I 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Washington, D. C. 20460 oOo PUBLIC HEARING on CALIFORNIA WAIVER REQUEST VOLUME II Pages 210 - 420 August 4, 1977 Conference Rooms A-B-C US Environmental Protection Agency, Region II 100 California Street San Francisco, California 9:00 a.m. Reported by: JERRY R. SMYTHE E & WILSON SHORTHAND REPORTERS (415) S43-3194/461-309S ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 HEARING PANEL 19290 BENJAMIN R. JACKSON, Presiding Officer Director, Mobile Source Enforcement Division CHARLES GRAY Chief, Standards Development and Support Branch KARL HELLMAN Chief, Technology and Evaluation Staff RON E. KRUSE Project Manager, Light Duty Vehicle Regulations EPA STAFF DANIEL M. STEINWAY Attorney-Advisor JAMES McNAB, III Attorney-Advisor JOAN F. URBINE Secretary E & WILSON SHORTHAND REPORTERS (415) 543*3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 INDEX WITNESS PAGE CHRYSLER CORPORATION 213 & 33 7 MICHAEL W. GRICE, Staff Attorney ROBERT M. WAGNER, Staff Engineer, Emission Planning AMERICAN MOTORS CORPORATION 232 & 396 WILLIAM C. JONES, Manager, Emissions and Energy Standards AUTOMOBILE IMPORTERS OF AMERICA 247 & 257 DONALD M. SCHWENTKER, Staff Attorney SUBARU OF AMERICA, INC. 251 & 406 WALTER D. BIGGERS, General Manager CALIFORNIA AIR RESOURCES BOARD 261 THOMAS AUSTIN, Deputy Executive Officer, Technical KINGSLEY MACOMBER, Chief Counsel GARY RUBENSTEIN, Manager, Special Projects Section MOTOR AND EQUIPMENT MANUFACTURERS ASSOCIATION 2 78 MARK R. JOELSON, Attorney with Arent, Fox, Kintner, Plotkin & Kahn of Washington, D.C. FORD MOTOR COMPANY 2 98 DONALD A. JENSEN, Director, Automotive Emissions and Fuel Economy Office EUGENE E. WEAVER, Emissions Planning Associate JOHN EPPEL, Attorney GENERAL MOTORS CORPORATION 3 65 EDWIN E. NELSON, Assistant Director of Automotive Emission Control HAROLD W. SCHWOCHERT, Staff Engineer RICHARD I. PETERSEN, Attorney SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/401 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3A INDEX (Cont'd) ATTACHMENTS Attachment A of AMC's Presentation Attachment I of Ford Motor Company's Presentation Attachment II of Ford Motor Company's Presentation Attachment III of Ford Motor Company's Presentation Attachment IV of Ford Motor Company's Presentation Attachment V of Ford Motor Company's Presentation Smog Chamber Simulation of Los Angeles Pollutant Transport by William A. Glasson, Environmental Science Department, General Motors Research Laboratories GM Statement on ARB Proposal for 1982 Automotive NO Exhaust Standards x Meeting of State of California Air Resources Board, (Excerpt), Wednesday, June 22, 1977, submitted by GM GMR Smog Chamber Simulation of Los Angeles Pollutant Transport Graph, submitted by GM Statement by American Motors Corporation on the California Air Resources Board Proposal for 1982 and Later Passenger Car, Light-Duty Truck and Medium- Duty Vehicle NO Exhaust Emission Standards (June 22, 1977) x oOo SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 213 MR. GRICE: Good morning. I am Michael Grice, an attorney with Chrysler Corporation. We welcome this oppor- tunity to present our views on California's request that the preemption provisions of Section 209(a), the Clean Air Act, be waived to permit California to enforce its vehicle maintenance regulations beginning with 1980 model passenger cars and 1981 model light- and medium-duty trucks. These regulations have two basic provisions. First, they would significantly limit the maintenance permitted during certification testing. This requirement is, in our judgment, well within the authority of both the ARB and EPA once tech- nological feasibility is established. Second, they would prohibit a manufacturer from recommending additional maintenance to its customers except under very limited and exceptional circumstances. I will address my comments to this second portion of California's regulation, the prohibition of additional main- tenance recommendations to consumers. As I will explain, this portion of the regulation is not authorized by either California or federal law and is specifically preempted by provisions of the federal law which cannot be waived pursuant to Section 209(b) of the Clean Air Act. Equally important, we do not believe that this regulation is technologically feasible within the meaning of the requirements of Section 202(a) of the Clean Air Act. Accordingly, we submit that California's request for waiver of its regulation prohibiting additional maintenance recom- mendations must be denied. I & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 214 I will not discuss the question of California's authority today. That subject has been discussed at length in the MVMA memorandum which has been submitted to the record here. Turning to the federal law, Section 207(c)(3) of the Federal Clean Air Act requires that the manufacturer furnish "such written instructions for the maintenance and use of the vehicle or engine by the ultimate purchaser as may be reason- able and necessary to assure the proper functioning of emission control devices and systems" This provision applies equally to vehicles sold in California and in the other 49 states. The determination of what maintenance is reasonable and necessary is primarily left to the discretion of the vehicle manufacturer. That discretion is controlling unless EPA establishes that the particular recommendation is unreasonable and unnecessary. Thus, the existing law permits, indeed requires, a manufacturer to specify additional maintenance to its customers if that maintenance is reasonably and necessarily required to assure proper operation of components affecting vehicle emissions during real world operation of the vehicle. As a practical matter, this requirement covers directly or indirectly virtually all engine and power train maintenance. Significant civil penalties can be imposed for failing to provide such maintenance instructions. We submit that under the "Supremacy Clause" of the United States Constitution the obligations and requirements of Section E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 215 207(c)(3) are the supreme law of the land and supersede and prohibit any state action such as contemplated by this pro- posal . CHAIRMAN JACKSON: Mr. Grice, may I interrupt you? MR. GRICE: Certainly. CHAIRMAN JACKSON: I perceive your argument is much the same as that offered by Ford and General Motors on this. Is that fair? Is there anything in here that I am going to be surprised with? MR. GRICE: Let me think about that question for a minute, Ben. My immediate reaction is no. CHAIRMAN JACKSON: Then let me ask you the question: If pursuant to this review that the EPA does, which you acknowledge as having the greater force of the law with regard to cars certified for California under the maintenance require- ments specified in the regulations that they have adopted, we make the determination that anything above and beyond what was done in connection with certification in their programs is unreasonable and unnecessary, would that satisfy your concerns about what goes in the maintenance instruction to the ultimate consumer? MR. GRICE: No, it wouldn't, because I don't think that you can make that finding. CHAIRMAN JACKSON: Well, now, wait a minute. You said very clearly on the bottom of Page 2 and top of Page 3, "This discretion is controlling unless EPA establishes that the particular recommendation is unreasonable and unnecessary." s & WILSON shorthand reporters (413) 543*3194/4Q1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 216 And the basic thrust of it would be that once above and beyond what is established by California rules is unreasonable and unnecessary, and I am saying: If that were the determination of the EPA, wouldn't that solve your con- cerns? MR. GRICE: No, it wouldn't. CHAIRMAN JACKSON: You wouldn't have a conflict of law, because the issue of your liability would be arguably dealt with when EPA made that determination. At least that's the way the court looks at it, I presume. MR. GRICE: Let's put it this way, Ben: I don't think that you can establish present maintenance recommenda- tions of manufacturers are unreasonable and unnecessary. CHAIRMAN JACKSON: In other words, it really doesn't have any meaning for EPA to make any kind of determination with regard to maintenance instructions offered by Chrysler or anybody else because there is no way you can prove its unreasonable and unnecessary if the manufacturer recommends it. MR. GRICE: I think under certain limited circum- stances it might very well be possible to establish that a recommendation is unreasonable and unnecessary. CHAIRMAN JACKSON: What one do you know of that's been made by Chrysler that would be such a recommendation? MR. GRICE: I think I object to that question. I am not speaking of any recommendation that is made by Chrysler. Hypothetically, I suppose someone using existing technology and recommending that the spark plugs be changed SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415} 543-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 217 every thousand miles, I really don't think EPA would have too much difficulty arguing that that was unreasonable and unnecessary. CHAIRMAN JACKSON: But if you made that in a good faith attempt to prescribe maintenance instructions for in-use vehicles, arguably you make the point that it's the discretion of the manufacturer to in good faith prescribe what he thinks is reasonable and necessary. MR. GRICE: That is correct. CHAIRMAN JACKSON: I can't imagine that somebody would do that just to be doing that. Certainly, it would be in good faith; wouldn't it? Certainly, Chrysler wouldn't be doing it? MR. GRICE: No, we certainly wouldn't. CHAIRMAN JACKSON: See, there's my problem. I don't think what you are telling me means anything in terms of any kind of substantive review on the part of EPA, and I don't see how that can get you in trouble with regards to the conflict of the two requirements. Because I always come back to where I'm trying to find out what it is that caused us to say you didn't provide reasonable and necessary instructions, and that's some sort of judgment about whether you were in good faith; and if you recommended it, surely you are not going to say, "I recommended it in bad faith." It's a very tight circle. MR. GRICE: I am not sure I agree with you there. I think EPA has a certain review power and a certain review authority over maintenance recommendations. E & WILSON SHORTHAND REPORTERS (415) 543-3194/461 <3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 218 CHAIRMAN JACKSON: Okay. Let me ask you this: If you in good faith made a recommendation, all your engineers believed it was necessary and reasonable for the proper func- tioning of the emission control of a particular car and EPA determined that it was unreasonable or unnecessary and you went ahead and put it in your instructions, what would that mean? MR. GRICE: I guess that might very well lead to a confrontation. CHAIRMAN JACKSON: Would it trigger the prohibition of failure to provide a maintenance instruction? MR. GRICE: I think conceivably it could. CHAIRMAN JACKSON: In other words, you would concede, if you did that MR. GRICE: Conceivably, you could challenge what- ever manufacturer was doing that that they had not issued reasonable and necessary or issued unreasonable and unnecessary maintenance instructions. CHAIRMAN JACKSON: What would EPA have to prove; that you were in bad faith? MR. GRICE: I am not certain that you would have to establish bad faith. You would have to establish that it was unreasonable and unnecessary. CHAIRMAN JACKSON: So the burden MR. GRICE: And that would be a very difficult showing. CHAIRMAN JACKSON: Right. Exactly. The burden is on EPA. E & WILSON SHORTHANO REPORTERS (415) 543-3194MS1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 219 MR. GRICE: That's right. CHAIRMAN JACKSON: So really what you are saying is whatever you say should go. MR. GRICE: I'm saying that's what the Clean Air Act provides, and I'm also saying that that is preempted that preempts California's authority in this area. CHAIRMAN JACKSON: I hear you saying that. Now, back to the point. If EPA goes ahead and says it's unreasonable and unnecessary if you go beyond the maintenance instructions associated with the regulations that we have before us here, how does that be in conflict? Are you saying we have to show it? Wouldn't we say that the showing has been made because in certification you didn't have to do it because it wasn't per- mitted? MR. GRICE: I think the argument has been made and Let me ask you a question, then. You CHAIRMAN JACKSON: You are supposed to answer them. MR. GRICE: Well, I am going to ask you a question first. You asked me whether the arguments that I made here primarily followed the arguments that were made yesterday by General Motors and Ford. They do. Are you making a request that I shortcut my state- ment, because I get into that point at some detail later. CHAIRMAN JACKSON: I'm just trying to find out exactly how this would work, this business that you have set up before us here. E & WILSON SHORTHAND REPORTERS (415) 3*3-3194/461.3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 220 You say unless EPA establishes a particular recom- mendation is unreasonable and unnecessary. And I say if our basis for doing that was the demonstration that was done in certification pursuant to California's regulations, why wouldn't that be necessary and why wouldn't that absolve this problem with the law that you seem to keep raising? MR. GRICE: Well, you raised the question CHAIRMAN JACKSON: You seem to concede EPA's judgment on the one hand. On the other hand, you say it's whether we decide that it's unreasonable and unnecessary or it's reason- able and necessary, and that would trigger the prohibition. On the one hand, you trigger the prohibition. On the other hand, we trigger the prohibition. And I'm trying to figure out which one you are really worried about. MR. GRICE: I don't think you I don't think you quite perceive the point. Basically, the manufacturer has the discretion to recommend those maintenance services. I am willing to concede that EPA has a limited power to challenge the reasonableness and the necessariness of those maintenance instructions, but EPA has the burden of establishing that they are unreasonable and unnecessary. CHAIRMAN JACKSON: Okay. Now let's follow this through. The conflict in the law that you seem to keep raising as your problem, is it self-actuating? EPA would have to establish the prohibition, would have to come in and E & WILSON SHORTHAND REPORTERS (413) 543-3194/401 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 221 find that Chrysler had, on the one hand, not provided a main- tenance instruction or, in your interpretation, not provided one that's reasonable and necessary; is that right? MR. GRICE: That's right. CHAIRMAN JACKSON: So it's up to EPA to make the conflict in the law. I mean it doesn't exist just because of your judgment. It exists because EPA is in opposition to your judgment about what's reasonable and what's necessary. MR. GRICE: No, I think we have on the one hand, we have a good faith obligation to provide what we consider is reasonable and necessary. And I think our failure to exercise that judgment and recommend what we consider reasonable and necessary for the purposes of emission control, for the purposes of fuel economy, for the purposes of keeping that vehicle in proper, safe functioning condition throughout its life all goes into these reasonable and necessary maintenance instructions. And I think if we fail to make a recommendation we could very easily if we fail to exercise that good-faith obligation, we very easily could be in violation of the law. CHAIRMAN JACKSON: You are saying the manufacturer triggers the prohibition by virtue of his good faith, and I just don't know how that ever happens. MR. GRICE: Well, I think the point is this, Ben: On the one hand, we have a flat obligation under federal law to issue those maintenance instructions that we consider reasonable and necessary. On the other hand, we have a flat prohibition in the California regulation that thou shalt not recommend maintenance instructions. E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 222 CHAIRMAN JACKSON: One more question, and we will leave it. You say EPA has the discretion to make a judgment about whether it's reasonable and necessary, but you made a good-faith MR. GRICE: EPA has the discretion to challenge. CHAIRMAN JACKSON: Okay. We challenge, and we determine that it's unnecessary. But you, nevertheless, made a good-faith judgment that you should have had that particular maintenance. Now what's going to happen? Are you not going to put it in the maintenance instructions? Now it's in opposition to your good faith, which is the thing that triggers the prohibition, that EPA has come in and said, "We think it's unreasonable." You say, "No, it's reasonable because we put that in there in good faith in the beginning." Is prohibition triggered if you don't put it in there? MR. GRICE: That would be a situation which I think a manufacturer's reaction in all likelihood would be to examine the particular recommendation and assess the relative strengths and weaknesses of EPA's position and its own posi- tion and make a judgment as to whether that was an issue which needed contesting. And I think in all likelihood if EPA said, "We don't think that's reasonable, and we don't think that's necessary," I suspect in a good many cases the manufacturer would follow that. CHAIRMAN JACKSON: That's the situation, the hypo- thetical that I set up before. We look at a car that's £ & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 223 certified under the California procedures and we judge that it's not reasonable or necessary. You in good faith think it is reasonable and necessary. But we made that judgment, so you don't put it in the maintenance instructions. No pro- hibition, even though it was in contradiction to your good- faith intentions. That's just what you walked me through. MR. GRICE: I think your hypothetical oversimplifies the matter to a great extent. CHAIRMAN JACKSON: I think it focuses it. MR. GRICE: No, I don't, because you are saying: Well, obviously, those instructions are reasonable and necessary because they have been performed on the certifica- tion vehicles on the durability fleet, and I think that's correct. Those are reasonable and necessary. However, that second step, that step from those are resaonable to those are the only recommendations that are reasonable and necessary, just doesn't follow because the durability test by itself is not an indication of the type of maintenance that's going to be needed in the real world. I mean you have a test which runs CHAIRMAN JACKSON: We are talking about the conflict of the law. That's your big hang-up here, is the fact you are going to get dinged $10,000 per car for every one of these maintenance instructions you put out for which in your judgment you needed to put in a maintenance instruction which we agreed with California you didn't need. That's your big problem here. I understand that there may be a situation where you E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 224 think you ought to cover yourself with regard to a particular maintenance item, and it may be good judgment to do it. But what I am talking about is this conflict with the law and how this law operates that gets you into this problem that you keep raising to us as being the reason why California should not be granted a waiver for these regulations. MR. GRICE: Well, I think there is a very clear conflict, Ben. I think there is a very clear conflict between the two requirements. I think there is also a very serious question as to whether or not this provision is subject to a waiver. It is our position that it is not. CHAIRMAN JACKSON: Okay. That's another issue. I am sorry to have interrupted you. I would suggest you go on and pick up the portion of your statement that jumps over this issue and goes on. MR. GRICE: Well, we are at that point. Section 209(a) of the Clean Air Act specifically preempts state action to control the emissions from new motor vehicles. That provision states: "No state or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part. No state shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as a condition prece- dent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, E & WILSON SHORTHAND REPORTERS (415) S43-3194M01-3O98 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 225 or equipment." Clearly, a prohibition against recommended main- tenance such as proposed by ARB is condition precedent to sale relating to the control of emissions covered by Section 209(a). Under limited circumstances, EPA may waive applica- tion of Section 209(a) to California standards "for the control of emissions from new motor vehicles." In our judgment, this provision permits California to seek a waiver for more stringen emissions standards than those promulgated under Section 202(a) and for more stringent test procedures than those promulgated under Section 206. It does not empower EPA to waive Section 209(a) as to the other requirements of the Clean Air Act, such as the requirements of Section 207(c)(3), which althouqh related to motor vehicle emissions, do not constitute standards within the meaninq of Section 209(b). I must therefore conclude that, subject to a finding of technological feasibility, changes to the certification test procedure are the proper subject for a waiver but the prohi- bition of recommended maintenance is not. As a result, waiver must be denied as to the prohibitions on recommended main- tenance. At the same time, we question whether a finding of technological feasibility as required by Section 209(b) is possible. This ARB regulation oversimplifies the problems and purposes of maintenance recommendations. It also misconstrues the results of a 50,000 mile durability test by equating what is necessary during the test with what maintenance will be required during five years or 50,000 miles of real world E & WILSON SHORTHAND REPORTERS (416) 543-3194U8V-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 226 operation. The certification test procedure is designed to provide a basis for estimating the performance of a vehicle over 50,00 0 miles of simulated average urban operation. As such, it does not provide a basis for predicting the per- formance of the vehicle when subjected to many normal but more severe driving conditions regularly encountered during real world operation. For example, the test is conducted over a peroid of about 12-15 weeks during which the vehicle is subjected to about 14 cold starts and few, if any, significant climatic changes. In real life, a vehicle will be subjected to thousands of cold starts, radical climatic changes and many other operating conditions not encountered in a durability test of a few weeks. Under these circumstances, a manu- facturer's ability to pass the test and certify does not establish or accurately predict what will be required to properly maintain the vehicle over its life. Proper emission control is only one of the factors involved in establishing vehicle maintenance requirements. Equally important are the needs of vehicle safety, proper vehicle operation, fuel economy and maintenance of vehicle life. Each factor is taken into consideration in establishing vehicle maintenance. As a practical matter, the manufacturer must recommend that maintenance which provides the required safety, performance, emission control and fuel economy, and at the same time, protects the performance of the vehicle over the E & WILSON SHORTHAND REPORTERS <415> 543-3194/4*1-309B ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 227 life expected by the customer. Anything which would provide less would be nothing short of irresponsible, would violate the provisions of Section 207 (c) (3) of the Clean Air Act, be contrary to the needs of motor vehicle safety and result in an unnecessary and unavoidable increase in product liability exposure. In typical customer usage, the time interval is as critical, if not more critical, than the mileage interval. It is simply unrealistic to equate an ability to perform adequately during a short lived durability test with the ability to perform over five years of reasonably anticipated use of an automobile. Some of the real world conditions severely taxing maintenance requirements include: the extended operation of a vehicle at low speeds for extended hours; driving in dusty areas; trailer towing; commercial usage such as in taxicabs or police service; long periods of idling; and numerous cold starts. Each of these situations and many other types of driving conditions too numerous to mention will realistically require routine maintenance service not required during certi- fication. To ignore these conditions and to base required maintenance on what is required for certification could result in a number of unsafe, poorly performing, high emitting vehicles. A few examples of the types of problems which can be encountered and the problems which can be anticipated would be helpful. They include: 1. Choke linkage. Emission durability cars are run l"HE & WILSON :IED SHORTHAND REPORTERS (415) 543*3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 228 under cover for 50,000 miles with only perhaps 14 cold starts in a period of 9 0 days. These vehicles probably could get by without solvent. However, to eliminate this inexpensive recommendation in typical field service will probably lead to numerous tune-ups to resolve inevitable choke sticking com- plaints. It would be improper to prohibit this normal type of maintenance which is required today and will be required in the future. 2. Drive belts are responsible for maintaining and operating many key components of a vehicle. Their proper operations is vital to the vehicle owner or operator not only in terms of emission control/but in terms of vehicle safety and performance as well. Indeed, in emission control their performance while significant is relatively minor when compared with providing the necessary safety, comfort and the perform- ance of the vehicle. Even more important, these belts are subject to weathering and deterioration due to aging which is substantially caused and affected by climatic conditions, as well as modes of use. 3. Air filters. Air filter performance would depend heavily upon the type of operation the vehicle is placed in. For example, the use of a truck in a dry, dusty desert may result in serious problems if the filter is not maintained frequently. Equally distressing is the possibility suggested at the ARB hearings on this proposal that the vehicle manu- facturer should be responsible for in-use service problems caused by a vehicle owner's failure to maintain a vehicle. ¦ & WILSON SHORTHAND REPORTERS (415) 543 3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 229 Chrysler submits that such a result would be highly improper. In our judgment, a service failure caused by normal in-use operation which could have been prevented by proper main- tenance is not a defect and cannot be the manufacturer's responsibility under the applicable emission warranty. Pushed to its extreme, the ARB proposal might have the long-term effect of making the vehicle manufacturer responsible for five years of maintenance. It is not unreason- able to assume that problems caused by failure to apply solvent to a choke linkage will result in many engine tune-ups and other service at a manufacturer's expense under the expanded warranty suggested during the ARB hearings on this matter. The disruptive impact of such a result on the vehicle manu- facturer, the vehicle dealer, and the service industry is readily apparent. It could result in substantial price increases to cover this type of service. Under the circumstances just discussed, we submit that no finding of technological feasibility is possible. And I think I would like to make a distinction. I am not certain, after having sat through yesterday's hearing, that it is entirely appropriate to zero in on the question of technological feasibility. That is an appropriate inquiry in a situation where EPA is considering a waiver request on a standard. Obviously, if through the promulgation of more severe certification requirements, for example, ARB was attempting to force the development of more durable technology, more maintenance-free technology, the question of technological feasibility would be appropriate. I really think that if we E & WILSON SHORTHANO REPORTERS (415) 543-3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 230 talk of technological feasibility in this type of a situation we must address the question of whether CARB has established that all other maintenance services are unreasonable and unnecessary. And I suggest this they have not done. Finally, I think it appropriate to note, as was discussed at some length yesterday by Ford, that the restric- tion on the maintenance recommendations that the ARB is pro- posing is highly questionable under the First Amendment of the United States Constitution. Bob Wagner and I will be happy to answer any ques- tions you may have. CHAIRMAN JACKSON: I have a question from the CARB. Don't California regulations allow more frequent air-filter and drive-belt maintenance to be recommended to owners to account for the extreme driving conditions and safety issues you raise? MR. GRICE: They certainly do. However, I don't think that the provisions that they have incorporated into their regulations adequately cover the needs of vehicle main- tenance. You may have a very, very simple maintenance service which costs nothing or next to nothing, an inspection of a particular component, an inspection of a hose or putting solvent on a choke linkage. In the process of developing your maintenance recommendations, a manufacturer is going to have to balance the ease and the cost of that particular service against the possibilities and the dangers that arise out of not performing the service. If, for example, it's a very = & WILSON SHORTHAND REPORTERS (415) 543-3104/461-3008 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 231 simple service but by having a particular component checked every 5,000 or 10,000 miles you are going to avoid the possibility of someone's engine failing, you are probably going to recommend it simply because it's very, very good preventive maintenance. If he is developing a problem, he is going to find out about it. And he is going to find out about it when he has to spend a few cents on a minor component instead of having an engine failure. CHAIRMAN JACKSON: Let me ask you MR. GRICE: This is not covered by the ARB regula- tions . CHAIRMAN JACKSON: With regard to what seems to be your problem here in terms of talking about technological feasibility, if we could for a moment assume that the only requirement is the restriction on the amount of maintenance done in certification and there's no requirement other than the EPA review with regard to unreasonableness, necessity of the instructions that you give the consumer, can we talk about the technological feasibility of meeting the requirements that they have placed on maintenance and certification? MR. GRICE: I think MR. WAGNER: Can we talk about that? MR. GRICE: you are talking about the I think we made the distinction very early in the statement that this is a very, very proper subject for a waiver hearing. And I guess the question of technological feasibility of those as certification requirements I'm going to have to turn to Bob. CHAIRMAN JACKSON: Fine. Are they technologically E & WILSON SHORTHAND REPORTERS (41S) 543-3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 232 feasible? MR. WAGNER: I don't think we've ever taken any issue on that basis of certification. Why, we feel that the moves that have been made are moves that the industry would probably have made all by themselves. And, of course, we have made the point on more than one occasion. We don't really think that this is an area that requires regulation. We feel that the manufacturers them- selves have the same basic objective that you fellows have, and that is to eventually eliminate maintenance. In the meantime, why, we feel we are in a better position to exercise reasonable judgment than anyone else. CHAIRMAN JACKSON: So really it's not an issue of technological feasibility once we get away from the idea of what you tell the consumer? MR. GRICE: That's right. CHAIRMAN JACKSON: Thank you very much, gentlemen. MR. JONES: Good morning. My name is William Jones, Manager of Energy and Emissions Standards for American Motors. American Motors appreciates the opportunity to comment on California's request for a waiver to impose restrictions on the allowable maintenance applicable to 1980 and later cars and 1981 and later model-year light-duty trucks and medium-duty vehicles. Although we have a standing commitment to extending the maintenance intervals for our vehicles, we submit that the Environmental Protection Agency must deny the California Air Resources Board waiver request for the following reasons: SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 943-3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 233 1. The Clean Air Act does not permit California to implement the proposed regulation and does not allow EPA to grant a waiver as requested. 2. The need to effectuate the regulation has not been demonstrated. 3. There is insufficient lead time for our com- pliance . On the issue of legal authority, we believe that the ARB lacks the legal authority to impose regulations that prohibit a manufacturer from providing reasonable and necessary maintenance instructions to their customers. By reference, American Motors endorses the legal memorandum submitted to the ARB by the Motor Vehicle Manufacturers Association, dated January 31, 1977, which we understand has been made part of the record. On the issue of need, we do not possess evidence, nor has the ARB shown sufficient evidence in their Staff Report No. 77-9-2 dated April 28, 1977, to provide a basis for con- cluding that maintenance limitations will result in an improve- ment in California's air quality. In fact, we have some very hard conceptual problems relating something For instance, like the power-steering pump belt, lack of being able to check the tension on that in less than 30,000 miles to California's air quality problems. The ARB estimates for 199 0 South Coast Air Basin total motor vehicle emissions reductions of 1.5 percent for HC; 2.5 percent for CO and 0.5 percent for NO really argue A against pursuing this regulatory action. The estimated E & WILSON SHORTHAND REPORTERS (415) 543*3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 234 emissions reductions involve uncertainty and demonstrate very marginal percentage gains which cannot be justified when the costs and risks to other vehicle performance factors are con- sidered. Competitive industry pressures combined with tech- nological improvements have dictated that extension of main- tenance intervals for all of our vehicles was good and neces- sary business. Since this trend exists, we suggest that this proposed regulatory action is not needed to achieve the goal of encouraging limited maintenance of emission-related compon- ents. We are convinced of the value of this goal, and we offer the AMC Buyer Protection Plan and the AMC Service Protection Plan as proof of our dedication to this end. Maintenance is scheduled to accommodate many interrelated objectives. Vehicle safety, driveability, dura- bility, reliability, fuel economy and customer satisfaction, as well as emission performance, must be factored into the maintenance equation to derive a reasonable and necessary main- tenance schedule. Narrow and rigid regulations such as the ARB as proposed run contrary to our efforts to optimize all of the necessary maintenance considerations. There are practical limitations to the ARB's desire to have the certification test procedure accurately reflect the real world of in-use vehicles. In the case of rubber- based belts and hoses, we find the certification schedule does not reflect the time-age relationship of in-use vehicles. The 50,000 mile span equates to more than four years of operation for about half of all car owners. Efforts by ARB SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 235 to equate the four- to five-month certification schedule to the real world are simply not practical. As a responsible manufacturer, we are compelled to specify periodic inspection of these parts. We judge this particular recommendation to be compatible with as well as complementary to current ARB and EPA plans for the implementation of a mandatory vehicle inspection program. Included as Attachment A is a graph which shows the results of a test of belt tension conducted on 20 new vehicles. The belt tension was first measured on the assembled engines before they were installed into the vehicle. A second reading was taken after the roll test on the final assembly lines. The vehicles were then driven for 20 miles. The belt tensions were again checked and recorded. The range of drop-off was from, a minimum of 40 pounds to a maximum of 85 pounds from the initial tension. This is quite a significant difference and shows the need for belt tension check and adjustment of in-use vehicles more frequently than every 30,000 miles. Vehicle maintenance must consider a variety of in-use driving conditions. As a manufacturer of four-wheel-drive vehicles, we are aware of differences that exist between passenger car in-use driving conditions and those encountered by our Jeep vehicle owners. Prior to this proposed California regulation, adequate regulatory flexibility permitted cars and trucks to comply with the same general maintenance cri- teria. The proposed regulation erroneously assumes that cars and all light-duty trucks and medium-duty vehicles can continue to comply with the same maintenance criteria. It l & WILSON SHORTHAND REPORTERS (415) S43-3184/4(1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 236 should be fully obvious that vehicles designed and used for off-highway operation such as our Jeep vehicles cannot meet the proposed reduced maintenance intervals even if by some magic cars could. On the issue of lead time, at the May 18, 1977, waiver hearing on the 1980 California car emission standards, we stated that due to our lack of experience and availability of three-way catalyst emission control systems the progress of our development programs as well as our durability and relia- bility programs would not permit reasonable certification success for the 1980 model year. With this critical situation in front of us, we are forced to conclude that the extended maintenance regulation places an additional time contraint on our emerging development programs which will further delay the date that we can successfully implement the required system technology. The possible impact of this regulation on our future emission control programs cannot be adequately assessed until we have gained production experience with the actual systems we are planning to introduce for the 1980 model year. In conclusion, we suggest that the one best course of action would be to allow the industry to continue to imple- ment its own schedule for reduced maintenance. Due to the uncertainties of all new 1980 and later emission control system and possible changes in fuel additives, the proposed regulatory action at this time is premature and far too rigid to be effective. We believe the practice of reasonable recommended maintenance supports the objective of clean air. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461*3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 237 Thank you. That concludes my statement. CHAIRMAN JACKSON: Mr. Jones, is it AMC's position that requirements aside from the notification of the owner are technically infeasible to do on certification? MR. JONES: We don't have the wherewithal at this point based on the 1980 systems which we are just beginning to develop. The maintenance requirements on those are classified as undefined at this point. CHAIRMAN JACKSON: So you can't say it is or it is not? MR. JONES: No, we can't say it is, and we can't say it isn't. MR. KRUSE: We have a question on your chart. MR. JONES: Certainly. Sorry for the reproduction on the axis there; although, the numbers are labeled. MR. KRUSE: I believe what you are telling is that you assembled this engine, set the drive belt tension assembly, installed the engine in the car, ran it on a chassis dynamometer for transmission checks or whatever, and then you went out and did 20 miles MR. JONES: That's correct. MR. KRUSE: with only one adjustment when the engine was assembled; is that right? MR. JONES: That's correct. MR. KRUSE: What kind of relationship would you expect to see if you had adjusted the belt tension after the dynanometer run out? MR. JONES: Would have been less of a drop-off. How E & WILSON SHORTHAND REPORTERS (415) 343-3194/4(1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 238 much, I am not sure. MR. KRUSE: Is it your experience that this thing continues to decay with time, or is there a plateau after original break-in. MR. JONES: There is a big knee in the curve in its early life of the engine in the vehicle, so there would be a plateau in time. And it would be a relatively short time. Our point here, of course, is that this is not recog- nized by the current regulation. If we don't catch it before it goes out our door, we don't get another crack at it until 30,000 miles. It's kind of inconceivable, really, from a practical engineering standpoint to say that we can't go and check the belt tension on our alternators, our power steering pump belts, our air-conditioning compressor belts. I don't get the relationship to clean air and to the objectives that are evident here. MR. KRUSE: From a technical point of view, it might be possible for you to check that just before it goes out the door and have it be satisfactory for some long period of time? MR. JONES: It would be a small step in the right direction, not totally compensating for, say, the first 5,000 miles of operation. CHAIRMAN JACKSON: Thank you very much. We have a question from Helen Petrauskas of Ford Motor Company for CARB asking for a clarification of an issue that was raised yesterday. Her question is: How does CARB intend to implement and interpret Subparagraph (a) 6.078-25a(5) (iii) incorporated by E & WILSON SHORTHAND REPORTERS (413) 543-3194/481-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 239 reference in Subsection 3(f) of the California Exhaust Emission standards and test procedures as amended June 22, 1977? MR. AUSTIN: Mr. Jackson, since I am intimately familiar with that paragraph and carry it with me in my wallet at all times, I'll try to give you a brief response now and then will provide something in greater detail for the record. This is the paragraph that gives us the authority to allow certain additional maintenance items. Should we Let's go over the specific language. "Request for authorization of scheduled maintenance of emission control related components not specifically authorized be maintained by these regulations must be made prior to the beginning of durability testing. The Administrator" in this case it would mean the Executive Officer "will approve the performance of such maintenance if the manufacturer makes a satisfactory showing that the maintenance will be performed on vehicles in use." We let that in in order to give us some flexibility should there be new devices or components which come into use which the manufacturer can show require maintenance prior to the completion of 50,000 miles and, additionally, the manu- facturer can show that we can be assured that that maintenance will be performed in actual customer use by virtue of the effect of not performing the maintenance, by virtue of what will happen if the maintenance is not performed. If, for example, there is component on a car, a widget or whatever, and failure to maintain this component will SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543*3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 240 cause the vehicle to fail to start and the only way the vehicle can be made to start reliably again is to have the component replaced rather than having a wire pulled off or some simple means of bypassing it accomplished, that's the kind of case that a manufacturer could make that we'd be very likely to go ahead and authorize additional maintenance for. There would have to be some showing that failure to perform the maintenance would cause some condition to exist which clearly would be intolerable to the owner; and not only that, the way to correct the condition would be to have proper main- tenance performed on the vehicle and there wouldn't be some more expeditious means of accomplishing the owner's desire to have the vehicle returned to proper operating condition. We'll supply you something in writing that may give some additional examples and elaborate on our thoughts on this provision in greater detail. CHAIRMAN JACKSON: Fine. Before you leave, yesterday General Motors requested that we include in the record of this proceeding the entire record associated with the maintenance limitation rulemaking from the CARB. Do you have that record? MR. AUSTIN: No. We discussed this briefly with General Motors yesterday. It will take us a significant amount of time to put together what we consider to be a complete record. If we receive that request formally, we will consider it and we will make a more detailed estimate of how long it will take. But it's not going to be something we can do E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 241 quickly, because of the fact that there are no written transcripts yet available of all the ARB meetings at which the regulations were considered. We will have to have someone sit down and go through all the tapes of those meetings. We have done that before for previous regulations, and we have discovered that it's a rather time-consuming process and it will take us quite a while. CHAIRMAN JACKSON: Mr. Austin, I'm not going to ask that you include that for this record. However, to the extent that General Motors feels that there was something included in that record which would be of benefit to their argument in connection with the matter under consideration here, they can feel free to submit that and it will be incorporated into the record. MR. PETERSEN: Mr. Jackson, could we ask that the record for the hearing be held open for the specific purpose of incorporating and including into the record the information which the Air Resources Board may have to gather together for this purpose? CHAIRMAN JACKSON: I have already said, Mr. Petersen, that as far as I am concerned I don't need that material. If there is something of particular interest to General Motors that they want to include in the record, they can do so. Are you talking about the transcripts? MR. PETERSEN: Yes, I am. I am talking specifically of the record of the rulemaking process which it may take the Air Resources Board more than three weeks to accumulate that I & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 242 information, and we would like to ask that the waiver hearing record be held open long enough to accommodate the inclusion of that information just for that sole purpose. CHAIRMAN JACKSON: Why is it relevant? MR. PETERSEN: Well, we believe that it's relevant for several issues: technological feasibility, cost, justifi- cation, need CHAIRMAN JACKSON: Above and beyond that argument which you provided to us on behalf of General Motors yesterday? MR. PETERSEN: I believe so. CHAIRMAN JACKSON: Is it somebody else's argument? MR. PETERSEN: It is General Motors' arguments made before the Air Resources Board and the other manufacturers' arguments before the Air Resources Board. And I have a letter from Motor Vehicle Manufacturers Association which we would like to give to Mr. Austin this morning asking that the record in the rulemaking proceeding be accumulated in time to submit to the EPA on behalf of the MVMA. CHAIRMAN JACKSON: Only to the extent that you can show how it's relevant to General Motors and how it's relevant to this proceeding. I presume any such information like that would be in your possession, and you are welcome to include that in the record of this proceeding to the extent it's a furtherance of your argument. But I am reluctant to just go out and get the entire record of the rulemaking and burden this record with it, because I haven't seen a demonstration of the reason why I should. You had an opportunity to make your case here E & WILSON SHORTHAND REPORTERS (41S) 543*3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 243 MR. PETERSEN: Mr. Jackson CHAIRMAN JACKSON: to present whatever documents you may think are pertinent to your case. MR. PETERSEN: You've got the discretion to not consider any information which is submitted for the record of this waiver hearing which you deem to be irrelevant. I can't make that determination before the fact, nor can you. Mr. Austin has stated that it may take a great deal of time to pull this record together. We are, on behalf of the MVMA, prepared to make someone available in Sacramento to help accumulate this record and pull the record together. That was part of the discussion yesterday afternoon with Messrs. Macomber, Rubenstein, and Austin. CHAIRMAN JACKSON: I'm certainly MR. PETERSEN: So it may not be necessary to hold the record open beyond the August 26th date. We certainly hope it wouldn't be necessary. CHAIRMAN JACKSON: Are you suggesting that you have made arguments relative to the case that General Motors champions that were made in front of CARB that were not made in this forum? MR. PETERSEN: There was a lot of discussion in the rulemaking process which certainly the EPA has not been exposed to relating to the maintenance issue. CHAIRMAN JACKSON: There is an awful lot of dis- cussion I have not been exposed to, I am sure. The question is, one, do I want to MR. PETERSEN: We believe E & WILSON SHORTHAND REPORTERS (415) 543*3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 244 CHAIRMAN JACKSON: and, too, is it relevant? MR. PETERSEN: We believe that discussion is rele- vant, Mr. Jackson, or we wouldn't be making the request. CHAIRMAN JACKSON: Is it material presented by General Motors? MR. PETERSEN: It's material that was presented by General Motors and other vehicle manufacturers and after- market parts manufacturers regarding the regulation, yes. MR. AUSTIN: Mr. Jackson, if I may. It sounds to me like all this material is material that was available to General Motors and, in fact, the Air Resources Board is being asked to help make General Motors1 case, something they were capable of doing on their own. CHAIRMAN JACKSON: That's kind of the way I am coming down. MR. PETERSEN: It's not only material that was sub- mitted by the manufacturers. It's the material that is in the Air Resources Board's possession justifying or establishing the need for this regulation CHAIRMAN JACKSON: Are you MR. PETERSEN: showing that the regulation is technologically feasible, showing that the regulation is necessary in order to meet compelling and extraordinary con- ditions in the State of California? CHAIRMAN JACKSON: Are you suggesting there is information in the possession of the CARB relating to this rulemaking that General Motors is not aware of that would be relevant to the decision that's before the EPA? E & WILSON SHORTHAND REPORTERS (41S) 343-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 245 MR. PETERSEN: I think that's possible, certainly. CHAIRMAN JACKSON: I'm not going to direct that the CARB provide that record for this record. To the extent that you have additional information that is not available to us that you are aware of, you are welcome to submit it. As far as directing the accumulation of that record for inclusion into this record with the potential of extending the comment period, I'm reluctant to do that. MR. AUSTIN: Mr. Jackson, if it would help General Motors out, we would be happy to provide General Motors copies of tapes from which they could make their own transcripts of the hearings, or perhaps since I believe all of these hearings were taken down by a court reporter, they could procure the transcripts for themselves and submit them. MR. PETERSEN: That's fine. That's all we are asking. Like I said, through MVMA, someone will be made available in Sacramento to help accumulate the record on this rulemaking proceeding. MR. AUSTIN: That's not what I understand they are asking for. They are not asking just for a transcript of the hearings, they are asking for ARB to itemize everything on which their decision was based, which is something that goes far beyond the transcript of the hearing process. MR. PETERSEN: That is exactly right. That is what we are asking for and we are going to make somebody available to help in that process and hopefully that information can be accumulated before the record for this hearing closes and the S a WILSON SHORTHAND REPORTERS (415) 543-3194/461 -3008 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 246 relevant information can be submitted to EPA for purposes of the waiver hearing. That's all we are asking. CHAIRMAN JACKSON: Fine. That's between you and CARB. If you get it in in time, that's fine. Mr. Eppel? MR. EPPEL: Mr. Jackson, I just have two comments. One, it's kind of incredible to me that you would suggest that the regulated party has the burden of scouring through untranscribed transcripts. It seems to me that the agency has the obligation to submit the record on which they rely so that you can make the determinations that you are required to make under the statutes. CHAIRMAN JACKSON: That's exactly what we are having this hearing for. If there is something you have failed to say on your behalf that you want to say in furtherance of your case, you should have said it yesterday. If you want addi- tional time, we'll let you do it. MR. EPPEL: All I am observing is it's very difficult to specify items from untranscribed transcripts. How are we supposed to do that? CHAIRMAN JACKSON: I presume if you said it you can say it again. MR. EPPEL: We are supposed to keep verbatim notes during those procedures? CHAIRMAN JACKSON: I don't know what you are supposed to do. I'm just saying the forum is here. The forum for decision-making is here. MR. EPPEL: Well, okay. Be that as it may E & WILSON SHORTHAND REPORTERS (415) 543-3104/461 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 247 CHAIRMAN JACKSON: I am giving you the opportunity to bring your case up here and make your arguments. MR. AUSTIN: As we see it, fortunately EPA and Ford are not constrained to have a decision on this issue made on the basis of the hearing record that was established by ARB. This is a new proceeding, and they are free to introduce any evidence that they introduced in our hearing procedures or any additional information. MR. EPPEL: That's true if it's material in our possession, but it's material in ARB's possession, such as studies and raw data. We don't have that. My second point is, just very briefly for the record, we'd like to join General Motors in the same request that they made. Thank you. MR. SCHWENTKER: My name is Don Schwentker, counsel for the Automobile Importers of America. It might be appropriate that I mention now while we are discussing it that I had planned to ask that on behalf of the Automobile Importers of America the responses that were made by the manufacturers to the ARB in response to the ARB questionnaire on maintenance intervals be made a part of the record. We were not asking that the entire ARB record be included in the record of this hearing, but specifically the responses of the manufacturers to the ARB questionnaire. I think that's entirely appropriate, in that ARB in its own statement relies on these responses and submits only a table as a matter of fact, I don't think a table has been provided yet. But we have had experiences in the E & WILSON SHORTHAND REPORTERS (415) 543 3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 248 past where the ARB has summarized the responses of manu- facturers, and we don't believe in every case that these summaries have been entirely accurate. We think it's very important that the responses to this questionnaire be included as part of this record. Each of these companies has not had the opportunity, it's not practical for each of them to come here and testify on this subject, but they would like their responses to be CHAIRMAN JACKSON: Are you asking permission to include in this record the responses of your clients to questions asked by the CARB in connection with this rule- making? MR. SCHWENTKER: It was a questionnaire that was sent out by ARB last Fall, and we are asking that the responses to this questionnaire be included, because what has been included by ARB CHAIRMAN JACKSON: You may include them. MR. SCHWENTKER: Pardon? CHAIRMAN JACKSON: You may include them. MR. SCHWENTKER: We may include them? CHAIRMAN JACKSON: That's correct. MR. SCHWENTKER: What we are asking is that the ARB submit them, because presumably they have them in a nice, neat stack. They have already included results in tabular form on which they are apparently relying, and what we are asking is that the complete responses CHAIRMAN JACKSON: Are they in your possession? MR. SCHWENTKER: Pardon? E & WILSON SHORTHAND REPORTERS (415) 543-3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 249 CHAIRMAN JACKSON: Are they in your possesion? MR. SCHWENTKER: Presumably the responses included a copy of the responses in the possession of each of the individual companies that responded. CHAIRMAN JACKSON: Each of those that are concerned about the outcome of this rulemaking has got an opportunity to present its argument however it may want to, not limited with what they presented to the CARB in any way. Nothing precludes them from presenting in this forum what they pre- sented to the CARB. MR. SCHWENTKER: As a practical matter, each of these companies cannot come here and make that presentation. CHAIRMAN JACKSON: As a practical matter, I am reluctant to go back and direct CARB in furtherance of their case to provide an entire record of their rulemaking. MR. SCHWENTKER: Don't misunderstand me, Ben. AIA is not asking that the entire record of the rulemaking be included. What we are asking specifically is that the responses to the questionnaire be included, and that's not asking something that requires 30 days of work on anyone's part. The responses to this questionnaire, I would be willing to bet, are in one manila folder and a copy could be made very readily. The concern we have is that there are in many cases in response to the questionnaire various caveats and qualifi- cations that were included in the responses that don't appear in the tabular material. The tabular material just says a, b, c, d, e. But it doesn't have the asterisks and the E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 250 footnotes and the warnings. We would like you to have a look at that without each of us having to go back and submit it. We think that it's not a burden to ask ARB to provide this. We think it's something that's readily available. CHAIRMAN JACKSON: Do you want to provide that? Is it not a burden? MR. AUSTIN: We will be happy to provide the written responses to the questionnaire that we sent out last year. That won't always include all of the responses we got, since the manufacturers did not fully answer were not fully responsive to the questionnaire and we had to draw out some additional information through personal contacts. But what was submitted in writing by the manufacturers can be pulled together by us and submitted for the record. We'll volun- tarily do that. MR. SCHWENTKER: That's what we are asking. I don't think we are asking for something that's unreasonable. MR. RUBENSTEIN: One more thing, Don. Some' of your member companies requested that portions, and in some cases major portions, of these responses be treated confidential. Unless we get express permission from them to release those documents, we will not be submitting them for the record. MR. SCHWENTKER: All right. CHAIRMAN JACKSON: Mr. Grice? MR. GRICE: Just for the record, Ben, I'd like to join in the request of GM and Ford that the record be included that you hold the record open for inclusion of the E & WILSON SHORTHAND REPORTERS (41S) 543-3194/481 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 251 CARB record in this matter. I think it's very important for EPA in connection with these hearings to thoroughly assess the ARB's basis for their action, and I think that is almost an impossibility without that record being in the material you are considering in these proceedings. CHAIRMAN JACKSON: Mr. Grice, as I said before, I am not going to direct that entire record be made a part of this record. To the extent that Chrysler feels that there is information that's available to them that hasn't been made available to this forum, I request you to evaluate your needs and submit whatever you think is pertinent. MR. GRICE: It is, of course, rather difficult to assess a record as a whole which has never been accumulated. We are aware or have a reasonable basis of drawing together the material that we have submitted. We do not have such a basis for the entire record of what has been a rather lengthy rulemaking proceeding before the ARB. CHAIRMAN JACKSON: All we want is Chrysler's position. MR. BIGGERS: Good morning. My name is Walt Biggers, and I am General Manager of Subaru Technical Center, and I am here representing Subaru of America, Inc. We would like to make several comments regarding the State of California's request for a waiver to enforce special requirements pertain- ing to the maintenance performed on durability and in-use vehicles beginning with the 198 0 model year. First of all, we believe that CARB's apparent assumption that tampering is directly related to the vehicle E & WILSON shorthand reporters (41S) 543-3194(461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 252 exposure to the service industry we believe that assumption is unfounded. It is our judgment that tampering, at least in California, is almost never voluntarily performed by service mechanics. Generally, it is an issue brought by strong pressure from the vehicle owner who perceives some defect in vehicle performance, driveability, fuel economy and so forth. The penalties for such action are well known by the industry in California. If our view is correct, then the proposed reduction in required maintenance will have no influence at all in reducing tampering, and because the greater complexity of the systems required to meet the more stringent durability requirements and the more marginal performance of some of these systems at extended service intervals in fact emissions performance will decrease and the whole approach will be basically counterproductive. We question whether these requirements constitute any additional stringency. While vehicles certified under conditions postulated by CARB may be more durable, they would not be any different in nominal emissions values. Can a requirement for a more durable car be viewed as a more stringent emission standard? If so, does this create an inconsistency with Section 202(a) by altering the concept of "useful life"? If the change in allowable maintenance does not constitute a more stringent standard or if it is more stringent because it alters the concept of "useful life," then we think the waiver should be denied. E & WILSON SHORTHAND REPORTERS (41S) 543*3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 253 Next, we must say that our supplier, Fuji Heavy Industries of Japan, has indicated that they have severe reservations about the technological feasibility of meeting California's maintenance requirements by model-year 198 0. It must be remembered that a durability development program by its very nature is a time-consuming program. The State of California is effectively asking auto makers to produce a car that can run without maintenance for a period of time longer than the time remaining to develop such a system. It has been impossible to address the issues of costs since we have no firm idea of the magnitude of the changes that would be involved. Other items that we think create problems include the following: 1. CARB limits drive-belt maintenance but, depending upon the particular emission control system, such maintenance is not necessarily emission related. 2. Spark plug change intervals of 30,0 00 miles are not presently technologically feasible with leaded fuels and maybe not with fuels which contain MMT either. The technical feasibility of a 30,000-mile interval for spark plug changes on small, highly loaded engines, even with unleaded fuels, is very uncertain. Furthermore, we do not consider the use of unleaded fuel solely to extend spark life as an economically justifiable solution. In view of American refinery capa- bilities, it may not even be feasible. 3. The current CARB list of allowable maintenance is apparently predicated on gasoline engines with three-way z & WILSON SHORTHAND REPORTERS (415) 543-3194/401 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 254 catalyst systems. The Subaru system basically, and there are other systems, does not depend upon catalysts. In some ways, their characteristics are entirely different. What about advanced engines, sterling engines, turbines, or other engines not now envisioned? Are these engines to be ruled out by regulations which do not anticipate the use of such engines? The great disparity between the requirements for gasoline and for diesel engine maintenance raises basic questions of equity and weather a compelling need really truly exists. Gasoline engines are permitted service at 30,000-mile intervals with the exception of valve lash at 15,000 miles while diesel vehicles can be serviced at 12,500-mile intervals. Further, the service allowed for gasoline vehicles is severely limited while the diesel service is virtually unrestricted. If a compelling need does exist, then it seems that both diesel and gasoline engine vehicles should be similarly constrained. Finally, the CARB has issued regulations covering the maintenance instructions that the manufacturer may issue. This appears to be directly preempted by Section 207(c)(3) for which there are no waiver provisions. In conclusion, we at Subaru of America feel that the maintenance related changes made by the State of California are undefined in terms of effects on stringency, doubtful for compelling need, unreasonable technically, and preempted in some areas. We therefore ask that California's request for waiver on maintenance-related items be denied. ¦ & WILSON SHORTHAND REPORTERS (413) 543-3194/401 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 255 That's all I have to say. If you have any questions, I'll try to answer them. CHAIRMAN JACKSON: Is it your contention that aside from all the other concerns it's technologically infeasible to comport with the limitations on maintenance that are contained in the regulations before us? MR. BIGGERS: We think so, at least for the 1980 model year, for us. CHAIRMAN JACKSON: How about '81? MR. BIGGERS: Well, it's a hard question to answer. CHAIRMAN JACKSON: Can't say it is; can't say it isn't? MR. BIGGERS: That's right. CHAIRMAN JACKSON: Can you be specific And I think you touched on it in your statement as to what you think is technologically infeasible to accomplish? MR. BIGGERS: Well, I think for us, since we have depended on leaded fuels, that the spark plug service interval of 30,000 miles, we feel, is not possible with leaded fuels. Of course, we can use unleaded fuels and penalize our owners by two to three cents a gallon, but we don't have enough experience, really, with the performance of our engines, which are substantially more heavily loaded than maybe the larger American engines are. We don't have enough experience at this time to judge whether it's possible or not. I think other items I think the drive belts and things like that our emission system doesn't directly depend on drive belts or any emission system proper, but we SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 256 certainly feel we need to adjust drive belt tensions more often than 30,000 miles. We just doubt that it's possible to not do it more often. CHAIRMAN JACKSON: You don't know that it's technologically infeasible? MR. BIGGERS: No. I think, as an engineer, we know that drive belts are a pretty highly developed item. I don't see any reason to believe that there are compounds available and material available that would really make that a feasible thing to do. CHAIRMAN JACKSON: It may cost more? MR. BIGGERS: Even at higher cost. So many things happen to drive belts that are well, again, I guess I have to say I don't know. CHAIRMAN JACKSON: You have raised the concern that was raised by Ford earlier, and that's the new technology which may have different intervals that do not comport with the California prescribed maintenance intervals, and you suggest that that could be a problem. It could preclude is that what you are saying new technology? MR. BIGGERS: Yes. I heard Mr. Austin's response this morning to that, but by essentially constraining certain things like spark plug changes I can envision an advanced engine utilizing spark plugs that might be a very good candi- date as an alternate engine. But maybe the spark plugs may have to be changed every 10,000 miles. It seems unreasonable to rule those out on the face of it just setting arbitrary restrictions which really seem to be directed at one specific E & WILSON SHORTHAND REPORTERS (415) 543*3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 257 engine technology. CHAIRMAN JACKSON: That's not a very good example; is it? Spark plug replacement at 10,000 miles, it's not very innovative technology? MR. BIGGERS: Well, maybe it could be. Suppose it's a sterling engine or something like that, and maybe because of the combustion chamber requirements they really do have to be a spark plug change is not a thing which is subject to tampering. It's a cost thing. It's hard to see how that has any effect on the argument that the ARB makes for the need for these regulations. CHAIRMAN JACKSON: Thank you, sir. We will take a short break. (Short recess.) MR. SCHWENTKER: My name is Don Schwentker, counsel for the Automobile Importers of America, and half of what I had planned to say I have already said. So I will be even faster, because I, too, want to get back to Washington. In the past CHAIRMAN JACKSON: You and what two? What two are you talking about? MR. SCHWENTKER: I assume that you guys, being hardworking government employees, are anxious to get back to Washington and get back to work CHAIRMAN JACKSON: So much for your assumptions. MR. SCHWENTKER: and cut out this vacation. Industry has in the past been accused at one time or another in responses to various rulemaking proposals of taking i & WILSON SHORTHAND REPORTERS (413) 543-3194/461 >3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 258 a least-common-denominator approach. If I understand the so-called least-common-denominator approach, what it means is that the industry gauges its ability to comply on the ability of the weakest of its members. If that's the appropriate comment, least-common- denominator approach to rulemaking, it would seem that ARB in this case, and EPA I guess if they accept the ARB premise, would be taking a most-common-denominator approach, if there is such a thing. I don't know what the opposite of least common denominator is, but let's assume for the moment it's called most common denominator. It would appear that that's the approach that ARB is taking. They are saying if these guys over here can do it, then all of these other guys can obviously do it. And it's being done on a piecemeal basis. It's being done on the ability of one guy to do something with respect to an ignition system and someone else being able to do something in an induction system and so on down the line and then we arrive at a composite which is the best that every- one can do in combination. I think that that is not exactly appropriate, and that's one of the reasons we wanted the responses to the questionnaire made part of this record, so that you would have the opinions and abilities of the so-called least-common- denominator people at your disposal. The most-common-denominator approach ignores the maintenance requirements, we believe, of small cars with small engines that don't necessarily require unleaded fuel. And E & WILSON SHORTHAND REPORTERS (4IS) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 259 Walt Biggers of Subaru explained that a little bit more fully, and I don't need to go into that. It's especially true with spark plug replacement. The ARB relied, we think rather heavily, on manu- facturers' past practices, which are not necessarily their current practices. The case of the Chrysler 5,000-mile spark plug we heard about over and over during the ARB rule- making. The Chrysler 50,000-mile spark plug is no more. We also heard yesterday about the Brand C's lack of a transmission drain plug in 1961 or 1962, and if that's so, and I have no reason to believe that it's not so, someone relying on that experience might logically conclude that everyone should eliminate transmission drain plugs. And apparently Brand C determined that that was not the best idea. So I just want to caution against buying that sort of approach. And, lastly, I think it's easily distinguishable, the difference between EPA approval of reasonable and necessary maintenance and the California requirements. The California requirements would disapprove in advance the manufacturers' determination as to what maintenance is reasonable and neces- sary. We are talking about making a determination in 1977 that would be applicable in 1980 and God knows how far beyond 1980. That's it. CHAIRMAN JACKSON: Is it your position that the manufacturer has an obligation to foresee what he thinks is pertinent to the maintenance of his vehicle? MR. SCHWENTKER: Of his vehicle under the E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 260 circumstances, yes. CHAIRMAN JACKSON: And prescribe that maintenance? MR. SCHWENTKER: That's right. CHAIRMAN JACKSON: And that's a flexibility he should continue to have and indeed should live up to? MR. SCHWENTKER: That's right. Absolutely. I don't think we can say right now what the situation is going to be in 1980 or 1981 or beyond. I think these determinations as to what's reasonable and necessary have to be made in the light of the technology that's in use at that time. By making determinations in advance, we tend to polarize. Many, many years ago the FAA made a decision that small airplanes weighed 12,500 pounds or less and large air- planes weighed more than 12,500 pounds, and they set forth different regulations applicable to these two different types of aircraft. That was easy at the time the determination was made because little airplanes weighed a lot less than 12,500 and big ones weighed a lot more. But as the years wore on small airplanes got bigger and some big airplanes got smaller, and finally we had airplanes that were weighing 12,500 pounds. Along came a guy named Bill Lear who wanted to certify a jet under the small airplane regulations because his jet weighed 12,500 pounds, and it was something that was considered in 1938 when that 12,500-pound limit was set. So you can't always foresee what's going to happen in the future, and I don't think that this thing should be polarized by being set now. What is reasonable and necessary in 1981, we may not know until 1980 or 1981. E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CHAIRMAN JACKSON: Thank you, Mr. Schwentker. The next item on the agenda was high altitude test requirements for 1980 and subsequent model-year passenger cars, light-duty trucks and medium-duty vehicles. And I understand that the concerns that Ford Motor Company and General Motors and AMC has have been resolved on the record. However, their statements will be included in the record, and whatever response is necessary on the part of the CARB will be included in the record, too. Mr. Grice has asked to make a statement on behalf of Chrysler on this subject. MR. GRICE: I'm not sure, Ben, I would dignify with a statement. I just wanted to make the comment that our basic concern, and I suspect the concern of our competition, was the lack of definition in the high altitude regulation. I think that lack of definition has been largely cured by the representations and interpretations of that regulation which are set forth in the ARB statement. CHAIRMAN JACKSON: Fine. (California Exhaust Emission Standards and Test Procedures for 1982 and Subsequent Model-Year Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles). MR. AUSTIN: Mr. Jackson, before I get into the next portion of our statement for this waiver hearing involving the lower NO emission standards to be established A for passenger cars, light-duty and medium-duty trucks, I'd like to briefly summarize the comments we made yesterday SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (4151 543-3194M61 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 262 regarding the issue of need for more stringent standards and the stringency issue itself. The NO emissions which we are attempting to further X control through the regulations which have recently been adopted by the Board relate to several different air quality problems in California. They relate to violations of the state and federal standard for nitrogen dioxide. They relate to violations of the state and federal standard for photo- chemical oxidant. But they also relate to violations of the state standard for visibility and the state and federal standards for total suspended particulate matter. We are additionally concerned over NO emissions because of their potentially carcinogenic effect on man. It's for all these reasons that the Board has taken action to further control NO . We would encourage the Environmental Protection Agency to not allow the manufacturers to attempt to mislead you in this situation by focusing exclusively on the effect that nitrogen dioxide nitrogen oxide emissions have on oxidants in upwind areas. We've had extensive seminars on this issue. We understand that reductions in NOx emissions, leaving all other emissions alone, will tend to increase oxidant emissions in the vicinity of the emission sources? or for most areas in California that would be the upwind areas of the particular basin or region that we are talking about. There's plenty of smog chamber data which shows that effect. Our principal concern, however, is quite often with the downwind areas, when there has been significant amount of SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543*3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 263 time elapse between the actual emission of the precursor compound and the formation of the high levels of photochemical oxidant that the populations in the downwind areas of a number of our basins are exposed to. We believe that there are some fundamental problems with the smog chamber data on which the industry has based some of their conclusions, and we believe that a study of the ambient air quality data in California over the last decade shows fairly conclusively that further reduc- tions in NO emissions will reduce the peak oxidant levels that the populations in the downwind end of the Los Angeles the greater Metropolitan-Los Angeles area are exposed to and will probably also reduce oxidant air quality problems in some of the other California Basins, such as the Central Valley Area where we believe we have a significant amount of our oxidant problem caused by transport from metropolitan areas such as the Bay Area. That all relates to the oxidant situation. In addition to that, we are regulating NO emissions further to X reduce the exposure of the public to nitrogen dioxide. We are still exceeding the federal standards in. the Los Angeles Area. We expect to continue to exceed the federal standards, and more importantly as far as we are concernedexceed the state hourly standard for a number of years unless we get substantially more NO control. X We believe that it was reasonable for us to consider our state standards, and indeed the National Academy of Sciences and other recognized organizations have encouraged the Environmental Protection Agency to adopt an hourly standard SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 264 for NO2 which is similar to California's state standard or, in fact, more stringent. We also think that our analysis of how nitrogen oxide emissions affect visibility and total suspended par- ticulate in the South Coast Air Basin is a valid one and that we should not ignore and you should not ignore the signifi- cance of NC>x emissions as it relates to violations of the state and federal standards for total suspended particulate matter. We prepared a table on the first page of our handout for today which summarizes the lower NO^ standards and modi- fied procedures for which the ARB is requesting a waiver of federal preemption. The HC and CO standards were the subject of previous waiver hearings, and are shown for information only. Basically, the new NOx standards require the 90 per- cent reduction in emissions originally mandated by the Clean Air Act Amendments of 1970 for the 1976 model-year vehicles. Some relaxation of the standards required for passenger cars has been provided for the heavier truck categories to account for the greater weight which those vehicles need to meet important customer needs. On the issue of stringency, whether or not the standards listed in the preceding table will be more stringent than federal standards depends on action yet to be taken by Congress and the President. ARB's waiver requests are therefore conditional in the sense that the waivers are requested only for those standards which turn out to be more E & WILSON SHORTHAND REPORTERS (419) 543-3194/461-3008 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 265 stringent than federal standards yet to be established. A related issue is whether California standards will apply in lieu of federal standards in cases where the California standard for a particular pollutant is less stringent. We understand that a provision of the conference bill may allow, on a model basis, some relaxation of the federal CO standard should the NO standards required by California adversely affect the cost or fuel economy associ- ated with meeting a federal CO standard of 3.4 grams per mile. Should this provision be signed into law, ARB requests that EPA consider relaxation of any federal CO standard lower than the CO standard requested by California for those California models using systems which the manu- facturer demonstrates experience a significant cost or fuel economy penalty when designed to meet the federal CO standard in lieu of the California CO standard. We believe federal CO standards lower than those which California believes are adquate to achieve and maintain the National Ambient Air Quality Standard for CO should not be required for California models unless EPA determines that cost and fuel economy penalties will not be associated with the enforcement of such standards. On the issue of technological feasibility, we see the question of technological feasibility, as it relates to the lower NO standards for which we are requesting a waiver, X as being in large part mooted by the successful certification of two different 1977 model vehicles by two different manu- facturers. The California regulations do not require E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 266 compliance until five years after demonstration of the capa- bilities of three-v/ay catalyst systems. The basic similarity between the models which have already met standards as low as those ARB has proposed for 1982 and beyond and, indeed, the statements of automobile manufacturers who participated in ARB workshops and meetings clearly indicate that this same basic emission control tech- nology can be effectively applied to most other models. In testimony presented at workshops and public hear- ings, and in reports submitted to ARB, manufacturers such as General Motors, Ford, Nissan, Honda, Volvo and Saab have indi- cated that the 0.4 grams per mile NO standard has been con- sistently achieved at low mileage. When we contrast this state of technology development, five years prior to its required use, with the state of hydrocarbon/carbon monoxide catalyst technology in 1970, five years prior to its intro- duction, it is apparent that the manufacturers are in an excellent position to comply with the 1982 California standards Many manufacturers of diesel vehicles have argued that the technology does not exist that will allow diesels to achieve 0.4 grams per mile NO , and will not be available by 1982. Testimony received by ARB in this area was often incon- sistent and contradictory; however, the ARB addressed the manu- facturers' concerns by providing alternative NO standards in A 1980 and later model years. Manufacturers will be permitted to certify vehicles to higher NO standards, as shown above, provided these vehicles satisfy specific maintenance and durability requirements for 100,000 miles. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) S43-3194!4tMQ93 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 267 Our conclusions regarding the ability of diesels to meet the 198 0 and later model-year NO standards are detailed and supported in our November 23, 1976 and June 22, 1977 staff reports on this matter. Based on testimony received during the last year, the ARB concluded that the 50,000-mile standards could be achieved by most diesels in 1980 and later model years. The 100,000-mile option and related standards were adopted in an attempt to alleviate the potential lead time and feasibility problems expressed by some manufacturers. In summary, we believe that compelling and extraordinary conditions now exist and will continue to exist in California, requiring more stringent NOx emission standards, that the California standards under consideration today are more stringent than the likely federal emission standards, and that California's standards are technologically feasible within the lead time remaining. Consequently, we believe that the Administrator cannot deny California's request for a waiver to implement these standards. We would be happy to answer any questions you may have for us. CHAIRMAN JACKSON: On Page 2, you stated that if a certain provision of the Conference-passed Clean Air Amendments is enacted into law you request the EPA to consider relaxation of the CO standard for California automobiles. How does that relate to your waiver request? MR. AUSTIN: We've requested a waiver for a set of standards for HC, CO, and NO . The CO standard may turn out x E & WILSON SHORTHAND REPORTERS (415) 543*3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 268 to be a less stringent standard than the CO standard that will apply under federal law. We have evaluated the need for CO control in California and determined that there are some benefits to requiring a standard lower than nine grams per mile as soon as possible but that will probably meet the Ambient Air Quality standard by staying with the nine gram standard as soon as we have a significant turnover of the vehicle fleet. This being the case, there's certainly no long- range benefit there is potentially no long-range benefit for California in having our vehicles meet a CO standard more stringent than the nine gram standard which we have adopted. However, as was brought out during the hearing process and the workshops which ARB conducted, there may be some disbenefit associated with enforcement of a federal CO standard that's somewhat lower than the nine gram standard which has been adopted by the Board. The penalties could range from cost penalties to fuel economy and driveability penalties. It appears to us that lower standards all the way down to the 3.4 level are technologically feasible, and I think the workshop and the hearing process and staff reports that the ARB put together would tend to support that determi- nation. However, the disbenefits may be significant. And that being the case, we'd prefer to see our set of standards used as a package and not to see a federal CO standard significantly more stringent than the nine gram standard superimposed on top of the requirements the manu- facturers have to meet for California. E & WILSON SHORTHAND REPORTERS (41S) 543-3194/461-8098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 269 CHAIRMAN JACKSON: Of course, it's speculation at this time because I don't think any of us has seen what came out of the Conference. But as I understand it, the CO standard for which a waiver may be granted to is seven grams, which is lower than nine. MR. AUSTIN: Based on what we heard yesterday from Mr. Eppel from Ford, it may be that there are going to be two provisions under which a CO standard could be relaxed from the basic standard that will be part of the Clean Air Act Amendments of 1977. There may be a provision for the federal government to, on their own, provide some relaxation up to a level of seven grams per mile for either California models or federal models on a specific model basis, and there may be another provision which would allow EPA to relax the CO standard to the level requested by California should the determination be made that the set of standards adopted by California in total are more stringent than the set of standards which would apply federally. This could provide some flexibility to set some CO standard, perhaps as high as nine grams. . CHAIRMAN JACKSON: Just for a point of clarification, Mr. Hellman has noted that on your table you show for the 198 0-1981 passenger cars a standard of 1.5 gram per mile of NOx with an option of 100,000-mile certification. MR. RUBETNSTEIN: No. Those standards apply to the 100,000-mile certification option. We are requesting at this hearing only a waiver for that option. The one gram NO standard, which is the original standard for 1980 passenger SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41$) 543-3194/401*3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 270 cars, was the subject of the May waiver hearing. CHAIRMAN JACKSON: I see. In other words, it would be at one gram, 50,000-mile certification MR. RUBENSTEIN: And one and a half gram for 100,000 miles. CHAIRMAN JACKSON: 100,000 miles? MR. RUBENSTEIN: That's correct. MR. MACOMBER: This table only reflects the most recent changes made by the Board. CHAIRMAN JACKSON: Okay. MR. HELLMAN: Mr. Austin, you indicated that in your opinion the standards for which you are requesting a waiver for 198 2 and later passenger cars are feasible based on, among other things, a demonstration of emissions to those levels by two foreign manufacturers. Can you tell us if in the ARB's judgment there is anything different between those vehicles and domestic vehicles, any technological reasons why that technology could or could not be applied to vehicles manufactured in the United States? MR. AUSTIN: We don't believe there are any significant differences. The issue of differences between those vehicles and domestic vehicles was the subject of a lot of the discussion that took place during the ARB hearings and workshops on this issue. One of the considerations was the weight of these vehicles. We are talking basically about the 3500-pound E & WILSON SHORTHANO REPORTERS (41$) 543*3104/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 271 inertia weight class as discussed in the staff reports which are a part of this hearing record. While that inertia weight class and lighter classes do not now make up the bulk of the market, by the 1982 model year we'll see a much greater fraction of total production, U.S. production, being in the 3500-pound weight class and. lighter. We also looked at the cushion that was available for those vehicles which certified 3500-pound weiqht class. We saw that those vehicles did not incorporate all of the NO control technology that is now available; the Volvo vehicle, for example, certifying at half the standard and not using exhaust gas recirculation. That was another consideration that led us to believe that the standards were feasible, not only for domestic vehicles in the 3 500-pound weight class and lighter but indeed for vehicles of significantly higher weight than 3500 pounds. There was a lot of discussion regarding the fact these vehicles used four-cylinder engines. However, we examined the data available on prototype vehicles from other manufacturers which indicated no significant difference in the efficiency of three-way catalyst control systems when they are applied to V-type engines of six or eight cylinders. If those two factors are indeed not going to cause a significant problem in transferring that technology over to different vehicles, then we don't see any reason why the same kind of performance that was demonstrated by Volvo and Saab cannot be demonstrated by the domestic manufacturers and other foreign manufacturers by the 1982 model year. E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 272 In our hearing process and in the staff reports, we discuss the engine-out emission levels of vehicles that had been equipped with three-way catalysts, and we could see that the engine-out emission levels of vehicles which were below the statutory standards or below the California proposed standards for 1982 were in line with the engine-out emission levels that are achievable on many different types of vehicles with different types of engines. We looked at the issue of fuel injected engines compared to carbureted engines. We could see there were no fundamental reasons why carburetors could not be made to work with three-way catalyst systems, and indeed there was proto- type data available to us which showed that, in fact, carbureted vehicles do perform well when equipped with three- way catalyst systems. MR. HELLMAN: Supposing that new carburetion or new fuel metering would be needed in order to meet the standards, how long do you think it would take a manufacturer to build a whole new facility from the ground up to manu- facture the new fuel metering system? MR. AUSTIN: If you were starting from the ground up with an entirely new fuel metering system First of all, I wouldn't necessarily want to conclude that you'd have to get into new bricks and mortar. It may very well be possible to build a fuel metering system in an existing facility. Were that the case, then you would be talking about lead times from design finalization, which any manufacturer would be very close to now since these systems are very similar SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) S43-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 273 from manufacturer to manufacturer and only relatively minor changes are required to incorporate a box-type fuel injection system, for example, onto an engine which has not yet used the system. We would be talking about lead times that would be in the range of two and a half to three years to start getting production hardware out the door and ready for installation on engines which had never used fuel injection before. This would be a sufficient amount of lead time to order and install entirely new tooling. The tooling would not have to be designed from the ground up, since similar tooling has been designed and is used by the manufacturers of fuel injection equipment now. The industry would know basically what was required. It would be talking about the lead time necessary to modify those designs slightly to get the tools built and installed and to start with the production process, and that's a lead time that normally runs two and a half to three years, depending on how much salvaging you can do of the basic bricks and mortar that will house the manufacturing facility in the first place. MR. HELLMAN: Do you consider this two-and-a-half- year time period to be a worse case In other words, that it could be speeded up and this is the upper bound of lead time for a whole new fuel metering system? MR. AUSTIN: It could be speeded up for many manu- facturers by relying on vendors rather than starting their own manufacturing facility. To some extent, vendors could increase their production and may be able to more efficiently provide the additional numbers of components that a manufacturei SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 274 may need or may want in order to comply with the standards that we are talking about. MR. HELLMAN: So that even at the worst case the lead time exists in the ARB's opinion to comply fully with these standards? MR. AUSTIN: That's right. The lead time still exists. The manufacturers are now at the point where they've got to be deciding whether they are going to continue with attempts to meet these standards using feedback control carburetion systems or whether they are going to go to fuel injection systems which potentially provide greater control over air-fuel ratio and potentially provide somewhat higher efficiency than may be achievable with carburetion systems. That's a decision for the manufacturers to make. They have two ways of going. There's still lead time for them to go either route for 198 2. MR. HELLMAN: Do you think that the cost in fuel economy, the implications of meeting this standard in 1982, should be deemed by EPA to be excessive? MR. AUSTIN: I think that EPA is only on firm ground in making determinations that the costs of the California standards will be excessive when that cost is at such a level that you can expect to see a problem with meeting basic market demand, a problem with continued turnover of the fleet, cost that's so excessive that it's likely to cause an adverse air quality impact. I think based on our past experience with what happens to car sales as a function of their cost that the costs E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3008 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 275 that we are talking about for compliance with these standards is nowhere close to a cost that would cause that kind of disruption, that kind of inability to meet basic market demand in California. MR. HELLMAN: Is a federal standard of 0.41 hydro- carbons, 3.4 CO, and 1.0 NO more or less stringent than a X California requirement for 0.41 hydrocarbons, nine CO, and 0.4 NOx? MR. AUSTIN: I think for most manufacturers for most models of cars the California requirement that includes the .4 gram per mile NO standard will turn out to be more stringent. The difference in what a manufacturer would have to do to meet the 3.4 CO standard in combination with a one gram NO standard may very likely involve differences in the use of x air pumps and oxidation catalysts. It could turn out that there's more sophisticated NO control techniques required on the .4 gram per mile NO cars, possibly more sophisticated EGR systems, to make a car meet both sets of standards. To comply with the 3.4 while it's complying with the .4 NO , we'd probably be talking about the addition of a second catalyst and an air pump for further oxidation after we go through the three-way catalyst bed. There it's going to be more a cost penalty associated with meeting both standards than a strict technological feasibility problem. MR. HELLMAN: Based on what you feel the performance of the systems that will be used to meet your proposed standards of 1.41 hydrocarbons, nine CO, and 0.4 NO , do you SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461-3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 276 believe that those vehicles would also comply with a CO standard of seven grams per mile on a federal basis? MR. AUSTIN: I think that's pretty clear that they would. This was something that we discussed with the manu- facturers to some extent. It appeared to us. that was only when you started getting close to the 3.4 CO level that you started running into some of these problems with three-way catalyst systems, problems in complying with the CO standard. The CO that's going to go into the catalyst bed is pretty much a function of the air-fuel ratio which you are operating the engine. In a three-way catalyst system, you are constrained to operate the engine over a fairly narrow band of air-fuel ratios, and you pretty much have to live with the CO that the engine is going to generate at that air-fuel ratio, and there's not much you can do to reduce it prior to the exhaust gases crossing over the three-way catalyst bed. Given the efficiency of current three-way catalyst systems on CO, it is difficult for middle size and large vehicles to achieve tailpipe levels significantly below 3.4. It is possible to get down to 3.4 by adding a second catalyst and adding an air pump to the engine and going back to an air oxidation catalyst bed after the gases have passed through the three-way catalyst bed. But that's going to add some cost to the system. It may increase the NOx emissions to some extent, requiring a little bit more exhaust gas recircula- tion or a little bit more spark retard on the basic engine. I think it was fairly clear, though, from the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 277 prototype data that we reviewed when going through our hearing process and from discussions with the manufacturers that the nine gram CO was going to pretty much come for three, can come automatically when you set the system up to meet the .41 hydrocarbon or the .4 NO or the .41 hydrocarbon in combination with the 1 NO for 19 80 and '81. X If you look at the prototype data, it appears that those vehicles will be coming in somewhere in the ratio of three to five grams carbon monoxide, well under the nine-gram standard, and would have no problem in complying with the standard in the seven-gram-per-mile range without any changes to the basic system that the manufacturers would choose to use to comply with our standard that includes the nine-gram CO limitation,. MR. HELLMAN: So that's your judgment, then, that imposition of a federal standard of seven grams per mile CO would not be very much of a burden or require system changes to vehicles that are meeting your requirements; but, however, a federal imposition of a standard of 3.4 CO would require major changes? MR. AUSTIN: Yes. I'd agree with that. That's essentially correct. There is essentially no burden, in my opinion, associated with the seven-gram standard. It's for all practical purposes just as easy to meet .41 hydrocarbon, seven CO, and .4 NOx as it is to meet .41 hydrocarbon, nine CO, and .4 NO . And in discussions we had with some of the conferees, SMYTHE & WILSON CERTtFlEO SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 278 members of the committees that were working on the Clean Air Act Amendments for 1977, our position was that a standard of six grams per mile CO was essentially the equivalent required the equivalent technology as our nine gram CO standard when in combination with the .4 hydrocarbon and the .4 NO or the .4 hydrocarbon and the 1 NOx. And we would have been com- fortable with any standard between six grams and nine grams. Comfortable in that we would not have expected that standard to in any way affect the cost or lead time associated with complying with our California standards. CHAIRMAN JACKSON: I like the six all along. I don't know why they didn't go with it. Thank you very much. MR. AUSTIN: Thank you. MR. JOELSON: Good morning. This all looks familiar. And given the familiarity of the issue we are con- sidering today to the proposal we took up yesterday, my state- ment may have a somewhat familiar ring. My name is Mark R. Joelson, and I am a member of the Washington, D.C. law firm of Arent, Fox, Kintner, Plotkin & Kahn. I am appearing today on behalf of the Motor and Equip- ment Manufacturers Association, a national trade association representing approximately 75 0 manufacturers of automotive parts. The MEMA member manufacturers produce vehicle equipment both for use as original equipment by the automobile manu- facturers, and for sale to vehicle owners through the auto- motive aftermarket. MEMA opposes granting California a waiver to SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461*3096 ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 279 implement amendments to the California exhaust emission standards pertaining to the 198 2 and subsequent model-year standards and test procedures, adopted on June 22, 1977. MEMA opposes the grant of this waiver because it fails to meet the prerequisites for a waiver under Section 209(b) of the Clean Air Act, and it would be severely anticompetitive in its effect. More particularly, we are concerned about and oppose a waiver for the optional 100,000 mile certification procedure. MEMA does not have specific expertise with respect to the technological feasibility of vehicle manufacturers meeting either a 1.0 or a .4 gram per mile standard for oxides of nitrogen. Therefore, while there appears to be substantial question whether the requisite technological feasibility has been shown, our statement is not directed to that issue. MEMA believes, however, that the proposed California regulations fail to meet the requirement in Section 209 (b) of the Clean Air Act that "the state standards and accompanying enforcement procedures" must be consistent with Section 202(a) of the Clean Air Act on the ground that there is substantial evidence that the amendment is not technically feasible in terms of its application throughout a vehicle's warranteed life, particularly during the stipulated optional 100,000- mile certification period. The optional 100,000-mile certification procedure appears to have been developed by the California Air Resources Board staff in recognition of the inability of diesel-powered passenger cars to meet a 1.0 gram per mile standard for oxides of nitrogen. Yet despite this limited reason for developing the option, the Air Resources Board Amendment would apply to SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) S43-3194/461-3OS0 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 280 all light- and medium-duty vehicles, whether gasoline or diesel powered. Surprisingly, the California Air Resources Board failed to make a critical finding, a finding which would be necessary to demonstrate the validity of the 100,000-mile certification option. Specifically, the Board made no finding that a 100,000-mile certification and warranty period with attendant restrictions on maintenance is technologically feasible for both gasoline and diesel powered vehicles. In point of fact, no consideration at all was given to the question of whether gasoline-powered vehicles could meet the longer certification period with the maintenance restrictions which the Board admits are "similar to those now recommended for diesels." Nevertheless, California adopted the optional standard for all vehicles. There is no question in our judgment that the 100,000-mile certification option was adopted arbitrarily and with no consideration given to its technological feasibility. The option, as a result, clearly fails to meet the requirements for a waiver under Section 209(b) of the Clean Air Act. In addition to the 100,000-mile option itself, the restrictions on maintenance built into that option also serve to disqualify it for a waiver from federal preemption. As was discussed yesterday with respect to California's proposals to restrict allowable maintenance, vehicle maintenance practice are dealt with in Section 207 of the Clean Air Act and do not come within the scope of the California exemption from the requirements of Section 202 of the Clean Air Act. Section SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S> 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 281 207(c) of the Act governs the maintenance of emission control devices, and it would be inconsistent with the regulatory scheme established in the Clean Air Act of California to assert jurisdiction in this area. In enacting the Clean Air Act, Congress made it clear that the law was not designed to require the vehicle manufacturer to undertake to perform vehicle maintenance which had been traditionally the responsibility of the car owner. This view was recently acknowledged by the EPA in the preamble to its advance notice of proposed rulemaking with respect to Section 207(a) of the Clean Air Act, in which it noted that "Congress did not intend to alter substantially the traditional burden of the purchaser to take care of his vehicle periodically at his expense." Since the 100,000-mile certification option would alter this traditional burden (particularly in the case of gasoline-fueled vehicles since the maintenance specified is based on diesel maintenance), by requiring the vehicle manu- facturer to assume responsibility for virtually all emission- related maintenance for 100,000 miles, it is inconsistent with the federal Clean Air Act, and a waiver would be inappropriate. I'd like at this point to revise the statement that you all have before you to deal with a point that came up yesterday. That is that the point was made yesterday, I think in colloquy between the panel and ARB, that the current proposal does not have the prepaid maintenance feature which was contained in an earlier proposal and that this anti- competitive feature therefore has been eliminated. But we submit that the impact of the present proposal SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 282 will, as a practical matter, be the same. If a car is not, in fact, a maintenance-free car and this is a conclusion that seems imminently reasonable to us, that the car will not go on for 100,000 miles with the very, very limited maintenance proposed here and under the proposal the vehicle manu- facturer has not given the motorist instructions for main- tenance that does prove to be reasonable and necessary in other words, the maintenance instructions were too limited then the motorist will look to the vehicle manufacturer to remedy the problem. That's the necessary import of this proposal. The independent parts and service industry will have been shut out of the process, although maintenance will, in fact, have been necessary. Once again, I want to stress that I am not advocating unneeded maintenance. I am suggesting that under these pro- posals as the car necessarily operates, particularly over a 100,000-mile life, there will be maintenance then, in fact, proves to be necessary and it will not be contained in the maintenance instructions. The motorist will certainly turn to the vehicle manufacturer on the basis that he was entitled to maintenance instructions, and they will turn to the vehicle manufacturer to remedy the problem. That's a problem for them, but it's also a problem for us in the sense that there will have been maintenance necessary. But our people, the independent industry, will not have had access to making those repairs. Now resuming the statement on Page 4. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543*3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 283 Like the general restrictions on allowable main- tenance, it is not sufficient for California to contend that this regulation only affects certification testing, since California officials state that maintenance prescribed by the manufacturer to the vehicle owner must comport with that performed during certification testing unless a specific waiver is granted. However, a vehicle manufacturer could not have maintenance instructions for California vehicles which differ from those approved by the federal government without risking a violation of federal law. As was discussed yesterday, Section 207(c)(3) is quite clear that it's an obligation of the vehicle manufacturer to give instructions which are, as a practical matter and subject to the review of the agency, reasonable and necessary. In this situation in which the scheme of the federal act is clear, traditional concepts of federal preemption dictate that the state regulation cannot be implemented. Furthermore, MEMA believes that the EPA has an affirmative obligation to consider the competitive impact of this proposal prior to granting the waiver requested by the State of California. Not only is the nature of the competitive impact a "cost of compliance" that must be considered by the EPA in determining whether the proposal is technically feasible and justifies a waiver under Section 209(b), but the EPA should always consider the competitive impacts of its activities, and a failure of the EPA in this case to consider that impact would be an abrogation of its responsibilities. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543*3194/461 -3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 284 And there are cases cited which should go into the record, but I won't burden you with them orally now. [See, e.g., International Harvester Co. v. Ruckelshaus, 478 F.2d 615 (D.C. Cir. 1973); Northern Natural Gas Co. v. F.P.C., 399 F.2d 953 (D.C. Cir. 1973); McLean Trucking Co. v. United States, 321 U.S. 67 (1944).] The competitive impact of the 100,000-mile certifi- cation option would be devastating, in that it would result in a substantial loss of business for automotive parts manu- facturers, independent garages and other repair outlets. As we mentioned yesterday, these repair facilities employ more than 60,000 people in California, many of whom would lose their jobs if repairs were not permitted at their current places of employment. The competitive implications of the 100,000 certification option are therefore an important and additional reason for denying the option. In sum, MEMA opposes the grant of a waiver to the State of California to implement amendments to the California exhaust emission standards and test procedures for 1982 and subsequent model year passenger cars, light-duty trucks, and medium-duty vehicles, pertaining to 1982 and subsequent model- year standards and test procedures. The California regulation does not meet the requirements for a waiver contained in Section 209(b) of the Clean Air Act. On behalf of MEMA, I want to express my appreciation for the opportunity to appear here today. I will be pleased to answer any questions. SMYTHE & WILSON CERTIFIED SHORTHANO REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 285 CHAIRMAN JACKSON: Mr. Joelson, you have concluded, again, that any kind of approval of this waiver would be devastating, but I don't see where you have made the case anywhere that it would be devastating in the terms of any kind of quantification at all. MR. JOELSON: Well, as we discussed yesterday, it's not possible to quantify something that has not occurred yet. The best we can do is to look at the proposal, to determine what the impact of the proposal is likely going to be, and to reach a conclusion. As I indicated yesterday, I'll see what we can do better to quantify it, but I remain doubtful that it can be quantified at this point. CHAIRMAN JACKSON: It's just very difficult to believe that you can come out and conclude it's going to be devastating, but yet you have no basis whatsoever for showing how you get there, other than just your judgment. MR. JOELSON: Well, this is a judgment-type hearing. It has to be because we are looking far into the future. We are talking about an industry that survives on maintenance basically. That's what the independent service industry is all about, and we are talking about a California proposal to drastically reduce the maintenance on cars for 100,000 miles. CHAIRMAN JACKSON: That's another term of lack of quantification, "drastic." MR. JOELSON: Well, I think you can look at their proposal and see that they contemplate very little maintenance. That's the purpose of it. E & WILSON SHORTHAND REPORTERS (415) S43-3194M61 3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 286 CHAIRMAN JACKSON: The industry has already said if you just let us alone we are going to drastically reduce the amount of maintenance necessary. MR. JOELSON: They have said two things, yes. They've said that the competitive pressures will be such that there will be a trend to limit and reduce main- tenance. We understand that. As I mentioned yesterday, to the extent that a maintenance-free car, in fact, becomes the case, I think our people will have to take their economic lumps. But what the vehicle manufacturers have also said is that some maintenance will be required. There will be a number of inspect, replace-if-necessary-type operations, that they do not believe that the California proposal is proper in that it would limit maintenance too much, that additional main- tenance is indeed necessary and will continue to be necessary in the foreseeable future. Therefore, I am saying, as I did yesterday, let us not, by legislative fiat, in effect eliminate maintenance when that maintenance cannot yet be eliminated. Let it happen as a factual matter. If that, indeed, happens as a factual matter, as I say, our people have no complaint. CHAIRMAN JACKSON: What I would like to see is: one, some sort of analysis that really puts this thing into focus. You pointed out the 100,000-mile certification thing is an option. I'm not sure I would see why anybody would choose that as an option. You apparently speculate that somebody would try to do that with the gasoline engine, but that's one contingency right there. Your speculation is based on SMYTHE & WILSON CERTIFIED SHORTHANO REPORTERS (415) 543*3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 287 somebody in the gasoline industry certifying to 100,000 miles, because if you are talking about diesels you really don't have that as a big part of your market either. MR. JOELSON: No, I'm not talking about diesel. But before you turn to the second premise, let's talk about that one. I think California is holding out this option as an attractive option. I think they intend it to be an attractive option, which is why they are holding it out. So I am not inclined to down play it, and I don't see why we should. CHAIRMAN JACKSON: Do you have any evidence to indi- cate that manufacturers would prefer to go to 100,000-mile certification versus meeting a lower standard at 50,000 miles? MR. JOELSON: Well, I think you have the manu- facturers here. You can ask them. I think that would be better evidence than my speculation. CHAIRMAN JACKSON: We can take your statement. MR. JOELSON: I don't want to testify for them, Mr. Jackson. On the other hand, this is obviously set forth by California as an attractive option. CHAIRMAN JACKSON: You are making a point that's based on some sort of judgment about what will happen, and to get us to believe that we'd like to see the basis upon which you make these judgments. And you've asked us to consider your statement, which is speculative at best, it's got a lot of words that are not quantified in any way at all, and it's just very hard to deal with that. I am not suggesting that you don't have anything to E & WILSON SHORTHAND REPORTERS (415) 543-3194/481 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 288 tell us, except to tell you you are not telling us. It makes it very difficult for us to deal with these kinds of generali- zations . MR. JOELSON: They are difficult to deal with, but may I respectfully submit that that's the nature of this entire process. You are talking about 1982 vehicles. I think the vehicle manufacturers have indicated there is a serious question as to what the maintenance parameters for 1980 cars will be. So, necessarily, there would be even more speculation as to what the parameters for 1982 cars would be. Nonetheless, everybody is trying to see into the future, trying to determine what the impact of all this will be without being able to quantify. If I am deficient in not being able to quantify, I am not the only one. CHAIRMAN JACKSON: I know you haven't been a party to these proceedings in the past to a great extent, but there is a certain burden on the part of those who oppose the regula- tions to demonstrate why they should not be put into effect and to consider the kinds of claims that you make here and to look for things that would permit us to make some.reasonable judg- ment about the likelihood of the outcome you predict. What I would like to see is some kind of analysis that shows which manufacturers and how many would elect to go to 100,000-mile certification and how that differential impact on maintenance in the aftermarket would be quantified, taking into consideration that they have said they are going to reduce maintenance in the future anyhow. So, really, we are only talking about the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 289 differential in the amount of maintenance that would be associated with, one, their election to go to 100,000-mile certification on gasoline engines; and, two, that the differential and maintenance that would be associated with the implementation of the California regs and that which the manufacturers would do on their own, and it's only that part that we are talking about that would be the influence of these regulations that would make any difference. MR. JOELSON: Mr. Jackson, but your fingers, let the record show, indicate a very small space there, and I think our people would be inclined to feel that it's a much larger space there. As I said, if we can supply anything further to quantify, we will. I think in some respects, for example, the attractive- ness of the option to the vehicle manufacturers, what they are likely to do, I'm not sure that is our burden. And I think to the extent that we can get elucidation on that point you are in as good if not better a position to inquire into that, and I think it is a part of your responsibility to determine how serious this option is. Obviously, as I said, I don't think California would have set it forth unless it were attractive, were at least a feasible option, and it's certainly an appropriate part of this hearing today to inquire into that. We are willing to carry our burden, but I think our burden may not be quite as large as you suggest. MR. GRAY: One question in clarification. Is it fair to say that you are not contending that SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194/481 3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 290 you have evidence that the .4 gram per mile NC>x standard for 1982 is technically infeasible for the 50,000-mile certifica- tion process? MR. JOELSON: No. As I indicated in our statement, we are not offering any views with respect to the feasibility of that. MR. GRAY: You seem to make your point about the you said there is no question that the 100,000-mile certifica- tion option was adopted with no consideration given to its technological feasibility. With the narrow constraints of technological feasibility, wouldn't you agree that since it is an option that the regulation as a whole would be no more stringent than the most stringent of two approaches? MR. JOELSON: I am not sure I understand your question. I'll try to answer it, although I am not sure I understand it. I think that in terms of whether you approve this waiver request or not, I think that you are obliged, really, to look at both options one option, the NO standard; and the other option, the 100,000-mile procedure and determine that both of them are substantiated, are justified. As I said, we take no position, are not qualified to take a position on the NO standard. But we can see that there has been no finding, based on a reasonable record, as to the feasibility of this 100,000-mile maintenance-free car. MR. GRAY: Perhaps if I put it another way. If it can be demonstrated that it is reasonable to expect that the technology can be developed and applied by 1982 to achieve a SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/401 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 291 .4 gram per mile NOx standard with a 50,000-mile certification period, isn't it a bit academic as to whether or not in the extreme the 100,000-mile certification is more or less diffi- cult if it is feasible to achieve the 50,000-mile standard? MR. JOELSON: It's not academic at all as long as the manufacturer has an option. As I understand the option and if I am wrong perhaps the Resources Board will explain it to me. As I understand it, they can choose. Even if they are able to meet the other standard, they can still choose. Therefore, if they can choose the second option, then I think that you should look at that option and determine the validity of it in terms of clean air as well as the legality of it, the propriety of it. MR. GRAY: You are not challenging the technological feasibility of the 100,000-mile program? MR. JOELSON: The 100,000-mile aspect, yes. I say there is a serious question which I think has been developed in the record on the 50,000-mile issue, and there has been no record on the 100,000-mile issue. I am not challenging with respect to the other part of the option, the N0x standard, because we are not technically qualified to make a statement on that. But your basic question, is the second option academic, I have to say very specifically no, it's not academic as long as they can choose it. MR. GRAY: If it is technically feasible to achieve the base standard and in a manufacturer's opinion not technologically feasible to achieve a 100,000-mile standard SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) 543-9194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 292 since it's an option, how can it be considered as a basis for denying the waiver? I mean if no manufacturer can elect that option, it wouldn't impact on the technological feasi- bility determination; would it? MR. JOELSON: The trouble with this whole problem is that you have something that may be technologically infeasible as a practical matter, but nonetheless by law that limited maintenance or no maintenance car will be decreed. As I said in the revision to my statement, once that is decreed, the consumer is going to come back to the vehicle manufacturer and say, "I didn't get reasonable and necessary maintenance instructions," and insist that he remedy it. And the inde- pendent industry, you know, will be shut out of it. MR. GRAY: Is it fair to say, then, that your basic concern is more along the lines of the 100,000-mile limited maintenance provision of that option as opposed to the issue of technological feasibility? MR. JOELSON: My concern is with the second half of the option, yes. But as I've said, as long as the manufacture:: can choose one of the two, the second one does not become academic and it must be reviewed on its own merits in review of the waiver. I don't think you can say the first part of the option is dandy, it's technically substantiated, it's attain- able, we grant the waiver without also looking at the other half of the option and saying that also is substantiated as long as somebody can choose the second option. MR. GRAY: I agree, certainly, that as long as the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194l4ei-30#6 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 293 option is there it needs to be evaluated. But in particular, if manufacturers can comply with the standards by electing the option and not, of course, certifying with the base standard, then it's a very important aspect of the consideration. But if they can achieve the standard without having to look at the option,then whether or not the option is more difficult or less difficult does not become important in that context if they can achieve it without even considering the option. MR. JOELSON: I think we are still not communicating on this point. As I understand, they are entitled to look at the option. MR. GRAY: Only if it's less stringent and more achievable. That's the reason the option is there. If it is less difficult, then it would be loqical that a manufacturer would elect the option. And certainly in review of the testi- mony it would be important to find out if it is technically more feasible for a manufacturer for certain instances or for all vehicles to achieve the standard with this option. Then it becomes an important part of the technological feasibility issue in that context. But more from a limiting standpoint, is it less stringent than the 50,000-mile requirement? If that's the case, then the required waiver could be granted on the basis that the option allows it to be implemented because it's economically feasible. MR. JOELSON: But the manufacturer may have other SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 294 factors that go into his determining which of the two options he is going to follow. He may have economic considerations, considerations of a CHAIRMAN JACKSON: We can let them make those decisions; right? MR. JOELSON: Pardon? CHAIRMAN JACKSON: We can let them make those decisions. MR. JOELSON: I think you can let them make those decisions if both of these options are valid. What I am saying is look at both of these options and make sure they are valid and not simply one on the theory that they are going to follow that one if it's available. MR. GRAY: Definitely. The issue is: Can the regulation be met using either of the options? MR. JOELSON: And are both of the options valid from the viewpoint of technical feasibility, the impact on clean air and the other standards that go into your rulemaking. CHAIRMAN JACKSON: That's your restatement of it, but that1s not what we are required to do. Just for the purpose of clarifying the record and making sure you don't leave here with a misimpression, if one of those options is technologically feasible, that's our burden if there is one. MR. JOELSON: lam sorry. Are you saying that as long as one of the options is feasible you can approve the entire package, even if CHAIRMAN JACKSON: As long as it's an option. E & WILSON SHORTHAND REPORTERS (415) 543-31 #4/4# 1 3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 295 MR. JOELSON: Well, I ~ CHAIRMAN JACKSON: That means it's technologically feasible to comply with the requirements of the regulation. Whether or not that suits your needs is a different issue as it relates to what might happen in the aftermarket. Tech- nologically feasible to meet one of those options. That reg has met the test of techonological feasibility as long as the other one is just he's got the option to do that. He can comply with the requirements of the regulations. MR. JOELSON: Let me I hate to take up the time. Let me posit this slightly differently. Without regard to the .specific options, what if we have one option that's perfectly adequate and perfectly approvable and then one option that's an absolute horror and clearly will impair clean air and do everything else. I trust you are not saying that as long as one of the two options is approvable and proper that this is sufficient for the waiver, that you need not consider whether the second option indeed will be chosen or indeed may impair clean air? CHAIRMAN JACKSON: I direct you to.go back and look at the test that we have to apply to a waiver. Technological feasibility and lead time cost. If one of those options is technologically feasible to be done in the time available, that meets the test for waiver. If they've got something else in there that doesn't make sense, is a horror, that's their public judgment about what they want. We are not going to make a judgment on that. MR. JOELSON: Even if SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543*3104/461 >3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 296 CHAIRMAN JACKSON: As long as there is a path to comply with the requirements of the law and it's more stringent than federal standards, then that meets the test for waiver. MR. JOELSON: I thought that it was a key part of your review that they do take a path that meets the waiver requirements and that's beneficial to clean air. It seems to me that if you permit them to take an option which is not beneficial to clean air and not technically feasible that you have missed the point in the review process. CHAIRMAN JACKSON: California makes a judgment that that is what they want to do. It's a public judgment. It may not make sense. It may be more costly than something else as far as they are concerned, but that's their judgment. MR. JOELSON: What if it's not beneficial to clean air? CHAIRMAN JACKSON: Are you making that contention, that it's not beneficial to clean air? MR. JOELSON: No. I am trying well, yes, I am as to the 100,000-mile option, yes. CHAIRMAN JACKSON: You can show that is? MR. JOELSON: I can show that it is on the basis of the testimony that some maintenance in addition to that prescribed by California will still be needed in order to make it a properly functioning car. CHAIRMAN JACKSON: Then you have to show it won't be done. MR. JOELSON: That what wonlt be done? CHAIRMAN JACKSON: That the maintenance needed won't SMYTHE A WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3184/461 3098 ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 297 be done. Not that it's needed, but that it won't be done. If you can make that argument, we will hear it. MR. JOELSON: That's California's theory, that maintenance is not being done now. CHAIRMAN JACKSON: Right. MR. JOELSON: Which is why they want to eliminate maintenance. CHAIRMAN JACKSON: But you are going to show us that it won't be done. MR. JOELSON: The prescribed maintenance won't be done? CHAIRMAN JACKSON: Right. MR. JOELSON: I am not arguing about the prescribed maintenance. What I am saying is that with a 100,000-mile basically largely maintenance-free car there will nonetheless still be a lot of maintenance which really should have been done. CHAIRMAN JACKSON: Yes, but you are qoinq to show us that it won't be done. Is that your point? MR. JOELSON: I am saying that it probably will not be done, and since the consumer has not been given those instructions, he is going to turn to the vehicle manufacturer and say, "You didn't properly instruct me as to how to maintain my car." CHAIRMAN JACKSON: I guess you have to show us how that is a differential in terms of clean air versus the other approach. MR. JOELSON: Well, I can argue. Once again, I SMYTHE A WILSON CERTIFIEO SHOfiTHA.NO REPORTERS (419) 543-3104/401 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 298 can't quantify. CHAIRMAN JACKSON: Anybody can argue. MR. JOELSON: Well, that's why I'm here. I don't think anybody can quantify it. I think that's all any of us is doing is really arguing, trying to reason forward. CHAIRMAN JACKSON: Sometimes it helps in the evalua- tion of these arguments to have some data, some information, some quantification with whatever qualifications for lack of position as may be appropriate, but just on the basis of speculation and argument and wolf which we have heard a lot of from the aftermarket parts and service industry it's very difficult to make any kind of judgment. MR. JOELSON: All right. I think the aftermarket has had some substantial problems created by the sort of limbo position it's been in under the Clean Air Act. Some of these problems are being remedied by the amendments that took place the other night. If they've cried wolf, it's because of fear of actions that have not yet taken place and have not yet been triggered and to some extent it sounds like wolf because it's hard to quantify. In terms of trying to quantify it better, I will go back and see what we can do. CHAIRMAN JACKSON: I would certainly appreciate that. MR. JOELSON: All right. Thank you. CHAIRMAN JACKSON: Thank you, sir. MR. JENSEN: I am D. A. Jensen, Director of Automotive Emissions and Fuel Economy Office, Ford Motor E & WILSON SHORTHAND REPORTERS (415) 543-3194/461 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 299 Company. On June 22, 1977, CARB adopted a NO standard of X 0.4 grams per mile, first applicable to 1982 model passenger cars and 1983 model light-duty trucks and certain medium-duty vehicles. Before CARB may enforce these regulations, EPA must find that they satisfy the criteria set forth in Section 209 of the Clean Air Act, the most relevant of which in this case are need and feasibility. A finding of feasibility at this time must rest upon specific facts and the absence of any persuasive analyses to the contrary. As noted in a recent EPA decision, no finding of feasiblity can be made where: "Plausible reasons for. . . estimates (of insuf- ficient lead time) were given by the various manu- facturers, and no concrete reasons for not accepting them were advanced by the CARB or any other witness." Our purpose in appearing today is to provide and review all facts and analyses available to Ford which relate to the feasibility of and the need for meeting these California standards. Prior to adoption of these emission standards, CARB held a series of workshop and public hearings. Ford's testimony at these meetings has been consistent and can be summarized as follows: First, a vehicle NO standard in the 1.0 gram per mile range should be sufficient to permit compliance with California's N02 air quality standard. Second, evaluation of data already generated by the E & WILSON SHORTHAND REPORTERS (415) 543-3194/401-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 300 Los Angeles Reactive Pollutant Program (LARPP) and other sources should be undertaken to assess whether or not a significant improvement in air quality will result from a 0.4 gram per mile NO standard over that achieved by a 1.0 gram A per mile NO standard. An analysis of this type is underway at Environmental Research and Technology, Inc., and their findings will be reported in a public seminar early in 1978. Third, Ford does not yet possess the technology necessary to meet the 0.4 gram per mile NO standard, and, in view of the limited lead time remaining, there is a significant question as to whether it can be developed for 1982. Finally, assuming there is capability to achieve the 0.4 gram per mile NO level, we are concerned that it may X result in significant compromises in model availability, fuel economy, and costs that are not commensurate with the potential effects on air quality. Based on these concerns, Ford has continued to recommend to CARB that the final decision be deferred at least one year so that as many of these issues as possible can be supported with data rather than to make the decision on regula- tory judgment. We believe that EPA's decision on this waiver request should similarly be deferred until the data needed to determine whether the compelling and extraordinary conditions in California will be improved by this action and whether the technological feasibility and lead time requirements are satisfied can be obtained. EPA does not have, and CARB cannot present, the facts required by EPA to fully consider, much less E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 301 make the determinations, required to grant a waiver of preemption under Section 209(b) of the Clean Air Act. The basis for our position on this matter is as follows: First, compelling and extraordinary conditions: As we understand it, CARB promulgated its 198 2 and beyond low NOx standard on the basis of its belief that NC>2 air quality standards are being exceeded and that the maximum control of NO emissions from mobile sources is required to rectify this situation, because it is not possible to obtain sufficient NO reductions from other sources to x meet the desired levels. This conclusion was based on a simple, basin-wide tonnage analysis and did not take into account the effects of the spacial distribution of NO sources X or possible adverse effects on local oxidant levels that may be associated with increases in the HC/NOx emissions ratio. Ford has presented two studies of the relationship between vehicle NO emissions and air quality for considera- tion by CARB. These studies are attached as Attachments I and II and support our conclusions that: A 1.0 gram per mile NO standard will permit attain- ment of the NO2 air quality standard in downtown Los Angeles, the most critical N02 problem area. Such a standard should go a long way toward solving, if not resolving, the N02 problem in other areas in the South Coast Air Basin. Of course, further study and work is needed to understand better the effects of vehicle NO in the "downwind areas." CARB has presented no evidence however that a .4 NOx standard is an ¦ & WILSON SHORTHAND REPORTERS (413) 943-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 302 answer to any remaining "downwind area" problem. For these N02 episode days when a 1.0 gram per mile NO standard would not permit attainment, it appears that A even a 0.4 NO standard would have little effect, because on A those unusual days, stationary sources appear to dominate. CARB has presented no evidence to the contrary. Feasibility and Lead Time: Ford has shared its technological developments with CARB and, for that matter, EPA. Ford has testified before CARB, and the fact is at this time, Ford does not possess the technology to assure attainment of the proposed NOx standards for 198 2 and beyond with acceptable durability. This should not be interpreted as an indication that we believe the standard is not attainable. Subsequent to a March 9, 1977, hearing of a House Subcommittee on Health and Environment, where CARB members also testified, we submitted to the subcommittee a list of prototype vehicles which met the 0.41 HC/3.4 CO/0.4 NO standards at low mileages. Attachment III lists these vehicles and provides the reasons why the systems shown are not considered tech- nologically feasible for production at this time. Let me intersperse here just a second. What we did in that attachment was list every research vehicle we have ever had that met the standards, then we classified them with different kinds of control systems like PROCO, three-way catalysts, dual catalysts, Questor systems, and so forth and analyzed why each one of those control systems had not E & WILSON SHORTHAND REPORTERS (413) 543-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 303 established feasibility as far as production is concerned. We can discuss that later if you wish. Back to the statement now, Mr. Chairman. During that public hearing this refers, now, back to the hearing in Washington, D.C. on March 9th we testified that, if our production and field experience are successful with three-way catalyst systems, we believe we can achieve standards of 0.41 HC/3.4 CO/l.O NO in the early 1980's with our total product line. We believe the technology utilized to meet those standards may have an ultimate capability of meeting a 0.4 NO standard. However, we cannot, today, say with any confidence when such levels will be possible. There are a whole series of unknowns that make a firm judgment extremely difficult, For example, MMT will affect our capability to control hydrocarbons, which in turn has an effect on NO levels we can achieve, because of control technology trade- offs between the two constituents. We have a similar problem in respect to a trade-off of CO. If California's nine grams per mile CO standard prevails, we have an opportunity to eliminate use of an oxidation catalyst in conjunction with the three-way catalyst and to pick up some additional potential for reducing NO emissions. The "clean-up" oxidation catalyst is part of the NOx problem, because it converts some ammonia from the three-way catalyst back to oxides of nitrogen. If a 0.4 gram per mile NO standard is required for 1982 in California, we will try to offer for sale our vehicles which have the greatest potential of meeting the 0.4 NO 2^ SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 304 standard with the added use of new hardware, such as three- way catalysts, feedback carburetors, electronic engine controls and electronic fuel metering, if development progress continues at the present rate. With current technology, our confidence of meeting a 0.4 NOx standard with larger vehicles is extremely low, and we expect that smaller vehicles/engines would have the best potential for certification in 1982. Further, we would expect that the complexity and nature of these control systems would pose unique and difficult problems with respect to meeting assembly line test and other unique requirements. Beyond the general problem of 0.4 gram per mile NO feasibility, we would like to draw EPA's attention to a special problem which results from the application of the 0.4 NOx standard to light-duty trucks. Since a pickup in the below 3999 pound inertia weight class would be tested at a PAU horsepower setting approximately 70 percent higher than that used for a comparable inertia weight class passenger car, increased NO emission X rates with increased PAU settings (about 2.2 percent for each 10 percent increase in PAU) would result. Therefore, a 3500 pound inertia weight light truck would be required to meet approximately a 15 percent more stringent emission standard than a passenger car of a com- parable weight. If 0.4 NO technology becomes available for passenger cars, it will not necessarily support a light truck standard more stringent than 0.5. Ford, therefore, believes that, at the very least, E & WILSON SHORTHAND REPORTERS (415) 543*3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 305 any waiver must be conditioned on an upward adjustment of the NO standard to 0.5 gram per mile. A In addition, the substantial differences in fuel economy expected between trucks designed to meet 0.4 NO (under 3500 pound inertia weight) and those designed to meet 1.0 NOx (4000 and over inertia weight) destroys any incentive even to attempt to implement weight reduction programs for trucks over 3500 pounds inertia weight in order to improve fuel economy. In other words, you try to keep the trucks a little heavier so you have more liberal NO standards. A In our June 22, 1977, testimony, we detailed our conventional engine 0.4 gram per mile NO development plans for the 1977 calendar year. A status report on this program is provided as Attachment IV. We redid this as of July 29th and brought it up to date where we stand at Ford in this regard. As you will note from this summary, we are concentrat- ing on the refinement and selection of the most promising three-way catalyst system components. Following selection of the candidate systems, advanced vehicle build programs will be initiated to determine feasibility and permit the start of the 1982 production program in early 1979, and we have a timing schedule which is part of that Attachment IV. From this timing chart, it can be seen that the final decision regarding 1982 emissions hardware needed to meet the 0.4 NO level should be made in late 1978 or early 1979. This advanced development program is coordinated with our planned production prove out program. For example, E & WILSON SHORTHAND REPORTERS (415) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 306 we are planning to introduce the three-way catalyst system on 1978 2.3 litre engines in California; we are also planning a separate 1978 pilot program for electronic engine controls. These systems will be merged and volume expanded beginning in 1979. If the 1978-1979 programs are successful, we would expect to have fully integrated electronic engine controls and three-way catalyst systems essentially across the board in the early 1980's. These production "tests" of the basic three-way catalyst/electronic control concepts will provide much of the data and experience needed to make a knowledge- able decision regarding the 1982 0.4 gram per mile NC>x feasibility in late 1978, as required. Beyond the development of three-way catalyst applications for conventional engines, Ford is also working on selected alternate engine programs, such as PROCO, which have good potential at 1.0 gram per mile NOx and may have a potential at..41 gram hydrocarbon and 0.4 gram per mile N0X levels. The PROCO engine is not a possible solution for 1982, however, because manufacturing and development lead time requirements preclude availability in volume that year. Total expenditures for development of low NO systems capable of meeting a 0.4 gram per mile NOx level have expanded substantially in recent years and will accelerate in the future in response to the continued California and federal concern regarding the need for NOx control. Expenditures for 1975-1976-1977 are shown on SMYTHE & WILSON CERTIFIED SHORTHAND HEP (415) 543-3194/461-3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 307 Attachment V and reflect the major acceleration in this effort, as outlined above. That attachment was submitted to EPA in April at their request, and the details in both financial and personnel dedicated to the program are indicated. Model Availability: Another key element of the 0.4 gram per mile NOx issue is the degree to which such a standard will force manu- facturers to reduce model offerings further. While significant, the restricted model problem has been minimized to date in California, because most manufacturers have been able to use some aspects of 49-state technology in California, and, more importantly, because there were no national fuel economy standards. These conditions will probably not be present in the early 1980's. Ford will be pressed up to, if not beyond, the limits of technology, manpower capability, and financial resources to meet, simultaneously, fuel economy and federal emission control requirements. This will, in turn, limit the resources available for satisfying a unique California market. Reduced model availability due to pressure limita- tions may be further aggravated by the difficulty of fuel efficient diesel, PROCO, CVCC, or other forms of "lean combustion" engines to meet the 0.4 gram per mile NO level. This could lead to further potential compromise in the automobiles available in California versus those available in the 49-states. E & WILSON SHORTHAND REPORTERS (413) 543-3194/461 '30SB ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 308 As manufacturers move toward a mandated 1985 fuel economy standard of 27.5 miles per gallon, Ford believes that the use of the various 'lean combustion" engine concepts will be increased in the 4 9 states. Thus, it is not out of the question to project that establishment of a 0.4 gram per mile NOx standard in California could lead to a future California fuel economy gap even greater than the current two to three miles per gallon, or 12 percent. Moreover, it is also possible that the combination of technology and fuel economy restraints will result in decreased availability of six-passenger vehicles versus 4 9- state Ford programs. Clearly, the interests of the people of California and, for that matter, all of the people in this country, would not be served if these penalties were to be exacted without major gains in California's air quality. In conclusion, Ford believes that there are serious questions as to the need, feasibility, and lead time associated with California's proposed 1982 and beyond NO standards. The lack of data on these issues will preclude EPA from making supportable findings on these key waiver criteria; however, studies now in progress will provide substantially more data on these issues by late 1978, when final 1982 decisions need to be made. On this basis, Ford does not believe that a waiver decision should be made at this time; instead, EPA should hold further hearings in late 1978 and make its 1982 waiver decision in early 1979. At this time, Mr. Chairman, I'd like to ask SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) 543-3194/461 *3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 309 Mr. Eppel from our Office of General Counsel to supplement what I have just read with some comments with respect to the Conference Bill before Congress. MR. EPPEL: I really would just like to add two points, and I would note, of course, for the record that the conference report has not been adopted by either House. But assuming that it is and assuming that it is done shortly, certain of the provisions of that report, it strikes me, will be relevant to this decision. It's true they may not control the hearing procedures today, but they do lay out, it seems to me, certain new factors that EPA is going to have to consider. The first provision I have reference to is taken from the House Bill that's known popularly as the Eckhardt Amendment, which provides, and I'll read it, "Notwithstanding Section 209 (a), any state which has planned provisions approved under this section" and these are transportation control plans "may adopt and enforce for any model year standards relating to the control of emissions from new motor vehicles or new motor vehicle engines and take such other actions as are referred to in Section 209(a) respecting such vehicles if (1) such standards are identical to the California standards for which a waiver has been granted for such model year; and (2) California and such state adopt such standards at least two years before commencement of such model year (as determined by regulation of the Administrator)." So I suggest to the hearing panel that your decision may involve considerably more vehicles than simply SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 310 those to be sold in the State of California in the model-year 1982. Now if you ask me how do we know which states will do this, I guess I can't answer that. But it seems to me you are going to have to take a look at all of th6 states that are at least authorized to take such action and make your determi- nations with respect to the fleet for all those states. Now the second provision is one that Mr. Austin alluded to earlier. This is also from the House Bill. It amends Section 209(b) of the Clean Air Act. I think it's directly relelvant to the 9.0 gram CO issue. It seems to me, anyway, under this provision there is no question that if EPA finds that .41, 9, and .4 is more stringent in the aggregate than .41, 3.4, and 1.0 you may properly grant a waiver for the nine gram CO standard as applied to California cars with the benefits that Mr. Austin noted earlier. In any event, Section 209(b) of the Clean Air Act, as amended, will read as follows: "The Administrator shall, after notice and oppor- tunity for public hearing, waive application of this section to any state which has adopted a standard (other than crankcase emission standards) for the control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966 if the state determines" And I guess I might interject this is the hew part "that the standard will be in the aggregate at least as protective of public health and welfare as the applicable federal standards. No such waiver will be granted if the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) $43-3194/4(1-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 311 Administrator finds that (a) the determination of the state is arbitrary and Capricious, (b) such state does not need such state standards to meet compelling and extraordinary conditions, or (c) such state standards and accompanying enforcement procedures are not consistent with Section 202 of this part." There's more, but that's the relevant portion of the conference report adopted provision from the House Bill. So that it is likely in my judgment that both of those provisions will probably, if the report is adopted, control your decision in this matter, because I doubt seriously you are going to get the decision out prior to the time those two provisions become law if they do become law. And those are my remarks. CHAIRMAN JACKSON: That's: pretty interesting. With regard to approved transportation control plans, is that as of some date? MR. EPPEL: I'm not familiar enough with the rest of that provision to answer that question, Mr. Jackson. CHAIRMAN JACKSON: I think we called for revisions for most of them. So, it's probably fair to say there's not very many approved plans out there. MR. EPPEL: I suspect that's the case, but I think the possibility still remains that all the states that fall within those criteria can at least consider the adoption of the California standards. CHAIRMAN JACKSON: The provision with regard to the aggregate notion, does that mean to you that we can grant a SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/461 3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 312 waiver for a CO standard that was less stringent than the federal standard? MR. EPPEL: I think that's exactly what it means to me. CHAIRMAN JACKSON: Then do your comments with regard to feasibility also pertain to such levels as seven for CO or nine for CO? MR. EPPEL: Well, I think the technical people can answer that. But I think Mr. Jensen's statement noted that a nine gram CO standard for California is at this point, anyway, at the time standard was written, somewhat of an uncertainty. And it does bear on our ability, I believe, Don? MR. JENSEN: Yes. I think it would be up to somebody else to determine in the aggregate whether it was more or less stringent. CHAIRMAN JACKSON: That's not my question. MR. JENSEN: But I personally would like to see it determined that way, if that's the answer to your question, because the nine gram CO helps us to meet a lower NO standard. CHAIRMAN JACKSON: That was my question. MR. JENSEN: Yes. CHAIRMAN JACKSON: Your technological feasibility argument is modified, I assume, at different levels of CO standards? MR. JENSEN: Yes, sir, because of the follow-on oxidation catalyst. CHAIRMAN JACKSON: Let's work on that a little bit. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 313 What is your technological feasibility of achieving .41, 9, and .4? MR. JENSEN: We haven't got the We haven't demon- strated feasibility to meet that standard at the moment. That's what the data shows, particularly CHAIRMAN JACKSON: What's your judgment about it? MR. JENSEN: As we said in the statement, we are not saying it cannot be attained, but we have no data now that would say we could meet it for 1982. CHAIRMAN JACKSON: What's your judgment? MR. JENSEN: And my judgment is that we cannot meet it in 1982. CHAIRMAN JACKSON: It really doesn't help in terms of your technological feasibility argument? MR. JENSEN: As I have indicated in the full state- ment, if it is feasible, it would be for the smaller engines. There may be a possibility there. And on those smaller engines, if you had a nine gram CO, it would help you meet the .4 gram NO . CHAIRMAN JACKSON: In your judgment, knowing what you do now, if the standard for CO were nine, which option would you select in 1982 for California certification? MR. JENSEN: I'm sorry, I don't understand the question, Mr. Chairman. CHAIRMAN JACKSON: With regard to your gasoline engines and MR. JENSEN: Oh, the 50 and 100,000? CHAIRMAN JACKSON: Correct. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194/401-3088 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 314 MR. JENSEN: Oh, the 50,000 mile because of catalyst durability and the durability of other components. MR. GRAY: You included as Attachment III a list of vehicles that had achieved a .41 HC, 3.4 CO, and .4 NO standards of low mileage. Do you have additional vehicles that have attained those standards except 3.4 CO being replaced by nine grams CO that could be added to that list? MR. JENSEN: Let me ask Dr. Weaver. Do you know of any vehicles that have met .41 and .4 NO with a higher CO level that is not on this list? X MR. WEAVER: There I'd have to go through my list here specifically, but we do have a fleet of three-way catalyst vehicles which you are aware of, and I'd have to look at them individually to see whether they could be added. But most of them, as I recall, do not meet, because we have had trouble with hydrocarbon control with this fleet. MR. JENSEN: We will check the record, though, and file for the record any additional cars that would meet .41, 9, and .4 and add to this list. MR. GRAY: Since this fleet appears to have been designed to try to achieve those levels, have you conducted any programs that provide the flexibility that a nine gram CO standard would provide to see what feasibility exists there, or are you really projecting from your experience at the 3.4 gram CO level. MR. JENSEN: Gene, you could answer that, I guess. MR. WEAVER: In the three-way catalyst fleet, there SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 943-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 315 are one or two vehicles which do not have cleanup oxidation catalysts on them. And the performance, again, has not been very satisfactory. These are durability vehicles. MR. GRAY: Do you think it's a very straightforward, simple distinction between, then, the nine and the 3.4, or the seven and the 3.4, being the cleanup catalyst, the oxida- tion catalyst, versus just the three-way catalyst? MR. WEAVER: What is the question? MR. GRAY: Is the only difference in your opinion between achieving 3.4 as opposed to seven or nine grams CO the cleanup oxidation catalyst? Can it be made that simple? MR. WEAVER: No, I don't think so. It depends on the inertia weight and the engine. MR. JENSEN: For clarification, we mention in our statement about ammonia being in the follow-on catalyst being converted back into NO . You may want to discuss that briefly, because I think it bears on Mr. Gray's question. DR. WEAVER: I think to this I look at an EPA report where they measured ammonia on a Volvo vehicle under normal operating conditions and malfunction conditions, and in this report there was a range and this was various test cycles, including the crowded freeway drivinq, the schedule of low CVS, and hiqhway fuel economy cycle. There was a ranqe in a normal operatinq vehicle, now, there was a ranqe of ammonia emitted by this vehicle durinq these test cycles of 15 to 4 0 milliqrams per mile. The maximum ammonia emitted in normal operatinq conditions was 126 milliqrams oer SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) S43-3194M61-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 316 mile. Now if you convert that to the amount of NC>2 emitted, if all of that ammonia was oxidized by the catalyst, under the maximum emissions it would be .34 grams per mile N02 emitted by that vehicle, which under the conditions of the test would be emitted by ammonia. So that gives you some feeling for the magnitude of our problem. MR. HELLMAN: Do you have any data or results that you can share with us on tests run on Ford vehicles to measure the ammonia produced and subsequently reoxidized? MR. WEAVER: We have measured ammonia produced under the maximum conditions but not under normal conditions at this point. We are currently making such measurements, in the process of making such measurements. MR. HELLMAN: So you can't say whether or not your systems that you are planning to introduce MR. WEAVER: That's right. MR. HELLMAN: will have the same problem that you conjectured might happen if you put an oxidation catalyst and an air pump on the Volvo vehicle that was tested by EPA? MR. WEAVERi That's right. MR. HELLMAN: I'd like to ask a question that deals with a statement you made on Page 2 of your statement. It deals with the lead time. Under the paragraph called "Third," Ford indicated that the lead time remaining was limited. However, later in your statement you recommend that EPA defer a decision on this SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) 543-3194/461 -3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 317 until late 1978 or early 1979 because that's when final 1982 decisions need to be made. MR. JENSEN: If you look at the attachment behind Attachment IV, the last page of Attachment IV, you can see that there is a timing chart the very last page of Attachment IV - which indicates that you select the system you go with among various possibilities, "Order hardware/build vehicles" and so forth, towards the latter part of 1978. And even then you would have a slippage of five months, but presumably you might be able to make that up. But, nevertheless, there is time for a decision between now and '78, and yet there would be this slippage even when you made that time. So there is a shortage of lead time under this hypothesis if you look at the timing chart. MR. HELLMAN: Yes. But statements in the end of your prepared statement and on Page 2 seem to me to be a little bit inconsistent. Would it be fair for us to conclude that with respect to the lead time issue there is lead time available now and there will even be lead time should EPA decide to defer the decision until late 1978? MR. JENSEN: Well, the difficulty here is it gets to another point that was in the statement in respect to production testing. As we indicated, we are now in '78 models putting in three-way catalyst systems in production for the first time in one group and electronic controls on another group of cars in large numbers. We will combine them in '79. We will be able, in the early Eighties, to go across the board. SMYTHE « WILSON CERTIFIED SHORTHAND REPORTERS (415) 54J-3194M81-30W ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 318 It's unknown technology, and it's hard for us to predict with certainty what's going to happen in those production tests. We wouldn't be doing them if we knew in advance. So the answer to the lead time question is: There wouldn't be a lead time problem if everything works out beautifully, but we don't think that's going to happen. It never has, and we think that's why we are doing the production tests, to try to get the bugs out of this so we have an orderly introduction to this new technology. MR. HELLMAN: So would it be fair for me to characterize your approach here is to tell EPA to wait a year or so to make the decision and then by that time the lead time will all be used up and the issue removed? MR. JENSEN: That isn't our intent at all. A year from now we will know a lot more about our production experience with three-way catalysts, electronic controls, and we'd also have a better feel because of the LARPP data being analyzed and reported on in 1978 with respect to the need. So there would be a much better opportunity to indicate the trade-offs between feasibility and need as far as air quality in California. But we would not from that timing chart, we would not throw up the statement that because of this year's delay that we ran out of lead time. We still perceive MR. HELLMAN: If there still would be lead time one year from now, then that means there is lead time now. MR. JENSEN: Again, I guess the definition of what works and what doesn't work as we go into production SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 54341MMC1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 319 experience with the systems. You may want to speak to this, Gene. MR. WEAVER: I don't think I can add anything more to that. MR. JENSEN: Okay. CHAIRMAN JACKSON:. Oh Page 5, you said, "Further, we would expect that the complexity and nature of these con- trol systems would pose unique and difficult problems with respect to meeting assembly line test and other unique require- ments. " What are you talking about there? MR. JENSEN: More and more, there has been a tendency, both in California and at EPA and now we are speaking about California to pay a lot more attention to production-line tests and a lot more attention to in-use tests of cars. California now is checking cars in use to see what happened to them, where the levels are. On end-of-line tests, there is year by year more and more tightened requirements with respect to levels that end-of-line test must pass. Sample testing in California under Title 13 of their Administrative Code have had increasing requirements applied. And those are unknown as far as we are concerned with respect to something like a .4 NO standard. At the present time, even with a 1.5 gram NO standard I don't know whether the car passed that's being tested today on Title 13, but we had difficulty meeting that on one engine family. So as these things get tighter year by year, both in SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) 549-3194/461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 320 Washington and in California, we just have no real feel for what .4 NO levels would do in those kind of tests. X Go ahead, Gene. MR. WEAVER: I'd like to add to that by pointing out more specifically what the components are. We will be using electronic controls, carburetors. We will be including electronic controls as spark timing and EGR. And these are new devices which we don't know how they are going to perform on end-of-line testing, for example. The electronic or any tests in the field, it would make more sense at this point, I guess. The electronic devices, as you all know from your experience with hand calcu- lators or whatever, there's often early problems with electronics. Until we have enough production experience here so that we know what to. look for to determine that we have proper quality control, we can expect some problems on end-of-line test and in the field. This is a risk we have to assume as we introduce new technology. We are willing to assume this, but we don't know at this point what kind of problems will be there, particularly related to electronic components. CHAIRMAN JACKSON: So it's not that you know of problems that you are going to have MR. WEAVER: That's right. CHAIRMAN JACKSON: but you are showing some sort of concern for the unknown? MR. WEAVER: That's right. MR. HELLMAN: You indicated that in order to meet SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 94S-31«4/4»1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 321 these California 1982 standards you might need added use of new hardware such as three-way catalysts, feedback carburetors, electronic engine controls, and electronic fuel metering. You also indicated in your statement that if you were successful you would achieve .41 hydrocarbons and 3.4 CO and 1.0 NOx in the early Eighties with your total product line. The system that's planned for use on your total product line to meet those standards I refer to is very much the same as the new technology that you refer to to meet the 0.4 NO x standard. So, that, new is relative. Will the technology that you are using in '82 already have a history of two or three years of use and be well implemented at that time? MR. JENSEN: Well, the reason Let me talk to components specifically; and, Gene, you pitch in when I get through. From my experience at least Gene is much more expert in the technical aspects Let me talk first about the electronic controls. By the time we put electronic controls in mass production on a car, the electronic experts that see that on a car think we are back in the dark ages. It moves that fast, the technology moves that fast. So we already have plans in-house for electronic controls one phase, second phase, and third phase down the line. So maybe .4 is going to be the fourth phase. But there's tremendous improvement going to come along year after year after year in electronic controls, I think much more, just from what my observation as more or SMYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-31M/4«1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 322 less a layman looking over the shoulders of what the engineers and electronic experts are doing at Ford. It will be even more dramatic, I think, than the advances we have seen in catalyst technology. You will recall in the suspension hearings before we had catalysts in cars we were talking about levels of efficiency of what we anticipated which are much higher now. All I am saying in all this discussion is that we just don't know today where we'll be in respect to .4 in '82. We think we will know a lot more a year from now because of this fast developing technology. Gene, do you want to add to this? MR. WEAVER: I think what you pointed out is right. The system will be essentially the same, the same idea. The Ford system, the three-way system, is a three-way catalyst, plus air introduced, followed up by a cleanup oxidation catalyst. The electronic components include the electronic control of the carburetor and a spark timing and EGR. And there are sensors involved here, which is something I didn't mention in connection with Ben's question about components which might fail. There's going to be sensors for the oxygen and the exhaust sensors of engine RPM, manifold vacuum, and this type of thing. All of these things, as Don has indicated, we expect that we will develop in a normal way and move so that we can introduce cars which will control a .41, 3.4, and 1.0 in the early Eighties. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (4IS) 543-31WM61-309# ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 323 If things move well, we have a certain amount of confidence we can do that. Beyond that, we are just unsure, and it takes time to get that confidence. MR. HELLMAN: Mr. Jensen mentioned that the electronic controls are moving quite quickly in their state of the art. They generally tend to improve; is that correct? MR. WEAVER: Sure. MR. HELLMAN: And performance gets better, smaller, possibly cheaper. But the performance, and we are specifically talking about emission performance here, is expected to be better because that's why you are developing them; isn't that correct? MR. JENSEN: Are you going to answer, Gene, or do you want me to? MR. WEAVER: Go ahead. I'll let you speculate. MR. JENSEN: Okay. It does get better, and we anticipate it getting better. It will get smaller. It will get cheaper. In addition to those items you mentioned, Mr. Hellman, it will also cover more aspects of engine operation. For example, like I think, Gene, we are talking about trying to get something that would detect engine knock, to make adjustments, that kind of thing which are not built into these initial systems. So there will be more aspects covered of engine operation. MR. HELLMAN: You are trying to certify vehicles right now for 1978 in California? MR. WEAVER: That's right. 8MYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) 543-3184/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 324 MR. HELLMAN: This has the first generation version of what you call the Ford system? MR. WEAVER: Yes. MR. HELLMAN: What would the emissions be of those vehicles if you took the oxidation catalyst off? MR. WEAVER: I don't know the answer to that. MR. HELLMAN: You haven't made any efficiency tests on prototypes to see what the efficiency is of the oxidation catalyst? MR. WEAVER: The vehicles have just finished the 15,000-mile durability, and to my knowledge we have not been allowed yet to do the post-certification evaluation of those catalysts. But we will do this. MR. JENSEN: Do you think we will be able to have that information before the hearing record closes? MR. WEAVER: I doubt it. MR. JENSEN: We will take a check, and if we do have it we will get the information to you. CHAIRMAN JACKSON: Would you let us know, if you can't get it in by the time the hearing record is closed, when you can have it in? MR. JENSEN: Okay. Fine. Gene, would you follow up on that? MR. HELLMAN: If the oxidation catalyst were taken off, you would expect that the hydrocarbon and CO levels would rise and the NO level would fall? MR. WEAVER: That's right. MR. HELLMAN: And except for hydrocarbons, SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41ft) S43-31M/4S1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 325 directionally that would be in the way that you would want to go to approach the California requirements which are higher CO and lower NO ? A MR. WEAVER: That's right. MR. HELLMAN: Would you try this approach for meeting these stnadards, or would you stick with the oxidation catalyst? MR. WEAVER: I think with the smaller engines it probably is a viable approach. I'm not sure about the larger vehicles and the larger engines. Because of the larger mass flow of exhaust through the larger engines, you are going to end up with more, larger, higher level of CO than you can easily convert over a three-way catalyst by itself. MR. JENSEN: Incidently, the reason we are not saying "yes" or "no" for some of these answers is there's internal debates at Ford on this subject. Some of our engineers have said we have just got to continue to have the oxidation catalyst. As you know, there's a group like that, Gene, that exists at the company. And other people argue with them and say, "We don't need the follow-on catalyst." So we really don't have enough data to make a firm decision in-house. We are talking from the state of the art at the moment. The engineers at Ford now that work with Dr. Weaver generally believe we are going to have to have the oxidation catalyst. MR. HELLMAN: But you wouldn't dispute my contention, if I make it, that Ford by 1982 could probably duplicate the SMYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS (415) M311WM81-J0M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 326 performance that Volvo has demonstrated in 1977 with their system? MR. WEAVER: We have obviously looked at the Volvo system, and we have a feel for the differences between the Volvo system and our own system. And I might point out, initially, that when we got these two vehicles they didn't work very well. The catalysts did not operate properly, and they did not meet the standards as they were first tested. After replacing the catalyst, we got some quite different results. Now the differences in the system between the Volvo system and our own system is partially in the fuel-injection system. We use a feedback carburetor, and it is not capable at this stage of development of having as close an air-fuel ratio control. As far as a range and an average reading as the fuel-injection system, it doesn't respond as quickly to changes measured by the oxidation sensor. Also in the area of fuel economy, we think that our system probably did a better job of getting fuel economy than the Volvo, which may merely reflect their more conservative approach on their first try. I am sure that they can improve that fuel economy. But on emissions, when it was operating properly, it did a very excellent job. I think we must agree with that. MR. HELLMAN: So there is no reason that Ford couldn't do as well on similar size vehicles with that same system? MR. WEAVER: If we had fuel injection, which doesn't SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) 343-3114/491-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 327 seem to be I can't I do not believe we could say that we could put fuel injection on all of our cars by 1982. MR. HELLMAN: Would you agree with the characteriza- tion made by the Air Resources Board with respect to cost and fuel economy determinations that EPA has to make that they should be wholly made in a negative sense if market demand is not met? MR. JENSEN: Mr. Eppel? MR. EPPEL: I guess I don't understand the question, Dr. Hellman. Do you want to try again? MR. HELLMAN: I asked how far into the question, which I can paraphrase thusly MR. EPPEL: Let me see if I can paraphrase what your question is and we'll see if I can do it that way, because hopefully I'll understand what I am saying. MR. HELLMAN: Okay. MR. EPPEL: I gather it's the assertion of California that the cost penalties have to be so great as to cause an inability of the otherwise marketplace to sustain those costs and to create a, if you will, diminution of demand less than would otherwise be there if the prices would have been in a more normal range. Is that a fair statement of their contention? MR. HELLMAN: I believe so, yes. MR. EPPEL: Well MR. JENSEN: I think Mr. Austin said it a lot better than you did, John. MR. EPPEL: Well, it was his argument; not mine. SMYTHE A WILSON CERTIFIED SHORTHAND REPORTERS (41S) S4*31«4/4«1-»M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 328 I guess the answer to that is I don't think that's consistent with the intent of International Harvester, and I guess we are working under 202(a) and that's where the terms "basic demand" comes from. I don't think that the costs have to be so prohibitive as to run the vehicles out of the range of the average consumer. I think you also have to look at it as a difficult judgment, but is a 9,000,000 car year Let's take the 49 states and look at it nationwide under 202. Is a 9,000,000 car year a basic demand and it otherwise would have been a 10,000,000 car year not basic demand? I think the court in International Harvester when they were talking about basic demand weren't simply talking about the benefits of consumers, but rather the place of the auto industry in the public interest. And a 9,000,000 car year versus a 10,000,000 car year, while there may not be anyone out there who is directly deprived of an automobile right now because they carry over the use of their old ones, the employment impacts and the impacts on the economy are substantial. So to that extent, I guess I don't believe that it has to be so substantial. Now on the other hand, I can't give you a figure I don't think Mr. Austin can either even under his definition as to when a cost on its face without any data and I might add with very little testimony on this point in the record before you as to when it becomes so costly as to frustrate the satisfaction of basic demand. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) S43>91M/4«t.30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 329 MR. HELLMAN: So I am concluding that you do not agree with the ARB position. MR. EPPEL: I think that's a fair statement. MR. HELLMAN: Do you believe that the costs MR. JENSEN: Let me say one other thing. In our statementwe didn't raise We talked about model availability, fuel economy, and other items. We didn't raise the cost issue. MR. HELLMAN: Do you believe that the model Let me take fuel economy. Do you believe that the fuel economy impact of these 1982 California standards should be judged excessive by EPA? MR. JENSEN: Well, this gets back to this new technology. We've testified in Washington this gets back to the same kind of technology we said would be across the product line in the early Eighties. We've testified in Washington when we have the maximum combination of electronic controls, three-way catalyst systems, and so forth that we can, in effect, negate any fuel economy loss. We still think, as we stated in the statement, that there would be a fuel economy loss if you went to .4 grams of NO . We put out regular charts that we've filed, inci- dentally with the Department of Transportation, and under .4 grams of NO we haven't even got an item listed on the charts as we speculate to future standards. We don't know what the fuel economy would be. So this is strictly a judgmental item rather than a data based fact. It's the only anticipated SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (411) M9-31W4C1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 330 number, and we have about 20 numbers on these charts where we estimate emission levels, you know, that have all been con- sidered in Congress and California. When you get to the California numbers with .4 NO , our chart just says, "No data X available." We speculate that as you go from one gram of NO to .4 gram of NOx you will lose fuel economy. But it's pure speculation. I don't think we've got any data at all. Have we, Gene? MR. WEAVER: No, except from engine mapping results, which are not vehicle results. CHAIRMAN JACKSON: Do you speculate that that will cause you not to be able to meet the fuel economy standards applicable to the 1982 model year? MR. JENSEN: I go back again to Washington testimony of about two weeks ago. We will met the fuel economy standards that are in the energy act. MR. HELLMAN: Your statement on Page 8 indicated that Ford is projecting 49-state usage of various, quote, lean combustion, unquote, technologies. Am I right in assuming that you feel these lean combustion technologies will enable you to meet federal standards of .41, 3.4, and 1 but would not be applicable to meet the California requirements that are before us here today for 1982? MR. JENSEN: At Ford, we are speaking primarily of PROCO in this lean combustion technology, and in Attachment III we do indicate under PROCO it's Page 17 in Attachment III SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41$) 543-3194/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 331 what the problems have been in respect to our PROCO development in trying to get down to .4 grams of NOx. We have only been able to do it on low mileage vehicles. The hydrocarbon emissions go up, and then we have to balance off the technology. So we think, at least what we have seen so far in PROCO, that we can meet the .41, 3.4, and 1 in the early Eighties. We haven't seen it where it's capable, and we explain this in detail, of meeting a .4 gram of N0x. But we are still working on it. It's one of the targets of the development engineers working on PROCO. MR. HELLMAN: When you calibrate the engine to meet 0.4 NO , which it can meet, the hydrocarbons cause you a very serious problem with that engine; isn't that correct? MR. JENSEN: Yes. MR. HELLMAN: So am I wrong in saying that the difficulty with that engine with respect to the California 1982 standards is primarily a hydrocarbon and not one of NOx? MR. JENSEN: Gene? MR. WEAVER: The hydrocarbon problem is the major problem, and because of that we have to use great volumes of catalysts, and twice or three times as much as we have on our current California cars. I might refer draw your attention to Attachment IV. There is two short paragraphs on the PROCO engine program there which is a research program, and it merely states that there is a study in Ford research to determine the capability of PROCO to meet .4, 3.4, and .4 emission standards. And the statement is made that "Preliminary SMYTHE & WILSON CERTIFIEO SHORTHAND REPORTERS (418) ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 332 projections from dynamometer data indicate that it may be possible to meet these standards in PROCO vehicles up to a 4,000-pound inertia weight with a conventional catalyst utilizing a lean calibration. Estimates of the average fuel economy losses range from approximately five to ten percent for a lean calibration .4 NO PROCO when compared to a one- X gram-per-mile NO lean calibration PROCO vehicle." So there will be a fuel economy loss, but apparently we are optimistic we will be able to do it on the lighter vehicles. MR. HELLMAN: But with the fuel MR. JENSEN: Just so there is no conflict, we are talking here, as he just read, about engine mapping, engine dynamometer data. No vehicle data. MR. HELLMAN: I understand that. MR. JENSEN: Okay. MR. HELLMAN: Based on your projections of fuel economy, would the PROCO engine with the five to ten percent fuel economy penalty be better or worse in fuel economy than a conventional engine would be comparable to it? MR. JENSEN: We have indicated that PROCO would get - what? 20 percent better fuel economy than a conventional engine. So you are still better off with this loss. MR. HELLMAN: Thank you. MR. EPPEL: Can I ask a quick question, Mr. Jackson? Dr. Hellman, I have one concern. Your comments about the PROCO1s difficulty being a hydrocarbon one rather than N0X problem, I hope you are not suggesting that the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) 543-3 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 333 hydrocarbon difficulties of that engine are irrelevant for the purposes of considering the .4 NO waiver on the grounds that we've already had a .41 hydrocarbon waiver. Because if you are, I don't think that would be an accurate assessment of the situation. If the engine is disqualified from .4 NOx for some other reason, it's still disqualified from .4 NO . X MR. HELLMAN: From the three standards MR. EPPEL: Correct. MR. HELLMAN: which we are considering? MR. EPPEL: Correct. CHAIRMAN JACKSON: Mr. Jensen, would you agree that there are compelling and extraordinary conditions of air pollution in California? MR. JENSEN: Yes, sir. CHAIRMAN JACKSON: With regard to oxidant and N02? MR. JENSEN: Yes, sir. CHAIRMAN JACKSON: You make a statement on Page 2 that we should wait on additional studies to determine to assess whether or not a significant improvement in air quality will result from .4. Can I infer from that that you think some improvement will result? MR. JENSEN: We really don't know until we get the LARPP data analyzed because of this spacial thing. I am way over my head on this, but I've sat and listened to our atmos- pheric chemists talk about ground level emissions from motor vehicles versus stack emissions in the air with respect to SMYTHE & WILSON CERTIFIEO SHORTHAND REPORTERS <41S> MVS1W/*61-J0#» ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 334 oxides of nitrogen, and when you get all through I've asked the same question of the scientists that you just asked, will there be some improvement. The answer it takes them about a half hour to answer, and when they end up I still don't know what they said. When they get right down to it, they say, "Let's analyze the LARPP data and see if there will be some improvement." At least that's the way I gather what they are saying. Gene, have you got a different interpretation? You understand them better than I do, I guess. MR. WEAVER: I think it depends a lot on the situation you are talking about. If you will read our Attachments I and II, we try to explain it in some detail. Maybe I can merely summarize it. Our analysis of the data says that under most of the stagnant conditions which lead to the atmospheric smog in Los Angeles in downtown Los Angeles, most of the NO when there is a low ceiling, most of the NO comes from the automobile and not from stationary sources. And if we take the available data about the atmospheric conditions under these worst conditions and if we use a rollback calculation similar to what EPA uses for modeling CO and relating CO ambient conditions to vehicle emission standards, if we do that, we conclude that a one gram NO standard is sufficient so that Los Angeles will meet the N02 atmospheric standard. Now that's one special situation. Now if we look at other data downtown and we are fairly certain that most of that NO comes from the automobile SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS <41S) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 335 because of the ratio between NO^ and CO in the atmosphere at this point. Now under some other conditions where there is apparently ventilation of the pollutants from the stacks and stationary sources, and we can verify this by seeing the difference now in the ratio between NO and CO in the atmos- phere, there we don't know how to make the calculation. So, we can't do it. What happens downwind is another situation. For these two situations, we think the LARPP data when the complete analysis of that data is made hopefully we will be able to understand those situations much better. The only situation we think we understand is the first one I described. I should say one other thing. Under the conditions where the stationary sources ventilate into the lower atmos- phere, on those episodes, even if the automobile contributed nothing to that episode, the ambient air quality standard for NO2 would still be exceeded. So the second point to remember is that on the few cases where the stationary sources contribute, if you had zero emissions from the car, you still wouldn't correct the problem. CHAIRMAN JACKSON: Okay. DR. WEAVER: So our position is that until we get all the information we ought not to make a final decision regarding .4 versus 1. CHAIRMAN JACKSON: I understand how you feel now, Mr. Jensen. SMYTHS & WILSON CCATIPIED SHORTHAND REPORTERS (419) M3-31»4/4«110M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 336 MR. WEAVER: I thought I did a pretty good job. CHAIRMAN JACKSON: I don't even think I mentioned 1. My question is: Why do you use the words "significant improvement" as opposed to "any improvement"? The inference that I choose to draw from that is there will be some improvement, but whether it's a whole lot or not may be difficult to judge. MR. JENSEN: Yes. We met one time with Mr. Austin in his office, and Mr. Austin asked Dr. Gratch, "Will there be some improvement?" You recall, Mr. Austin, he said, "Yes, there will be some"? MR. AUSTIN: Yes. MR. JENSEN: So, you've got the right inference. Mr. Austin dragged it out of him. I couldn't get it out of him. CHAIRMAN JACKSON: Thank you very much, gentlemen. MR. JENSEN: Do you have anything to say, John? MR. EPPEL: Yes, I had just a couple things I wanted to add to clarify the record. First of all, with respect to the conference committee provisions we didn't write our statement in antici- pation of those. We might have some things to add for the record with respect to the impact of both of those provisions. We may or may not on that. Secondly, on the question of whether or not we've got some inconsistency with respect to our recommendations about lead time and waiting, I don't really think there is ¦ & WILSON SHORTHAND REPORTERS (41S) 543-3194/481-3096 ------- 1 2 3 4 5 6 1 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 337 an inconsistency. I think what we are trying to say is what- ever lead-time problems we've got are not going to be made any worse by deferring the decision and having a little bit better scientific and technical basis for making the decision. And as to the electronics, whether or not they improve that's a matter of speculation. And I don't think the record has anything on it that would allow that speculation. They may or may not improve. If you want to take judicial notice of the fact that the hand calculator has improved, well be my guest. But how that relates to some of the devices in the automobile, I don't know. That's all I got to say. MR. JENSEN: That wasn't bad. Thank you, Ben. CHAIRMAN JACKSON: I'd like to reconvene at 1:30. (Luncheon recess.) CHAIRMAN JACKSON: We are ready, Mr. Wagner. MR. WAGNER: Chrysler Corporation welcomes the opportunity to speak again on the important subject of vehicle emission standards for California. We would like to emphasize, as we have at previous Air Resources Board meetings and EPA hearings, that Chrysler and the State of California have the same basic objective, which is to attain clean air goals as rapidly as possible by eliminating automotive emissions, but hopefully not the automobile, as a contributing source. Since the early 1950's, Chrysler has served in many capacities to help relieve the air pollution problems in SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (4It) 94»41M<4ei-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 338 California. We believe our contributions have been sub- stantial, and we retain a strong interest in this continuous and sometimes frustrating struggle. We fell, therefore, an obligation to once again summarize our conclusions regard- ing more stringent emission standards for California. Chrysler agrees that Southern California in par- ticular continues to have an extraordinary air pollution problem despite the billions of dollars and manhours expended during the last two decades. This fact alone should make one wonder if it is wise to continue to do more of the same thing. The same thought must have occurred to the ARB when they scheduled the air quality workshop in January of this year. The most prominent air quality experts were gathered together to pool their knowledge and hopefully establish direction for future improvements. We believe the workshop was worthwhile and more frequent meetings of a similar nature should be held. However, it was very apparent that the reports presented were not conclusive and no positive direction could be established except to observe that additional study was required. In fact, there was substantial disagreement and it is not at all clear, for instance, what the effect of a NO <2C change would be downstream of the emission source. Certainly some of the experts, but not all, felt that the overall effect depended on the amount of hydrocarbons in the air, and that it was more important to control hydrocarbons than N0X. E & WILSON SHORTHANO REPORTERS (41S> S43-31»4f4«1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 339 The consensus seemed to be that good progress has been made. Dr. Pitts believes the eye irritation and odor problems have been essentially resolved and we must now work on the visibility problem. However, the way is not clear. The experts agreed there is a need for a compre- hensive coordinated program to better define ambient air con- ditions and the changes that occur. They also recognized a need for better control and coordination of the data gathering activity. Chrysler can only conclude after hearing the recom- mendations of the experts that it would certainly be prema- ture at best to insist that lowerina the NO standard would result in anv measurable improvement in California air aualitv. We have stronalv recommended to the Air Resources Board that no additional chancres be made in the recmlated standards until additional technical information is provided which clearlv indicates the direction to move, otherwise we think some verv costlv mistakes mav be made. Chrysler believes the waiver should be denied on this basis alone. In addition, there are unresolved technological problems, that Chrysler has revealed to the Air Resources Board on numerous occasions, obviously with little apparent effect. As we have previously testified, technology will probably exist to achieve 1.0 gram per mile N0X by the 1980 model year, but the techniques required will be new. Chrysler recently decided to attempt to certify for 1979 California production a three-way catalyst with feedback carburetor 8MYTHE & WILSON CERTIFIED SHORTHANO REPORTERS (41ft) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 340 emission control system on our 225 six-cylinder engine. Hopefully some production experience at the 1.5 NO level can be used to help resolve the problems associated with getting to the 1.0 and .4 NO levels. However, there will still be the inevitable higher costs for this new technology which can only be paid by the consumer. To date, we have had limited success applying three- way catalysts and associated components to four-and six- cylinder engines; our V-8 program has just started. Whatever success we have had so far has been achieved with catalyst volumes approximately 70 percent of engine displacement, roughly a two-fold increase in catalyst size over those oxi- dation systems currently in use. We are deeply concerned about our ability to accommodate this catalyst volume in all our vehicles and also about the implications to worldwide availability to the catalyst ingredients. As regards the feedback systems which are most likely to be required with three-way systems, we have been working with two suppliers of fuel injection systems and both of our major carburetor suppliers. While we are confident that such systems can and will be developed, we are disappointed to observe that announcements of success and availability are frequently overly optimistic and premature. The result is that we are unable to fully identify the implications of such new systems in terms of cost, emissions, driveability and fuel economy at this time. The foregoing comments are equally applicable to the proposed .4 N0X standard for 1982 model passenger cars as SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (4IS) S43-31MM41-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 341 they are for the 1.0 NO standard for 1980 models. In addition we would make the following comments. First, to our knowledge, no one has demonstrated the ability to certify and manufacture its product line in compliance with a .4 gram per mile NO standard. Second, we are convinced that the federally mandated fuel economy requirements and the California assembly line audit test requirements would render compliance with such a standard virtually impossible. Third, any NO standard below the 1.0 or 1.5 gpm range would preclude consideration of offering the diesel engine in California. Predictions by our diesel consultant indicate possible capability to achieve 1.0 gram per mile level for four-cylinder engines but no capability below that. As you know, the diesel represents a potentially significant fuel economy improvement. In summary, we conclude that our ability to comply with a 1.0 gram per mile NOx standard is still uncertain, and our ability to comply with a .4 gram per mile NOx standard is still nonexistent. Therefore, we cannot precisely quantify the costs of such standards to the California public. We can predict, however, as we have in the past, that these standards will penalize fuel economy, further limit product avail- ability, and increase vehicle cost. Chrysler's position on fuel economy has been con- sistent and clear. Our engineers are convinced that a more stringent NOx standard means poorer fuel economy. While we are constantly striving to find emission systems which provide SMYTHE & WILSON CCHTIFIEO SHORTHANO REPORTERS (418) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 342 better economy while meeting the standards, the fact remains that for any particular emission system, fuel economy can be improved if the standards are eased. Conversely, fuel economy is penalized when the standards are tightened. In the future, as we are faced with tighter federal fuel economy standards and presumably tighter California emission standards, the lower fuel economy of whatever system is required to satisfy California will force compensating improvements in federal vehicle fuel economy. Just what these improvements will be and what they will cost in purchase price, driveability and product offering remains to be seen, but suffice to say that, by definition, a tighter California NO standard will perpetuate and increase the gap in fuel economy and cost between comparable 49 state and California vehicles. This is not to say that the State of California should not tighten its emission standards simply because fuel economy will suffer; rather, we wish to emphasize that any claims that this can be achieved without economy loss are not consistent with the facts. Costs for undeveloped or unperfected hardware cannot be reliably predicted. However, we believe these standards will materially increase the price differential between California and 49 state vehicles, which presently stands at approximately $75 per vehicle and which is only part of the total cost. The balance is spread over the other 49 states. In summary, Chrysler recommends that the ARB waiver SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41$) S4J-31MM»1-30W ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 343 request be denied so that the 1980 emission standards would be retained for both passenger cars and trucks. Progress toward cleaner air would continue as older, higher emitting vehicles are retired without imposing additional cost and fuel penalties on the California consumer. Mike Grice from our legal staff has a short statement to make in conjunction with mine. MR. GRICE: I would like to address one additional aspect of the issues presented here. As you know, the National Highway Traffic Safety Administration recently promulgated fleet average fuel economy standards for the 1981 through *84 model years. In its notice, NHTSA indicated that these standards seriously press the limits of technological feasibility for these years and could result in the imposition of penalties for some manufacturers. As Bob indicated, we anticipate that a .4 gram per mile NO standard will have a significant adverse effect on A the fuel economy of California cars. In our judgment, this would have one of two possible results. First, it could increase the likelihood or amounts of a civil penalty imposed under the Energy Act. Chrysler submits that a standard which could result in the imposition of civil penalties for a violation of the Energy Act is not technologically feasible within the requirements of the waiver provision. Second, it is also possible that a manufacturer will be forced to seriously restrict the size and engines of SMYTHE & WILSON certified shorthand reporters (4It) S434tMM«1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 344 vehicles offered in California as a means of reducing or eliminating such civil penalties. We submit this could result in the inability of the automobile industry to meet basic market demand as defined and discussed in the International Harvester decision. Under these circumstances, we believe that no finding of tech- nological feasibility is possible. There are a couple of other recent developments, potential developments, which I think also should be con- sidered and certainly could have an aggravating effect on the points that I have just raised. The Metzenbaum Amendment would prohibit the sale of vehicles under a certain mile-per-gallon level. This obviously would have the tendency to aggravate this situation. The second is the provisions of the Conference Bill, which in all honesty I haven't had an opportunity to review very closely, which would permit other states to obtain or enforce standards at the California levels. Obviously, these are factors which I think will have to be taken into consideration in your technological feasi- bility assessment of California's waiver request. CHAIRMAN JACKSON; Have you concluded that there are compelling and extraordinary conditions of air pollution in California? MR. WAGNER: Yes, sir. CHAIRMAN JACKSON: With regard to oxidant and NO2? MR. WAGNER: Yes. CHAIRMAN JACKSON: However, you quantify the effect SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) S4341«4Mai-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 345 of a lower NO standard for automobiles somewhat differently than did Ford, in that you suggest it's premature that there will be any measurable improvement in California air quality. You make that statement with regard to both oxidant and N02? MR. WAGNER: I make that statement primarily associated with oxidants. I'm trying to recall what some of the testimony of the experts was, and as I remember it it's reasonable to assume that if you lower NO from automobiles there should be some lowering of N02 in the atmosphere. Whether you can measure it or not, I really don't know. CHAIRMAN JACKSON: Is it Chrysler's position that there would be some reduction in NOj with lower tailpipe N0X standards? MR. WAGNER: I believe so. CHAIRMAN JACKSON: You raised, again, the point that Ford raised with regard to assembly line audit test require- ments, and on Page 4 you suggest that these requirements would render compliance with the .4 gram per mile NO standard X virtually impossible. Would you explain that a little bit? MR. WAGNER: Yes, I said that. And right now we don't know how to meet .4, the fuel economy requirements, and the quality audit requirements on a production basis. That's not to say that we don't have some test results that meet the proposed or the standards that the waiver is requested for. The problem as we see it for 1982 is to meet the fuel economy requirements at the same time that you are trying SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) M3-31MS4C1-3QM ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 346 to meet the .4 and still get the average below the standard. And we just don't know how to do that yet, and whether we will have that knowledge by the time we have to go into production for 1982, I think, is anybody's guess at this moment. CHAIRMAN JACKSON: With regard to your concerns about ability to meet a .4 gram per mile NO standard, has your conclusion changed any as you look at different CO standards associated with that standard? MR. WAGNER: If we go all the way down to 3.4, it definitely makes the job more difficult. We don't see a difference between seven and nine bothering anybody. CHAIRMAN JACKSON: Do you conclude that it's tech- nologically feasible to meet .41, 9, and .4? MR. WAGNER: No. That's what I just said. We don't see how we can do that. CHAIRMAN JACKSON: In other words, it doesn't make any difference to you? MR. WAGNER: What? CHAIRMAN JACKSON: In terms of your technological conclusion? MR. WAGNER: What doesn't make any difference? CHAIRMAN JACKSON: The higher CO number. MR. WAGNER: Higher than seven? CHAIRMAN JACKSON: Right. Nine. MR. WAGNER: The seven or nine doesn't make any difference in our conclusions. CHAIRMAN JACKSON: I see. I presumed your conclusion was based on 3.4. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) S43-3«M/4«1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 347 MR. WAGNER: No. The conclusion is based on the proposed California standard the standards that California has adopted and for which they are requesting a waiver, which is .41, 9, and .4. CHAIRMAN JACKSON: I see. You are going to ignore the federal standards? MR. WAGNER: Didn't know they were there when I wrote this up. Oh, you mean the 3.4 federal one? CHAIRMAN JACKSON: Yes, sir. MR. WAGNER: Sorry about that. No, we didn't ignore it. We just recognized it would make life more difficult. CHAIRMAN JACKSON: Do you agree with Ford that there is a break point in the technology somewhere between seven and five on CO? MR. WAGNER: I .think they said six and nine. As I remember, Ford said No, we have no basis for disputing what Ford said. At the same time, I don't believe our testing has been that extensive to be able to make that statement. MR. HELLMAN: Chrysler's statement on Page 3 indi- cates the technology will probably exist to achieve 1.0 grams per mile NO by the 1980 model year but the techniques required will be new. MR. WAGNER: We are talking about three-way catalyst techniques and the electronics associated with feedback carburetors. MR. HELLMAN: Is this 1.0 NO in conjunction with WW a certain hydrocarbon and CO level? SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) 543-31 »U4«1-)0M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 348 MR. WAGNER: Yes, .41 hydrocarbons and 9.0 CO. MR. HELLMAN: This feedback fuel metering and three-way catalyst technology that will exist to achieve this level, how does that differ from the technology that you would attempt to use to try to meet the proposed or the adopted in California 1982 standard? MR. WAGNER: Well, when you say "technology," I kind of wish you would talk about an emission control system. How would the emission control system differ between a one gram NO and a .4 gram NO , because the basic technology that we are talking about is a three-way catalyst system with a feed- back carburetor. That's the basic technology that we are talking about. Your question is: Why if you can meet 1, can't you meet .4? The answer is MR. HELLMAN: No. MR. WAGNER: No? MR. HELLMAN: My question was: What will the emis- sion control system be like comparing the 1 standard to the .4 standard? MR. WAGNER: I'd like to be able to tell you that, but we don't know how to get to .4 yet, so I don't know what that technology really will be. MR. HELLMAN: You indicated you had some results that were possibly of low mileage, below the standard. MR. WAGNER: We have some research numbers that are below the standard. MR. HELLMAN: What kind of system was used on those SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) S43-31MMS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 349 cars? MR. WAGNER: Three-way catalyst with feedback carburetor. MR. HELLMAN: So the generic system is the same? MR. WAGNER: Say again? MR. HELLMAN: The generic system, the technologies you referred to, is the same? It's a three-way catalyst with feedback carburetion? MR. WAGNER: The emission control system of components, ye s. MR. HELLMAN: Do you know what's different about those research cars? Did they have a bigger catalyst, more highly loaded? MR. WAGNER: Both. We have done both. We have been experimenting with different size catalysts and different loadings in the catalysts, and with various combinations, why, we are trying to get numbers that are, first of all, below 1.0 and, secondly, below .4. We are having extreme difficulty in trying to get numbers on the order of 1.0 grams per mile. If we get an N0x number below .4, it's usually in conjunction with some other number which is exceeding our objective. We really have developed very little confidence that we are going to be able to satisfy all of the requirements even by 1980. MR. HELLMAN: If as you indicate in your statement the technology will be available for meeting 1.0 N0x in 1980, is it fair to conclude that the time that's available for you to at least produce systems of the type that could be used to meet 0.4 NOx? SMYTHE & WILSON C8RTIFIED SHORTHAND REPORTERS (41S) 343-31MM«1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 350 MR. WAGNER: I think the answer to that is fairly obvious. As long as we are assuming that the systems are going to be, for all intents and purposes, very much the same between 1980 and 1982, the capability of producing such systems should exist. Whether or not we will be able to meet a .4 in conjunction with all the other requirements is pretty unlikely at this point. MR. HELLMAN: That's based on your extreme diffi- culty in meeting 1? MR. WAGNER: That's based upon our extreme difficulty in not only meeting 1, but getting good, consistent results with what we have so far and in recognition that the fuel economy requirements are going to be pressing us to the wall all the way. MR. HELLMAN: The results that you have had so far is your statement Do I interpret your statement correctly that you have no three-way catalyst results on V-8 engines? MR. WAGNER: No. I said our V-8 engine program has just started. We have generated some results. I don't have any direct knowledge of what those results are, as I said. MR. HELLMAN: The 70 percent of engine displacement for the volume of the catalyst, was that used on V-8's or on all the engines? MR. WAGNER: That's been used on the 4 and 6's. I don't know what the ratio is with the V-8's. MR. HELLMAN: What's the problem with the ability to accommodate this catalyst? Is it a space problem? MR. WAGNER: Space problem, yes. SMYTHE & WILSON aUTBlID SHORTHAND REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 351 MR. HELLMAN: The bodies that are going to be used in 198 2, are they already frozen in terms of being set up for production? MR. WAGNER: No. MR. HELLMAN: So there is time yet to increase the room there MR. WAGNER: Yes. MR. HELLMAN: to make room for a larger catalyst should you need it? MR. WAGNER: There is time to juggle things around, yes. MR. HELLMAN: Would you consider a California standard of .41 hydrocarbons, 9 CO, and 0.4 NO more stringent or less stringent than a federal standard of .41 hydrocarbons, 3.4 CO, and 1.0 NO? MR. WAGNER: I believe that the California require- ment is more stringent than the federal requirement that you mention. CHAIRMAN JACKSON: Mr. Wagner, have you developed any data on systems targeted to 1 or .4 NOx that's not available to EPA? MR. WAGNER: Would you ask that again? CHAIRMAN JACKSON: Have you developed emission data on systems that are targeted to 1 NO or .4 NO that is not X X available to EPA that has not been made available? MR. WAGNER: No, sir. Whatever information we have is available to EPA or ARB. I have recently given ARB some of the latest BMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (4IS) S43-31M4V1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 352 information that we have, test data. CHAIRMAN JACKSON: You are continuing to -- MR. WAGNER: If we haven't already forwarded a copy of that to EPA, we certainly will. CHAIRMAN JACKSON: Are you continuing to develop these systems and test them? MR. WAGNER: Oh, yes. CHAIRMAN JACKSON: I would ask that you submit to the record of this proceeding any data which becomes available before the record closes. MR. WAGNER: Certainly will. MR. HELLMAN: Mr. Grice, in your statement you talked about the impact of the proposed standards on the availability of cars. How should I characterize that? Is it one that you think is serious enough that would meet or fail to meet an International Harvester test of basic market demand? . I am not accepting or rejecting that as it applies under this hearing. MR. GRICE: I think at this point in time the ability of a manufacturer, the ability of Chrysler to be specific, to meet .4 is totally speculative. The impact of that, the impact of whatever system was developed, if any, to meet that standard on fuel economy is uncertain at least in terms of the extent of the impact. At this point in time, the answer to your question is uncertain. It is a distinct possibility, even a probability, I think my purpose in raising the issue was not that we can at this point in time demonstrate that this is going to SMYTHE & WILSON certified shobtha.no reporters (41ft ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 353 occur. However, I think it is a factor which you in your deliberations on the waiver request have to consider, and it is a possibility which does exist. MR. HELLMAN: Because there is uncertainty on this issue, would you agree that the uncertainty lies in both directions? MR. GRICE: It is possible that it lies in both directions. On the basis, I think, of the information avail- able today, it's likely to have some significant impact on vehicle availability. Whether that impairs the industry's ability to meet basic market demand or not is uncertain. It is, however, a very distinct possibility. MR. HELLMAN: You indicated that if the cars manu- factured for sale in California had poor fuel economy this would tend to directionally require the cars sold in the other 4 9 states to have better fuel economy for you to meet a NHTSA requirement; is that correct? MR. GRICE: I think both Bob and I indicated that, yes. MR. HELLMAN: Would you maintain based on that statement that that is something that has to be considered by EPA in granting a waiver, whether or not Chrysler meets or does not meet the requirements of NHTSA? MR. GRICE: I think EPA has to consider two things. I think they have to consider and I am not certain that it is restricted narrowly to Chrysler, but this obviously is a factor. I think they have to consider the ability of the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) M3-31M/441-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 354 industry to meet basic demand,and I think they have to consider the in terms of technological feasibility whether or not that will have an additional impact in terms of civil penal- ties on manufacturers. CHAIRMAN JACKSON: That being the cost of compliance? MR. GRICE: I donft totally follow your remark, Ben. CHAIRMAN JACKSON: Well, the idea being we have to judge consistency with 202, which says lead time taking into consideration the cost of compliance. MR. GRICE: No. No, I'm not saying that at all. I am raising the question of whether a standard which will or will likely result in the imposition of civil penalties on a manufacturer for inability to meet another federal standard is technologically feasible. I think it goes beyond the question of cost of compliance. MR. HELLMAN: Just what is it that makes you so negative about your ability to meet these standards? We have heard some testimony by the Air Resources Board that indi- cated that two manufacturers in 1977 almost a year ago now as the model year runs already would have complied with those standards in 1977 had they been applicable. MR. WAGNER: Would they have complied with the fuel economy and quality audit requirements at the same time for 1982? The answer to that question is no. Their fuel economy today would not meet the 1982 fuel economy require- ments. In order for them to meet the 1982 fuel economy requirements, they are going to have to do something to that engine, which with our present knowledge would indicate they SMYTHS & WILSON canTimeo shorthand reporters Mitt ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 355 would not be able to meet .4 NO requirements. They may have X some knowledge that we don't have, but they've got a long way to go before they can say that they"are going to meet all of the: requirements in 1982. MR. HELLMAN: All right. Thank you for your dissertation on why it's going to be difficult for two foreign manufacturers to meet the fuel economy standards in 1982. What I'd like to get from you is some idea of your feeling on why it is that the emission performance required by the California standards for N02 is going to be so difficult for you to meet since other manufacturers have already met it? MR. WAGNER: I think I have already answered that question. MR. HELLMAN: Is it a problem of catalyst deficiency? Is it a problem of emissions out of the engine? What is it for you? MR. WAGNER: It's a problem of getting fuel economy, meeting the emission standards on a consistent enough basis to meet quality audit requirements, and with our present state of knowledge of three-way catalyst and feedback carburetor systems. So far we do not see any way of meeting all three of those things. If you want to have just the .4 NO requirement and do away with the other two, why, certainly we would be a lot more optimistic about meeting .4. If you want to do away with meeting .4, we would be a lot more optimistic about meeting fuel requirements. All I am saying is when you put all of those things BMYTHE & WILSON CCRTIFIEO SHORTHAND REPORTERS <41») MS-UMMtl-WM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 356 together, we don't see how we are going to do it as of right now. Hopefully before the time comes when it is too late we will have more knowledge than we have today that will make us more optimistic. But I cannot tell you that we are optimistic today when we are not. CHAIRMAN JACKSON: You said consistently meet the quality audit requirements. What are you talking about there? MR. WAGNER: There are two options in the quality audit requirements. One is that on your quality audit sample, you shall meet the standards with at least the undeteriorated standards with at least 90 percent of your vehicle; or, Option 2, with the deteriorated standards you should pass on average. That's what I mean by consistently meeting the requirements. Right now we don't see any way of doing that. CHAIRMAN JACKSON: What leads you to believe that you can't do it? MR. WAGNER: Because in order to consistently meet a .4 NO our engineering test goal must be on the order of .2 NO . We aren't seeing numbers anywhere near that yet. CHAIRMAN JACKSON: I see. Are you suggesting, then, that you can possibly certify at a .4, or that there is a situation where you can certify at .4 but you couldn't meet the assembly line test requirements at .4? MR. WAGNER: It would be more likely to be able to certify at .4 than to be able to meet the quality audit requirements, too, yes. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (416) 543-31W/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 357 CHAIRMAN JACKSON: That meaning that assembly line test requirement added some measure of stringency beyond that which MR. WAGNER: Yes, it does. CHAIRMAN JACKSON: ~ for certification? MR. WAGNER: Yes, it does. CHAIRMAN JACKSON: Mr. Austin, do you have any quality audit data on the Volvo system? MR. AUSTIN: Yes. CHAIRMAN JACKSON: Would you make that available to us? MR. AUSTIN: Yes. We will submit it. Would you like a brief summary of what it looks like? MR. HELLMAN: If you would, please. MR. RUBENSTEIN: The quality audit data for the, I guess, first three quarters, or how many have been completed, for both Volvo and Saab have indicated that both three-way catalyst engine families fully comply with the force quality audit requirements with a comfortable safety margin. MR. AUSTIN: What about NOx emissions? MR. RUBENSTEIN: The NO emissions for those cars, I believe they are using the averaging approach, somewhere between .1 and .2 grams per mile, including deterioration factors. CHAIRMAN JACKSON: Have you got variability data? Do you know what the standard deviation is? I mean, are you seeing a great deal of variation, or is it fairly consistent? MR. AUSTIN: The data I've looked at shows quite a SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-31WM1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 358 lot of variation, but that's often due to the fact that one vehicle will be Q,5 grams per mile NOx and the next would be .2. You know, half the standard to a tenth of the standard or something in that neighborhood. There is variation, but usually the large variation is only when the levels are well under the .4 level. CHAIRMAN JACKSON: Mr. Wagner, have you seen that data? MR. WAGNER: No, I haven't. CHAIRMAN JACKSON: What's the added cost of a system that would be targeted to the .4 standard? MR. WAGNER: Over what? Over the 1.0 standard or the present standard? CHAIRMAN JACKSON: What standards are now required for I think it1s 1.5. MR. WAGNER: Now, yes. CHAIRMAN JACKSON: Excuse me. MR. WAGNER: The cost of putting a three-way catalyst system in is about $300 to $350. CHAIRMAN JACKSON: Over MR. WAGNER: Over the present system. CHAIRMAN JACKSON: Over the 2 MR. WAGNER: Over the present mini catalyst, oxida- tion catalyst system. CHAIRMAN JACKSON: That's system design for two gram per mile NO ? MR. WAGNER: Or one and a half, yes. CHAIRMAN JACKSON: One and a half? SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) 54J-31MM61SOM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 359 MR. WAGNER: Right. CHAIRMAN JACKSON: So it would be $300? MR. WAGNER: $300 to $350 for a 1 or .4 NOx- CHAIRMAN JACKSON: I guess I would like to have some sort of elucidation, if you could, on your position with regard to the impact of fuel economy in California assembly line audit test requirements rendering compliance with the standard virtually impossible. I don't think I quite under- stand. What I would suggest is you submit something into the record and detail more precisely just exactly what your concerns are there. We've had information from the CARB that suggests that these targets are achievable, at least with Volvo, and the variability is not that great. So that tends to direct itself at that particular concern. As far as fuel economy is concerned, I guess we want to understand just exactly what you mean, whether you are saying because you sell ten percent of your cars in California it would not be able to get as low a fuel economy as you like that would cause you to fail to meet the aggregate fuel economy goals that are established under Fuel Economy Act. MR. WAGNER: I'm not sure what I can give you to satisfy you in that respect, Ben, because the basis for coming to the conclusions that we have are the numbers, which I have indicated I will forward to you, which say that we are trying to right now trying to get to a one-gram NO level. That's our immediate objective for 1980. We are experiencing very limited success in being able to do that. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS <41» MS-SIMMtt-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 360 In conjunction with those tests, we will run fuel economy with them. And the fuel economy numbers that we are getting would lead us to believe that even if we achieve the 1.0 standard by 1980 meeting fuel economy requirements will be extremely difficult. When we are talking about going to .4, there are only very limited available techniques to you to improve fuel economy at the same that you are lowering NO requirements. And so far we don't have a system that will do both of those things is what I am saying. All I can give you to support that statement are the test results that we have been able to achieve so far. X don't think that Volvo for 1977 tried to achieve the 1982 fuel economy numbers. I sura pretty sure they didn't. And I think that when they do come up with a system to meet the 1982 fuel economy requirements, it's going to be somewhat different from what it is today. CHAIRMAN JACKSON: I have a question from CARB. Isn't it true that the fuel economy of the three-way Volvo and Saab vehicles are significantly better than the fuel economy of 1977 model domestic vehicles of similar weight and power-to-weight ratios? MR. WAGNER: Which vehicles? CHAIRMAN JACKSON: The '77 model domestic vehicles of similar weights and power-to-weight ratios. MR. WAGNER: The information that I have seen would indicate that their fuel economy is poorer than other compar- able sized vehicles. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS {419) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 361 CHAIRMAN JACKSON: What is comparable? MR. WAGNER: What is comparable? Same inertia weight category, same engine displacement. That type of comparability. CHAIRMAN JACKSON: Chrysler vehicles? MR. WAGNER: No, not Chrysler vehicles. Other vehicles. CHAIRMAN JACKSON: Is that there are no comparable Chrysler vehicles? MR. WAGNER: That's right. MR. AUSTIN: Mr. Jackson, could I ask a point of clarification? The question dealt with power-to-weight ratios, the horsepower of the engine that moves the vehicle, not the size of the engine. CHAIRMAN JACKSON: Does that point of clarification make any difference, sir? MR. WAGNER: I don't I don't think I can I don't have knowledge offhand associated with power-to-weight, so I can't answer the question on that basis. MR. HELLMAN: Just to expand on the question that the Air Resources Board asked. Of the 40 or so vehicles that were in the detailed listing of the '77 data that was in the Fuel Economy Buyers Guide, the 40 vehicles that were reasonably comparable to the Volvos in terms of inertia weight, horsepower, axle ratio, N/V and other parameters that influence fuel economy when adjustments are made to put the vehicles on a common basis. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (*1*> ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 362 Of the 40 vehicles, the Volvos were better in fuel economy than all but three vehicles, and those three vehicles were not domestic vehicles. CHAIRMAN JACKSON: I have a follow-on question for CARB that arose, I presume, with a question that I asked them. You don't have to. answer this one (meaning Mr. Wagner). MR. WAGNER: Can I if I want to? CHAIRMAN JACKSON: Has CARB any test results on any three-way catalyst equipped Volvo or Saab vehicle or vehicles in excess of .41 HC, 9 CO, and .4 NO ? MR. AUSTIN: We have run some tests of the ten Volvos that the state owns where individual tests were in excess of one or more of the standards on occasion. In cases where there were levels above the .41,'. 3.4, and .4 levels, there was an attempt to determine the cause, and on, I think, a couple of cars we found defective components which when replaced cause the emission levels to go below those levels again. There have been numerous tests run. Not all of the tests have been under the standards. When we have had any significant deviation from the standards, we have been able to identify the problem. In all cases, we have found it to have been a problem that was not related to the basic capability of a three-way catalyst system to reduce emissions, but some quality problem with one or more of the components on the vehicle. CHAIRMAN JACKSON: Did you prepare a report with 8MYTHE * WILSON CERTIFIED SHORTHAND REPORTERS (4H) MS-31MIM1.MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 363 regard to those tests? MR. AUSTIN: I don't believe we have put together any report yet on the testing. The testing is still in progress. CHAIRMAN JACKSON: Would you supply the test results to the record of this hearing? MR. AUSTIN: We can give you a summary of basically what's been done to date. CHAIRMAN JACKSON: How about the individual test results? MR. AUSTIN: The individual test results include a number of tests where we have altered the vehicles and, therefore, I'd be reluctant to supply data on vehicles which we wouldn't feel to be representative of what's coming off the line. I think that you'd be on much or anyone would be on much firmer ground assessing the capabilities of the system by reviewing the quality audit data which we have already agreed to supply. CHAIRMAN JACKSON: I don't quarrel with the evalua- tion of the quality audit data, but it seems to me if we are going to set this system out as one that's demonstrating the technological feasibility of meeting the standards, we ought to have all the relative data. You can qualify the various tests any way you want to according to the facts, but I think that information should be provided, MR. AUSTIN: I'd like to give you the data, then, from the vehicles which are in the condition as they left the factory or else if there was a defect found after the defect SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (*1S) M3-31M1M1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 364 was corrected, but not give you the data that involves vehicles that have been altered by ARB for our own in-house purposes. I don't see how that bears on the issue here. CHAIRMAN JACKSON: That would be fine. MR. GRICE: I would suggest, Mr. Jackson, that in one respect I think it would be very relevant for the record in this hearing if all of that data were included in the record, particularly the data from the vehicles which Mr. Austin stated had developed a defect. I think the existence of those defects, I think the number of those defects to some degree has a great deal of relevance to the capability of the particular system. I think that it is very, very inadequate to submit only the data reflecting vehicles tested after the defects have been corrected. CHAIRMAN JACKSON: I think he said he would supply the test data with regard to the defective vehicles. Is that correct? MR. AUSTIN: That's correct. MR. WAGNER: Would you give us the test information -- or I guess I shouldn't put it that way. I guess the test information before and after correction might be significant. CHAIRMAN JACKSON: He said he would supply that, Mr. Wagner. MR. WAGNER: Okay. I know our engineers would be interested in data that would indicate what kind of deterioration factors we are talking about. E & WILSON SHORTHAND REPORTERS (415) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 365 MR. HELLMAN: On the Volvo? MR. WAGNER: Yes. CHAIRMAN JACKSON: I would imagine the certifica- tion MR. HELLMAN: It was published in "the Federal Register on Wednesday, June.8th, 1977. MR. WAGNER: You are probably right. MR. SCHWENTKER: Have you got a copy we can read? CHAIRMAN JACKSON: Mr. Wagner, that's all we have. Thank you very much. MR. WAGNER: All right. MR. NELSON: Good afternoon, Mr. Jackson, members of the EPA Hearing Panel, and ladies and gentlemen. My name is Edwin E. Nelson, Assistant Director of Automotive Emission Control, General Motors Environmental Activities Staff. With me today is Harold VI. Schwochert, Staff Engineer in charge of California emission regulations; Richard I. Petersen, an attorney with GM legal staff; and Or. Klimisch, head of Environmental Science Department, General Motors Research Laboratories. General Motors submits the following comments con- cerning California's waiver request for 1982 model-year passenger car NO exhaust standards of 0.4 grams per mile. We believe that the two most important considera- tions which are pertinent to this hearing are, one, the need for the standards to meet air quality and health requirements and, two, the technological feasibility of meeting the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (411) S4341W44140M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 366 proposed standards. Historically, General Motors has supported the need for more stringent automotive emission standards in California because of the special air pollution problem.s. The need for more hydrocarbon control has never been seriously questioned or challenged because scientists generally agree that hydro- carbon reduction is a straightforward and effective means of reducing ozone everywhere in the state. The effect of more stringent NO automotive emission standards is not as clear. It is generally agreed by the scientific community that NO reduction increases ozone in the vicinity of the emission source which is also the most highly populated area. Experimental data also suggest that N0x reduction may decrease ozone in regions that are downwind from the primary emission source. In an area such as the Los Angeles Basin, which is complex from both a geographical and meteorological standpoint, it is not clear what, if any, reduced ozone benefits in down- wind areas will be realized by reductions in NO. However, it is clear that reductions in N0X will have an adverse effect on ozone in downtown Los-Angeles.; Since most health experts agree that ozone health effects are more severe than N02 health effects, EPA must be convinced that NO reduction will not cause a net adverse health effect. GM briefly described this oxidant/N02 trade-off issue at the May, 1977, EPA waiver hearing where California's 1.0 gram per miles N0x standard for 1980 was considered. The issue becomes more significant, however, as the NO SMYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS (41S) MS41MM1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 367 standard is set at lower numerical values such as the 0.5 grams per mile proposal being considered today. At the May waiver hearing, the EPA panel appeared to dismiss this issue by inferring that compelling and extraordinary conditions presently exist in California, and will continue to exist whether or not California implements the proposed NOx standard. It is GM's opinion that Congress intended that EPA give more than casual treatment to this air quality and health effects issue. This health effects subject is much more important than other potential penalties associated with more stringent automotive emission standards. Although GM has disagreed with EPA's position, EPA has given deference to California in deciding if the fuel economy, vehicle drive- ability, model availability, cost and other penalties associated with a given set of requirements are offset by the reduction in automotive emissions. EPA clearly cannot defer to California when the trade-offs are quality and health related. EPA must be convinced that these standards will result in net health effect benefits prior to granting the requested waiver. Any action short of this would be evading the supervisory responsibility imposed upon the agency by Congress. The proposed 1982 and subsequent model-year exhaust emission standards apply to both gasoline and diesel-powered vehicles. Since the apparent technological feasibility of meeting 0.4 gram per mile NO for these two power plants differs substantially, feasibility for the two engines will be discussed separately. SMYTHE & WILSON CERTIFIED SHORTHANO REPORTERS (41$) M9-31MM41-MM ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 368 Both the EPA and ARB are aware of GM's plans to introduce Phase II catalyst systems on gasoline powered vehicles in California in 1978. Expanded application of three-way catalysts and closed loop fuel metering is planned for 1979, with full scale usage scheduled for 1980 California production. This new hardware provides for additional control of NO and will allow standards more stringent than the present 1.5 gram per mile NOx standard to be met. Numerous reports to both agencies over the past several years have shown experimental test results at or below the proposed NO standard of 0.4 gram per mile on low mileage vehicles. Although we have been encouraged by our advanced experimental work, the present state of development has not demonstrated the ability to achieve 0.4 gram per mile NO under the 50,000-mile certification requirements. This includes the proposed maintenance restrictions that were considered both yesterday and today. This includes not being done under those conditions. The technology available to GM today is not sufficient to meet the 0.4 gram per mile NO standard. However, we are dedicated to continue development work with this goal in mind. With respect to the diesel engine, the primary reason for GM's interest in this power plant is its superior energy efficiency. However, experimental data available to General Motors has not indicated that diesel vehicles have the potential to be certified at 0.4 NO . Based on what is known today, we cannot project the potential of this power plant to meet the 0.4 grams per mile NO standard. Therefore, we must SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41») M9-31MWf140M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 369 conclude that GM passenger car and light truck diesels will be excluded from the California market by this proposed NOx standard. In summary, the implementation of the 0.4 gram per mile N0X standard could result in net adverse health effects because of the air chemistry oxidant/N02 trade-offs that occur. It is our opinion that EPA should be sure that the proposed standards are the correct emission control strategy for the Los Angeles Basin air quality before they grant California a waiver. Experimental data which are below the proposed standards have been obtained from low mileage gasoline powered vehicles. Although vehicles have not demonstrated the required durability for 50,000 miles, we are continuing our development of advanced emission control systems toward the 0.4 grams per mile NO goal. Until we have achieved acceptable durability, we cannot project when such a standard is feasible. Our judgment is that the application of energy efficient diesel engines -in light duty vehicles will be eliminated by the 0.4 NO standard. We are not aware of any information which can be used to project potential of the diesel engine to meet the proposed standards. Therefore, based on air quality and health effects considerations, General Motors recommends that EPA not grant this requested waiver. Mr. Jackson, I would like to submit three addi- tional reports to be included in the record of this hearing. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 370 The first report is entitled "Smog Chamber Simulation of Los Angeles Pollutant Transport" by Dr. William A. Glasson, submitted to the ARB seminar on June (sic) 6th, 1977. The second statement was submitted to ARB on the 1982 NO standard by Dr. Fred Bowditch at the ARB hearing on January 25, 1977. The third report is a transcript of the General Motors testimony at the June 22nd, 1977, ARB meeting. I'd like to make a correction. On the first report, it should be January 6th, 1977. I apparently said "June," and that was January. Also, Dr. Klimisch, head of the Environmental Science Department of General Motors Research, will now make some additional comments on the air quality and health effect considerations. Dr. Klimisch? DR. KLIMISCH: It's a monumental understatement to say that the formation of smog and photochemical processes are complex, and the arguments about the effects of nitrogen oxides have been going on for a long time. I want to assure you that our purpose isn't to mislead. We are very much concerned that the strategy that's used is the right one. We are using smog chamber data, but the regulations are basically set on the basis of smog chamber data. We realize some of the imperfections in smog chamber data, and that still looks like the best model of the atmosphere we have. 8MYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS (415) M3-31MMS140M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 371 Furthermore, nothing has happened to clear up this issue or resolve it, particularly nothing at the conference on the ARB. As a matter of fact, I think the general consensus was that NO control is even more questionable, but that's certainly only opinion. Furthermore, as Mr. Austin said this morning, that I believe he said that historical trends show that NOx decreases oxidants. As far as I know, that's completely wrong. The historical trends, particularly in California, have shown hydrocarbon going down and ozone going down. At the same time, NO has either stayed the same or gone up slightly. Those were analyses by EPA contractors. The major agreement is that hvdrocarbons reduce ozone everywhere, both upwind and downwind, and all that historical data, I think, confirms that. I also want to point out that all those other things that are currently unregulated, such as pam peroxyacil - nitrates, nitrous acid, nitric acid, visibility, even NOj itself to some extent are also improved by hydrocarbon control. And that's why we haven't argued about the need for hydro- carbon control, particularly in the Los Angeles Basin. The effect of the NO problem has been called a dilemma since the beginning, and I passed a chart out which showed a smog chamber run that we did last year. And it shows I think everyone agreed that the initial effect of NOx is an increase in ozone near the source, and I think this is the first time it was confirmed, the NO effect downwind. X That is, increasing NO may, in fact, increase ozone downwind. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41 S> ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 372 We have tried to put locations on this for the Los Angeles Basin by looking and corresponding the time the light intensity and the time of an air mass moving out. We think the crossover point from the plus to minus effect in ozone may occur in the San Bernardino/Riverside area. That can move up or down, depending upon what factors one considers. The problem is you can't consider just that downwind effect and not consider the upwind effect. You can also argue about which is bigger. However, since the population density is higher upwind, it would seem clear, coupled with the fact ozone health effects are much more severe, the net effect is going to be adverse for NOx reduction. Furthermore, this same effect is going to occur everywhere else in California, and all the other cities will primarily experience the first part of that. And, so, our conclusions are on the back, and we end up with our estimate that this reduction is going to cause a net adverse health effect. CHAIRMAN JACKSON: If I understand you correctly, you say you are still working diligently towards a .4 tailpipe MR. NELSON: That is correct. CHAIRMAN JACKSON: Why? MR. NELSON: Well, because there is a possibility that it will become a standard, and that possibility was even greater until Congress acted apparently or is appearing to act. CHAIRMAN JACKSON: Is that based on the MR. NELSON: It's based on the probability of a SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS HIS) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 373 standard being required at that level, and we are developing CHAIRMAN JACKSON: In the federal law? MR. NELSON: Well, in any law, in any regulation, whether it be federal or California. CHAIRMAN JACKSON: Why would you continue to work on it in California if you are convinced it's a net detriment to health? MR. NELSON: California regulation requires it if the waiver is granted by California. So, we are attempting to meet future possible requirements. CHAIRMAN JACKSON: Do you think we can rightly grant a waiver if your conclusions are correct? MR. NELSON: I believe that we have valid concerns for every conclusion we have stated, and it would appear that it would be improper for EPA to ignore some of the considera- tions we have pointed out. CHAIRMAN JACKSON: Do yoij think your conclusions are sufficient to suggest that you wouldn't be willing to accept a grant of waiver? MR. NELSON: I can't answer that question. CHAIRMAN JACKSON: You mean there is some doubt? It's not all black and white? DR. KLIMISCH: No, of course not:. You said the California Air Resources Board came to a different conclusion than we've come to, and I said this was controversial. And it's been controversial for some time, and the issue is not resolved yet. CHAIRMAN JACKSON: Do you see a forum for resolution? SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS ------- I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 374 DR. KLIMISCH: Well, I think the best bet at the moment is perhaps the analysis of the LARPP data. I don't think that's going to be the final answer either. I don't think the EPA scientists have been able to make up their minds on this issue either, if I interpret their statements correctly, nor has the National Academy of Science or National Research Council or anybody else that's looked at this problem. You have two effects. You have a law that says you have to meet nitrogen oxide standards, but you know that's going to have an adverse effect on ozone. But the law doesn't take that into account. The law doesn't take those inter- actions into account. Neither do the health effect estimates that the EPA did on the 300 or the Interagency Task Force don't take those kinds of interactions into account. It's been thefe, and it still is there. CHAIRMAN JACKSON: You don't see an answer coming in the near future? DR. KLIMISCH: I don't see an answer that everybody is going to accept. It's going to be difficult to resolve that question. Certainly it's not black and white. CHAIRMAN JACKSON: Would you say it's fair to say, then, that there is room to believe that reducing tailpipe NO emissions may have beneficial effect in terms of DR. KLIMISCH: A net beneficial effect? CHAIRMAN JACKSON: Yes. DR. KLIMISCH: There is room to believe that, certainly. A lot of people believe that. CHAIRMAN JACKSON: So that's why you are keeping on 8MYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS ------- 1 2 3 4 5 6 1 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 375 working with it in regard to targeted .4? MR. NELSON: We don't believe that argument, as you just'heard from Dr. Klimisch, but we do believe in meeting any requirement that is placed on us to meet. And we've got a federal law and a proposal in California to meet .4. So, I think it behooves us as a prudent business practice to attempt to meet that requirement. CHAIRMAN JACKSON: Is that a contemporary statement in liqht of the action by the Conference in the Clean Air Bill? MR. NELSON: I don't understand what you mean by "A contemporary statement." CHAIRMAN JACKSON: That is, does it take into con- sideration the fact that .4 is not going to show up as a federal standard? MR. NELSON: I don't know that yet. Can you assure me that? CHAIRMAN JACKSON: My question was: Does it take that into account? Your statement is with regard to the assumption that .4 will stay in the federal law; is that correct? MR. PETERSEN: I think the statement was based on the fact that until yesterday or the day before, whenever the Conference Committee adjourned, that .4 was the law. We haven't had a chance to analyze the Conference Bill. CHAIRMAN JACKSON: I understand. But I'm asking you: In the eventuality that the .4 does not stay in the federal law, will you continue your efforts? E & WILSON SHORTHAND REPORTERS (419) MM1WMI1-W ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 376 MR. NELSON: I'm not prepared to say we would make any change in our policy. So far, we have been working to be able to comply with that requirement if it goes into effect. We have serious concerns that we have expressed that it's not the direction, but that's somebody else's decision to make. MR. HELLMAN: Dr. Klimisch, you indicated that there was substantial controversy about the methods by which you control air pollutants, especially the effect of producing tailpipe NO , and you made some conclusions here on the back of the figure that you handed us. Do you think there's the same degree of controversy on all of these issues: No. 1, "Hydrocarbon reduction decreases ozone everywhere"? DR. KLIMISCH: No, I don't think there is a contro- versy about that. MR. HELLMAN: Mr. Austin, could you comment on this conclusion? MR. AUSTIN: That hydrocarbon reduction decreases ozone everywhere? MR. HELLMAN: That's correct. MR. AUSTIN: I think that's essentially correct. There may be some rural areas where hydrocarbons are much less significant and NO is the principal source of the oxidant, but for all practical purposes I think that's essentially correct. And there is fairly universal agreement on that. MR. HELLMAN: The second point you made, Dr. Klimisch, was: re<^ucti°n increases ozone in the most populated areas and may decrease ozone in downwind regions." SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (4 IS) M3-31MMS1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 377 Is there a lot of controversy on that as far as you know? DR. KLIMISCH: Yes. Well, the controversy is about the second part. That really is the more difficult to demon- strate. It ends up to be a complicated process. As an air mass moves away from a city, it gets diluted, it gets other things added to it. That's been more difficult to pin down. The first effect, the initial increase, is not as controversial. Although, you know, there's degrees of contro- versy, and there's a lot of people that MR. HELLMAN: But you would say that the second part of the statement, No. 2, ". . . may decrease ozone in downwind regions," is a source of greater controversy than for the first part? What I am trying to do here, for the record, is try to focus the areas that you indicated were controversial so the record will be clear about which areas are and which are not. DR. KLIMISCH: The whole effect of NO is quite controversial. The whole issue. MR. HELLMAN: Do you have a few short words you can say on that second conclusion, Mr. Austin? MR. AUSTIN: I'd say it's becoming much less controversial, and it's becoming clear that in many areas, particularly the Eastern seaboard, NO is definitely contribut- X ing to the oxidant problem because there is long-range trans- port involved and the people who are exposed to pollutants are living great distances from the original source of the SMYTHE ft WILSON CEflTIFIfO SHOBTHANO REPORTERS («1S> ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 378 pollutants. And any time you have that situation, NO becomes a very significant factor. DR. KLIMISCH: Well, that's an opinion. There are many people who say that that's largely stratospheric. There are many opinions on what that East Coast ozone comes from. Again, you get into degrees of controversy. There is no doubt that that's controversial, too. MR. HELLMAN: What about the "ozone health effects are more severe than NC^ effects"? Do you think that is controversial? DR. KLIMISCH: No, I don't think that is contro- versial. MR. HELLMAN: What about it, Mr. Austin, is there controversy on this point? MR. AUSTIN: There's less controversy. The basic difference of opinion that we have here with GM, though, is that the peak ozone levels are the problem. It's as the ozone goes up, the effect does not go up in a linear manner. You have greater and greater health effects as ozone goes up incrementally, and we believe that our studies have shown that the worst ozone levels will be reduced if we control NOx further in the Basin. The worst ozone levels being those that occur somewhat downwind of downtown Los Angeles. DR. KLIMISCH: No one knows whether these things are linear. That's tremendously controversial. There isn't any data that can prove that point. That's a controversial issue, except where you measure the two effects, the two pollutants, you find ten to 50 times greater biological responses to ozone SMYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS <41t) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 379 than NO2. MR. HELLMAN: Then I guess it may be redundant, but your fourth conclusion is that the NO reduction and I am assuming that this means the NOx reduction from the tailpipes as proposed by California will cause a net adverse health effect. I guess I'd just like to ask Mr. Austin if you agree with that. MS. AUSTIN: I think the answer is obvious. If we believed that/ we never would have taken the action. I think the EPA should also be cognizant of the fact that the Air Resources Board doesn't have a vested interest in controlling air pollution in California one way or the other. MR. HELLMAN; So this is the crux of the difference in opinion, whether or not it's a net adverse health effect? DR. KLIMISCH: I resent that if that's an implica- tion that we intend to harm the health of the people of California. I said our objective is to make sure the right thing is done and to make sure that this is considered. Again, I'd ask you about the EPA opinion. They have been studying this thing for a long time, and maybe they should be the arbiter of this. They are quite aware of this controversy. MR. HELLMAN: Mr. Nelson, on Page 4 of your state- ment you make a reference to a 50,000-mile requirement. I think it's in the first paragraph. On Page 5, in the second paragraph, you also make SMYTHE A WILSON CERTIFIED SHORTHAND REPORTERS (4 IS) MJJtMMSVJOtS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 380 mention to a required durability of 50,000 miles. Can you explain a little bit more about what you mean by that in relation to meeting the California standards? MR. NELSON: The basic standard requires 50,000 miles of durability before you can be certified. So I am saying we have not been able to run a vehicle for 50,000 miles under the certification requirements as we know them or under the restricted maintenance requirements that were considered yesterday and this morning at this hearing. MR. HELLMAN: Considering just the emission require- ments for the time being, is it your understanding that in order to qualify to be in compliance with the California regulations the vehicle has to be operated on durability for 50,000 miles remaining below those standards? MR. NELSON: That isn't my understanding of the requirement, but I don't understand the question. Certainly if you take the requirement into considera- tion, the least square lines to the data points, the require- ment clearly states that you have to be below the standard with that line that's calculated from your data points. MR. HELLMAN: For the California standards? MR. NELSON: Yes. MR. HELLMAN: Is that correct, Mr. Austin? MR. AUSTIN: Restate it, Karl. MR. HELLMAN: Do the California regulations require » these are the 1982 regulations we are talking about for .4 NO . Do they require that a vehicle must demonstrate compliance with the durability car for the entire 50,000 miles? SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 381 MR. AUSTIN: No. MR. HELLMAN: No they do not? MR. AUSTIN: The durability car does not have to be below the standards for 50,000 miles. MR. HELLMAN: So what is this 50,000-mile require- ment you are talking about,. Mr. Nelson? MR. NELSON: Well, I am sorry I indicated it did. Mr. Austin is correct, of course, because there is carryover as long as it stays under the federal requirement for 50,000 miles. But one of our criteria is to meet the present federal requirement that does have a 50,000-4nile durability being under the standard for 50,000 miles. MR. HELLMAN: But the federal standard is not 0.4 N°x. MR. NELSON: It is as far as the federal law today is concerned. MR. HELLMAN: And that's what you are trying to meet; is that right? MR. NELSON: That was the objective of trying to run durability tests for 50,000 miles and meet the criteria, yes. MR. PETERSEN: I might also add that we are responsible for in-use compliance, and I don't think that our in-use compliance is -judqed by the federal standards in California. Is it, Mr. Austin? MR. AUSTIN: Under California law, you are responsible for meetino that standard»se for 5q#000 miles. E & WILSON SHORTHAND REPORTERS (41$) |4341MM«140M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 382 The question related to the durability vehicle itself, a specific test vehicle. It's true that that vehicle does not have to meet the standard of 50,000 miles. MR. HELLMAN: I'd like to proceed on this line of questioning. Assuming that the federal standard of 0.4 NOx will not be enforced in 1982 if it is, then the question is moot. Given that consideration, what is the problem with the 50,000-mile durability? Is it that the vehicles that you are running with the systems that you plan to introduce fall apart before 50,000 miles? MR. SCHWOCHERT: The point we are trying to make is that without regard for what the certification requirements are, certainly as a responsible manufacturer, one must be assured of your emission control system having the capability of meeting the requirements that the standards that you are trying to meet. And the point we are trying to make is that in our development work we have not run vehicles for 50,000 miles below the proposed California standards. MR. HELLMAN: All right. But let's leave the record with the clear understanding that that does not prohibit you from satisfying those certification requirements in California. MR. SCHWOCHERT: It would not prohibit us from meeting one of the requirements that exist in the State of California. MR. HELLMAN: Right. The certification require- ments. SMYTHE A WILSON CERTIFIED SHORTHAND REPORTERS (411) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 383 MR. SCHWOCHERT: The certification requirements. MR. HELLMAN: Correct. Is there any reason that would lead you to believe, especially considering the successful introduction of three-way catalysts by other manufacturers, that General Motors would be unable to run a vehicle for 50,000 miles to satisfy the California requirements in 1982? MR. SCHWOCHERT: Are we just talking about the certification requirements now? MR. HELLMAN: Yes. Again, just certification. MR. SCHWOCHERT: I guess based on what we know today, that we have been able to build low mileage vehicles at or below the .4 gram per mile standard. So based on what we know today, I guess the answer would be there's probably a pretty good possibility that we could build a vehicle to meet the certification requirements if that's the only concern we had. MR. HELLMAN: I want to make sure that up until now we have primarily been talking about gasoline vehicles, because you did divide-your testimony into two different parts for gasoline and dieselj is that correct? MR. SCHWOCHERT: That's right. MR. PETERSEN: But I'd like to clarify that we would not offer that vehicle for sale unless we were assured that it would also comply with the California assembly line test requirements and our in-use emissions performance responsibilities. CHAIRMAN JACKSON: What you are saying is there is SMYTHE A WILSON CERTIFIED SHORTHAND REPORTERS <41S) S43-31tW4t1>30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 384 an added degree of stringency associated with those latter two programs? MR. PETERSEN: Well, certainly there is. We cannot Mr. Austin just stated that in-use compliance is determined by the California standard, not the federal standard, for NOx. MR. HELLMAN: Yes. However, do you mean to say that General Motors wouldn't introduce a vehicle for sale in California unless it did pass the federal requirements pass the California requirements and also not exceed the standards for 50,000 miles during certification? Is that your position? MR. PETERSEN: No, we are not saying that at all. MR. HELLMAN: Okay. MR. PETERSEN: I think the record will be clear on what we said. MR. HELLMAN: On Page 5, you discuss the diesel engine, and you indicate that the energy efficient diesel engine will be eliminated by the 0.4 gram per mile NO standard, Earlier today we had testimony from the California Air Resources Board that indicated that there was an optional procedure which is part of the package for which they are requesting a waiver. Your statement applies to a 0.4 gram per mile N0X standard. Does the existence of this waiver alter the con- clusion that you have drawn? MR. NELSON: Existence of what waiver? MR«. HELLMAN * X mean the option, X am sorry. SMYTHE & WILSON " CERTIFIED SHORTHANO REPORTERS ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 385 MR. NELSON: I guess we could look at that option as no option at all, because it's twice as long, 50,000 miles to 100,000 miles. It would take twice as long. It would be more complicated to run a vehicle that way, and if it's equivalent we don't have a whole lot of data on a 100,000 mile type of operation. But if that's equivalent on air quality, as ARB implied in their report when they considered the issue, then if you can't meet one I don't know how you can meet the other one. Most of our judgment is based on the old rule of 50,000 miles. MR. HELLMAN: I didn't quite understand your answer. Let me see if I can paraphrase it and see if I got it right. Most of the work that you have done to date has been to try to determine compliance with the 50,000-mile require- ment? MR. NELSON: That's correct. MR. HELLMAN: There isn't a whole lot of data available to you to be able to judge your ability to meet the optional procedure. And, therefore, is it too premature to make a conclusion, or what? MR. NELSON: I think it's premature without data to make a determination, but the basic premise in my comment was: If it's equivalent and we can't do it under the 50K, why would you spend more money and double your cost of opera- tion and the complexity of operation and try to do it at 100,000 miles? MR. HELLMAN: So is it your position that it's SMYTHE It WILSON CERTIFIED SHORTHAND REPORTERS <4It) ------- I 2 3 4 5 6 7 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 386 disequivalent in terms of MR. NELSON: No, sir, I didn't say that. I don't have the data to know whether it is or is not. It was apparently judged by ARB staff to be equivalent. MR. HELLMAN: What's General Motors' position on the lead time available to meet these standards? MR. NELSON: The absence of a lead time argument in the statement would imply that is not a major problem we can foresee at this time. MR. SCHWOCHERT: I'd like to add that we have indicated right today we don't have the technology in hand to meet the standard, and one can really not project when the technology is going to be available. So you can't really discuss the issue of lead time in a very positive and specific sense, since you are confronted with getting the technology, obtaining the technology before you can really make a lead- time determination. MR. HELLMAN: Is the California standard of 0.41 hydrocarbons, 9 CO, and 0.4 NO in your judgment more or less stringent than the federal requirement for .41 hydrocarbons, 3.4 CO, and 1.0 NO ? MR. SCHWOCHERT: Well, it's certainly The California standard is less stringent for CO and more stringent for NO . MR. HELLMAN: That appears to be correct. Can you give me your CHAIRMAN JACKSON: You are losing a little of the SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS Mitt I4J-31M/M1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 387 edge here. MR. HELLMAN: Right. your opinion of the stringency of the standards taken as a package that you have to design and build systems to meet? MR. SCHWOCHERT: I guess I really don't understand \ the relevancy of that question, since really the 3.4 gram per mile standard is not a subject of this waiver hearing today. That it is not a proposed California standard, so I guess I don't really understand the question. MR. HELLMAN: What happens if it's a federal standard at the same year that the California waiver is applied for? MR. SCHWOCHERT: I guess MR. HELLMAN: Doesn't that make it relevant to this hearing? MR. SCHWOCHERT: It seems like then your agency is forced into a determination of the stringency of the standard. MR. HELLMAN: And so that you would just rather not answer the question; is that right? I've asked several other people to try to get them to give EPA some guidance or opinions on this issue, which we always request and are glad to get. MR. SCHWOCHERT: I don't think there is an answer that's really straightforward. I think in general the more stringent N0X standard the .4 grams per mile NOx is a very difficult standard, and it probably in itself is a more stringent standard. I think that I'd have to make that SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418k ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 388 general concession, that it is a very stringent standard. So that would seem to suggest that the combination that includes the .4 grams per mile NOx standard is probably more stringent. MR. HELLMAN: Thank you. One last question. The statement that you gave to us doesn't include a discussion of the cost and/or fuel economy impact as being a reason why the waiver should be denied. Since it's not there, am I correct in inferring that General Motors' position is that the cost, including the fuel economy impacts of that standard, is not one which should cause EPA to deny the waiver application? MR. SCHWOCHERTs We felt in the past that this is one of the considerations that should impact EPA's decision. Generally speaking, as we indicated in our statement, EPA has deferred this issue to California. We did not include this specific cost and fuel economy estimates because we don't know what hardware would be required to meet the standard today. If the three-way catalyst system is able to meet the standard itself without additional hardware, then the costs obviously would be essentially the same as the costs will be in 198 0 as we have announced our plans to go across the board with three-way systems in California. We do expect that if this same system is used that is, three-way catalyst systems there will be a fuel economy penalty. To achieve lower NO , one would have to assuming the catalyst hasn^t changed appreciably, we have about the same catalyst activity, one would have to increase SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (tt« HMIM4U40M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 389 the amount of exhaust gas recirculation which increases hydrocarbons. And to lower hydrocarbons again to the original value again is going to probably result in a fuel economy penalty. So, probably, if the same system is used, there will be a fuel economy penalty but we can't quantify it at this time. MR. HELLMAN: Cannot be quantified at this time; is that right? MR. SCHWOCHERT: That's right. CHAIRMAN JACKSON: Are you familiar with the LARPP study? 1 think you mentioned that you were. DR. KLIMISCH: Yes. CHAIRMAN JACKSON: And I think you also said some- thing about whether it has any hope of shedding any light on the issue of the benefits of a lower NO tailpipe standard. DR. KLIMISCH: Yes. It's the best data that's available. It's the most detailed collection of atmospheric data that's just become available. The problem is it's so detailed that no one's had a chance to analyze it. Through the APRAC organization, we've contracted with Environmental Research and Technology to analyze that data. And they are doing that now and expect to have some information on how that fits the mathematical models by the first of the year. At that point, then, it's a matter of scientific judgment in terms of how much faith one is going to put in the SMYTHE & WILSON ~ ~~ CERTIFIED SHORTHANO REPORTERS («15» MMIWW-** ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 390 extrapolations. But certainly that's better than anything we have today. CHAIRMAN JACKSON: Would you comment on whether or not there would be sufficient lead time to design your best system for production in 1982 if your decision was made some- time near the first of the year? MR. NELSON: Mr. Jackson, as we pointed out in our statement, we don't know how to meet the requirement. So until we learn how to meet that requirement, we don't know what type lead-time problem there could be because we don't know whal: technology we would have to use to meet the requirement. CHAIRMAN JACKSON: How about your best system right now, first choice system? MR. NELSON: There wouldn't be any problem. If we were going to build that, it would be like releasing the three-way system in California. We are doing that next year and the following year, and then across the board in 1980 is our present plan. And, so, we don't have a lead-time argument with this system, but if we have to develop additional capability, we can't prognosticate what lead time would be with that new system. CHAIRMAN JACKSON: Do you think there is any possi- bility that the analysis of the Clean Air Bill that's been passed by the Conference and hopefully will be passed by the Congress Friday and signed by the President over the weekend will give you any reason to reevaluate your position with regard to the California NOx standard? SMYTHE & WILSON CERT1FIE0 SHORTHAND REPORTERS («1i) ------- I 7 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 391 MR. SCHWOCHERT: Although there's probably some small possibility that it might affect our position, I think basically it would not because our basic position is one of we are questioning moving ahead in this regard from it being a direct control strategy because of the oxidant/NOj trade-off situation. So, basically, that's our basis for requesting that EPA deny the waiver. It's not going to affect that aspect of our position. CHAIRMAN JACKSON: Wait a minute. You just jumped stories on me. A while ago you said your basic goal was to go ahead and target from .41 because that was in the law. Now you have said it won't make any difference. MR. PETERSEN: Can you repeat the question, Mr. Jackson, because I'm not sure we understood it. CHAIRMAN JACKSON: I am questioning whether or not an analysis of the hoped-to*-be amended Clean Air Act would make any difference in your position with regard to the .4 NO standard. Do you think there is a possibility? X MR. PETERSEN: What part of our position? CHAIRMAN JACKSON! I'm not sure. MR. SCHWOCHERT: I tried to answer CHAIRMAN JACKSON: Obviously, one part would be your determination to continue development work towards .4 because it's in the federal law. Obviously, that would change. MR. PETERSEN: I think it would be inappropriate for us to speculate on that part of our position now. There are other parts of our position. Mr. Schwochert responded to one, SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS <4«*> S43-31MMU-M** ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 392 and that wasn't the part that you were interested in, the air quality aspect. CHAIRMAN JACKSON: I think the air quality aspect thing of it is connected as I understand it from your scientists, would be evaluated based on looking at the results of the LARPP as opposed to amendments to the Clean Air Act. MR. PETERSEN: I think that's what Mr. Schwochert said. MR. SCHWOCHERT: I don't think that I'm not aware of anything that would change our basic position relative to the bill that left the Conference Committee as we understood it. CHAIRMAN JACKSON: In other words, a higher CO number wouldn't change your position? MR. SCHWOCHERT: I am sorry, Mr. Jackson, I don't understand what you mean by "a higher CO number." CHAIRMAN JACKSON: Well, you have said before that you realize that the statutory requirements are the ones that apply to you. That is, the 3.4 CO number. I am just suggest- ing you look at a 9 in combination with a .41. Does that change your position with regard to technological feasibility of meeting .4? And I asked it that way because I didn't want to get the answer that well, the federal law requires this. I'm trying to put you behind the amendments to the federal law. MR. SCHWOCHERT: With respect to the feasibility of meeting .4 grams per mile NO. whether the standard is 9 or 3.4, right now we do not have the technology to meet either SMYTHS A WILSON CERTIFIED SHORTHAND REPORTERS (41»> ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 393 standard. CHAIRMAN JACKSON: Would you change any of your development work? MR. SCHWOCHERT: I think in general the answer probably would be no, that we would proceed to work on systems that we think have the capability of meeting .4 grams per mile N°x. CHAIRMAN JACKSON: If you weren't concerned so much about the level of CO, certainly you wouldn't be concerned about 3.4. MR. SCHWOCHERT: That does impose upon us another concern, because we do feel that we are I guess a first- line system, if you will, that we would prefer to consider having potential to meet .4 would be just a plain three-way catalyst system. But 3.4 grams per mile CO, based on what we know today, we would have to add an oxidizing converter behind the three-way catalyst, we think, to achieve that CO control. That presents some additional NO control problems that we don't completely understand. We do also see an increase in NO across the oxidizing converter. We don't completely understand that. I don't know if it's the inability to measure ammonia correctly or not, but it appears that the increase is greater than one would anticipate based on present ammonia measurements that one can make. So, the system would be different, perhaps, if we had 3.4 versus 9. But it still wouldn't change our basic development program. We would still continue along the same 8MYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-3194Mtt-3QM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 394 basic lines, I think. CHAIRMAN JACKSON: A question with regard to your position on diesel technology. You said the option with reqard to 100,000-mile durability wasn't really an option, and the lower standard was technologically infeasible. I think, Mr. Nelson, you said that the reason that it wasn't an option was because it took so much longer; is that correct? MR. NELSON: The reason it isn't an attractive option is because it's double as expensive as the present pro- cedure, takes twice as long, it would be much more time- consuming and complex to go through a certification process in that manner. We can just double everything. So, it doesn't appear attractive. The main basis for not being very excited about the optional 100,000 mile requirement relates to the fact that ARB apparently felt that it was equivalent or at least it was equivalent to the atmosphere and, therefore, it would be an option. If it's equivalent, I don't see any point in trying to develop that requirement. We don't have experience I did point that out, too that would help guide us. It's a guessing game on that requirement until we have more time to look at it. CHAIRMAN JACKSON: But you are not making a judgment that it's technologically infeasible to run 100,000 miles? MR. NELSON: I didn't make that determination, no. CHAIRMAN JACKSON: What you are saying is there are a lot of practical reasons why you don't want to run 100,000 8MYTHE A WILSON CERTIFIED SHORTHAND WPORTeRS «1 ) WS-31 30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 395 miles as an option, but you are not saying it's technologically infeasible? MR. SCHWOCHERT: It's not technologically infeasible to run 100,000 miles, but if it's equivalent from the atmos- phere standpoint we think it, too, is technologically infeasi- ble to meet that requirement since we think it's technologically infeasible to meet .4. So from that standpoint we think it's technologically infeasible. CHAIRMAN JACKSON: Let's assume you don't worry about whether it's equivalent or not. Let California worry about that. MR. SCHWOCHERT: Well, then, we can't make that determination. We don't have enough information to make that determination. CHAIRMAN JACKSON: Just the simple question of being prepared to be able to run and certify at 100,000 miles, a diesel. You make the statement that you just wouldn't offer diesels in California at the 100,000 mile requirement for certification. Are you saying you wouldn't do it because it's technologically infeasible, or you just don't want to go through the cost of running a 100,000-mile certification? MR. SCHWOCHERT: We don't know if it's technologically infeasible because we don't have the information that one needs to make that determination. We have questions about the ability of diesels to even meet one gram per mile for 50,000 miles, as a matter of fact, right now. Right now we feel that we cannot meet one gram per mile for 50,000 miles. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS <4*8) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 396 CHAIRMAN JACKSON: How about 1.5 for 100,000? MR. PETERSEN: How about two for 50? CHAIRMAN JACKSON: I'm talking about the 1.5. MR. HELLMAN: So, then, it's your position that it's not technologically feasible to meet 1.0 grams per mile NO for 50,000 miles with a diesel engine? MR. SCHWOCHERT: Right today we don't know how to do that. With our present experience, we don't know how to do that. MR. HELLMAN: Present experience and present hard- ware? MR. SCHWOCHERT: That's right. In order to achieve that level of NO control, we believe that.we need to use exhaust gas recirculation. And there are some unknowns associated with the use of exhaust gas recirculation on diesel engines in our mind right at this time. MR. HELLMAN: That doesn't rule it out from being a possibility? It's just that you have not done the developmen work that would allow you to draw that conclusion? it's an unknown? MR. SCHWOCHERT: That's right. We haven't resolved all of the problems that we have uncovered at this time. CHAIRMAN JACKSON: Gentlemen, thank you very much. Take about a five-minute break. (Short recess.) MR. JONES: Good afternoon. My name is William Jones, Manager of Energy and Emissions Standards for American Motors. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) S43-3194/461-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 397 American Motors appreciates this opportunity to present our brief testimony pertaining to California's request for a waiver of preemption to permit California to enforce its 1980 and later oxides of nitrogen standards and test procedures. These standards and test procedures apply to passenger cars, light-duty trucks and medium-duty vehicles. Based on our previous waiver hearing statements concerning our experience and lead-time requirements for the 1.0 gram per mile NO level, we believe the Environmental Protection Agency is cognizant of the facts as they would pertain to the 0.4 gram per mile NO level proposed for the 1982 model year. In brief, American Motors as a low-volume vendor- dependent producer needs approximately two extra years of development and prove-out time when the NOx standard drops to a level that forces use of new total-system technology. We must acquire the new basic total-system technology externally as a total system, and this is why we would need a special delay of about two sears. Further discussion on our part would not provide any new input to this hearing. For the record, I have attached to this statement our November 23, 1976, January 25, 1977 and June 22, 1977, statements before the ARB. One other comment that we have, just to maintain consistency, we also raise the problem that Ford mentioned this morning and we have been consistent in mentioning it is the way that light-duty trucks are being given actually a more stringent standard than passenger cars and particularly SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS <41S> ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 398 light-duty trucks of the 3500-pound inertia weight and below. That concludes my statement. CHAIRMAN JACKSON: Is it fair to conclude from what you said that if the industry in general can meet the standard that American Motors can likely meet that standard within two years? MR. JONES: That gives us a fighting chance/ yes. CHAIRMAN JACKSON: Do you know whether the Conference Bill provides a delay for American Motors in connection with standards in California? MR. JONES: Just secondhand. I haven't anything firm from American Motors on this position. I'm just aware of the two-year NO waiver for companies like American Motors. CHAIRMAN JACKSON: Do you know of any? MR. JONES: I certainly do. CHAIRMAN JACKSON: But you don't know whether it would apply to the standards of California or not? MR. JONES: I think it would be premature for me to comment on that. MR. HELLMAN: Mr. Jones, could you describe for us what a vendor-dependent company is? MR. JONES: American Motors. We are talking in the context of emission control systems, and that's the context in which I use "vendor- dependent." And I assume that's the context of which your question raises. MR. HELLMAN: Yes, and with respect to emission control. £ & WILSON shorthand reporters (418) S43-31MMS1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 399 That means you have to buy fuel-metering systems and catalysts? MR. JONES: That means we virtually make nothing. We certainly produce nothing that can be considered an emission control device. MR. HELLMAN: You. buy almost all of it from other people? MR. JONES: Except one small component that I am aware of at this time. MR. HELLMAN: So you do buy your fuel metering from other people, you buy your ignition systems from other people, and you buy your catalysts from other people? MR. JONES: And our air pumps and EGR belts, correct. MR. HELLMAN: You maintain that this puts you in a very difficult position with respect to meeting the standards proposed by California? MR. JONES: It hasn't up to now, but with the advent of total-system technology where you can no longer go out and buy part add-on like a catalytic converter was not really a total system. It was a component. An air pump was a component. These were like building blocks of a system, but they weren't required uniquely as an optimized package in a given model year. And this is specifically what I am referring to right now. MR. HELLMAN: Currently you buy components from other people and optimize them for your specific vehicle engine combinations? MR. JONES: Correct. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) 543-31M/461-90M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 400 MR. HELLMAN: And you will continue to do that? MR. JONES: Correct. MR. HELLMAN: Volvo buys their catalysts from Englehart and buy their fuel-injection systems from Bosch. I believe they also buy their distributors from Bosch, too. Yet in 1977 they were able to meet these standards that are pro- posed for 1982 for California. Is there something different there between that company which buys components and assembles them and cali- brates them and certifies them? MR. JONES: Other than the whole basic vehicle philosophy that Volvo has. They are a more expensive vehicle. They have fuel injection. It's been a part of their vehicle for years. The basic unit price of their vehicle is about double ours. I think you tend to maybe enjoy some luxuries that we don't enjoy when you look at how we are going to approach a control problem. MR. HELLMAN: And the reason for the difference is that their components that they buy are more expensive; is that right? MR. JONES: Certainly the fuel injection is. MR. HELLMAN: But you wouldn't say the distributor or the catalyst are more expensive? MR. JONES: No, I don't think I would make that statement. I don't know for sure, but I don't think. MR. HELLMAN: Do you know how much the fuel- injection system costs compared to carburetors? MR. JONES: We have looked at it almost on a yearly SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS M1SI ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 401 basis religiously at American Motors and have always been of the opinion that it was not a cost-effective device for our product. This doesn't mean that next year we haven't the right to change that opinion, but that has been our past opinion and it is our current today's opinion. MR. HELLMAN: And how much is this extra cost that makes it not cost effective? MR. JONES: I don't have the exact cost data, but the last recollection I had it was in the $150 to $200 cost penalty range. MR. HELLMAN: Over and above carburetion? MR. JONES: Over and above carburetion. And there were no You know, you just don't look at it on a cost basis. We tested it. So, therefore, we said, "Okay. Cost is a factor, but let's see if we can justify the cost with the merits of the system." We did not see driveability improve- ments . We did not see fuel economy improvements. We did not see emission improvements. All we saw was a cost when we were done evaluating it. Therefore, we are left with a cost that we could not absorb because of the potential that it may have in system optimization. MR. HELLMAN: If there is no emission benefit over a carburetor and the catalyst costs about the same, then you could do what Volvo did with the carburetor? MR. JONES: You are jumping gears on me. You just jumped from a current technology to a three-way catalyst system. You are not talking apples and apples anymore. You are talking about a system that happens to like the control, SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-31M/M1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 402 the preciseness, that a fuel-injection system would have. Up until now we have been able to capably adapt the carburetor to the current needs. I'm not saying that a .4 NO or a lower level NO can be addressed with a carburetor X X anymore. I'm conceding that. MR. HELLMAN: And.it's the time that it takes you to optimize these systems that puts you a year or more, as your statement says MR. JONES: No. No. If you read the attachments, and you probably haven't been able to, but we have to enter into a contractual agreement. We have to find a source that has the capability of supplying us with not just a piece that we are going to plug into our system. We now have to go out and look for a total system. These total systems, as the larger manufacturers today have indicated, are in a very crude state in technology. Especially the electronic tech- nology is changing rapidly. Can you imagine what it's like to try to get in and negotiate a contract with everything changing all over the place? You know, it's a difficult situation. That's a big aspect of it. It's not the total aspect of it, but it's a very large aspect of it. And then to get the hardware that's of a system-type, to bring it back, and to adapt it to our engine is the other significant part of it. This is what takes what we consider a minimum of a year, probably two years. MR. HELLMAN: Both the procurement and the optimiza- tion? SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-31M/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 403 MR. JONES: Yes. It's a major undertaking. MR. HELLMAN: And that takes Is it a year to year, or can you MR. JONESt We haven't done it yet, so ask me about 1980 and I'll have a better answer. Today I just can't give you an estimate there. MR. HELLMAN: You don't have anything to add over your other statements about the cost or the fuel economy impacts of these proposed regulations? As far as you are concerned, they are the same as -they were in May when you were discussing the 1.0 NO standard. MR. JONES: No, we have nothing. We would have worse than poor speculation at this point. I don't think that would be worth bringing up from our point of view. MR. HELLMAN: In your opinion, which standard is more stringent, the California standard of .41 hydrocarbons, 9 CO, and .4 NOx or a federal standard of .41 hydrocarbons, 3.4 CO, and 1.0 NO ? A MR. JONES: I'm flattered that you would ask me that question. I know you've asked it of all the other manu- facturers. And in beinq flattered with you askinq me the question, I'il try to be as direct as I can; althouqh, again, it's very, very poor speculation on my part. I would concede that .4 NOx is a more stringent requirement on system development than the CO standard differential. But this is speculation. This is something we will not have data on for some time to come. MR. HELLMAN: In the past, you have bought components SMYTHE ft WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-31*4/441-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 404 from other people and introduced them on your vehicles pretty much at the same time that they did. For example, the catalytic converter that you procured from a supplier. This new total system that you are talking about, which I assume to be integrated with electronic control of several engine parameters, that's what's going to make it different; is that right? MR. JONES: That's correct. MR. HELLMAN: You would probably purchase something that had application other than to your product; is that correct? For example, now you buy carburetors and the carburetor has uses other than for just the AMC product on which it goes? MR. JONES: That's correct. MR. HELLMAN: So the sensors that you would procure, the actuators that you would procure, would also have applica- tion other than AMC vehicles to avail yourself of the economies of scale? MR. JONES: Most likely. MR. HELLMAN: So if they are going to be used on other people's products in a given year, then they will be available to you in that year also? I'm not saying that you know what to do with them yet. We will get to that. But I am saying if the XYZ company gears up to produce 5,500,000 electronic controlled EGR valves for use in model year '81 or something like that, then you would be able to buy those in *81? MR. JONES: Yes. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (418) S43-31W481-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 405 MR. HELLMAN: So in terms of your lead time being significantly different than others, it's the fact that the XYZ company was able to do the optimization and calibration work on their vehicles while they were getting ready to produce the part and you haven't been able to do that; is that correct? MR. JONES: To a great degree, yes. MR. HELLMAN: You don't make any agreements with your suppliers, potential suppliers, to get prototype hardware for you ±o evaluate? MR. JONES: No. We get prototype. That's why I said to a great degree. Not totally. MR. HELLMAN: And you have prototype hardware of some of the components you are going to need for the early '80 California standards? MR. JONES: Yes. MR. HELLMAN: And you are working on it right now? MR. JONES: Yes. MR. HELLMAN: Then as far as you know, from what you have heard other people talking about today, they are working on it right now too; isn't that right? MR. JONES: Yes, with a qualification. What they are working on right now isn't necessarily what they are willing to share with us right now. MR. HELLMAN: So if, as Mr. Jensen said, they have generation one and generation two and generation three of some electronic gadget that you might be working with generation one and they might be working with some more advanced generation? SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-31MM11-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 406 MR. JONES: That's quite possible. MR. HELLMAN: But when they go into production, they won't produce generation one for you, will they? You will get what they produce? MR. JONES: It all depends on how the contract is worded. A contract can be pretty binding on both parties, and a contract has to be established very early in the game before any exchanges of even prototype hardware. It's a difficult MR. HELLMAN: A contract has to be established with the exchange of prototype hardware? MR. JONES: Yes. MR. HELLMAN: But a production commitment does not have to be made before you get a piece of prototype product? MR. JONES: Right. CHAIRMAN JACKSON: Thank you very much, sir. MR. BIGGERS: Gentlemen, my name is Walt Biggers, and I represent Subaru of America, Inc. We would like to comment on the State of California's request for a waiver to enforce more stringent standards for oxides of nitrogen. The Subaru system now used in California and the balance of the United States utilizes a lean combustion approach which does not require a catalytic converter to meet relatively low emission standards. Further, in contrast to other lean combustion systems, Subaru vehicles do not employ complicated engine configurations or complex carburetion and ignition systems. As a result of this, the Subaru engine is one of the simplest sold in California. Procedures and techniques SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194/4*1-J0M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 407 required for service are familiar to today's mechanics. Because of this, the car can be maintained about as easily and inexpensively as a car without emission controls over most of the useful life of the car, far beyond the statutory 50,000 miles. One problem which, appears to be inherent in our system is that as emission levels drop lower and lower, both fuel economy and performance begin to suffer. At some point, the system becomes noncompetitive in the marketplace because of these advantages. My best personal estimate of this point for the Subaru system is that at any level significantly below 0.41 HC, 9 gram CO and 1.0 gram NO , we will be forced to adopt catalyst technology. Why do we wish to avoid using catalyst? First of all, for purely selfish commercial reasons, because it will increase the cost of our car the initial cost and main- tenance costs and thereby weaken our competitive position. However, there are additional considerations which are more in the public interest and which we hope you will consider. Without catalyst, Subaru and other lean burn cars can utilize leaded fuels. This results in a 3 percent to 4 percent saving to the owner and means that lower grade petroleum stocks can be upgraded to usable motor fuels. Without catalyst, systems are not nearly so sus- ceptible to permanent damage due to fuel contamination or poisoning, accidental or otherwise. Subaru systems do not exhibit any significant SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543-3194/401-30 W ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 408 deterioration in emissions performance in the 50,000-mile EPA durability test. Our experience with cars in actual service demonstrates that with normal routine service, such as oil chanqes, spark pluq replacement, and carburetor adjustments, Subaru systems will maintain effective emission control well beyond the statutory 50,000 miles. This is important to air quality because 50,000 miles is only about half the service life of a car. Most cars still need emission control for another 50,000 miles, and this is when they are in the hands of second and third owners who are less able or likely to spend money for major service. We are confident that Subaru can continue to give good emission control in the second half of its life without placing an undue burden on its owner. V7e don't think that this will be true with a catalyst technique. Finally, the basic Subaru approach is a frugal one in terms of resource utilization. It requires less material, energy, and manpower to build and maintain. We believe that in the future, society's personal transportation needs will be best met by even smaller, simpler, and more efficient vehicles. If a costly, complex, and bulky system is required to meet emission standards, this line of evolution" will be thwarted. The standards that the CARB proposes are actually a two-tiered system. A low value for NO with a conventional 50,000-mile certification and a higher value for NO if a X 100,000-mile certification procedure is employed. Faced with SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41$) 843-31M4«1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 409 this apparent anomaly, the first question which is raised is whether a compelling need for a stringent NO standard really exists. It's my understanding, which may be incorrect, that this is really a NO /hydrocarbon trade-off because no system that I am aware of, except the three-way catalyst systems, really demonstrates much NO deterioration. Nonetheless, 50,000-mile stndards are much lower than 100,000-mile standards. If there is a compelling need for a low NOx standard, then why is the 100,000-mile standard so disparate from the 50,000-mile standard? Secondly, it would appear that the 100,000-mile durability procedure is clearly in conflict with Section 202(a) and Section 202(d) by using concepts beyond "useful life" for setting standards. Finally, we see absolutely no feasibility in achiev- ing 100,000-mile durability, or even 50,000 miles, within the constraints of the allowed maintenance. As now stated, with no spark plug changes permitted, 100,000-mile durability seems impossible for gasoline engine. We would imagine that it is extremely difficult for diesel engines as well. In our opinion, neither Congress nor the various regulatory agencies have adequately considered or faced up to really what may happen during the second half of a vehicle's normal service life. In our view, the California regulations force the use of three-way catalyst for most manufacturers. We have seen some problems already in maintaining emissions performance in actual field use. And here I'm not referring SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 410 to a three-way catalyst. I'm talking about conventional catalyst systems. Systems being proposed to meet 0.4 gram N0X are far more complex and costly from a service viewpoint than existing systems. Does it seem reasonable that field experience with these new systems will be even as good as it is with conventional catalyst systems? A substantial commitment to three-way catalyst technology has already been made by GM and others. Surely it would be wiser to wait until the performance of these systems can be judged before adopting regulations which force industry-wide commitment to an as yet unproven technology. Now we've heard some discussion today about two manufacturers who produce three-way catalyst cars, and I think we all commend their industry and their success in this. But I don't know their actual sales figures in California# but I would guess that they must be under 10,000 vehicles. And that's a very small percentage of the total cars and really seems to me some question as to whether that's an adequate sample. And they have not been in service very long. Anyway, because of these reasons, we urge denial of this waiver. Any questions, I'll be happy to try to answer them. MR. HELLMAN: Mr. Biggers, is it fair to characterize your testimony as that you are not taking a strong position against the feasibility or the lead time or the cost or the stringency determinations that EPA has to make, is that Subaru of America would just rather not meet these standards? MR. BIGGERS: No, I don't mean that at all. Subaru 8MYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) 543-3194V 461<30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 76 27 28 411 in Japan is We don't have anything like the publicity that Honda does or the other people, but in Japan Subaru characteristically is the first company to meet Japanese standards. Generally speaking, we meet them for six months to a year ahead of our major competition. We were the first Japanese company to complete certification to the latest Japanese standards with our full product line. And I think our engineering people are very' aggressive. We have three-way catalyst systems under development, and we can adopt three-way catalyst technology as easily as any other Japanese company. And I think we all have somewhat of a disadvantage because electronic technology and some of the really in terms of hardware technology, I think Japan is maybe a year to two years behind the rest of the world, at least behind the United States. But we are confident that we can meet the standards, at least as far as one gram, if anyone else can. And that's not really the issue. The issue is we think we have a system which is representative of few other systems that are similar that really is a maybe much better answer to what we need in society, especially if you consider the long-term durability aspects than catalyst systems. If you want to be a little paranoid, you can look at what might happen in the case of a major fuel shortage in this country. Suppose we don't have enough refinery capacity a couple years down the road to make all the unleaded gasoline we need. Suppose there is another major outbreak in the SMYTHE & WILSON CCRTIFIED SHORTHAND REPORTERS (418) M3-91M/M1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 412 Par East or Middle East, and suppose that there's a shortage for whatever reason of unleaded gasoline. Do you really think if there's leaded gasoline available people with catalyst cars are going to walk to work or not go to work? I think they are going to get a funnel and put leaded fuel in the car. The other question arises as to what happens 60, 70, 80,000 miles down the road. Those cars are still in use. We'd like to believe that they still have adequate emission control systems. We know our kind of system. We are not the only people who make systems that are like this. We think our kind of system basically doesn't have the disadvantage of having very expensive components that may have to be replaced in order to make it meet its to furnish good emissions over almost the total life of the car. I'm really very seriously afraid when we talk about systems that have costs of $350 to $500 or $600 what's going to happen at 60,000 miles or 70,000 miles if it's determined that there really is a problem for whatever reason with these cars., Do you think that it's going to be politically possible for the State of California to make people change $100 or $200 systems? That's really what our interest is. MR. HELLMAN: So that you are in favor of systems that last a long time? MR. BIGGERS: Yes, and systems that are simple. In my job as Manager of Subaru Technical Center, we are very directly involved in the service aspect. We have a durability fleet of privately owned vehicles in California SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 84S-31M/4S1-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 413 which numbers about 200 vehicles. In the durability fleet, we also have a few competitive makes, and so we are verv much aware of the problems of servicinq vehicles. You've got to remember that when you get 50,000,000 or so catalyst cars on the road or three-way catalyst cars on the road, it takes a lot of mechanics to service those, and all of them have to know how and have to be trained and have to have the proper equipment and have to be able to do it if it's going to be effective at prices people can afford to pay. We think our kind of system has some inherent advantages in this area that are not shared by the more expensive, more complex systems. MR. HELLMAN: As far as you know, what needs to be serviced on a catalyst system that's not serviced on your system? MR. BIGGERS: Well, I'm not familiar with all the systems. I am more familiar, I quess, with some of the Japanese systems. I'd say that if you open the hood of a Subaru or a Honda or a Mitsubishi product in California and look at the systems I think, first of all, you'll see a lot more parts, generally speaking, on the catalyst systems, more hoses, more controls. The systems, I think, are more complex. I think that part of the problem right now the State of California alludes to tampering and maladjustment as being a major problem of system degradation in the field. I think there is some tampering; although, to be honest with you, we didn't see very much of it. It's really quite small, SMYTHE & WILSON BEATIFIED SHORTHAND REPORTERS («1S) 543-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 414 at least on our product and the vehicles that we service. As I told you earlier, I don't think tampering is ever done spontaneously. I think it's done in a direct response to an express need by the consumer. The maladjustment, to a certain extent, is a direct we can all do a better job of training our service people. And Subaru, of all the companies, we are one of the newest people to sell vehicles in this country. We have further to go than a lot of other people. We've still got a long ways to go. We've done a qood job of traininq our people, but we are nowheres near our service needs at this point are nowhere near what they ought to be. Part of the problem is that even our system is difficult with the people we get for service, it's diffi- cult to train them to do it properly. With the more complex systems, I think it would be far more difficult to service and to train people to service properly. MR. HELLMAN: You mentioned Honda and Mitsubishi. Am I to infer from that that they are two other manufacturers that have a technology which is the type of technology you apparently prefer? MR. BIGGERS: Well, I don't want to exclude other people. I think diesel technology is comparable, and that there may be there are more expensive components to some extent in terms of fuel-injection pumps. But, generally speaking, they are relatively long-lived, and I think only a small part of them really need service or replacement at 100,000 miles. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (419) &43-31M/4S1-309* ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 415 MR. HELLMAN: Considering the Honda approach for just a minute here, I think the California Air Resources Board in their statement and submittals to the record has indicated that Honda may very well have a good chance of meeting this standard that they propose for 1982. If vou don't like being forced into using a more complicated catalyst technology, to use your words, why couldn't you use their technology? MR. BIGGERS: Well, we could use our own technology. We think we can meet the standards with our technology. I don't think it would be commercially viable. I think that with our lean system at something like current federal standards we are maybe 15 to 20 percent better than a system that's basically stoichiometric. We lose almost all of that in order to get to one gram NO . So we lose 15 to 20 percent from two grams to one gram and with nine grams CO. We can probably go with 0.4 N0X with our system, but we think the fuel economy penalty would be on the order of another 20 percent. And we don't think that that faced with three-way catalyst systems that are probably not much worse at four-tenths of a: gram thaft they, are at, one. gram, we don't think we can stay in business with that kind of fuel economy. MR. HELLMAN: So what's forcing you into a technology that you would rather not go to is fuel economy rather than emissions? MR. BIGGERS: Yes, but it's all part of the same SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS HI 6) S44-31M/441-MM ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 416 package. I'd also like to address the comments that ARB made and sort of alluded to Honda. I frankly have never heard Honda make a commitment that they could meet four-tenths of a gram NOx with competitive fuel economy. I heard Mr. Austin make a reference to that effect, but I've never seen a statement to that effect. I think it's kind of noteworthy that Honda has been conspicuous by their absence at any of these hearings in the past year or two. I don't know what their position is. I don't see any fundamental reason why they can go much lower than we can or why their system is really inherently much different than ours in terms of this capability at those low emission levels. MR. HEELMAN: According to your estimate of relative stringency to the standards, would you care to offer a comment on whether vou thought the California standards of .41 hydrocarbons, 9 CO, and 0.4 NO were more or less stringent than the federal standards of .41 hydrocarbons, 3.4 CO, and 1.0 NO ? MR. BIGGERS: I think clearly the California standard is much more stringent for us. I think even than catalyst vehicles. The carbon monoxide, CO level, is by far the biggest factor. The latest estimate I've seen is that and this is based on actual performance for '76 and '77- California model cars is that to go from 1.5 gram N0x at 9 grams CO is only SMYTHE & WILSON CERTIFIED SHORTHANO REPORTERS (415) 543-3104^461*3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 417 a three to five percent fuel economy penalty. But to go simultaneously to a 3.4 gram CO adds another 15 percent well, another 12 to 15 percent. MR. HELLMAN: And why is that? MR. BIGGERS: Primarily because our system is a lean system. One of the things we run into, if we lean the mixture too much, it's a combination of driveability, lean surge problem, and hydrocarbon misfire. Now we can handle the hydrocarbon by converting it essentially in our exhaust system. But it gets converted not all the way, it gets converted to CO. So, we end up with something that starts out as hydrocarbon at the exhaust valve and ends up as CO at the tailpipe. The only way we can oxidize it is to put in more heat at the exhaust valve, which means retardinq the timing. So the net effect is that our system is maybe some- what more penalized by goinq to lower CO standards than the other systems, although I think all the catalyst systems have a similar problem. MR. HELLMAN: If the partial oxidation of hydro- carbons to CO you indicated was dependent on the temperature, oxygen level in the exhaust also has something to do with it; doesn't it? MR. BIGGERS: That's right, but you can't have MR. HELLMAN: The air pump on your double wall insulated reactor and exhaust system, would that heat up some of the hydrocarbon? MR. BIGGERS: No, it wouldn't. The problem is SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (413) 543-3194/461-3096 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 418 because our system depends on a very careful balance of just enough oxygen. If you add air to an air pump, you also cool the system and the heat turns out the heat to us is more important than the extra oxygen as long as we have enough oxygen. And one of the reasons why our system works as well as it does is because the air suction valve which we use happens to give us almost exactly the right air flow with load and speed that we need to do an optimum job over the whole range. If we added more air, we'd drop the reaction tempera- ture so low that there probably would be no net gain. MR. HELLMAN: If you have enoucth air for an optimum job. then what you are saying is the optimum for your system is 9 CO; is that right? "Optimum" is a relative word; it's a value judgment. MR. BIGGERS: It depends on the hydrocarbons and NOx both. MR. HELLMAN: All right. I have a question for you from the Air Resources Board. Has Subaru compared the cost and complexity of the Volvo three-way catalyst system with the cost and complexity of the conventional oxidation catalyst system used by Volvo to meet much less stringent 1976 California standards? MR. BIGGERS: I haven't. And if the factory has, I don't know about it. I think we have done some rough analysis of comparing our system with existing technology to what we think a three- way catalyst system would cost. We think our existing system is a little hard to determine what part of the total cost of SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (415) 543*3104/461-3098 ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 419 the vehicle is really represented by the emission control system. But my best estimate is that our existing system is about $150 the cost of it is about $150 incrementally over what our, essentially, uncontrolled vehicles would be. We think that to add three-way catalyst, we are talking about an additional $300 to $500. That's a pretty wide band, but that's about as close as we can estimate it. MR. HELLMAN: Would this cause your cars to be noncompetitive? In your statement, you indicated on Page 2 that will increase the cost of the car in terms of initial cost and weaken your competitive position. However, if, as you indicated, other manufacturers are going to more expensive technology, wouldn't this just more or less keep you in the same relative position? MR. BIGGERS: Yes, I suppose in a way to some extent. One problem we have, we are a small manufacturer and our friends at General Motors are very strong and any com- petitive situation which requires a high degree of technology, whether it's emissions or air bags or whatever, I think that General Motors the more complicated the system is, the better their competitive position because of their strength in these areas. In contrast, the poorer our position is and the poorer the other manufacturer's position is. CHAIRMAN JACKSON: Thank you very much, sir. Anybody else have anything to say? This hearing is adjourned. SMYTHE & WILSON CERTIFIED SHORTHAND REPORTERS (41S) S43-3184/M1-30M ------- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 420 STATE OF CALIFORNIA ) o ss. City and County of San Francisco ) I, RICHARD S. ADAMS, a Notary Public in and for the County of Marin, and I, JERRY R. SMYTHE, a Notary Public in and for the County of Contra Costa, do hereby certify: That we are disinterested persons herein; that the foregoing United States Environmental Protection Agency public hearing on the California Waiver Request was reported in short- hand by us, Shorthand Reporters of the State of California, and thereafter transcribed into typewriting. We further certify that we are not of counsel or attorney for amy of the parties to said hearing, nor in any way interested in the outcome of said hearing. IN WITNESS WHEREOF, we have hereunto set our hands this 8th day of August, 1977. i I C- "uS. ¦* . ' ' ./ "V y'j - - NOTARY PUBLIC in and for the County of Marin, State of California NOTARY PUBLIC in and for the County of Contra Costa, State of California SMYTHE & WILSON CERTIFIED SHORTHANO REPORTERS (419) M34IMM1-30M ------- |