MEETING

                         BEFORE THE

               CALIFORNIA AIR RESOURCES BOARD











                     BOARD HEARING ROOM

               CALIFORNIA AIR RESOURCES BOARD

                        2020 L STREET

                   SACRAMENTO, CALIFORNIA











                 THURSDAY, OCTOBER 26, 1995

                          9:38 A.M.









Nadine J. Parks
Shorthand Reporter


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                       MEMBERS PRESENT


John D. Dunlap, III, Chairman

Eugene A. Boston, M.D.
Joseph C. Calhoun
Lynne T. Edgerton
M. Patricia Hilligoss
John S. Lagarias
Jack C. Parnell
Barbara Riordan
Ron Roberts
James W. Silva
Doug Vagim


Staff:

Jim Boyd, Executive Officer
Tom Cackette, Chief Deputy Executive Officer
Mike Scheible, Deputy Executive Officer
Mike Kenny, Chief Counsel

Terry McGuire, Chief, Technical Support Division
Peter Rooney, Executive Director, State Board of Food
 and Agriculture
Don McNerny, Chief, Modeling and Meteorology Branch, TSD
Jeff Wright, Associate Meteorologist, TSD
Arndt Lorenzen, Manager, Meteorology Section, TSD
Leslie Krinsk, Staff Counsel, Office of Legal Affairs

Bob Cross, Assistant Chief, Mobile Source Division
Bill Lovelace, Manager, Regulatory Section, MSD
Kirk Oliver, Staff Counsel, Office of Legal Affairs
Tom Jennings, Staff Counsel, Office of Legal Affairs

Bill Loscutoff, Chief, Monitoring and Laboratory Division
Jim Shikiya, Chief, Southern Laboratory Branch
Annette Hebert, Manager, Inorganic Analysis Section, MSD
Paul Rieger, Inorganic Analysis Section, MSD
Kathleen Walsh, Staff Counsel, Office of Legal Affairs

Pat Hutchens, Board Secretary
Wendy Grandchamp, Secretary
Bill Valdez, Administrative Services Division


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                          I N D E X

                                                    PAGE

Proceedings                                           1

Call to Order and Roll Call                        1, 2

Pledge of Allegiance Led by Supervisor Riordan        2

Opening Remarks by Chairman Dunlap                    2

AGENDA ITEMS:

95-10-1   Continuation of Public Meeting to
          Consider the First Biennial Report
          to Legislature on the Connelly-Areias-
          Chandler Rice Straw Burning Reduction
          Act of 1991

          Introductory Remarks by Chairman Dunlap     2

          Staff Presentation:

          Jim Boyd
          Executive Officer                           3

          Arndt Lorenzen
          Manager
          Meteorology Section
          Technical Support Division                  4

          Questions/Comments                          8

          Motion by Parnell to Approve the
          Report to Legislature                      12

          Discussion                                 12

          (Suggestion to Staff)                      13

          Further Discussion                         13

          Roll Call Vote                         29, 30

          (Direction to Staff by Chairman)           30

Presentation of Award from MECA                      31


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INDEX, continued. . .                               PAGE

Presentation of Award from Association of
 Energy Engineers                                    35

AGENDA ITEMS:

95-11-1   Public Meeting to Consider Approval of
          Guidelines for Generation of Mobile
          Source Emission Reduction Credits
          Through the Purchase of New, Reduced
          Emission Heavy-Duty Vehicles

          Introductory Remarks by Chairman Dunlap    38

          Staff Presentation:

          Jim Boyd
          Executive Officer                          39

          Bill Lovelace
          Manager
          Regulatory Section, MSD                    40

          Questions/Comments                         57

          Motion by Calhoun to Approve
          Resolution 95-44                           87

          Entry into Record of Written
          Comments                                   87

          Questions/Comments                         89

          (Direction to Staff)                       89

          Roll Call Vote                         90, 91

95-11-2   Public Hearing to Consider Amending
          the Test Methods Designated for
          Determining the Benzene, Aromatic
          Hydrocarbon, Olefin, and Sulfur
          Content of Phase 2 Gasoline

          Introductory Remarks by Chairman Dunlap    91


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INDEX, continued. . .                               PAGE

AGENDA ITEMS:

95-11-2   Staff Presentation:

          Jim Boyd
          Executive Officer                          92

          Paul Rieger
          Inorganic Analysis Section
          Monitoring and Laboratory Division         94

          Written Comments Entered into Record      101

          Questions/Comments                        105

          PUBLIC COMMENTS:

          Donald Bea
          WSPA                                      106

          Questions/Comments                        108

          Continued Comments by Mr. Bea             110

          Questions/Comments                        111

          Continued Comments by Mr. Bea             112

          Record of Item 95-11-2 officially
          closed, awaiting notice of 15-day
          comment period                            113

          Disclosure of Ex Parte Communications     114

          Motion by Lagarias to Approve
          Resolution 95-45                          114

          Roll Call Vote                       115, 116

Luncheon Recess                                     116

Afternoon Session                                   117


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INDEX, continued. . .                               PAGE

AGENDA ITEMS:

95-11-3   Public Meeting to Update Board on
          Technological Progress of
          Zero-Emission Vehicles

          Introductory Remarks by Chairman Dunlap   117

          Staff Presentation:

          Jim Boyd
          Executive Officer                         118

          Bob Cross
          Assistant Chief
          Mobile Source Division                    119

          Questions/Comments                        135

          Fritz Kalhammer
          Co-Chairman
          Battery Technology Advisory Panel         142

          Questions/Comments                        171

          PUBLIC COMMENTS:

          Jan Dunbar
          Division Chief
          Sacramento Fire Department                192

          Questions/Comments                        197

          Joe Moore
          Sacramento Fire Department                198

          Questions/Comments                        199

          Bill Somers
          Battalion Chief
          Stockton Fire Department                  203

          Questions/Comments                        205

          Darlene Skelton
          NIEVS                                     217


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INDEX, continued. . .                               PAGE

AGENDA ITEMS:

95-11-3   Questions/Comments                        227

          Terry Scortt
          Captain
          California Firefighters Association       238

          Ralph Craven
          NIEVS                                     242

          Questions/Comments                        244

          Direction to Staff                   245, 246

          Questions/Comments                        246

          Directions to Staff                       251

          Questions/Comments                        252

Adjournment                                         260

Certificate of Reporter                             261


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

 2                              --o0o--

 3             CHAIRMAN DUNLAP:  Will the October California Air

 4   Resources Board meeting please come to order?  Madam

 5   Secretary, if I could get you to call the roll?

 6             MS. HUTCHENS:  Boston?

 7             DR. BOSTON:  Here.

 8             MS. HUTCHENS:  Calhoun?

 9             Edgerton?

10             MS. EDGERTON:  Here.

11             MS. HUTCHENS:  Hilligoss?

12             MAYOR HILLIGOSS:  Here.

13             MS. HUTCHENS:  Lagarias?

14             MR. LAGARIAS:  Here.

15             MS. HUTCHENS:  Parnell?

16             MR. PARNELL:  Here.

17             MS. HUTCHENS:  Riordan?

18             SUPERVISOR RIORDAN:  Here.

19             MS. HUTCHENS:  Roberts?

20             SUPERVISOR ROBERTS:  Here.

21             MS. HUTCHENS:  Silva?

22             SUPERVISOR SILVA:  Here.

23             MS. HUTCHENS:  Vagim?

24             SUPERVISOR VAGIM:  Here.

25             MS. HUTCHENS:  Chairman Dunlap.


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 1             CHAIRMAN DUNLAP:  Here.

 2             I'd like to ask Supervisor Riordan to lead us in

 3   the Pledge of Allegiance.  So, will you all please rise?

 4             SUPERVISOR RIORDAN:  If you'd rise, please, and

 5   join me in the pledge to our flag.

 6             (Thereupon, all in the hearing room joined

 7             in the Pledge of Allegiance.)

 8             CHAIRMAN DUNLAP:  Thank you.

 9             I would like to remind those of you in the

10   audience who would like to present testimony to the Board on

11   any of today's agenda items to please sign up with the Board

12   Secretary to our left.  And if you have written statements,

13   please be sure to give her 20 copies.

14             The first item on the agenda today is 95-10-1, a

15   continuation of a public meeting to consider the first

16   biennial report to the Legislature on the Connelly-Areias-

17   Chandler Rice Straw Burning Reduction Act of 1991.

18             This item is the continuation of the Board's

19   consideration of the draft report to the Legislature on the

20   progress to date of the implementation of this Burning

21   Reduction Act.

22             The law phases down the burning of rice straw in

23   the Sacramento Valley.  Last month, the staff explained the

24   draft report, and the Board heard comments on that report

25   from 27 people.  At the end of last month's meeting, the


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 1   Board closed the session for oral comments and agreed to

 2   accept written comments for a period of 10 days, and

 3   postponed the discussion and decision on the draft report

 4   until today's meeting.

 5             Additional written comments not heard at the

 6   September Board meeting have been provided to each of the

 7   Board members.  Although Board members, Silva, Roberts, and

 8   Lagarias were not present last month to hear this item, I'm

 9   advised that they have since reviewed the meeting's

10   transcript and they are prepared to participate in the

11   decision today.

12             I appreciate the efforts of those who have offered

13   comments on the matter and for the time that went into their

14   preparation and attendance here at this meeting and last

15   month's meeting.

16             The Board today will hear staff's summary of the

17   additional comments received, discuss the issue, and make a

18   decision.  So, why don't we begin by asking Mr. Boyd to tell

19   us if he has any additional information for the Board.

20             MR. BOYD:  Thank you, Mr. Chairman.  A couple of

21   items.  First, I would like to once again welcome Peter

22   Rooney of the Department of Food and Agriculture, who's

23   joined us at the staff table.  As you recall, he was

24   introduced at our last meeting, and they at the Department,

25   and Peter in particular, played a very significant role in


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 1   working on this subject, working with the affected

 2   communities, and working with the staff of the Air Resources

 3   Board.  And we're grateful to Peter for the work that he's

 4   done and for his being with us here today.

 5             Secondly, staff has received 33 additional comment

 6   letters, and we'll be summarizing them for the Board.  And

 7   also, the staff will give us a synopsis of the proposal that

 8   the staff has put before the Board.

 9             With that brief introduction, I would like to turn

10   the microphone over to Mr. Arndt Lorenzen, who's manager of

11   the Meteorology Section in our Technical Support Division,

12   who will provide us a synopsis of the letters and a synopsis

13   of our recommendation.

14             Mr. Lorenzen?

15             MR. LORENZEN:  Thank you, Mr. Boyd.

16             Good morning, Chairman Dunlap and members of the

17   Board.  As Mr. Boyd said, I will summarize the comment

18   letters we received in response to the final draft report to

19   the Legislature on the progress of the phase-down of rice

20   straw burning in the Sacramento Valley.

21             First, though, I would like to recall the report's

22   three principal recommendations regarding changes to the

23   Connelly-Areias-Chandler Rice Straw Burning Reduction Act of

24   1991.

25             The first recommendation would pause the annual


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 1   phase-down schedule on September 1st, 1996, to allow 50

 2   percent of acres planted to be burned each year for an

 3   additional three years.  The phase-down scheduled would be

 4   resumed on September 1st in the year 2000.

 5             The second recommendation would retain the current

 6   phase-down schedule for the critical fall burning period.

 7   Under this recommendation, no more than 25 percent of the

 8   rice straw could be burned during the fall after 1997..

 9             During the year 2003 and thereafter, burning would

10   be allowed only where disease was found to cause a

11   significant reduction in yield as provided by the current

12   law.

13             This recommendation would preserve nearly all of

14   the present Act's fall benefits and cause impacts of the

15   three-year pause to occur during the spring when smoke

16   problems are rare.

17             The third recommendation would establish a

18   mitigation fee for a five-year period, during which growers

19   would be allowed to burn 25 percent more acres than allowed

20   by the annual phase-down schedule if they pay a fee equal to

21   the average cost of incorporating straw into the soil.

22             The revenue generated from these fees would be

23   used to research and develop alternative uses of rice straw.

24   After hearing oral comments from 27 people at last month's

25   meeting, the Board closed the record for oral comments and


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 1   allowed an additional 10 days for the submittal of written

 2   comments.

 3             Between the release of the final draft report and

 4   the end of the 10-day comment period, the staff received 31

 5   comment letter from persons who did not speak to the Board

 6   at the September meeting.

 7             Twenty-seven of the 31 letters are from citizens

 8   who are concerned about the health consequences of rice

 9   straw burning, and urge the Board to not accept the staff's

10   recommendation of a three-year pause.

11             These comments typically express concern that the

12   ARB was sacrificing the health and well-being of Valley

13   residents for a small increment in the rice growers'

14   profits.

15             A letter was received from Professor Bryan Jenkins

16   from the University of California at Davis, Department of

17   Biological and Agricultural Engineering.  Professor Jenkins

18   discusses apparent flaws in AB 1378, such as not limiting

19   other agricultural burning in the Valley, and stresses the

20   need for a concerted effort to develop alternative uses for

21   agricultural wastes during the three-year pause.

22             Two letters were from the Boards of Supervisors of

23   Trinity and Amador Counties supporting the Colusa County

24   Board of Supervisors' resolution asking the Board to roll

25   back or halt the phase-down schedule.


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 1             A letter from Senator Maurice Johannessen was

 2   summarized in the Board Book, but was unclear.  He supports

 3   an annual phase-down pause, but not in the fall.

 4             In addition to the 31 letters from people who did

 5   not provide oral testimony last month, Ed Romano, Air

 6   Pollution Control Officer of Glenn County, and Joe

 7   Carrancho, a rice grower, each sent a letter subsequent to

 8   speaking at last September's Board meeting.

 9             Mr. Romano's letter stated that the draft report

10   was a step in the right direction.  He stated that

11   phase-down limits in excess of 50 percent should apply only

12   during the fall, even after the year 2000, and that burning

13   for disease management be allowed during the spring without

14   approval from an agricultural commissioner.

15             Mr. Carrancho's letter requested that the phase-

16   down be rolled back to 30 percent for the 1995-96 burn year

17   and remain at that level until viable alternatives to rice

18   straw burning are available.

19             Ten additional letters were received after the

20   comment period closed.  All of them opposed the pause and

21   the phase-down of rice straw burning.

22             This concludes the staff's summary of the written

23   reports -- correction -- the written comments received in

24   response to the draft report.

25             In addition, the staff intends to make five


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 1   nonsubstantive editorial changes to the final draft report.

 2             This concludes my statement.

 3             MR. SCHEIBLE:  I'd just like to add a

 4   clarification in response to the letter received from

 5   Senator Johannessen.  The staff's summary of the letter in

 6   the Board's summary was somewhat unclear and, so, we wanted

 7   to clarify that.  The Senator's letter was not unclear.

 8             CHAIRMAN DUNLAP:  Okay.  Thank you.

 9             MR. BOYD:  Mr. Chairman, just one closing comment.

10   I might note for the benefit of the Board and audience that

11   today is a no-burn day.  So, if you look out there and see a

12   little haze on the horizon, it has nothing to do with

13   burning anything in the region.

14             CHAIRMAN DUNLAP:  All right.  Thanks, Mr. Boyd.

15             Do any of the Board members have any questions of

16   staff on the matter?  Any clarification needed?

17             Supervisor Roberts?

18             SUPERVISOR ROBERTS:  Thank you, Mr. Chairman.  You

19   already stated, but I wanted to acknowledge, that we did

20   receive and I did read this rather lengthy report.  I wanted

21   to compliment Nadine for the thoroughness of the testimony.

22   There was quite a bit to get through here.

23             CHAIRMAN DUNLAP:  Thank you for being diligent.

24   And, Nadine, thank you for an accurate record.

25             Any other questions, comments?  Okay.


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 1             Mr. Boyd, do you have anything else to add?

 2             MR. BOYD:  No, Mr. Chairman, other than to say our

 3   position remains, as it was in the initial meeting, to

 4   recommend the staff proposal, which has been worked out

 5   cooperatively with the Department of Food & Agriculture.

 6             And, admittedly, there are people on both sides of

 7   the issue, and we have striven to do our best to protect and

 8   to continue to protect the public's health.  That is our

 9   number one concern.  But we, as always, have a concern for

10   the viability of the air quality program in this State.  And

11   it depends a lot on the viability of the economy.  A healthy

12   economy and a healthy environment have historically gone

13   hand in glove.  And this agency has pioneered everything

14   that's done in that context.

15             Our concern here is beyond just pure economics.

16   It is a matter of very complicated issues of soil science

17   and what have you relative to continuing the incorporation

18   trend, and it also is a product of the inability of anyone

19   today to provide a viable alternative use.

20             And to stimulate the many uses that have been

21   identified for rice straw in other commercial enterprises, I

22   believe if some notoriety and attention can be given to that

23   subject -- there was one outspoken, but courageous,

24   gentleman here last month pointing out that he's trying to

25   find a niche in this arena.


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 1             I think if some effort -- and perhaps the Food and

 2   Ag Department and Committee that advises all on the subject

 3   can get some additional help in stimulating that use, we can

 4   solve multiple problems in this region in terms of the

 5   economy, the use of an allegedly waste product, and continue

 6   then to have the engine produce revenue that will allow us

 7   to find continued programs to clean up the air in the area.

 8             CHAIRMAN DUNLAP:  Thank you.

 9             I'd like to make a brief statement before we get

10   into taking action on this item.

11             This is an extremely difficult and emotional issue

12   for many people.  These are really real life issues.  The

13   Board is extremely cognizant of the impacts of rice straw

14   burning on public health and our goal, of course, is to

15   protect public health.

16             But the goal of environmental regulations is not

17   to close down a business or to destroy a way of life.

18   Sacramento Valley is home to more than 2500 rice farmers who

19   produce 90 percent of the rice grown in California.  We have

20   to recognize that they face a very real threat to their

21   livelihood here if alternatives are not found, and if we

22   continue to phase out rice straw burning as dictated by the

23   Rice Straw Act.

24             We simply have to find a balance.  Our challenge

25   is to protect the heart of the Rice Straw Act by preserving


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 1   the benefits to public health.  We now recognize that the

 2   spring months provide the kind of weather conditions that

 3   readily disperse the rice straw smoke, and that the fall is

 4   the time of year when there's the greatest threat to public

 5   health.

 6             The Connelly Act is an annual program.  It doesn't

 7   make that distinction between spring and the fall and the

 8   relative impacts on public health.  The recommendation in

 9   the report protects the heart of the law by continuing to

10   phase down rice straw burning in the fall; that's when the

11   risk to public health is the greatest.

12             If we can find real solutions to the problems that

13   rice growers face, we will achieve the kind of feasible and

14   cost-effective alternatives to rice straw burning that the

15   Rice Straw Act requires us to search for.  But we need time

16   to do that.

17             The goal of the Act was to find the alternatives

18   necessary to make rice straw burning a thing of the past and

19   to protect public health.  This recommendation buys us the

20   time to realize that goal while continuing to protect public

21   health.

22             So, with that, I would like to open up any Board

23   discussion.  And I'd certainly be looking for a motion on

24   this item.

25             MR. PARNELL:  Mr. Chairman?


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 1             CHAIRMAN DUNLAP:  Mr. Parnell.

 2             MR. PARNELL:  If I may, I guess this is a great

 3   opportunity to make a speech, which I will forego.  But I

 4   think Mr. Boyd summed up my thoughts without question, and

 5   that is:  Hand in hand go environmental quality and the

 6   economy of a region.

 7             And certainly, my compliments to the staff for

 8   having done what I consider to be outstanding work in trying

 9   to measure and to weigh all of the competing interests and

10   to try to not walk down the center line, but rather do what

11   is absolutely right in this instance.

12             And so, with that, I will make the motion to

13   submit the report as submitted to us by the staff.

14             CHAIRMAN DUNLAP:  Okay.  We have a motion.  Do we

15   have a second?

16             SUPERVISOR VAGIM:  Mr. Chairman, second.

17             CHAIRMAN DUNLAP:  Okay.  Any discussion?

18             MR. LAGARIAS:  Mr. Chairman?

19             CHAIRMAN DUNLAP:  Mr. Lagarias.

20             MR. LAGARIAS:  I was unable to attend the meeting

21   but, like Supervisor Roberts, I've gone through the

22   transcript of the meeting and read the reports.  So, my

23   questions are still pretty much answered.  I do have a

24   couple comments before you work on this.

25             CHAIRMAN DUNLAP:  Sure, please.


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 1             MR. LAGARIAS:  I think the burning of the rice

 2   straw might be improved.  The plan, as I understand it, is

 3   the Sacramento Valley has a program, in which the ARB

 4   participates with the growers, in determining when there

 5   should be a burn or no-burn day and how it should be done.

 6             I think there might be improvements in that plan.

 7   And I would like to see our staff work more vigorously to

 8   see if we can't prevent infrequent occurrences that result

 9   in greater pollution than we have now.  And if we can get a

10   more rigorous program of when burn and no-burn can occur and

11   how large it should be, we may be able, at least for now, to

12   reduce the magnitude of the problem.

13             CHAIRMAN DUNLAP:  I would echo that and say that

14   we certainly need to tie down our predictive capabilities so

15   that we're as protective of human exposure as possible.  I

16   think that's a good point, Mr. Lagarias.

17             Ms. Edgerton.

18             MS. EDGERTON:  The testimony at the last meeting

19   was very moving and of tremendous concern to me.  It was

20   quite dramatic.  Those of you who were here will recall

21   children with gas masks appearing before us, and that was

22   very, very poignant.

23             It doesn't change the fact, though, that the law

24   that was passed by the Legislature, in my view, contemplated

25   finding alternatives which would be effective to make a


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 1   transition.  And those alternatives have not appeared as

 2   rapidly as we had hoped.  That is critical to the success of

 3   the legislation.

 4             So, I would ask those of you who came bringing

 5   your children and your hearts to -- not to walk away from

 6   this meeting upset with us, but to come closer to us and

 7   help us find those alternatives so that we can achieve a

 8   sustainable program for rice growing here in Sacramento.

 9             Stay with us, please.

10             CHAIRMAN DUNLAP:  Thank you.  Any other?

11   Supervisor Roberts.

12             SUPERVISOR ROBERTS:  Thank you, Mr. Chairman.  As

13   I read this, I had two concerns, and I think Mr. Lagarias

14   has perhaps touched on one, and that was the -- what seemed

15   to be a rather disastrous day last year, and I think it was

16   November 1st that was referred to in the testimony.

17             My first concern would be to do whatever we could

18   to see that that type of thing doesn't occur as in the past.

19   And I think that's what his comment was addressed to.

20             CHAIRMAN DUNLAP:  Sure.

21             SUPERVISOR ROBERTS:  The second thing that

22   concerned me, as I read this, was the way that the law has

23   developed, which has a percentage as a basis, which, as it

24   presently stands, could allow a subsequent year to provide

25   for more burning than a prior year because of the amount of


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 1   acreage that would be planted.

 2             Somehow that doesn't -- it seems to me that that

 3   is a flaw, especially if we're going to be talking about a

 4   pause.  It would disappoint me to see a pause, where we

 5   actually then have more burning in a second year than we

 6   have in a first year.

 7             And I would like to offer up a suggestion that our

 8   recommendation include language that in no event will the

 9   total acreage available in any year -- the total acreage

10   available to burn in any year exceed the acreage available

11   in any prior year; so that we know, in fact, irrespective of

12   how those years may spike up and down, with respect to the

13   burning, we're not going to see an increase in lands

14   available.  And I think that's as it should be.

15             CHAIRMAN DUNLAP:  On that point, if I could ask,

16   Mr. Scheible and your team, if you'd address that point

17   about possible or likely increases in total acreage burned.

18   And also, Mr. Rooney, if you have a perspective there, we'd

19   like to hear it.

20             MR. SCHEIBLE:   We believe that what we saw at the

21   beginning of the Act, which was, as the phase-down came into

22   effect for the 10 and 20 percent level, what we saw was an

23   increase in acreage planted of about that magnitude in the

24   first two years really that the Act prevented acres from

25   being burned that would have otherwise been burned, but did


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 1   not reduce it over the base.

 2             As we go forth and we go to the 40 and 50 percent

 3   phase-down level, that is not expected to happen; that we

 4   are pretty close in the past year to the top acreage that

 5   would be expected to be planted.

 6             However, the way the law is designed now, if you

 7   did have a low-planting year at the 50 percent level

 8   followed by a higher planting year, more acreage would be

 9   allowed, so that it is possible for the acres during a pause

10   to be higher in a subsequent year than they were in the

11   previous.

12             That was, evidently, the intent of the Legislature

13   not to limit the absolute acreage, but to tie it to a

14   percentage.

15             CHAIRMAN DUNLAP:  Mr. Rooney, is it likely that

16   that could occur?

17             MR. ROONEY:  It's conceivable.  If you look back

18   at the cycle that's reproduced on page 3-2, the rice

19   industry does reflect market conditions.  And last year, we

20   did have 484,000 acres planted; this year, we have 450.

21   Conceivably, in that three-year cycle, the cycle might turn

22   again.

23             It looks like we're going down and that during the

24   phase-out of the moratorium years, it's conceivable by the

25   last year of that, that the downward trend may be reversed


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 1   and Supervisor Roberts' point is well taken.

 2             If you look at the structure of the Act, the

 3   Legislature tried to build into the Act the concern that is

 4   raised, and that is that an overall cap of around 500,000

 5   acres seems to be the number that's implied in the

 6   legislation.  Because, if you look -- starting in the year

 7   l9-- of the year 2000, growers would be -- the maximum they

 8   could burn would be 25 percent of the planted acreage or a

 9   maximum of 125,000 acres.

10             Multiplying that out, the Legislature came up with

11   the number of 500,000 as a maximum cap.  So, you know, in my

12   discussions with people who were familiar with the

13   legislative debate, they say that the number was settled on

14   after much discourse; that a portion of the debate wanted a

15   number higher, the actual historic high of the industry.

16   Others felt, just as Supervisor Roberts' point, if we're

17   going to make headway in reducing it, that we have to have a

18   realistic number.  And 500,000 was the number that the

19   Legislature came up with.

20             Now, the industry has not grown 500,000 acres

21   since 1981-82.  The highest prior to that time was last year

22   at 484,000.  And we think now that statewide, there's

23   450,000 acres this year; let's assume that 15,000 of it's in

24   the San Joaquin Valley.  So, we're around 435,000 in the

25   Sacramento Valley.


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 1             So, the point is, yes, it is a cyclical business.

 2   I did have just one question, Supervisor.  The language you

 3   used was that of the actual acreage burnt the prior year or

 4   the actual acreage available to burn?

 5             SUPERVISOR ROBERTS:  I was speaking of the acreage

 6   available, and for this reason:  In some years, they don't

 7   burn the total acreage available, and I would like not to

 8   set up a situation where we created a disincentive for them

 9   to burn less in a given year, feeling they've got to burn it

10   to the limit in order to maintain that number.

11             So, I think if we worked off the base -- what

12   really assures that in every year, the acreage available

13   will continue to go down or, at the very worst, be equal to

14   what it was in prior years.  Because I think that's really

15   what we're trying to do.  Yet the way that it stands right

16   now, it can go up.  And I think that's a mistake in terms of

17   what we're trying to achieve.

18             Now, we're talking about a pause.  We're talking

19   about something that's different from the original

20   legislation, and we're talking about making a recommendation

21   that will be fair to the farmers and at least give the

22   assurance to the people of the community that this thing is

23   going to continue on a course downward.  And I think this

24   would do it.

25             CHAIRMAN DUNLAP:  I think the intent, though, is


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 1   the pause will allow the alternatives to emerge or be more

 2   successfully developed so they can be utilized; so, we'll

 3   ultimately end up with much less burning anyway.

 4             Supervisor Silva, and then Jack, if you had

 5   anything?

 6             SUPERVISOR SILVA:  Thank you.  I think the public

 7   health issue is the primary issue of the entire society, not

 8   just the people that live in the Sacramento Valley Air

 9   Basin.

10             And basically, this is where the tire meets the

11   road -- economics versus health or human exposure.  And I

12   have spoken with some of the local citizens up here, and

13   I've tried to get as much input as I can from the people who

14   are actually affected by this, as well as spending time with

15   our staff.

16             There are other States, also there are other

17   countries, that produce large rice crops.  How do they

18   handle the elimination of the straw and preventing the rot?

19             MR. ROONEY:  It's our understanding that in the

20   South -- Arkansas is a major rice producer and Louisiana --

21   and because of the humid conditions there, decomposition of

22   the rice straw is a rather rapid process as opposed to our

23   basically arid condition here, where the only decomposition

24   that's going to occur is to the extent the straw is

25   reintroduced to the soil early enough in the season and


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 1   water applied to it, so that decomposition can take place

 2   while there's still some warmth in the soil.

 3             As we get into the winter, the cold winter,

 4   basically, the decomposition process is significantly

 5   retarded.  And so, it presents a different problem here than

 6   it does in Arkansas.  And that's the major distinction.

 7             Some of the other countries -- certainly, I've

 8   landed in Bangkok and was amazed to see burnt fields, field

 9   where rice was being transplanted into the fields, and other

10   fields where the rice was ready to harvest.  So, it's just a

11   totally culture of growing rice.  And, of course, Thailand

12   is the world's leader in rice production.

13             I think in Japan, where you have rice paddies of,

14   you know, one hectare or so in size, where rice is gathered

15   up in full stalks and taken to a central threshing point,

16   the straw isn't still in the field.  It's mechanically

17   removed, taken off to a processing plant for entirely

18   different reasons than the type of commercial agriculture

19   that we have here.

20             So, those are some of the problems that lead to

21   it.  And I know Jack Parnell -- certainly, his experience

22   with USDA -- probably saw a lot of that himself.

23             CHAIRMAN DUNLAP:  Mr. Parnell.

24             MR. PARNELL:  I did.  And let me just say that I

25   don't wish to elongate the discussion.  But if Supervisor


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 1   Roberts' comments are intended to raise issues of concern

 2   that we might ponder as this moves forward into the real

 3   debate, which will occur in the Legislature, you know, I

 4   accept those as constructive.

 5             If the intent is to change the report, I don't

 6   accept that.  And I guess I would argue that it's a

 7   complicated formula that will have potentially some

 8   undesired effects.  And I would like to have time to look at

 9   it very carefully if that was the intent.

10             But I would also like to say that, if you look at

11   this in the context of what's going on nationally in the

12   federal budget and what the rice growers are going to have

13   to be looking forward to, and the flexibility that will be

14   granted them, acreage is a function somewhat of those

15   programs that have been placed in place by the Federal

16   Government and partially market-driven as well.

17             But we have a situation now where the pressures on

18   the federal budget are going to dictate that those programs

19   may disappear entirely over a period of a few years.  I

20   suspect that that will lead to a substantial reduction in

21   rice growing, not an increase in rice acreage.

22             So, I only say that in support of recognizing,

23   Supervisor Roberts, that there is a concern -- it is a

24   legitimate concern -- that, as to changing this report at

25   this point without complete and thorough debate, I would


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 1   have to be opposed to that kind of an amendment if that was

 2   your intent.

 3             CHAIRMAN DUNLAP:  Okay.

 4             MR. BOYD:  Mr. Chairman, might I address a

 5   question -- perhaps to Peter.  Maybe he can help me here.

 6             In listening to this discussion, I know from the

 7   experience of working in this arena for a long time, that

 8   one of the crises -- I guess many crises -- facing

 9   California agriculture, one of them is the pressure on

10   available land -- I mean the incredible population growth

11   and the spread of development.

12             And I just had a question as to whether that

13   dilemma is also facing the land availability in the region

14   where rice is grown --

15             MR. PARNELL:  Absolutely.

16             MR. BOYD:  -- and whether that pressure alone

17   might prohibit in and of itself much expansion of available

18   acreage to be grown, and thus eligible to be burned.  But I

19   frankly don't know the answer to that in this region.  I

20   know the answer in other regions in this State, because I

21   know many people, ourselves included, have been address this

22   loss of agricultural land.

23             MR. ROONEY:  I think the points well taken.  Just

24   yesterday, the American Farm Land Trust released their

25   report on growth in the entire Central Valley, and the


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 1   amount of land that will be converted by, you know, a

 2   relatively short time to urban uses.

 3             And if we look at Sacramento, Sutter County

 4   certainly, the Natomas area -- obviously it's a situation

 5   where the expansion of Sacramento in a relatively short time

 6   is going to make farming, you know, a thing of the past.

 7   And if we get into Sutter County, we have a situation of

 8   Sutter Bay development, New Town right in the heart of the

 9   rice country.  It's bound to occur.

10             And, as we get up farther into the Valley, there's

11   probably even less pressure; but, nonetheless, as people

12   move from the coastal areas into the Valley, it's bound to

13   just continue to eat up the land.

14             And interestingly enough, in the long-term

15   perspective, it might be the best solution to convert some

16   of the less productive land from the bigger picture, which

17   is rice land, as opposed to the more fertile soils in the

18   various river bottoms.

19             And I'm not about to -- you folks that are in

20   local government and see the land planning issues are far

21   more knowledgeable than I.  But, as from the Agriculture

22   Department's point of view, given the choice of converting

23   marginal farm lands versus Class One, the highest soils, we

24   would rather see urban growth on the more marginal soils.

25             And rice -- and that's part of the problem of why


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 1   we have this problem of rice on rice, on rice, on rice, on

 2   rice every year is because the land doesn't lend itself to

 3   rotations and to a whole mix of crops.

 4             CHAIRMAN DUNLAP:  Mr. Lagarias, then Supervisor

 5   Silva.

 6             MR. LAGARIAS:  Mr. Chairman, I think that the

 7   comments being made today might very well be suited in a

 8   transmittal letter with the report --

 9             CHAIRMAN DUNLAP:  Good point.

10             MR. LAGARIAS:  -- presuming that it goes forward.

11             But I was particularly struck by the Advisory

12   Committee on Alternatives to Rice Burning, and the

13   suggestions Ms. Edgerton presented on finding economic

14   alternatives to rice burning.

15             I think they are probably down the road apiece and

16   do not address the time issues that we're facing.  But I was

17   struck with the fact that, when we burn rice, we destroy it

18   in a matter of hours.  When we incorporate rice straw into

19   the soil, it's destroyed in a matter of months or longer.

20   And we get the benefits of air pollution reduction as a

21   result.

22             I always look for a compromise.  And I would like

23   to see some oxidation process encouraged using microbes that

24   would destroy the rice in a matter of weeks.  In other

25   words, instead of a back yard incinerator, you have a


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 1   compost pile.

 2             And I would encourage the professors to look and

 3   see if there can't be accelerated ways of destroying the

 4   rice straw without burning it and still oxidizing it.

 5             CHAIRMAN DUNLAP:  Good point.  I think great care

 6   should be taken after our action relative to the transmittal

 7   of our recommendations.

 8             Okay.  Supervisor Silva.

 9             SUPERVISOR SILVA:  Just real quick.  After reading

10   the material that was presented to me, I feel that the staff

11   recommendation is fair.  I'm sure there are people on both

12   sides that probably would be in disagreement.  But I am

13   prepared to support the recommendation.

14             CHAIRMAN DUNLAP:  Okay.  Very good.  Dr. Boston.

15             DR. BOSTON:  It's been a very difficult item for

16   me.  I would certainly like to see burning stopped all

17   together.  I think it's very clear that the acute health

18   effects at least are very real.  I think that the testimony

19   we had is accurate, it's believable, and I think the people

20   were very sincere.

21             I think the long-term effects, however, are less

22   clear, and the thing that really probably turned it for me

23   was the fact that we were guaranteed that there be no

24   further burning during the fall season when the season is

25   the worst for the movement of the smoke.  So, as a health


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 1   person, I would certainly like to see the smoke stopped all

 2   together.  Coming from a farming family, I can see the other

 3   side.

 4             And with the assurance that there will be no

 5   worsening of the smoke in the fall season, I'm going to vote

 6   for the item.

 7             CHAIRMAN DUNLAP:  Okay.  Very well.  If there are

 8   no other comments or questions, I guess we'll call the

 9   question.

10             SUPERVISOR ROBERTS:  Mr. Chairman?

11             CHAIRMAN DUNLAP:  Sure, Supervisor Roberts.

12             SUPERVISOR ROBERTS:  I remain concerned with the

13   point I made, and I'm not sure what "ponder" means and I"m

14   not sure what a "letter of transmittal" means.

15             Perhaps some of you veterans on this Board would

16   share with me what does that relegate that to?  Because I

17   feel uncomfortable right now.

18             CHAIRMAN DUNLAP:  Well, two points.  I'll let Jack

19   interpret part of that if he needs to.  But when the Board

20   takes action, we will transmit our recommendation and the

21   report, the form the report is in, to the Legislature.

22             That transmittal letter and what is said in it is

23   of import to us, in that the Legislature would be

24   considering the recommendations in this report and may have

25   legislation in mind.  They may want to make some changes to


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 1   the Act as a result of it.

 2             So, we want to be particularly sensitive and

 3   careful in what we say and how we say it as it relates to

 4   what you would suggested about possible changes to the

 5   report.

 6             As I heard Mr. Parnell, he is not willing to

 7   accept it as part of the recommendations at this point for

 8   his motion.  So, we'll call the question.  If the motion

 9   fails, then we'll turn the time back to you --

10             SUPERVISOR ROBERTS:  Are you talking about that in

11   the transmittal letter, that that issue which I raised will

12   be mentioned or it won't be mentioned?  It's not clear to me

13   what you're saying.

14             CHAIRMAN DUNLAP:  It is possible for us to add

15   that in a transmittal letter.

16             SUPERVISOR ROBERTS:  Okay.  I guess I'm asking for

17   clarification whether it will be in the transmittal letter

18   or it won't be in the transmittal letter.

19             Because I will tell you that what I hear is that

20   everybody is kind of dancing around this thing and saying

21   it's very likely that this is what's going to occur, but

22   nobody wants to ensure that that is what's going to occur.

23   And that leaves me with some level of discomfort.

24             CHAIRMAN DUNLAP:  I will be happy to direct staff

25   after we take action, as we ready the transmittal letter, to


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 1   make sure that the full -- to the extent we can in a letter,

 2   cover the full sense and interest of the Board.  So, Ron,

 3   we'll find a way to include that concern in it.

 4             SUPERVISOR ROBERTS:  Thank you.

 5             MS. EDGERTON:  I would like to agree with

 6   Supervisor Roberts that -- if I understood you correctly --

 7   I did not think that the report highlighted sufficiently the

 8   effect -- what had happened in terms of whether there was a

 9   real net reduction each year in the burning.

10             And it seemed to me that in the report -- I found

11   it, and it's been discussed here, but it didn't seem to me

12   that it was as clear as it might have been that this was

13   potentially a tremendous limitation in that Act if the

14   Legislature is sincere about having a reduction every year

15   in the smoke -- in the burning.

16             So, I would very much like -- that is something

17   that if -- I don't want to stop the report at this point.

18   But I do -- I would feel more comfortable with assurance

19   that there would be a transmittal letter that would, you

20   know, clearly state that we recognize and discussed that the

21   legislation, as now drafted, does not -- has not delivered

22   the net reductions that one might have expected from a piece

23   of legislation with its title.

24             CHAIRMAN DUNLAP:  Good point.  We will -- I will

25   ensure that great care is taken as we develop this letter


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 1   after we take the action.

 2             But, at this point, unless there's anything else,

 3   I would like to ask the Board Secretary to call the roll.

 4             MS. HUTCHENS:  Boston?

 5             DR. BOSTON:  Yes.

 6             MS. HUTCHENS:  Calhoun?

 7             MR. CALHOUN:  Aye.

 8             MS. HUTCHENS:  Edgerton?

 9             MS. EDGERTON:  Yes.

10             MS. HUTCHENS:  Hilligoss?

11             MAYOR HILLIGOSS:  Aye.

12             MS. HUTCHENS:  Lagarias?

13             MR. LAGARIAS:  Yes.

14             MS. HUTCHENS:  Parnell?

15             MR. PARNELL:  Aye.

16             MS. HUTCHENS:  Riordan?

17             SUPERVISOR RIORDAN:  Aye.

18             MS. HUTCHENS:  Roberts?

19             SUPERVISOR ROBERTS:  Aye.

20             MS. HUTCHENS:  Silva?

21             SUPERVISOR SILVA:  Aye.

22             MS. HUTCHENS:  Vagim?

23             SUPERVISOR VAGIM:  Aye.

24             MS. HUTCHENS:  Chairman Dunlap.

25             CHAIRMAN DUNLAP:  Aye.


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 1             MS. HUTCHENS:  The motion passes 11 to 0.

 2             CHAIRMAN DUNLAP:  Very well.  Thank you.  Mr.

 3   Boyd, as we craft the transmittal letter on this report, I

 4   would like for you to give great care in the development of

 5   this letter.  I would like for you to seek input from my

 6   colleagues on the Board and make sure that it represents the

 7   sentiments of the Board members here and the discussion that

 8   we've had this day on this item.  Okay?

 9             MR. BOYD:  Yes, Mr. Chairman.  We'll take that

10   into account.

11             CHAIRMAN DUNLAP:  All right.  Very good.  Thank

12   you.  And I'd like to recognize the Advisory Committee, Mr.

13   Forest, that he chaired, and the efforts of Food and Ag and

14   others working closely together to bring this item to us.

15   Thank you very much.

16             Okay.  Before we continue with the next agenda

17   item this morning, I'd like to take a few moments for a

18   couple of awards to be presented to the Board.  As the

19   members of the Board know, the ARB is a world leader in its

20   commitment to clean air and the efforts that it carries out

21   to manage air quality issues.  It has been the recipient of

22   numerous awards on a variety of fronts related to air

23   quality and public health protection.

24             First, I'd like to introduce Mr. Bruce Bertelsen,

25   the Executive Director of the Manufacturers of Emission


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 1   Controls Association, or MECA.

 2             In September, MECA held in reception in

 3   Washington, D.C. celebrating the 20th anniversary of the

 4   automotive catalyst, and honoring individuals and

 5   institutions who have made extraordinary contributions to

 6   clean air.

 7             The ARB was one of the honorees, but was not able

 8   to send a representative to receive the award at that time.

 9   I think that was our Board meeting day as I recall.

10             So, I've asked Mr. Bertelsen to attend our Board

11   meeting today to present the award to the Board.  And since

12   Mr. Roberts is closest to you, Mr. Bertelsen, I'll ask him

13   to stand to your side and you can make the presentation to

14   him on our behalf.

15             Good morning.

16             MR. BERTELSEN:  Thank you very much, Chairman

17   Dunlap, members of the Board.  It's certainly a pleasure to

18   be here today.

19             And on the occasion of the 20th anniversary of the

20   automotive catalyst, MECA is pleased to honor the Air

21   Resources Board for its pioneering efforts in establishing

22   and expanding the California motor vehicle emission control

23   program.

24             The California program created the regulatory

25   incentive which helped lead to the development,


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 1   commercialization, and continued evolution on the automotive

 2   catalyst.

 3             California was the first jurisdiction worldwide to

 4   establish a control problem to control exhaust emissions

 5   from new motor vehicles.  The program has contributed

 6   significantly to the enormous progress that has been

 7   achieved in improving California's air quality over the past

 8   three decades.

 9             The California program has also served as a model

10   for the U.S. motor vehicle program, and a growing number of

11   countries around the world look to California in developing

12   their motor vehicle control programs.

13             The technological cornerstone to the California

14   and U.S. motor vehicle program was, of course, the

15   automotive catalyst, which was introduced on 1975 model

16   year's automobiles nationwide.

17             Today's catalyst-equipped vehicles emit a small

18   fraction of the pollution compared to the 1960s vintage

19   automobile.  Indeed, since 1970, emissions from motor

20   vehicles have been cut by over 1.5 billion tons in the U.S.,

21   and the catalytic converter has made a critical role in this

22   achievement.

23             The important technological development of the

24   catalytic converter simply would not have occurred without

25   the leadership and vision of the Air Resources Board.  The


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 1   California program, established in 1960, not only led to the

 2   introduction of the automotive catalyst, but later

 3   refinements to the program led to further significant

 4   developments.

 5             One very good example of that was in the 1970s,

 6   when the Air Resources Board established a tight oxides of

 7   nitrogen standard, which resulted in the introduction of the

 8   three-way catalytic converter.

 9             More recently, the creation of the low-emission

10   vehicle program in 1990, has resulted in further

11   evolutionary breakthroughs in catalyst technology.  And, as

12   California continues to strengthen its motor vehicle program

13   in the future, no doubt, further technological developments

14   will occur as well.

15             We commend the Board for its enormous

16   accomplishments in helping to clean up the air for the

17   residents of California and for its continuing leadership in

18   developing and implementing the California motor vehicle

19   emission control program.

20             In recognition of the Board's contribution to

21   clean air, we're pleased to make a contribution to the

22   University of Southern California's School of Engineering

23   Geoffrey A. Calhoun Memorial Scholarship.

24             We also would like to present a small remembrance

25   of this occasion.  Again, I'd like to thank members of the


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 1   Board, the staff, and former members of the Board and staff

 2   for your enormous contribution over the years.  You've

 3   really made a difference, not only in California, but

 4   throughout this country and, today, throughout the world.

 5             Thank you very, very much.

 6             CHAIRMAN DUNLAP:  Thank you, Mr. Bertelsen,

 7   appreciate it.

 8             Joe, would you go help Ron carry the trophy back

 9   here?

10             (Applause.)

11             Would you mind saying a word or two about the

12   donation to the scholarship fund?

13             MR. BERTELSEN:  Right.  We are making a

14   contribution to USC's School of Engineering Geoffrey A.

15   Calhoun Memorial Scholarship Fund.  We thought that was an

16   appropriate way to express our appreciation and will, in a

17   small way, hopefully encourage others to get into the field

18   and continue the fine work that has gone on in automotive

19   technology, and we thought it would be an appropriate way to

20   honor the Board members.

21             CHAIRMAN DUNLAP:  Thank you.  Thank you for that

22   generous donation as well.

23             Thanks, gentlemen.  Jim, will you find a place of

24   honor for our trophy somewhere in our building?

25             MR. BOYD:  Indeed, Mr. Chairman, it will be a


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 1   great pleasure.

 2             CHAIRMAN DUNLAP:  Very good.  Thank you.

 3             MR. CALHOUN:  Mr. Chairman?

 4             CHAIRMAN DUNLAP:  Mr. Calhoun.

 5             MR. CALHOUN:  Obviously, I am moved by this

 6   generous donation from MECA.  I'd like to thank you very

 7   much, and I hope that you will convey my thanks to the

 8   member companies of your association.

 9             Thank you very much.

10             MR. BERTELSEN:  Thank you very much, Joe.

11             CHAIRMAN DUNLAP:  Also here today to present the

12   ARB with an environmental project of the year award for its

13   low-emission vehicle/clean fuels program is Mr. Mike Broso

14   of the Association of Energy Engineers, AEE.  Mr. Broso is

15   the City of Roseville's Electric Resources Manager and the

16   awards chairman.

17             Thank you for joining us today.  We appreciate

18   your presence.

19             MR. BROSO:  Thank you very much, Mr. Chairman and

20   members of the Board.

21             As you indicated, my name is Mike Broso.  I'm Vice

22   President Sierra-Sacramento Chapter of the Association of

23   Energy Engineers.

24             And I'm here today to recognize the efforts of the

25   California Air Resources Board and its staff for the low-


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 1   emission vehicles/clean fuels program.

 2             As you are aware, this program will reduce vehicle

 3   emissions by about 50 percent below previous standards and,

 4   clearly, it's a dramatic step forward in controlling air

 5   pollution in the region and in the State of California.

 6             The program will also lead to an infrastructure

 7   for alternative fuels as well as zero-emission vehicles,

 8   which will further reduce pollution and, even more

 9   importantly perhaps, promote innovative technologies within

10   the State of California.

11             The low-emission/clean fuels program we believe

12   has established a benchmark for the rest of the nation and

13   deserves recognition.  As a result and as a representative

14   of the Association of Energy Engineers, I would like to

15   present to the California Air Resources Board the West Coast

16   Regional Award for Environmental Project of the Year.

17             CHAIRMAN DUNLAP:  Thank you very much.

18             MR. BROSO:  (Speaking to Supervisor Roberts)  Do

19   you get the award, also?

20             CHAIRMAN DUNLAP:  No, we'll have Supervisor Vagim

21   grab this hardware.

22             MR. BROSO:  I was going to say he's the lucky guy

23   for sitting there.

24             SUPERVISOR VAGIM:  Thank you very much.

25             CHAIRMAN DUNLAP:  Thank you for your generous


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 1   recognition.  We appreciate it.

 2             MR. BROSO:  Thank you very much for your efforts.

 3             (Applause.)

 4             CHAIRMAN DUNLAP:  All right.  Mr. Boyd, I suppose

 5   we should congratulate you as well for working with these

 6   organizations.  Good job to you and your team.

 7             MR. BOYD:  Thank you, Mr. Chairman.  If I might

 8   just say another word.  I was a little emotional in the

 9   previous award, and it was difficult for me to say anything

10   as I'm sure it is for Joe.  I'd just like to say that it's a

11   particular pleasure to receive that award.  As you know, Joe

12   was a long-time member of this staff --

13             CHAIRMAN DUNLAP:  Right.

14             MR. BOYD:  -- of the Air Resources Board, as well

15   as working in the automotive industry, and sitting with your

16   Board.  And we have great pride in the receipt of this

17   award, and we have particular pride in the way MECA directed

18   the award.  And it just pleases us beyond words to have this

19   tribute to Joe and his family to be received in this way.

20             And I just want to say, Joe, for the staff, you

21   know, we've shared with you for a long, long time the

22   pleasures and the difficulties of working together, and

23   we're certainly with you during those moments and these

24   moments.  And it is indeed a great pleasure.

25             CHAIRMAN DUNLAP:  Well said, Jim.  Thank you.


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 1             The second item on the agenda today is 95-11-1, a

 2   public meeting to consider the approval of guidelines for

 3   the generation of mobile source emission reduction credits

 4   through the purchase of new, reduced emission heavy-duty

 5   vehicles.

 6             This item is the consideration of additions to the

 7   previously approved mobile source emission reduction credit

 8   guidelines.

 9             In February of '93, the staff presented to this

10   Board guidelines for district use in developing rules for

11   generating  emission reductions credits on based on mobile

12   source emission reductions.

13             At that meeting, we approved the guidelines for

14   use by the districts.  In November of '93, the Board

15   approved additional guidelines to be included in the

16   original document.  We continue to support the concept of

17   mobile source emission reduction credit programs as a useful

18   tool in meeting our air quality goals.

19             The guidelines being presented for our

20   consideration today are further additions to the previously

21   approved guidelines.  They address an additional new

22   approach to credit generation that increases district

23   flexibility in developing such programs.

24             At this point, I'd like to ask Mr. Boyd to

25   introduce the item and begin the staff's presentation.


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 1             Jim?

 2             MR. BOYD:  Thank you, Mr. Chairman, members.

 3             The guidelines presented today identify additional

 4   procedures that the Board would recommend to districts that

 5   choose to implement a mobile source emission reduction

 6   credit program.

 7             In developing these additional guidelines, we held

 8   a workshop, received numerous verbal and written comments.

 9   We considered all comments received in the formulation of

10   the additions to our guidelines.  In particular, these

11   guidelines address the procedures for generating credits

12   through the purchase of new, reduced emission heavy-duty

13   vehicles.

14             The guidelines are an extension of those

15   previously approved by your Board for the generation of

16   credits through the purchase of new low-emission urban

17   transit buses.  Specifically, they discuss hardware

18   certification, credit calculations and life, enforcement,

19   and the types of vehicles and engines that are eligible.

20             Districts, vehicle operators, and industry have

21   shown significant interest in generating credits through

22   this type of approach.  Such credits may be used to meet the

23   need for emission offsets for new and expanding commercial

24   and industrial facilities, or to meet air quality goals and

25   their regulations.


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 1             Adding these guidelines for new heavy-duty vehicle

 2   purchase credits to the mobile source emission reduction

 3   credit guidelines will provide an additional opportunity for

 4   industry to meet air quality requirements.  By using these

 5   guidelines to develop mobile source credit rules, the

 6   districts will help ensure that their rules are approved by

 7   this Board.

 8             Today's staff presentation will provide an

 9   overview of the guidelines proposed for generating these

10   credits from vehicle retrofits.

11             And with that, I'd like to introduce Mr. Bill

12   Lovelace of the Mobile Source Division, who will present the

13   proposed guidelines.  Bill?

14             MR. LOVELACE:  Thank you, Mr. Boyd, Mr. Chairman,

15   and members of the Board.

16             There are two objectives to today's presentation.

17   The first is to brief the Board on the proposed heavy-duty

18   vehicle credits guidelines.  The second is to ask for the

19   Board's approval for addition of these specific guidelines

20   into the previously approved mobile source credits

21   guidelines document.

22             These are the major topics in the presentation.

23   First, I'll give a brief background on the subject of mobile

24   source credits, then I'll present the proposed guidelines

25   for generating credits from the purchase of new heavy-duty


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 1   vehicles.  Next, I'll discuss the previously approved

 2   optional certification standards used in the guidelines,

 3   along with a simple credit calculation.

 4             Finally, I'll discuss the issues related to this

 5   topic and then close with a summary and recommendation.

 6             As background, I'll give a brief description and

 7   history of ARB's mobile source credits efforts.  The credit

 8   cards shown on the slide are not facetious.  Emission

 9   reduction credits are used as credit and used to make up a

10   debit.  It is an appropriate analogy and I'll explain how

11   the process works.

12             Emission reduction credits are a way of

13   transferring the effect of emission reductions from one

14   source to another.  If a source's emissions are reduced

15   below the level it is otherwise required to meet, that extra

16   reduction could be credited to another emission source, such

17   that the second source may exceed its required level by the

18   amount of the credit.

19             The main idea is that there is no net increase in

20   emissions from the two sources.

21             Mobile source emission reduction credits are

22   simply credits generated by reducing the emissions from

23   mobile sources.  Note that credit programs provide no direct

24   air quality benefit unless part of the credit is

25   deliberately set aside for that purpose.  Otherwise, a


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 1   credit of a particular amount is used to make up a debit of

 2   the same amount.

 3             Accurate credit accounting is important to ensure

 4   the credit programs work as intended.  From this follow the

 5   three necessary criteria that must be met for an emission

 6   reduction to be used as a credit.

 7             First, the reduction must be surplus; that is, it

 8   must be in excess of any Federal, State, or local

 9   requirements, or to emission levels already occurring.

10             Second, this reduction must be real and

11   significant, not the result of creative bookkeeping or of

12   just recalibrating an engine such that some small, minor

13   reduction that may or may not be permanent takes place.

14             Finally, the reduction must be readily

15   quantifiable so that planning and regulatory agencies can

16   accurately account for the emissions trading and protect air

17   quality.

18             The Board has taken a nonregulatory approach to

19   mobile source credits.  Specifically, this has been done by

20   approving and issuing guidelines to the local air quality

21   districts for their use in developing mobile source credit

22   rules and programs.

23             This slide and the next provide a short history of

24   the guidelines that the Board has approved to date.  The

25   original set of mobile source emission reduction credit


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 1   guidelines was approved by the Board in February, 1993.

 2   That first set of guidelines covered three methods of

 3   generating these credits -- accelerated vehicle retirement,

 4   sometimes known as car scrapping; purchase of low-emission

 5   urban transit buses instead of conventional buses; and

 6   purchase of zero-emission vehicles before any requirements

 7   for ZEVs.

 8             Each of these scenarios has its own chapter in the

 9   guidelines document.

10             In November, 1993, the Board approved the addition

11   of two more chapters to the guidelines.  These covered the

12   generation of credits through the retrofit of existing

13   vehicles to low-emission configurations.

14             One chapter applied to the retrofit of light- and

15   medium-duty vehicles and the other to the retrofit of heavy-

16   duty vehicles.

17             How are credits calculated?  It depends on the

18   specific category.  For early retirement programs, the

19   emission reduction is equal to the difference between the

20   average emission for the vehicles of the model year of the

21   retired vehicle and the average emissions of the statewide

22   fleet at the time of retirement.

23             New bus purchase credits are based on the

24   difference between the mandatory standard as applied to the

25   bus that would otherwise have been procured and the optional


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 1   certification standard of the new reduced emission bus and

 2   engine.

 3             For credits based on the purchase of a ZEV, the

 4   emission reduction to be used is based on the difference

 5   between the emissions of the typical vehicle which would

 6   otherwise have been purchased and the emissions of the ZEV,

 7   which are, of course, zero.

 8             ZEV-based credits must be in excess of any

 9   regulatory ZEV requirement.

10             A retrofit credit reduction is based on the

11   difference between the emission standard to which the

12   vehicle or engine was originally certified and the standard

13   to which the retrofit kit is certified.

14             Once the emission reduction has been determined,

15   it is assumed to occur over the appropriate expected

16   lifetime vehicle mileage.  This allows the determination of

17   the lifetime vehicle emission reduction credit and the

18   length of the credit life.

19             Now, I'll talk about the proposed new guidelines,

20   the reason that we are here today.

21             The graphic on this title slide illustrates a

22   point that I made earlier -- that credit programs do not

23   have an air quality benefit.  They involve transfers from

24   one source type to another, with a gain in one being a loss

25   in another, and an overall balancing out.


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 1             The principles apply to the additions to the

 2   guidelines we are proposing today.

 3             These pie charts show the large amounts of NOx

 4   produced by heavy-duty vehicles compared to other on-road

 5   vehicles and in comparison to their numbers and total

 6   vehicle miles traveled.

 7             Because of the large per-vehicle emissions,

 8   reducing emissions from just a few vehicles could generate a

 9   significant quantity of emission reduction credits.  The

10   proposed new heavy-duty vehicle credit guidelines are

11   extensions of the new low-emission bus credit guidelines

12   that the Board has already approved.  A credit generating

13   heavy-duty vehicle uses an engine certified to an optional

14   NOx standard instead of  the mandatory standard.

15             It is presumed that the conventional vehicle and

16   engine that would have been bought, if a reduced-emission

17   vehicle had not been chosen, would have been certified to

18   the mandatory standard in effect at the time of the

19   purchase.

20             The credit is calculated based on the difference

21   between the mandatory standard in effect at the time of

22   purchase and the optional certification standard of the new

23   reduced-emission vehicle and engine.

24             Heavy-duty engine emission standards are measured

25   in pollutant mass per unit off engine work provided; in this


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 1   case, grams per brake horsepower hour.  This is compared to

 2   light- and medium-duty vehicle standards that are expressed

 3   in terms of grams per mile.  The difference in the mandatory

 4   standard and optional standards for heavy-duty engines must

 5   be multiplied by a conversion factor which accounts for the

 6   amount of work required to move the vehicle a certain

 7   distance over its operating cycle.

 8             The credit applicant has the opportunity to

 9   provide the expected value of the conversion factor, subject

10   to review by the district and the ARB.

11             In addition, the expected life of the vehicle is

12   also the expected life of the credit.  The credit applicant

13   should provide reasonable values for the conversion factor

14   and vehicle lifetime based on known data and previous

15   experience.

16             Of course, the operator is also expected to

17   maintain the reduced emission operating condition of the

18   vehicle.  I want to emphasize that the heavy-duty vehicle

19   credit program, like the new urban bus program, is strictly

20   voluntary and that NOx is the only pollutant for which

21   credits can be granted.

22             Important components of the new heavy-duty vehicle

23   credit program are the optional certification standards as

24   previously adopted by the Board.  These standards are the

25   measuring sticks by which credit amounts are calculated.  By


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 1   way of background, this table shows the recent history of

 2   new heavy-duty truck and bus engine mandatory NOx standards,

 3   both California and Federal.

 4             I want to call your attention to the change in the

 5   truck NOx standard from five grams per brake horsepower hour

 6   to four beginning in 1998.

 7             This change in standard was adopted by the Board

 8   at the end of June this year.

 9             Optional certification standards for reduced

10   emission engines allows certification to emission levels

11   lower than the mandatory values.  The optional standards,

12   also adopted by the Board in June, are then used to

13   calculate the amount which emissions are reduced below the

14   required levels from a particular engine or vehicle.

15             Such reductions would then be available for use in

16   mobile source credit programs of the sort being considered

17   here today.

18             This approach to using optional standards for

19   credit certification and calculation is the same as that

20   used in the urban bus credit guidelines previously approved

21   by the Board.  I want to reiterate here that certification

22   to optional standards is strictly voluntary on the part of

23   the particular engine manufacturer and is only necessary to

24   take advantage of credit programs.

25             This table presents the optional certification


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 1   standards for new heavy-duty diesel engines.  As I

 2   mentioned, were approved by the Board at the June, 1995,

 3   Board hearing.

 4             For vehicles of model years 1995 through 1997, the

 5   standards range from 3.5 grams down to 0.5 grams per brake

 6   horsepower hour, inclusive, in 0.5 gram increments.

 7             For 1998 and later model years, they range from

 8   2.5 grams down to a half-gram in half-gram increments.

 9             The maximum optional credit level is reduced in

10   1998 to correspond with the reduction in the mandatory

11   standard in that year.   These levels are identical to those

12   previously adopted for urban bus use.

13             They were chosen to provide the manufacturers with

14   the maximum flexibility possible, while still meeting the

15   requirement that the subsequent emission reductions are

16   indeed surplus, real, and quantifiable.

17             There is no zero-emission optional standard

18   included in this table.  This is because the engine

19   standards include test procedures specific to that type;

20   that is, a diesel or gasoline engine.  However, zero-

21   emission heavy-duty vehicles would be eligible to generate

22   emission reduction credits.  The value of zero would be used

23   rather than one of the values that you see here.

24             Some existing gasoline heavy-duty engines already

25   have NOx emission levels that are significantly lower than


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 1   the current mandatory standard.  The Otto cycle here refers

 2   to gasoline engines

 3             Although there is a large amount of variability

 4   between engine families, since the engines providing such

 5   reductions are already commonly in use, the reductions would

 6   not be eligible for use as credits, because they clearly are

 7   not surplus.  This concern dictates that lower maximum

 8   optional standards be used for gasoline engines relative to

 9   diesel engines to ensure the surplus nature of emission

10   reductions to be used for credit.

11             This also has the added effect of eliminating

12   incentives for simply switching from existing diesel engines

13   to existing gasoline engines, which would also violate the

14   surplus criterion.

15             This table presents the specific values for the

16   optional standards for heavy-duty gasoline engines.  As done

17   for the diesel optional standards, the gasoline standards

18   were chosen to provide the manufacturers with the maximum

19   flexibility possible, while meeting the requirements of

20   surplus, real, and quantifiable.

21             This table clearly shows that the highest optional

22   credit levels are reduced in 1998 to correspond with the

23   reduction in the mandatory standard that would go into

24   effect in that year.

25             The next two slides will show how these optional


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 1   standards are used to calculate the total emission

 2   reductions and, thus, the total amount of credit to be

 3   generated.

 4             First, the conversion factor, which is the CF in

 5   the slide, must be determined.  The conventional way of

 6   calculating this quantity is by dividing fuel density by

 7   engine brake specific fuel consumption and by the vehicle

 8   fuel mileage.

 9             Assuming some typical values for these quantities,

10   as shown, results in a value of 2.1 brake horsepower hour

11   per mile for this particular case.

12             The credit proponent is requested to coordinate

13   the calculation of this value with the ARB staff to ensure

14   that reasonable values are generated.  The proponent also is

15   free to submit other appropriately determined values.

16             Continuing with this example, consider the case of

17   a heavy-duty truck operator who purchases a reduced-emission

18   truck with an engine certified to, say, 2 grams per brake

19   horsepower hour of NOx.

20             Assuming the operator otherwise would have bought

21   a truck certified only to the current mandatory NOx standard

22   of 5 grams per brake horsepower hour, the operator  is then

23   eligible to generate a NOx credit based on a reduction for

24   the difference of 3 grams per brake horsepower hour.

25             Making reasonable assumptions about the conversion


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 1   factor relating the engine work with miles traveled and

 2   about the lifetime vehicle mileage accumulation, the total

 3   credit amount is calculated to be more than 5 tons over the

 4   life of the truck.

 5             Four major issues have been brought up with

 6   respect to these proposed guidelines.  Several of these

 7   issues were discussed at length during the June Board

 8   meeting when the Board adopted the optional standards.

 9             Engine manufacturer representatives have requested

10   that the increment size between the optional standard values

11   be reduced to provide more closely spaced values.  This

12   table shows the half-gram increment size under discussion.

13   These representatives have made this request of the Board in

14   the past, mostly recently in June of this year when the

15   optional certification standards were presented to the

16   Board.

17             They have requested increment sizes ranging down

18   to 0.1 grams per brake horsepower hour down to a continuous

19   scale.  They point out that this adjustment to the standards

20   would provide easier certification of engines and a closer

21   match between actual emissions and the certification

22   standard.

23             However, the staff is concerned that smaller

24   increments would encourage shaving of compliance margins,

25   resulting in reduced protection against measurement


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 1   uncertainty and engine-to-engine variability in emissions

 2   performance.

 3             The staff believes that the adopted structure

 4   using half-gram increments adequately addresses this concern

 5   and also is consistent with the urban bus optional standards

 6   previously adopted by the Board.

 7             The Board discussed this issue extensively at the

 8   June Board meeting and directed the staff to reevaluate the

 9   appropriateness of the present increment size once

10   sufficient related experience and data have been obtained.

11   We remain committed to doing just that.

12             This issue is a companion to the previous one and

13   it, too, was discussed extensively at the June Board

14   meeting.  The manufacturer representatives requested that

15   the maximum optional standards, as shown in this table, are

16   too low and should be increased to bring them closer to the

17   mandatory standards.

18             They claim that this would also allow more engines

19   to be certified to optional standards.  Again, this is a

20   request that has been made of the Board on previous

21   occasions.  Again, the staff is concerned about the

22   incentive to shave compliance margins and the resulting

23   impact on the surplus, real, and quantifiable credit

24   requirements previously described.

25             Since compliance margins already exist, they do


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 1   not meet the surplus criterion for use as mobile source

 2   emission reduction credits.

 3             The maximum optional standards shown are those

 4   adopted by the Board four months ago and, as the Board

 5   directed, we will also reexamine this issue.

 6             This issue involves requests to allow credits for

 7   engine replacement in existing vehicles, known as

 8   "repowering," as opposed to purchasing a complete new

 9   vehicle.  The requesters suggest that the ceiling standards

10   for such repowering credits be the original engine

11   certification standard when it was new.  This would result

12   in higher calculated emission reductions than would be

13   obtained by using the current mandatory standard as the

14   ceiling.

15             The staff is concerned that this scenario would

16   result in credits being given away for routine engine

17   replacement which would have occurred anyway.  Such emission

18   reductions could not be considered surplus and, therefore,

19   cannot be used as a basis for generating credits.  Instead,

20   the draft guidelines provide for repowering credits if the

21   replacement engine is certified to an optional standard

22   significantly cleaner than the current mandatory standard.

23             The ceiling standard used in the credit

24   calculations would be the current mandatory standard and not

25   the original engine certification standard regardless of


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 1   age.

 2             Requests have been made that the Board consider

 3   credit guidelines for pollutants other than NOx.  Proponents

 4   suggest that credits for hydrocarbon, carbon monoxide, and

 5   particulate matter would provide additional incentive for

 6   increased development of equipment for controlling the

 7   emissions of these other pollutants.

 8             However, the staff notes that the level of

 9   hydrocarbon and CO emissions from existing heavy-duty

10   engines -- both diesel and Otto cycle, or gasoline -- varies

11   significantly between engine families.  And some engine

12   families, especially diesel engines, already emit these

13   pollutants at very low levels.

14             Such preexisting reductions are not surplus.  And

15   ensuring that any further reductions would be truly surplus

16   would require standards too low to be practical.

17             There is another issue, and I don't have a slide

18   for this one.  This relates to in-use testing, and I believe

19   that you will hear from one of the witnesses today present

20   some comments (sic).

21             Our proposed guidelines call for districts to

22   establish in-use testing programs to ensure emissions remain

23   where they are supposed to be, including during the useful

24   life of 290,000 miles, and after that lifetime when the

25   engine may be rebuilt.


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 1             We've asked for this to make sure that air quality

 2   is not adversely affected if the emissions exceed more than

 3   one would expect.

 4             Now, we received a comment from The Gas Company,

 5   otherwise known as SoCal Gas, that because the ARB is

 6   responsible for ensuring that engines are certified to a

 7   particular standard, are durable regarding emissions, that

 8   an in-use testing program is unnecessary.  While not

 9   disagreeing with this, that some testing is needed after the

10   useful life is up, the Engine Manufacturers Association also

11   has written comments along the same line, and I'll summarize

12   those comments at the appropriate time.

13             The staff believes that testing programs should be

14   instituted on a case-by-case basis.  For example, if a

15   particular engine design were such that it could invite

16   tampering, that might be a case where we'd like to see some

17   tests to make sure that the engine that received credits is

18   performing as it was supposed to.

19             And we are not talking about a massive test

20   program here.  We don't want to have an onerous test program

21   or emission testing every engine and vehicle.  A program

22   like that would strain the resources of the credit

23   generator, the districts, and the ARB.

24             We envision working with project proponents and

25   the districts to determine what is appropriate, but we don't


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 1   want to completely eliminate the need for testing where it

 2   is appropriate.

 3             To summarize, the staff has developed guidelines

 4   for the generation of mobile source credits through the

 5   purchase of new reduced emission heavy-duty vehicles in lieu

 6   of purchasing conventional heavy-duty vehicles.

 7             These proposed new guidelines are patterned after

 8   the previously approved guidelines for low-emission bus

 9   credit generation.  The guidelines are intended to cover a

10   broad range of cases, so they leave it to the credit

11   proponent to provide some of the necessary detailed data,

12   such as conversion factors and expected vehicle life.

13             The optional certification standards needed to

14   demonstrate a vehicle's reduced emission status have already

15   been adopted by the Board.

16             It should be remembered that this credit program,

17   like those previously approved by the Board, is strictly

18   voluntary and no one is required to participate in it.

19             The staff recommends that the Board approve the

20   proposed guidelines and direct the staff to include them in

21   the existing guidelines document, and forward that document

22   to the State's local air quality districts for use in the

23   development of their mobile source credit programs and

24   rules.

25             And that concludes my presentation.


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 1             CHAIRMAN DUNLAP:  Thank you, Mr. Lovelace.

 2             Any questions of staff by any of the Board

 3   members?  Mr. Calhoun.

 4             MR. CALHOUN:  I wish the staff would explain the

 5   rationale for arriving at the trigger level, and the

 6   rationale used to arrive at the various increments for

 7   granting of credits.

 8             MR. LOVELACE:  Those maximum optional standards

 9   and the increments are 30 percent basically, 30 percent

10   below the certification standard, the required certification

11   standard.

12             The original proposal for bus engines, when this

13   was first broached with the Board several years ago, was set

14   at 1 gram.  That was the staff proposal at that time, that

15   the increment be 1 gram.

16             After considerable discussion by the Board, the

17   Board directed the staff to modify that increment to be a

18   one-half increment.  The 30 percent is a level that we felt

19   was -- provided a substantial reduction and, as I mentioned,

20   rather than having a higher value, such that it might be

21   subject to -- I don't want to say "abuse," but it might be

22   used in a way that would not provide the real emission

23   reduction that one would expect.

24             MR. CALHOUN:  Obviously, we're going to hear some

25   testimony in this regard later.  But I guess the next


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 1   question I would have is the -- you mentioned something

 2   about the staff proposal imposes the requirement on the

 3   local districts to decide -- to establish some type of

 4   in-use test program.

 5             MR. LOVELACE:  Yes.  We request that the districts

 6   implement an in-use test program for the reasons I provided.

 7   When the ARB certifies an engine, it is our responsibility

 8   to make sure that that engine performs as required.  But

 9   there also certain maintenance considerations taken in

10   there, and malmaintenance or tampering of a vehicle's

11   emission control system is really not within the purview of

12   the engine manufacturers.

13             So, in cases where, for example, air-fuel ratios

14   could be adjusted, we want to make sure that that kind of

15   abuse is not occurring.

16             On the other hand, a program for testing would be

17   done on a case-by-case basis, depending on the type of

18   engine and what its emission control system was.  For

19   example, if we felt that an emissions control system was

20   bulletproof, did not allow for tampering, that kind of

21   thing, we might have very minimal testing requirements.

22             MR. CALHOUN:  I guess I'm somewhat bothered by

23   this, because of the fact that we're asking the local

24   districts to impose a test program on the applicant.  And

25   the Board certifies these engines and are certainly more


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 1   knowledgeable, I would think, than the local districts.  And

 2   it would seem to me as though the Board ought to be involved

 3   in establishing what kind of a test program that's going to

 4   be used in deciding whether or not these vehicles do, in

 5   fact, meet the emission standards at whatever mileage we

 6   suggest.

 7             MR. LOVELACE:  Yes, indeed.  And we've left the

 8   language in the guidelines somewhat open.  And the reason is

 9   that we want to work with the districts and the project

10   proponents to develop a test program that would be

11   acceptable.

12             True, the ARB has the expertise in the area of

13   testing and certification, and we would definitely want to

14   be part of that process, not to fob it off on the district.

15             MR. CALHOUN:  Does the ARB intend to have to sign

16   off on the test or approve it before -- I just don't -- I

17   just have difficulty with us imposing this on the local

18   districts when the expertise is here.

19             And it seems to me as though, if there's going to

20   be a test program, the support ought to be -- in addition to

21   being involved, you ought to sign off on it.

22             MR. LOVELACE:  These are guidelines, and we're not

23   imposing something on the districts.  We do want assurance

24   through some testing that the emission reductions are real.

25   But we're -- the district does not have to pass a regulation


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 1   requiring testing, but they do have the authority to grant

 2   or not grant those credits.

 3             MR. CALHOUN:  I understand that.  But this Board

 4   is being asked to approve guidelines for granting of

 5   credits.  And it seems to me, if we're going to issue some

 6   guidelines, they ought to have some real good basis for it,

 7   you know, something that, as you talked about, is

 8   quantifiable.

 9             MR. CROSS:  The problem with this is that the

10   range of proposals that we're -- that we've seen

11   historically, and I think that we expect to see, is quite

12   broad, ranging from retrofitting the vehicles to another

13   fuel, for example, or even a highly modified engine, which

14   nobody has a lot of experience with, to an OEM developed,

15   highly tested engine which we think -- we fairly confident

16   will be durable in use.

17             And so, the range of likely in-use testing

18   requirements is quite broad.  In other words, we certify the

19   OEM engine.  We can be pretty sure that with sort of a few

20   tests, we'll be sure it's all right.

21             Whereas, with a more bizarre program, we can

22   certify it based on the data which the proponent provides.

23   In other words, they could, you know, show that the emission

24   levels are achieved.  But we really may not have the

25   confidence in the durability that we would with the OEM.


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 1   And, in that case, we'd want to work with the district and

 2   the proponent to develop a program that's sort of -- that

 3   takes care of it without overly burning them.

 4             So, with that broad range of examples, I think

 5   we're trying to give flexibility through the language, so we

 6   can really respond to what the proponents want to do.  When

 7   we start getting detailed, then I think we can hang

 8   ourselves up in terms of the guidance we give ourselves.

 9             CHAIRMAN DUNLAP:  Go ahead.  Ms. Edgerton.

10             MS. EDGERTON:  Well, correct me if I am wrong, but

11   it's my understanding that we are giving -- I mean it's the

12   districts that award the credits, is it not?

13             MR. LOVELACE:  That's correct.

14             MS. EDGERTON:  And they have the option to put the

15   program into place or not.  And they must ultimately feel

16   comfortable with the credits that they award for these

17   reductions.

18             And so, it does make sense to me, since they have

19   the responsibility for the award, that they should be

20   prepared to assure that they're real and quantifiable.  And

21   they don't have to have a program where they put these

22   credits in at all.  Do they?

23             MR. LOVELACE:  that's correct.

24             MS. EDGERTON:  But if they do have one, then they

25   need to have it be an excellent one, where we know that the


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 1   credits that they're getting are real, quantifiable, and

 2   surplus.

 3             And there's really no reason in my view to have

 4   one of these programs if that's not what we're getting.

 5             So, I find -- with these some of these new things,

 6   I think it would be -- border on irresponsible if there

 7   wasn't some sort of testing to make sure we're getting what

 8   they say we're getting.

 9             So, that's my understanding.

10             CHAIRMAN DUNLAP:  Well, we have one witness on

11   this item.  Mr. Vlasek, why don't you come forward, and

12   let's hear from you now.

13             While we're all revved up, we want to put you on

14   the stand.

15             MR. VLASEK:  Good morning, Chairman and Board

16   members.  I am Greg Vlasek, the promised witness.

17             The dialogue here has covered many of the issues

18   that the Natural Gas Vehicle industry in particular had

19   intended to make here this morning.

20             Our concern generally I think was addressed by Mr.

21   Lovelace's presentation with regards to the need to look at

22   these things on a case-by-case basis, and to allow some

23   flexibility to the local districts with some oversight by

24   the Air Resources Board staff.

25             It might be helpful to cite an example that might


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 1   some of these things into perspective.  There is a third

 2   generation natural gas engine that will be out in 1996, a

 3   Cummins 10-liter engine.  It's a heavy-duty engine for big

 4   trucks and buses.

 5             We hope that that will be certified to one of

 6   these optional standards, and one that would certainly --

 7   hopefully be a part of one of these credit programs.  That's

 8   an OEM engine and has electronic controls.  So, it's not the

 9   type of engine that we think that ARB would need to have

10   particular tampering concerns with.  It's a very much

11   state-of-the-art engine.

12             That engine, under current ARB regulations, has to

13   have a certain durability life and is subject to in-use

14   compliance testing.  And the manufacturer's on the hook for

15   guaranteeing those emissions if, in fact, it's certified to

16   an optional standard.

17             In that case, we don't see any particular reason

18   why the end user, either the generator or the user of the

19   emissions credits, should be in any way responsible or on

20   the hook for, you know, either the testing cost -- which is

21   substantial -- or the loss of credits if, in fact, the, you

22   know, the engine doesn't prove out to be fully durable.

23             Now, given where we are in the evolution of this

24   marketplace, that's more the exception than the rule.  There

25   are engines out there that are not fully certified to the


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 1   optional standard or do not have electronic controls and may

 2   be, you know, could be subject to maintenance problems in

 3   use that are not necessarily the responsibility of OEM.

 4             What we're really asking for, from our point of

 5   view, is the recognition, one, that this emissions testing

 6   that's specified in here -- the engine dyno testing, or

 7   excuse me, the chassis dyno testing for heavy-duty vehicles

 8   is very expensive.  And for fleets that are, you know, are

 9   kind of on the edge as to whether or not they're going to,

10   you know, stick their neck out with a lower emission

11   technology and a natural gas or other type of low-emission

12   engine, they're going to be, I think, in many cases averse

13   to any additional risk that they have to spend, you know,

14   20, 30, $50,000 to test vehicles.  So, that needs to be

15   taken into account.

16             And the other thing is -- really, it just boils

17   down to flexibility, leaving them the opportunity to kind of

18   look at these things and appeal to ARB staff if they feel

19   they need help, but do so on a case-by-case basis.

20             CHAIRMAN DUNLAP:  But you would recommend the

21   emphasis be more on OEM testing rather than those --

22             MR. VLASEK:  (Interjecting)  Well, to the extent

23   that OEM testing's already required, then there should not

24   be kind of a double-jeopardy that's placed on the users or

25   the generators of the credits.


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 1             CHAIRMAN DUNLAP:  So they have to test again.

 2             MR. VLASEK:  Right.  Right.  To the extent that

 3   it's not guaranteed, as Ms. Edgerton pointed out, there

 4   needs to be some level of screening --

 5             CHAIRMAN DUNLAP:  Right.

 6             MR. VLASEK:  -- or assurance provided.

 7             CHAIRMAN DUNLAP:  But you are --

 8             MR. VLASEK:  (Interjecting)  It might not have to

 9   be -- excuse me.  It might not have to be -- in the future,

10   it may not have to be a chassis dyno test.  There may be

11   other less expensive screening-type tests.

12             CHAIRMAN DUNLAP:  Right.

13             MR. VLASEK:  And I know some of those are under

14   development now, and they're being reviewed by the trucking

15   industry to try, you know, provide that assurance without

16   having to go into the MTA engine dyno lab and spend $40,000

17   per vehicle.

18             CHAIRMAN DUNLAP:  Right.  But you are supportive

19   of the staff proposal with those concerns noted, correct?

20             MR. VLASEK:  Yeah.  There's actually one statement

21   that I'd like to call your attention to.  It's in the first

22   paragraph of page A-8 of the guidelines.

23             It says, "At a minimum, it will be necessary for a

24   small number of vehicles to be made available for chassis

25   dynamometer emissions tests."  So, that's pretty specific.


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 1             It says they "will" be made available.  And based

 2   on my experience with the districts, they're going to take

 3   that pretty much at the face of what it is, and they're

 4   going to expect that there will be some testing required.

 5             We would prefer to see a "may" in there, or

 6   something that reflects based on a case-by-case need as

 7   determined by the district experts with the assistance of

 8   the ARB staff.

 9             CHAIRMAN DUNLAP:  Where is that specifically on

10   that page?

11             MR. VLASEK:  Line 7, starts at line 7 on page A-8

12   of the version I have.

13             CHAIRMAN DUNLAP:  You would prefer it to say, "It

14   'may' be necessary"?

15             MR. VLASEK:  Yes.

16             CHAIRMAN DUNLAP:  Okay.  How would staff feel

17   about that?  Is that acceptable?

18             MR. CROSS:  That's fine with us.

19             CHAIRMAN DUNLAP:  Okay.  Supervisor Vagim.

20             SUPERVISOR VAGIM:  I want to follow up on what Mr.

21   Calhoun was talking about.

22             Do I read this correctly and understand that the

23   districts then will be responsible for almost a

24   recertification of what these vehicles are emitting to

25   establish the real credits?


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 1             Are we going to have a redundant testing program

 2   throughout every district in California?

 3             MR. CALHOUN:  I'm sorry, Supervisor, could you

 4   repeat the question?

 5             SUPERVISOR VAGIM:  Well, I mean, I just want to

 6   make sure I understand.  Is the certification requirements

 7   or responsibility that is going to be inherited by the

 8   districts, so they want to implement this credit program, is

 9   that going to create their need to have a recertification --

10             MR. CROSS:  No.

11             SUPERVISOR VAGIM:  -- method or methodology or

12   testing program that emulates what CARB is already doing?

13             MR. CROSS:  No.  The certification is done by

14   CARB, period.  Basically, the testing requirement that we're

15   discussing is one of where certification is granted for

16   somewhat marginal hardware.  In other words, we're not --

17   you know, the proponent doesn't have the wealth of

18   durability testing, let's say, that Cummins does on its

19   engines.

20             We want to reserve with the district the

21   discretion to be able to go in and ask them to test a few of

22   those vehicles in use and monitor their performance.

23             And clearly, if you had a program like that in

24   South Coast, you wouldn't run the same program in Ventura,

25   and another one in Sacramento, and another one in San


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 1   Francisco for the same retrofit.

 2             In other words, it would be, quote, "the first" of

 3   a particular technical approach to doing it.

 4             SUPERVISOR VAGIM:  Okay.

 5             MR. CROSS:  Does that answer it?

 6             SUPERVISOR VAGIM:  Well, it does, but I just want

 7   to make further clarification for myself.  And that is,

 8   there are going to be some vehicles that you are totally

 9   going to certify, and the credits can be taken as they are

10   purchased from the showroom floor so to speak.  No one has

11   to go through recertification -- is that correct -- at the

12   district?  You're going to say, "This has been certified,

13   durability, and everything else."

14             MR. CROSS:  Right.

15             SUPERVISOR VAGIM:  Those others that are

16   conversions and that type of stuff, which we at one time

17   were going -- we contemplated certifying durability on all

18   those.  Now we've backed off a bit on those; is that

19   correct?

20             MR. CROSS:  Well, we've always certified

21   conversions and sort've assumed that they would be durable.

22   But the conversions have never previously been used for

23   credit generation.  In other words, it would usually

24   basically certifying that the emissions would not go up.

25   And I think that, when you start saying that you're going to


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 1   use retrofit hardware to bring the emissions down, you need

 2   to remember you're letting a factory emit more for doing it.

 3             You need to be a little bit more careful in terms

 4   of ascertaining whether or not there's an in-use problem.

 5             SUPERVISOR VAGIM:  Some of these are going to

 6   have gone through CARB's certification program; isn't that

 7   correct?

 8             MR. CROSS:  But the durability testing that's

 9   required of these to get through CARB's certification is far

10   less than the durability testing which a Cummins or a DDC

11   would do.

12             SUPERVISOR VAGIM:  Okay.  But if CARB feels

13   satisfied that these meet the durability test case by case,

14   will the district ask CARB if they feel that way, or will

15   they have to just automatically do it?

16             Will CARB call them up and say, "We think you

17   ought to do a durability test on this"?

18             MR. CROSS:  We would work with them.  Since the

19   proponents have to go through our certification at the

20   beginning to get certified in the lower credit standards

21   before they ever go to the districts with a program, we're

22   already kind of in the driver's seat in terms of interacting

23   with the manufacturer while they're certifying.

24             SUPERVISOR VAGIM:  So, you know who they are.

25             MR. CROSS:  Yeah.  And we would be talking to them


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 1   and saying, "Hey, you know, we're certifying this, but we're

 2   going to be working with you and the district to demonstrate

 3   durability, because we all agree that it wasn't tested as

 4   much as maybe needed to be."

 5             SUPERVISOR VAGIM:  So, I guess then, the issue

 6   becomes, if the scale is 80 percent of the field is being

 7   asked to -- at least of these particular cases -- are being

 8   asked to go through durability, what's the difference

 9   between CARB just doing them all versus having the districts

10   do them?

11             Or if it's, of course, down lower, to 10 percent

12   or something, then that makes more sense where you're going

13   to do it on a selective case-by-case basis.

14             MR. CROSS:  I think the problem we run into is

15   that a lot of times the hardware developers don't have the

16   wherewithal to do very, very high-cost durability

17   demonstrations of a number of vehicles.  And what they're

18   basically asking us to do is, based on good engineering,

19   give them a certificate which says, "Yeah, we kind of all

20   agree this'll probably be durable," without them having to

21   run engines for hundreds of thousands of miles, with the

22   condition that will verify that they are, in fact, durable

23   in the field.

24             SUPERVISOR VAGIM:  So, the durability's be in the

25   field, and you want a monitoring system --


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 1             MR. CROSS:  Right.

 2             SUPERVISOR VAGIM:  -- but by the district, to keep

 3   coming back with reports on where the emissions are in that

 4   vehicle; is that right?

 5             MR. CROSS:  So, it becomes a way of basically

 6   letting sort of entrepreneurial type ventures which have

 7   something to offer, based on their test data, to actually

 8   get out and do something.

 9             Whereas, if we required them to do all the work

10   that Cummins and DDC did, most of them would never get off

11   the ground, because it costs too much.

12             SUPERVISOR VAGIM:  But there's going to be some

13   cost to this durability testing and monitoring.

14             MR. CROSS:  Certainly.

15             SUPERVISOR VAGIM:  Who picks that tab up?

16             MR. CROSS:  It would be the proponent essentially.

17   In other words, the folks who make the deal, if you will, to

18   generate the emissions credit.

19             SUPERVISOR VAGIM:  Yeah.  Not a lot of places in

20   California for heavy-duty certification.  Where does one do

21   with them?

22             MR. CROSS:  But I think that there are --

23   remember, we're just trying to verify whether or not the

24   system is durable or not.

25             There are lots of dynos which can do sort of


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 1   steady-state or elaborate steady-state tests in California.

 2   Many heavy-duty facilities have those.  And what one could

 3   do would be -- follow up the certification test of one of

 4   these retrofit systems with some sort of steady-state test,

 5   where you would baseline it, knowing what it emits on the

 6   official test.  And then what you could do is monitor it

 7   with these cheaper steady-state tests through its life

 8   without ever having to run the expensive test again.

 9             And, as long as the monitoring shows that things

10   aren't changing, you're probably okay.

11             SUPERVISOR VAGIM:  And again, what one established

12   in one district through that program would qualify for the

13   rest of the districts.

14             MR. CROSS:  Right.

15             SUPERVISOR VAGIM:  They would not have to go

16   through it again.

17             MR. CROSS:  Right.  But typically, one of these

18   proponents would be marketing in multiple deals, if you

19   will.  They would be working it out at the beginning while

20   you're certifying them.

21             SUPERVISOR VAGIM:  Right.  But why would you want

22   to take one district, or two districts, or three districts

23   through the same program, when one district putting that

24   same vehicle through the program would be --

25             MR. CROSS:  You wouldn't.


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 1             SUPERVISOR VAGIM:  So, who makes that decision?

 2   Where's the clearinghouse going to be?

 3             MR. CROSS:  That would be --

 4             SUPERVISOR VAGIM:  If five districts call you up

 5   and say, "Okay, we all have it," who's going to --

 6             MR. CROSS:  We'd sit down with the proponent, with

 7   the developer of the system, which is who is basically

 8   using, who is marketing it to stationary sources.

 9             SUPERVISOR VAGIM:  What happens if none of the

10   districts wanted to do it?

11             MR. CROSS:  We all sit.

12             SUPERVISOR VAGIM:  Huh?

13             MR. CROSS:  We all sit.  Doesn't go anywhere.

14             SUPERVISOR VAGIM:  So, they're all going to wait

15   for one guy to step up and say --

16             MR. CROSS:  Well, districts aren't doing it.  The

17   people who pay for --

18             SUPERVISOR VAGIM:  But they have -- the districts

19   have to monitor it, though.  They have to kind of enforce

20   it.  Don't they have to put it in place?

21             MR. CROSS:  Yes.  Well, they have to monitor it,

22   but the districts don't pay for it.

23             SUPERVISOR VAGIM:  It will pass the cost through.

24             MR. CROSS:  Yeah.  The folks who actually want to

25   do the emissions trade are the ones who pay for it.  And I


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 1   see that as the barrier as opposed to the district.

 2             SUPERVISOR VAGIM:  The obvious is where these

 3   facilities are for heavy-duty testing and stuff is more

 4   likely where this is going to happen versus in remote

 5   districts that don't have these type of stuff.

 6             You probably won't have that kind of

 7   entrepreneurialship in those districts.  And that does have

 8   some kind of, like say, dissuading part for some of these

 9   folks in the rural parts of our --

10             MR. CROSS:  You'd be surprised --

11             SUPERVISOR VAGIM:  -- State.

12             MR. CROSS:  -- at how many chassis dynos there are

13   out there for heavy-duty engines.

14             SUPERVISOR VAGIM:  I just don't run into them on

15   an everyday basis, I guess.

16             MR. CROSS:  You have Stockton, for example.

17   There's, you know, MTA in Southern California has one.

18   There are a lot of --

19             CHAIRMAN DUNLAP:  Bob, if I may --

20             MR. CROSS:  That's fine.

21             CHAIRMAN DUNLAP:  -- kind of hop in.  The

22   sentiment of the Board, it seems to me, is that redundant

23   testing or testing requirements that are difficult or

24   impossible to achieve, and that a clearinghouse function is

25   necessary for this to be successful.  Those seem to be all


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 1   priorities for us.

 2             So, I guess, with the feeling that we want to move

 3   this item, I think I would be prepared to give some

 4   direction to you after we take our action; that is, to

 5   staff, Mr. Boyd, to send some very clear signals relative to

 6   this clearinghouse function, and making lists of testing

 7   facilities made available, perhaps make this modification of

 8   changing the word here about "may," and just making sure

 9   that we do -- we provide a high level of technical

10   assistance to the districts.  That is essential in order for

11   this to work, it seems to me, well.

12             MR. BOYD:  Mr. Chairman, if I might, I've been

13   holding back here.  But my personal sentiments are in total

14   agreement with what Mr. Calhoun said, and then with what Ms.

15   Edgerton said earlier.

16             And the dilemma we have is that we, the staff,

17   find ourselves on the horns of a dilemma, in that the

18   legislation asked us to do guidance.

19             CHAIRMAN DUNLAP:  Right.

20             MR. BOYD:  And we've been doing guidance

21   historically to districts, and guidance is just that.  It is

22   only guidance.  And so, with this program, districts have

23   the option or not of going into a credits program.

24             And what is bothersome to me -- and Mr. Calhoun

25   picked it up -- is they have the option or not, if they do a


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 1   credits program, of doing testing.  And I'm personally quite

 2   bothered by the idea that there would be a credits program

 3   without some verification.  Because we're not dealing with

 4   the routine certification of engines at the standard

 5   established for all.

 6             We're dealing with an extraordinary level that is

 7   more difficult to achieve and will be on a much more limited

 8   basis, and not necessarily just by OEMs.

 9             CHAIRMAN DUNLAP:  Understood.  But people need to

10   be able to avail themselves of this extraordinary credit or

11   recognition.  And there's infrastructure limitations,

12   there's also certainly some leader -- and we do this

13   routinely, Jim, as you know.  We share information and

14   publicize it.

15             All of those things need to happen in order for

16   this to work well, so that we don't disadvantage some of the

17   more rural districts in our State in particular.

18             That seems to me to be the --

19             MR. BOYD:  I agree with that, and I was going to

20   solicit direction --

21             CHAIRMAN DUNLAP:  Sure.

22             MR. BOYD:  -- from the Board, as I'm quite open to

23   direction from the Board to deal, subsequent to the release

24   of this --

25             CHAIRMAN DUNLAP:  Okay.


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 1             MR. BOYD:  -- initial guidelines to deal with this

 2   testing issue, to look for surrogate types of testing that

 3   are more economical, to look for the most efficient ways of

 4   doing this and to, as a minimum, have the State prescribe

 5   standards and guidelines on how you do this to a maximum of

 6   working out the arrangements for exactly how it would be

 7   done on a contractual basis with some types of organizations

 8   that we're aware of that perhaps locals aren't, to be funded

 9   through the revenues derived by the program and what have

10   you.

11             I think there's another tier, echelon, round of --

12             CHAIRMAN DUNLAP:  Okay.

13             MR. BOYD:  -- technical discussion needed here on

14   that point.

15             CHAIRMAN DUNLAP:  Okay.  Good.  I appreciate that.

16   I think you're getting clearly where the Board's coming from

17   on this.

18             Mr. Silva, did you want to say something?  Then,

19   maybe we can call -- do we have anything else for Mr.

20   Vlasek?  I notice his posture is suffering standing there so

21   long.

22             MR. VLASEK:  I'm fine.  I actually had a couple of

23   quick points in addition to the ones --

24             CHAIRMAN DUNLAP:  Sure.

25             MR. VLASEK:  -- I've already made.


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 1             CHAIRMAN DUNLAP:  Will you yield to our witness,

 2   Mr. Silva?

 3             SUPERVISOR SILVA:  Please.

 4             CHAIRMAN DUNLAP:  Okay.

 5             MR. VLASEK:  One was partially in response to

 6   Supervisor Vagim's question regarding -- are there going to

 7   be programs coming in, and are the districts really going to

 8   be looking for this sort of guidance?

 9             I noted that California Trucking Association has

10   submitted written comments on this item.  And from what I

11   can gather, they are basically very supportive of the

12   program, but have the same concern about the cost of testing

13   and whether or not an extremely expensive testing program

14   would inhibit or limit the success of emissions credit

15   trading.

16             I think they're very, very serious.  And we've had

17   an ongoing, very positive discussion with them about natural

18   gas engines and how we might get more of them into the

19   California fleet.

20             And I think that, you know, as long as there's

21   this sort of willingness to work together between the

22   proponents of the credits, and the ARB, and the local

23   district, that we're going to be able to work out some good

24   credit programs.

25             The final point was with regards to the non-NOx


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 1   emissions credit trading.  And our industry -- obviously,

 2   we're in a position where we can -- we're very strongly

 3   supportive of anything that can provide opportunities for

 4   reduction of PM, because we have a very low particulate

 5   matter fuel.

 6             We think it's painting this whole mobile source

 7   emission credit opportunity with too broad of a brush to

 8   just say, well, you know, we're not going to get that much.

 9   The particulate matter emissions that we're talking about

10   are toxic.  We know they're very toxic, maybe carcinogens.

11             Natural gas engines are well below 50 percent or

12   well above 50 percent cleaner than the diesel technologies

13   out there today.  I haven't seen any studies that show that

14   that deteriorates over time because of the nature of the

15   fuel.

16             So, we would urge the ARB now to preclude local

17   districts from developing some sort of PM credit mechanism

18   if they feel that that's an important part of their PM

19   attainment goals.  And, as currently written, the heavy-duty

20   guidelines do preclude other types of credit programs.

21             CHAIRMAN DUNLAP:  Okay.  All right.

22             SUPERVISOR VAGIM:  Mr. Chairman, I just wanted to

23   reiterate.  I think that's an excellent point.  And I would

24   hope we could incorporate that in the future --

25             CHAIRMAN DUNLAP:  Okay.


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 1             SUPERVISOR VAGIM:  -- embellishment of that.

 2             CHAIRMAN DUNLAP:  Thank you, Mr. Vlasek.  You are

 3   our only witness according to what the Board Secretary's

 4   provided me.  So, we'll close the public testimony portion

 5   on this item.

 6             Supervisor Silva.

 7             SUPERVISOR SILVA:  Yes.  I have a lot of respect

 8   for the staff.  I think the integrity of the staff reports

 9   have been great.  This is just, you know, finishing up my

10   first year.  But I do know that there are times when we have

11   philosophical disagreements.  And I feel that the credit

12   program, I do have a little bit of a problem with.

13             In addition to being a Supervisor in Orange

14   County, I'm also on the Orange County Transit Authority's

15   Board.  And Orange County was able to solve their bankruptcy

16   problem with basically everybody in the county getting a

17   haircut.

18             And the OCTA received approximately a 20 percent

19   reduction in their revenue to help the county restructure

20   their investment pool.

21             And I'm talking about the bus situation, where an

22   engine life can be anywhere from 200 to 400,000 miles, some

23   cases even more.  And the chassis life can be triple that.

24             A rebuilt engine is cheaper than a new engine,

25   oftentimes as much as 50 percent.  And the question is,


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 1   should we rebuild engines or should we buy new engines for

 2   old chassis?

 3             With the tight economy, maybe Vance Packard's

 4   book, The Waste Makers, may be holding true, that we're

 5   going to have to look at ways to cut back that we've never

 6   looked at before.

 7             And I think that, in addition to the OCTA, I think

 8   many businesses that have large fleets will be rebuilding

 9   their engines rather than buying new engines.  And this

10   could be a reality as well as a fact of life.  And I feel

11   that the emission reduction credits should be given.  I may

12   be in the minority here, but I would like to hear from the

13   staff on this.

14             CHAIRMAN DUNLAP:  On that point, I'd certainly

15   like to have staff respond, because it gets at a core issue.

16             If I might, though, Jim, maybe make a comment.

17   One of the things that I've found over the years in this

18   business is you want to recognize people that go the extra

19   mile.  Jim I think said it well about extraordinary efforts,

20   extraordinary credit.

21             The problem that we face is we need to get every

22   gram, every pound, every ton of air pollution reduction we

23   can.  So, if we recognize too much, if we give too many

24   people organizations that mean well too much credit, we will

25   never move forward towards attainment of those clean air


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 1   goals.

 2             So, all I would say to you, while I appreciate the

 3   philosophy behind asking that question -- I think you're

 4   right -- but I want to caution you, over time, as you look

 5   at it in perspective, to make sure that we don't reach out

 6   too far and recognize too much, and end up falling short of

 7   our ultimate goal, as you said in that last item about

 8   protecting public health.

 9             So, contextually, there's an issue here.  And,

10   Tom, I know you're an expert in this area.  You want to say

11   a few words?

12             MR. CACKETTE:  Mr. Chairman, you captured, I

13   think, our viewpoint very well.  The success of the motor

14   vehicle control program in California has been essentially

15   the turnover of older, high-emitting vehicles to newer,

16   lower emitting vehicles, and that occurs when people

17   purchase vehicles, new ones in particular.

18             And in the case of buses --  actually, this

19   proposal here is dealing with heavy-duty trucks; we dealt

20   with the bus issue, but it's a direct analog to --

21             CHAIRMAN DUNLAP:  Right.

22             MR. CACKETTE:  -- it previously, and this wasn't

23   made at that time, but certainly it's the same principle

24   involved.

25             The concern the staff has is that they had to


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 1   balance what could be a substantial slow-down in the

 2   turnover to cleaner vehicles and, thus, lower emissions

 3   versus a situation where we might be inadvertently or

 4   inappropriately incentivizing people to rebuild old engines

 5   rather than repower with new engines in existing coaches.

 6             And our feeling is that the incentives for putting

 7   new engines into existing vehicles or buying entirely new

 8   vehicles with low-emission engines is driven by a number of

 9   factors, most of which are not environmentally related, but

10   have to do with the reliability of the vehicle and, in

11   particular, the much improved fuel economy of these new

12   engines, which are typically double what some of the older

13   engines are.

14             Our concern was that, as people choose to repower,

15   because -- particularly in buses, the coaches sometimes can

16   be remanufactured to last 30 or 40 years.  As people would

17   choose to repower, the net effect would be, they'd be

18   selling emission credits, which would cause another -- allow

19   another source to pollute.  And we would be slowing down

20   through that process the natural turnover to low-emission

21   engines.

22             We thought that threat of that occurring is much

23   greater than the possible disincentive of a few people

24   deciding to rebuild rather than repower or buy a new

25   vehicle.  And so, it was a weighing or balancing act where


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 1   we didn't want to see the program get a bad eye, and we

 2   didn't want to see emissions substantially increase by

 3   people being able to sell credits or make -- you know, use

 4   credits, when in fact they were just doing what they were

 5   going to do.

 6             And we had an analogy the staff developed, which

 7   is, many of you probably regularly buy a new car to replace

 8   your old car.  A brand new one.  And I would think the Board

 9   would agree unanimously that, if you buy a new car, you

10   probably shouldn't get an emission credit that you can sell.

11   In other words, the breathers need to take advantage of the

12   fact that you've got a nice, new, clean car.

13             But I probably wouldn't use myself, because I have

14   bought one new car.  But let's say I'd never bought a new

15   car in my life.  And I'd say, "Look it.  I've had all of

16   these used cars.  I keep buying these used cars, but now I'm

17   going to go forward and make the choice to buy a new car."

18   And I'm going to do it based on the fact that I want to get

19   an emission credit for it.

20             That emission credit made me change my mind on

21   what we're going to do.  Arguably, we should be

22   incentivizing that.  But also, arguably, we're opening up

23   the door for every person, including all of you who buy new

24   cars, to get a marketable emission credit when you do what

25   you otherwise would be doing anyway.


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 1             And that's what we're trying to protect against.

 2   And I don't see any other way of doing it, other than by

 3   picking the balance that the staff did.

 4             If we went with the idea of repowering getting

 5   credits, I think we'd be opening the door to a slowdown in

 6   the improvement of air quality in this area.

 7             CHAIRMAN DUNLAP:  Sure.  Okay, Tom.

 8             MR. CACKETTE:  So, I guess it's philosophical to

 9   some degree, and it's not a black-and-white issue.  But

10   that's sort of the logic of how we came out where we did.

11             CHAIRMAN DUNLAP:  And, Supervisor, for my part, I

12   think you brought up an excellent issue and a good point.

13   And I know some of the spokespersons for that very point

14   have very strong feelings about it and are, you know,

15   honorable people trying to do the right thing.  And I

16   respect that position.

17             MS. EDGERTON:  Well, if I understand it correctly,

18   it's not a question of how much -- I mean it's not a

19   question -- I'll just put it this way.

20             It's a question of how much the credit would be,

21   whether the credit -- if you put in a newer engine, whether

22   it's from the existing mandatory standard to the optional

23   standard versus whether it's the old certification of that

24   individual vehicle versus the optional standard -- if

25   they've put in the optional standard.


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 1             But it's how much credit they get.  It's not that

 2   the changeover isn't incentivized.  Indeed, it is still

 3   incentivized from the mandatory standard forward.

 4             So, you know, I think that's -- I'm glad that

 5   you're shaking your head that I understand it correctly.

 6             You know, as I studied that, I said, well, you

 7   know, this incentive is still there; it's just a question of

 8   how much, whether you're incentivizing from the mandatory

 9   forward or whether you're incentivizing from, you know, ten

10   years ago standard.

11             MR. CACKETTE:  Right.

12             MS. EDGERTON:  And I'm comfortable with the

13   staff's recommendation.

14             MR. CACKETTE:  I think that -- just to be clear on

15   it, that is correct, and it was a necessary clarification

16   there.

17             What some people are proposing, if you have an

18   existing dirty 10-gram engine and you buy a standard engine

19   off the shelf to repower, which is a five gram engine,

20   they're arguing you should get five grams worth of credit.

21   And what Ms. Edgerton is saying is -- and what staff is

22   saying is, no, we don't think that's the case.  But you

23   still are incentivized that, if you buy an optional two-gram

24   engine, you would get three grams -- and repower with it,

25   you'd get three grams worth of credit.


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 1             So, there is an incentive to go lower.  It's just

 2   that the incentive would not be as big as going from ten to

 3   five.

 4             CHAIRMAN DUNLAP:  Okay.  I think the dialogue is

 5   important and necessary.  How's our court reporter doing?

 6   You need a moment?  You haven't cried uncle today.

 7             SUPERVISOR RIORDAN:  We're going slow.

 8             CHAIRMAN DUNLAP:  We're going slow.  So, I'd like

 9   to wind up the dialogue.  But if there's something

10   meaningful we need to cover, let's do it.

11             Joe, did you have anything you wanted to --

12             MR. CALHOUN:  Mr. Chairman, with the understanding

13   that the staff will incorporate the sentiments of the Board

14   at some of the subsequent hearings, I'm ready to move the

15   adoption of Resolution 95-44.

16             SUPERVISOR RIORDAN:  I'll second the motion.

17             CHAIRMAN DUNLAP:  We have a motion and a second,

18   but I wasn't on the ball enough to get you ahead of that.

19   We have a few written comments we need to summarize.

20             Can we do that briefly?  I think Mr. Vlasek took

21   care of at least some of CTA's issue, but we need to do it

22   ourselves.

23             Will you cover that quickly, and then we'll

24   discuss it.  Bob or Bill?

25             MR. LOVELACE:  Yes, Mr. Chairman.  Engine


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 1   manufacturers submitted written comments.  All of their

 2   issues we covered today -- the level of the optional

 3   standards, increments, the in-use testing requirements were

 4   already covered.

 5             They also brought up a question about the

 6   conversion factors that are included in the presentation.

 7   We want to provide maximum flexibility to the project

 8   proponents, in that they would supply their own data based

 9   on their own fleets and their own historical experience.

10             EMA proposes a very broad-brush average approach

11   that we don't believe is appropriate.

12             The Gas Company, the Vlasek covered the comments

13   there.  They support the program.  They prefer the "may"

14   rather than "will," also.

15             And Mr. Vlasek also touched on CTA's comments.

16   They support the program.  They had the same concerns about

17   the in-use testing, and then they have some extremely -- how

18   shall I say -- broad comments regarding application of the

19   program's statewide credit banking system that is really

20   beyond the scope of what we're doing today, including cross-

21   pollutant trading and some other things.  So --

22             CHAIRMAN DUNLAP:  Okay.

23             MR. LOVELACE:  So, generally, they support our

24   approach.

25             CHAIRMAN DUNLAP:  Okay.  Yes, Ms. Edgerton.  Thank


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 1   you, Mr. Lovelace.

 2             MS. EDGERTON:  Just a point of information.   Mr.

 3   Calhoun, is your motion with "may"?  Just a point of

 4   clarification.  Have you -- let's just make sure we know

 5   what we're doing in terms of what we're voting for.

 6             Are we voting for the change with the "may"?

 7             CHAIRMAN DUNLAP:  On page A-8.

 8             MS. EDGERTON:  Or as --

 9             CHAIRMAN DUNLAP:  I have it in front of me.  Joe,

10   is your motion --

11             MR. CALHOUN:  Chairman Dunlap summarized what he

12   thought the sentiments of the Board were.

13             CHAIRMAN DUNLAP:  I will do it again if you'd

14   like.

15             MR. CALHOUN:  And that included --

16             CHAIRMAN DUNLAP:  On page A-8, we'll change the

17   guidance document to read rather than it "will" be

18   necessary, it "may" be necessary.

19             We'll direct staff to aggressively undertake

20   this clearinghouse idea, making the information about these

21   testing facilities available for people.  I don't know

22   whether that's a list you do every six months on a mailing

23   list or whatever.  And also, perhaps, to have some training

24   or meetings with the local districts to let them know, you

25   know, how to put this into place, those that have expressed


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 1   an interest and want to do it.  And just provide that high

 2   level of customer and technical assistance that Mr. Boyd has

 3   committed to throughout his career and did a few moments ago

 4   as well.

 5             Does that capture it?

 6             MS. EDGERTON:  Yes, it does.

 7             CHAIRMAN DUNLAP:  Okay.  Supervisor Vagim?  Are

 8   you comfortable with that?

 9             SUPERVISOR VAGIM:  Very much so.

10             CHAIRMAN DUNLAP:  Okay.  With that, if there's no

11   further discussion, I'll ask the Board Secretary to call the

12   question.

13             MS. HUTCHENS:  Boston?

14             DR. BOSTON:  Yes.

15             MS. HUTCHENS:  Calhoun?

16             MR. CALHOUN:  Aye.

17             MS. HUTCHENS:  Edgerton?

18             MS. EDGERTON:  Yes.

19             MS. HUTCHENS:  Hilligoss?

20             MAYOR HILLIGOSS:  Aye.

21             MS. HUTCHENS:  Lagarias?

22             MR. LAGARIAS:  Yes.

23             MS. HUTCHENS:  Parnell?

24             MR. PARNELL:  Yes.

25             MS. HUTCHENS:  Riordan?


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 1             SUPERVISOR RIORDAN:  Aye.

 2             MS. HUTCHENS:  Roberts?

 3             SUPERVISOR ROBERTS:  Aye.

 4             MS. HUTCHENS:  Silva?

 5             SUPERVISOR SILVA:  Aye.

 6             MS. HUTCHENS:  Vagim?

 7             SUPERVISOR VAGIM:  Aye.

 8             MS. HUTCHENS:  Chairman Dunlap.

 9             CHAIRMAN DUNLAP:  Aye.

10             MS. HUTCHENS:  Resolution 95-44 passes 11-0.

11             CHAIRMAN DUNLAP:  Right.  And that was, of course,

12   for the resolution that we have before us.  Thank you.

13             All right.   Our next item is 95-11-2.  We'll

14   cover that.  Does staff need to adjust their positions here?

15             Again, I'd like to remind those in the audience

16   who wish to testify to please check in with the Board

17   Secretary.  If you have written comments, please give her 20

18   copies.

19             The third item is 95-11-2, public hearing to

20   consider amending the test methods designated for

21   determining the benzene, aromatic hydrocarbon, olefin, and

22   sulfur content of Phase 2 gasoline.

23             These test methods are used to determine if

24   California gasoline complies with the requirements specified

25   in our reformulated gasoline regulations.


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 1             When California reformulated gasoline reaches the

 2   pumps next spring, it will be the world's cleanest burning

 3   gasoline and will lead to a dramatic reduction in air

 4   pollution.

 5             The use of California RFG will reduce smog-forming

 6   pollutants by 15 percent and reduce human cancer risk

 7   exposure by 30 to 40 percent.

 8             As with many other aspects of this regulatory

 9   program, the development of improved test methods has been a

10   cooperative effort between industry and the Air Resources

11   Board staff.  I really think an unprecedented spirit of

12   cooperation exists surrounding this program, and that is

13   seen not only by myself, but Board Members Calhoun and

14   Lagarias, who are actually involved with the committees

15   bringing this program forward.

16             At this point, I'd like to ask Mr. Boyd to

17   introduce the item and begin the staff's presentation.

18             But first, Nadine needs a break.

19             (Thereupon, there was a pause in the

20             proceedings to allow the reporter to

21             replenish her stenograph paper.)

22             CHAIRMAN DUNLAP:  Nadine, how are you doing?  You

23   ready?   Okay, Mr. Boyd.

24             MR. BOYD:  Thank you, Mr. Chairman.  Well, as you

25   indicated and the Board knows, the Board approved the


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 1   reformulated gasoline regulations in November of 1991, and,

 2   as indicated, these regulations established a very

 3   comprehensive set of specifications for commercial gasoline

 4   to be sold in California beginning in the spring of 1996.

 5             In addition to those specifications, the Board

 6   also adopted test methods that would be used to measure the

 7   regulated components of this same gasoline.  While the test

 8   methods adopted in 1991 were the best methods available at

 9   the time, it was recognized by the affected industries, and

10   certainly by ourselves, that improvements in the test

11   methods were needed and were likely.

12             Accordingly, the Board, in approving the

13   regulations, specifically directed the staff to work with

14   the industry to identify and improve test procedures.

15             Heeding that directive, we have met regularly with

16   the members of the oil industry, the Western States

17   Petroleum Association, to discuss test methods and

18   developments, and have participated in interlaboratory

19   studies of test method precision carried by the American

20   Society of Testing and Materials.

21             In developing our recommendations, we have relied

22   on in-house evaluations of test methods and on the input

23   provided from instrument manufacturers and, of course, from

24   representatives of the oil companies and oil industry.

25             As a result of this comprehensive process, we have


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 1   identified and we're proposing updated test methods for the

 2   measurement of the benzene, aromatic hydrocarbon, olefin,

 3   and sulfur content of gasoline.

 4             The proposed test methods we believe are more

 5   precise and, in some cases, more accurate than the current

 6   methods designated by the Air Resources Board.

 7             With that brief introduction, I'll now ask Mr.

 8   Paul Rieger of our Monitoring and Laboratory Division to

 9   give you the staff presentation.

10             Mr. Rieger.

11             MR. RIEGER:  Thank you, Mr. Boyd.

12             Good morning, Chairman Dunlap and members of the

13   Board.

14             As was stated earlier, we're here to consider

15   amending the test methods designated for determining the

16   benzene, aromatic hydrocarbon, olefin, and sulfur content of

17   Phase 2, or California reformulated gasoline.

18             California reformulated gasoline regulations

19   specify eight properties of commercial gasoline to be sold

20   beginning March 1, 1996.

21             The specifications for the eight gasoline

22   properties are shown on the screen.  We're proposing test

23   method changes for measuring the specifications highlighted

24   in yellow.

25             The specific test method changes are shown on the


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 1   following screen.  Our proposed test methods were developed

 2   in cooperation with the Western States Petroleum Association

 3   and the American Society of Testing and Materials, or ASTM.

 4             The last two digits of an ASTM test method

 5   represent the last year of approval of the method.  The 9x

 6   designation refers to the most recent draft of a method.

 7             We will discuss our proposed test method changes

 8   in the order that they appear on the screen.

 9             For the measurement of benzene and aromatic

10   hydrocarbons, we're proposing to replace ASTM D3606-87 and

11   MLD 116 with ASTM D5580-9x.  Both currently adopted methods

12   have been shown to have potential interferences when applied

13   to California reformulated gasoline.

14             We're recommending ASTM D5580-9x for two reasons:

15   First of all, D5580 does not have any interferences from

16   oxygenated compounds as is the case with the currently

17   adopted methods and, secondly, D5580 is highly reproducible

18   as will be discussed later.

19             Several alternative methods were evaluated by ARB

20   staff.  The most promising of these were gas chromatography

21   coupled with Fourier transform infrared detection, or

22   GC/FTIR, and gas chromatography coupled with mass selective

23   detection, or GC/MS.

24             Both methods utilize a detector that is selective

25   for aromatic compounds.  Detector selectivity is useful,


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 1   because it reduces the possibility of interference.

 2             ASTM D1319, an old method based on column

 3   chromatography, was also considered.

 4             We did not select these methods for the following

 5   reasons:   For both selective methods, the instrumentation

 6   is relatively expensive, and the instrument calibration is

 7   more complex and time-consuming.

 8             For GC/FTIR, continued vendor support is

 9   uncertain.  And for the GC/MS method, work is being -- the

10   method is being subjected to retesting due to technical

11   deficiencies.

12             ASTM D1319 has several disadvantages.  It is

13   highly nonreproducible.  It is very labor intensive, and it

14   cannot be used for benzene determination.

15             The reproducibilities of the proposed and several

16   alternative methods are shown on the display.

17   Reproducibility is a measure of the variability in results

18   when the identical sample is measured by different

19   laboratories.

20             A lower reproducibility value indicates a lower

21   degree of uncertainty in the result.

22             As can be seen from the table, for the measurement

23   of benzene, ASTM D5580-9x is more reproducible than ASTM

24   D3606, but not as reproducible as GC/MS and GC/FTIR.

25             For the determination of aromatic hydrocarbons,


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 1   ASTM D5580-9x is the most reproducible of all the methods

 2   tested.

 3             In summary, we're proposing the adoption of ASTM

 4   D5580-9x, because it does not have interferences from

 5   oxygenated compounds and is relatively reproducible.

 6   Furthermore, relative to the selective methods, it is more

 7   cost-effective and practical.

 8             Olefin determination:  For the determination of

 9   olefins, we're proposing the adoption of ASTM D13-9x (sic)

10   in place of ASTM D13-89 (sic).

11             Operationally, the proposed method is identical to

12   the adopted method.  However, the proposed method expands

13   the scope to include oxygenated gasolines and includes

14   calculation equations for determining olefins in gasoline

15   when oxygenates are present.

16             ASTM D1319-9x contains updated reproducibility

17   data which is stated as an equation as shown on the screen.

18             Due to the averaging provisions in the RFG

19   regulations, it is highly likely that reformulated gasolines

20   will be produced with olefin content before four volume

21   percent, the lower limit of the reproducibility statement as

22   currently published.

23             In the absence of reproducibility data below the

24   four percent level, staff  is proposing to extend the range

25   of applicability of this equation by extrapolation to 0.3


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 1   volume percent, which is the lower limit of applicability of

 2   the method.

 3             Sulfur determination --  For the determination of

 4   sulfur, we're proposing several changes as follows:  First

 5   of all, replacing the currently adopted method, ASTM

 6   D2622-87 with ASTM D2622-94.

 7             ASTM D2622-94 contains editorial changes which

 8   clarify the method.

 9             Secondly, we propose updating the calibration

10   procedure and reproducibility statement of D2622-94.

11             And, finally, we propose adopting ASTM D5453-93 as

12   an alternate method to ASTM D2622-94.

13             We're proposing to update the calibration

14   procedure because the current procedure is not suitable for

15   California RFG.  Concentration levels of the calibration

16   standard do not extend to the specified levels, and the

17   calibration matrix is very different from gasoline.

18             In addition to revising the calibration procedure,

19   we're also proposing to update the published reproducibility

20   of D2622-94.  The currently published reproducibility

21   statement does not reflect modern instrumentation and is

22   based on an unsuitable calibration procedure.

23             WSPA and ARB staff collaborated on several

24   interlaboratory studies to update the reproducibility data,

25   In the first study, D2622 was retested using modern


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 1   instrumentation but the ASTM calibration procedure.

 2             In the latest interlaboratory study, the updated

 3   calibration procedure was incorporated and parallel tests

 4   were run on a second method, ASTM D5453.

 5             The preliminary results of the study showed an

 6   improvement in reproducibility relative to the values

 7   published by ASTM.  The results from preliminary

 8   calculations are shown on the screen.

 9             The WSPA/ARB study also verified that ASTM

10   D2622-94, even with the calibration modification, becomes

11   highly nonreproducible below 10 parts per million and,

12   therefore, is inadequate when applied to low sulfur

13   averaging gasoline batches.

14             Staff is therefore proposing the adoption of ASTM

15   D5453-93 for the measurement of sulfur below 10 ppm.

16             ASTM D5453 is relatively reproducible in a range

17   of concentrations from to 1 to 8,000 ppm.  In order to

18   provide flexibility to industry laboratories, staff is also

19   proposing that this method be allowed as an alternate method

20   to D2622 for measuring higher concentrations of sulfur.

21             Since we are allowing the use of two methods for

22   the measurement of sulfur, it is important that any bias

23   between the methods be determined.  For this reason, the

24   recent interlaboratory studies included both methods.

25             The results, as shown on this screen, indicate


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 1   that no significant bias exists between the two proposed

 2   methods.

 3             Staff has also reviewed three alternative methods

 4   for measurement of sulfur.  We did not recommend these

 5   methods because all are poorer in reproducibility than the

 6   adopted methods, or the proposed methods.

 7             15-day changes -- Staff has made several changes

 8   to the original proposals based on data recently made

 9   available.  These changes will be included in the 15-day

10   change package and will include the following.

11             For benzene and aromatic hydrocarbon

12   determination, we anticipate a change in the designation of

13   the method from D5580-9x to D5580-95.

14             For the olefin determination, we've extended the

15   limit of applicability of the method from four volume

16   percent to 0.3 volume percent.

17             15-day changes continued -- For the measurement of

18   sulfur, we're proposing to allow ASTM D2622-94, as modified,

19   to be used for measurement of concentrations down to 10

20   parts per million, which is -- which is down from the 30

21   parts per million proposed earlier.

22             We're replacing the reproducibility statement

23   originally proposed with one that is based on the most

24   recent testing.  Preliminary data was presented today.  A

25   final table will be included in the 15-day package.


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 1             Finally, our original proposal for a bias

 2   correction for ASTM D5453 is no longer required.

 3             Because of the averaging provisions in the

 4   regulation, some gasoline batches may have component

 5   concentrations below the scope or useful range of the

 6   method.  Industry has asked staff to clarify how they may

 7   report values below the scope of the method.

 8             Staff has agreed to work with industry to define

 9   these lower limits based on future interlaboratory testing.

10   Until the study is completed, staff is proposing to set the

11   reporting limit at the lower limit of the method's scope.

12             Staff has not identified any air quality or

13   environmental impacts.  The stringency of the regulation is

14   not affected by the proposed changes.

15             The economic impacts of the proposed changes are

16   expected to be minimal.  The instrumentation required to

17   carry out the proposed methods is similar in cost to the

18   instrumentation required to carry out the currently adopted

19   methods.

20             This ends our formal presentation, but we've

21   received industry comments, which we would like to address

22   at this time.

23             In a letter to the Board dated October 23, 1995,

24   Union Oil Company submitted several comments regarding our

25   test method proposals.  I will briefly summarize the


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 1   comments and provide a response.

 2             The first comment:  Unocal suggests that the ARB

 3   provide for a phase-in period of up to two years for new

 4   test methods when there is the need for a large investment

 5   in equipment and personnel training.

 6             Unocal recognizes, however, that the test methods

 7   being proposed at this Board hearing do not entail such an

 8   investment, and is making the suggestion for potential

 9   future test method changes.

10             Our response is that we believe that the WSPA/ARB

11   working group on test methods provides an adequate forum for

12   providing advance notification of test method changes, and

13   we are prepared to work with this forum on considering

14   changes on a case-by-case basis.

15             The second comment:  Unocal requests that the ARB

16   adopt a formal protocol to determine minimum detection or

17   quantitation limits for its test methods.

18             We agree that the quantitation limits for the test

19   methods need to be determined, and we've proposed a protocol

20   for their determination.

21             The lower limit of the method is being proposed as

22   a reporting limit until such time that detection limits are

23   determined.

24             Their third comment:  Unocal feels that it is

25   inappropriate to designate the lower limit of the scope of


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 1   the method as the reporting limit, and requests that values

 2   below the lower limit be permitted for reporting purposes.

 3             We have already taken steps at this rulemaking to

 4   reduce the reporting limit of the designated test methods.

 5   For sulfur measurement, we have adopted an alternate test

 6   method which reduces the reporting limit from 10 ppm to 1

 7   ppm sulfur.

 8             For olefin determination, we extended the

 9   reporting limit from 4 percent to 0.3 volume percent.

10             We're also participating with industry in the

11   testing of an olefin method with lower limits of

12   applicability.  We're prepared to continue to work with

13   industry to find ways of reducing limits of applicability --

14   or detection limits as they are called -- and to develop

15   alternate methods with inherently lower limits of detection.

16             Finally, Unocal -- our fourth response.  Unocal

17   suggests that ASTM D5453 -- the reproducibilities, as stated

18   in the ASTM method be revised based on the recent ARB/WSPA

19   round-robin testing.

20             The purpose of the WSPA/ARB testing was to revise

21   the reproducibility of ASTM D2622-94 in view of the revised

22   calibration procedure.  ASTM D5453 was included in this

23   study only for the purpose of determining the bias between

24   the methods.  Therefore, changing the reproducibility would

25   go beyond the scope of the study.


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 1             The loss in reproducibility shown in the recent

 2   WSPA/ARB study suggests that the quality control procedures

 3   for this test must -- need to be reviewed and, if necessary,

 4   tightened.  Staff is prepared to work with industry on this

 5   problem.

 6             We've also received -- that ends the comments from

 7   Unocal.

 8             We've also received a letter from Valero Refining

 9   and Marketing Company in Houston, Texas, dated October 24,

10   1995.

11             In general, the comments are supportive of our

12   proposals.  There was a comment regarding the benzene

13   determination, our proposal using ASTM D5580.  Valero

14   suggested that there was a bias in the determination of

15   benzene.

16             We are not aware of such a bias.  The current

17   method, D5580 and the ASTM D3606, as well as the two

18   selective methods that we mention in our presentation, were

19   all subjected to parallel testing, and no bias for benzene

20   analysis was determined.

21             There was also a comment from Valero regarding our

22   proposal regarding total aromatics, and I believe there was

23   a misunderstanding of our proposal, and we will be in

24   contact with Valero to clarify that.

25             And that ends the comments and our presentation.


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 1             CHAIRMAN DUNLAP:  Thank you very much.  Appreciate

 2   that overview.

 3             Any questions of staff?

 4             Mr. Calhoun.

 5             MR. CALHOUN:  Yes.  I have one question concerning

 6   one of the viewgraphs that shows the correlation between

 7   D2622 and D5453.  What are the units on the graph?

 8             MR. RIEGER:  Those are parts per million, both

 9   axes.  Parts per million sulfur.

10             MR. CALHOUN:  Okay.  That's fine.

11             CHAIRMAN DUNLAP:  Okay.  Any other questions?

12             Mr. Lagarias.

13             MR. LAGARIAS:  Will you refresh my memory?  As I

14   recall, the ASTM, that's the American Society for Testing

15   and Materials.

16             MR. RIEGER:  That's correct.

17             MR. LAGARIAS:  And that's a nonprofit

18   organization.  And the way they usually run their tests,

19   they use round-robins, they send a reference sample to a

20   number of different laboratories to see how they get their

21   reproducibility, and how they report the results?

22             MR. RIEGER:  That's correct.  They send out a test

23   method -- a proposed test method, very detailed, and with

24   instructions.

25             MR. LAGARIAS:  So, they get input from a number of


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 1   laboratories?

 2             MR. RIEGER:  Right.  They usually have a

 3   requirement of six laboratories at the minimum, and 15

 4   samples.

 5             MR. LAGARIAS:  And it usually takes a number of

 6   years before they ever get around to making a test, and even

 7   longer to revise it.

 8             MR. RIEGER:  That's correct.  And that's why we

 9   went the route of proposing the calibration change ahead of

10   the ASTM.  We expect ASTM will make this change eventually.

11             MR. LAGARIAS:  Well, we strongly endorse the

12   policy of using ASTM methods rather than cobbling up our

13   own.  And I think this is a good way to go.

14             CHAIRMAN DUNLAP:  Yes.  Thank you.  Anything else?

15             Okay.  We have one witness from WSPA, Donald Bea.

16             Is this the only witness, Pat?

17             MS. HUTCHENS:  Yes.

18             CHAIRMAN DUNLAP:  Okay.  Very good.  Good

19   afternoon.  It's one minute past noon, I think.

20             MR. BEA:  It is afternoon.  I was going to say

21   "good morning."

22             I think you may have a copy of my testimony, and a

23   lot of it's been addressed already.  So, I think I'm just

24   going to skip through lots of it --

25             CHAIRMAN DUNLAP:  Okay.


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 1             MR. BEA:  -- and just hit the salient parts.

 2             CHAIRMAN DUNLAP:  Thank you.

 3             MR. BEA:  One thing I would like to comment is

 4   that we've had an excellent working relationship with staff

 5   on this issue, and it's probably the best that we've -- that

 6   I've experienced anyhow, and we've sort of worked out our

 7   issues beforehand rather than after the fact or in meetings

 8   like this.

 9             The one point that I would like to reiterate that

10   we would like to see a little difference on is -- concerns

11   reproducibility of the D5453 for sulfur.  Staff has talked

12   about changing the reproducibility for the X-ray method,

13   which is the 2622, and we feel that there's also a need for

14   changing of the 5453, and this is again based upon the work

15   that was done in the WSPA/ARB recent round-robin.

16             And our justification for that was that this

17   round-robin was a lot more thorough and more representative

18   than similar type round-robins that were done under ASTM.

19             This round-robin consisted of not only research

20   labs, which generally were used in ASTM work, but refinery

21   labs, and commercial labs, as well as CARB's lab.  And this

22   is also one that will -- specifically made fuels that were

23   like CARB Phase 2 gasoline, so they were looking for low

24   sulfurs, both in the finished product and as well as to the

25   blend components.  And so, this is really the only one that


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 1   really addresses these low sulfur levels.

 2             And that was our justification for making this

 3   recommendation.

 4             And what we propose to do is use the WSPA

 5   reproducibility for the interim, but then propose to the

 6   ASTM that they update their precision statement for this

 7   test method, and that'll probably lead to another

 8   round-robin, where it was originated by the ASTM to go

 9   through this whole cycle again.

10             And, as Mr. Lagarias said, that sometimes takes a

11   while.  And so, we're trying to get this into something

12   that's more representative of what we really think is really

13   out -- going to happen out there in the real world.

14             CHAIRMAN DUNLAP:  I think Mr. Lagarias said six

15   years or something.

16             MR. BEA:  Well, that's probably extreme.  But it

17   does -- sometimes it seems like six years.

18             CHAIRMAN DUNLAP:  All right.

19             MR. BEA:  Sometimes it seems like infinite.

20             CHAIRMAN DUNLAP:  Well, I guess I would say, if

21   there's anything we can do to nudge that process along --

22   maybe we're already doing that -- we'd be willing.

23             MR. BEA:  Yeah.  What we'd like, again, is for the

24   interim to use the latest reproducibilities we got out of

25   this recent test, and then go through the process of getting


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 1   that revised officially through the ASTM process.

 2             CHAIRMAN DUNLAP:  Okay.  Let me ask staff, if I

 3   may.  May interrupt you at this point?

 4             MR. BEA:  You may.

 5             CHAIRMAN DUNLAP:  How does staff feel about that?

 6             MR. RIEGER:  Well, this data came in just last

 7   week.

 8             CHAIRMAN DUNLAP:  Okay.

 9             MR. RIEGER:  But also, the scope of this test

10   method did not include this round-robin, did not include

11   revising 5453.  We did not identify any deficiencies with

12   5453 as we did with 2622.

13             CHAIRMAN DUNLAP:  Okay.  All right.

14             MR. BEA:  But we did run it as the -- as it

15   currently is stated, and this is the reproducibility it got,

16   and it was, as I said, a large number of labs of different

17   types, a lot bigger mix than normal.

18             CHAIRMAN DUNLAP:  Okay.

19             MR. BEA:  And so, that's why we feel pretty

20   strongly on that.

21             CHAIRMAN DUNLAP:  So, what would you have us do?

22             MR. BEA:  Well, what I propose is that you adopt

23   for the interim the current reproducibilities that we got

24   from the latest WSPA/CARB round-robin test program, and then

25   officially petition ASTM to update their precision statement


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 1   and go through the official process, and get that adopted.

 2             And when that's adopted, that becomes the official

 3   method.

 4             MR. RIEGER:  Well, I think we'd like to discuss

 5   this maybe with the WSPA working group before we make that

 6   change.  But we can try to make that change in the 15-day

 7   period.

 8             CHAIRMAN DUNLAP:  Okay.

 9             MR. RIEGER:  After we have that discussion.

10             CHAIRMAN DUNLAP:  Mr. Kenny, is that --

11             MR. KENNY:  If I could have one moment?

12             CHAIRMAN DUNLAP:  Sure.

13             MR. KENNY:  That's not a problem.

14             CHAIRMAN DUNLAP:  Okay.  Very good.

15             MR. BEA:  The last thing I'd like to mention is a

16   couple of things that were also mentioned in the staff

17   presentation.  They had to do with the detection limits

18   question, which they talked about working with us to get

19   that resolved.  That's an issue that is becoming more

20   important, now that everybody's  started to look seriously

21   how they're going to make their Phase 2 gasoline.

22             A year ago, that was not something that we really

23   thought much about now when you look -- particularly with a

24   predictive model, some particular parameters, you start to

25   run -- try to run as low as possible.  That's become a


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 1   bigger issue than before, and so we need to probably to get

 2   that resolved.

 3             And we sort of propose to try to get that done by

 4   the end of January.

 5             The other one had to do with the phase-in of new

 6   test methods, and they've also addressed that question.  I

 7   don't think I have anything new.

 8             CHAIRMAN DUNLAP:  So, these other two items, thus

 9   far, staff's worked with you on, and you feel comfortable

10   with where we're at?

11             MR. BEA:  Yeah.  We feel comfortable, and we just

12   need to -- particularly the detection limit, try to get that

13   resolved as quickly as we can, because we'd like to have

14   that done -- known before we start into actual production of

15   Phase 2 gasoline.

16             CHAIRMAN DUNLAP:  Okay.  Understood.

17             Staff, we're going to move that forward?

18             (There were affirmative nods by the staff.)

19             CHAIRMAN DUNLAP:  Okay.

20             Do either of those two areas that he suggested --

21   I'm seeing heads nodding.  We're okay with it.  Processwise,

22   we can do that?

23             MR. RIEGER:  Yes, I believe so.

24             CHAIRMAN DUNLAP:  Okay.  You have enough

25   flexibility to do that.  All right.


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 1             MR. BEA:  The other -- just a couple other minor

 2   things I want to mention is that in our work with CARB,

 3   we've discovered what looks like a small bias on the

 4   aromatics procedure that's caused by heavy paraffin

 5   compounds.

 6             We don't really know what that is, why it's

 7   causing that, or what the correction will be, but we're

 8   going to be continuing to work with staff to try to resolve

 9   that issue.

10             And also, they talked about the new precision

11   statement for olefins at the low levels.  And we accept the

12   position that they're proposing currently, but we want to

13   continue to work with that to see whether or not that's

14   really right or wrong.

15             CHAIRMAN DUNLAP:  And that can be done

16   administratively without any change.

17             MR. BEA:  I don't think that needs to -- at this

18   stage, we don't have anything to propose new, so I don't see

19   anything different on it.

20             And that's all.  The rest of the comments you

21   have, and they're pretty much supportive of what staff has.

22             CHAIRMAN DUNLAP:  Okay.

23             MR. BEA:  You know, I sort of had to guess what

24   was going to happen ahead of time, so. . .

25             CHAIRMAN DUNLAP:  Thank you for your preparation


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 1   and your willingness to work with us on this.  Appreciate it

 2   very much.

 3             Tell your colleagues --

 4             MR. BEA:  (Interjecting)  If there are additional

 5   questions, I'll be willing to answer.

 6             CHAIRMAN DUNLAP:  Please tell your colleagues at

 7   WSPA how seriously we're taking this program, and how

 8   important it is for us to work together with you on this

 9   program.

10             Okay.  Any questions of our witness?  Okay.  Very

11   well.

12             Mr. Boyd, anything else you'd like to add?

13             MR. BOYD:  No, Mr. Chairman.  No further comments

14   form the staff.

15             CHAIRMAN DUNLAP:  Okay.  I remembered the

16   resolution that we have before us this time, 95-45.  I guess

17   I need to close the record.  We've heard the written

18   comments already summarized.

19             The record will be reopened when the 15-day notice

20   of public availability is issued.  Written or oral comments

21   received after this hearing date but before the 15-day

22   notice period is issued will not be accepted as part of the

23   official record of this agenda item.

24             When the record is reopened for a 15-day comment

25   period, the public may submit written comments on the


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 1   proposed changes, which will be considered and responded to

 2   in the final statement of reasons for the regulation.

 3             Just a reminder to the Board concerning ex parte

 4   communications.  While we may communicate off the record

 5   with outside persons regarding Board rulemaking, we must

 6   disclose the names of our contacts and the nature of the

 7   contents on the record.  This requirement applies

 8   specifically to communications which take place after the

 9   notice of a Board hearing has been published.

10             Are there any communications which need to be

11   disclosed at this point?

12             MAYOR HILLIGOSS:  I attended the Chevron tour a

13   week ago Friday.

14             CHAIRMAN DUNLAP:  Okay.

15             MAYOR HILLIGOSS:  And they did mention RFG, but

16   not any of the testing or anything.

17             CHAIRMAN DUNLAP:  Okay.  Very good.

18             Anything else?  All right.  We have the resolution

19   before us.  It seem we've been able to work out some of the

20   issues.  Staff has done, it seems, a fine job working with

21   the industry group on this.

22             Any concerns?  If we don't have any, I would

23   certainly entertain a motion.

24             MR. LAGARIAS:  I move adoption of Resolution

25   95-45.


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 1             SUPERVISOR ROBERTS:  Second.

 2             CHAIRMAN DUNLAP:  Was there a second?  Mr. Vagim,

 3   I think I heard --

 4             SUPERVISOR VAGIM:  No, it was Mr. Roberts.

 5             CHAIRMAN DUNLAP:  Supervisor Roberts.  Thank you.

 6             Any other comments or issues need to be discussed

 7   surrounding this resolution?

 8             All right.  Will the Board Secretary please call

 9   the roll for a vote on Resolution 95-45.

10             MS. HUTCHENS:  Boston?

11             DR. BOSTON:  Yes.

12             MS. HUTCHENS:  Calhoun?

13             MR. CALHOUN:  Aye.

14             MS. HUTCHENS:  Edgerton?

15             MS. EDGERTON:  Yes.

16             MS. HUTCHENS:  Hilligoss?

17             MAYOR HILLIGOSS:  Aye.

18             MS. HUTCHENS:  Lagarias?

19             MR. LAGARIAS:  Yes.

20             MS. HUTCHENS:  Parnell?

21             MR. PARNELL:  Aye.

22             MS. HUTCHENS:  Riordan?

23             SUPERVISOR RIORDAN:  Aye.

24             MS. HUTCHENS:  Roberts?

25             SUPERVISOR ROBERTS:  Yes.


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 1             MS. HUTCHENS:  Silva?

 2             SUPERVISOR SILVA:  Aye.

 3             MS. HUTCHENS:  Vagim?

 4             SUPERVISOR VAGIM:  Aye.

 5             MS. HUTCHENS:  Chairman Dunlap.

 6             CHAIRMAN DUNLAP:  Aye.

 7             MS. HUTCHENS:  Resolution passes 11-0.

 8             CHAIRMAN DUNLAP:  Okay.

 9             At this juncture, I would like to propose that we

10   take a break for about an hour, an hour and 15 minutes, come

11   back about 1:30.

12             Board members, there's some food awaiting us in

13   our upstairs conference room, which I'll tell you about in a

14   moment.  And for the audience, you won't see us again till

15   about 1:30.

16             So, we'll take the break.  Thank you.

17             (Thereupon, the luncheon recess was taken.)

18

19

20

21

22

23

24

25


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 1                         AFTERNOON SESSION

 2

 3                              --o0o--

 4             CHAIRMAN DUNLAP:  We'll reconvene.  While we're

 5   taking our seats, I'd like to make a standard announcement.

 6   Those of you that wish to testify on this item, please check

 7   in with the Board Secretary to our left.  Those of you that

 8   wish to provide us with written comments, we remind you to

 9   please provide us with 20 copies, and also check in with the

10   Board Secretary.

11             The next item on today's agenda is 95-11-3, a

12   public meeting to update the Board on the technological

13   progress of zero-emission vehicles.

14             As you know, staff at my direction has held a

15   series of forums to gather information on the zero-emission

16   vehicle development process and issues surrounding it.

17             These forums have been well attended, including

18   attendance by the Board members.  We've had three or four

19   Board members at each of the seven or so forums we've had to

20   date.

21             I thought it timely to ask staff to brief the full

22   Board on key issues raised at the forums, and to give us a

23   sense of what was said and positions brought forward.

24             Some of you may be wondering about the final forum

25   on costs and benefits that is scheduled for November 8th.


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 1   The staff will summarize comments from this forum at our

 2   November 16th Board meeting.   So, this Board will hear

 3   about what went on from the staff in total on all of these

 4   forums.

 5             At this point, I'd like to introduce Mr. Boyd and

 6   ask him to kick off this presentation.  And it's my

 7   understanding that it'll take about an hour or so for the

 8   two portions of the presentation.

 9             Mr. Boyd.

10             MR. BOYD:  Thank you, Mr. Chairman.  I'll try to

11   be brief, because Bob Cross, who has moderated these forums,

12   will be giving the summary of the forums to date for you.

13   But I'd like to build on your comments on the attendance and

14   participation at these forums, which basically have been

15   taking place on a monthly basis since the month of May.

16             I know I speak for the staff.  We've been pleased

17   to see such a high level of active participation among so

18   many interested parties concerning the California zero-

19   emission vehicle program.  We, of course, have heard from

20   many representatives of the auto industries, the battery

21   industry, the California auto dealers, the electric

22   utilities, various California business partnerships, small

23   business entities, environmental groups, representatives

24   from our universities, industry associations, various

25   government agencies, and hosts of private citizens.


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 1             Participation at these forums, in essence,

 2   captures the essence of our public rulemaking process and

 3   what it's all about.  This organization has not and does not

 4   promulgate air quality regulations control strategies in a

 5   vacuum and without total knowledge of the technical

 6   capabilities of the world's industries to meet our needs.

 7             Soliciting input from these many outside groups

 8   helps ensure that we do not overlook any important concerns,

 9   and that we ultimately end up with workable programs.  With

10   that, I'd like to, as I say, introduce Bob Cross, who has

11   moderated each of the forums and done, from my perspective,

12   an outstanding job and probably deserves a Purple Heart by

13   now for it.  He's going to summarize the comments that have

14   been received at the forums.

15             And then, following his presentation, at the

16   Chairman's request, Dr. Kalhammer, who is a member of the

17   Battery Technical Advisory Panel, will be addressing the

18   Board with the findings of the Battery Panel this date.

19             With that, I'll call upon Mr. Cross to begin the

20   presentation.

21             MR. CROSS:  Good afternoon, all.  It's a pleasure

22   and an honor to be before this group this afternoon.  I'm

23   standing at the podium here so my staff can see when I

24   change overheads, so this will come off as more or less

25   coordinated.


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 1             Essentially, what I'm going to do with my

 2   presentation is give a very quick one-slide background ZEV

 3   requirements, then I'll jump right to the forums.  I'll try

 4   and compress six long days of testimony into a few major

 5   points.

 6             As I told everyone when I gave many of these

 7   comments a couple days ago, because of the volume of

 8   testimony, what I've tried to do is capture themes as

 9   opposed to represent every detail that came out in the

10   workshops.

11             Following that, I'm going to talk about some of

12   the more obvious but I think important conclusions that came

13   out of the workshops.  And, then, as Mr. Boyd mentioned,

14   I'll turn the microphone over to Fritz Kalhammer, who will

15   talk about the Battery Panel's findings.

16             ZEV requirements were adopted in 1990 as part of

17   the low-emission vehicle regulations.  They require the

18   seven largest volume manufacturers to introduce EVs in the

19   percentages shown up there.  The manufacturers are Honda,

20   Nissan, Toyota, Mazda, Chrysler, Ford, and GM.

21             The requirement to introduce and sell at the

22   volumes shown up there and the years shown up there are

23   enforceable under the Health & Safety Code, Section 43211,

24   which has a $5,000 fine associated -- per vehicle associated

25   with noncompliance.


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 1             I might add that the '98 through 2000 requirement

 2   of 2 percent would end up with about 60,000 vehicles total

 3   being sold in the State; and by 2010, implementing the

 4   requirements as shown up there, we'd end up with a fleet of

 5   about 1.1 million electric vehicles in California.

 6             Jumping right into the forums this shows the

 7   schedule of the forums.  I'm going to change the order a

 8   little bit and talk about the hybrid vehicles shown for May

 9   9th, a little bit later in the forum, because there were

10   actually two forums on hybrids, and I want to combine them.

11             The forums were well-attended as Mr. Boyd noted.

12   And I think that's a sign of the level of interest in this

13   program.

14             The last forum is the November 8th forum, which

15   will be in a couple of weeks.

16             Major stakeholders represented at the forums can

17   kind of be grouped.  Obviously, we have folks who are

18   concerned about public and environment.  We have the next

19   four -- manufacturers, dealers, battery manufacturers, and

20   start-up businesses, all who are potential electric vehicle

21   suppliers.  Utilities and the oil industry are the energy

22   suppliers which stand to gain and lose business through the

23   implementation of electric vehicles.

24             And then, obviously, consumers are concerned about

25   the impact of all of this on them.  And so, you have folks


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 1   who were interested because they're potential purchasers,

 2   and then also people who are concerned about their utility

 3   bills and things like, for example.

 4             The first forum, marketability:  In each of these

 5   forums, I'm going to introduce them with a slide like this,

 6   which essentially conveys the theme.  And for the

 7   marketability theme, the  -- I think the real question that

 8   needed to be answered and needs to be answered is whether or

 9   not there will be sufficient demand for 1998 ZEVs to support

10   the level of two percent of product; in other words, 20,000

11   vehicles in that first year.

12             Most affected stakeholders is fairly obvious.  All

13   of the suppliers of technology and then also the folks who

14   might end up seeing these vehicles on the showroom floors

15             As I said before, the two percent requirement is

16   equal to about 20,000 vehicles per year, and estimated sales

17   that we got at the workshop ranged from 3500 to 98,000 in

18   '98.

19             In the following two slides, I'm going to talk a

20   little bit more about each of those.

21             On the low end of the estimates are automobile

22   manufacturer surveys.  Obviously, the auto manufacturers,

23   being interested in selling electric vehicles, have done

24   extensive market research on this through focus groups and

25   other studies.


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 1             Toyota, at the workshop, estimated EV sales in '98

 2   at 5800.  GM estimated '98 sales at 3500, but then also

 3   noted that the sales could rise to 10,000 if additional

 4   incentives and infrastructure were available.

 5             So, we have the car manufacturers coming in below

 6   the 20,000 per year that we were talking about a moment ago.

 7             Contrasted to that, the University of California

 8   at Davis did a study for the Air Resources Board, where they

 9   surveyed California households and essentially came up with

10   the concept that the household of now and the future is one

11   which has different vehicles for different purposes.  In

12   other words, people typically have a vehicle that they use

13   for kind of hopping around town and another one that they

14   use for long trips.

15             And because of that, the survey found that many of

16   these multiple vehicle households would, in fact, be

17   interested in owning an electric vehicle for the shorter

18   range trips that they do all the time.

19             Davis estimated the market at between 7 and 15

20   percent, and that is based on assuming equivalent prices to

21   internal combustion engine vehicles.  Ranges between 60 and

22   150 miles were examined.

23             Okay.  Now, we're back to the major issues, and

24   we've talked about whether or not the 20,000 would be

25   possible in the demand estimate.  There was a large group of


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 1   consumers at the forum that were very excited about EVs.

 2   These were folks who had had an opportunity to preview the

 3   GM Impact, folks that had experience with Ecostars, people

 4   who had converted their own vehicles.  And all of these

 5   people have very, very positive things to say about their

 6   readiness, if you will, to purchase EVs when they are

 7   available on the market.

 8             Contrasted to that, there were comments by

 9   manufacturers and dealers noting that consumers would be

10   doing comparisons between electric vehicles and other kinds

11   of vehicles that folks could purchase.  And clearly, range

12   and purchase price are major factors in that kind of

13   decision.

14             Moreover, I think the staff came away from this

15   discussion concerned that it's important that the first

16   vehicles that are put out by the big manufacturers be good

17   ones.  In other words, you don't want to have a situation

18   where you introduce vehicles onto the market which don't do

19   what they're purported to do and, therefore, turn off the

20   consumer market.

21             And the example that I use for this is the Olds

22   diesel that was introduced a few years ago, which created a

23   great deal of excitement on the market and then had horrible

24   reliability problems and, really, in my view, almost

25   poisoned the market for diesel passenger cars in America.


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 1             And I don't think we want to see that repeated

 2   with electric vehicles.

 3             Okay.  We're to the next forum.  The theme is

 4   clearly, will the necessary infrastructure be in place in

 5   1998?  Most affected stakeholders would be the electric

 6   utilities, who are infrastructure providers; manufacturers

 7   and dealers, who are concerned about marketing their

 8   vehicles in the back light of how much infrastructure is out

 9   there; and then, consumers and fleets, who would be making

10   purchase decisions based on the availability of

11   infrastructure.

12             Major issues:  Clearly, home charger installations

13   must be timely.  I think the dealers made the point that to

14   be able to sell a vehicle, you need to be able to tell the

15   purchaser that they can have a charger installed efficiently

16   and quickly in their home.

17             Public charging is needed in the early market.  As

18   people become accustomed to these vehicles, they're going to

19   be a little nervous about how far they can go on a charge

20   when they first start out with them.  I think they learn

21   fairly quickly just based on experience.  But to get over

22   that barrier, it's important that they have some confidence

23   that, should they get stuck someplace, that charging is

24   available.

25             And there are already something like 400 public


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 1   charging outlets out there.  But I think this needs to be

 2   addressed further.

 3             EV fuel costs about half of what gasoline does for

 4   a comparable vehicle based on some calculations that we

 5   made.  And the assumptions behind that are comparable

 6   vehicle efficiencies.  We used sort of a Ford Escort type

 7   vehicle, which corresponds with the Ford Ecostar electric

 8   vehicle, for our estimates.

 9             And we assumed off-peak charging rate that's been

10   proposed by the utilities, which is about a nickel a

11   kilowatt hour.  The on-peak rate currently being charged in

12   Southern California is 13 or 14 cents a kilowatt hour.  The

13   break-even point between gas and electricity is about a

14   dime.

15             So, at the proposed rate, fuel cost is half as

16   much; at the current rate you pay for on-peak, it's about 30

17   percent more than it would be for gasoline.

18             It's important to train emergency response

19   personnel.  And this is occurring.  I think there'll be some

20   additional discussion about that later on, but we've already

21   had a number of meetings with emergency response folks.

22   There's training going on up here, which staff will probably

23   be able to talk about later.

24             There's a video.  We're coordinating with the

25   State Fire Marshal.  I think this is a controllable issue,


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 1   but it's clearly also an important one.

 2             Also, another theme that came out of that workshop

 3   was that there are -- there are a lot of different ways to

 4   introduce electric vehicles into the marketplace, and one or

 5   two witnesses suggested that, if you control the

 6   introduction -- in other words, put the vehicles in fleets

 7   or put them in specific locations; in other words, cities,

 8   or something like that -- where there's a concentration of

 9   infrastructure and knowledge about the vehicles, it may be

10   easier for folks to have a positive experience with the

11   vehicle rather than having them all scattered out all over

12   the place.

13             So, it's just an idea, but I think it was an

14   interesting idea that was floated at the workshop.

15             One other theme that was discussed very briefly at

16   the infrastructure forum was a Carnegie-Mellon study done on

17   the environmental impacts of lead-acid batteries.  And

18   essentially, it was a very one-sided discussion.  CMU did

19   not attend the workshop, and the -- essentially, the sense

20   of the testimony was that CMU had grossly overestimated the

21   environmental hazards associated with lead-acid batteries,

22   because they had treated all lead emissions -- whether they

23   be solid or air -- as air.

24             And it turns out that most of the emissions of

25   lead associated by various processes are solid; they're


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 1   slag, which doesn't ever end up in the air.

 2             There were several subsequent exchanges of written

 3   comments between CMU and ARB staff.  I don't think that

 4   we'll ever fully agree with CMU.  They haven't entirely

 5   moved off their position, and we're confident we're right.

 6   So, I don't think that the debate is going anywhere.

 7             Okay.  The next workshop, the theme is one of

 8   whether or not the ZEV standards, as they currently are

 9   configured, are too narrow in defining a ZEV.  And what we

10   really mean by that is basically ZEVs do have power plant

11   emissions.  And then the question that comes to mind is,

12   well, shouldn't other vehicles which also have power plant

13   emissions qualify under a ZEV program?

14             Most affected stakeholders are lead-acid battery

15   manufacturers and hybrid vehicle technology developers and

16   auto manufacturers.  The first two see a potential market

17   for short-range vehicles, hybrid vehicles, which should be

18   also very low emissions, and basically wanted to become

19   players in the ZEV program.

20             The auto manufacturers were involved more to see

21   whether or not this was a short-term option for them instead

22   of complying with sort of the electric vehicle spirit of the

23   mandate.  And we can talk a little bit more about that in a

24   moment.

25             Concepts presented at the forum were full ZEV


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 1   credit to vehicles meeting power plant emission levels and

 2   partial ZEV credit for hybrids with significant all-electric

 3   range.

 4             These proposals, particularly the first one, are

 5   technology neutral and resolve that question about vehicles

 6   with power plant emissions also qualifying.  It provides

 7   long-term flexibility for industry.

 8             Neither concept, though, provides alternatives for

 9   the auto industry in the near term.  And it's mostly because

10   there would not be sufficient leadtime to develop some other

11   technology that emits at power plant levels in time for

12   1998.

13             The auto industry also was concerned that the

14   hybrid proposal could cause confusion, which would shift

15   resources from electric vehicle programs to other programs.

16   And I think that was clarified in the discussion at the

17   workshops.  So, I think they understand now that the

18   proposal was never intended to be a near-term proposal, but

19   more of a fix to the program so that it was technologically

20   fair.

21             And then last, there was concern about the

22   certainty of emission benefits of these vehicles which would

23   come in at power plant emissions, because those vehicles

24   would have engines on them, which would have emission

25   control systems, which have in-use emissions deterioration


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 1   problems, which is analogous to our regular cars.

 2             Fleet forum:  The theme is clearly fleets as early

 3   adopters of electric vehicles.  The most affected

 4   stakeholders are obviously fleet operators and the folks who

 5   would supply vehicles, and energy, and subsidies to them as

 6   shown here.

 7             Major issues:  Lead-acid vehicles were found to

 8   perform well in short range and stop-and-go applications;

 9   for example, post office applications is one that comes to

10   mind, local delivery, local sales routes, repetitive routes,

11   any short-range stop-and-go route where a fleet vehicle is

12   used for sort of 30, 40, 50 miles per day, and it's

13   predictable.

14             Higher range requirements for some fleets may

15   limit the potential market.  An example of that, one obvious

16   example, would be taxis, some rental cars, depending on the

17   purpose that the renter is intending to put the car to, and

18   longer delivery routes.

19             Fleet managers are cost conscious.  They're

20   concerned about the cost that they pay for the vehicle, its

21   resale.  Subsidies, we think, will be required to place

22   early electric vehicles in fleets.  They're also concerned

23   about operating costs, obviously.  In other words, fleet

24   managers compare their total costs with different vehicle

25   options.  So, they would be comparing electric vehicle


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 1   lifetime for them costs to any other vehicle options that

 2   they're looking at.

 3             Technology forum:  When will advanced vehicles and

 4   batteries be market ready?  I think the major focus on this

 5   was between '98 and 2002, which is kind of where our crystal

 6   ball is the clearest, although it's not super clear.

 7             Most affected stakeholders are battery

 8   manufacturers, auto manufacturers, and small start-up

 9   businesses.  And on the start-up business one, I might add

10   there's been a whole lot of entrepreneurial activity that's

11   gone on around electric vehicles, with folks starting up

12   small companies to provide components and, in fact,

13   conversion vehicles and even complete vehicles.

14             I think a lot of these businesses are depending on

15   staying the course for their marketing plans to work out.

16   At the technology forum, the Battery Panel presented its

17   preliminary results, and that will follow my presentation.

18             It was clear at the workshop that the ZEV

19   requirement has substantially accelerated investment and

20   progress in EV development.

21             Small businesses are offering conversion EVs with

22   lead-acid batteries right now.  And OEM lead-acid vehicles

23   should be available in 1998.  Non-OEM purpose-built vehicles

24   will also be -- can also be available in 1998.  In other

25   words, they're on the drawing Boards or in the test phases


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 1   now.  And we had one on display built by Solectria at the

 2   technology workshop.

 3             Also advanced batteries are on the immediate

 4   horizon.  And that was a conclusion that was reached, not

 5   only by the battery panel, but by the U.S. ABC, and a number

 6   of battery companies which spoke at the workshop.

 7             So, I would say that that is a consensus.  And

 8   immediate horizon means production quantities by 2001.

 9             Key steps to getting there are pilot scale

10   production of advanced batteries and fleet testing.  And by

11   pilot production, I mean producing hundreds of batteries,

12   several hundred batteries per battery company per year at an

13   assembly cost of about a thousand dollars per kilowatt hour,

14   which means one battery pack costs maybe 15 to $30,000,

15   depending on its energy capacity.

16             And the reason they need to go through this step

17   is to be able to pilot some of the critical steps that

18   they're going to be using to mass produce the batteries.

19   But the batteries still have a lot of handwork in assembling

20   them, which is why they're so expensive.

21             When I say hundreds of batteries per manufacturer,

22   if you run that out -- if you assume that five manufacturers

23   jump into it in '98, with pilot production plans, that would

24   mean, if they did -- each did a couple of hundred, that

25   would mean you'd get about a thousand batteries per year for


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 1   three years between '98 and 2000 essentially.

 2             So, overall, we're talking about several thousand

 3   batteries during the '98 to 2,000 timeframe being piloted in

 4   various places.

 5             Vehicle and battery safety must also be addressed

 6   during this piloting phase also.  I think it needs to be

 7   addressed ahead of that in terms of the design steps.  But,

 8   obviously, you have some time while you're piloting this

 9   stuff to do additional work.

10             This is the workshop which will be -- forum which

11   will be coming up in November.  And its theme is the

12   benefits and costs of ZEVs.  Most affected stakeholders I

13   project, since we haven't seen who's going to testify yet,

14   are obviously public health representatives,

15   environmentalists, consumers who are concerned about the

16   cost of purchasing vehicles, ratepayers as consumers, also,

17   who are concerned about how much it's going to cost for

18   electricity, and then, obviously, vehicle suppliers --

19   automobile manufacturers, and dealers.   And, as I said,

20   that's coming up on November 8th.

21             We're now at the sort of final of the three parts

22   of the discussion.  These are some very general things that

23   the staff has drawn from these forums.  First of all, we

24   think lead-acid batteries are the primary high-volume option

25   for 1998 electric vehicles.


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 1             And demand is uncertain, because, based on what we

 2   talked about having to do with marketability, and then

 3   infrastructure needs to be in place in order for the market

 4   to properly accept these vehicles.

 5             Some advance batteries will be available in 1998,

 6   as we've discussed; in other words, in order to get these

 7   pilot programs going, there has to be some advanced

 8   batteries out there.

 9             And, also, advanced lead-acid will be available,

10   although that's still lead-acid, and possibly some nickel-

11   cadmium batteries, which are already available on the

12   market.

13             And I think Ovonic in its presentation indicated

14   that it wanted to get quite a few batteries onto the market

15   in '98.

16             Advanced batteries in high production volumes with

17   enhanced range and lifetime are expected by 2001.  Realizing

18   that promise requires that the demonstration programs

19   between '98 and 2000 that I mentioned ago -- at the level of

20   a couple of thousand batteries over that period (sic).

21             And then, I think the last conclusion is that the

22   ZEV requirement could be more responsive to these issues.

23   And I think that the forums have unearthed a lot of issues,

24   as we've discussed here, which could be responded to with

25   improvements to the ZEV requirement as its currently framed.


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 1             That concludes my remarks, and I guess I can

 2   answer questions, and then I'll turn it over to Dr.

 3   Kalhammer.

 4             CHAIRMAN DUNLAP:  Mr. Parnell.

 5             MR. PARNELL:  Thank you.  You talked about

 6   infrastructure.  Since the developing technology is more or

 7   less known, but more or less unknown in terms of the

 8   spectrum of batteries that we think will be out there, is

 9   the infrastructure need for all of those batteries the same,

10   or will it be different, depending upon which battery

11   emerges as the battery of choice?

12             MR. CROSS:  For charging, I think the

13   infrastructure needed is pretty much the same.  In other

14   words, we already have 220 in our house, and I think

15   everybody's sort of headed for using a 30 or 40 amp service

16   to do it.

17             So, that's taken care of.

18             And I think that -- and they're standardized

19   connectors and things that are already in the works.  And in

20   many vehicles, the charger is onboard the vehicle, so the

21   intelligence which converts the 220 to what the vehicle

22   needs is already on the car.

23             I think in other areas, such as service,

24   maintenance, safety, and things like that, which we may talk

25   about later on, each of these batteries has its own sort of


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 1   unique set of issues associated with it, but none of them

 2   are, in my view, particularly problematic.

 3             It' just a matter of sort of getting the word out

 4   to everybody.

 5             MR. PARNELL:  Thanks.

 6             MR. CROSS:  Uh-huh.

 7             CHAIRMAN DUNLAP:  Supervisor Vagim.

 8             SUPERVISOR VAGIM:  Thank you, Mr. Chairman.

 9             Bob, I just wanted to get a couple of points

10   straight first.  You mentioned that two percent would be

11   60,000 vehicles approximately; is that correct?

12             MR. CROSS:  Over the three years.

13             SUPERVISOR VAGIM:  Over three years.  Okay.  And

14   the 10 percent -- by the time it hits the 10 percent, there

15   should be 1.1 million vehicles?

16             MR. CROSS:  By 2010.  So, that's all of the entire

17    requirement cumulatively run out till 2010.

18             SUPERVISOR VAGIM:  Okay.  And then in the

19   information overview, it said 20,000 vehicles per year.

20   That's cumulative of all --

21             MR. CROSS:  (Interjecting)  The 20,000 per year is

22   equivalent to two percent of sales.

23             SUPERVISOR VAGIM:  Of all --

24             MR. CROSS:  Yeah, in other words, they sell a

25   million vehicles per year and, so, two percent per year is


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 1   20,000.

 2             SUPERVISOR VAGIM:  That's all the ones who qualify

 3   over the threshold.  All right.

 4             The area of cost, you mentioned that the break-

 5   even point between gasoline and a ZEV would be about 10

 6   percent -- 10 cents a kilowatt hour; is that correct?

 7             MR. CROSS:  Right.

 8             SUPERVISOR VAGIM:  And the off-peak hours, which

 9   is anticipated where most of this will be happening, is five

10   cents per kilowatt hour?

11             MR. CROSS:  A little less, I think.

12             SUPERVISOR VAGIM:  Does that five cents include

13   the sales tax, the gasoline tax, all the other taxes on a

14   gallon of gasoline?

15             MR. CROSS:  The way I did the calculation was to

16   reduce the price of gasoline to a dollar, which is -- I

17   think they're about 35 cents of road taxes and other taxes

18   other than sales tax on gasoline.  So, typically, you pay a

19   dollar, you know.  For mid-grade, you pay about a $1.30,

20   $1.35 a gallon for gas.

21             So, I subtracted them from the gasoline price.

22   For the electricity price, I believe a nickel includes some

23   of the electricity taxes, but I wasn't sure what they were.

24   So, if anything, I pulled gasoline down a little bit and

25   wasn't sure what to do with electricity.


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 1             SUPERVISOR VAGIM:  But you excluded sales tax in

 2   both cases.

 3             MR. CROSS:  Yes.

 4             SUPERVISOR VAGIM:  Okay.

 5             MR. CROSS:  I excluded road taxes.

 6             SUPERVISOR VAGIM:  You excluded road taxes in both

 7   cases.

 8             Isn't there a Federal and a State side of the road

 9   tax; in other words, for example, the State has its vehicle

10   in lieu of charge, and that type of stuff, which is embedded

11   in some of the gasoline charges in addition Federal excise

12   tax.  All of that is embedded  in their use -- that's only

13   35 cents?

14             MR. CROSS:  That's what I've been informed, yes.

15   But even if I was wrong, say I was a nickel or a dime

16   wrong on the price there, I think it's still within

17   reasonable bounds to say it's about half.

18             In other words, if you go to your Unocal station

19   that charges, you know, a buck and a half a gallon for

20   premium, you're still okay.   If you go to your Arco and

21   spend a dollar-twenty or something for their lowest grade,

22   then obviously you pull it down.  I think you just have to

23   calibrate it based on what you typically pay for gas.  And

24   about 35 cents of that is the various road taxes.

25             SUPERVISOR VAGIM:  Okay.  So, on that scenario, if


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 1   you're not paying $1.35, but you're paying $1.10, what

 2   happens?

 3             MR. CROSS:  Well, that would reduce it from a

 4   dollar -- from my assumption of a dollar to 90 cents.  So,

 5   that would make it ten percent off of a half.  In other

 6   words, if it were five percent off of a half, it would make

 7   45 percent.

 8             SUPERVISOR VAGIM:  So, the cheaper the gasoline

 9   runs, the more you're --

10             MR. CROSS:  Sure.

11             SUPERVISOR VAGIM:  -- you get close to that

12   threshold, huh?

13             MR. CROSS:  Sure.  And the same for electricity,

14   too.

15             SUPERVISOR VAGIM:  Okay.  The question then

16   becomes, in the transfer, how much will be transferred?

17   Obviously something has to be transferred to electricity,

18   because we've got to keep paving our roads.

19             MR. CROSS:  Right.

20             SUPERVISOR VAGIM:  And that's back to the

21   infrastructure question, and all the other things that go

22   along with it.

23             How much of that is being discussed?  Who is going

24   to pony up to the bar at the Legislature and say, "We're

25   going to do that transfer"?


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 1             And who and what is it going to include?  Is it

 2   going to include a differential rate only when you're

 3   charging, or is it going to include when we're reading

 4   books?

 5             MR. CROSS:  Oh, the charge.  In order to get the

 6   off-peak rate, they put a separate meter on the house.

 7             SUPERVISOR VAGIM:  So, how do we guarantee that

 8   someone's not going to pirate around that meter?

 9             MR. CROSS:  That's always possible.  It's possible

10   to pirate around the meter on your house now if you want to.

11   But I think --

12             SUPERVISOR VAGIM:  Except PG&E knows I'm doing

13   that, because they know the whole flow that's around it.

14   But they don't know the flow that I could be just turning on

15   a 300 watt bulb or a 3,000 watt bulb.

16             MR. CROSS:  I think that the utility -- first of

17   all, the utility is the one which would typically be doing

18   the installation for most consumers.

19             In other words, if a utility comes in and they put

20   the extra meter in and wire the stuff.  So, I think the

21   temptation to pirate would be reduced somewhat by the

22   utility's having control of how this is done.

23             I think, also, that if there was a substantial

24   mount of pirating, it would show up on the kilowatt hours

25   that are used.  I mean, you basically can kind of estimate


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 1   how much an electric vehicle could, as a practical matter,

 2   use during the day and recharge.

 3             And if you're using substantially more than that,

 4   then somebody's running a welder, or an air conditioner, or

 5   something like that with that meter on.  I think they could

 6   come back and get it, get the consumer.

 7             So, if it's a little -- you know, if they're

 8   running a light with it, I don't think that it's a problem.

 9   But if they're pirating a significant amount of electricity,

10   the utility can --

11             SUPERVISOR VAGIM:  Well, that's -- I guess that's

12   if you tell them you have a ZEV.  And if you don't tell them

13   you have a ZEV, and the bill goes up on your utility bill, I

14   haven't heard utility companies bellyache about that at all.

15             MR. CROSS:  Oh, no.  The only way you can get the

16   rate brought down from 14 cents to a nickel per kilowatt is

17   to call the utility, say you have a ZEV, get the special

18   meter installed, and then use that to charge your ZEV.

19             So, you don't get the rate otherwise.  And so, the

20   issue is one of --

21             SUPERVISOR VAGIM:  So, you're talking about

22   transferring the off-peak hour energy adjustment of the

23   commercial folks can get in a special circumstance, where

24   they can apply for the off-peak hourly rate.

25             MR. CROSS:  With the time-of-day rate essentially.


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 1             SUPERVISOR VAGIM:  Okay.  All right.  Thank you.

 2             MR. CROSS:  Uh-huh.

 3             CHAIRMAN DUNLAP:  I have to rib the Supervisor for

 4   a minute.  I know why they're asking so many questions about

 5   the fuel tax, because you're not paying it because you're

 6   getting that demonstration fuel in your car, aren't you?

 7             SUPERVISOR VAGIM:  Well, wait till I demonstrate a

 8   ZEV.

 9             (Laughter.)

10             CHAIRMAN DUNLAP:  All right.  Any other questions

11   of Bob before we hear from Dr. Kalhammer?

12             All right.  Bob, we reserve the right to bring you

13   back.  So, don't go far.

14             All right.  Dr. Kalhammer and Dr. Moyer, good to

15   see you.

16             DR. KALHAMMER:  Good afternoon, Mr. Chairman,

17   members of the Board.  I'd be very happy to give you a

18   progress report on a rather intensive study that our panel

19   conducted, at the behest of the Air Resources Board, with

20   the project management from Mr. Cross.

21             I stress that this is a progress report.  We

22   covered a lot of ground both physically and technically, and

23   we are still refining some of our information.

24             But I don't think that this impacts the major

25   conclusions that we have come up with, and I'd like to


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 1   summarize for you briefly how we approached our job, what we

 2   investigated, our major results -- technical results, and

 3   then the conclusions that we think we can draw from this.

 4             I want to briefly acknowledge my co-panelists.

 5   You see them here on the slide.  Dr. Moyer is right here.

 6   He's been co-chairing this effort with me.  The other two

 7   are battery experts who are right now in their home bases,

 8   one in Japan and one on the East coast.

 9             Here you can see the presentation outline of what

10   we have done.  I'll briefly talk about our approach here,

11   then tell you some of the key findings on the battery

12   performance, which was one of the questions posed to us:

13   What is the performance likely to be of these advanced

14   batteries?  Is this adequate for electric vehicle

15   propulsion?

16             And then, I will talk a little bit about the

17   answer to the other question:  Are these batteries going to

18   be available, which depends in large measure on the

19   development and commercialization schedules, which we also

20   studied.

21             And then I will have some final remarks.

22             On the outline, following with the charter that we

23   were given -- and these are a lot of words, so let me cut

24   this short for you perhaps.  One key point was that our

25   study was worldwide.   We certainly did not limit it to the


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 1   U.S., but we spent time in Europe as well, and also a short

 2   trip in Japan.  And these were all, I think, visits that

 3   gave us a lot of good information.  And I must stress here

 4   that the organizations that we contacted, both battery

 5   manufacturers and vehicle manufacturers, were extremely

 6   forthcoming in helping us, and being very open in where they

 7   were and how they saw the future.

 8             As a result, we really think that we got cogent

 9   information.

10             Here, in the rest of these words, really speak

11   primarily to the two questions that we were addressing.

12   What's the technical status of these advanced batteries?

13   Are they really coming up to the kind of performance that's

14   needed to propel electric vehicles over practical distances

15   and with practical performance, number one; and number two,

16   are they going to be available in the five years of the ZEV

17   regulation, '98 to 2003, or possibly thereafter.

18             I think I can be very brief about this slide, too.

19   We obviously had to collect the information directly from

20   the sources, because what you can read in publications, and

21   books, and handbooks is certainly always superseded by these

22   development efforts, which are very dynamic.  There's a fair

23   amount of money spent around the world these days, and

24   progress -- as you will hear me say later -- has really been

25   quite impressive.


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 1             We did, in order to make the information

 2   comparable that we were obtaining, create a questionnaire,

 3   rather detailed, asking for a lot of technical data as well

 4   as a lot of qualitative information on key issues and

 5   development schedules.  And, again, we were gratified that

 6   almost all the organizations that we contacted and visited,

 7   about half of them, were responding to this questionnaire.

 8   So, we have a really very good database from which to draw

 9   our results and conclusions.

10             Next one.

11             The topics that we were interested in ranged

12   really from very technical questions that would allow us to

13   tell where the individual technologies were and whether they

14   have a chance to make it into practical development of

15   batteries within a reasonable period of time.

16             We wanted to not only know, of course, whether

17   these concepts have been demonstrated in the laboratory, but

18   whether the technology had been reduced to full size cells,

19   and packages of cells which are called modules and, of

20   course, also batteries; whether these batteries had already

21   been tested in vehicles; whether the batteries that were

22   tested in vehicles already represented the state of the art

23   that was expected for the next five years, or whether we

24   could expect major improvements that would give these

25   batteries yet another boost and the vehicles greater range


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 1   and performance.

 2             We were very much interested in the development

 3   schedules.  Bob Cross already mentioned the importance off

 4   going through an orderly process of first prototype

 5   batteries and pilot line batteries in order to really

 6   understand the behavior of the technology, also with respect

 7   to safety on the levels that count and on the levels that

 8   are going to be critical for car manufacturers to make

 9   decisions -- whether they really want to use batteries like

10   this eventually in production vehicles.

11             It was therefore also very important for us not

12   only to talk to battery developers, but to see the

13   viewpoints and the activities of the vehicle developers and

14   manufacturers, because it's their actions in the last

15   analysis that are going to bring the batteries into viable

16   electric vehicles.

17             I want to just take a moment here to cover a few

18   of the electric vehicle terminology points, talk about

19   electric vehicle characteristics, and some of the technical

20   goals for batteries, so that you can, when I talk about the

21   results in a moment, understand what these results mean.

22             As you undoubtedly know and I'm sure have heard

23   many times, the key characteristic for a battery is really

24   the specific energy expressed in watt hours per kilogram,

25   simply means how much energy is a particular battery capable


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 1   to store per unit.

 2             We all know that the limitation or at least the

 3   most serious limitation of batteries for electric vehicles

 4   is how much energy you can cram in these packages and how

 5   much of that you can put on a car.  So, this is the key

 6   characteristic, and that tends to be typical for the various

 7   battery systems.

 8             All the other characteristics in this table here,

 9   the peak power that this battery can deliver, the life, how

10   often you can cycle it, and the cost tend to be derived

11   quantities.  They depend in large measure on how the

12   battery's engineered.  They are very important, but they are

13   not quite as fundamental as the specific energy where you

14   really in large measure deal with nature.

15             Now, the specific energy, the amount of energy on

16   the vehicle, obviously translates directly into how far you

17   can drive a vehicle on a single charge.  The peak power

18   determines the rate of acceleration or hill climbing.  The

19   cycle life obviously has an immediate impact on how much the

20   battery will cost an owner, and the cost of the battery

21   itself is the other factor that determines the ownership

22   cost.

23             Let's just look for a moment at some of the

24   targets for these various characteristics of batteries that

25   have been established.  And I'm showing here the numbers


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 1   that have been put forward by the United States Advanced

 2   Battery Consortium, where a number of car companies have

 3   come together and worked pretty hard to try to understand

 4   what these parameters had to be in order to get certain

 5   vehicle performance.

 6             So, in order to get about a hundred miles on a

 7   single charge, single battery charge with a vehicle on one

 8   cycle, on one discharge of the battery, the U.S. ABC feels,

 9   and I think they have a lot of data to back this up, that

10   you need a specific energy of 80 to 100 watt hours per

11   kilogram.

12             In order to have reasonable acceleration, 0 to 60

13   in maybe 15 or perhaps 18 seconds, you need a peak power of

14   about 150 watts per kilogram.

15             In order to get a five-year life out of a battery,

16   it probably needs to last about 600 cycles at least.  And if

17   the battery can be developed and produced to cost less than

18   150 watt hours -- excuse me -- dollars per kilowatt hour,

19   then you probably have a device that you can economically

20   use in an electric vehicle.

21             Some of these numbers, 80 to 100,  here 150, 600

22   cycles, $150 per kilowatt hour, you ought to keep in mind

23   when I'm going to present some of the results.

24             What I want to do first, though, is just spend a

25   few minutes in giving you a perspective on the type of


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 1   batteries that are candidates for electric vehicle

 2   propulsion.  And I'm not sure that you can see this here.  I

 3   hope I can explain sufficiently well so that you don't

 4   necessarily have to see the writing here.

 5             Where we are plotting here is specific energy, the

 6   theoretical specific energy.  That's the absolute maximum

 7   that a battery can have in theory if it consisted out of

 8   nothing except the materials that react in the battery -- no

 9   cases, no conductors, no anything.  So, that's the absolute

10   maximum.

11             And the scale here reaches from 0 to about 1400.

12   And now let's look at the various.  The highest is actually

13   the zinc-air battery.  And the reason is that you don't have

14   to carry the air on the vehicle, so it doesn't weigh in the

15   battery.  That's the main reason why the value here is so

16   high.

17             On the other end of the scale, you see some pretty

18   low values for nickel cadmium and lead-acid.  These are the

19   two battery types that, as was pointed out before, are

20   available today.  And now you must remember that the value

21   that we wanted in practice is about 80 to 100, and here

22   their theoretical maximum is around 200.  And a good rule of

23   thumb is that, in practice, a battery can realize between a

24   quarter and a third of the maximum theoretical value.

25             So, if you've got a lead-acid battery at about 170


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 1   or so, you can say, all right, a third of that would be 55,

 2   and that's really pushing it.  55 is a lot less than 80 to

 3   100, and that's one of the issues with the lead-acid

 4   battery.

 5             Similar, with nickel cadmium, a little better, but

 6   not much.  But if you now get to the other batteries -- and

 7   I've talked about zinc-air; I'll have more to say on that in

 8   a moment -- you talk about the other batteries that today

 9   are talked about, zebra, which is the sodium nickel

10   chloride, sodium sulfur, lithium-ion, and over here the

11   other dark one, the nickel metal hydride, they all are

12   significantly or, in fact, a lot better than lead-acid.  And

13   that's where we have to look for the candidates.

14             There's also the zinc bromine battery in here, and

15   I'll talk a little bit more about this later.

16             But I want to focus the discussion here on those

17   shown dark -- zebra, sodium sulfur, lithium-ion, and nickel

18   metal hydride -- because these are the batteries that are

19   not only well-qualified from a theoretical point of view,

20   but are receiving the bulk of the development efforts

21   worldwide today.

22             These are the systems that battery developers

23   really are concentrating on and vehicle manufacturers are

24   looking to.

25             This is just a visual impression for you of our


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 1   sources of information.  We visited about ten major

 2   organizations of battery developers worldwide, and we

 3   collected information via primarily our questionnaire from

 4   another 12, and the list is actually still growing slowly.

 5   There are a few more visits, a few more requests for

 6   information.  But this is essentially the bulk of our

 7   information sources here.

 8             And over here, you see the various batteries that

 9   they are covering -- lead-acid, nickel cadmium, nickel metal

10   hydride, lithium-ion, and so on.  And what you can see here

11   that there are some systems -- lead-acid, of course, to a

12   lesser extent nickel cadmium, but also nickel metal hydride

13   and lithium-ion -- where a whole lot of organizations are

14   working on.  So, we have multiple information sources.

15   There are multiple programs going on on these systems.

16             On the other hand, there are some very interesting

17   systems, one of them being sodium sulfur, the other one the

18   so-called zebra battery, where there's really only one

19   developer each.  And this is also pretty well true, for

20   example, for zinc-air and zinc bromine.

21             It tends to be -- let me make a generalization

22   here, but I think one that's quite valuable -- the classical

23   battery manufacturers tend to focus on these advanced

24   systems -- nickel metal hydride and lithium-ion -- because

25   they are somewhat similar, at least in general principals,


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 1   to systems that are well known like nickel cadmium.

 2             On the other hand, these high temperature systems,

 3   sodium sulfur and zebra, are really a very different

 4   technology, and the organizations developing them are really

 5   not your classical battery manufacturers.

 6             Let's move on.

 7             Now, for some of the results.  And the first one I

 8   want to focus on is the specific energy that's so important.

 9   Here now, we're talking about the practically achieved or

10   near-term projected specific energy of these batteries.

11             And just to remind you here, these horizontal

12   lines are at 80 and 100, these are the USABC midterm goals.

13   This is what's necessary in the view of USABC, and I would

14   certainly concur to that, to give a vehicle at least a

15   hundred mile range in an urban/suburban duty cycle.

16             So, that's a practical value, and what you can see

17   is that the systems that we investigated -- these four most

18   of all -- are either already at this criterion, they can

19   meet this criterion or, in the case of nickel metal hydride,

20   projected to be there within a few years.

21             It is also true that none of these systems is

22   projected even ten years down the road to make the long-term

23   goals of USABC, which will give a car maybe 200 to 250

24   miles.

25             So, that's something to remember, also.


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 1   Nevertheless, I think it's very encouraging that all of

 2   these systems do appear to be capable to meet the midterm

 3   specific energy goals.  I've already mentioned lead-acid and

 4   nickel cadmium.  They are projected to improve somewhat, but

 5   they are likely to fall; in fact, they are just about

 6   certain to fall short of these midterm goals.

 7             Next one.

 8             The next characterization I want to look at is the

 9   power.  The problem with electric vehicles in the past has

10   been that most of them have been very sluggish; in fact,

11   most them that you can drive today -- not all of them --

12   will still be pretty sluggish.  That's because they are

13   often limited by the specific power of the battery.  The

14   USABC goal is about 150, the horizontal line, to 200.  And,

15   as you can see, the situation is quite good here.

16             The systems that we investigated, including nickel

17   cadmium here, can already in their current configurations

18   meet the power -- specific power requirements.  And some of

19   them are projected to actually go well above these levels.

20             The lead-acid battery is interesting, in that

21   what's established firmly is well below what's required to

22   have enough power and therefore acceleration, but the system

23   is actually capable of being engineered in something with

24   much more power.  So, this is probably a rather believable

25   number up here.


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 1             So, all of these systems are likely to give enough

 2   power.

 3             Next one.

 4             The cycle life is obviously very important, and

 5   the owners of electric vehicles that have old style SLI

 6   lead-acid type batteries usually tell you a tale of woe,

 7   that the batteries don't last very much more than 100 or

 8   maybe 200 cycles.  And obviously, with the battery not being

 9   cheap, the replacement cost becomes a large part of the

10   ownership cost of an electric vehicle.

11             So, we need to do better, and the USABC felt that

12   600 cycles is kind of a minimum for economic practicality.

13   And in the long run, they feel that a thousand cycles is

14   what's needed here.

15             Now, parenthetically, if you have a battery that

16   has a lot of specific energy in the package, much more than

17   another battery, then obviously if you drive a certain

18   distance, you will discharge such a battery only in part.

19   You don't need all the energy in it.  So, the cycle life

20   that we're talking about here is total cycles, deep cycles,

21   at least 80 percent.

22             When you have a battery with a lot of energy in

23   it, you probably don't ever fully discharge it, so these

24   batteries with a lot of specific energy don't really need

25   all that much cycle life, because they will have a lot of


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 1   energy that you don't use every day.  So, you might have

 2   only a cycle every three days, 100 cycles a year.  So, 600

 3   cycles might be six years.

 4             And, indeed, 600 cycles is considered equivalent

 5   to a five-year life of the battery.

 6             All right.  Now, the story here also is very

 7   encouraging, in that you can see that almost every one of

 8   the systems here really exceed not only the 600 cycles, but

 9   already exceeds or is projected to exceed, where you see

10   these arrows, to exceed a thousand cycles.

11             So, that's a very encouraging situation.  I think

12   cycle life is definitely not going to be the major problem

13   of these advanced batteries.  And even the lead-acid

14   battery's projected to become a lot better.

15             NOw, I'm going to talk about the next two slides

16   very quickly, because we are getting into technical detail.

17   We asked these developers what technical issues they were

18   still struggling with, either to make the specific energy

19   higher or the power, or to make the life longer, or to

20   reduce the cost, and there were still issues in front of all

21   of these efforts.

22             But I think it's fair to say that for all of these

23   issues, they have technical approaches that are already

24   well-advanced and that look like they will lead to success

25   in all those that could be show stoppers.


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 1             That's true for the systems that I mentioned and

 2   that we investigated in the greatest depth.  This does not

 3   include the zinc systems, because they do have some major

 4   problems with short cycle life and also with low power.

 5             So, we did not spend a whole lot of time on the

 6   zinc systems.  I have to state this quite clearly.

 7             These issues are being tackled I think very

 8   successfully right now, as we are here, and in parallel with

 9   the engineering of these batteries.  And I think there is a

10   very good probability that all of these are going to be

11   overcome.

12             I'll pick out two or three that you may have heard

13   about simply to give you a somewhat better feel.

14             For the nickel metal hydride, one of the issues

15   that has been mentioned and that the developer is struggling

16   with is cost.  The materials in these batteries are

17   relatively costly.  So, it's important to squeeze every

18   little bit of energy out of the materials that are being

19   used.  And we have seen, I think, from the developer some

20   very encouraging indications that advanced materials will be

21   available of which you need less and which may even be

22   cheaper, so that even the nickel metal hydride battery has,

23   I think, a reasonable chance to make the cost goal.

24             We also have heard from at least one developer

25   that they have come up with new materials that are going to


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 1   give the nickel metal hydride considerably greater specific

 2   energy than what I showed you even.  This isn't quite as far

 3   along and, so, we have discounted this a little bit.  But

 4   there is real promise I think in the nickel metal hydride

 5   system.

 6             Lithium-ion, very exciting, has been announced by

 7   Sony only a few weeks ago; is being worked on by several

 8   organizations, including Europe and the U.S., looks very

 9   promising.  But there is right now a material, cobalt oxide,

10   that seems to be important for long life and good

11   performance.  And the cobalt oxide must go.  It's too

12   expensive.  There are substitutes, and it looks like this is

13   going to be successful.  But there is still some uncertainty

14   on this system.

15             The other two systems that we studied in most

16   detail sodium sulfur and the zebra battery, both are high

17   temperature batteries.  This is viewed by a lot of people as

18   a handicap, because these batteries tend to cool.  No matter

19   how well you insulate, there's always a certain amount of

20   heat lost.  And if you would let them stand, say for a

21   month, they would freeze up and so you would have to rethaw

22   the materials.  And that is certainly an issue.

23             But, on the other hand, both systems have shown

24   that they can be thawed, if you will, and both of them are

25   now such that, even without keeping them warm electrically,


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 1   they can probably stand there between a week and two without

 2   really freezing up.

 3             So, I think this issue is probably not as

 4   important.  Safety issue in both cases has been advanced as

 5   a problem.  I think the battery designs that we've seen

 6   literally on the bench and had explained to us look to us

 7   like they have designed-in safety.  So, I'm not too

 8   concerned about this, although, as Bob Cross said, the proof

 9   of the pudding, if you will, really is the testing of these

10   batteries in vehicles, the crashing of vehicles, and so on.

11             And that has to happen over the next several years

12   in all of these cases.

13             Both of these systems still have relatively high

14   cost, but the materials in them are very inexpensive or

15   quite inexpensive.  And so, the cost reduction there is

16   manufacturing development, and a lot of money's spent on

17   this right now.

18             Let's move on.

19             So, let me get to one bottom line here, and this

20   is:  What kind of driving range might we get from all of

21   these batteries in an urban/suburban, not-too-demanding duty

22   cycle?  But it's not the kind of constant 30 miles an hour.

23   It's realistic driving in a relatively easy duty cycle.

24             And here, you can see on top, the longest range on

25   that basis would be provided by the sodium sulfur, which


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 1   already has demonstrated 110 watt hours per kilogram, and

 2   this would translate into this cycle to about 140 miles.

 3   For a battery that only weighs 250 kilograms, and if you

 4   went to a 500 kilogram battery, which, of course, would then

 5   be roughly twice as expensive, you could get well over 200

 6   miles.

 7             So, the light bars are the heavy batteries and the

 8   dark bars are the light batteries.  And I'm not sure why the

 9   draftsman did that.  But the lithium-ion battery has a

10   comparable potential, already having achieved 110 watt hours

11   per kilogram.  The zebra battery is a little bit behind, not

12   much.  Then the nickel metal hydride again is projected to

13   have 90, and if you want to believe some of the laboratory

14   data from one developer, might be also 110 or even 120.  So,

15   all of these will give vehicles driving ranges over 100

16   miles with a battery weighing only 250 kilograms, a little

17   over 500 pounds.

18             Pretty attractive.

19             Zinc-air would be the champion here, but the

20   problem is that these batteries simply haven't shown the

21   kind of cycle life or the power density that you're going to

22   need in a practical vehicle.

23             Let me briefly speak to my other point, and I can

24   be, I think, fairly brief on that, particularly since Bob

25   Cross has already said most of the important things here,


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 1   and that's the time that it's going to take until these

 2   systems are going to be available in practical, commercially

 3   viable electric vehicles.

 4             Their performance I think is going to be there.

 5   When are the batteries going to be there in vehicles, fully

 6   integrated?  And there's just no way to get around certain

 7   steps that are critical in the development of batteries

 8   from, let's say, the point where the concept is already

 9   established to the point where a manufacturer will put these

10   batteries in a vehicle that they're willing to sell.

11             This is the schedule for the batteries.  Battery

12   development in the upper half, and I don't really want to go

13   through this, except to say if, at this point, you have

14   decided what your technology, you've frozen the design of

15   the cell, which is the key unit in the battery, and now you

16   build prototype batteries, which you then have evaluated in

17   a parallel schedule where the vehicle developer is beginning

18   to get his or her hands on the battery, then you've got to

19   go through a period that's about two years here, and about

20   one to two years here, and only then will you have the

21   confidence to say, I'm going to build a pilot-plant that is

22   going to make the hundred or two hundred batteries per year

23   that Bob Cross talked about.

24             And then, these pilot-plant batteries have to go

25   into vehicles that now begin to resemble the real thing.


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 1   The batteries are not yet mass-produced, but they resemble

 2   the commercial item, which has to be fully shaken down in a

 3   vehicle with respect to performance and safety.  And there's

 4   just no way around it.

 5             This conceptual schedule is the result of perhaps

 6   10 conversations that we've had with battery developers and

 7   vehicle developers, and all of them are showing schedules

 8   that are roughly similar.

 9             So, I think there's a lot of validity in these

10   long times.  It's perhaps not something for impatient

11   people, but it's the reality.

12             And only after the pilot level batteries have been

13   validated in vehicles and fully integrated in vehicles will

14   it be possible for a car manufacturer to say, "This

15   technology is ready to go in vehicles."  And, at this point,

16   he can send a signal to the battery developer and say, "I'm

17   going to buy these vehicles (sic) if the price is right."

18             And at that point, the battery developer will

19   build a factory and will take about a year, and will take

20   another year before the factory runs properly and the

21   batteries really are representative of the commercial

22   product.  And only then can they go in vehicles that will be

23   delivered to customers.

24             Now, with all of this in mind, we tried to put the

25   various systems that we investigated on this chart.  And you


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 1   see that down here.  And, again, it's difficult to read, but

 2   the front runners, not surprisingly, of course, are the

 3   lead-acid and nickel cadmium batteries, which are basically

 4   available now.

 5             But, as I said earlier, they give vehicle ranges

 6   that are well less than 100 miles in realistic driving

 7   conditions.

 8             The advanced lead-acid battery is probably two

 9   years behind, but progress is being made and it seems quite

10   clear.  But even the advanced lead-acid batteries are not

11   going to give electric vehicles the magic 100 mile range

12   under realistic driving conditions.

13             However, they probably will give vehicles enough

14   range and cycle life, which is very important for niche

15   markets.

16             Then next, we are having here the high temperature

17   batteries, zebra and sodium-sulfur, and nickel metal

18   hydride, which are probably about five years away from being

19   a commercial product that can be put in vehicles.  And the

20   lithium-ion battery is not far behind.  The length of the

21   bar, incidentally, is the variation in the estimates that we

22   got.  The longer the bar there the more is there difference

23   of opinion among our sources of information.

24             Okay.  Next one.

25             So, what does all of this mean for availability of


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 1   these advanced batteries?  And incidentally, also the

 2   advanced lead-acid and nickel cadmium batteries, both of

 3   which have to be sealed, and that's a step forward in

 4   technology over the old SLI batteries, and over the old

 5   nickel cadmium batteries that are used since many years as

 6   standby power sources and so on.

 7             Well, pilot-scale battery production for lead-acid

 8   and nickel cadmium I think can start -- in fact, is starting

 9   this year.  We saw that in France, for instance, for nickel

10   cadmium.  And it will take about two years or so for volume

11   production of commercial batteries.  In both cases, this

12   period is a little shorter for these batteries, because the

13   technology is so well understood, including manufacturing

14   technology.

15             Now, when you get to the advanced batteries, all

16   of them -- and I don't really want to quibble about a year

17   here certainly -- all of them I think are going to be

18   available in these pilot-scale quantities of some hundreds

19   per year in the 1997, let's say, to 1999 period.

20             Bob Cross referred to that.  And I think one of

21   the critical questions or issues confronting those who want

22   to see zero-emission vehicles is how you get through this

23   pilot phase, which is going to be expensive.  Because

24   without going through that, you're not going to come home

25   with the commercial product, which could -- if everything


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 1   goes well, if all the decisions are made at the earliest

 2   period of time, if there isn't any sudden discovery of a

 3   major issue, a safety issue, or whatever, or a materials

 4   issue that hadn't been anticipated -- if that doesn't

 5   happen, and if the car makers make the commitments at the

 6   earliest possible time to actually buy these advanced

 7   batteries, these are the times in which you can expect the

 8   advanced batteries to be produced in commercial quantities

 9   at costs that are beginning to be close to the ultimate

10   mass-production costs.

11             And if you show the next one, then you see the

12   same slide once more, except now I have included some costs.

13   We did ask the question of what these batteries would cost,

14   not so much because we were going to do a detailed

15   engineering cost analysis, but because reduction of cost is

16   driving a lot of the efforts that are ongoing right now.

17   Whether they are still on the level of materials selection,

18   whether they are in manufacturing development, cost is

19   driving a lot of the efforts that are going on now.  Because

20   none of these batteries is going to be cheaper than the

21   lead-acid battery.  I think that's safe to say.

22             And it's probably also safe to say that all of

23   them have to struggle mightily to get down to the levels of

24   the lead-acid battery.

25             Now, when you remember that their life, their


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 1   cycle life is going to be very likely substantially longer

 2   than that of the lead-acid battery -- it's probably safe to

 3   say at least twice as long and maybe longer -- then, that

 4   cost issue is not quite as daunting as it might strike you

 5   first.

 6             Well, Bob Cross mentioned that in this pilot-scale

 7   phase that we are looking at for the next few years, costs,

 8   with the exception of lead-acid, are going to be pretty

 9   high, fairly consistently a thousand to two thousand dollars

10   per kilowatt hour, which means a 30 kilowatt hour battery

11   would cost $30,000.  That's an issue obviously.

12             On the other hand, we did enough talking and

13   understanding of manufacturing development to see and

14   appreciate that the costs of all these systems can go down

15   to considerably lower levels.  And I've shown here the

16   levels that we think are likely to be available at the time

17   when these batteries are first produced on a large scale.

18   And by large scale, we mean maybe 20,000 batteries per year.

19

20             That would be large scale in that sense.  At that

21   level, the cost is beginning to flatten as a function of

22   production volume.  If you went to 200,000 a year, the costs

23   would still drop, but not as much as between let's say 2,000

24   and 20,000 a year.  That's where the big drop is.

25             So, you've got to get to these levels.  Here, I'm


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 1   saying 10 to 40,000 pear year before you can approach these

 2   costs.  And these are costs that I think are going, together

 3   with long cycle life, are going to make these batteries

 4   economically feasible.

 5             There is, as shown here in parentheses, with these

 6   arrows, potential in every case for even lower costs in one

 7   of two cases -- if you go to real mass production, as I just

 8   mentioned, or if you learn how to substitute some of the

 9   more expensive materials.

10             So, there is ultimately potential to get down to,

11   I would say close to the lead-acid battery, but probably not

12   less.

13             Now, what does all of this mean?  We have gone

14   through the effort to write a number of specific

15   conclusions, which I believe all of you have in front of

16   you, at least members of the Board.  So, I want to go

17   through them rather quickly.

18             But I believe that, together, these conclusions

19   tell a fairly clear story.

20             Lead-acid batteries will be available in 1998.

21   But it was certainly clear that the automobile manufacturers

22   felt that vehicles with lead-acid batteries were not going

23   to capture really large markets.  There's a lot of argument

24   what the market is.  We did not do a market study, so I want

25   to here demur and not speak on how many vehicles might be


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 1   commercially viable with lead-acid batteries.  It's

 2   certainly going to be limited.

 3             It's also clear from what we did and what we saw

 4   that these very capable, very intense, and highly funded

 5   development efforts that we've seen on three continents have

 6   brought about major progress in advanced batteries.

 7             I've been in batteries for a long time, and I've

 8   never seen the rate of progress before that I've seen in the

 9   last five years.  It's truly impressive, and it can really

10   make you optimistic about what will be possible early next

11   century.

12             And this is true despite the fact that,

13   electrochemically, these are quite different systems, and

14   they pose different problems.  But these problems have been

15   tackled by a combination of modern science, modern

16   technology, modern materials knowledge, modern electronics

17   that simply wasn't available in the past.  So, we are seeing

18   here, I think, something rather remarkable.

19             Now, I already made this point before, so I can be

20   brief.  It's just a reality that the manufacturers of

21   vehicles will not put batteries in their commercial product

22   that would compromise either safety or reliability.  And so,

23   we have to go through these systematic steps of both battery

24   development and then evaluation of these batteries in

25   vehicles.


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 1             There really isn't a short-cut.  And if you try a

 2   short-cut, I think you probably have to pay for that with

 3   frustration and disappointment.  And there's lots of

 4   examples in the past where this has happened in other

 5   programs.

 6             Next one.

 7             The problem that I mentioned, of course, and that

 8   you could derive from just recollecting the numbers of 2,000

 9   or $1,000 per kilowatt our of battery is that these pilot-

10   phases are going to be expensive.  If we have a 30 kilowatt

11   hour, $30,000 batteries, and we have 200 per manufacturer,

12   so you have $6 million, for example, for the batteries just

13   from one manufacturer.

14             And it will be difficult, if not impossible, for

15   commercial organizations or individual users to pay for

16   these batteries.

17             So, there is no question that the key step that we

18   have to go through -- and that's going to be expensive --

19   needs to be catalyzed in some way.  And while the panel has

20   not tried to be clever about how to do this or how to come

21   up with regulation -- that wasn't our job -- there were a

22   lot of, I thought, very intelligent statements that were

23   made to us by the developers of batteries.

24             They felt they had to go through this orderly

25   process, that incentives were needed to help them go through


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 1   this process.  They also need, if you will, some assurance

 2   that, in the end, there's going to be a market.  So, they

 3   felt that some form of mandate or regulation was still

 4   important.  But they also felt that the regulation really

 5   ought to favor those battery systems that are ultimately

 6   going to give electric vehicles the kind of range and

 7   performance that's going to make them competitive.

 8             So, there has to be some level of selectivity

 9   here.  And that was a unanimous view of the advanced battery

10   manufacturers.  Of course, the lead-acid and nickel cadmium

11   battery manufacturers had a somewhat different opinion as

12   you can guess.

13             If you put on the last slide here, maybe the most

14   important point that I should have made before and Bob Cross

15   had made it -- I think very clearly -- so let me just

16   restate it.

17             It was the unanimous view of the battery

18   developers that the zero-emission regulation has catalyzed

19   and stimulated a good part of this very intense development

20   effort that we've seen over the last three, four years in

21   particular.

22             They all felt that without that, it was unlikely

23   that they were going to have these programs funded by their

24   own organizations and other stakeholders that are putting

25   down their money here.  And so, they were quite anxious that


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 1   the Air Resources Board recognize this and find a way to

 2   continue creating some kind of drivers that will keep the

 3   money flowing in these major efforts that are really unique

 4   and have not -- have no counterpart in the past.

 5             The bottom line from everything that we did is

 6   that, yes, in a complete success scenario where all the

 7   decisions are being made at the earliest point where we

 8   don't have any show stoppers, no major problems, good

 9   cooperation between battery developers and vehicle

10   manufacturers, then we might see these advanced batteries

11   that I think lead to very competent electric vehicles early

12   next century, maybe 2001, as Bob mentioned.  If it were one

13   or two years later, I don't think I would be totally

14   surprised because there's a lot of pressure on these

15   organizations to succeed.

16             All these people who spend money there want to see

17   it resolved.  And so that does tend to lead to, if you will,

18   optimistic estimates.

19             But we've looked into this enough to say, yes, in

20   a complete success scenario, maybe we have some or maybe all

21   of these advanced batteries in around 2001.

22             Thank you very much for your attention.  I'll be

23   happy to answer questions.

24             CHAIRMAN DUNLAP:  Thank you, Dr. Kalhammer.  I

25   appreciate it.


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 1             I want to also recognize Dr. Moyer, who's with us

 2   as well, over there, your colleague.

 3             I know there's questions.  Supervisor Vagim, do

 4   you want to kick it off?

 5             SUPERVISOR VAGIM:  Yes.  Thank you, Mr. Chairman.

 6             CHAIRMAN DUNLAP:  Then, Supervisor Roberts, we'll

 7   have you follow up.

 8             SUPERVISOR VAGIM:  Doctor, I have just a few

 9   questions.  At what point is a cycle considered to be a

10   cycle?  I mean, if you go through half the deposition or

11   discharge, or a quarter, and you charge it back up full, is

12   that a cycle?

13             DR. KALHAMMER:  That's an excellent question.

14   What normally is used to define a cycle is to take out 80

15   percent of the maximum amount of energy that you could take

16   out.

17             SUPERVISOR VAGIM:  In a nickel cadmium, we're all

18   used to the memory that they get, going down a quarter and

19   charging them back up, and they tell you to charge them all

20   the way down, and I'll always make that mistake of letting

21   them go dead, because I never know when they're halfway out

22   or not.

23             So, they've introduced discharge chargers that

24   discharge and then charge them back up again, just so you

25   know you've got a full tank and they don't get a memory.


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 1             DR. KALHAMMER:  Yes.

 2             SUPERVISOR VAGIM:  Do you have that same problem

 3   with the automobile nickel cadmium technology?

 4             DR. KALHAMMER:  The answer to that -- and we

 5   raised this question.  And the answer that we got was, no,

 6   if you treat the battery properly.  There are actually three

 7   types of memory effects.  They all have different

 8   electrochemical causes, and all three of them you can avoid

 9   if you properly manage the charge and the battery.

10             That gives me a chance to just make one comment

11   that I perhaps should have made before.  All of these

12   systems either call for or benefit greatly from an accurate

13   electric management of charge, the recharging and how you do

14   it, particularly how you finish it, how you overcharge or

15   don't overcharge, but also how you might limit the depth of

16   discharge.

17             All of this today can be done electrically with a

18   level of sophistication and accuracy that is economically

19   feasible, and that's enormously beneficial to the safety and

20   the life of these batteries.

21             In fact, they go so far that some batteries, like

22   the lithium-ion battery, because of the specific

23   electrochemical properties that it has, has to be charged

24   and probably even discharged in a way that you control the

25   current through each cell, not through a string of cells


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 1   that are strung together to give you the necessary voltage.

 2   But each single cell can have a different current flowing

 3   through it during charge and discharge.

 4             And this is possible today.  And that, in fact, is

 5   essential for the lithium-ion battery.   The same technique

 6   is likely to be applied to the other systems as well

 7   ultimately, and it will greatly increase the safety and very

 8   likely the life of these batteries.

 9             Some people talk about gentle charging or the

10   gentle treatment of batteries.  That today is feasible; was

11   not feasible even five years ago.

12             SUPERVISOR VAGIM:  So, so two 40s make an 80 in a

13   cycle?  Two 40 percent drawdowns --

14             DR. KALHAMMER:  In that, yes.  And it's typically

15   true, not always, but typically true that if you can get

16   more than twice the number of 40 percent cycles then 80

17   percent cycles.

18             SUPERVISOR VAGIM:  So that is mathematically --

19   holds true then in actuality?

20             DR. KALHAMMER:  In actuality, you can say, if I

21   characterize a battery, and say this battery gets a thousand

22   cycles on a hundred percent depth of discharge, if I now do

23   the equivalent of these thousand total cycles, as let's say,

24   10,000 10 percent cycles, it'll last much longer actually.

25             SUPERVISOR VAGIM:  Okay.  As far as the reverse to


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 1   that then, let's say I have a trip to just -- I end up

 2   coasting into my driveway, which is an absolute drawdown, is

 3   there -- have they come this far to forgive that particular

 4   event?

 5             I know that lead-acid was the only one for a

 6   while.

 7             DR. KALHAMMER:  The lead-acid is probably one of

 8   the less forgiving systems when you totally exhaust the

 9   batteries.  Most of the other batteries will be more

10   forgiving and you will pay less of a penalty in life if you

11   draw the battery down that far.

12             SUPERVISOR VAGIM:  I thought the nickel metal had

13   a problem with that one on total deposition.

14             DR. KALHAMMER:  No.

15             SUPERVISOR VAGIM:  As far as the ability to quick

16   charge, is there any particular technology that is more

17   accepting of a quick charge?  And when I say "quick charge,"

18   super high, kVA, just dump it in there --

19             DR. KALHAMMER:  Yes.  They are not all equal with

20   respect to quick charge.  But, as I said earlier, the power

21   capability, which, of course, is also related not only to

22   power out but also power in, is in good measure an

23   engineering characteristic.  For example, lead-acid

24   batteries can now be engineered to accept a very high level

25   of powering even more than in the past.


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 1             Nickel cadmium is certainly a good candidate for

 2   quick charging.  Nickel metal hydride is.  Lithium-ion is if

 3   you do the kind of control that I just talked about.

 4             I think the high temperature batteries are

 5   probably less amenable to really very quick charging, but

 6   even they today, after redesign that they've seen, probably

 7   could be charged, oh, if you will, three-quarters in maybe

 8   an hour or so.

 9             SUPERVISOR VAGIM:  Okay.  And finally, Mr.

10   Chairman, an esoteric question if I may.

11             We all watched the computer industry go from

12   vacuum to transistors to solid state.  At what point do you

13   think we are in batteries if the old lead-acid was a vacuum

14   tube?

15             DR. KALHAMMER:  I think we are at a solid state

16   level now.

17             SUPERVISOR VAGIM:  With these technologies you

18   showed up here?

19             DR. KALHAMMER:  Yes.

20             SUPERVISOR VAGIM:  That far ahead?

21             DR. KALHAMMER:  Yeah.

22             SUPERVISOR VAGIM:  Because --

23             DR. KALHAMMER:  Particularly if you add to it the

24   management, both electrical and thermal management with all

25   the levels that we can do today.


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 1             SUPERVISOR VAGIM:  And these managements you're

 2   talking about --

 3             DR. KALHAMMER:  Yes.

 4             SUPERVISOR VAGIM:  -- this is operator involved or

 5   are these --

 6             DR. KALHAMMER:  No.  That's going to be all

 7   reduced to programs.

 8             SUPERVISOR VAGIM:  Very good.  Thank you.  Thank

 9   you, Mr. Chairman.

10             CHAIRMAN DUNLAP:  All right.  Do you yield to your

11   colleague from San Diego County?

12             Go ahead, Ron.

13             SUPERVISOR ROBERTS:  I have a question, Doctor,

14   and it came up earlier today, and it came up in a discussion

15   during a visit to the Calstart program, meetings I attended

16   recently.

17             And it had to do with the infrastructure we might

18   be building.  And you've described quite a range of

19   different battery types that, in the very short future, are

20   going to be out there and in production.

21             In your talking about the life cycle and a lot of

22   different sensitive issues relating to how those are

23   recharged, and the question came up earlier today regarding

24   the infrastructure, did the infrastructure  have to be

25   different, considering what's here and what's coming, and it


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 1   seems to me that there's some pretty strong implications of

 2   changes and differences that are needed.

 3             But could you tell us a little bit about that, and

 4   I guess I'm wondering if what we might build today for the

 5   lead-acid batteries, how would that have to be modified in

 6   the future?

 7             DR. KALHAMMER:  It's not a question that we

 8   specifically examined as a panel.

 9             SUPERVISOR ROBERTS:  I understand.

10             DR. KALHAMMER:  So, I'm going to just give you my

11   opinion from what I know technically.  But I imagine the

12   staff probably is very capable to answer you more

13   specifically.

14             I think, again, with modern power electronics,

15   which underlies all of these chargers, you -- it's easy to

16   get almost any charging profile that you basically would

17   then in the modern charger -- I'm not saying that they

18   necessarily exist yet -- but there certainly would -- it

19   wouldn't be a miracle to design and build them.

20             These modern chargers, you could have a variety of

21   programs, and you basically push a button when you have a

22   battery with nickel metal hydride, then you push a different

23   button if you drive up and you want to charge a lead-acid

24   battery.

25             That's certainly my view of it.  This isn't the


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 1   same as saying that that's what you would build your

 2   infrastructure right away.  I mean you would have to do some

 3   very careful tradeoff thinking of what you're really trying

 4   to accomplish with your infrastructure.

 5             SUPERVISOR ROBERTS:  So, it might be a second

 6   generation of charging units that's out there.

 7             DR. KALHAMMER:  For example, but I think I'm at

 8   this point out of my  depth, and maybe the staff ought to

 9   answer that question.

10             CHAIRMAN DUNLAP:  Ms. Edgerton.

11             SUPERVISOR ROBERTS:  Before we move on, I didn't

12   know if any of the staff might want to add to that.

13             MR. CROSS:  If I can comment very briefly.

14             CHAIRMAN DUNLAP:  Sure.

15             MR. CROSS:  In the vein of the modern power

16   electronics, it's also very analogous to the answer I gave

17   earlier, but it's very easy to put the power electronics on

18   the vehicle which does the charging.  You've already got a

19   whole lot of power electronics on there to turn what comes

20   out of the batteries to --

21             SUPERVISOR ROBERTS:  So, there's something in the

22   car that tells the charger --

23             MR. CROSS:  You can either tell a charger what you

24   have or else you can use the modern power electronics to

25   take the 220 off of 110 or 220 that you would get from maybe


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 1   an outlet, to turn that into what the battery needs.  So,

 2   those are kind of the two approaches.

 3             The vehicle I've been using lately basically it

 4   doesn't matter.  You plug into 220 and it figures out what

 5   to do.  You plug it into 110 and it figures out what to do.

 6             CHAIRMAN DUNLAP:  Okay.  Anything else, Ron?  I

 7   might mention before Ms. Edgerton asks her question, that

 8   the reason she has the balloon affixed to her chair is it's

 9   her birthday.  I didn't want anyone to get the wrong idea

10   about that.

11             And we've hooked it in such a way where she can't

12   get it off.  So, if you're wondering why it's there, that's

13   why.  Lynne?

14             MS. EDGERTON:  Thank you.  This is my thirtieth

15   birthday.

16             (Laughter.)

17             MS. EDGERTON:  Occasionally, there are -- there's

18   a convergence of events that enables us to see that we have

19   a tremendous potential to choose one future or another.  And

20   I want to thank you, Dr. Kalhammer, Dr. Moyer, and your

21   Committee for  your contributions to this choice, which is

22   the responsibility -- the privilege of the responsibility of

23   us here.

24             If I understand what has been reported, there -- I

25   jut want to go over it -- there are ten companies which are


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 1   at the gate or running down the lanes of this horse race,

 2   which could deliver the USABC midterm battery to us.  Four

 3   nickel metal hydride, is it Ovonic, Varta --

 4             DR. KALHAMMER:  SAFT.

 5             MS. EDGERTON:  SAFT.

 6             DR. KALHAMMER:  Matsushita.

 7             MS. EDGERTON:  And Matsushita.

 8             DR. KALHAMMER:  And others.

 9             MS. EDGERTON:  And others.  But four leading, four

10   in this heat.

11             DR. KALHAMMER:  Four serious players.

12             MS. EDGERTON:  Four serious players in heat

13   number, first heat, fastest heat.

14             DR. KALHAMMER:  At least four, I'd say.

15             MS. EDGERTON:  At least four.

16             DR. KALHAMMER:  Yes.

17             MS. EDGERTON:  In the nickel metal hydride.

18             DR. KALHAMMER:  Yes.

19             MS. EDGERTON:  Then, in the lithium-ion, we have

20   two up there with the nickel metal hydride.  We have the

21   Sony, and we have --

22             DR. KALHAMMER:  Varta.

23             MS. EDGERTON:  Varta.

24             DR. KALHAMMER:  And there are others.

25             MS. EDGERTON:  And there are others, but those are


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 1   the two.  That makes six.

 2             We have sodium-sulfur.

 3             DR. KALHAMMER:  One.

 4             MS. EDGERTON:  One with Silent Power?

 5             DR. KALHAMMER:  Correct.

 6             MS. EDGERTON:  We have AEG making the zebra

 7   battery; that's eight.  Now, where are the other two?  Maybe

 8   it's eight.

 9             DR. KALHAMMER:  Oh, there are really one or two

10   others in both lithium-ion and nickel metal hydride, and if

11   you --

12             MS. EDGERTON:  Oh, did we say Ovonics (sic)?

13             DR. KALHAMMER:  Yes, you did.  But there are

14   really more than four.

15             MS. EDGERTON:  There are really more than four.

16             DR. KALHAMMER:  Yeah.  I said ten.  And even there

17   I would get disagreement, because the people who are

18   developing the zinc bromine battery, for instance, would

19   consider themselves a serious player.  And even the

20   developers of zinc-air, although I think they're a little

21   further behind, want to also be considered serious players.

22             And that's just what we covered.  And I wouldn't,

23   you know, lay very high odds that we might not have missed

24   one or two in some other country.

25             We also have not yet included in the list that you


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 1   just mentioned a couple organizations that are directly

 2   funded by USABC.  One is 3M and other one is Grace.  And

 3   both of these are working on so-called lithium polymer

 4   systems, which are closely related to lithium-ion.

 5             So, there are a lot of players.

 6             MS. EDGERTON:  Strong companies with lots of --

 7             DR. KALHAMMER:  That's right.

 8             MS. EDGERTON:  -- resources.  AEG is huge.

 9             DR. KALHAMMER:  That's an absolute key point,

10   yeah.

11             MS. EDGERTON:  Well, with tremendous resources

12   pouring into this effort worldwide.

13             I remember -- I think Westinghouse also had a

14   lithium-ion battery, but you didn't get to them.

15             DR. KALHAMMER:  I don't think they are, you know,

16   as far as advanced.  But they also work on some other

17   batteries.  So, there's a lot more going on.  But just these

18   big efforts are impressive both technically and with respect

19   to the resources that they command.

20             MS. EDGERTON:  It's a tremendously exciting report

21   that you give.

22             Forgive me for a couple of things I don't -- a

23   couple things I would like clarification on, which I don't

24   quite understand.

25             There was a slide here -- I want to make sure I


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 1   have the right slide.  It had to do with the -- how far the

 2   batteries could go, and the range.

 3             DR. KALHAMMER:  The bar graph you mean?

 4             MS. EDGERTON:  Yeah, the bar graph.

 5             DR. KALHAMMER:  The horizontal bar graph?

 6             MS. EDGERTON:  Would that be -- just bear with me

 7   a minute.  Oh, I see.  The specific energy slide with

 8   achieved and projected batteries.

 9             Do you have that in front of you?

10             DR. KALHAMMER:  Yes.

11             MS. EDGERTON:  Okay.  It was the one with the

12   kilograms, not with the --

13             DR. KALHAMMER:  Right.

14             MS. EDGERTON:  You indicated -- one of the things

15   that confused me on this was that reports have indicated

16   that, for example, the nickel metal hydride can get up to

17   150 miles per charge.  But this doesn't seem to reflect

18   that.

19             DR. KALHAMMER:  Yes.

20             MS. EDGERTON:  And none of them seem to reflect

21   the 200 miles per charge that the Sunrise --

22             DR. KALHAMMER:  Yes.

23             MS. EDGERTON:  -- Solectria got.  So, what is

24   there in the way that you approach it that has discounted

25   those?


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 1             DR. KALHAMMER:  These are excellent questions.

 2   And there are really two factors involved.  The basic

 3   assumption in the range graph, in this horizontal bar graph,

 4   you may recall was that the battery weighed either 250

 5   kilograms or 500 kilograms.  And I suspect that the

 6   batteries in Selectria weighed more than 250 kilograms.  So,

 7   it had more energy in it.

 8             Yeah, you have to normalize this in order to

 9   compare the batteries.  And the rational way to do that is

10   to say same weight, right?  Because, ultimately, you're

11   going to be limited by how much weight you can pack on a

12   vehicle.

13             So, that's one explanation.  But there is also

14   usually another explanation in addition.  And that is that

15   the vehicles can be driven in very different ways.  And if

16   somebody sets out to prove that you are going to get, you

17   know, great range, they usually pick conditions, including

18   the way the vehicle is driven, that are reasonably

19   favorable.

20             Now, for instance, in some cases, they will say

21   driven at a constant 40 miles an hour, or whatever, or 60

22   miles an hour.  So, you really have to look at the

23   conditions under which the vehicle is driven before you can

24   make a statement.

25             However, the situation is really quite easy in


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 1   that sense, that for different modes of driving a vehicle,

 2   it's normally known how much energy you need to drive that

 3   vehicle a mile, let's say.  Okay?  For a certain cycle,

 4   there will be so many watt hours per ton mile.  That's a

 5   characteristic.

 6             And then, all you need to know is how many

 7   kilowatt hours you have on the battery, which you decide.

 8   And then, you will know what the range is.

 9             So, you have to be really very careful when you

10   hear all of these enormous claims for long distances driven.

11   In the limit, you might have a thousand pound battery on the

12   vehicle or even more.  And that's not all that realistic.

13             MS. EDGERTON:  That's very helpful.  Thank you.

14             CHAIRMAN DUNLAP:  Okay.  Mr. Lagarias.

15             MR. LAGARIAS:  Dr. Kalhammer, I agree with Ms.

16   Edgerton that this, indeed, is a very useful and far-

17   reaching report that you're presenting to us.

18             In your estimate of the costs of the pilot program

19   and the production program, it would seem that it might be

20   appropriate to see that four or five of the most promising

21   programs would go through the pilot-plant stage so we could

22   get the batteries on the road and get the testing done to

23   evaluate it.

24             And then, there should be -- if things follow

25   normal practices -- a fallout, and only one or two of those


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 1   battery types would ever go into full production.  So, we

 2   don't add up all the costs of full production of all these

 3   processes.

 4             So, we're concerned with the cost and the time

 5   and, of course, the results.  Would you agree with that?

 6             DR. KALHAMMER:  Yeah.  That, of course, is totally

 7   rational, economically rational, and it is a principle that

 8   is very wise.

 9             The other side of the coin is that there's still

10   risks in each one of these, and also these batteries have

11   somewhat different characteristics.

12             Some of them, for instance, would work best if

13   they saw more or less complete charge/discharge every day in

14   a vehicle that really works a lot.  And that, of course, in

15   a sense, is a vehicle that would contribute most to the

16   reduction of pollution, because it produces the most miles

17   per day.

18             And some systems would be better for that and some

19   systems would be better for somewhat different duty cycles.

20   So, right now, I think it would be a little early to decide

21   which the winning horse is.

22             MR. LAGARIAS:  Well, that I think would be the

23   reason for going through a number of pilot programs.

24             DR. KALHAMMER:  Yes, exactly.

25             MR. LAGARIAS:  To screen out those that are --


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 1             DR. KALHAMMER:  And then the market will take over

 2   at some point.

 3             MR. LAGARIAS:  Hopefully.  I hope Sony does better

 4   with the lithium battery than they did with their Beta VCR.

 5             On another point, I assume you're using a common

 6   platform, a weight platform, or a normalizing to determine

 7   the mileage range for these batteries.  Wouldn't it seem

 8   appropriate that battery technology would be the one that

 9   would most benefit from reduction in weight, going from less

10   heavy materials in the vehicle to do more aerodynamic

11   streamlining, because it would be much more important there

12   than it would be with a gasoline powered car?

13             DR. KALHAMMER:  Absolutely.

14             MR. LAGARIAS:  And that could literally -- taking

15   a number out of the air -- double the mileage that you're

16   now projecting if you used a different platform for

17   consideration.

18             DR. KALHAMMER:  Yes, absolutely.  Already today's

19   electric vehicles are, as a vehicle, quite aside from the

20   battery, as a vehicle, much more efficient than they used to

21   be.

22             The other point that's often forgotten, but has

23   been very important is that the drive train itself, the

24   electrical conversion from the DC that comes from the

25   battery to what eventually goes to the motor, that the


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 1   efficiency of this system has been greatly improved.

 2             So, I can tell you that 15, 20 years ago, say a

 3   van -- the General Motors electric van, which was very heavy

 4   with lead-acid battery, needed something like 2.4 kilowatt

 5   hours per mile.  The G-Van that was developed with help of

 6   my organization, the Electric Power Research Institute, had

 7   a vehicle then that was almost identical to this earlier

 8   vehicle that used 1 kilowatt per mile.

 9             And the Chrysler T-Van is using more like half a

10   kilowatt hour.  So, a factor of five improvement just in the

11   vehicle.  And, of course, as you say, this has enormous

12   benefits for electric vehicles, the increase in efficiency.

13             MR. LAGARIAS:  Well, I think these improvements

14   are essential for the electric vehicle.

15             DR. KALHAMMER:  Yes.

16             MR. LAGARIAS:  But they could also be useful in

17   going back into the gasoline-powered vehicle.

18             DR. KALHAMMER:  Absolutely.  Yes, so the electric

19   vehicle does something useful for efficiency in general.

20             MR. LAGARIAS:  Thank you.

21             CHAIRMAN DUNLAP:  Dr. Kalhammer, I have a

22   question.  Could you just take a moment and share with us

23   how you were received when you went out and talked to these

24   experts, particularly the automakers subject to this ZEV

25   requirement.  Was cooperation good?


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 1             DR. KALHAMMER:  It was outstanding.  And I really

 2   think all of these organizations recognize, you know, the

 3   importance of the regulation and the beneficial impact that

 4   the regulation has made.  And they were very open, really.

 5             Now, of course, in many cases, the staff was able

 6   to just introduce us, basically saying what the purpose was

 7   of our investigation, and that really did open the doors.

 8             CHAIRMAN DUNLAP:  Okay.  Good.  What I'd like to

 9   suggest -- Dr. Kalhammer, will you be able to be with us for

10   another hour or so?

11             DR. KALHAMMER:  Certainly.  And I'm sure that you

12   will probably also have questions for Carl Moyer as well.

13             CHAIRMAN DUNLAP:  Right.  Well, I've mentioned his

14   name a couple of times.  I haven't seen him jump up to the

15   podium yet.  But we'll get back to him.

16             If it's okay, I'd ask my Board member colleagues

17   to allow us to let Dr. Kalhammer sit down for a few moments,

18   and let's get to these witnesses, and then we can come back.

19             Sure.  As he's transitioning to the table over

20   there, Ms. Edgerton wants one last question.  So, it's fine

21   if you wish to take it sitting.

22             MS. EDGERTON:  Well, thank you.  I wanted to ask

23   you -- there are a lot of chemicals in these batteries.

24   What approach did you take in evaluating possible emissions

25   from the new batteries as well as the lead-acid batteries?


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 1             Did your analysis cover that, and what did you

 2   find?

 3             DR. KALHAMMER:  I would say that we certainly

 4   heard quite a few things about recycling of batteries, and

 5   it was not the point that we stressed in our investigation.

 6             But particularly, also in Europe and Japan, the

 7   consciousness, you know, of the need to completely close the

 8   loop of these materials is very high.  And so, all of these

 9   organizations have schemes for recycling these batteries.

10             But if you ask me technical detail, how are they

11   all going to do that, I couldn't answer that.  And, in any

12   case, this is different in each case.  But I think it's an

13   issue that has to be solved.  There's just no way today to

14   work with something that might get in the environment that'd

15   be toxic.

16             MS. EDGERTON:  I thought I heard at the workshop

17   that each of the companies working on this had as a specific

18   objective and goal to have a closed-loop system.  Did I hear

19   that correctly or?

20             DR. KALHAMMER:  Yes.

21             MS. EDGERTON:  Thank you.

22             DR. KALHAMMER:  You know, let me just add here,

23   gratuitously, we did make one visit to a lead-acid battery

24   recycling plant.  And that was driven in large measure

25   because of this alarming Carnegie-Mellon study that I'm sure


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 1   everybody has heard about.

 2             And so, we got quite a presentation, and we got an

 3   information package.  And it seems quite clear to us -- Carl

 4   Moyer is much more expert in this field than I am -- but it

 5   seems quite clear to us that Carnegie-Mellon's study worked

 6   with data that are either not applicable anymore -- since,

 7   historic from precontrol days, or downright wrong.  And

 8   generally speaking, it's off by a factor of a thousand.

 9             CHAIRMAN DUNLAP:  Thank you.

10             DR. MOYER:  May I add one remark --

11             CHAIRMAN DUNLAP:  Sure.

12             DR. MOYER:  -- there about battery recycling.  ARB

13   is sponsoring a very complete battery recycling assessment,

14   looking at life cycle emissions of batteries of all the

15   major types.  And that report is partly complete and partly

16   not yet complete, but will be complete in a couple of

17   months.

18             I have myself seen the results -- preliminary

19   results of what you call a population risk assessment for

20   the different battery types.  All the advance batteries in a

21   proper recycling context score actually better than a lead-

22   acid battery does when you're talking about melting forms of

23   recycling in the case of lead-acid.  And we have a very good

24   model in the Vernon plant in L.A.  So, we should be moving

25   forward, luckily, in reduced environmental implications with


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 1   the advanced batteries compared with lead-acid batteries.

 2             CHAIRMAN DUNLAP:  Okay.  Thank you.  What I'd like

 3   to do, our court reporter's going to need to take a break in

 4   a moment.  So, what I would like to do is call one witness

 5   and then we'll continue through the stream.

 6             We have six witnesses signed up.  I'd like to

 7   start off with Division Chief Jan Dunbar of the Sacramento

 8   Fire Department.  And then I'll call up the others as soon

 9   as we hear from him.  And then, we'll give the court

10   reporter a break.

11             MR. DUNBAR:  Good afternoon, members of the Board.

12   Thank you for these few moments.

13             Ladies and gentlemen of the Board, my name is Jan

14   Dunbar.  I am a Division Chief with the City of Sacramento

15   Fire Department, Division of Hazardous Materials.

16             I would like to start off first by saying -- and I

17   also included this in my typewritten notes to myself -- that

18   the purpose of electric cars in California perhaps is a good

19   thing.  I'm not here to criticize that, or throw stones, or

20   anything with regard to the concept of electric cars in

21   California.

22             For that matter, perhaps in a few years, what you

23   might see go by in the streets up here will be an electric

24   fire truck, at least you'll see it; you won't hear it.

25             But who knows?  Batteries will probably have to be


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 1   pretty big for that vehicle.

 2             What I had put together in the way of some notes,

 3   and I'm going to diverse (sic) from my notes purposely, is

 4   that I have been involved in collecting a lot of information

 5   for the past 16 years, 18 months on this issue, so has a

 6   colleague of mine, one of my captains, who has actually been

 7   more deeply involved than I have and has become quite

 8   expertise at what information was available.

 9             I would also say that up to and including last

10   night, there appears to be a shortcoming of information

11   based on what was brought to my attention by my captain and

12   by other members of the fire service community in

13   California.

14             Today, I think that I perhaps should say a few

15   other words.  In some arenas, there is still some

16   insufficient information with respect to the concerns of the

17   fire service.  On the other hand, the last six or seven

18   hours today has also been very educational.  We have learned

19   a few more things.

20             What is interesting is that, in the few cases,

21   though, perhaps that information having been available was

22   not made available when we were looking for it.

23             Our concern in the fire service -- I think I don't

24   need to go into a great deal of detail with respect to the

25   dangers of a new enterprise.  This is not the same as the


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 1   day when we mandated new seat belts or airbags.  We were the

 2   first in the nation to do so.  That didn't affect the fire

 3   service so much.

 4             But this does.  I want you people to understand

 5   that the fire service and I want to be very sincere with you

 6   when we bring up questions with regards to technology.  It's

 7   okay to go forward.  It's okay to go forward fast.  I,

 8   myself, am on four NFPA committees where we do write

 9   standards.  I know what technology is.  And I know what the

10   repercussions are with respect to stating a mandated date.

11             I am here to say to you that I am concerned with

12   regards to your ability, this Board, and in association with

13   the manufacturers and the research that they're bringing

14   before this Board, to meet that date and to meet that date

15   according to your wishes, but also to the fire service

16   concerns.

17             True, it is not much of your concern about what

18   our concerns are.  I'm asking you, though, not to disregard

19   them.  I want you to pay attention that, when we have

20   questions, we obviously are not getting  the accurate

21   answers about the batteries, about the acids, about how

22   these batteries will automatically disengage themselves in

23   an accident.

24             Is it foolproof?

25             Above and beyond what safety features are being


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 1   designed into these vehicles for the protection of the

 2   consumer, what protection has been designed into these

 3   vehicles for the protection of the emergency worker -- the

 4   firefighter?  When they arrive on the scene under the duress

 5   of an unpredictable emergency, it is one thing to be told

 6   that these batteries will not collapse when I know

 7   otherwise.

 8             I've witnessed research and participated in

 9   research with NASA, with the Racing Institute; fuel cells

10   for our race cars rupture.  You see it on television.  And

11   yet the manufacturer will say, well, that wasn't supposed to

12   happen.

13             Pretty soon, by 1998, we're going to start with

14   60,000 vehicles and thereafter many, many more.  You are

15   going to witness -- it's a matter of happenstance -- major

16   accidents in California.

17             Are we addressing all issues?  The attention that

18   I had intended to draw before this Board with my statement,

19   making a few statements, perhaps strongly worded, was not to

20   put anybody on the point, but to bring attention to you

21   people, that here at least in the Sacramento City Fire

22   Department, the lead fire department I believe in the State

23   that began asking questions before anybody else, and we were

24   not getting answers; that there are still a lot of open

25   holes left.


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 1             So, I would like to perhaps close by just saying

 2   this, with conversations and many of which I've had in the

 3   last 20 minutes in the hallway, there has been an agreement,

 4   and I will put forth this offer that, if the California Air

 5   Resources Board will work with the Sacramento Fire

 6   Department to address these issues, to put together training

 7   programs in conjunction with a grant from the State Fire

 8   Marshal's Office -- which I think you people have already

 9   approached them for -- that we, too, will work with them;

10   that we will use the 1998 target date to resolve these

11   issues accurately; that I would, in turn, promise to the Air

12   Resources Board the full resources of the Sacramento Fire

13   Department.

14             And, as we approach the 1998 date, and there are

15   some issues that left -- that are left to be resolved that

16   have not been resolved, that perhaps then would be an

17   appropriate time to reexamine the institution of that date,

18   and it would be premature to do so now.

19             But by all means, though, that does not mean that

20   everything is of concern of the fire service is being

21   resolved today.  There is too much to be done.

22             I would like to thank everybody, including members

23   of this Board, for listening to me, and the manufacturers

24   who will be in response to our inquiries in the future, and

25   to cooperate with the fire service of California.


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 1             And I thank you very much.

 2             CHAIRMAN DUNLAP:  Thank you.  If I could ask a

 3   question or two of you.  When you say you've contacted the

 4   Board, is it the Board you're talking about, for information

 5   and we haven't -- staff hasn't been forthcoming to provide

 6   you information?  Or are you talking about automakers?

 7   Who's been reluctant to give the fire service, as you put

 8   it, the information about vehicles and whatever it is you're

 9   seeking?

10             MR. DUNBAR:  The information that we have

11   solicited has been issued to various automakers.  One has

12   replied, and replied quite well, and perhaps I should

13   mention them.  And that is Ford Motor Company.

14             So, the other manufacturers did not reply.

15             CHAIRMAN DUNLAP:  Okay.  So, you approached the

16   automakers and they haven't given you information on vehicle

17   types and the like?

18             MR. DUNBAR:  Or even they were not prepared to

19   send us anything.  We did not receive any information.

20             CHAIRMAN DUNLAP:  Have we?  Have you asked

21   anything of us, of the Board?

22             MR. DUNBAR:  I personally have not.  I do know

23   that my captain has been contact on numerous occasions,

24   which also included --

25             CHAIRMAN DUNLAP:  Is he here by the way?


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 1             MR. DUNBAR:  Yes, he is.  He's in the audience.

 2   Joe Moore.

 3             CHAIRMAN DUNLAP:  Sir, could I get you to come

 4   forward for a minute?

 5             Have you contacted the staff and we've been

 6   reluctant -- staff's been reluctant to provide you

 7   information?

 8             MR. MOORE:  My contact -- I'm Captain Joe Moore.

 9   I'm involved in training in Sacramento City Fire Department.

10             I've been working -- initially , about a year and

11   a half ago, one of Cal-EPA's representatives, E. D. Chang,

12   came in with a Ford representative, Ed Stannick.  And they

13   were -- wanted to present some information.

14             The information we got at that time I didn't feel

15   was accurate or complete.  It was supposed to be a 20-minute

16   meeting.  It turned out to be about a two-and-a-half-hour

17   meeting, with an understanding there was a lot of things

18   lacking; that they would get back.

19             I requested at the time some training, a vehicle,

20   more information.  Just recently, some of the other Cal-

21   EPA/ARB employees -- Chuck Owens and Robert Ianni -- came

22   over and just finished up some training session with our

23   department.  And we invited a few other departments to

24   participate.

25             We got West Sac and a couple of representatives


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 1   from other departments.

 2             CHAIRMAN DUNLAP:  So, you've had contacts and

 3   meetings, and you just haven't gotten all the information

 4   you'd like to have at this point.

 5             MR. MOORE:  Yeah.

 6             CHAIRMAN DUNLAP:  Okay.

 7             MR. MOORE:  Some of the information created more

 8   questions.  It was incomplete.  Some of the information that

 9   we got, we couldn't operate like that in California.  We

10   would be in trouble if we did what initially they required

11   us or they wanted us to do.

12             CHAIRMAN DUNLAP:  Okay.  Thank you.  I just wanted

13   get a sense.  We'll make sure that the coordination is more

14   tightly done.

15             Mr. Dunbar, you mentioned that you sit on these

16   national advisory committees and come up with standards and

17   what not.

18             What kind of leadtime do you have when you do

19   that, generally speaking?  How many years out before

20   programs are implemented?

21             MR. DUNBAR:  The initiation process starts with a

22   five-year deadline.

23             CHAIRMAN DUNLAP:  Okay.

24             MR. DUNBAR:  And with Cal-OSHA, I've even done a

25   little bit of writing, though it's been some time, with


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 1   firefighter protective clothing and breathing apparatus.

 2             In fact, that's an interesting point.  With our

 3   breathing apparatus, when we in the fire service want what

 4   we call positive pressure, pressure demand breathing

 5   apparatus, an arbitrary date was set.  I think it was 1976.

 6             As 1976 approached, it was obvious to Cal-OSHA

 7   that the manufacturers still were not ready.  And so that

 8   date had to be pushed back.

 9             CHAIRMAN DUNLAP:  I guess what I'm saying is that

10   I want to get a sense of how many years in advance of a

11   program's implementation or being required do you normally

12   get involved and start working on standards and

13   familiarizing --

14             MR. DUNBAR:  With the NFPA standards, it's five

15   years.

16             CHAIRMAN DUNLAP:  Five years, okay.  All right.

17   Very good.  Any of the Board members have any questions of

18   Mr. Dunbar?

19             Sure, Lynne?

20             MS. EDGERTON:  I'm trying to understand, Mr.

21   Dunbar -- thank you for coming.  I have your testimony in

22   front of me.  It's different from what you've said.

23             MR. DUNBAR:  Yes.  And I purposely digressed from

24   it.

25             MS. EDGERTON:  Well, let me see if I understand.


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 1   Then, you are retracting this testimony, and you're not --

 2             MR. DUNBAR:  I've modified it.

 3             MS. EDGERTON:  You've modified it.  So this -- you

 4   don't -- you are not calling on us to delay or rescind the

 5   electric car program.

 6             MR. DUNBAR:  No, and it would not have been my

 7   suggestion to do so.  It would and it is my recommendation

 8   that if these mandates with these concerns can be met by

 9   1998, and at least that you also listen to the concerns of

10   the fire service, why that's just fine.  If that cannot be

11   done, then we have a problem.

12             (Thereupon, there was a pause in the

13             proceedings to allow the reporter to

14             replenish her stenograph paper.)

15             MS. EDGERTON:  Yes.  I just want to respond to

16   your comment that the concerns of the fire department may

17   not be our concerns, and just say that they are.  Your

18   concerns are very much our concerns.  We very much want to

19   hear those.  We are very concerned about the firefighters.

20   We have tremendous respect for the firefighters.

21             We thank you for what you do for us, and we -- in

22   my view, this program is a very ambitious program, a very

23   important one, and it's tremendously important that you be

24   involved.  And I'm delighted to hear that you worked it out

25   so that you can be involved, because you're tremendously


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 1   important to it.  And that's just the truth of it.

 2             Thank you.

 3             CHAIRMAN DUNLAP:  Okay.   Thank you very much.

 4             MR. PARNELL:  Can I?  I'll just take one moment.

 5   I was struck by some of the statements that were made in

 6   your written testimony, and it's my understanding that when

 7   this mandate was set down, that it was very clearly

 8   understood that battery technology was not there; that this

 9   was a technology forcing mandate.  I think the desired

10   effect that you heard testified to today has been felt.

11             But we committed ourselves to regular reviews of

12   the issues as they were available for us to review.  That's

13   the process that's going on.  And I don't wish to be

14   argumentative, but in your statement, I would have preferred

15   that you said you were going to rescind your written

16   statement in preference to your verbal statement.

17             But you made the statement that the California Air

18   Resources Board does not want and is not willing to deal

19   with these problems, when the whole process that was set

20   down at the very onset was to deal with these problems

21   fairly.

22             And so, I'm not looking for a response

23   necessarily, other than to say that this is an ongoing

24   process.  And to the extent if, in fact, it's been the case

25   that we haven't been responsive to your needs, then we will


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 1   be.

 2             But these kinds of allegations sometimes tend to

 3   exacerbate problems rather than solve them.

 4             MR. DUNBAR:  I understand that, and that is why I

 5   did digress from my printed statement.

 6             CHAIRMAN DUNLAP:  Okay.  Thank you.  What I think

 7   I'd like to do is move on with the witnesses, if we could.

 8             Thanks.

 9             CHAIRMAN DUNLAP:  Okay.  Why don't we take a five-

10   minute break, and we'll come back.

11             (Thereupon, there was a brief recess

12             taken.)

13             CHAIRMAN DUNLAP:  If you'll take your seats, we'll

14   begin.  I'm going to call the next witnesses now.  I'd like

15   to call Battalion Chief Bill Somers from the Stockton Fire

16   Department, followed by Darlene Skelton.  Good afternoon.

17             MR. SOMERS:  Good afternoon, Mr. Chairman, Board

18   members.

19             My name is Bill Somers.  I'm the Battalion Chief

20   of the City of Stockton Fire Department.  My duties require

21   me to respond to accidents involving automobile accidents.

22             I would like to say at this time that we're all

23   very appreciative of your acts in the past, the actions that

24   you've taken.  You've done an excellent job in cleaning up

25   the air in California.  I want to thank you for that.


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 1             The industries that we're dealing with here are

 2   transportation systems, transportation industries.  These

 3   are very dynamic moving and uncontrollable type situations

 4   once you release a product out into that stream.  And what

 5   we're saying is that once it's released, then you have no

 6   control over its use, application, et cetera, et cetera, et

 7   cetera.  So, therefore, all the engineered uses can come to

 8   naught.

 9             I want to change my oral presentation somewhat

10   different from my written presentation that you have to a

11   much less technical thing.

12             I'm sure that you've been inundated with technical

13   data and stuff like this.  And I'm going to talk to you

14   primarily about occupant safety.  As far as the exemptions

15   for occupant safety standards that are being exempted, I

16   hope we keep in mind that these standards were purchased by

17   the tremendous price in the past by citizens experiencing

18   unfortunate incidents in motor vehicle accidents.

19             And almost all of the standards that exist today

20   are based on someone's tragedy, perhaps thousands and tens

21   of thousands of tragedies.

22             And before we exempt these occupant safety

23   standards, we should think well upon the prices that were

24   paid for those standards.  Also keep in mind that billions,

25   untold billions, have been spent on medical care and legal


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 1   costs that are associated with those standards.

 2             We should also keep in mind that these exemptions,

 3   based on our past experience, documented experience, that

 4   they can represent a clear and present danger to the

 5   occupant safety of these vehicles.

 6             And I understand, and I'm sure that you're aware

 7   of the magnitude of the impacts of the decision that you'll

 8   be making here on this Board.

 9             I hope that in your decision-making process you'll

10   keep in mind that the decisions you make will have a strong

11   impact, perhaps a life-and-death impact upon the families

12   who place their trust in the product you approved for use.

13             I'm sure you take these responsibilities

14   sincerely, and I'm just asking that occupant safety,

15   passenger safety, be given a very strong consideration,

16   perhaps a primary consideration in releasing this product

17   into the market where no one has control of their use.

18             Thank you.

19             SUPERVISOR RIORDAN:  Thank you, Chief Somers.

20   Maybe there are questions from the Board before you leave

21   the podium.

22             Any of the Board members have any questions for

23   the Chief?  You do?  Ms. Edgerton, and then Supervisor

24   Roberts.

25             MS. EDGERTON:  Chief, thank you for coming today.


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 1   I understand there was a press conference earlier this

 2   morning.  When you present at that?

 3             MR. SOMERS:  Yes, ma'am, I was.

 4             MS. EDGERTON:  And did you release the testimony

 5   that we have before us at that?

 6             MR. SOMERS:  Yes, I did.

 7             MS. EDGERTON:  Because your testimony is -- what

 8   you just said is not exactly the same thing what you said in

 9   your testimony.

10             MR. SOMERS:  I believe I cleared that up earlier.

11   Yes, ma'am.

12             MS. EDGERTON:  Did you attend the -- have you read

13   any of the materials put out by the Air Resources Board on

14   zero-emission vehicles and their safety?

15             MR. SOMERS:  No, I have not.

16             MS. EDGERTON:  Did you read the 1994 ZEV staff

17   report?

18             MR. SOMERS:  No, ma'am, I have not.

19             MS. EDGERTON:  Did you attend any of the workshops

20   that we have held in the last year on infrastructure and

21   safety for zero-emission vehicles?

22             MR. SOMERS:  No, I have not.

23             MS. EDGERTON:  To your knowledge, did any of the

24   people who went to any of the -- any of the other chiefs who

25   went to the press conference attend the infrastructure --


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 1             MR. SOMERS:  I don't know that.

 2             MS. EDGERTON:  Have you ever approached any of the

 3   utilities with respect to the safety efforts that they're

 4   making for recharging and infrastructure for electric

 5   vehicles?

 6             MR. SOMERS:  No, I haven't.

 7             MS. EDGERTON:  You commented about the exemptions.

 8   Are you aware of the difference between an exemption for an

 9   experimental vehicle or prototype vehicle and an exemption

10   for a broad-based consumer sales for vehicles?

11             MR. SOMERS:  Technically, no, but, yes, I do

12   understand the concept.

13             MS. EDGERTON:  Have you reviewed this sheet with

14   these exemptions that is before me that --

15             MR. SOMERS:  I briefly looked over it, yes.

16             MS. EDGERTON:  Is this what you're referring to

17   when you say you thought we shouldn't have exemptions for

18   electric vehicles?

19             MR. SOMERS:  I think that, if you allow

20   exemptions, you should weigh heavily the impact it may have

21   on passenger safety, yes.

22             MS. EDGERTON:  I see here that one, two, three

23   four, five, six, seven of them had to do with windshield

24   defrosting for electric vehicles, and a number of these

25   others -- I don't know whether you have checked into them,


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 1   but there -- it may be just 14 cars.  Because I do know that

 2   that is how prototype vehicles get tested.

 3             Does that concern you just as much if it's an

 4   exemption so they can test a prototype electric vehicle  as

 5   opposed to being offered generally for sale to consumers?

 6             MR. SOMERS:  As I understand, the issue at this

 7   point is that -- I am not aware that the Air Resources Board

 8   is going to vary their waivers on passenger safety

 9   requirements.  I don't know how many prototype vehicles

10   there's going to be out there in the public.  Are there

11   going to be 15 or 20, or are there going to be 20,000?

12             MS. EDGERTON:  Well, you know, there's quite a

13   difference here.  For example, at the moment, I'm not aware

14   of any of the seven automobile manufacturers who are covered

15   by the ZEV program in 1998 -- I'm not aware that any of

16   them, not one of them, is currently offering an electric

17   vehicle for sale.  I can't buy one.

18             MR. SOMERS:  Well, I understand that.  And so long

19   as they're granted waivers, they're not going to offer you

20   one.

21             MS. EDGERTON:  I beg your pardon?

22             MR. SOMERS:  I understand that the manufacturer is

23   not going to produce something they're not required to

24   produce.  I think if we go back and look at that, the reason

25   that we have these exemptions, a lot of them are related to


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 1   weight and efficiency things, and passenger safety may have

 2   been violated in the effort to make the vehicle marketable,

 3   more efficient, long-range, more acceleration, et cetera, et

 4   cetera.

 5             I don't know those things.  But they seem to play

 6   a part in these issues.  And all I'm asking the Board to do

 7   is to, number one, ensure that the occupant safety of an

 8   electric car is no less than it is in a regular standard

 9   car.

10             MS. EDGERTON:  Oh, well, sir, I guess maybe

11   there's confusion here.  We haven't granted any exemptions.

12   These are exemptions by the Federal Motor Vehicle Safety

13   Standards folks to companies that are testing out vehicles.

14   They are not exemptions granted by the Air Resources Board.

15   It's not a safety exemption that we have put out.  And it's

16   not something that jeopardizes the public in any way,

17   because it's for prototype experimental vehicles.  They're

18   not for vehicles that are generally for sale yet.

19             This is 1995.  And so, I guess my -- the drift of

20   my comments is to reassure you that these are not -- these

21   are not exemptions for vehicles that are currently offered

22   for sale or, to my knowledge, for vehicles that have been

23   proposed to be offered to the general consumer market.  It's

24   just not something that you need to -- it's not applicable

25   to your safety concerns, except with respect to the


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 1   occasional EV currently that might be on the road as an

 2   experiment, an experimental vehicle.

 3             MR. SOMERS:  Well, pardon me.  As I understand it,

 4   there's one vehicle that's a three-wheeler that has no

 5   passenger safety consideration whatsoever.  I don't know if

 6   that's going to be a prototype or if that's going to be a

 7   production model, because if a vehicle is rated as a

 8   motorcycle versus a passenger vehicle, then, of course,

 9   there's no standards by which it has to address passenger

10   safety, other than that of what a motorcycle might have.

11             MS. EDGERTON:  Well, let me get back to this --

12   maybe someone else can address the -- one of the staff can

13   address the three-wheel vehicle.  Is that something that

14   gets ZEV credit?

15             It's not governed under our program for ZEV

16   credit?

17             No, that's not us.

18             MR. SOMERS:  Again, my main concern is, as a field

19   responder, I respond to accidents as they occur on our

20   highways and byways.  And I'm only addressing the Board

21   here.  And my concern's based on my experience on passenger

22   safety.

23             And so, if the Board doesn't have an involvement

24   in that or if the Board can't influence passenger safety,

25   then that's a moot issue at this Board.


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 1             MS. EDGERTON:  Well, sir, we are very interested

 2   in that, and I notice here on a technical issue, you didn't

 3   want to talk about the technical issues, but we are very

 4   interested in the technical issues.  That's precisely what

 5   we are interested in.  And, in your comments that your

 6   comments that you released to the Press, you mentioned

 7   caustic liquid spills from batteries.  Is that correct?

 8             MR. SOMERS:  Yes.  That's correct.

 9             MS. EDGERTON:  And where did you get your

10   information that the batteries in the electric vehicles are

11   going to have liquid spills?

12             MR. SOMERS:  As you've heard earlier today, they

13   talk about these lead-acid batteries, and they do definitely

14   contain sulfuric acid.  And we experience them right now in

15   the field.

16             MS. EDGERTON:  What I think would be helpful would

17   be if I could ask Mr. Cackette to address -- my

18   understanding is that there is not going to be -- there is

19   not liquid in these batteries; that it's a gel that's being

20   used.  Can you address a couple of these technical issues

21   that the Captain has brought up?

22             MR. CACKETTE:  Yes, I believe that is the case.

23   Most of the manufacturers of lead-acid batteries for the '98

24   time frame are envisioning vehicles -- batteries which do

25   not have a liquid sulfuric acid in them as does the starting


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 1   battery of your car today.

 2             And so, if they crack, you will not have a flow of

 3   gallons of sulfuric acid out onto the pavement.  The gel

 4   will basically stay with the battery.

 5             MR. SOMERS:  Well, if I may, our concern with that

 6   particular issue isn't necessarily a crack and it running

 7   out on the ground.  Our concern would be that the impact and

 8   the crushing of the battery in a very rapid sequence causing

 9   these gel sacs to erupt and then you'd have a situation

10   again -- this is not the forum for this, but you'd have a

11   situation where you'd have -- let's say a glob of hot tar on

12   your skin versus a liquid that would run off you could wash

13   off easily.

14             There's many technical things, like you say, to

15   consider.  But again, all I'm asking is passenger safety

16   should have -- and I'm sure that it has -- a high priority

17   in the design of a passenger compartment.

18             MS. EDGERTON:  Well, sir, I'm going to yield to my

19   colleague, Mr. Calhoun, but I will say that it is very

20   troubling, because this is the forum.  We would prefer for

21   you to bring these concerns here rather than calling a press

22   conference with a lot of data, which is incorrect in my

23   view, and in the view of our staff and the battery

24   manufacturers, and the automobile manufacturers.  I would be

25   interested in what they have told you as well.


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 1             However, they are ultimately liable.  Thank you.

 2             CHAIRMAN DUNLAP:  Mr. Calhoun.

 3             MR. CALHOUN:  Mr. Chairman, if I didn't know

 4   better, I would think that the impression that is being

 5   given here is that the auto manufacturers don't pay any

 6   attention to product safety.  And if they're paying

 7   attention to anything, they pay attention to product safety.

 8             They're very concerned about product liability.

 9   They get sued every day because of allegations, claims made

10   about product safety.  And before they can sell any vehicles

11   on the market, they have to meet the standards set by the

12   National Highway and Traffic Safety Administration.

13             And I would hate the people are given or even

14   believe that no effort is put forth to try and assure that

15   the vehicles are, in fact, safe.  The auto manufacturers

16   aren't about to release those vehicles out there without

17   some assurance that they are, in fact, safe.  They will go

18   through every possible failure mode that they can think of

19   at this particular time.

20             And even so, they will still miss something.  Just

21   like you see vehicles that are involved in accidents that

22   catch fire -- but I wouldn't want the impression created

23   before this audience or before this country that the

24   automobile industry does not pay attention to product

25   safety, but that's simply not the truth.


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 1             MR. SOMERS:  I agree with that.  And all I'm

 2   saying is that the occupant safety standards that are in

 3   place are there, and that a high price was paid for those

 4   standards, and we should pay close attention to those, and

 5   then handle them with a great amount of care based on, let's

 6   say, past experience.

 7             MR. CALHOUN:  And I'm sure that the auto

 8   manufacturers are thinking as much as they possibly can as

 9   to possible difficulties that may be encountered, and are

10   going to put forth every effort to try and build safety into

11   that particular vehicle, because, as I said before, they

12   don't like these product liability suits, and they happen

13   every day.

14             CHAIRMAN DUNLAP:  Mr. Lagarias.

15             MR. LAGARIAS:  Chief Somers, can you give me an

16   estimate of the relative risk of crash of an electric

17   vehicle versus vehicles powered by gasoline?

18             MR. SOMERS:  Well, I would -- again, I'm not

19   familiar with the design.  I've seen pictures, mostly is

20   what I've seen of most electric cars.  I've seen a couple

21   sitting over in the parking garage downtown today.

22             I would say that the electric car would suffer a

23   tremendous, much more damage than, let's say, a standard

24   car.  I would say it has a good -- a good possibility of

25   being totally overran by the opposing vehicle.


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 1             MR. LAGARIAS:  Is that because of size?

 2             MR. SOMERS:  Size and weight, yes, and height.

 3             MR. LAGARIAS:  But those are not the issues that

 4   we are hearing about.  We're talking about the battery, and

 5   is that where your risk was centered on?

 6             MR. SOMERS:  My primary concern is the passenger

 7   safety, and the battery, of course, will play a big role in

 8   that safety.

 9             MR. LAGARIAS:  Vis-a-vis gasoline, which are the

10   fuels we're talking about?

11             MR. SOMERS:  Well, basically, if gasoline gets

12   into the passenger compartment, you have a problem.  And if

13   the contents of the battery gets into the passenger

14   compartment, you can have a problem.

15             And all we're saying is the passenger compartment

16   needs to be designed, and I'm sure we have the technology

17   and the brains out there to do it, to give the maximum

18   amount of protection to the --

19             MR. LAGARIAS:  We'll see that that message gets

20   back to the automobile manufacturers.

21             SUPERVISOR VAGIM:  You can put a 500 kilogram

22   battery, and it will roll over anything.

23             MR. SOMERS:  But it's very low to the ground, so

24   the other higher vehicles will pass over it.

25             CHAIRMAN DUNLAP:  Thank you, sir.  Appreciate your


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 1   time and attention.

 2             SUPERVISOR ROBERTS:  Mr. Chairman?

 3             CHAIRMAN DUNLAP:  Yes, Ron, I'm sorry.

 4             SUPERVISOR ROBERTS:  Some of what I had to say I

 5   think -- at least the substance of it was covered.  But I

 6   think there's another aspect here, and I think the -- for

 7   the fire captain and others in his profession that are here,

 8   I think there's another aspect.  And it sounds like

 9   everybody's been sort of orchestrated to look at accidents.

10             CHAIRMAN DUNLAP:  Right.

11             SUPERVISOR ROBERTS:  But let me just call your

12   attention to the fact that my visit that I mentioned earlier

13   to Calstart, we had a discussion on building codes and

14   reviews by the building inspectors and the fire department

15   with respect to some changes that are going to be needed t o

16   accommodate recharging and other issues that come up.

17             And I hope that rather than guessing what's out

18   there and throwing up your hands and saying, we've got to

19   stop everything because we haven't seen it yet, we can get

20   you involved in this process.  I was an architect before I

21   got into this business, and have quite a bit of experience

22   in that area.  And there is a significant role for you

23   fellows to play.  But if you get your information in the way

24   you've gotten your information so far, you're not going to

25   be of any help to the people in your community.  And I think


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 1   that would be unfortunate.

 2             So, I think you've got some homework to do.  And I

 3   think -- and I hope, to the extent that our staff and others

 4   can get you involved in this, that it can be successfully

 5   done.

 6             MR. SOMERS:  Mr. Chairman and Board members, I can

 7   assure this, this meeting has had a significant impact upon

 8   public safety responders, industry, trainers, the whole

 9   thing.  And from this meeting today, I believe that there's

10   going to be a tremendous amount of exchanges in the future

11   regarding this issue.  And I would just like to thank you

12   for that.

13             CHAIRMAN DUNLAP:  Thank you.  Well said, Ron.

14   Appreciate it.

15             Darlene Skelton, followed by Captain Terry Scortt.

16   Ms. Skelton's with the National Institute of Emergency

17   Vehicle Safety.  And Captain Terry Scortt is with the

18   California Firefighters Association.

19             MS. SKELTON:  My name is Darlene Skelton.  I'm

20   president of the National Institute of Emergency Vehicle

21   Safety.  I'm a founding member of EVS, and I have been

22   concerned about federal motor vehicle safety standards to an

23   extensive level, as how they relate to emergency vehicle

24   safety.

25             EVS is a nonprofit organization whose primary


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 1   focus is vehicle safety for emergency responders.

 2             The Federal Motor Vehicle Safety Standards for

 3   conventionally fueled cars were first promulgated by the

 4   National Traffic and Motor Vehicle Safety Act of 1966.

 5   These standards have now enjoyed over 20 years of success in

 6   protecting the public.

 7             At this point, I'd like to interject that the

 8   concerns that I'm about to express and review are based on

 9   research and conversations that we have had.  The concerns

10   that we are expressing are no more than what the National

11   Highway Traffic Safety Administration expressed in their

12   request for public comment of September 30th, 1994, which

13   addresses the same safety issues that I'm about to express.

14             We've also had discussions with NHTSA officials.

15   We have been told that they have conducted several crash

16   tests.  They are concerned about substantial acid spillage.

17   So, we know that it's happening.  We have evidence from

18   reports with them.

19             We have also reviewed a videotape that NHTSA

20   conducted a crash test, and we also know that the new car

21   assessment program, which is sponsored by the National

22   Highway Traffic Safety Administration, has absolutely no

23   plans to involve electric vehicles in their crash-testing

24   program for consumer protection.

25             Consumers today instinctively believe that when


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 1   they purchase a vehicle, that that vehicle has met certain

 2   occupant safety protection criteria.  However, we feel that

 3   with electric cars, buyers must beware.  Government records

 4   indicate that out of 12 requests by electric car

 5   manufacturers for exemptions from occupant restraint and

 6   crash protection standards, 11 of those requests were

 7   granted, as well as two requests for electric cars to be

 8   exempt from roof crush resistance standards.

 9             According to staffers with the National Highway

10   and Traffic Safety Administration, no vehicle standards

11   currently exist for hazards unique to electric vehicles.  No

12   standards for electric shock, electrolyte spillage, and

13   hydrogen gas.  Although NHTSA has issued a request for

14   comment regarding safety issues in electric vehicles, their

15   rulemaking process is currently on hold.  The Society of

16   Automotive Engineers is attempting to develop standards for

17   electric shock and electrolyte spillage by the end of this

18   year.

19             However, NHTSA staffers expressed skepticism that

20   SAE would be able to meet that deadline.  Further, SAE

21   standards are voluntary and NHTSA would be forced to

22   initiate a complete and formal rulemaking process before it

23   promulgated binding standards, which normally takes five to

24   seven years.

25             EVS certainly does not anticipate that NHTSA will


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 1   have complete finding standards for the unique risks posed

 2   by electric vehicles regarding shock -- electric shock and

 3   electrolyte spillage in time to meet your mandate for the

 4   1998 year.

 5             We're further concerned that there seems to be no

 6   process at all within SAE or NHTSA regarding what could be

 7   the most hazardous aspect of electric vehicles -- the

 8   generation of hydrogen gas by electric vehicles under a

 9   stressed environment, such as overcharging, overdischarging,

10   or in the event of a vehicle collision, short circuit, or

11   fire.

12             For example, if you're a firefighter extricating

13   me from an incident in an electric vehicle, you have no

14   guarantee that those battery cables are not routed in an

15   area where you are about to cut in order to extricate me

16   from that vehicle -- in the door, in the roof, in the

17   support system, or in the frame structure.  Or if I'm

18   extricating you, and you have to wait for a battery bleed-

19   down time for two minutes, you could be dead before I could

20   reach you.

21             We believe that these are realities for the

22   consumer and the emergency responder.  Without specific

23   regulatory standards, anything is in the realm of

24   possibility.  I speak that from personal experience and what

25   we have seen through the National Institute of Emergency


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 1   Vehicle Safety, when there are not specific standards

 2   addressing issues, because the fire service is so prone to

 3   having small numbers of vehicles by small manufacturers and

 4   producing custom vehicles.

 5             According to NHTSA staffers, all electric vehicles

 6   on the road today, every single one, has either been

 7   exempted from federal vehicle safety standards or has

 8   slipped through the loophole in federal standards.

 9             I have a partial list, which is included with my

10   written testimony citing almost 50 different exemptions and

11   requests for exemptions from federal vehicle safety

12   standards from December, 1991 through March, 1994.

13             We don't know when they'll end.  We don't know how

14   long these exemptions will continue.  The exemptions cover

15   almost every safety standard under the sun, from occupant

16   protection to brake systems and hoses to steering control

17   and rearward displacement.  All of the requests for safety

18   standard exemptions that were made from 1991 to 1994, only

19   two requests were denied.

20             Most disturbing, uniform exemptions for crash

21   controls and brake system safety standards were granted or

22   proposed for all electric vehicles.  Currently, we are not

23   aware of any plans to replace those standards, which there

24   has been a proposed exemption for.

25             These electric vehicles are advertised to be able


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 1   to reach speeds up to 70 miles per hour with a supposed

 2   range of 100 miles.  Couple these claims made by the

 3   electric car salesmen with unpublicized exemptions or the

 4   complete lack of safety standards regarding some hazards,

 5   and we believe that consumers are unknowingly left with a

 6   tremendous false sense of security.

 7             The companies requesting exemptions include the

 8   big three car manufacturers and familiar names that we've

 9   heard throughout these workshops, such as Selectria and

10   Calstart -- affiliated battery company -- company Battery

11   Automated Technology, or BAT.

12             While it may be standard practice to grant

13   exemptions for prototype vehicles, all of the smaller

14   electric car procedures, like Selectria and BAT, claim to be

15   on the verge of large-scale production.  We have no

16   guarantee that these exemptions will stop by 1998.  We are

17   very concerned that the safety -- current safety standard

18   exemptions, which have been granted so far, will continue to

19   apply as these companies produce greater numbers of electric

20   cars for consumer use.

21             Further, many electric cars have slipped through

22   the loopholes in motor vehicle safety standards.  Mr. Somers

23   mentioned a three-wheeled vehicle.  And personally, that's

24   one that totally frightens me.  We have an article -- this

25   is not included in my testimony -- we have an article where


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 1   a company out of the State of Washington was interviewed,

 2   and they were ecstatic over the mandate in California in

 3   1998, because they felt that they were at the right place at

 4   the right time.

 5             These are three-wheeled vehicles.  The author of

 6   the article test drove this vehicle.  He indicated that an

 7   individual that was six-feet tall would have difficulties

 8   getting in it.  His knees were against the dashboard.  And

 9   you would have difficulty getting the keys into the

10   ignition.

11             He also stated in the article that, when driving

12   this vehicle and decelerating from highway speeds, the front

13   end floated over the highway.

14             So, we're concerned that these three-wheeled

15   electric vehicles that are currently on the market right now

16   will slip into this mandate and find a market niche for

17   themselves.

18             Although these vehicles are commonly referred to

19   as cars, they are carefully -- they are fully enclosed, the

20   wheelers -- the three-wheelers are only required to meet

21   motorcycle standards which offer little or no occupant

22   protection.

23             Further, we know that the three-wheel all terrain

24   vehicle was deemed inherently unsafe and subject to high

25   rollover propensity as well as assorted handling and


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 1   steering problems.

 2             Vehicles with high rollover risk, such as the

 3   Samurai and CJ5, have already been taken out of the

 4   marketplace.  We ask why are we opening up the market

 5   through a mandate for more unsafe vehicles like these three-

 6   wheeled electric cars?

 7             Again, without specific standards for electric

 8   vehicles, anything is in the realm of possibility.  We

 9   believe that the average consumer will probably not be able

10   to afford the extra l0 to $30,000 additional purchase

11   expense required to buy an electric car.  We believe,

12   instead, the public and private fleets, already struggling

13   to meet existing purchase mandates for alternative-fueled

14   vehicles, will be targeted for further purchase mandates for

15   electric vehicles.  A number of municipalities, even if not

16   compelled by State or Federal mandate, will probably assume

17   local mandates of their own given past history.  That's

18   based on a personal experience that we've had with EVS, that

19   after an executive order by the President of the United

20   States encouraging recycled materials, that there were

21   literally local mandates requiring emergency response

22   agencies to run recycled or retreaded tires on their

23   vehicles.

24             So, we see that with a mandate, we can expect that

25   local jurisdictions will also adopt similar mandates in


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 1   order to carry their share of the burden.

 2             Municipalities are often required by law to take

 3   the lowest bidder.  From our experience with EVS, we see

 4   what kind of interesting vehicles end up in fire

 5   departments.  Coupled with the FMVSS exemptions,

 6   municipalities will be diverting scarce funds to expensive

 7   electric vehicles that will not offer the same range as

 8   conventional vehicles, and which do not meet thee federal

 9   safety standards.

10             Not only will the mandate be creating greater

11   problems for local public safety agencies, but the mandate

12   will be taking money, we feel, directly from the pockets of

13   the fire department, police officers, and other emergency

14   responders.

15             We've heard testimony two weeks ago in L.A. where

16   the auto manufacturers was calling for -- and I believe we

17   heard it again today -- that municipal governments need to

18   pull together to meet this mandate and put these electric

19   vehicles in their fleet.

20             There is no perfect material and there is no

21   perfect design.  And we recognize that the National Highway

22   Traffic Safety Administration provides exemptions for

23   federal standards to encourage the development of new

24   technologies.  However, as I previously stated, the electric

25   vehicles on the roads today are exempted from the federal


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 1   standards.

 2             And those standards exist for safety issues unique

 3   to the electric cars; specifically, the electric shock,

 4   electrolyte spillage, and hydrogen gas.

 5             There will not be binding safety standards for

 6   electric cars in the foreseeable future.  With current

 7   exemptions from the standards, the lack of standards for

 8   safety hazards unique to electric vehicles, plus the mandate

 9   of 20 to 30,0000 cars to be put on California's roads by

10   1988 (sic), we believe and anticipate that a situation where

11   consumers, fire department, public safety personnel and

12   citizen alike -- citizens alike will not have any protection

13   against these issues.

14             At the very least, we as that you rescind the

15   mandate until such time that the National Highway Traffic

16   Safety Administration, the federal regulatory agency, has

17   had sufficient time to apply current federal safety

18   standards to all electric vehicles, and promulgate new

19   standards for safety hazards unique to electric vehicles.

20             We're here today in hopes that you will hear and

21   listen to our concerns.  The National Institute of Emergency

22   Vehicle Safety has been a national leader in addressing

23   vehicle safety issues for emergency responders nationwide

24   for the last four and a half years.

25             We hope that you've heard our voice and that


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 1   you're willing to work with EVS to resolve these issues.

 2             Thank you for your time today.

 3             CHAIRMAN DUNLAP:  We have and we are -- heard your

 4   voice.  Any other questions of our witness?  Ms. Edgerton.

 5             MS. EDGERTON:  Thank you for coming today.

 6             Ms. Skelton, could you give me a little

 7   information on the size of your staff and -- I see here that

 8   you're in Reno.

 9             MS. SKELTON:  That's correct.

10             MS. EDGERTON:  Is that your only office?

11             MS. SKELTON:  Yes.  We were located in Castro

12   Valley, California until the beginning of June this year.

13             MS. EDGERTON:  And then you're moving to Reno?

14             MS. SKELTON:  We already moved.

15             MS. EDGERTON:  Wait.  I'm confused.

16             MS. SKELTON:  We were in Castro Valley, California

17   until June of this year.  We moved to Reno.

18             MS. EDGERTON:  So, you're not a California

19   institute.

20             MS. SKELTON:  No, we're a national institute.

21             MS. EDGERTON:  How many staff members, paid staff

22   members do you have?

23             MS. SKELTON:  We currently have two paid staff

24   members, and approximately three to four nearly fulltime

25   volunteers.


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 1             MS. EDGERTON:  And the two staff members, what are

 2   their positions?

 3             MS. SKELTON:  It's myself as president, and we

 4   have an executive assistant and an office manager.

 5             MS. EDGERTON:  And what is your educational

 6   background with respect to safety?

 7             MS. SKELTON:  One of a concerned citizen, one of a

 8   concerned person who has been in the fire service and

 9   understands the dangers and the threats that emergency

10   responders have to work with, specifically when vehicle

11   issues are put in front of them that they are not prepared

12   to deal with, and specific issues have not been addressed.

13             MS. EDGERTON:  What's your annual budget?

14             MS. SKELTON:  Our annual budget is about $100,000.

15   We budget more but, unfortunately, we don't meet it.

16             MS. EDGERTON:  It's true of a lot of nonprofits.

17   Who are the primary -- are you a 501C-3?

18             MS. SKELTON:  Yes, we are.

19             MS. EDGERTON:  MS. EDGERTON:  Where do you get

20   most of your funding?

21             MS. SKELTON:  Most of our funding comes from about

22   150 members across the country, of which about 70 to 80 are

23   in the State of California.  We also conduct training

24   classes and provide vehicle analysis, failure analysis,

25   fleet analysis,


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 1             Our training classes involve anything having to do

 2   with hazards of vehicles and dealing with them, on how to

 3   spec them and get the best safe vehicle for the fire

 4   department, best utilization of their funds.

 5             So, it's a combination.  Currently, we do not,

 6   unfortunately, have not received any large grants,

 7   donations, federal grants, and literally it threatens our

 8   existence that we're unable to get the support that we need.

 9             MS. EDGERTON:  Do you have an annual report?

10             MS. SKELTON:  We issue a newsletter every other

11   month.  We have not yet issued annual reports.  We give

12   reports to our board members.

13             MS. EDGERTON:  And I guess you file with the

14   Internal Revenue Service --

15             MS. SKELTON:  Yes.

16             MS. EDGERTON:  -- your list of donors?

17             Is this a specific focus?  I mean it's interesting

18   to me that you're here today.  Do you have a specific

19   project on electric vehicles?

20             MS. SKELTON:  We first got involved with this

21   issue when the FIP/SIP came around.  At that point,

22   initially, we were told that there were no exemptions for

23   fire departments.  We became very active.  This is really a

24   rollover from the FIP/SIP issue.

25             We see that the electric vehicles are something


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 1   that the fire departments are going to have to deal with.

 2   Because we look and deal with the federal motor vehicle

 3   safety standards on a daily basis and how they apply to

 4   emergency vehicles, we fully understand that without the

 5   specific standards that we're asking for, that anything is

 6   in the realm of possibility.  We are not as concerned with

 7   the more responsible auto manufacturers.  We know what

 8   happens when doors are opened and there's no specific

 9   standard to address an issue.

10             We have worked on cases before where there were

11   definite safety issues and we could not get them looked at

12   because there was just no standard for it.  So, we see these

13   as serious issues that we would like to see in place under

14   the federal motor vehicle safety standards before there's

15   any kind of mandate.

16             If NHTSA can push them through in two years, that

17   would be great.   I just don't believe that they can or that

18   they will.

19             MS. EDGERTON:  Who funded your FIP/SIP work?

20             MS. SKELTON:  The FIP/SIP work, we did.

21             MS. EDGERTON:  From your general revenues?

22             MS. SKELTON:  Yes.

23             MS. EDGERTON:  Who funds your safety work and

24   coming out here today.

25             MS. SKELTON:  Coming here today, in this


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 1   particular issue, because our budget funds have been very,

 2   very scarce, we have joined with the Coalition of

 3   Californians Against Hidden Taxes.  They have paid our

 4   travel expenses here.  We have -- I'm sure maybe your next

 5   question, or there's a number of people wondering, have we

 6   received any money from auto manufacturers or the oil

 7   industry, and the answer to that is, no.  They're involved

 8   in the coalition and support the coalition.  I don't know to

 9   what degree.

10             Our expenses here today, both for me and Mr.

11   Craven, who'll be speaking later, is probably less than

12   $200.  We specifically, even a year ago, applied for a grant

13   to Exxon, not even having anything to do with this issue,

14   talking about the kind of safety programs that we have and

15   the concerns, and even how it improves safety for their own

16   fire departments.  And we received a flat rejection in less

17   than seven days.

18             So, we do not receive, not one penny from the oil

19   industry or the auto manufacturers.  We do have a small,

20   probably less than a half a dozen, of fire and ambulance

21   manufacturers who are members of our organization, because

22   they are as equally concerned about emergency vehicle safety

23   as we are.

24             MS. EDGERTON:  So, if I understand you, your

25   funding to get here today and to have a presence on this is


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 1   from the Californians -- the Coalition Against Hidden Taxes?

 2             MS. SKELTON:  Yes.

 3             MS. EDGERTON:  Which, as you have said, if I

 4   understood you, you said, of course, they have gotten money

 5   also from the oil companies?

 6             MS. SKELTON:  I'm not sure.  I'm not an official

 7   in that organization.  I do not know to what degree they get

 8   support.

 9             MS. EDGERTON:  Okay.  Let me try to see if we

10   can't some answers to a couple of the questions that you --

11   you've made some pretty serious charges.  Electric shock,

12   let's see if we can discuss your concerns about electric

13   shock.  I don't know what kind of electric shock standards

14   you are talking about.

15             MS. SKELTON:  Okay.  As the example I used, if I

16   was an occupant of an emergency vehicle -- excuse me -- EV,

17   emergency vehicle/electric vehicle, I interchange them

18   sometimes.

19             Electric vehicles, if I'm in an electric vehicle

20   that's involved in a severe crash and you are a firefighter

21   that needs to extricate me, extrication many times involves

22   cutting off doors, cutting off roofs.   Currently, because

23   there's no standard, you, as a firefighter, have no

24   guarantee that if you use that jaws of life to cut the

25   support system to the roof or to cut into that door that


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 1   there's no battery cables routed through that system.

 2             We've heard a lot of talk about the  a little bit

 3   off of the issue of electric shock.  But the current -- the

 4   training video that was made available indicates that the

 5   emergency shut-off switch is located under the driver's

 6   seat.  If you are the driver/occupant of that electric

 7   vehicle and I need to get to you, then the only way I can

 8   reach that emergency shut-off switch is to remove you.

 9             So, I have no guarantee that there's no electric

10   charge in that vehicle until I shut off that emergency

11   switch.  Without a standard that's saying the emergency

12   shut-off switch must be accessible at a specific place, you

13   have no guarantees where any of these small car

14   manufacturers, who see this as a wonderful opportunity, will

15   place it.

16             MS. EDGERTON:  And what is your concern about

17   electrolyte spillage?

18             MS. SKELTON:  The acid spillage, we have heard

19   figures from the National Highway Traffic Safety

20   Administration of gallons of acid spillage based on the

21   tests that they have conducted.  They qualified it as

22   substantial spillage.  Not only does that in itself create

23   an environmental hazard to have to clean up, but it also is

24   a safety issue that the occupants of the vehicle, as well as

25   emergency responders, have to deal with.


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 1             MS. EDGERTON:  May I ask, do you all want to

 2   respond to either the spillage issue or the electric shock

 3   issue?  I know we -- this is not the forum where we can an

 4   elaborate discussion.  Frankly, I'm kind of impressed by the

 5   ambitiousness of your effort, in that there are many, many

 6   other folks obviously all around the world working on all of

 7   these issues to ensure that the electric vehicles are safe.

 8             But, Mr. Cackette, would you?

 9             MR. CACKETTE:  Well, I think I addressed the

10   spillage of sulfuric acid on a lead-acid batteries, where

11   the cars that would be affected by our ZEV program

12   requirements in 1998, and there won't be any.  They're all

13   planning on using gel-type batteries.  So, even if the case

14   of the battery cracks, nothing's going to come pouring out.

15             On the safety issue, as she said, they all have a

16   safety disconnect.  Many of the manufacturers are planning

17   for a situation where there's an accident, that there'll be

18   an automatic disconnect of the battery from the electrical

19   system, much like, you know, an airbag that was triggered by

20   a sensor, the same kind of thing would happen.

21             And if it's a serious enough accident and traps

22   somebody inside a car, then that's going to happen.  And

23   that's even on some of the prototypes that we've seen

24   already today.

25             So, the power's immediately cut off, and it


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 1   doesn't matter where you cut the vehicle.  If you cut

 2   through a line, you will not be cutting into 300 volts of

 3   battery power.

 4             I think the fundamental disconnect in this

 5   testimony is that, on one hand, Ms. Skelton is pointing out

 6   that there are cars on the road today that are electric

 7   powered that do not meet the federal safety standards.  And,

 8   essentially, a lot of these, especially the examples about

 9   the three-wheels, are basically like kit cars, you know,

10   things that have been built in relatively low volume, almost

11   in the back yard or in the garage type of a situation.

12             You can build yourself a Cobra replica, you can

13   build yourself all kinds of different cars today that don't

14   meet federal safety standards of any type.  And that's not

15   being driven by this regulatory program nor is it relevant

16   to 1998.

17             What's relevant to 1998, I think the impact of

18   this program, is that those vehicles which do lack

19   demonstrated safety through the FMVSS will change by 1998.

20             Because we're dealing with volumes, because we're

21   dealing with full-fledged auto manufacturers who will be

22   producing these cars, these vehicles will all be FMVSS

23   safety certified.

24             And the Federal Government is working to go

25   through all of the regulations, and either identify the need


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 1   for new ones or the need -- the nonapplicability of other

 2   ones -- for example, ones that might apply to gas tanks and

 3   locations of gas tanks, which are obviously not relevant to

 4   an electric vehicle.

 5             So, the net effect of the regulation and this

 6   general effort will be that there will be safety standards

 7   established, and these vehicles will meet safety standards.

 8   And GM, and Ford, and Toyota are not going to sell cars that

 9   are not FMVSS safety certified.  That's the bottom line.

10             MS. EDGERTON:  Just one question more, Mr.

11   Cackette.  The witness is concerned about the time line on

12   those federal safety standards, whether these will be out--

13             MR. CACKETTE:  I can't respond, because I don't

14   know.

15             MS. EDGERTON:  We don't control them obviously.

16             MR. CACKETTE:  But we will certainly follow up --

17             MS. EDGERTON:  To try to speed that on.

18             MR. CACKETTE:  -- and try to understand what that

19   is, and make sure -- to the extent we can, that it's

20   responsive to the State's needs.  But, again, you know, it's

21   not the auto manufacturers are going to say, well, the FMVSS

22   standard isn't quite, you know, defined or fully -- we're

23   going to ignore it and build an unsafe car.

24             I think they are concerned about their product

25   liability, and they know how too make these cars safe.


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 1             MS. EDGERTON:  Could you make one final comment on

 2   the hydrogen issue?  I know that's something that you're

 3   well aware of, and it seems to be very overblown in this

 4   context.

 5             MR. CACKETTE:  All the batteries, as well as being

 6   gel batteries, are sealed batteries.  So, any gases that are

 7   formed inside these batteries are contained so they're not

 8   normally accessible to some kind of spark that could cause

 9   them to go off.

10             On the GM Impact, for example, the one electric

11   vehicle that's gotten a lot of mileage, they have a sensor.

12   And if the hydrogen within the sealed battery gets anywhere

13   within a fraction of the combustible limit, the car shuts

14   down.  And it doesn't do that because only of extreme

15   conditions or malfunction conditions, would that occur.

16             The manufacturers, even on these early prototypes,

17   are fully aware of what kind of problems there are, and

18   they're thinking about the solutions.  EVs present new

19   safety issues.  There is no doubt about that.  But, in our

20   view, they're all solvable by common sense safety practices.

21             CHAIRMAN DUNLAP:  We have two remaining witnesses.

22   I'd like to move along.  Thank you, Ms. Skelton.

23             MS. SKELTON:  If I could just say one last

24   comment.  EVS, National Institute of Emergency Vehicle

25   Safety, our primary goal is to improve vehicle safety for


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 1   the fire service.  Many fire departments are not equipped,

 2   have the staff to monitor these kind of issues.  Most of

 3   them don't even know what the federal motor vehicle safety

 4   standards are.  Most of them don't even know when they have

 5   a safety related defect.  That's why we organized EVS.

 6             And that is why we focus on national issues.  We

 7   work very hard to get defective vehicles recalled, and

 8   that's how we have a personal knowledge of how the federal

 9   motor vehicle safety standards operate and how they can

10   impede on the public safety if certain standards aren't in

11   place.

12             Thank you.

13             CHAIRMAN DUNLAP:  Thank you.  Captain Terry

14   Scortt, followed by Ralph Craven.  Good afternoon.

15             MR. SCORTT:  Good afternoon.  Thank you, Chairman

16   and the Board for your time.

17             I know we talked about the fact that good morning

18   was almost afternoon, and now it's almost good evening.

19             A lot of what I have to say has already been

20   discussed with the previous people.  So, I will try to go

21   through this in an expedient fashion here.

22             Good afternoon, my name is Terry Scortt, and I'm

23   a Captain with the Orange County Fire Authority.  I'm here

24   today representing the California State Firefighters

25   Association.  I serve as a member of the hazardous materials


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 1   committee.

 2             We respond to emergency calls all the time, many

 3   of which involve automobile accidents.  A lot of those are

 4   critical situations where a few seconds can mean the

 5   difference between life and death.

 6             Firefighters are trained to react reflectively in

 7   those instances.  We don't have the luxury of being able to

 8   stop and assess what variables might exist with respect to

 9   the type of equipment involved in an accident.

10             It is absolutely imperative that our firefighters

11   and other emergency personnel know exactly what to expect

12   when going in.  As stated previously by Darlene, in case of

13   conventionally fueled vehicles, we know exactly what we're

14   looking at.  Federal motor vehicle standards for those cars

15   have been in place since the 1960s.

16             The standards are routinely upgraded to

17   accommodate advances in technology; firefighters and other

18   emergency workers participate in ongoing, continuing

19   education programs to ensure that there is always trained

20   people to resolve the emergencies as quickly and successful

21   as possible.

22             As stated earlier, the National Institute of

23   Vehicle Safety stated that virtually there's no meaningful

24   safety standards for the electric cars, which are expected

25   to hit the roads here in just a few short months.  That


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 1   means that if the emergency personnel and drivers and

 2   passengers of electric cars could be exposed to some unique

 3   and potential lethal consequences that don't appear to have

 4   been seriously addressed by this agency.

 5             As was just previously discussed, the much vaunted

 6   automatic disconnect mechanism, which is supposed to prevent

 7   severe electric shock in a collision, has inconsistently

 8   been located and the variable bleed-down times, which make

 9   immediate emergency rescue activities dangerous for vehicle

10   occupants and emergency workers alike.

11             Now, some electric car promoters like to talk

12   about the fact that there are already some EVs on the road,

13   implying that those cars couldn't be out there if they

14   weren't safe.

15             but the fact of the matter is that those cars are

16   exempt from the type of stringent safety standards that your

17   conventional gasoline powered car must meet.

18             It's not unusual for experimental prototypes to be

19   let off the hook when it comes  to limited numbers

20   introduced for research purposes.  But with the

21   implementation of the electric vehicle mandate, we're

22   looking at tens of thousands of these cars being purchased

23   by consumers who may not realize that the level of safety

24   they've come to depend upon in cars that they've bought in

25   the past just might not be there this time.


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 1             The firefighters and emergency personnel who

 2   respond to their calls for help in the event of a collision

 3   or other emergency situations may not have sufficient

 4   information and training to enable them to effect a safe and

 5   quick response.

 6             That type of scenario can turn tragic in a matter

 7   of moments.  California's firefighters and emergency workers

 8   give a hundred percent.  We're committed to doing the best

 9   job that we can, and we certainly are not afraid of new

10   technology.

11             What we are afraid of is technology that's been

12   put out there without first undergoing extensive research

13   and safety testing, and of not being adequately informed and

14   trained on how to deal with the circumstances particular to

15   that new technology.

16             So, in closing, I think we've all learned a lot

17   today.  I know the group of people that I'm with today have,

18   and hopefully you folks have, too.

19             Hopefully, there'll be a better dialogue between

20   us and some of these safety issues can be raised and

21   addressed all in a timely fashion.

22             CHAIRMAN DUNLAP:  Thank you.  You represent the

23   Firefighters Association?

24             MR. SCORTT:  Yes, sir.

25             CHAIRMAN DUNLAP:  Okay.  Very well.  Any


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 1   questions?  Thank you.  Let's call the last witness.  Mr.

 2   Crave, I'm going to ask your indulgence.  We have your six-

 3   page written testimony before us.  Much has been covered.

 4   Sir, is there any way you could maybe just run through the

 5   highlights for us?

 6             MR. CRAVEN:  Well, basically, I'll break it down,

 7   since it's three minutes to 5:00.  I know you want to go

 8   home.

 9             The four issues is -- the gentleman referred to

10   the sealed battery and it's not going to offload hydrogen.

11   Well, we found that not to be the case.  West Hartford,

12   Connecticut, you're all familiar with the jaws of life.

13   Curtis Wright Power Hawk Company built an electric power

14   tool, which I thought was great, because it's about one-

15   third the size of the Hurst tool, weighs about one-third the

16   weight.  And it was electric.  Thought it was great,

17   outstanding; in fact, I tested and used the prototype.

18   Because, in my lifetime, I teach auto extrication, and I've

19   probably literally torn apart about a thousand cars.

20             So, in the West Hartford, Connecticut, they were

21   using the tool, also, and they discharged it and they

22   charged it overnight.  And when they went to turn it on the

23   next morning, the sealed battery offloaded hydrogen gas into

24   the case, and the case blew up and it seriously injured six

25   firefighters, one very seriously -- has hearing loss, vision


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 1   loss, memory loss.  He's probably never work again.

 2             And I would have to compliment to Curtis Wright on

 3   that issue, because they were under the assumption that a

 4   sealed battery means sealed.  Well, they found out it wasn't

 5   sealed.  They're going to change the name of the battery,

 6   pressure-vented now, or relief vented battery.  It still

 7   offloads the hydrogen gas, and what they've had to do is

 8   take that battery and put it in a separate case with a

 9   separate switch, and then they have to plug the two cases

10   in.

11             So, to me, when you say it's a sealed battery and

12   it's not going to offload hydrogen gas, I would argue with

13   you.

14             In my course of my duties, 30 years as a

15   firefighter, I've seen a lot of things.  I won't use the

16   slang term, but it does happen, and we have to deal with it.

17   And what we're seeing to you in all sincerity is before this

18   mandate goes through, we'd like several things looked.

19             How are we going to deal with a car in a river?

20   How are we going to deal with a car in a creek, especially

21   if it's running at 180 to 330 volts.  The American Coalition

22   of Traffic Safety put that video out.  I reviewed it.

23   Firefighters in Washington reviewed it.  I raised more

24   questions in our minds than it answered.

25             The scenario where we have to open up the driver's


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 1   door, tilt the driver -- tilt the driver's seat forward,

 2   slide the driver's seat forward, then reach in and get and

 3   remove a panel to hit the battery disconnect, that's totally

 4   ludicrous.

 5             If you're familiar with the race care industry, I

 6   don't care whose car it is -- Roger Penske's car,

 7   Granitelli's car, I don't care.  When one of those hits the

 8   wall, I have friends who work on those crash crews, they

 9   know where those switches are.  They know where those fuel

10   shutoffs are, because there's a standard for them.

11             And that's all we're asking.  We're also asking

12   that you utilize some of your AB 2766 funds to deal with

13   these issues, these training issues we're asking you to look

14   at.  The fire service in California does not have the funds

15   to develop these programs.  They just don't.

16             And this is new.  We're moving at a very rapid

17   pace, and they're on the road, and we're having to deal with

18   them.

19             So, you have my six pages of testimony.  And in

20   deference to the Chairman, I did it in three minutes.

21             CHAIRMAN DUNLAP:  Well done.

22             Yes, Mr. Lagarias.

23             MR. LAGARIAS:  Mr. Craven, the gist of what I get

24   from you is you're concerned about the safety issues that

25   are unique to electric vehicles, particularly as they may


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 1   impact the firefighting industry.

 2             MR. CRAVEN:  Well, emergency responders.

 3             MR. LAGARIAS:  Emergency responders.  That

 4   includes the battery manufacturers and the automobile

 5   manufacturers.  We will be sure that that message gets back

 6   to them.

 7             MR. CRAVEN:  Well, I would -- when we went through

 8   the airbag issue, when airbags came in the cars, I mean

 9   there was all kinds of rumors associated with the airbag

10   issues, tremendous amount of rumors.  And the firefighters

11   in the State of California went to the automobile

12   manufacturers and said, hey, we've got some questions.  So,

13   all of a sudden, we started getting inundated with training

14   tapes and automobile manufacturers came out and put aside

15   some of our rumors.

16             They discovered some of the things that were

17   raising with them were, in fact, true.  And they had to go

18   back and rewrite and look at these issues in a different

19   way.

20             MR. LAGARIAS:  Well, I'm aware that our staff has

21   been addressing these safety issues and communicating to the

22   extent feasible their state of knowledge and what can be

23   done as we get the information ourselves.

24             MR. CRAVEN:  Thank you.

25             CHAIRMAN DUNLAP:  What I would like to do is


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 1   propose something that's certainly in my authority to do,

 2   and I would like the support of my colleagues on the Board.

 3   And that is I'd like to direct Mr. Boyd and your team, your

 4   ZEV team, to put together some type of working group, some

 5   standing working group with the firefighters, and the

 6   National Institute of Emergency Vehicle Safety, and others.

 7   It can be an ad hoc group.  I'd like to have a meeting set

 8   up within the next 30 days, where we could get some common

 9   issues on the table and start to work through them and

10   dispel myths and misinformation, and start finding areas of

11   common interest and concern.

12             Would that be acceptable to the parties that

13   testified on this item?  Okay.

14             All right.  Very good.

15             SUPERVISOR RIORDAN:  Mr. Chairman, if I might, I

16   might ask that you include -- because you have, I think,

17   through the Fire Marshal's Office, which seems to be

18   merging, or has it merged --

19             CHAIRMAN DUNLAP:  It's part of CDF, yes.

20             SUPERVISOR RIORDAN:  Right.  So, and those

21   individuals that are involved and can reach out to a whole

22   host of fire departments, while I'm not sure the membership,

23   and I couldn't tell exactly by the testimony of one of the

24   previous speakers, I think we need to reach much further

25   than what the Institute may actually reach.  So, I would


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 1   want to be sure that we're involving more.

 2             Now, somebody like the California Firefighters

 3   Association certainly might be one, but let's reach a little

 4   bit further.

 5             And I would support you in that effort.  I would

 6   also caution -- and having been a former member of the State

 7   Fire Services Board, I think I can speak to those of you who

 8   are sitting in the audience, who are part of the fire

 9   services, I think you need to be dedicated to your issues

10   and not necessarily to issues that perhaps are others'.

11             I sense in the background here a push from maybe

12   other than firefighters and emergency responders.  And that

13   concerns me.  Don't let happen to you.  I would say to you,

14   be very sure of what your issues are, and bring those to the

15   table rather than somebody else's.  I caught that a little

16   bit in some of that testimony, and definitely within the

17   articles that I see before me.

18             CHAIRMAN DUNLAP:  Thank you.  Do we have support,

19   consensus on the Board, to have staff go ahead and set that

20   up?

21             Okay.  Just perhaps a closing point for me at

22   least.  I appreciate the time and attention you spent on

23   this issue.  I think it's true we both learned some things

24   today.

25             We, and I think as you work with the staff in


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 1   particular -- and I wish you could have watched some of the

 2   Board meetings over the last few months -- in particular,

 3   you would see that this Board regularly gets complimented by

 4   those that it regulates for being open, and willing to work

 5   with people, and being inclusive in the regulatory process.

 6   That's what we pride ourselves on.

 7             Looking at Press releases and other things that

 8   have come our way today, you know, we've been here since

 9   9:33; we didn't get a chance to attend any press

10   conferences.  We're trying to attend to the people's

11   business as it relates to protecting public health.  We're a

12   bit troubled to see press releases and things saying that

13   we're not interested in public safety issues.

14             And I was in particular, because that simply is

15   not true, and I hope we've passed muster with you all that

16   we are interested and do want to learn more and work, not

17   just as a Board -- that is the 11 folks sitting up here --

18   but the staff as well.

19             So, we'll extend the hand of fellowship to you to

20   work on this issue, but ask that you sift through those

21   issues and determine what's truly most important to you, and

22   we'll work on them together.

23             Any other comments?  Supervisor Roberts.

24             SUPERVISOR ROBERTS:  Well, I was wondering, in

25   addition to the committee you're setting up, it seems to me


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 1   when you're talking about reaching out, there maybe needs to

 2   be a targeted information packet put together to maybe send

 3   out to all of the emergency responders.

 4             I think we've got a little bit of a problem here.

 5   I see it in the testimony, even of those people who maybe

 6   should know better.  We're talking about the mandate, which

 7   applies to all the larger -- in fact, only to the larger car

 8   companies, and we're using all these examples of, you know,

 9   everybody that builds a car in their garage as though that

10   were some kind of standard.

11             They're not subject to the mandate.  They don't

12   have anything to do with us, and yet we're seeing all the

13   questions raised relative to those things, which are going

14   to continue to be out there.  There's not anything we're

15   going to be able to do about it.  And they don't have

16   anything to do with the mandate, but you can see that, you

17   know, some of the people who are studying this issue have

18   failed to recognize maybe that distinction.  So, I think --

19   and I know for some of the emergency responders in my own

20   area, I'd like it if there was some kind of packet, if

21   there's a way for us to help in getting that word out there.

22   I'd be glad to do it.

23             MR. BOYD:  Mr. Chairman, might I respond to

24   Supervisor Roberts?

25             CHAIRMAN DUNLAP:  Yes, Mr. Boyd.


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 1             MR. BOYD:  I'm glad to hear the testimony we've

 2   heard today with regard to the concerns, and I think the

 3   points been well made that the Board and its staff are

 4   equally concerned.  I would point out that we have been

 5   working with the State Fire Marshal on this issue, and that

 6   the approach that we made to the Sacramento Fire Department

 7   was a very early preliminary approach.  We've probably had

 8   200 firefighters in this area in this session from about 23

 9   stations scattered throughout the area to talk about this

10   issue of developing appropriate training programs.  And I

11   welcome the opportunity to -- in hand with the State Fire

12   Marshal and now the Department of Forestry and Fire

13   Protection -- to approach the Firefighters Association as

14   well as the representatives of the individual

15   municipalities, and develop the kind of training program

16   that they would like to see.

17             So, indeed, we can reach out to all the

18   municipalities who would have this concern, and maybe for

19   the first and unique time to address their concerns about

20   being approached well after the fact, as has occurred with

21   other types of program developments.  Maybe we can have this

22   all in place when the electric vehicles that are going to be

23   a product of this program, which is much different than the

24   three-wheelers that have been referenced, do hit the roads

25   in 1998.


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 1             So, we welcome the opportunity to work with these

 2   people, and I'm impressed with the attitude of the testimony

 3   we've heard today vis-a-vis the press releases and the other

 4   things.  A lot of people have learned a lot today.

 5             CHAIRMAN DUNLAP:  That would be terrific.  I would

 6   also ask, Jim, that you get out a briefing to the Board, a

 7   memo, or some communication outlining the work that Mr.

 8   Jacobs has done thus far.  He's sitting in the second row

 9   there.  He's done some outreach to emergency response

10   personnel thus far in this region.   And also, Supervisors

11   Roberts and Riordan suggested a different thing today about

12   having this package of information, educational package.

13   I'd like to ask you, Jim, to put your team on starting to

14   develop that.

15             And then, maybe as an outgrowth of this ad hoc

16   committee that we put together, we can run it by them and

17   see if it is answering more questions.

18             Also, one other point that Mr. Calhoun made that

19   was very, very well made, Joe, about the interest that the

20   automakers have and others surrounding development of these

21   vehicles to ensure that people are educated and know about

22   their commitment to safety and consistency and all of that.

23   I think they need to be woven into the process -- perhaps we

24   ask them for information that goes into the packet as well.

25             Ms. Edgerton, you have a point?


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 1             MS. EDGERTON:  Yes.  I'm moving off of the safety

 2   and firefighters.  I had a couple of questions I wanted to

 3   ask Dr. Moyer and Dr. Kalhammer, who are still here, and who

 4   are extraordinary resources to this Board.

 5             You all were not commissioned, as I understand, to

 6   report too us with respect -- I think you told me a couple

 7   times that you're not in charge of the regulation or the

 8   encouragement; that this Board is in charge of it.

 9             But I did hear you say that you got the message

10   pretty clearly from people you interviewed that it was

11   critical to continue a stable program of encouragement for

12   realization of the 2000 and 2001 opportunity.

13             I wanted to be sure and give you each an

14   opportunity to share with us your personal views if you have

15   suggestions about how that might be accomplished in this

16   setting.

17             I know Dr. Moyer is very -- has a very fertile

18   mind.  I'm sure that he has some thoughts.  He may not want

19   to share them right now.  But I didn't want to  lose the

20   opportunity to hear from you.

21             DR. MOYER:  I think from our work a number of

22   themes emerged that you will want to pay attention to.  And

23   you are asking us to speak beyond the scope of our work with

24   the Battery Panel a little bit, I would say the following:

25             One is continuity in program is very important.


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 1   Many of these battery development efforts are into their

 2   program.  Many tens of millions of dollars, as Dr. Kalhammer

 3   described, they're now in a position of having to invest in

 4   pilot production and work very closely with automobile

 5   manufacturers on a rather expensive fleet testing phase,

 6   which is going to be many more tens of millions of dollars.

 7   That kind of commitment probably will depend on California

 8   making a statement that they are continuing with their

 9   program in one form or another.

10             I think, to be really blunt about it, if

11   California was deciding to slip the entire schedule as one

12   mechanism for responding to the slow appearance of advanced

13   batteries, that that would have an extremely negative effect

14   on development schedules of events in batteries.

15             So, what would need to be done -- let me back up a

16   minute.

17             It is also clear that lead-acid batteries are a

18   player in this game, and the problem that confronts you is

19   perhaps not one that was exactly foreseen in 1990.  And that

20   is you have some vehicles that would be available with a

21   battery with fairly limited performance, which the car

22   makers are warning you will not gain very much market

23   acceptance.  Some disagree.

24             But the people whose job it is to make and sell

25   cars are telling you and us in very clear terms that they're


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 1   not confident that the market is big enough to support the

 2   two percent mandate.

 3             You also have succeeded -- we have all succeeded

 4   in calling forth the investment that the regulation was

 5   designed to call forth in these advanced technologies.  The

 6   time scale is not quite right, however.  We're still in a

 7   period of hundreds of batteries not tens of thousands of

 8   batteries.  So, to me, the art of the design of the

 9   regulation is going to be to find some mixed mode, in which

10   lead-acid batteries can find where they belong in the

11   marketplace, recognizing that that might be a lot less than

12   20,000 vehicles a year, and that the advanced batteries also

13   have their field to play at a level which is probably

14   hundreds of batteries a year.

15             And your question perhaps speaks to the fact that

16   there are many proposals that have been floated informally

17   for how to have two things happening at the same time.  And

18   I'm sure a lot of people have ideas on how to make that

19   happen.

20             Bob Cross' presentation mentioned this point

21   somewhat obliquely that some consideration to the fact that

22   we're dealing with two different worlds is probably going to

23   have to be given.  But I think there are probably many

24   excellent ways of doing that which have proposed already,

25   and they will require very careful thought of how to balance


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 1   the two.

 2             But, in general, I think you would have to say

 3   that the California regulation has been quite successful in

 4   drawing forth exactly what we wished it to do.  Now there's

 5   some detail to be solved for the next three years that

 6   you'll have to get busy on exactly how to do that.

 7             I hope that helps somewhat.  I could go one more

 8   step explicit, I suppose, if you want.

 9             MS. EDGERTON:  I'd like for you to do that.

10             DR. MOYER:  Well, a common suggestion that we have

11   heard from the suppliers of advanced batteries is that if,

12   in the next -- in the years '98, '99, and 2000, that

13   vehicles with those batteries could somehow in the

14   regulatory structure count for more.  ARB has already used

15   this concept in the case of hybrid vehicles, where the

16   vehicle counts more if it's more electrically capable than

17   combustion capable.

18             As its electric capability increases, it counts

19   for more against your requirement.

20             Similar ideas have been suggested for the EV

21   mandate itself; that the truly capable vehicles somehow

22   count for more in the regulation.  That would construct a

23   field in which both technologies could play, and they could

24   sort themselves out, and you would not be squashing the

25   opportunity for the advanced batteries to appear, and you


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 1   would not be overencouraging -- if that's possible -- and

 2   somebody will think it is.  You would not be overstressing

 3   the lead-acid field.

 4             CHAIRMAN DUNLAP:  Anything else before we close

 5   after a long day?

 6             Mr. Boyd or Mr. Cackette?

 7             MR. BOYD:  Mr. Chairman, I have no further

 8   comments.  Thank you.

 9             CHAIRMAN DUNLAP:  Dr. Boston.

10             DR. BOSTON:  Dr. Moyer, there's been an awful lot

11   of adverse propaganda against electric vehicles coming from

12   many sources.  We're all inundated with letters and so forth

13   in our respective offices.

14             And my concern has been that maybe all this

15   publicity has slowed down the progress of the development of

16   these batteries.  Have you noted that at all?  Has that been

17   mentioned to you, that maybe the California Air Resources

18   Board is going to back off; they're getting flooded with

19   requests to back off, and maybe we ought to slow down our

20   development?

21             Does that come across to you?

22             DR. MOYER:  I'm not sure exactly how to answer

23   that, other than -- I would say not so far.  Dr. Kalhammer

24   would perhaps be better to answer specifically on the

25   battery development efforts.


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 1             I think the battery development efforts have been

 2   proceeding quite vigorously, as he described in our

 3   presentation.  They are aware of t he significance of what

 4   is going to happen in the next two, three, four, five months

 5   here in California.  And they are extremely interested about

 6   it, and even worried about it, because they know the crunch

 7   is coming here and it's time to make a decision so that they

 8   know whether to proceed or not proceed, or how fast to

 9   proceed.  So, I guess my brief answer to that is not yet,

10   but you will certainly see it; that is, whatever decisions

11   are made in the next few months are likely to have a very

12   significant effect on the pace of development of advanced

13   batteries.

14             DR. BOSTON:  Thank you.

15             MR. BOYD:  Mr. Chair?

16             CHAIRMAN DUNLAP:  Sure.

17             MR. BOYD:  If you would indulge me.  I was so

18   distracted, if not distressed, by some of the testimony of

19   late on the safety issues that I forgot a technical issue

20   that I made a note about earlier in the day that Dr.

21   Kalhammer reminded me about.

22             And it's kind of a personal observation, but I

23   know it's shared by members of the staff, because we talked

24   about it.

25             Dr. Kalhammer talked and made reference to battery


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 1   management on several occasions.  And I think something

 2   that's impressed me very significantly, having been here

 3   since the conception and birthing of this program, and the

 4   huge emphasis on battery technology and battery development,

 5   one of the things that's impressed me in the past several

 6   months and particularly brought to home by the work of the

 7   Battery Panel, is this issue of battery management and

 8   management of the operation of the battery and its charging

 9   and discharging, and what have you.

10             And what I have seen, as somewhat of a layperson,

11   here is tremendous development in both knowledge and

12   technology relative to that issue, such that because of

13   changes in that practice and different approaches and

14   procedures, even taking a battery at a point in time, there

15   is an ability to get far more power, and range, and life out

16   of that battery by optimizing the management of that system.

17             And so, as we couple that with the advancing

18   technology, I'm impressed that there are even greater

19   opportunities or awfully good opportunities to see this

20   technology furthered.  And this is kind of to me a spillover

21   benefit that we're learning more and more about, and we've

22   seen some of the -- I mean, in the beginning, it was a long

23   time to charge certain types of batteries, and now we've

24   seen battery management systems and studies of how to do

25   that work.


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 1             As already indicated, you get very rapid battery

 2   recharging possibilities, without the detrimental concerns

 3   in effect in the past.  And if that continues, I'm extremely

 4   optimistic about what the future holds with  regard to the

 5   ability of this technology to take the niche in the

 6   California fleet that we saw years ago that it needs to take

 7   in order to meet our public health driven air quality

 8   standards.

 9             So, just that comment.

10             CHAIRMAN DUNLAP:  One final comment from Mr.

11   Lagarias.

12             MR. LAGARIAS:  Mr. Boyd, you've just identified

13   the next research project, OBBC-1, on-board battery

14   controls.

15             (Laughter.)

16             CHAIRMAN DUNLAP:  Short point.

17             MS. EDGERTON:  I'll make a short point, but I want

18   to respond to Dr. Boston.  I think your comment's well

19   taken.  If I read the paper correctly, I believe the

20   gentleman from the University of Chicago just won a Nobel

21   Prize for identifying the principle that capital investment

22   responds to anticipated regulatory action.

23             (Laughter.)

24             MS. EDGERTON:  Thank you.

25             CHAIRMAN DUNLAP:  One final thought from me, very


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 1   brief.  Again, I'd like to thank Dr. Kalhammer and Dr. Moyer

 2   for being here, and for Bob Cross for shepherding the

 3   process thus far, and for Tom Cackette and his team.  Well

 4   done.  We're very appreciate of the work that the Battery

 5   Panel has done.  You've traveled the world for us.  You've

 6   been honest brokers, and we appreciate it and are grateful

 7   for your time and your attention and your expertise.

 8             If there's nothing else, we will adjourn this, the

 9   October meeting of the California Air Resources Board.

10             (Thereupon, the meeting was adjourned

11             at 5:25 p.m.)

12                              --o0o--

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 1                 CERTIFICATE OF SHORTHAND REPORTER

 2

 3

 4             I, Nadine J. Parks, a shorthand reporter of the

 5   State of California, do hereby certify that I am a

 6   disinterested person herein; that the foregoing meeting was

 7   reported by me in shorthand writing, and thereafter

 8   transcribed into typewriting.

 9             I further certify that I am not of counsel or

10   attorney for any of the parties to said meeting, nor am I

11   interested in the outcome of said meeting.

12             In witness whereof, I have hereunto set my hand

13   this   4th       day of    November          , 1995.

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16                             Nadine J. Parks

17                             Shorthand Reporter

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