Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
May 20, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 3629 words
HEADLINE:
TESTIMONY May 20, 1999 CAROL M. BROWNER ADMINISTRATOR SENATE
ENVIRONMENT AND PUBLIC WORKS CLEAN AIR, WETLANDS, PRIVATE PROPERTY AND NUCLEAR
SAFETY EPA S PROPOSED SULFUR STANDARD
BODY:
TESTIMONY OF CAROL M. BROWNER, ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY BEFORE THE SUBCOMMITTEE ON CLEAN AIR,
WETLANDS, PRIVATE PROPERTY AND NUCLEAR SAFETY OF THE COMMITTEE ON ENVIRONMENT
AND PUBLIC WORKS UNITED STATES SENATE May 20, 1999 Thank you, Mr. Chairman and
Members of the Subcommittee, for the opportunity to appear here today to discuss
the U.S. Environmental Protection Agency's (EPA) proposed Tier 2 standards for
cars and light-duty trucks and the accompanying proposed low
sulfur requirements for gasoline. Our proposal
follows from sweeping changes over the past couple of decades in how Americans
move around. We've gone from under 100 million light vehicles in 1970 to 200
million last year. And we're driving farther -- from just over one trillion
miles per year in 1970 to just over two trillion miles per year today. And as
you probably know, there has been a dramatic shift in recent years toward sales
of the larger light vehicles meeting emission standards 2 to 5 times less
stringent than passenger cars. All indications are that these trends will
continue indefinitely into the future, and they will have significant impacts on
increasing emissions from motor vehicles. Our proposal, over the next decade,
will improve and maintain the nation's air quality by phasing in both cleaner
vehicle technologies and cleaner burning gasoline using
flexible, market driven mechanisms that are fair to industry with minimal
consumer cost while preserving vehicle choice. TIER 2 REPORT TO CONGRESS These
issues were highlighted in the context of the Clean Air Act's requirement that
we reassess light-duty standards. We were to report to Congress on three issues:
whether there would be an air quality need for new tailpipe standards in the
post-2004 time frame, whether such standards could be technologically feasible
and whether they are cost-effective. Last year, we reported to Congress in the
affirmative on all three issues. Let me say a few words about the specific
evidence in this report. Our projections identified large parts of the country,
involving about one hundred thirty million residents, that would be at or near
unhealthy levels of pollution in the middle of the next decade, even with all
expected control programs in place. A large part of that problem will be ozone,
which reduces the lung function of otherwise healthy people and increases
hospital admissions for people with respiratory ailments like asthma and which,
under longer exposures, permanent lung damage can occur. Particles are the other
major part of the problem because they can penetrate deep into the lungs and are
linked with premature death, increased hospital admissions, and changes in lung
tissue. Other environmental problems related to pollution from motor vehicles,
such as agricultural damage, impaired visibility, and nitrogen deposition in our
nation's waterways, will also remain a concern to citizens across the nation.
The vehicles we are discussing today -- cars, minivans and full- size vans,
pickups, and sport utility vehicles (SUVs) -- are big contributors to air
quality problems. For example, they will be responsible for about 20% of ozone
causing NOx emissions nationwide and approach 40% in some metropolitan areas
like Atlanta in 2004. And since more vehicles are being purchased and more miles
are being driven, total emissions from these vehicles will increase after 2010
eroding the progress made by local and state government in cleaning the air.
This was a large part of the evidence we reported that led to our decision to
propose new standards for this vehicle class. In our Tier 2 Report to Congress,
we also demonstrated that much lower vehicle emission standards were within
reach of current emission control technologies; improvements in today's
technology, not new breakthroughs, are what will be needed. In fact, many
vehicles being sold today in California and the Northeastern U.S. are already
employing technologies that can achieve lower emission levels when operated on
low sulfur gasoline. In addition, as a technology demonstration
at EPA's laboratory, we have made progress in significantly lowering emissions
from a large pickup and a popular SUV by making calibration and catalyst changes
to the emission control systems. In fact, we have been able to achieve the
proposed standards on both of these vehicles. Since these large emission
reductions would come at a fairly modest estimated cost, we reported that new
standards beyond the National Low Emission Vehicle Program would be
cost-effective. These findings on air quality need, feasibility, and
cost-effectiveness formed the basis for our recent proposed rule. We also
determined that lower sulfur gasoline will be needed to allow
these advanced emission control technologies to be effective in reducing
emissions. There is widespread agreement that sulfur degrades
emission control performance for all vehicles, reducing the effectiveness of the
catalyst in converting pollutants such as hydrocarbons, carbon monoxide,
nitrogen oxides, and particulate matter. Further, a combined industry research
project by the Coordinating Research Council, a consortium of oil and auto
companies, as well as other research, has found high levels of
sulfur permanently damages vehicle emission controls.
Unfortunately, this problem will get worse in the future because as emission
levels are lowered, the more effective control systems are even more sensitive
to sulfur. So gasoline sulfur levels must be
reduced -- significantly -- to enable cleaner emission control technologies to
work to their full potential. PROCESS Our proposal is the culmination of an
extensive deliberative process during which we worked intensively with a wide
range of stakeholders. Before completing the proposal, we met repeatedly at high
levels with the vehicle manufacturing industry, the oil refining industry
(including a special outreach process with small refiners), states,
environmental organizations, and other parts of the federal government. We
logged many hours at all management levels in meetings with individual companies
and trade associations, state organizations, and others to understand the issues
and the capabilities of each group to respond to these concerns. The
perspectives of these many stakeholders are reflected in the design of our
proposed program and the principles on which we based it. PRINCIPLES Through
this broad deliberative process, we developed a list of overarching principles
for the design of a strong, national program, including: -- Do not constrain
consumer choice of vehicles or driving styles, either due to cost or technical
factors; -- Treat vehicles and fuels as one system; -- Hold cars and light
trucks to the same emission standards, since in the vast majority of cases they
are used for the same purposes, and the fleet mix is shifting toward larger
vehicles; -- Set emission standards that build on the success of the National
Low Emission Vehicle Program (NLEV) and that are fuel neutral, so that it
doesn't matter whether the vehicle is fueled by gasoline,
diesel, or an alternative fuel; -- Make sure that the standards and accompanying
program not preclude the introduction of low emission and fuel efficient
technologies; -- Employ performance standards and provide both automakers and
gasoline refiners a menu of flexible provisions for
demonstrating compliance with the program; and -- Provide sufficient lead time
to allow automakers to design even their heaviest light-duty trucks to meet our
standards and to allow refiners to install the necessary equipment. VEHICLE
PROGRAM The auto and oil industries and other stakeholders provided meaningful
suggestions during the development of the proposal. Based on our work with the
stakeholders, we drafted a proposal, which we then shared and revised based on
our discussions with other parts of the federal government, including the
Department of Energy and the Office of Management and Budget, to ensure that the
proposal balanced concerns regarding cost, benefits, and timing. We believe that
the Tier 2/Gasoline Sulfur standards that we proposed on May 1,
1999, represent a common sense, cost- effective plan resulting from the many
levels of cooperation we experienced in this process. Our proposal consists of
two parts: Tier 2 emission standards and gasoline sulfur
requirements. The vehicle standards require manufacturers to meet a corporate
average NOx standard of 0.07 grams/mile -- a 77% reduction from NLEV levels and
a more than 90% reduction from Tier 1 levels. These standards are phased in over
time beginning in 2004, and the heavier vehicles (between 6,000 lbs. and 8,500
lbs. GVWR) are given the greatest amount of time, until 2009. During the
phase-in period, the remaining cars and smaller trucks will continue to meet
NLEV levels, and the heavier trucks, which are currently certified to Tier 1
standards, will have to meet average levels of 0.2 g/mi NOx. In meeting the
corporate averages, manufacturers will have a number of certification "bins" to
choose from. The bin with the highest emission levels will accommodate vehicles
certified to 0.2 g/mi NOx, with corresponding standards for hydrocarbon, carbon
monoxide and particulate emissions. We believe this bin will provide substantial
flexibility for manufacturers to comply with the Tier 2 standards while still
meeting their customers' desires for larger trucks and SUVs, including possible
diesel- fueled vehicles. Our proposal also reduces evaporative emissions from
all vehicles by 50%, and extends the useful life requirements for these vehicles
to 120,000 miles to more properly represent the actual operating life of today's
cars and trucks. Thus, although much of our effort was focused on ensuring
reductions in NOx emissions, our program will also result in fewer hydrocarbon
emissions. These reductions will help states to improve and maintain their air
quality for many years. We have designed this program to achieve the
environmental goals as early as possible while minimizing the burden on the
affected industries. In addition to allowing vehicle manufacturers to choose
from emission standard bins above and below the average standards, we have
provided other compliance flexibilities for manufacturers. In addition to the
certification bins, manufacturers will be able to use an averaging, banking, and
trading program when meeting the corporate average standards. Under this
program, manufacturers who surpass their corporate average standard in a given
year can bank or trade NOx credits for future use or for use by manufacturers
that are having trouble meeting the corporate average standards. Other
flexibilities include the phase-in and interim standards. Overall, we have
estimated that these requirements will only result in modest increases to the
cost of producing these vehicles. We estimate that the technologies required for
cars and the smaller light trucks will average about $100/vehicle. The heavier
trucks will require more changes, particularly since they are starting from less
stringent standards; this technology will average about $200/vehicle.
GASOLINE SULFUR PROGRAM To enable the emission control
technologies necessary to meet these proposed standards, we have proposed a
national gasoline sulfur standard of 30 ppm on an annual
average basis, with a maximum cap of 80 ppm in 2004, and a credit program to
allow for compliance as late as 2006. Based on the information I mentioned
earlier, we believe a national program is the best option, due to the permanent
damage that sulfur causes on vehicle emission control
performance and the magnitude of environmental benefits to be achieved from this
program. Tier 2 technologies anticipated to be used to meet emission levels
required to address our air quality concerns are expected to be even more
sensitive to sulfur than today's technologies, and these new
technologies simply cannot be exposed to high sulfur levels and
continue to perform as designed. Current information indicates that these
catalysts will have a partial but permanent loss in performance if they are
exposed to high sulfur levels, even for a short period of time.
This permanent damage can on average mean a loss of as much as 50% of the
emission-reducing capacity of a catalyst, which for some vehicles means the
emissions reductions of the new standards are lost. For example, a 1999 Ford
Taurus designed to meet NLEV standards that was a part of the industry testing
program only recovered 40 percent of its capacity after a short exposure to
gasoline with a sulfur content typical of
current gasoline. As vehicles are required to maintain tighter
controls on operations in order to meet low emission standards over a range of
operating conditions, the ability of the catalyst to reverse the negative
sulfur impact is further lost. The role irreversibility will
play on vehicles which travel across the country also supports the need for a
national program. A regional sulfur control program would
compromise the ability of a vehicle/fuel program to achieve the air quality
reductions needed to protect public health by limiting the effectiveness of the
emission control systems in "high-sulfur" regions versus
"low-sulfur" regions. In addition, clean vehicles which for any
number of reasons might travel to a "high-sulfur" region would
be irreversibly damaged. Hence, tighter emission standards would require not
only substantial reductions in sulfur levels, but timely and
uniform reductions across the country to protect the new technology. There are
additional reasons for a nationwide sulfur control program.
Gasoline sulfur reduction is essential to improve the emission
control performance of current technology vehicles. NLEV vehicles being sold
today in the Northeast and by 2001 in the rest of the country using high
sulfur fuels will have NOx emissions about 140% greater than
NLEV vehicles operated on 30 ppm gasoline. Sulfur reductions
will result in emission benefits from existing vehicles as well as enabling
future Tier 2 vehicles, including vehicles using fuel efficient technologies. A
national program will provide broad environmental and health benefits including:
reduced air tonics, reduced acid rain, improved visibility, reduced nitrogen
deposition in our nation's waterways, and reduced agricultural damage. Finally,
a national program will not preclude the introduction of fuel efficient
technologies, such as gasoline direct injection, and will
ensure compliance with the vehicle standards across the nation. We believe there
are a number of promising technologies available to refineries to remove
sulfur. Several technologies have been developed that reduce
the capital investment, the loss of octane value, and the energy consumption
involved in desulfurizing gasoline compared to conventional
methods. Two specific technologies, CDTech and OCTGAIN, were closely examined
during the development of this proposal and we believe they are cost- effective
viable technologies for removing sulfur from gasoline. In
addition, a number of refineries and other companies are exploring other
technologies. We believe the industry will make extensive use of these
technologies in meeting the proposed requirements. To enhance the flexibility of
compliance for the oil industry, we have proposed to provide refiners with two
additional years, until 2006, to comply with the proposed requirements through a
voluntary banking and trading credit program. This credit program will allow
sulfur credits to be generated as early as 2000 by refineries
making early reductions in sulfur levels. To provide some
protection to the Tier 2 vehicles that will be phasing into the fleet in this
same time frame as the credit program for refiners, refiners will meet a maximum
cap standard of 120 ppm in 2004 and of 90 ppm in 2005 as well as actual in-use
average sulfur level standards that are substantially lower
than current sulfur levels. The rule is expected to be
finalized at the end of this year. Under this proposal, refiners will have four
years for planning and construction, and then an additional two years during
which refiners could use credits to meet the phase-in of the 30 ppm average
standard. In addition to these provisions, the particular problems of small
refiners have been carefully considered. We convened a panel under the Small
Business Regulatory Enforcement Fairness Act (SBREFA) to evaluate the potential
impact on small refiners of our proposed gasoline sulfur
standards. The panel used the Small Business Administration definition of small
refiner based on the total number of employees in the corporation, including any
non- refining functions. Based on the panel's recommendations, we have proposed
to allow refiners employing no more than 1,500 people an additional four to six
years (beyond 2004) before they will be held to the 30 ppm average/80 ppm cap
standards. In the interim, about half of these small refiners would have to
reduce their sulfur levels below 300 ppm, but they will not
have to meet the same levels that the majority of refiners will be held to in
2004. This delay will allow small refiners to make the required investments over
a longer time, and we expect all of them will be able to comply by the end of
the delay period. Throughout the SBREFA process a number of specific issues were
identified as concerns. We have identified these issues in the proposal and are
asking for comment on how to address these concerns. As an example, in the
proposal, we have asked for specific comment on other potential definitions for
small refiners -- ranging from the crude oil processing capacity of the refinery
to counting employees only involved in gasoline production.
While the purpose of these provisions is to provide some relief to the smallest
refiners, we are looking forward to working with the entire industry to find the
most appropriate definition. A number of other issues are outlined in the
proposal where we are keenly aware of the concerns likely to be expressed and
are seeking input and ideas from the public and the industry. A specific example
is the concerns expressed by refiners regarding the time constraints on being
able to construct the necessary desulfurization equipment in time to meet our
standards or, hopefully, to generate credits through early reductions. We have
proposed to work with industry and the states to streamline the construction
permitting process to minimize the potential that permitting could be a
roadblock to early compliance. In addition, we are requesting comments on a
general hardship provision. Although I believe our proposal expresses a clear
willingness to design the most workable program possible, I do not want to
minimize the cost and effort that the oil industry will expend in meeting the
proposed standards. We estimate that it will cost 1-2 cents/gallon to reduce
gasoline sulfur levels to the proposed standards. However with
the flexibilities we have outlined in the proposal and the advances in
desulfurization technologies that have occurred in recent years, we believe we
have outlined a sound and effective proposal for reducing sulfur from
gasoline. Since diesel cars and light trucks will also be impacted by
the proposed vehicle standards, we've also released an Advance Notice of
Proposed Rulemaking which raises questions about the need to control diesel
sulfur levels to enable these technologies to meet the Tier 2
standards. After consideration of comments received on the need to control
diesel fuel sulfur levels, we plan to issue a Notice of
Proposed Rulemaking late this year, so that refiners have this information at
the same time that they receive our final regulations for gasoline
sulfur control. Since this decision has significant implications for
the refining industry, we would work with representatives of this industry to
identify workable options and would work with small refiners to address their
unique concerns. CONCLUSION We believe our combined vehicle standards and
gasoline sulfur requirements to be very cost-effective, at
about $2,000 per ton of NOx plus VOC reduced. In 2020, the emission reductions
from these new national standards would be equivalent to reducing the number of
vehicles on the road by more than 2/3, or 166 million vehicles. While the total
cost of the program for cleaner vehicles and gasoline, adjusted
for inflation, is estimated to be around $4 billion annually, the benefits --
avoided deaths, avoided illness and hospital days, avoided lost work days, etc.
- - are estimated to be worth over $16 billion annually in our best- case
estimate. In conclusion, let me emphasize that we believe that the progress that
has been made to date to bring cleaner vehicles to our nation's highways has
been one of the reasons our air quality continues to improve. However, as we
move into the next century, there is no doubt that even cleaner vehicles and
gasoline need to continue to be part of the solution as we
strive to ensure clean air across our nation. The amount of miles that people
drive continues to increase. Sales of larger (more polluting) vehicles, such as
minivans, SUVs, and pickup trucks, continue to increase. Current emission
standards cannot offset the growth in miles traveled. Technology is available
and affordable to better control these vehicle emissions, provided that we
address the negative impact of sulfur in
gasoline on these technologies. Cleaner vehicles and cleaner
gasolines are part of the cost- effective solution to cleaner
air. Thank you again for this opportunity to discuss our program with you. I
would be happy to answer any questions that you may have.
LOAD-DATE: May 21, 1999