Governor’s Vehicle Emissions Workgroup Report November 2005 State of Oregon 2 Preface In March of 2005, the Governor’s Advisory Group on Global Warming submitted its final report to Governor Kulongoski, which recommended that the Governor convene an interim Workgroup on California’s motor vehicle emission standards, with the LEV II and Pavley components. The Governor established this Workgroup, made up of citizens, environmental, and business interests. Members included: Mark Reeve (Chair) Reeve Kearns Bob Anderson NW Auto Trades Association Alan DeBoer Oregon Auto Dealers Association Steven Douglas Alliance of Automobile Manufacturers Elliott Eki AAA Steve Gutmann Flexcar Chris Hagerbaumer Oregon Environmental Council Ashley Henry Oregon Business Association Al Jubitz Citizen, retired, Jubitz Corporation Mitch Rofsky Better World Club Don Taylor City of Portland Fleet Administrator Ex-Officio Members: David Van’t Hof Governor’s Office Andy Ginsburg Oregon Department of Environmental Quality The Governor asked the Workgroup to explore issues surrounding the implementation of California standards in Oregon. The Workgroup was specifically charged with providing information on the costs, benefits, and impacts of the following California motor vehicle emission requirements and issues: 1. Legal requirements and issues; 2. Expected benefits to human health and the environment; 3. Costs of new vehicles (including potential vehicle owner benefits); and 4. Effect on vehicle model availability (including diesel vehicles) and the biodiesel market. The Workgroup was further charged with identifying the pros and cons of the implementation features associated with the California motor vehicle emission requirements. Those features or requirements were: 1. Zero emission vehicle (ZEV) requirements, including the effect on the auto repair industry, 2. Compliance verification and enforcement, and 3. Administrative costs and funding. Sam Imperati, J.D., Executive Director of the Institute for Conflict Management, Inc., facilitated the process. Rachel Sakata, Dave Nordberg, and David Collier of the Oregon Department of Environmental Quality staffed the Workgroup. Members met over the course of 4 ½ days in September and October 2005, and this report summarizes their discussions. The Workgroup reviewed drafts of this document and the facilitator participated in the creation of this final report. 3 Table of Contents I. Background on California’s On-Road Motor Vehicle Regulations ....................... 9 A. Introduction............................................................................................................ 9 B. What States have Adopted California’s Emissions Standards? ............................ 9 C. Overview of the Motor Vehicle Emissions Standards............................................ 9 D. Similarities and Differences between Federal (Tier 2) and California (LEV/Pavley) Vehicle Standards ............................................................................................... 13 E. California’s Zero Emissions Vehicle (ZEV) Requirement .................................... 13 F. NMOG Fleet Average Emission Requirement..................................................... 14 G. Role of Reformulated Gas................................................................................... 14 H. Discussion of Background Material ..................................................................... 14 1. Summary of Guest Speaker Comments.................................................. 14 2. Summary of Public Comments ................................................................ 15 3. Summary of Workgroup Comments ........................................................ 16 II. Legal Requirements and Issues for States Opting into California’s Motor Vehicle Regulations ................................................................................................ 18 A. Federal Preemption and Exceptions ................................................................... 18 B. Process for Opting in to California’s Standards................................................... 18 C. Identicality Provision and “Third Vehicles”........................................................... 18 D. Prior Litigation..................................................................................................... 19 E. Current Lawsuits................................................................................................. 20 1. Regulation of CO2 as a Pollutant ............................................................. 20 2. Fuel Economy Standards........................................................................ 20 3. California Environmental Quality Act (CEQA).......................................... 21 4. Oregon’s Expenditures to Adopt California Standards ............................ 21 F. Impact of Pavley Lawsuits if Successful.............................................................. 21 G. Discussion of Legal Issues and Requirements.................................................... 21 1. Summary of Guest Speaker Comments.................................................. 21 2. Summary of Public Comments ................................................................ 21 3. Summary of Workgroup Comments ........................................................ 22 III. Expected Benefits to Human Health and the Environment in Oregon............... 23 A. Overview ............................................................................................................. 23 B. Pollution Impacts................................................................................................. 23 1. Pavley...................................................................................................... 23 2. LEV.......................................................................................................... 23 C. Emissions Reductions......................................................................................... 24 1. Background.............................................................................................. 24 2. Greenhouse Gases (Pavley) ................................................................... 24 3. Criteria Pollutants (LEV) .......................................................................... 25 4. Modeling Results..................................................................................... 25 5. Methodology/Range of Results................................................................27 6. Effects of Inspection/Maintenance program ............................................ 28 D. Discussion of Costs, Benefits and Impacts ......................................................... 28 1. Summary of Guest Speaker Comments.................................................. 28 2. Summary of Public Comments ................................................................ 29 3. Summary of Workgroup Comments ........................................................ 29 4 IV. Cost of Vehicles ...................................................................................................... 33 A. Overview ............................................................................................................. 33 B. California Air Resources Board (CARB).............................................................. 33 1. LEV.......................................................................................................... 33 2. Pavley Costs............................................................................................ 33 3. Pavley Savings ........................................................................................ 34 C. Northeast States Center for a Clean Air Future................................................... 34 D. Auto Industry Estimates ...................................................................................... 34 E. Reliability of Past Cost Estimates........................................................................ 35 F. Costs of No Action under the California Standards............................................. 35 G. Discussion of Costs, Benefits and Impacts ......................................................... 37 1. Summary of Guest Speaker Comments.................................................. 37 2. Summary of Public Comments ................................................................ 38 3. Summary of Workgroup Comments ........................................................ 38 V. Independent Auto Repair Industry ........................................................................ 39 A. Overview ............................................................................................................. 39 B. Discussion of Costs, Benefits and Impacts ......................................................... 40 1. Summary of Guest Speaker Comments.................................................. 40 2. Summary of Public Comments ................................................................ 41 3. Summary of Workgroup Comments ........................................................ 41 VI. Vehicle Model Availability (including diesel vehicles) and the Biodiesel Market....................................................................................................................... 43 A. Model Availability for Gasoline Vehicles.............................................................. 43 B. Potential Effect for Gasoline Vehicle Availability in Oregon ...............................