California Air Resources Board Shuts Door on Construction Industry

- By Brad Barnum, Vice President Government Relations

 

Last Thursday in Sacramento, by a vote of 9-0 (2 members were absent), the California Air Resources Board (CARB) voted to adopt an off-road diesel equipment rule that will have a profound, negative impact on California’s infrastructure re-building efforts, the health of the state’s construction industry and its overall economy.  This vote came after a final staff report, hours of public testimony (78 speakers), comments by CARB Board Members, and a final push by the CARB Chair to defeat one compromise that would have given the construction industry more flexibility to meet the goals of the program.

 

NOTE:  Due to the complex nature of the final off-road diesel rules, we will hold a “workshop” on Wednesday, August 29 from 10:00 – 11:30 AM at the AGC to provide you with the specific details and compliance timelines.  Mike Buckantz of Justice & Associates will lead us through the new regulations and how they will impact contractors and the construction industry.  A registration flyer will be sent out in the near future.

 

There is an upcoming 15-day written comment period for stakeholders on the final rules, which will go into effect January 2009 with full implementation by 2010.  The rules are aimed at reducing diesel emissions from the state's estimated 180,000 "off-road" vehicles used in construction, mining, airport ground support and other industries. 

 

The requirements and deadlines vary depending on fleet size. For small fleets, which include small businesses or municipalities with a combined horsepower of 2500 or less, implementation does not begin until 2015.  Medium fleets, with 2501 to 5000 horsepower, have until 2013, while large fleets, with over 5000 horsepower, must begin complying in 2010.  Affected vehicles include bulldozers, loaders, backhoes and forklifts, as well as many other self-propelled off-road diesel vehicles.

The Board's action sets the stage for efforts next year to develop similar requirements for the hundreds of thousands of on-road trucks that travel on California's roads every day.

Industry’s Alternative Shot Down

 

As we have been reporting to you, AGC has been part of a coalition that has worked feverishly with the CARB staff over the past two years to craft an alternative proposal that would result in the cleanest construction fleets in the world.  The proposal also would keep the most number of construction companies in business and workers’ employed, the Rebuild California bond program on schedule, construction costs to a minimum, and the bidding environment at its most competitive.

 

The one compromise of the alternative proposal which received the most attention, and ultimately went down to defeat by a vote of 6-3, was an initial three year compliance time frame. It would have have allowed contractors to reach specific emission reduction goals (the same as proposed by CARB staff), manage their fleets in a fashion most suitable for their financial conditions and allow for a practical business planning cycle, and give them flexibility to use a range of options, such as re-powering, retrofitting, replacing, or retiring equipment. 

 

CARB Board Members Sandra Berg and San Diego County Supervisor Ron Roberts led the charge to make this modification, but they found there was not much support for the change (Ron, “thank you” for trying!).  Chairwoman Mary Nichols quickly called for a vote, and she and five other Board Members voted to oppose this change.  A vote for the entire CARB staff proposal (with some compromises) was then brought forward….and you guessed it!  A 9-0 vote followed by an adjournment…it was that quick!

 

Compromise Defeated – Was it Politics?

 

Speculation abounds as to why the compromise was defeated, but was it “pure” coincidence that four out of the six opposed to the compromise are up for confirmation?  Chairwoman Mary Nichols, Judith Case, Jerry Hill, and Daniel Sperling have been appointed by Governor Schwarzenegger within the past six months, and each of them still has to be confirmed by the California State Senate. 

 

With the State Senate strongly controlled by Democrats, a vote in support of the construction industry and in opposition to the environmental community likely would have made it much more difficult for the four political appointees to get confirmed.  Confirmation requires a 2/3 vote of the State Senate, so appointees need all the Democratic support they can get!

 

The Construction Industry’s Effort ….CARB Off Road Diesel Emission Regulation
By Jim Ryan, AGCSD Executive Vice President

Well, by now most of you are aware that the construction industry suffered a severe setback in Sacramento on Thursday.  The California air Resources Board (CARB) rejected a compromise that had been offered by the industry and moved ahead with the basic CARB staff recommendations for the new off-road diesel emission standards.  This setback came after one of the best construction industry efforts I have seen to reshape a proposed regulation to make it more workable for the industry while still achieving the results that were desired by the state.

The CARB regulation established reduction requirements for 2015 and 2020 for large fleets.  Small and medium sized fleets have the same requirements but at latter dates.  The industry proposal allowed contractors flexibility to adjust their equipment fleets between now and 2015.  The CARB regulation defines year by year the percentage reductions that must be achieved to meet the 2015 requirements.  The industry proposal also included extending the 2020 pollution reduction standards to 2025.  This would have given the manufacturers and the contractors more time to include Tier 4 technology engines into the fleet without having to make adjustments to existing equipment before the Tier 4 technology was made available. 

So the industry was proposing to meet the CARB requirements for pollution reduction but to do it in a manner that made more economic sense for this huge industry.  Bottom line….same pollution reduction percentages in both proposals in relatively the same time frame….ours was just recognizing that each fleet is different and gave individual firms some flexibility.

Well the CARB Staff and the Board rejected the compromise and adopted their version with few changes.

So how was the industry represented in this process?

The industry throughout the state came together under the Construction Industry Air Quality Coalition (CIAQC).  CIAQC has been in existence for a number of years to represent the industry with air quality and other environmental issues in the Los Angeles area.  Because of this, they were the logical group to head up the industry’s efforts as the off-road diesel regulations were being written by CARB staff.  Over 60 associations and other firms were part of the CIAQC during the past year.  The industry raised several hundred thousand in donations to finance the effort.

Mike Lewis and Clayton Miller staffed CIAQC and did an outstanding job.  AGC of California’s John Hakel was the “point” person for AGC.   John also did an outstanding job.  The AGCSD Board appointed a Task Force consisting of Scott Erreca, Erreca’s Inc; John Nelson, FCI Constructors; Steve Coker, TC Construction; Mike Carcioppolo, Hawthorne Equipment; Mike Furby, Marathon Construction; Mike Shaw, Perry and Shaw; and John Daley, Jr., Daley Corporation  to oversee our participation.  The Task Force met numerous times and was very active in the negotiations. 

CIAQC faced an uphill battle from the beginning.  CARB kept coming back to their claim that 4,000 lives would be saved over the next 20 years if their version of the regulation was adopted.   They also claimed that 110,000 cases of asthma that would be avoided.  Any effort to adjust the regulation was consistently met with the allegation that the adjustment would reduce the number of lives saved or asthma cases avoided.  Now, I suspect even the health advocates that originated these statistics would admit that these statistics are estimates.  But as logical changes were proposed, CARB seemed to respond that any change would cost more lives.  That made lobbying this regulation very difficult for CIAQC.

There are no statistics to counteract this claim, so the CIAQC negotiators could only react with arguments concerning cost.   If we were to eliminate all cars and trucks, we would save thousands of lives each year….but at what cost?  Reducing off-road diesel emissions will save lives, but if the regulations are so difficult that thousands of jobs are eliminated and hundreds of firms go out of business and construction costs escalate dramatically, will the regulation solve one problem and create other serious problems?

CIAQC negotiators then used this basic premise to work through the CARB staff’s various proposed regulations as they developed during the past year or so.  The CARB staff would come out with a proposal….CIAQC would sit down with the staff and detail our concerns.  The staff would go back and consider the input for a few months and sometimes change things one way or the other.  But the proposed regulation did not change dramatically throughout this process.   As the CARB meeting to vote on the staff proposal approached, thousands of hours of meetings with politicians, the Governor and his staff, CARB directors, as well as the industry were held. 

AGC Legislative Advocate Dave Ackerman assisted CIAQC staff nearly on a daily basis for the past several months.  Over $500,000 was raised by the industry to finance this effort.  The AGC of America donated the legal expertise of experts on their staff and from private firms.  The industry was approached, and thousands of letters were written in support of the industry position.

In late May, CIAQC developed the compromise position.  Another round of talks with CARB directors, politicians, the environmental community, the Governor and his staff were held.  It appeared that as late as Wednesday night a compromise would be reached…the final meetings with CARB concluded late Wednesday night.  However, when the staff presented their recommendations on Thursday they held the line and did not recommend any significant components of the compromise.  The CARB Board then voted to accept the recommendation.

It was a disappointing result.   However, I suspect that without all of this activity the regulation would have been far more difficult than it is.

What happens now…..if the history of other regulations is any indication, there will be a legal challenge considered and a lawsuit may be filed.   Also, as the regulation start in 2010 approaches, CARB may review the state of technology at that time….if the technology has not improved perhaps some changes will take place.

Bottom line…..the industry did about everything humanly possible to create a better, more workable regulation.  The regulation that resulted is difficult and will be hard to comply.  At this point, every AGC member firm should attend seminars and gain a detailed understanding of the regulation and how it will affect your firm.   

 

CARB Joins Regional Water Board in Making it Difficult for Contractors to do Business

 

This is the second time within the year that the construction/building industry has been hit with regulations that will make it harder to do business.  In January, the San Diego Regional Water Quality Control Board voted to implement revisions to the Storm Water Permit that will require contractors to comply with additional on-site detainment, advance treatment, and grading requirements for public agencies, and will increase the costs of construction projects.

 

Both of these agency decisions will have a dramatic impact on the numerous infrastructure projects being built throughout the region and the state.  Elected officials and voters may see that the billions of dollars of construction they supported may not go as far now.  What does that mean for future bond measures?  Stay tuned.

 

 

Speaking of Water Regulations…  Please Attend Thursday’s Meeting 

Two Sessions Now Scheduled at AGC: 9 AM or 10:45 AM

We have received such an overwhelming response to a meeting to discuss impacts of the Regional Storm Water Permit and the impending State Construction Permit that we have had to break the meeting into two separate meetings.  One meeting will begin at 9 AM, the other will begin at 10:45 AM.  Both meetings will last 1 hour and 15 minutes. 

For those of the 120+ of you who you initially signed up for the meeting we have “split” you up into one of the two sessions (you should have received e-mail notification).  For those of you who would like to make a change or have yet to register, please do so now by clicking here.

Please consider attending on one the meetings on August 2.  Questions?  Contact Brad Barnum at bbarnum@agcsd.org.

 

Announcing the AGC Annual Softball Tournament

Registration forms are now available for the annual AGC Softball Tournament, scheduled for Saturday, September 15 at the SportsPlex USA in Poway.

It's time once again to get your teams together and start practicing!  Last year we had 21 teams participate and it was a full day of friendly competition.

For information on rules and regulations, and to register your team, please click here for registration.

You can also contact Rae Krushensky at 858-731-8157 with any questions.

 

AGC Summer Mixer- August 16th

Last October, when AGC had their official Open House to showcase the newly remodeled building, AGC staff and members commented that the AGC patio would be a great summer venue for a Mixer, therefore, we are pleased to introduce our brand new member, Zumasys who will be hosting the Mixer on August 16^th at the AGC. Zumasys located in Lake Forest, recently appeared on Computer Reseller News’ list of the 100 fastest growing IT solution s in the United States.

These mixers have turned into a popular event offering AGC members the opportunity to mingle with business associates and gain new contacts.   CLICK HERE FOR REGISTRATION FORM. Pre-registration is required. 

                              

“AGC Education & Training….Building a Solid Foundation”
The latest AGC Education Catalog (July – December 2007) is now posted on our website.
CLICK HERE FOR CATALOG   

Upcoming Construction Education and Safety Training Classes 

Safety Training Classes
AUGUST
OSHA 10 Hour- August 6 - click here
Spanish OSHA 10 hour- Aug. 14- click here
Spanish CPR – August 15- click here
CPR/First Aid- August 29 – click here

Construction Education Training Classes
AUGUST
Blue Print 103- starts August 7 (4 sessions)- click here
Excel Level I- August 7 –click here
MAP Leadership – “Hoosiers”- August 13- click here
Auto CAD- August 13-14 – click here
Microsoft Project- August 15-16- click here
LEED- August 15- click here
SWPPP – August 17-click here
Advanced Auto CAD- August 20-21-click here    
Timberline – August 22-23-  click here
Timberline Estimated Extended- Aug 24-   click here
Excel Level 2- August 28- click here

 

All committee meetings are held at AGC unless indicated otherwise

AUGUST
August 1 – Safety Committee – 7 A
August 2- Storm Water Issues- 2 sessions- 9:00-10:15 or 10:45-12:00
August 3- Electronic Age – 7 AM
August 23- Affiliate Members Council- 12 PM
August 28- Foundation for Success – 12 PM
August 29 – Off-Road Diesel Emission Rules Workshop- 10-11:30 AM

AGC Toastmasters- Every other Wednesday- 7 AM at the Roel Training Center. Click here

 

UPCOMING AGC EVENTS
August 6 – Affiliate Day Golf Tournament – Singing Hills- SOLD OUT!
August 16- AGC Mixer – AGC outdoor patio click here for registration
September 15 – AGC Softball Tournament – click here for registration click here for registration.
September 22 – SDSU Aztec Football Tailgate & KGB Sky Show- click here for registration form
October 12- Midway Mixer
November 1 - Build San Diego Awards click here