BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SJR 29|
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THIRD READING
Bill No: SJR 29
Author: Lieu (D)
Amended: As introduced
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 7-0, 6/23/14
AYES: Lieu, Wyland, Berryhill, Corbett, Galgiani, Hill, Torres
NO VOTE RECORDED: Block, Hernandez
SUBJECT : Natural gas vehicle fuel standards
SOURCE : Author
DIGEST : This resolution urges any official of the State of
California involved with the National Conference on Weights and
Measures (NCWM) to strongly support the natural gas vehicle fuel
standards recommended by the Natural Gas Steering Committee of
the NCWM; and urges the U.S. Department of Commerce, the NCWM,
and the National Institute of Standards and Technology (NIST) to
work with the natural gas industry to develop natural gas
vehicle fuel standards that are user and consumer friendly and
that include recognition of the gasoline gallon equivalent (GGE)
and diesel gallon equivalent (DGE) units for dispensing natural
gas.
ANALYSIS :
Existing federal law:
1.Reserves to the states the right to regulate commerce
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including the regulation of the weights and measures system
within their borders.
2.Establishes the NIST in the U.S. Department of Commerce whose
mission is to promote U.S. innovation and industrial
competitiveness by advancing measurement science, standards,
and technology in ways that enhance economic security and
improve our quality of life.
Existing state law:
3.Provides that the Division of Measurement Standards (DMS)
within the Department of Food and Agriculture (CDFA) has
general enforcement supervision of the laws relating to
weights and measures and measuring devices, and provides for
the enforcement of those laws and the inspection and testing
of measuring devices in each county by the county sealer.
4.Requires the Director of CDFA to establish requirements for
commercial weighing and measuring; and requires the adoption,
by reference, of the latest standards by the NCWM published in
the NIST Handbook 44 (NIST HB 44). The NIST HB 44 (2014)
provides that when compressed natural gas is dispensed as an
engine fuel, the delivered quantity shall be indicated in
gasoline liter equivalent units or GGE units.
5.Provides that the definitions of basic units of weight and
measure, and the tables of weight and measure and weights and
measures equivalents, as published by the NIST are recognized
and shall govern weighing and measuring equipment and
transactions in this state.
6.Defines, under the weights and measures provisions of
California law, that liquefied natural gas (LNG) is a
"petroleum product" and thus is an "engine fuel" or "motor
vehicle fuel."
This resolution makes the following declarations:
1.Regarding the NCWM:
In 1906, a number of states met together to discuss the
lack of uniform standards for weights and measurement in
the U.S. that was crippling economic growth. These
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meetings marked the birth of the NCWM.
The NCWM has evolved into a not-for-profit corporation
that ensures national standards keep pace with evolving
technology and marketing practices.
1.Regarding the use of natural gas as a vehicle fuel:
Natural gas is the cleanest burning alternative
transportation fuel commercially available today; and
natural gas vehicles emit 20 to 30% less greenhouse gases
than their diesel and gasoline counterparts.
The utilization of natural gas as a motor vehicle fuel
has seen a massive increase over the past five years due to
stable and affordable pricing.
1.Regarding California's efforts to promote the use of natural
gas vehicles:
California provides incentives to encourage the
development and deployment of natural gas vehicles and
fueling stations in the state; and laws have been enacted
to encourage growth in purchases of natural gas vehicles.
New networks of natural gas vehicles and fueling
stations are being established around the country and
within California.
1.Regarding the manner in which natural gas is sold for vehicle
fuel:
In 1994, the NCWM established the GGE as the official
unit of sale for compressed natural gas (CNG). The GGE
standard puts CNG in a unit that is familiar to consumers
and allows consumers to evaluate the cost between CNG and
traditional motor vehicle fuels.
Since 2011, an increasing number of long-haul trucking
companies have begun converting their fuel source to LNG;
and by the end of 2014, there is expected to be a
nationwide network of LNG refueling stations.
1.Regarding the standards by which natural gas fuel is
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calculated for sale to consumers:
On March 19, 2014, the NCWM announced that its Natural
Gas Steering Committee recommended that natural gas be sold
in terms of gasoline and DGEs as opposed to units of mass,
either pounds or kilograms.
The NIST publishes the standards adopted by the NCWM;
and California is one of 44 states that automatically adopt
the standards published by the NIST.
Background
The use of natural gas as an alternative to traditional motor
fuel has greatly increased over the past five years due to its
affordable pricing and environmental incentives: namely,
natural gas' emission of 20-30% less greenhouse gases than its
gasoline and diesel counterparts. There are two types of
natural gas: CNG and LNG.
In 1994, the NCWM established the GGE for the sale of CNG. The
GGE is a consumer friendly standard because it signifies an
amount of CNG that has the same energy content as a gallon of
gasoline. This allows consumers to easily analyze the costs and
benefits of switching to natural gas.
In the past two to three years, many long-haul trucking
companies have transitioned, or are in the process of
transitioning, to LNG trucks. Because LNG only replaces diesel,
the Clean Vehicles Education Foundation along with the Natural
Gas Vehicle Industry recognized this change and in 2013
requested that the National Conference on Weights and Measures
adopt a standard of DGE.
In January 2014, the NCWM announced a recommendation, to not
only deny the DGE proposal, but also to repeal the GGE standard
approved 20 years earlier. Instead of continuing the status
quo, the NCWM considered a new metric system based measurement
of natural gas in kilograms.
There was immediate backlash from the Natural Gas Vehicle
Industry, which argued that the proposal would create barriers
to natural gas vehicle adoption, such as consumer confusion and
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costly replacement of natural gas dispensers, estimated at
$70,000 apiece.
A committee within the NCWM was created, called the Natural Gas
Steering Committee, whose purpose was to research the benefits
of the two different standards and make a recommendation based
on their findings. In March 2014, the Committee announced their
recommendation that natural gas be sold in terms of GGE and DGE
as opposed to units of mass, either in pounds or kilograms.
Even in light of this finding, however, there is still debate
surrounding which standard should be used. The NCWM is
scheduled to vote on the recommended natural gas vehicle fuel
standards at its meeting in July 2014.
Comments
The author states:
"At their annual meeting in July the National Conference of
Weights and Measures will vote on the standard unit of measure
for natural gas used in transportation. The National Conference
on Weights and Measures is a professional nonprofit association
of state and local weights and measures officials, federal
agencies, manufacturers, retailers and consumers. The NCWM
develops national weights and measures standards.
"The Natural Gas Steering Committee of the National Conference
of Weights and Measures is recommending: (1) that retailers be
allowed to dispense CNG and Liquefied Natural Gas (LNG) in DGE
units; and (2) the retention of the existing standard (with some
minor changes) allowing CNG to be sold in gasoline gallon
equivalents or GGE units. The GGE standard has been in place
since 1994.
"California's natural gas transportation industry and freight
and transport companies strongly support this recommendation.
"California and the United States must establish a vibrant
marketplace for transportation fuels or petroleum will continue
to dominate for decades. A vibrant fuels marketplace requires a
transparent, simple, and understandable system for consumers to
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make educated and informed choices. Using gallon equivalents
for natural gas will help achieve this.
"California's representatives to the National Conference of
Weights and Measures should support the gallon equivalent
approach to selling natural gas used in transportation."
FISCAL EFFECT : Fiscal Com.: No
SUPPORT : (Verified 6/24/14)
California Natural Gas Vehicle Coalition
UPS (United Parcel Service)
ARGUMENTS IN SUPPORT : The California Natural Gas Vehicle
Coalition states, "We strongly believe that establishing a
national diesel gallon equivalent (DGE) standard that allows
retailers to sell LNG in DGE units will significantly help the
development and deployment of a growing domestic NGV industry.
We also support maintaining the existing Gasoline Gallon
Equivalent (GGE) which was established in 1994."
Proponents contend that there must be a strong and valid
marketplace for transportation fuels such as natural gas or
petroleum will continue to dominate for decades. The market
place demands a transparent, simple, and understandable system
for consumers to make educated and informed choices about
vehicle and fuel purchases. They write, "Establishing a
national standard for selling natural gas in gallon equivalent
units will help create such a marketplace that benefits
consumers, retailers, and the economy as whole."
MW:e 6/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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