Amicus Curiae Brief — Engine Mfrs. Assn. v. South Coast Air Quality Management Dist.

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/> FILED —

No. 02-1343 NOV 17 2093

THE CLERK

In The

Supreme Court of the Anited States

ENGINE MANUFACTURERS ASSOCIATION

AND WESTERN STATES PETROLEUM ASSOCIATION,

Petitioners,

vs.

SOUTH COAST AIR QUALITY

MANAGEMENT DISTRICT, et al.,

Respondents.

On Writ Of Certiorari To The

United States Court Of Appeals

For The Ninth Circuit

BRIEF OF AMICUS CURIAE

SUNLINE TRANSIT AGENCY

IN SUPPORT OF RESPONDENTS

LISA GARVIN COPELAND

A Professional Corporation

74-040 Highway 111, Suite 225

Palm Desert, CA 92260

(760) 341-7773

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE ................00cc000000 1

STATEMENT OF THE CASE...................ccseeceseceseeees 1

I. THE EXPERIENCE OF SUNLINE, OPERA-

II.

TION OF LOW EMISSION AND ALTERNA-

TIVELY FUELED FLEETS IS NOT MORE

BURDENSOME THAN OPERATION OF

TRADITIONALLY FUELED FLEETG. ..........

THE COURT SHOULD REJECT AMICI’S

ARGUMENT THAT SECTION 246 OF THE

ACT PRE-EMPTS THE FLEET RULE. .......

A. Section 246 Is an Optional Program for

Improving Air Quality in Nonattainment

BORD, cscnensemmnnnsimeimn

. The CFFP Does Not “Occupy the Field” of

Clean-Fuel Vehicle Purchase Require-

SIBGTIDD, cocccveccecccenesennecscepcavecescnssonsensusconsees

. The Fleet Rules Are Not Inconsistent

With And Thereby Pre-empted by Sec-

tion 246 Under “Conflict Pre-emption”

PUTTIN, eescnsccsocnecnnninmanpetniiniiinieibiaiidinine

1. There is no support for AALA’s argu-

ment that there is a federal policy of

uniformity with respect to fleet pur-

chase requirements. ....................0ee000

2. The Fleet Rules do not interfere with

any purported objective of a policy of

uniformity, even if such a federal pol-

icy or Congressional intent could be

implied from the CFFP.......................

CIPI cocscecscenccnsvecescensnnnsnssseusennnnensensesonseosess

‘i

TABLE OF AUTHORITIES

Page

CASES

Engine Mfrs. Ass’n v. SCAQMD, 158 F. Supp. 2d

a 1

Engine Mfrs. Ass’n v. SCAQMD, 309 F.3d 550

Ireland icine ea denaiiamatniadinnaiainnesnesnseussnenemenscsncnesees 2

Envt'l Encapsulating Corp. v. New York, 855 F.2d

48 (2d Cir. 1988)....... hahahianieiadiddiiienendindainadanmesenesennnennecsenes 13

Exxon Mobil Corp. v. U.S. EPA, 217 F.3d 1246 (9th

IE TT chstintiatactetiearisepeiennneeeeniiiibeniianepbenenemeneneenteneenennnes 13

Fidelity Fed. Sav. & Loan Ass’n v. De La Cuesta,

I i ainsi ren edcenpenmnesnemenen 11, 13

Geier v. American Honda Motor Company, Inc.,

Be Wes Ge Gee cccceccscccssccscscssssecessesee 19, 22, 23, 24, 25

Hillsborough County, Florida v. Automated Medical

Laboratories, Inc., 471 U.S. 707 (1985) ...............00.. 13, 22

Hines v. Davidowitz, 312 U.S. 52 (1941) ......... ccc eeeeeeeee es 19

Northwest Central Pipeline Corp. v. State Corpo-

ration Commission of Kansas, 489 U.S. 493

ee 10, 11, 14, 15, 19

Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) ....13, 18

Train v. Natural Resources Defense Council, Inc.,

| Ene 15

Wisconsin Public Intervenor v. Mortier, 501 U.S.

iin a nmrarnmtenenemenennnnsecennnet 14

STATUTES

SITIES TTT ities teateienrminsnnsenenennsencesoueseaee 7, 14, 16, 25

iia itatmrrnnsnennnoneneenecoennets 16

——— —— -——

TABLE OF AUTHORITIES — Continued

Page

Ee 16

| ae eee 15

Ene 25

ee 7, 10, 14, 15, 25

SL ee 12

Se SEIT ctrniccccnsenabsinicntenianbanenddenmiennnnsieiesss 17

a 25

an 18

Ee ae 10, 12

| ee ee 12

IT TTT tic ninceeiieaneiidinstaidarianntacincenaneaecemeeil 21

Kk eee 21

California Government Code §6250 ..............:ccccccccceeeeeeeenee 1

California Health and Safety Code §40447.5................00.. 16

RULES

ee 1

56 Fed.Reg. 50196, 50198 (1991). ...............cccccsscessereeeeseeees 21

es Cs CU GR ccccccsccsacccccesenescsescseseeccsecserseseees 20

64 Fed. Reg. 46,849 (1999)................cccccccssssosssssssseecessseees 18

SCAQMD Rule 1186.1(e)(1(C) .........ccccccsscesseeseeeeeeeseeeeeeees 23

ee CE 23

a 23

SCAQMD Rule 1192(e)(1)(B) ..........sccsccoscsscessecerceceeceeneees 23

TABLE OF AUTHORITIES -— Continued

Page

SCAQMD Rule 1193 (OMB) .......0cccceccrsserccsscccccsrscossccssssensoees 23

SCAQMD Rule 119B(OMSB) ......00ccccrcrserroresscersssesnssccsssccsssvoeMe

BORAGE Balbo BBDG6 cncecccscccccsccsccesssesccssscssscssssnssscssessssesssess 23

SCAQMD Rule 1194(€)(1) ...........cccccseseceesesserseseereeseenseeenees 23

SCAQMD Rule 1194(€)(2) ...........ccccssececeeresseersseeeeessenseeeenees 23

BOAGBED Bathe BID cnccccccccsesccccsscssccsssnscvesccssscsssesesssssssseses 23

SCAQMD Rule 1196(e)(1)(C) ..........cccccceeesscecerereseeeeeeneeereees 23

oe ee 23

SCAQMD Rule 1196(f)(6).............cccccscssssesserseseeereseeenseeenees 23

LEGISLATIVE HISTORY

Pub. L. No. 101-549, 104 Stat. 2399 §299 (1990)

(codified at 42 U.S.C. $7586)............ssscsccccssssssorssseensees 11

APPENDICES

Cummins Westport, et al., Report entitled, “Up-

graded B Gas Plus Engine for Operation with

Hydrogen Blended Natural Gas”.................00c0++e+ App. 1

U.S. Department of Energy, Hydrogen Fuel Cell &

Infrastructure Technologies Program Report

entitled “SunLine Test Drives Hydrogen Bus”....... App. 7

Sacramento Regional Transit District and SunLine

Transit Agency Report entitled “Three Year

Comparison of Natural Gas and Diesel Transit

RUGS cccccnsccenssssnssesssensesnsnnemmemmnmmesnnmemmmanenennasenesetens App. 13

INTEREST OF AMICUS CURIAE

SunLine Transit Agency (“SunLine”) is a California

joint powers authority organized and existing pursuant to

California Government Code §6250 et seq. and composed

of the California cities of Desert Hot Springs, Palm

Springs, Cathedral City, Rancho Mirage, Palm Desert,

Indian Wells, La Quinta, Indio, Coachella and the County

of Riverside. SunLine is a fleet owner and operator as well

as a world renowned leader in the development and

application of alternative fuel technologies. SunLine

advocated for the adoption of the Fleet Rules by the South

Coast Air Quality Management District that are chal-

lenged in this case and files its brief in accordance with

Supreme Court Rule 37.3.’

STATEMENT OF THE CASE

SunLine Transit Agency (“SunLine”) submits this

amicus curiae brief in support of Respondents, the South

Coast Air Quality Management District (“SCAQMD” or

“South Coast”), et al., and Natural Resources Defense

Council, et al. (collectively referred to as “Respondent”)

and in defense of the district court decision which upheld

the Fleet Rules adopted by SCAQMD against various pre-

emption challenges. Engine Mfrs. Ass’n v. SCAQMD, 158

F. Supp. 2d 1107 (C.D. Cal. 2001) and as affirmed by the

" The parties have consented to the filing of this brief. This brief

was not authored in any part by counsel for any party, and no persons

or entities other than Amicus Curiae or its counsel have made a

monetary contribution toward the preparation or submission of this

brief.

Ninth Circuit Court of Appeals in Engine Mfrs. Ass’n v.

SCAQMD, 309 F.3d 550 (2002). SunLine adopts the

Statement of the Case submitted by Respondent with the

addition of the following background considerations and

urges affirmance of the decisions below.

SunLine has experience that is significant to this case.

SunLine was a vo7al supporter of the adoption of the Fleet

Rules by South Coast and participated throughout the rule

making process in expression of its position. SunLine’s

service area is well known as a haven for recreational

activities, sporting some 200 golf courses and serving as

the venue for one of the “Masters Series” tennis tourna-

ments held at the Indian Wells Tennis Garden. The Coa-

chella Valley in which SunLine operates is nearly

surrounded by high mountain ranges whose geographic

and environmental features have the potential to “re-

create” the air quality problems experienced by the Los

Angeles basin as the population in the area grows. Clean,

healthful air is a prime attractant for the tourist industry

that fuels much of the economy in SunLine’s territory.

Long before the adoption of the Fleet Rules at issue in this

case, leaders in the Coachella Valley were concerned about

preservation of the area’s air quality. With the aspiration

in mind to prevent degradation of its air resource, in 1993,

SunLine’s board of directors adopted a policy which

required the agency to purchase only alternatively fueled

vehicles for both revenue and non-revenue purposes. In

1994 SunLine became the first public transit agency in the

United States to become 100% alternatively fueled

through its purchase of compressed natural gas (“CNG”)

buses and related support vehicles. SunLine currently

operates a total of 54 alternative fueled buses which tally

a total of 4 million miles per year in fixed route operations.

Had ‘

Of the total 54 alternative fueled buses operated regularly

by SunLine, 47 are CNG powered, 2 run on Hythane®, 2

are electric powered and 3 are operated using liquified

natural gas (LNG). The 54 heavy-duty transit buses are

only a portion of the full SunLine fleet. In addition to its

buses, SunLine operates 25 CNG powered vans used in its

paratransit service. These vans, ranging from 7 to 14

passenger size (plus wheel chair lifts & ADA equipment)

drive in excess of 875,000 annual miles. Also in the fleet

are 40 support and specialty vehicles ranging from pas-

senger cars to heavy-duty trucks. These vehicles operate

an additional 662,000 annual miles.

Since its initial commitment to alternative fueled

vehicles and programs, SunLine has grown to become a

recognized global expert in the alternative fuel movement,

having been invited to make presentations in many

foreign countries, including Taiwan, Canada, Germany

and Chile, to name a few, concerning the operational,

economic and practical aspects of CNG fleet operations.

Due in large part to SunLine’s innovation, what once was

viewed as a new relatively untested technology in CNG

fleet operations, has now proven to be a time tested,

reliable and cost effective manner of operating a fleet.

SunLine is also a leader in the research and develop-

ment of other clean fuel technologies for commercial

application and is a pioneer in research and development

related to the use_of hydrogen as a fuel. Due to the inex-

haustible source of clean burning hydrogen, this technol-

ogy promises a likely next step in the fight against air

pollution. SunLine is utilizing Hythane® fuel in two

different applications designed for commercial use.

Hythane® combines a mixture of 20% hydrogen with 80%

CNG to further reduce emissions already achieved by

CNG alone by 43%. In the near term, Hythane® has been

used by SunLine to power a more conventional modified

engine in commercial transit application and achieves

significant air quality benefits from reduced emissions.

(See the Cummins Westport, et al., Report entitled “Up-

graded B Gas Plus Engine for Operation with Hydrogen

Blended Natural Gas Fuel” attached as Appendix, pp. 1

through 6).

In the long term, another new and promising technol-

ogy uses Hythane® with fuel cells in a commercial appli-

cation, another arena in which SunLine is a pioneer. Not

only is SunLine a founding member of the World Wide

Fuel Cell Transit Consortium, it also became the first

transit agency to operate a hybrid fuel cell bus in transit

revenue service in a project sponsored by the U.S. De-

partment of Energy througn its National Renewable

Energy Laboratory, the SCAQMD and others.’ SunLine is

also in the process of acquiring one of four prototype

transit buses intended to be powered by a fuel cell spe-

cially designed for this purpose. All of SunLine’s efforts are

devoted to the primary goal that it shares with the Clean

Air Act; that of achieving and preserving the air quality in

its region. SunLine’s hope is that its work in the develop-

ment of alternative technologies advances the use of

cleaner technology by others to achieve the same purpose.

SunLine responds to the joint amicus curiae brief of the

American Automotive Leasing Association and National

* A copy of the DOE Hydrogen Fuel Cell & Infrastructure Tech-

nologies Program Report on SunLine’s hydrogen bus demonstration

project is attached as Appendix, pp. 7 through 12.

Association of Fleet Administrators Inc., (collectively

referenced here as “AALA”). AALA makes several factual

claims in support of its legal argument to the effect that

the Fleet Rules are pre-empted by Section 246 of the Clean

Air Act which AALA characterizes as part of a federal

policy that established a limited, uniform series of fleet

regulations. AALA’s policy arguments are founded upon

fears and speculative barriers that are inconsistent with

the actual operational experience of SunLine as a fleet

operator and with the goals of the Clean Air Act as a

whole.

AALA asserts that several unique attributes of fleets

were meant to be addressed by Congress in its adoption of

the clean-fuel fleet program (“CFFP”) which Amicus

characterizes as a uniform federal scheme for fleet regula-

tion. According to AALA, requirements of the Fleet Rules

adopted by the South Coast Air Quality Management

District discourage and frustrate the environmental

benefits already generated by fleet operations. (See AALA,

p. 5-6). AALA contends that this is so because the industry

already provides “tangible air quality benefits” due to

improved fleet maintenance and the fact that vehicles are

selected to be “right sized” such that they do not unneces-

sarily consume pollution generating fuels. (See AALA, p.

5). Operational difficulties are feared by AALA in the

industry’s potential exposure to varying fleet requirements

among different jurisdictions in which they operate and

they assert that they face increased costs associated in

their compliance with the Fleet Rules and the restrictive

choices given them to choose among “right sized” compli-

ant vehicles.’ -

AALA’s arguments are unpersuasive when they are

considered in the context of the entirety of the Clean Air

Act, the amendments of which the CFFP is a part, and

with the Fleet Rules themselves. There is no support for

the proposition that Congress intended for Section 246 of

the Clean Air Act to occupy the field of fleet regulation or

to provide an exclusionary uniform federal scheme for the

regulation of fleets. The fact that Congress adopted Sec-

tion 246 in the first instance undermines AALA’s premise

that fleets already contribute their “fair share” of emis-

sions benefits over and above that of the “general popula-

tion” such that they should remain essentially self

regulated. If such were the case, Section 246 would not

have been offered by Congress as an optional method for

nonattainment area States to adopt as a method to lower

emissions.

AALA’s claim that the CFFP was intended to provide

a uniform system of regulation designed to protect fleets

from varying State standards is also misplaced. If this

were truly the purported Congressional purpose in adopt-

ing Section 246, it would have more plainly signaled that

* AALA’s fears about limited choice in the available vehicles that

are of an appropriate size to meet varying fleet needs are unfounded as

demonstrated by the growing number and variety of alternatively

fueled vehicles offered on the market. (See for instance, the wide range

of CNG powered light, medium and heavy-duty vehicles in many

different sizes and configurations that are manufactured by well

recognized producers such as Ford, GMC, Orion and Thomas among

others at the website of the California Natural Gas Vehicle Coalition,

Www.cngvc.org).

intent. The fact that Congress has adopted fleet require-

ments in other areas which differ from the CFFP stands in

contrast to AALA’s uniformity argument. Although certain

features that address the practical aspects of fleet opera-

tion were logically included in the development of the

language of Section 246, such considerations should not be

read out of context or be extended to the level of an over-

riding Congressional mandate that undercuts the balance

of the Clean Air Act and the dual regulatory system that

forms its framework. Rather, the CFFP should be con-

strued as consistent with the broader goals of the Clean

Air Act to protect the public health from increasing risks

associated with air pollution in nonattainment areas.

One of the inherent difficulties in the administration

of the Clean Air Act (“CAA”) is~the basic fact that the

occurrence and levels of air pollution are not “uniform” or

restricted to certain State or local boundaries, a fact

recognized as the starting point for Congress having

established its dual federal/state regulatory system which

affords the States and their political subdivisions wide

latitude to regulate aspects of air quality under Sections

101 (42 U.S.C. §7401) and 116 (42 U.S.C. §7416). Congress

did not choose to include the provisions of Section 246, or

others of the CFFP in its list of federally regulated sub-

jects where it has chosen to pre-empt the field and to

provide for a single uniform regulation of the subject

matter. In light of these considerations, AALA’s arguments

for field and conflict pre-emption of the Fleet Rules by

Section 246 should be rejected.

I. IN THE EXPERIENCE OF SUNLINE, OPERA-

TION OF LOW EMISSION AND ALTERNA-

TIVELY FUELED FLEETS IS NOT MORE

BURDENSOME THAN OPERATION OF TRA-

DITIONALLY FUELED FLEETS.

In addition to its more recent research activities,

SunLine, along with the Sacramento Regional Transit

District (another CNG fleet operator), participated in a

study entitled “Three Year Comparison of Natural Gas and

Diesel Transit Buses” (“Three Year Study”).‘ The Three

Year Study found that CNG alternative fuel vehicles

provide far better savings in terms of maintenance than

their dirtier diesel counterparts. SunLine achieved a 27

percent reduction in maintenance costs compared to a

diesel fleet and Sacramento Regional Transit achieved a

38 percent savings. (The comparison figures are to older

diesel buses in the Sacramento fleet, a factor recognized by

the study and accounted for in its findings.) The Three

Year Study also documented the savings in terms of fuel

cost achieved by both transit agencies in their use of clean

burning compressed natural gas. Not documented, was the

cost savings in terms of human health benefits that both

transit agencies produced in their reduction of harmful air

emissions in the regions in which they each operate.”

* The Three Year Study is attached as Appendix, pp. 13 through

36.

* The Three Year Study was based upon actual operations by two

diverse transit agencies utilizing the technology in service under

differing conditions in contrast to the assertion by Amici Curiae,

Alliance of Automobile Manufacturers, et al., to the effect that one

transit official anticipated that future operations of advanced diesel

(Continued on following page)

AALA has pointed to the contribution of its members

to the air pollution problems faced by many jurisdictions

in that its members arguably use “right sized” vehicles to

meet the varying demands of their operations, implying

that the choice of vehicles covered by the Fleet Rules is

limited. Any such claim is not factually supportable. There

is no lack of variety in available models of low-emitting or

alternatively fueled vehicles. In the transit bus arena

alone, more than 19 available models from major industry

suppliers are listed in the California Natural Gas Vehicle

website (www.cngv.org). In addition to public transit

service with alternative fuel buses, SunLine also serves

other municipal functions for its member cities which

includes street sweeping operations that rely solely upon

alternative fueled vehicles. All of the street sweeping

vehicles, water trucks, pick up trucks, dump trucks and

support vehicles were readily available on the open mar-

ket for SunLine’s purchase and use. Another governmental

duty SunLine provides is that of regulating taxicabs for

the valley cities, and SunLine recently assisted the taxi

and limousine industry to purchase 50 alternative fuel

vehicles that range from passenger sedans to passenger

vans that are used in the transport of the public to and

from local airports and other destinations. As demon-

strated by the California Natural Gas Vehicle Coalition

web site listings, a wide variety of alternative fueled

vehicles in differing sizes and specifications are therefore

presently available with more choices slated for the future.

vehicles would be the “most cost effective way to reduce emissions.”

(See brief of Alliance of Automobile Manufacturers, et al., p. 22, fn. 28).

II. THE COURT SHOULD REJECT AMICI’S

ARGUMENT THAT SECTION 246 OF THE

ACT PRE-EMPTS THE FLEET RULES.

The amicus brief of AALA asserts that the federal

clean-fuel fleet program (“CFFP”) set forth in Section 246

of the Clean Air Act (42 U.S.C. §7586) pre-empts the Fleet

Rules. AALA argues that Congress has pre-empted the

field of fleet regulation by adopting the CFFP even though

Section 246 is not included in the list of pre-empted

subjects. Since it is not so included, AALA must fashion its

argument upon implications of pre-emption which invite

an “extravagant mode of interpretation” rejected on more

than one occasion by this court (see for example Northwest

Central Pipeline Corp. v. State Corporation Commission of

Kansas, 489 U.S. 493 (1989).

The Clean Air Act is well recognized as one of the most

comprehensive pieces of legislation adopted by Congress

which is designed to achieve and maintain air quality

standards by, among other things, imposing standards for

air quality to be achieved by the States and their political

subdivisions. Congress did not, on the one hand impose

mandates without also preserving to the States the regu-

latory tools needed to realize the public health and safety

goals inherent in the Clean Air Act. The proposition that

Congress intended to preserve the authority of the States

to regulate fleets is reflected first and foremost, by the fact

that Section 246 is not included in the Section 116 list of

Clean Air Act provisions intended to be pre-empted. See 42

U.S.C. §7416 (listing exceptions to the “savings clause” of

the Clean Air Act). This omission is crucial and should be

the paramount consideration in evaluating the viability of

the Fleet Rules, in the context of the dual regulatory

structure of the Clean Air Act. This is a case where caution

should be used to “avoid encroachment” into the areas that

Congress intended to be reserved to the States. Northwest

Central Pipeline Corp. v. State Corporation Commission of

Kansas, 489 U.S. 493 (1989).

Nor is the presumptive hurdle created by the omission

of Section 246 from Section 116 overcome by AALA’s

implied pre-emption argument primarily because a State

may elect to opt-out of the clean fleet provisions of Section

246 either in whole or in part. In addition, both Congress

and EPA have either adopted differing fleet requirements

in other regulatory contexts or have recognized that the

States and their subdivisions may do so. The fleet regula-

tions of the CFFP cannot be said then, to be “so pervasive”

or to “touch upon a field” of federally intended dominance

sufficient to support an implied pre-emption argument.

Fidelity Fed. Sav. & Loan Ass’n v. De La Cuesta, 458 U.S.

141 (1982)

Finally, SCAQMD’s Fleet Rules do not conflict with

any federal policy under the Clean Air Act designed to

establish uniformity in the regulation of fleets that oper-

ate in multiple jurisdictions. Even if such a purpose were

to be artificially grafted into the CFFP, specific exemptions

included in the Fleet Rules uperate to alleviate any bur-

densome compliance requirements.

A. Section 246 Is an Optional Program for

Improving Air Quality in Nonattainment

Areas.

The CFFP and Section 246 originated in the 1990

Amendments to the Clean Air Act and concern improve-

ments to air quality in designated nonattainment areas.

See Pub. L. No. 101-549, 104 Stat. 2399 §299 (1990)

(codified at 42 U.S.C. §7586). The emissions reductions

required pursuant to Section 246 and the CFFP apply only

to States with ozone or carbon monoxide nonattainment

areas. Under the 1990 Amendments, each State that

contains a covered nonattainment area must submit to

EPA a revision of its state implementation plan (“SIP”)

adopting either the federal CFFP or a substitute program,

approved by EPA, that produces an equivalent or greater

reduction of pollution. See 42 U.S.C. §75lla(c)(4). The

CFFP, which is a program requiring fleet operators to

include specified percentages of clean-fuel vehicles in their

fleets by given target dates (see 42 U.S.C. §7586(a)), is an

optional ready-made federal model that States may use as

one of many tools to achieve air quality improvements in

the nonattainment areas. In sum, States can adopt the

CFFP or find another way to achieve the same reductions.

The CFFP does not dictate to the States a rigid set of rules

for imposing clean-fuel vehicle purchase requirements on

fleet operators, but rather, supplies a model program for

achieving air quality improvements. The 1990 Amend-

ments reflect that Congress continued to allow States the

same traditional flexibility that formed the initial basis for

the CAA in achieving the emissions reductions.

B. The CFFP Does Not “Occupy the Field” of

Clean-Fuel Vehicle Purchase Requirements.

AALA’s argument, that the CFFP occupies the field of

fleet purchase regulation, faces a significant hurdle in

establishing evidence of clear Congressional intent to pre-

empt state regulation in this area. In order to support an

inference of field pre-emption, the scheme of federal

regulation must “touch a field in which the federal interest

is so dominant that the federal system will be assumed to

preclude enforcement of state laws on the same subject”

and must be “‘so pervasive as to make reasonable the

inference that Congress left no room for the States to

supplement it.’” Fidelity Fed. Sav. & Loan Ass’n v. De La

Cuesta, 458 U.S. 141, 153 (1982) (quoting Rice v. Santa Fe

Elevator Corp., 331 U.S. 218, 230 (1947)). The full context

of the Clean Air Act of which the CFFP is only a part, does

not justify such an inference of pre-emptive intent.

If traditionally the federal government has not been

active in the relevant regulatory field, Congress must be

especially clear in its intent to pre-empt the subject

matter. “Where the field that Congress is said to have pre-

empted has been traditionally occupied by the States, ‘we

start with the assumption that the historic police powers

of the States were not to be superseded by the Federal Act

unless that was the clear and manifest purpose of Con-

gress.’” Hillsborough County, Florida v. Automated Medi-

cal Laboratories, Inc., 471 U.S. 707, 722, 723 (1985)

(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230

(1947)). The lower federal courts have found air pollution

control to be a regulatory area traditionally dominated by

the States and thus have required evidence of clear Con-

gressional intent to pre-empt such State efforts. See Exxon

Mobil Corp. v. U.S. EPA, 217 F.3d 1246, 1255 (9th Cir.

2000) (Air pollution prevention falls under the broad police

powers of the States, which include the power to protect

the health of citizens in the State); Envt’l Encapsulating

Corp. v. New York, 855 F.2d 48, 53-54 (2d Cir. 1988) (find-

ing that the State asbestos program at issue “unmistaka-

bly involves an exercise of a State’s police powers”).

This principle has particular effect where, as in the

case of the CAA, Congress has developed a long standing

dual regulatory role between itself and the States — includ-

ing the political subdivisions of the States such as Respon-

dent. (See Northwest Central Pipeline Corp. v. State

Corporation Commission of Kansas, 489 U.S. 493 (1989),

and Wisconsin Public Intervenor v. Mortier, 501 U.S. 597

(1991)). Congressional intent, as derived primarily from

the face of the language and structure of the statute itself,

is the starting point for review. “In analyzing whether

Kansas entered a pre-empted field, we must take seriously

the lines Congress drew in establishing a dual regulatory

system, and we conclude that paragraph (p) is a regulation

of ‘production or gathering’ within Kansas’ power under

the NGA.” Northwest Central Pipeline Corp. v. State

Corporation Commission of Kansas, 489 U.S. 493, 513

(1989). The lines of demarcation drawn by Congress for

purposes of pre-emption are expressly drawn in the CAA

in several places.

First, under Section 116 (42 U.S.C. §7416) of the CAA

Congress has specifically listed those provisions that it

intends to have pre-emptive effect in its dual regulatory

system under Section 101 (42 U.S.C. §7401).° The fact that

Congress omitted Section 246 from its well recognized list

of pre-emptive provisions provides strong evidence that it

had no intent to afford such an effect to the CFFP. Sec-

ondly, Section 246 must be read in the context of the

findings and purpose of the Clean Air Act as a whole, and

* The listed pre-emptive Sections only include (in addition to

designated Sections of the Act effective before 1977), Section 209 (pre-

emption of state standards relating to the control of emissions from new

motor vehicles or new motor vehicle engines), Section 211(c\4) (regula-

tion of fuels and fuel additives), and Section 233 (standards respecting

emissions from aircraft or aircraft engines).

-_—

should not be evaluated in isolation as is the case with

AALA’s argument. On the one hand, EPA has established

certain national ambient air quality standards (“NAAQS)

to be met by the States as directed by Congress in Section

108 (42 U.S.C. §7408). The power required for States to

meet the NAAQS is expressly reserved to them under

Section 116 (42 U.S.C. §7416) and is a critically required

feature for their achievement of the public health goals

sought to be advanced by the Clean Air Act. AALA’s

argument invites the same sort of “extravagant interpreta-

tion” rejected in Northwest Central Pipeline Corp. v. State

Corporation Commission of Kansas, 489 U.S. 493 (1989)

where the State was specifically reserved authority over

certain aspects of gas production but, it was argued, could

not enforce its regulations. It has long since been resolved

under the CAA that the dual regulatory system of that

statute not only permits, but dictates that States and their

political subdivisions develop measures designed to

achieve the air quality standards imposed by the statute.

Train v. Natural Resources Defense Council, Inc., 421 U.S.

60 (1975) “So long as the ultimate effect of a State’s choice

of emission limitations is in compliance with the national

standards for ambient air, the State is at liberty to adopt

whatever mix of emission limitations it deems best suited

to its particular situation” subject only to the limitations

expressed on the face of the statute itself. Jd. at p. 746.

Similarly, here, “it would be strange indeed” to hold that

Congress imposed a mandate upon the States to achieve

ambient air quality standards established by the EPA yet

deprived them of the means in which to comply with the

statutory directive.

Nor is the fact that the Fleet Rules were adopted by

South Coast rather than by the California Air Resources

Board or the California Legislature of any importance to a

pre-emption analysis. The California Air Resources Board

is not the only political subdivision within the State of

California empowered to regulate air quality. The

SCAQMD is specifically authorized by California Health

and Safety Code Section 40447.5 to adopt fleet rules

thereby reflecting, at the State legislative level, a choice

that Respondent’s contribution to “the mix” of regulations

to clean the air could specifically include the adoption of

rules regulating fleets.

In the case of power under the Clean Air Act, the

authority of the States and their political subdivision is

expressed in Section 101 (42 U.S.C. §7401) which deline-

ates Congressional findings -to the effect “(a)(3) that air

pollution prevention (that is, the reduction or elimination,

through any measures of the amount of pollutants pro-

duced or created at the source) and air pollution control at

its primary source is the primary responsibility of States

and local governments” (Emphasis added). In terms of its

declaration of purposes, Section 101 includes “Pollution

prevention” as a primary purpose and recites as its goal

“to encourage or otherwise promote reasonable Federal,

State and local governmental actions, consistent with the

provisions of this Act, for pollution prevention.” (see 42

U.S.C. §7401(c)). These Congressional statements of intent

expressly acknowledge the important role played by States

and their political subdivisions in achieving the goals of

the statute.

The structure of the 1990 Amendments enacting

Section 246 and the CFFP also indicate that Congress did

not intend to occupy the field of fleet purchase regulations.

The concern of Congress in enacting the CFFP was with

achieving emissions reductions, not with regulating fleets.

The lone decisive factor governing EPA’s approval of a

Section 246 substitute program is whether or not the

program is designed to achieve emissions reductions

equivalent or superior to those contemplated by the CFFP.

EPA must approve a SIP revision implementing a State

substitute program if the program “will achieve long-term

reductions in ozone-producing and toxic air emissions

equal to those achieved under [the Act’s clean-fuel vehicle

program], or the percentage thereof attributable to the

portion of the clean-fuel vehicle program for which the

revision is to substitute.” 42 U.S.C. §75lla(c)(4)(B). This

language is unambiguous in its restriction of EPA’s discre-

tion to a consideration of a single variable: emissions

reduction. See 42 U.S.C. §75lla(c\4\(B) (EPA “shall

approve ... any revision” that produces equivalent reduc-

tions) (Emphasis added). So long as the substitute pro-

gram promises equivalent emissions reductions, its other

features are essentially irrelevant, including whether the

program incorporates any particular provision of the

CFFP. This feature provides further support that Congress

did not deviate from or “supplement” its goals to pursue

uniform fleet regulation as a purpose under the CAA when

it adopted Section 246. :

For evidence of Congressional intent to limit the

discretion of the States to regulate fleets, AALA also points

to provisions in Section 246 such as the requirement that

the program be “vehicle- and fuel-neutral.” (See AALA, et

al., at p. 14). Since States may “opt-out” of the CFFP by

implementing a substitute program that lacks vehicle- and

fuel-neutral provisions altogether, particular provisions of

the CFFP cannot be read to reflect a Congressional intent

to limit the wide latitude otherwise granted the States and

their political subdivisions to regulate in the field. EPA’s

approval of California’s LEV program as a substitute for

the CFFP illustrates the broad leeway States have in

opting out of the CFFP. See 64 Fed. Reg. 46,849 (1999)

(California submitted and EPA approved, California’s Low

Emission Vehicle (“LEV”) Program as a replacement for

the CFFP). The LEV Program is California’s regulatory

program setting standards and certification requirements

for new light- and medium-duty motor vehicles pursuant

to Section 209(b), 42 U.S.C. §7543(b), of the Clean Air Act.

The LEV Program consists primarily of tailpipe emission

standards and production requirements for light-duty and

medium-duty motor vehicles. No aspect of the LEV pro-

gram regulates or concerns fleets or fleet purchase re-

quirements. In approving the substitution of the LEV

Program for the CFFP, EPA, in conformance with the

directive of Congress, recognized that the substitution

would commit California to achieve “long-term reductions

in ozone and toxic air contaminants ... provided by the

[CFFP].” 64 Fed. Reg. 46,849 (1999).

The fact that all provisions in Section 246 may be

disposed of by States, if they design a different program to

achieve Section 246 reductions, undercuts AALA’s asser-

tion that “fuel-neutral” and other provisions of Section 246

are intended to occupy the field. The “character of obliga-

tion imposed” by the CFFP — i.e., a reduction in ozone and

toxic air contaminants — does not suggest that Congress

wanted fleets regulated in a particular, federally-

stipulated fashion. Rice v. Santa Fe Elevator Corp., 331

U.S. 218, 230 (1947). The CFFP would not be a “pervasive”

regulatory scheme that would occupy the field even if it

were mandatory, and it certainly does not occupy the field

where compliance with the scheme is wholly optional.

C. The Fleet Rules Are Not Inconsistent With

And Thereby Pre-empted by Section 246

Under “Conflict Pre-emption” Principles.

AALA also argues that the Fleet Rules are inconsis-

tent with Section 246 and therefore pre-empted by princi-

ples of conflict pre-emption. Conflict pre-emption may

exist where “‘under the circumstances of the particular

case’” the state or local requirement “‘stands as an obsta-

cle to the accomplishment and execution of the full pur-

poses and objectives of Congress.’” (Geier v. American

Honda Motor Company, Inc., 529 U.S. 861, 873 (2000)

citing Hines v. Davidowitz, 312 U.S. 52, 67 (1941)

Where, as here, there is a dual regulatory role estab-

lished in the statute, any conflict pre-emption analysis

“must be applied sensitively ... so as to prevent the

diminution of the role Congress reserved to the States,

while at the same time preserving the federal role.”

Northwest Central Pipeline Corp. v. State Corporation

Commission of Kansas, 489 U.S. 493, 531 (1989). The fact

that some impact or effect upon an area within the feder-

ally established side of the equation is created by the local

regulation does not “trigger” a finding of a conflict because

inevitably, “jurisdictional tensions” are inherent in any

dual regulatory system. Jd. at p. 515.

The conflict pre-emption argument of AALA fails for

the reasons outlined above: nothing in the text, structure,

or legislative history of the Clean Air Act demonstrates a

Congressional intent to establish uniform fleet purchase

requirements, and the States’ ability to supplant the

federal CFFP with their own programs fatally undermines

such a view of Section 246. The only uniformity sought by

Congress in enacting the CFFP was to compel States with

designated nonattainment areas to take further affirmative

action to achieve emissions reductions — either through

the CFFP or by otherwise intensifying their regulatory

efforts to achieve emissions reductions.

1. There is no support for AALA’s argu-

ment that there is a federal policy of

uniformity with respect to fleet pur-

chase requirements.

In support of its assertion that there is a federal policy

of uniformity with respect to fleet purchase requirements,

AALA cites EPA’s notice of proposed rule making

(“NPRM”) for the CFFP. (See AALA at p. 4, 14, and 28

(citing 58 Fed. Reg. 32,474 (1993)). Contrary to this

assertion, the NPRM makes no mention of a congressional

purpose and provides no evidence of a federal policy of

uniformity. See 58 Fed. Reg. 32,474 (1993) (The NPRM’s

only discussion of uniformity is its summary of comments

received from AALA et. al.’s constituents: “The industry

strongly requested that a patchwork set of state programs

be avoided. The industry stated that this would assist

their implementation, reduce their costs, and improve

overall program effectiveness.... As a result, the mem-

bers of the fleet industry requested regulations to ensure

that states would enact similar programs.”)’

The fact that Congress and EPA have adopted, or

recognized, non-uniform fleet regulations in these other

" Moreover, the rules adopted by EPA apply only to States that

choose to adopt the federal CEFP, not to those that go their own way.

Whatever uniformity is promised by EPA's rules, then, can be undercut

by States’ adopting nonconforming substitute programs.

contexts speaks volumes. For example, the Energy Policy

Act (““EPACT”), imposes fleet requirements that are not

“fuel neutral” and differs from the “fuel neutral” provisions

of the CFFP, upon which AALA relies to support its argu-

ment. EPACT requires federal and state fleets to use

vehicles operating on “alternative fuels” which include

natural gas, methanol, ethanol, electricity, and other fuels

that are “substantially not petroleum.” See 42 U.S.C.

§13211(2). Thus, Congressional enactments affecting fleet

operators are themselves not uniform in their require-

ments.

In other contexts, EPA has recognized that existing

state and local clean fuel fleet programs differ from the

CFFP and has never indicated any intent to pre-empt such

programs. See eg., 56 Fed. Reg. 50196, 50198 (1991)

(Preamble, Clean Fuel Fleet Credit Programs) (“In addi-

tion to the clean fuel fleet program required by the Clean

Air Act, there are a number of other programs being

implemented or considered at national, state or local

levels, which involve the introduction of clean fuel vehicles

in fleets. There is expected to be some overlap between the

requirements for vehicles in these programs and those for

vehicles in the CAA fleet program.”) EPA has not refer-

enced any intent by Congress or by the agency to establish

a set of national, overriding standards to regulate fleets.

EPA's statements in the preamble to the Clean Fuel Fleet

* While EPACT alternative fuel requirements apply to light and

some medium-duty fleets, not heavy-duty fleets, 42 U.S.C. §13211(9),

the law nevertheless demonstrates a Congressional purpose to support

the development and deployment of alternative fuel vehicles and non-

uniformity with respect to designation of fuel types in programs

regulating fleets.

Credit Programs is “dispositive on the question of an

implicit intent to pre-empt” unless it clearly conflicts with

Congressional intent. Hillsborough County, Florida uv.

Automated Medical Laboratories, Inc., 471 U.S. 707, 714

(1985). AALA has failed to make a showing of “implicit

pre-emption of the whole field, or of a conflict between a

particular local provision and the federal scheme that is

strong enough to overcome the presumption that state and

local regulation of health and safety matters can constitu-

tionally coexist with federal regulation.” Jd. at p. 723. A

finding that the CFFP occupies the field of fleet regulation

would contradict EPA’s statements in the Clean Fuel Fleet

Credit program and invalidate portions of EPACT.

2. The Fleet Rules do not interfere with

any purported objective of a policy of

uniformity, even if such a federal pol-

icy or Congressional intent could be

implied from the CFFP.

AALA argues that the Fleet Rules are pre-empted by

Section 246 because they stand as an “obstacle” to the

Congressional purpose of the CFFP which is to regulate

fleets in a uniform manner. (See AALA pp. 28-29). AALA

cites Geier v. American Honda Motor Company, Inc., 529

U.S. 861, 873 (2000) in support of its position. The analy-

sis of the statutory structure under the Geier case is

distinguishable for several reasons. First, Geier considered

the continued viability of a state tort claim premised upon

a specific standard that was the concurrent subject of an

express pre-emption provision of the National Traffic and

Motor Vehicle Safety Act. The CFFP was not similarly

elevated by Congress to be included in either Section 209

or Section 116 of the CAA.

The opinion in Geier also made clear that the conflict

pre-emption analysis is fact specific and does not exist

unless “under the circumstances of the particular case” the

state or local law is an “obstacle” to the purposes and

objectives of Congress. See Geier, supra, 529 U.S. at 873.

On the facts of this case, the Fleet Rules simply do not

interfere with any purported objective of requiring uni-

formity in order to protect fleet operators operating in

multiple states. The Fleet Rules are designed to address

operators’ concerns regarding operation outside the

boundaries of the District and contain exemptions that

apply to fleets which include vehicles operating in more

than one jurisdiction or geographic area.’ Each of the

District’s Fleet Rules contains a provision allowing exemp-

tions where a compliant vehicle is not available or suitable

for use. (Rule 1191(f8), Rule 1192(e\(2), Rule 1193(e\3),

Rule 1194(e)(2), Rule 1186.1(e1\C), and Rule 1196(e)(1C)).

AALA’s argument is founded on a faulty premise that

the purpose and objective of Congress in adopting the

* Rule 1192, pertaining to transit bus fleets, contains an exemption

for buses used for long-distance, out-of-District trips. Rule 1192(e1\B).

Rule 1194, pertaining to commercial airport ground access vehicles,

such as shuttles and taxis, likewise exempts vehicles providing long-

distance, out-of-District service. Rule 1194(eX1). Similarly, Rule 1196

contains an exemption for heavy-duty vehicles used routinely to

transport materials in and out of the District. Rule 1196(f6). Rule

1196, which applies to public agency heavy-duty fleets not covered by

the more specific rules and to fleets whose jurisdictions extend beyond

the boundaries of the District, contains an additional exemption for

vehicles garaged or used within the District for less than 180 days in a

year. Rule 1196(f). There is no need for such an exemption for light-duty

passenger vehicles, or for medium-duty vehicles, since the majority of

models of these vehicles available in California comply with the fleet

rules running on gasoline.

CFFP was to promote uniformity in the regulation of fleets

when, in fact, the Congressional purpose was to promote

the attainment of clean air. In Geier, this court found, after

reference to extensive administrative proceedings, that the

statutory purpose was to provide manufacturers with a

“mix” of options to implement federally mandated passive

restraint systems in motor vehicles. By contrast, under the

CAA, the discretion allowed by the statute rests not with

the fleet industry, but rather with the States to develop

the “mix” of regulations they require to achieve the feder-

ally mandated air quality standards imposed upon them.

The CFFP is one of a myriad of available options within

the limits of the State’s authority under Section 209.

Finally, unlike the court’s discussion in Geier, the Clean

Air Act’s legislative history offers nothing to compensate

for the lack of evidence of pre-emptive intent in the statu-

tory text or structure. Nothing in the legislative history of

the 1990 Amendments (enacting Section 246), including

the committee reports or floor debates, even implicitly

suggests that Congress intended the CFFP was intended

to displace all state action in the area.

Finally, in Geier, a majority of this court expressly

rejected the dissent’s position that a “special burden” was

placed upon the party claiming pre-emption where there

was either a savings clause and a pre-emption provision

(or both) and that ordinary conflict pre-emption provisions

were to apply. Jd. at pp. 870, 871. SunLine believes that

the legislative structure of the Clean Air Act distinguishes

it from the statute at issue in the Geier case and urges the

court to consider some form of analysis (by whatever

name) that creates a strong presumption against a finding

of implied field or conflict pre-emption within the context

of a dual regulatory structure, particularly where it is

ee eee

bl PF 8 OT ne, —

_——

coupled with a mandate such as that of Section 110 (42

U.S.C. §7410(a)(1)). Unlike the provisions of the National

Traffic and Motor Vehicle Safety Act at issue in Geier, the

Clean Air Act is first and foremost a mandate to the

States, directing that they achieve certain levels of air

quality in a timely fashion. When this statutory mandate

is coupled with the savings clause of Section 116 (42

U.S.C. $7416), the explicit pre-emption provision of Sec-

tion 209 (42 U.S.C. §7543), and the findings and purposes

set forth in Section 101 (42 U.S.C §7401), some additional

burden or presumption against implied pre-emption would

be logically justified.

In the circumstances of this particular case, AALA

cannot carry its burden of proving that the Fleet Rules

interfere with the purposes of any Congressional intent for

regulation of fleets uniformity, even if such intent could be

implied from the CFFP program.

CONCLUSION

If States and local governments are to make progress

in the field of air pollution control as mandated by Con-

gress under the Clean Air Act, their wols for achieving its

purposes must be preserved. Judicial restraint and caution

has directed the past course of review where arguments

for implied field and conflict pre-emption have been

advanced. This is particularly true where the statute at

issue structures a dual regulatory role between the federal

government and the states. No indicia of Congressional

intent to pre-empt State authority can be tied to Section

246. For the foregoing reasons, SunLine supports the

South Coast Air Quality Management District in its

defense of the district court’s opinion and urge this court to

affirm that decision.

Respectfully submitted,

LisA GARVIN COPELAND, Esq.

LAW OFFICE OF LISA GARVIN COPELAND

74-040 Highway 111, Ste. 225

Palm Desert, CA 92260

- Attorney for Amicus Curiae

SunLine Transit Agency

App. 1

Cummins Westport SunLine Westport

INNOVATIONS INC.

Upgraded B Gas Plus Engine for Operation with

Hydrogen Blended Natural Gas Fuel

*Overview and Summary Results«

> Introduction

With funding from the U.S. Department of Energy

through NREL and SCAQMD, SunLine Transit Agency

initiated a project to demonstrate two buses operating on a

mixture of natural gas and hydrogen (HCNG or

Hythane®). SunLine asked Cummins Westport Inc. (CWI)

to upgrade the CWI B Gas Plus engine rated at 230

horsepower. The work was done by Westport Innovations

Inc., a parent company of CWI. Hydrogen Components Inc.

of Littleton, Colorado, which led the previous Hythane®

engine tests, is an advisory member of the current project

team.

Previous investigations have shown that the presence of

hydrogen in the natural gas enabled leaner (air/fuel)

mixtures to be used, leading to reduced nitrogen oxides

(NOx) emissions.

> Objectives

The objectives of the engine upgrade portion of the project

were to:

¢ determine if significant NOx reductions could still be

achieved on modern engines operating closer to the

lean (air/fuel) limit;

¢ determine the most suitable hydrogen content in the

range of 15% to 30% by volume for the B Gas Plus

engine, with the constraint of retaining the engine per-

formance and efficiency;

App. 2

¢ configure engine controls for operation on the chosen

mixture; and

® calculate the overall emissions benefits.

>» Engine

, The HCNG upgrade was developed for the CWI B Gas

Plus - an in-line 6 cylinder, electronically controlled and

turbocharged lean burn spark-ignited engine. The engine

has a displacement of 5.9 liters and is certified at

NOx+non-methane hydrocarbons (nmHC) levels of 1.8

g/bhp-hr and particulate matter (PM) of 0.01 g/bhp-hr

when fitted with the standard oxidation catalyst.

Hardware modifications were limited to the fuel flow rate

sensor. All other components remained unchanged.

>» Method

Natural gas and hydrogen blends were prepared and

stored in a high-pressure storage vessel.

The fuel mixture was fed to a B Gas Plus engine that was

mounted on a dynamometer. The engine was operated

under steady-state conditions at four selected speeds and

loads. At these operating points, engine combustion was

optimized over a defined matrix for hydrogen fractions

between 20 and 32%.

A 20% hydrogen content by volume was found to provide

the most cost effective benefits when taking into consid-

eration the engine and vehicle performance attributes.

Range consideration was also taken into account — for

example, a 20% hydrogen mixture reduces the range of a

vehicle by approximately 15%, unless more storage vessels

or higher-pressure vessels are used. A 20% hydrogen

2 eR

App. 3

mixture contains 3% hydrogen by mass and 7% hydrogen

by energy.

A full engine map was developed for the chosen mixture,

and was verified over the steady-state AVL 8 mode cycle,

which approximates the heavy-duty transient certification

cycle.

> Selected Results

Figure 1 shows that the power and torque curves are

maintained over the full engine speed range under HCNG

operation.

Figure 2 shows the pre-catalyst emissions results normal-

ized compared to the original natural gas operation. It

shows that NOx and nmHC emissions are reduced by 50%,

while CO and CH, emissions are slightly reduced. As

expected, CO, emissions are reduced by 7%, consistent

App. 4

with the hydrogen energy content, and with the main-

tained fuel consumption also shown in Figure 2.

higee 2

(NG comssons aad fuel (on sumpuen

mormetized agaicst ("6

(=)

6 £

arearr SRe a Se Yeon ee

Mx ankt#G @

® mK

The engine transient response was found to equal that of

the original natural gas engine operation over a simulated

transient school bus cycle. The school bus cycle simulates

transient changes in engine speed and load on an engine

dynamometer representing driving of an actual heavy-

duty vehicle involving idle operation, gear shifts, cruise

and rated power operation.

» HCNG Benefits

An upgrade of Cummins Westport’s engines to HCNG

would allow hydrogen to become a more rapid part of the

transportation fuel mix by enabling its usage in modern,

electronically controlled engines. Within a short time,

commercial Cummins Westport engines could be powering

medium- and heavy-duty vehicles using hydrogen. This

would catalyze the development of the hydrogen infra-

structure needed for future vehicles powered by pure

hydrogen.

App. 5

Based on the results achieved in this project, it appears

that substantial NOx reduction could be achieved com-

pared to both regular natural gas operation and diesel

operation. Opportunities may also exist for improved

efficiency and lowered greenhouse gas (GHG) emissions.

> Next Steps

As part of the Sunline demonstration, the two HCNG

buses will complete a 24,000 mile (38,624 km) on-road test

starting in the summer of 2003, which will include chassis

dynamometer testing of the vehicles. Two control CNG

buses will also be monitored for comparison.

Opportunities exist to apply HCNG to other engines as

well. An upgrade to the C Gas Plus engine rated at 280hp

could be developed for large buses and trucks.

To develop a fully commercial engine, CWI will have to

perform further product development tasks. For example,

formal emissions certifications or verification tests should

be conducted. Also, while previous demonstrations indi-

cate that natural gas fuel system components are not

affected by the presence of 3% hydrogen by mass, formal

components durability testing must be completed.

Contact Information

PUNE 4

ngine Upgrade Project:

. Sandeep Munshi

vanced Engine Development Scientist

tel: 604.718.2049

email: smunshi@westport.com

unline Bus Demonstration

Gay] Biondi

r, Business Development

tel: 760.343.3456

App. 6

email: gbiondi@sunline.org

estport Innovations Inc.

1700 West 75th Ave.

ancouver, B.C., Canada V6P 6G2

ousand Palms, CA 92276-3501

eb: www.sunline.org

)

App. 7

FUEL CELL BUS DEMONSTRATION PROJECTS

Hydrogen Fuel Cell & Infrastructure Technologies

Program

[LOGO] U.S. Department of Energy

Energy Efficiency and Renewable Energy

Bringing you a prosperous future where energy is

clean, abundant, reliable, and affordable

SunLine Test Drives Hydrogen Bus

IN FALL 2002, SUNLINE TRANSIT AGENCY became

the first transit agency to put a hybrid fuel cell bus into

routine passenger service. From November 2002 to Febru-

ary 2003, the prototype advanced technology bus served

Palm Springs, California, which is not far from SunLine’s

hometown of Thousand Palms.

SunLine collaborated with the U.S. Department of En-

ergys (DOE) Hydrogen, Fuel Cells & Infrastructure

Technologies (HFC&IT) Program on the evaluation of the

30-foot hybrid fuel cell bus that was developed by Thun-

derPower LLC, a joint venture by Thor Industries and ISE

Research. The data gathered during the ThunderPower

bus demonstration will help fleets make informed pur-

chasing decisions and help researchers assess whether

fuel cell vehicles can meet commercialization require-

ments.

This evaluation is one of several DOE projects that sup-

port the research and development of highly efficient, low-

or zero-emission fuel cell power systems, which serve as an

alternative to internal combustion engines. The demon-

stration is consistent with the HFC&IT goal of having

advanced technology vehicles enter the marketplace by

2010.

App. 8

THE PRINCIPLE BEHIND FUEL CELLS was discov-

ered in 1839 but wasn’t used in practical applications until

the 1960s when fuel cells were selected to produce electric-

ity for rockets during the Gemini and Apollo space pro-

grams. Fuel cells are favorable in transportation

applications because they produce little noise, have no

moving parts, and can increase a vehicle’s operating

efficiency by 20% to 30%.

The ThunderPower fuel cell bus has a compact but power-

ful 60-kilowatt fuel cell power plant to provide the re-

quired power. The propulsion system is efficient, quiet,

and reliable and can triple the fuel economy of a conven-

tional bus. Pius, the only emissions the system produces

are water and air, making the bus a zero emissions vehi-

cle.

The hydrogen fuel cell system in the ThunderPower bus

works like this:

¢ A heavy-duty fuel cell uses hydrogen, which can be

made from renewable sources (such as wind or solar

power), and air to produce enough electricity to power

the bus.

¢ The fuel cell produces electricity through a chemical

process using hydrogen and oxygen from the air.

¢ The electricity is routed to electric motors that turn the

wheels.

¢ On-board battery packs store energy to propel the bus

and absorb energy during braking. This is known as

“regenerative braking.”

THE THUNDERPOWER BUS looks like a standard bus

but is able to cover 11 miles on an energy equivalent

gallon of hydrogen, nearly triple the fuel economy of a

App. 9

30-foot conventional bus. It accommodates up to 26 riders

and has a range of 175 to 200 city miles.

ISE Research (ISE-TVI1) integrated the electric propulsion

with the drive system power plant in collaboration with

UTC Fuel Cells, which installed its newest technology

proton-exchange membrane (PEM) fuel cell in the bus. The

PEM combines a thin plastic film and a substance — called

electrolyte — that increases the conduction of electricity.

Manufactured by Thor/ElDorado National, the bus chassis

uses a drive system by ISE-TVI ThunderVolt™ and in-

cludes hybrid propulsion components of Siemens’ ELFA™

propulsion system. A motive drive hybrid subsystem is

based on a dual motor and controller set from Siemens.

This includes a combining gearbox that directly couples to

the two motors and provides a flange for a drive shaft to

the differential.

The dual motor/controller set has a continuous power

rating of 170 kilowatts and a peak power rating of 288

kilowatts. ISE-TVI also developed a communication

system integrating the fuel cell, drive system, energy

storage system, operator controls, accessory drives, and

standard bus controls.

SunLine’s Partners

In addition to DOE, SunLine-benefits from the support of

several partners. They include:

¢ Demonstration partners:

Sacramento Municipal Utility District, the U.S. De-

partment of Transportation, and South Coast Air Qual-

ity Management District

App. 10

* Technology partners:

ISE Research Corp. (syste'1s integration), UTC (fuel

cell), Siemens (propulsion system), Thor/ElDorado Na-

tional (bus chassis)

¢ Evaluation partner:

National Renewable Energy Laboratory

ACCORDING TO RESEARCHERS, the commercial use

of fuel cell buses may be 10 years away, but SunLine is off

to a good start and is a recognized leader in selecting and

using alternative fuels.

PHUNDERPOWER BUS FACTS

Bus Chassis Precommercial ElDorado National

7 ° EZ Rider 2

(Model Year 2002

Length/Width/Height (80 ft./102 in./137.5 in.

GVWR/Curb Weight 34,000 lbs./25,180 lbs.

Seats 26 (with no wheel chair spaces)

20 (with two wheel chair spaces)

(Wheel Base 160 in.

Service Transit service (Line 50)

Drive System High voltage electrical system

Engine Two electric motors; inverters; com-

lbining gearbox; pre-commercial,

zero emission fuel cell

Batteries 48 Panasonic

Transmission Automatic

Vehicle Controls Multiplexing system controlling

operations (driver controls, air,

ydraulic, cooling system, energy

anagement)

App. 11

Brakes [Regenerative with air support

[Hydrogen Storage On-board, pressurized tanks

Propulsion fuel cell (60 kW continuous),

electric AC induction motors

Drive System Siemens ELFA™ electric propulsio

Nominal Output 2 x 85 kW @ 600 VDC

[Peak Output 2x 140 kW

Rated Speed 9,000 rpm

Storage Device [Battery (under floor in rear)

Battery Pack 600V, 48 12 V batteries

missions Equipment Zero emissions

Fuel [Hydrogen fuel cells

In 1994, SunLine became the first U.S. public transit

agency to abandon its diesel buses and switch overnight to

an entire fleet of clean-burning compressed natural gas

buses. Before the prototype fuel cell bus arrived at

SunLine in 2002, the agency began generating hydrogen

on site from solar power and reformed natural gas.

When the demonstration of the prototype fuel cell bus

ended at SunLine, ‘he transit agency began looking at

options to acquire additional fuel cell buses. SunLine

managers believe DOE’s evaluation will be useful in estab-

lishing parameters, conducting environmental testing in

extreme heat conditions, and transferring technology to

the agency. SunLine looks forward to continuing its role as

a test site for new fuel cells and systems.

The ThunderPower bus left SunLine for Chula Vista

Transit to complete further testing and operation. Chula

Vista is located just south of San Diego and is near ISE

Research’s home offices.

App. 12

For More Information

Read about SunLine’s experience with the ThunderPower

bus in “ThunderPower Fuel Cell Bus Evaluation at Sun

Transit Agency,” a more detailed report that will be

available in September 2003 on Alternative Fuels Data

Center Web site (www.afdc.doe.gov). The publication will

feature details on the buses’ performance during its six

months of operation at SunLine, including its three

months of revenue service.

Neither the United States government nor any agency

thereof, nor any of their employees, makes any warranty,

express or implied, or assumes any legal liability or

responsibility for the accuracy, completeness, or useful-

ness of any information, apparatus, product, or process

disclosed, or represents that its use would not infringe

privately owned rights. Reference herein to any specific

commercial product, process, or service by trade name,

trademark, manufacturer, or otherwise does not necessar-

ily constitute or imply its endorsement, recommendation,

or favoring by the United States government or any

agency thereof. The views and opinions of authors ex-

pressed herein do not necessarily state or reflect those of

the United States government or any agency thereof.

App. 13

[LOGO]

Regional

Transit

SunLine

TRANSIT AGENCY

Three Year Comparison

~ of

Natural Gas and Diesel

Transit Buses

Revised August 1999

Sacramento Regional SunLine Transit Agency

Transit District Tracy Daly, Assistant

Cameron Beach, Chief General Manager

Operating Officer Bruce Finley,

Michael Cooke, Engineering Manager

Maintenance Manager Cis Leroy, Consultant

EXECUTIVE SUMMARY

This report details the experiences of two California public

transit agencies which replaced aging diesel buses with

new compressed natural gas (CNG) buses in 1994. The

operating characteristics and costs of 170 natural gas

buses were compared with 73 older diesel buses. The

natural gas bus fleets have operated well and led to cost

reductions in both fleets.

The findings are particularly significant because both

Sacramento Regional Transit District (RT) and SunLine

Transit Agency have been using the same engine-chassis

configuration, thus enabling a valid method to combine

cost data for a large sample fleet of buses. The data

indicates that labor for diesel equipment was almost twice

that for CNG vehicles, parts were 25% more and fuel costs

were nearly double.

App. 14

In 1997, CNG buses saved RT over $1 million in fuel,

maintenance, parts and hazardous waste disposal, a 38%

per mile reduction over the cost of their diesel buses. This

was an approximate cost savings that year of $0.197 per

mile over 5.7 million miles with 136 buses. That same

year, SunLine’s CNG buses saved over $200,000, a 27%

per mile reduction from the cost of RT’s diesel buses.

SunLine saved approximately $0.142 per mile over 1.5

million miles with 34 buses.

The incremental capital costs of CNG buses run between

$35,000 and $50,000 more per unit. After three years and

a combined 22.2 million miles of experience, the payback

appears to be realized in approximately six to eight years

or 250,000 to 350,000 miles per bus. Lower maintenance

costs are attributable to thorough mechanic training and

some CNG life-cycle cost reduction because of reduced

engine wear.

With the absence of carbon deposits, the CNG engines at

both agencies show no signs of needing a mid-life rebuild

as usually done with diesel engines at approximately

250,000 miles. The Federal Transit Administration’s

standard 12-year replacement cycle could potentially be

extended with maintenance practices concurrently improv-

ing chassis life expectancy.

Even though new CNG buses were compared to older

diesel buses, the data show that the margin of cost reduc-

tions continues to grow over diesel. The rate at which

diesel expenses climbed from 1995 to 1997 was 16%, while

RT’s CNG expenses went up 11% over the same period.

This is particularly significant given that RT reduced their

diesel fleet by 36% and increased the new CNG fleet by

30% during that time.

App. 15

Particulate matter and other harmful emissions from CNG

buses are greatly reduced over their diesel counterparts.

Both Sacramento RT and SunLine have found a win-win

in CNG as it is a more economical fuel over diesel and

their respective communities enjoy the good citizenship of

transit promoting cleaner air.

INTRODUCTION AND BACKGROUND

At the beginning of their respective transitions to alterna-

tive fuel, Sacramento RT aud SunLine were operating

fleets of diese] buses that were reaching significant age

and needing replacement. Both public agencies began

independent research into the plausible alternatives and

each decided upon CNG as the best choice at the given

time. It became mere coincidence that they chose the same

transit bus manufacturer, chassis and engine configura-

tion, albeit determined in great part by the availability of

California Air Resources Board-certified (CARB) engine

choices.

While there are known air quality advantages of CNG

fuel, what has been missing is a protracted study compar-

ing the maintenance cost impacts of CNG to diesel. Re-

ports at the onset of the alternative fuels movement

featured small sample sizes and/or a relative short study

of operating period. The data in this study was collected

from a large sample of buses from two transit agencies.

CNG versus diesel is compared head-to-head in equal

service environments and maintenance practices.

RT first began service in 1973 in the growing Sacramento,

California region. RT currently operates in a 418 square

mile area serving a population of 1,060,000 with 60 bus

App. 16

routes and light rail. The transit fleet consists of approxi-

mately 209 buses and 36 light rail vehicles. RT serves an

area that the Environmental Protection Agency has

classified as severe non-attainment for air quality and is

committed to eventually replacing all diesel buses with

buses fueled by lower emission CNG. Ridership on buses

and light rail totals approximately 24,802,000 unlinked

trips per year. Overall annual operating expense is ap-

proximately $55,000,000 for all agency-operations.

SunLine first began service in 1977 in the Palm Springs

and desert resort region of the Coachella Valley in South-

ern California. The current population is more than

260,000 and the service area is approximately 406 square

miles. Once having the dubious distinction of operating

one of the oldest fleets in the country, in 1994 SunLine

replaced its entire fleet with CNG buses. Ridership ex-

ceeds 3,500,000 per year. The overall annual operating

budget is approximately $11,000,000.

Both CNG fleets surpass the 1994 CARB stringent emis-

sion standards, primarily in reduction of particulate

matter and NOx emissions. Both agencies operate fueling

stations on-site. Both systems have had steadily increas-

ing ridership over the last few years.

PROFILE OF FLEETS

In fixed route service, RT operated 136, 40-foot Orion V

CNG buses built since 1993. These 136 buses operated

approximately 5.7 million miles per year, each averaging

about 42,000 miles per year. The 73 bus diesel fleet oper-

ated approximately 50 percent less.

App. 17

SunLine operates a 100% CNG fleet of 34, 40-foot Orion V

buses built in 1993 and 5, 29-foot El Dorado buses. For the

purposes of this report, only the 34 Orion buses have been

compared with RT’s buses. Each vehicle averaged about

43,500 miles per year, together nearly 1.5 million miles in

annual fixed route service. The study fleet composition is

listed in Table 1.

TABLE 1. STUDY FLEET COMPOSITION

Fleet | Quantity | Year Manufacturer

Diesel | CNG Engine

RT 48 1990 | Gi”ig | Detroit Diesel

6V92TA

25 1985 | Gillig | Detroit Diesel

V92TB

41 1996 | Orion Cummins

L10G/280

20 | 1994 | Orion Cummins

L10G/240

75 1993 | Orion Cummins

L10G/240

SunLine 34 1993 | Orion Cummins

L10G/240

TOTAL 73 170

Both agencies operate fully accessible fleets and comple-

mentary paratransit services, according to the Americans |

with Disabilities Act. The common CNG fleet configura-

tions studied in this report are model years 1993/94/96

Orion V powered by 6 cylinder cummins L10G engines,

original equipment manufactured for dedicated CNG

operation. All buses at both agencies have bike racks to

allow for multi-modal travel, wheelchair lifts, and air

conditioning, due to extreme summer air temperatures in

_ both regions. The diesel buses are model years 1985/90

App. 18

Gillig powered by Detroit Diesel 6V92 series engines.

These 2-stroke diesel engines are the most common source

of bus power in the American public transit system.

METHODOLOGY

This report was prepared by researching the maintenance

records and databases of both agencies. RT and SunLine

use different computer-based programs to track cost

categories and have different philosophies on tracking the

work order process as applied to cost allocations. Those

differences were manually adjusted in the final analysis

and cost breakdown, such that the data could be collated

into matching categorical descriptions. It appears that this

process was successful as indicated by the final totals for

CNG-to-CNG cost performance between the two agencies.

Assumption 1: New buses versus old. It is difficult to

quantify the maintenance advantage of a completely new

bus in comparison to one that has been aged in service.

Certainly, a new diesel bus would show maintenance cost

advantages over an old diesel bus, and the new CNG buses

are being compared to old diesel. For an agency attempt-

ing to discontinue diesel purchases, the CNG cost data can

still be used to make comparisons to similar vintage diesel.

All of the buses show increasing annual expense as each of

the fleets age. But, the margin of cost reductions of CNG

buses over diesel continues to grow, as explained in the

Years to Year Costs section (page 6).

Assumption 2: Characterization of operating envi-

ronments. RT and SunLine have very similar transit

duty demands on maintainability and reliability. Ambient

temperature, weather and primarily flat terrain of service

App. 19

area are similar. This factor is considered negligible as an

effect in collating the cost data.

Assumption 3: Weight disadvantages of CNG buses.

The weight of a CNG bus can be 2500 pounds more than a

diesel bus because of the CNG storage cylinders. Yet this

did not present a clear problem to either agency and

operationa! cost savings were still substantial. Tire wear

was included in the parts category. The intuitive conclu-

sion for increased brake wear due to the resulting in-

creased inertial forces was actually found to have

decreased by using state-of-the-art transmissions employ-

ing a speed retarder for additional deceleration assistance.

This same property would apply to new diesel buses, too.

Assumption 4: Fuel range impacts. The potential need

for interim, enroute fueling was not a problem for either

agency; each has its own fueling facilities on site. There

was no attribution to maintenance for a roadcall wo provide

refueling (or “rescue”) service because planning strategies

have eliminated those type of roadcalls.

Of note, the fuel range on the Orion buses is specified to be

at least 350 miles for equity to a diesel bus. Range can be

less due to high ambient temperatures combined with

CNG heat of compression and air conditioning use. Vari-

ous management strategies are employed when routes are

longer than the range. Rather than using maintenance

servicing trucks, a coach operator may drive out to the

relief point in a fully-fueled bus and have the relieved

operator return to base in the bus lower on fuel. Another

scenario may have coach operators exchange buses mid-

route when one is traveling back to base. These options

would then be reflected in operating cost rather than

maintenance cost. Management planning is crucial within

App. 20

the dispatch strategy to think through the mileage and

bus range of each line. Dispatchers acknowledge that it is

an easy process and soon becomes standard procedure.

Assumption 5: Training the maintenance personnel.

Training cost is net a factor of this report because of its

many variances, as well as a shared philosophy that

training is part of “business as usual” and would apply to

any fuel-bus configuration. Further discussion of training

is in the section Additional Investment in Switch to CNG

(page 9).

Assumption 6: Special projects. During the study

period SunLine was very active in assisting the clean fuels

industry advance the development of technology by becom-

ing a “beta” test site for commercialization via field dem-

onstration. The labor involved in tracking those specific

projects, as well as any impact to parts, has been deducted

in the final analysis to remove the potential to skew

results.

Assumption 7: Extrapolation of capital cost recov-

ery. The only portion of capital investment considered is

the incremental cost of bus price over a similar diesel bus.

In calculating capital recovery periods, the cost of mid-life

rebuild has been omitted. At this point in their mainte-

nance history, mid-life CNG engine rebuilds will not need

to occur as with diesel buses, since engine wear is substan-

tially reduced.

DESCRIPTION OF COST CATEGORIES

As was shown in Public Transportation alternative Fuels

... A Perspective for Small Transportation Operations

(Booz-Allen & Hamilton, Inc., 1992) use of “gaseous fuels

App. 21

will potentially allow less maintenance and greater engine

durability than operation with liquid fuels. This is because

of the elimination of formation of deposits on the fuel

injector tip, ring grooves, piston bowl and other combus-

tion chamber surfaces. Oil change frequency is longer

because of the reduction of formation of acidic products of

combustion. Gaseous fuels will not dilute the lubricating

oil, accelerating ring, cylinder and bearing wear” (pages 2-

62).

Data from both agencies demonstrates this general as-

sessment, as can be seen in the comparison of CNG and

diesel maintenance costs (Table 2 and Figure 1). SunLine

did not have diesel costs after 1994, since no diesel buses

remained in the fleet after that time. RT continued to

operate both diesel and CNG vehicles, so both comparative

costs are available. Following is a discussion of 1997

statistics in Table 2.

TABLE 2.

FY 1997 CNG VS. DIESEL COST PER MILE

Cost CNG RT

|_Category RT SunLine Diesel

Labor .087 111 .160

Parts .088 .061 .110

Fuel 122 .178 .223

Oil .006 012 .007

Indirect .019 015 .019

Total $0.322 $0.377 $0.519

Maintenance Labor. Labor costs were computed for

mechanics with chargeable time against a specific bus.

Graffiti removal is included by SunLine in the labor and

parts categories (body/glass). No administrative time is

computed in this costs.

App. 22

Maintenance Parts. Maintenance parts were consistent

for both agencies, although coding for computer input

varied somewhat. All parts chargeable to a specific bus

were included. In general, categories included: heating/

ventilation/air conditioning, body/glass, headsign, wheel-

chair lift, farebox, brakes, suspension, tires, driveline,

cranking/charging, electrical, engine/transmission cooling,

preventive maintenance, accident, and vandalism.

TABLE 3.

FUEL PRICES (PER GALLON EQUIVALENT)

CNG RT

RT SunLine Diesel

1995 $0.283 $0.538 $0.692

1996 .380 .600 .735

1997 .402 .551 .599

Fuel. The cost of compression (capital, electricity, and

maintenance) was not included in the figures of Table 2.

RT owns 100% of its fueling facility. SunLine owns 25% of

one facility and 90% of another facility. These percentages

are used in fuel cost calculations. On Table 3 is a listing of

fuel prices for CNG and diesel over the years of the study.

While RT’s diesel buses averaged 3.51 miles per gallon,

their most recent mileage for CNG buses was 3.07 and

SunLine’s was 3.09 miles per equivalent gallon.

Oil. This category includes only the cost of oil, while other

associated preventive maintenance costs (such as the

filters and labor), are allocated against parts and labor,

respectively. Both agencies have monitored oil quality

through independent analysis and are able to extend oil

change intervals between 10,000 to 12,000 miles.

— — —

App. 23

Indirect Costs. Indirect costs include “bench stock,”

overhead, and minor parts such as bulbs, fuses and hoses

which are generally low cost and not charged to specific

buses. Over several years, these costs can vary dramati-

cally depending on bulk purchases, fleet diversity and

specific fleet issues. Although these costs were a minor

portion of the overall cost, sometimes varying accounting

procedures can affect this type of line item.

FIGURE 1. FY 1997 CNG VS. DIESEL COST PER MILE

OD SunLine CNG

ORT CNG

BRT Diesel

App. 24

< N

8 3 3 3 3

S]'W Jed SOD

Total |

Fuel Oil Indirect

Parts

Labor

App. 25

MAINTENANCE COST SAVINGS ANALYSIS

FY 1997 Category Costs. RT labor and fuel for the older

diesel buses were nearly twice that for CNG buses and

parts were 25% more. Indirect costs and oil remained

approximately the same during the reporting period, since

RT had not yet decreased the frequency of oil changes for

the CNG buses. Oil change frequency has since gone from

8,000 miles to 10,000 miles.

For FY97, the data shows that CNG buses saved RT

$1,122,900 in fuel, maintenance labor, and parts. This is

significant with cost savings of $0.197 per mile over 5.7

million miles using 136 buses.

That same year, SunLine saved approximately $213,000,

or $0.142 per mile over 1.5 million miles with 34 CNG

buses. Similar to RT, cost savings are seen in fuel, main-

tenance, and parts. Oil changes for SunLine did occur

every 6,000 miles while the buses were under warranty,

and now oil changes are performed every 12,000 miles and

carefully monitored by analysis.

The total cost per mile differences between the two transit

agencies can be attributed to various factors. SunLine has

an aggressive preventive maintenance program (PM), and

therefore PM costs (labor and materials) account for 23%

of the budget, whereas at RT it comprises 16%. This

particularly rigorous program is also due in large part to

the desert climate of the SunLine service territory, where

blowing sand is a daily occurrence and vehicles must be

cleaned thoroughly. SunLine also uses each vehicle ap-

proximately 3% more than RT in revenue service.

App. 26

Indirect costs were slightly higher for RT than for SunLine

due to the diversity of its fleet, requiring more overhead in

bench stock/small parts.

Year-to-Year Costs. Cost savings can be attributed, in

part, to the newness of the CNG buses. Any new bus might

cost less to maintain than an older model, especially

during the manufacturer’s warranty period.

As expected in the data of Table 4, all of the buses showed

increasing annual expense as the fleets aged. It is interest-

ing to note that although there were expected cost savings

in the first years on CNG due to the warranty coverages,

the margin of cost reductions continues to grow over

diesel. Figure 2 represents the rate at which costs grew by

comparing the slope of trending costs. Diesel expenses

climbed 16% from 1995 to 1997, while CNG expenses went

up 11% over the same period for RT. That is even more

significant when considering RT reduced its diesel fleet by

36%, increased the new CNG fleet by 30% over the same

time frame, and the diesel buses incurred about 50% less

miles each year than the CNG buses.

SunLine had higher expenses in FY95 relative to the next

two years that could be attributed to two significant

situations. First there was a pressure relief device (PRD)

failure’ in December 1994 that required removal and

* SunLine had a high pressure PRD failure inside the maintenance

garage leading to a burn of vented fuel, causing no harm to personnel or

damage to buses, but minor facility damage. The extreme cost impact

was to hazardous material clean-up caused by fire suppression sprin-

kler flow into, and subsequent overflow of, waste oil reservoirs creating

a massive oil spill on the property. For more details, see the article

(Continued on following page)

App. 27

replacement of PRDs for the total fleet. That event would

have contributed a cost of vented fuel loss to depressurize

the storage system and increased mechanic time to accom-

plish the upgrade to newer PRDs (RT upgraded in FY97).

Second, in January 1995 SunLine opened a second operat-

ing division that required the additional expense of mobile

fueling of the fleet until the installation of a fixed-site

compressor station.

The significant conclusion depicted here is that the re-

duced rate of CNG cost growth may indeed be an indicator

of lower life cycle costs as addressed in the cost category

descriptions and the increasing cost savings shown in

Table 5.

TABLE 4. YEAR-TO-YEAR

COMPARISON TOTAL COST

Dollars per 1000 Mil

Fuel Type | Agency |FY 1995; FY 1996 | FY 1997

Diesel RT 447 466 519

CNG RT 290 294 322

SunLine | 366 343 377

TABLE 5.

YEAR-TO-YEAR COMPARISON COST SAVINGS

Dollars per 1000 Miles

Agency _ FY 1995 FY 1996 FY 1997

RT 157 172 197

SunLine 81 123 142

published in Natural Gas Fuels Magazine, November 1995, Safety First:

Lessons Learned from a Pressure Relief Device Failure.

FIGURE 2. TREND COMPARISONS OF COSTS AND SAVINGS

App. 28

Oo ; | f ::

. kk oe 1 g

Oo © \ >

g 2 8g g 8

($) SPW 0001 Jed yso5

— ————

App. 29

ADDITIONAL SAVINGS

Both RT and SunLine are experiencing cost savings in

hazardous waste disposal. This can be explained because

of fewer oil changes. Since the 4-stroke, spark-ignited

engine remains cleaner in the absence of heavy particulate

matter, it does not require steam cleaning as often, which

in California creates hazardous waste that must be carried

away for disposal. In addition, clean-up in the shop and in

the parking area is also substantially less. SunLine’s

hazardous waste disposal costs have decreased approxi-

mately 72% since removal of diesel buses from the fleet.

RT’s hazardous waste costs have decreased by one third,

but are expected to decrease further as fewer diesel buses

make up the fleet.

Roadcalls have not been compared because of the diversity

of reporting procedures between the two agencies. For

example, the Federal Transit Administration (FTA) does

not specify that a malfunctioning air conditioner is a

roadcall, but both agencies count these as roadcalls be-

cause of climatic conditions. Still, neither agency has

experienced a significant number of CNG-system related

road calls.

The transit industry diesel average is approximately 4,000

miles between road calls for all categories. Even with

variances in reporting between the two agencies, the

differences are impressive. SunLine’s most recent figures

exceeded 29,000 miles between road calls. RT’s most

recent figures show the CNG bus average exceeded 8,500

miles compared to 6,200 miles between road calls for their

older diesel buses. SunLine’s advantage can be attributed

to an innovative practice of a joint inspection by the

operator and mechanic when the bus returns from service

App. 30

each day. This reduces the potential of unreported prob-

lems producing road calls.

INCREMENTAL COST PAYBACK

Until the manufacturing volume of CNG buses begins to

match that of their diesel counterparts, the incremental

cost of a CNG-equipped bus will be higher (currently

between $35,000 and $50,000 more per unit). At the rate

of savings experienced during the first three years of

operation, the payback of the incremental cost would occur

about half way through the life of the buses. Table 6 shows

the payback calculated at $50,000 incremental cost per

unit without consideration of life cycle cost factors.

All information currently gathered indicates CNG will

have a favorable reduction in life cycle costs. RT sought to

find out whether their fleet would need the mid-life engine

rebuild normally required for diesel engines at 250,000

miles. Cummins West, Inc., analyzed internal wear factors

to assess engine durability during disassembly of an RT

engine which had 296,628 miles. The engine was found to

be in very good condition and no problems were discovered

which would have prevented it from continuing to operate

in the fleet. The internal report noted that the bearings

could easily go for double the mileage, the crankshaft was

reusable without rework, the pistons were visually in

“new” condition, and the oil pump was in excellent condi-

tion.

With the absence of carbon deposits, additional life-cycle

cost savings have resulted as the CNG engines at both

agencies show no signs of needing a $3,000 to $4,000 mid-

life rebuild.

i ee ——

TABLE 6. PAYBACK OF INCREMENTAL COSTS

253,807

352,113

$1,122,900 | $ 0.197 | 6.1

$ 213,000 | $ 0.142 | 8.0

136

* FTA guideline for the planned replacement life of a bus is 12 years or 500,000 miles.

App. 32

ADDITIONAL INVESTMENT INSWITCH TO CNG

Both agencies experienced initial costs of fuel station

installation, facility modifications and training for both

mechanics and operators. Other than the fuel station

capital cost recovery in the price of fuel, these costs were

not factored into the cost per mile comparisons.

Fueling and maintenance facilities. SunLine spent

$1.47 million to design and construct its CNG fueling

facility and adapt the maintenance facility. In partnership

with Pickens Fuel Corporation, SunLine operates a public

access 1200 scfm fuel station with two compressors.

SunLine has a 25% ownership share and receives credits

for all fuel sales; therefore, some of the capital costs are

offset by the volume of sales to neighboring public and

private fleets. Facility renovations included automated

make-up air ventilation integrated into gas detec-

tion/alarm systems of 12 sensors for automatic activation

of the new mechanical exhaust fans, explosion proof

electrical conduit, sealed sulfur lighting, and totally

enclosed heaters.

RT spent $3.5 million to design and construct its CNG

fueling facility and adapt the maintenance facility. This

included three compressors, dehydrators, buffer vessels,

dispenser/control units, control room and emergency shut-

down (ESD) system. RT’s design, similar to SunLine’s,

incorporated 28 gas/fire sensors that detect the presence of

gas and increased shop air flow through the installation of

several new ventilation systems, both electric and passive.

It should be noted that many of these up-front costs of

facility modification were incurred for safety reasons and a

vast array of choices exist between regulatory jurisdictions

App. 33

in interpreting guidance for the acceptable level of mitiga-

tion versus the potential for a hazardous occurrence.

Mechanic training. SunLine’s mechanics attended 100

hours of training at College of the Desert (COD), which

cost approximately $84,000 in mechanic wages and bene-

fits. RT invested between $27,000 and $30,000 in labor

costs to retrain their mechanics.

As is the case with any relatively new product, personnel

need to be trained in order for the introduction of the new

technology to be successful. SunLine and RT firmly believe

the positive results shown in this study are directly

related to thorough training practices. For training to be

effectively implemented there has to be a commitment

from top management toward the alternative fuel and

acceptance of lost productivity during the transition

period.

Costs of New Technology and the Payback. As dis-

cussed in the Maintenance Cost Savings Analysis section

(page 6), both agencies replaced pressure relief devices

which affected expenses. In 1998 following this study, RT

began replacing their EDO brand cylinders because of a

leakage problem, whereas cylinders usually last 15 years.

The up front costs incurred in fueling and maintenance

facilities are not calculated here in terms of payback.

Because both agencies have committed to procurement of

a growing number of CNG vehicles over time, it would be

inaccurate to load the upfront infrastructure costs c.gainst

the initial vehicles. In SunLine’s case, public access

infrastructure supports paratransit and non revenue

vehicles, as well as a variety of local government vehicles

and heavy duty refuse trucks. At RT, their CNG bus fleet

is growing each year and their 200+ fleet will be all CNG

App. 34

in the next few years. Both agencies are in natural gas for

the long run, and the greater the number of vehicles using

the infrastructure, over time, the lower those costs are per

vehicle and operating costs per mile.

Infrastructure is a substantial cost, but one that can be

offset either by making the fueling facility a profit center

(as SunLine has done) or by not incurring those costs at all

by fuvling off-site. Another way of looking at the cost is

determining the cost of a diesel fueling facility and its

ongoing facility costs.

POLICY IMPLICATIONS AND CONCLUSION

The savings resulting from CNG buses help maintain an

equitable pace with inflation, thus enabling both agencies

to plan for vehicle replacements and possibly add service,

as the stability of future funding allows. Lower mainte-

nance costs are attributable to thorough mechanic train-

ing. There also appears to be some longevity advantage for

CNG life-cycle cost reduction because of reduced engine

wear due to fewer engine deposits, resulting absence of

engine knock, better oil life, and longer life of reciprocating

engine components.

With the absence of carbon deposits leading to longer life

of load bearing surfaces, the CNG engines at both agencies

show no signs of needing a rebuild as is normally done

with diesel engines at 250,000 miles. The Federal Transit

Administration’s standard 12-year replacement cycle coula

potentially be extended with maintenance practices

concurrently improving chassis life expectancy (in favor-

able climactic environments). Particulate matter and other

harmful emissions from CNG buses are greatly reduced

over their diesel counterparts.

App. 35

Prior studies indicate the operating costs of CNG buses

are generally higher or about the same as diesel, but the

number of CNG buses compared was much smaller than

the number of diesel vehicles. The cost to operate five

CNG buses at Pierce Transit was $0.28/mile and five CNG

buses at Metro-Dade was $0.55/mile, as reported in the

October 1996 National Renewable Energy Laboratory’s

(NREL) Alternative Fuel Transit Buses, Final Results...

from a Vehicle Evaluation Program. The NREL study was

closely matched with diesel controls. RT and SunLine’s

data are within the best and worst range of that report but

showed much better results over diesel, which could be

partly attributed to the age of RT’s diesel engines.

RT will continue to procure buses with CNG engines to

meet the goal of replacing the entire fleet by 2003.

SunLine will continue to purchase only CNG or new clean

technology replacement vehicles for service operation and

support. Both agencies will pursue all subsequent im-

provements to CNG technology, with the goal of providing

more reliable vehicles in a cleaner environment.

Use of CNG technology also improves the image of mass

transit. Transit buses are usually thought of as belching

black smoke, and no driver enjoys being behind a bus in

slow moving traffic. CNG buses emit no black smoke

particulates, which stain the buses making them appear

unattractive, and they are also quieter to operate. This

presents a more appealing perspective of bus riding;

hopefully encouraging more individuals to use mass

transit and take community pride in their transit systems.

In August of 1998, California became the first state in the

nation to declare that diesel exhaust is a toxic air con-

taminant, one that can cause cancer and other disease.

App. 36

With the growing environmental and health concerns of

diesel, both agencies are sending strong messages to the

citizens of their communities that alternative fuels help

maintain a clean environment. Elected officials at both

public agencies share a commitment to use alternative

fuels and assist other local partners in using alternative

fuels. Such efforts are already occurring with sanita-

tion/refuse haulers, local water districts, car rental agen-

cies, shuttle services, and municipalities. Both agencies

are active participants in their regions’ U.S. Department

of Energy Clean Cities programs.

CNG buses support the local economies of Sacramento as

the California state capitol, and the Coachella Valley as an

international resort destination. Air quality is an impor-

tant destination criteria to visitors and residents alike.

Both Sacramento RT and SunLine have found a win-win

in CNG with significant maintenance savings and emis-

sion reductions. It is more economical to power buses on

CNG than diesel and both communities take pride in

transit’s leadership in promoting cleaner air.

The authors wish to thank staff from the following organi-

zations for their technical review of the article before final

publication: Clean Air Now (Riverside, California), Gas

Research Institute (Chicago, Illinois), INFORM (New York,

New York), National Renewable Energy Laboratory

(NREL: Golden, Colorado), Natural Gas Vehicle Coalition

(Washington, D.C.).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.