BOARD MEETING DATE: November 2, 2007
AGENDA NO. 2

RECOMMENDED ACTION:

Authorize the Chairman to execute a contract with BAF Technologies to develop and certify with CARB 2008 model-year natural gas-powered Ford F-150 and F-250 pick-up truck models in an amount not to exceed $250,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Further progress in air quality goals and reductions in air toxic exposure depends on the commercial availability of alternative fuel vehicles and other advanced emissions control technologies. Unfortunately, efforts to increase the use of alternative fueled vehicles are becoming more challenging. Both Ford and General Motors have ceased to produce any natural gas-powered vehicles that are offered for sale nationally or in California. Presently, American Honda is the only major automotive manufacturer offering a natural gas-powered vehicle for model year 2007 in California. Honda offers a natural gas-powered Civic GX, a small passenger car.

Consequently, companies that specialize in the production of aftermarket alternative-fuel conversion systems have become pivotal in ensuring the continued availability of natural gas vehicle models for use by the public and for vehicle fleets. These companies must comply with CARB certification regulations in order to make their alternative fuel conversion systems commercially available for installation on approved gasoline vehicle models. The CARB certification regulations contain specific emission, warranty, durability, and onboard diagnostic system (OBD) requirements, similar to requirements applicable to vehicle models produced by original equipment manufacturers (OEMs).

BAF Technologies is one of two companies that currently offer natural gas conversion systems for light- and medium-duty vehicles in the California market. BAF Technologies presently offers four natural gas-powered vehicles based on Ford models: the Crown Victoria, Grand Marquis, Town Car, and the full-sized van, E-350.

Proposal

AQMD staff received an unsolicited proposal from BAF Technologies for the certification of two 2008 model year, dedicated natural gas-powered pick-up truck models that would be derived from the Ford F-150 and Ford F-250. BAF Technologies will be responsible for the management, development, tooling, testing, verification, certification, and installation of the natural gas vehicle technology into the base gasoline vehicles.

BAF Technologies also specified funding requirements and cost share allocations. The total project cost is estimated to be $675,000, with BAF Technologies responsible for the work outlined as follows: developmental test vehicles, design of prototype CNG tank package and high pressure hardware, transportation of vehicles to/from emissions test lab, SULEV software calibration, catalyst aging, emissions lab testing, certification application, and field validation.

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) Project involving cost sharing by multiple sponsors.

This program is cosponsored by a couple of entities, where AQMD’s contribution will be leveraged at a ratio of approximately one to three. Project funding will be supplied by BAF Technologies and Clean Energy. BAF is a company that provides overall engineering and hardware procurement for the production of natural gas vehicles. Clean Energy is a company that supplies natural gas refueling services to vehicle fleet customers in the AQMD, and is additionally supporting this project through monetary assistance.

Benefits to AQMD

The AQMP relies upon accelerated implementation of advanced technologies within Southern California to achieve federal and state ambient air quality standards and to further reductions in air toxic exposure. Because pick-up trucks are widely used in fleets as service vehicles, the natural gas conversion of Ford F-150 and Ford F-250 pick-up trucks will facilitate these objectives by providing opportunity for early reductions of exhaust and evaporative emissions from high mileage fleets. The availability of natural gas-powered Ford F-150 and F-250 pick-up trucks will also enhance the implementation of Rule 1191 - Clean On-Road Light- and Medium-Duty Public Fleet Vehicles.

For the purpose of illustrating the potential emission benefits of this project, if 100 natural gas-powered Ford F-150 and F-250 pick-up trucks are sold in the South Coast in the 2008 calendar year, exhaust and evaporative emission reductions are expected to be approximately 1,323 pounds of hydrocarbons and 441 pounds of NOx over the life of the project.

It should be noted that additional emission reductions could result from this project. Emission reductions could be generated for future model-year sales of converted natural gas-powered Ford F-150 and F-250 pick-up trucks if these trucks qualify for carry-over of the emission certification (e.g., the 2008 model year certification application is deemed approvable by CARB for the 2009 model year). This situation would most likely occur if the emission control system and related components of the base gasoline models do not change significantly from one model year to the next. It should also be noted that BAF Technologies will certify the 2008 model year Ford F-150 and F-250 pick-up trucks at the Super Ultra Low Emission Level (SULEV) certification level.

Finally, this project is included in the March 2007 Technology Advancement Office Plan Update under the category, “Engine Technologies: Develop and Demonstrate Alternative Fuel and Clean Conventional Fuel Light-Duty Vehicles.”

Resource Impacts

Total cost for the proposed project is approximately $675,000. AQMD’s contribution from the Clean Fuels Fund shall not exceed $250,000. The total estimated cost-share for this proposed project is $425,000 from BAF Technologies and Clean Energy.

Sufficient funds are available in the Clean Fuels Fund, which is established as 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.