Construction companies nationwide will suffer significant financial losses and more construction workers will lose their jobs if the federal government allows California to proceed with plans to impose retroactive emissions standards on diesel construction equipment, warned AGC in an August 10 letter to the U.S. Environmental Protection Agency (EPA).
California's off-road diesel engine emission standards for in-use equipment would punish contractors for purchasing equipment that met all of the emissions standards in effect at the time of its manufacture, devastating construction employment far more than helping the environment. AGC's letter to EPA recognizes that California officials could not have foreseen current economic conditions or the impact they are having on construction emissions, but strongly points out that the state already has agreed to assess how the economic downturn has changed the situation. Until California completes that assessment, it is impossible to know if California's rule, which would cost contractors an estimated $13 billion to implement, would have significant environmental benefits. Meanwhile, construction employment has declined 17.5 percent statewide in the last twelve months alone.
With California's own governor describing conditions as a "state of emergency," AGC has asked the California Air Resources Board (CARB) to take a step back and reevaluate whether this rule provides the kinds of benefits that will justify its extremely high cost to construction employment. AGC's most recent letter to EPA reminds the Agency that it should not rush to approve a regulation that is still in flux and which has a myriad of costs that CARB has not fully evaluated.
Unless blocked, California's new rule on off-road diesel emissions will require the state's contractors to retrofit, repower, retire and/or replace much of their off-road equipment. A study conducted by AGC shows that 32 states, including Arizona, Georgia, Illinois, Maryland, New York, Pennsylvania and Texas, are poised to follow California's lead on the issue. Meanwhile, AGC pointed out that states would be hard pressed to find a better way to undermine the stimulus than forcing contractors to throw away billions in perfectly good equipment.
Currently, both AGC and CARB are examining statewide data on off-road fleets, including the reporting data required by the regulation, and the model protocols necessary to determine current emissions levels based on the "true" inventory data. The parties expect to exchange findings within the next two months and answer the fundamental question of whether or not the recession has caused a such a reduction in emissions that the extremely aggressive retrofit/replacement schedule called for by the rule is no longer necessary to achieve California's clean air goals.
Click here to view a copy of the letter to the EPA and click here to view a copy of the new analysis of states likely to follow in California's wake. More information on AGC's response to the California off-road diesel engine emissions rule is online at http://www.agc.org/carbrule.
Background
The Clean Air Act generally preempts any state standards for engine emissions, leaving the federal government with the exclusive authority to adopt and enforce such standards. The statute, however, makes a fairly broad exception for the state of California, permitting that state to adopt and enforce emission standards for off-road diesel equipment already in use. California standards must still meet certain federal requirements, but if they do, then not only California, but also other states are free to adopt and enforce identical standards.
AGC quickly realized that the rule could well affect AGC members across the entire country, and the national organization therefore joined with the California Chapters in a collective effort to modify if not stop it. Since California finalized the rule, AGC has formally petitioned CARB to reopen its rulemaking and persuaded CARB to direct its staff to "work with AGC" to get to the bottom of the several arguments that AGC included in its petition - and particularly its claim that the economic downturn has already reduced emissions from off-road diesel equipment to the point that CARB can relax its rule without compromising the agency's environmental objectives. In addition, AGC has urged U.S. EPA to hold hearings in California before deciding whether to grant California's request for federal approval of its rule and formally opposed that request for federal approval on the grounds that the rule does not meet the standards that the Clean Air Act has set.
For more information, please contact Leah Pilconis at pilconisl@agc.org or (703) 837-5332.
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