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EPA Concludes Public Hearings on California Waiver for New Vehicle CO2 Regulations

31 May 2007

The EPA yesterday held its second and final public hearing on California’s request for a federal waiver that would allow the state to proceed with implementing its law restricting emissions of greenhouse gases from light-duty vehicles starting in 2009. The eleven other states that have adopted California's measure will also be affected by the waiver decision.

More than 50 supporters of the waiver testified at the hearing, including politicians, Air Resource Board staff, scientists and representatives from big business (Sempra Energy and PG&E). Only two—both representatives of the Alliance of Automobile Manufacturers—argued against it.

It’s been many years since we’ve convened a waiver hearing in the state of California. This speaks to the importance we attach to this request. We also recognize the participation of other states. This is certainly a very serious undertaking.

—Chris Grundler, Deputy Director EPA Office of Transportation and Air Quality, and presiding officer at the hearing

The California regulation. In 2002, the California Assembly passed AB1493, which called for a reduction in combined greenhouse gas emissions (CO2, CH4, N2O and HFCs) from all vehicular sources (tailpipe, air conditioner) starting in model year 2009.

AB1493 maintains the two categories of light-duty vehicles used in California’s Low Emission Vehicle (LEV) II regulations: PC/LDT1 for passenger cars, and small trucks and SUVs; and LDT2/MDV for large trucks and SUVs. Work trucks are explicitly exempt from the GHG requirement.

AB1493 allows credit trading between the two categories and between manufacturers. It also offers an optional compliance mechanism for alternatively-fueled vehicles, and imposes less stringent requirements for small and intermediate volume manufacturers.

Following the passage of the bill, the issue was turned over to the California Air Resources Board (ARB) to determine the reduction targets, based on the ARB’s analysis of available and near-term technology and cost. After evaluating the options, in 2004 the ARB established limits that will result in approximately a 22% reduction in GHG emissions from new vehicles by 2012, and approximately a 30% reduction by 2016.

The regulatory background. In 1943, Los Angeles experienced its first major smog event. In 1945, the Los Angeles City Health Department established the Bureau of Smoke Control. In 1947, California Governor Earl Warren authorized the creation of air pollution control districts in every county. The Los Angeles County Air Pollution Control District (APCD) became the first of its kind in the state—and in the US.

In 1952, Arie Haagen-Smit, a professor of biochemistry at CalTech, discovered the nature and causes of photochemical smog.

In 1955, the Federal Air Pollution Control Act was passed to support a better understanding of the causes and effects of air pollution. The Los Angeles County Motor Vehicle Control Lab and the State Bureau of Air Sanitation were established. Legislation in 1959 enabled California to develop ambient air standards and controls for motor vehicles. The first ambient air standards were established based on observations of health.

In 1960, the California Motor Vehicle Pollution Control Board was established to test and certify motor vehicle emission control devices, while the Federal Motor Vehicle Act of 1960 provided research to address pollution from motor vehicles.

In 1961, the California Motor Vehicle Pollution Control Board mandated the first automotive emission control technology requirements in California and the nation. The first Federal Clean Air Act was passed in 1963. In 1967, California Governor Ronald Reagan (later US President) created the California Air Resources Board by combining the California Motor Vehicle Pollution Control Board and the Bureau of Air Sanitation and Lab. Professor Haagen-Smit became the first ARB Chairman and the first California Ambient Air Quality Standards were published in 1969.

In 1970, US President Richard Nixon signed a new Federal Clean Air Act (CAA)—which included deadlines for meeting air quality goals—and established by executive order the US Environmental Protection Agency (EPA) to implement the CAA. The CAA was subsequently amended in 1975, 1977, and 1990.

The Federal Clean Air Act reserves the control of emissions from motor vehicles for the federal government—with the exception of California, due to its early activity and special conditions (high density of motor vehicles, topography conducive to pollution formation in heavily populated basins—e.g., Los Angeles and the San Joaquin Valley), and any states that opt for the California regulations. In other words, there are two choices in the US: the federal requirements, and the California requirements.

For California to implement a modification such as that represented by the new CO2 regulation, it must, by the language of the CAA, request a waiver (Sec. 209 (b)1).  This is the waiver process for which the EPA is now holding hearings. (Over the years, the state has received more than 40 of these from the EPA.) California had originally requested the AB1493 waiver in December 2005.

For the waiver to be granted, the state standard must, according to the CAA, be “at least as protective” of public health and welfare as the applicable Federal standard. This is one of the points that the auto industry, through AAM, is trying to use as an argument for denying the waiver.

The current arguments. As expressed by Catherine Witherspoon, Executive Officer of the California ARB in the hearing yesterday, California’s position is that there are only three issues before the EPA:

  • Meeting the “protectiveness” standard;

  • California conditions which justify the establishment of state standards;

  • Consistency with another section of the CAA—202(a)—regarding the establishment of regulations.

The state contends that the burden is on the opponents, and that the EPA should defer to California’s judgements, based on the state’s history and continued special conditions.

Witherspoon’s testimony yesterday was partially directed at rebutting assertions or challenges raised by the auto industry during the first hearing in Washington. These included contentions that California had been arbitrary and capricious in determining that its standards are at least as protective as applicable federal standards.

To the contention that California should have compared its standards to non-EPA standards—e.g., the fuel economy standards—the state responded that the CAA requires comparison to EPA standards only, and that as yet there are no EPA GHG standards.

Much of the pro-waiver testimony focused on the conditions in California compelling the adoption of the standard, and on the damage that will be caused to the state by the affects of climate change in terms of diminished snow pack for water, rising sea levels, increases in severe wildfires, and worsening smog due to higher temperatures.

California is arguing that it is not required to demonstrate a specific temperature impact (i.e., a reduction in temperatures) based on the implementation of the AB1493 standards. The state cites a 1971 decision by then EPA Administrator Train:

The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its cost or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent...

—EPA Administrator Train, 36 Fed. Reg. 17158 (31 August 1971)

California’s stance is that all greenhouse gas emission reductions matter, and that AB1493 is part of a wedge-based strategy (Pacala and Socolow) toward stabilization.

The auto industry, through Steven Douglas of the AAM, argued that the waiver should be denied because:

  • California failed to demonstrate that its standards are as protective of human health as are the federal standards (the fuel economy standards).

  • Imposition of the regulation would worsen public health. AAM argues that the higher cost of the AB1493-compliant vehicles would push consumers into hanging on to older cars for longer (the jalopy effect) and that the higher fuel economy vehicles resulting from AB 1493 would result in the rebound effect of increasing vehicle miles travelled, thereby worsening the overall pollution situation. (EPA requested that AAM provided the assumptions from which it derived these scenarios.)

  • Imposition of the regulation would not make any kind of measurable difference, but would come at great cost.

Next steps. The EPA is accepting written comments on the waiver request through 15 June 2007. (Comments can be submitted and/or seen online at www.regulations.gov, Docket ID No. EPA-HQ-OAR-2006-0173). The agency will then decide on the waiver.

I want to thank all of the political leaders in the Western US and California in carrying the wider appeal. This should be a routine procedure, but we suspect that it may not be...If the waiver is turned down, we have the lawsuit all ready to go.

—Dr. Robert Sawyer, ARB Chairman

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May 31, 2007 in Climate Change, Policy | Permalink | Comments (21) | TrackBack (0)

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Comments

It will be interesting to see how this unfolds. How stubborn is Bush?

I predict, and hope I'm wrong, that the scenario will play out like this:
The waiver will be denied by the Bush EPA; the law suit will be filed and the AAM (All of the large auto companies except Honda and the smaller companies like Tesla) will tie the regulations up for years, all the while claiming they are working on the people's behalf. And, with their legal plan in action, the auto companies will introduce the inefficient diesel ICEs back into the U.S. market.

Do you think that the American people will wise up, not fall for the stalling, and decide not to buy until GHGs are addressed by building a clean car? Or, do you think the slick court maneuvers and cover-over PR campaigns will win the day again? I for one intend to keep my Volvo, drive it less and wait to trade it in on a rightly-priced PHEV or BEV. I believe this is the technological correct personal car for the companies to build across their whole line of offerings.

I predict that it will be challenged on the grounds nthat it oversteps the Federal laws on fuel economy. The states can regulate pollutants, CO2 is a pollutant, but it also overlaps the Federal trump card on fuel economy mandates.

There is a correlation among displacement, fuel economy and CO2 out the tailpipe per mile and I think the Feds will drag their feet on that basis.

Ultimately they will not win. Refineries are within state boarders, oil is brought into their ports and over rail lines into their states. The people of that state breath the air, pay the prices and have to live with the consequences like everyone else.

No one is restricting interstate commerce in any way. But the defacto outcome of this is to reduce the displacement of engines in cars, use hybrids or EVs.

I have not read the California law to see if it is fleet average, I do not think it is. I would imagine it is on any given vehicle and how much CO2 is emitted per mile and on that basis, large loses.

...introduce the inefficient diesel ICEs back into the U.S. market.
I guess you meant efficient diesel ICEs.

And yes, they are coming, as high fuel prices invariably lure them back. And not just from existing auto companies. Surely ARB is expecting this, and is fine with it.

I hope Lad isn't holding his breath untill the PHEV or BEV
offerings under 30K hit the showrooms. It will be another
few years untill this technology is snapped up by the
early adopters and follows an economy of scale market
penetration. This rollout will be similar to the Hybrid introduction,
aproximating a decades time frame and 5% market share.
Better to get your hands on an 2009 next generation Prius,
when they hit the dealer lots in the fall next year. Then
up convert it when you really want to go the extra distance on
Li-ion power.It may be another 5-10K but you can ditch the pump.

Its very likely that if cal wins it will regret it big time. The result will be a ton of cars both big and small dropping from cal dealership lots... and whats left will have to fund those dealerships and operationsin cal..

On top of that alot of cars will have to swap in MUCH more spendy parts.. prices will shoot up even more.

And o ream cal even more alot ofdealerships outside cal will start selling en mass to cal buyers.. as happened before...

The big auto companies arnt likely to bother spending much on ice tech and no matter what arbhold thinks hybrids wont grow faster just because he demands it.

Combine all that with china and a market that makes us look puny and you get no money and no reason to bother short term.

Not quite, wintermane,
I see a shift: one that's going to hurt the (traditional) Big 2.5. Any carmaker that can't compete will simply loose market share. Honda and Toyota will likely get a compatitive advantage from AB1493.

And no, if a number of other states adopt AB1493 standards, it would be a foolish carmaker who does not try to meet the standard. For better or worse, CA tends to lead the nation.

I was just reading on Autoblog that the UAW is considering making a huge change in order to make American auto companies more competitive. They're thinking about taking on the health care responsibilities onto the union. While the automakers would still contribute, they would no longer have to deal with the rising costs. A bold step.

Engineer:
Nope! the word is inefficient; diesel engines are still ICEs and as such limited because of friction, heat, and emission losses. The gasoline ICE runs about 25% and the diesel is about 5% more ,unless pressure charged. Additionally to meet diesel emissions standards, ultra-refining must be accomplished to remove the sulfur from the fuel which results in more raw oil being used. And of course the muffler will be replaced with a catalyzed diesel particulate filter, very expensive.

Storing energy in batteries to turn electric motors is more efficient than using stored chemical energy in fuels and burning it in the atmosphere to drive mechanical gears; first we burn the fuel in the cylinders then we spend almost as much money to clean up the byproducts. Electric cars makes a lot more sense.

Sure Lad,
Now remember, don't hold your breath for those electric cars. Could develop a nasty blue hue in no time at all.

Meanwhile, back in the real world, diesels beat hybrids for efficiency. And the premium is lower.

BTW, how much capacity does your batteries loose in the first year of operation? How is that going to affect resale value for a pure electric car?

That's interesting news Cervus. For the big three's sake I hope it goes through.

Engineer:
I like BEVs and can live with any of its shortcomings and benefits. It appears you believe the DV is good for you. That's fine, we can agree to disagree.

Marcus:

Since roughly $1900 of every vehicle counts towards GM's healthcare costs, if they follow through with this it'll actually make smaller vehicles instantly more profitable. This means that they'll get more R&D dollars. This is critical if the Big 3 are really going to change direction to more directly compete with Honda, Toyota, etc.

The problem is china... the car makers are sprnding all thier money there and that wont change any time soon. As a result none of them have money for a real attempt at meeting these goals with ice engines.

So they will glide andtake losses until electric drive ev fc and genset cars hit mainstream... 10 years or so.

Cervus, Marcus:

What is the point? The auto makers will still make them cheaper in China, and if they make more per car, it will just go into some Exec's golden parachute. They have been doing it since the eary 70's. There is no plan to turn the companies around, but pad the pockets of Lutz an the like. Short-term self interest.

The unions may be desperate enough to take on the health care load, but that will not save jobs for the members.

They prolly havefigured out what the big three are realy up to and hope by takinghealth care on they can somehow keep thier healthcare.

The wildcard was always china and india. When those markets exploded theyran out of time.

Its very likely that if cal wins it will regret it big time. The result will be a ton of cars both big and small dropping from cal dealership lots... and whats left will have to fund those dealerships and operationsin cal.. -- wintermane

That's what they all said in the 70's, when CARB enacted much stricter emission laws than the feds. Today CA remains one of the 10 largest economies in the world.

Additionally to meet diesel emissions standards, ultra-refining must be accomplished to remove the sulfur from the fuel which results in more raw oil being used. And of course the muffler will be replaced with a catalyzed diesel particulate filter, very expensive. -- Lad

As opposed to what? Gasoline, which requires more raw oil for manufacture and platinum based catalytic converters?

If you're concerned about expense, how are batteries doing?

Storing energy in batteries to turn electric motors is more efficient than using stored chemical energy in fuels and burning it in the atmosphere to drive mechanical gears; first we burn the fuel in the cylinders then we spend almost as much money to clean up the byproducts. Electric cars makes a lot more sense. -- Lad

It's a shame that you can't store much energy in a battery. As for burning stored chemical energy, how do you propose to charge 100M EVs given this?

I would love to see widespread use of EVs today. I'd also like to see most of the traffic out there be replaced by bicycles. There are no silver bullets, not even EVs, and business as usual until EVs arrive in numbers isn't going to be nearly adequate.

You do know ALOT of people went to nevada during the early years of the carb mess to buy thier cars? My dad did that saved him a ton specialy as theearly converters tended to melt or blow up and fall off.Oh and thats whathappened to his next carafter that the converter blew up and both his milage and power increased greatlyas a result;/

It'll be interesting to see if CARB will discontinue its GHG-related efforts IFF the next federal administration proves more amenable to mitigation at the federal and especially, the international level. Sacramento cannot negotiate directly with China nor India.

As for the Big 2.5, UAW jobs are valuable but not to the point of holding the planet's climate to ransom. US auto manufacturers must adapt or die, and so must the UAW. Gas prices are high and will likely remain so for a long time because China and India are buying up whatever additional oil is available on the world market. Also, the US imports 1 out of every 7 (trend worsening) gallons of gasoline because of NIMBYs who block refinery expansion/construction.

I think its important to note its not that the car makers are saying they cant do it they are saying they cant get the us car buyers to pay enough to do it. There is a BIG difference.

And they are right the us car BUYERS will freak if they get that bill.

wintermane, how many people are buying the Tesla Roadster? How many more do you think will buy the Whitestar? Then, how many do you think will buy there even cheaper third generation car? The big three already sell expensive niche cars. Why can't they add PHEVs/BEVs these to the selection?

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