AGC Urges EPA To Deny California's Request to Enforce Costly, Unsafe Rule Requiring Replacement of Most Heavy Construction Equipment

January 7, 2009
Last August, the California Air Resources Board (CARB) asked the U.S. Environmental Protection Agency (EPA) to approve the state's new standards for off-road diesel engine emissions, which would force construction companies in California to replace most of their heavy construction equipment.  In mid-December, AGC asked EPA either to deny that request, or in the alternative, to defer any decision until California considers AGC's formal petition to reopen or repeal the nation's first-ever statewide rule on the exhaust from existing fleets of off-road diesel equipment.  In a concerted effort to influence EPA, AGC chapter staff and members used the AGC Legislative Action Center to tell EPA how their businesses will be impacted if California's emission standards spread nationwide. EPA must review and approve California's standards before the state can legally enforce them; a Clean Air Act process called "granting a waiver of federal preemption."  If EPA grants the state's waiver request, other states would be free to adopt California's new requirements, which apply to all off-road diesel fleets currently in use. On Dec. 19, AGC submitted 180 pages of written comments to EPA on California's request for a waiver.  AGC's letter tells EPA that it is premature to take action on CARB's request, pointing to the new and relevant facts and figures in AGC's petition, as well as pending revisions to the so-called "In-Use Off-Road Diesel-Fueled Fleets Regulation" initiated by CARB on its own accord (more details below).  AGC continues to request that EPA hold public hearings on the waiver proceeding in California to make certain that the state's contractors have a meaningful opportunity to convey their concerns. In its Dec. 19 letter, AGC also maintained that unless and until California makes major changes in its off-road engine emission standards, the off-road rule will continue to violate the Clean Air Act and will not qualify for a waiver. AGC Chapters, Members Take Action More than 150 AGC chapter staff and members used AGC's Legislative Action Center to tell EPA how California's costly and unsafe rule will impact their businesses.  AGC members nationwide expressed concern that the rule will needlessly force California builders to throw away billions of dollars worth of equipment at a time when the volume of construction work in California has fallen by $22 billion below the state's economic forecast and the state's construction industry has lost approximately 120,000 jobs.  The construction industry estimates that the cost of compliance will reach roughly $13 billion in California alone, and even the state has put the cost at $3.4 billion.  If other states across the nation adopt (or "opt-in") to California's requirements, the cost to industry will be many times greater. AGC's Legal Petition Earlier, AGC of America and its two California chapters had formally petitioned CARB to reopen or repeal the off-road engine emission standards, demonstrating that the rule would impose an excessive burden on the state's struggling construction industry.  AGC's 55-page submission, including 9 declarations by individual AGC members, explains that changes in economic, financial and other circumstances compel a careful reexamination of the necessity for, and the technological and economic feasibility of, compliance with the rule.  AGC's petition emphasizes that the economic conditions are far worse than CARB had anticipated and that serious safety issues have surfaced since the agency finalized the rule.  Among other things, the petition notes that deteriorating economic conditions have rendered it impossible for construction contractors to pass along any of the cost of compliance with the rule and financing compliance is proving to be far more difficult than CARB had anticipated.  The petition also points out that for both safety and other reasons, retrofitting equipment is far more difficult and expensive than CARB had anticipated.  While sharing California's commitment to a cleaner environment, AGC maintains that the urgency behind the well-meaning rule is no longer there, as construction work and the consumption of diesel fuel have dropped dramatically, reducing off-road diesel emissions. In early December, CARB independently announced plans to reconsider several of the issues that its standards raise, in light of significant and unforeseen changes in critical technical, economic and environmental conditions.  AGC's petition points out that CARB has already acknowledged (1) that retrofit technology has been slow to develop, (2) that retrofitting equipment is more expensive than CARB had anticipated, and (3) that safety standards have rendered "most if not all of the retrofits required by the off-road regulation . . . impossible to install." To read the rule, AGC's petition, and AGC's comments to EPA regarding California's waiver request go to (this Web page will continually be updated with the latest news and information).
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