South Coast Air Quality Management District

Execute Three Contracts to Cosponsor Development of Next-Generation Natural Gas Vehicles

SYNOPSIS:

The U.S Department of Energy/National Renewable Energy Laboratory (DOE/NREL) issued an RFP to cosponsor development of the "Next Generation of Natural Gas Vehicles" (NGNGV). The purpose of NGNGV is to develop new low emission heavy-duty natural gas vehicles for commercialization starting in 2004. Of the highest rated proposals, four were recommended for DOE/NREL funding and three for AQMD funding. Staff proposes executing two contracts with Cummins Westport for $400,000 and $378,715, and one with GFI Control Systems for $140,000. The funding of $918,715 for these three contracts will include $471,541 from AQMD, and $447,174 from CEC to be passed through AQMD. These three contracts will cost a total of $2,774,684 with the remaining balance of $1,855,969 cost-shared by the proposers.

COMMITTEE:

Technology, July 27, 2001. Less than a quorum was present during the discussion of this item; the Vice Chair communicated the concurrence of the members present in the meeting and their recommendation that this item be forwarded for Board consideration with no approval or disapproval recommendation from the Committee.

RECOMMENDED ACTION:

1. Recognize $447,174 in revenue from the California Energy Commission (CEC) to the Clean Fuels Fund and authorize the Chairman to execute an agreement with the CEC to cofund two projects with Cummins Westport.
   
   
2. Authorize the Chairman to execute a contract with Cummins Westport Incorporated to evaluate and demonstrate exhaust emission treatment technologies for heavy-duty natural-gas engines in an amount not to exceed $400,000 from the Clean Fuels Fund ($347,174 from CEC).
   
   
3. Authorize the Chairman to execute a contract with Cummins Westport Incorporated to develop preliminary natural-gas vehicle designs and market introduction strategies for a medium-duty (Class3-6) CNG vehicle and a heavy-duty (Class 7-8) LNG vehicle in an amount not to exceed $378,715 from the Clean Fuels Fund. ($100,000 from CEC).
   
   
4. Authorize the Chairman to execute a contract with GFI Control Systems Incorporated to evaluate and demonstrate exhaust emission treatment technologies for heavy-duty natural-gas engines in an amount not to exceed $140,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The majority of heavy-duty vehicles in the Basin are powered by diesel engines that contribute significantly to emissions of NOx and particulate matter. With an increasing number of trucks and other heavy-duty vehicles, the need for reducing emissions from these sources is critically important to meet clean air goals. The AQMD has long recognized the adverse air quality and health impacts of diesel exhaust and has adopted several measures to promote the use of low-emission natural-gas vehicles.

DOE/NREL have initiated a program called the "Next Generation of Natural Gas Vehicles" (NGNGV). The purpose of this program is to develop one new medium-duty (Class 3-6) compressed natural gas (CNG) vehicles and new heavy-duty (Class 7-8) liquefied natural gas (LNG) vehicle for commercialization starting in 2004. These new natural gas vehicles must have NOx emissions at or below 0.5 g/bhp-hr and PM emissions at or below 0.01 g/bhp-hr. For the 2007 timeframe, NOx emissions must be at 0.2 g/bhp-hr to meet EPA’s emission standards. Such vehicles will represent a step-change in natural gas vehicle technology. The most ambitious of the NGNGV goals is that these vehicles are intended to be cost competitive with diesel vehicle counterparts in terms of performance and life-cycle economics.

DOE/NREL proposed two rounds of NGNGV research. The first round is to identify and develop enabling natural-gas technologies that could be made commercially available as early as 2004 as one- to two-year projects. DOE/NREL issued RFP No. RCI-1-3-31070 for the first round on March 1, 2001, and received 15 proposals. Funding for three of these proposals is addressed by this letter. The second round of NGNGV will involve demonstration of two specific natural gas vehicles, a Class 3-6 CNG vehicle and a heavier Class 7-8 LNG vehicle. This second round of research will have substantial funding by DOE/NREL and other partners.

The 15 proposals under round one were reviewed and evaluated according to established DOE/NREL guidelines published in the RFP. The evaluation panel consisted of five members, one each from the USDOE Office of Heavy Vehicle Technologies, NREL, Natural Gas Vehicle Coalition, California Energy Commission (CEC) and AQMD. The top seven proposals were recommended for funding. The top three scoring proposals are recommended for AQMD funding, with financial support from the CEC. A summary of the panel’s scoring is included as Attachment A.

Proposal

Three proposals are recommended for AQMD funding as part of phase 1 of the DOE/NREL program: two from a joint venture of Cummins and Westport Innovations called Cummins Westport, Incorporated, and one from GFI Control Systems Incorporated.

Cummins Westport, Incorporated, (Proposal A-4) proposes to develop a natural gas engine system to reduce engine-out NOx emissions as well as to evaluate exhaust treatment technologies to achieve 0.5 g/bhp-hr NOx and 0.01 g/bhp-hr PM. This technology uses spark ignition and is different from the Westport technology that uses diesel fuel to initiate natural gas combustion. In Task 1, the intended design of the Cummins spark-ignited 5.9L natural gas engine will be improved to lower NOx from 2.0 to 1.2 g/bhp-hr. This includes adding a new electronic control system, calibrating the engine, testing a prototype engine in the laboratory, and testing several engines in field customer vehicles. Design changes will also be made to lower lubrication oil consumption. In Task 2, exhaust after-treatment technology will be studied, modeled and tested on laboratory engines. The engine calibration will also be updated to accommodate the selected after-treatment system. In Task 3, longer-term, more radical technologies will be investigated for further lowering NOx emissions to 0.2 g/bhp-hr.

Cummins Westport, Incorporated, (Proposal B-1), in partnership with PACCAR, a heavy-duty truck chassis manufacturer which includes Kenworth and Peterbilt divisions, proposes to develop preliminary designs and market introduction strategies for both a medium-duty CNG truck (Class 3-6) and a heavy-duty LNG truck (Class 7-8). The most commercially viable natural gas vehicles for 2004 will be identified. This includes studying emission control requirements, fuel pricing, component pricing, on-vehicle fuel storage (both CNG and LNG), refueling infrastructure, ranges of application, safety, and other customer needs. All possible engine, chassis and vocation combinations will be reviewed. Economic models will then be used to develop potential chassis/engine combinations. A preliminary market evaluation will be performed, canvassing Cummins, Westport and PACCAR customer and distributor bases and interviewing potential customers. Candidate vehicles will be selected, and preliminary vehicle designs and specifications will be prepared. Finally, market introduction plans will be prepared.

GFI Control Systems Incorporated (GFI) is presently working with General Motors (GM) to develop dedicated and bi-fuel versions of the GMT 610 (cargo vans, passenger vans, and cut-away vans up to 12,001 lb GVW). For 2003 models, the engine and vehicle designs have been set. In the NGNGV project for 2004 models, GFI with its partners GM and Engelhard is proposing to extend the existing the GMT 610 project to lower NOx emissions below 0.5 g/bhp-hr from just below 1.0 g/bhp-hr. This involves further refinement of the primary catalytic converter, calibration development work, possibly adding an oxygen sensor downstream of the converter, and emissions testing. This involves baseline emissions testing, iterative evaluations of three different catalytic converter designs, and final calibration optimization testing for emissions and driveability. For later models, GFI will also be investigating technology to achieve 0.2 g/bhp-hr NOx.

DOE/NREL will enter into separate agreements with four other proposers who submitted winning proposals under the NGNGV RFP. All seven projects funded under NGNGV round one (three under AQMD/CEC and four under DOE/NREL) will be jointly administered by all the funders, and each will have full access to the results and outcome of all seven projects.

Sole Source Justification

Section VIII.B.2. of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for a sole source award is made under provision B.2.d.: Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interest of the AQMD. Specifically, these circumstances are: B.2.d.(1) Projects involving cost sharing by multiple sponsors.

Each of the three proposed contracts were selected through a competitive RFP process conducted by DOE/NREL, and each proposal provides significant cost sharing by the proposer and others. First, the proposed project from Cummins Westport (A-4) has a total cost of $2,036,000. Of this cost, $1,636,000 will be provided by Cummins Westport, and $347,174 will be provided by the CEC. The second proposed project from Cummins Westport (B-1) has a total cost of $504,954. Of this cost, $126,239 will be provided by Cummins Westport, and $100,000 will be provided by the CEC. For the third project from GFI Control Systems, the total cost is $233,730. $93,730 of this will be provided by GFI Control Systems.

Benefits to AQMD

The proposed project is included in the March 2001 update of the Technology Advancement Plan under Project 2001M2-6, "Development and Demonstration of Low Emission Natural Gas Heavy-Duty Vehicles." The AQMP relies on the expedited implementation of advanced technologies in Southern California to achieve air quality standards.

AQMD’s Clean Fuels Program has supported the development and demonstration of low emission, alternative fuel heavy-duty engines. This support has directly led to the low emission certification of alternative fuel heavy-duty engines. Commercialization of 0.5 g/bhp-hr NOx natural gas engines and vehicles by 2004 should increase the number of low-emission heavy-duty natural gas vehicle models that will be available and will enhance the AQMD’s efforts to reduce emissions from the heavy-duty vehicle sector. A Class 3 pick-up and delivery van operating 40,000 miles/year with a 0.5 g/bhp-hr engine would produce 0.38 tons NOx less when compared to a vehicle operating with a 2.5 g/bhp-hr engine, and 0.66 tons NOx less when compared to a vehicle operating with a 4.0 g/bhp-hr engine.

Resource Impacts

Total cost for the three proposed contracts is $2,774,684. AQMD’s contribution from the Clean Fuels Fund shall not exceed $471,541 in addition to $447,174 in co-funding from the CEC. The total estimated cost-share for these three contracts is:

	Cummins Westport (A-4)	Cummins Westport PACCAR (B-1)	GFI Controls	Total
CEC	$   347,174	$ 100,000	-	$    447,174
AQMD	52,826	278,715	$ 140,000	$    471,541
Subtotal	$   400,000	$ 378,715	$ 140,000	$    918,715
Cost-Share	$1,636,000	$ 126,239	$   93,730	$ 1,855,969
Total	$2,036,000	$ 504,954	$ 233,730	$ 2,774,684

Sufficient funds are available in the Clean Fuels Fund, which is established as a special revenue from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.

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