November 17, 1995

South Coast Air Quality

Management District Board

Background

Heavy-duty trucks (HDT) account for 4% of the vehicle population in California, but contribute nearly 50% of the oxides of nitrogen (NOx) and over 80% of the on-road particulate matter (PM) as estimated by the California Air Resources Board (ARB) for the year 2000. The majority of these trucks are powered by diesel fuel. The ARB has estimated that about 20% of the heavy-duty truck vehicle miles traveled (VMT) is produced from vehicles registered outside California, further exacerbating the problem.

At its May 1995 meeting, the AQMD Governing Board approved release of Request for Proposals (RFP) 9495-31 entitled, "Alternative Fuels-Heavy-Duty Truck Demonstration, to solicit demonstration projects for alternative fuel use in heavy-duty trucks. The objective of the RFP was to solicit proposals to develop and demonstrate the use of alternative fuel engines with NOx emissions of 2.5 g/bhp-hr, one-half the current NOx standard, or lower. The RFP further expressed a goal of ten or more trucks at each host site. The purpose of this goal was to expand current alternative fuel truck experience beyond the one and two prototype vehicle stage.

Three proposals were received in response to this RFP: 1) County Sanitation Districts of Orange County (CSDOC) who proposed to demonstrate a dual-fuel (diesel pilot ignition/compressed natural gas) Caterpillar 3176B engine in trucks transporting biosolid materials from Fountain Valley to Kern County; 2) Acurex Environmental Corporation (Acurex) who proposed to demonstrate liquified natural gas (LNG) Cummins L-10 and M-11 engines in trucks operated by J. B. Kelley and Apex Bulk Commodities and traveling interstate routes; and 3) The Tred Foundation who proposed to demonstrate ten LNG Cummins L-10 engines in trucks operated by Ryder Commercial Leasing and Services and their customers in the Basin.

The proposals were reviewed and scored by a committee composed of representatives of the AQMD and the California Energy Commission, and an independent consultant. The selection committee recommended that the CSDOC and Acurex receive full and partial awards respectively. The committee's recommendation that both Acurex and CSDOC be funded was arrived as a result of the unique aspects of each project. The CSDOC project will demonstrate the viability of a dual-fuel re-engine strategy, while the Acurex proposal will demonstrate the viability of alternative fuel use in interstate trucking applications. The CSDOC proposal received the highest score, and was recommended for full funding of $447,000. The Acurex proposal requested $1,000,000 for two interstate truck demonstrations - one travelling LA Basin-Salt Lake City-Sacramento, the other LA-Arizona. The $1,000,000 funding constraint of the RFP precluded full funding of the Acurex proposal. However, the committee recommended funding part of the proposal, the LA-Salt Lake City-Sacramento demonstration of five LNG trucks, in the amount of $553,000. Attachment 1 describes the selection process in greater detail.

Proposals

CSDOC will install a CNG fueling facility at its Fountain Valley site and demonstrate the Caterpillar 3176B dual-fuel engine in ten heavy-duty trucks that transport municipal biosolids from Fountain Valley to Kern County. The 3176B dual-fuel engine burns natural gas with a small quantity of diesel as a pilot to achieve significant emission reductions compared to dedicated heavy-duty diesel engines. Ten trucks will be repowered with the 3176B dual-fuel engine and three control trucks will continue to operate on standard 3176 diesel engines. Each truck will make the approximately 300-mile round trip twice a day. Battelle Memorial Institute will provide technical support to the demonstration.

Acurex will demonstrate five Cummins L-10 engines, operating on LNG, in vehicles operated by J. B. Kelley. J. B. Kelley is a high-mileage operation that conducts interstate business. Acurex shall also establish a fueling facility at or near the host site in the Inland Empire. A major objective of this demonstration is to create a Clean Corridor Program, with the trucks operating on a Basin-Salt Lake City-Sacramento-Basin route. This is the first step in addressing the issue of out-of-state trucks entering California, and creating a fueling infrastructure to serve those trucks.

Financial Terms

Staff recommends that the AQMD cosponsor two demonstrations of LNG in heavy-duty trucks, one with CSDOC and the other one with Acurex.

County Sanitation Districts of Orange County

CSDOC requested $447,000 cosponsorship funding from the AQMD, with the total project cost being $2,402,459. Project cosponsors and their respective contributions are defined below.

Direct In-kind

Project Participant Contributions Contributions

CSDOC $ 836,000
The Gas Company $ 93,500
Pima Gro Systems, Inc. 192,700
Power Systems Associates 838,259
Emission Testing 80,000
AQMD 447,000 _________

Total $1,475,700 $926,759

Acurex Environmental Corporation

Acurex requested $1,000,000 in AQMD cofunding to support demonstration of LNG trucks at two sites. Staff recommends demonstration support at only one site in the amount of $553,000. The total project cost is $1,597,550. Project cosponsors and their respective contributors are defined below.

Direct In-Kind

Project Participant Contributions Contributions

J. B. Kelley $ 469,550
ALT-USA/Mesa Pacific LNG 375,000
*U.S. DOE 1995-96 $ 200,000
AQMD 553,000 ________

Total $ 1,222,550 $ 375,000

*Contingent on approval of DOE 1995-96 budget by Congress.

Sufficient funds are available in the Fiscal Year 1995-96 Budget of Technology Advancement to fund these two projects in the amount of $1,000,000. These projects were approved at the October 11, 1995 Technology Committee meeting. In addition, they have been approved by the Technical Review Committee established to review the allocation of SB 2297 funds.

THEREFORE IT IS RECOMMENDED THAT YOUR BOARD

--Authorize the Chairman to execute an agreement with the County Sanitation Districts of Orange County, in an amount not to exceed $447,000 to demonstrate the Caterpillar 3176B dual-fuel engine.

--Authorize the Chairman to execute an agreement with Acurex Environmental Corporation in the amount of $553,000 to demonstrate the Cummins L-10 natural gas engine with Jack B. Kelly, Inc.

Respectfully,

James M. Lents, Ph.D.
Executive Officer

ACL:ARA:CS

Attachment