Diesel regulations put pinch on businesses
LANCASTER - State regulators' efforts to cut diesel emissions, a major contributor of health and smog problems, is also putting the squeeze on businesses who say new regulations will cost them billions and drive many of them to either stop operating or to leave California.
The California Air Resources Board, or CARB, adopted regulations in July aimed at reducing diesel emissions from off-road equipment, such as bulldozers, scrapers and other heavy construction equipment. Those regulations will affect an estimated 180,000 vehicles, whose parts would have to be replaced or retrofitted with smog traps, filters or cleaner-burning technology over the next 12 years.
CARB is now in the process of developing regulations for on-road vehicles - regulations that will impact 300,000 vehicles.
The governor and health advocates hail the new regulations, stating they will help prevent 4,000 premature deaths and tens of thousands of cases of asthma over the next two decades.
"California has the most challenging air issues in the nation," said CARB spokeswoman Karen Caesar. "Seventy percent of air toxics come from diesel particulate matter. It causes not just cancer, but other health problems such as respiratory distress, asthma. It is a significant public health issue."
Certain businesses, including the construction industry, say they understand the push to be more environmentally friendly, but that the new regulations are asking for too much too soon.
"This equipment is not like a Volvo you can trade in," said Jason Royster, who runs a Lancaster construction company with his brother Tim. "You make a 30-year commitment with these machines."
Royster estimates it will cost his family's company about $2 million to bring their equipment into compliance.
"Between the regulations and the taxes, a lot of contractors are leaving the state," Royster said. "The state doesn't want to listen to this. They say you either do this or you get out of business."
Larry Rottman, of Rottman Drilling, a Lancaster company that has been in business for 80 years, estimates it will cost him $5 million to comply with the regulations - more than twice the worth of the company. Rottman estimates that 90% of his 60-plus inventory of equipment would need to be replaced.
"It's going to put every construction company out of business except the big guys," Rottman said "Nobody can spend two times their net worth to stay open. People just don't have the money to comply with it."
Assemblywoman Sharon Runner, R-Lancaster, said her office has been contacted by both the Roysters and Rottman about the regulations. Runner said she has sent letters off to the governor asking for him to prompt CARB to re-examine the issue.
"The economic harm it would do is unreasonable," Runner said. "It's devastating to agriculture, to drillers, to anybody in construction. Road and highway construction will become even more expensive. It's going to cost more and there will be less people here willing to do the job."
When the off-road emissions were adopted, Gov. Arnold Schwarzenegger hailed them as being "balanced and well-crafted regulations" that would save lives and billions in healthcare costs.
"The measure will also greatly improve the quality of life for our citizens, those who increasingly suffer from respiratory disease and cardiovascular problems," the governor said in a statement when the regulations were adopted. "When one out of six residents in the San Joaquin Valley has been diagnosed with asthma and one in five children carry an inhaler to school, it is a call to action."
There have been dramatically differing economic impact analysis of the off-road regulations. CARB estimates it will cost businesses $3.5 billion over 12 years to bring their equipment into compliance.
At the same time, the regulations will save about $18 billion to $26 billion in healthcare costs. Reducing diesel emissions would reduce such problems as lung cancer, decreased lung function in children, chronic bronchitis, increased respiratory and cardiovascular hospitalizations, aggravated asthma and lost workdays.
"The cost of the regulation pales in comparison to the health benefits," Caesar said.
Critics say the economic impact is, at a minimum, $13 billion. Critics said the new regulations would increase the cost of homes, highways and commercial buildings, cause job losses and further damage the state's already ailing economy.
The economic analysis states that most businesses should be able to absorb the cost of the new rules and that overall construction costs should rise by three-tenths of 1%.
An economic analysis has not yet been performed for the on-road vehicle regulations now in the formation process. The proposed rules call for the highest level of particulate matter control technology available and that nitrogen oxide emissions be equal to or less than exhaust emissions from a 2007-model engine.
On-road vehicles account for 32% of the diesel emissions. With an estimated 300,000 vehicles to be affected, CARB said it will be the agency's most far-reaching regulation.
To date, 25 public workshops have been held to help craft the regulations. Another round of workshops will be conducted this spring. The final regulations are expected to be out in October.
"It's a living document. It's still evolving," Caesar said. "All comments are considered."