation based economy and

 14 protect the environment for the many generations to

 15 come.

 16 And to their credit, everyone from both the

 17 business and residential communities came together

 18 to put together a very strong climate protection

 19 plan. So we did everything from zero waste, taking

 20 it to schools, renewable energy portfolios, electric

 21 vehicle infrastructure.

 22 And I should also mention that as a local

 23 elected official, I was appointed to the Valley

 24 Transportation Authority, which is a transportation

 25 board, and also to the Bay Area Air Quality

 242
 1 Management District where I became Chair of the

 2 Climate Protection Committee.

 3 So my point is that there are a huge number

 4 of things that we can do at the local government

 5 level. And we did many, if not most of them, and we

 6 are doing them. But my point today is that we

 7 cannot do it alone, and it's really clear from

 8 looking at the data from the Air District, as well

 9 as from my climate plan, that working alone at the

 10 local level, even if all the mayors and all the city

 11 council members took every step possible, we cannot

 12 achieve the 80-percent reduction below 1990 levels.

 13 And that is the role of the federal

 14 government, and I guess California also took that

 15 initiative.

 16 So that's my main point. I also live

 17 part-time in Mendocino County which is a very

 18 different county, much less population with less

 19 resources. And I did see some interesting numbers

 20 there. In 2002, about 19 percent of aftertax

 21 household expenditures were spent on energy, and by

 22 2007, it had gone up to 31 percent and I suspect

 23 much higher by today. And more than half of that

 24 was for transportation.

 25 And so, again, the federal government has a

 243
 1 huge opportunity to reduce the impact on the average

 2 household, especially the low income, as well as

 3 secure the energy future.

 4 So just my two points, which is that if the

 5 federal government does -- and I hope it does --

 6 take a leadership role, I'm sure that at the local

 7 level, city councils and mayors around the country

 8 will support you by putting in the electric vehicle

 9 infrastructure.

 10 And the steps that we need to take at the

 11 local level, and also to remind you about the role

 12 of government, which, you know, in this political

 13 environment we are often invited to think about.

 14 And to me, the role of government is to

 15 take collective action on issues of the highest

 16 public interest. And to me, there can be no higher

 17 public interest than climate change, which is

 18 irreversible and will have impact for many

 19 generations to come. Thank you.

 20 MR. MEDFORD: Thank you very much. Ms.

 21 Stephensen?

 22 TESTIMONY BY SUSAN STEPHENSEN

 23 MS. STEPHENSEN: Hi. Thank you very much

 24 for the opportunity to comment today. I'm Susan

 25 Stephensen, representing California Interfaith Power

 244
 1 & Light, and we would like to strongly support the

 2 proposed vehicle greenhouse gas emissions and CAFE

 3 standards.

 4 We think that the new proposed standard

 5 represents the best available opportunity to curb

 6 climate change, clean up air pollution, and cut

 7 America's oil dependence.

 8 California Interfaith Power & Light works

 9 with congregations of all faiths all over the state

 10 to address global warming through energy efficiency,

 11 conservation and renewable energy.

 12 Our 540 member congregations are working

 13 hard to do their part to protect creation by

 14 retrofitting their buildings, putting solar panels

 15 on their rooftops, and educating their communities

 16 about the moral impact of our energy choices.

 17 But we know that our actions alone are not

 18 going to be enough to curb climate change. We need

 19 policy change at the local, state, and the federal

 20 level.

 21 Here in California, the transportation

 22 sector is the largest contributor to our carbon

 23 footprint, and that's why our organization has been

 24 active in supporting California's efforts to reduce

 25 emissions at the tailpipe for the past decade,

 245
 1 including the landmark Pavley bill, AB 1493, even

 2 while the federal standards continue to lag.

 3 So we're really pleased to be here today in

 4 support of the new proposed fuel efficiency

 5 standards. Thank you very much for your leadership.

 6 Thank you for this opportunity to comment today in

 7 San Francisco.

 8 MR. MEDFORD: Thank you. Ms. Simoneaux.

 9 TESTIMONY BY SANDRA SIMONEAUX

 10 MS. SIMONEAUX: Greetings everyone. I'm

 11 Sandra Simoneaux, and I appreciate this opportunity

 12 to express my opinion on air pollution and the need

 13 for increased vehicle emission standards.

 14 I'm a recently retired public school

 15 teacher, which gives me an opportunity to be here,

 16 and a grandmother of a two-year old girl. I'm

 17 concerned about the health of our planet and the

 18 health of all people on our planet, especially our

 19 children.

 20 Our children's asthma rate continues to

 21 rise in my classroom, and now when I volunteer at my

 22 school, I see more children requiring the use of

 23 inhalers. Pollution is a health risk to all of us.

 24 Our beautiful state of California is home

 25 to the worst smog pollution in the country and that

 246
 1 pollution is largely because of pollution from cars

 2 and trucks.

 3 I support strong standards for vehicle

 4 emissions as an important key to this pollution

 5 problem. Doubling our fuel efficiency standards

 6 nationwide by 2025 is an important step forward in

 7 solving our problem. This will also help us in

 8 fossil fuel efficiency, decreasing our need for

 9 foreign oil, and reducing the potential for oil

 10 disasters.

 11 As a teacher, I have always had high

 12 expectations for my students, and I see no reason to

 13 expect any less from my government. Thank you.

 14 MR. MEDFORD: Thank you very much.

 15 Reverend Bingham.

 16 TESTIMONY BY REV. SALLY BINGHAM

 17 MS. BINGHAM: Good afternoon. Thank you

 18 also for the opportunity to speak. I am the

 19 Reverend Sally Bingham and I'm the Canon for the

 20 Environment for the Episcopal Diocese of California,

 21 and I'm also the President of Interfaith Power &

 22 Light.

 23 Our organization has 14,000 congregations

 24 of all major denominations, all major religions in

 25 our network and we operate in 39 states around the

 247
 1 country, and we represent approximately 5 million

 2 people of faith who are very concerned about

 3 human-induced climate change.

 4 And I would like you to know, too, that

 5 many faith leaders, myself included, drive

 6 energy-efficient hybrid or fuel efficient cars and

 7 that's because we try to practice what we preach.

 8 And right now, we're preaching about the

 9 moral responsibility we have to act and behave as if

 10 we care about the world that we leave behind for

 11 future generations.

 12 And that's why Interfaith Power & Light

 13 supports the EPA's 2017 and later model year

 14 light-duty vehicle greenhouse gas emissions and

 15 Corporate Average Fuel Economy Standards. And this

 16 bill is a heroic chance to require oil suppliers to

 17 slash the carbon footprint from their motor fuels,

 18 measured not just by the emissions from the

 19 tailpipes but across the whole lifecycle from

 20 extraction to combustion.

 21 We have a moral responsibility to leave

 22 this planet at least as clean as it was when we

 23 arrived, if not more improved, and having clean cars

 24 is one way to do that.

 25 Religious people know that we are the

 248
 1 stewards of creation, and we cannot sit quietly by

 2 and let our air be polluted. And when solutions

 3 like this one are available to us, we have a

 4 responsibility to God and to each other.

 5 And to wrap up, I couldn't agree more with

 6 the U.S. Global Change Research Program who just put

 7 out a statement where the conclusion is future

 8 climate change and its impacts depend on the choices

 9 that we make today. Higher fuel standards will be a

 10 good choice.

 11 So Interfaith Power & Light applauds

 12 Administrator Jackson and the Obama Administration

 13 for making the right moral choices to protect our

 14 planet, the climate, and our future.

 15 And this is not part of my prepared

 16 remarks, but I just want to add that every single

 17 time there is a new regulation or anything having to

 18 do with cars, there are big challenges and

 19 oppositions. Starting with the fact that at the

 20 turn of the century when vehicles were being asked

 21 by the government to register, there was great

 22 objection for vehicle owners to register because

 23 they thought that it meant that people who still

 24 rode around with horse and carriage were at an

 25 advantage because they didn't have to register, and

 249
 1 there were big arguments over that. Point of

 2 interest. Thank you very much for having me.

 3 MR. MEDFORD: Thank you. Do my colleagues

 4 have questions for the panel? Thank each you for

 5 your contributions.

 6 MS. OGE: So we'll start with Matthew

 7 Vipond.

 8 TESTIMONY BY MATTHEW VIPOND

 9 MR. VIPOND: Hello, my name is Matthew

 10 Vipond. I'm here as a constituent of the Sierra

 11 Club and a citizen. I endorse these fuel efficiency

 12 standards that are in discussion today.

 13 In 2008, I decided to change careers and go

 14 back to school. For the previous 11 years I had

 15 lived in Los Angeles where I drove upwards of 400

 16 miles a week for freelance work.

 17 Upon completion of my degree, I knew I

 18 didn't want to go back to my life of driving and so

 19 I chose to relocate to San Francisco, a city with

 20 access to good public transportation and decent 

 21 walking.

 22 As a native New Yorker, it was personally

 23 liberating to sell my car and become a pedestrian

 24 once again. But this enthusiasm is mitigated by the

 25 constant vehicular pollution which walkers and

 250
 1 cyclists must endure on a daily basis from cars,

 2 trucks and buses.

 3 These proposed emission standards offer the

 4 opportunity not just to decrease carbon and

 5 dependence on foreign oil but also to improve our

 6 daily lives by significantly reducing the amount of

 7 exhaust we must ingest as we go about our business.

 8 This, in turn, would encourage thousands of

 9 other like-minded individuals like me who have

 10 debated whether or not to trade the convenience of

 11 an automobile for the benefits of less congestion

 12 and stress by offering them cleaner air to breathe

 13 and an improved quality of life.

 14 I fear an America in 2025 with an increased

 15 population, the added proportion of cars, and no

 16 standards like the ones being debated today.

 17 Thank you very much for the opportunity to

 18 share my views with the panel.

 19 MS. OGE: Thank you. Mr. Alan Carlton.

 20 Good afternoon.

 21 TESTIMONY BY ALAN CARLTON

 22 MR. CARLTON: Hello. My name is Alan

 23 Carlton. I'm the chairman of the California-Nevada

 24 Regional Conservation Committee of the Sierra Club

 25 and here on behalf of the Sierra Club.

 251
 1 And as you probably know, the Sierra Club

 2 supports these standards. We've been advocating for

 3 these kind of standards for a long time, and we

 4 applaud the Obama Administration and the EPA for

 5 coming up with good, strong standards.

 6 From a personal point of view, I try to

 7 walk my talk. I got here by riding my bike to BART.

 8 I rode BART and then I walked over from the

 9 Embarcadero.

 10 Also, I've been driving fuel-efficient cars

 11 for a long time. My first vehicle I bought was a

 12 Datsun 1200. If you remember those real little

 13 Datsuns, they got great mileage; they were good

 14 cars. And I have been driving fuel efficient

 15 vehicles ever since, and I saved a lot of money and

 16 cleaned up the air.

 17 And when you think about these standards,

 18 with the higher mileage standards, they do several

 19 things. But the two most important things are they

 20 save people money because they get better gas

 21 mileage, and, of course, they clean up the air.

 22 So why would anybody oppose these kind of

 23 standards that do something for everybody? I don't

 24 understand why the car companies would oppose them.

 25 American car companies have not been real

 252
 1 competitive lately. They had to get bailed out, as

 2 we all know. And one reason was, and I suggest the

 3 prime reason was, they insisted on sticking with

 4 gas-guzzling SUVs, and they didn't get into the

 5 forefront of fuel-efficient cars. The Japanese

 6 manufacturers, Toyota and Honda did.

 7 That's why the Prius, you see them all over

 8 California because that's where you can get them.

 9 U.S. car manufacturers will be forced to become more

 10 efficient and get cars that people want; fuel

 11 efficient cars by these standards. And I don't see

 12 why they would complain at all. They are actually

 13 being forced to become more competitive.

 14 And I think the other thing is I think

 15 these standards should be put in place without any

 16 exceptions. I remember the last standard had the

 17 light truck exception, and I, at one point, was

 18 looking to buy a light truck and the mileage wasn't

 19 as good. And there weren't any hybrids because they

 20 weren't forced to be applied to the light trucks,

 21 those standards.

 22 I think these standards should apply to all

 23 vehicles, and there is no reason to accept things

 24 like light trucks. Thank you very much.

 25 MS. OGE: Thank you. Ms. Emily Folly.

 253
 1 TESTIMONY BY EMILY FOLLY

 2 MS. FOLLY: Yes, hello. I'm Emily Folly.

 3 I'm a resident of Oakland. I came here on a cable

 4 car along with the tourists today, but I felt I

 5 shouldn't drive.

 6 And I also feel that stronger emission

 7 standards are a complete no-brainer. It's clear

 8 that global warming is the biggest challenge that's

 9 facing us as a world, as a nation, as a society.

 10 And so for this reason, we have to lower our

 11 emissions. And it's incumbent upon the government

 12 to set that standard to do that.

 13 So I completely support all of these

 14 cleaner car standards, and I also support them from

 15 my own personal breathing of clean air and for the

 16 thought that for my children and for their children

 17 that we will leave them a world that is not in

 18 collapse.

 19 I am reminded of the book by Jared Diamond

 20 in which he discusses societies that collapse. And

 21 one of them that he talks about is Easter Island

 22 where they have no trees and the society collapsed

 23 because they cut down all their trees.

 24 And he has a line in there where he says,

 25 what were they thinking on Easter Island as they cut

 254
 1 down the last tree.

 2 And I am constantly being reminded of that

 3 when we see what we're doing to our environment and

 4 moving down the path towards global warming.

 5 So I completely support these standards,

 6 and I also want to be sure that nothing gets lost in

 7 the negotiations; that California doesn't lose its

 8 ability to set higher standards than the ones that

 9 are set for the nation.

 10 I think that's extremely important, and I

 11 think that's has been borne out over the past decade

 12 or so of emissions standards. So thank you very

 13 much.

 14 MS. OGE: Thank you. Mr. Jack Fleck. Good

 15 afternoon.

 16 TESTIMONY BY JACK FLECK

 17 MR. FLECK: Yes, I'm Jack Fleck. I retired

 18 last year as a San Francisco city traffic engineer,

 19 so I'm very familiar with cars and transportation.

 20 I want to second the comment that Emily

 21 just made about global warming, and I strongly

 22 support the 54.5 mile per gallon goal. But I want

 23 to emphasize that that is just a step in the right

 24 direction; it's not going to get us where we really

 25 need to go.

 255
 1 The problem is it feels like kind of a

 2 negotiated number. And when it comes to physics and

 3 chemistry, they don't negotiate. We're in a world

 4 right now where greenhouse gases last year went up

 5 more than they had any other year.

 6 We're at 390 parts per million now. That's

 7 way beyond the 350 that many scientists feel is

 8 actually sustainable. It's going up about 2 parts

 9 per million every year.

 10 So it's just a scientific fact that we are

 11 in a warming world and the climate is changing and

 12 this is heading us towards catastrophe.

 13 There is another fact that I'd like to

 14 point out which is that the earth can only absorb

 15 about 7 billion tons of fossil fuel generated CO2 in

 16 a year.

 17 Now, there are about 7 billion people on

 18 the planet, so do the math. Each of us gets one

 19 ton. Well, that sounds doable. Well, the problem

 20 is the United States, we're generating about 20 tons

 21 per person. That's just non-sustainable. It has to

 22 stop.

 23 And it may seem overwhelming, but the fact

 24 is it's doable. If we switch to 100 percent

 25 electric cars generating that electricity with

 256
 1 renewable power, we can do this.

 2 In fact, I drive the Chevy Volt. It gets

 3 about 250 miles per gallon around town. I have

 4 solar panels on my roof, and it costs about 2 cents

 5 a mile to drive the car.

 6 The technology is here. There is no reason

 7 that technically we can't do this. Economically,

 8 it's affordable. The cost of the electricity is

 9 almost exactly the same as our utility, PG&E,

 10 charges.

 11 And all of this can be done. It's really

 12 just a matter of political will, and it has to be

 13 done for the environment's sake.

 14 Just one other point I want to make. How

 15 come people ask, well, aren't electric cars using

 16 fossil fuels? And if you don't have a solar panel,

 17 that's true. But I like to refer to what sometimes

 18 is called Big Oil's dirty little secret, which is

 19 that it takes as much electricity to refine one

 20 gallon of gas, that an electric car can drive on

 21 that same amount of electricity, about 7 kilowatt

 22 hours, an electric car can go about 23 miles on it,

 23 and that's about what an average car gets on a

 24 gallon.

 25 So not even counting the carbon dioxide

 257
 1 that's produced by the burning of the fuel, electric

 2 cars are just that much more efficient.

 3 So one other point is the grid in

 4 California is getting greener and cleaner as the

 5 years go by, and the law has required that; whereas,

 6 fossil fuels are getting dirtier and dirtier. The

 7 tar sands, the extra heavy crude oil, drilling in

 8 the Arctic, drilling the artery deeper, with more

 9 risks in the Gulf.

 10 All of these things are in exactly the

 11 wrong direction, whereas if we go to

 12 electrification, we can move to a cleaner and

 13 cleaner planet.

 14 So I just want to encourage you to support

 15 this measure. It's a step in the right direction.

 16 Please don't do anything to water it down and keep

 17 an eye on it. Do everything you can to strengthen

 18 it, because the planet depends on you.

 19 MS. OGE: Thank you Mr. Fleck. Mr. Sean

 20 Watson?

 21 TESTIMONY BY SEAN WATSON

 22 MR. WATSON: I'm Sean Watson. I'm the

 23 California Representative for the Pew Clean Energy

 24 Program, and I'm pleased to deliver public comments

 25 on behalf of the Pew Charitable Trust. 

 258
 1 The Pew Charitable Trust is pleased to

 2 comment on the proposed joint rule issued by the

 3 Environmental Protection Agency and the Department

 4 of Transportation. It would require manufacturers

 5 of light-duty vehicles to achieve a fleet wide

 6 average of 54.5 miles per gallon fuel economy and

 7 greenhouse gas emission equivalent standard for

 8 model 2025 year vehicles.

 9 The proposed rule would double passenger

 10 vehicle fuel efficiency from the level enacted in

 11 2007, a significant increase that will save

 12 consumers money at the pump, blunt the economic and

 13 national security threats presented by oil

 14 dependence and price volatility, and help American

 15 manufacturers develop new technologies to spur

 16 investment in research, development, and production

 17 of advanced vehicles.

 18 Pew has long supported higher federal fuel

 19 economy standards. In 2007, we worked to help

 20 achieve overwhelming bipartisan support in Congress

 21 on the first fuel economy increase in 30 years.

 22 We also sought to inform the public and

 23 policymakers across the nation about the dangers of

 24 U.S. oil dependence to our nation's economy,

 25 national security, and to the lives of the U.S.

 259
 1 servicemen and woman who defend oil transit routes

 2 and chokepoints around the world.

 3 The RAND Corporation estimates that the

 4 U.S. military spends between $67 and $83 billion

 5 annually defending oil chokepoints around the world.

 6 The proposed joint rule for model years

 7 2017 and 2025 incentivizes the introduction of

 8 advanced technologies that seek to decrease U.S.

 9 dependence on foreign oil. Incentives designed to

 10 spur deployment of electric and hybrid vehicle

 11 technologies in the U.S. light-duty fleet provide a

 12 clear path for auto manufacturers to invest in

 13 research, development, and production, which can

 14 improve the competitiveness of U.S. manufacturing

 15 and enhance exports to nations with growing demand.

 16 Investment in research, development,

 17 production and deployment of advanced vehicle

 18 technologies will help vehicle manufacturers located

 19 in the United States achieve the proposed standards,

 20 and present an opportunity for the U.S. to lead in

 21 new markets such as advanced batteries which experts

 22 predict could be a $100 billion dollar global

 23 industry annually by 2030.

 24 Pew is a strong advocate for the deployment

 25 of electric and hybrid vehicles and the necessary

 260
 1 charging infrastructure, which could significantly

 2 reduce oil consumption and consumer fuel costs.

 3 While the proposed requirements set forth

 4 by EPA and DOT are aggressive and laudable, Pew

 5 strongly urges the agencies not to allow the final

 6 standards to be weakened during the midterm review

 7 period.

 8 Pew understands that fuel efficiency

 9 standards produced by DOT are limited by the statute 

 10 to five-year increments, and also appreciates the

 11 value of technological and cost review to ensure

 12 that standards are achievable.

 13 However, we believe that federal fuel

 14 efficiency standards must remain strong in order to

 15 enhance American manufacturing competitiveness in

 16 the auto industry while protecting consumers and

 17 businesses from fuel cost volatility.

 18 As you know, the public strongly supports

 19 reducing U.S. oil dependence through higher fuel

 20 economy. Our bipartisan poll commissioned in July

 21 2011 found that 91 percent of Americans identify

 22 U.S. dependence on foreign oil as a threat to our

 23 national security, significant bipartisan majorities

 24 in every region of the country believe that adopting

 25 stronger fuel economy standard is the best way to

 261
 1 lessen that dependence.

 2 In addition to the petition submitted to

 3 President Obama on November 1, 2011 and signed by

 4 more than 31,000 Americans, Pew has and will

 5 continue to highlight the importance of fuel

 6 efficiency with auto supply manufacturers, working

 7 families, and veterans at events around the nation.

 8 Thank you for your consideration of these

 9 comments and have a great rest of your evening.

 10 MS. OGE: Thank you. Also, a Ms. Vaughan,

 11 will you please come up and be part of this panel

 12 and give your testimony?

 13 TESTIMONY BY SUSAN VAUGHAN

 14 MS. VAUGHAN: Sure. Thank you. I'm an

 15 active member of the Sierra Club. My name is Sue

 16 Vaughan, and I'm not testifying on behalf of the

 17 Sierra Club; I'm testifying on behalf of myself. So

 18 good afternoon and thank you for all your good

 19 public work.

 20 This morning there has been a lot of

 21 testimony in favor of the new standards and a few

 22 detractors. While I applaud efforts to increase

 23 fuel efficiency standards, I went to underscore that

 24 merely improving fuel efficiency standards -- and,

 25 according to one previous individual who testified

 262
 1 today, Europe now has a requirement that cars get 47

 2 miles per gallon -- is not enough. And I want to

 3 remind all of you, there is no such thing as a

 4 "clean" or a "green" car.

 5 As you move forward refining these rules,

 6 please take into consideration: The energy

 7 dividends.

 8 A number of people who testified today

 9 talked about the money that consumers will save and

 10 the energy that will not be expended because of the

 11 proposed increases in miles per gallon.

 12 However, this is a problem itself called

 13 the "energy dividend." Measures need to be put in

 14 place to ensure that saved money is not spent on

 15 expenditures of energy in other sectors of the

 16 economy. The best way to do this through energy

 17 taxes.

 18 As it is right now, the federal gasoline

 19 tax, at 18.3 cents per gallon, has not been raised

 20 since the early 1990s. It is high time that

 21 Congress increase this tax and make it a percentage

 22 of sales so that tax increases automatically with an

 23 increase in the cost of gasoline. And I realize you

 24 are not members of Congress.

 25 In addition, measure all sources of energy

 263
 1 used and carbon emitted from the beginning of a

 2 car's existence to the end of its existence when you

 3 are taking into consideration these increased fuel

 4 efficiency standards.

 5 These sources include energy used in the

 6 extraction, transportation and transformation of raw

 7 materials and the manufacture of the car to the

 8 disposal of the car and/or its parts when its life

 9 is over.

 10 I want to read this old newspaper article

 11 from 2004 and it's called "The Road to Nowhere," and

 12 it's about somebody who is critiquing the excitement

 13 over the hydrogen fuel cell car a few years ago.

 14 Well, nobody is excited about that car anymore. But

 15 he's just reminding everybody about all the other

 16 problems with cars:

 17 "26.5 tons of waste and 922 cubic meters of

 18 polluted air from extracting raw materials. 12

 19 liters of crude oil spilled into the world's oceans

 20 and 425 million cubic meters of polluted air from

 21 transporting raw materials. 1.5 tons of waste and

 22 74 million cubic meters of polluted air from

 23 producing the car. 40.5 pounds of waste and 1,016

 24 million cubic meters of polluted air from driving

 25 the car. And 102 million cubic meters of polluted

 264
 1 air from disposing of the car."

 2 That's not to mention all the issues with

 3 land use and sprawl that are perpetuated by our

 4 car-based culture.

 5 So where does this all get us to? Well, it

 6 gets us to what is the solution. And the solution

 7 is public transportation. It's San Francisco's

 8 Transit-First Policy which we have not quite put

 9 into place.

 10 We are still working on that, but that is

 11 the goal, to be a become a Transit-First city and a

 12 Transit-First country where we also include our feet

 13 and our bicycles.

 14 And this is something that appeared in an

 15 election guide this past year: "If you aggregate

 16 all energy used in San Francisco for whatever

 17 purpose and from whatever source, nearly half of all

 18 energy used in the city is petroleum-based fuel used

 19 to power cars and trucks. This counters intuitive

 20 facts as uncovered by the city's Peak Oil

 21 Preparedness Task Force and published in their 2009

 22 report. On the other side of that coin, only 2% of

 23 all energy in San Francisco is used to power our

 24 Municipal Transportation Agency: Caltrain and Bay

 25 Area Rapid Transit. Do the math. More than 15

 265
 1 times as much energy is spent on cars and trucks as

 2 on public transit. Can you say inefficient use of

 3 energy? How about plenty of room for improvement?"

 4 Okay. So the point is that what we want to

 5 do is this is a good start. We need more

 6 fuel-efficient vehicles. But, in particular, we

 7 need more fuel-efficient public transportation

 8 vehicles and we need to really change the culture in

 9 this entire country.

 10 Because what Mr. Fleck is talking about

 11 here about having our little electric vehicles, and

 12 you think with 7 billion people on the planet do we

 13 have the resources to give every single one of those

 14 people their own electric vehicle; do we have the

 15 energy and the other resources used to do that if we

 16 are going to have an equal society? I don't think

 17 we do. Equal means public transportation and

 18 transit first. Thank you.

 19 MS. OGE: Thank you for your testimony.

 20 Any questions for the panel? Okay. Thank you for

 21 your testimony. I think we are going to take a

 22 break.

 23 (A break was taken at this time.)

 24 MR. MEDFORD: We've asked that those who

 25 have been identified to give testimony in Panel 9 to

 266
 1 come to the table, and if you would write your name

 2 on the cards. You will be given five minutes of

 3 time to present your testimony. At the end of five

 4 minutes, you will hear a little ding-dong that will

 5 remind you that your time is up.

 6 So Ms. Green, Mr. Gray, Mr. Katz,

 7 Mr. Arbour. I think it's Ms. Robinson, Mr. Riehl,

 8 Mr. Edeli and Ms. Klotz.

 9 Ms. Green, it's my understanding you have

 10 been waiting for awhile and you're going to go

 11 first. And whenever you're ready, you can just

 12 identify yourself and begin.

 13 TESTIMONY BY SUSAN GREEN

 14 MS. GREEN: Okay. Thank you for the

 15 opportunity to speak, and forgive me, but at the end

 16 of this I'm going to need to run out immediately.

 17 My name is Susan Green. I've been a member

 18 of the Sierra Club for at least 20 years and that's

 19 where I first heard about these hearings, although

 20 it is not concern for the environment per se that

 21 brought me here today.

 22 I'm a pretty average San Franciscan. I

 23 work full time here in the city. I'm married with

 24 two teenage kids, so now we have four drivers in our

 25 household.

 267
 1 We own a house in San Francisco and two

 2 hybrid cars. And I have to add that although we

 3 knew their fuel efficiency ratings were a bit

 4 inflated when we purchased them, neither gets the

 5 gas mileage we hoped for, unfortunately. Especially

 6 not here in San Francisco with the hills.

 7 I want to begin by thanking you for your

 8 leadership in establishing the existing standards to

 9 increase the average fuel efficiency of vehicles by

 10 2016, and I want to voice complete support for the

 11 strongest possible standards for vehicles introduced

 12 after 2016, including caps on special treatment for

 13 trucks and electric vehicles, and test procedures

 14 that accurately measure fuel efficiency.

 15 As you can probably tell, I am not entirely

 16 comfortable with public speaking, that's why I have

 17 written remarks. But I jumped at the chance to come

 18 and talk today because, quite simply, I believe we

 19 face no more important and immediate issue than

 20 global warming.

 21 Climate scientists are telling us daily

 22 that we need to deploy every emissions reduction

 23 technology at our disposable as quickly as possible.

 24 Here's just a small sample of climate

 25 science headlines and news summaries from just the

 268
 1 last few days:

 2 On January 19th, NASA released data showing

 3 that average arctic temperatures rose beyond the

 4 record set in 2010, establishing a new record in

 5 2011. Despite the cooling effects of a strong La

 6 Niña and low solar activity, they note that record

 7 ice loss and tundra melts are amplifying warming.

 8 A headline from yesterday's Yale

 9 Environment 360 blog says that the rise in ocean

 10 acidity is unprecedented in the past 21,000 years.

 11 Unless we change the way we live, the earth's coral

 12 reefs will be utterly destroyed within our

 13 children's lifetimes.

 14 From today's NRDC's staff blog comes the

 15 headline, "By 2020, California will face a shortfall

 16 of freshwater as great as the amount that all its

 17 cities and towns currently consume today, a

 18 consequence of projected warming and changing

 19 precipitation patterns."

 20 Yesterday's Washington Post Wonkblog

 21 includes a post that International Energy Agency's

 22 argument that global emissions need to peak around

 23 2017 to have a 50/50 shot at keeping global warming

 24 below 2 degrees centigrade, the most commonly

 25 agreed-upon target to avoid potentially catastrophic

 269
 1 impact from climate change.

 2 The blog explains why a delay of just two

 3 or three years will make it considerably more

 4 challenging to meet that target, if not impossible.

 5 And finally, the U.S. Energy Information

 6 Agency released its Annual Energy Outlook 2012 just

 7 yesterday which shows that U.S. energy-related CO2

 8 emissions have just about flatlined as of 2011.

 9 Taking into account projected savings from

 10 stronger fuel efficiency standards and other

 11 emissions reductions impact, they estimate U.S. CO2

 12 grew but just 3 percent over the 25 years from 2010

 13 to 2035.

 14 That's pretty good news compared to our

 15 recent path, but it stands in stark contrast to the

 16 idea that global emissions need to decline by up to

 17 3 percent each year starting just five to seven

 18 years from now.

 19 And that's just to have a 50/50 shot of

 20 avoiding potentially catastrophic climate changes.

 21 Those aren't great odds to be shooting for to begin

 22 with.

 23 And, you know, maybe the most alarming

 24 thing to me about these news releases is that they

 25 are pretty typical of what we can see every week.

 270
 1 And, unfortunately, we currently have no national

 2 climate strategy to get us from here to there.

 3 I think climate activists tend to

 4 Christopher's description of our national political

 5 discussion on climate change. It's a useful way to

 6 frame discussion of where we stand now.

 7 To paraphrase: With climate change, the

 8 political center is a balancing point between the

 9 climate scientists on one side saying this is what

 10 needs to be done, and on the other, ExxonMobil

 11 promoting business as usual, and corporate cash

 12 dominating politics in DC.

 13 What we urgently need from your political

 14 leaders is something much different than a

 15 politically centrist climate strategy, because the

 16 political center is far less than what is necessary

 17 to yield that 50/50 chance of keeping global warming

 18 below 2 degrees centigrade.

 19 Those of us who aren't in Washington need

 20 your help shifting that political center. More than

 21 ever, we need the EPA's scientific expertise,

 22 political skills, and your bold leadership to push

 23 for the strongest emissions reduction as quickly as

 24 possible. On behalf of my kids' future, I'm very

 25 grateful for your efforts. Thank you.

 271
 1 MR. MEDFORD: Thank you very much for

 2 coming. Mr. Gray.

 3 TESTIMONY BY DAVID GRAY

 4 MR. GRAY: Hello. My name is David Gray.

 5 I'm a resident of El Cerrito where my wife and I

 6 have lived for some 10 years now.

 7 First off, I would like to indicate that I

 8 am a member of the Sierra Club California Energy and

 9 Climate Committee, and I'm also Chair of the Sierra

 10 Club Chapter Energy Committee for the Bay Chapter.

 11 I would like to thank the EPA and the NHTSA

 12 folks for proposing these strong standards, and it's

 13 going to be critically important to make sure that

 14 these standards are adhered to and that no loopholes

 15 that are going to be pushed for by industry be

 16 allowed to creep in.

 17 As the previous testimony has indicated, we

 18 are in a climate crisis. The latest results

 19 published by NOAA for the parts per million CO2 at

 20 the Mauna Loa Observatory shows us hitting 390 parts

 21 per million, and this is well over the 350 parts per

 22 million that would keep us on a path that would

 23 leave us with a habitable planet.

 24 So I would encourage both EPA and the

 25 National Highway Transportation Safety

 272
 1 Administration to hold industry's feet to the fire

 2 and supporting these very strong, very good

 3 guidelines that you have put forth.

 4 Minimizing greenhouse gases and maximizing

 5 fuel efficiency is something that's been really

 6 important to me. Effectively, I drive a car I

 7 bought in 1993 that still gets 30 miles per gallon.

 8 So those who wanted better mile per gallon vehicles,

 9 that was available at the time and it's still going

 10 strong.

 11 My wife and I put our money where our mouth

 12 is and bought a 2007 Toyota Prius which nominally

 13 gets 51 miles per gallon. It is something that we

 14 obviously feel strongly about in terms of putting

 15 our resources into higher vehicle mileage standards.

 16 So I really appreciate your continuing your

 17 excellent work. If there is any way to increase the

 18 vehicle MPG target, that would be fantastic. Thank

 19 you so much.

 20 MR. MEDFORD: Thank you very much.

 21 Mr. Katz.

 22 TESTIMONY BY ANDY KATZ

 23 MR. KATZ: Good evening. My name is Andy

 24 Katz. I'm representing Breathe California, which is

 25 an organization with affiliates throughout the state

 273
 1 of California advocating for lung health and

 2 improving public health focusing on clean air and

 3 the health of our lungs and our whole bodies.

 4 I'm here in strong support of the EPA and

 5 NHTSA proposal to extend the national program to

 6 reduce greenhouse gasses and improve fuel economy

 7 for cars and trucks. These standards are critical

 8 for today; a comprehensive plan that includes other

 9 U.S. EPA regulations and state actions to reduce

 10 greenhouse gasses.

 11 Climate change poses a serious threat to

 12 our health, particularly in California. We have

 13 some of the dirtiest air in the country. We have

 14 several of the dirtiest air basins, and we are at

 15 non-attainment in the South Coast Air Basin, the San

 16 Joaquin Valley, and several other air basins in

 17 terms of ozone and particulate matter pollution.

 18 So these standards will have very

 19 significant benefits to our health by not only

 20 reducing the criteria pollutant emissions in those

 21 air basins, because of the some of the effects of

 22 encouraging plug-in hybrids and electric vehicles

 23 that will reduce the combustion of gasoline in the

 24 air basin, but also by reducing global warming. And

 25 the average temperatures will reduce the amount of

 274
 1 high ozone days because of reducing the amount of

 2 ozone that is created on very high temperature and

 3 extreme weather of those days.

 4 So there are very significant benefits to

 5 our health that are documented in written comments

 6 that have been presented to the agency. I would

 7 like to strongly urge the agency to adopt the most

 8 stringent option before you.

 9 There has been some study presented to the

 10 EPA that some of the more lenient pathways, the 3.5

 11 percent per year as opposed to the 5 percent per

 12 year, could actually have the effect of making it

 13 more difficult to have market transformation.

 14 The regulation would be cheaper and more

 15 available to the public, provide more affordable

 16 cars to the public if there is a market

 17 transformation.

 18 And to accomplish that there needs to be

 19 more of an availability, more of a market, more on

 20 an economy of scale. And by slowing things down,

 21 not only do we have more emissions that endanger our

 22 health and endanger our environment, but we may also

 23 make it more difficult to have a market

 24 transformation in the fleet of vehicles.

 25 So I strongly urge the agency to adopt the

 275
 1 most stringent version of the rule to have the most

 2 accelerated pathway to clean cars, because the

 3 climate demands it, our health demands it, and it

 4 make sense because of the consumer and health

 5 benefits associated with the rule.

 6 I would like to conclude my remarks and

 7 thank you for the excellent work that the U.S. EPA

 8 has done to advance this regulation.

 9 MR. MEDFORD: Thank you very much.

 10 Mr. Arbour.

 11 TESTIMONY BY TYLER ARBOUR

 12 MR. ARBOUR: I also have this statement

 13 written down on my phone, so if you don't mind me

 14 staring down at that while I give it.

 15 First of all, thank you for holding this

 16 hearing and giving us a chance to speak about this.

 17 As a graduate student in Earth and Planetary Science

 18 at UC Berkeley, I've had my fair share of exposure

 19 to this science and evidence behind the idea that

 20 humans are affecting earth's climate.

 21 There is no longer any doubt that this is

 22 the case, and I truly believe that it is one of the

 23 most urgent issues that we've ever faced as a

 24 society.

 25 The most likely outcomes for this scenario,

 276
 1 unless we do not act quickly to reduce our CO2

 2 emissions based on the best science, are deeply

 3 troubling to say the least.

 4 For these reasons, I feel a responsibility

 5 to share this message with as many people as I can;

 6 not just this hearing, but in general. And since

 7 there remain some who doubt the urgency of our

 8 current situation, supporting smart, proactive

 9 initiatives like this one is one way to share this

 10 message and help us move forward to a future that

 11 looks less grim.

 12 It's no secret some big companies have an

 13 interest to resist this and similar initiatives, but

 14 I try to be practical in viewing this situation. I

 15 don't think that big companies are inherently evil;

 16 after all, even big corporations are made up of

 17 individual people just like myself.

 18 Unfortunately, however, a narrow focus on

 19 the bottom line can easily distort the motives of

 20 individuals calling shots at these companies. And

 21 this is why we need others outside the influence of

 22 profit to give their two cents on the issues leading

 23 to a better balance between the well-being of

 24 companies, of citizens, and of our environment.

 25 Anyone who has driven in the Bay Area --

 277
 1 and I'm from Montana, so it was kind of a shock when

 2 I first arrived here -- anyone who has driven here

 3 knows and can understand that vehicles and driving

 4 are a major part of our energy use and emissions.

 5 This highlights the importance and

 6 potential impacts of this clean car proposal. And

 7 people are already interested. A recent Consumer

 8 Reports poll showed that 70 percent of respondents

 9 agree that car manufacturers should produce more

 10 fuel-efficient vehicles and that the government

 11 should increase standards and enforce them.

 12 Fortunately, much of the technology is

 13 already there. We have impressive hybrids and

 14 electric vehicles. But the cost of these vehicles

 15 is prohibitively high for many people or families,

 16 and setting higher standards will jump start efforts

 17 to improve the technology even further and introduce

 18 a wider variety of fuel-efficient next-generation

 19 vehicles to the market.

 20 So I urge you to strongly support this

 21 clean cars proposal. And as the previous speaker

 22 said, the strictest version of it. And big

 23 corporations have the advantage of deep pockets and

 24 lobbying power to try and resist this, and as a

 25 graduate student, all I can offer is my time and

 278
 1 energy. So thank you.

 2 MR. MEDFORD: Thank you for your time and

 3 energy. Ms. Robinson.

 4 TESTIMONY BY EMILY ROBINSON

 5 MS. ROBINSON: Thank you for your time

 6 today. My name is Emily Robinson. I'm an

 7 undergraduate student at UC Berkeley. I'm here

 8 today with CALPIRG. They were the ones that told me

 9 about this opportunity to come speak.

 10 I am originally from the central coast from

 11 the Monterey Bay Area which is a wonderful place to

 12 live. It's a beautiful area. But for my family,

 13 it's pretty much critical that we live somewhere

 14 along the coast, because I have a younger sister.

 15 Her name is Abby. She's 14. And she was born with

 16 cystic fibrosis which is one of the most common

 17 genetic diseases in the country. It is primarily a

 18 lung disease. The current life expectancy, if I

 19 remember correctly, is 38 years old.

 20 When my sister was born, it became really,

 21 really important for our family to keep living on

 22 the coast. Because her lungs are so sensitive that

 23 if she were to live in an area where there was a lot

 24 of smog, a lot of pollution in the air, it would be

 25 catastrophic for her health. It's critical we

 279
 1 continue living in an area with clean air. It is

 2 always clear there aside from the fog, just like

 3 here.

 4 So I'm not here to talk about the numbers.

 5 I think Mr. Green did an excellent job of really

 6 laying out the scientific bases for why the

 7 increased standards are necessary.

 8 I'm here to talk to you on behalf of my

 9 sister, because she obviously couldn't come up here

 10 on a school night. So I'm here to tell you what

 11 it's like for her to actually be prohibited from

 12 living in certain parts of this state because of how

 13 bad the air is.

 14 About 10 years ago, my family had an

 15 opportunity to move down to Southern California to

 16 Los Angeles, and it was a really hard decision for

 17 us. And we eventually decided not to do so because

 18 it would be so hard for us to live in that area

 19 because we would have to be so careful about

 20 choosing where we live, because the air there is so

 21 bad, and it would have been terrible for my younger

 22 sister to live in an area where the air there is so

 23 polluted, so bad for her, that it would have harmed

 24 her health just to be breathing it in every day.

 25 And that was the motivating factor for us

 280
 1 to stay living where we are. We couldn't move down

 2 because of that.

 3 And I know a lot of us take for granted

 4 clean air as being a fact. It's not something that

 5 I think about every time I take a breath. But for

 6 her it's an important decision. And it's really sad

 7 for me that about half of the state right now, at

 8 some point in her future she can't move there, she

 9 can't live there because the air is so, so bad, it's

 10 so toxic.

 11 So I'm here today to encourage you on

 12 behalf of my younger sister and on the rest of us

 13 that breathe this air every day to please do

 14 whatever you can to raise these standards so that

 15 the air stays the way it is now and clears up so

 16 that we can keep breathing as long as possible.

 17 Thank you for your time.

 18 MR. MEDFORD: Thank you. Mr. Riehl.

 19 TESTIMONY BY JAMES RIEHL

 20 MR. RIEHL: Hello. I'm James Riehl and I'm

 21 also a first year at Cal, and I'm here because of

 22 CALPIRG.

 23 So growing up, I've always known a lot

 24 about global warming and its impacts. My family has

 25 been very good about educating me about that. We

 281
 1 own two Priuses and are waiting for the plug-in

 2 currently.

 3 I honestly don't have very much to add

 4 other than I have taken an Earth and Planetary

 5 Science class and I know that if global warming is

 6 allowed to continue unchecked, the national

 7 disasters are just going to get worse.

 8 We're going to have receding coastlines,

 9 acidification of the ocean is going on, destroying

 10 the coral reefs. There's going to be tsunamis,

 11 hurricanes, floods, everything is just going to get

 12 worse.

 13 And it's still surprising that there is

 14 just so many people who believe global warming is a

 15 myth or that there is science to actually contradict

 16 it. So I'm definitely behind any legislation that

 17 will reduce emissions and help combat global

 18 warming.

 19 MR. MEDFORD: Thank you. Mr. Edeli.

 20 TESTIMONY BY TERRY EDELI

 21 MR. EDELI: Name is Terry Edeli, and I'm a

 22 retired principal and current educator, so I'm

 23 thrilled to see the students here speaking on our

 24 behalf. It means more to them, I think, than to

 25 some of us for the future.

 282
 1 So in my mind I have four areas, four

 2 reasons why this is like really important to enact

 3 this program and to make it as stringent and as

 4 difficult to abate.

 5 One is global, one is national, one is

 6 local, and one is personal.

 7 So globally, people have spoken to it well

 8 here just the threat of global warming and climate

 9 change; it's real, it's serious.

 10 And if this country and our EPA -- which is

 11 doing a great job under this administration which is

 12 probably the most proactive that we've had -- can't

 13 take leadership around this particular problem of

 14 global warming in this way with mileage standards,

 15 who will?

 16 Second, national. I can't believe how much

 17 money this country sends out of the country to buy

 18 oil so that we can have cars and trucks that have

 19 poorer mileage. And it seems to me that it even

 20 causes us occasionally to go to war to protect our

 21 oil interests.

 22 So on a national level, it seems like it's

 23 a national security issue to move towards better

 24 mileage standards that can't be escaped by any

 25 mechanism, and so I would urge you to adopt these

 283
 1 standards and keep them as stringent as possible.

 2 Third, local. I'm a native Bay Area

 3 resident, and I have a strong memory when I was

 4 first teaching, I was living in Mountain View and

 5 every day, five days a week, when I came home from

 6 work, I would look up and I could not see the Santa

 7 Cruz Mountains.

 8 So the air quality is actually better in

 9 the Bay Area now than it was before because of

 10 government leadership, and I think this is the time

 11 for government leadership.

 12 And finally, on a personal level, cars with

 13 good mileage save money. I like saving money. So I

 14 do have a Prius, too. And my personal story is that

 15 I only have one problem with the Prius, and it's

 16 come up recently.

 17 So I'm also a skier, so I really like good

 18 mileage because you have to drive to the mountains.

 19 But right now, Shell Oil has a promotion where they

 20 give you a free lift ticket if you fill up your car.

 21 So I go in with my Prius empty, and I fill

 22 it up and I go to get my free ticket, and I have

 23 only gotten 9 1/2 gallons and they wouldn't give me

 24 a free ticket. So I had to buy a half a gallon of

 25 gas and put it in somebody else's car so I could get

 284
 1 my free ski ticket. So anyway, that's the only

 2 problem I have.

 3 I think that it's great that you're here.

 4 It's great that you're listening to us, and I

 5 appreciate your work and I hope it goes through.

 6 MR. MEDFORD: Thank you for your testimony.

 7 Ms. Klotz.

 8 TESTIMONY BY MARIE-LUISE KLOTZ

 9 MS. KLOTZ: Hi. I'm Marie-Luise Klotz, and

 10 I don't have any statistics or anything like that.

 11 I have my personal thoughts to share.

 12 I'm German, and I live here now, but the

 13 generation of my grandparents is oftentimes

 14 confronted with questions concerning the genocide of

 15 the Second World War, which are questions like why

 16 didn't you do anything; why didn't you prevent this

 17 from happening.

 18 And I'm here today because I don't want my

 19 kids to ask me that question one day and ask me why

 20 didn't you do anything, you knew this was happening,

 21 you could have changed it back then.

 22 So, I'm 25 years old. I really want to

 23 have kids, but I'm really worried to bring kids into

 24 this world because it's scary and I don't want them

 25 to have to deal with an extreme situation in every

 285
 1 sense of word that they might have to.

 2 So I'm really glad to be here, and I

 3 hope -- and previous people said -- that you can

 4 enforce stricter regulations, and I strongly support

 5 that. Thank you.

 6 MR. MEDFORD: Thank you. Do any of my

 7 colleagues have questions?

 8 MS. OGE: I just want to thank all of you,

 9 especially the young people who have taken their

 10 time to come and testify. After all, a lot of what

 11 we're doing is for you and your children and

 12 grandchildren.

 13 MR. MEDFORD: Thank you all for coming and

 14 it was very helpful to have your testimony. Thank

 15 you for taking your time. I think we're ready for

 16 the next panel.

 17 MS. OGE: Now we're going to Panel No. 10.

 18 Katie Perry, plus 10.

 19 TESTIMONY BY KATIE PERRY

 20 MS. PERRY: So my name is Katie Perry. I'm

 21 a director with the Citizen Outreach Program with

 22 Environment California. I don't have 10, but I have

 23 a few, so I brought them with me. And thanks to

 24 Sean, I was able to know about what was going on.

 25 I've been working with Environment

 286
 1 California for about six months now, and basically

 2 we work on the top problems with the environment.

 3 So I'm really glad that I'm here because we're

 4 actually seeing the results of what we're working

 5 towards.

 6 And we go out every day and talk to people

 7 on the streets about these issues about getting

 8 cleaner cars, banning plastic grocery bags, all

 9 those wonderful things, and being here right now is

 10 awesome. So thank you guys for having us.

 11 Personally, I think obviously I wouldn't be

 12 doing this work unless I thought there was some

 13 problems with the environment and we needed to fix

 14 some things. So obviously, cleaner cars and getting

 15 our standards up is really important, especially

 16 because we're going to be doing a lot of things in

 17 the next few months.

 18 So this is an exciting time. I have a few

 19 people and they want to say a couple things, so I'm

 20 just going to let them go.

 21 MS. OGE: Ask them to say their names for

 22 the reporter.

 23 TESTIMONY BY JONATHAN LEWIS

 24 MR. LEWIS: First of all, thank you for

 25 giving me the time to speak today. My name is

 287
 1 Jonathan Lewis and I'm also a field manager with

 2 Environment California and actually a returned Peace

 3 Corps volunteer, so I'm really excited to be here

 4 today.

 5 You know, in California, cars are a huge

 6 source of smog and air pollution, which we all know.

 7 Personally, I'm actually allergic to smog. I took a

 8 family trip down to LA and just became extremely

 9 sick.

 10 So I'm really excited that we are making

 11 these strides forward. I think that as Californians

 12 and also as Americans we need to constantly be

 13 moving forward and pushing positive environmentally

 14 friendly bills like this one.

 15 A bill pushing better mileage standards is

 16 exactly that. I truly believe that we need to

 17 continually be moving forward with proposals like

 18 this one. And, yeah, the facts are in, and it's

 19 about time. This is a major breakthrough. So thank

 20 you very much for allowing me to speak.

 21 MS. OGE: Thank you. Next?

 22 TESTIMONY BY KATE SALINZOK (phonetic)

 23 MS. SALINZOK: Hi. My name is Kate

 24 Salinzok, and I'm a field manager with the Fund for

 25 Public Interest. We work with Environment

 288
 1 California.

 2 Just really quickly. Actually, I lived in

 3 Alabama for five years; that's where I went to

 4 college. And two separate things that occurred

 5 there directly related to this issue are, No. 1, the

 6 oil spill, and obviously the second one would be the

 7 tornado. We were in that tornado in April, and that

 8 is directly related to global warming. And

 9 obviously the oil spill is directly related to

 10 global warming. So thank you guys so much for

 11 having us, and we really appreciate what you are

 12 doing.

 13 MS. OGE: Thank you. Anybody else?

 14 MR. DYER: I guess I will add a little

 15 something.

 16 MS. OGE: Your name?

 17 TESTIMONY BY WESLEY DYER

 18 MR. DYER: My name is Wesley Dyer. I'm

 19 also a field manager with Environment California. I

 20 also thank you for being here and holding this

 21 public hearing and giving us the opportunity to

 22 voice these opinions.

 23 Climate change is the most important issue

 24 to me personally. I think it is the greatest

 25 challenge that we face. And it's not just us, but

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 1 it's also for our children and our grandchildren.

 2 And so I think that we have to take all the

 3 action we can right now to make sure that they have

 4 a life even comparable to what we can have.

 5 So I really urge you to adopt the most

 6 stringent regulations that you can. Thank you.

 7 MS. OGE: Thank you. Next neighbor.

 8 TESTIMONY BY TARA LEWIS

 9 MS. LEWIS: I'll say something. Hi, my

 10 name is Tara Lewis, and I came for Environment

 11 California. I just wanted to say that I support the

 12 clean cars because this planet is our home. We

 13 should take care of it. Thank you.

 14 MS. OGE: Thank you. Anybody else? So Ms.

 15 Margo Aparicio?

 16 MS. APARICIO: Yes.

 17 MS. OGE: Good evening.

 18 TESTIMONY BY MARGO APARICIO

 19 MS. APARICIO: I'm Margo Aparicio. I live

 20 here in San Francisco and I'm just a plain old

 21 citizen. I do support this 54.5 mile per gallon

 22 vehicle targeted by 2025.

 23 But you know what? It's not really enough.

 24 And the reason why I say that is because the

 25 technology for giving the American people a choice

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 1 of both electric cars and autos with gas mileage

 2 capabilities of actually 100 miles per gallon has

 3 already been in place for decades.

 4 If you haven't watched the documentary "Who

 5 Killed the Electric Car?", please do so. It will

 6 actually make your blood boil. It did mine.

 7 A similar quote unquote "experiment" was

 8 conducted with consumer vehicles that got 100 miles

 9 per gallon a couple of decades back. UC Berkeley

 10 happened to be one of the recipients of one of those

 11 vehicles and sued to try to keep the vehicle when

 12 it, too, was recalled and, of course, destroyed. I

 13 guess it was too much of a good thing too early on

 14 in our environment.

 15 Please do not fall prey to the oil and auto

 16 industry's partnership, because they will be crying

 17 they'll fall into bankruptcy and go out of business

 18 and that would be worse for the world if they

 19 disappear if this proposal passes.

 20 Because let the chips fall where they may.

 21 I really don't believe they will go under. I don't

 22 believe they need any bailouts. They have plenty to

 23 keep them going.

 24 The American people and our environment

 25 deserve to have what the oil and auto industries are

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 1 already capable of delivering. They are just

 2 holding back on it, and I think the world deserves

 3 it.

 4 The unfortunate situation is that there are

 5 middle class groups in emerging countries that are

 6 now just grappling for oil, and it's going to

 7 increase the destruction of the environment

 8 worldwide.

 9 We need to be the leader, and so far we're

 10 kind of holding back. And the capabilities are

 11 there. I would just like to see even more stringent

 12 things.

 13 We need to break our addiction to oil and

 14 its environmental destruction sooner than later, and

 15 it's not always easy or convenient for me, but I'm

 16 putting my mouth where my money is or my money where

 17 my mouth is and I gave up my car eight years ago.

 18 I don't own one. Man, I want a car. I

 19 want one so bad, but I'm holding out for the

 20 environmentally sound vehicles. And I hope the

 21 Republican Party doesn't destroy the EPA because I

 22 know they're gunning for you. But we appreciate

 23 that you're here now and hopefully you will be

 24 around for years to come as well.

 25 MS. OGE: Thank you. Any questions from

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 1 the panel? I want to thank all of you for taking

 2 the time especially this late in the day. Oh, there

 3 is another one. I'm sorry. Could you please state

 4 your name? Oh, Peter Barker. I'm sorry.

 5 MR. BARKER-HOMEK: Yes. Peter

 6 Barker-Homek. I won't take it personally.

 7 MS. OGE: I think you were with Katie Perry

 8 plus 10.

 9 TESTIMONY BY PETER BARKER-HOMEK

 10 MR. BARKER-HOMEK: I'm representing the

 11 Sierra Club today. By way of background, I've been

 12 an environmental activist for about 34 years, and

 13 for 28 years I've been in the energy sector working

 14 for government in one capacity or another, and

 15 that's including being an officer in the U.S. Marine

 16 Corps, economic analyst for the U.S. Department of

 17 State, and then working in utilities in the U.S.,

 18 and oil and gas companies in the U.S. and overseas,

 19 Southeast Asia, Latin America, Europe, and Middle

 20 East. So my comments kind of come from that journey

 21 in life.

 22 Greed is the only obstacle to achieving a

 23 mile per gallon standard of 54.5. It's not your

 24 greed or my greed but oil company, oil company

 25 lobbyists and their puppet politicians' greed who

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 1 will stand in the way of the right decision.

 2 The EPA has the support for this

 3 initiative; two-thirds of Americans polled, 19 auto

 4 manufacturers which represent 90 percent of the cars

 5 sold in America today, and the United Oil Workers.

 6 Not issuing the 54.5 mile a gallon standard

 7 will continue and deepen America's dependence on

 8 foreign oil and foreign refineries. America will

 9 continue to finance dictators, terrorists, and human

 10 rights abusers.

 11 The technology exists today to set U.S. on

 12 the right path; the path that will save four billion

 13 barrels of oil, make $400 billion available to

 14 reinvest into our economy in productive ways, put

 15 $4,000 in each car buyer's pocket, reduce many of

 16 the health risks caused by mobile source

 17 pollution -- lung damage, asthma, premature births

 18 and deaths, heart disease, eyes, skin irritation,

 19 cancers -- and lost work days which measured at 2.8

 20 million in California alone.

 21 I, we, call on the EPA to issue strong

 22 final standards in July and ensure any flexibilities

 23 in the standards don't dilute our oil savings or

 24 pollution reductions.

 25 When testing vehicles to comply with these

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 1 standards, the agency's current test procedures

 2 overestimate efficiencies by about 25 percent. It's

 3 critical that the agency develops new, accurate test

 4 procedures. Thank you very much.

 5 MS. OGE: Thank you. Mr. Carroll?

 6 TESTIMONY BY SEAN CARROLL

 7 MR. CARROLL: Hi. My name is Sean Carroll.

 8 I'm the federal field associate from Environment

 9 California. And Environment California is a

 10 statewide environmental advocacy group, and I'm here

 11 to represent our 50,000 citizen members and the

 12 250,000 people that we will talk to face to face in

 13 the next couple of months about these issues to

 14 build our resources, educate them, mobilize our

 15 grassroots base.

 16 I want to thank you guys for having this

 17 hearing and I want to welcome you to our great

 18 state. And I want to start off by going through a

 19 few things that make this state so great.

 20 One is our cities. So cities like San

 21 Francisco, Los Angeles, San Jose, San Diego are some

 22 of the most diverse, both racially and culturally,

 23 civic centers in the world. We have places like

 24 Silicon Valley. We have intellectual hubs like UC

 25 Berkeley, UCLA. We have one of the most robust

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 1 community college systems in the entire country; 150

 2 community colleges.

 3 In addition to that, we also have some of

 4 the most important forests and parks in the entire

 5 world. Places like Yosemite, the Redwood forests

 6 and the Sierras. And then we also have one of the

 7 most beautiful coastlines in the entire world.

 8 Places like Malibu, Big Sur, Monterey, Santa Cruz.

 9 And I mention this not only because

 10 Californians take a lot of pride in their state, but

 11 because Californians identify with these places and

 12 these are the places that are at risk from air

 13 pollution, oil dependence and global warming.

 14 The first one is smog. We talk about our

 15 cities. California has six of 10 smoggiest cities

 16 in the country. We heard multiple people talk about

 17 how these intellectual hubs are threatening people's

 18 health every day.

 19 The second is our forests and our parks,

 20 and we see things like increased wildfires from the

 21 threat of global warming. We see the destruction of

 22 the native plant species. And then, of course,

 23 there is our coastline and the threat of our

 24 dependence on oil.

 25 It's not being an extremist or radical to

 296
 1 not be worried that in my lifetime or my children's

 2 lifetime places like San Francisco could be under

 3 water.

 4 Next week will be the 23rd anniversary of

 5 the Santa Barbara oil spill. When that happened, it

 6 was the largest oil spill in this country's history.

 7 It's now the third largest.

 8 If you talk to people in California who

 9 were in Santa Barbara when that oil spill happened,

 10 they can tell you horrific stories; stories that are

 11 matched by people that lived in Los Angeles in the

 12 late '70s and talking about walking outside and

 13 their eyes burning from the air quality.

 14 There is a phrase that's pretty common,

 15 which is that with great challenges come great

 16 responsibility, and I wanted to -- sorry, with great

 17 power comes great responsibility. I wanted to

 18 change that a little bit to "With great challenges

 19 come great leadership."

 20 And California has done that and has lead

 21 the way. We are the first state to pass a cap on

 22 global warming pollution. Other states have

 23 followed. We were the first state to invest heavily

 24 in rooftop solar. And as of today, there are only

 25 five countries in the world that have more rooftop

 297
 1 solar than in California, and we were the first

 2 state to pass a clean cars law like this.

 3 Other folks are following and now the

 4 federal government, we're proud to say, is following

 5 along.

 6 I'm here to speak on behalf of our members

 7 to say that California needs to continue to have

 8 that authority to set the strongest standards. We

 9 need it because we have a lot to lose here in the

 10 state. We need it because it's what the folks in

 11 California want.

 12 And so we're here to represent our folks to

 13 applaud you in what you're doing in your leadership

 14 and thank you for holding these hearings and to ask 

 15 you to make sure that we can continue to push the

 16 envelope forward.

 17 Because while this is the largest step our

 18 country has ever taken to cut our dependence on oil

 19 and reduce global warming pollution, it is not the

 20 solution to either of those problems. And so, thank

 21 you very much.

 22 MS. OGE: Thank you, Mr. Carroll. Any

 23 questions? Again, thank you, all of you. Thanks

 24 for taking the time.

 25 MR. MEDFORD: So I think that concludes the

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 1 hearing. We want to thank everyone for coming. And

 2 this is the end of a series of three hearings.

 3 Thank you very much.

 4 (Proceedings adjourned at 6:42 p.m.)

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 1 CERTIFICATE OF REPORTER

 2 I hereby certify that said proceedings (pages

 3 191 through 300) were taken at the time and place

 4 herein set forth; that the proceeding is a true

 5 record of the testimony as reported by me, a duly

 6 certified shorthand reporter and a disinterested

 7 person, and was thereafter transcribed into

 8 typewriting by computer.

 9 I further certify that I am not interested in

 10 the outcome of the said action, nor to their

 11 respective counsel.

 12 IN WITNESS WHEREOF, I have hereunto set my had

 13 this 2nd day of February 2012.

 14 Dated:

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 1 STATE OF CALIFORNIA )

 2 ) SS.

 3 COUNTY OF SONOMA )

 4 

 5 I hereby certify that said proceedings (pages 1

 6 through 190) were taken at the time and place herein

 7 named; that the proceeding is a true record of the

 8 testimony as reported by me, a duly certified shorthand

 9 reporter and a disinterested person, and was thereafter

 10 transcribed into typewriting by computer.

 11

 12 I further certify that I am not interested in

 13 the outcome of the said action, nor connected with, nor

 14 related to any of the parties in said action, nor to their

 15 respective counsel.

 16

 17 IN WITNESS WHEREOF, I have hereunto set my hand

 18 this 2nd day of February 2012.

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 22 _________________________________

 23 DEBORAH E. TAGGART, CSR NO. 5942

 24 STATE OF CALIFORNIA

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