Monday, January 23, 2012

Pollution control industry to EPA: cleaner cars and cleaner gas mean big economic benefits

This is an excellent letter. It points out that long-awaited EPA standards for cleaner cars and cleaner gasoline will not only mean cleaner air, but also real economic benefits.

January 13, 2012
BY E-MAIL
The Honorable Lisa Jackson
Administrator
U.S. EPA Headquarters
Ariel Rios Building
Mail Code: 1101A
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

jackson.lisa@epa.gov

Dear Administrator Jackson:

We are writing collectively as representatives of the mobile source emissions control industry to respectfully urge you to advance the agency’s proposal for Tier 3 emission and fuel standards this month and adopt the new standards by mid-year. We fear that delay will jeopardize the ultimate
adoption of these new standards and deny the country of the health and economic benefits associated with the new rule.

The potential health benefits associated with Tier 3 are well established by numerous health effects studies. The plain fact is passenger vehicles are a major source of emissions of ozone precursors,carbon monoxide, and particulate matter. Studies have shown that these pollutants threaten human
health by reducing lung function, aggravating asthma and other chronic lung diseases, causing permanent lung damage through repeated exposure, and causing heart attacks.1

These health threats can lead to premature death. Tier 3 has the potential to substantially reduce these health threats by cutting overall vehicle emissions of nitrogen oxides by 29%, carbon monoxides by 38%, and volatile organic compounds by 26% by 2030.2

Reducing the sulfur content of gasoline is critical to achieving these emission reductions on new vehicles. State-of-the-art emission control systems require low sulfur fuel to achieve optimal performance in terms of both emissions reduction and cost. Importantly, reducing the sulfur content
of the fuel will also reduce harmful emissions from the in-use-fleet by almost 30% in the first year of the program.

In addition to these important environmental benefits, Tier 3 also has the potential to generate substantial economic benefits. First among these is the ability of the auto industry and its suppliers to scale production and maximize efficiency in the manufacture of new vehicles and systems that are
designed to meet the tighter tailpipe emission standards.

1 Health Effects Institute, “Traffic-Related Air Pollution: A Critical Review of the Literature on Emissions, Exposure, and Health Effects, Special Report 17,” January 12, 2010.

2 National Association of Clean Air Agencies, “Cleaner Cars, Cleaner Fuel, Cleaner Air: The Need for and Benefits of Tier 3 Vehicle and Fuel Regulations,” October 2011, p 16.


California is adopting new emission standards under their LEV III rule to address serious ozone and PM nonattainment problems in many regions of the state. If EPA does not move forward promptly to adopt Tier 3, other states with ozone and PM nonattainment problems will likely adopt emission
standards similar to LEV III, as they are authorized to do so under the Clean Air Act. This would result in automakers and their suppliers having to manufacture vehicles with different emission systems for different state markets.

Tier 3 addresses this problem by harmonizing emission standards across the country. This would enable car makers and their suppliers to scale production to one set of standards, thereby minimizing the cost of the emissions reduction for the auto industry, its suppliers, and consumers alike.

The second important economic benefit is the increased investment that will be driven by Tier 3. Automakers, their suppliers, and petroleum refiners will have to make an increased investment to meet the new tailpipe and fuel standards. This investment will most certainly generate employment
opportunities in the United States. Our industry is willing and eager to make this investment to improve the national economy.

The third economic benefit is the technology development that will be required to meet the new Tier 3 standards. Over the last forty years, our industry has collaborated with our customers in the auto industry to develop successive generations of emission control technologies to meet the evertightening emission standards. Because the United States has led the world in mobile source regulation, we have also led the world in the development of emissions reduction technology. Tier 3 will be no different.

It will establish a new threshold of tighter standards that will set the stage for the next step of emission reductions around the world. We will develop technology that will meet the new Tier 3 standards in the United States first. And, as these new standards migrate around the world,
we will be in the best position to supply product into these new expanding markets.

The experience of our industry over the last 40 years vividly demonstrates this connection between regulation and economic development. Prior to 1970, our industry did not exist. But, with the enactment of the Clean Air Act in 1970, our industry has flourished, developing successive generations of technology to meet ever tightening regulatory standards. Since the introduction of the catalytic converter in 1975, more than 500 million light-duty vehicles have been sold in the United States equipped with exhaust and evaporative emission control technologies developed by our
industry. This generated an estimated $250-$300 billion in economic activity since 1975. In 2010 alone, our industry generated $12 billion of economic activity and accounted for 65,000 U.S. jobs, mostly in manufacturing.3

We understand that other parties have argued against the adoption of low sulfur fuel standards because of increased investment that may be necessary at the refinery level to meet the lower sulfur standard and because of an alleged increase in the cost of gasoline for consumers. We believe that
increased business investment is good for America and we are prepared to make the investment to meet the new Tier 3 tailpipe standards. We believe our customers in the automobile industry share this view.4

3 Manufacturers of Emission Controls Association, “MECA Highlights Economic Benefits of Mobile Source Emissions Control Industry,” March 11, 2011.

4 Bainwol, Mitch. Letter. Alliance of Automobile Manufacturers, October 6, 2011.


We also believe that the cost to consumers of low sulfur fuel is insignificant, at less than $5 per year for an average American driver.5 This small increased cost of fuel will be more than offset for American consumers by the health benefits of cleaner air arising from the new Tier 3 emission and fuel standards.

We appreciate the opportunity to make our views known and stand ready to be of assistance to your agency as you proceed with your consideration of Tier 3.

Sincerely,

Joseph Kubsh
Executive Director
Manufacturers of Emission Controls Association
www.meca.org

Timothy Regan
President
Emissions Control Technology Association
www.ectausa.com

BASF Corporation
BorgWarner Inc.
Bosal Emission Control Systems North America
Clean Diesel Technologies Inc., including Catalytic Solutions Inc. and
Engine Control Systems Limited
Corning Incorporated
Johnson Matthey Inc.
MANN+HUMMEL USA
NGK Automotive Ceramics USA, Inc.
Stoneridge Inc.
Tenneco, Inc.
Umicore Autocat USA
Unifrax I LLC

cc: Bob Perciasepe, Deputy Administrator, EPA (perciasepe.bob@epa.gov)
Gina McCarthy, Assistant Administrator, OAR (mccarthy.gina@epa.gov)
Nancy Sutley, Chair, CEQ (Nancy_H._Sutley@ceq.eop.gov)
Gary Guzy, Deputy Director, CEQ (Gary_S._Guzy@ceq.eop.gov)
Margo Oge, Director, OAR/OTAQ (oge.margo@epa.gov)
Cass Sunstein, Administrator, OIRA (Cass_R._Sunstein@omb.eop.gov)
Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, (Heather_R._Zichal@who.eop.gov)

5 National Association of Clean Air Agencies, “Cleaner Cars, Cleaner Fuel, Cleaner Air: The Need for and Benefits of Tier 3 Vehicle and Fuel Regulations,” October 2011, p 15. The sulfur provision translates to a cost
of $4.80 per year for the average driver or the equivalent of about 1.5 gallons of gasoline at current prices (assumes 12,000 miles/year, 25 mpg, 1 cent/gal

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