BOARD MEETING DATE: November 7, 2008
AGENDA NO. 3

PROPOSAL:

Execute Contract to Cosponsor CNG Drayage Truck and Refueling Station Project at Ports

SYNOPSIS:

Activities related to goods movement remain the largest source of air toxic and criteria pollutants in the South Coast Air Basin. As part of the effort to mitigate these emissions, the Ports and the AQMD propose to partner with SoCalGas, AutoCar and California Cartage Company to develop and demonstrate the first compressed natural gas drayage trucks utilizing the lowest emission heavy-duty engine available. This action is to execute a contract with SoCalGas to demonstrate four vehicles and install a small refueling station at an AQMD cost not to exceed $421,250 from the Clean Fuels Fund. The remainder of the $2 million total project costs will be funded by the other project team members.

COMMITTEE:

Technology, October 17, 2008, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute a contract with the Southern California Gas Company to demonstrate the use of heavy-duty CNG port drayage trucks and related infrastructure equipment at a cost not to exceed $421,250 from the Clean Fuels Fund.
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

As part of the overall efforts to expand the deployment of alternative fueled vehicles in the South Coast Air Basin, the AQMD has supported the demonstration and deployment of alternative fueled engine technologies for various vehicle applications. One area where CNG fueled engine technology has not been utilized is in a port drayage application. Currently, there are no CNG vehicles in these heavy-duty applications, only LNG. Given that approximately 65% of containers being moved from the San Pedro Bay Ports by truck are delivered within 25 miles of the harbors, it is believed that CNG technology can effectively provide the necessary power and range needed to make these short-haul deliveries from the port while having 33% lower life cycle costs than a comparable new diesel truck.

Proposal

The project team of the Southern California Gas Company (SoCalGas) the Port of Long Beach and the Port of Los Angeles, California Cartage, Los Angeles Freightliner and Gladstein, Neandross and Associates (GNA) has requested AQMD participation to demonstrate the use of four (4) heavy-duty CNG port trucks in local drayage applications. Currently, there are no CNG vehicles in these heavy-duty applications – these would be the first. The project will demonstrate the use of clean burning low carbon natural gas fuel in port applications. The port trucks will be built by Autocar and will be powered by Cummins Westport 320 horsepower (1,050 ft-lbs torque) ISL G natural gas engines. The ISL G engine is certified by CARB to the 2010 U.S. EPA on-road emission standards of 0.2 g/bhp-hr NOx and 0.01 g/bhp-hr PM, making it the lowest emission commercially available heavy-duty engine in the United States.

The CNG port drayage trucks will be operated by California Cartage Company between the Ports of Los Angeles and Ports of Long Beach. SoCalGas will be responsible for the overall project efforts and for providing the necessary CNG refueling infrastructure required to support the CNG trucks. Autocar will build and deliver the CNG trucks, and support them with assistance from LA Freightliner. California Cartage will be responsible for the day-to-day operation of the trucks. GNA has been contracted by SoCalGas to manage the one-year demonstration phase and project reporting. Cost-sharing of the infrastructure has been requested of the AQMD in the amount of $421,250.

This demonstration program will positively address end-user concerns regarding the use of CNG drayage vehicles by providing first-hand experience with this technology for short-haul applications. Other project goals include determining the in-use CNG life cycle costs for port drayage truck operations compared to diesel fueled trucks, and bringing to market a third natural gas truck manufacturer, Autocar, to support the deployment of clean drayage trucks.
 

Benefits to AQMD

The proposed project is included in the Technology Advancement Office Clean Fuels Program 2008 Plan Update under item “Infrastructure and Deployment.” The AQMD has been extremely proactive in developing and demonstrating cost-effective technologies and utilization of clean fuels, including compressed natural gas as a transportation fuel. Natural gas vehicles are among the cleanest alternative-fuel vehicles today, and successful demonstration of such platforms will accelerate the acceptance and ultimate commercialization of these vehicles.
 

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedures identifies four major provisions under which a sole source award may be justified.  This request for a sole source award is made under B.2.d (1): Projects including cost sharing by multiple sponsors.  This project is being developed in partnership with SoCalGas which is the major contributing sponsor.  Autocar is an industry leader in the manufacture of natural gas-powered class 7 and 8 trucks for the refuse and other industries.  Many of its natural gas vehicles designed and built at its Hagerstown, Indiana factory are now operating throughout Southern California. Cal Cartage is the largest trucking company operating in the Ports of Los Angeles and Long Beach (San Pedro Bay Ports) with approximately 1,200 trucks in their operation.  Cal Cartage will be deploying these natural gas trucks in the San Pedro Bay Ports drayage operation. Other sponsors sharing the project costs include the Ports of Long Beach and Los Angeles, and this proposed project will greatly help to expand the fleet of natural gas trucks used at these two ports.
 

Resource Impacts

The total project costs are estimated to be $1,995,384. The project team is requesting $421,250 from the AQMD to support the overall project and, in particular, the necessary CNG refueling infrastructure. The proposed project is not to exceed $421,250 from the Clean Fuel Funds.

The following table summarizes the proposed levels of cost-share between the participants.

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.