AUTHORIZATION REQUEST SUPPORT DOCUMENT

CALIFORNIA’S REQUEST FOR A CL EAN AIR ACT SECTION 209(e)

AUTHORIZATION FOR THE AIRBORNE TOXIC CONTROL MEASURE FOR

PORTABLE DIESEL ENGINES 50 HORSEPOWER AND GREATER

December 2006

I. INTRODUCTION

In this proceeding, the California Air Re sources Board (CARB or the Board) is requesting pursuant to Clean Air Act (CAA) sect ion 209(e)(2) that the Administrator of the U.S. Environmental Protection Agency (U.S. EPA) authorize California to adopt and

enforce the CARB airborne toxic control m easure (ATCM) for in-use portable dieselfueled engines 50 brake horsepo wer (hp) and greater (portable engines). This request covers the following four primary subst antive requirements of the regulation:

1. Starting January 1, 2010, all portabl e engines in the State must be

certified to meet a federal or Calif ornia standard for newly manufactured

nonroad 1 engines, subject to specified exceptions;

2. Starting January 1, 2020, all portable engines in the State must be either (a) certified to meet Tier 4 em ission standards, (b) equipped with a properly functioning Level-3 verifi ed technology, or (c) equipped with a combination of control strategies t hat have been verified together to achieve at least an 85 percent reducti on in diesel particulate matter (PM) emissions, subject to specified exceptions;

3. All portable engines that, prior to January 1, 2006, have not been either registered in CARB’s Portable Equipment Registration Program (Statewide Program or PERP) or pe rmitted under the permit program of an air quality management district or air pollution control district (local air district) must meet the mo st stringent of the federal or California emission standards for nonroad engines, subjec t to specified exceptions;

4. Each fleet of portable engines mu st comply with increasingly more stringent weighted PM emission fleet averages that apply starting January 1, 2013, Januar y 1, 2017, and January 1, 2020, subject to specified exceptions.

Clean Air Act preemption of state regulations concerni ng nonroad engines is governed by CAA section 209(e). In Engine Manufacturers Associati on, et al. v. Environmental Protection Agency (EMA v. EPA) , 88 F.3d 1075, 1093-94. (D.C . Cir. 1996), the Court

1 CARB has, at times, used the term “off-road” to desc ribe nonroad mobile sources. For purposes of this request, nonroad refers to both nonroad and off-road engines.

1held that the implied preemption resulting from CAA section 209(e)(2) covers state standards and other requirements pertaining to in-use as well as new nonroad engines, but does not extend to restrictions on the oper ational use of nonroad e ngines. The four requirements of CARB’s portable engine AT CM listed above constitute standards for in-use nonroad engines and accordingly are co vered by the implied preemption of section 209(e)(2). A fifth substantive require ment of the regulation pertains to the fuels that may be used in in-use portable diesel -fueled engines in California. (§ 93116.3(a), title 17, California Code of Regulations (CCR).) This requirement is not preempted by CAA section 209(e) (Appendix A to Subpart A of 40 CFR Part 89; see also 69 F.R. 38958, 39072-3 (June 29, 2004) (CAA § 211(c)(4)(A) does not preempt state regulation of fuels used in locomotives, and implicitly su ch regulation is not covered by § 209(e)). CARB accordingly is seeking an authorization for all elements of t he regulation except for the fuels requirement. By its terms, the por table engine regulation does not apply to any preempted engine categories covered by CAA section 209(e)(1). (§ 93316.1(b)(6), title 17, CCR.)

II. PROCEDURAL HISTORY

The eleven-member Board considered the proposed Portable Diesel-Fueled Engine regulation at a February 26, 2004, public hearing. At the conc lusion of the hearing, the Board adopted Resolution 04-7 (Tab 1), in whic h it directed the Executive Officer to adopt new sections 93116-93116.5, title 17, CCR, with specified modifications approved by the Board and such other conforming m odifications as may be appropriate, after making the modified regulator y language available for public comment for a period of 15 days. 2 The Board directed the Executive Office r to consider such written comments as may be submitted during the supplem ental comment period, make further modifications as may be appropriate in light of the comments received or as necessary to ensure consistency with the modificati ons approved by the Board, and bring any proposed changes to the Board for further consideration if the Executive Officer

believes that it is warranted. The Exec utive Officer subsequently made the modified regulatory text available for a supplement al comment period ending June 1, 2004. After considering the supplemental comments, the Executive Officer issued Executive Order G-04-080 on December 23, 2004 (Tab 2), adopting the ATCM, which was then

submitted to California’s Office of Administ rative Law (OAL) on January 4, 2005. OAL approved the ATCM on February 9, 2005 (Tab 3), and it became op erative March 11,

2005.

III. THE PORTABLE ENGINE ATCM

A. Background

California Health and Safety Code (HSC ) sections 39600 (General Powers) and 39601 (Standards, Definitions, Rules, and Measures ) confer on CARB the general authority to

2 Under California law, an agency may not adopt a re gulation that reflects other than nonsubstantial modifications to the originally proposed text unless the modified text is made available for a supplemental comment period of 15 days or more. (Cal . Government Code § 11346.8(c).)

2adopt rules and measures necessary to execute the Board's powers and duties imposed by State law. More specifically, California's Air Toxics Program, established under California law by Assembly Bill (AB) 1807 (Stats. 1983, Ch. 1047), and set forth in HSC sections 39650 through 39675, mandates the identification and control of air toxics in California. The identification phase of the Air Toxics Program requires the ARB, with participation of other state agencies, such as the Office of Environmental Health Hazard Assessment (OEHHA), to evaluate the health impacts of and exposure to substances and to identify those substances that pos e the greatest health threat as toxic air contaminants (TACs). CARB's evaluation is made available to the public and is formally reviewed by the Scientific Review Panel (SRP), established under HSC section 39670. Following CARB's evaluation an d the SRP's review, the Board may formally identify a TAC at a public hearing. Following the identification of a substance as a TAC, HSC sections 39658 and 39665 require CARB, wit h the participation of the local air districts, and in consultation with affected sources and interested parties, to prepare a report on the need and appropriate degree of regulation for that substance (risk management phase).

In August 1998, the Board identified diesel PM as a TAC, and in September 2000, CARB adopted the "Risk Reduction Plan to R educe Particulate Matter Emissions from Diesel-fueled Engines and Vehicles" (Diese l Risk Reduction Plan). The Diesel Risk Reduction Plan was the first formal produc t of the risk management phase and serves as the needs assessment under the AB 1807 proc ess. In the Diesel Risk Reduction Plan, CARB identified the available options to reduce diesel PM and the recommended control measures to achieve reductions, in cluding a measure to reduce diesel PM from diesel-fueled portable engines. The ultimate goal of the Diesel Risk Reduction Plan is

to reduce California’s diesel PM emissions and associated cancer risks by 85 percent by 2020.

In 1999, the Legislature amended California’s Air Toxics Pr ogram (Senate Bill 25 (Stats. 1999, Ch. 731)) to require further consider ation of health impacts to infants and children. As amended, OEHHA was required to identify up to five TACs that make children especially susceptible to illness. OEHHA published the "Prior itization of Toxic

Air Contaminants under the Children's Environmental Health Protection Act" in October 2001, identifying diesel PM as one of the five TACs. Additional requirements established by Senate Bill 25 in HSC sect ion 39669.5 direct CARB to adopt ATCMs, as appropriate, to protect public health, particularly infant s and children, from these specially identified TACs.

Diesel exhaust is a complex mixture of thousands of gases and fine particles that

contains more than 40 identified toxic air c ontaminants. These in clude many known or suspected cancer-causing substances, such as benzene, arsenic, and formaldehyde. Diesel exhaust can irritate the eyes, nose, throat, and lungs and can cause coughing, headaches, light-headedness and nausea. Diesel exhaust is a major source of ambient particulate matter pollution as well, and numerous studies have linked elevated particle levels in the air to increased hospital admission, emergency room visits, asthma attacks, and premature deaths among those suffering from respiratory problems.

3The ATCM for portable diesel fueled engines t hat is the subject of this authorization request fulfills the goals of the Diesel Risk Reduction Plan to reduce diesel PM

emissions and associated risk from the us e of diesel-fueled portable engines in

California. CARB estimates that the ATCM, when fully im plemented in 2020, will reduce diesel PM emissions from portable engines by 95 percent from year 2000 emission

levels. Diesel PM emissions are estimated to be responsible for about 70 percent of the

total cancer risk from inhalation in California

B. Summary of Requirements

The ATCM affects all diesel-fueled portable 3 engines that are 50 hp and greater. This includes all engines that are subject to local air district permits as well as, with several exceptions, those engines that have been exem pt to date from district permitting requirements. The ATCM will reduce emissi ons of diesel PM by first requiring all portable engines to be certified to Tier 1, 2, or 3 U.S. EPA /CARB off-road engine standards by January 1, 2010. 4 All portable engines that have not been registered or permitted in state or local air district progr ams prior to January 1, 2006 must meet the new engine certification standards at the time of application for registration or a permit. All portable engines that have been register ed or permitted before January 1, 2006 have until January 1, 2010 to come into compliance. After 2010, the ATCM further requires all fleets (as defined by the regulation and discussed below in section II.C.5.) of portable engines to meet diesel PM em ission fleet average standards that become increasingly more stringent in 2013, 2017, and 2020. Owners/operators of these fleets will have flexibility in determi ning how the fleet emission st andards are to be satisfied. Options that are available to satisfy thes e standards include: pur chasing new equipment with cleaner engines, repowering existing equipment with cleaner engines , using verified add-on control devices on existing equipment and engines, switching to alternative diesel fuels or alternative fuels, or electrifying some or all of the fleet and receiving emission credits.

To meet the diesel PM standard for 2020, all engines in a fleet must either: a) be

certified to U.S. EPA Tier 4 newly manufactured off-road engi ne emission standards; or b) be equipped with a Level-3 PM control te chnology; or c) be a certified engine equipped with a combination of verified contro l technologies that achieve an emission of 0.04 g/bhp-hr for engines that are less than 175 horsepowe r or 0.02 g/bhp-hr for engines that are 175 horsepower and larger. Level-3 PM control technology refers to a control technology that has been verified to achieve PM reductions of at least 85 percent under ARB’s Verification Procedure, Warranty and In-Use Compliance

3 Portable engines are engines that may be moved easily from location to location. The engines are used to power a variety of equipment, including pumps, gr ound support equipment at airports, cranes, oil-well drilling and workover rigs, power generators, dredging equipment, rock crushing and screening equipment, welding equipment, woodchippers, and compressors. (§ 93116.2(bb), title 17, CCR.)

4 Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuel; Final Rule, Vol. 69, No. 124 Fed.Reg. 38957-39273 (June 29, 2004); Amendments to the California Exhaust Emission Standards and Test Procedures for New 2008 and Later Tier 4 Off-Road Compression-Ignition Engines and Equipment , title 13, CCR, sections 2420 et seq.

4Requirements for In-Use Strategies to Control Emission from Diesel Engines 5
(Verification Program).

C. Detailed Description of the Portable Engine ATCM

1. Applicability

As stated, the ATCM applies to all diesel-f ueled portable engines 50 hp and greater. As defined by the ATCM, to be por table, the engine must not reside at any one location for

more than 12 consecutive months. A location is any place of operation or single site at a building, structure, facility, installation, or well site. An engine that remains at one

location for more than 12 consecutive mont hs would be considered a stationary engine.

2. Exemptions

There are certain types of diesel-fueled engi nes that are exempt from the ATCM. The exemptions are as follows:

Engines Used In Mobile Applications

Engines used to propel mobile equipment and motor vehicles are not regulated by the ATCM. These engines include dual-use engines that both propel the equipment and operate the attached equipment. Examples of a dual-use engine include cranes and cherry pickers. Power Take-Off (PTO) applicat ions are also not subject to the ATCM. PTO refers to a piece of equi pment attached to a motor vehi cle that is powered by the same engine that is used to propel the vehicl e. An example would be a welder on a utility truck that is power ed by the truck’s engine.

Dual-Fuel Diesel Pilot Engines

Dual-fuel diesel pilot engines that use alternative fuel or alternative diesel fuel are not subject to the ATCM. These engines use a small amount of diesel fuel, typically less than 5% of the total fuel used by the engine , and therefore the emissions of diesel PM are only a small portion of the engine's total emissions.

Military Tactical Support Equipment (TSE)

TSE is also not covered by the ATCM. TSE refers to portable equipment that is owned by the United States Department of Defense and its allies and used in combat, combat support, tactical or relief operations, or trai ning for such operations. HSC section 41754 specifically exempts TSE from control technology requi rements and in-use operational controls. Portable diesel-fueled engines t hat are not consider ed TSE at military

installations in California are subject to the ATCM.

5 Approved by the Board in May 2002. Sections 2700-2710, title 13, CCR.

5Ground Support Equipment (GSE)

GSE refers to mobile and portable equipm ent used to support the operation of an airport. Portable equipment typically represents just a sm all fraction (10 - 15 percent) of the total ground support equi pment at an airport. This equipment includes ground power units, air conditioner s, and start-carts.

To address emissions from GSE in the S outh Coast Air Quality Management District (SCAQMD), CARB, SCAQMD, and the major air ca rriers at the five major airports within the District recently signed a Memorandum of Understanding (MOU) which requires the

air carriers to reduce the emissions of dies el PM and ozone precurso rs from their GSE fleets over a specific timet able. In recognizing t he commitments made by the air carriers under the MOU, CARB has provided in the ATCM that if the airports are able to achieve equivalent or gr eater overall PM reductions under the MOU, portable equipment subject to the MOU would be exem pted from the ATCM. It is CARB’s position that should similar MOUs be executed at other major airports across the State, the portable equipment portion of the affect ed GSE would also qualify for exemption

from the ATCM.

Other Categories

Portable engines that use an al ternative fuel -- such as natural gas, propane, butane, and gasoline – are not subject to the ATCM, as it only applie s to portable engines that are fueled with diesel. Portable engines used at San Clemente or San Nicolas Island are also not subject to the r equirements of the ATCM. This exemption is consistent with the SCAQMD and Ventura County Air Polluti on Control District internal combustion engine regulations, which exempt engines on these islands from their permitting requirements.

3. Fuel Requirements for Diesel-Fueled Portable Engines

The ATCM requires portable engines to use CARB diesel fuel. The regulations for

CARB diesel fuel were recent ly revised to limit the sulfur content of diesel fuel to 15 parts per million (ppm). 6 The revised CARB diesel fuel regulations, which require the widespread availability of low-sulfur diesel fuel by mid-summer 2006, will help promote the use of diesel particu late filters, the most efficient diesel PM control devices.

The revised fuel regulation allows mixtures of up to 50 percent biodiesel or 100 percent Fischer-Tropsch fuels to qualify as CARB diesel fuel as long as specific requirements

are satisfied. While the use of biodiesel or Fischer-Tropsch fuels have been shown to reduce diesel PM, they have, to date, not been verified by CARB for use as a PM control technology.

6 Approved by the Board in July 2003. Revision s to section 2281, Title 13, California Code of Regulations.

6The requirements for verification differ depending on whether the fuel is treated as an alternative diesel fuel or as a specific additive, which would be considered a control technology. If the additive is supplie d to the engine fuel by an on-board dosing mechanism, is directly mixed into the fuel, or is added to the fuel at the time of refueling,

then the additive is considered a control te chnology, not an alternative diesel fuel.

As noted above, these fuel provisions ar e not preempted by CAA section 209(e) and CARB accordingly is not seeking a se ction 209(e)(2) authorization for them.

4. Requirements for Indi vidual Portable Engines

The ATCM requires all portable diesel-fueled engines in California to be certified to

CARB or U.S. EPA emission standards for newly manufactured off-road engines by January 1, 2010. Starting Januar y 1, 2006, the ATCM requires all portable diesel-fueled engines initially registering or applying for per mits from CARB or local air districts, respectively, to be certified to the most stri ngent of the federal or California emission standards for nonroad engines. On or after J anuary 1, 2010, all portable diesel-fueled engines operating in the stat e – whether or not regist ered or permitted – must be

certified to the California or federal Tier 1, 2 or 3 off -road emission standard. About 20,000 preexisting engines will need to be replaced.

Recognizing that some port able engines operate only on a limited annual basis, the ATCM includes n exception to the 2010 requi rement for portable engines that are used strictly for emergency purposes or are low- use engines that operate 80 hours or less in a calendar year, including time for maintenan ce and testing. These engines are exempt from the 2010 requirem ents if the fleet owner commits to replacing the engines with engines certified to Tier 4 standards withi n two years of Tier 4 engines becoming

available. If the fleet owner does not agree to early replac ement of these engines, the portable engines would not be exempt from the ATCM and must be replaced with engines certified to existing emission standards by January 1, 2010.

By requiring engine replacement by January 1, 2010, the ATCM uses present technology or technology that will be available in the next few years to reduce diesel PM in the near term. Verified add-on technologies are not yet available for most off-road diesel engines, and Tier 4 engines will, in ge neral, not be available until 2011. Setting an engine replacement schedule that would take effect significantly before 2010 would be less effective in the long run, as many of the cleaner Tier 3 engines only become commercially available in the 2006-2008 timefr ame. Staff believes that requiring the engines to be replaced by 2010 will allow engine manufacturers sufficient time to satisfy the demand caused by the ATCM’s 2010 requirement.

5. Fleet Avera ge Requirements

After 2010, owners of fleets of portable engines must satisfy progressively more stringent diesel PM emission fleet emissi on standards by January 1, 2013, 2017, and 2020. The purpose of the diesel PM fleet emission standards is to create additional

7diesel PM emission reductions beyond thos e that would be achieved from normal engine turnover after 2010.

Definition of Fleet

A fleet includes portable engines register ed with ARB’s Statewid e Program, permitted with local air districts, and t hose that have been previously ex empt from district permit requirements. The fleet defin ition excludes portable engi nes that operate exclusively outside of California, engines operated only wit hin the Outer Continental Shelf (OCS), engines used exclusively in emergency applicat ions, and engines qualifying as low-use. Portable engines can also be exempt from the fleet requirements if equipped, as of January 1, 2004, with a properly operating selective ca talytic reduction (SCR) system.

A fleet is defined in the ATCM as an engine or group of engines either under the same ownership or owned by entities under the c ontrol of a “Responsible Official” – an

individual who has the authorit y to certify that portable engines under his/her control comply with the applicable requirements of the ATCM, has authority to manage the use of the portable equipment, and may be invo lved in the purchase of the equipment.

A company or public agency can have more than one fleet if each fleet is under the control of a different Responsible Official. For example, companies owned by the same holding company could be considered to have separate fleets if each fleet's operation and composition are controlled by separate Re sponsible Officials. In the case of military installations, each installation is c onsidered a separate fleet instead of one fleet under the control of the Department of Defense. Conversely, if several companies were under the common control of one Responsible Official, then all the portable engines of the companies would be considered one fleet.

Fleet Diesel PM Standards

The ATCM addresses diesel PM standards for three ranges of engine sizes: engines less than 175 hp, engines between 175 hp and 749 hp, and engines gr eater than or equal to 750 hp. The fleet diesel PM standards (grams per brake horsepower-hour (g/bhp-hr)) are illustrated below:

Fleet Standard Compliance

Date Engines <175 hp (g/bhp-hr) Engines

> 175 to 749 hp

(g/bhp-hr) Engines

> 750 hp

(g/bhp-hr)

/ 1/2013 0.3 0.15 0.25

/ 1/2017 0.18 0.08 0.08

/ 1/2020 0.04 0.02 0.02

The three sets of fleet dies el PM standards for each impl ementation period reflect the differences in engine classification size. Emission standards for certified portable engines less than 175 hp are less stringent than the standards for the larger classes of engines. A separate fleet standard for engi nes greater than or equal to 750 hp was

8created because these large engines are expens ive to replace and have a much longer useful life than engines that fall between 175 hp and 749 hp. These larger engines must meet a higher fleet standard in 2013, pr oviding owners more time to replace or retrofit these more expensive engines. Star ting January 1, 2017, these engines will be required to meet the same fleet st andard as engines between 175 hp and 749 hp.

The fleet emission standards take into account the potential commercial availability of Tier 4 engines, which should become available in the 2011-2014 timeframe. They also take into account the future availability of verified Level-3 PM control technologies. The 2013 fleet average emission standards are int ended to force replacement of Tier 1 engines <750 hp with either Tier 3 or Tier 4 engines. The PM standard for Tier 3 and Tier 4 off-road engines are significantly lowe r than the Tier 1 engine PM standard. At this time, most Tier 1 engines being repl aced would have been operated 10 to 17 years.

The CARB staff believes that the 2013 fleet average standards will likely not affect owners who had replaced uncertified engines with Tier 2 or Tier 3 engines prior to 2010.

The 2017 standards are likely to result in hal f of the engines in a fleet being replaced with engines certified to Tier 4 standards or equipped with Leve l-3 control technology or a combination of verified control technologies to achieve an 85 percent reduction in diesel PM emissions. By this time, t he affected engines would have operated between 6 to 17 years. The 2020 standards are likely to result in all engines in the fleet being certified to Tier 4 standards or equippe d with Level-3 verified technology or a combination of verified control technologies to achieve 85 percent diesel PM emission

reduction.

Weighted Fleet Average

Owners of portable engine fl eets will determine compliance with the fleet standard by comparing the fleet's actual weighted dies el PM emission rate with the fleet average

emission standard. The fleet's actual wei ghted emission rate shall be determined by using the following formula:

∑ Summation for each engine in the fleet (bhp x emission factor)
∑ Summation for each engine in the fleet (bhp)

Wh ere: bhp = horsepower at maximum rated capacity

Emission factor = di esel PM emission rate

For example: A fleet owner has five certif ied engines with the following horsepower and

PM emission factors:

75 hp emission ra te of 0.30 g/bhp-hr 75 hp emission rate of 0.30 g/bhp-hr 100 hp emission rate of 0.22 g/bhp-hr 150 hp emission rate of 0.22 g/bhp-hr 150 hp emission rate of 0.22 g/bhp-hr

9(75 X 0.30) + (75 X 0.30) +(100 X 0.22) + (150 X 0.22) + (150 X 0.22)

75 + 75 + 100 + 150 + 150

Fleet’s weighted dies el PM emission rate = 0.24 g/bhp-hr

These emission factors can be modified using the emissions reductions for the control technologies that have been verified through the CARB Verificati on Program. For example, if an engine owner installs a diesel particulate filter that has been verified to an 85 percent control effectiveness, the engine’s emission factor would be the certified value multiplied by 0.15.

Emergency and Low-Use Engines

Portable engines that are used exclusivel y in emergency applicat ions or are deemed low-use engines are not subject to the fl eet emission standards of the ATCM. These engines would be required, by January 1, 2020, to: 1) be replac ed with portable engines certified to the Tier 4 newly manufactu red nonroad engine emission standards, 2) be equipped with a Level-3 PM control technolog y, or 3) be equipped wit h a combination of verified control technologies to achieve di esel PM emissions of 0.04 g/bhp-hr for engines <175 hp or 0.02 g/bhp-hr for engines that are > 175 hp. The ATCM delayed compliance for these engines until January 1, 2020, because these engines emit less than one percent of the total diesel PM emissions from portable engines and requiring these engines to meet the interim fleet averages would not be cost-effective.

Engines Equipped with Selectiv e Catalytic Reduction (SCR)

Portable engines may be exem pt from the fleet require ments if equipped, as of January 1, 2004, with a properly operating SCR system. Source test results have shown that an SCR system, typically used to reduce oxides of ni trogen (NOx), also significantly reduces diesel PM emissions. In addition, the pressure drop requirements for engines make it technically challenging today to add additional control technologies, such as a diesel particulate filter, to an engine already equipped with SCR. To qualify for the exemption, engine owners must submit specific information to the Executive Officer indicating that the SCR system is operating properly.

Owners of portable engines equ ipped with SCR may alternatively elect to include these engines as part of their fleet weighted diesel PM average. Engine-specific source tests from these engines must be used to determine diesel PM emission rates. PM measurements can be performed using CARB Test Method 5 front-half (filter and probe wash) or equivalent district methods. Requiring only th e front-half of CARB Test Method 5 is consistent with the recommendations of the Test Method Working Group that was created during the dev elopment of the Stationary Compression Ignition Engine

ATCM and consistent with test methods us ed to certify engines to nonroad engine standards. The Test Method Working Group was formed to evaluate different test

10methods for measuring PM from diesel-f ueled engines and to recommend the most appropriate measuring technique for diesel PM.

6. Incentives

To encourage the use of cleaner technologies and to encourage repowering or replacement of older engines with new, lowe r-emitting engines, the ATCM provides for several incentives to promote these options as part of the fleet reduction approach.

One incentive allows credit toward satisfyi ng a fleet standard by allowing, under certain circumstances, alternative-fueled engines into the fleet. To obtain the credit, the engine must operate at l east 100 hours annually.

The ATCM also allows credit for applications where grid power is used in lieu of using a portable diesel-fueled engine. The credit is granted where more than 200 hours of grid power is used for a given project and t he necessary recordkeeping and reporting requirements are satisfied.

Finally, a credit is included to encourage the pur chase of engines certified to the Tier 4

standards.

The credit can be used when fleet owner s purchase Tier 4 engines prior to January 1, 2015. In these cases, the owner can count the Tier 4 engine twice in the calculations for the fleet weighted diesel PM emission rates. To use the credit for the 2013 standard, the engine must be in the fleet prior to January 1, 2013. Double counting the Tier 4 engines will result in lower fleet weighted diesel PM rates for compliance with the 2013 and 2017 diesel PM standards. The double counting of Tier 4 engines is not allowed for complianc e with the diesel PM standards for 2020 because all engines must be certified to the Ti er 4 standards or retrofitted with verified control devices to achieve 85 per cent reduction by that date.

7. Recordkeeping and Reporting Requirements

As discussed below, the ATCM specifies re cordkeeping and reporting requirements to enhance enforceability. These recordkeeping and reporting requirements may be in addition to requirements that ar e specified in applicable stat e registration or district permitting programs for portable engines.

The ATCM requires that owners maintain re cords and report their findings to CARB will to ensure the ATCM's enforceability. Re cordkeeping and reporting requirements are not specified in the ATCM for determining a company’s or agency’s compliance with the 2010 requirement. CARB believes that co mpliance with the 2010 requirement can be enforced through the existing PERP and district permit programs.

11Recordkeeping

For many fleets, the required recordkeeping would only consis t of keeping track of all the engines in the fleet and thei r associated emission factors. If the fleet's diesel PM emission rate average satisfies the 2020 flee t standards, the fleet’s owner would not be required to meet the recordkeeping or reporti ng requirements of the ATCM for individual portable engines in the fleet.

The recordkeeping requirements extend only to those engines in a fleet that have minimum or maximum hourly limitations, engi nes equipped with SCR, and fleets taking advantage of the electrif ication incentive. Engines wi th hourly limitations include alternative-fueled portable eng ines that are run for at least 100 hours per year, engines operating 80 hours or less per year (low-use engines), and engines used exclusively in emergency applications in which yearly us e is limited. These engines must be equipped with non-resettable hour meters, and t he operator must maintain records on the engines’ annual hours of operation. The ATCM requir es the owner/operator to

maintain the records at a central location for five years. In additi on, the owner/operator is required to forward copies of records within three business days, if requested by

either the CARB or lo cal air district staff.

Recordkeeping requirements are also required if electrification is used to satisfy a fleet requirement and for all engines equipped with SCR. If electrification is used to determine the fleet average, CARB must be notif ied in advance of projects that will rely on electrification instead of diesel engines. The notification must identify each engine that will be affected by the electrificati on project and shall include information on the electrification activity. For engines equipp ed with SCR, records must be maintained to

demonstrate that the S CR system is operating properly. The records must be retained for five years. In addition, a company is required to forward copies of these records within three business days, if requested by either the CARB or local air district staff.

Status Reports

The ATCM requires the Responsible Official of the fleet to submit a status report by March 1, 2011, and subsequent co mpliance statements by March 1 of each applicable year when a new fleet emission standard becomes effective.

The purpose of the status report is to prov ide CARB and local air districts specific information on the composition of the flee t. The 2011 status report must include the fleet's average diesel PM emission rate for the 2010 calendar year, as well as a summary of each engine’s emission rate, in g/bhp- hr. The status report should indicate the number of fleet(s) in each company or agency and the Responsible Official in charge of each fleet. The stat us report must also identif y whether each engine in each fleet within a company or agency is register ed with CARB’s PERP program or permitted

with local air districts. Alternative fueled eng ines must be identified by fuel type. Sufficient information should be provided for each engine to be able to identify the engine, including the make, model, serial nu mber, year of manufacture, and local air

12district permit or state regist ration number. Additionally, t he status report must identify each engine that the owner commi ts to replacing with an engi ne certified to the Tier 4 standards, engines used exclusively in emer gency applications, engines satisfying the low-use engine requirements, and all necessary documentation to demonstrate that engine equipped with SCR are operating properly.

Compliance Statements

The Responsible Official must provide a si gned statement of comp liance indicating the applicable fleet emission standard is being achieved and identifying each engine in the

fleet and the associated emission rate. T he statement of compliance is due March 1 of the year a new fleet emission standard becom es effective (i.e. 2013, 2017, 2020). Compliance is based upon the compositi on of the fleet as of January 1 of that year. The Responsible Official must provide sufficient information for each engine in the fleet to allow CARB to properly identify the engine, including the make, model, serial number and year of manufacture. The compliance report will have to identify engines used exclusively in emergency app lications, low-use engines, and engines exclu ded from the fleet because they are operated exclusively ou tside of California or operated only within

the OCS. If electrification is used for ca lculating the fleet average, the Responsible Official must provide documentation supporting the credit claimed for electrification. As part of the compliance report, the responsible official must also certify the following:

• All alternative-fueled engines included in the fleet average operated at least 100 hours in the previous calendar year;

• engines designated as emergency were only used for emergency applications;

• engines designated as low-use were operated no more than 80 hours in the previous calendar year; and

• engines equipped with SCR comply with applicabl e district or statewide registration requirements.

The ATCM allows CARB and local air district staff to requi re additional information from a fleet owner, beyond the submittal of compli ance reports, that demonstrates the fleets are in compliance with the applicable fleet st andards. The fleet owner must provide the requested information within 30 days.

8. Enforcement Requirements

HSC section 39666(d) requires the local air di stricts to implement and enforce an ATCM that has been approved by the Board. Theref ore, both CARB and t he districts have the authority to review or seek enforcement ac tion for violation of the fleet emission standards. Despite this overlapping jurisdiction, it is not the intent of the ATCM to place engine owners in “double jeopardy.” Appropr iate enforcement action will be taken by

either CARB or the local ai r districts, as necessary.

13D. Air Quality Impacts of the Portable Engine ATCM

The ATCM will reduce diesel PM emissions and associated exposures from portable engines throughout California. The table be low provides estimates of diesel PM emissions reductions from portable engines re sulting from implement ation of the ATCM

in addition to benefits from the PERP. T he estimates are based upon reductions from the year 2000 base year. California’s air quality will also expe rience benefits from reduced criteria pollutant emissions (e.g. NOx and reactive organic gas (ROG)). The table also provides estimates for NOx and ROG reductions. By 2010, diesel PM emissions will be reduced by 2.2 TPD, or about 803 T PY, and NOx emissions will be reduced by 34 TPD, or about 12,400 TPY.

Year Diesel PM

Emissions

(TPD) Percent

Reduction NOx

Emissions

(TPD) Percent

Reduction ROG

Emissions

(TPD) Percent

Reduction

2000 4.2 -- 67 -- 6.7 --

2010 2.0 52% 33 51% 4.6 30%

2015 1.3 69% 26 61% 2.9 57%

2020 0.2 95% 23 66% 1.2 78%

CARB anticipates significant health cost sa vings due to reduced mortality, incidences of cancer, PM-related cardiovascular effects, chronic bronchitis, asthma, and hospital admissions from pneumonia and asthma-related conditions. The diesel PM reductions are expected to reduce the number of prem ature deaths in California. Although the implementation date for the final diesel PM emission standards in t he regulation is 2020,

CARB believes that the full benefits of t he diesel PM standard r equirements will extend to 2037. (CARB assumed that through a normal engine turnover rate, all portable diesel-fueled engines would have been replaced by engines that are certified to Tier 4 standards by approximately 2037. Therefor e, the costs and benefits of the ATCM extend to 2037, despite full implementation by 2020.). CARB estimates that by 2037, 768 premature deaths will be avoided. Prior to 2037, cumula tively, it is estimated that 50 premature deaths w ould be avoided by 2010 and 339 by 2020. Additional health benefits are expected from the reduction of NOx emissions, which give rise to secondary PM from the conversion of NOx to PM 2.5 nitrate. CARB has concluded that no significant adverse environmental impac ts should occur from adoption of, and compliance with, the ATCM.

14IV. AUTHORIZATION ANALYSIS

A. Introduction

Section 209(e)(2) of the CAA sets forth the protocol for granting Ca lifornia authorization to adopt and enforce standards and other require ments relating to controlling emissions from nonroad engines that ar e not otherwise spec ifically preempted from all state regulations under section 209(e)(1). Under section 209(e)(2), the Administrator is directed to grant the authoriz ation to California if the St ate has determined that the its standards will be, in the aggregate , at least as protective of public health and welfare as applicable federal standards, unl ess he finds that: (1) the pr otectiveness finding of the state is arbitrary and capricious; (2) Calif ornia does not need separate state standards to meet compelling and ex traordinary conditions; or (3 ) the state standards and accompanying enforcement proc edures are not consistent with section 209 of the CAA.

In adopting the authorization process of sect ion 209(e)(2), Congress provided California with authority to adopt and enforce its own em ission standards and regulations for nonpreempted nonroad engines. This authority is similar to that which Congress granted to the State in section 209(b) – the right to adopt and enf orce independent emission standards for motor vehicles. Section 209(e )(2), like section 209(b), requires California to obtain the Administrator’s approval (i.e., waiver or authorization). In acting on a California request for a waiver under section 209(e)(2), the Administrator must consider criteria nearly identical to those considered under section 209(b). In light of these almost identical protocols, the U.S. EPA has confirmed that it would similarly interpret sections 209(b) and (e) w here the language is similar. 7 In Resolution 01-23, the Board made the determinations that section 209 requ ires (Tab 1, p. 6), and the Executive Officer later affirmed these acts (Tab 2, p. 2). Therefore, authoriz ation must be granted

unless the Administrator makes one or more of the three findings enumerated in section 209(e)(2) of the CAA.

B. The Principles Regarding Consider ation of CAA Section 209(b) Waiver Requests Should Apply to Secti on 209(e) Authoriz ation Requests

In adopting the CAA Amendments of 1990, Congress adopted provisions in section 209(e)(2) that allow California, upon receivi ng authorization from t he U.S. EPA, to adopt

and enforce its own standards and other re quirements relating to the control of emissions for all nonroad vehicles or engines not specifically preempted under section 209(e)(1). This allowance to California closely parallels the right provided to California to adopt separate standards for motor vehicl es under section 209(b). Section 209(b), like section 209(e), requires California to receive U.S. EPA’s approval for adoption and enforcement of separate standards. 8

7 Air Pollution Control; Preemption of State Regulati on for Nonroad Engine and Vehicle Standards (Final 209(e) Rule) , 59 Fed. Reg. 36969, 36981 (July 20, 1994); see also Utility Authorization, Decision Document, at p. 11.

8 CARB agrees with U.S. EPA's interpretation of section 209(e) to require California to first adopt its regulations before seeking authorizat ion to enforce. This enables U.S. EPA to review final regulations

15In light of the similar language of sections 209(b) and (e)(2), CARB believes that the U.S. EPA should analyze requests for Californi a authorization under 209(e)(2) using the same principles that it has applied in anal yzing motor vehicle wa iver requests under section 209(b). These principles include: (1) U.S. EPA should limit its inquiry to the specific criteria identified in section 209(e)(2); (2) U.S. EPA should give substantial deference to the policy judgm ents California has made in adopting its regulations; and (3) those parties opposed to t he granting of authoriz ation have the burden of persuading

the Administrator that no basis exists for granting the authorization request.

1. The Scope of the Authorizati on Hearing Should Be Limited

The scope of the Administrator’s inquiry in determining whether to deny an authorization request is limited by the express terms of section 209(e)(2). In the Final 209(e) Rule

, U.S. EPA acknowledged that its inquiry would be so limited. 9 Thus, once California

determines that its standards are, in the aggregate, at least as protective of public health and welfare as applicable federal standards, the Admi nistrator must grant the authorization request unless one of the three specified fi ndings can be made. This reading of the statute is cons istent with the decision in Motor and Equipment

Manufacturers Association v. EPA , 627 F.2d 1095 (D.C. Circuit 1979) ( MEMA I ) and with prior U.S. EPA waiver decisions interp reting section 209(b), which hold that the

review of California’s decision to adopt separate standards is a narrow one. 10 As

Administrator William D. Ruckelshaus stated in a 1971 decision:

The law makes it clear that the wa iver request cannot be denied unless the specific findings designated in t he statute can properly be made. The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its cost or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent to my decision under section 209.... 11

2. Deference Should be Given to California’s Policy Judgments

As indicated in the waiver decision quoted above, in granting waivers to California’s motor vehicle program, U.S. EPA has routi nely deferred to the policy judgments of

California’s decision makers. U.S. EPA has recognized that the intent of Congress in creating a limited review of California’s determinations that California needs its own separate standards was to ensure that the federal government not second-guess the wisdom of state policy. 12 Administrators have recogni zed that the deference is wideranging:

rather than moving targets. See 40 Code of Federal Regulations (CFR) section 85.1604, and citation to it

in the Utility Authorization , Decision Document, at p. 46.

9 Final 209(e) Rule, 59 Fed. Reg. at 36983.

10 See 40 Fed.Reg. 23102, 23103 (May 28, 1975).

11 36 Fed.Reg. 17158 (August 31, 1971). See also 40 Fed.Reg. 23102, 23104; 58 Fed.Reg. 4166 (January 7, 1993), Decision Document, at p. 20.

12 40 Fed.Reg. 23102, 23103.

16The structure and history of the California waiver provision clearly indicate both a Congressional intent and an EPA pr actice of leaving the decision on ambiguous and controversial matters of public policy to California’s judgment.

* * * * * * It is worth noting . . . I would feel constrained to approve a California approach to the problem which I might also feel unable to adopt at the federal level in my own capacity as a regulator. The whole approach of the CAA is to force the development of new types of emission control technology where that is needed by com pelling the industry to “catch up” to some degree with newly promulgat ed standards. Such an approach . . . may be attended with costs, in the s hape of a reduced product offering, or price or fuel economy penalties, and by risks that a wider number of vehicle classes may not be able to complete their development work in time. Since a balancing of these risks and costs against the potential

benefits from reduced emissions is a central policy decision for any regulatory agency under t he statutory scheme outlined above, I believe I am required to give very substantia l deference to California’s judgments

on this score. 13

In allowing California to adopt its own emission standards for nonroad vehicles and engines and by establishing almost identic al requirements for U.S. EPA review of authorizing requests under section 209(e)(2) as it requires for waiver decisions under section 209(b), Congress unmistakably inte nded that the U.S. EPA accord similar

deference to California’s decis ions under section 209(e)(2). 14

3. Burden of Proof Should Be on Thos e Opposed to the Authorization Request

As stated above, under both sections 209(b) and (e)(2), the Administrator must deny a

waiver or an authorization if he makes one of the three findings set forth in those sections. In interpreting the language of section 209(b), it has been held that the burden of proof to show that there is a bas is for making one of the three findings is squarely on the opponents of a waiver. As the appellate court stated in MEMA I at pages 1120-21:

It is not necessary for the Administra tor affirmatively to find that these conditions do not exist before granting a waiver. The statute does not say, “the Administrator shall grant a waiv er only if” he makes the negative of these findings. That he must deny a waiver if certain facts exist does not

13 40 Fed.Reg. 23102, 23104 (emphasis added). See also 58 Fed.Reg. 4166, Decision Document, at p. 4.

14 See discussion in Engine Manufacturers Association v. U.S. EPA , 88 F.3d 1075, 1090 (D.C. Cir. 1996) ( EMA ), wherein the court recognized California's leader ship in emission control regulation in both new motor vehicles and new and in-use nonroad engines.

17mean that he must independ ently proceed to make the opposite of those findings before he grants the waiver regardless of t he state of the record.... The language of the statute and its legisl ative history indicate that California’s regulations, and Cali fornia’s determination that they comply with the statute, when pr esented to the Administrator are presumed to satisfy the waiver requirements and that the burden of proving otherwise is on whoever atta cks them. California must present its regulations and findings at the hear ing, and thereafter the parties opposing the waiver request bear the burden of persuading the

Administrator that the waiver request should be denied.

Given the identical structure and near identic al language of sections 209(b) and (e)(2), the opponents of an authorizat ion request bear a similar bur den of proof when arguing that authorization should be denied under section 209(e)(2). The U.S. EPA has so

stated in all nonroad road author ization decisions to date. 15

B. No Basis Exists for the Administra tor to Deny This Authorization Request

1. The Adopted Regulations Are Not Subj ect to the 50-State Preemption of CAA Section 209(e)(1)

Section 209(e)(1) of the CAA preempts all states, including Ca lifornia, from establishing

emission standards and other emission-rela ted requirements for new engines under 175 hp used in farm and construction equi pment and new locomotives and engines

used in locomotives. The ATCM does not apply to new locomotive and locomotive engines. Moreover, the portable engines su bject to the ATCM are engines that are used in in-use equipment. To the extent that an owner or operator may elect to replace existing equipment with new equipment with new engines or repower existing equipment with new engines, t he ATCM requires the use of engines meeting federal

and California certification requirements for new engines. 16 Therefore, the ATCM does

not establish emission standards that ar e otherwise preempt ed under CAA section 2099(e)(1). CARB received no information call ing this determination into question. Accordingly, no party opposing this authorization can reas onably argue that the ATCM

establishes new emission standards or other requirement relating to the control of emissions for sources preempt ed under CAA section 209(e)(1).

2. Protectiveness Determination

U.S. EPA has interpreted the first two crit eria for determining nonroad authorization requests similarly to how it has interpret ed the same criteria in determining waivers

15 OHRV Authorization , Decision Document, at pp. 16-17; Utility Authorization , Decision Document, at p. 14; 60 Fed. Reg. 48981 (September 21, 1995) ( HDOR Authorization) , Decision Document, at p. 13.

See also Waiver of Federal Preemption California Low-Emission Vehicle Standards , 58 Fed. Reg. 4166 (January 7, 1993) (LEV Waiver) , Decision Document, at p. 21.

16 CARB has adopted emission certification standards that are aligned with federal nonroad standards and has requested that the Administrator grant Calif ornia to adopt and enforce such standards pursuant to CAA section 209(e)(2).

18under section 209(b). In finding that California has met the protectiveness criterion in the previously granted authoriz ations, U.S. EPA accepted CARB’s determinations that the standards, in the aggregate, are at least as protective of public health and welfare as the applicable federal standards in that t he regulations were expected to result in further reductions in pollutant emissions. 17

In Resolution 04-7, CARB, acting on behalf of the State of Californi a, determined that the standards set in the ATCM will be, in the aggregate, at least as pr otective of public health and welfare as any applicable f ederal standards. The protectiveness determination was a simple ma tter, because there are no f ederal standards for in-use portable engines. ARB received no information calling this determination into question. Accordingly, the ATCM is undisputedly at least as stringent as applicable federal regulations, a conclusion that for the above reas ons clearly is not arbitrary or capricious.

3. The Adopted Regulations are Necessary to Meet Compelli ng and Extraordinary

Circumstances

California needs its own nonroad engine and vehicle program to meet serious air pollution problems unique to t he State. The Administrator has previously and consistently recognized Califor nia’s unique needs when granting waivers for motor vehicles under section 209(b) and authorizations for Califor nia’s nonroad regulations under section 209(e) of the CAA.

The relevant inquiry under section 209(e)(2)( A)(ii) is whether Ca lifornia needs its own emission control program to meet compelling and extraordinary conditions, not whether any given standard is necessary to meet such conditions. 18 In approving waivers under section 209(b), the Administ rator has determined that:

“compelling and extraordinary conditions ” does not refer to levels of pollution directly, but primarily to t he factors that tend to produce them: geographical and climatic conditions that, when combined with large numbers and high concentrations of automobiles, create serious air pollution problems. 19

California -- in particular, the South Coast and San Joaquin Valley Air Basins

− continues to experience some of the worst air quality in the nation. 20 The unique geographical and climatic conditions, and the tremendous growth in vehicle population and use that moved Congress to authorize Ca lifornia to establish separate vehicle standards in 1967, still exist today. As of March 2, 2006, U.S. EPA’s “Green Book” listing of non-attainment areas of the 8-hour ozone standard identified both air basins as

17 OHRV Authorization , Decision Document, at pp. 21-22; Utility Authorization , Decision Document, at p. 23; HDOR Authorization , Decision Document, at p. 16. See also LEV Waiver , Decision Document, at pp. 45-46; Final 209(e) Rule , 59 Fed. Reg. 36969 at 36982.

18 49 Fed. Reg. 18887, 18892 (May 3, 1984).)

19 Id.

. 20 See e.g. Approval and Promulgation of State Impl ementation Plans; California -- South Coast , 64 FR 1770, 1771 (January 12, 1999).

19severe. 21 Both air basins also continue to be identified as non- attainment for PM 2.5. 22
U.S. EPA recently affirmed ARB’ s judgment, on behalf of the Stat e of California, on this

matter. 23

In the California Clean Air Act of 1988, the California Legislature found that:

despite the significant reductions in vehicle emissions which have been achieved in recent years, continued growth in population and vehicle miles traveled throughout California have the potential not only to prevent

attainment of the stat e standards, but in some cases, to result in worsening of air quality. 24

In response to the undisputed severe air qua lity problems in Califor nia, the California Legislature authorized CARB to consider adopting, inter alia, standards and regulations for nonroad engines. 25 Given the serious air pollution problems California faces and the

resultant need to achieve the maximum r eductions in emissions, the California Legislature and CARB believe it is necessary to develop emission controls for nonroad

sources as well as for motor vehicles. 26 CARB continues to find such previously uncontrolled nonroad engines to be significant em ission sources for which controls are necessary to meet federal and state air quality standards. 27 The ATCM adds to California’s program for nonroad sources by regulating a nonroad engine category not covered by previously granted nonroad authorizations.

By adding federal and state authority to regulate nonroad engines, Congress and California’s Legislature, respectively, acknowledged the incr easing importance of reducing emissions from all mobile sour ces, including nonroad engines. The Administrator has repeatedly agreed with CA RB that California’s continuing extraordinary conditions justify s eparate California nonroad programs. 28 Nothing in these conditions has changed to warrant a change in this determination. Accordingly,

for all the aforementioned reason s, there can be no doubt of t he continuing existence of compelling and extraordinary conditions justif ying California’s need for its own program within its nonroad vehicle and engi ne emissions control program.

21 http://www.epa.gov/oar/oaqps/greenbk/gncs.html#CALIFORNIA

22 Id.

23 California State Motor Vehicle Pollution Control Standar ds; Waiver of Federal Preemption -- Notice of Decision, 68 Fed.Reg.19811,19812 (April 22, 2003).

24 California Health and Safety Code section 43000.5.

25 California Health and Safety Code sections 43013 and 43018.

26 See California Health and Safety Code sections 41750, 41754, 43000.5, 43013 and 43018.

27 Resolution 01-23 (Tab 2), at p. 2. S ee also Staff Report (Tab 5) at pp. 14-15 and 44-47.

28 Utility Authorization , Decision Document, at p. 33; OHRV Authorization , Decision Document, at pp. 27-29; and HDOR Authorization , Decision Document, at pp. 16-18.

204. Consistency

The ATCM is fully consistent with section 209 of the CAA. Section 209(e)(2)(A)(iii) provides that the Administrator shall not authorize California to regulate nonroad

sources if “California’s standards and accompanying enforcement procedures are not

consistent with this section.” In the Final 209(e) Rule , U.S. EPA interpreted “consistent

with this section” to mean all of secti on 209, including section 209(b)(1)(C). It accordingly concluded that the “consisten cy” criterion review of nonroad requests should parallel that of onroad mo tor vehicle waiver requests. 29

Under section 209(b)(1)(C), California’s motor vehicle standards and enforcement procedures must be consistent with section 202(a). The Administrator has established a two-part test for determini ng whether California’s standar ds and test procedures are consistent with section 202(a). First, California’s standards and test procedures must be technologically feasible in the lead time pr ovided considering the co st of compliance. Second, the State’s test procedures must be compatible with federal test procedures.

Applying the test to the ATCM, CARB believe s that the Administrator should find them

consistent with section 209. As previously stated, the AT CM neither applies to motor vehicles that are preempt ed under section 209(a) or to new engines less than 175 hp used in farm and construction equipment and vehicles or to new locomotives or locomotive engines.

a. Technological Feasibility and Lead Time

Section 202(a)(2) provides that a regulation shall take effe ct after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of comp liance. In making determinations under section 209(b)(1)(C), the Administrator has relied upon federal court decisions applying the requirements of section 202(a)(2) to federal standards. The leading federal cases construing section 202(a)(2) are Natural Resources Defense

Council v. U.S. EPA , 655 F.2d 318 (D.C. Cir. 1981 ) ( NRDC ) and International Harvester

Co. v. Ruckelshaus , 478 F.2d 615 (D.C. Cir. 1973) ( International Harvester ).

NRDC makes clear that Congress intended U.S. EPA to project future advances in pollution control technology rather than be limited to the technology existing when the

standards were set. 30 The NRDC court noted that a longer lead time “gives the EPA greater scope for confidence t hat theoretical solutions w ill be translated successfully

into mechanical realizations.” 31 In addition, “[t]he presence of substantial lead time for development before manufacturers will have to commit themselves to mass production of a chosen prototype gives the agency greate r leeway to modify its standards if the actual future course of technology dive rges from expectation.” (Id.) The court

concluded:

29 59 Fed.Reg. 36969, 36983.

30 655 F.2d at 328.

31 Id. at 329.

21We think that the EPA will have dem onstrated the reasonableness of its basis for prediction if it answers any theoretical objections to the [projected control technology], identifies the major steps necessary in refinement of the [technology], and offers plausible reasons for believing that each of those steps can be completed in the time available. 32

The emission standards and related requirements adopted in the ATCM satisfy the

criteria set forth in the International Harvester and NRDC cases. In both its Staff Report: Initial Statement of Reasons for Rulemaking (Staff Report, Tab 4) and Final Statement of Reasons (Tab 5), CARB either has dem onstrated that the necessary technology presently exists to meet the established standards or has specif ically identified the projected control technology, answered objec tions raised by industry regarding that technology, and has explained its reasons for be lieving that each of the steps can be completed in the time available. 33

As discussed above, the emission reduction goals of the ATCM are expected to be achieved with a combination of engine repl acement and verified diesel PM retrofit strategies. Engine replacement or repower will be the likely met hod for satisfying the individual portable engine r equirements of the ATCM and the initial fleet average requirement that become effective in 2013. The emission standards for certified portable engines are all technolog ically feasible in the time provided in this ATCM, in that they parallel emission standards for off-road compressi on ignition engines set forth in title 13, CCR, section 2423 and 40 CFR Pa rt 89. In promul gating the federal regulations, U.S. EPA made express findings pur suant to CAA section 202(a) that the Tier I through 4 emission standar ds are technologically feasible. Moreover, Tier 1, 2, and 3 portable engines are presently being m anufactured and sold for most kilowatt ratings.

Portable engine owners and operators will likel y use a combination of new engine replacement and verified diesel PM retrofit strategies to sati sfy the fleet average requirements that become effective in 2017 and 2020. Verified diesel PM retrofit strategies refer to emission control stra tegies that have been verified pursuant to CARB’s Verification Program. 34 Because U.S. EPA does not administer a comparable program, the Verification Pr ogram mechanism and availabl e control strategies are

discussed below.

The Verification Program establishes a process through which manufacturers of emission control equipment can demonstr ate and verify the emission reduction capabilities of control technologi es. Examples of emission control technologies that can

be considered for verification incl ude: diesel particulate filters, diesel oxidation catalysts,

32 Id. at 331-32. Accord

, Husqvarna AB v. Environmental Protection Agency, 254 F.3d 195, 201 (D.C. Cir. 2001) and National Petrochemical & Refiners Association v. Environmental Protection Agency , 287 F.3d 1130, 1136 (D.C. Cir. 2002).

33 Id

. 34 See footnote 5.

22exhaust gas recirculation, selective cata lytic reduction systems, fuel additives and alternative diesel fuel systems. The Veri fication Program is voluntary and applies to emission control technologies for onroad, off-road and stationar y applications.

The Verification Program requires emission c ontrol strategy applicants to establish the emissions reduction capabilities for an emissi on control device, conduct a durability demonstration, conduct a field demonstrat ion and submit resu lts with additional information in a prescribed-format applicatio n to CARB. The applicant verifies the product for a specific engine manufacturer, y ears produced, engine family and series. If after reviewing the application CARB verifies the diesel emission control strategy, it will issue an Executive Order to the applicant stating the verified emission reduction and any conditions that must be met for the dies el emission control strategy to function properly. The Verification Program also requi res that the applicants provide a warranty to the end-user and conduct in-use compliance testing.

The results of the Verification Program testing determine the control technology

classification. The multi-leve l verification system consists of three PM reduction levels. The Verification Program also has provisions for verifying strategies that reduce NOx

emissions. Control device verifications for bo th PM and NOx are classified by level as

listed below.

Verification Classifications for Di esel Emission Control Strategies

Pollutant Reduction Classification

< 25% Not Verified

> 25% Level 1

> 50 % Level 2 PM

> 85% or < 0.01 g/bhp-hr Level 3

< 15% Not Verified NOx

> 15% Verified in 5% increments

Once a device has been verified, the executive order and accompanying information is posted on CARB's web site at http://www.arb.ca.gov/diesel/verifieddevices/verdev.htm

.

Emission Control Strategies

A brief description of the available c ontrol strategies is given below.

Diesel Oxidation Catalyst

A diesel oxidation catalyst (DOC) reduces the emissions of PM, carbon monoxide (CO) and gaseous reactive organic gas (ROG) from di esel engines by catalytic oxidation. The technology is only effective on the soluble organic faction of diesel PM, and therefore the overall reduction that can be achieved by a DOC is limited – the range of reduction is typically between 10 to 30 percent.

23Diesel Particulate and Flow Through Filters

A diesel particulate filter (DPF) reduces di esel PM emissions through filtration. This technology is very efficient in controlling diesel PM emissions, and has been demonstrated to reduce diesel PM by over 90 percent. DPFs can be categorized into several classifications: passive , active, or flow-through.

A passive DPF uses a catalytic material that allows the trapped PM to be burned-off or oxidized at a lower temperatur e. For the system to be successful, the engine must be operated such that the exhaust maintains a mi nimum temperature for a certain period of time. Otherwise, diesel PM will accumulate in the filter, eventual ly causing operating problems.

An active DPF performs the same function as a passive DPF. The difference is that the active DPF does not use heat from the engine exhaust to oxidize the trapped PM. An

active DPF is better suited for low exh aust temperatures or engines with high PM

emissions. Most common methods use electr ical regeneration by passing an electrical current through the filter medium , injecting fuel to provide additional heat to oxidize the trapped PM, or adding fuel-borne catalyst or other reagents to initiate periodic regeneration.

Flow through filter (FTF) technology is a re latively new technology for reducing diesel PM emissions. Unlike a DPF, in which onl y gasses can pass through the substrate, the FTF does not physically "trap" and accumula te PM. Instead, exhaust flows through a medium (such as wire mesh) that has a high density of interrupted flow channels. The FTF medium is typically treated with an oxidiz ing catalyst that is able to reduce emissions of PM, ROG, and CO, or used in c onjunction with a fuel- borne catalyst. Consequently, the FTF is not as efficient as a particulate filter in reducing diesel PM

emissions.

Fuel Additives

Fuel additives are essentially any subst ances added to the fuel. These additives can reduce the total mass of PM, with variable effects on CO, NOx and ROG production. Fuel borne catalysts (FBC) are addi tives to diesel fuel to aid in soot removal in DPFs by lowering the ignition temperat ures of the carbonaceous particl es in the exhaust stream. If the ignition temperature is lower, t hen more of the carbonaceous portion of the

exhaust stream is incinerated and not trapped in the DPF. These FBCs are to be used in conjunction with passive and active DPFs. FBCs use various metals such as cerium, platinum, copper, and iron. Most fuel addi tives will work with a range of sulfur

concentrations as well with other fuels and other fuel additives.

24Alternative Diesel Fuels

An alternative diesel fuel is a fuel that can be used in a diesel engine without modification to the engine. Alternative diesel fuels include emulsified fuels, biodiesels, Fischer-Tropsch (F-T) fuels and any combination of these fuels with regular diesel fuels.

Water emulsion diesel fuel mixes water with diesel and adds an agent to keep the fuel and water from separating. The water is suspended in the droplets within the fuel, creating a cooling effect in the combustion chamber that decreases NOx emissions. A

fuel-water emulsion creates a leaner fuel to air ratio in the combustion chamber, generating less soot at combustion, thus lowering PM emissions.

Biodiesel is a mono-alkyl ester-based oxyge nated fuel made from vegetable oils, such as oilseed plants or used veget able oils, or animal fats. Bi odiesel has similar properties to petroleum-based diesel fuel, and can be bl ended into petroleum-based diesel fuel at 20 percent, and is called B20. Pure biodiesel is called B100. U.S. EPA recently evaluated biodiesel using publicly available data and concluded that while biodiesel and biodiesel blends reduce PM, ROG, and CO emission, NOx emissions increase, depending on the biodiesel to diesel fuel blend ratio

Fischer-Tropsch fuels have been used to some degree since the 1920s. Today, thesefuels are being used in South Africa to power buses, trucks and taxicabs. FischerTropsch technology converts coal, natural gas and low-value refinery products into a high-value, clean burning fuel. This fuel is interchangeable with conventional diesel fuel and can be blended with diesel fuel in any rati o with little or no modification. FischerTropsch fuels do have emissions reduction benefits. A study showed that PM emissions were reduced by 30 percent and NO x emissions by five percent.

Demonstration of Technological Feasibility

Historically, control techniques developed for diesel engines are first developed for onroad applications, and the experience gai ned is subsequently applied to nonroad applications. The additional time for devel oping and implementing control techniques for nonroad applications is necessary because of the wider range in engine sizes duty cycles for nonroad applications. For example, the most stringent emission standards for onroad applications apply to models manufactured in 2007 and later (40 CFR Part 86 and title 13 CCR). In contra st, the most stringent emi ssion standards for off-road applications are applicable to engines manu factured beginning in 2011 (the standards are phased in by engine size and are fully implemented by 2015)

− four to eight years after similar standards are implemented in onroad applications (40 CFR Part 1039 and title 13 CCR).

In general, developing retrof it techniques for diesel engines presents a greater challenge than manufacturing new diesel engines in order to meet emission standards. A number of these retrofit techniques have been developed for onroad and stationary applications. Control techniques such as DOC, DPF (both passive, active, and flow25through), and water emulsion diesel fuel have been verified for onroad applications. Overall, 26 different products have been veri fied for onroad applications, including 14 verified at level 3, or 85 percent PM reducti on. In addition, five different products have been verified for stationary applications.

Based on the activity of the Verification Pr ogram, there is a so lid base of control technology development for bot h onroad and stationar y applications. Given that owners and operators of portable equipm ent will not be required by t he ATCM to use retrofit technologies until 2017 -- mo re than 10 years from now

− manufacturers of control techniques will have about ten years to develop the necessary products

− ample lead time to allow the development of the nece ssary control techniques. Two techniques have already been verified for nonroad applications: an active DPF and emulsion diesel fuel. These verifications limit the usage to specified types of nonroad equipment; however, both manufacturers are explorin g the possibility of expanding these verifications to other types of nonroad equi pment. CARB staff believes these two technologies are the technolog ies most likely to be used to achieve the goals of the

ATCM.

Manufacturers will also have the opportunity to observe the implementat ion of the Tier 4

nonroad emission standards. The control techniques applied to these newly manufactured engines will also be applicable to the in-use fleet. Again, the Tier 4 standards are phased in beginning in 2011 and fully implemented by 2015, two years before retrofit technology is expected to be applied to the in-use portable equipment

fleet.

Finally, CARB has committed to perform a technology review regarding the development of retrofit tec hnologies and will make the necessary modifications to the ATCM based on the findings of the technology review. This technology review is expected to be completed by 2008-2009.

Of course, California is not bound by U.S. EPA’s feasibility and lead time analyses for its own rulemakings, let alone by preambles stating advisory opinions without proposing

exhaust emission standards. 35 The U.S. EPA has consist ently and correctly reasoned that placing such a requirement on Califor nia's determination would effectively limit technology-forcing for the California market to that of the national market, effectively closing California as the nation' s emissions control laboratory. 36 Such a result would render CAA section 209(e) a nullity without independent force or effect , contrary to the long history of section 209(b) waiver implementation an d Congress's endorsement of that implementation scheme for nonroad engines.

35 Supra note 1.

36 See e.g., Utility Authorization , Decision Document at pp. 54-55.

26b. Test Procedure Consistency

The portable engine ATCM does not establish any test procedures for which there are comparable federal test procedures. Theref ore, there is no issue of test procedure inconsistency.

CONCLUSION

Based on the foregoing, CARB respectfully requests authorization for California to enforce the portable engine ATCM, as pres ented in Tab 3. The following tabbed documents pertaining to the ATCM cove red by this request are enclosed:

1. Resolution 04-7.

2. Executive Order G-04-080.

3. Face sheet (Form 400) as approved by OAL February 9, 2005 and filed with the Secretary of State, along with the Final Regulation Or der containing the newly adopted sections 93116 thr ough 93116.5 of title 17, California Code of Regulations, effect ive March 11, 2005.

4. Staff Report: Initial Statement of Reasons fo r Proposed Rulemaking and Proposed Regulations and Incorpor ated Documents, January 2004

5. Final Statement of Reasons for Rule making, Including Su mmary of Comments and Agency Responses and Addendum to the Final Statement of Reasons, filed January 4, 2005.

6. February 26, 2004 Air Resources Board Hearing Transcript.

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