BOARD MEETING
STATE OF CALIFORNIA
AIR RESOURCES BOARD
JOE SERNA, JR. BUILDING
CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY
CENTRAL VALLEY AUDITORIUM, SECOND FLOOR
1001 I STREET
SACRAMENTO, CALIFORNIA
THURSDAY, APRIL 24, 2003
9:00 A.M.
TIFFANY C. KRAFT, CSR, RPR
CERTIFIED SHORTHAND REPORTER
LICENSE NUMBER 12277
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APPEARANCES
BOARD MEMBERS
Dr. Alan Lloyd, Chairperson
Dr. William Burke
Mr. Joseph Calhoun
Ms. Dorene D'Adamo
Supervisor Mark DeSaulnier
Professor Hugh Friedman
Dr. William Friedman
Mr. Matthew McKinnon
Supervisor Barbara Patricks
Mrs. Barbara Riordan
Supervisor Ron Roberts
STAFF
Ms. Catherine Witherspoon, Executive Officer
Mr. Tom Cackette, Chief Deputy Executive Officer
Mr. Mike Scheible, Deputy Executive Officer
Ms. Lynn Terry, Deputy Executive Officer
Ms. Kathleen Walsh, General Counsel
Dr. Alberto Ayala, Manager, Alternative Strategies
Section, MSCD
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APPEARANCES CONTINUED
STAFF
Mr. Craig Childers
Mr. Bart Croes, P.E., Chief, Research Division
Mr. Tony Dickerson, Engineer, Field Inspection/Testing
Section
Ms. Deborah Drechsler, Air Pollution Specialist, Research
Division
Ms. Annette Guerrero, Staff Air Pollution Specialist
Mr. Larry Hunsaker, Emission Inventory Analysis Section
Mr. Bob Jenne, Senior Staff Counsel
Mr. Chuck Shulock, Vehicle Program Specialist, MSCD
ALSO PRESENT
Tom Addison, Bay Area Air Quality Management District
Larry Armstrong, Quality Tune Up Shops
Chris Ervine, Coalition for Test and Repair Stations
Kathy Patton, Santa Barbara County
Charlie Peters, Clean Air Performance Professionals
Bob Larson, U.S. EPA
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INDEX
PAGE
Pledge of Allegiance 3
Roll Call 3
Item 03-2-4
Chairperson Lloyd 5
Executive Officer Witherspoon 11
Staff Presentation 12
Q&A 70
Motion 75
Vote 111
Item 03-2-3
Chairperson Lloyd 112
Executive Officer Witherspoon 112
Mr. Tom Addison 113
Motion 115
Vote 115
Item 03-3-1
Chairperson Lloyd 116
Executive Officer Witherspoon 116
Staff Presentation 117
Item 03-2-2
Chairperson Lloyd 123
Executive Officer Witherspoon 123
Staff Presentation 124
Motion 126
Vote 126
Item 03-3-2
Chairperson Lloyd 126
Executive Officer Witherspoon 128
Staff Presentation 129
Q&A 140
Mr. Charlie Peters 148
Mr. Chris Ervine 152
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INDEX CONTINUED
PAGE
Item 03-3-3
Chairperson Lloyd 164
Executive Officer Witherspoon 165
Staff Presentation 166
Q&A 176
Mr. Charlie Peters 190
Mr. Larry Armstrong 193
Mr. Chris Ervine 198
Motion 202
Vote 202
Item 03-3-4
Chairperson Lloyd 203
Executive Officer Witherspoon 204
Staff Presentation 205
Q&A 219
Bob Larson 227
Public Comment
Kathy Patton 235
Adjournment 248
Reporter's Certificate 249
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1 PROCEEDINGS
2 CHAIRPERSON LLOYD: Before we get started, I've
3 got to read an announcement from the owners of the
4 building, and that is that throughout the month of May we
5 will be conducting safety preparedness drills that will
6 include evacuating this room. This drill may occur during
7 this meeting. In order to prepare us for unexpected
8 emergencies, we do not know what date or time the alarm
9 will sound.
10 And I thought this was an infrequent occurrence.
11 Yesterday in the meeting of the Fuel Cell Partnership just
12 next door, we did, in fact, get an alarms. We weren't
13 evacuated from that room because it occurred on the 20th
14 through 22nd floors. But it can happen. So don't be
15 surprised.
16 At that time please look for and note two
17 emergency exits. The exits are located inside the public
18 hearing rooms on the first and second floors in the
19 connecting halls outside the conference room within the
20 remainder of the building. If you do have to go out,
21 don't expect to go out and turn right. A wall will come
22 down and prevent you from going right out of this
23 building. You need to go left and then be directed out of
24 the building. My colleagues here will have to go through
25 here and get out there.
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1 So if the alarm sounds, evacuate immediately.
2 Take all valuables with you. Typically they'll indicate
3 what part of the building there's this exercise. So you
4 don't have to evacuate as soon as you hear the siren.
5 This doesn't apply -- you're not using the elevators. If
6 you have mobility concern that would prevent you from
7 using the stairways, please let the host of the meeting
8 know so the arrangement can be made to have you wait
9 safely in the protected area. You'll be directed to a
10 safe stairwell vestibule, and an aide will stay with you
11 until you hear the all-clear announcement.
12 Then if you evacuate outside the building --
13 there's some pretty mundane instructions. I'll skip
14 those. Stay at the relocation area until the all-clear
15 signal of the completion of the drill is given. Inside
16 the building the completion of the drill will be announced
17 by the public address system. You go in the park, the
18 all-clear signal will be given from the command center set
19 up on the stage. If you do not hear the announcement,
20 simply stay and follow the lead of your meeting host.
21 Thank you cooperating with the safety program.
22 BOARD MEMBER CALHOUN: Mr. Chairman, I missed
23 that. Can you read that again?
24 (Laughter)
25 CHAIRPERSON LLOYD: I will provide you a copy.
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1 BOARD MEMBER CALHOUN: Thank you.
2 CHAIRPERSON LLOYD: Well, with that, good
3 morning. I'd like to bring the April 24th public meeting
4 of the Air Resources Board to order.
5 And Would please join me in the pledge of
6 allegiance.
7 (Thereupon the Pledge of Allegiance was
8 Recited in unison.)
9 CHAIRPERSON LLOYD: Thank you. Will the clerk of
10 the Board please call the roll.
11 BOARD CLERK DORAIS: Dr. Burke?
12 BOARD MEMBER BURKE: Present.
13 BOARD CLERK DORAIS: Mr. Calhoun?
14 BOARD MEMBER CALHOUN: Here.
15 BOARD CLERK DORAIS: Ms. D'Adamo?
16 Board MEMBER D'ADAMO: Here.
17 BOARD CLERK DORAIS: Supervisor DeSaulnier?
18 BOARD MEMBER DeSAULNIER: Here.
19 BOARD CLERK DORAIS: Professor Friedman?
20 BOARD MEMBER HUGH FRIEDMAN: Here.
21 BOARD CLERK DORAIS: Dr. Friedman?
22 BOARD MEMBER WILLIAM FRIEDMAN: Here.
23 BOARD CLERK DORAIS: Mr. McKinnon?
24 BOARD MEMBER McKINNON: Here.
25 BOARD CLERK DORAIS: Supervisor Patrick?
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1 SUPERVISOR PATRICK: Here.
2 BOARD CLERK DORAIS: Ms. Riordan?
3 BOARD MEMBER RIORDAN: Here.
4 BOARD CLERK DORAIS: Supervisor Roberts?
5 BOARD MEMBER ROBERTS: Here.
6 BOARD CLERK DORAIS: Chairman Lloyd?
7 CHAIRPERSON LLOYD: Here.
8 Again, we're going to start today's proceedings
9 with two carry-over items from last month. But before I
10 introduce the first item, I'd like to make the following
11 notation for the record.
12 Supervisor Patrick was not present at the
13 March 27th, 28th Board meeting but was provided with
14 transcripts and comment letters received and has had the
15 opportunity to read the material in detail. Therefore,
16 she is prepared to participate in the discussion and vote
17 the two items that were continued; amendments to the zero
18 emission vehicle regulation and amendments to the
19 Proposition 40 Carl Moyer funds, both of those.
20 Similarly, Dr. Friedman was present on March 27th
21 for all of the Carl Moyer item and most of our
22 deliberation on this zero emission vehicle regulation,
23 departing at 7:45 that evening. He's also received the
24 transcripts and comment letters received and had the
25 opportunity to read the material. Therefore, he's
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1 prepared to participate in the discussion and vote on this
2 zero emission regulation.
3 I'd also like to remind anyone in the audience
4 who wishes to testify on today's agenda items, except for
5 the zero emission for which the public record is closed,
6 to please sign up with the attendant at the entrance to
7 the Boardroom. Also if you have a written statement,
8 please provide 30 copies to the Clerk of the Board.
9 The first item on the agenda today is 03-2-4,
10 proposed amendments to the zero emission vehicle
11 regulation. Last month we began our deliberation on
12 changes to the ZEV regulation. At that time I shared my
13 personal perspective on the matter before us and what it
14 means to people of California, I would add today, to the
15 world as well. The reason being the ZEV mandate is the
16 most powerful idea and the most motivating force this
17 Board has ever unleashed on the vehicle sector.
18 For the last 13 years since the ZEV mandate was
19 first adopted we've seen the near-impossible accomplished
20 with gasoline vehicle; zero evaporative emissions,
21 exceedingly clean exhaust, cleaner in some cases than the
22 outside air entering the vehicle for ventilation purposes,
23 and emission control system that twice as durable than the
24 conventional forebearers forecasted to last an astonishing
25 15 years or 150 thousand miles. That's a tremendous
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1 accomplishment.
2 I'm speaking, of course, of the PZEVs, partial
3 zero emission vehicles which we also refer to as the
4 bronze category of the automobile. The Sacramento Bee ran
5 an excellent full-page story on these vehicles a week or
6 so ago essentially calling them the unsung heroes of the
7 ZEV regulation revolution or regulation. And, in fact,
8 they are. Maybe the Rodney Dangerfield of the cadre we
9 have of technology we have under the ZEV umbrella. In
10 this year alone 140,000 PZEVs will be sold to California
11 consumers, including the following makes and models: the
12 Honda Accord, Toyota Camry, Ford Focus, Nissan Sentra,
13 Volvo S60 and V70, BMW 325, Volkswagen Jetta, and more to
14 come.
15 The market penetrations of these vehicles will
16 continue to grow as manufacturers take full advantage of
17 the option we provided to them within the ZEV regulation
18 to satisfy up to 6 percent of the total 10 percent ZEV
19 requirement with ultra clean, ultra durable gasoline
20 vehicles.
21 In the silver category advanced technology PZEV
22 class, the progress has been equally tremendous. With
23 AT PZEVs we get the same underlying emission performance
24 and durability, plus the innovation of ZEV-enabling
25 componentry, reduced life cycle emissions, and zero
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1 emitting miles.
2 The entire nation is now familiar with the Honda
3 Insight and the Toyota Prius, the first mass production
4 gasoline electric hybrid vehicles to hit the market.
5 Initial demand for these vehicles exceeded all
6 expectations and is pushing the industry rapidly to expand
7 its hybrid offerings as quickly as possible.
8 The press coverage has been substantial for both
9 of those categories, including the more recently extensive
10 Honda Civic with both the hybrid and natural gas, examples
11 of tremendous progress. And most recently some of you
12 will have seen last week the announcement of the recent
13 version of the Toyota Prius, which has shown the
14 revolution is continuing that you can have larger,
15 cleaner, better performing vehicles. And this is
16 tremendously good news for the consumer and I think a
17 direct result of the piece of this regulation.
18 On another technology front, we see Ford and BMW
19 actively exploring the flexibility of the feasibility and
20 flexibility of the hydrogen internal combustion engine.
21 Again, this has come a long way in the last several years,
22 and we are now affording opportunities for that technology
23 to take its rightful place.
24 Studies are under way also to evaluate the
25 appropriate design and features of plug-in electric hybrid
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1 vehicles. Again, this is another exciting development.
2 As these vehicles complete certification process for AT
3 PZEVs, they'll be able to qualify for up to 2 percent of
4 the total 10 percent ZEV mandate. That is exactly what
5 this Board envisioned would happen in 2001. And what we
6 are now seeing and being realized in the real world.
7 Giving all the progress I just described, no one
8 described the California ZEV mandate as a failure. And,
9 in fact, having a tremendous benefit to clean air in
10 California for all citizens. To be sure, we've had more
11 than our share of difficulty in achieving the ultimate
12 goal of pure zero emission vehicles. In fact, it was just
13 today that I was looking back at a publicized magazine in
14 the early '90s looking at the promise of pure battery
15 electric vehicles.
16 We've seen progress in the gold category. It's
17 been steady and sure. Batteries are, in fact, more
18 durable and higher performing than ever before. Range has
19 improved. Costs have come down. And consumers are
20 clearly excited about all the ZEV products they've seen
21 and the potential they hold for the future. The only real
22 problem we're having, obviously, it's a formidable one, is
23 getting truly affordable, truly reliable, truly commercial
24 gold category products on the road. And that's a problem
25 we share fully with the automotive industry since mandates
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1 alone cannot overcome the nature of physics, the material
2 costs of precious metals, or some of the other technical
3 challenges that are bedeviling both the industry and us.
4 As I reread that article, the comment was made
5 here about the potential. But if, in fact, we weren't
6 able to drive those costs down or if we didn't get enough
7 consumer acceptance at those costs then, in fact, we
8 wouldn't be able to have a sustainable market.
9 So again, here we are, rightfully celebrating all
10 that's been accomplished, in fact, very humbled. And I
11 feel this also very personally compared to a few years
12 ago. Humbled by what has not, and also by the challenge
13 of what is still before us, but utterly committed to the
14 ultimate goal of zero emissions. And I think I can as
15 iterated last time most eloquently by my colleague,
16 Supervisor Roberts -- in fact, there was never an intent
17 to stray from that commitment to the goal of zero
18 emissions.
19 As the Board debates today over the finer details
20 of the revised regulation, I ask all my colleagues and the
21 audience to keep in mind the historic nature of what we're
22 attempting to do. As we have seen repeatedly the action
23 of this Board echo around the world in almost every
24 program area. That makes this Board extremely
25 influential. But it also means in my view that we have a
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1 great responsibility to be thoughtful and judicious since
2 so many others may mimic what we do. And, again, I think
3 that's speaking more from the technical side. That, I
4 think, is a real responsibility for us to implement.
5 I'd also like us to remember that we are not
6 running a marathon. We are running, in fact, a marathon,
7 not a sprint. Although obviously we need to go as fast as
8 possible because the quality of our air demand, in fact,
9 that we get as much of this technology on the road as fast
10 as possible.
11 When we lasted revisited the ZEV mandate in 2001,
12 we had a number of near-term concession that were balanced
13 again the longer term gains of growing the ZEV mandate
14 from 10 to 14 percent between 2003 and 2018. I would
15 suggest to my colleagues that we are in a similar position
16 today with one key difference. This time we have the
17 intermediate silver and bronze category achieved in the
18 real world that we were merely hoping for in 2001, which
19 means we are able to fully preserve or accomplish even
20 more emission reductions as we continue to refine
21 California ZEV regulation and get cleaner air to all
22 Californians as rapidly as possible.
23 At the end of last month's hearing, the Board
24 asked to staff to look into several specific issues and
25 provide an assessment of their implications for the ZEV
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1 program and for air quality in general.
2 So with that, at this time I'd like to turn it
3 over to Ms. Witherspoon to begin the staff presentation.
4 EXECUTIVE OFFICER WITHERSPOON: Thank you,
5 Chairman Lloyd, and good morning members of the Board.
6 In response to the Board's direction, staff
7 developed additional information since the last hearing to
8 help clarify the issues before you. Staff has also
9 analyzed the impact and implications of various
10 alternatives that came up during your deliberations last
11 month.
12 In bringing this item back before you, we tried
13 to capture the sense of the Board regarding which features
14 of the proposed ZEV regulation were generally acceptable
15 to Board members and which needed further discussion and
16 resolution. We also made every effort to address the
17 Board's request for incentives that would keep existing
18 BEVs on the road in California, incentives to stimulate
19 new BEV production, and specific production targets for
20 2009 and later fuel cell vehicles for their equivalence.
21 The staff proposal before you today strengthens
22 the pure gold element of the ZEV regulation as compared to
23 last month presentation primarily due to the inclusion of
24 the specific targets on the alternative compliance path
25 for 2009 and beyond, which you all made clear was
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1 extremely important to the Board. Staff believes that the
2 ZEV program as proposed will continue to advance pure ZEV
3 technology, research, and development, support the
4 commercialization of ZEV-enabling advanced technology
5 vehicles, and will achieve significant criteria pollutant
6 emission reductions.
7 Chuck Shulock of the Mobile Source Control
8 Division will now make the staff presentation.
9 VEHICLE PROGRAM SPECIALIST SHULOCK: Good morning
10 Mr. Chairman and members.
11 Our staff presentation this morning will start
12 off with the recap of the March Board meeting, the
13 information presented to you at that time, and the
14 alternatives that were provided with regard to possible
15 numeric vehicle targets. We then will present the results
16 of the additional staff analysis that we have undertaken
17 since the Board meeting in response to your request. We
18 will conclude with a summary of the proposed regulation
19 including our response to the various open issues and our
20 staff recommendation.
21 (Thereupon an overhead presentation was
22 presented as follows.)
23 VEHICLE PROGRAM SPECIALIST SHULOCK: We will set
24 the stage for our recap of the March meeting by revisiting
25 what has brought us to today, why are amendments needed.
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1 We will give a very brief overview of the main features of
2 the proposed regulation, followed by an overview of the
3 testimony that you heard and what we took away from the
4 Board discussion. The recap will conclude by summarizing
5 the issues that were still outstanding at the conclusion
6 of the March meeting and the directives that you gave to
7 staff.
8 --o0o--
9 VEHICLE PROGRAM SPECIALIST SHULOCK: We are here
10 today because there is a need to amend the regulation.
11 First of all, there are legal challenges to the 2001
12 amendments that need to be addressed. Due to legal action
13 that has taken place, the ARB is prohibited from enforcing
14 the current regulation through the 2003 and 2004 model
15 years. Under the circumstances, 2005 is the earliest
16 practical restart date.
17 --o0o--
18 VEHICLE PROGRAM SPECIALIST SHULOCK: In addition,
19 as we discussed at some length in March, in staff's view
20 there is a need to modify the regulation to better align
21 with technology status and market demand. Despite all of
22 the efforts to date and the Board's continued emphasis on
23 zero, at present there is no pure ZEV that is
24 technologically and financially ready for mass deployment.
25 And although there is considerable investment in fuel cell
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1 technology and infrastructure both by auto makers and by
2 government, the pace of future ZEV development is quite
3 difficult to predict.
4 On the bright side, however, there has been
5 tremendous such as near-zero technology such as PZEVs in
6 the bronze category and advanced technology PZEVs in the
7 silver category. This is creating significant new
8 opportunities for air quality improvement.
9 --o0o--
10 VEHICLE PROGRAM SPECIALIST SHULOCK: Reinforcing
11 what the Chairman noted in his opening remarks, one good
12 example of progress newly announced since the March Board
13 meeting is the 2004 Toyota Prius that is pictured here.
14 Not only is the 2004 Prius cleaner than its predecessor,
15 it's also larger, has better acceleration, and is more
16 efficient. It features more advanced versions of key
17 ZEV-enabling technologies such as its electric drive
18 system. Our understanding is that all this will be made
19 available at roughly the same retail price.
20 --o0o--
21 VEHICLE PROGRAM SPECIALIST SHULOCK: PZEVs are
22 always making news. As the Chairman mentioned, the
23 Sacramento Bee recently ran a front page article on PZEVs.
24 This slide shows a graphic from that article listing the
25 different models of PZEVs available and explaining their
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1 cutting-edge technology. It is noteworthy manufacturers
2 are expected to sell some 140,000 PZEVs in the 2003 model
3 year. So as you can see, the near-zero side of the
4 program continues to develop at a rapid pace.
5 --o0o--
6 VEHICLE PROGRAM SPECIALIST SHULOCK: The next
7 element of our recap deals with the basic structure of the
8 proposed regulation. One factor that was of great
9 importance to staff as we developed the proposal was the
10 desire to preserve compliance under the 2001 regulation.
11 Some manufacturers have made good faith efforts to comply
12 by building, marketing, and placing ZEV products. This
13 resulted in their legitimate accrual of ZEV credits
14 sufficient in some cases to defer the need for additional
15 vehicles for a number of years. Although some have
16 suggested that the resulting ZEV blackout should be
17 addressed by devaluing such early credits, in staff's view
18 it was more important in the long run to recognize and
19 preserve the value of the early efforts that were
20 undertaken.
21 --o0o--
22 VEHICLE PROGRAM SPECIALIST SHULOCK: This desire
23 to recognize compliance under the 2001 regulation directly
24 led to the two-path concept embodied in the proposed
25 regulation. The base path allows manufacturers that
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1 invested early and have banked credits to continue to use
2 those credits to achieve compliance. The alternative path
3 provides an incentive for manufacturers to continue to
4 build new products. It requires manufacturers to produce
5 demonstration quantities of new vehicles but then allows
6 the remaining gold obligation to be back filled with
7 silver vehicles up to the full 4 percent. The progress of
8 the program and the ongoing requirements will be assessed
9 by the Board at a future date.
10 --o0o--
11 VEHICLE PROGRAM SPECIALIST SHULOCK: Testimony at
12 the March hearing raised few strong objections to the
13 continuation of the base path as an option. There was
14 some comment that several staff-proposed changes unduly
15 relaxed the program, but in general comment was
16 supportive.
17 The alternative path proposal as originally
18 defined by staff was another story. Here there was
19 significant opposition focused on vehicle totals in the
20 initial 2001 through 2008 time period, the need for firm
21 production targets in model years 2009 and beyond, the
22 role of battery electric vehicles, and the timing and role
23 of the independent expert review panel.
24 --o0o--
25 VEHICLE PROGRAM SPECIALIST SHULOCK: These next
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1 several slides present staff's interpretation of the sense
2 of the Board at the March hearing. We heard some areas of
3 clear agreement. The Board wanted to see specific future
4 targets for fuel cell production under the alternative
5 path as opposed to the to-be-determined approach
6 recommended by staff.
7 The Board also was interested in exploring all
8 feasible means to bring battery electric vehicles back to
9 the marketplace and more broadly encouraging the continued
10 availability of cars that have already been placed.
11 The Board also seemed to generally agree that if
12 plug-in hybrid technology were to be moved to the gold
13 category, the required minimum range and other aspects of
14 the definition would need to be adjusted.
15 --o0o--
16 VEHICLE PROGRAM SPECIALIST SHULOCK: With regard
17 to questions involving the independent expert review
18 panel, the Board seemed to be of the opinion that the
19 language in the draft resolution captured the appropriate
20 role of the panel and fully preserved the Board's
21 discretion. Finally, although there was some discussion
22 of the potential leakage of vehicles to other states, due
23 to staff's proposed treatment of the travel issue, there
24 seems to be consensus that the staff approach combined
25 with the 2011 sunset was workable.
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1 --o0o--
2 VEHICLE PROGRAM SPECIALIST SHULOCK: It was also
3 clear in March that there were several issues that were
4 not resolved. First among these was the target production
5 level for 2001 through 2008 on the alternative path.
6 Should it be 250 or 500 vehicles? Related to that is the
7 question of future minimum production levels for 2009 and
8 beyond and their rational.
9 There also were different views with regard to
10 the appropriate method to encourage battery EVs. Should
11 there be incentives or a mandate? And if a mandate is
12 favored, should it be a direct numeric requirement, or is
13 it better to indirectly mandate BEVs through an increase
14 in the fuel cell requirements.
15 Finally, the Board left open whether plug-in
16 hybrid vehicles should be moved to the gold category.
17 --o0o--
18 VEHICLE PROGRAM SPECIALIST SHULOCK: At the close
19 of the March hearing, the Board gave directives to staff.
20 You asked us to frame the remaining issues and discuss the
21 implications of the various possible alternatives. You
22 also made note of the fact that the regulation is complex
23 and there are interactions among it's various provisions.
24 So you asked that staff describe the combined effects of
25 the proposal in a comprehensive fashion so you would have
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1 clarity as to the complete package before you and what it
2 means.
3 --o0o--
4 VEHICLE PROGRAM SPECIALIST SHULOCK: The next
5 section of the staff presentation outlines the results of
6 our additional staff analysis. We will start by
7 describing some elements of the big picture, the key
8 factors that must be kept in mind during your
9 deliberation.
10 First of all, we must not lose site of the fact
11 we are aiming for here is long-term mass-market
12 penetration. Measures that address near-term vehicle
13 availability clearly have their place, but they ideally
14 should be steps on a path to sustainable
15 commercialization.
16 We also need to communicate clearly that zero
17 emissions is still the goal. Staff has recommended that
18 you take steps to capitalize on the near-term availability
19 of near-zero technology, but that must all be viewed and
20 communicated as transitional measures toward the ultimate
21 goal of zero.
22 As far as real world issues that stand in the
23 way, the biggest hurdles are vehicle performance,
24 affordability, wide-spread consumer acceptance, and in
25 some cases infrastructure.
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1 --o0o--
2 VEHICLE PROGRAM SPECIALIST SHULOCK: Turning
3 again to near-zero technology, we need to emphasize again
4 these vehicles represent tremendous progress.
5 Bronze vehicles provide extremely low tailpipe
6 emissions, zero evaporative emissions, and an extended
7 emission warranty.
8 Silver vehicles provide all of the above, plus
9 additional ZEV-enabling features such as electric drive,
10 low fuel cycle emissions, or zero emission VMT.
11 This progress bodes well for the future of zero
12 emission transportation. But in the near-term, practical,
13 affordable, pure ZEVs are still an illusive goal.
14 --o0o--
15 VEHICLE PROGRAM SPECIALIST SHULOCK: During the
16 2001 deliberations, staff said that one of our key goals
17 was a steady sustained grant towards commercialization.
18 What we have seen today, however, is closer to the
19 opposite. The existing regulation has not resulted in the
20 sustained ramp, but rather in work-arounds, litigation,
21 and intermittent product blackouts. This fundamentally is
22 due to the fact that the major manufacturers do not see a
23 business case for further battery EV development. Absent
24 a battery breakthrough, they do not see a future in which
25 some such vehicles meet a sustainable, profitable market
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1 demand. And, thus, they have expressed no interest in
2 moving toward larger volumes.
3 Rather, the OEMs have been voting with their
4 research and development dollars in favor of fuel cell
5 vehicles. This, of course, should not be the sole by
6 which options are evaluated, but in staff's view it needs
7 to be taken into account. Simply put, we see greater
8 potential for sustained progress towards our goal when the
9 chosen approach is one that accelerates already existing
10 momentum.
11 --o0o--
12 VEHICLE PROGRAM SPECIALIST SHULOCK: Finally,
13 there appears to be interest by third-party BEV
14 manufacturers, but only if price, taking into account the
15 market value of BEV credits, and/or subsidize are
16 sufficient and sustained. At present what is needed by
17 the third-party manufacturers is evidence will there be
18 future subsidies or credit values sufficient to make
19 long-term production appear to be profitable. In that
20 respect, the third-party manufacturers face many of the
21 same challenges faced by the OEMs, cost and the need for
22 widespread market acceptance.
23 --o0o--
24 VEHICLE PROGRAM SPECIALIST SHULOCK: With all
25 that as background we will now turn to the open issues.
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1 We will discuss four; whether the 2001 through to 2008
2 demonstration vehicle requirement under the alternative
3 path should be 250 or 500 vehicles; what can be done to
4 encourage BEV production; targets for fuel cell production
5 in 2009 and beyond; and the treatment of plug-in hybrid
6 vehicles.
7 --o0o--
8 VEHICLE PROGRAM SPECIALIST SHULOCK: The first
9 issue involves the number of vehicles to be required under
10 the alternative path for 2001 through 2008. Our staff
11 recommendation of 250 represents a stretch goal for fuel
12 cell production.
13 At the March hearing you discussed an alternative
14 goal of 500 vehicles. This increase does not appear to be
15 aimed at actually increasing the number of fuel cell
16 vehicles, but rather appears to be intended to indirectly
17 leverage increased battery vehicle production. The
18 thinking here is that a larger fuel cell requirement in
19 conjunction with BEV substitution would encourage
20 manufacturers to build BEVs or purchase BEV credits rather
21 than build the additional fuel cell vehicles.
22 --o0o--
23 VEHICLE PROGRAM SPECIALIST SHULOCK: At the March
24 meeting you asked us to work through the implications of
25 choosing 250 versus 500 as the initial fuel cell target.
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1 We first will look at the 250 level.
2 Under this approach, all manufacturers appear to
3 be able to formulate a viable compliance strategy either
4 on the base or alternative paths. The requirements on the
5 alternative path are higher than some would choose, but
6 our understanding is they are achievable. This approach
7 keeps open the option for some manufacturers to initially
8 choose the base path but then move over to the alternative
9 path if they make sufficient progress on fuel cell
10 development, thus increasing the number of new ZEVs.
11 With regard to BEV substitution, it is possible
12 given a requirement of 250. But in staff's view it is
13 unlikely.
14 --o0o--
15 VEHICLE PROGRAM SPECIALIST SHULOCK: Going to 500
16 would have several significant impacts. First of all, the
17 compliance cost to manufacturers would double. The cost
18 to build small numbers of fuel cells in 2006 to 2008 time
19 frame at the latter end of the initial period is
20 uncertain. But assuming that the cost remains at or
21 near current levels, the total cost of the requirement
22 would jump significantly from some 250 million to about
23 $500 million.
24 Staff also concludes that the number of vehicles
25 required for manufacture under the 500 vehicle approach is
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1 in excess of that needed to maintain progress towards fuel
2 cell development at this stage. This could actually slow
3 advancement as manufacturers seek the lowest-cost approach
4 to meet the requirement.
5 BEV substitution clearly would be more
6 economically attractive with the requirement of 500 fuel
7 cells, but it still appears to be unlikely. This is due
8 to the fact, as we noted above manufacturers do not see a
9 commercial future for BEV technology. They, therefore,
10 wish to avoid any additional investment, either directly
11 on their own systems or indirectly through purchase of
12 credits from other manufactures.
13 You could, of course, address the situation head
14 on by imposing a specific requirement that manufacturers
15 build some minimum number of battery vehicles. In staff's
16 view, this is not an attractive option. It would require
17 manufacturers to simultaneously pursue two technologies
18 and would run counter to our underlying objective to
19 ensure that aggressive pursuit of fuel technology is
20 sufficient to ensure compliance.
21 --o0o--
22 VEHICLE PROGRAM SPECIALIST SHULOCK: Looking at
23 possible manufacturer responses, it appears first of all
24 that manufacturers would be motivated to seek to avoid the
25 alternative path completely. This could involve
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1 purchasing bank credits from another manufacturer. Or
2 manufacturers could delay action until 2008 and hope for a
3 change when the Board meets to consider future program
4 requirements. If this occurred, there could actually be
5 fewer new ZEVs than would be the case under the 250
6 vehicle approach. There also would be a reduction in the
7 number of AT PZEVs because the manufacturers would not
8 have the option to increase AT PZEV production to offset a
9 portion of their gold requirement.
10 --o0o--
11 VEHICLE PROGRAM SPECIALIST SHULOCK: Given all of
12 the above, our staff recommendation will come as no
13 surprise. We recommend that the Board select 250 as the
14 target for the 2001 through 2008 demonstration period. We
15 further recommend that the Board allow BEV substitution up
16 to 50 percent of the 250 vehicle requirement. And details
17 of our recommended BEV substitution approach will be
18 discussed in more detail later in the presentation.
19 --o0o--
20 VEHICLE PROGRAM SPECIALIST SHULOCK: The next
21 issue is the target for model years 2009 and beyond. The
22 staff originally recommended that the future requirement
23 be treated as to-be-determined following input from the
24 independent review panel. During the March Board hearing,
25 however, several witnesses argued and the Board clearly
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1 concurred that specific targets should be set now, even if
2 they are subject to revision later on.
3 --o0o--
4 VEHICLE PROGRAM SPECIALIST SHULOCK: Several
5 alternatives were put before you. Here I will describe
6 the rationale for each. The specific numbers associated
7 with each will be shown on the next slide.
8 The first approach involved growth in stages
9 which we refer to as the 10x approach. This alternative
10 is based on the principle that early production for new
11 types of vehicle precedes and defines stages where volumes
12 grow typically from ten to hundreds then to thousands.
13 The second approach was suggested by the
14 California Electric Transportation Coalition or CalETC.
15 It was based on annual doubling of the production amount.
16 This third alternative suggested by the Union of
17 Concerned Scientists grows in stages that are based on
18 Department of Energy national goals in the early years and
19 manufacture public and press statements in the later
20 years.
21 The final approach was outlined by staff from the
22 South Coast Air Quality Management District. This was the
23 most aggressive and involved maintaining a 2 percent gold
24 requirement that adding on top of it rather than as a
25 backfill the largest AT PZEV number projected in the March
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1 version of the staff proposal.
2 --o0o--
3 VEHICLE PROGRAM SPECIALIST SHULOCK: Looking at
4 the numbers, several things stand out. In the long term,
5 they all end up in the same place. All of these
6 approaches rejoin the original red line by 2018. The main
7 differences are in the early years. Even here, however,
8 the 10x and CalETC numbers are actually quite similar.
9 The major difference involves the 2015 time period where
10 the 10x target is 50,000 vehicles, but CalETC calls for
11 71,000. This difference is due to the fact our suggested
12 implementation of the 10x approach provides for a more
13 gradual ramp up to the original red line requirement.
14 The UCS proposal is somewhat higher in the
15 initial years, and the South Coast proposal is
16 dramatically higher. With respect to the South Coast
17 proposal, based on what we know today, it is very
18 optimistic. We also need to point out that it actually is
19 quite a bit more stringent than the base path in that it
20 requires the same gold production as the base path. But
21 in addition requires significantly more silver vehicles.
22 Therefore, as an "alternative path" it really has no
23 practical effect because there would be no incentive for
24 any manufacturer to choose it. They'd be better off under
25 the base path.
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1 --o0o--
2 VEHICLE PROGRAM SPECIALIST SHULOCK: Taking all
3 of this into account, staff has several observations.
4 First of all, as we have noted all the approaches are
5 similar in the long term.
6 Secondly, all of the numbers in the time frame
7 are subject to Board review and could be modified up or
8 down based on new developments.
9 And finally, given the overall similarity and the
10 possibility of future adjustment, one key point today is
11 the rational for selecting one path over another.
12 --o0o--
13 VEHICLE PROGRAM SPECIALIST SHULOCK: As you no
14 doubt recall, our original staff recommendation was
15 to-be-determined. Recognizing that our suggested approach
16 has been soundly rejected, however, we have taken a look
17 at other alternatives that would accomplish the Board's
18 direction.
19 In that light, we would recommend that you follow
20 the 10x rational. It is consistent with the Department of
21 Energy targets when those targets are scaled to California
22 rather than national coverage. It also is consistant with
23 our discussions with both automobile and fuel cell
24 manufacturers. We would further recommend that the
25 production total align with the red line in 2018 and that
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1 BEV substitution be allowed to continue on in the 2009 and
2 beyond time frame similar to its use in the early years.
3 --o0o--
4 VEHICLE PROGRAM SPECIALIST SHULOCK: The next
5 major issue involves providing encouragement for battery
6 electric vehicles. Based on the discussion at the March
7 hearing, you had two different aspects of this question in
8 mind. First was a design to keep existing BEVs on the
9 road as long as possible. And secondly, a desire to bring
10 fresh or new BEVs to the market by any feasible means.
11 --o0o--
12 VEHICLE PROGRAM SPECIALIST SHULOCK: We first
13 have taken a look at incentives to extend the life of
14 existing BEVs. Here we recommend two separate actions.
15 First of all, we recommend that you increase the existing
16 credit for BEVs that are still on the road after three
17 years. The existing regulation says that vehicles that
18 are still on the road beyond a three-year placement are
19 eligible to receive fractional additional credit. This is
20 referred to as in-use credit, and we recommend it be
21 increased.
22 The second action involves the battery warranty.
23 Under the existing regulation a vehicle must have a
24 manufacture battery warranty in force in order to earn the
25 in-use credit. This requirement was put in place in order
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1 to provide a measure of protection to consumers who lease
2 such older vehicles. As it turns out, however, the
3 requirement to have a battery warranty in place may
4 actually get in the way.
5 --o0o--
6 VEHICLE PROGRAM SPECIALIST SHULOCK:
7 Manufacturers are reluctant to commit to having to
8 purchase a replacement pack, and customers may be
9 perfectly willing to lease the vehicle without a warranty
10 as long as it continues to meet their needs.
11 Therefore, we recommend that you drop the
12 requirement the vehicle needs to have a battery warranty
13 in force in years four and beyond in order to earn this
14 in-use credit. This would not effect warranties for the
15 initial three-year period.
16 --o0o--
17 VEHICLE PROGRAM SPECIALIST SHULOCK: The next
18 category of possible incentives involves measures to keep
19 new vehicles in the hands of drivers. In the previous
20 hearings you have heard testimony how drivers have been
21 unable to renew their leases even if they were delighted
22 with the performance of their vehicles. To provide an
23 incentive to manufacturers to give drivers an option,
24 staff recommends that the regulation provide a 1.25 credit
25 multiplier for Type 1 and 2 batteries EV that are sold or
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1 leased with a consumer option to purchase or re-lease.
2 This option would be effective with model year 2003 and
3 newer vehicles.
4 --o0o--
5 VEHICLE PROGRAM SPECIALIST SHULOCK: We have
6 previously mentioned our recommendation that you allow BEV
7 substitution within the minimum production requirement of
8 the alternative path. This slide shows our complete
9 recommendation. We recommend that BEVs be allowed to meet
10 up to 50 percent of the alternative path fresh
11 requirement. This would apply to 2003 and later new
12 vehicle placements.
13 We recommend that the credit ratios be based on
14 the relative cost of various technologies with a bias to
15 make BEV substitution more economically attractive.
16 Here we have looked at work undertaken by CalETC to
17 develop appropriate credit ratios. We have reviewed their
18 approach and believe it is reasonable, and therefore, for
19 the 2001 through 2008 time period would endorse the use of
20 the ratio shown here which they have suggested, 20 to 1
21 for city EVs and 10 to 1 for full-function EVs.
22 Appropriate ratios for 2009 and beyond would also need to
23 be established.
24 --o0o--
25 VEHICLE PROGRAM SPECIALIST SHULOCK: In summary,
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1 the recommended incentives would have the following
2 effect. They would encourage the continued availability
3 of used BEVs. They would encourage the sale and
4 open-ended lease any new BEVs that are brought to market.
5 They would provide incentives for new BEV production under
6 the BEV substitution approach, given that the cost per
7 credit is less than for fuel cell vehicles.
8 On the other hand, we must be clear there is no
9 guarantee these incentives would result in new BEVs being
10 marketed. That depends mostly on the availability of
11 third-party manufacture financing.
12 And finally, please bear in mind that higher BEV
13 credits along with BEV substitution would reduce the total
14 number of fuel cell vehicles needed and also reduce the
15 need for AT PZEVs to backfill any shortfall in the gold
16 obligation.
17 --o0o--
18 VEHICLE PROGRAM SPECIALIST SHULOCK: The final
19 issue involves the treatment of hybrid vehicles. The
20 first thing to note here is that plug-in vehicles are
21 highly incentivized under the existing proposal. This
22 graph compares the credit levels earned by plug-in and
23 non-plug-in hybrid electric vehicles along with some other
24 vehicles that I won't discuss.
25 --o0o--
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1 VEHICLE PROGRAM SPECIALIST SHULOCK: The
2 upward-pointing arrows show the credits earned by HEV 60
3 and HEV 20 vehicles which are vehicles with a 60 mile
4 all-electric range and 20 mile all-electric range
5 respectively. The downward-pointing arrow shows the
6 credit earned by HEV zero which is a hybrid with no
7 all-electric range, such as a Toyota Prius, Honda Civic
8 hybrid or Ford Escape hybrid. As you can see the plug-in
9 vehicles earn substantially higher credit.
10 --o0o--
11 VEHICLE PROGRAM SPECIALIST SHULOCK: Continuing
12 on with the current status, it also needs to be understood
13 that under the revised staff proposal manufacturers have a
14 significant need for silver credits. You may recall
15 manufacturer testimony at the March hearing stating the AT
16 PZEV option is quite ambitious. Thus, there is an
17 incentive for manufacturers to pursue options that can
18 earn additional AT PZEV credit. Using our best cost
19 information as shown in the table, plug-in hybrids are
20 more attractive than other hybrids on a cost per credit
21 basis through the 2008 model year.
22 --o0o--
23 VEHICLE PROGRAM SPECIALIST SHULOCK: A few other
24 things to keep in mind, if plug-in hybrids were to be
25 treated as gold, their credit level would need to be
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1 reduced. This occurs because their credit level as silver
2 has been boosted significantly in order to provide an
3 incentive for the technology, even though the vehicles are
4 in the silver category. This level would no longer be
5 appropriate if the vehicles moved to gold and were being
6 weighed against BEVs and fuel cell technologies.
7 --o0o--
8 VEHICLE PROGRAM SPECIALIST SHULOCK: In addition,
9 if the vehicles were placed in gold, you likely would want
10 to increase the minimal electric range beyond the ten-mile
11 level in the current regulation. These changes would add
12 cost to the vehicle and reduce its relative
13 attractiveness, possibly negating the effort.
14 In light of all of the above, staff recommends
15 leaving these vehicles in the silver category.
16 --o0o--
17 VEHICLE PROGRAM SPECIALIST SHULOCK: The final
18 section of our presentation provides a summary of the
19 staff proposal in light of the direction provided at the
20 last Board meeting. This is intended to give you an
21 overview of the entire regulation in order to assist you
22 in understanding what is before you today. This summary
23 is based on the various staff recommendations that we have
24 described so far. Obviously, the details of the package
25 would change in line with whatever modifications you
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1 choose to make to what we have suggested. We will first
2 describe the major elements of the proposal which include
3 the base and alternative paths, the credit calculation
4 methods, and the independent expert review panel. We then
5 will describe the effect of the program on the number of
6 vehicles required and on air quality.
7 --o0o--
8 VEHICLE PROGRAM SPECIALIST SHULOCK: The base
9 path preserves the 2001 regulation structure along with
10 other modifications that staff believes are appropriate in
11 light of today's circumstances. The base path uses the
12 2001 percentage requirements of 2 percent gold, 2 percent
13 silver, and 6 percent bronze and allows full use of Bank
14 credits subject to NEV caps in the gold and silver
15 categories.
16 To get on the alternative path, a manufacturer
17 must produce its market share of defined minimum
18 production totals. The industry-wide numbers under the
19 staff recommendation are 250 for model years 2001 through
20 2008; 2,500 for 2009 through 2011; 25,000 for 2012 through
21 2014; and 50,000 for 2015 through 2017. Beyond that, it
22 would return to red line numbers.
23 Manufacturers would be allowed to meet up to
24 50 percent of this requirement with battery electric
25 vehicles. The remainder of a manufacturer's gold
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1 obligation could be met with AT PZEVs.
2 --o0o--
3 VEHICLE PROGRAM SPECIALIST SHULOCK: The proposal
4 would modify the calculation of ZEV credits. It removes
5 the efficiency multiplier, extends the incentive for early
6 fuel cell vehicles, creates several categories of ZEVs
7 with appropriate credit levels, and adjusts those credit
8 levels over time.
9 --o0o--
10 VEHICLE PROGRAM SPECIALIST SHULOCK: The proposal
11 would also modify the calculation of AT PZEV credits. It
12 would remove the efficiency multiplier and all references
13 to fuel economy. It would modify the credit calculation
14 for advanced componentry credit by establishing three
15 levels of hybrid electric vehicle. It would also modify
16 the calculation of zero emission VMT, low fuel cycle
17 emissions, and CNG vehicles. The staff proposal would
18 also make a number of other modifications I'll list.
19 Several of them are significant here.
20 --o0o--
21 VEHICLE PROGRAM SPECIALIST SHULOCK: It would
22 provide incentives for early production of PZEVs in model
23 years 2003 and 2004. It would reaffirm the addition of
24 LDT 2 vehicles to the baseline against which manufacturer
25 compliance obligations are assessed. It would extend the
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1 sunset date for transportation system credit. It would
2 revise the deadline by which a vehicle must be placed in
3 service to earn credit in a particular model year. It
4 would delay the imposition of a NEV credit cap in the
5 silver category, and it would add severability clauses to
6 the regulation language.
7 --o0o--
8 VEHICLE PROGRAM SPECIALIST SHULOCK: The final
9 noteworthy feature of the staff proposal is the creation
10 of an independent expert review panel. The panel would
11 consist of independent experts without any conflicts
12 involving the automotive industry. The role of the panel
13 would be to access ZEV and AT PZEV technologies, including
14 fuel cells, battery EV, and advanced ZEV componentry. The
15 panel would assess technology status and market readiness
16 in each area and would provide the Board with data to
17 support the Board's review of future ZEV requirements.
18 --o0o--
19 VEHICLE PROGRAM SPECIALIST SHULOCK: With respect
20 to the number of vehicles required, the general effect of
21 the changes before you today as compared to the March
22 version of the staff proposal are as follows. This would
23 increase the number of new or fresh ZEVs on the
24 alternative path by adding targets for 2009 and beyond.
25 It would then decrease the number of AT PZEVs on the
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1 alternative path since fewer offsets against the gold
2 requirement would be needed. There would be no changes to
3 the base path, the alternative path requirement for 2001
4 through 2008, or the PZEV option.
5 --o0o--
6 VEHICLE PROGRAM SPECIALIST SHULOCK: This graph
7 shows the number of ZEVs in 2009 and beyond under the base
8 path and also shows for comparison purposes the number of
9 ZEVs under the alternative path for the March version of
10 the proposal versus the April version. The largest
11 numbers -- the top line represents the base path. The
12 March version of the alternative path is the flat line at
13 the bottom shown as zero because under that proposal the
14 specific total is to be determined.
15 As you can see, the April version starts out
16 lower than the base path, then gradually increases,
17 rejoining it at 2018. The totals under the April version
18 correspond with to the 250, 2500, 250,000 progression
19 recommended by staff. The difference being that here the
20 numbers are shown year by year rather than in three-year
21 blocks.
22 --o0o--
23 VEHICLE PROGRAM SPECIALIST SHULOCK: This graph
24 makes a similar comparison of AT PZEV totals for 2009 and
25 beyond, again, showing the base path and the March and
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1 April versions of the alternative path. Here the lowest
2 totals are the base path. The March version of the
3 alternative path is the highest because it assumes zero
4 ZEV production in these years and, therefore, the maximum
5 AT PZEV backfill.
6 The April version of the alternative path is the
7 middle line which starts out higher than the base path,
8 then gradually rejoins it. As you can see under the April
9 version the maximum AT PZEV penetration in any single year
10 is around 200,000. This is down significantly from the
11 total shown for the March proposal which again assumes
12 zero pure ZEV production in those out years.
13 --o0o--
14 VEHICLE PROGRAM SPECIALIST SHULOCK: The final
15 slides address our air quality analysis. We first present
16 the emission reductions under the proposal. We then
17 discuss two environmental issues raised in public comment,
18 the fleet turn over effect and the air quality impact of
19 providing hydrogen infrastructure.
20 --o0o--
21 VEHICLE PROGRAM SPECIALIST SHULOCK: Staff has
22 estimated the emission impact of the April proposal for
23 the South Coast Air basin in 2010 and 2020 using the
24 impact emission model and our usual assumptions.
25 This slide shows the results of the April
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1 proposal as compared to the March proposal, the 2001 and
2 amendments, and the no-ZEV alternative. In this format a
3 plus sign means an air quality benefit.
4 The take-home message from this slide are as
5 follows. When compared to the March proposal, the April
6 proposal shows a slight increase in ROG in both 2010 and
7 2020 and a slight increase in NOx in 2020. This is due to
8 the reduced number of AT PZEVs under the April proposal.
9 Even though ZEVs are cleaner on a vehicle-by-vehicle
10 basis, under our credit ratios over the long-term one ZEV
11 must be replaced by about six AT PZEVs. Therefore, the
12 backfill of AT PZEVs for ZEVs results in a air quality
13 benefit, and the reduced amount of such backfill under the
14 April proposal slightly reduces the air quality benefits.
15 As the slide illustrates when compared to the 2001
16 amendments, the April proposal is roughly a wash.
17 Finally, when compared to the no-ZEV program, the
18 April proposal continues to show positive air quality
19 benefits. Please also note that although not quantified
20 here, the ZEV program also will result in decreased
21 emissions of CO and toxic air contamination.
22 --o0o--
23 VEHICLE PROGRAM SPECIALIST SHULOCK: Before
24 leaving the topic of air quality impacts, we would like to
25 touch on two environmental issues that have been raised in
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1 the context of CEQA compliance. The first has to do with
2 the fleet turn over effect. You may recall this argument
3 from the 2001 rule making. At that time commenters argued
4 that the ZEV program, by raising the price of new vehicles
5 sold in California, will reduce the sale of the new
6 vehicles. This then would mean that older, dirtier
7 vehicles are kept on the road longer such that the ZEV
8 program actually would have an emission disbenefit.
9 We reviewed this issue in 2001 and concluded that
10 when we use reasonable assumptions regarding the
11 incremental cost of the various technologies, the program
12 had only a minor effect on sales. Commenters have again
13 raised the fleet turn over ratio with respect to the March
14 staff proposal. At this point based on our analysis to
15 date, staff sees no reason to modify its previous
16 conclusion regarding the effect of the ZEV program on new
17 vehicle sales and resulting fleet-wide emissions.
18 In our previous analysis, as I mentioned, we
19 determined that the 2001 amendments would have only a
20 minor effect. The 2003 proposal is less burdensome to
21 manufacturers than 2001, so staff expects at this time
22 that it would likewise have only a minor effect.
23 The second issue raised by commenters has to do
24 with up-stream emissions for hydrogen infrastructure.
25 Commenters have argued that the air quality analysis does
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1 not account for excess emissions associated with the
2 production and marketing of hydrogen fuel. In the
3 near-term any such emissions will be insignificant because
4 the number of vehicles to be fueled is quite small.
5 Staff has preliminarily calculated, using the
6 commenters own assumptions that providing fuel for 2,750
7 vehicles, which is the number expected through 2011 under
8 the proposal that we have described, that providing fuel
9 for that number of vehicles would result in a 0.3 percent
10 change in the emission benefit of the program.
11 As the fleet expands, there will be a number of
12 refueling options to be explored, and there will be ample
13 opportunity to review and optimize their environmental
14 performance.
15 We should not forget one reason for the
16 widespread governmental and stakeholder interest in a
17 hydrogen economy is that it supports a long-term vision of
18 sustainable and renewable energy production. As is the
19 case with the ZEV program as a whole, when looking at
20 hydrogen infrastructure, we're taking early steps that
21 have the potential for a tremendous long-term pay off.
22 --o0o--
23 VEHICLE PROGRAM SPECIALIST SHULOCK: In
24 conclusion, staff recommends that the Board approve the
25 proposed amendments to the 2001 zero-emission vehicle
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1 regulation. The staff proposal maintains the air quality
2 benefit, addresses litigation issues, allow the ZEV
3 program to be implemented, and maintains progress towards
4 transforming California's vehicle fleet to zero emissions.
5 Thank you.
6 CHAIRPERSON LLOYD: Thank you, very much. At
7 this time before we go into discussion, do the colleagues
8 have any questions of the staff?
9 Thank you.
10 Well, last month we skipped over our ex parte
11 disclosure since we are continuing the Zev item today.
12 I'd like to go through the disclosures at this time to get
13 that out of the way before we begin our deliberations on
14 the proposal regulatory changes.
15 And let me remind my colleagues in the public of
16 our policy concerning ex parte communications. While we
17 may communicate off the Board with outside persons
18 regarding Board rule-making, we must disclose the names of
19 contacts and the nature of the contents on the record.
20 This requirement applies specifically communications that
21 take place after notice of the Board hearing has been
22 public.
23 Starting at my far left with Supervisor Roberts
24 and working down, are there any ex parte communications
25 Board members need to disclose at this time? I know I
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1 have several.
2 SUPERVISOR ROBERTS: Mr. Chairman, I have several
3 also.
4 On March 19 I met with a number of people to
5 discuss the proposed issues. Among those are Kelly Brown,
6 Ford; Bob Cassidy, Nissan; Reg Modlin of DaimlerChrysler;
7 Al Weaverstadt, General Motors. And I'm going to
8 mispronounce this, I'm sure, Akimasa Yasouka -- is that
9 close enough -- okay -- of Honda.
10 On March 20th I met with Dean Kato and Dave
11 Hermance of Toyota.
12 On March 21st I met with Bob Epstein representing
13 the NRDC.
14 On March 24th I had a telephone conversation with
15 Jason Mark representing the Union of Concerned Scientists.
16 And on April 23rd a member of my staff, Tony
17 Orlando, met with Dr. James Burns and Dean Taylor
18 representing San Diego State University and Southern
19 California Edison respectively.
20 The subject of all of these conversations concern
21 the pending regulations and in various aspects that have
22 been covered in staff's report today.
23 That's a complete list as best as I know it of
24 all of the contacts.
25 CHAIRMAN LLOYD: Thanks, Ron.
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1 Supervisor Patrick.
2 SUPERVISOR PATRICK: Thank you, Mr. Chairman.
3 I met -- or I had a telephone conversation on
4 April 21 with Greg Hanssen and Bill Mason of the
5 Production Electric Vehicle Drivers Coalition.
6 And on April 22nd I had a conference call with
7 Kent Harris from PG&E; Linda Urata from the San Joaquin
8 Valley Clean Cities Coalition; and Bill West and Dean
9 Taylor of Southern California Edison. Both of those
10 conversations were regarding a compromised proposal where
11 they felt that 250 vehicles was too low and that they were
12 in favor of the CalETC compromise proposal.
13 Thank you.
14 CHAIRPERSON LLOYD: And just point out to my
15 colleagues, the reason we have these balls here. These
16 are stress balls courtesy of the California Fuel Cell
17 Partnership. So they're here for our use.
18 SUPERVISOR PATRICK: I've used mine already,
19 Mr. Chairman.
20 CHAIRPERSON LLOYD: Mr. Calhoun.
21 BOARD MEMBER CALHOUN: Mr. Chairman, on the 26th
22 of January I had a telephone call -- conversation with
23 Mr. Jim Ehlmann from the General Motors, and he talked
24 about the difference between the initial staff report and
25 the most recent one that was published at that particular
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1 time.
2 And I had a follow-up conversation with him on
3 the 21st of March. And that particular conversation
4 focused on credits for fuel cell.
5 On the 27th of January I talked to Mr. Kelly
6 Brown of Ford Motor Company. And our conversation was
7 about the impact of the latest staff proposal at that time
8 on the industry. I also -- and he made a comparison
9 between the initial staff report and the one that was just
10 released.
11 On the 27th I also talked to Mr. Reg Modlin of
12 DaimlerChrysler and had a similar conversation with him
13 about the comparison of the two different staff proposals.
14 On the 18th of March I had a meeting with Bill
15 West and Ed Kjaer from Southern California Edison, and
16 their concern was focused primarily on keeping some
17 existing requirements out there for electric vehicles for
18 battery electrics.
19 And I had a similar meeting with them on April
20 the 21st. That was actually our last meeting after the
21 last Board meeting, and they talked about the need to
22 keep -- maybe perhaps establish a credit market and
23 reemphasized the desire that we keep some battery electric
24 vehicles on the markets.
25 On the 24th of March I had a meeting with
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1 Dr. Larry Berg and Steve Kukucha from Ballard, and we
2 talked about the status of fuel cell technology and that
3 they thought the staff proposal at that time on the
4 required number of fuel cell vehicles was somewhat
5 reasonable.
6 And on the 21st of April I had a similar
7 telephone call from Dr. Larry Berg, and he informed me
8 that Ballards' position had not changed.
9 On the 21st of April I had a telephone call from
10 Ben Knight of Honda, and he also expressed concern about
11 the impact of the proposed changes on the industry and on
12 Honda in particular.
13 That concludes my ex parte communication.
14 CHAIRPERSON LLOYD: Thank you.
15 Dr. Burke.
16 BOARD MEMBER BURKE: On March 17th, Mike Kane met
17 with my staff in my office.
18 On March 19th, Paul Scott met with my staff.
19 On April 21st, Bill West and Ed Kjaer and Scott
20 Briasco met with me in my office to discuss the reissuance
21 issue and credit market issue.
22 On April 21st, Ben Knight with Honda came to
23 discuss the same matters that he discussed with
24 Mr. Calhoun.
25 And on April 23rd, Greg Hanssen and Bill Mason
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1 spoke with my staff via phone.
2 And that's all my ex partes.
3 CHAIRPERSON LLOYD: Thank you. Ms. Riordan.
4 BOARD MEMBER RIORDAN: Yes. Thank you,
5 Mr. Chairman.
6 On January 23rd I met with Ron Wilson and Randy
7 Hasty from e-Motion.
8 On March 14th I met with Bill West, Ed Kjaer,
9 Felix Oduyemi from Southern California Edison.
10 On March 21st I met with Deigo Miralles with
11 REVA-EV.
12 And on March 24th I met with Dr. Larry Berg and
13 Steve Kukucha representing Ballard.
14 All of these discussions focused on the staff
15 report that was developed for the early meetings of what
16 would have been February and then March 27th.
17 CHAIRPERSON LLOYD: Yes. On January 23rd I met
18 with John Wilson, Randy Hasty of e-Motion Mobility. Again
19 similar to Barbara, all my discussions were focused on the
20 staff proposal and the alternatives to the staff proposed.
21 On February the 6th I met with members of the
22 Auto Alliance, the large manufacturers, Kelly Brown, Ford;
23 Reg Modlin, DaimlerChrylser; Bob Cassidy, Nissan; and Jim
24 Ehlmann from General Motors.
25 On the 6th of February I had a telephone
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1 conversation with Diane Ogilue from Toyota.
2 Then on the 7th of February I met with Dean Kato,
3 Dave Hermance, Joe Tomita, and Akihoto Hayasaka from
4 Toyota.
5 On February the 6th, met with CalETC
6 representatives Dave Modisette, Bill West, Ed Kjaer, Bill
7 Boyce, and Kent Harris. I guess I should say Dave
8 Modisette from Public Policy Advocates. Bill West and Ed
9 Kjaer from So. Cal. Edison. Bill Boyce from SMUD. And
10 Kent Harris from PG&E.
11 On 13th of February I met with Rick Woodbury from
12 Commuter Car Corporation, also called TANGO.
13 Had a telephone conversation February 19th with
14 EV Drivers Coalition, Greg Hanssen and Bill Mason.
15 Then had a meeting with part of the Auto Alliance
16 and environmental groups. This was Bonnie Homes-Gen, Lung
17 Association. This was January 29th in Sacramento. Jamie
18 Knapp with ZEV Alliance; Jason Mark from Union of
19 Concerned Scientists; Rolad Hwang from NRDC; Dave
20 Modisette, CalETC; Sandray Spelliscy, PCL; and Jason Mark,
21 UCS via telephone call.
22 Then on February the 24th and the 27th I had a
23 telephone conversation with Beth Lowery from General
24 Motors.
25 Then on the 28th I had a telephone call with
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1 Kelly Brown from Ford representing the Auto Alliance.
2 Same day I had a discussion with Reg Modlin, Auto Alliance
3 from DaimlerChrysler.
4 Then I had a telephone call on March 14th with
5 Paul Staples from HyGen.
6 Then on the 14th of March also had a telephone
7 conversation with Beth Lowery from General Motors.
8 I had a telephone conversation on the 18th with
9 Ben Knight of Honda.
10 I had a meeting on the ZEV Alliance on the 19th
11 in Sacramento with Bonnie Homes-Gen, Lung Association;
12 Jason Mark, UCS; and Rolad Hwang, NRDC.
13 Met the same day with CalETC, Dave Modisette;
14 Bill Warf from SMUD, and Bill West, So. Cal. Edison.
15 I had a telephone conversation with Greg Hanssen
16 and Bill Mason from the EV Drivers Coalition on March the
17 19th.
18 Had a meeting with Diego Miralles representing
19 REVA-EV on the 20th in Sacramento. And another meeting
20 with the Auto Alliance, the large auto manufacturers, in
21 the Sacramento on the 20th; Ben Knight, Honda; Aki Yasouka
22 from Honda; Bob Cassidy, Nissan; Reg Modlin,
23 DaimlerChrylser; Kelly Brown from Ford; Al Weaverstadt
24 from General Motors.
25 Had a telephone conversation on the 24th with
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1 Dean Kato from Toyota.
2 Another telephone conversation with Kelly Brown
3 on the 24th of March.
4 Had a meeting on the 24th with Jason Mark and
5 Rolad Hwang from the ZEV alliance.
6 Had a telephone conversation on to 25th with
7 Dr. Larry Berg, Ballard.
8 I had a telephone conversation on April the 9th
9 with Tim Carmichael, Coalition for Clean Air. On the same
10 day discussion with Bonnie Homes-Gen on the American Lung
11 Association.
12 April 9th, a telephone conversation with Rolad
13 Hwang.
14 I had a meeting on April 10th with Dean Kato in
15 Sacramento and Joe Tomita via video conferencing in a
16 similar meeting. That's right. On the 10th. That was by
17 Joe Tomita by video conference.
18 April 10th had a meeting with Kelly Brown, I
19 think this time representing Ford in Sacramento. Reg
20 Modlin, I had a phone call April 14th with
21 DaimlerChrysler.
22 Had a telephone conversation April 18th with Dave
23 Modisette representing CalETC.
24 Had two phone calls on the 2nd and the 8th of
25 April with John White representing Sierra Club.
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1 Had a meeting on April 22nd with Dr. Berg, Steve
2 Kukucha, and Firoz Razul from Ballard.
3 I think that's it.
4 Well, April 24th a telephone conversation with
5 Beth Lowery from General Motors.
6 Professor Friedman.
7 BOARD MEMBER HUGH FRIEDMAN: Prior to the revised
8 staff report in advance of the March hearing, I met in
9 Sacramento on January 30th with the ZEV Alliance Group,
10 Bonnie Homes-Gen and Jamie Knapp and David Modisette of
11 CalETC.
12 On February 6th I met with the Auto Alliance
13 so-called of the large auto manufacturers representatives
14 in Sacramento, Kelly Brown, Ford; Reg Modlin of
15 DaimlerChrysler; Bob Cassidy of Nissan; and Jim Ehlmann
16 for General Motors.
17 I would say with respect to all of these
18 disclosures that the content of the conversation and the
19 presentations by all of these folks with whom I met or
20 spoke by phone was the same as was presented by them or
21 their other representatives at the March hearing. And I
22 made a note of that at the time at the March hearing.
23 I met on February 6th in Sacramento again with
24 CalETC representatives including Dave Modisette, Ed Kjaer,
25 Bill Boyce, Kent Harris, and Mark Duvall.
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1 And I, by telephone, had a conversation with the
2 EV Drivers Coalition, Greg Hanssen and Bill Mason on
3 February 6th.
4 After the revised staff report in advance of the
5 March hearing, I had further meetings or conversations. I
6 was contacted again by Greg Hanssen and Bill Mason of the
7 EV Drivers Coalition.
8 March 17th I had a meeting in San Diego -- March
9 19th with General Motors' representatives Bob White, Beth
10 Lowery, Ray Buttacavoli. Again, their conversation with
11 me was to urge consideration of stationary fuel cell
12 systems as that would be interchangeable essentially with
13 mobile use or suitable for mobile applications to be given
14 some credits.
15 Auto Alliance large auto manufactures met with me
16 on March 19th. Again, that was Kelly Brown of Ford; Bob
17 Cassidy of Nissan; Reg Modlin of DaimlerChrysler; and Al
18 Weaverstadt of General Motors. And this time joined by
19 Aki Yasouka of Honda.
20 ZEV Alliance contacted me again by phone on March
21 20th, Bonnie Homes-Gen, Rolad Hwang, and Katherine
22 Philips.
23 Toyota met with me. I think that was with
24 Supervisor Roberts as well on March 20th in San Diego,
25 Dean Kato and Dave Hermance.
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1 And CalETC contacted me again in Sacramento on
2 March 26th. That was Dave Modisette, Public Policy
3 Advocacy; Ed Kjaer, Bill West, Southern Cal Edison; John
4 Wilson, e-Motion Mobility; and Randy Hasty of e-Motion
5 Mobility.
6 And finally, after our March hearing leading to
7 this meeting, I had the following contacts. CalETC,
8 April 16th and 18th phone calls by Dave Modisette.
9 Actually, the 18th was, I think, a letter.
10 On April 15th I received a CalETC compromise
11 general proposal that was discussed on the April 16th
12 phone conversation. This had to do with numbers.
13 And then the 18th phone call was regarding
14 another compromise proposal -- revised compromise
15 proposal.
16 Toyota -- I met with Toyota yesterday by video
17 conference, Dean Kato in Sacramento and Joe Tomita,
18 Mr. Kawai, general manager of the fuel cell division. And
19 this was done -- I think I was joined by other members of
20 the Board who will identify themselves. And that was
21 based on an April 23rd letter we received from Toyota.
22 And then I had a letter dated April 10th from the
23 Sierra Club, finally. That's my final disclosure. John
24 White signing it for the Sierra club. And this letter
25 essentially congratulates or says, "It's encouraging to
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1 hear Board members embrace staff's suggestions for
2 increasing the required number of AT PZEVs, particularly
3 hybrid electric vehicles." It says he believes "the Board
4 has made it clear that the Board remains committed to
5 achieving a state-wide goal of emissions." With respect
6 to the unresolved issues that we're going to be resolving
7 today hopefully, his position was an unqualified
8 recommendation to support the staff's recommendation for a
9 minimum requirement in the alternative compliance pathway
10 of 250 zero emission vehicles for the 2005-2008 period.
11 His discussion points out that increasing that
12 number would not give any great health benefits and could
13 cause risk -- put at risk some of the fuel cell or other
14 technology efforts and cooperative efforts.
15 He also addresses other matters. I don't know if
16 this is in the record or not. I think the record's been
17 closed. I don't know if I need to read the whole letter
18 or what I need to do. I think other Board members have
19 directly received this letter.
20 GENERAL COUNSEL WALSH: Professor Friedman, we
21 can make sure all of the Board members have a copy of the
22 letter. It will be made a part of the record as a part of
23 your disclosure this morning.
24 BOARD MEMBER HUGH FRIEDMAN: Then I won't
25 elaborate further on it at this time. Thank you.
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1 BOARD MEMBER WILLIAM FRIEDMAN: Mr. Chairman,
2 since mid-January my secretary informs me that I've
3 received 218 phone calls from patients or family members
4 of patients and a slightly larger number of calls from
5 faculty or community doctors, none of whom chose to
6 discuss the ZEV regulation, I'm pleased to say. I have
7 nothing to declare.
8 (Laughter)
9 CHAIRPERSON LLOYD: Thank you.
10 BOARD MEMBER D'ADAMO: Lucky you. All right.
11 What I'll do with my list is only note where
12 additional issue or specific issues were discussed beyond
13 the staff proposals that were out and available for the
14 public at the time of the meetings that I'll be listing.
15 On January 21st, in Stanislaus County -- I
16 believe this was in Modesto. I met with representatives
17 from e-Motion Mobility, John Wilson, Randy Hasty; and with
18 representatives from Stanislaus County, Reagan Wilson,
19 Mike Lynch; and with the representative from the
20 Stanislaus County Economic Development Board, Kirk
21 Lindsay.
22 On March 6th, I met in Modesto with the Auto
23 Alliance, several representatives from the Auto Alliance,
24 Kelly Brown from Ford; Bob Cassidy from Nissan; and Jim
25 Ehlmann from GM.
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1 February 6th, in Modesto met with representatives
2 from the ZEV Alliance, Bonnie Homes-Gen from the American
3 Lung Association, and Todd Dipaola from the Kirsch
4 Foundation.
5 February 7th, in Modesto I met with
6 representatives from Toyota, Dean Kato, Dave Hermance and
7 Kazuo Tomita, and Akihoto Hayasaka.
8 On March 12th and then again on March 17th I had
9 two separate telephone conversations with representatives
10 from Stanislaus County, Reagan Wilson and Mike Lynch.
11 On March 20th, in Sacramento I joined in the
12 meeting with other Board members and with representatives
13 from the Auto Alliance, Ben Knight from Honda, Akimasa
14 Yasouka from Honda; Bob Cassidy, Nissan; Reg Modlin,
15 DaimlerChrysler; Kelly Brown, Ford; Al Weaverstadt, GM.
16 On March 20th, in Sacramento, meeting with CalETC
17 representatives Dave Modisette, Scott Briasco, Bill Boyce,
18 and Serge Roy.
19 On the 20th of March I had a conference call with
20 representatives from the ZEV Alliance, Bonnie Homes-Gen,
21 Jason Mark, Rolad Hwang.
22 On the 25th of March, phone call with
23 representatives from the EV Drivers Coalition, Greg
24 Hanssen and Bill Mason.
25 On the 25th of March a phone call with
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1 representatives from CalETC and e-Motion Mobility, Dave
2 Modisette and John Wilson.
3 On the 27th of March I had a telephone
4 conversation with Reg Modlin from DaimlerChrysler and Dan
5 Surges, Mobility Labs regarding the specific issue of city
6 car transportation and neighborhood electric vehicles.
7 On the 25th of March, a telephone conversation
8 with Laurie David from NRDC.
9 On the 25th of March, a telephone conversation
10 with Bonnie Homes-Gen representing the American Lung
11 Association.
12 On April 3rd, in Modesto and then again on April
13 16th in Modesto I had two meetings with representatives
14 from Stanislaus County, Reagan Wilson and Mike Lynch.
15 On April 10th, a phone call with an interested
16 private citizen, Elaine Lissner. Additionally,
17 Ms. Lissner provided me with an e-mail communication
18 regarding her thoughts, again, regarding the staff
19 proposal.
20 On April 10th, I had a discussion -- telephone
21 call with Alec Brooks who also provided additional written
22 materials to me regarding the staff proposal.
23 On April 16th, a phone call with Dave Modisette.
24 And in addition, I received -- for the purposes of that
25 telephone call on April 15th I received CalETC compromised
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1 proposal, then a revised version of that on April 17th
2 from Dave Modisette. And again, a communication from Dave
3 Modisette in writing on April 21st regarding follow-up
4 material to the meeting that we had on -- the phone call
5 we had on April 16th.
6 On April 23rd, a phone call with representatives
7 from CalETC, Dave Modisette, Bill West, Ed Kjaer, John
8 Wilson, and Randy Hasty.
9 On April 16th, phone call with the EV Drivers
10 Coalition, Greg Hanssen and Bill Mason.
11 On April 17th, in Stockton I had a meeting with
12 Dean Kato from Toyota. At that time I also received a
13 letter from him regarding Toyota's position.
14 On April 17th I had a phone conversation with
15 Kelly Brown from Ford.
16 On April 17th, a telephone conversation with
17 representatives from e-Motion Mobility, John Wilson and
18 Randy Hasty.
19 On April 18th, a phone call with representatives
20 from CalETC and Stanislaus County, Dave Modisette and Mike
21 Lynch.
22 On April 23rd, a telephone call with Ben Knight
23 specifically regarding hybrid issues.
24 On April 23rd, a phone call with John White. At
25 this time John discussed the letter that he has since
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1 provided to me, the same letter that Professor Friedman
2 mentioned.
3 On April 23rd, a phone call from Dean Kato
4 regarding -- from Toyota regarding hybrid issues, and Dean
5 followed up with an e-mail written communication to me
6 regarding hybrid issues as well.
7 CHAIRPERSON LLOYD: Thank you. McKinnon.
8 BOARD MEMBER McKINNON: Okay. The first set of
9 ex parte was pre-March 5th revision of the staff report.
10 On the 23rd of January, I met with e-Motion
11 Mobility, John Wilson, Randy Hasty. Essentially they
12 described how their business works, their business
13 provides sort of transportation solutions to communities
14 and businesses where -- and I hate to mischaracterize
15 this -- where people essentially check out the appropriate
16 vehicle for the job that's needed. And certainly they see
17 ZEVs as a key ingredient. Their primary concern was the
18 ever-changing regulation and their ability to operate as a
19 business with the changes in the regulation that continue
20 to happen.
21 On the 6th of February I met with CalETC, Dave
22 Modisette, Ed Kjaer, Bill Boyce, Kent Harris, and Mark
23 Duvall. Essentially, they were opposed to the staff
24 report at the time, and their comments are pretty clearly
25 in the record.
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1 The EV Driver Coalition was my next meeting that
2 was also on the 6th of February, Greg Hanssen and Bill
3 Mason. Same comment, opposition to the staff proposal at
4 that point in time. Their comments are clearly reflected
5 in the record.
6 Auto Alliance -- just those large auto makers in
7 the Auto Alliance minus Toyota met with me on the 7th of
8 February, Kelly Brown from Ford; Bob Cassidy from Nissan;
9 Jim Ehlmann of GM; and Reg Modlin from DaimlerChrysler.
10 Frankly, in this meeting the concerns were expressed about
11 the travel issue which is pretty clearly in the record.
12 And, frankly, I can say the concerns that were raised in
13 this meeting are in the record. The tone of the
14 conversation was more supportive to the proposal with a
15 few concerns.
16 Also on the 7th of February, I met with Toyota,
17 Dean Kato, Dave Hermance, Joe Tomita, and Aki Hayasaka.
18 In that meeting the very similar conversation, more or
19 less supportive of the staff proposal with a few concerns.
20 And it has -- all of those issues are very clearly in the
21 record.
22 On the 11th of February I met with the ZEV
23 Alliance, Bonnie Homes-Gen from the Lung Association;
24 Jaime Knapp from the ZEV Alliance; and Todd Dipaola from
25 the Kirsch Foundation. Again, very clearly a conversation
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1 that was opposed to the staff proposal at that time, and
2 their comments are very clearly in the record from
3 hearings and letters.
4 The next meeting I had was also on the 11th of
5 February. It was with General Motors. I met with Beth
6 Lowery, Ray Buttacavoli, Dave Barthmuss. And I think
7 General Motors' comments are in the record with two
8 exceptions. There was quite a bit of conversation about
9 their interest for stationary fuel cells. The other area
10 that was attempted to be discussed, and I want to be very,
11 very clear about this on the record --
12 (Thereupon, a fire alarm drill occured.)
13 CHAIRPERSON LLOYD: We'll be okay, but we'll get
14 another interruption when they tell us we're okay.
15 SUPERVISOR DeSAULNIER: By that time you'll be up
16 to March.
17 (Laughter)
18 BOARD MEMBER McKINNON: On the 11th of February
19 in the General Motors meeting, the other subject that was
20 addressed that I want to make very clear in the record --
21 because I'm very concerned about the subject coming up.
22 On two occasions representatives of General Motors tried
23 to bring up the subject of fuel economy. And at the first
24 instance that the subject of fuel economy was brought up,
25 I asked that they refer that issue to the federal agencies
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1 that regulate fuel economy and that our Board had been
2 clearly let know that we are not in the fuel economy
3 business. That's a federal agency that regulates fuel
4 economy. It came up again after that, and I offered to
5 cancel the meeting if the subject came up again.
6 My next meeting also occurred on that day, the
7 11th. The Planning and Conservation League gave very,
8 very clear indication of opposition and concern for the
9 zero-emission mandate. They're clearly in the record.
10 After the March 5th staff proposal -- revised
11 staff proposal came out, I had a meeting with the large
12 auto makers on the March 20th.
13 I'm up to March, Mark.
14 Ben Knight of Honda; Bob Cassidy from Nissan, Reg
15 Modlin for DaimlerChrysler; Kelly Brown from Ford; Al
16 Weaverstadt from GM. Their comments are clearly in the
17 record.
18 CalETC and I met also on the same day, March
19 20th, Dave Modisette, Scott Briasco, Bill Boyce, Serge
20 Roy, Kent Harris, and Bill West. Their comments are
21 clearly in the record in opposition to that staff
22 proposal.
23 I received a phone call from Laurie David who
24 identified -- on the 25th of March who identified herself
25 as part of the Natural Resources Defense Counsel's
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1 Hollywood chapter strongly opposed to the staff report and
2 clearly a zero-emission vehicle driver.
3 And also on the 25th I received a telephone call
4 from the EV Drivers Coalition, again, opposed. Their
5 comments are clearly in the record.
6 On the 26th, had a telephone conversation with
7 Dave Modisette. Again, clear opposition and a fairly
8 lengthy discussion about a proposal for a compromise, very
9 early discussion about that. Both his comments and the
10 compromise are clearly indicated in the record from the
11 hearing.
12 On the same day I met with Bonnie Homes-Gen from
13 the American Lung Association. She was clearly opposed to
14 the staff proposal, and her comments are in the record.
15 The same day I met with Ballard, Larry Berg and
16 Steve Kukucha. Essentially the meeting was on the subject
17 of fuel cells and the state of fuel cells. Their comments
18 are clearly in the record.
19 After the Board hearing ex parte I had a
20 telephone conversation with Elaine Lissner on the 14th of
21 April. Elaine with her phone conversation and e-mail that
22 followed clearly was proposing a very simplified approach
23 that was very, very strongly supportive of battery
24 electric vehicles.
25 Alec Brooks and I spoke on April 16th on the
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1 telephone, he as an individual interested private citizen.
2 And he followed up with e-mail which clearly argued that
3 the battery electric vehicle should be given more due
4 consideration in our deliberations with very clear
5 arguments about sort of the state of the fuel cell versus
6 the battery electric at this point in time, and that the
7 development of the battery electric over the last seven
8 years wasn't getting sort of due respect in the hearing.
9 The next -- I had three conversations with CalETC
10 April 16th on the telephone, April 21st on the telephone
11 and April -- also April 21st, a face-to-face meeting.
12 Those were with Dave Modisette. And then on April 23rd a
13 meeting with Dave Modisette, Bill West, Ed Kjaer, John
14 Wilson, and Randy Hasty. Those discussions were clearly a
15 development of a compromise proposal. Some of that
16 compromise proposal or portions of that compromised
17 proposal were talked about in the staff report, certainly
18 not in full. I would feel most comfortable if -- in that
19 that sort of public disclosure that I disclose sort of the
20 written documents that are involved with that. So I'd
21 like to offer them for the record.
22 (Thereupon, the public address system made an
23 all-clear announcement.)
24 BOARD MEMBER McKINNON: On the April 16th and
25 23rd I had telephone conversations with Greg Hanssen and
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1 Bill Mason. Those conversations were also continuing
2 opposition to the staff proposal and encouragement to look
3 at some of the compromise proposals that were out there.
4 On the 16th I met in person with John White, and
5 I received the letter that was referred to by Board Member
6 Hugh Friedman. I received that letter some time later, a
7 few days later.
8 But essentially the John White meeting was a
9 pretty strong departure from the position of the Sierra
10 Club in that -- that's on the record. On the record the
11 position called for fairly high numbers of fuel cells and
12 the change in position changed to an agreement with the
13 250 number. He also gave due credit to the progress and
14 PZEV and AT PZEV area, and based his reasoning on that
15 progress in large part.
16 On the 21st of April I received a telephone call
17 from Larry Berg from Ballard. He reaffirmed Ballard's
18 position that they supported the staff proposal and the
19 250 fuel cell number.
20 On the 21st of April I received a telephone call
21 from Coalition of Clean Air and the Planning Conservation
22 League, Tim Carmichael and Sandray Spelliscy. They
23 strongly reaffirmed their opposition to the staff proposal
24 and the problems with the lack of near-term zero emission
25 vehicles.
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1 April 23rd I met with Toyota. Dean Kato was here
2 in Sacramento. In Japan via video conference were
3 Ms. Fugimoto, Mr. Kawai, and Mr. Matsuoka. The content
4 was very clearly a very thoughtful discussion about the
5 development of the fuel cell, about how Toyota was
6 thinking through what the steps would be in the
7 development of the fuel cell, including those factors that
8 may not be under their control, such as infrastructure and
9 social kind of view of the fuel cell and sort of the
10 decline of fossil fuels as a primary. It was a very, very
11 informative discussion.
12 With that, I think I've covered it all. Thank
13 you.
14 CHAIRPERSON LLOYD: Thanks, Matt.
15 Supervisor DeSaulnier.
16 SUPERVISOR DeSAULNIER: For once people are glad
17 to hear me speak because I'm at the end. Reminds me of a
18 really bad academy award acceptance speech when people
19 name everybody they've talked to in the last 5 years.
20 On February 6th I meet with Dean Kato, Joe
21 Tomita, Akohoto Hayasaka in my Concord office. The
22 conversation was consistent with their correspondence and
23 their testimony.
24 On the 20th of February, I met with ZEV Alliance,
25 Jason Mark from the Union of Concerned Scientists and Todd
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1 Dipaola from the Kirsch Foundation.
2 On February 20th also I received a phone call
3 from Greg Hanssen and Bill Mason. Those conversations
4 were also consistent with their testimony.
5 On March 19th I met with Rick Woodbury from the
6 Commuter Cars Corporation. His conversation with me was
7 similar to his conversation with the Chairman.
8 On March 20th I had a phone call with Dave
9 Modisette, Scott Briasco from the Department of Water and
10 Power; Bill Boyce from SMUD; and Serge Roy from Capitech.
11 That was consistant with their testimony last month.
12 On the 20th I had a conference call with Bonnie
13 Homes-Gen and Jason Mark, again, consistent with their
14 testimony of last month.
15 The EV Drivers Coalition, Greg Hanssen and Bill
16 Mason, had a phone call with them on March 25th.
17 On the 26th I had another phone conversation with
18 Dave Modisette in regards to his attempts to put a
19 compromise proposal.
20 On April 16th in the Concord office I had a
21 conversation with Elaine Lissner an interested private
22 citizen who -- our conversation again was consistent with
23 her testimony last month.
24 On April 17th I received a phone call from
25 CalETC, again from Dave Modisette updating me on his
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1 ever-going endeavors consistent with his submission that
2 we have in front of us.
3 On the 17th I received a phone call from the EV
4 Drivers Coalition, Greg Hanssen, Bill Mason, again trying
5 to argue that we not -- or we support their positions.
6 On April 18th in Oakland I met with Dean Kato
7 expressing his concerns similar to the concerns expressed
8 in a letter from Toyota of April 23rd.
9 On Tuesday the 22nd I talked to Dean again.
10 And on Wednesday the 23rd I had a series of
11 messages from John White going back and forth, and they're
12 consistent with the conversations other Board members had
13 with Mr. White.
14 And I also had a conversation by phone with Rolad
15 Hwang.
16 And that's it, Mr. Chairman.
17 CHAIRPERSON LLOYD: Thank you very much,
18 Supervisor DeSaulnier.
19 I'd also like to -- I think it was referred to.
20 I just want to make sure, Ms. Walsh, that the letter of
21 April 23rd from Joe Tomita of Toyota is, in fact, in the
22 record. I think it was sent to me, to Ms. D'Adamo, to
23 Supervisor DeSaulnier, Dr. Friedman, and Mr. McKinnon.
24 GENERAL COUNSEL WALSH: Yes. It will be made a
25 part of the record as the disclosures made this morning,
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1 and we did have copies made and they have been provided to
2 all the Board members.
3 CHAIRPERSON LLOYD: Again I think now that we
4 have completed our ex parte disclosures it's time to begin
5 the Board's decision on discussion process on the matter
6 before us.
7 Again, with my colleagues permission, I would
8 like to exercise the Chairman's prerogative and start us
9 off by sharing my own perspective on proposed regulation
10 before us before we get into detailed discussion.
11 I said at the outset of today's hearing we have
12 not failed in our quest for zero-emission transportation.
13 In fact, I stated it is, in fact, a marathon, not a
14 sprint. The task of achieving a revolutionary change in
15 motor vehicle technology is simply more difficult than
16 anyone anticipated when this effort began in the early
17 '90s and, in fact, requires working closely with the
18 industries who are, in fact, expected to effect that
19 change.
20 In my judgment we need to be realistic about the
21 challenge that is still before us, but we should keep our
22 optimism and never, never give up. That's important. At
23 the same time we need to stay focused on what is
24 achievable in each time frame and about what constitutes
25 the progress towards our ultimate goal, which is advancing
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1 the technology and getting clean air and, in fact, our
2 drive to zero.
3 I think it's, again, important as we look to our
4 challenges for clean air that goal is very, very
5 important. But as we've seen, the family of technologies
6 that are getting us to cleaner air are, in fact, a
7 critical portion of this overall regulation, although the
8 ZEV piece attracts the most attention.
9 Again, with all that being said the support in
10 general, the staff proposal for amending the ZEV
11 regulation as laid out today in particular just to
12 reiterate changes to the ZEV and hybrid electric vehicle
13 calculation to address the legal concerns. I think the
14 two-path compliance structure is important given that
15 flexibility.
16 The reliance on the California Fuel Cell
17 Partnership stretch goals to define the appropriate number
18 of fuel cell vehicles on the alternative path in 2001 to
19 2008 which brings up the 250 number. And again, since the
20 last meeting we have had that strong letter from Sierra
21 Club and John White endorsing that number. And I will
22 also say at this time being one of -- ARB being one of the
23 founding members of California Fuel Cell Partnership,
24 being the Chairman for this year of that, again I have a
25 lot of faith and a lot of hope in that partnership to get
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1 us to zero-emission technology. Recognize there are many
2 challenges to be overcome, but I think we have a chance
3 to, in fact, turn the tide, if you like, to work together
4 with all the stakeholders here to bring us a technology to
5 California and working together with the energy partners,
6 government partners, technology developers, and the
7 industry, I think we will have a real opportunity and I
8 think with the increased effort at the national level and
9 international level.
10 That's not to say, obviously, that we are going
11 to continue with our other seeking of battery electric
12 technology to get to us to zero. I think on the 250
13 number -- I've learned a lot in the last two years about
14 the numbers. And I think that as we look at the
15 development program the cost it takes, while that may seem
16 a smaller number than I certainly would have approved
17 two years ago, I feel seeing firsthand what this industry
18 needs and takes, I think in a development process that's a
19 reasonable number. And, in fact, the stage growth in
20 terms of using the factor of 10 as defined by the staff
21 for 2009 and beyond is, I think, a realistic goal.
22 I think the creation of a new independent expert
23 review panel to assist the Board in evaluating the status
24 of ZEV technology, both fuel cell and batteries and hybrid
25 electrics, I think is a very important piece of this
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1 overall.
2 I would suggest that we maybe early on -- staff
3 was talking about getting that started in 2005. I think
4 that's too early. I would like to see that being sort of
5 in the 2007/08 time frame or '06, some flexibility there
6 to give us time to understand the technology.
7 But I would request that annually the Board
8 reports -- the staff reports to the Board to give us a
9 status report as we have in some others about the progress
10 of how this regulation is being implemented. And I think
11 in the past we've been surprised about maybe people have
12 taken advantage of this. Maybe that -- the basically
13 unexpected consequences. So I think if the staff would
14 report back to the Board to make sure it's going along.
15 An annual basis would be helpful. Not a hearing, just an
16 informational one.
17 I think the suggested provision to address the
18 travel issue with other states, I think, is reasonable. I
19 think with regard to battery electric vehicles I, too, am
20 concerned that the manufacturers step away from this
21 technology at this time. And it's been deeply
22 disappointing. Two years ago I had great hopes. However,
23 I think that the staff has made every reasonable effort to
24 encourage and foster their participation in the
25 regulation.
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1 And I'm pleased the additional incentives to the
2 proposal to encourage auto makers to keep BEVs on the road
3 as long as possible. And I'm also satisfied with the
4 inclusion of BEVs and the alternative compliance path is
5 done so at a favorable ratio. So we're not turning our
6 back.
7 With regard to plug-in hybrids, I think we've all
8 heard the response from auto makers from the question
9 posed regarding what incentives could be offered to induce
10 them to introduce plug-in hybrids. And, in fact, we
11 explicitly asked that question at the hearing of the auto
12 manufacturers. This response has ranged from clear
13 indifference to acknowledgement that the proposed
14 regulatory structure was attractive enough to look into.
15 With this information holding firm to my
16 principle that zero means zero, the tailpipe, I agree with
17 the staff's suggestion that plug-in hybrids continue to be
18 treated in silver category vehicles.
19 Again, to sum it all up, I think we should
20 seriously consider a motion to approve staff's proposal
21 essentially as is with the comments that I made. But I'm
22 also keenly aware that some of my colleagues have
23 different views on individual elements of the proposed ZEV
24 modifications. I do not mean to cut the discussion short
25 in any way because it's a complex issue.
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1 BOARD MEMBER RIORDAN: Mr. Chairman.
2 CHAIRPERSON LLOYD: Ms. Riordan.
3 BOARD MEMBER RIORDAN: If I might, just to help
4 us frame our discussion this morning, I would like to move
5 that the Board approve the staff recommendations that are
6 before us today and to include your request for the staff
7 reports to follow on an annual basis and the delay of
8 your -- at the Advisory Board to 2006 or after.
9 BOARD MEMBER HUGH FRIEDMAN: Second.
10 CHAIRPERSON LLOYD: Discussion. Yes.
11 BOARD MEMBER D'ADAMO: I think we need to discuss
12 the staff proposal.
13 CHAIRPERSON LLOYD: Yes.
14 BOARD MEMBER McKINNON: Could I -- we have a
15 number of documents that were talked about going into the
16 record. I'm wondering if before we have the discussion if
17 we can have those documents copied so everybody has them
18 to look at. I don't mean to cut anybody off but --
19 CHAIRPERSON LLOYD: I think that's fine.
20 GENERAL COUNSEL WALSH: They're being copied now.
21 And as soon as they're ready, we'll distribute them.
22 BOARD MEMBER D'ADAMO: I'm fine with going ahead
23 with what I have to say. I won't be referring to any of
24 them specifically.
25 Mr. Chairman, I would like to compliment how far
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1 we've come in this staff report in a number of areas,
2 particularly regarding the structure of the base path and
3 the alternative compliance path. And some of the changes
4 that were made with regard to the silver and bronze
5 category. However, I haven't seen any -- that's pretty
6 much where we were in March with regard to what I felt to
7 be the consensus that emerged at the last hearing. There
8 was strong consensus that battery electric vehicles be
9 incentivized by some sort of ratio, and there was also
10 strong -- I felt strong consensus with regard to at a
11 minimum a number of 250 and higher numbers in the out
12 years. I'm disappointed that what we have before us today
13 is the minimum level where I felt we left off at the last
14 hearing.
15 I think that we can do more. I think we can do
16 better particularly in the near term. And I think that we
17 need to be honest with ourselves when we look at just one
18 example, the number in the near term, the 250. We need to
19 be honest with ourselves that we are not talking about 250
20 fuel cells that will be built in that time frame in your
21 term because we know realistically there are a number of
22 auto makers that are going to remain on the base path. So
23 right off the top we can chop that figure roughly in half
24 or in a third, you know, depending on how many auto makers
25 choose to stay on the base path.
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1 Then, in addition, because of the concern that
2 was expressed by myself and a number of other Board
3 members and witnesses, there is a credit scheme that's
4 been added into the mix that wasn't originally envisioned
5 on the alternative path to provide for BEV incentives and
6 for new BEVs, new BEV production, and for release.
7 I've been advised that realistically staff
8 believes that the auto makers believe that those
9 incentives are not enough to encourage new production of
10 BEVs. But they probably are enough to incentivize a
11 re-lease of existing BEVs that are already out there.
12 So I'm in sort of a quandary. I feel like we
13 have an unattended consequence here as a result of an
14 issue I feel very strongly about, and that is BEVs. So
15 considering those additional incentives with regard to
16 re-leases, the number of 250 cut in half or cut down to a
17 third would be reduced even further. Plus, we also don't
18 have any complete assurances those vehicle are going to be
19 in the state of California, which gives me great
20 heartache.
21 I think that what we should have done is given it
22 a good college try. Sit down with the auto makers and the
23 stakeholders and see what could be done to increase that
24 number and keep the auto makers at the table. Keep them
25 working through the Fuel Cell Partnership. We already
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1 know they were committed to roughly 250 anyway. But with
2 the number that we have, it's going to be less than 250
3 realistically. I think we could have done better. We
4 could have pushed for -- had staff and through their
5 discussions pushed for a higher number. I don't know what
6 the magic number is. I'm not in the position to be able
7 to say what that should be, but I think it's got to be
8 more than 250.
9 Other alternatives we could have looked at would
10 have been a floor for BEVs. And I think we should have
11 done a better job at exploring a viable credit trading
12 program similar to the initial reduction credit system
13 that's in place with regard to stationary sources at the
14 district level.
15 I've raised this issue several times over the
16 last couple of weeks with staff, and I just don't get a
17 sense there was any attempt to work with the auto makers
18 and come up with a creative approach. I know there was
19 some suggestions advanced by CalETC. That may not have
20 been the way to do it. But I feel that if we had tried
21 hard enough, we probably could have come up with
22 something.
23 Basically, my bottom line is I think we need to
24 have more fuel cell numbers, fuel cell equivalents so we
25 can have a meaningful incentive program for BEVs. I'm
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1 just not ready to close the door on any technology that's
2 out there. I think we need to do everything we can to
3 keep optimistic, just as we are with fuel cells. Keep
4 optimistic with BEV production.
5 I'm nervous about having BEV production
6 advancements frozen in time to this date while the other
7 technologies continue to advance, which is what we want.
8 We want to have fuel cell technologies advance, hybrid
9 technologies, plug-in hybrids. I think BEVs need to be in
10 that mix as well. So I reluctantly will be -- unless
11 there are any changes, I'll be opposing the staff
12 proposal.
13 CHAIRPERSON LLOYD: Let me just comment on the
14 fuel cell. That's close to my area. I think that there
15 was not a commitment of the Fuel Cell Partnership 250
16 vehicles. In fact, that was a goal they put forward.
17 This regulation would actually put that into a specific
18 number. So I think it's incorrect to say that that was a
19 commitment.
20 I would also like to have seen that number
21 higher. But after talking to the manufacturers, seeing
22 what's involved, I cannot in good conscious require them
23 to put a greater number of vehicles out there, which are
24 expensive which we realize are in the development stage.
25 And it doesn't bother me a lot that the number
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1 may be smaller because as long as you've got a reasonable
2 number out there because these are development vehicles.
3 And I feel assured also with the competition going on
4 there will be a significant development. This regulation,
5 however, ensures that we're getting this technology on the
6 road in California through the partnership as fast as
7 possible. And we're, in fact, developing the
8 infrastructure in a true partnership way which will
9 require them. And, in fact, we have the great leadership
10 by the South Coast Air Quality Management District in
11 putting hydrogen infrastructure already in the basin. So
12 the numbers don't bother me that much.
13 And I also feel that part of what I said earlier
14 on, I think what we're trying to do here, we have tried to
15 force batteries onto the road. We have not been
16 successful with the major manufacturers. And what we've
17 had, as I think staff indicated, we had starts and
18 confrontation.
19 I'm now convinced that our greatest benefit here
20 is to try to identify technologies that they have
21 identified that can be commercial successes, the hybrids
22 already and the fuel cells, but not ignoring the
23 batteries. Because if we can see that there are other
24 ways, if we can see that the cost changed significantly
25 trying to keep that open, the base path is there. We
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1 had -- in 2001 we had people taking advantage of that base
2 path. We didn't get the vehicles we wanted. We got a lot
3 of smaller vehicles.
4 So again, I'm not nearly as pessimistic as you
5 are in terms of the numbers and the consequences because I
6 think as we see this, this is tremendous potential.
7 BOARD MEMBER D'ADAMO: Well, my only response --
8 I know other Board members would like to speak. But I
9 would like to -- I share your optimism on fuel cells, just
10 not to the extent. I think it's bait and switch strategy.
11 I hope I'm wrong.
12 I just -- as you indicated in your remarks,
13 Mr. Chairman, that you think we need to keep focus, keep
14 optimistic. I feel that way with regard to BEVs as well.
15 I think if they're incentivized enough, there will be
16 improvements. Will they be to the extent we had all
17 dreamed and hoped? Probably not. But I suspect that with
18 all the brain trust that's out there, there will be
19 improvements.
20 CHAIRPERSON LLOYD: Of course, there will be
21 improvements as a result of the hybrids because they're a
22 critical part of that, both for fuel cells and for
23 gasoline or the hybrids. I recognize they're a different
24 type of batteries there. I don't know if staff wants to
25 respond to that at this time.
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1 Dr. Burke and Supervisor Robert.
2 BOARD MEMBER BURKE: I'll concede to the
3 Supervisor.
4 SUPERVISOR ROBERTS: Thank you, Dr. Burke.
5 First, I'm not disappointed, and I want to
6 compliment staff. This report has brought clarity to what
7 I was looking at as a Roubix cube of air quality issues.
8 There's an incredible number of different pieces here all
9 seeming to go in directions. And obviously a lot of
10 different interests. There's a lot of focus on the
11 numbers because numbers are an easy thing to grasp.
12 I'm not disappointed in this number, not even in
13 the least. Talking about a number when we're talking
14 about the R&D that needs to occur over the next several
15 years is like requiring a chemist to use a certain number
16 of test tubes in his R&D. It's not critical. The number
17 is not critical. We need as a sustained effective
18 research and develop program. We need a commitment to
19 that. And then we have to hold the feet to the fire to
20 make sure that's happening.
21 I probably would have liked to have the report in
22 a couple years because it's -- there's a lot that's
23 already happened that's going on, and we're not sort of up
24 to date on, at least I feel like I'm not. And I would
25 like to have had that probably earlier rather than later.
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1 The main goal of cleaning up the air in
2 California, if not in the nation and the world, I think is
3 going to be very much an outcome of this proposal. And I
4 like it for that reason. But I also like it for some of
5 the secondary things that aren't necessarily part of our
6 official agenda.
7 I like the fact that hydrogen might be in a
8 position to displace the petroleum products. I like it
9 because of the potential for use in a distributed
10 generation solution to some of our other energy
11 requirements. I like what I see happening.
12 I also like the fact that the recommendation is
13 not to move the plug-in hybrids to the gold category.
14 They simply aren't gold. They shoudln't be in gold. You
15 know, it's a nice thing, and there's a place for it. And
16 it's been incentivized to the highest level it should be.
17 But they shouldn't confuse what that gold category is.
18 And it should be something that really is gold and
19 contributes in a significant way to the overall solution.
20 And the plug-in hybrids, in my mind, aren't there.
21 So I like this. I like the proposal. I like
22 what staff has done here. I'm satisfied with the numbers
23 both in the early years. As I say, I don't think the
24 numbers in and of themselves are what's going to be
25 important. I mean, you can put 250 fuel cell vehicles out
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1 there, and if it's not really part of an effective
2 sustained research and development program, you won't get
3 anything out of it. You'll get numbers. And it isn't
4 numbers that are important. It's to get the actual
5 operating vehicles and to get the knowledge and to be able
6 then to be able to respond to the market and the cost and
7 the convenience and the range and the maintenance and
8 everything else to accomplish those goals.
9 So maybe I'm overly optimistic at this point.
10 But based on what I've seen, I think that we've got a
11 great program here. Again, I want to compliment staff for
12 bringing the clarity to this that wasn't there at the last
13 meeting. There was so many loose ends here. I thought,
14 how are we going to get this stuff all put back together?
15 I think your recommendations are excellent, and I intend
16 to vote for the motion.
17 CHAIRPERSON LLOYD: Thank you, Supervisor
18 Roberts.
19 Dr. Burke.
20 BOARD MEMBER BURKE: The reason I seeded my time
21 to the supervisor because we spoke --
22 CHAIRPERSON LLOYD: Would you speak up, Bill,
23 please.
24 BOARD MEMBER BURKE: Mumbles Burke here.
25 The reason I seeded my time to Supervisor Roberts
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1 is because we had discussed this at some length personally
2 over the last few days. And he reflects my personal
3 thinking.
4 There is some concern from South Coast as it
5 relates to what we hear as the domestic car manufacturers
6 are going to put all their cars in back east. And the
7 foreign car manufacturers are going to put all theirs in
8 California. We think that's a bad public policy
9 situation.
10 As far as the staff proposal, with that one
11 caveat, I plan on supporting it vigorously. And South
12 Coast District looks forward to helping with the
13 infrastructure at any point that we can, whether it's
14 intellectually or financially. We're going to be out
15 there supporting this. But I really would like to have
16 some further discussion of this travel issue.
17 EXECUTIVE OFFICER WITHERSPOON: On that point,
18 staff intends to monitor the placement of fuel cell
19 vehicles quite closely. If we see significant leakage to
20 other states, we'll be back before you with an amendment
21 to the travel provision.
22 But we think on the natural, we have all of the
23 right ingredients to make the fuel cells come to
24 California, including, of course, your own infrastructure.
25 BOARD MEMBER BURKE: Our concern's one of
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1 Congressal influence. And with the Chairman of -- you
2 know, it's pretty easy for him to shift that way. And it
3 would seem to me that we would want to do something in
4 advance of the problem, rather than seeing it happen and
5 then trying to deal with it.
6 CHAIRPERSON LLOYD: I think this is -- I would
7 say this is an opportunity -- and I'm looking to the back
8 of the room to our domestic manufacturers. In fact, we've
9 heard many times that you know you don't like mandates.
10 This is an opportunity, in fact, to, in fact, work as a
11 true partnership so that, in fact, the concern that you
12 hear expressed, we don't get cars in California basically
13 is not a valid concern.
14 After talking about a number of you there, I have
15 confidence that we will get our share of cars. But,
16 again, I think you're hearing that -- please help us.
17 Please make this a really two-way working relationship.
18 Because one of the reasons, obviously, for us asking staff
19 to report back to us on a regular basis is that we want to
20 develop a new relationship working together. But there's
21 not sufficient trust there yet, public trust that we want
22 that we see that moving ahead.
23 So I'm hopeful, Dr. Burke, that can happen. And
24 I think we are in discussions with the companies. And I'm
25 optimistic, and I want to keep it that way. At least at
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1 this time I would hope we wouldn't try to put something
2 more than we have there. But try to work together with
3 the companies. I think each are desirous of that. And if
4 no other reason, I don't think they would want to see
5 California roads be even more dominated by competitors
6 from overseas. And they would want to make sure their
7 technology is getting out there. As we see in the
8 partnership, they're all working well together. And we
9 see the various generation of vehicles getting better and
10 better.
11 I'm not sure that addressed your concern, but
12 let's be positive.
13 BOARD MEMBER BURKE: I'm willing to accept yours
14 and Katherine's assurance that you'll monitor that. And
15 trust me, our people will be in touch with you in
16 following up.
17 CHAIRPERSON LLOYD: I know. McKinnon.
18 BOARD MEMBER McKINNON: Yeah. I also join Member
19 D'Adamo in opposition to the resolution. And I think it's
20 really hard to do that on this Board because there's a lot
21 of respect between the members of the Board and towards
22 the Chair and towards the staff. We have a bright,
23 hard-working staff that works hard to fix and negotiate
24 problem. And the Chairman brings experience and science
25 to every problem. And it's just really, really hard to
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1 come out with a different opinion, but I have a different
2 opinion.
3 So I want -- I want to say what's positive, what
4 I think is really positive about the proposal. And what's
5 really positive in terms of clean air, which is the bottom
6 line, in the bronze category and silver is the AT PZEV and
7 the PZEV make a major contribution to cleaner air, big
8 time.
9 And I know Kelly Brown's been waiting for me to
10 say that forever. So I said it, Kelly. There you know.
11 It's a big deal, and it matters. And my
12 concern -- we can play all sort of semantic games about
13 base path and alternative path. My concern, and the
14 reason I put a motion up last time, is that I'm concerned
15 we're putting all our marbles into one basket, and that
16 being fuel cell. And the electric car is a proven
17 technology. Yes, there's battery difficulties, costs and
18 range. Fuel cell, you still have range problems.
19 I guess my bottom line is that we're weighing in
20 on technology unwittingly. We're saying this is the
21 course for the future, and we're weighing in pretty
22 heavily.
23 Between the paths and between the way that we
24 could have worked on resolving this, we could have left
25 the availability of multiple technologies. I don't think
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1 we did that. I think by setting the 250 number which is
2 some -- it's sort of a deceptive number. It's sort of
3 like some will go to the base path and then some will use
4 other methods. We could get as few as 85 fuel cell cars
5 distributed throughout the United States. I mean,
6 that's -- hopefully that doesn't happen. And I know with
7 the work that's gone on with the partnership, it's
8 unlikely that will happen. And I will grant that. But it
9 could go as low as that.
10 It seems to me that we should be developing this
11 without sort of the weakening of the 2001 course. I mean,
12 sort of how this starts is we weaken the 2001 path, and
13 then we have to be concerned about the alternative path
14 not being so strong that we don't get anything out of it.
15 Well, we need to go back to 2001 path. It should be as
16 close as possible to what the deal was in 2001. A deal's
17 a deal. That was what it was.
18 And then you have -- from there you have the
19 discussion about what the alternative path is. 2001 -- I
20 mean, we have cars that land in California for a year and
21 then they're gone that are ZEV. They're moved to New York
22 or they're moved to Massachusetts.
23 I really appreciate that CalETC did a lot of work
24 trying to figure out -- and, actually, they halved their
25 proposal for compromise between the last meeting and their
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1 April 17th. They halved the number of electric cars that
2 could meet to match fuel cell.
3 And, you know, maybe this isn't the right scheme
4 to do it. But it seems to me there ought to be a scheme
5 that says we want in the mix in the near term
6 zero-emission vehicles. Zero. And that we've given a
7 scheme where the auto makers can choose and pick how they
8 get there and what they do. I'm not saying we mandate
9 battery electric vehicles. I can live with not mandating
10 fuel cell vehicles, if that was how you did it. That it's
11 a choice and it's a path that they determine what the mix
12 is. We just determine what the fair tradeoffs are between
13 the vehicles.
14 The only kind of other subject I want to address
15 is that part of the Modisette Proposal proposed setting up
16 a trading mechanism so that if a company was working on
17 fuel cells and they got down the line and they were having
18 difficulty and they said, "You know, we want to delay
19 making ten more fuel cell cars because we're grappling
20 with a problem, a materials problem. And we want to find
21 a replacement to the rare metals that are being used" so
22 that they can reduce the cost. They say, "Let's work on
23 that for a while. Not produce any more fuel cells. We
24 will put battery electrics on the street to replace them,"
25 during that interim period of time because it doesn't make
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1 sense to make more fuel cells before you fix that problem.
2 And if there was a trading mechanism where
3 companies could go to some of the people that want to make
4 battery electric vehicles and purchase them or purchase
5 credits from them, that would be a good approach, and I
6 think a valid approach.
7 My final comment is that when we talk about what
8 things cost, there's all sorts of numbers that have
9 floated around in the fuel cell development. And I have
10 to tell you from last hearing to most recently, the cost
11 numbers went from $1 million per car to
12 half-a-million-dollars per car. And that's now. That's
13 not looking at over the next few years when everything
14 we've seen -- costs go down as thing are developed.
15 So when people talk about cost, that needs to be
16 considered, clearly. The other thing that needs to be
17 considered is there are other costs that are being wrapped
18 into the discussion. For instance, if a manufacturer,
19 which one is, has developed a car that is software
20 controlled to the hilt. Boeing did that with the 777.
21 And that's a great approach. You can fine tune all sorts
22 of factors in the vehicle, the airplane, or the car with
23 the software. It is not fuel cell development, however.
24 So when people talk about costs, if they want to
25 include that in the cost, it's introducing software into
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1 the controls of the vehicle. It's nothing else, and it
2 shouldn't be publicized as part of the cost. I'm not
3 saying anybody's done that, but I know how this stuff
4 works. I want to put that on the record.
5 The other thing that's being discussed in one of
6 the fuel cell cars that's been developed is sort of this
7 modular construction where the fuel cell and the
8 electronics and the controls are sort of all in one piece,
9 and then the body is interchangeable. And that isn't fuel
10 cell development. What that is, is manufacturing process
11 development, and it is maybe a more efficient way to make
12 cars or to change product lines or whatever. It shouldn't
13 be counted as part of the cost of developing fuel cells.
14 It should be counted as smart development of a company at
15 a better way of manufacturing.
16 So with all of that said, I can't support it. I
17 have a lot of respect for the work and the decision making
18 that's gone into this process. But I think we've gone
19 just a little bit too far in determining which technology
20 will move forward.
21 CHAIRPERSON LLOYD: Just a comment on the cost,
22 and I'd like staff to respond.
23 The impression you give I don't think it is quite
24 right. And, in fact, if staff has been able to have the
25 cost of fuel cells in a month, then we got a number of
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1 people in the audience who would love to employee you
2 right away. So maybe you could clarify why, in fact, we
3 reduced -- used a lower number.
4 EXECUTIVE OFFICER WITHERSPOON: We did not, in
5 fact, change our estimate of the cost compliance. From
6 everything we understand from the confidential
7 conversations with auto manufacturers, the expenses of a
8 hand-built fuel cell vehicle at the moment are in the
9 million-plus range. It's difficult for any of us to
10 project what they'll be by the end of 2008.
11 However, to make sure that we were not setting up
12 an unfavorable ratio for BEV substitution, in that
13 instance we assumed the cost would come down so that we
14 wouldn't leave BEVs more expensive than fuel cells in a
15 trading scenario.
16 So for the purpose of that analysis, we assumed
17 they'd come down by half. That doesn't mean we know that
18 will or have any evidence they will. But we want to make
19 sure BEVs remain cheaper as a substitute to any fuel cell
20 vehicle.
21 CHAIRPERSON LLOYD: Thank you for that
22 clarification.
23 Supervisor DeSaulnier.
24 SUPERVISOR DeSAULNIER: Thank you, Mr. Chairman.
25 As you look down to your far right, I just first of all
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1 want to echo all of my colleagues' comments so far, and
2 particularly the respect I feel for staff and for the
3 Chairman. I know it's been a difficult few months,
4 particularly few hours.
5 And I don't think from my perspective -- you
6 know, Matt mentioned semantics. I do think it's a
7 question of degree up here, and truly it's a question of
8 trust from my perspective. This is an incredible bully
9 pulpit, as Teddy Roosevelt used to say about another
10 office. But when it comes to air quality, the value of
11 being a member of the California Air Resources Board is
12 really quite amazing. And one of the things I've been
13 concerned is devaluing that in any way. And, of course,
14 we deal with perception. Optics is a favorite word now in
15 politics. And I think it's important that we all leave
16 here with a true commitment to whatever the reg is because
17 I don't think victory will be determined today. It will
18 be determined most likely in the coming decade, but really
19 in the next year, I think. And I see that in terms of
20 what the auto industry does with what happens today.
21 My difficulty with the staff recommendation and
22 why I agreed with D.D. and Matt a month ago was perhaps
23 somewhat simplistic. But as a generalist, maybe that's
24 the best thing to do. Was the 500 number or better was a
25 source of currency basically that would be, as staff put
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1 it, used to leverage BEV technology.
2 I don't think BEV technology in my own
3 experience -- and it's largely intuitive -- is we should
4 give up on it, as D.D. said and Matt said. I look at
5 vehicle miles traveled in the state of California from a
6 transportation perspective. And I've mentioned this
7 before, and I know others up here who have sat on MPOs
8 metropolitan planning organizations. We realize we can't
9 provide the infrastructure over the next few decades for
10 single occupancy vehicle used the way we have in the past.
11 The California dream of super highways and that kind of
12 infrastructure doesn't exist. So the cars are going to
13 have to change by necessity. The land use is changing.
14 And the dependence on transit is changing.
15 I think there's an opportunity there that people
16 will begin to see things like city cars as a viable
17 alternative, the way they see them in Europe right now in
18 the smart car in particular, although that's an
19 alternative combustion engine. But I do think that
20 platform will have growing validity. And I think the
21 possibility for the battery technology is something my
22 friends at Toyota have led me to believe is there are more
23 and more mass-produced hybrids, there's greater
24 opportunity for that kind of use.
25 Now, the Chairman assures me, and I trust him,
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1 that that opportunity exists with this regulation. As I
2 read it, it does. But my level of trust is not as strong
3 with some of the other auto manufacturers who at the very
4 best I feel have been disingenuous. And unfortunately
5 those are American companies, one large American company
6 in particular.
7 So the reason I hesitate to support it is not
8 because I feel it's a step back or I don't trust staff or
9 I don't trust some of the manufacturers or I lack respect
10 for where the Chairman is coming from. It's that from my
11 experience -- unfortunately, I've been growingly skeptical
12 about certain of the people who are involved in the
13 regulated community.
14 And then, in addition, going back to Mr. Friedman
15 when he was here in his attempt to look like Cal and speak
16 like Cal Worthington, I think there's great opportunity
17 for fuel cells -- or hydrogen, I should say, not just fuel
18 cells and internal combustion engines. But this -- and
19 for lack of a better expression and I've been corrected on
20 this -- chicken and egg aspect, whether it's deliberate or
21 not, the fuels' people, the petroleum industry, I don't
22 think are going to be terribly interested in providing the
23 infrastructure of the hydrogen either small scale or large
24 scale.
25 So I am interested -- and maybe staff can respond
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1 when we come back in three months about not just
2 infrastructure but the trick to the infrastructure is
3 matching it so supply and demand and the possibility for a
4 very low emitter a PZEV or close to it that would be
5 hydrogen ice that may be captured in this regulation that
6 I'm missing or perhaps we need to work with.
7 And then I appreciate the time -- I've gone back
8 and forth. Allen called me last night, and I do think
9 that if this motion passes, which I'm inclined to think it
10 will, we all leave here expecting that there won't be
11 revisions backwards, that the auto industry will embrace
12 it and accept it for what it is and work with us and work
13 with us in the next year on other areas.
14 I won't support it because I've unfortunately
15 grown skeptical. But I'm willing to be proven wrong. And
16 I hope I will be proven wrong by those members of the auto
17 industry who chose to be responsible to California and its
18 public health.
19 Thank you, Mr. Chairman.
20 CHAIRPERSON LLOYD: Just a clarification, again,
21 for just reminding us I think in the resolution it does
22 require staff to come back with a report talking about the
23 appropriate process for incentivizing station cars and
24 hydrogen infrastructure and also how we might integrate
25 that into the related transportation management programs
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1 and also looking at the appropriate role for stationary
2 fuel cells.
3 SUPERVISOR DeSAULNIER: Mr. Chair, if I could
4 clarify. I appreciate that paragraph. I have it
5 highlighted. Also as part of that is the connection with
6 potentially that infrastructure with a growing demand
7 which would be perhaps hydrogen ice.
8 CHAIRPERSON LLOYD: As I mentioned before, I
9 think I had the -- again, the opportunity yesterday to see
10 the progress made by -- being made by South Coast with
11 various partners to deploy hydrogen infrastructure down
12 there. They're doing a really excellent job. We're
13 slower up north. But that's moving across from Auburn
14 through West Sacramento to the Bay Area and down. And we
15 will have links north and south. So that's coming on.
16 But obviously as I said before, that will be a slower
17 progress.
18 Dr. Friedman.
19 BOARD MEMBER WILLIAM FRIEDMAN: As usual as I
20 was trying to put my thoughts together about what to say
21 about this regulation, Ron Roberts said the things I was
22 thinking better than I could have said. I'm not going to
23 repeat those things.
24 But both D.D. and Bill Burke did raise this issue
25 about out-of-state transport. And Catherine mentioned the
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1 fact that this would be monitored. I'm curious why can't
2 we -- I mean, of course, you'll monitor it. But can we at
3 some date -- doesn't have to be today -- get some notion
4 of what indices will be employed to raise a red flag.
5 It's one thing to monitor. It's another thing to know
6 what, indeed, will trigger some response that we need to
7 make.
8 CHAIRPERSON LLOYD: You want early warning?
9 BOARD MEMBER WILLIAM FRIEDMAN: I think that's
10 appropriate. And I'd like to make sure that, you know,
11 indeed, we get some more clarification on that point.
12 EXECUTIVE OFFICER WITHERSPOON: Earlier today the
13 Chairman asked us to report back annually on how the
14 entire program is evolving. That's certainly one
15 mechanism.
16 But the things we would be looking at is actually
17 vehicle placements, the amount of time that California
18 vehicles reside in California. That's been an issue in
19 the Fuel Cell Partnership to date. And to the extent we
20 start to credit them under our regulation, we need to be
21 clear about how long we expect them to remain in our state
22 to count against the alternative compliance path.
23 BOARD MEMBER WILLIAM FRIEDMAN: That's my point,
24 Catherine. I agree with -- those are the things you're
25 going to look at. But where's the line about when we
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1 really need to be -- need to potentially do something when
2 the line is crossed?
3 EXECUTIVE OFFICER WITHERSPOON: It's your call,
4 of course, how much alarms you. I would say anything over
5 10 percent would alarm me. I would want to bring it to
6 your attention.
7 The vehicles only count if they're played in
8 another LEV state. So we're only talking about New York
9 and Massachusetts. Placements in Washington D.C. where
10 there's a lot of interest in getting Congressal attention
11 these vehicles or in Michigan would not count. Those have
12 to be vehicles produced separately for that purpose. And
13 the temperature situation in New York and Massachusetts
14 works against them. Getting cars early, cold weather
15 management is a problem with fuel cells. So California's
16 more temperate climate is the one of the biggest reasons
17 we'll get them first, along with the fact we have a very
18 well-developed partnership and early introduction of
19 hydrogen infrastructure and now a regulatory reason to
20 bring them here.
21 CHAIRPERSON LLOYD: And if you'd like,
22 Dr. Friedman, we could -- again, if there's anything that
23 staff want to elaborate on in three months time, we can
24 add to that.
25 Dr. Burke.
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1 BOARD MEMBER BURKE: South Coast is spending a
2 lot of money putting in hydrogen infrastructure. Some
3 people question if we're not spending more than we should.
4 And it's the basis probably of our concern of movement of
5 these cars. There are cities like Santa Ana who want to
6 establish a city free of hydrogen cars and have federal
7 indication that there may be some support there to do
8 that. This question nibbles at me because we're spending
9 millions and millions and millions on this infrastructure.
10 And I'd think to be at the back side of the bell curve --
11 and I know Catherine's going to watch it. But if there
12 was something we could figure out that would give us
13 rather than retrospective, prospective warning, we sure
14 would appreciate it. But we don't want to let that stand
15 in the way of the progress of what we're doing today.
16 CHAIRPERSON LLOYD: I think, Dr. Burke, we
17 will -- staff will report back on that in three months. I
18 think that's a -- plus the fact, just remind my
19 colleagues, that as we are developing the hydrogen
20 infrastructure as a result of one of the other regulations
21 we are having a demonstration of zero emission fuel cell
22 buses which we hope will grow in the latter part of this
23 decade. So that's also being an important part. These
24 are being developed in California.
25 EXECUTIVE OFFICER WITHERSPOON: Chairman Lloyd,
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1 Tom could get at another point he wanted to bring to the
2 Board's attention about early signal to where these cars
3 might go.
4 MR. CACKETTE: One other strong pulling factor
5 for these vehicles is that the Department of Energy has
6 announced a large amount of money to subsidize fuel cell
7 demonstrations. And there's an RFP on the street and
8 people are teaming up to bid on it. They do to have to be
9 in multiple states. So there would be some bids that will
10 include cars going to other states.
11 But that's one way that we will sort of get an
12 advance that something's happening. We'll see the results
13 of those, who gets awarded them. And if there's going to
14 be a problem because they're all going somewhere else
15 because of that money and not California, I think we could
16 react fairly quickly and let you know right away if
17 there's a problem. And you could take the action to
18 require more of them here.
19 BOARD MEMBER BURKE: I would just like to share
20 with you we have an intelligence which indicates that it's
21 not coming here. Already we know it's not coming here.
22 So if we want to protect our own, you don't have to wait
23 for that information. I'm giving that to you now.
24 CHAIRPERSON LLOYD: I've been talking to maybe
25 not the same source, but I'm a bit more optimistic than
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1 you are that we can get them. But it is a concern, I
2 agree. I agree. And that's where I think we need to work
3 into true partnership with the partners in the Fuel Cell
4 Partnership to make sure that, if fact, what we're hoping
5 for here does happen.
6 EXECUTIVE OFFICER WITHERSPOON: Just one last
7 comment on the whole issue. The cure for the travel issue
8 is to take fuel cell vehicles out of regulation entirely
9 and have them administered under a memorandum of
10 agreement, which is how we did electric vehicles back in
11 1998. And staff believes that a regulatory approach is
12 preferable to a memorandum of agreement because it's
13 enforceable. But it has this leakage aspect to it, and
14 we'll see as we go whether we should switch to a different
15 mechanism which has its own drawbacks as well.
16 CHAIRPERSON LLOYD: Any other discussion on the
17 motion?
18 Supervisor Patrick.
19 SUPERVISOR PATRICK: Thank you very much.
20 As you know, I was not here at last month's
21 meeting. And I thought I had dodged a bullet, but
22 apparently I wasn't able to do that. I have read the
23 transcript, and I especially was interested in the
24 transcript of the discussion on the Friday of last month's
25 meeting and the issues of concern which I think were or
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1 well articulated.
2 And I would like to compliment staff on the good
3 job that you have done in addressing each and every one of
4 those issues. I think that I in looking at the proposal
5 that's before us today on a much higher comfort level with
6 it certainly than I did previously.
7 But I'm very supportive of this proposal. I
8 think that it moves us into the future. And I do have to
9 agree, though, with Supervisor DeSaulnier, the proof of
10 this is going to be in the pudding. And so we're looking
11 forward to working with all of the stakeholders in making
12 sure this proposal is something that moves us forward in
13 the zero-emission area because that's critically important
14 to all of us here in the state, certainly in the Valley
15 where I represent quite a few folks.
16 But I think it's no more necessary in the Valley,
17 really, than it is in any other particular area. And that
18 we need to move forward and that this proposal does that
19 and look forward to seeing what happens in the next decade
20 as that proposal comes to fruition.
21 CHAIRPERSON LLOYD: Thank you.
22 Mr. Calhoun.
23 BOARD MEMBER CALHOUN: Mr. Chairman, members of
24 the Board, I guess I'm not as pessimistic about the auto
25 industry as some of any fellow Board members. And maybe
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1 that's understandable.
2 We can't dictate technology. We have to set a
3 goal and expect the manufacturers to work toward meeting
4 that goal. I don't think we've eliminated battery
5 technology. I don't think we've eliminated any
6 technology. I think if the manufacturers can make
7 business case for a given technology, then obviously that
8 will be their preference. We've heard over and over
9 comments about their inability to make a business case for
10 batteries. And hopefully if progress is made in the
11 future, maybe they can. And I'd like to see the battery
12 technology survive also, but I don't think that it's up to
13 this Board to try to force the manufacturers to produce
14 battery-powered vehicle.
15 So I'm going to support the regulation. And I
16 think it's essential that we get the auto manufacturers to
17 cooperate with us. In whatever is it we're trying to
18 accomplish, you can't head down one road and they head
19 down a different road because you're going to end up
20 having a battle on your hands. And you'll end up in
21 court. We're fighting them or they're fighting us. And
22 if I've learned anything in the last 40 years it's that
23 you need them to cooperate. So hopefully they will take a
24 lead from this and the action taken by the Board they that
25 will encourage them to cooperate. So I will support the
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1 motion.
2 CHAIRPERSON LLOYD: Thank you, Mr. Calhoun.
3 Professor Friedman, you're the last.
4 BOARD MEMBER HUGH FRIEDMAN: I'm used to having
5 the last word in my classes so --
6 I, too, commend staff. There was a lot of
7 clarity in the presentation. And I know how hard you've
8 worked to read what we said and try and get a proposal
9 that's rational, and I think you've accomplished that. I
10 think this proposal is realistic of achievement. I think
11 it gives stability and continuity to what was long begun
12 before and to what lies ahead. I think it gives us some
13 sure and realistic progress in attaining cleaner air
14 through lower emissions. Especially while the early years
15 don't give us as many zero emissions, they give us a lot
16 of reduced emissions, earlier and more.
17 And some of this -- and I, too -- I, too, wish to
18 share the desire of Board Member D'Adamo and my good
19 friend, Matt, my fellow public member, and the Supervisor
20 DeSaulnier that we could dictate technology or so
21 incentivize it they would have no choice but to build it.
22 But I do -- I'm pleased to see the incentivizing
23 for releasing, extending the -- hopefully, the
24 availability and use and presence on our roads in
25 California of the some or hopefully most of the battery
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1 electrics that were made, and that those great people who
2 bought them early on because they believed in it and have
3 supported all of our efforts will be able to continue to
4 use those cars and show them, showcase them and create a
5 culture -- further a culture in our society for the
6 battery zero, which is the only game in town at this point
7 that has been produced.
8 On the other hand, as has been said, I don't feel
9 comfortable and I probably never would writing on somebody
10 else's checkbook and telling them exactly what they have
11 to make or buy. Our goal is zero-emission vehicles. We
12 have been steadfast in that. How they get there is still,
13 I think, ultimately got to be left to those who make it.
14 And I realize that much of this is dependent on
15 good faith and a collaborative effort. And some of you
16 are closer than I am to the auto manufacturers. And I
17 think those of you who are closer, at least the Chairman,
18 and the partnership, Fuel Cell Partnerships and its
19 aspirations of its members have a lot of faith and feel
20 that that's important to preserve and to make this effort.
21 And I hope it's not misplaced. It would be a shame, a
22 tragedy if it is.
23 But we have every opportunity to monitor, to look
24 again at all of this. And it's a brave, brave kind of
25 faith. And there's some reasons to be skeptical, as has
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1 been pointed out. But let's hope that this works.
2 And if it doesn't, and there are good reasons on
3 both sides why it didn't work, we can always come back.
4 We don't have all the answers now. None of us does. And
5 all we can do is hold to the zero-emission goal and
6 continue our quest and our journey. And I think this is
7 advancing the progress toward it. It's a good balance.
8 And so I think I'm prepared -- as I second the
9 motion, I'm prepared to support it. I do join in the
10 request, and I think the motion embraced it, that it
11 include the -- at least annually reviewing -- that is a
12 report from the staff to give us an opportunity to decide
13 whether we need to have another review and a hearing. And
14 I would also suggest that that report be at least annually
15 so that if the staff or the Chair, obviously, or anybody
16 else gets an idea that somebody's not working the way we
17 are all hoping it works in the spirit of what we've said,
18 it can be brought back before us.
19 CHAIRPERSON LLOYD: Thank you very much,
20 Professor Friedman.
21 Before we go to go to -- I guess we've got a
22 motion. Again, I would like to thank my colleagues. I
23 would reiterate what Mr. McKinnon and Ms. D'Adamo and
24 Supervisor DeSaulnier was saying. Again, I have the
25 utmost respect for all three of them. I continue to learn
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1 every day. It's painful also for me to not have that. We
2 really tried, and you can see from the amount of ex parte
3 that we've had meetings with all stakeholders. It's been
4 the toughest job I've had because I got the deep desires
5 to zero. I also don't want to give up on batteries, but I
6 also want to encourage other technologies. It's been
7 extremely tough and continues to be very, very tough.
8 I'd also like to thank staff for the tremendous
9 hours they've put in, many long hours, days, nights,
10 mornings. And you've done a tremendous job. And it's not
11 easy, the issues. I think that the Board -- I know I've
12 been in some of those meetings where staff has been
13 battling amongst each other because you have advocates and
14 you have detractors within the staff so this gets hashed
15 out. So my hat's off to you doing this job.
16 And to Ms. Witherspoon for this mammoth job here.
17 I know -- again, I thank you so much for the effort you
18 put in.
19 We really tried. It's much easier if you have a
20 clean sheet of paper when we started off. But we have
21 many people on different pieces of the path, different
22 parts of the path. And that's where the difficulties come
23 in. Whenever we've looked at that, on the face of it
24 looks easy to do, somebody is impacted. And you have many
25 people making good-faith efforts, and you want -- so
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1 that's made it very difficult. I'd say if we started off,
2 it'd have been much easier.
3 So with that, again, I want to express my true
4 gratitude to my colleagues for very thoughtful comments
5 here to the staff and the people we've interacted with.
6 As Mr. McKinnon said, we've got many thoughtful proposals
7 from many of the stakeholders. And it's really made our
8 job both easier and more difficult because everybody is
9 sincere.
10 So it's really a responsibility when part of it
11 comes down to it -- and I remember Mr. Cackette saying
12 early on that people say well, we have a responsibility
13 and we have an obligation. But we have a credibility.
14 And he pointed out to me credibility works both ways. So
15 I also see that we have a technical credibility as well.
16 And you know, unfortunately, with some technical
17 understanding I've had to make some tough choices here,
18 that two years ago I was probably looking at numbers and
19 higher numbers.
20 With that said, I'd like to thank you all. And
21 maybe now we can -- since we have a motion on the floor
22 proposal by Ms. Riordan, could I can the Clerk of the
23 Board the call the roll.
24 CLERK DORAIS: Dr. Burke?
25 BOARD MEMBER BURKE: Aye.
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1 CLERK DORAIS: Mr. Calhoun?
2 BOARD MEMBER CALHOUN: Aye.
3 CLERK DORAIS: Ms. D'Adamo?
4 BOARD MEMBER D'ADAMO: No.
5 CLERK DORAIS: Supervisor DeSaulnier?
6 SUPERVISOR DeSAULNIER: No.
7 CLERK DORAIS: Professor Friedman?
8 BOARD MEMBER WILLIAM FRIEDMAN: Yes.
9 CLERK DORAIS: Dr. Friedman?
10 BOARD MEMBER WILLIAM FRIEDMAN: Yes.
11 CLERK DORAIS: Mr. McKinnon?
12 BOARD MEMBER McKINNON: No.
13 CLERK DORAIS: Supervisor Patrick?
14 SUPERVISOR PATRICK: Yes.
15 CLERK DORAIS: Ms. Riordan?
16 BOARD MEMBER RIORDAN: Aye.
17 CLERK DORAIS: Supervisor Roberts?
18 SUPERVISOR ROBERTS: Aye.
19 CLERK DORAIS: Chairman Lloyd?
20 CHAIRPERSON LLOYD: Yes.
21 With that, the motion passes eight to three.
22 And, again, thank you all very much. I'm sorry
23 for the court reporter. We'll have to take a break now.
24 Let's take a 15-minute break.
25 (Thereupon a lunch recess was taken.)
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1 CHAIRPERSON LLOYD: We'll recommence with the
2 next agenda item, 03-2-3, public meeting to consider
3 Proposition 40 and related amendments to the Carl Moyer
4 program guidelines.
5 This item was considered by the Board at our last
6 hearing on March 27th. At that time we approved the Prop.
7 40 school bus funding for this year but continued our
8 deliberation on the Carl Moyer funding in response to
9 issues and concerns raised by the Bay Area Air Quality
10 Management District. Since then, the Bay Area AQMD and
11 all of CAPCOA's membership have come together to discuss
12 this issue. And we decided collectively to leave the
13 current allocation formula intact for this year. Remember
14 it's a two-year program. For this year. There's still a
15 great deal of interest in modifying the formula, but all
16 parties agree it will take additional time to work through
17 the various options and implications.
18 So Ms. Witherspoon, staff's job looks relatively
19 straightforward. I presume we can go through this fairly
20 quickly.
21 EXECUTIVE OFFICER WITHERSPOON: Yes, Dr. Lloyd.
22 That's correct. Since the last hearing we received a
23 letter from the Bay Area District withdrawing their
24 request for the Board to consider a new Carl Moyer funding
25 distribution this year. However, they would like staff to
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1 carefully consider the issues they raise as we consider
2 funding allocations for next year. Staff is fully
3 committed to doing that and will begin those discussions
4 with all of CAPCOA's members immediately following this
5 hearing.
6 At this point all parties accept the existing
7 formula which is based 50 percent on population and
8 50 percent on the M4 SIP commitment to reducing NOx from
9 mobile sources. Again, that's just for this year.
10 And Dr. Alberto Ayala is prepared to cover some
11 of the items we discussed last time. But in the interest
12 of time you could dispense with that and go straight to a
13 vote.
14 CHAIRPERSON LLOYD: Unless you have a burning
15 desire to Dr. Ayala, reading the sentiments of the Board,
16 if you can contain those and we can have the first
17 witness.
18 ALTERNATIVE STRATEGIES SECTION MANAGER AYALA:
19 I'd be happy to try, Dr. Lloyd.
20 CHAIRPERSON LLOYD: Thank you very much. So with
21 that, we'll call the first and only witness on this. And
22 it's Tom Addison from the Bay Area who started this.
23 MR. ADDISON: Indeed, Dr. Lloyd. As staff know,
24 we started this four years ago. But it did certainly come
25 to a head at the last Board meeting. And I'd just like to
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1 say that, you know, what you've heard from your Executive
2 Officer is correct. The Bay Area Air District does not
3 want to cause any funds to not be spent. We realize your
4 staff was not -- had not planned a distribution of 02/03
5 funds. So we're withdrawing our request for 02/03 funds,
6 and we look forward to a productive and fruitful
7 discussion for 03/04 in future years.
8 CHAIRPERSON LLOYD: Thank you, Tom.
9 Again, on the serious side -- I was being a
10 little bit flippant. But the conversations you and I had,
11 this issue had been raised in the past, and I know it's an
12 ongoing issue. So I appreciate that. And, in fact, as
13 you heard from staff it's a commitment to work with you as
14 we look at the next round of funding. And we appreciate
15 your patience on that.
16 MR. ADDISON: And we commit to working together
17 to try to come up with something that makes sense for all
18 parties.
19 CHAIRPERSON LLOYD: Thank you very much.
20 SUPERVISOR DeSAULNIER: Mr. Chairman.
21 CHAIRPERSON LLOYD: Yes, Supervisor DeSaulnier.
22 SUPERVISOR DeSAULNIER: He hesitates to recognize
23 me. I just want to be on the losing end of everything
24 today. No. I appreciate -- I do appreciate your comments
25 from staff and Tom. But it's a really important, I think,
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1 for this Board -- and D.D. and I have had some of
2 this conversation, and Barbara -- that we don't look at
3 this just in isolation, but we look at it collectively
4 between our relationship with the Bay Area and the our
5 downwind neighbors sort of globally.
6 So hopefully our staff can help facilitate with
7 us being able to do that with the CAPCOAs. Not just for
8 this, but for transport, some of what we talked about over
9 lunch.
10 So with that, I would move the staff
11 recommendation.
12 BOARD MEMBER McKINNON: Second.
13 SUPERVISOR DeSAULNIER: That's not part of a
14 motion. That's just a request.
15 CHAIRPERSON LLOYD: So the bottom line, so do we
16 have any objections to that proposal?
17 SUPERVISOR DeSAULNIER: I'm sorry. Do you want
18 me to withdraw the motion? You seem startled.
19 CHAIRPERSON LLOYD: No. It's good. So do we
20 have any objections? It's unanimous approval. Thank you.
21 Thank you.
22 And thank you for that great presentation,
23 Dr. Ayala. Cost effectiveness was tremendous.
24 EXECUTIVE OFFICER WITHERSPOON: Chairman Lloyd,
25 we talked about juggling the next few agenda items, it
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1 turns out they're still working on the slides and the
2 copies for both the in-use motor vehicles and the smog
3 check items. So I would suggest that we proceed with the
4 health update after all.
5 CHAIRPERSON LLOYD: Do we have the same staff
6 working of ZEVs as this other stuff?
7 EXECUTIVE OFFICER WITHERSPOON: No.
8 CHAIRPERSON LLOYD: Okay. So what you're
9 suggesting is we actually go ahead with the health update
10 and the R&D.
11 EXECUTIVE OFFICER WITHERSPOON: I saw Bart Croes
12 walked into the room. I'm wondering where the rest of the
13 research staff is. They're here.
14 CHAIRPERSON LLOYD: Again, just the recognition
15 we have several Board members who are going to be leaving.
16 I think again the third item on the agenda is
17 03-3-1, monthly public health update. And today's update
18 focus on the health effects of ozone, which obviously
19 important because staff is currently reviewing the
20 scientific literature on ozone in preparation from making
21 recommendation on a possible revision to the California
22 ozone standard.
23 With that, Ms. Witherspoon, would you start the
24 presentation and introduce this item.
25 EXECUTIVE OFFICER WITHERSPOON: Thank you,
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1 Dr. Lloyd.
2 This informational item will highlight recent
3 findings from a study on responses of allergic asthmatics
4 exposed to ozone. Today Dr. Deborah Drechsler from the
5 Research Division will update the Board on the findings
6 from this study.
7 Dr. Drechsler.
8 AIR POLLUTION SPECIALIST DRECHSLER: Good
9 afternoon, Dr. Lloyd and members of the Board.
10 The study we are discussing today deals with
11 ozone health effects in people with asthma. The health
12 effects of air pollution on people with asthma have been a
13 concern of the Board for some time due to the sensitivity
14 of this vulnerable population.
15 CHAIRPERSON LLOYD: Could you speak a bit closer
16 to the mic, please.
17 AIR POLLUTION SPECIALIST DRECHSLER: The result
18 of many epidemiological studies have demonstrated
19 statistical associations between ambient ozone exposures
20 and emergency room visits and hospital admissions for
21 asthma. To give you a perspective on the magnitude of
22 this issue, over 300,00 California residents visited the
23 emergency room during 2001 because of their asthma.
24 However, a biological explanation for why asthmatics may
25 be vulnerable to air pollution's effects is only just
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1 beginning to emerge.
2 (Thereupon an overhead presentation was
3 presented as follows.)
4 AIR POLLUTION SPECIALIST DRECHSLER: This
5 afternoon we would like to tell you about a recently
6 published paper entitled "Ozone Exposure Increases
7 Eosinophilic Airway Response Induced By Previous Allergen
8 Challenge," by Vagaggini and colleagues from the
9 University of Pisa in Italy. The paper appeared in late
10 2002 in the American Journal of Respiratory and Critical
11 Care Medicine.
12 --o0o--
13 AIR POLLUTION SPECIALIST DRECHSLER: As I
14 mentioned, epidemiological studies have reported an
15 association between ozone exposure, asthma exacerbation,
16 and emergency room visits and hospital admissions for
17 asthma. However, in most studies of asthmatics who have
18 been exposed to controlled concentrations of just ozone,
19 the asthmatics have shown responses that were not
20 different from non-asthmatics. This raises the question
21 of how to reconcile these disparate findings.
22 Asthma is a chronic lung disease characterized by
23 airway inflammation that is primarily related to a type of
24 immune cell called the eosinophil. Eosinophils release
25 chemicals that induce inflammation of the lung tissues.
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1 These cells are also involved in allergic responses inside
2 the lungs.
3 Other features of asthma include reversible
4 airway constriction and hyperreactive airway muscle cells.
5 Allergy is a prominent feature in most cases of asthma.
6 Ozone is not an allergen. However, some researchers have
7 hypothesized that ozone may increase ongoing allergic
8 responses by increasing the intensity of airway
9 inflammation and thereby increasing bronchial constriction
10 and airway hyperreactivity in asthmatics.
11 The purpose of this study was to investigate the
12 effects of ozone exposure in allergic asthmatics who were
13 already experiencing allergen-induced asthma exacerbation.
14 --o0o--
15 AIR POLLUTION SPECIALIST DRECHSLER: The study
16 involved 12 mild allergics as who attended the laboratory
17 on four days. In order to induce an asthma exacerbation,
18 subjects were asked to inhale allergens on the first day.
19 24 hours later the subjects were exposed to either
20 filtered air or .27 parts per million ozone for two hours
21 and they performed 20 minutes of light exercise during
22 each hour of exposure.
23 At least four weeks later the subjects repeated
24 allergen inhalation and 24 hours after that completed a
25 two-hour exposure to the opposite atmosphere as
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1 previously, that is ozone or filtered air. All subjects
2 completed both exposures. The ozone concentration used
3 .27 parts per million is higher than has been measured in
4 California in recent years. It was chosen to maximize the
5 possibility of sedating the biological mechanisms involved
6 in the responses of interest while ensuring subject safety
7 and the relevance of the results to current ambient
8 conditions.
9 Further, the study involved mild asthmatics. It
10 is likely that more severe asthmatics would experience
11 similar responses with lower levels of ozone exposure.
12 The measures of respiratory health included lung function
13 tests and the presence and severity of a group of
14 respiratory symptoms, including among others cough, chest
15 tightness, pain on deep breath, and nose and throat
16 irritation. The number of the eosinophils in sputum
17 samples was used an as index of the degrees of allergic
18 inflammation in the lungs.
19 --o0o--
20 AIR POLLUTION SPECIALIST DRECHSLER: Two hours of
21 exposure to filtered air did not change lung function or
22 respiratory symptoms in this these subjects. In contrast,
23 a two-hour exposure to ozone resulted in reduced lung
24 function and increased respiratory symptoms, such as
25 cough, chest tightness, and pain on deep breath compared
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1 to the filtered air exposure.
2 In addition, exposure to ozone increased the
3 number of eosinophils in the lungs compared to the
4 exposure to filtered air. This means that ozone
5 inhalation increased the allergic inflammation that had
6 been induced by the allergen exposure the previous day.
7 --o0o--
8 AIR POLLUTION SPECIALIST DRECHSLER: These
9 results indicate that ozone exposure can intensify
10 allergic inflammatory responses induced by previous
11 allergen exposure in subjects with mild allergic asthma.
12 Further, the results provide biological explanation for
13 increased asthma systems, emergency room visits, and
14 hospital admissions for asthma exacerbation observed in
15 epidemiological studies.
16 Finally, this report illustrates that exposure
17 studies that do not include an allergen challenge may
18 underestimate the impact of ozone on the health of
19 asthmatics. Thank you. We would be happy to respond to
20 any questions at this time.
21 CHAIRPERSON LLOYD: Thank you, very much.
22 Dr. Friedman.
23 BOARD MEMBER WILLIAM FRIEDMAN: I don't have any
24 questions, but the Italians actually got this right.
25 Because in the past, people have done these experiments
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1 the opposite way. First they expose you to a lot of
2 ozone, and then they expose you to some allergen. And
3 that's not what happens in the real world. For example,
4 right now it's a big allergy season in California. You
5 know, so your exposure to allergens occurs, period. And
6 then if you're unlikely enough to be in an ozone
7 high-intensity area, then you really have a problem.
8 And what I like about the study, these
9 eosinophils they harvest -- the eosinophils are the little
10 white blood cells that have all the histamine in them.
11 And that really is what triggers a lot of the
12 inflammation. So something -- this is simple clinical
13 experiment, and it really makes a lot of sense. And it
14 shows a really powerful relationship, and it was done
15 sequentially the right way. So it's a nice study.
16 CHAIRPERSON LLOYD: The levels aren't that far
17 from ambient.
18 BOARD MEMBER WILLIAM FRIEDMAN: The ozone levels
19 are a bit higher than we're used to seeing. But you need
20 to get a response to know if there's going to be a
21 response.
22 CHAIRPERSON LLOYD: But not that far from the --
23 BOARD MEMBER WILLIAM FRIEDMAN: Not too bad.
24 Thank you.
25 CHAIRPERSON LLOYD: Thank you very much indeed.
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1 Thank you.
2 So I guess since it's not a regulatory item. Not
3 necessary to close the record. Thank you.
4 And we'll move on to the next item, and that is
5 agenda item 03-2-2, public meeting to consider
6 appointments to the Research Screening Committee.
7 The statute creating the Board also authorized
8 the Board to appoint a Research Screening Committee to
9 advise the Boards on its extramural research activities.
10 Currently, the Committee has one vacancy to be
11 filled, and we would like to add one ex officio member,
12 each representing a scientific or technical discipline
13 that is relevant to review, and advise on our air quality
14 research program.
15 We have been privileged over the years to have a
16 host of eminent scientists serve on the committee. As you
17 know, the workload is significant, and the compensation is
18 definitely more symbolic than financial. The input has
19 been invaluable to the Board over the years. Nominations
20 for the Research Screening Committee along with the
21 candidates' credentials and resume are before us today.
22 Ms. Witherspoon, would you like you and your
23 staff to provide names and their general affiliations and
24 areas of expertise.
25 EXECUTIVE OFFICER WITHERSPOON: Bart Croes is
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1 going read into the question the qualifications of the
2 nominated Research Screening Committee members.
3 RESEARCH DIVISION CHIEF CROES: Thank you,
4 Ms. Witherspoon, and good afternoon Chairman Lloyd and
5 members of the Board. We are very pleased that two highly
6 qualified candidates are willing to serve on the Research
7 Screening Committee.
8 The first nominee, Dr. Tracy Thatcher, is a
9 scientist with the Air Flow and Pollutant Transport Group
10 within the Indoor Department at the National Berkeley --
11 at the Lawrence Berkeley National Laboratory. She
12 received her Ph.D. in civil and environmental engineering
13 from the University of California, Berkeley.
14 Dr. Thatcher has over ten years of experience in
15 the design and execution of aerosol and pollutant
16 transport experiments in the indoor environment. Her
17 expertise will be particularly useful for indoor air
18 quality projects that we will manage with the California
19 Energy Commission.
20 Dr. Thatcher's research interests have focused on
21 aerosol behavior indoors and the transport of pollutants
22 across the building. Dr. Thatcher is also a registered
23 professional engineer in civil engineering in the state of
24 California.
25 Dr. Michael Prather, an ex officio nominee for
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1 Climate Change Research, is a chaired professor in the
2 Earth System Science Department at the University of
3 California, Irvine. He received his Ph.D. in astronomy
4 from Yale University. His research interests include
5 simulation of the physical, chemical, and biological
6 processes that determine atmospheric composition and the
7 development of detailed numerical models of photochemistry
8 and atmospheric radiation, and global chemical transport
9 models that describe ozone and other trace gasses.
10 Dr. Prather has played a significant role in the
11 second and third assessments from the Intergovernmental
12 Panel on Climate Change and the World Meteorological
13 Organization's Ozone Assessments. He's served on several
14 National Academy of Science panels on climate change. His
15 expertise will assist with research projects supporting
16 AB 1493. The number of climate change research projects
17 is small and does not require attendance at every meeting
18 of the Research Screening Committee.
19 This summarizes the qualifications of the
20 candidates. Further details are available in your
21 information packages.
22 We recommend that you approve the appointments of
23 Dr. Tracy Thatcher and Dr. Michael Prather to the Research
24 Screening Committee. We'll be happy to answer any
25 questions that you may have.
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1 CHAIRPERSON LLOYD: Is Dr. Thatcher a student of
2 the Bill Nazaroff?
3 RESEARCH DIVISION CHIEF CROES: That's correct.
4 BOARD MEMBER WILLIAM FRIEDMAN: I'd like to move
5 approval and then make a comment.
6 BOARD MEMBER RIORDAN: I'll second the motion.
7 BOARD MEMBER WILLIAM FRIEDMAN: I want to
8 congratulate Bart on identifying two truly imminent
9 scientists who will contribute importantly. Dr. Thatcher
10 because we really are going to be focusing on indoor air
11 in a very important way. Both of these people are
12 award-winning and renowned folks. I think these are great
13 complements to the Committee. I'm very, very pleased.
14 Thanks for your help.
15 RESEARCH DIVISION CHIEF CROES: Thank you very
16 much.
17 CHAIRPERSON LLOYD: I reiterate those comments.
18 I don't know Dr. Thatcher. I do know Dr. Prather, so I
19 think that area's going to be a tremendous help to us as
20 we move ahead in those areas so good job.
21 We have a motion before us. All in favor say
22 aye.
23 (Ayes)
24 CHAIRPERSON LLOYD: Thank you very much. So a
25 unanimous approval.
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1 And thank you very much, Bart.
2 RESEARCH DIVISION CHIEF CROES: Thank you.
3 CHAIRPERSON LLOYD: Now we will move ahead to the
4 next item, and that is item 03-3-3 report on findings on
5 the effect of exempting additional vehicles from the
6 smog --
7 EXECUTIVE OFFICER WITHERSPOON: We're doing
8 reducing in-use emissions first, 03-3-2.
9 CHAIRPERSON LLOYD: Sorry. Thank you. My zeal
10 to get this over.
11 EXECUTIVE OFFICER WITHERSPOON: It's an important
12 set up. That's why we're doing this one first.
13 CHAIRPERSON LLOYD: I'm sorry. Next item,
14 03-3-2, strategies for reducing emission from in-use
15 gallons vehicles.
16 Some months ago I asked staff to report to the
17 Board what the effect of existing passenger cars on the
18 state's air quality. I've been concerned about the
19 significant and continuing contribution of emission from
20 older cars and what, if anything, can we do about that.
21 That's the genesis of the item. And, actually, I
22 didn't realize that it's going to work out this way
23 because the concern that I had at the time was that we've
24 been focusing so much on zero emission on new vehicles,
25 and we've been criticized for not paying attention to
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1 vehicles on the road. So it turns out today we've
2 actually finished up the new vehicles, and now we're
3 addressing the existing vehicles. So I think the timing
4 is great.
5 And I thank staff for bringing this item back to
6 us.
7 So with that, I'll turn it to Ms. Witherspoon.
8 EXECUTIVE OFFICER WITHERSPOON: Thank you,
9 Chairman Lloyd, members of the Board.
10 We've made great progress in reducing vehicle
11 emission since catalysts were first required in the 1970s.
12 New light duty vehicles are now 99 percent cleaner for
13 non-methane-organic gasses and 95 percent cleaner for NOx.
14 Despite this progress, existing vehicles still
15 account for a significant portion of remaining emissions.
16 There are several reasons for this. First of all,
17 California's vehicle population keeps growing, as does the
18 total number of vehicle miles traveled each day. In
19 addition, cars last a long time in our climate, resulting
20 in a slower retirement rate than other states may observe.
21 Finally, deterioration of emission control
22 systems is a significant factor causing vehicles to emit
23 more as they age. By the time we get to 2010, 10-year-old
24 and older cars will be the dominant portion of the
25 light-duty inventory which forces us to concentrate now on
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1 how those in-use vehicles might be addressed.
2 Today staff presentation will be given by a
3 Annette Guerrero of our Mobile Source Control Division.
4 Annette.
5 (Thereupon an overhead presentation was
6 presented as follows.)
7 STAFF AIR POLLUTION SPECIALIST GUERRERO: Thank
8 you, Catherine.
9 Good afternoon, Chairman Lloyd and members of the
10 Board.
11 Today in response to a request by Chairman Lloyd
12 at the December Board hearing, I will be discussing excess
13 emissions from the in-use light duty vehicle fleet and the
14 potential to reduce these emissions. To clarify excess
15 emission are the portion that exceed the standards to
16 which the vehicles have been certified.
17 CHAIRPERSON LLOYD: Zero emissions.
18 MR. LUNA: That file doesn't look like it's going
19 to open for us.
20 STAFF AIR POLLUTION SPECIALIST GUERRERO: I'll
21 wave my hands a lot.
22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Just
23 say the slide number.
24 STAFF AIR POLLUTION SPECIALIST GUERRERO: This is
25 slide number 2. After providing you some background on
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1 our progress on reducing vehicle emissions, I will
2 quantify the impact of older vehicles on emissions,
3 followed by a discussion of several programs currently
4 being examined that can reduce these excess emissions from
5 in-use light-duty vehicles. Although we will present the
6 emissions in the South Coast air basin, the same trends
7 can be observed throughout the state.
8 Slide number 3.
9 --o0o--
10 STAFF AIR POLLUTION SPECIALIST GUERRERO: Since
11 the 1960s emissions from light-duty vehicles on a per-mile
12 basis have been dramatically reduced due to the adoption
13 of increasingly stringent emission standards. These
14 emission reductions have been possible due to the
15 development and use of catalysts, on-board computers, and
16 cleaner gasoline. Because of these efforts, hydrocarbon
17 plus NOx, emissions from cars were reduced by over
18 90 percent from the 1990 under controlled level -- 90
19 percent by 1990 from uncontrolled levels.
20 Slide number 4.
21 --o0o--
22 STAFF AIR POLLUTION SPECIALIST GUERRERO: Despite
23 this accomplishment, continuing air quality problems
24 required emissions from light-duty vehicles to be reduced
25 even further. Consequently, in 1990 the Air Resources
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1 Board adopted the low emission vehicle program, or LEV I.
2 The Lev I program further reduces light-duty vehicle
3 emissions by 75 percent between 1994 and 2003.
4 The second phase of these regulations left to
5 expand the scope of the LEV regulations beginning in 2004.
6 The LEV program combined with cleaner-burning gasoline
7 will result in emissions from new light-duty vehicles on a
8 per-mile basis being reduced in 2010 to approximately
9 1 percent of their uncontrolled levels.
10 Slide number 5.
11 --o0o--
12 STAFF AIR POLLUTION SPECIALIST GUERRERO:
13 Reductions in cumulative emissions of light-duty vehicles
14 have, in general, followed the downward trend of new
15 vehicle emissions. This has occurred despite the
16 ever-increasing number of miles traveled by these vehicles
17 every day. For example, hydrocarbon emissions from
18 light-duty vehicles were reduced from more than 1200 tons
19 per day in 1970 to approximately 350 tons per day in 2000.
20 By 2020 we anticipate that hydrocarbon emissions will have
21 dropped below 90 tons per day. Similarly, NOx emissions
22 from light-duty vehicles will have dropped from
23 approximately 650 tons per day in 1970 to 380 tons per day
24 in 2000 and will be further reduced to below 75 tons per
25 day in 2020.
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1 Slide number 6.
2 --o0o--
3 STAFF AIR POLLUTION SPECIALIST GUERRERO: At this
4 point I would like to focus on the impact of excess
5 emissions from light-duty vehicles. It's often heard that
6 a very small portion of the fleet is responsible for a
7 disproportionately high percentage of vehicle emissions.
8 As you can see in 2000, pre-1993 or non-LEV
9 vehicles made up 53 percent of the vehicle fleet but
10 accounted for 87 percent of hydrocarbon emissions. By
11 2010 only 18 percent of light-duty vehicles are 1993 and
12 older models, but they are responsible for 62 percent of
13 hydrocarbon emissions.
14 In contrast, LEV I and LEV II vehicles will
15 comprise 82 percent of the light-duty vehicle fleet in
16 22010, yet only contribute 28 percent of the hydrocarbon
17 emissions. Clearly, older vehicles need attention in
18 addressing ways to reduce emissions, especially in the
19 near term.
20 Slide number 7.
21 --o0o--
22 STAFF AIR POLLUTION SPECIALIST GUERRERO: Older
23 vehicles emit a disproportionately high level emissions
24 for several reasons. First, these vehicles were certified
25 to less-stringent emission standards. Second, they employ
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1 emission control systems that are less durable than those
2 used on newer low-emission vehicles. And third, they lack
3 on-board diagnostic systems that can facilitate proper
4 maintenance of their emission control systems.
5 This display on your slide of the emissions from
6 the vehicle fleet in 2010 demonstrates the contribution of
7 each model year to the total light-duty hydrocarbon
8 emissions.
9 I don't know you have color slides, but the
10 bottom bars are green. They represent hydrocarbon
11 emissions if passenger cars just meet the emission
12 standard to which they originally certified.
13 I see we have the slide coming up.
14 --o0o--
15 STAFF AIR POLLUTION SPECIALIST GUERRERO: The red
16 bars show the excess emissions due to vehicles that exceed
17 emission standards in-use.
18 As you can see, excess emissions can more than
19 double the emission levels from a properly-maintained
20 vehicle fleet. Excess NOx emission from non-LEV vehicles
21 are similar in magnitude. These excess emission are the
22 target of the smog check program. As I will discuss
23 later, we are looking at other ways of reducing these
24 excess emissions. Also note that the excess emission
25 levels from LEV vehicles equipped with OBD II are
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1 projected to be much lower.
2 --o0o--
3 STAFF AIR POLLUTION SPECIALIST GUERRERO: By 2020
4 when most of the cars on the road are OBD II equipped
5 low-emission vehicles, excess emissions from the vehicle
6 fleet are projected to be minimal. By facilitating proper
7 vehicle maintenance, OBD II allows the very significant
8 emission reduction achieved by the low-emission vehicle
9 program to be maintained throughout the full life of the
10 vehicle.
11 I will now turn to a discussion of some of the
12 measures specifically designed to reduce in-use vehicle
13 emission.
14 --o0o--
15 STAFF AIR POLLUTION SPECIALIST GUERRERO: Three
16 of these measures include improvement to the smog check
17 program, voluntary vehicle scrapping, and an emission
18 control replacement program to examine the feasibility and
19 benefits of replacing critical emission control components
20 on pre-LEV vehicles.
21 --o0o--
22 STAFF AIR POLLUTION SPECIALIST GUERRERO: The
23 smog check program has been designed to reduce excess
24 emissions through requiring proper maintenance and repair
25 of high-emitting vehicles. As illustrated in the chart,
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1 the remission reductions currently being achieved are
2 large, approximately 90 tons per day in the South Coast.
3 Also illustrated is that even with the current
4 program in place, substantial excess emissions remain.
5 One way this is being addressed is by making improvement
6 to the smog check program.
7 --o0o--
8 STAFF AIR POLLUTION SPECIALIST GUERRERO: Three
9 significant improvements are being implemented to smog
10 check. The first requires heavier gasoline trucks between
11 8500 and 10,000 pounds GVW to undergo a dyamometer test
12 used for cars. This test allows measurement of NOx
13 emissions in addition to hydrocarbon NCO.
14 The second improvement increases the number of
15 vehicles tested at test-only smog check stations. BAR
16 studies have shown that greater emission reductions are
17 achieved at test-only stations, rather than at test and
18 repair station. Consequently, BAR lass recently increased
19 the volume of cars tested at test-only stations from
20 20 percent to 37 percent of the fleet.
21 The third improvement to be implemented in 2004
22 incorporates a more effective test of the integrity of the
23 evaporative control system. The emission benefit of these
24 improvements to the current smog check required is 14 tons
25 per day hydrocarbon plus NOx in the South Coast air basin
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1 in 2010.
2 --o0o--
3 STAFF AIR POLLUTION SPECIALIST GUERRERO: Another
4 program we have evaluated is voluntary vehicle scrapping.
5 This program aims to reduce the number of older vehicles
6 in the fleet. In doing so, the inherently high emissions
7 of those older cars is reduced when the vehicle is reduced
8 by a newer vehicle which meets more recent emission
9 standards.
10 Another benefit of scrapping older cars is these
11 vehicles often have the highest excess emissions as well.
12 There are several different programs that
13 encourage scrapping of older cars. In 2000 about 4,000
14 vehicles were retired through this program. BAR has also
15 offered to pay for scrapping vehicles which cannot pass
16 the smog check test, although funding for this program has
17 run out.
18 Private sector firms also pay for scrapping
19 vehicles in order to generate marketable emission credits.
20 To put the potential benefits of scrapping vehicles into
21 perspective if 75,000 vehicles were scrapped each year,
22 emissions would be reduced by 7 tons per day in 2010. The
23 cost for such a program would run between 70 and $100
24 million per year.
25 --o0o--
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1 STAFF AIR POLLUTION SPECIALIST GUERRERO: The
2 third program under consideration addresses reducing
3 excess in-use emissions by replacing key emission control
4 components on older vehicles. Even when a vehicle passes
5 the smog check program cut points, its emissions may still
6 be well in excess of the emission standard to which it was
7 certified when it was new. Some evidence suggests that
8 replacing certain critical emission components, such as
9 the oxygen censor, will further reduce emissions.
10 ARB is currently conducting a test program to
11 evaluate the effectiveness and cost effectiveness of
12 replacing emission control components on older vehicles
13 that pass smog check cut points.
14 The components slated for replacements are the
15 oxygen censor and catalyst to reduce exhaust emissions and
16 the canister and associated hoses to reduce evaporative
17 emissions. Preliminary results from the test program
18 indicate that replacing catalytic converter and oxygen
19 censor is effective in reducing excess emissions.
20 However, the emission benefits from replacing the
21 evaporative canister and associated hoses are less clear
22 due to the limited number of vehicles tested to date and
23 high variability in test results. Further testing is
24 planned to better understand the potential of this
25 program.
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1 --o0o--
2 STAFF AIR POLLUTION SPECIALIST GUERRERO: This
3 chart illustrates the potential of the programs just
4 discussed to reduce excess emissions. The red part of
5 each bar is the excess emissions. The second and third
6 bars show that the smog check programs provide large
7 emission reductions and improvements under way will
8 provide additional reductions.
9 The component replacement program, should it turn
10 out to be viable, also has a potential to provide large
11 reductions. The AVR, the code name for vehicle scrapping,
12 shows a small benefit in this illustration, but it is
13 important to note that reductions can be bigger if more
14 money were available to fund scrapping.
15 Overall, the chart illustrates that it is
16 possible to eliminate most of the excess emissions.
17 With the implementation of all three in-use
18 vehicle programs previously discussed, improvements to
19 California smog check program, a voluntary accelerated
20 vehicle retired program, and an emission control component
21 replacement program excess emission could be substantially
22 reduced.
23 --o0o--
24 STAFF AIR POLLUTION SPECIALIST GUERRERO: In
25 summary, the biggest reduction in emissions is coming from
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1 the new vehicle emission standard as the fleet turns over
2 to lower emitting vehicles. We can look forward to a
3 75 percent reduction in fleet-wide emission from
4 light-duty vehicles over the next 20 years.
5 In the mean time, older vehicles emit a
6 disproportionate amount of pollution. Even by 2010 when
7 the fleet is made up of a majority of low-emission
8 vehicles, a small number of older vehicles will emit over
9 half of light-duty emissions. The smog check program and
10 vehicle scrappage which focus on older vehicles can be
11 effective in further reducing emissions.
12 --o0o--
13 STAFF AIR POLLUTION SPECIALIST GUERRERO: Excess
14 emissions are significant and will continue to be
15 significant until 2020 or beyond. While the latest
16 technology used to meet LEV II coupled with OBD II and
17 extended warranty will reduce or eliminate excess
18 emissions, the older vehicles will still have excess
19 emissions that need to be reduced through the smog check
20 program. We also hope we will find that replacement of
21 certain critical emission control components will further
22 restore the lower emitting capability of some of the older
23 vehicles. We will be able to share with you more on this
24 next year. That completes --
25 CHAIRPERSON LLOYD: Thank you very much indeed.
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1 EXECUTIVE OFFICER WITHERSPOON: Just one final
2 comment from the staff to put that presentation in
3 perspective.
4 In the current draft plan for the South Coast Air
5 Quality Management District, we have a black box of 400
6 tons per day of ROG and NOx that we don't know how to
7 accomplish. And certainly coming up with the full
8 complement of controls for existing emissions from in-use
9 vehicles will be necessary. Anything we can do to reduce
10 those emissions will help us fill that black box and
11 achieve attainment.
12 BOARD MEMBER D'ADAMO: Mr. Chairman.
13 CHAIRPERSON LLOYD: Yes, Ms. D'Adamo.
14 BOARD MEMBER D'ADAMO: Looking at slide 15, the
15 summary and older vehicle caused disproportionate amount
16 of emissions, 55 percent if we look at the older vehicles,
17 if all of the suggestions were implemented, the vehicle
18 scrapping program, for example, the potential benefits of
19 retiring -- associated with retiring 75,000 vehicles per
20 year, et cetera, what would that number look like or could
21 you take --
22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: If you
23 look back at slide 14, you can see the excess emissions
24 can be eliminated. But you still have the inherent
25 emissions of the older vehicles depending on how much
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1 scrapping you do.
2 So as we showed in that one illustration, it
3 costs a lot of money to scrap a lot of vehicles to get 7
4 tons per day. To some degree we're destined to waiting
5 for those vehicles to eliminate themselves from the fleet.
6 And there's -- there's no other way of getting at that
7 other than a modernization of the fleet. Well-maintained
8 25-year-old vehicle puts out a lot more emissions than a
9 well-maintained five year old vehicle. That's just seems
10 like time. We're a very large scrapping program. It's
11 only way is to address that.
12 BOARD MEMBER D'ADAMO: And could you elaborate on
13 the voluntary vehicle scrapping program, that the cost at
14 $3 million, that's public expenditures on the local
15 district programs.
16 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: That
17 was the example of the local district programs. A lot
18 more vehicles were scrapped through the smog check program
19 which had an option if you couldn't pass that you could
20 get scrappage money. It was as much as $1,000 a vehicle.
21 That money's run out. I think there may be as many as
22 20,000 vehicles scrapped there.
23 There's also scrapping going on for the purposes
24 of generating emission credits. That one doesn't bring
25 down the overall emissions very much because you scrap the
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1 vehicle and use most of those emissions to allow other
2 industry to expand or something like that. So -- or site.
3 And that's still ongoing in the private sector right now
4 generating marketable emission credits from scrapping
5 vehicles.
6 BOARD MEMBER D'ADAMO: And the smog vehicle
7 scrappage program as a result of not complying with smog,
8 what do those numbers look like?
9 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think
10 there was about 20,000 scrapped. I'm not sure over
11 exactly what time frame. Someone here would know that if
12 it's important to be more precise.
13 BOARD MEMBER D'ADAMO: No. Just general.
14 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: The
15 source of funding with the budget crisis has dried up so
16 they're not paying for scrap cars right now. But it could
17 restart. Right now all the money that is available is
18 going to pay for low income repairs assistance.
19 BOARD MEMBER D'ADAMO: And same thing with the
20 district scrappage program.
21 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think
22 district scrappage programs are still under way. But it
23 depends on -- the money's coming out of things like the $4
24 surcharge on your registration fee that districts have
25 adopted. It's not in all districts. And I'm not
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1 personally aware of which ones are doing it right at this
2 point in time.
3 BOARD MEMBER D'ADAMO: Sounds like there's not
4 much room. But I'd be interested in seeing if there's
5 anything that can be done, short of just money falling out
6 of the sky.
7 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think
8 one of the observations that may be useful when we start
9 looking at the clean air plans, the SIPS later this year,
10 is that Catherine mentioned we're short hundreds of tons
11 of each pollutant. And we went through and showed you
12 smog check of 90 tons in the South Coast. That sounds --
13 that's really big.
14 But the other once we're looking at like
15 improving the smog check program, scrapping cars, they
16 were getting like tens of tons. So we're facing this very
17 difficult situation where there's no more hundred-ton
18 things that we can do. And we're having to look at a lot
19 of ten-ton-type ones or less. And many of them -- because
20 the goal is to get to 400 more tons of emission reduction.
21 So on one hand these look small. But on the other hand,
22 they're all the ammo we have in our arsenal at the moment,
23 and we're going to have to look in each one of them.
24 BOARD MEMBER D'ADAMO: And on a similar line, in
25 looking at the proposals that the district will be
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1 presenting, do you see that the older vehicles are
2 concentrated in certain parts of the state, or are they
3 pretty well evenly distributed?
4 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: There
5 is a distribution. It's different in different areas.
6 But in general, if you look at regional areas
7 it's not a whole bunch different. If you look at the
8 valley versus L.A., for example, you wouldn't see huge
9 differences in the age distribution. If you go to parts
10 of L.A. versus other parts of L.A., you see fairly radical
11 differences in age distribution. That would be true of
12 other areas too.
13 BOARD MEMBER D'ADAMO: Thank you.
14 CHAIRPERSON LLOYD: Thank you.
15 Mr. McKinnon.
16 BOARD MEMBER McKINNON: If I follow, you know,
17 sort of the logic that's -- we're doing very as well sort
18 of at reducing emissions sort of in recent times. And
19 getting older cars repaired is very important, and
20 hopefully them leaving the fleet is also important.
21 One of the things I often end up talking to
22 people about when they want to talk to me because I'm an
23 Air Board member because of sort of other aspects of my
24 life is sort of the hot rodder car collector concern that
25 there are people that have cars that they don't drive a
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1 whole lot.
2 Have we ever sort of tried to figure out what is
3 sort of a fair amount of miles per year to talk about what
4 a collector car or hot rodder's car would be like? If you
5 start going after older cars, there is a constituency of
6 people that, I think, work hard on their cars. And I
7 think there's sort of an interest in figuring out a
8 solution for them. Have we ever considered sort of
9 variables in mileage?
10 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Yes.
11 The car collectors and car enthusiasts have been very
12 vocal in this whole issue of scrappage. They are very
13 concerned that someone might take their car away from them
14 in some manner or require them to do something that no
15 longer makes it a classic car or a collectible car.
16 The word I want to emphasize in that VAVR which
17 we were calling scrappage, the V is for voluntary. These
18 are only people that want to get rid of their car for
19 money that are in this kind of a program. No one has ever
20 suggested that there be a mandatory claiming of older
21 cars.
22 When the car collectors expressed concern about
23 things like smog check, it can be come from two angles.
24 One is they don't drive the car much so why do they have
25 to spend 50 bucks every two years. That's one angle. The
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1 other angle is a fear that some aspect of smog check will
2 be too stringent such as the older car could never pass,
3 and then it has no option. Maybe scrappage is its only
4 option.
5 That, I don't think, is really a genuine concern
6 because the standards as we showed for smog check allow a
7 lot of excess emissions. And the car collectors are the
8 people that, you know, make the car run perfectly. And
9 it's going to have this inherently low emission as it
10 possibly can. It's still going to be much dirty than a
11 new car. It's not going to be a gross emitter. Those are
12 pristine cars.
13 We're not aware of any evidence that collector
14 type car, well-maintained cars have any problem getting
15 past the smog check program. That shouldn't be a concern.
16 The scrappage is voluntary and shouldn't be a certain.
17 But there is a heightened concern by those members that
18 something will happen to their cars.
19 BOARD MEMBER McKINNON: They're required to be
20 tested at sort of the standard for their model year of
21 car?
22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Yes.
23 The standard is typically at least a couple times what the
24 car could emit if all the components were in good working
25 order for a car of 100,000 miles. So if they can restore
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1 it to be something like a normal car at 100,000, they're
2 going to pass with flying colors. And they do.
3 BOARD MEMBER McKINNON: Thanks.
4 CHAIRPERSON LLOYD: Thank you.
5 BOARD MEMBER CALHOUN: What is your current
6 thinking about replacing of these older parts? Are you
7 thinking in terms of only when they fail smog check or
8 voluntary replacement?
9 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Well,
10 until we've completed the study, we're not going to know
11 exactly which are the most effective and most cost
12 effective of the three parts to replace. And some of them
13 are simple to do like -- and low cost like an oxygen
14 censor. And some of them are simple and higher cost, like
15 catalysts. Some of them are not so costly but hard to do
16 like evaporative canisters because on many cars they're
17 hidden somewhere in the car and very hard to get at.
18 So it will depend on which one sort of looms, if
19 any of them loom, as the most cost effective and practical
20 way of doing it. We are thinking very preliminary that it
21 could be done in smog check in some manner. As you know,
22 a mandatory repair if you do fail, for example, this would
23 be one of this things that has to be fixed because we know
24 from the study it would reduce emissions. There's other
25 options too to how this could happen.
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1 But it's hard to design until we know which the
2 components are. It's a $300 part like a catalyst or
3 something that's going to be very hard to do because
4 that's a repair -- that's in excess of what people pay
5 now. They only pay $150, $125 on average repairs for smog
6 check.
7 CHAIRPERSON LLOYD: Thank you.
8 SUPERVISOR DeSAULNIER: I had a question for you
9 anyway.
10 CHAIRPERSON LLOYD: I guess we have one witness
11 signed up.
12 Do you want to speak on this one or the next one?
13 MR. PETERS: I would love to speak on this one,
14 sir. Chairman Lloyd, Committee, and staff, I'm Charlie
15 Peters, Clean Air Performance Professionals. And we
16 represent motorists.
17 I find it interesting -- Matthew brought up the
18 issue of collector cars, et cetera because Hemming's Motor
19 News has honored us and had for most every month for about
20 the last seven or eight years put our letter reporting
21 on --
22 BOARD MEMBER WILLIAM FRIEDMAN: Can you speak
23 up?
24 CHAIRPERSON LLOYD: We can't hear you very well
25 up here.
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1 MR. PETERS: Excuse me. I'll try to help that a
2 little bit.
3 I'm Charlie Peters, Clean Air Performance
4 Professionals. We represent motorists. And for about the
5 last seven or eight years we have had a letter most every
6 month in Hemming's Motor news, which is considered the
7 Bible of the old car hobby. And Matthew brought up the
8 issue of concerns of some of the hobbyists. So we have
9 been trying to contribute to that and trying to report on
10 that.
11 We're quite concerned that there are significant
12 opportunities to improve how the public's being treated,
13 to increase their options, to improve performance of cars,
14 and to significantly improve the environmental performance
15 of cars by some appropriate supportive credit and support
16 for the providers of service in the marketplace to enhance
17 and improve compliance and improve how the public's being
18 treated.
19 I've heard many times here today talking about
20 how, "Gee, we got this great program called PZEVs and 15
21 year, 150,000 mile emissions warranties, and that's just
22 going to make all the flowers bloom and make it a great
23 day and make it a better world." Just because those are
24 free, all the car manufacturers are just going to be there
25 and just do it right every time. And every one of those
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1 cars is going to get fixed every time just right.
2 Let me say to you there are currently
3 downloadable free programs where you can go in and say
4 every monitor on the car is happy and just right when, in
5 fact, there's nothing on the car that's right. And that
6 warranty situations in the dealer depends upon having
7 options to the public where they can get their cars to get
8 a second opinion. And we have a market that's supported
9 by a regulatory process to improve performance.
10 So I believe that this -- what I've been hearing
11 here today, the technology and huge amounts of money and
12 huge costs, enforcing technology is the solution to all
13 the problems in the world, that maybe we need to consider
14 the possibility of this particular subject that huge
15 opportunities to improve air quality in California by
16 appropriate support and credit for an industry that serves
17 the public to see it gets done right more often.
18 The I&M Review Committee, yesterday the subject
19 came up -- customer goes to one place, gets a smog check.
20 Fails. Goes someplace else, and it passes. We take care
21 of that complaint. Well, who's going to get the
22 complaint? The guy that failed the car. Who gets
23 addressed by the regulatory agency? The guy that got the
24 complaint. Who's the guy that did the job right? The guy
25 that got the complaint. Who's the guy that said it was
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1 okay? In this case it happened to be the new car dealer.
2 The car never got fixed.
3 So without a regulatory support, without some
4 credit, without starting to be concerned about the
5 breathers out here, the people that drive cars, and the
6 air, then all we're going to do in California is continue
7 to exacerbate the loss of credibility for our Governor,
8 the loss in opportunities to improve the air quality, and
9 we're not going to get where we should be able to
10 responsibly go.
11 We can cut fraud in half in the smog check
12 program in a year. We can cut the failure rate in half by
13 a year and reduce fleet emissions 2,000 tons a day. Oh,
14 gee, that would be expensive. We need to start by maybe
15 going out and finding out if we can improve performance
16 with one shop with a best guy in the state or the worst
17 guy in the state. Do a little pilot study to find out if
18 there is, in fact, a quantifiable real benefit to the
19 public that can take place by reduced fraud and improved
20 performance by the most important technology that has not
21 been discussed here at all today, that's the stuff between
22 people's ears. Empowering that to work and serve the
23 public. I would appreciate your consideration of a
24 possibility of accomplishing that.
25 We have an appointment to see a Senator who's
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1 thrown his hat in the ring to be the pro tem of the Senate
2 on Tuesday. We have heard that the Air Resources Board
3 and the Department of Consumers Affairs have been invited
4 to that meeting. That's extremely exciting. We've
5 already met with the founder and author of "Smog Check for
6 California," Senator Presley. He was fantastic. And
7 we've met with the Secretary of State and Consumer
8 Services and the Chief of the Bureau of Automotive Repair.
9 Maybe it's time for us to consider the motoring public and
10 the air and create some support to do it better.
11 Thank you.
12 CHAIRPERSON LLOYD: Thank you. We have another
13 witness signed up, Chris Ervine. Recognize that -- I know
14 you spoke in opposition. We don't have any resolution
15 before us on this item. This is an information item. The
16 next one is --
17 MR. ERVINE: I understand that.
18 CHAIRPERSON LLOYD: Thank you.
19 MR. ERVINE: I'm Chris Ervine. I'm with the
20 Coalition of State Test and Repair Stations.
21 I'm a little disappointed. We're hearing an
22 awful lot of talk about reducing emissions, and we have a
23 huge untapped reservoir of emissions out there that are
24 available for reduction. And this is in the basic area in
25 the change of ownership areas. We're talking about a very
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1 small percentage of vehicles here that are 19 -- or older
2 vehicles. When you get into a change of ownership area --
3 I just live in a change of ownership area. I just retired
4 a 1993 Nissan Maxima with 225,000 miles on it. Has never
5 been in a smog check station. Now, my car was well taken
6 care of. Passed with no problem at all.
7 But problem that we have in these outlining areas
8 is these people ignore the check engine light. As long as
9 that car gets them from point A to point B, they don't
10 care if that light's on or not. The vehicles are not
11 maintained properly. They've never been checked in a smog
12 check station and probably upwards of 70 percent of those
13 vehicles are transit vehicles that go into the enhanced
14 areas and spew their pollution out there as computer
15 vehicles. So we have a large untapped resource of
16 emission reductions that nobody wants to talk about. And
17 I think this is something that needs to be looked into.
18 The other problem that we have is -- it was
19 brought up we're shifting more and more vehicles to the
20 test-only stations. You're asking the test and repair
21 industry in the Bay Area right now to invest $50,000 in a
22 piece of equipment that they're never going to get their
23 money out of because they're going to lose so much of
24 their business to the test-only industry when it really
25 gets going.
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1 In San Joaquin Valley my shop and other shops --
2 I have -- at this point I have 60 members in the San
3 Joaquin Valley. We have experienced an 80 percent
4 reduction in smog tests. You're now talking to us about
5 in 2004 we're going to have to invest in emission testing
6 for evaporative emission control system. You're taking
7 cars away from us to where we can't pay for the equipment
8 we have presently, and you're asking us to spend more
9 money towards testing vehicles that we're never going to
10 see.
11 It does not make good business sense, and I urge
12 the people in the Bay Area not to come on line with this
13 program because of these problems with the test-only
14 industry. They're never going to recover their
15 investment. And I think that everybody needs to look at
16 this. More and more test and repair stations are shifting
17 over to test only. And when this is all said and done,
18 who's going to reduce all your emissions when the test and
19 repair industry is out of business?
20 Thank you.
21 CHAIRPERSON LLOYD: Thank you.
22 Mr. McKinnon, comment.
23 BOARD MEMBER McKINNON: Yeah. The question for
24 staff, can you kind of quantify the sort of the older car
25 question versus those cars that are transiting between
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1 enhance -- not enhanced areas into enhanced areas. That
2 was your -- do you have a way of quantifying that.
3 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I don't
4 think we have information about exactly how many cars that
5 are in basic areas, which are the smaller cities rural
6 areas go to the smoggy areas or what fraction of the
7 vehicles in the smoggy areas are from these basic areas.
8 The one thing that has happened that's addressed
9 this is the number of ZIP codes or the subregions that now
10 have the enhanced programs, particularly in the valley
11 have been greatly expanded. I think they added 100,000
12 cars -- over 700,000 cars were shifted from the basic
13 program to the enhanced program in the Valley. Like in
14 South Coast it's virtually all enhanced so. It wasn't
15 necessarily change. But that's one way it's been
16 addressed is to spread the enhanced program which is the
17 dyno testing, to more and more of the state that now
18 represents almost 90 percent of the cars that are in the
19 enhanced program. So it's to the extent this transfer of
20 vehicles from one basic area to the other one is
21 occurring, that's being reduced because there's less
22 opportunity for that. Certainly it still occurs.
23 EXECUTIVE OFFICER WITHERSPOON: Just as a follow
24 up. It's been the staff's preference for a long time that
25 we have a state-wide enhanced program. But it was a
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1 decision by the state Legislature to create a three-tier
2 structure where in very rural parts of the state it's
3 change of ownership only. In smaller towns it's a basic
4 inspection program. And then in federal, urban,
5 non-attainment areas in the urbanized portion it's
6 enhanced. And that's the structure we have to live with.
7 So most of the improvements we talked about in
8 this presentation are within the enhanced program. And we
9 just have to live with the fact that vehicles move across
10 boundaries. But as Mr. Cackette indicated, the number of
11 vehicles outside of enhanced areas represents roughly 10
12 percent of the whole fleet that might be subject to
13 inspections were we to have a state-wide enhanced
14 inspection program.
15 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Just to
16 point out that while it's desirable, perhaps, to have a
17 uniform program throughout the state, the gentleman
18 mentioned it cost $50,000 to go to enhanced. And if
19 you're a test station or repair station and you're in a
20 community of a couple thousand people who only get a
21 couple thousand inspections and it's out in the boonies
22 somewhere, it's going to be hard for someone to make that
23 decision to provide the equipment. If they don't provide
24 the equipment there, you've got the person having to drive
25 50 miles or something to find a test station. That's not
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1 a good public policy.
2 So there's something on the positive side for
3 having some basic areas with less stringent, less costly
4 requirement in some. But I think what we had before was a
5 lot of urbanized areas with basic program what we're going
6 towards was really just the small towns and the rural
7 areas that will not have the fully enhanced program.
8 BOARD MEMBER McKINNON: Can I follow up?
9 CHAIRPERSON LLOYD: Yes.
10 BOARD MEMBER McKINNON: Did that shift happen so
11 recently that it wouldn't be felt by folks or --
12 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: A year
13 or so ago.
14 BOARD MEMBER McKINNON: A year or so ago. Okay.
15 Is there any -- clearly, we had cars that were
16 old enough to be exempted and we have cleaner cars that
17 are going to pass tests for at least a few years. Other
18 than those two explanations, can you think of any reason
19 why 80 percent of the tests would be at test-only
20 stations?
21 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: No. We
22 had the -- if you talk about the total fleet -- and very
23 roughly we've got 36 percent being directed to test only.
24 We've got a similar number that can go to test and repair,
25 and there's a similar number that are exempted, something
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1 around 30 percent. Those are the cars for the first four
2 years. I don't know the exact numbers precisely, but it's
3 kind of partitioned into threes.
4 When we went from 20 percent test-only to 36, it
5 certainly doesn't represent a potential loss of business
6 of 80 percent. We do know that many people do find
7 test-only more convenient. There's a fraction of people
8 that choose to got to test-only, even though they're not
9 directed. Maybe that's what's happening. I don't know.
10 But in any case, there is a business case for
11 those cars that are directed to test-only are the ones
12 with the high probability of failing. And the test
13 only-station won't fix them. They've got to go somewhere
14 to be repaired. That's where one of the business
15 opportunities remains.
16 So I don't think the comment that the test and
17 repair business will go out of business probably is not
18 correct. But clearly they've lost some test business when
19 the state directed more cars to test only.
20 BOARD MEMBER McKINNON: Mr. Chairman, I started
21 this. There was somebody testifying, and he walked away.
22 And I think he wants to be --
23 CHAIRPERSON LLOYD: I saw both shoot up when
24 staff made a comment. So we owe it to them. So if one of
25 you could come up. And I assume from the reaction you
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1 disagreed with staff's comment.
2 MR. ERVINE: Yes.
3 As to his remark with 36 percent of the smog
4 fleet is directed to test-only, you have to understand
5 that four years of newer vehicles -- we're talking about
6 enhanced areas with test-only. We're not talking bout the
7 basic area or the change of ownership area. Enhanced
8 area, this is where they're spending the big money for the
9 dynos. In the enhanced areas, four years and newer
10 vehicles are exempt from the program. This is 40 percent
11 of the smog fleet is exempt from the program. 1974 and
12 earlier makes up 6 percent of the program. They are
13 exempt from the program.
14 What VAR has done is they have taken 36 percent
15 of brand-new vehicles all the way to 1966 vehicles and
16 this is what their 36 percent is. And when you do the
17 fuzzy math, you come up with about 80 percent of the
18 vehicles are either exempt or going to test-only. And
19 that leaves a very small percentage of the vehicle to go
20 to the test and repair industry.
21 The test and repair industry, we need to keep our
22 dynos busy. I need to do six tests a day to pay for my
23 dyno. I have $1,000 a month payment on it. I pay $4,000
24 a year for the maintenance contract on it. My most
25 expensive technician runs that dyno. I have one stall
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1 dedicated solely to that smog test. I can't do anything
2 else in that bay because of the dyno being in the way.
3 And I need to keep that machine busy all day long in order
4 to make a profit on it. I have gone from 12 and 13 smogs
5 per day to less than two.
6 CHAIRPERSON LLOYD: Thank you.
7 BOARD MEMBER McKINNON: You certainly got me to
8 the 80 percent. Now I get how we're very close to that.
9 Thanks a lot.
10 CHAIRPERSON LLOYD: Is there a comment from staff
11 or is there --
12 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I just
13 have to say we'll sit down and go over the math with them.
14 But that's not our understanding of where the cars go.
15 That's not 80. You know, 20 percent of them don't go to
16 test and repair.
17 BOARD MEMBER McKINNON: I thought it was 36.
18 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Test
19 and repair, the kind of business he runs.
20 BOARD MEMBER McKINNON: Maybe I misunderstood.
21 How many are referred to test-only? What percentage?
22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: It's 36
23 percent of the vehicles subject to the program, which
24 includes the exempted newer vehicles, which when I
25 characterized it I said it was about a third. Maybe it's
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1 a little bit more. I'm not sure what the exact number is.
2 He said it was 40 percent of.
3 But of the cars that actually get a renewal, I
4 think it's closer to 40 percent of them would end up in
5 the test and repair situation. Then you've got 17 percent
6 of the cars that go through change of ownerships. They
7 can go anywhere they want on top of that. So I think the
8 best estimate we have is about half the cars seeking a
9 smog check go to test and repair. Half of them go to test
10 only.
11 BOARD MEMBER McKINNON: If you start out of 40
12 percent of exempt -- that's where I was following his
13 number. But anyway --
14 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Those
15 are exempted by the Legislature. They're not in the
16 program until they're four years old. And the old ones
17 too are exempted by the Legislature. So with the
18 remaining -- I think the dispute there is that we called
19 it 36 percent which is in -- the denominator has those
20 exempted newer cars in it. And the gentleman's saying,
21 well, take those out and it's different. It's more like
22 half at that point.
23 MR. ERVINE: If you have 100 vehicles, 46 of them
24 are exempted, and 36 of them go to test-only. That leaves
25 you 82 percent of the fleet is either exempted or going to
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1 test-only, which leaves roughly about 15 percent that are
2 going to the test and repair.
3 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: We'll
4 have to sit down and go over the math because that's not
5 the way the math looks for us.
6 CHAIRPERSON LLOYD: It would be helpful if you
7 could get together.
8 Charlie, I see your hand, but what I'd like to do
9 is move onto the next item because it's related. You
10 won't let me do that. Okay. Well, you may have a very
11 short time there.
12 MR. PETERS: I very much appreciate your
13 consideration of that, Dr. Lloyd.
14 I think some consideration of whether or not --
15 just how it is testing a car on a dynamometer by itself
16 fixes cars. I don't think that's true. And as a matter
17 of fact, I think the real performance is test and repair
18 is more than twice as effective as test-only as a system.
19 Based upon observations comparing test-only
20 programs and test and repair programs for campers, for
21 emissions, and all factors, whether or not it passes in an
22 off-cycle test later, the test and repair is more than
23 twice as effective as test only. If, in fact, you have to
24 have test-only because you have fraud and cheating, which
25 certainly might be true, then an appropriate oversight
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1 demanding improvement in performance can improve that by a
2 significant factor.
3 The Clean Air Act doesn't require any test-only.
4 Doesn't require dynamometers. The California Legislation
5 statutes up until quite recently required no test-only.
6 It required the ability to test in test-only, but didn't
7 require any test-only. So this division of the industry
8 and abuse of the public with multiple tests that are not
9 necessary needs to be looked at and evaluated because this
10 requirement for test-only is not required by the federal
11 government or by the statutes of the Legislature until
12 quite recently. I think it needs some additional
13 consideration.
14 Thank you.
15 CHAIRPERSON LLOYD: Do you want to respond now?
16 Any other comments?
17 BOARD MEMBER D'ADAMO: I just have a quick
18 question. Whether or not there's any further discretion
19 on the part of the San Joaquin Valley to expand a program
20 even further.
21 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: It's my
22 understanding they work with BAR to identify all of the
23 areas that would fit the definition mainly because they
24 grew and got -- there's a threshold of population minimum
25 for doing enhanced. And they found all those areas that
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1 have grown since the last census included them. And then
2 they included a bunch of other areas that were adjacent.
3 So that you -- instead of having these little pockets of
4 areas, they kind of made a smooth curve around it, around
5 the urban areas and included all those areas in the
6 enhanced, except some of those areas are not allowed by
7 state law to have the test-only feature.
8 I think it's been expanded roughly as far as it
9 can go under the current structure.
10 BOARD MEMBER D'ADAMO: Okay.
11 CHAIRPERSON LLOYD: Thank you. Any other
12 comments? Since it's not a regulatory item, it's not
13 necessary to officially close the record.
14 So with that, we move on to the next item, the
15 time to change staff. The next item 03-3-3, report and
16 findings on the effect of exempting additional vehicles
17 from the smog check program, highly related to the last
18 discussion. And this is an item where we would also be
19 taking testimony.
20 During the last item we talked about the
21 contribution of in-use vehicles to California's air
22 quality problem and the general role of smog check
23 inspections. Now we're going to turn to a specific aspect
24 of the smog check program itself, namely the exception for
25 new vehicles and whether that can be expanded without
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1 causing us to move backward in our emission control
2 efforts.
3 AB 2637 provides that new motor vehicles shall be
4 exempted from smog check inspections for six years,
5 instead of the current four years, unless this Board finds
6 such an exemption would prevent California from complying
7 with the Federal Clean Air Act or meeting our state plan
8 commitments. So you can see there's a significant
9 obligation here.
10 So Ms. Witherspoon, please introduce the item and
11 begin staff's presentation.
12 EXECUTIVE OFFICER WITHERSPOON: Thank you,
13 Chairman Lloyd and members of the Board.
14 Last year AB 2637 by then Assemblyman Dennis
15 Cardoza was signed into law establishing the enhanced smog
16 check program in the San Francisco Bay Area. That program
17 is in the process of being implemented right now by the
18 Bureau of Automotive Repair with enhanced inspections due
19 to begin in July of this year.
20 As AB 2637 was being debated in the state
21 Legislature, the question came up could the state-wide
22 smog check program be modified to reduce the burdens on
23 all motorists. Lots of alternatives were discussed during
24 that process, and the Legislature eventually settled on
25 the concept of expanding the new car exemption for
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1 everyone but with one important caveat. They asked the
2 Air Resources Board to determine whether that change would
3 prohibit California from complying with federal law or
4 from meeting our state implementation plan commitments.
5 If the Board makes this determination, then
6 AB 2637 specifies that the increased exemption will not
7 occur.
8 I'm going to steal staff's thunder and tell you
9 the bottom line. Exempting five- and six-year-old cars
10 would prohibit California from meeting its SIP commitments
11 and is, therefore, not recommended at this time for
12 enhanced smog check areas. However, that change could be
13 implemented in basic rather than enhanced smog check areas
14 without creating a SIP difficulty.
15 The Legislature is continuing to inquire whether
16 changes to the overall smog check program are warranted,
17 and we are continuing to evaluate any and all such
18 proposals. On July 1st, ARB and the Bureau of Automotive
19 Repair will be submitting a major joint report to the
20 Legislature on the status and effectiveness of the current
21 smog check program. In that report we will also be making
22 various recommendations for program improvements. So the
23 dialogue will continue beyond your deliberations here
24 today.
25 But at this juncture, we're here for just one
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1 narrow purpose, to present our analysis on the effect of
2 exempting five- and six-year-old cars from smog check
3 inspections. At the request of the Chairman, a
4 representative from the Bureau of Automotive Repair has
5 joined us today to answer any questions you may have.
6 David Amlin, the engineering chief for BAR, is present and
7 will be available to answer questions following staff's
8 presentation.
9 CHAIRMAN LLOYD: Has the Legislature been waiting
10 for this report?
11 EXECUTIVE OFFICER WITHERSPOON: This report? The
12 law requires that you make a determination. Otherwise,
13 the exemption would take effect January 1st of next year.
14 Staff's presentation will be made by Tony
15 Dickerson of the Mobile Source Operations Division.
16 FIELD INSPECTION/TESTING SECTION ENGINEER
17 DICKERSON: Thank you, Catherine.
18 Good afternoon, Dr. Lloyd and members of the
19 Board.
20 This afternoon I'm presenting for your
21 consideration the results of an analysis on the emissions
22 impact of removing five- and six-year-old vehicles from
23 the state smog check program. This analysis was performed
24 in response to recent Legislation with state-wide smog
25 check implications.
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1 (Thereupon an overhead presentation was
2 presented as follows.)
3 FIELD INSPECTION/TESTING SECTION ENGINEER
4 DICKERSON: Assembly 2637 was signed in law in September
5 2002 providing for the establishment of enhanced smog
6 check program in the urbanized area of San Francisco Bay
7 Area -- excuse me -- San Francisco Bay Area basin. The
8 areas affected will be the counties of Alameda, Contra
9 Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara,
10 and portions of Solano and Sonoma Counties. These areas
11 are indicated in orange on the map. The enhanced smog
12 check program is to be implemented by January 2004.
13 --o0o--
14 FIELD INSPECTION/TESTING SECTION ENGINEER
15 DICKERSON: Another portion of AB 2637 has state-wide
16 impact on smog check, specifically the bill increased the
17 existing smog check exemption for new vehicles from four
18 to six years after purchase. The additional two-year
19 exemption from the biannual smog check program was
20 included in the law with the intent to decrease program
21 cost and improve efficiency and was based on a preliminary
22 emissions analysis which indicated that the reduction in
23 smog check emissions benefits might not be significant.
24 --o0o--
25 FIELD INSPECTION/TESTING SECTION ENGINEER
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1 DICKERSON: The increased exemptions are to be effective
2 in all basic and enhanced smog check areas beginning
3 January 1, 2004, unless the ARB finds that exempting the
4 additional vehicles would prohibit the state from meeting
5 the requirements of the Federal Clean Air Act or the state
6 implementation plan.
7 A detailed analysis of the emissions impact of
8 extending the new vehicle emissions from four to six years
9 has been performed. The purpose of the staff report and
10 this presentation is to provide the Board with the results
11 of this analysis and staff's recommendation regarding the
12 finding called for in legislation.
13 --o0o--
14 FIELD INSPECTION/TESTING SECTION ENGINEER
15 DICKERSON: Staff used the latest data available to assess
16 the emissions impact of additional vehicle exemptions. In
17 some cases multiple data sets were used to verify limited
18 California data, including those from other states. Also
19 staff decided to try to identify alternative exemptions
20 should the evaluation indicate significant adverse
21 emission impacts.
22 --o0o--
23 FIELD INSPECTION/TESTING SECTION ENGINEER
24 DICKERSON: This slide summarizes the different sources of
25 data we analyzed. For example, the Bureau of Automotive
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1 Repair has performed enhanced smog checks on randomly
2 selected vehicles at the roadside. Data on the frequency
3 of OBD II check engine lights that were illuminated has
4 been collected in California and during emission
5 inspections performed in Wisconsin and Arizona.
6 Testing in our El Monte laboratory allowed us to
7 convert the smog check data to on-road emissions. Testing
8 before and after repairs done at U.C. Riverside allowed us
9 to determine per-vehicle emission reductions that can be
10 lost due to exemptions. Computer models such as NVAC
11 allow us to calculate emissions in tons per day.
12 --o0o--
13 FIELD INSPECTION/TESTING SECTION ENGINEER
14 DICKERSON: This chart illustrates one of the findings of
15 our evaluation. Shown is the smog check failure rate of
16 vehicles by age based on OBD II failures. It is clear
17 that by age four, the age that most vehicles will receive
18 their first smog check, the failure rate has begun to
19 increase. This is also the age when the emission warranty
20 for most parts expire. By age six the failure rate is
21 five times higher than it was at age three.
22 --o0o--
23 FIELD INSPECTION/TESTING SECTION ENGINEER
24 DICKERSON: The results of the analysis indicated that
25 extending the new vehicle exemption for an additional one
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1 to two more years is projected to significantly increase
2 vehicle emission in enhanced smog check area.
3 As shown in this chart, exempting both five- and
4 six-year-old vehicles will increase emissions by about
5 four tons per day of ROG and NOx in 2005. Exempting only
6 five-year-old vehicles would increase 2005 calendar year
7 emissions by nearly two tons per day in enhanced areas.
8 The projected emission increases are lower in 2010 due
9 to lower baseline emissions levels. However, a five- or
10 six-year exemption is still estimated to increase
11 ozone-forming emissions by one- to two-and-a-half tons per
12 day respectively.
13 --o0o--
14 FIELD INSPECTION/TESTING SECTION ENGINEER
15 DICKERSON: In November 1994 California submitted to the
16 U.S. EPA a comprehensive SIP detailing how San Diego
17 County, San Joaquin Valley, Ventura County, the Sacramento
18 region, the southeast desert, and the South Coast areas
19 would attain the one-hour federal ozone standard by a
20 statutory deadline.
21 Enhanced smog check was included in the SIP for
22 each area and contributed emission reductions needed for
23 attainment. In fact, in the South Coast, enhanced smog
24 check provided about one-fourth of the emission reductions
25 needed. Smog check will also be very important in helping
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1 the state attain the new more stringent federal eight-hour
2 standard. In addition to being a key strategy for
3 attaining the one-hour ozone standard, smog check is a
4 critical element in the South Coast, San Joaquin Valley PM
5 10 attainment plans.
6 --o0o--
7 FIELD INSPECTION/TESTING SECTION ENGINEER
8 DICKERSON: In July 2000 ARB and BAR released a report
9 that concluded enhanced smog check was achieving emission
10 reductions, but the reductions fall short of meeting ARB
11 SIP commitment. In August 2000 ARB and BAR committed to
12 implement additional smog check improvement to remedy the
13 short fall. Most, but not all of these improvements, have
14 been fully implemented. This illustrates the difficulty
15 of achieving the full benefits of the enhanced smog check
16 program. Lost emission reductions through program
17 relaxations would make this an even more difficult task.
18 --o0o--
19 FIELD INSPECTION/TESTING SECTION ENGINEER
20 DICKERSON: In bringing SIP implications more into focus,
21 I'll outline the implications of a five- and six-year
22 exemption separately for areas of California in fall under
23 the enhanced program and the basic program.
24 Enhanced smog check has been implemented under
25 SIP commitments that areas that currently do not meet air
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1 quality standards. As mentioned previously, additional
2 emission reductions are needed in these areas from smog
3 check and other programs in order to insure that
4 California will meet its air quality objectives.
5 Therefore, staff believes the emission reductions
6 lost from the exception of five- or six-year-old vehicle
7 would jeopardize SIP commitments. And basic smog check
8 areas which in general have a lesser air pollution
9 problem, the emission increase due to additional
10 exemptions are not large enough to jeopardize existing SIP
11 commitments. Therefore, the staff believes a fleet-wide
12 exemption for new motor vehicles beyond current four years
13 would not prohibit the state for meeting California's
14 commitment with respected to the SIP in basic areas.
15 --o0o--
16 FIELD INSPECTION/TESTING SECTION ENGINEER
17 DICKERSON: In order to put staff's recommendation to
18 perspective, this map of California identifies the three
19 smog check program types. Also included is a breakdown by
20 percentage of vehicles in the state smog check program.
21 The enhanced program areas are shown here in orange.
22 85 percent of the total state fleet is concentrated in
23 these areas.
24 The program basic program areas shown here in
25 dark blue comprise only 12 percent of the state's total
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1 fleet. Lastly, the change of ownership areas are shown in
2 light blue with only 3 percent of the state's population.
3 --o0o--
4 FIELD INSPECTION/TESTING SECTION ENGINEER
5 DICKERSON: In summary, staff has reviewed the
6 requirements AB 2637 and has investigated the emission
7 impact of increasing the smog check exemption to either
8 five or six years for new motor vehicles.
9 The analysis shows that a significant adverse
10 emissions impact would result in enhanced smog check areas
11 from such a change. Therefore, the staff proposes that
12 the Board approve its report and find that a fleet-wide
13 exemption for new motor vehicles beyond the current four
14 years would prohibit the state from meeting California SIP
15 commitments in enhanced smog check areas. This means that
16 the exemptions would not occur in enhanced areas.
17 In basic smog check areas, the staff recommends
18 the Board find that five- and six-year exemptions would
19 not prohibit the state from meeting California SIP
20 commitments, clearing the way for exemptions to be
21 implemented.
22 The ARB staff in cooperation with BAR will
23 continue to study targeted new vehicle exemption options
24 for enhanced areas that offer promise to decrease smog
25 check testing costs while preserving the emission benefits
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1 of the program.
2 On the next few slides I'll give you a preview of
3 the alternatives staff is investigating.
4 --o0o--
5 FIELD INSPECTION/TESTING SECTION ENGINEER
6 DICKERSON: In evaluating other possible exemptions, staff
7 is seeking to improve the cost effectiveness of smog check
8 by exempting vehicles or vehicle classes that have a high
9 likelihood of passing a smog check inspection. This would
10 reduce consumer cost and inconvenience. It will also
11 minimize any lost emission reductions. We are currently
12 evaluating three different ways of exempting additional
13 vehicles.
14 --o0o--
15 FIELD INSPECTION/TESTING SECTION ENGINEER
16 DICKERSON: The first is to exempt all PZEVs. Because
17 PZEVs have a 150,000-mile warranty, we expect most owners
18 will seek out repairs whenever the check engine light come
19 on.
20 The second approach involves using remote censors
21 at the roadside to identify vehicles which repeatedly
22 demonstrate very low emissions.
23 Finally, BAR is evaluating whether there are
24 groups of vehicles, such as a specific model, which rarely
25 fail smog check and, therefore, could be exempted.
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1 We will inform you if any of these approaches
2 proves itself a viable way to exempt more vehicles from
3 the smog check.
4 Thank you.
5 CHAIRPERSON LLOYD: Thank you very much.
6 Questions. Ms. D'Adamo.
7 BOARD MEMBER D'ADAMO: Yes. The slide that you
8 provided results -- lost emission benefits and enhanced
9 smog check areas. Do you have a similar chart for the
10 basic areas? Or regardless of whether or not you have a
11 chart, do you have that information on the basic areas?
12 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: In the
13 chart here it showed the basic areas being 12 percent of
14 the cars in the state and 85, not 90 I said before, were
15 in the enhanced. Another 3 percent that were only subject
16 to change of ownership inspections. So I guess you could
17 use that ratio roughly to figure out what the tons would
18 be. I guess it would be 12/85th times these numbers.
19 BOARD MEMBER D'ADAMO: The concern that I have --
20 and this relates to our earlier conversations. I suppose
21 in certain areas of the state that are almost entirely in
22 basic areas it's not going to make that big of a
23 difference. But in areas such as the Valley -- and I
24 don't know about South Coast. I imagine there's probably
25 not much of anything in South Coast that's in basic. So
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1 just for purposes of discussion here, looking at the
2 Valley, I imagine there's a fair portion of the rural
3 areas that would still be considered basic. And
4 especially if the Valley gets bumped up to extreme, I
5 would think, you know, anything that could come out of
6 that black box would make a difference in terms of meeting
7 the state's air quality standards.
8 So I'm just wondering if the staff considered not
9 allowing the exemption to occur in certain areas --
10 certain non-attainment areas extreme, severe.
11 EXECUTIVE OFFICER WITHERSPOON: We had the same
12 concern you did about whether -- in the Valley in
13 particular if you look in the map and see how much basic
14 and enhanced coexist side by side whether we'd be eroding
15 progress. But the standard that the Cardoza Bill gave us
16 was very narrow. It said we had to find it was going to
17 directly violate a SIP commitment or interfere with
18 conformity. And by that standard we could not reach the
19 finding that it would necessarily undercut what we were
20 legally committed to do because we had established one SIP
21 finding for basic areas and a separate one for enhanced
22 originally.
23 So where we're deficient in enhanced areas -- and
24 certainly some vehicles will traverse back and forth -- we
25 couldn't pin that down sufficiently to say it had risen to
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1 the level of the standard of the Cardoza Bill that we
2 could tell you to make this finding and stop the exemption
3 from going into effect. But we did weigh that.
4 BOARD MEMBER D'ADAMO: Even in the event the
5 Valley goes extreme? We're looking at Title 5, for
6 example, remote areas of the Valley where farmers are
7 going to be required to get their diesel irrigation pumps
8 either permitted or replaced and in remote areas of the
9 state. So just -- I realize this bill had nothing to do
10 with Title 5, but just drawing a comparison I think that
11 especially in an area -- maybe Ms. Walsh can answer this.
12 But is the language so restrictive that it wouldn't allow
13 for some additional consideration if the Valley were to go
14 extreme and have the black box situation?
15 SENIOR STAFF COUNSEL JENNE: I think the issue is
16 whether we can make a finding that would prohibit the
17 state from meeting its SIP commitments. And the bottom
18 line I think when staff looked at the numbers, it just
19 looked like the numbers were very, very small. And we
20 couldn't make that legal finding that they were big enough
21 to prohibit the state from meeting SIP. I think in the
22 Valley when you go to extreme that the number is still
23 very small, and it's probably not enough to reach that
24 legal standard.
25 BOARD MEMBER D'ADAMO: And the standard actually
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1 requires -- it's tied to SIP commitments?
2 SENIOR STAFF COUNSEL JENNE: It says "prohibit
3 the state from meeting their requirements of the state's
4 commitments with respect to the state implementation plan.
5 EXECUTIVE OFFICER WITHERSPOON: D.D., the other
6 factor -- excuse me -- Ms. D'Adamo is the existing legally
7 enforceable SIP. So it's the 1994 SIP in the San Joaquin
8 Valley's case, not the one that's under preparation now,
9 or would be required under extreme designation.
10 I suppose could you construct a conflict by
11 setting up the SIP to depend on those emission reductions.
12 And later we could revisit this and make a finding under a
13 new SIP. But under the one we have on the books, we
14 didn't think we could reach the result.
15 BOARD MEMBER D'ADAMO: Would the district have
16 the option as they reevaluate -- as they evaluate the SIP
17 measures to include that as a measure that they would like
18 to have?
19 EXECUTIVE OFFICER WITHERSPOON: I think we can.
20 BOARD MEMBER D'ADAMO: Just looking for any way I
21 can to have there be another inequity argument that we can
22 bring back to the Board later.
23 SUPERVISOR DeSAULNIER: I'm prepared to ask
24 Senator Burton to write a bill so you don't have to have
25 enhanced areas at all in the valley. We keep giving and
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1 giving.
2 CHAIRPERSON LLOYD: I thought we should use
3 staff's creativity and have a partially-enhanced area, the
4 transition. I think it's a good point.
5 BOARD MEMBER D'ADAMO: Right. I guess I'm a bit
6 more sympathetic to the test-only situation. But basic
7 doesn't require that anyways. So, Mr. Cackette, what you
8 had mentioned earlier about someone in a remote area
9 having to drive in to go to a test-only station, that
10 wouldn't apply. These people are --
11 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: To go
12 to an enhanced station which means one with a dyamometer.
13 It would be test and repair. But even in those areas, you
14 know, there may not be enough business to support a
15 $50,000 dyamometer purchase. Not test-only, but enhanced
16 with the dyamometer.
17 BOARD MEMBER D'ADAMO: But in the rural areas
18 they're required already. This would be an exemption with
19 regard to the newer vehicles under a basic.
20 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Yes.
21 That's correct.
22 CHAIRPERSON LLOYD: The other area where it could
23 be helpful -- and this context is getting back some of the
24 later comments from staff. If you're able to work the
25 district to identify makes and models which basically are
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1 more reliable more vital for that period of time, get some
2 preferred options there.
3 Mr. -- Supervisor DeSaulnier and Mr. McKinnon.
4 SUPERVISOR DeSAULNIER: Matt says he wants the
5 last word this time.
6 As I read this, I don't know whether to ask staff
7 from the author's office or our staff. It doesn't seem if
8 as if we have any legal discretion, or very little.
9 EXECUTIVE OFFICER WITHERSPOON: With respect to
10 enhanced areas, you mean? I think that's correct.
11 SUPERVISOR DeSAULNIER: Just in terms of
12 philosophically, what the last speaker on the last item
13 said -- I've heard this from other people Dennis Dakota
14 amongst them. In an area like the Bay Area that
15 generally, as I understand it, for a metropolitan area has
16 a relatively new fleet, just the issue of we bring the
17 tested-only stations on and the amount of demand is going
18 to decrease. So you've got these people putting out a
19 large capital investment considering the size of their
20 business and the demand may not be there, which would be a
21 good thing for air quality.
22 Could you respond to that? Or is that something
23 you can look at in terms of the ongoing look at how we can
24 improve smog check.
25 EXECUTIVE OFFICER WITHERSPOON: I would say there
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1 is a tension between trying to minimize burdens on
2 motorists and also trying to preserve market share and
3 business opportunities for the stations that have been
4 invested in equipment and wish to provide these services.
5 That, you know, to the extent more vehicles are exempt now
6 by any means, whether because there PZEV, because they're
7 super clean models, because they've passed clean screen
8 remote censors, that will reduce business to -- whether
9 it's test-only or test and repair. And the competing
10 public policy goal is why send someone to a test that
11 doesn't have a dirty vehicle that needs to be repaired?
12 And so the cost effectiveness -- even if keeping
13 these vehicles in is at the high side of 45,000 a ton,
14 something to that effect, so the I&M Committee when they
15 looked at it they supported our determination but said we
16 really need to keep working on this problem because we're
17 wasting dollars. Now, granted, those are dollars we're
18 not viewed as wasted by the industry that's invested in
19 dynos and trying to recoup its investment. But in terms
20 of dollars spent to reduces pollution, it's wasted in
21 another sense if there is no pollution there to be
22 addressed.
23 So finding that balance point and not
24 undercutting the companys that are our partners this in
25 this effort is very challenging task and it has been
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1 challenging ever since smog check began.
2 SUPERVISOR DeSAULNIER: I'm fine with this item,
3 Mr. Chairman. But I do think as staff reviews it, it
4 seems this tension will most likely get worse. And with
5 the risk of agreeing with Charlie, then you get into the
6 issue as this business operation becomes more difficult to
7 be profitable, it seems that you might have further
8 problems with fraud, with people trying to create an
9 underground business.
10 So when we look at this, it'd just be nice if
11 staff would report on that and try to figure out as well
12 as you can without -- just generally quantify if this is
13 an issue, if the issue's growing, if there's a way to stop
14 it or prohibit it.
15 Thank you.
16 CHAIRPERSON LLOYD: I think Mr. McKinnon had a
17 comment.
18 BOARD MEMBER McKINNON: Yeah. I'm very
19 comfortable with the resolution. I also -- I think as
20 warranties get better and better and as the cars get more
21 and more reliable, I think that it should be a benefit to
22 the person that's purchasing a car that they've paid more
23 for emission controls that are warranted for longer and
24 long they should receive some of the benefit of that of
25 going less often. And I think eventually we have to as
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1 the cleaner and cleaner cars with the longer warranties
2 come into effect, we have to get good at figuring out
3 which cars fit that category and how reliable it is. But
4 it should be a benefit of buying one of those cars is that
5 you go less often, I think.
6 Now, as long-time advocate for defense workers,
7 when your market is developed by government, you are
8 subject to government changing and deciding that you have
9 less of a market. And you're also subject to things that
10 happen. And I think we were just talking about the
11 tensions. You know, we all know we need to deal with
12 older cars. We know that. And then there's sort of
13 another subject that enters in this area, and that is that
14 rule changes don't contemplate what it costs to do the
15 change. And sometimes it's the dyno in that example, and
16 sometimes it's rule changes that require training at a
17 frequency that is almost unfair to the people that do the
18 work.
19 And I don't -- I'm not on BAR's Board. I
20 don't -- but I often talk to mechanics who have difficulty
21 with frequent rule changes having to take courses, course
22 availability being a problem, and certification being a
23 problem in such a frequent time frame. And I think, you
24 know, there are places where we could be better and fairer
25 as government. I mean, it may not be this agency. It may
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1 be BAR. But we could be a little more consider at of how
2 often we change to give people time to adjust to the
3 changes.
4 But I don't buy that when you create a regulated
5 market that you have a duty to protect that market if the
6 technology gets to the point where the cars are cleaner
7 for longer. I'm comfortable with this decision where
8 there's evidence that the cars get dirty at four years.
9 But if we get to the point where cars don't get dirty for
10 ten years, we need to look at that, and we need to be fair
11 to the people that purchase the cars that stay in good
12 shape for ten years.
13 CHAIRPERSON LLOYD: Thank you.
14 Professor Friedman.
15 BOARD MEMBER HUGH FRIEDMAN: Would you correct me
16 if I'm wrong. My understanding is that the Legislature,
17 not us, has imposed this smog check regime and made the
18 distinctions between test and -- test-only and test and
19 repair. I'm sure -- or I assume we had -- we or our
20 predecessors have some input on that. We can either
21 voluntarily testify or be asked and called upon for our
22 views.
23 But I'm not sure that it is our ultimate decision
24 or responsibility, and I don't believe it is, to decide
25 what gets exempt -- other than being referred this
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1 specific issue to extend the exception for two years.
2 Actually, we're just making a finding. But beyond that,
3 it's the Bureau of Automotive Repair. That's in a
4 different agency. And it's the Legislature. And I'm --
5 while I certainly that -- I really like, Matt, your
6 putting the context on this in terms of what the test and
7 repair people are facing potentially. I'm -- other than
8 just being sympathetic, I'm not sure we're the right forum
9 for any kind of action or decision other than what we have
10 before us. And I'm comfortable with the recommendation.
11 GENERAL COUNSEL WALSH: I think that's an
12 accurate description of the situation that states law does
13 largely draw the design of the system we are looking at.
14 As Supervisor DeSaulnier indicated earlier, it's
15 accurate that this is not a discretionary decision in the
16 way that most of the decisions that come before you are.
17 This is making a factual finding, and that finding will
18 trigger a specific requirement that's already in state
19 law.
20 CHAIRPERSON LLOYD: Supervisor Patrick.
21 SUPERVISOR PATRICK: Thank you, Mr. Chairman.
22 Professor Friedman's comments, notwithstanding, I
23 think it's important that we go back to Board Member
24 D'Adamo's point. As someone who's from the Valley and
25 recognizes, as all of us in this room do, the Valley's
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1 challenges, it concerns me that our basic areas will
2 get -- they're already basic as opposed to enhanced. And
3 now they're going to get an additional two years. And our
4 charts show us that at year four the emissions start
5 rising. So I think your point is very well taken. And I
6 think that that's something that we have to be concerned
7 about.
8 Now, perhaps, it's not something that we have,
9 you know -- under this piece of legislation that we have
10 the ability to do anything about. But I think that we
11 would be remiss if not at least acknowledging that in the
12 Valley we're going to need all the help that we can get.
13 And to give them a pass on advance versus basic, I think,
14 makes a lot of sense. Because they're in small
15 communities and, you know, perhaps it's an inconvenience.
16 Perhaps if we want to make sure that the folks that are
17 providing these tests in small communities, you know, that
18 they can stay in their community and do this.
19 So I'm completely comfortable with that. But
20 then to give them an additional two years I don't think
21 makes a whole lot of sense. I don't know how you go about
22 acknowledging that, but I do think it's something that in
23 the Valley that we have to be concerned about, perhaps
24 some other areas as well.
25 But I appreciate you bringing it up and you beat
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1 me to the punch. Thank you.
2 CHAIRPERSON LLOYD: Thank you.
3 EXECUTIVE OFFICER WITHERSPOON: We've been having
4 a furious discussion between all four deputies --
5 SUPERVISOR PATRICK: I noticed.
6 EXECUTIVE OFFICER WITHERSPOON: -- on this
7 question and whether we erred, whether we can construct a
8 different theory, how we might to get to the result, which
9 seems too obvious that the basic portions of the San
10 Joaquin Valley, because they are in an attainment area
11 somehow be included.
12 So what I think I would like to recommend at this
13 point is that staff go back and take another look at the
14 Valley specifically and see if we want to make a different
15 finding about them.
16 We have time. This law does not take effect
17 until January 1st of 2004, though we'd certainly need to
18 decide relatively soon so BAR and the Department of Motor
19 Vehicles can take the appropriate steps to implement or
20 not implement this exemption. But there's enough dialog
21 going on between the four of us that we want to put our
22 best brains to it and see if we can't reach a finding that
23 the Valley should say stay in. And our preliminary
24 conclusion was they can't, but we'll take one more look at
25 it, if that would be amenable to Ms. D'Adamo and
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1 Supervisor Patrick.
2 BOARD MEMBER D'ADAMO: I'm fine with that, or to
3 adopt what we have and bring that smaller piece back.
4 EXECUTIVE OFFICER WITHERSPOON: That's what I was
5 suggesting. Go ahead and make the finding in general. If
6 we need to refine it for the San Joaquin Valley, we'll
7 bring back the refinement on just that piece. Because
8 none of the other basic areas are non-attainment for
9 federal law, I don't think.
10 SENIOR STAFF COUNSEL JENNE: Ms. D'Adamo, the way
11 the resolution is currently structured, the Board would be
12 making a finding today for enhanced areas and would
13 essentially be declining to make any finding right now
14 about the basic areas. So because the Board isn't making
15 a finding in the basic areas, the exception would into
16 effect. But the Board -- we could certainly come back
17 later on about another finding for just the basic areas as
18 you suggested. And that wouldn't affect anything you
19 would do today, which would be just be making the finding
20 for the enhanced areas.
21 BOARD MEMBER HUGH FRIEDMAN: I just wanted to
22 clarify that too for Supervisor Patrick and anybody else I
23 might have misled. When I said -- I indicated I
24 understood we had a limited role, it was to make findings
25 as referred by the legislation. And when I said I support
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1 the proposal, it did not take action with respect to the
2 basic areas on our part, and I didn't mean to preclude any
3 further consideration with respect to magnifying pollution
4 problems or non-attainment areas. So I certainly have no
5 problem with it coming back if there's some way that in
6 good faith a finding can be made with respect to that.
7 CHAIRPERSON LLOYD: Supervisor DeSaulnier.
8 SUPERVISOR DeSAULNIER: I'd be happy to make a
9 motion. And if you need you need an amendment to the
10 resolution, D.D., you can do that, or if the direction is
11 sufficient for you to come back. But I'll move
12 resolution --
13 CHAIRPERSON LLOYD: Supervisor DeSaulnier, I
14 appreciate your anxiety, but we do have three witnesses
15 signed up to --
16 SUPERVISOR DeSAULNIER: I thought we had --
17 sorry, Charlie. I know you'll get back at me some way.
18 Sorry Charlie. What commercial did that come from?
19 CHAIRPERSON LLOYD: So indeed, if there are no
20 more question from the Board, we do have three witnesses
21 signed up. Charlie Peters, Larry Armstrong, and Chris
22 Ervine. And then we will be ready for the motion.
23 Charlie.
24 MR. PETERS: Mr. DeSaulnier, Mr. Chairman, and
25 Board. Very much appreciate Mr. DeSaulnier's attention,
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1 him being a small businessman in the Bay Area with
2 significant efforts against small businesses -- restaurant
3 businesses throughout the state of California currently
4 with unfair business practice situations where some
5 regulator might come in to Dr. DeSaulnier's business, in
6 spite of the fact of how important and powerful he is, and
7 put some minor correctional issue against his business.
8 And what can happen there can get pretty interesting, even
9 in spite of his power.
10 What I'm here to talk to you about today is I
11 gave you a packet of information which includes -- and I'm
12 interested in the policy issues -- includes a small
13 businessman in Southern California. There was no
14 opportunity to make corrections. An employee of his did
15 something inappropriate, which he immediately let go
16 before he found out what had happened.
17 He goes to his association, which is the largest
18 in the state supporting these issues, and the attorney
19 says $20,000 to start and you lose. He said, "Well, gee,
20 I'm good guy." He goes before the regulator, and they
21 say, "You're out of business."
22 That's an interesting place to start. He's
23 currently today out of business. He's 40 years old, AAA
24 approved shop, CAP approved shop, passed every test, every
25 standard there is. Has never had a citation in his life.
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1 Has had a perfect record with AAA. State of California
2 has him out of business today.
3 We are trying to mitigate that. He now has an
4 attorney. He's now a petitioned this to the Supreme
5 Court. He's now petitioned this to the Department of
6 Consumers Affairs. We're hoping he gets back in business.
7 We hope he gets some additional consideration. We hope we
8 can mitigate this.
9 But what's right behind that is immediately after
10 that they can take him to the district attorney. The
11 attorney general's got him now. Then the district
12 attorney comes for him. And then immediately after
13 that -- because there's been some action against him, we
14 can have an unfair business practice suit against him that
15 can extract another 20,000, $30,000 from this money.
16 Immediately as soon as that's done, the same attorney with
17 the same pseudo consumer can make another action, and
18 every attorney in the state of California can continue to
19 take action against this individual. And this guy never
20 did anything wrong.
21 What are we doing to small business in
22 California? What are we doing to the air, putting
23 somebody who's a professional that can fix the problem out
24 of business with no consideration. It's wrong. I want
25 your help. Say you have nothing to do with this. I've
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1 had everybody tell me for 15 years it's ain't my problem.
2 Well, it's mine. I'm the problem and my lack of ability
3 to communicate -- I'm working on trying to make it better.
4 I'm petitioning you. I'll get on my hands and knees if it
5 takes it to help support small business and better air
6 quality in California starting today and to create some
7 protection for Mr. DeSaulnier and his business in the Bay
8 Area.
9 Thank you.
10 CHAIRPERSON LLOYD: Thank you for your written
11 statement.
12 We have Larry Armstrong and then Chris Ervine.
13 MR. ARMSTRONG: Yes. My name is Larry Armstrong.
14 I operate some automotive tune-up shops that participate
15 in the smog check program in both the Bay Area and one
16 left in the enhanced area.
17 I submitted a letter to the Chairman concerning
18 my concerns over the recommendation of the I&M Review
19 Committee. I'd like to make a couple quick comments. I
20 sat back on the other issue.
21 First, Mr. McKinnon, I would like you to consider
22 maybe an alternative theory on relinquishing a need to
23 have a smog check. And I would suggest to you there's a
24 very strong possibility that the reason these cars keep
25 getting better is because they were subjected to smog
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1 check and they failed smog check and the manufacturers
2 went back and fixed those problems and made better cars.
3 So there's a reverse spin on this thing that I would wish
4 that you would consider.
5 I think that -- I think that the smog check
6 program has caused vehicles to become a lot stronger and a
7 lot better in the things they do so that the manufacturers
8 could get out of the way of having their cars fail.
9 The issue of how many cars go to test-only, I
10 have strongly objected to this. Regulators have never
11 willingly admitted to what they're doing, and I listened
12 to Mr. Cackette over here, and I listened to him carefully
13 as to what he said. He told you the truth. But what he
14 really did was spin you a little bit. And it bothers me
15 when that gets done to me, and it bothers me when it gets
16 down to you folks. When he tells you that 36 percent of
17 the vehicles in the fleet are being sent to test-only, the
18 Senate Transportation Committee equated that one half of
19 all the directed vehicles. It's not 36 percent of the
20 vehicles being tested. Over 50 percent of the vehicles
21 are being directed to test-only.
22 Somebody talked about investment and return on
23 that investment. I finally gave away a smog check station
24 that I've run since 1976 in Fresno. Virtually gave it
25 away to get away from the losses that I was continuously
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1 incurring because of the laws that we put in place that
2 took my business away.
3 If that serves the public somehow, I guess that's
4 the way it goes. But I don't see how it serves the public
5 to take away the ability to find and repair cars in need
6 of emission repairs in favor of what? So I would ask you
7 to at least be thinking about that.
8 I have asked the Bureau of Automotive Repair for
9 the data that was given to you today as an example that
10 somehow vehicles that go to test only are somehow treated
11 definitely and better and whatever. And the fact of the
12 matter is that to my knowledge that evidence has never
13 been available. I've asked the Bureau of Automotive
14 Repair again a couple of weeks ago to provide me with that
15 evidence, and I've seen none of that evidence.
16 The 36 percent factor that you're dealing with
17 was developed by a company under the direction of a fellow
18 named Rob Clausmyer, and it was done based on an arbitrary
19 50 percent discount to test and repair. They then
20 calculated up to 36 percent of the vehicles would have to
21 go to test-only to meet the requirements of this
22 50 percent discount. Well, there was no basis for the
23 50 percent discount so whole thing is bologna.
24 In a positive note, I would like to commend the
25 ARB staff for standing up to the subtle pressure from the
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1 Legislature on and Governor an AB 2637 to cave in and
2 figure out a way to do that, even though they know there
3 are detrimental effects on emissions from doing that.
4 I was very much concerned with the presentation
5 to the I&M Review Committee which then prompted a letter
6 that came to you folks expressing a lot of concern about
7 the cost of taking those vehicles out. I have asked the
8 Chairman of the Air Resources Board to provide me with the
9 documentation so that I can figure out how that was done
10 because it doesn't seem logical to me. It shouldn't seem
11 logical to you if older cars -- makes sense to fix and
12 repair and -- find and repair the broken ones. If ten
13 percent of that group of cars of those newer vehicles are
14 broken, how does it become this astronomical cost to fix
15 those cars.
16 And I question whether -- and I don't know
17 whether the effect of the remainder of new car warranty
18 might be available to those consumers. If it is, the
19 additional cost factor is, in fact, zero because the new
20 car manufacturers have an obligation the fix those cars.
21 And if that cost moves over to the consumer because it
22 didn't get a smog check at a later date, then who's
23 responsible for that? If we as a society just allow those
24 cars to go out beyond the warranty so that the consumer
25 can be obligated to pay for those repairs, that doesn't
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1 make a lot of sense to me.
2 The other issue that I have with this, and it has
3 absolutely no effect on me except that as I sat back here
4 had little blue areas on the chart up on the wall, looked
5 like more geographical area to me than the enhanced areas.
6 And these were areas that we're going to say in the
7 enhanced area the removal of the five- and six-year cars
8 would cause this damage to our ability to maintain the
9 SIP, but in the blue areas we're -- because of the way the
10 law was written, you folks as a group do not have the
11 ability to stand up and say wait a minute. If we're going
12 to leave these cars in the enhanced areas, we see
13 absolutely no sense in taking them out of the other areas.
14 So I would ask you to stand up and, if necessary,
15 ask the Legislature to correct that little loophole in
16 there. And as I say, it makes absolutely no difference to
17 me, except I think I drive through some of those basic
18 areas with my clean vehicle. And so I guess I'm subjected
19 to the air. So it does make a difference to me.
20 To me the -- removing those cars just because is
21 irresponsible. And I would hope that you would take the
22 responsible action. And I would -- again, in writing I
23 requested the information that produced those cost
24 factors. I'd like to have it in writing. I'd like to
25 have the data behind it. And I will tell you folks that
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1 every single time since 1992 I've asked for information
2 that I was concerned about, when I got the information it
3 was fairly easy to see how the numbers were maneuvered so
4 they look like something they weren't.
5 CHAIRPERSON LLOYD: Thank you very much. I think
6 staff heard from request from Mr. Armstrong.
7 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: The
8 detailed data for this is publicly available now. The
9 report that backs up the staff report. So if you need
10 more than that we can get it.
11 CHAIRPERSON LLOYD: I think it would be
12 helpful -- might available to send him the relevant
13 information so he doesn't have to work for it would be
14 great.
15 CHAIRPERSON LLOYD: And lastly, Chris Ervine.
16 MR. ERVINE: Exempting five-year new vehicles, I
17 have an example. We handle two fleets of -- they happen
18 to be Ford Ranger and Mazda pickups. These vehicles range
19 in age from 1999 to 2002. And I can guarantee you that by
20 the time these vehicles reach 70,000 miles, they have had
21 three emission failures. The sale thing on the 2002,
22 which is only a one-year old vehicle. These are a typical
23 fleet vehicle. They're a low -- well, I don't know
24 whether you want to call $10,000 --
25 CHAIRPERSON LLOYD: What were the two models?
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1 What was the latter model you mentioned?
2 MR. ERVINE: Ford Ranger and Mazda V2500.
3 CHAIRPERSON LLOYD: It's a good job Kelly came
4 back.
5 MR. ERVINE: In one fleet in particular by the
6 time they reach 80,000 miles, they've had valve failures
7 in them and cracked cylinder heads. In one particular
8 case I contacted BAR because we had one that had 47,000
9 miles on it, and it had three bad valves in it and was
10 sending a misfire -- intermittent misfire code. And BAR's
11 repy was to test the vehicle and then send it to the
12 dealership to be repaired under warranty. The dealership
13 would not repair it under warranty and BAR would not back
14 us up and make the dealership fix it. The consumer ended
15 up repairing that engine on their own.
16 Ford will not admit to this problem or any of the
17 other emission failures concerned with these vehicles.
18 So there are vehicles out there that, yes, will
19 go 200,000 miles without an emission failure. There are
20 other vehicles that are on the low end of cost that are
21 typically not maintained well that are typically a fleet
22 vehicle that will fail. And in the cases of these fleet
23 vehicles here, the owner of this fleet was more than happy
24 to repair these vehicles any time there was anything wrong
25 with them. But his employees never told him that there
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1 was anything wrong with these vehicles. And they
2 continued to drive them. And in some cases we found out
3 at a later date that it had been six months that this
4 thing had been on the road with a burned valve.
5 By extending it to six years, a lot of these
6 vehicles with emission failures are out of warranty. So
7 the consumer is being hurt in that they're not finding out
8 there's an emission problem with their vehicle until it's
9 out of warranty and then they're having to pay for the
10 emission repairs.
11 Consumers in San Joaquin Valley and Sacramento
12 Valley and other places are being penalized financially on
13 repairs -- the cost of repairs. In these areas in the
14 enhanced area the cost of repairs has gone from a point
15 where we're dealing with spending this much money to
16 reduce this much emissions, to spending this much money to
17 get this much emission reduction. And by bringing in some
18 of the basic areas which are all up and down the central
19 valley on both sides and bringing in not the whole area as
20 an enhanced area but the high density population spots in
21 these basic areas into the enhanced area and bringing in
22 the change of ownership. I think the whole state should
23 be at least a biannual smog inspection.
24 The program is already in place. As far as
25 having people that have to travel further for their
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1 inspections, it's not going to happen because the smog
2 machines are out there, even though they're basic machines
3 and they're not the enhanced machines. By just bringing
4 these outlying areas on as a biannual inspection is going
5 to reduce emissions tremendously. And bringing in high
6 density areas that are in the basic area into it, we're
7 going to also reduce emissions.
8 We all know that the enhanced loaded mode testing
9 finds a lot more emissions than just the two-speed idle
10 test. And we also know that there's a huge percentage --
11 as BAR showed, if there's no program what the emissions
12 were and by just having the basic program what the
13 emission reduction was, it was a big jump. And I think
14 that the name of this is not to reduce emissions just in
15 the high non-attainment areas, but to reduce emissions
16 worldwide.
17 CHAIRPERSON LLOYD: Thank you very much. Any
18 questions from the Board? Thank you.
19 So with that, it's not a regulatory item. It's
20 not necessary to officially close the record. However, we
21 do have a resolution before us. Resolution number 03-6
22 containing staff recommendation. Do I have the motion
23 seconded?
24 Sorry, Supervisor DeSaulnier.
25 SUPERVISOR DeSAULNIER: Is now okay? Thanks for
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1 all those comments, Charlie about all the power. I
2 certainly feel very powerful up here.
3 I move resolution 03-6. And D.D. --
4 BOARD MEMBER D'ADAMO: Yes. Do we have
5 sufficient direction? The only thing I probably should
6 add, I think we're probably just talking about the Valley.
7 But I wouldn't want the valley to necessarily be singled
8 out. So maybe non-attainment areas.
9 EXECUTIVE OFFICER WITHERSPOON: Federal
10 non-attainment areas. That would be where there would be
11 a SIP requirement.
12 BOARD MEMBER D'ADAMO: Okay.
13 CHAIRPERSON LLOYD: You're going to speak to the
14 author about the limitations of the legislation?
15 BOARD MEMBER D'ADAMO: Absolutely. Actually,
16 since you brought it up, I mentioned what we were going to
17 be doing. He said he was comfortable with it. Apparently
18 this was an amendment that was sort of --
19 CHAIRPERSON LLOYD: But I think to me it
20 highlighted a very good discussion because it highlighted
21 many of the issues which -- some which we can't control.
22 But I think it was a very good discussion.
23 BOARD MEMBER D'ADAMO: In light of that then, I
24 second.
25 CHAIRPERSON LLOYD: All in favor say aye.
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1 (Ayes)
2 CHAIRPERSON LLOYD: Anybody against?
3 Thank you very much.
4 With that, I think we're going to take a
5 ten-minute break for the court reporter. I don't think we
6 can go to the next item without that ten-minute break. So
7 thank you very much.
8 (Thereupon a recess was taken.)
9 CHAIRPERSON LLOYD: I'd like to continue with
10 agenda 03-3-4, public meeting to consider federal source
11 of air pollution in California.
12 This item is a timely one as the San Joaquin and
13 South Coast Air Quality District are in the process of
14 preparing new air quality plans for federal one-hour ozone
15 standard attainment. It's clear we can't meet our
16 attainment goals without federal action to complement both
17 the state and the local efforts.
18 The Federal Clean Air Act assigns U.S. EPA some
19 specific responsibilities for reducing emissions from
20 mobile sources and also preempts states from regulating
21 certain sources. There are also practical considerations
22 in the case of interstate trucks that make it necessary
23 for action at the national level. This shared regulatory
24 responsibility combined with the challenging emission
25 reduction targets we face makes it critical for continued
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1 action at the federal level. This needs to occur on a
2 parallel track as ARB and local district continue to
3 pursue every feasible measures for sources under state and
4 local jurisdiction.
5 I am pleased that had Mr. Bob Larson from the
6 U.S. EPA's Office of Transportation and Air Quality has
7 traveled from Ann Arbor to join us today. Good to see
8 you, Bob. It's been a while. I know Bob has worked
9 closely with ARB staff in the development of our
10 respective mobile source strategies, and he will provide
11 comments following staff's presentation.
12 And I would like then to turn it over to
13 Ms. Witherspoon to introduce this item and begin the staff
14 presentation.
15 EXECUTIVE OFFICER WITHERSPOON: Thank you,
16 Chairman Lloyd, members of the Board.
17 California has made significant progress in
18 reducing emissions and improving air quality as a result
19 of actions at the local, state, and federal levels. But
20 we also have a long way to go to meet health-based air
21 quality standards in all California communities.
22 Staff's presentation will highlight the relative
23 contribution of emission sources under federal
24 jurisdiction, key actions already taken, and further
25 opportunities we see to reduce emissions from these
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1 sources.
2 We want to continue our path of progress with the
3 inter-agency partnerships that have been successful in the
4 past, our technical and collaborative regulations have
5 resulted in the adoption of key measures from the 1994
6 ozone SIP and set the stage for future actions.
7 Over the past few years we have jointly tackled
8 issue such as excess NOx emissions from heavy duty trucks
9 with benefits being realized nationwide. For another
10 important group of sources, off road construction and farm
11 equipment, the U.S. EPA has just released a new regulatory
12 proposal. The emission reductions from this rule will
13 help reduce both ozone and particulate pollution from new
14 diesel engines. We want to build on these successes as we
15 move forward. One of the big challenges is to address
16 existing as well as new engines. This is critical since
17 federal sources include trucks, trains, ships, and other
18 equipment with long usable lives.
19 Mr. Larry Hunsaker will now make the staff
20 presentation.
21 MR. HUNSAKER: Thank you, Ms. Witherspoon. Good
22 afternoon, Chairman Lloyd, members of the Board.
23 Federal sources of air pollution are a
24 significant contributor to California's air quality
25 problem. This presentation is intended to provide a
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1 background on why these sources are important to control
2 and highlight opportunities for further emission
3 reductions.
4 (Thereupon an overhead presentation was
5 presented as follows.)
6 MR. HUNSAKER: Actions is to reduce emissions
7 from federal sources are essential to our efforts to meet
8 air quality standards. When we use the term federal
9 sources, we are referring to mobile sources that must be
10 addressed by the federal government for one of two
11 reasons. Either the federal Clean Air Act preempts our
12 regulatory authority or practical considerations make
13 national regulations necessary.
14 Under federal law only U.S. EPA can set emissions
15 standards for new locomotive engines and new construction
16 and farm equipment with less than 175 horsepower. In the
17 case of heavy duty trucks, ARB cannot set emission
18 standards for truck that are purchased and registered
19 outside of California. The interstate nature of the
20 trucking industry makes national standards the most
21 practical approach.
22 Lastly, engine standards for aircraft and
23 ocean-going ships are set at the international level with
24 the federal government representing the US.
25 --o0o--
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1 MR. HUNSAKER: The primary pollutants of concern
2 from federal sources are NOx and diesel PM. State-wide in
3 2010 emissions of reactive organic gasses are relatively
4 small at about 6 percent, whereas federal sources will
5 account for 28 percent of the NOx and 61 percent of the
6 diesel PM.
7 While we show state-wide emissions here, there
8 are some regional difference. In the South Coast federal
9 sources contribute about 32 percent of the NOx and 65
10 percent of the diesel PM, slightly more than the
11 state-wide percentage.
12 In the San Joaquin Valley there are no ship
13 emission. Federal sources contribute somewhat less than
14 the state-wide percentage, about 22 percent of the NOx and
15 46 percent of the diesel PM. For diesel PM localized
16 impacts from sources are important. Facilities such as
17 ports and rail yards are good examples of where local,
18 state, and federal cooperation is necessary.
19 --o0o--
20 MR. HUNSAKER: This slide shows the state-wide
21 breakdown of federal NOx sources into their major
22 components, ranging from 8 percent from construction
23 equipment to 3 percent for trains and aircraft. This
24 breakdown varies region in the state. For example, in the
25 San Joaquin Valley farm equipment contributes the most at
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1 9 percent, while aircraft contribute the least at 1
2 percent. In the South Coast construction equipment is the
3 top category at 11 percent, while farm equipment is the
4 lowest at 1 percent.
5 Now let's look at the breakdown for diesel PM.
6 --o0o--
7 MR. HUNSAKER: Federal sources are a big
8 contributor to diesel PM emissions. From a public
9 exposure standpoint, the toxicity of diesel PM combined
10 with its contribution to overall particulate pollution
11 makes these emissions important both regionally and
12 locally. Statewide emissions range from 28 percent for
13 construction equipment to 4 percent for trains and
14 out-of-state trucks. If we include all interstate trucks,
15 those that are registered both in California and in other
16 states, the contribution from trucks would be about
17 double.
18 Again, there are regional differences and
19 relative emission contributions. For the San Joaquin
20 Valley, the largest category is farm equipment at 25
21 percent, while in the South Coast the largest category is
22 construction equipment at 34 percent.
23 --o0o--
24 MR. HUNSAKER: This slide shows the projected NOx
25 emissions for preempted farm and construction equipment,
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1 out-of-state trucks, and trains based on current
2 requirements.
3 The big drop in farm and construction equipment
4 emissions is due to fleet turn over and implementation of
5 progressively tighter engine standards phasing in between
6 1997 and 2008. Out-of-state truck emissions show a steady
7 decline at the 2002 and 2000 search emission standard kick
8 in. There is also a decline in train emissions reflecting
9 national standards that phase in between 2001 and 2005.
10 And the agreement with the industry to reduce fleet
11 emissions in South Coast by 2010.
12 Diesel PM emissions generally follow those same
13 trends. These trends demonstrate how the benefits of
14 federal actions taken to date accrue over time. However,
15 significant emissions remain, and we must talk about
16 further reduction opportunities in a moment.
17 --o0o--
18 MR. HUNSAKER: This trend slide shows two federal
19 source categories, ships and aircraft whose emissions are
20 projected to increase rather than decrease. This reflects
21 a relative lack of progress in tightening engine standards
22 compared to other categories combined with growth and
23 other activities. Obviously, for aircraft emissions the
24 current industry problems will effect near-term emission
25 trends. But looking 15 or 20 years out, we do expect
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1 continued growth. This long-term perspective is important
2 for aircraft engines which remain in the service for
3 20 years or more.
4 The same problem applies to ships as growth
5 overtakes any benefit of current national and
6 international engine standards.
7 --o0o--
8 MR. HUNSAKER: The downward trends of emissions
9 shown in the previous slides are results of a joint effort
10 by U.S. EPA and ARB to adopt the controls called for in
11 the 1994 SIP. U.S. EPA and ARB adopted emission standards
12 for diesel trucks, off-road diesel gasoline, and LTD
13 powered engines and marine pleasure aircraft, such as jet
14 skis.
15 U.S. EPA also adopted standards for locomotives
16 and marine harbor craft. These regulatory efforts have
17 been complemented with memoranda of understanding signed
18 with the railroads to reduce locomotive emissions and with
19 the airlines to reduce emissions from airport ground
20 support equipment in the South Coast.
21 Voluntary approaches ever also been taken, such
22 as the voluntary shipping speed limit now in place in the
23 vicinity of the ports of Los Angeles and Long Beach. This
24 speed reduction results in lower NOx emissions.
25 --o0o--
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1 MR. HUNSAKER: Now let's look at where we stand
2 with current engine standard for heavy-duty diesel trucks.
3 This slide slows the progression of tighter emission
4 standards through the end of this decade. In 1997 U.S.
5 EPA adopted the two gram NOx for diesel trucks anticipated
6 in the 1994 SIP.
7 ARB adopted California standards in 1998 that
8 aligned with the national standards. These standards were
9 scheduled to take effect in 2004 but were accelerated to
10 2002 under the terms of the consent decree with the engine
11 manufacturers. In 2001 U.S. EPA adopted tighter diesel
12 truck standards which will be phased in between 2007 and
13 2010 and represent an overall reduction of 98 percent from
14 uncontrolled engine emissions.
15 Introduction of low sulfur diesel fuel in 2006 is
16 an integral part of the standards. ARB has adopted these
17 same engine standards for California.
18 --o0o--
19 MR. HUNSAKER: This is not the end of the story,
20 however. We are encouraging U.S. EPA to pursue strategies
21 to ensure that the benefits of tighter engine standards
22 are achieved in use. One strategy to ensure that
23 sophisticated emission controls perform adequately over
24 time is to require on-board diagnostic systems on new
25 engines.
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1 Another strategy is to adopt a manufacturer
2 in-use testing and recall program similar to the program
3 required for car manufacturers.
4 Also while diesel trucks will be much cleaner
5 starting in 2007, the long live of diesel engines slows
6 the introduction of cleaner vehicles into the fleet. This
7 makes it important to find ways to clean up the existing
8 fleet.
9 ARB is developing measures to implement our
10 diesel risk reduction plan. Last year ARB is scheduled to
11 consider a proposal to reduce diesel emissions from solid
12 waste collection vehicles. We are also working on
13 accelerated software up grade requirements to address the
14 excess NOx emissions resulting from the use of emission
15 control defeat devices in trucks engines during the 1990s.
16 --o0o--
17 MR. HUNSAKER: Over half the NOx and 75 percent
18 of the PM from off-road diesel engines come from preempted
19 farm and construction sources. We have cooperated with
20 U.S. EPA to address these engines, and our standards for
21 the engines we can regulate are harmonized with the
22 national EPA standards.
23 This slide slows the progress of adopted emission
24 standards for one category of off-road diesel engines,
25 those ranging from 100 to 175 horsepower. When the most
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1 stringent standards are fully phased in by 2008, new
2 engines will be up to 75 percent cleaner than uncontrolled
3 engines.
4 --o0o--
5 MR. HUNSAKER: Based on the current level of
6 control and the remaining emissions from off-road engines,
7 it's clear more needs to be done. Just last week U.S. EPA
8 proposed the anticipated next phase for federal off-road
9 engine standards. This proposal would reduce emissions by
10 an additional 90 percent by transferring on-road control
11 technology to off-road engines. The extension of lower
12 sulfur diesel fuel requirements to off-road engines
13 nationally is an integral part of the proposal.
14 We are very supportive of this proposal. And
15 following federal adoption, we will harmonize our standard
16 for that portion of the off-road fleet under state
17 control.
18 In terms of existing engines, ARB is pursuing
19 diesel PM risk-reduction measures and supporting incentive
20 programs to reduce NOx emissions from off-road engines.
21 --o0o--
22 MR. HUNSAKER: In 1998 U.S. EPA set emission
23 standards for new and remanufactured locomotives and
24 locomotive engines beginning in 2001 and phasing in
25 through 2005.
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1 In recognition of the severity of the South Coast
2 air quality problem and the contribution of locomotive
3 engines in the region, ARB reached agreement with the
4 railroads to further reduce their emissions in the South
5 Coast. This memorandum of understanding ensures that the
6 cleanest locomotive engines, those meeting 2005 standards,
7 are brought to the region.
8 With these programs, we project that locomotive
9 emissions in California will be cut in half between 2000
10 and 2010. However, we believe that there are further
11 opportunities for emission reductions from locomotives.
12 As technology continues to advance, U.S. EPA should
13 consider further tightening the standards for locomotives.
14 Use of cleaner fuels can also reduce emissions
15 and allow for application of additional control technology
16 and retrofits. And we support you U.S. EPA's proposal to
17 limit the sulfur content of locomotive diesel fuel to 500
18 parts per million of its off-road diesel proposed
19 announced last week.
20 --o0o--
21 MR. HUNSAKER: Commercial marine vessels include
22 both large ocean-going vessels, such as cargo ships and
23 passenger cruise ships, as well as smaller harbor craft.
24 The larger ocean-going ships travel internationally are
25 and predominantly foreign flag vessels.
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1 Harbor craft spends most of their time in
2 California coastal water. Standards for ocean-going ships
3 are set internationally through the International Maritime
4 Organization, or IMO. For American flag vessels the U.S.
5 EPA adopted standards based on the IMO levels.
6 U.S. EPA has also set standards for harbor craft.
7 However, these stands will achieve relatively modest
8 emission reductions in California. And with continued
9 growth in shipping activity, emissions are projected to
10 increase overall. The emission levels from these engines
11 remain well above those from other off-road or on-road
12 engines.
13 ARB established the Maritime Air Quality
14 Technical Working Group to work on air quality strategies.
15 The group includes stakeholders, such as the ports,
16 commercial shipping companies and industrial associations,
17 U.S. EPA, local air districts, and community and
18 environmental groups. The efforts of the working group
19 are starting to translate into programs to reduce
20 emissions, such as the speed reduction program I mentioned
21 earlier, and another program set to begin later this year
22 to test the effectiveness of promising retrofit control
23 technologies on ships.
24 --o0o--
25 MR. HUNSAKER: There is a lot more that can and
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1 should be done. In our draft state and federal element
2 for the upcoming California SIPS, we had laid out a number
3 of opportunities for emission reductions. We continue to
4 urge U.S. EPA to adopt more stringent new engine standards
5 for harbor craft and ocean-going ships working through the
6 IMO process.
7 We are looking at options for reducing in-use
8 emissions from marine vessels. We believe that close
9 coordination at the national, state, and local level is
10 essential in developing the most effective in-use control
11 strategies to reduce emission from maritime and port
12 activities.
13 Use of cleaner fuels and retrofit technologies
14 would cut emissions. Economic incentive programs could
15 also be implemented to encourage vessel owners to reduce
16 their emissions. Operational controls can provide
17 emission reductions through a broad array of potential
18 measures including speed controls, idling time limits, and
19 other changes to vessel activities.
20 Dock site strategies include the use of
21 electricity to provide power for ships while they are in
22 port. Currently vessels typically run diesel generators
23 when at rest in port to generate power for lights and
24 equipment on board.
25 --o0o--
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1 MR. HUNSAKER: While we realize the near-term
2 economic challenges facing the airline industry, a long
3 term strategy to reduce aircraft emissions is needed.
4 U.S. EPA works its standard-setting process through the
5 International Civil Aviation Organization, or ICAO,
6 because of the international nature of the industry.
7 With the current emission standards in place,
8 aircraft emissions are project to grow in the longer term
9 as the previous emission trend slide showed.
10 Consequently, aircraft will become an increasing piece of
11 the emissions pie as other sources continue to reduce
12 their emissions.
13 Since 1998 U.S. EPA and the Federal Aviation
14 Administration have jointly sponsored a national
15 stakeholder groups whose goal is to define emission
16 reduction targets for air carriers that include a longer
17 term goal for reductions in jet aircraft emissions. One
18 objective of this process is for ICAO to develop more
19 stringent aircraft emission standards. We need U.S EPA to
20 work closely with the federal aviation administration to
21 advocate for tighter emission standards.
22 --o0o--
23 MR. HUNSAKER: Before concluding, I want to speak
24 briefly about the importance of funding from the federal
25 government for emission control programs. Federal funding
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1 can provide for incentive-based programs or fill
2 regulatory gaps in the control of federal sources. Over
3 the last -- over the past several years, California has
4 funded programs to clean up existing sources under state
5 and local jurisdiction in order to supplement our
6 regulatory programs. U.S. EPA could do the same as part
7 of its effort to reduce emissions from federal sources.
8 In conclusion, we need the federal government to do
9 its part to achieve clean air in California. The
10 substantial emissions contribution of federal sources and
11 the challenging emission reduction targets we face make it
12 impossible for California to do it alone.
13 Opportunity exists for technically-feasible
14 cost-effective reductions from federal sources. And U.S.
15 EPA needs to pursue them, whether through regulation,
16 federal funding, or other incentives. In conjunction with
17 local air districts, ARB and U.S. EPA need to continue to
18 partner to find new ways to reduce emissions, meet our
19 federal air quality planning requirements, and make
20 progress towards our mutual public health goals.
21 Thank you. This concludes my presentation.
22 CHAIRPERSON LLOYD: Thank you very much.
23 Colleagues have any questions before we move to
24 Mr. Bob Larson from EPA?
25 BOARD MEMBER CALHOUN: I have one question. What
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1 federal agency has responsibility for reducing emission on
2 federal property?
3 GENERAL COUNSEL WALSH: For federal properties
4 that are within the state of California, federal agencies
5 are responsible for meeting the applicable rules and
6 regulations that are set out in the California SIP. Under
7 the federal Clean Air Act, federal agencies are required
8 to comply with those rules and regulations to the same
9 extent as any private business or business.
10 BOARD MEMBER CALHOUN: So if I go out to the air
11 force base and LAX and see smoke incinerator or something
12 there, would I call the South Coast district if I wanted
13 to --
14 GENERAL COUNSEL WALSH: That's correct.
15 BOARD MEMBER CALHOUN: What would they do about
16 it?
17 GENERAL COUNSEL WALSH: They would no doubt go
18 out and take a look at the situation. If there was a
19 violation of a district rule or a regulation, they would
20 follow up with appropriate enforcement action. And those
21 federal agencies are subject to those enforcement actions
22 as well as the rules and regulations themselves.
23 BOARD MEMBER CALHOUN: Is it generally true the
24 federal agencies are responsible for complying with the
25 local air quality standard?
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1 GENERAL COUNSEL WALSH: Well, it may be treated
2 differently under certain -- different acts, federal laws.
3 The federal constitution provides supremacy to the federal
4 government, but that's supremacy can be waived. And,
5 indeed, in Section 118 of the federal Clean Air Act,
6 Congress has waived federal immunity from the application
7 of state law, rules and regulations, enforcement
8 activities and the like with respect to requirements that
9 relate to the control and abatement of air pollution. So
10 Congress has waived the federal immunity that would
11 otherwise apply under federal law.
12 BOARD MEMBER CALHOUN: What about the federal
13 vehicles that are used by the federal agencies in the
14 state? Do they meet California standard, or do they meet
15 federal standards?
16 GENERAL COUNSEL WALSH: They meet California
17 standards. There is a provision in Section 118 that
18 provides for exceptions if the president declares some
19 sort of national emergency related to the security of the
20 nation. That has never to my knowledge been implicated.
21 We have in some of our motor vehicle or non-road engine
22 regulations included specific exemptions for tactical-type
23 vehicles. But just vehicles that are generally used by
24 those federal agencies and on federal sites are subject to
25 our regulations.
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1 BOARD MEMBER CALHOUN: Okay.
2 CHAIRPERSON LLOYD: Mr. McKinnon.
3 BOARD MEMBER CALHOUN: I'm through.
4 BOARD MEMBER McKINNON: It's my understanding
5 that there are cleaner and cleaner jet engines being
6 produced. The problem is that nobody's going to be buying
7 them any time soon because there's not a need to buy new
8 airplanes. Is that sort of -- what's the direction of
9 clean air jet engines? Is that the case or --
10 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I can
11 take a stab at that. I know a little bit about it, not
12 all about it.
13 Within the current selection of engines that you
14 can put on a current jet, there is some variation in
15 emissions. It's not real big. But there are cleaner ones
16 and slightly higher emitting ones. I don't what the
17 variation is. But we might be talking 10 percent or
18 something like that.
19 There are engines under development and some of
20 them still in the research stage like at NASA that would
21 have like 50 to 70 percent more NOx emissions than current
22 engines. The problem is is that there is kind of an
23 inherent conflict in that the engine manufacturers and the
24 aircraft operators or looking for engines with higher and
25 higher pressure ratios to reduce fuel burner or increase
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1 the efficiencies of the engines. And that makes them
2 hotter, which makes NOx, which makes emissions goes up.
3 There's a trend in technology for higher NOx emissions,
4 and there is technology development to try to reduce that.
5 Those are sort of conflicting to some degree.
6 Without something pushing the aircraft
7 manufacturers to buy really clean engines, then I think as
8 the chart shows emissions go up from aircraft because
9 they're just getting higher pressure ratios for efficiency
10 and putting out more NOx as a result.
11 BOARD MEMBER McKINNON: My second question has to
12 do with rail engines. And my understanding is that at
13 least in California the railroads have purchased clean
14 engines more recently. Are they -- is it the same?
15 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: In the
16 South Coast.
17 BOARD MEMBER McKINNON: What about here in the
18 Roseville yard and that kind of thing? That's sort of
19 where I heard.
20 EXECUTIVE OFFICER WITHERSPOON: I think you might
21 have heard news reports about yard haulers retrofitting
22 for shifting the engines around. That was a Cummins West
23 project I think that was funded by the local air district
24 with Carl Moyer money and with the expectation if it
25 proved out and was cost-effective it would be replicated
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1 around the state. So it wasn't the trains passing
2 through, but moving the cars around in the yards
3 themselves.
4 BOARD MEMBER McKINNON: Okay.
5 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: What's
6 important on -- the federal government has stepped up and
7 required new locomotives to be much lower emissions. I
8 think probably roughly 50, 60, 70 percent reduction in
9 NOx. And they've also had a provision when these things
10 are rebuild -- since they last forever -- they be build
11 down to the tighter standards. That's a good provision.
12 But it has stopped at a level that is way higher per unit
13 of work than the trucks or even the off-road equipment.
14 So there's a need for -- we think the federal
15 government to drop the standard further now that the
16 technology is being developed for diesel trucks and
17 construction equipment. It could be applied. And we made
18 a comment in there about supporting -- they have a
19 proposal or suggestion -- they're asking for comments on
20 doing that in their new rule making for off-road trip
21 equipment in general.
22 I think there was a comment made we support a
23 cleaner fuel at 500 PPM, but we probably would end up
24 supporting cleaner fuel at 15 PPM because that would be
25 the level of sulfur that would allow locomotives to
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1 potential have particulate control which they don't have
2 right now. We'll have to figure out when we comment on
3 this rule whether that makes good sense or not. But it's
4 pretty clear we would definitely benefit from having much
5 cleaner locomotives as the new technology evolve.
6 BOARD MEMBER McKINNON: What's the life of a
7 locomotive of the engine considering that they're rebuilt.
8 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE:
9 Probably 30 or 40 years at least.
10 BOARD MEMBER McKINNON: A long time. Okay.
11 BOARD MEMBER CALHOUN: One more question. All of
12 these standards are tied to getting the sulfur content in
13 fuel reduced. What's the status of that program?
14 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: When
15 you say all of the standards, you have bring it up by
16 category.
17 BOARD MEMBER CALHOUN: I shouldn't say all. I'm
18 thinking in terms of --
19 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: On-road
20 fuel for trucks will be down to a level of sulfur that
21 will allow the use of particulate filters in the summer of
22 '06 nation-wide. For off-road equipment the EPA proposal
23 is to have on that same fuel available and required
24 nation-wide in the summer of 2010, I think it is. So four
25 years later. I'm think that's right. Bob can correct me
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1 if I'm off by a year.
2 Then they're seeking comments on what the fuel
3 should be for locomotives 500 or 15 perhaps. And one
4 would tend to argue for the lower number because that
5 allows the use of particulate filters where the higher
6 number probably would not. And then on, you know, marine
7 vessels, they tend to use really high -- ocean-going type
8 really high sulfur type fuel. I'm not sure what's in jet
9 aircraft from a sulfur standpoint but --
10 BOARD MEMBER CALHOUN: Thank you.
11 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We're
12 scheduled to bring the Board in July a regulation change
13 for the diesel regulation for California that would align
14 for on-road fuel and off-road fuel with 15 PPM starting in
15 2006.
16 BOARD MEMBER CALHOUN: Is that the same as the
17 federal?
18 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It's the same
19 sulfur level as the federal. But we would do the off-road
20 earlier in California because there really isn't a
21 separate market for off-road fuel. So once the on-road
22 fuel goes down, the off-road fuel could go with it in
23 tandem. It will not affect locomotives or ships.
24 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: And the
25 parallel to it not affecting locomotives and ships is we
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1 do have a lot of interstate traffic. Even the heavy duty
2 equipment -- construction equipment moves from state to
3 state. So you can get fuel -- federal fuel being used in
4 California to some degree, especially on the trucks. So
5 we definitely get a benefit from having nation-wide
6 consistent low sulfur fuel compared to doing just by
7 ourselves.
8 CHAIRPERSON LLOYD: We will be getting a
9 nation-wide consistent diesel fuel? No need to answer
10 that.
11 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: For
12 sulfur -- excuse me. That was a serious omission. For
13 sulfur.
14 CHAIRPERSON LLOYD: Any more questions?
15 BOARD MEMBER RIORDAN: Just a note. One of the
16 things that stood out -- I always blamed a lot of other
17 sources for these diesel PM. But ships are significant,
18 are they not, in California. And many of those ships are
19 not flying American flags. So we have to rely on some
20 international source of -- and how that's that working?
21 Is that successful?
22 EXECUTIVE OFFICER WITHERSPOON: Well, EPA can
23 address that when they come to the --
24 BOARD MEMBER RIORDAN: Maybe I should leave that
25 for them.
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1 EXECUTIVE OFFICER WITHERSPOON: There are
2 international pressures to reduce the emissions from ships
3 because of protocol concerns which are probably
4 stimulating more activity than has been brought about in
5 the last ten years because we've been trying to do
6 something about ships for a very long time. So --
7 BOARD MEMBER RIORDAN: So if I could ask the
8 speaker from EPA perhaps to just touch on that, I'd be
9 interested in that.
10 DEPUTY EXECUTIVE OFFICER TERRY: I just want to
11 add one thing. There was recently a national conference
12 on particulate pollution and a major new compilation of
13 the scientific evidence on particulate pollution was
14 displayed at NARSTO. It's Mexico, U.S., and Canada. And
15 Jeff Holmstead was there, and he's getting a lot pressure
16 both from Canada and Mexico, the entire west coast
17 corridor, to take a look at the shipping issue. And a
18 number of air districts in California have been pushing
19 hard. And I think you'll hear from Santa Barbara on this
20 point as well.
21 BOARD MEMBER RIORDAN: Good.
22 CHAIRPERSON LLOYD: Seeing no more questions, I'd
23 like to call on Mr. Bob Larson from EPA.
24 Bob, thank for coming out.
25 MR. LARSON: Thank you for the opportunity to
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1 address you on behalf the Environmental Protection Agency.
2 (Thereupon an overhead presentation was
3 presented as follows.)
4 MR. LARSON: At the outset I'd like to
5 acknowledge that we have had a very close and productive
6 working relationship with the ARB staff. We certainly
7 appreciated their professionalism. And we look forward to
8 continuing that cooperative effort into the future.
9 Much of what I have on my slides here -- I have
10 just a few have already been touched on by previous
11 presentation. But -- so this may not take too long. But
12 I have an opportunity to address a couple of points in
13 particular.
14 Certainly from my view I think the federal EPA
15 has been particularly aggressive, productive, and useful
16 from your perspective. Over the last few years we've
17 adopted national standards that are very stringent and
18 impact those fleets that you're not able to control
19 yourself, starting with the tier two standard for
20 light-duty vehicles. Going on to the 2004 heavy duty
21 standards, there was some pull ahead for 2002 standards.
22 And then very significantly I think for your benefit is
23 the 2007 heavy duty standards where we do have combination
24 of very stringent reductions in emissions performance but
25 also then the necessary improvements in the fuel sulfur
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1 level of the fuel.
2 --o0o--
3 MR. LARSON: As has already been mentioned, we
4 have put standards in place for large spark ignition
5 engines, recreational vehicles, recreational marine
6 engines, and on the last point the large marine engines,
7 C1 and C2, category 1 and category two engines which are
8 more typical harbor craft using locomotive-size diesel
9 engine with medium at higher speed. And then the C3
10 engines which are more the ocean-going ships. As
11 Ms. Riordan points out they are almost entirely flagged in
12 other nations so, therefore, not under our direct control.
13 Nevertheless, we have adopted standards that
14 are -- have been put in place through the international
15 maritime organization so called Marpole Annex 6 standards,
16 and those will be going into effect in 2004 in the
17 United States. And we expect around that same time frame
18 internationally. So there will be some standards in
19 place. Unfortunately, those standards also are not the
20 most stringent. There's a large number of the newer
21 engines that basically are meeting those standards.
22 At the federal EPA we are interesting in trying
23 to improve the emission performance of ocean-going ships.
24 The obvious problem, though, is they're not under our
25 control. So we are working very hard through our efforts
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1 with the international maritime organization to encourage
2 that international body to pursue more stringent
3 standards. And we hope to convince them that the types of
4 technologies that we're investigating that we plan on
5 pursuing for regulation here within the United States are
6 also technologies that would work elsewhere in the world,
7 including engine and fuel and perhaps after-treatment
8 types of technologies similar to what we've been very
9 successful on the land-based side.
10 If we are successful, of course, those emission
11 reductions aren't going to be here in the next few years.
12 So we are talking about something that is a bit a longer
13 term.
14 --o0o--
15 MR. LARSON: It was mentioned that we have just
16 proposed a non-road NPRM which has very significant
17 emission reductions again and adopts the low sulfur
18 standard of 500 PPM cap in the -- I think it starts in
19 September of 2007 and then 15 PPM cap that goes into place
20 in 2010. There is a hearing in several areas of the
21 United States. One is being held in the Los Angeles area,
22 here on June 17th, and we appreciate your support.
23 --o0o--
24 MR. LARSON: As part of that proposal we did
25 acknowledge a commitment on our part to have these revised
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1 locomotives and marine standards that will be two separate
2 rule makings. But I grouped them here because there are
3 fairly, for the most part a similar type of regulatory
4 path. We expect about a year from now to have an advance
5 notes of proposal rule making set out technical issues we
6 see that will help us frame the actual proposal which
7 would occur about a year later during the 2005 year.
8 Again, as I mentioned a moment ago, it will include both
9 fuel improvements both in sulfur and technology options
10 will be considered.
11 Implementation -- well, it's not a real big --
12 but it should be a big question mark there -- noted that
13 perhaps 2012 that's my guess. That's no real prediction
14 of exactly when we'll be able to determine what is
15 technically feasible and what's the economic time for
16 phasing those things in. So, again, I would say certainly
17 that is not something that could be in place prior to
18 2010. But maybe in the early part of the following decade
19 we would hope to have these standards in place.
20 --o0o--
21 MR. LARSON: On the aircraft side there are two
22 activities that are going on. One is with the -- on the
23 international side where we're working to try to get
24 international standards in place. The standards --
25 investigating body there which we are a participant is
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1 looking at NOx reductions that range from 5 to 30 percent
2 compared to the existing standard. And they're analyzing
3 two different implementation years. One of them 2008, and
4 one of them 2012. I don't think we should be too much
5 into that -- those implementation dates and anticipate
6 they would actually have standards in place that would be
7 effective beginning 2008. I think we all recognize not
8 only the technical lead times associated with getting more
9 stringent standards in place, but the economic
10 difficulties that are for the airline industry.
11 The second activity was also mentioned a moment
12 ago in the earlier presentation. That is stakeholder
13 activity within the United States that we're co-chairing
14 with the Federal Aviation Agency. And it's looking at a
15 range of options trying to improve emissions from
16 aircraft, airports in general.
17 A couple of them are mentioned here. One of them
18 is looking at options for improving the ground surface
19 equipment emissions and model that for the successful work
20 that was accomplished in the South Coast.
21 And the second one was to -- even though there is
22 a small range of the emission performance of existing
23 engines, as Mr. Cackette mentioned, to look to encouraging
24 airlines to purchase those engines that are currently
25 available and are at the lower end of that range for what
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1 benefit we can get from those kinds of emission.
2 We're hoping also to encourage them to retire the
3 various portions of their fleet, not bring back engines
4 that are currently partnering with us in the desert.
5 Those kinds of things.
6 --o0o--
7 MR. LARSON: And lastly, I think it's important
8 to mention that we're not only working on the regulatory
9 aspect -- although it's an area where we've been
10 particularly successful. We also have launched a
11 nation-wide voluntary program. We think there is a role
12 for voluntary emission reductions and we're pursuing them
13 quite rigorously. The first one is named "Best Workplace
14 for Commuters" basically to try to encourage employers to
15 provide maximum benefits to their employees to discourage
16 single occupancy vehicle trips to and from work.
17 Telecommuniting's an obvious one, ride sharing, transit
18 passes, those types of things.
19 Through this program we try to recognize those
20 workplaces who are particularly aggressive there in
21 offering those benefits and bring up the rest of the
22 employment community to those levels.
23 Smart way transport program is focused on efforts
24 to reduce emissions the freight industry. Right now the
25 biggest emphasis in this program is on the trucking
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1 industry. And we're encouraged in looking towards things
2 such as reducing idling either through truck stops which
3 is one of the options that is being considered here in
4 California as well as auxiliary power units that would
5 Obviate the need for running big diesel engine to provide
6 heat and power the cooling to the cab.
7 The third voluntary program that we've been --
8 recognized here is we just launched less than a month ago
9 our school bus initiative, again, looking at reducing
10 idling. And a key component there -- but also replacing
11 the older school buses. As you can appreciate, a lot of
12 the school buses are pre '91 inversions of engines and are
13 quite dirty compared to what's available now.
14 Looking for financing to -- we had some over the
15 $20 million available right now to help that work. And
16 we're looking for other innovative financing options to
17 improve the turn over of fleet school buses, retrofitting
18 the more recent vintage buses hopefully to have the entire
19 fleet of school buses across the nation turned over
20 basically to clean technologies by 2010.
21 CHAIRPERSON LLOYD: Thanks very much, Bob.
22 Questions from the colleagues of the Board?
23 Thanks very much for coming out. Any other comments from
24 the staff?
25 EXECUTIVE OFFICER WITHERSPOON: Just there's one
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1 more witness signed up to speak. No more comments at this
2 time.
3 CHAIRPERSON LLOYD: We do have one witness signed
4 up for the public testimony. That's Kathy Patton from
5 Santa Barbara County.
6 Welcome.
7 MS. PATTON: Thank you very much.
8 I think I'm supposed to have a clicker. If the
9 technology works, I'll get through this quickly.
10 I'm Kathy Patton from Santa Barbara County Air
11 Pollution Control District.
12 (Thereupon an overhead presentation was
13 presented as follows.)
14 MS. PATTON: I'm here to talk about just one
15 element of what your staff has presented today, that is
16 the impact of marine shipping. On a local area like ours,
17 I was saddened to hear the number of times that Mr. Larson
18 had to admit that the federal actions that are being taken
19 will be long-term actions. And I think you'll see in my
20 slides we need help now, and all of California right now
21 needs help with this particular sector.
22 --o0o--
23 MS. PATTON: So you may wonder, if you know
24 anything about Santa Barbara at all, why we would be
25 concerned about marine shipping when we don't have a port.
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1 If our 2001 clean air plan, we went through an emission
2 inventory process that was really quite a surprising
3 process to us when we started looking at the relative
4 emission impact from marine shipping.
5 Marine shipping is the largest uncontrolled
6 source of NOx in our county, and we believe probably in
7 most coastal areas throughout the nation. We're concerned
8 that failure to control this source is going to need -- or
9 require that coastal areas compensate for the emissions
10 that we're receiving from off-shore.
11 --o0o--
12 MS. PATTON: Just to put our little county in
13 context, we are roughly halfway between San Francisco and
14 Los Angeles, closer to Los Angeles. We make up 130 miles
15 of the California coast line. Any ships traveling from
16 the ports of Long Beach or Los Angeles going to the north
17 or even to Asia will pass by our county and by most of the
18 California coast line. Just the way the great circle
19 route goes. The world is round. And they travel quite a
20 ways north before heading west.
21 --o0o--
22 MS. PATTON: In our county we have the Channel
23 Islands just off shore, which means most of these ships
24 are traveling within 10 to 15 miles of shore. These are
25 huge, huge ships. It's like having power plants traveling
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1 right off shore your coast line.
2 In our emission inventory efforts, we worked very
3 closely with the marine exchange from the ports of
4 Los Angeles and Long Beach and found that we have about
5 1300 making roughly 7,000 transits per year through our
6 Channel Islands. Surprisingly, even though we don't have
7 a port, our emission inventory is roughly equivalent to
8 the inventory that South Coast has with those two ports.
9 --o0o--
10 MS. PATTON: Just to show you how marine shipping
11 stacks up with our emissions inventory, your staff just
12 showed you that federal sources were roughly a third of
13 the state-wide inventory for NOx. Well, marine shipping
14 alone is roughly a third of our emissions inventory. It's
15 greater even than all of our on-road mobile sources. When
16 you factor in the increase that we're told from this
17 industry is going to happen over the years, it gets even
18 more alarming and more concerning for us.
19 --o0o--
20 MS. PATTON: This slide shows the top of -- is
21 that -- would you call that purple? Purple area there at
22 the very top is marine shipping. And when you forecast
23 out into the future, the growth in marine shipping -- it
24 goes from being a third of our inventory to being almost
25 two-thirds of our inventory.
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1 All those other sources -- all those other bars
2 that you see on this graphic are showing either reduction
3 or staying slightly the same. Those are those sources
4 that for the most part the state and local areas have
5 control other. This federal source where we do not have
6 control is projected to eat up all of the progress we
7 would have made in those other areas.
8 If any of our estimates going out into the future
9 are not accurate, then you can see that that bar we're
10 trying to stay under, which is the bar that we showed back
11 in our base year we could attain the federal standard
12 under -- any of those sources not meeting these
13 reductions -- and if marine shipping even goes up further,
14 we are in danger of not being able to maintain the federal
15 standard.
16 And although EPA has recently adopted standards
17 for U.S. flag ships, I would note those standards are
18 based on IMO, the International Maritime Organization,
19 levels which are already projected in the bars that you
20 see in front of you here. And also since EPA decided --
21 and we believe it was a decision not a legal requirement.
22 Since they decided to only apply their regulations to U.S.
23 flagged ships, it will not provide very many reductions
24 for us at all.
25 --o0o--
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1 MS. PATTON: Again, in the inventory 90 percent
2 of the vessels that transit the California coast line --
3 actually, it's over 90 percent -- are foreign flagged,
4 and, therefore, not regulated by the recent EPA rule.
5 We also found -- we call them our frequent
6 flyers. That roughly 10 percent of those 1300 vessels
7 mentioned make up about 50 percent of that NOx emission
8 bar that you say.
9 So if we could together with EPA just get at that
10 10 percent of our emissions and really focus on these
11 frequent flyers, we could cut in half that big purple bar
12 that you saw. And that's what we would like to do.
13 Also to put it just in a slightly different
14 perspective, you're all familiar with Title 5 permits.
15 Well, 40 of these ships alone for qualify under our
16 program of being 50 tons or more annually of NOx. They
17 would qualify for a Title 5 program if they were on shore.
18 Off-shore, they're uncontrolled.
19 --o0o--
20 MS. PATTON: We are hopeful that the
21 International Maritime Organization will reopen the NOx
22 provisions. We understand that they are slated to do that
23 sometime in the near future. The NOx provision of that
24 Marpole agreement, the treaty you heard the previous
25 speaker talking about -- if that happens we need EPA, we
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1 need ARB, we need all of us at the table to say just how
2 important this source is to us.
3 However, those are long-term goals. In the mean
4 time, we think we have some short-term solutions. We've
5 been working with your staff in the maritime technical
6 working group. EPA has been at the table, has been a
7 valuable partner with us in that. As you heard from your
8 staff, ship owners are there. Technology providers,
9 engine manufacturers, the Maritime Administration, air
10 agency. We are all at the table discussing this. It's
11 time now for us to put our money where our mouth is and
12 start to fund some retrofitting demonstration programs.
13 Your staff has done a marvelous job of pulling
14 the parties together and finding out there is some
15 interest in launching some demonstrations on these large
16 vessels. Unfortunately, we've recently heard that while
17 EPA is supportive -- you didn't see our name on the list
18 there at the end of the slide as a funding incentive
19 program. We want our name on that list. We need it now.
20 So while Santa Barbara may be one of the first
21 districts that have gone through the Clear Air Plan and
22 seen how these ship stack up, this shouldn't be a surprise
23 for other coastal areas. It's a large unregulated source.
24 We urge you to urge EPA to take a leadership role in the
25 international discussions, but also to take a local role
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1 in helping to fund incentive programs for marine vessels.
2 Thank you.
3 CHAIRPERSON LLOYD: Thank you very much.
4 Professor Friedman.
5 BOARD MEMBER HUGH FRIEDMAN: I'm not sure I'm
6 addressing this question to you. Perhaps our
7 representative of EPA or staff. What is -- first of all,
8 what kind of transport for prevailing westerly winds or
9 winds coming off of the ocean carry that pollution, the
10 NOx and any particulate matter, to shore? And from how
11 far away does it need to be before it might dissipate
12 significantly?
13 MS. PATTON: Do you want me -- your staff will
14 have a more technical --
15 BOARD MEMBER HUGH FRIEDMAN: I'll tell you what
16 I'm thinking. I'm sure this idea has occurred to you. I
17 don't have very many original ideas anymore. But it does
18 occur to me if you could move those ships to go around the
19 islands, at least for Santa Barbara. I'm not sure how far
20 off-shore they'd have to be. And it seems to be the U.S.
21 has some say in that with respect to foreign ships. And,
22 again, I'm not sure, but I think those are -- at some
23 point they become international waters.
24 But I think, you know -- I remember the old tuna
25 fleet used to get captured many, many miles from shore off
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1 Costa Rica. And some of these places are U.S. flagged
2 vessels. So with foreign vessels we get -- maybe a
3 bargaining ship or something at the international level in
4 the organization or just U.S. Fiat or so disposed could
5 either clean these ships up on a time table or route
6 around. It will cost you more to go out, and that may
7 cost ultimately the consumer a little bit more business,
8 more -- or both. But clean air is our goal. And I'm just
9 wondering if the staff or somebody can respond.
10 EXECUTIVE OFFICER WITHERSPOON: Well, Professor
11 Friedman, that exact strategy was contemplated by the
12 Santa Barbara Air District and others as well.
13 In the case of the Channel Islands, what's on the
14 other side is a military testing zone for ordinances. And
15 it was not thought to be desirable to have ships
16 traversing where military exercises were taking place
17 so --
18 CHAIRPERSON LLOYD: That would be an effective
19 mitigation strategy.
20 BOARD MEMBER HUGH FRIEDMAN: I walked right into
21 that.
22 EXECUTIVE OFFICER WITHERSPOON: Which caused us
23 to pursue the speed reduction strategies instead that were
24 easier to implement. They had a dramatic effect on NOx.
25 With respect to your broader question, California
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1 as a state is prevailing on-shore breezes. It's why our
2 ozone problem is so severs. We do trace them well out
3 into the ocean. I think our modeling domains for the
4 South Coast and now even for the Central California ozone
5 study extend out by more than 20 miles. So we would trace
6 some contribution always. And nearby transit, of course,
7 is, you know, almost as good as having been on the shore.
8 MS. PATTON: And just if I could add one other
9 item. In early -- actually late '80s when we were doing
10 modeling we did find that emissions out in our channels,
11 whether they be from off-shore oil rigs or marine
12 shipping, they differently did have an impact on us and on
13 Ventura.
14 So the numbers that I presented today of our
15 current plan were based on an emission inventory basis,
16 not necessarily on a model impact basis.
17 DEPUTY EXECUTIVE OFFICER TERRY: Just as a follow
18 up, a couple of thoughts. The idea of leverage is a good
19 one. We do have some improved science we didn't have in
20 1994 when we did this initial measure in SIP. That came
21 later with the speed limit. I think with some using the
22 current models, we could reevaluate the impacts and
23 perhaps make it an even stronger case.
24 CHAIRPERSON LLOYD: As I recollect, if my memory
25 serves me, when they were looking at the Grand Canyon,
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1 there was some creative accounting that said some of the
2 SOX emissions from the shipping was actually getting into
3 the Grand Canyon. Whether that was real or whether it was
4 to fill in for some modeling deficiencies -- but I think
5 there is some long term transport as well as.
6 Mr. McKinnon.
7 BOARD MEMBER McKINNON: There is an area for
8 leverage and I'll address this to the representative of
9 the U.S. EPA. A couple of years ago I had to do a lot of
10 work looking at this industry. And there is a Defense
11 Department subsidy very large dollar figures that is
12 distributed for having capacity available in the event
13 there's a war to be able to transport large amounts of
14 equipment and materials to a theater of war.
15 And there's a huge subsidy that goes to shipping
16 companies every year, year in and year out, irregardless
17 of whether or not there's a war. And there's a
18 requirement that they be American flagged companies. And
19 there is currently a move afoot to change that requirement
20 and to allow it to be an American subsidy of a
21 foreign-owned company, something like that.
22 And it seems to me -- and there's just some
23 really big bucks involved for really not doing anything
24 except being ready in case of a war. And it seems to me
25 that if the federal government wanted to exercise some
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1 leverage, there are some huge shipping companies involved
2 in that discussion that would be subject to that leverage.
3 CHAIRPERSON LLOYD: Thank you.
4 Supervisor DeSaulnier.
5 SUPERVISOR DeSAULNIER: Just a couple comments,
6 Mr. Chairman. Perhaps the Bay Area has found the source
7 of our problems. I wish D.D. was still here in terms of
8 our transport issues. Can we start to work on smog check
9 for a peaceful legislation at a federal level for enhanced
10 smog check for President Kennedy here.
11 CHAIRPERSON LLOYD: Well, I think Charlie Peters
12 could be usefully employed in that deal as well.
13 SUPERVISOR DeSAULNIER: Would it be a one-way
14 ticket?
15 In the Bay Area, some of you know, we spent a lot
16 of our money in the Carl Moyer on retrofitting tug boats.
17 And it was amazing to me how much bang for the buck we got
18 in that program. And it was one of the reasons why
19 hopefully in future years we'll get more money, both for
20 our sake and our downwind neighbors.
21 But for those few of us -- Santa Barbara. Those
22 few of us who have been fortunate enough to ascend to the
23 region administrator for region 9's beautiful office on
24 the upper floor overlooking the bay -- I know I have. The
25 former regional administrator I can remember teasing one
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1 as we looked out on to the freight just sitting in the
2 water waiting to go into the port of Oakland, wouldn't it
3 be nice if she could do something about that. I know the
4 current administrator has the same office so I know he has
5 the same view.
6 It would be really significant though, and I'm
7 appreciative that we've had this report. There's some
8 movement, but it would be tremendously significant, I
9 think, for the whole coastal region, not just to the Bay
10 Area, if we could be more proactive either with subsidies
11 or educational programs or looking -- as Matt suggested,
12 other incentive in this age of globalism where perhaps
13 disincentive that collectively federal agencies -- and I
14 assume you're doing some of that -- can work with to
15 encourage, prod of some our trading partners.
16 And Matt was pointing out that Kennedy here used
17 to be American Shipping Lines, and it is now owned by a
18 Dutch company. Maybe there are things we can do to
19 convince them to could the right thing and help us with
20 some of our problems.
21 CHAIRPERSON LLOYD: Good point. Thank you. Any
22 other comments from staff? Board? No.
23 BOARD MEMBER HUGH FRIEDMAN: Well --
24 CHAIRPERSON LLOYD: Yes.
25 BOARD MEMBER HUGH FRIEDMAN: We had -- I think I
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1 heard a request from the speaker that we urge the U.S.
2 EPA, who apparently has exclusive jurisdiction here -- and
3 I think not only should our comments, but I think they
4 should be collated, assembled, aggregated with as much
5 honest and sincere force be made into a appropriate urging
6 and emphasize the importance of speed, the need to do
7 something. Not just talk about it.
8 EXECUTIVE OFFICER WITHERSPOON: We would be happy
9 to do that.
10 CHAIRPERSON LLOYD: I think the second part of
11 that request was an invitation to go down to look at the
12 shipping liens and to observe the close proximity to the
13 islands.
14 SUPERVISOR DeSAULNIER: Where they're testing
15 emission or --
16 BOARD MEMBER RIORDAN: He's going to do the
17 inside of the Channel and send us to the outer area.
18 SUPERVISOR DeSAULNIER: He was thinking the
19 Biltmore. I was thinking the tug boat.
20 CHAIRPERSON LLOYD: Thank you very much for the
21 information on both those items indicating the challenges
22 we have.
23 And thank you, Bob, for coming up.
24 Thank you, Kathy, for coming up. It was very
25 helpful, very constructive.
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1 I guess we have nobody for the open comment
2 period. So it's my great pleasure if there's no other
3 business to bring -- the April meeting of the Air
4 Resources Board will now adjourn and see you next month.
5 And thank you again staff, colleagues, thank you.
6 (Thereupon the California Air Resources Board
7 adjourned at 4:14 p.m.)
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1 CERTIFICATE OF REPORTER
2 I, TIFFANY C. KRAFT, a Certified Shorthand
3 Reporter of the State of California, and Registered
4 Professional Reporter, do hereby certify:
5 That I am a disinterested person herein; that the
6 foregoing hearing was reported in shorthand by me,
7 Tiffany C. Kraft, a Certified Shorthand Reporter of the
8 State of California, and thereafter transcribed into
9 typewriting.
10 I further certify that I am not of counsel or
11 attorney for any of the parties to said hearing nor in any
12 way interested in the outcome of said hearing.
13 IN WITNESS WHEREOF, I have hereunto set my hand
14 this 5th day of May, 2003.
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23 TIFFANY C. KRAFT, CSR, RPR
24 Certified Shorthand Reporter
25 License No. 12277
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