MEETING
BEFORE THE
CALIFORNIA AIR RESOURCES BOARD
HEARING ROOM
CALIFORNIA AIR RESOURCES BOARD
2020 L STREET
SACRAMENTO, CALIFORNIA
FRIDAY, MARCH 29, 1996
8:40 A.M.
Nadine J. Parks
Shorthand Reporter
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MEMBERS PRESENT
John D. Dunlap, III, Chairman
Eugene 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
Bob Cross, Assistant Chief, Mobile Source Division
Tom Evashenk, Staff, MSD
Jack Kitowski, Chief, On Road Control Regulations, MSD
Kathleen Walsh, Staff Counsel
Patricia Hutchens, Board Secretary
Wendy Grandchamp, Secretary
Bill Valdez, Administrative Services
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I N D E X
PAGE
Proceedings 1
AGENDA ITEM: (Continued)
96-2-2 Public Hearing to Consider Amendments
to ZEV Requirements for Passenger
Cars and Light-Duty Trucks
Call to Order and Roll Call 1, 2
Summary Comments by
Jim Boyd
Executive Officer 2
Statement by Chairman Dunlap 9
Comments and Questions
by Supervisor Roberts 15
Questions/Comments
Comments by Mr. Calhoun 27
Questions/Comments 30
Clarification of Ex Parte Communications
by Supervisor Silva 30
Comments by Supervisor Silva 31
Comments by Mr. Lagarias 34
Comments by Dr. Boston 37
Comments by Ms. Edgerton 38
Questions/Comments 44
Comments by Supervisor Riordan 48
Questions/Comments 49
Comments by Mr. Parnell 50
Comments by Supervisor Vagim 52
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INDEX, continued. . . PAGE
AGENDA ITEMS:
96-2-2 Further Comments by
Supervisor Roberts 57
Questions/Comments 58
Motion to Approve Resolution 96-12
by Mr. Parnell 59
Discussion 59
Substitute Motion by Ms. Edgerton 60
Discussion 67
Roll Call Vote on Substitute Motion 74-75
Roll Call Vote on Main Motion 75-76
Discussion 76
Direction to Staff by Chairman 77-78
Discussion 79
Adjournment 81
Certificate of Reporter 82
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1 P R O C E E D I N G S
2 --o0o--
3 CHAIRMAN DUNLAP: Will Day 2 of the March meeting
4 of the California Air Resources Board please come to order.
5 Ms. Hutchens, will you please call the roll?
6 MS. HUTCHENS: Boston?
7 DR. BOSTON: Here.
8 MS. HUTCHENS: Calhoun?
9 MR. CALHOUN: Here.
10 MS. HUTCHENS: Edgerton?
11 MS. EDGERTON: Here.
12 MS. HUTCHENS: Hilligoss?
13 MAYOR HILLIGOSS: Here.
14 MS. HUTCHENS: Lagarias?
15 MR. LAGARIAS: Here.
16 MS. HUTCHENS: Parnell?
17 MR. PARNELL: Here.
18 MS. HUTCHENS: Riordan?
19 SUPERVISOR RIORDAN: Here.
20 MS. HUTCHENS: Roberts?
21 SUPERVISOR ROBERTS: Here.
22 MS. HUTCHENS: Silva?
23 SUPERVISOR SILVA: Here.
24 MS. HUTCHENS: Vagim?
25 SUPERVISOR VAGIM: Here.
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1 MS. HUTCHENS: Chairman Dunlap.
2 CHAIRMAN DUNLAP: Here.
3 Before we begin, I'd like to recognize the
4 addition of Supervisor Vagim. I want you to know that he
5 had delivered to his hotel room more paper that he could
6 possibly carry, and he's assured me he stayed up all night
7 reading it.
8 So, he's prepared and sufficiently caught up, I
9 believe, to participate today.
10 Doug, you concur with that?
11 SUPERVISOR VAGIM: Yes.
12 CHAIRMAN DUNLAP: Okay. With that, I'd like to
13 live up to my commitment to Mr. Boyd to give him a few
14 moments this morning, and make some -- I guess some closing
15 comments on staff's behalf.
16 MR. BOYD: Thank you, Mr. Chairman. Good morning,
17 Board members, and good morning to the audience.
18 Now, that I've had time to mull over yesterday's
19 events and listen to the radio, I'll probably will speak a
20 little bit longer than I would have last night.
21 (Laughter.)
22 MR. BOYD: I think over the course of the long day
23 yesterday, I was reminded of the long continuing series of
24 forums, and workshops, and Board meetings last year. Last
25 year seems like only yesterday to some of us.
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1 And you get mixed messages from those experiences.
2 There's a lot of similar rhetoric that we've all learned to
3 just sit and be patient with, and there are a lot of very
4 good ideas and thoughts that come up at each subsequent
5 meeting and discussion, which gives rise to the theme that I
6 heard the Chairman address yesterday -- I heard many of you
7 address -- and many of the members of the public talked
8 about the theme of partnering, and participation, and
9 broad-based support for programs being a necessary thing in
10 this day and age, and a desirable thing, and something that
11 works that perhaps years ago didn't work.
12 And I think that continues to be a theme. And I
13 think I can pledge to you that I know we're interested in
14 it. The experience of cleaner burning gasoline and a lot of
15 other experiences that some Board members know something
16 about because they were involved that the public does or
17 doesn't know about.
18 I mean, we have had huge public partnerships
19 underway in the San Joaquin Valley for several years, and
20 the studies we've done with industry there.
21 And Supervisor Vagim's been intimately involved.
22 Mr. Parnell was involved in another life in that same study,
23 and other types of things like that just give rise to the
24 need to do those kinds of things.
25 Secondly, a lot of views yesterday about the glass
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1 being "half empty," perhaps rather than half-full. I don't
2 think the glass is even only half full. But there's a lot
3 of negativism rather than positive views. But then there
4 were lots of, in my mind, rays of sunshine about people
5 saying that's then and now's now, and we want to work
6 together for the future.
7 So, I think that was extremely positive. There's
8 still many whose main touchstone for analysis and comparison
9 is the original 1990, as I said yesterday, decision of 2
10 percent in '98. And there's a lot of us who feel that that
11 never would be the starting point for any analysis today, no
12 matter what had happened in the past, no matter how
13 imperfect or perfect the world might have been.
14 I sincerely believe we'd before you today, if it
15 had been a perfect world, saying -- and no other firestorms
16 that we had to walk through -- we'd be saying,
17 technologically, you can't quite get there. We don't want
18 to ruin the program. It does need to be changed. And we'd
19 be having that debate.
20 This morning on the radio on the way to work, I
21 heard reference to the Board's meeting yesterday and the
22 fact the decision would be made today to, quote, "withdraw
23 from the program."
24 Well, I thought to myself, "That word's not as bad
25 as some I've heard the last few days."
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1 But the item went on to make reference to "the
2 breathers will pay," and "the SIP will be put in jeopardy."
3 And then there was an interview of an individual
4 who made that case. And that brings up the issue that we
5 wrestled with so much yesterday, the NLEV issue and whether
6 we protect ourselves or what have you.
7 And I would remind you, had it been a perfect
8 world, and had we not had the type of situation we did, we
9 probably wouldn't have an agreement. We'd be sitting here
10 talking about whether to launch a program or not launch a
11 program. And had we launched it as originally proposed, or
12 in any modified form and it failed, the breathers and the
13 SIP both would be in jeopardy.
14 We have fortuitously or what have you --
15 serendipitously, say what you want -- a situation where we
16 have a negotiated agreement that, in my mind, does guarantee
17 that the SIP is whole, the breathers are very well
18 protected.
19 There has been a lot of question about the
20 accuracy of the calculations in the analysis and whether,
21 you know, different bases should have been used, and
22 different averages, and what have you. And I hope Mr.
23 Cackette put a lot of that to rest yesterday by pointing out
24 that you can vary the numbers fairly widely, and it doesn't
25 make a big difference.
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1 Also injected is the issue of two other States and
2 the fact that they would have a different program than the
3 NLEV program.
4 Well, true. They'd have the California program if
5 they stick to their guns. And far be it for us to say that
6 anybody shouldn't have the California program. So, the
7 import of cars to California will either be NLEVs or they'll
8 be other California-type cars. And these are States very
9 remote from California, and the odds of their cars being a
10 predominant part of the vehicles that are imported into
11 California are pretty low.
12 In fact, by the time the snow and the salt gets
13 done with them, I don't know how good it is at all. But the
14 propensity is for most of the cars to come from areas closer
15 to California. But that's just, you know, trying to level
16 the playing field a little bit on that issue and whether or
17 not it's a make or break issue.
18 I have obviously infinite faith in the capability
19 of your staff and my staff to both analyze and calculate
20 what is best for California. And I was there, as was Mr.
21 Cackette, for the days, weeks, and hours -- and the late
22 hours -- that this debate went on as to the value of the
23 NLEV program. And I was there when we let the auto industry
24 know that, intuitively, it couldn't be as good as they said
25 it was going to be.
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1 And I was there as all the concessions were made
2 relative to the value of that program. I mean, they went
3 into this program like a lot of other people went into other
4 programs we've heard about that, "We don't need anything
5 else in the SIP. We just have this one magic program." went
6 They went into this thinking that you've got so
7 many credits here, I mean, you know, we're giving you the
8 whole thing, but it's worth the world.
9 Well, we were there when we boiled it down to the
10 final answer, which was: It's still positive, and it's
11 still even brings a premium.
12 So, I hope that the audience, the public, the
13 media gets the message that we've been here protecting the
14 public's health in the face of a lot of adversity for a long
15 time. And this recommendation we bring to you still
16 protects the public health and still protects the sanctity
17 of the State Implementation Plan.
18 Finally, the enforcement and legal protections:
19 If we don't get NLEVs, there are lots of teeth in the
20 memorandum and agreement. And I would just remind the
21 California public of the past history of the posture of this
22 Board and its staff relative to enforcing the rules and
23 regulations on the books of the State of California relative
24 to protecting our public health.
25 You can be assured that, first, your legal staff,
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1 in which I have undying faith of their ability to give us
2 advice and counsel on what would be the best possible
3 agreement, and their ability to understand the California
4 law and protect the public health I think is unchallenged
5 and unchallengeable.
6 And when they assure us and you that we have got a
7 positive deal, they would not do something lightly and put
8 in jeopardy our program or the breathers of this State. We
9 have legal protections. I think we have a very strong
10 situation here. We have the faith of the auto industry and
11 their pledges to do good. I happen to believe it. But I
12 happen to believe it because I know I'm backed up and you
13 are backed up by the strongest possible protections.
14 There's no question we have the ability to verify
15 the situation.
16 The modified program I think is a good deal for
17 California in today's world. The fact that it brings a
18 positive partnership forward rather than continuing any
19 adversarial situation I think is worth its weight in gold in
20 today's world. And I think people like Mr. Heckeroth
21 yesterday, who has been -- and I can sympathize -- through a
22 very bleak and black year because his small business -- I
23 can believe -- would have been impacted by all the adverse
24 publicity that was out there.
25 But if the auto industry's going to use its
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1 talents and capabilities to advertise, as they do so well,
2 vehicles and sell them, Mr. Heckeroth should have a field
3 day in the future, if he can live that long economically,
4 because he should benefit from the very positive message
5 that I'm sure we will be seeing now in the future about
6 electric vehicles, and the value of electric vehicles, and
7 the reliability of electric vehicles and their benefits.
8 So, I only hope he can survive long enough to
9 benefit from that.
10 So, with that, Mr. Chairman and ladies and
11 gentlemen of the Board, I close my remarks -- again
12 recommending and indicating that I feel that what we have
13 brought to you and the guidance you have given us has given
14 us an excellent program to continue the future of the
15 electric vehicle in California.
16 CHAIRMAN DUNLAP: Thank you, Mr. Boyd. I
17 appreciate your focusing on those issues that were discussed
18 most frequently yesterday.
19 I'd like again, before we kick off our
20 deliberations and discussion here, I'd like to take just a
21 few minutes and cover some ground, perhaps remind not only
22 my colleagues on the Board, but the audience as well the
23 staff, over what ground we have trod over the past year as
24 we dealt with this issue.
25 Again, my thanks to those that participated
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1 yesterday and throughout this process, from the staff to
2 those stakeholders that are so impacted by the Board's
3 action on this item. I appreciate your involvement.
4 I'd like to make a few observations about this
5 process. In December, we reflected on all the information
6 and viewpoints that were developed and brought forward to
7 the Board during the public forums, workshops, and Board
8 meetings, and decided on a course of action which balanced
9 the market-based approach as well as the more traditional
10 command and control approach.
11 I've heard considerable support over the last two
12 days for the approach we are considering today. I continue
13 to believe it offers the best course to follow. With proper
14 nurturing and a commitment to successful implementation by
15 the stakeholders, there is high assurance that we will
16 experience a healthy and growing market for zero-emission
17 vehicles in California beginning this fall.
18 With these changes, California has set a course to
19 have more ZEVs on the road than anywhere in the world. I
20 plan on being one of the 800,000 ZEV owners in the year
21 2010. Hopefully, by then it will be my second or maybe even
22 third ZEV vehicle.
23 Let me address some of the concerns I have heard,
24 however. We've heard comments that the MOA developed
25 between the staff and the seven automobile manufacturers has
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1 weaknesses which should be addressed.
2 My read is these concerns result from differences
3 in interpretation primarily. I would like to suggest to my
4 colleagues that we provide on the record how the Board would
5 interpret some of the provisions for which concerns have
6 been raised, not only today but in previous meetings.
7 Let me share with you my thoughts and
8 perspectives. As you know, the MOA provides that the staff
9 will obtain the business plans for ZEV commercial
10 development from each of the seven automobile manufacturers
11 and will provide for site visits for verification.
12 The concern raised is that much of the information
13 provided by the manufacturers is propriety and can not be
14 revealed to the public. I've met with staff and they assure
15 me that they will be able to extract from the auto
16 manufacturers submissions, data the Board needs to measure
17 whether manufacturers good-faith efforts, complete efforts
18 to develop a market of adequate size to meet the 2003
19 requirements -- that 10 percent hard target.
20 For the record, I am committed to presenting as
21 much information to the public as possible, consistent with
22 protection of confidential information required under the
23 law.
24 There have also been concerns raised about the
25 ability of the Board to reimpose the current ZEV
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1 requirements through 2002 should a manufacturer fail to make
2 a good-faith effort to implement the MOA, their commitments
3 under the contract.
4 Should this unexpected event occur, I am committed
5 to bring a rulemaking action to the Board and to move it
6 through the rulemaking process on an expedited basis.
7 Questions have also been raised regarding several
8 phrases contained in the MOA. One has to do with the
9 provision that states a manufacturer's not in violation of
10 the technology partnership if advanced batteries are not
11 available at a, quote, "reasonable pilot level price," end
12 quote.
13 Some parties believe this is a loophole; in fact,
14 as it was mentioned yesterday, it was put in the MOA to
15 preserve some market competition on pricing of pilot
16 batteries.
17 Certainly, our interests are not served if
18 advanced vehicles have million-dollar battery packs, which
19 would occur if the agreement requires batteries to be
20 purchased without regard for price.
21 The MOA requires the Executive Officer to decide
22 advanced are priced unreasonably. And our battery panel has
23 given us the information to make this judgment, the
24 framework from which it should be applied.
25 Finally, there have also been concerns raised
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1 that, if the vehicle manufacturers choose to meet their
2 emission reduction requirements by other than a national LEV
3 program, we may not gain all the reductions needed.
4 Should the national low-emission vehicle agreement
5 not occur, the Executive Officer will be directed to provide
6 the greatest degree of scrutiny to all possible alternatives
7 and require the highest level of assurance that emission
8 reductions equivalents to or greater than would have been
9 provided by the NLEV program are achieved.
10 If, for any reason, the vehicles are not
11 introduced on time, the Board should then act to ensure that
12 the emission reductions are achieved from motor vehicles,
13 from that very source we're talking about today.
14 I believe the staff has also addressed these
15 issues in their draft resolution, which will be presented to
16 us shortly. If the Board approves the staff proposal -- and
17 I hope it will -- I will dedicating resources to assuring
18 that implementation is successful. Our team is ready to
19 take on this effort, which involves the removal of barriers
20 to the acceptance of ZEVs by the car-buying public.
21 To further bolster this effort, I will form an
22 implementation advisory group made up of representatives of
23 key stakeholder groups. I would like to appoint one of the
24 Board members as the Board's representative to this effort.
25 May expectation of this group is to assure that
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1 all issues affecting ZEV implementation and market growth
2 are being addressed and, if some are not, to encourage the
3 appropriate stakeholders -- where we are not the lead, but
4 others in some cases --- to address the issue.
5 One final note. There continues to be a growing
6 interest in fuel cells encouraged by developments that
7 suggest this promising technology is much closer to
8 commercialization than some would think. As was said
9 yesterday -- and I've said myself -- I've charged the staff
10 with tracking fuel cell progress, and already they report to
11 me many encouraging developments.
12 While the ZEV in 1998 will continue to be a
13 battery-powered electric vehicle, I expect we will be seeing
14 other ZEV technologies, such as fuel cells and hybrid
15 electric vehicles, nipping at their heels in very short
16 order.
17 I ask the Executive Officer to bring to the Board
18 later this year any regulatory changes needed to open the
19 way for these technologies if they're warranted. If you can
20 concur with me, this would be my direction to staff.
21 At this point, I'd like to open up the discussion
22 at the Board level on the proposal in front of us, and clear
23 up any issues that might remain.
24 I can go right around the horn if you like. Mr.
25 Roberts, would you like to start it off?
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1 SUPERVISOR ROBERTS: First of all, I have to tell
2 you that I've just received this --
3 CHAIRMAN DUNLAP: Right.
4 SUPERVISOR ROBERTS: -- and I haven't read it.
5 And I'd like to do that before --
6 CHAIRMAN DUNLAP: I'm not talking about at this
7 point even dealing with --
8 SUPERVISOR ROBERTS: Okay.
9 CHAIRMAN DUNLAP: -- the resolution.
10 SUPERVISOR ROBERTS: Let me make some comments.
11 At the top of my list was going to be a suggestion that
12 there be some type of cooperative task force put together,
13 and I think that's what I understood you referred to, where
14 not only would our staff and the manufacturers participate,
15 but others with an interest in this, including members of
16 this Board.
17 That was a concern to me.
18 There are a couple of other things that I guess
19 remain as concerns, and the first of those has to do with
20 the functioning of that task force. It seems to me that one
21 of the problems in the way we have this every two-year
22 review is that you may fly past the point of being able to
23 take effective action just because of the nature of every
24 two years and coming up on the year 2000, which is a -- in
25 fact, 1999, we found is a critical year.
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1 And it would be my suggestion that somehow we
2 incorporate an annual review as part of this process.
3 CHAIRMAN DUNLAP: Some have argued that it's been
4 a continuous review. I've heard Boyd say that on more than
5 occasion.
6 SUPERVISOR ROBERTS: That may be what's needed,
7 but I am concerned with the two-year review.
8 I'm also concerned about the followup on the NLEV
9 program. It seems tome there has to be a strong monitoring
10 program as part of that to see if this theoretical 49-State
11 car is in actuality going to bring us the results that we're
12 looking for, and that it sounds like it would be something
13 relatively easy to do in time.
14 I did have a question in that respect, because the
15 one chart that was shown with the intersecting curves -- it
16 still isn't clear to me if the only difference -- if I
17 understand those charts -- is that one of those lines
18 includes a three-year benefit from the earlier introduction
19 of the NLEV. In all other respects, they're the same as far
20 as the contribution of the NLEV?
21 MR. CACKETTE: The one that has NLEV in it has
22 also subtracted from it five years of ZEVs, no ZEVs in '98
23 through 2002.
24 SUPERVISOR ROBERTS: Okay.
25 MR. CACKETTE: And the other one's the current
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1 program, as on the books now, if it was to be implemented.
2 So, ZEVs from '98 on versus ZEVs from 2003 on,
3 plus NLEV. That's the two comparisons.
4 But shouldn't there be an NLEV that kicks in three
5 years later on the other one?
6 MR. CACKETTE: No, neither one of them have --
7 neither one of them have NLEV beyond 2004.
8 SUPERVISOR ROBERTS: And that was the question I
9 was asking. Neither of them have that.
10 MR. CACKETTE: It's assumed that neither of them
11 beyond 2004.
12 SUPERVISOR ROBERTS: So, basically, they're equal
13 with respect to that issue.
14 And then let me also ask you -- in the credits
15 there was a mention of range. It's not clear to me how
16 range was being --
17 CHAIRMAN DUNLAP: Factored in?
18 SUPERVISOR ROBERTS: -- defined. And I ask this,
19 because my own experience really raises some questions about
20 how range works. I was, as you know, very disappointed to
21 find that I couldn't in any way, shape, or form get the
22 range that was advertised with one of the ZEVs.
23 MR. CROSS: I think the key thing to do at this
24 point in range is to make sure that all of the vehicles are
25 measured the same way and with --
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1 SUPERVISOR ROBERTS: (Interjecting) Well, that's,
2 I mean that's -- I think that's --
3 MR. CROSS: Let me --
4 SUPERVISOR ROBERTS: -- that's basic, but you've
5 got a number. You've got some threshold numbers in there
6 with respect to range.
7 MR. CROSS: Okay. Let me -- I need to go on.
8 SUPERVISOR ROBERTS: Okay.
9 MR. CROSS: The procedure that --
10 SUPERVISOR ROBERTS: You do.
11 MR. CROSS: The procedure that will be used is the
12 city driving cycle of the Federal test procedure, which is
13 the more energy consumptive cycle. And essentially, we will
14 repeat that urban cycle over and over until the vehicle's
15 discharge to the 20 percent level, to the lower bound of
16 what the battery can accept.
17 Originally, we were talking about a highway, urban
18 highway, urban mix, but that's too optimistic in terms of
19 estimating range. So, what we're doing is going with just
20 the city cycle.
21 In terms of -- at this point, it will not include
22 air conditioning load, but we're going to try and develop a
23 special procedure for air conditioning. The problem with
24 air conditioning is electric vehicles don't consume the same
25 amount of energy with air conditioning that conventional ICE
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1 vehicles do. And so, we don't do an inaccurate correction
2 on that.
3 But the test should provide a good mix.
4 SUPERVISOR ROBERTS: That would be in keeping with
5 the way I think it should be done. So, I don't have a
6 problem with that.
7 CHAIRMAN DUNLAP: Okay.
8 SUPERVISOR ROBERTS: The fourth item -- and I
9 don't think you touched on it -- though we touched on it,
10 although we touched on it in the discussion -- was the
11 battery value formula and incorporation of that in the
12 overall evaluation.
13 And those are four items that were of concern to
14 me, Mr. Chairman. Task force, one-year review, monitoring
15 of the NLEVs, and the battery value formula.
16 Can I make just a general comment now?
17 CHAIRMAN DUNLAP: Sure. Sure.
18 SUPERVISOR ROBERTS: This process is a lot more
19 difficult right now than it ought to be, and think because
20 of the fear that I have and that a lot of the public has
21 based on the actions of some of the manufacturers'
22 associations.
23 I think what took place in this State last year
24 was exactly the opposite of what should have happened to
25 create an arena for us to be able to have the kind of
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1 discussion that we should be able to have.
2 Half of me wants to say, "The heck with all of
3 this," based on what was done. There was so much
4 misinformation, there was so much distortion, there were so
5 many outright lies that were put out that it makes it very
6 difficult to have a conversation on this issue in any
7 reasonable sort of way.
8 And, as much as I would join in the comments that
9 were made for the CalPIRG representative the other day,
10 which I concur in fully, I would have the same feeling
11 towards what was done on the part of the manufacturers this
12 past year.
13 If that's the spirit in which we're going into
14 this, we don't have a chance in the world of making this
15 work.
16 CHAIRMAN DUNLAP: Right.
17 SUPERVISOR ROBERTS: And that's why I'm concerned
18 on that task force. I hope that task force will have the
19 fullest access --
20 CHAIRMAN DUNLAP: Sure.
21 SUPERVISOR ROBERTS: -- to the records and to be
22 able to report back to this Board not once every two years,
23 but at any point in the process in which they've discovered
24 that something is wrong.
25 I'm encouraged by what I've seen with natural gas
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1 vehicles. Some of the manufacturers have really, without
2 any burden or regulatory reason, have really gone and made
3 every effort to extend those technologies and to make them
4 work.
5 And we've seen the introduction in San Diego
6 recently of some production line vehicles that I think are
7 exemplary. And that gives me some confidence that this may
8 work.
9 It's balanced off by the negatives that I've
10 mentioned. Some of the manufacturers clearly see the big
11 picture. I was very impressed with the Chairman of General
12 Motors and his comments at the auto show in acknowledging
13 that all of the countries, the developing countries of this
14 world aren't going to have the same interstate system that
15 we have. And that some of them are probably going to
16 regulate the types of cars you can drive in some of their
17 most polluted cities, and that there's a market beyond
18 California.
19 And, again, that's balanced by some of what seem
20 half-hearted efforts, minimal efforts that we're seeing by
21 some of the other companies that I'm concerned about with
22 respect to the ramp-up issue.
23 It's my intention to get to that 10 percent. I'd
24 like to get to that 10 percent with the use of market. But
25 what you have is some companies that will take that to heart
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1 and will make it and others that would fall woefully short
2 if there were no regulatory push here. So, I think you'd
3 still need that.
4 And I'm going to support your efforts if it
5 includes those points that I mentioned. I'm going to remain
6 a little cynical, but I'm going to hope that we can work
7 this out, and I'm going to do everything I can to ensure
8 that that is the case.
9 I'd like to see, especially in San Diego -- I want
10 to see clean air. And I want to see this major component
11 reduced.
12 CHAIRMAN DUNLAP: Thank you for your comments. I
13 think, Supervisor, certainly it dovetails with not only the
14 spirit, but the specifics of what I'd outlined, and I think
15 they can be accommodated easily, and I think it makes good
16 sense.
17 I would like to, though, shift over to Mayor
18 Hilligoss about the point about the NLEV issue. And it was
19 brought up yesterday and discussed.
20 Jim, I'd like to have a little bit of a wrap-up
21 relative to what, if the NLEV hits some glitches, what's the
22 provision, the out provision for the automakers and for us,
23 and where we likely go immediately, and what would be the
24 likely time frame, et cetera?
25 How would we identify the problem, how would we
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1 remedy it, and how would we be certain that there's no air
2 quality -- negative air quality ramifications?
3 Mayor Hilligoss, did I catch the spirit of that?
4 MAYOR HILLIGOSS: Yes.
5 MR. BOYD: I'll ask Mr. Cackette to elaborate on
6 that.
7 CHAIRMAN DUNLAP: And, Tom, you know that one of
8 the things that causes us a lot of concern is when people
9 say that the air quality benefits aren't certain. And we
10 need that pinned down. And staff has been right so many
11 times -- I don't mean to suggest otherwise. You have been
12 right.
13 But, in this case, there's a lot of concern
14 focused, which is a little bit unusual for us to hear that,
15 so. . .
16 MR. CACKETTE: Okay. Well, on the more global
17 basis, the things that we'll do is, first of all, watch the
18 Federal rulemaking, which is the enforcement structure for
19 the NLEV cars to be sold in the other States. And that's
20 supposed to be out in May. And we'll track that to make
21 sure that the cars that are being sold under that are truly
22 equivalent to California cars and not some relaxed version
23 that may somehow result from negotiations that occur outside
24 this State.
25 Second of all, if that doesn't occur, then we'll
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1 immediately meet with the manufacturers and start going over
2 what the alternatives are. The first alternative is for
3 them to sell just plain California cars in the other States.
4 And I don't think there's any legal impediment to that, but
5 again, we'd have to verify that EPA isn't a roadblock to
6 that occurring.
7 And from the many discussions we've had with them,
8 it's very clear that one of the those two paths is where
9 they want to go. Only if neither were possible would we
10 enter into -- and I think that's a very remote situation --
11 would we have to enter into, "What else can you do?"
12 But, as Jim said when we do that -- and, as the
13 Chairman said -- if we ever get to that point, and I hope we
14 don't, we'll be as touch as we can to make sure that the
15 substitutes are as fully protective of air quality as
16 possible.
17 CHAIRMAN DUNLAP: Right.
18 MR. CACKETTE: So, let me flip back to the one
19 that we expect to happen, which is NLEV. And that's, in my
20 view, that's a 90 percent-plus probability that that will be
21 the outcome.
22 Based on, you know, the considerable discussion
23 we've had here today, staff will not only make sure that
24 we're aware -- fully aware that NLEV is occurring, but we
25 will do some monitoring in terms of where those cars are and
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1 we'll track the trends in migration back to the State of
2 California.
3 And, as you indicated, we'll go back and check the
4 numbers --
5 CHAIRMAN DUNLAP: Sure.
6 MR. CACKETTE: -- a little bit more, look at some
7 of the things we didn't include, like the tourism and also,
8 you know, account for the fact that there may be California
9 cars anyway in some of the other States.
10 And we'll keep our ear open also on the national
11 scene to -- maybe better than we have -- to make sure that
12 what's being said out here is the same thing that's being
13 said back East.
14 CHAIRMAN DUNLAP: Elsewhere, that's great.
15 MR. CACKETTE: I think, with those, we'll keep on
16 top of it. Of course, we won't be doing any monitoring
17 until 2001 when those cars actually start being sold, but
18 we'll follow the migration trends in between anyway.
19 CHAIRMAN DUNLAP: Okay. So, back to the point
20 Supervisor Roberts made so well.
21 How would we -- Tom, how would we be able to
22 identify where there's a problem; in the reports that are
23 submitted to us?
24 MR. CACKETTE: The Board? Yeah. We'll keep you
25 informed if it becomes annual reports to the Board on what's
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1 happening in that area. And we'll try to be on top of the
2 more immediate negotiations of where these -- you know, the
3 structure for these cars going into the other States.
4 CHAIRMAN DUNLAP: Okay.
5 MR. CACKETTE: Which will be happening on a
6 monthly basis from now on.
7 CHAIRMAN DUNLAP: Okay. So, we'll be able to see
8 any problems coming in plenty of time --
9 MR. CACKETTE: Yeah.
10 CHAIRMAN DUNLAP: -- in advance, and be able to
11 communicate back to the Board.
12 MR. CACKETTE: Right.
13 CHAIRMAN DUNLAP: Okay.
14 MR. BOYD: Just let me reinforce what Mr. Cackette
15 said. The original offer was the NLEV; our backstop was the
16 California LEV on a voluntary basis, but enforced by the MOA
17 should something happen with the so-called NLEV.
18 And then we put in an additional floor, if all
19 that fails, which we don't think it will. You will still be
20 committed to protect California.
21 So, the alternative provision is another one of
22 those provisions that we put in to make sure that, should
23 NLEV/Cal LEV fail for some reason -- which it won't -- but
24 that we would assure ourselves that they will continue to
25 have the obligation and would have to work with us.
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1 CHAIRMAN DUNLAP: Right. Okay.
2 Mr. Calhoun, I would like to come to you now about
3 having you share your perspective relative to the -- not
4 just the symbolism of this partnership approach, but some of
5 the practical considerations that provide us with a good
6 shot at the best launch possible.
7 Could you maybe share some of your views.
8 MR. CALHOUN: I guess I'd be happy to do that, Mr.
9 Chairman. But before I do that, let me just say a few
10 things.
11 MR. CALHOUN: Before I do that, let me just say a
12 few things. Yesterday, we heard testimony -- we heard a
13 proposal from the staff regarding changes to the ZEV
14 requirements. Following that proposal, we heard testimony
15 for and against the proposal.
16 The central theme of the opposition's testimony
17 seemed to be a recognition of the fact that something needed
18 to be done to the program, but their feeling is that the MOA
19 is not -- they don't have a lot of confidence. It doesn't
20 give you a warm tummy feeling, and they would have preferred
21 something else to be done.
22 While I'm sensitive to their concerns, I guess I
23 don't share the same feeling. And I say that because of my
24 own experiences and because of the fact that MOAs are
25 nothing new. The Board can enforce this particular
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1 memorandum of understanding, plus the fact that over the
2 years the staff has had a unique way of influencing
3 manufacturers outside of the specific regulations being
4 looked. And I don't need to go into that, but the auto
5 industry recognizes what I'm talking about.
6 So, I don't think there would be any difficulty in
7 getting the MOA enforced.
8 And I guess I don't share Supervisor Roberts'
9 concerns that this whole thing isn't going to work.
10 Frankly, I think this is the best approach to having a
11 successful launch of a new technology.
12 We are, in fact, treading in an area where we
13 haven't gone before. And I just don't think you can rush
14 out there overnight and I think the approach being taken
15 here is the best possible that we could get if you want to
16 have a successful introduction.
17 Now, we don't have to wait for these two years in
18 order to get some feedback. And I don't think the staff
19 will be waiting two years. That isn't the way they normally
20 operate. They will be looking over the industry's shoulder,
21 and I'm sure the industry will be sharing information with
22 them, so that they will have some feel in advance of the two
23 years as to what is actually taking place.
24 And I also feel confident that, if the staff feels
25 as though things aren't progressing the way they should,
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1 they will the industry in and lean on them and see if we
2 can't get them to make amends.
3 And I tell you something, I'm absolutely amazed
4 that you've had seven auto companies stick together on this
5 issue. This is a first, I can assure you of that. And I
6 have been in many meetings where we've tried to effect a
7 similar type of an agreement. And if you had told me two
8 years ago that you would have gotten the -- if you had told
9 me a year ago that the auto industry would have stuck
10 together, I would have said, "No way."
11 But I'm pleasantly surprised and very happy that
12 they are committed to this program. And I think that one of
13 the things that happened - when the Chairman of General
14 Motors made the announcement in January that GM was going to
15 start marketing that product starting this year, all the
16 other manufacturers looked around and said, "Hey, we can not
17 allow GM to get ahead of us in the market."
18 So, whatever they had in the back rooms, they
19 pulled it out. I can assure you of that.
20 And that particular announcement influenced their
21 action. And I see them out there smiling, because it's a
22 fact. And the auto industry is one of the most competitive
23 industries that you can possibly imagine. And I have no
24 doubt, I have no worry; I'm not going to lose any sleep at
25 night worrying about whether or not this is going to happen,
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1 because I think it will happen.
2 And I'm willing, Mr. Chairman, to commit some of
3 my time to looking over their shoulders.
4 CHAIRMAN DUNLAP: Okay.
5 MR. CALHOUN: Thank you.
6 CHAIRMAN DUNLAP: Thank you, Mr. Calhoun. Just to
7 clarify, though the Supervisor doesn't need me to look out
8 for him, Ron was suggested, I think, Joe, that if we were
9 able to deal with these four or five issues, we would
10 strengthen this program's ability to work. And I think
11 that's how I took it at least, Supervisor.
12 SUPERVISOR ROBERTS: And I was suggesting that,
13 while I have some concerns, I would agree with you that this
14 is probably a better solution than the road we were going
15 down and is the best option for us today. I don't have any
16 disagreement with what you're saying.
17 I guess it's going to take some effort on our part
18 and some changes of attitude --
19 CHAIRMAN DUNLAP: Right.
20 SUPERVISOR ROBERTS: -- on some of the others'
21 parts to make this work. And that's a concern I do have as
22 we go forward.
23 CHAIRMAN DUNLAP: Supervisor Silva.
24 SUPERVISOR SILVA: Yes. Thank you, Mr. Chairman.
25 Just for the record, I had in my office on the 14th of this
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1 month, March, '96, a meeting with Sam Leonard from General
2 Motors, Eric Ridenour of Chrysler, and John Schutz of Nissan
3 We looked it up last night. So, I apologize for not having
4 the names yesterday.
5 A couple comments. After yesterday's meeting and
6 actually some of the meetings I've had in Orange County, I
7 find that many -- not all people, but many of the people on
8 both sides of the ZEV mandate issue feel that the facts are
9 relatively simple.
10 And if you look at it, they are basically simple.
11 the goal, I think, for the CARB Board and the staff is to
12 reduce emissions whenever and wherever possible, all in the
13 name of public health.
14 I don't think that you'd find anyone in
15 disagreement up here. The problem is, which path to follow.
16 And there's not really a shortage of ZEV activists as we saw
17 yesterday. The problem is finding the buyers. I note that
18 there was a couple of college students yesterday, and they
19 were very excited about the program. And I wanted to ask
20 them, but I didn't, are they going to buy a car in '98. In
21 fact, when I go out to a lot of the groups, like I'm sure
22 that most of you do -- the Lions Clubs, the Rotary Clubs,
23 the homeowner groups -- I usually save the last 10 or 15
24 minutes of a presentation for questions.
25 And when they find out that I'm on the Board or
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1 just in general, they all ask about the electric vehicle.
2 And I have asked people to raise their hand -- "How many
3 would like to have -- or how many feel that the zero-
4 emission vehicle would be a way to go in the future?"
5 And just about everybody's hand will go up. And
6 then, I ask the question, "How many of you will be buying a
7 car in '98, an electric car?"
8 And there's not a hand goes up.
9 Well, actually, I did find one person that's going
10 to buy one in 1998. It's Councilman Marvin Braude in Los
11 Angeles.
12 (Laughter.)
13 SUPERVISOR SILVA: The first ZEV buyers I think
14 will be called pioneers. And if they have a bad experience,
15 they're not only going to tell ten people, they'll probably
16 end up telling a hundred people, which will multiply out.
17 And I think what we'll be doing is poisoning the well.
18 And I don't want to do that. I think this Board,
19 if they didn't believe in the ZEV mandate, would probably
20 let it go through at the two percent rule for '98, which
21 would, I think, poison the well.
22 I've talked to Supervisor Roberts and Chairman
23 Dunlap, and we would like to take -- I believe you've been
24 back to Detroit. I'd like to go back and look at some of
25 the R & D that is being done in this area. I think that
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1 it's very important that we get as much information as we
2 can.
3 I've driven two ZEV cars in the last three or four
4 months, and I think that there's still some work that has to
5 be done. The future of the ZEV I think looks bright. I
6 predict that the CARB staff in the year 2010 will be making
7 comments about the meetings that we've had here the last
8 couple days as being very naive.
9 I know that the fuel cells and lithium -- who
10 knows what else is out there and will be the solution and
11 provide success for the ZEV program? But there's one thing
12 for sure, that the growing body of information is, I think,
13 just on the cutting edge. There's some great improvements
14 that are going to be taking place. I do believe in the
15 program.
16 And, in fact, I'd like to see a special license
17 plate made for ZEV cars here in California. And I think
18 that this would be a valuable marketing tool. If you see a
19 person that's driving one and you talk to him about it and
20 he's having a good experience, I think that's the way that
21 we're going to sell the program.
22 The stakes are high. Public health and public
23 safety are at the top or they should be at the top of every
24 public official in the nation.
25 And today, I will be supporting -- I believe it's
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1 Resolution 96-12.
2 CHAIRMAN DUNLAP: Right. Okay. Thank you,
3 Supervisor. I'm not surprised that Councilman Braude's
4 going to buy one of the first cars if any of you know him.
5 Mr. Lagarias.
6 MR. LAGARIAS: I'd like to comment on two areas,
7 the first on the mitigating actions that are proposed for
8 the interim period if we don't have ZEVs in the first two
9 stages.
10 The assessment has been made that the NLEV program
11 will not quite make the anticipated reductions in the early
12 years, but will make them in the subsequent later years as
13 the population of ZEVs increases.
14 So, we look at a tradeoff. Do we accept a
15 shortfall at the beginning to get a larger benefit later on?
16 And, to my mind, I think that's a reasonable tradeoff. And
17 don't forget. We're not talking about emissions. We're
18 talking about promises of reductions of cars that won't put
19 out, not that there will be any increases of emissions.
20 Now, the second point I'd like to dwell on is my
21 assessment of the program. I've been involved with this
22 decision making since it was passed in 1990. Dr. Boston and
23 I served on that Board that passed that regulation.
24 And you have to keep in mind that the ZEV program
25 is the part of the Air Resources Board's clean car/clean
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1 fuels program, and the ZEV at the most will only affect 10
2 percent of the new cars. And that's starting in the year
3 2003.
4 All the rest of the program, the TLEVs, the LEVs,
5 the ULEVs, and the clean burning gas are already being
6 implemented now or are in the process of being implemented.
7 The ZEV program, in a sense, is a sizzle, an aroma
8 of promises to come; whereas, the steak and the meat is in
9 the clean car and the clean gas program.
10 In the following years, between 1998 and 2002, a
11 five-year period, I look upon that as a demonstration
12 period where we can establish the acceptance, the
13 performance, the reliability, and the equivalency of the
14 ZEVs, and also to identify issues that are not known or
15 currently are underestimated.
16 You know, it's not what we know are the areas that
17 we should be concerned with, there are areas we don't know
18 about, and they won't show up till we get the cars on the
19 road and tested. And I'm concerned about what we don't know
20 as well as what we do know.
21 And market surveys aside, we don't know how people
22 will buy and use cars until they get a chance to use and
23 test them. And the performance won't be truly tested until
24 we have consumers actually using them and misusing them.
25 Now, the MOA that we're discussing today is a
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1 mandate to produce and market a certain number of cars,
2 although not as many as we had originally thought of in
3 1990.
4 In addition to what we get from the MOA are a
5 certain number of positive steps, as Joe has indicated,
6 that we have not been able to get and were not able to get.
7 We get a demonstration program to evaluate a number of
8 advance battery technologies. We get a commitment to a 49-
9 State NLEV program three years before the Federal Government
10 could possibly even act on it.
11 We get a financial commitment to support advanced
12 battery research, and we get the commitment to promote and
13 market ZEVs.
14 We get a commitment to prepare and submit a ramp-
15 up program to achieve a 10 percent reduction in the year
16 2003. None of these things did we get before. And I think
17 it's a compliment to the staff to hammer out such a
18 provision with the manufacturers. All these, from my
19 assessment from the beginning to where we are now -- to the
20 fact that the technology, as I see it, is not ready in the
21 next few years to support a full scale demonstration
22 program, makes me believe that this MOA is worthy of
23 support.
24 Thank you.
25 CHAIRMAN DUNLAP: Thank you, Mr. Lagarias.
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1 Dr. Boston?
2 DR. BOSTON: First of all, let me state that I
3 come from bankrupt Orange County, and I'm not sure I want
4 Supervisor Silva going to Detroit.
5 (Laughter.)
6 CHAIRMAN DUNLAP: He needs a little bit of a
7 break. It's been a tough year and a half.
8 DR. BOSTON: What I do want, though, is the
9 successful introduction of ZEVs. And I think the key word
10 is "successful."
11 It's obvious that our 1990 regulation has
12 stimulated tremendous research that never would have
13 happened without that regulation. If you just look at the
14 parking lot out there today and yesterday, it's obvious that
15 there's been a lot of money spent. And I believe that's in
16 the realm of hundreds of millions of dollars.
17 Now, these major auto companies are not stupid.
18 After spending all that money, they're going to want to sell
19 those products and are going to want to recover that money.
20 And I think it's time now for us to go ahead and let them do
21 their thing and start selling cars. I don't believe that
22 delaying this mandate by a few years is going to work
23 against us. I think it's going to be working for us.
24 I think that we'll have a union, and I think the
25 people that were here yesterday clamoring for electric cars
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1 should really go out there and start promoting them now and
2 get their friends to buy them. So, if the auto companies
3 are seeing that there's a clamor for this type of car, I'm
4 sure they're going to make them even faster. And we may
5 have more than the 20,000 cars on the road by the end of
6 1998 than we would have had with the two percent mandate.
7 So, I'm for this agreement and I'm looking forward
8 to seeing lots of electric cars on the road in the near
9 future.
10 Thank you.
11 CHAIRMAN DUNLAP: Thank you, Dr. Boston.
12 Any other? Ms. Edgerton.
13 MS. EDGERTON: I appreciate you calling on me.
14 I have considered it a great privilege to serve on
15 the Board and I consider it a privilege to be here with you
16 today as we work on this difficult problem.
17 These are difficult balls and strikes to call, and
18 there's nothing any of us can do except bring everything
19 that we have -- as Mr. Calhoun has said -- experience that
20 we have to it.
21 I think that the direction that has been taken, as
22 I say -- I think that this proposal is directionally
23 correct. I think that I am mindful that my background is in
24 legal. I have a legal training background, and that may
25 make me more sensitive to some issues than others.
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1 CHAIRMAN DUNLAP: We just noticed when you speak,
2 Mr. Kenny sits up straight in his chair.
3 (Laughter.)
4 MS. EDGERTON: He's getting ready to have to --
5 CHAIRMAN DUNLAP: When the rest of us do that, he
6 slouches a little bit.
7 (Laughter.)
8 MS. EDGERTON: Well, Mr. Kenny, thank you, Mr.
9 Kenny. I must say -- I might as well go ahead and say
10 publicly that I have taken up a fair amount of Mr. Kenny's
11 time on a number of these issues, and he's very sturdy and a
12 very fine lawyer for the Board. We are very fortunate to
13 have him as General Counsel.
14 Having said that, there's some findings in this
15 resolution which I would prefer that we do not actually make
16 today, because they are fact findings. And I'd like to have
17 the opportunity to have a few more facts to make them.
18 I would say that, with respect to the finding in
19 the MMOA (sic) that the emissions reductions are equivalent,
20 I do not believe that it is appropriate for that finding to
21 be in the MMOA.
22 I believe that it may be appropriate to have it in
23 the resolution. I know it's in the resolution. I believe
24 that it's acceptable to me to go forward with it in the
25 resolution, because that gives us the opportunity to follow
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1 through as Mr. Dunlap said and have more information about
2 exactly how the emissions reductions were calculated brought
3 to this Board and reflect on that. And if we believe that
4 here are additional measures which should go into place for
5 our SIP, we have retained Board prerogative to do that.
6 What troubles me is having that little provision
7 No. 3 in the MMOA, because that's a contractual matter, and
8 everybody can take that to court and the court -- if I were
9 the judge of the court, I would be bound to make that as a
10 matter of law.
11 We wouldn't even be able to take testimony really
12 on that. It's a finding. It's agreed by the parties that
13 there's an equivalency. That's a done deal. And anything
14 that you or I may have to say about it afterwards, I
15 believe, will be out of the ball park.
16 So, I think it would be more consistent with the
17 conversation we had yesterday to remove that finding from
18 the MMOA.
19 Secondly, I don't believe it's accurate to say,
20 with respect to the emissions findings, that there are no
21 emissions increases. The resolution itself is very specific
22 with respect to the particular pollutants which -- the
23 emissions of which are equivalently reduced.
24 But the resolution also clearly provides that
25 there are other pollutants which are increased by the action
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1 and those emissions include some which are motor vehicle
2 toxic air contaminant emissions and global warming
3 emissions.
4 That doesn't, in my view doom the proposal. No, I
5 think we need to go forward with the proposal. But it does
6 again make me cautious about leaving the -- any kind of
7 finding of equivalency in the MMOA. I want to keep our
8 prerogatives to listen to the science over the years and
9 make our own decisions on that.
10 Again, another measure that's a finding -- it's
11 not part of the resolution, but is a finding, which troubles
12 me, is the finding that there are no additional feasible
13 mitigation measures or alternatives available to the Board
14 that would substantially reduce the potential adverse
15 impacts of the proposed regulatory action.
16 I am not prepared on this record to find that,
17 particularly since I sat here and heard Mr. Austin and other
18 people over the course of these hearings bring up other
19 things that we could conceivably do -- not easy things. I'm
20 not living in a dream world. But I would like to have the
21 staff, Mr. Dunlap, if it were possible, report back in some
22 way on other -- you know, if we can come up with any
23 additional mitigating measures.
24 Now, I know this is bound to make the staff go
25 into a massive decline. "How in the world is the woman --
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1 is she for real? Is she really saying we're supposed to
2 find some more reductions?"
3 And, yes, I really am saying that. I really do
4 want to find some more. And I would like to work on that
5 some more.
6 So, finally, one more comment, and it has to do
7 with the very difficult and complicated legal issue -- sit
8 up, Mr. Kenny -- of suspension versus repeal. I have
9 struggled with that a great deal, and I thought, Mr.
10 Chairman -- I believe the regulation -- I mean, even our
11 "whereases" show that. I quite honestly thought that what t
12 his Board had in December asked the staff to prepare for us
13 was documents which reflected a suspension. Now, that may
14 be semantics. But, in retrospect, I must say that I would
15 have sought more discourse on that had I understood that I
16 was going to be presented with a proposal suggesting
17 outright repeal.
18 And this is why. Well, there's several reasons
19 why. One of the reasons is what was discussed yesterday,
20 which is the difficulty of reinstituting -- the tremendous
21 difficulty of reinstituting a regulatory provision which
22 wouldn't violate the equal protection clause of the
23 constitution, or bills of attainder, or -- you know, all
24 kinds of provisions which make it hard to single out one
25 noncomplying company without penalizing the other ones.
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1 And I am the last person inn the world who wants
2 to penalize the people who are doing the right thing.
3 So, that bothers me. And, secondly, I have given
4 a lot of thought and I spoke about this in the car to my
5 colleague Barbara Riordan on the way over here -- I've given
6 a lot of thought to whether -- I really believe that this
7 repeal will effectively prevent Massachusetts and New York
8 from adopting -- for maintaining the adoption of their
9 California statute -- of their California program.
10 And it's very unclear to me that it will. I
11 believe that it very well may be that they adopted -- since
12 they adopted our program when it was legal, and they did it
13 all legally, that the mere repeal of it -- our repeal of it
14 will not at the end of day, after being litigated all the
15 way up to the Supreme Court, will not prevent them from
16 holding their ground.
17 But anyway, this is more a matter for the Supreme
18 Court than for this Board.
19 Suffice it to say -- suffice it to say -- I'm
20 almost finished. Suffice it to say that I'm not -- I'm
21 absolutely confident that the lawyers for the automobile
22 companies have made the same calculations and, consequently,
23 I wonder whether -- whether that requirement, their
24 insistence on that, isn't more a measure of intimidation
25 than of negotiation.
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1 Thank you.
2 CHAIRMAN DUNLAP: Mr. Kenny, I'd like for you talk
3 about that selective enforcement issue again.
4 MR. KENNY: In terms of the question that Ms.
5 Edgerton raised with regard to selective enforcement, there
6 is a question with regard to how we would pursue enforcement
7 against an individual company that was not in compliance
8 with the MOAs.
9 Ms. Edgerton is correct that it is very difficult
10 to pursue a regulatory option that was targeted on a single
11 company. So that would not be the proposal, I think, that
12 we would bring to the Board in the event that that did
13 occur.
14 The proposal we would bring to the Board in the
15 event that occurred would be one in which we would
16 essentially be reinstituting a regulatory approach that was
17 applicable to all the companies, but which would have an
18 alternative compliance plan element that would allow for an
19 escape valve for those companies in compliance.
20 CHAIRMAN DUNLAP: And the alternative compliance
21 plan would be something that the Board would have to
22 sanction or approve for those other six or whatever the
23 number was.
24 MR. KENNY: Yes.
25 CHAIRMAN DUNLAP: If they were in accord with that
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1 alternative compliance plan, they would be separate from the
2 new requirements or the enforcement element to that
3 agreement. Correct?
4 MR. KENNY: Yes. And I think one of the key
5 elements here is essentially what would happen in the event
6 of this kind of noncompliance is really -- right now what
7 we're talking about is an Option B approach.
8 CHAIRMAN DUNLAP: Okay.
9 MR. KENNY: Under the three options. In the event
10 we went to this alternative compliance approach to
11 essentially provide for an enforcement mechanism, we're
12 really converting our Option B to an Option C.
13 CHAIRMAN DUNLAP: Okay. And that's conceptually
14 consistent with what we've done with consumer products in
15 the last three or four years, or whatever the time frame's
16 been, Mr. Kenny?
17 MR. KENNY: Yes.
18 CHAIRMAN DUNLAP: Okay.
19 MR. LAGARIAS: Another comment.
20 CHAIRMAN DUNLAP: Yes, Mr. Lagarias.
21 MR. LAGARIAS: I'd like to comment on the concern
22 that has been voiced, a distrust of the agreement that has
23 been made or is proposed with the industry on trying to
24 achieve a program.
25 By looking at the history of this particular Air
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1 Board, which originally started with command and control
2 regulations -- you do this because we say so, without
3 necessarily having to have a true justification for it,
4 other than the goal is laudatory.
5 Well, that evolved to going into a workshop
6 program in which proposed regulations were presented in a
7 workshop and people that might be affected could participate
8 in discussions of the proposed regulation before it came to
9 the Board. And this resolved a lot of issues.
10 And the command and control gradually involved
11 participation. And from that, when there were major studies
12 to be made -- like the San Joaquin Valley study -- which
13 Supervisor Vagim now chairs -- began, it involved the
14 involvement of Federal Government, State Government, some 40
15 industries that were affected in the San Joaquin Valley,
16 local agencies, industrial groups, agricultural groups, all
17 working to determine a common baseline of what the air
18 quality was in that valley.
19 And that program has been phenomenally successful,
20 in that the people involved were able to understand what the
21 issues were, to participate in it, and to agree on what the
22 facts were. And then the judgment and the regulation was
23 still left with us, with the Air Board, to take the
24 appropriate action.
25 And from that, we evolved into the advisory
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1 committee for the clean burning gas in which automobile
2 people, oil people, environmental groups, public interest
3 groups all came to a common table, some 40 to 60
4 organizations affected, to bring a program into fruition.
5 And that experience in working with adversary
6 groups, affected groups has led me to believe that this
7 action is also positive and can work to our benefit.
8 We've got the experience there.
9 CHAIRMAN DUNLAP: Thank you, Mr. Lagarias.
10 I think that that process where people -- I took
11 to heart what Supervisor Roberts said about some of the
12 adversarial communications, plans, and how that affects us,
13 and I think it maybe would be of benefit for me to say a
14 word or two on that.
15 It's extremely challenging for us as appointed
16 public officials, and several of us are elected officials,
17 to weigh all of the evidence. And when you have a lot of
18 noise, extraneous noise, and some particularly that isn't on
19 an individual issue that isn't accurate, it confuses and
20 confounds the process. And that's why I am supremely
21 confident of the course that we took relative to coming to
22 this decision point from those workshops, and forums, and
23 the battery audit panel.
24 But we tried to sift through campaigns, some of
25 which was fraught with misinformation, to try to get to the
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1 core issues. What was the status of the technology? What
2 were we looking at if we held the line in 1998? What kind
3 of consumer acceptability was likely?
4 And I felt that that process was not only
5 important, but absolutely essential. I don't think we could
6 have even come to this point without providing the
7 leadership to cut through it and get to the bottom line
8 issues.
9 And it's been a challenge to try to cut through
10 all of that information and get to those core elements.
11 There's been a few that haven't had a chance to
12 say anything. I'd like to offer that time now, if you'd
13 like, Supervisor Riordan?
14 SUPERVISOR RIORDAN: Thank you, Chairman Dunlap.
15 I appreciate that. My comments are very, very short. I
16 think the long-term goal for this Board is to have a
17 successful zero-emission program. And it really means that
18 we have to have consumer acceptance of a new technology.
19 And had we not had what I would term more of a
20 midcourse correction, hopefully, that we may deal with in
21 just a moment, I'm afraid that the consumer acceptance would
22 have been very, very low.
23 And that isn't going to lead us to a positive
24 result.
25 The MOA, in my opinion, underscores some very
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1 important things and I'm particularly concerned with the
2 element of commitment to research. That continues to need
3 to march forward. It was addressed in our MOAs, and I think
4 it's very, very important.
5 We've talked a little bit about verification and
6 enforcement, and I think those are adequately handled,
7 though I would certainly agree with Supervisor Roberts on
8 more of an annualized report to the Board.
9 So, I recognize staff is going to have a great
10 deal of information on an ongoing basis. But I think the
11 Board and the public perhaps would feel much more
12 comfortable with an annualized report.
13 But I am very supportive of what is before us, and
14 I salute all of those who have worked so hard to make it
15 possible, including you, Mr. Chairman.
16 CHAIRMAN DUNLAP: Thank you.
17 SUPERVISOR RIORDAN: Because I think it is a good
18 working agreement that's going to lead to a very successful
19 program, and I do appreciate the factor of research.
20 Because I still think and believe that that is absolutely
21 essential to make this program work.
22 CHAIRMAN DUNLAP: Thank you.
23 SUPERVISOR RIORDAN: So, I end my comments there.
24 CHAIRMAN DUNLAP: The research provision, that
25 technology development partnership is going to be absolutely
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1 essential for us to be able to assess those new
2 technologies. And I think Ms. Edgerton's perspective on
3 fuel cells and what we've learned over the course of the
4 last few months I think opened our eyes that, you know,
5 unless we're particularly vigilant in doing technology
6 assessment work, there's some things that might escape our
7 attention.
8 And I would echo what you said about the research
9 element. That's very, very important.
10 Mr. Parnell.
11 MR. PARNELL: Well, I'll keep my comments very
12 brief and very general. But I think, as we look at the
13 whole issue of EVs, it strikes me as being one of a real
14 confrontation which was taken to the Press. And we've had
15 some comments about whether that was right or wrong. I
16 think that's freedom of speech. That's one of the
17 greatnesses of this country, because we can say what we
18 believe and we can do it in a public forum. And I invite
19 that. I continue to invite that.
20 That's what public officials are all about, to
21 listen to all sides of an argument, and then to weigh those
22 arguments and to make judgments.
23 But we've come on this issue from a place where --
24 for varying reasons. I see this as kind of three sides to
25 this issue, not just two. There are those who want to force
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1 EVs onto the market because of the clean air benefits. We
2 support that.
3 There are those who want to do away with mandates
4 all together.
5 There are those who want to bring EVs to the
6 market in a logical and more intelligent way, which is
7 supported by those who will be responsible for doing so.
8 So, I think it's fun and appropriate that all
9 people have made their voices heard in the process.
10 But we've come from a time when people were
11 basically saying that EVs won't work under any set of
12 circumstances, and automobile manufacturers going in a
13 variety of directions. And today, I think we should be
14 excited about the future and the good work that the staff
15 has done.
16 We should be enthusiastic about supporting an
17 approach that seems to now be unified. I was struck with
18 the whole idea of General Motors coming into the market
19 early. And just in an idle conversation saying to another
20 automobile man manufacturer, "Wasn't it interesting. This
21 is a good looking car. It's an excellent car."
22 They're going to try to bring it to the market in
23 a very intelligent and appropriate way. And they kind of
24 tugged on my shirt sleeve, "You ain't seen nothing yet. We
25 have something in the back room that'll blow the doors off
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1 of this thing."
2 Now, I don't know whether they do or don't. But
3 what I'm saying is that markets are working. And that'll do
4 more to bring EVs effectively to the California market than
5 any other one thing. And I believe this agreement is
6 protective of air quality. It is protective in every way.
7 And I can't say strongly enough or in terms that are more
8 glowing -- the staff has done a superb job of negotiating
9 the best possible deal under the most adverse set of
10 circumstances, and I compliment you. My hat's off to you.
11 And I'm ready to support Resolution 96-12.
12 CHAIRMAN DUNLAP: Okay. Very good. Thank you,
13 Mr. Parnell.
14 Supervisor Vagim.
15 SUPERVISOR VAGIM: Thank you, Mr. Chairman. Thank
16 you for delivering the mail.
17 CHAIRMAN DUNLAP: Brought about 40 pounds of paper
18 to your doorstep.
19 SUPERVISOR VAGIM: I brought a young colleague up
20 with me last night so he could get together with his old
21 rock band. And I was pulled out of the Old Country Tavern
22 to join with this. So, I had an interesting evening last
23 night.
24 But having sat through many hearings, many
25 workshops, and listening to the debate from both sides, and
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1 from my colleagues, and even today, I think we have to look
2 at this in another perspective, too, and that's there are
3 other parts of this State that will get more benefit out of
4 this particular program than would be the previous program.
5 And I'm specifically talking about the NLEV program.
6 The San Joaquin Valley, which I represent on this
7 Board, does have a significant problem in its air quality.
8 As a matter of fact, we have to be there by 1999, not by
9 2010. And I believe the NLEV will have the ability to, as
10 we grow -- and we are the fastest growing part of the State.
11 The NLEV will have more potential to the San Joaquin Valley
12 than will the ZEV program, for the fact that the ZEV program
13 really won't be started in the San Joaquin Valley as it will
14 in Southern California and other parts of the State.
15 The issue, of course, for this agency has always
16 been, where it's always met its, I think, most promise is in
17 its ability to nudge the more modern technologies of
18 environmental control.
19 I believe a nudge is still there with 10 percent
20 at 2003, particularly when the Eastern States can now meet
21 also that 10 percent and not fall over the other side of the
22 2004 deadline, which is allowing them to hook into their
23 mandate.
24 I think some other areas need to be looked at.
25 And I firmly believe that the nudge factor will allow the
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1 entrepreneurial -- which we've heard so much from,
2 particularly when they criticized the price of the vehicle
3 that the Big Seven will be -- already out by GM -- is too
4 high. Well, then, fine. Put out a product that's cheaper.
5 This will give that opportunity. It will give
6 those -- the Big Seven having to look over their shoulders,
7 and someone's going to be there with a product that's better
8 than ours if we're really not working hard enough.
9 So, it does keep that pressure on.
10 The other issue for me is some that I think have
11 not really been dealt with that much here, and that is what
12 will your first and second vehicle, Chairman Dunlap, be
13 worth when you sell them?
14 What is the used market going to be like in this?
15 And anybody who knows the automobile industry knows the used
16 market is just as important as the new market. Where are
17 you going to move those vehicles, or are they going to go
18 directly to the crusher?
19 I mean these are issues that need to be dealt
20 with.
21 Some other issues need to be dealt with, too, and
22 I hope we have this intervening time to start really dealing
23 with this statewide.
24 What happens to the tax? Where is this tax
25 transfer going to happen? The road tax, the sales tax, the
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1 energy tax. All these taxes that we pay on a gallon of
2 gasoline are not currently in a kilowatt, and we have to
3 figure that out and, at the same time, the piracy issue has
4 to be dealt with.
5 Many of these issues, I hope, will be ironed out
6 as we move through and finding out the nudge factor will
7 create an actual demand for these vehicles versus forcing
8 the product.
9 We've heard a lot about when we demanded certain
10 elements in a car, like airbags, catalytic converters, the
11 price was high and it went low.
12 As much as it's easy to compare those past events,
13 I do believe this is a major quantum leap in taking a
14 product that is one element of a whole automobile and
15 comparing it to a whole another regime of travel, and
16 saying, oh, you're going to have the same effect; start out
17 high costs and go lost costs. Is everything going to be the
18 same way as it occurred with an airbag?
19 That's a big unknown. This will give us some time
20 to find that out.
21 And, of course, the other issue is, where are the
22 batteries going to go? How are they going to be recycled?
23 How are we going to keep them off our highways, byways, and
24 empty areas around our counties?
25 Are we going to have the used tire marketplace,
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1 where you pay a dollar and find out that they all end up in
2 the same spot on some empty field?
3 I mean, these issues need to be dealt with. If
4 they're not, it's going to come back to haunt us,
5 particularly as we get closer to 2003. I do support
6 Resolution 96-12, and I hope we can incorporate the concerns
7 of this Board as we move through the time.
8 Thank you.
9 CHAIRMAN DUNLAP: Appreciate your comments and the
10 long-term view. I think most of the debate is centered on
11 some of the things confronting us immediately, not looking
12 at the integration of these vehicles into the overall
13 system.
14 Wise counsel. Appreciate that, Supervisor.
15 Mayor Hilligoss from the Bay Area's perspective.
16 I know you've been very, very concerned about ensuring that
17 those air quality benefits under this program are real and
18 are going to be consistent.
19 MAYOR HILLIGOSS: That's right. That's the main
20 part of my -- but, also, I think for the Bay Area, just like
21 for San Joaquin, I think that the NLEVs will certainly be
22 very good, because we do have a lot of new people coming in.
23 So, I think that -- I am in favor of it.
24 CHAIRMAN DUNLAP: Okay. Has staff been able to
25 adequately answer your questions in the regard? Feel
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1 comfortable with that, Mayor Hilligoss?
2 MAYOR HILLIGOSS: Yes.
3 CHAIRMAN DUNLAP: Very good. Is there any other
4 discussion that we need to have before Mr. Parnell moves
5 this item?
6 SUPERVISOR ROBERTS: Mr. Chairman, could I close
7 the loop on one last --
8 CHAIRMAN DUNLAP: Sure.
9 SUPERVISOR ROBERTS: -- because you called on me
10 first, and I wasn't completely prepared.
11 CHAIRMAN DUNLAP: That was intentional.
12 (Laughter.)
13 SUPERVISOR ROBERTS: I had a feeling that was part
14 of your strategy.
15 Let me -- just two quick comments. One, an issue
16 that I had raised over the last few meetings was the amount
17 of money that was going to be contributed to the USABC
18 effort. And I feel comfortable, having talked to staff now,
19 about this issue since yesterday's meeting, that the USABC
20 budget -- and I guess it was November of last year, prior to
21 the more generous commitment made by Mr. Leonard --
22 (Laughter.)
23 SUPERVISOR ROBERTS: -- and I appreciate his
24 efforts. But prior to his making that statement as part of
25 the public record, it does reflect the amount that's in this
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1 agreement. So, I feel his statement notwithstanding, that
2 this is an appropriate number for us to proceed on.
3 I would also hope that they might consider a
4 contribution level closer to that higher amount, but I think
5 this is the number that we should have in here.
6 And finally, I think -- you know, one of the
7 things that I think maybe needs to be said, that a good part
8 of this is really a trade of two different strategies, a
9 trade of quality for quantity. Having driven one of these
10 electric cars for some considerable miles with the lead acid
11 batteries, I found that the performance was -- with respect
12 to range - was in all respects less than what I would have
13 expected based on all the hoopla surrounding this.
14 And you don't have the options that you have with
15 gas stations out there. We need some time to put some
16 infrastructure. We're starting on that in San Diego County,
17 and I think that, along with the advanced batteries as
18 opposed to the lead-acid batteries, really gives us an
19 opportunity to be successful if the cooperation of the
20 manufacturers is there.
21 And I think that is what is giving me the balance
22 to go forward with this.
23 CHAIRMAN DUNLAP: Thank you, Supervisor.
24 One, perhaps just a clarifying comment. In the
25 advanced lead-acid battery arena, I've been quite impressed.
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1 I know several of you have had an opportunity to hear from
2 those folks.
3 They have made great strides and have done an
4 awful lot to communicate to us the advancements they've made
5 and what they're anticipating.
6 So, the lead-acid agency folks have a significant
7 niche market, perhaps more than that. And I don't want to
8 write them off too soon. There's some things that they can
9 certainly do to help us implement this program.
10 Mr. Parnell.
11 MR. PARNELL: Mr. Chairman, it gives me pleasure
12 to move Resolution 96-12 as submitted to the Board members
13 just a few minutes ago.
14 CHAIRMAN DUNLAP: Thank you. Is there a second to
15 Mr. Parnell's motion?
16 MR. CALHOUN: I second it.
17 CHAIRMAN DUNLAP: Mr. Calhoun. All right.
18 Do we need to have any specific discussion on the
19 resolution that we haven't already covered?
20 MS. EDGERTON: Move to separate. I want to
21 substitute -- either we can have a substitute motion or we
22 can just move to separate certain questions.
23 CHAIRMAN DUNLAP: What I would ask is, Lynne, if
24 you would outline what you would like to be done, we'll ask
25 the person -- the folks that made the motion and a second
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1 whether it's agreeable to them. Go ahead.
2 MS. EDGERTON: Well, then it would be taken up as
3 an amendment to their main motion. I would prefer to take a
4 vote up on certain provisions -- substitute takes precedence
5 over the other. So, we can vote those up or down and then
6 we can vote on the main motion.
7 CHAIRMAN DUNLAP: Well, we have a main motion now.
8 What I'd prefer is have you outline what you would like to
9 do, and let's see if we can get the motion's amended.
10 MS. EDGERTON: Okay. Then I'll make a substitute
11 motion, with the following changes.
12 My substitute motion would be to have the entire
13 resolution 96-12, as it is proved here, with the following
14 modifications.
15 None on 1, none on page 2, none on page 3, none on
16 page 4, none on page 5, none on page 6. One on page 7,
17 second paragraph of the whereas the Board finds.
18 "Elimination of the ZEV requirement for model
19 years 1998 through 1992 (sic) will not jeopardize the SIP
20 because the NOx and NMOG emission reductions to be realized
21 from implementation of a 49-state program are not encumbered
22 by or otherwise available to meet any. . .SIP
23 requirement(sic) and are sufficient. . ."
24 I would prefer to -- my motion says "may be
25 sufficient."
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1 Next page.
2 CHAIRMAN DUNLAP: Rather than "will not," you
3 would substitute "may not"?
4 MS. EDGERTON: Yeah. Rather than "are not"
5 sufficient, I'm saying "may be" sufficient.
6 That's the only change on page 7. Instead of "are
7 sufficient," I want it to be "may be sufficient to." Oh,
8 yeah, "are" is changed to "may be."
9 CHAIRMAN DUNLAP: All right.
10 DR. BOSTON: What line are you talking about?
11 MS. EDGERTON: Oh, you want me to say what line
12 number it is?
13 Okay. On page 7, line number --
14 CHAIRMAN DUNLAP: Second paragraph, fourth line.
15 MS. EDGERTON: Oh, second paragraph, line 4.
16 CHAIRMAN DUNLAP: The word "are" --
17 MS. EDGERTON: The word "are" changed to "may be."
18 CHAIRMAN DUNLAP: Okay.
19 MS. EDGERTON: All right. Page 8 --
20 CHAIRMAN DUNLAP: Mr. Kenny, are you traveling
21 with us here?
22 Okay.
23 MS. EDGERTON: Would you please interrupt if you
24 need to have a clarification?
25 In the first paragraph under the whereas --
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1 CHAIRMAN DUNLAP: Page 8?
2 MS. EDGERTON: Page 8, the first paragraph under
3 the whereas, line 1, 2. Again, this is instead of the
4 emissions benefits "will be" equivalent. I'd like for it to
5 be "may be" equivalent.
6 So, I would change "will" to "may."
7 CHAIRMAN DUNLAP: All right.
8 MS. EDGERTON: I will -- on the fourth paragraph -
9 CHAIRMAN DUNLAP: Under whereas?
10 MS. EDGERTON: Under whereas, on page 8, it says,
11 "There are no additional feasible mitigation measures. . .
12 available to the Board that would substantially reduce the
13 potential adverse impacts. . ."
14 I would change to "there may be no."
15 CHAIRMAN DUNLAP: Okay. So, delete "are," put in
16 "may be."
17 MS. EDGERTON: Uh-huh.
18 CHAIRMAN DUNLAP: Okay.
19 MS. EDGERTON: With respect to the resolution for
20 the Board approval, on page 8, it says at the very bottom,
21 "Be it further resolved that the Board approves the terms
22 and conditions of the MOAs. . ."
23 CHAIRMAN DUNLAP: Right.
24 MS. EDGERTON: Turn the page -- let's see. That's
25 fine. Well, let's see. I don't know whether. I'll put it
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1 here.
2 Okay. In that one, on the bottom of page 8, after
3 ". . .signatory manufacturers," put comma, "provided,
4 however, that. . ."
5 I want to get the exact -- Section III, that's
6 Roman Numeral III, SIP credits, is modified as follows:
7 MR. LAGARIAS: Where are you now?
8 CHAIRMAN DUNLAP: She's at the bottom of page 8.
9 MR. LAGARIAS: Well, I know that. I've got
10 "provided, however, that. . ."
11 MS. EDGERTON: -- ". . .that the MOA. . ." Roman
12 Numeral III, line 3 is changed to read, "the emissions
13 reductions benefits could be equivalent" as opposed to "are
14 at least equivalent."
15 CHAIRMAN DUNLAP: Could be.
16 MS. EDGERTON: Uh-huh.
17 SUPERVISOR VAGIM: Can you read that whole thing
18 again, please?
19 CHAIRMAN DUNLAP: Read the whole sentence.
20 SUPERVISOR VAGIM: Just of your modification.
21 CHAIRMAN DUNLAP: Read the whole sentence that you
22 just outlined.
23 MS. EDGERTON: Oh, from III?
24 SUPERVISOR RIORDAN: Provided, however --
25 MS. EDGERTON: ". . .provided, however, that
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1 Section III of the MMOA be modified to read that the
2 emissions reduction benefits 'could be', quote/unquote,
3 equivalent to the benefits attributable to the 1998 through
4 2002 percentage ZEV requirements in the current SIP."
5 And also provided that -- and this is Mr. Roberts'
6 suggestion that I thought was a good one -- provided that
7 provision --
8 CHAIRMAN DUNLAP: What --
9 MS. EDGERTON: This is the product plan. I would
10 like to have an annual product plan submission as opposed to
11 a product plan submission the November 1st before our
12 biennial review?
13 Can you look in your thing? Let's find the exact
14 cite.
15 CHAIRMAN DUNLAP: While you're doing that, may I
16 ask Mr. Cackette a question?
17 Is there a problem that you see with the
18 automakers providing us an update, an annual update to their
19 product plan?
20 MR. CACKETTE: Since they have product plans at
21 all times that fit various time frames, I don't know that
22 there's a problem in providing. The problem would, in
23 general, is opening up the MOA. I guess I thought I heard
24 Supervisor Roberts indicating, and you, Mr. Chairman,
25 indicating -- Supervisor Riordan, too -- that they'd like to
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1 have annual reports back from the Board on what was going
2 on. We get out of the MOA and the annual report on what's
3 happened in the past. We get a biennial report that is
4 specifically designed to feed into these more massive
5 reviews like we've had this time.
6 CHAIRMAN DUNLAP: Right.
7 MR. CACKETTE: And at least I could envision that
8 we could meet the Board's needs by having a combination of
9 both, one more of an informational report on an annual
10 basis, and then the next year having the more full-blown
11 biennial review based on the plans and the business plans,
12 et cetera.
13 MR. BOYD: Mr. Chairman, I didn't jump in at that
14 point of the discussion of an annual report, but I was
15 prepared to say earlier that I thought we had the tools to
16 accomplish the needs of the Board to have an annual report
17 along the lines of what Mr. Cackette just said.
18 We are asking for annual on certain facets; we get
19 an update of the business plan on a biennial basis. We have
20 the provision for access to staff and facilities on a
21 fulltime regular basis. And I felt that we could easily
22 provide an annual report of progress --
23 CHAIRMAN DUNLAP: Okay.
24 MR. BOYD: -- perhaps every other year --
25 MS. EDGERTON: That's not my -- yeah. I
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1 appreciate the clarification, but that's not my substitute
2 motion.
3 CHAIRMAN DUNLAP: All right.
4 MS. EDGERTON: My substitute motion is in Section
5 I-C, ZEV Product Plans, Ramp-Up Transition Plans.
6 And I want it to be so that instead of saying
7 "prior to November 1st of the year preceding each of the
8 scheduled reviews, the manufacturers shall submit to ARB
9 confidentially its ZEV plans."
10 I'd like for it to say, "on November 1st of every
11 year manufacturers shall submit to ARB confidentially its
12 ZEV product plans."
13 I'm less concerned about having, you know, an
14 annual with the full forum here than I am concerned about
15 having a binding obligation in the contract itself for the
16 manufacturers to submit product plans each year.
17 So, my motion sounds like it wouldn't be a problem
18 for them. My motion is to ask them to submit confidentially
19 to the Air Resources Board annual product plans.
20 I think that's --
21 SUPERVISOR ROBERTS: Lynne, that's also in
22 keeping, I think, with the stronger type of reporting that
23 I'd like to see.
24 MS. EDGERTON: Is that something you could
25 support?
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1 SUPERVISOR ROBERTS: I could.
2 MS. EDGERTON: Good. I think it's a minor, minor,
3 minor change. And I think that it would help us to have a
4 little more confidence overall in the process that we're
5 undertaking for the next six years. And, in fact, we do
6 want to know what the product plans are every year, and
7 that's what I thought we had.
8 So, that's my substitute motion. And I move my
9 motion.
10 CHAIRMAN DUNLAP: Okay.
11 MS. EDGERTON: Is there a second?
12 CHAIRMAN DUNLAP: Is there a second to the
13 substitute motion?
14 SUPERVISOR ROBERTS: I'll second that.
15 CHAIRMAN DUNLAP: Okay. We need to have some
16 discussion on this.
17 SUPERVISOR RIORDAN: Yes. Mr. Chairman, if I
18 might.
19 CHAIRMAN DUNLAP: Supervisor Riordan.
20 SUPERVISOR RIORDAN: While I certainly appreciate
21 your last motion --
22 MS. EDGERTON: The whole substitute or the last
23 part?
24 SUPERVISOR RIORDAN: The last part of your motion.
25 I need to understand from staff the wording change of
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1 "could." I believe we've added a lot of coulds instead of
2 "ares."
3 And I need to understand what that does.
4 MR. KENNY: With the exception of the last one
5 with regard to product plans, all three of the prior
6 amendments relate to whether or not the SIP would be whole
7 by this particular change. That does raise some concerns,
8 at least in my mind, because of the fact that we've recently
9 had EPA proposed approval of our SIP submittal.
10 To the extent that this language would be changed
11 from an equivalent emissions reduction being achieved from
12 the MOAs to a possible equivalent emissions reduction
13 achieved from the MOAs, when we eventually submit to this to
14 EPA for a scope of the waiver determination, it could raise
15 questions about whether or not the SIP is whole.
16 And I think --
17 CHAIRMAN DUNLAP: And it could jeopardize the SIP
18 approval?
19 MR. KENNY: I don't want to say it would
20 jeopardize the SIP approval. I think it will simply raise
21 questions about how we are going to ensure that the
22 emissions equivalency determination is made, because,
23 clearly, by the resolution of this Board with the "could"
24 language there is not an equivalents determination made.
25 CHAIRMAN DUNLAP: All right. Would these
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1 amendments require an opening up of the MOA, Mr. Kenny, Mr.
2 Cackette?
3 MR. KENNY: The MOA currently does have language
4 in it that says the MOA reductions would be equivalent to
5 the reductions that would have been achieved from the
6 existing regulatory programs. So, yes.
7 In addition, one of Mr. Edgerton's amendments was
8 specifically on point.
9 CHAIRMAN DUNLAP: Mr. Cackette, the ramifications
10 here by these amendments relative to the balance that's been
11 struck relative to the negotiations with the automakers on
12 your proposal, or what?
13 MR. CACKETTE: I can only speculate, because it
14 was a negotiated agreement to this point to initial them. I
15 don't know what the total reaction would be of the other
16 seven signatories other than the Air Resources Board.
17 But the general theme was that no one was -- no
18 one was entertaining the idea of additional change -- what
19 we were told at least on the automobile side, was that it
20 was a fragile agreement which any change could jeopardize
21 it.
22 I can't answer the question directly, because I
23 don't know the --
24 CHAIRMAN DUNLAP: Okay. Mr. Parnell.
25 MR. PARNELL: Mr. Chairman, I rise to speak
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1 against the substitute motion for the very reason that this
2 was a very sensitive negotiation. Each one of the
3 participants in that negotiation had to go back to their
4 CEOs with pills that they did not want to swallow.
5 And the quickest and most direct route to strike
6 down the agreement that's in place that I talked about with
7 some enthusiasm will be to change it in this forum.
8 I think what we need to do is decide up or down
9 whether or not the resolution, the MOA, as it's currently
10 written, can stand.
11 That was my motion. That's where it should go,
12 and not to attempt to tweak or to change something that is
13 undergone a very, very, serious, serious negotiation.
14 CHAIRMAN DUNLAP: I, too, share those concerns,
15 particularly as it relates to the whole SIP process we've
16 been through. Mr. Roberts, did you have a comment?
17 SUPERVISOR ROBERTS: Well, it sounds like you
18 don't want to discuss the issues of the points that have
19 been made, which I think is unfortunate.
20 I'm not used to walking in a room when somebody
21 tells me we're going to vote this up or down. I attended a
22 large number of the public workshops, and I can tell you, I
23 don't feel like I've been involved in this negotiation that
24 has brought this forward here today.
25 And it bothers me to be told that you can't change
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1 anything, however significant or insignificant you may feel
2 that it is. And if that's the case, you know, I don't think
3 it bodes well for us.
4 I didn't have a hand in these negotiations, and
5 I'm taking it on good faith that, in fact, that our staff
6 put their best effort into this. But to say that we now are
7 at a point that we've got to take it or leave it, you might
8 as well just let the industry write whatever they want and
9 just sending it in here in a take it or leave it situation.
10 The points that have been raised I think ought to
11 be the discussion. And I think the points are well made and
12 the language is fairly innocuous.
13 And if this would bring everybody to their knees,
14 then I don't think we're going to get there anyway.
15 CHAIRMAN DUNLAP: First of all, the Board doesn't
16 directly negotiate. That's what we have staff for.
17 The process, as -- I think it's been lauded
18 uniformly by everyone on this Board that the process to get
19 to this decision has been one that has been complete,
20 thorough. We've relied upon not only experts here on staff,
21 but we commissioned battery panels. We've examined these
22 things.
23 I'm more interested in getting on with
24 implementation rather than some artful manipulation of
25 language at the eleventh hour here.
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1 And there are ramifications to this language,
2 Supervisor Roberts, relative to something that this Board
3 worked on and -- the majority of this Board worked on that
4 predates me, and that's their SIP. And I'm concerned about
5 in any way weakening a very positive situation we have
6 relative to our SIP review and throwing that into question.
7 And so, that's why I am comfortable with the
8 original motion. I'm uncomfortable with the motion made and
9 seconded by you and Ms. Edgerton, because it throws in some
10 factors into the situation that could have dire
11 consequences.
12 Now, I've heard staff indicate that they are
13 comfortable and willing to come forward with an annual
14 review. I've indicated some support at the outset for
15 having this implementation advisory committee that can get
16 heavily involved with this, and that we have the ability, if
17 this thing went sour, to make some significant changes and
18 hole those people accountable and not suffer any air quality
19 harm.
20 And for me, at this juncture, I am very
21 comfortable with being in that situation. And so, I'd like
22 to, unless there's anything else that needs to be said, I'd
23 like to call the question on this substitute motion.
24 Dr. Boston.
25 DR. BOSTON: Well, I just wanted to say that I
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1 don't really see the point in all the "may bes" and the
2 "coulds." It just makes it sound as though we don't know
3 how to make calculations, and we don't know how to do our
4 figuring. And I think that's totally erroneous.
5 And I don't see the point of it. It makes no
6 sense to me. So, I stick with the original resolution as
7 presented by Mr. Parnell.
8 CHAIRMAN DUNLAP: Mr. Lagarias.
9 MR. LAGARIAS: With regard to the SIP submittal,
10 changing the language from can to may be to get the
11 equivalent emission reductions, the last resolution says
12 that the Executive Officer must submit documentation to EPA
13 demonstrating that the SIP is not jeopardized, so that --
14 there is a checkup on this. It has to be documented and it
15 has to be submitted to EPA to show that the LEV program is
16 indeed achieving the reductions that we claim for it.
17 There's the check for it --
18 MS. EDGERTON: Excuse me. Which is --
19 MR. LAGARIAS: -- in the last resolution.
20 MS. EDGERTON: -- thank you for making the point.
21 Because that's -- I agree. And that's consistent
22 with -- I believe that's consistent with my substitute
23 motion. Because I believe that it is this Board's
24 obligation and prerogative to submit to the U.S. EPA our
25 calculations of equivalency. And I don't think it should be
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1 a matter of contract with the auto manufacturers. But
2 that's a technicality which matters to me.
3 I do not believe that the changes that I am making
4 would jeopardize in any way the approval of our SIP.
5 Thank you.
6 CHAIRMAN DUNLAP: If there's nothing else, I'll
7 ask the Board Secretary to call the question on the
8 substitute motion.
9 MS. HUTCHENS: Boston?
10 DR. BOSTON: No.
11 MS. HUTCHENS: Calhoun?
12 MR. CALHOUN: No.
13 MS. HUTCHENS: Edgerton?
14 MS. EDGERTON: Yes.
15 MS. HUTCHENS: Hilligoss?
16 MAYOR HILLIGOSS: No.
17 MS. HUTCHENS: Lagarias?
18 MR. LAGARIAS: No.
19 MS. HUTCHENS: Parnell?
20 MR. PARNELL: No.
21 MS. HUTCHENS: Riordan?
22 SUPERVISOR RIORDAN: No.
23 MS. HUTCHENS: Roberts?
24 SUPERVISOR ROBERTS: Yes.
25 MS. HUTCHENS: Silva?
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1 SUPERVISOR SILVA: No.
2 MS. HUTCHENS: Vagim?
3 SUPERVISOR VAGIM: No.
4 MS. HUTCHENS: Chairman Dunlap.
5 CHAIRMAN DUNLAP: No.
6 MS. HUTCHENS: The SIP doesn't pass 9 to 2. I
7 mean the substitute motion.
8 (Laughter.)
9 CHAIRMAN DUNLAP: "There" was a slip of the
10 tongue.
11 (Laughter.)
12 CHAIRMAN DUNLAP: Okay. Let's go back to the
13 original motion.
14 We have a motion and a second. We've had
15 discussion on Mr. Parnell's motion. Is there any other
16 discussion that we need to have on it?
17 With that, I'll ask the Board Secretary to call
18 the question, which is approval of the Resolution before the
19 Board, 96-12.
20 MS. HUTCHENS: Boston?
21 DR. BOSTON: Yes.
22 MS. HUTCHENS: Calhoun?
23 MR. CALHOUN: Aye.
24 MS. HUTCHENS: Edgerton?
25 MS. EDGERTON: Yes.
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1 MS. HUTCHENS: Hilligoss?
2 MAYOR HILLIGOSS: Aye.
3 MS. HUTCHENS: Lagarias?
4 MR. LAGARIAS: Yes.
5 MS. HUTCHENS: Parnell?
6 MR. PARNELL: Yes.
7 MS. HUTCHENS: Riordan?
8 SUPERVISOR RIORDAN: Aye.
9 MS. HUTCHENS: Roberts?
10 SUPERVISOR ROBERTS: Yes.
11 MS. HUTCHENS: Silva?
12 SUPERVISOR SILVA: Yes.
13 MS. HUTCHENS: Vagim?
14 SUPERVISOR VAGIM: Aye.
15 MS. HUTCHENS: Chairman Dunlap.
16 CHAIRMAN DUNLAP: Aye.
17 MS. HUTCHENS: Passes 11-0.
18 CHAIRMAN DUNLAP: Okay. Thank you very much.
19 Appreciate it.
20 (Applause.)
21 CHAIRMAN DUNLAP: Supervisor Riordan.
22 SUPERVISOR RIORDAN: Mr. Chairman, I don't know if
23 there needs to be any motion to -- or maybe it just can
24 come as a direction from the Chair -- on working out a
25 little bit of a difference of reporting more towards the
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1 annual basis. And I don't know how you or staff want to
2 handle that. But I think it needs to be part of the record
3 that there are a number of us who would like to see a little
4 more -- I don't think that creates a problem for anybody.
5 As you do your planning, you usually roll it out one year,
6 one year, and one year. So, hopefully, that could be done.
7 CHAIRMAN DUNLAP: Sure.
8 SUPERVISOR RIORDAN: And I don't know how you want
9 to do it.
10 MR. BOYD: Mr. Chairman, I've already taken that
11 as the sense of the Board --
12 CHAIRMAN DUNLAP: To do that.
13 MR. BOYD: -- that you'd like that done. And, as
14 I said, I really think we have the tools --
15 CHAIRMAN DUNLAP: Okay.
16 MR. BOYD: -- and the capacity to do that.
17 CHAIRMAN DUNLAP: I'd like to ask the audience to
18 please take their seats. We have a couple more minutes
19 where we need to discuss a few things at the meeting.
20 So, Mr. Boyd, to cover that ground, you've
21 indicated the annual report is something you'll do.
22 Also, it's probably wise to summarize a few things
23 here. This Board, as you well know, Mr. Boyd, and have said
24 to me many times, there's a lot of expertise on this Board.
25 There's some perspectives that bear listening to very
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1 carefully.
2 I think the questioning of the witnesses yesterday
3 where we had the back and forth was productive and positive,
4 but don't leave -- staff, do not leave this hearing room
5 today thinking that all questions have been answered and
6 that the Board is in complete accord with all the nooks and
7 crannies of this MOA.
8 There are some areas of concern. There's some
9 areas of vulnerability. There's also some areas -- and we
10 believe an overriding theme, is that we have an overriding
11 chance of success, and we're positioned very, very
12 positively.
13 And don't lose those perspectives, because they're
14 important. You need to be particularly vigilant, as you are
15 in every other case, to examine what progress is being made,
16 how things are going, and if we are going to be facing a
17 problem. And you need to get back to this Board quickly.
18 So, the annual reviews are fine. We need them. We've
19 requested them.
20 But there might be other communication mechanisms
21 that you can employ to get the word out to this Board.
22 I've indicated a willingness to appoint this advisory
23 committee. We can't have all of the Board members on the
24 advisory committee, certainly one or two. And that will be
25 a conduit to get word back as well.
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1 But you need to be reporting on a regular basis,
2 particularly in the area of legal accountability, Mr. Kenny.
3 You need to be very vigilant to make sure that we are
4 positioned where we can move quickly if anyone fails to live
5 up to their obligations.
6 And we're counting on you and expect you to be
7 ready to move very, very quickly. We do not want to be
8 surprised relative to the implementation of this program.
9 MR. BOYD: Mr. Chairman, I take your comments
10 quite seriously. And I agree with you. Let me assure you,
11 I recognize this vote as not only momentous and significant,
12 but in some respects a vote of confidence in the staff and
13 our responsibilities to you to follow up and see that
14 there's enforcement, and see that all that we are mutually
15 pledged to do with the auto industry really takes place.
16 Nobody is more interested than your staff in the
17 successful launch --
18 CHAIRMAN DUNLAP: Right.
19 MR. BOYD: -- of this program. Some of us have
20 been there since conception, birth, and what have you, and
21 are desperate to see it survive.
22 And I take to heart what each and every one of you
23 individually, as well as collectively, says. And Supervisor
24 Roberts, I want to make sure he feels more comfortable in
25 the future with regard to actions we take.
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1 And he had some very sage advice with regard to --
2 and I appreciated some of his comments with regard to the
3 climate out there and the climate that has existed --
4 CHAIRMAN DUNLAP: Right.
5 MR. BOYD: -- in the past. The dark side is still
6 there. They're still opposed, and they will still be active
7 in their opposition to this program. And I think we need to
8 work together, all of us, staff and Board, to see that these
9 questions are always answered.
10 CHAIRMAN DUNLAP: Thank you. Having said that,
11 and issued the warning to you all to be vigilant and on your
12 game, also, I want to echo something that Mr. Parnell said
13 very well. I appreciated his comments and perspective.
14 Staff has done a good job here. You've done an
15 excellent job. It's been difficult. You've had a lot of
16 people giving you counsel and advice, and you've kept your
17 heads. And you have put forward a good proposal.
18 And you should feel very proud of that fact. And
19 you're to be commended.
20 Mr Boyd, I've said many times you have a world
21 class staff, and you've shown it certainly here with this
22 proposal.
23 So, with that, Mr. Boyd, do you have anything else
24 to add or bring before the Board today?
25 MR. BOYD: No, Mr. Chairman. That concludes our
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1 business for the Board.
2 CHAIRMAN DUNLAP: Okay.
3 We will now conclude, adjourn this, the March
4 Board meeting of the California Air Resources Board.
5 (Thereupon, the meeting was adjourned
6 at 10:30 a.m.)
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1 CERTIFICATE OF SHORTHAND REPORTER
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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 8th day of April , 1996.
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16 Nadine J. Parks
17 Shorthand Reporter
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