BOARD MEETING DATE: March 3, 2006
AGENDA NO. 7

Execute Contract to Cosponsor Development and Demonstration of Heavy-Duty Hydrogen and Natural Gas Mixture Engine Meeting Future Emission Standards

SYNPOSIS:

Natural gas transit buses have significantly reduced emissions compared to other conventional fuels. Further emission reductions from on-road heavy-duty engines beyond the 2010 federal emis-sions standards will be needed for the region to attain ambient air quality standards. In addition, CARB has requirements for zero emission buses to be part of transit fleets beginning in the 2010 timeframe. This action is to award a contract to City Engines to develop a near-zero emissions heavy-duty hydrogen and natural gas (HCNG) engine for transit buses that at a minimum meet 2010 emission standards with a goal to go beyond the 2010 standards, at a cost not to exceed $500,000 from the Clean Fuels Fund. Total cost for this project is $1,000,000, with Los Angeles County Met-ropolitan Transit Authority’s Advanced Transit Vehicle Consor-tium cofunding 50% or $500,000 of the total costs of the engine development and demonstration project. Staff anticipates up to $250,000 co-funding from the U.S. Department of Transportation Federal Transit Administration to reduce AQMD cost share by a like amount.

COMMITTEE:

Technology, February 24, 2006, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Executive Officer to enter into an agreement with the U.S. Department of Transportation, Federal Transit Administration (FTA) to provide up to $250,000 to co-fund the development and demonstration of the HCNG engine; and
2. Recognize into the Clean Fuels Fund anticipated funds from the U.S. Department of Transportation, Federal Transit Administration (FTA) of $250,000; and
3. Authorize the Executive Officer to execute a sole-source contract with City Engines to co-fund the development, demonstration, and certification of a heavy-duty HCNG engine that at a minimum meets the 2010 standards with a goal to go beyond the 2010 standards, at a cost not to exceed $500,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The majority of heavy-duty vehicles in the South Coast Air Basin are powered by diesel engines that contribute significant emissions of NOx and particulate matter. 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.

In keeping with this strategy, the Board has previously co-funded with U.S. Department of Energy, National Renewable Energy Laboratory (DOE/NREL), as well as engine original equipment manufacturers to develop alternative fuel engines that meet the 2010 heavy-duty engine standards. The previous projects have resulted in successful commercialization of low-emitting natural gas engines into the marketplace for a variety of uses, including transit buses, refuse haulers, pick-up and delivery trucks, as well as municipal and utility fleets. Some studies conducted by NREL actually show an overall increase in fuel economy and decrease in operational costs when compared to their diesel counter-parts. In parallel, the Board has also cofunded projects that have focused on hydrogen-compressed natural gas (HCNG) mixtures, as well as internal combustion engines (ICEs) that operate on hydrogen fuel. The previous projects on HCNG mixtures have illustrated significant emission benefits above and beyond those achieved by natural gas ICEs, specifically for NOx and greenhouse gas emissions.

The Los Angeles County Metropolitan Transit Authority (MTA) has over 2,300 transit buses that operate on CNG. MTA is interested in evaluating various technologies that will help in complying with future CARB and U.S. EPA requirements, including the Zero Emission Bus program required under CARB Transit Bus Regulations. The MTA is currently evaluating a variety of technologies and strongly believes that HCNG fueled ICEs with NOx aftertreatment will provide a bus with near-zero emissions, qualifying as a Zero-Emission Bus. MTA believes that this may be the one of the most cost-effective zero emission propulsion systems available in the near future.

Proposal

City Engines proposes to modify an existing 11.0L Doosan engine to operate on a mixture of 30% hydrogen blended into natural gas, and demonstrate two transit buses on CNG and two on HCNG for a period of six months to evaluate the technology as well as quantify the emission benefits of the HCNG mixture. City Engines will also seek emissions certification for this HCNG ICE for transit bus use. Additionally, Trillium Fuel Systems, MTA’s primary CNG supplier, will modify one of MTA’s refueling facilities to allow for fueling the four buses with the HCNG mixture. Hydrogen will be supplied us-ing a tube trailer. City Engines plans to commercialize the engine based on the success of the program. The recommended action is to award a sole-source contract to City Engines to develop, demonstrate, and certify a heavy-duty HCNG engine meeting the federal 2010 standards.

Sole Source Justification

In the “Procurement Policy and Procedure” document, Section VIII outlines the provisions for awarding a sole source contract. Specifically, under item B. 2.d, “Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interests of the AQMD,” namely (1) “Projects involving cost sharing by multiple sponsors”. AQMD funding is requested at a cost not to exceed $500,000 from the Clean Fuels Fund, with total project costs of $1,000,000. Cofunding of $500,000 is being pro-vided by LACMTA, and staff anticipates additional cofunding from the U.S. Department of Transportation Federal Transit Administration (FTA) for up to $250,000. If the latter funding is received, AQMD’s cost share will be reduced by a like amount.

Benefits to AQMD

The proposed project is included in the Technology Advancement Office Clean Fuels Program 2005 Plan Update under item “Develop and Demonstrate Hydrogen-Natural Gas Internal Combustion Engines.” The projects identified in the Plan Update are in-tended to identify and support the development of advanced control technologies for stationary and mobile sources.

The AQMD has been extremely proactive in developing and demonstrating low emission, medium and heavy duty, alternative fuel vehicles. These projects will help achieve better air quality by further reducing NOx and particulate emissions from these vehicles, while also reducing CO2 greenhouse gas emissions.

Resource Impacts

The total amount of AQMD funding for this program shall not exceed $500,000. Staff proposes to cost-share the HCNG engine development, demonstration and certification project, with a total project cost of $1,000,000. The FTA may provide up to $250,000, thereby reducing the AQMD portion of the cost share will be reduced by a like amount.

Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting 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 sup-port the objectives of the Clean Fuels Program.

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