BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 857
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|Author: |Perea |
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|Version: |6/23/2015 |Hearing |7/15/2015 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Rebecca Newhouse |
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SUBJECT: California Clean Truck, Bus, and Off-Road Vehicle and
Equipment Technology Program
ANALYSIS:
Existing law:
1) Under the California Global Warming Solutions Act of 2006
(commonly referred to as AB 32), requires the Air Resources
Board (ARB) to determine the 1990 statewide greenhouse gas
(GHG) emissions level and approve a statewide GHG emissions
limit that is equivalent to that level, to be achieved by
2020, and to adopt GHG emissions reductions measures by
regulation. ARB is authorized to include the use of
market-based mechanisms to comply with these regulations.
(Health and Safety Code (HSC) §38500 et seq.)
2) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury and requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund and requires the Department of Finance,
in consultation with ARB and any other relevant state agency,
to develop, as specified, a three-year investment plan for the
moneys deposited in GGRF. (Government Code §16428.8)
3) Requires the investment plan to allocate a minimum of 25% of
the available moneys in the fund to projects that provide
benefits to disadvantaged communities, and a minimum of 10% of
the available moneys in the fund to projects located within
disadvantaged communities. (HSC §39713).
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4) Requires moneys from GGRF be used to facilitate the
achievement of reductions of GHG emissions in this state
consistent with the California Global Warming Solutions Act of
2006, and to the extent feasible complement efforts to improve
air quality, and direct investment toward the most
disadvantaged communities and households in the state, among
other things. (HSC §39712).
5) Requires the State Energy Resources Conservation and
Development Commission (CEC) to implement the Alternative and
Renewable Fuels and Vehicle Technology Program (ARFVTP) to
provide funding measures to specified entities to develop and
deploy technologies and alternative and renewable fuels in the
marketplace to help attain the state's climate change
policies. (HSC §43865 et seq.)
6) Creates the Air Quality Improvement Program (AQIP), to be
administered by ARB in consultation with local air districts,
to fund air quality improvement projects. (HSC §44274)
7) Establishes certain vehicle and vessel related surcharges and
fees, until January 1, 2016, including an $8 fee increase in
the smog abatement, a $3 fee increase in the annual vehicle
registration fee, a $5 fee increase for special identification
plates and a $10-20 fee increase for vessel registration, to
fund the AQIP and ARFVT programs, among others. (HSC §44060.5
and Vehicle Code §§9250.1, 9261.1, & 9853.6)
8) Creates the California Clean Truck, Bus, and Off-Road Vehicle
and Equipment Technology Program, funded through the GGRF, for
the development, demonstration, pre-commercial pilot, and
early commercial deployment of zero- and near-zero-emission
truck, bus, and off-road vehicle and equipment technologies.
Until January 1, 2018, no less than 20% of funding made
available for the purposes of this paragraph shall support
early commercial deployment of existing zero- and near-zero
emission near-zero-emission heavy-duty truck technology. (HSC
§39719.2 )
This bill:
1) Appropriates 50% or $100 million annually, whichever is
greater, of GGRF funds allocated to the California Clean
AB 857 (Perea) Page 3 of
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Truck, Bus, and Off-Road Vehicle and Equipment Technology
Program for medium and heavy-duty trucks, to support the
commercial deployment of existing zero- and near-zero-emission
heavy-duty truck technology that meets or exceeds ARB's
optional low oxides of nitrogen (NOx) standard, between
January 1, 2018 and January 2, 2023.
2) Beginning in 2018, prohibits a heavy-duty truck with an
internal combustion engine receiving Program funds from using
a fuel with a carbon intensity of more than 79% of the carbon
intensity of diesel, as specified.
3) Authorizes ARB to reduce the maximum fuel carbon intensity in
subsequent years if it finds that greater reduction is
commercially feasible and the CEC finds that there is
sufficient available renewable energy fuel supply and
specifies that such a reduction shall apply prospectively to
funds awarded.
4) Provides that the above requirement shall not alter or affect
the amount of credits or grants for which a low-carbon fuel
provider or truck operator is eligible.
5) Beginning January 1, 2018, for purposes of program
eligibility, defines a "heavy-duty truck" as one with a gross
vehicle weight rating of 26,001 pounds gross vehicle weight
rating (GVWR) or more.
Background
1) Cap-and-trade auction revenue. ARB has conducted 11
cap-and-trade auctions. The first 10 have generated almost
$1.6 billion in proceeds to the state.
Several bills in 2012, and one in 2014, provided legislative
direction for the expenditure of auction proceeds including
the following:
SB 535 (de León, Chapter 830, Statutes of 2012)
requires that 25% of auction revenue be used to benefit
disadvantaged communities and requires that 10% of
auction revenue be invested in disadvantaged communities.
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AB 1532 (J. Pérez, Chapter 807, Statutes of 2012)
directs the Department of Finance to develop and
periodically update a three-year investment plan that
identifies feasible and cost-effective GHG emission
reduction investments to be funded with cap-and-trade
auction revenues. AB 1532 specifies that GGRF moneys may
be allocated to reduce GHG emissions through investments
including, but not limited to, development of
state-of-the-art systems to move goods and freight,
advanced technology vehicles and vehicle infrastructure,
advanced biofuels, and low-carbon and efficient public
transportation.
SB 1018 (Budget Committee, Chapter 39, Statutes of
2012) created the GGRF, into which all auction revenue is
to be deposited. The legislation requires that before
departments can spend moneys from the GGRF, they must
prepare a record specifying: (1) how the expenditures
will be used, (2) how the expenditures will further the
purposes of AB 32 (Nuñez, Pavley, Chapter 488, Statutes
of 2006), (3) how the expenditures will achieve GHG
emission reductions, (4) how the department considered
other non-GHG-related objectives, and (5) how the
department will document the results of the expenditures.
SB 862 (Budget Committee, Chapter 36, Statutes of
2014) requires the ARB to develop guidelines on
maximizing benefits for disadvantaged communities by
agencies administering GGRF funds, and guidance for
administering agencies on GHG emission reduction
reporting and quantification methods.
Legal consideration of cap-and-trade auction revenues. The
2012-13 Budget analysis of cap-and-trade auction revenue by
the Legislative Analyst's Office noted that, based on an
opinion from the Office of Legislative Counsel, the auction
revenues should be considered mitigation fee revenues, and
their use requires that a clear nexus exist between an
activity for which a mitigation fee is used and the adverse
effects related to the activity on which that fee is levied.
Therefore, in order for their use to be valid as mitigation
fees, revenues from the cap-and-trade auction must be used to
mitigate GHG emissions or the harms caused by GHG emissions.
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In 2012, the California Chamber of Commerce filed a lawsuit
against the ARB claiming that cap-and-trade auction revenues
constitute illegal tax revenue. In November 2013, the
superior court ruling declined to hold the auction a tax,
concluding that it is more akin to a regulatory fee. The
plaintiffs filed an appeal with the 3rd District Court of
Appeal in Sacramento in February of last year.
AB 32 auction revenue investment plan. The first three-year
investment plan for cap-and-trade auction proceeds, submitted
by Department of Finance, in consultation with ARB and other
state agencies in May of 2013, identified sustainable
communities and clean transportation, clean energy and energy
efficiency, and natural resources and waste diversion, as the
three key sectors that provide the best opportunities for
achieving the legislative goals and supporting the purposes of
AB 32. The plan recommended the aforementioned sector receive
the largest allocation of funds from the GGRF, but did not
specify a monetary amount.
Budget allocations. The 2014-15 Budget allocates $832 million
in GGRF revenues to a variety of transportation, energy, and
resources programs aimed at reducing GHG emissions. Various
agencies are in the process of implementing this funding. SB
862 (Committee on Budget and Fiscal Review), a budget trailer
bill, established a long-term cap-and-trade expenditure plan
by continuously appropriating portions of the funds for
designated programs or purposes. The legislation appropriates
25% for the state's high-speed rail project, 20% for
affordable housing and sustainable communities grants, 10% to
the Transit and Intercity Rail Capital Program, and 5% for
low-carbon transit operations. The remaining 40% is available
for annual appropriation by the Legislature.
Of that 40%, $200 million was appropriated to ARB to implement
low carbon transportation programs.
2)NOx and ozone. Smog is formed from the reaction of oxides of
nitrogen (NOx) with volatile organic compounds (VOCs) to
produce ground-level ozone, or tropospheric ozone. Ozone has a
number of negative health effects including irritated
respiratory system, reduced lung function, aggravated asthma
and inflammation and damage of the lining of the lung. Active
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children are the group at highest risk from ozone exposure. In
addition to negative public health impacts, ozone itself is a
powerful SCLP.
Under the federal Clean Air Act, the United States
Environmental Protection Agency (US EPA) established National
Ambient Air Quality Standards (NAAQS) that apply for outdoor
air throughout the country. These standards exist for several
air pollutants due to their negative impact on public health
above specified concentrations, including ozone. ARB has also
adopted state ambient air quality standards for various air
pollutants that are, in some cases, more stringent than
federal standards. Local air districts are required to adopt
and enforce rules to achieve and maintain the state and
federal ambient air quality standards. Nonattainment areas
are regions that do not meet the ambient air quality standard
for one of those pollutants. There are several nonattainment
designations ranging from concentrations slightly above the
standard, termed marginal nonattainment, to extreme
nonattainment, where pollution levels far exceed the national
standard.
To comply with the standards for ozone, local air districts
have regulations limiting emissions of NOx and VOCs for
stationary sources located in their jurisdiction. These local
air district requirements have cut in half the emissions of
VOCs and NOx, and significantly reduced ozone concentrations
throughout California.
On November 25, 2014, the US EPA proposed to strengthen the
current 2008 NAAQS for ground-level ozone, based on extensive
scientific evidence about ozone's effects on public health and
welfare. US EPA's proposal finds that the current level of
the standard, 75 parts per billion, is not adequate to protect
public health.
The San Joaquin and South Coast air basins are both in extreme
nonattainment for the 2008 NAAQS for ozone. States with
nonattainment areas would have until 2020 to late 2037 to meet
the proposed health standard, with attainment dates varying
based on the ozone level in the area.
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3)Heavy-duty vehicle incentive funding. California has a number
of programs to provide funding for low emission, near-zero and
zero-emission vehicles to help improve air quality throughout
the state, and reduce GHG emissions.
a) Carl Moyer Memorial Air Quality Standards Attainment
Program (Carl Moyer Program): Existing law establishes the
Carl Moyer Program under ARB. This program provides grants
through the state's 35 local air quality management and air
pollution control districts (air districts) for deployment
of engines, equipment, and NOx and PM emission-reduction
technologies that are cleaner than required by current laws
or regulations. The program, which provides approximately
$60 million for projects each year throughout the state, is
funded through vehicle registration fee surcharges and tire
fees. Currently, the majority of projects for trucks are
on-road trucks. The maximum funding for a log truck is
$60,000 and the maximum funding for a non-log truck is
$45,000.
b) Proposition 1B: Highway Safety, Traffic Reduction, Air
Quality, and Port Security Bond Act of 2006. Proposition 1B,
approved by voters in November 2006, included $1 billion for
the Goods Movement Emission Reduction Program, a partnership
between ARB and local air districts to reduce air pollution
emissions and health risks from freight movement along
California's trade corridors. This program has to date
provided funding for approximately 12,000 cleaner trucks.
For the next funding cycle, ARB proposes to fund trucks in
amounts ranging from $10,000 to $200,000 for Class 6 to
Class 8.
c) AB 118. AB 118 (Núñez, Chapter 750, Statutes of 2007)
created the ARFVT program and AQIP. AB 118 provides, upon
appropriation by the Legislature, approximately $180 million
annually until 2023 for these programs. These funds
primarily come from additional fees on vehicle registrations
and vessel registrations.
i) Air Quality Improvement Program: AQIP, administered
by ARB in consultation with local air districts, provides
competitive grants to fund projects to improve the air
quality impacts of alternative fuels and vehicles,
vessels, and equipment technologies. AQIP encompasses
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several programs, including the following:
The Hybrid and Zero-Emission Truck
and Bus Voucher Incentive Project (HVIP),
administered by ARB and its contractor CALSTART,
provides vouchers to California fleet owners to
help purchase hybrid and zero-emission trucks and
buses. For fiscal year 2015-16, ARB proposes
allocating $12 million for this program.
The On-Road Heavy-Duty Vehicle Air
Quality Loan Program (Truck Loan Assistance
Program), administered by ARB and the California
Pollution Control Financing Authority, helps small
business truckers to secure financing for newer
trucks or diesel exhaust retrofits in advance of
compliance deadlines for ARB's in-use truck and
bus regulation. As of April 30, 2015, about $57
million in Truck Loan Assistance Program funding
has been expended to provide about $446 million in
financing to small business truckers for the
purchase of nearly 7,500 cleaner trucks, exhaust
retrofits, and trailers. For fiscal year 2015-16,
ARB proposes allocating $15 million for this
program.
ii) Alternative and Renewable Fuel and Vehicle Technology
Program: ARFVTP, administered by CEC, provides funding for
development and deployment of alternative and renewable
fuels and advanced transportation technologies to help
attain the state's climate change goals. Eligible projects
include, for example, development, improvement, and
production of alternative and renewable low-carbon fuels;
improvement of light-, medium-, and heavy-duty vehicle
technologies; and expansion of infrastructure connected
with existing fleets, public transit, and transportation
corridors.
a) Low Carbon Transportation. SB 1204 (Lara, Pavley,
Chapter 524, Statutes of 2014) created a new program to fund
development, demonstration, pre-commercial pilot, and early
commercial deployment of zero- and near-zero-emission truck,
bus, and off-road vehicle and equipment technologies. SB
1204 authorizes GGRF funding for this program and requires
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it to prioritize projects located in disadvantaged
communities. The bill specified that, until January 1,
2018, 20% for early commercial deployment of existing
zero-and near-zero emission heavy-duty truck technology.
ARB's FY 2015-16 AQIP Funding Plan, which the ARB board will
vote on at its June 25, 2015, meeting, allocates $148
million in GGRF funds to the SB 1204 Program. The funding
plan was approved on July 1, 2015.
Pursuant to SB 1204, ARB has created several new program
categories to fund the development and deployment of zero
and near-zero emission trucks, buses and off-road vehicles.
i) Advanced Technology Demonstration Projects,
administered by ARB, provide grants to local air districts
and other public agencies to fund advanced-technology
vehicle, equipment, or emission-control projects that are
not yet commercialized. Approximately $60 million is
proposed for this program for FY 2015-16, including $30
million for on-road trucks.
ii) Zero Emission Truck and Bus Pilots seek to leverage
resources, promote efficiencies, and help drive down per
vehicle costs via large, location-specific deployments of
zero-emission trucks and buses. Eligible project types
include zero-emission transit buses, zero-emission school
buses, and zero-emission freight/delivery trucks. $45
million for buses and $20 million for trucks is proposed
for the 2015-16 fiscal year.
iii) Zero Emission Off-Road Freight Equipment Pilot
Commercial Deployment Projects provide incentives for zero
emission off-road freight equipment to accelerate
deployment and drive consumer acceptance in the early
stages of commercialization. Eligible off-road
zero-emission projects would include forklifts, transport
refrigeration units, yard trucks, airport ground support,
and cargo handling equipment. The current funding plan
proposes $9 million for these projects.
iv) Low NOx truck incentives, also under AQIP, provide
funding for heavy-duty trucks 14,000 pounds GVWR or
greater with engines certified to the lower NOx standards.
ARB is proposing an additional incentive for the use of
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alternative fuels. The FY 2015-16 AQIP Funding Plan
allocates $7 million for this program.
Comments
1) Purpose of Bill. According to the author, "California
continues to suffer from the worst air quality in the nation,
contributing to serious health risks including asthma, cancer,
birth defects and even premature death. Air pollution affects
everyone and remains a public health threat, particularly for
those who live in disadvantaged communities near major
transportation corridors such as freeways, ports and rail
depots.
"A recent report by the American Lung Association revealed
that the five most ozone-polluted areas are in California;
with Los Angeles-Long Beach topping the list, followed by
Visalia-Porterville-Hanford, Bakersfield, Fresno-Madera, and
Sacramento-Roseville; and the California Environmental
Protection Agency tells us that disadvantaged communities in
the Central Valley and near our ports suffer significantly
from multiple sources of air pollution. While we have made
great strides in bettering the state's air, we still have a
long way to go. California agencies have documented that the
transportation sector is the largest contributor of air
pollution, accounting for 80 percent of our smog-forming
pollutants and 40 percent of our greenhouse gas emissions.
While our car-dependent culture is largely to blame,
heavy-duty diesel trucks are the biggest polluters in this
sector. Replacing heavy-duty diesel trucks represents the
best, most cost effective way to get our cities off the "most
polluted" list, and more critically, help the many
disadvantaged communities that sit along key goods movement
corridors."
2) Low NOx and natural gas. ARB regulations provide for an
optional reduced NOx emission standard for on-road heavy-duty
engines of 0.02 grams NOx per brake horsepower-hour. This
standard is intended to encourage engine manufacturers to
introduce new technologies to reduce NOx emissions below the
current mandatory on-road heavy-duty diesel engine emission
standards for model years 2010 and later, and represents a 90%
reduction in NOx from the current NOx standard. The movement
of goods and freight is a major contributor to NOx pollution
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in the state's nonattainment air basins.
AB 857 includes a five year set-aside beginning in 2018 for
low NOx heavy duty trucks meeting this standard of $100
million per year, or 50%, depending on which is greater, of
GGRF moneys appropriated to the California Clean Truck, Bus,
and Off-Road Vehicle and Equipment Program established through
SB 1204 (Lara, Chapter 524, Statutes of 2014). Currently, no
heavy-duty engine has been certified to meet ARB's optional
low NOx standard, however the author states that manufacturers
report that new technologies will be available in the
transportation marketplace within three years that could meet
this standard for heavy-duty vehicles using natural gas.
3) $500 million for commercial deployment of low-NOx heavy-duty
trucks. The program established through SB 1204 (Lara) is
intended to fund the development, demonstration and early
commercial deployment of near-zero and zero-emission trucks,
buses, off-road vehicles, and equipment in order to accelerate
commercial success, and large-scale adoption of these
technologies.
As noted, AB 857 requires at least $100 million annually for
five years, or half a billion dollars total, go toward the
commercial deployment of heavy-duty trucks meeting a low-NOx
standard of 0.02 grams per brake horsepower-hour, and where
heavy duty is defined in the bill as greater than 26,000
pounds GVWR.
As total proposed GGRF moneys for the 2015-16 fiscal year is
$148 million, $100 million represents two thirds of the
funding for the entire SB 1204 program to fund all other
non-heavy-duty truck deployment projects, including
demonstration projects, freight equipment, and pilot
deployments of near-zero and zero-emission buses, off-road
vehicles and equipment.
The result is that, after allocation to heavy-duty trucks,
there will be a much smaller pot of money to divvy up among
all the other projects, ensuring significantly reduced
investments in every other category, with some project
categories possibly eliminated from funding. Although low-NOx
heavy duty trucks represent an important cleaner technology
investment in the near term, allocating two-thirds of the
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funding squeezes out every other investment and may stifle
advancement in those areas, further pushing progress toward
commercial deployment of those near-zero and zero-emission
technologies further off into the future.
With so much of the funding directed to trucks, and of that
category, only the heaviest trucks (Class 7 and 8 with weights
over 26,000 pounds GVWR), this bill seems to work counter to
the goals of SB 1204 to create a comprehensive program to
advance near-zero and zero-emission medium and heavy duty
vehicles, including medium-duty trucks, busses, and other
off-road vehicles.
Additionally, by directing such a large portion of program
funds to deployment of Class 7 and 8 trucks that meet the
optional low NOx standard, this bill effectively removes
incentive funds from technological development of medium-duty
trucks. According to ARB, advanced technologies and initial
deployments typically begin in the lower weight classes
(14,001-26,000 pounds GVWR) before moving to heavier weight
classes. For example, approximately 68% of all HVIP vouchers
have gone to trucks that are 26,000 pounds GVWR or less. So
in addition to stagnating other near-zero and zero-emission
vehicle and equipment types, heavy-duty truck technology could
also stall at the low-NOx natural gas stage, instead of
continuing to push for a near-zero or zero-emission future.
For this reason, an amendment is needed to expand the
definition of heavy-duty to weight classes of 14,000 pounds
GVWR and greater.
4) Other funding for low-NOx vehicles. As noted in the
background, the state has multiple other programs that could
provide incentive funds for the purchase of low-NOx heavy duty
natural gas trucks, such as Proposition 1b funds, the Carl
Moyer Program, AB 118's Alternative and Renewable Fuel and
Vehicle Technology Program administered by CEC, and ARB's
Truck Loan Assistance Program. In light of this, it is not
clear why such a large fraction of the funding is warranted
for a single technology and vehicle class from the SB 1204
program.
5) In three years' time. The set-aside in AB 857 begins in 2018.
Is it necessary to guarantee half a billion dollars for a
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technology that has yet to be certified to meet the low-NOx
standard? In addition, since there are not yet any engines
available that have been certified to the low NOx standard, it
is difficult to predict what the demand for these vehicles
will be in 2018 to 2023. Currently, ARB has the ability to
determine, on an annual basis, how to apportion funds based on
promising technologies, technological developments, market
conditions, and a variety of other factors. This flexibility
allows appropriations to vary from year to year if market
forces change or technological advances occur. Is it prudent
to remove this discretion at the agency level to make these
funding determinations? If the Legislature instead decides
that a set-aside for this technology is warranted, is it
necessary to establish it now in statute when the technology
is not available and has not been demonstrated? Would it be
more prudent to wait until that time to establish if the
vehicles are ready for deployment?
6) GHG emissions reductions. Moneys for low NOx heavy-duty trucks
required by this bill would be funded through the GGRF, and as
such, are required to achieve GHG emissions reduction.
Proponents state that there are significant GHG emission
reductions when switching from diesel fueled trucks, to
natural gas. However, as previously noted, AB 857 potentially
stifles development of other zero-emission transformative
technologies, and in this way, may not be structured to allow
for the prioritization of projects or funding categories in
order to maximally reduce GHG emissions.
In addition to the fact that stifled innovation may hamper GHG
emission reduction efforts in the long term, there are many
other vehicles types such as medium-heavy-duty trucks,
including drayage trucks used at ports and to transport goods
to inland warehouses, which are abundant and contribute
significantly to GHG emissions in the state, but that are not
included in the $100 million set-aside of funds.
Where is the natural gas coming from? California imports 90%
of its natural gas from out of state. And although ARB's life
cycle analysis should incorporate all aspects of production,
and delivery through their carbon intensity accounting, recent
scientific reports indicate that there have been large
underestimates of methane emissions, the primary component of
natural gas (where methane has 20 to 30 times the global
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warming potential of CO2) throughout the United States. These
initial studies imply that estimates of the carbon intensity
of natural gas imports may need to be reevaluated to provide a
more accurate picture of the actual climate impacts from a
transportation system that continues to rely more heavily on
natural gas.
Low-NOx natural gas engines and GHG emissions. The low NOx
heavy-duty trucks that would quality for the funds allocated
in AB 857, although a large technological advancement in terms
of reduced NOx, do not represent gains over conventional
natural gas trucks in terms of GHG emission reductions.
Renewable natural gas. Renewable gas, or biomethane, is
purified biogas, which is the gaseous product of anaerobic
digestion and is comprised primarily of methane and carbon
dioxide. Biomethane is considered a "low-carbon" fuel because
its combustion destroys methane, a potent climate-warming gas.
In addition, biomethane can be used to displace the use of
fossil fuels, such as natural gas, thereby further decreasing
its carbon intensity.
Assembly Natural Resources amendment. In order to ensure more
significant GHG emission reductions for the large GGRF
investments toward low-NOx heavy duty trucks required under AB
857, an amendment was taken in the Assembly Natural Resources
Committee to require that, to be eligible for funding, these
trucks use at least 10% renewable fuel. In an attempt to
express this value in a way that accounts for the carbon
life-cycle of fuels, this provision was later amended by the
author to specify a carbon intensity value of no greater than
79% for the fuel as compared to diesel, in order to qualify
for funding.
It is unclear what assumptions went into this calculation and,
therefore, what level of renewable fuel on average would be
required by a carbon intensity of 79% of conventional diesel.
Additionally, because carbon intensities are dependent on the
specific life-cycle for each fuel, it is not clear how ARB
would implement this provision and verify a carbon intensity
requirement for individual trucks or fleets.
Assuming a carbon intensity threshold of 79% does accurately
represent a 10% renewable gas requirement, this value is a
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still a very low bar for renewable fuel, considering the
significant growth in the production of renewable fuel used as
a transportation fuel in the last few years. According to
ARB, in 2012, only about 2% of natural gas used as a
transportation fuel was renewable. In 2013, the percentage
increased five-fold to 10%. In 2014, the amount more than
doubled to 21%, but the last quarter of 2014 saw 42% renewable
and the first quarter of 2015 was 60%.
In order to justify the use of GGRF moneys with a meaningful
renewable fuel requirement that recognizes the substantial
growth in renewable gas over the last few years, an amendment
is needed to1) set the renewable fuel requirement at 50%, or
the equivalent carbon intensity value compared to conventional
diesel, as determined by ARB, and 2) provide ARB the
discretion to increase or lower the percentage based on
technological feasibility and supply considerations.
7) Additional amendments from Assembly Natural Resources.
Amendments taken in the Assembly Natural Resources Committee
required the owner or responsible official of a heavy-duty
truck that received incentive funding under AB 857 to document
the required renewable content by volume of fuel dispensed, as
determined by ARB.
Author's amendments have since struck this requirement.
An amendment is needed to restore that language to honor the
agreement made in that committee.
8) Piece by piece. GGRF investments must facilitate the
achievement of GHG emissions reductions. However, after that
requirement is fulfilled, there are a number of other policy
goals that should be considered, including benefits to
environmental quality, resource protection, public health and
the economy, as well as benefits to disadvantaged communities.
And although the fund is growing, it is still a limited
source of revenue. In order to create an optimized investment
strategy from GGRF moneys, proposals should not be considered
in isolation, but be assessed in aggregate to determine what
suite of measures best meets the requirements of the fund,
uses resources most efficiently, and maximizes policy
objectives.
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As budget discussions on a cap-and-trade investment strategy
have been pushed to later this session, an opportunity exists
to have a comprehensive discussion on the universe of GGRF
proposals currently in the Legislature, during budget
negotiations this summer. If the Legislature feels that AB
857 is an appropriate expenditure of GGRF moneys, then this
measure should also be considered through the budget process
for cap-and-trade expenditures, along with all other measures
proposing to expend, or authorize for expenditure, GGRF
moneys.
Related/Prior Legislation
SB 1204 (Lara, Pavley, Chapter 524, Statutes of 2014) established
the California Clean Truck, Bus, Off-Road Vehicle and Equipment
Program, funded through the GGRF, for the development and
deployment of near-zero and zero-emission truck, bus, off-road
and equipment technologies.
DOUBLE REFERRAL:
This measure was heard in Senate Transportation and Housing
Committee on July 7, 2015, and passed out of committee with a
vote of 8-1.
SOURCE: Southern California Gas Company
SUPPORT:
Agile Sourcing Partners
Agility Fuel Systems, Inc.
Alameda Construction Services, Inc.
Alhambra Chamber of Commerce
A.M. Ortega, Inc.
Anaheim Chamber of Commerce
Antelope Valley Air Quality Management District
Antelope Valley African American Chamber of Commerce
Antelope Valley Board of Trade
Antelope Valley Boys and Girls Club
ARB, Inc.
Arborland Montessori School
AB 857 (Perea) Page 17 of
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Asian Business Association of the Inland Empire
Association of California Cities - Orange County
Azusa Chamber of Commerce
Bienvenidos Community Health Center
Binational Health Week Planning Committee, Los Angeles
Bioenergy Association of California
Black Business Association
Black Chamber of Orange County
Boys & Girls Club of Greater Ventura
Boys and Girls Clubs of Greater Redlands-Riverside of San
Bernardino &
Riverside Counties
Boys & Girls Club of Pomona Valley
Boys Republic
BREATHE California of Los Angeles County
Brotherhood Crusade
Building Industry Association of Southern California, Inc.
Burbank Chamber of Commerce
California Black Chamber - Council of Chambers
California Center for Public Policy
California Food Policy Council
California Natural Gas Vehicle Coalition
California Trucking Association
Cambodia Town, Inc.
Cars are Basic
Casa 0101
Casa Esperanza
Central City Association of Los Angeles
Cesar Chavez Foundation
Charter Oak Unified School District
City of Atascadero
City of Beaumont
City of Buena Park
City of Commerce
City of Compton
City of Downey
City of El Monte
City of Fontana
City of Fountain Valley
City of Goleta
City of Hanford
City of Huntington Beach
City of Lake Elsinore
City of Los Angeles, Council Member Felipe Fuentes
AB 857 (Perea) Page 18 of
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City of Lynwood
City of Maywood
City of McFarland
City of Monterey Park
City of Palm Desert
City of Perris
City of Pico Rivera
City of Pomona
City of Riverside
City of San Fernando
City of South Gate
City of Tulare
City of Westminster
Clean Air Now
Clean Energy
CleanTech OC
Clinica Msr. Oscar A. Romero Community Health Centers
CM Distributors, Inc.
Coachella Valley Economic Partnership
Commerce Industrial Council Chamber of Commerce
Congress of California Seniors
COPE Health Solutions
Councilmember Fernando Vasquez, City of Downey
County of Kings
County of San Bernardino
County of Santa Barbara
County of Tulare
Culver City Chamber of Commerce
Cummins Westport Inc.
Dana Point Chamber of Commerce
Desert Healthcare District
Desert Valleys Builders Association
Discovery Cube Science Center
Dignity Health
Duarte Chamber of Commerce
Duarte Unified School District
Economic Development Collaborative - Ventura County
Economic Development Corporation serving Tulare County
Economic Vitality Corporation of San Luis Obispo
EDCO
El Concilio Family Services
El Monte/South El Monte Chamber of Commerce
Federacion de Clubes Jaliscienses Del Sur de California
Foothill Workforce Investment Board
AB 857 (Perea) Page 19 of
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Fountain Valley Chamber of Commerce
Fullerton Chamber of Commerce
G&C Equipment Corporation
Gardena Valley Chamber of Commerce
Gateway Chambers Alliance
Glendale Chamber of Commerce
Glendora Unified School District
Grandma's House of Hope
Greater Conejo Valley Chamber of Commerce
Greater Los Angeles African American Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Greater West Covina Business Association
GreenFIX America, LLC
Hanford Chamber of Commerce
Harvest Power California, LLC
Hemet San Jacinto Chamber of Commerce
Herman Weissker, Inc.
Hispanas Organized for Political Equality
Huntington Beach Chamber of Commerce
Industry Manufacturers Council
Infinity Business Solutions
Inglewood/Airport Area Chamber of Commerce
Inland Action
Inland Empire Economic Partnership
Jabo Industries, LLC
Kern County Board of Supervisors
Kern County Superintendent of Schools
Kern Economic Development Foundation
Kheir Clinic
Laguna Nigel Chamber of Commerce
La Verne Chamber of Commerce
League of California Cities, Orange County Division
Lincoln Training Center
Los Angeles Area Chamber of Commerce
Los Angeles Business Council
Los Angeles County Business Federation
Los Angeles Opportunities Industrialization Center
Lyles Utility Construction, LLC
Madera County Board of Supervisors
Meals on Wheels Industry, Inc.
Mojave Desert Air Quality Management District
Montebello Unified School District Board of Education
Moreno Valley Black Chamber of Commerce
Mothers of East Los Angeles
AB 857 (Perea) Page 20 of
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Mujeres del la Tierra
Neal Construction Services
National Construction and Development, Inc.
National Congress of Black Women, Inc., Los Angeles Chapter
North Orange County Legislative Alliance
North of the River Chamber of Commerce
Oceanside Chamber of Commerce
Ojai Valley Chamber of Commerce
Orange County Business Council
Orange County Hispanic Chamber of Commerce
Orange County Taxpayers Association
Orange County Transportation Authority
Otay Mesa Chamber of Commerce
Our Weekly
Oxnard Chamber of Commerce
Pacific Asian Consortium in Employment
Pacific Asian Counseling Services
Palm Desert Area Chamber of Commerce
Pasadena Chamber of Commerce, Board of Directors
Pinnacle Petroleum, Inc.
Pomona Valley Hospital Medical Center
Placita Santa Fe Merchants Association
Plaza Community Services
Proteus, Inc.
ReFuel by Atlas Disposal Industries
Regional Chamber of Commerce - San Gabriel Valley
Riverside National Association for the Advancement of Colored
People
Rosemead Chamber of Commerce
Rowland Heights Community Coordinating Council
Ryder
Rowland Unified School District
Salvadoran American Leadership and Educational Fund
Salvation Army L.A. Red Shield Youth and Community Center
San Diego East County Chamber of Commerce
San Diego Gas & Electric (SDG&E)
San Diego Port Tenants Association
San Gabriel Valley Council of Governments
San Gabriel Valley Regional Chamber of Commerce
San Joaquin Valley Air Districts
San Joaquin Valley Air Pollution Control District
San Joaquin Valley Regional Transportation Planning Agencies
Santa Ana Chamber of Commerce
Santa Clarita Valley Chamber of Commerce
AB 857 (Perea) Page 21 of
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Santa Maria Valley Chamber of Commerce
Santa Monica Chamber of Commerce
S E Pipe Line Construction Co.
Sempra Energy Utilities
Sequoia Riverlands Trust
Simi Valley Chamber of Commerce
South Orange County Economic Coalition
Southeast Community Development Corporation
Southern California Gas Company (SoCalGas)
Southwest California Legislative Council
S.W. Administrators, Inc.
The Coalition for Renewable Natural Gas
TELACU (The East Los Angeles Community Union)
The Placita Santa Fe Merchants Association
The Salvation Army
The Valley Economic Alliance
Torrance Area Chamber of Commerce
Uchida Pipe & Industrial Products
United Chambers of Commerce, San Fernando Valley & Region
University of California, Riverside Center for Sustainable
Suburban Development
UPS
Utility Partners of America
Valley Family Center
Valley Presbyterian Hospital
Valley Vista Services, Inc.
Venice Chamber of Commerce
Vobecky Enterprises, Inc.
Waste Mangement
Western Riverside Council of Governments (WRCOG)
West Valley Boys & Girls Club
YMCA (Anaheim)
3G CNG Corporation
99 Cents Only Stores, LLC
OPPOSITION:
Alameda-Contra Costa Transit District
American Lung Association of California
BAE Systems, Inc.
BYD Motors, Inc.
Center for Transportation and the Environment
Clean Power Campaign
Complete Coach Works
AB 857 (Perea) Page 22 of
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Environment California
National Parks Conservation Association
Natural Resources Defense Council
Nuvera Fuel Cells, LLC
Orange EV
Physicians for Social Responsibility - Los Angeles Chapter
Regional Asthma Management & Prevention
Sierra Club California
The Greenling Institute
Union of Concerned Scientists
US Hybrid
Valley Improvement Projects
Wireless Advanced Vehicle Electrification (WAVE)
XL Hybrids
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