Thank you for the opportunity to testify today on EPA's diesel fuel and emissions proposal. At NRDC, we believe strongly that EPA's diesel proposal offers a once-in-a-generation opportunity to significantly clean up one of America's most enduring pollution problems. Given the critical importance of the diesel trucking industry to our nation's economic health, it is essential that EPA act as quickly as possible to ensure the nation that its trucks and other diesel vehicles are as clean as possible.
NRDC has been working to clean up diesel emissions since the mid-1970s at about the same time as we were spear-heading the campaign to remove lead from gasoline. The connection between our lead campaign and EPA's current proposal is an important one: Just as lead in gasoline was the barrier to cleaner cars in the 1970s, sulfur in diesel is the barrier to cleaner trucks and buses in this decade.
NRDC strongly supports EPA's proposal for a very simple reason EPA's proposal means cleaner air and better health for all Americans. By mid-2006, 97 percent of the sulfur in diesel fuel would be eliminated, and starting with the 2007 model year, asthma attack-inducing soot particles would be slashed by 90 percent. By the end of the decade, tailpipe emissions of smog-forming nitrogen oxides (NOx) would be cut by 95 percent. These emission reductions will be the equivalent of removing the pollution from 13 million of today's trucks from the roads, and will result in the elimination of 2.8 million tons/year of NOx, 305,000 tons/year of non-methane hydrocarbons, and 110,000 tons/year of particulates. This will bring critical relief to the more than 120 million Americans live in areas that don't meet EPA's health standards for ozone and/or particulate matter.
The key to the success of EPA's Proposal is the desulfurization of today's high-sulfur diesel fuel: Just as a small amount of lead in gasoline disables automobile catalytic converters, even a small amount of diesel sulfur will disable the most promising emission controls for nitrogen oxides and will make the soot controls less effective. In other words, a smaller, compromised sulfur cut (as suggested by oil interests) would render the EPA's proposed PM and NOx targets unachievable, but EPA's proposed 97 percent sulfur cut would make the air cleaner in every state of the nation.
Undoubtedly, the oil industry and its allies will continue their fight until the end of the year, hoping to push this Proposal into the next Administration. They are fighting against cleaner air and improved public health even though the oil industry earns more profits in a single quarter of a single year than its own estimated costs of compliance for the entire 10-year roll-out of the Proposal, and even though the past three decades of environmental regulations are filled with examples of air pollution regulations that did not cost nearly as much as industry advocates had previously estimated.
EPA and the administration should continue to hold firm because it is on the verge of a historic environmental victory. When it happens, removing sulfur from diesel fuel will be the biggest vehicle news since the removal of lead from gasoline. By cleaning up every truck and bus in the nation, this should mean longer, healthier lives for asthmatics, and many other Americans, who currently hold their breath when a diesel truck or bus blows by and who fear the summer's first ozone alerts far more than they should.
However, NRDC believes strongly that the Proposal and EPA's overall program to reduce diesel emissions can be improved in the following ways: (a) remove the four-year phase-in of the NOx standard, thereby implementing this standard fully in 2007; (b) improve the in-use compliance and enforcement program, to ensure that engine and vehicle certification emissions more accurately reflect in-use, real-world emissions levels (c) ensure that the NTE limits and other compliance mechanisms of the 1999 Consent Decrees do not expire in 2004; and (d) add a series of incentives for the increased use of advanced technology and alternative fuel vehicles in urban fleets, especially transit buses, sanitation trucks and delivery vehicles.
II. The Health Threat of Diesel Emissions
The reasons for our concern about diesel emissions are clear. In our view, diesel's excessive quantities of particulate matter (PM), NOx and toxic emissions are probably the most serious air pollution threat facing many Americans, particularly in many urban areas.
More than fifty studies show links between particulate matter generally and a wide range of health impacts, including increased asthma attacks and emergencies, endocrine disruption, numerous cardiopulmonary ailments, cancer and premature death. Nitrogen oxides contribute to ground-level ozone formation, acid deposition, nutrient pollution of waterways, and secondary (i.e., atmospheric) formation of particulate matter.
While numerous studies have concluded that the particulate matter and nitrogen oxide emissions in diesel exhaust are harmful to human health, NRDC is increasingly concerned about the growing evidence that diesel particulates are associated with increased cancer risk. Diesel exhaust has long been considered to be at least a probable human carcinogen by the National Institute of Occupational Safety and Health (NIOSH) and the World Health Organization's International Agency for Research on Cancer (IARC).
In the past two years, three actions by various government bodies moved the nation further along this path: In July, EPA staff reiterated its prior conclusion that diesel exhaust is a likely human carcinogen, based on compelling epidemiological studies. We expect the Clean Air Scientific Advisory Committee to finalize its work on this document at its October meeting. In August 1998, the California Air Resources Board (CARB) formally declared diesel particulate exhaust to be a toxic air contaminant. And in December 1998, the National Toxicology Program advisory board recommended that diesel exhaust particulates be listed as "reasonably anticipated to be a human carcinogen" in the ninth edition of the Congressionally-mandated Report on Carcinogens.
Diesel's link to cancer results in thousands of avoidable cancers nationwide. The association of the nation's state, territorial and local air pollution officials estimates that current levels of diesel pollution result in over 125,000 potential lifetime cancers nationwide, based on their extrapolation of the MATES-II study.
NRDC is also especially concerned about the growing incidence of asthma in our nation, as well as the association between diesel particulate matter and asthma attacks. A recent study estimated that asthma cases will double by 2020, hitting one out of every five American families. Nobody knows what causes asthma, but numerous studies have found associations between pollution (i.e., both ozone and particulate levels) and acute respiratory symptoms, including asthma attacks and hospitalizations.
III. NRDC Strongly Supports the Proposed National Sulfur Limit of 15 parts per million (ppm), Starting in mid-2006.
NRDC strongly supports EPA's proposed national sulfur cap of 15 ppm in mid-2006. In fact, NRDC has previously testified that EPA should adopt a national sulfur cap of 10 ppm. NRDC would strongly oppose any sulfur level above a cap of 15 ppm because such a sulfur level would disable NOx adsorbers and other promising NOx and PM controls, and would reduce the effectiveness of continuously regenerating PM traps and other promising emission controls.
Our opposition to higher sulfur caps derives from the simple truth, noted above: Just as a small amount of lead in gasoline disables automobile catalytic converters, even a small amount of diesel sulfur will inhibit or disable the most promising NOx emission controls and will make PM controls less effective. Because sulfur-sensitive emission controls will be affected more by their interaction with peaks of sulfur than by average sulfur levels, NRDC believes that EPA should focus its sulfur limits on caps, rather than averages.
NRDC believes that a paradigm shift is required to sufficiently clean up diesel emissions. Such a paradigm shift involves a "systems" approach to reducing diesel emissions evaluating fuel, engine and aftertreatment technologies together as a unified system to maximize the potential emission reductions from the entire "system." Reducing sulfur levels is the key to enabling a systems approach to reducing diesel emissions. Such an approach was critical to the success of last year's Tier 2 emissions and gasoline sulfur standards, and it is appropriately the principle behind today's Proposal.
In sum, implementing the new 15 ppm sulfur cap nationally by mid-2006 makes sense for at least four reasons:
First, only the near-elimination of sulfur (i.e., capped at 15 ppm) will create a fuel supply that is clean enough to adequately support the most promising PM and NOx emission controls like continuously regenerating PM traps and NOx adsorbers.
Second, a national approach to low-sulfur diesel is critical, given the mobility of the vehicles themselves. Because the presence of sulfur could disable NOx adsorbers and other emission controls, EPA must ensure vehicle operators that the on-road diesel fuel supply is as close to sulfur-free as possible, wherever the vehicle is operating. With a national fuel supply, mislabeling, misfueling and fuel supply contamination concerns are eliminated thereby responding to the concerns of the nation's diesel fuel sellers.
Third, implementing the low-sulfur cap in mid-2006 ensures that the fuel supply of low-sulfur diesel will be adequate to service the first model year 2007 vehicles that are sold (typically, in the summer and fall preceding the calendar year). By requiring that all highway diesel fuel produced by refiners or imported meet the new sulfur standard by April 1, 2006, and that all highway diesel fuel at the terminal level meet the new sulfur standard by May 1, 2006, EPA is providing adequate lead time to ensure that all highway diesel fuel users are buying only the low-sulfur diesel fuel by June 1, 2006 and is providing a clear and useful road map to implementing the sulfur limits in a manner that avoids market disruptions that could occur if only a retail compliance date were provided.
Fourth, a national low-sulfur diesel fuel will provide direct sulfate emissions reductions in pre-2007 diesel vehicles that do not have PM or NOx aftertreatment, helping reduce sulfate particulate matter, acid deposition (due to reduced sulfur dioxide emissions) and other harmful air pollution.
Predictably, the oil companies that fought unleaded gasoline in the 1970s and that would have to clean up their diesel fuels in order to help the nation's trucks and buses reach the new emission targets are crying foul. NRDC firmly rejects the oil's industry's suggestion of a 90 percent sulfur cut (to 50 ppm) because it would render the EPA's proposed PM and NOx targets unachievable.
Under the oil industry proposal of 50 ppm, PM traps are likely to suffer high failure rates, leaving oxidation catalysts that yield only a 20 percent PM reduction as the most likely PM after-treatment technology. While some PM traps (including the most promising continuously regenerating traps) can operate at 50 ppm, trap clogging and failure is a serious problem at this level, due to the formation of sulfate PM. Fuel economy also suffers, as a result of increased regeneration needs. As a result, it would be difficult if not impossible for engine, aftertreatment and/or vehicle manufacturers and/or sellers to warrant such a trap for the full useful life of the vehicle, and fuel economy-sensitive vehicle users might not welcome the technology. Consequently, in the event that EPA adopts a 50 ppm sulfur cap, manufacturers and sellers would be likely to opt for the less effective oxidation catalyst, rendering the proposed 0.01 g/bhp-hr PM standard unachievable.
Likewise, under the oil industry proposal, engine manufacturers and vehicle sellers would likely opt for selective catalytic reduction (SCR) as their preferred NOx after-treatment because it is less sulfur-sensitive than NOx adsorbers and other NOx aftertreatment technologies that are in development. NOx adsorber efficiencies are dramatically reduced when sulfur contacts the NOx storage bed. Perhaps for this reason, the Manufacturers of Emission Controls Association has testified that industry efforts to develop an effective NOx adsorber would cease if EPA adopts a 50 ppm cap. While SCR seems capable of significant emission reductions, it also requires the development of a nationwide urea infrastructure that would cost billions of dollars to install, operate and maintain. As with oxidation catalysts, it seems unlikely that the proposed 0.2 g/bhp-hr NOx standard would be achievable with an SCR-only strategy.
It is worth reiterating that the oil industry's 50 ppm sulfur limit would have a negative effect on the fuel economy of the nation's trucks and buses. For example, NOx adsorbers are expected to consume diesel fuel as they cleanse themselves of stored sulfates. As noted above, PM trap regeneration is inhibited by diesel fuel's sulfur leading to increased PM loading, increased exhaust backpressure, and decreased fuel economy. In other words, the higher the sulfur cap, the lower the fuel economy.
Because they can't win on the science, the oil industry and its allies are making three arguments: The companies can't afford it; American consumers won't stand for it; and delay. Each argument is addressed briefly in the following paragraphs.
First, EPA estimates that its proposal will force the oil industry to spend, together, between $3 and $4 billion over the next six to ten years to update their refineries to produce low-sulfur diesel fuel. Given that America's largest oil companies reported nearly $12 billion in profits in just the first quarter of 2000 (see Appendix A), this investment in cleaner fuels seems to be an extremely reasonable cost of continuing an extremely profitable business.
Second, some oil industry opponents of this Proposal have asserted that a 15 ppm sulfur fuel would create an undue cost on the American consumer. We disagree strongly. EPA has estimated that these rules could add up to four cents to the price of a gallon of diesel fuel over the course of the decade hardly enough to derail the nation's strong economy. It is worth noting that BP the nation's largest seller of diesel fuel has reported that its 15 ppm sulfur fuel will be sold in California next year at an incremental cost of five cents/gallon, even without the economies-of-scale benefits of a nationwide fuel. Tosco the nation's leading independent refiner and marketer of petroleum products recently announced its commitment to upgrading its California and Washington refineries to enable it to sell 15 ppm sulfur fuel in 2003 at a better return on capital for its investors than its current, high-sulfur diesel fuel.
A recent American Lung Association/Clean Air Trust/Environmental Defense poll found that 85 percent of the American public would be willing to pay the incremental costs anticipated by EPA, BP and Tosco. These costs seem especially reasonable once the benefits of eliminating 2.8 million tons/year of NOx, 305,000 tons/year of non-methane hydrocarbons, and 110,000 tons/year of particulates are factored in.
Finally, Cummins and some other opponents of the Proposal are asking EPA to "slow down" the rule-making process, i.e., that EPA should not rush to finalize these rules this year. These opponents claim that the PM and NOx technology has not been demonstrated, so EPA shouldn't act.
Already, the Manufacturers of Emission Controls Association (MECA) has testified in support of the proposed PM and NOx standards and has stated that it believes that its members will able to meet the requirements of this proposal in a cost-effective manner. Given that MECA members are quite likely to develop and commercialize the PM and NOx aftertreatment controls, MECA's position should be given great weight by EPA and this Subcommittee. Further, it is worth noting that the past three decades of environmental regulation are filled with examples of regulations that were opposed by regulated entities who said it couldn't be done, only to thereafter prove that it could be done and usually at a lower cost than initially estimated.
Cummins' position is troubling for another reason. There is evidence in the rulemaking docket that suggests strongly that Cummins' presumptive emission targets are as low as EPA's proposed PM and NOx levels, and that it already believes that NOx adsorbers will work, that there are several approaches to sulfur management, and that a sulfur level of 50 ppm is deleterious to EGR systems.
The bottom line is this: Technologies that require low-sulfur diesel are being commercialized and used in Europe and elsewhere, and are providing the health benefits of reduced diesel emissions in those places. Americans deserve the health benefits of these technologies. Every year of delay on industry's part means more avoidable asthma emergencies and more avoidable cancers.
It is worth noting that industry is not monolithic in its opposition to this Proposal. We note those industry associations and companies that have supported EPA's timetable and the move to ultra-low sulfur diesel (in some cases, supporting a move to a cap below 15 ppm), including the Engine Manufacturers Association, the Manufacturers of Emission Controls Association, the Alliance of Automobile Manufacturers, the California Trucking Association, International, TOSCO, BP, the Diesel Technology Forum, and others. We invite their peers to reconsider their positions of opposition to cleaner fuels, trucks and buses.
IV. NRDC Strongly Supports the Proposed Emission Standards for PM, NOx and Other Emissions from Diesel Vehicles and Engines in 2007 But With No NOx Phase-In.
NRDC strongly supports EPA's proposed new standards for particulate matter and nitrogen oxides (0.01 grams-per-brake-horsepower-hour (g/bhp-hr) for PM and 0.2 g/bhp-hr for NOx, respectively). However, NRDC has strongly urged EPA to eliminate the four-year phase-in of the NOx standard. NRDC also supports and applauds EPA's other proposed emissions standards (e.g., non-methane hydrocarbons, formaldehyde, complete vehicle standards, gasoline standards), as well as EPA's decision to include turbocharged diesels in the existing crankcase emissions prohibition.
We have urged EPA to eliminate the NOx phase-in, for the following reasons.
First, by 2007, low-sulfur diesel fuel will be available nationwide, so there will be no fuel barrier to the national use of the most advanced PM and NOx controls. If the oil industry is required to complete its infrastructure and distribution investments by mid-2006 in order to provide fuel for model year 2007 vehicles and engines, it makes sense to require engine manufacturers and aftertreatment suppliers to work on the same timetable.
Second, implementing all of the new standards at the same time will minimize the cost and burdens of compliance. This is especially true for the engine manufacturers and after-treatment companies that will be commercializing new equipment to meet the proposed PM, NOx and NMHC standards, as well as California's upcoming urban bus standards. With one national, industry-wide compliance date, these companies will not have to maintain multiple production and record-keeping operations, nor will EPA have to investigate the sales records of every truck and bus seller in the nation.
Third, other low-emission heavy-duty activities around the world from the California Air Resources Board's urban bus standards to various upcoming European national and European Community low-sulfur diesel requirements will have created momentum for the commercialization of advanced emission control technologies elsewhere that will be applied to meeting EPA's requirements.
Fourth, states around the nation will be relying on the new NOx standards to meet ozone attainment and maintenance deadlines over the course of the decade. Public health imperatives in these states, combined with these states' legal obligation to meet their attainment and maintenance deadlines, require the implementation of the proposed NOx standard as expeditiously as practicable. It is not clear how states will be able to take SIP credits on a NOx standard that is implemented over a four-year time frame on a percent-of-sales basis. In contrast, a full phase-in of the NOx standard in 2007 would enable nonattainment areas to take full advantage of this Proposal's NOx standard in meeting their attainment and maintenance requirements.
V. In-Use Compliance, Testing Procedures and Enforcement
Setting more stringent tailpipe standards alone will not be sufficient to assure Americans that diesels are getting cleaner, so NRDC has urged EPA to ensure the strongest possible in-use compliance and enforcement program for the nation's trucks and buses. Thanks to the diesel engine industry's decade-long practice of designing and building engines that meet EPA's certification standards while emitting far-greater emissions on the open road, Americans continue to breathe excess NOx emissions from the current truck fleet. These excess emissions will add a wide range of serious public health impacts and costs, including an estimated 2,500 premature deaths, 5,000 hospitalizations and public health costs of 6-21 billion dollars over the lives of these vehicles. This widespread industry practice resulted in last year's consent decrees between the U.S. government and seven major diesel engine manufacturers (collectively, the "Consent Decrees").
Even beyond the deplorable industry actions that led to the Consent Decrees, several recent studies confirm that emission levels rise significantly as a vehicle ages and its parts deteriorate. One recent study found that actual NOx and particulate matter emission levels from heavy-duty diesel vehicles ranging in age from model year 1994 and later were as high as 12.5 g/bhp-hr and 0.6 g/bhp-hr, respectively. This is surprisingly high, given that these same diesel vehicles had been certified at NOx and PM emission levels of 5.0 g/bhp-hr and 0.1 g/bhp-hr, respectively, only a few years earlier. Even more telling, an analysis performed for this same study indicated that "in-use PM and NOx emissions for [tested vehicles] may not reflect the emissions improvements expected based on stricter engine certification test standards put into effect since 1985." In other words, because diesel vehicles deteriorate with age but are never re-tested to ensure that they continue to comply with certification emission standards, EPA may not be realizing the intended air quality benefits from increasingly stronger certification standards.
NRDC notes approvingly that EPA recently finalized a rule (the "2004 Rule") that will require diesel engines to meet the not-to-exceed (NTE) limits in last year's Consent Decrees, new onboard diagnostics (OBD) requirements, a steady-state emissions test and other compliance and enforcement mechanisms (collectively, the "compliance mechanisms"), beginning in 2007. However, NRDC is deeply concerned that the final 2004 Rule may leave a three-year gap between the termination of the Consent Decrees in 2004 and the industry-wide implementation of the NTE limits and other compliance mechanisms in 2007 under the 2004 Rule's implementation schedule. Thus, we have urged EPA to take steps to extend the Consent Decrees until the codification of the NTE limits and other compliance mechanisms are fully implemented in 2007.
Even though the 2004 Rule is now final, NRDC stresses the importance of these points because of the interaction between the Consent Decrees, the 2004 Rule and this 2007 Proposal. It has been widely reported that at least some of the engine companies wish to weaken the NTE limits and perhaps other compliance mechanisms. NRDC continues to urge EPA to maintain a rigorous commitment to these mechanisms because they are the public's best protection against the kind of emissions "cheating" practiced throughout the 1990s and because they will help assure the public that real world, in-use emissions are being reduced as a result of the Proposal's new emissions standards and other provisions. To the extent that competitive issues underlie the companies' request for relief from the Consent Decree's NTE limits and other compliance mechanisms, NRDC feels strongly that the only acceptable resolution of these competitive issues is an industry-wide adherence to the NTE limits and the other compliance mechanisms, rather than carve-outs and exceptions that favor one company over another especially if such carve-outs result in competitive advantages for companies that have failed to remove the auxiliary emission control devices that were at the heart of the defeat device problem.
To summarize, NRDC strongly opposes any change to the NTE limits contained in the Consent Decrees, strongly opposes any weakening of the NTE limits or any of the compliance mechanisms in the 2004 Rule, and strongly urges EPA to apply the NTE limits and other compliance mechanisms to all heavy-duty engines and vehicles, regardless of the fuel used. Further, NRDC strongly encourages EPA to take all necessary steps to extend last year's Consent Decrees until the NTE limits and other compliance mechanisms are implemented on a codified, industry-wide basis in 2007, including a strict enforcement of EPA's defeat device policy and returning to court if necessary.
Even under the 2004 Rule, it appears that heavy-duty engines and vehicles may only be tested once when they are new. Regular, in-use testing which would demonstrate whether engines or vehicles are remaining at certified emissions levels throughout their useful life still will not be required under the 2004 Rule or this Proposal. NRDC continues to urge EPA to expand its in-use compliance and enforcement mechanisms to ensure that emissions from the nation's fleet of heavy-duty vehicles and engines do not deteriorate as these vehicles and engines age.
In closing, a more robust system of in-use emissions testing will become particularly important if and when emerging diesel technologies including the PM traps, NOx adsorbers and other aftertreatment technologies envisioned by this Proposal are certified. Some of these technologies are still being developed, and they will be tested and commercialized in upcoming years. However, their long-term performance and reliability is not proven yet. This point cannot be overstated regular testing and an effective compliance and enforcement program is critical to ensuring the proper operation of these new technologies and their abilities to reduce harmful emissions over their full useful lives.
VI. Advanced Technology and Alternative-Fuel Vehicle Incentives
As discussed above, emissions test data demonstrates a gap between certification and in-use emissions for heavy-duty diesel engines. This gap does not appear to exist for engines powered by alternative fuels, such as natural gas. For example, the staff of the California Air Resources Board (CARB) concludes that diesel transit buses currently have in-use particulate emissions of approximately 0.23 g/mi, over ten times the 0.02 g/mi for natural gas buses even though the diesel buses certify to PM levels only two to three times higher than their natural gas counterparts.
Zero-emission technologies, such as the fuel cell buses expected to be commercial by the time EPA's rule goes into effect, offer substantial, guaranteed air pollution benefits while also eliminating toxic emissions from the tailpipe, substantially cutting emissions of greenhouse gases over the total fuel cycle, and reducing reliance on foreign oil. Other advanced technologies, such as hybrid-electric vehicles, may also offer in-use emissions benefits if they are designed to reduce engine operating characteristics that lead to high emissions rates.
These intrinsically cleaner options are currently being demonstrated throughout the country in applications such as medium duty delivery vehicles, school buses, transit buses and waste haulers, and wider applications are expected within the next few years. We have urged EPA to ensure that its rule does everything it can to encourage these technologies and fuels by (a) revising to its averaging, banking and trading ("ABT") program (a program that permits engines that beat EPA's standards to generate marketable credits); (b) creating a separate, more stringent emissions standard for fleet vehicles (historically, transit buses have met more stringent emissions standards than other heavy duty vehicles, thereby providing greater health protection from diesel emissions in high-population urban centers); and/or (c) creating optional low-pollution standards (following California's lead, EPA should adopt optional low-pollution standards for diesel engines that would encourage the development of even lower-polluting engines, taking toxic and greenhouse gas emissions into account)
VII. Conclusion
NRDC looks forward to working with the Subcommittee and all interested parties towards the successful finalization of this Proposal by the end of this year.
Thank you again for the opportunity to testify today. For further information, please do not hesitate to contact Richard Kassel at (212) 727-4454 or at
Big Oil's Big Profits
Company--First Qtr. 2000 Profits (rounded)
ExxonMobil --$3.35 billion
Royal Dutch/Shell-- 3.13 billion
BP Amoco-- 2.71 billion
Chevron-- 1.04 billion
Texaco---- 602 million
Conoco-- 391 million
Phillips-- 250 million
Marathon-- 199 million
Coastal-- 174 million
Sunoco-- 78 million
Tosco-- 75 million
Total--11.99 billion
Source: Clean Air Trust