BOARD MEETING DATE: February 2. 2007
AGENDA NO. 6

PROPOSAL:

Execute Contract to Cosponsor Development, Demonstration, and Certification of Heavy-Duty Natural Gas Engine Meeting 2010 Emission Standards

SYNOPSIS:

Heavy-duty engines used in vocational market segments such as school buses, delivery trucks, and utility trucks are significant contributors to the Basin’s on-road vehicle emissions inventory. To meet the 2010 Federal NOx standard of 0.2 g/bhp-hr, major engine manufacturers are targeting new vehicles and are not planning to repower existing vocations at the lowest emissions. This action is to award a contract to Emissions Solutions, Inc. to develop, demonstrate and certify a 7.6L heavy-duty natural gas engine that could be used in both repower of existing diesel engines as well as in new vehicles that meets the 2010 standard at a cost not to exceed $400,000 from the Clean Fuels Fund. The remainder of the $1.2 million total project costs will be funded by the other project partners.  This action is also to recognize funding from Mack Trucks, Inc. in the amount of $50,000 in response to CARB’s request and deposit into the Clean Fuels Fund as partial funding for this project.

COMMITTEE:

Technology, January 26, 2007, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute an agreement with Mack Trucks, Inc. to receive $50,000 for the Emissions Solutions, Inc. natural gas heavy-duty engine development, certification and demonstration project.
2. Recognize upon receipt, $50,000 in revenue from Mack Trucks, Inc. into the Clean Fuels Fund.
3. Authorize the Chairman to execute a contract with Emission Solutions, Inc. to develop and certify a heavy-duty natural gas engine which meets 2010 emissions standards at a cost not to exceed $400,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The majority of heavy-duty vehicles operating in the South Coast Basin are powered by diesel engines that contribute significant emissions of NO_x and particulate matter.  The AQMD has long recognized the adverse air quality and health impacts of diesel exhaust and has adopted several measures to support the use of alternative fuels, including low-emission natural gas vehicles. 

In keeping with this strategy, the Board has previously awarded funding on May 6, 2005 and June 3, 2005 to Cummins Westport Inc. and John Deere Power Systems, Inc., respectively, for the development of heavy-duty natural gas engines meeting 2010 emission standards.  Unfortunately, both engine manufacturers are delayed in offering a commercial product, which notably affects Type D transit-style school buses.  For the past several years, the John Deere natural gas heavy-duty engines have been exclusively used by school bus manufacturers in this market segment. 

The development and demonstration of a heavy-duty natural gas engine proposed by Emission Solutions is expected to help address the current void in natural gas engine availability.  Emission Solution’s natural gas engine specifically proposed for this project is based on the International DT 466 engine, which is one of the leading engines currently powering diesel engine school buses.  This design feature should help facilitate the commercialization and use of the Emission Solution natural gas engine in school bus applications.  For similar reasons, the Emission Solutions natural gas engine proposed for development and certification could potentially be used in a number of other applications including utility and delivery trucks. 

Proposal

Emission Solutions, Inc. proposes to develop and field test a heavy-duty dedicated natural gas engine (Phoenix NG7.6L – six cylinder) to be certified to the 2010 heavy-duty engine emissions standards (0.2 g/bhp-hr NOx and 0.01 g/bhp-hr PM).  This engine could be used in both the repower of existing diesel engines as well as in new vehicles.  The proposed project also includes negotiating and executing agreements with interested fleets for the purpose of monitoring and verifying the performance of this engine model in a minimum of two different fleet applications.  To date, at least five fleets located in the District are interested in conducting performance testing of vehicles powered by this natural gas engine.

Sole Source Justification

In the AQMD Procurement Policy and Procedure, Section VIII outlines the provisions for awarding a sole source contract.  Specifically, under subdivision 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.”

The development, demonstration and certification project includes an estimated cost sharing of 25% from the AQMD and the remaining 75% from other project partners, including Emission Solutions, Inc., SoCalGas and Clean Energy. 

Benefits to AQMD

The Clean Fuels Program 2006 Plan Update includes the project Develop and Demonstrate Advanced Alternative Fuel Heavy-Duty and Medium-Duty Engines and Vehicles, allocating additional research funds for a heavy-duty engine.  Furthermore, the proposed project is included in the June 7, 2002 Advanced Air Pollution Research Plan under item D-1 “Demonstrate Vehicles with Advanced CNG/LNG Engines,” and also supports the 2003 AQMP Mobile Sources Control Measure, On-Road Heavy-Duty-3, “Pursue Approaches to Clean Up the Existing and New Truck/Bus Fleet.”  This project is intended to expedite the commercialization of low-emission alternative fuel heavy-duty engine technology in California, which meets 2010 emissions standards at least two years earlier.

The AQMD has been extremely proactive in developing and demonstrating low-emission heavy-duty, natural gas vehicles.  This project will provide greater emission reductions earlier compared to diesel counterparts, which will more than likely be certified to 1.2 g/bhp-hr for NOx compared to 0.2 g/bhp-hr NOx.

Resource Impacts

Total project cost is estimated at $1.2 million.  At the request of CARB, pursuant to actions developed from a settlement agreement between CARB and Mack Trucks, Inc. (Mack),  AQMD will recognize upon receipt $50,000 in co-funding from Mack toward this project.  The total amount of AQMD funding for this program shall not exceed $350,000, plus $50,000 from Mack, for a total of $400,000 from the Clean Fuels Fund.  The remainder of the total project costs is being provided by Emission Solutions, SoCalGas and Clean Energy.  The proposed breakdown is shown in the following table:

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 support the objectives of the Clean Fuels Program.