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Proposed Rule

Control of Emissions of Air Pollution From Locomotive Engines and Marine Compression-Ignition Engines Less Than 30 Liters per Cylinder

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Start Preamble Start Printed Page 15938

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

Locomotives and marine diesel engines are important contributors to our nation's air pollution today. These sources are projected to continue to generate large amounts of particulate matter (PM) and nitrogen oxides (NOX) emissions that contribute to nonattainment of the National Ambient Air Quality Standards (NAAQS) for PM2.5 and ozone across the United States. The emissions of PM and ozone precursors from these engines are associated with serious public health problems including premature mortality, aggravation of respiratory and cardiovascular disease, aggravation of existing asthma, acute respiratory symptoms, chronic bronchitis, and decreased lung function. In addition, emissions from locomotives and marine diesel engines are of particular concern, as diesel exhaust has been classified by EPA as a likely human carcinogen.

EPA is proposing a comprehensive program to dramatically reduce emissions from locomotives and marine diesel engines. It would apply new exhaust emission standards and idle reduction requirements to diesel locomotives of all types—line-haul, switch, and passenger. It would also set new exhaust emission standards for all types of marine diesel engines below 30 liters per cylinder displacement. These include marine propulsion engines used on vessels from recreational and small fishing boats to super-yachts, tugs and Great Lakes freighters, and marine auxiliary engines ranging from small gensets to large generators on ocean-going vessels. The proposed program includes a set of near-term emission standards for newly-built engines. These would phase in starting in 2009. The near-term program also contains more stringent emissions standards for existing locomotives. These would apply when the locomotive is remanufactured and would take effect as soon as certified remanufacture systems are available (as early as 2008), but no later than 2010 (2013 for Tier 2 locomotives). We are requesting comment on an alternative under consideration that would apply a similar requirement to existing marine diesel engines when they are remanufactured. We are also proposing long-term emissions standards for newly-built locomotives and marine diesel engines based on the application of high-efficiency catalytic aftertreatment technology. These standards would phase in beginning in 2015 for locomotives and 2014 for marine diesel engines. We estimate PM reductions of 90 percent and NOX reductions of 80 percent from engines meeting these standards, compared to engines meeting the current standards.

We project that by 2030, this program would reduce annual emissions of NOX and PM by 765,000 and 28,000 tons, respectively. These reductions are estimated to annually prevent 1,500 premature deaths, 170,000 work days lost, and 1,000,000 minor restricted-activity days. The estimated annual monetized health benefits of this rule in 2030 would be approximately $12 billion, assuming a 3 percent discount rate (or $11 billion assuming a 7 percent discount rate). These estimates would be increased substantially if we were to adopt the remanufactured marine engine program concept. The annual cost of the proposed program in 2030 would be significantly less, at approximately $600 million.

DATES:

Comments must be received on or before July 2, 2007. Under the Paperwork Reduction Act, comments on the information collection provisions must be received by OMB on or before May 3, 2007.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2003-0190, by one of the following methods:

  • www.regulations.gov: Follow the on-line instructions for submitting comments.
  • Fax: (202) 566-1741
  • Mail: Air Docket, Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 20503.
  • Hand Delivery: EPA Docket Center, (EPA/DC) EPA West, Room 3334, 1301 Constitution Ave., NW, Washington DC, 20004. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2003-0190. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/​epahome/​dockets.htm. For additional instructions on submitting comments, go to section I.A. of the SUPPLEMENTARY INFORMATION section of this document, and also go to section VIII.A. of the Public Participation section of this document.

Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the EPA-EQ-OAR-2003-0190 Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, Start Printed Page 15939DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the EPA-EQ-OAR-2003-0190 is (202) 566-1742.

Hearing: Two hearings will be held, at 10 a.m. on Tuesday, May 8, 2007 in Seattle, WA, and at 10 a.m. on Thursday, May 10, 2007 in Chicago, IL. For more information on these hearings or to request to speak, see section VIII.C. “WILL THERE BE A PUBLIC HEARING.”

Start Further Info

FOR FURTHER INFORMATION CONTACT:

John Mueller, U.S. EPA, Office of Transportation and Air Quality, Assessment and Standards Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4275; fax number: (734) 214-4816; e-mail address: Mueller.John@epa.gov, or Assessment and Standards Division Hotline; telephone number: (734) 214-4636.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

General Information

♢ Does This Action Apply to Me?

♢ Locomotive

Entities potentially regulated by this action are those which manufacture, remanufacture and/or import locomotives and/or locomotive engines; and those which own and operate locomotives. Regulated categories and entities include:

CategoryNAICS Code 1Examples of potentially affected entities
Industry333618, 336510Manufacturers, remanufacturers and importers of locomotives and locomotive engines.
Industry482110, 482111, 482112Railroad owners and operators.
Industry488210Engine repair and maintenance.
1 North American Industry Classification System (NAICS).

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your company is regulated by this action, you should carefully examine the applicability criteria in 40 CFR sections 92.1, 92.801, 92.901, 92.1001, 1065.1, 1068.1, 85.1601, 89.1, and the proposed regulations. If you have questions, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

♢ Marine

This proposed action would affect companies and persons that manufacture, sell, or import into the United States new marine compression-ignition engines, companies and persons that rebuild or maintain these engines, companies and persons that make vessels that use such engines, and the owners/operators of such vessels. Affected categories and entities include:

CategoryNAICS Code 1Examples of potentially affected entities
Industry333618Manufacturers of new marine diesel engines.
Industry33661 and 346611Ship and boat building; ship building and repairing.
Industry811310Engine repair, remanufacture, and maintenance.
Industry483Water transportation, freight and passenger.
Industry336612Boat building (watercraft not built in shipyards and typically of the type suitable or intended for personal use).
1 North American Industry Classification System (NAICS).

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your company is regulated by this action, you should carefully examine the applicability criteria in 40 CFR 94.1, 1065.1, 1068.1, and the proposed regulations. If you have questions, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

♢ Additional Information About This Rulemaking

♢ Locomotive

The current emission standards for locomotive engines were adopted by EPA in 1998 (see 63 FR 18978, April 16, 1998). This notice of proposed rulemaking relies in part on information that was obtained for that rule, which can be found in Public Docket A-94-31. That docket is incorporated by reference into the docket for this action, OAR-2003-0190.

♢ Marine

The current emission standards for new commercial marine diesel engines were adopted in 1999 and 2003 (see 64 FR 73300, December 29, 1999 and 66 FR 9746, February 28, 2003). The current emission standards for new recreational marine diesel engines were adopted in 2002 (see 67 FR 68241, November 8, 2002). The current emission standards for marine diesel engines below 37 kW (50 hp) were adopted in 1998 (see 63 FR 56967, October 23, 1998). This notice of proposed rulemaking relies in part on information that was obtained for those rules, which can be found in Public Dockets A-96-40, A-97-50, A-98-01, A-2000-01, and A-2001-11. Those dockets are incorporated by reference into the docket for this action, OAR-2003-0190.

♢ Other Dockets

This notice of proposed rulemaking relies in part on information that was obtained for our recent highway diesel and nonroad diesel rulemakings, which can be found in Public Dockets A-99-06 and A-2001-28 (see also OAR 2003-Start Printed Page 159400012).[1] [2] Those dockets are incorporated by reference into the docket for this action, OAR-2003-0190.

Outline of This Preamble

I. Overview

A. What Is EPA Proposing?

B. Why Is EPA Making This Proposal?

II. Air Quality and Health Impacts

A. Overview

B. Public Health Impacts

C. Other Environmental Effects

D. Other Criteria Pollutants Affected by This NPRM

E. Emissions From Locomotive and Marine Diesel Engines

III. Emission Standards

A. What Locomotives and Marine Engines Are Covered?

B. Existing EPA Standards

C. What Standards Are We Proposing?

D. Are the Proposed Standards Feasible?

E. What Are EPA's Plans for Diesel Marine Engines on Large Ocean-Going Vessels?

IV. Certification and Compliance Program

A. Issues Common to Locomotives and Marine

B. Compliance Issues Specific to Locomotives

C. Compliance Issues Specific to Marine Engines

V. Costs and Economic Impacts

A. Engineering Costs

B. Cost Effectiveness

C. EIA

VI. Benefits

A. Overview

B. Quantified Human Health and Environmental Effects of the Proposed Standards

C. Monetized Benefits

D. What Are the Significant Limitations of the Benefit-Cost Analysis?

E. Benefit-Cost Analysis

VII. Alternative Program Options

A. Summary of Alternatives

B. Summary of Results

VIII. Public Participation

A. How Do I Submit Comments?

B. How Should I Submit CBI to the Agency?

C. Will There Be a Public Hearing?

D. Comment Period

E. What Should I Consider as I Prepare My Comments for EPA?

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: (Federalism)

F. Executive Order 13175: (Consultation and Coordination With Indian Tribal Governments)

G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer Advancement Act

X. Statutory Provisions and Legal Authority

I. Overview

This proposal is an important step in EPA's ongoing National Clean Diesel Campaign (NCDC). In recent years, we have adopted major new programs designed to reduce emissions from highway and nonroad diesel engines.[3] When fully implemented, these new programs would largely eliminate emissions of harmful pollutants from these sources. This Notice of Proposed Rulemaking (NPRM) sets out the next step in this ambitious effort by addressing two additional diesel sectors that are major sources of air pollution nationwide: locomotive engines and marine diesel engines below 30 liters per cylinder displacement.[4] This addresses all types of diesel locomotives— line-haul, switch, and passenger rail, and all types of marine diesel engines below 30 liters per cylinder displacement (hereafter collectively called “marine diesel engines.”). These include marine propulsion engines used on vessels from recreational and small fishing boats to super-yachts, tugs and Great Lakes freighters, and marine auxiliary engines ranging from small gensets to large generators on ocean-going vessels.[5]

Emission levels for locomotive and marine diesel engines remain at high levels—comparable to the emissions standards for highway trucks in the early 1990s—and emit high level of pollutants that contribute to unhealthy air in many areas of the U.S. Nationally, in 2007 these engines account for about 20 percent of mobile source NOX emissions and 25 percent of mobile source diesel PM2.5 emissions. Absent new emissions standards, we expect overall emissions from these engines to remain relatively flat over the next 10 to 15 years due to existing regulations such as lower fuel sulfur requirements and the phase-in of locomotive and marine diesel Tier 1 and Tier 2 engine standards but starting in about 2025 emissions from these engines would begin to grow. Under today's proposed program, by 2030, annual NOX emissions from locomotive and marine diesel engines would be reduced by 765,000 tons and PM2.5 and 28,000 tons. Without new controls, by 2030, these engines would become a large portion of the total mobile source emissions inventory constituting 35 percent of mobile source NOX emissions and 65 percent of diesel PM emissions.

We followed certain principles when developing the elements of this proposal. First, the program must achieve sizeable reductions in PM and NOX emissions as early as possible. Second, as we did in the 2007 highway diesel and clean nonroad diesel programs, we are considering engines and fuels together as a system to maximize emissions reductions in a highly cost-effective manner. The groundwork for this systems approach was laid in the 2004 nonroad diesel final rule which mandated that locomotive and marine diesel fuel comply with the 15 parts per million sulfur cap for ultra-low sulfur diesel fuel (ULSD) by 2012, in anticipation of this rulemaking (69 FR 38958, June 29, 2004). The costs, benefits, and other impacts of the locomotive and marine diesel fuel regulation are covered in the 2004 rulemaking and are not duplicated here. Lastly, we are proposing standards and implementation schedules that take full advantage of the efforts now being expended to develop advanced emissions control technologies for the highway and nonroad sectors. As discussed throughout this proposal, the proposed standards represent a feasible progression in the application of advanced technologies, providing a cost-effective program with very large public health and welfare benefits.

The proposal consists of a three-part program. First, we are proposing more stringent standards for existing locomotives that would apply when they are remanufactured. The proposed remanufactured locomotive program would take effect as soon as certified remanufacture systems are available (as early as 2008), but no later than 2010 (2013 for Tier 2 locomotives). We are also requesting comment on an alternative under consideration that would apply a similar requirement to existing marine diesel engines when Start Printed Page 15941they are remanufactured. Second, we are proposing a set of near-term emission standards, referred to as Tier 3, for newly-built locomotives and marine engines, that reflect the application of technologies to reduce engine-out PM and NOX. Third, we are proposing longer-term standards, referred to as Tier 4, that reflect the application of high-efficiency catalytic aftertreatment technology enabled by the availability of ULSD. These standards phase in over time, beginning in 2014. We are also proposing provisions to eliminate emissions from unnecessary locomotive idling.

Locomotives and marine diesel engines designed to these proposed standards would achieve PM reductions of 90 percent and NOX reductions of 80 percent, compared to engines meeting the current Tier 2 standards. The proposed standards would also yield sizeable reductions in emissions of nonmethane hydrocarbons (NMHC), carbon monoxide (CO), and hazardous compounds known as air toxics. Table I-1 summarizes the PM and NOX emission reductions for the proposed standards compared to today's (Tier 2) emission standards or, in the case of remanufactured locomotives, compared to the current standards for each tier of locomotives covered.

Table I.-1.—Reductions From Levels of Existing Standards

SectorProposed standards tierPMNOX
LocomotivesRemanufactured Tier 060%15-20%
Remanufactured Tier 150
Remanufactured Tier 250
Tier 350
Tier 49080
Marine Diesel Engines aRemanufactured Engines b25-60up to 20
Tier 35020
Tier 49080
a Existing and proposed standards vary by displacement and within power categories. Reductions indicated are typical.
b This proposal asks for comment on an alternative under consideration that would reduce emissions from existing marine diesel engines. See section VII.A(2).

Combined, these reductions would result in substantial benefits to public health and welfare and to the environment. We project that by 2030 this program would reduce annual emissions of NOX and PM by 765,000 and 28,000 tons, respectively, and the magnitude of these reductions would continue to grow well beyond 2030. We estimate that these annual emission reductions would prevent 1,500 premature mortalities in 2030. These annual emission reductions are also estimated to prevent 1,000,000 minor restricted-activity days, 170,000 work days lost, and other quantifiable benefits. All told, the estimated monetized health benefits of this rule in 2030 would be approximately $12 billion, assuming a 3 percent discount rate (or $11 billion assuming a 7 percent discount rate). The annual cost of the program in 2030 would be significantly less, at approximately $600 million.

A. What Is EPA Proposing?

This proposal is a further step in EPA's ongoing program to control emissions from diesel engines, including those used in marine vessels and locomotives. EPA's current standards for newly-built and remanufactured locomotives were adopted in 1998 and were implemented in three tiers (Tiers 0, 1, and 2) over 2000 through 2005. The current program includes Tier 0 emission limits for existing locomotives originally manufactured in 1973 or later, that apply when they are remanufactured. The standards for marine diesel engines were adopted in 1998 for engines under 37 kilowatts (kW), in 1999 for commercial marine engines, and in 2002 for recreational marine engines. These various Tier 1 and Tier 2 standards phase in from 1999 through 2009, depending on engine size and application. The most stringent of these existing locomotive and marine diesel engine standards are similar in stringency to EPA's nonroad Tier 2 standards that are now in the process of being replaced by Tier 3 and 4 standards.

The major elements of the proposal are summarized below. We are also proposing revised testing, certification, and compliance provisions to better ensure emissions control in use. Detailed provisions and our justifications for them are discussed in sections III and IV and in the draft Regulatory Impact Analysis (RIA). Section VII of this preamble describes a number of alternatives that we considered in developing this proposal, including a more simplistic approach that would introduce aftertreatment-based standards earlier. Our analysis shows that such an approach would result in higher emissions and fewer health and welfare benefits than we project will be realized from the program we are proposing today. After evaluating the alternatives, we believe that our proposed program provides the best opportunity for achieving timely and very substantial emissions reductions from locomotive and marine diesel engines. It best takes into account the need for appropriate lead time to develop and apply the technologies necessary to meet these emission standards, the goal of achieving very significant emissions reductions as early as possible, the interaction of requirements in this proposal with existing highway and nonroad diesel engine programs, and other legal and policy considerations.

Overall, this comprehensive three-part approach to setting standards for locomotives and marine diesel engines would provide very large reductions in PM, NOX, and toxic compounds, both in the near-term (as early as 2008), and in the long-term. These reductions would be achieved in a manner that: (1) Is very cost-effective, (2) leverages technology developments in other diesel sectors, (3) aligns well with the clean diesel fuel requirements already being implemented, and (4) provides the lead time needed to deal with the significant engineering design workload that is involved. We are asking for comments on all aspects of the proposal, including standards levels and implementation dates, and on the alternatives discussed in this proposal.

(1) Locomotive Emission Standards

We are proposing stringent exhaust emissions standards for newly-built and remanufactured locomotives, furthering the initiative for cleaner locomotives started in 2004 with the establishment of the ULSD locomotive fuel program, and adding this important category of engines to the highway and nonroad Start Printed Page 15942diesel applications already covered under EPA's National Clean Diesel Campaign.[6]

In the Advance Notice of Proposed Rulemaking (ANPRM) for this proposal (69 FR 39276, June 29, 2004), we suggested a program for comment that would bring about the introduction of high-efficiency exhaust aftertreatment to this sector in a single step. Although it has taken longer than expected to develop, the proposal we are issuing today is far more comprehensive than we envisioned in 2004. Informed by extensive analyses documented in the draft RIA and numerous discussions with stakeholders since then, this proposal goes significantly beyond that vision. It sets out standards for locomotives in three steps to more fully leverage the opportunities provided by both the already-established clean fuel programs, and the migration of clean diesel technology from the highway and nonroad sectors. It also addresses the large and long-lived existing locomotive fleet with stringent new emissions requirements at remanufacture starting in 2008. Finally, it sets new requirements for idle emissions control on newly-built and remanufactured locomotives.

Briefly, for newly-built line-haul locomotives we are proposing a new Tier 3 PM standard of 0.10 grams per brake horsepower-hour (g/bhp-hr), based on improvements to existing engine designs. This standard would take effect in 2012. We are also proposing new Tier 4 standards of 0.03 g/bhp-hr for PM and 1.3 g/bhp-hr for NOX, based on the evolution of high-efficiency catalytic aftertreatment technologies now being developed and introduced in the highway diesel sector. The Tier 4 standards would take effect in 2015 and 2017 for PM and NOX, respectively. We are proposing that remanufactured Tier 2 locomotives meet a PM standard of 0.10 g/bhp-hr, based on the same engine design improvements as Tier 3 locomotives, and that remanufactured Tier 0 and Tier 1 locomotives meet a 0.22 g/bhp-hr PM standard. We also propose that remanufactured Tier 0 locomotives meet a NOX standard of 7.4 g/bhp-hr, the same level as current Tier 1 locomotives, or 8.0 g/bhp-hr if the locomotive is not equipped with a separate loop intake air cooling system. Section III provides a detailed discussion of these proposed new standards, and section IV details improvements being proposed to the applicable test, certification, and compliance programs.

In setting our original locomotive emission standards in 1998, the historic pattern of transitioning older line-haul locomotives to road- and yard-switcher service resulted in our making little distinction between line-haul and switch locomotives. Because of the increase in the size of new locomotives in recent years, that pattern cannot be sustained by the railroad industry, as today's 4000+ hp (3000+ kW) locomotives are poorly suited for switcher duty. Furthermore, although there is still a fairly sizeable legacy fleet of older smaller line-haul locomotives that could find their way into the switcher fleet, essentially the only newly-built switchers put into service over the last two decades have been of radically different design, employing one to three smaller high-speed diesel engines designed for use in nonroad applications. In light of these trends, we are establishing new standards and special certification provisions for newly-built and remanufactured switch locomotives that take these trends into account.

Locomotives spend a substantial amount of time idling, during which they emit harmful pollutants and consume fuel. Two ways that idling time can be reduced are through the use of automated systems to stop idling locomotive engines (restarting them on an as-needed basis), and through the use of small low-emitting auxiliary engines to provide essential accessory power. Both types of systems are installed in a number of U.S. locomotives today for various reasons, including to save fuel, to help meet current Tier 0 emissions standards, and to address complaints from railyard neighbors about noise and pollution from idling locomotives.

We are proposing that idle control systems be required on all newly-built Tier 3 and Tier 4 locomotives. We also propose that they be installed on all existing locomotives that are subject to the proposed remanufactured engine standards, at the point of first remanufacture under the proposed standards, unless already equipped with idle controls. We are proposing that automated stop/start systems be required, but encourage the use of auxiliary power units by allowing their emission reduction to be factored into the certification test program as appropriate.

Taken together, the proposed elements described above constitute a comprehensive program that would address the problems caused by locomotive emissions from both a near-term and long-term perspective, and do so more completely than would have occurred under the concept described in the ANPRM. It would do this while providing for an orderly and cost-effective implementation schedule for the railroads, builders, and remanufacturers.

(2) Marine Engine Emission Standards

We are also proposing emissions standards for newly-built marine diesel engines with displacements under 30 liters per cylinder (referred to as Category 1 and 2, or C1 and C2, engines). This would include engines used in commercial, recreational, and auxiliary power applications, and those below 37 kW (50 hp) that were previously regulated separately in our nonroad diesel program. As with locomotives, our ANPRM described a one-step marine diesel program that would bring about the introduction of high-efficiency exhaust aftertreatment in this sector. Just as for locomotives, our subsequent extensive analyses (documented in the draft RIA) and numerous discussions with stakeholders since then have resulted in this proposal for standards in multiple steps, with the longer-term implementation of advanced technologies focused especially on the engines with the greatest potential for large PM and NOX emission reductions.

The proposed marine diesel engine standards include stringent engine-based Tier 3 standards for newly-built marine diesel engines that phase in beginning in 2009. These are followed by aftertreatment-based Tier 4 standards for engines above 600 kW (800 hp) that phase in beginning in 2014. The specific levels and implementation dates for the proposed Tier 3 and Tier 4 standards vary by engine sub-groupings. Although this results in a somewhat complicated array of emissions standards, it will ensure the most stringent standards feasible for each group of newly-built marine engines, and will help engine and vessel manufacturers to implement the program in a cost effective manner that also emphasizes early emission reductions. The proposed standards and implementation schedules, as well as their technological feasibility, are described in detail in section III of this preamble.

We are also requesting comment on an alternative we are considering to address the considerable impact of emissions from large marine diesel Start Printed Page 15943engines installed in vessels currently in the fleet. We have in the past considered but not finalized a program to regulate such engines as “new” engines at the time of remanufacture, similar to the approach taken in the locomotive program. We are again considering such a program in the context of this rulemaking and are soliciting comments on this alternative.

Briefly summarized, it would consist of two parts. In the first part, which could begin as early as 2008, vessel owners and rebuilders would be required to install a certified emissions control system when the engine is remanufactured, if such a system were available. Initially, we would expect the systems installed on remanufactured marine engines to be those certified for the remanufactured locomotive program, although this alternative would not limit the program to only those engines. Eventually manufacturers would be expected to provide systems for other large engines as well. In the second part, to take effect in 2013, marine diesel engines identified by EPA as high-sales volume engine models would have to meet specified emissions standards when remanufactured. The rebuilder or owner would be required to either use a system certified to meet the standards or, if no certified systems were available, to either retrofit an emission reduction technology for the engine that demonstrates at least a 25 percent reduction or to repower (replace the engine with a new one). The alternative under consideration is described in more detail in section VII.A(2). We request comment on the elements of this alternative as well as other possible approaches to achieve this goal, with the view that EPA may adopt a remanufacture program in the final rule if appropriate.

B. Why Is EPA Making This Proposal?

(1) Locomotives and Marine Diesels Contribute to Serious Air Pollution Problems

Locomotive and marine diesel engines subject to today's proposal generate significant emissions of fine particulate matter (PM2.5) and nitrogen oxides (NOX) that contribute to nonattainment of the National Ambient Air Quality Standards for PM2.5 and ozone. NOX is a key precursor to ozone and secondary PM formation. These engines also emit hazardous air pollutants or air toxics, which are associated with serious adverse health effects. Emissions from locomotive and marine diesel engines also cause harm to public welfare, including contributing to visibility impairment and other harmful environmental impacts across the US.

The health and environmental effects associated with these emissions are a classic example of a negative externality (an activity that imposes uncompensated costs on others). With a negative externality, an activity's social cost (the cost borne to society imposed as a result of the activity taking place) exceeds its private cost (the cost to those directly engaged in the activity). In this case, as described below and in Section II, emissions from locomotives and marine diesel engines and vessels impose public health and environmental costs on society. However, these added costs to society are not reflected in the costs of those using these engines and equipment. The market system itself cannot correct this externality because firms in the market are rewarded for minimizing their production costs, including the costs of pollution control. In addition, firms that may take steps to use equipment that reduces air pollution may find themselves at a competitive disadvantage compared to firms that do not. To correct this market failure and reduce the negative externality from these emissions, it is necessary to give producers the signals for the social costs generated from the emissions. The standards EPA is proposing will accomplish this by mandating that locomotives and marine diesel engines reduce their emissions to a technologically feasible limit. In other words, with this proposed rule the costs of the transportation services produced by these engines and equipment will account for social costs more fully.

Emissions from locomotive and marine diesel engines account for substantial portions of the country's ambient PM2.5 and NOX levels. We estimate that today hese engines account for about 20 percent of mobile source NOX emissions and about 25 percent of mobile source diesel PM2.5 emissions. Under today's proposed standards, by 2030, annual NOX emissions from these diesel engines would be reduced by 765,000 tons and PM2.5 emissions by 28,000 tons, and those reductions would continue to grow beyond 2030 as fleet turnover to the clean engines is completed.

EPA has already taken steps to bring emissions levels from light-duty and heavy-duty highway, and nonroad diesel vehicles and engines to very low levels over the next decade, as well as certain stationary diesel engines also subject to these standards, while the emission levels for locomotive and marine diesel engines remain at much higher levels—comparable to the emissions for highway trucks in the early 1990s.

Both ozone and PM2.5 contribute to serious public health problems, including premature mortality, aggravation of respiratory and cardiovascular disease (as indicated by increased hospital admissions and emergency room visits, school absences, lost work days, and restricted activity days), changes in lung function and increased respiratory symptoms, altered respiratory defense mechanisms, and chronic bronchitis. Diesel exhaust is of special public health concern, and since 2002 EPA has classified it as likely to be carcinogenic to humans by inhalation at environmental exposures.[7] Recent studies are showing that populations living near large diesel emission sources such as major roadways,[8] rail yards, and marine ports [9] are likely to experience greater diesel exhaust exposure levels than the overall U.S. population, putting them at greater health risks. We are currently studying the size of the U.S. population living near a sample of approximately 60 marine ports and rail yards, and will place the information in the docket upon completion prior to the final rule.

Today millions of Americans continue to live in areas that do not meet existing air quality standards. Currently, ozone concentrations exceeding the 8-hour ozone NAAQS occur over wide geographic areas, including most of the nation's major population centers. As of October 2006 there are approximately 157 million people living in 116 areas (461 full or partial counties) designated as not in attainment with the 8-hour ozone NAAQS. These numbers do not include people living in areas where there is a potential that the area may fail to maintain or achieve the 8-hour ozone NAAQS. With regard to PM2.5 nonattainment, EPA has recently finalized nonattainment designations Start Printed Page 15944(70 FR 943, Jan 5, 2005), and as of October 2006 there are 88 million people living in 39 areas (which include all or part of 208 counties) that either do not meet the PM2.5 NAAQS or contribute to violations in other counties. These numbers do not include individuals living in areas that may fail to maintain or achieve the PM2.5 NAAQS in the future.

In addition to public health impacts, there are public welfare and environmental impacts associated with ozone and PM2.5 emissions which are also serious. Specifically, ozone causes damage to vegetation which leads to crop and forestry economic losses, as well as harm to national parks, wilderness areas, and other natural systems. NOX and direct emissions of PM2.5 can contribute to the substantial impairment of visibility in many part of the U.S., where people live, work, and recreate, including national parks, wilderness areas, and mandatory class I federal areas. The deposition of airborne particles can also reduce the aesthetic appeal of buildings and culturally important articles through soiling, and can contribute directly (or in conjunction with other pollutants) to structural damage by means of corrosion or erosion. Finally, NOX emissions from diesel engines contribute to the acidification, nitrification, and eutrophication of water bodies.

While EPA has already adopted many emission control programs that are expected to reduce ambient ozone and PM2.5 levels, including the Clean Air Interstate Rule (CAIR) (70 FR 25162, May 12, 2005) and the Clean Air Nonroad Diesel Rule (69 FR 38957, June 29, 2004), the Heavy Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements (66 FR 5002, Jan. 18, 2001), and the Tier 2 Vehicle and Gasoline Sulfur Program (65 FR 6698, Feb. 10, 2000), the additional PM2.5 and NOX emission reductions resulting from the standards proposed in this action would assist states in attaining and maintaining the Ozone and the PM2.5 NAAQS near term and in the decades to come.

In September 2006, EPA finalized revised PM2.5 NAAQS standards and over the next few years the Agency will undergo the process of designating areas that are not able to meet this new standard. EPA modeling, conducted as part of finalizing the revised NAAQS, projects that in 2015 up to 52 counties with 53 million people may violate either the daily, annual, or both standards for PM2.5 while an additional 27 million people in 54 counties may live in areas that have air quality measurements within 10 percent of the revised NAAQS. Even in 2020 up to 48 counties, with 54 million people, may still not be able to meet the revised PM2.5 NAAQS and an additional 25 million people, living in 50 counties, are projected to have air quality measurements within 10 percent of the revised standards. The locomotive and marine diesel PM2.5 reductions resulting from this proposal will be needed by states to both attain and maintain the revised PM2.5 NAAQS.

State and local governments are working to protect the health of their citizens and comply with requirements of the Clean Air Act (CAA or “the Act”). As part of this effort they recognize the need to secure additional major reductions in both diesel PM2.5 and NOX emissions by undertaking numerous state level actions,[10] while also seeking Agency action, including the setting of stringent new locomotive and marine diesel engine standards being proposed today.[11] The emission reductions in this proposal will play a critical part in state efforts to attain and maintain the NAAQS through the next two decades.

While the program we are proposing today will help many states and communities achieve cleaner air, for some areas, the reductions will not be large enough or early enough to assist them in meeting near term ozone and PM air quality goals. More can be done, beyond what we are proposing today, to address the emissions from locomotive and marine diesel engines. For example, as part of this proposal we are requesting comment on a concept to set emission standards for existing large marine diesel engines when they are remanufactured. Were we to finalize such a concept, it could provide substantial emission reductions, beginning in the next few years, from some of the large legacy fleets of dirtier diesel engines.

At the time of our previous locomotive rulemaking, the State of California worked with the railroads operating in southern California to develop and implement a corollary program, ensuring that the cleanest technologies are expeditiously introduced in these areas with greatest air quality improvement needs. Today's proposal includes provisions, such as streamlined switcher locomotive certification using clean nonroad engines, that are well-suited to encouraging early deployment of cleaner technologies through the development of similar programs.

In addition to regulatory programs, the Agency has a number of voluntary programs that partner government, industry, and local communities together to help address challenging air quality problems. The EPA SmartWay program has initiatives to reduce unnecessary locomotive idling and to encourage the use of idle reduction technologies that can substantially reduce locomotive emissions while reducing fuel consumption. EPA's National Clean Diesel Campaign, through its Clean Ports USA program, is working with port authorities, terminal operators, and trucking and rail companies to promote cleaner diesel technologies and strategies today through education, incentives, and financial assistance for diesel emissions reductions at ports. Part of these efforts involves voluntary retrofit programs that can further reduce emissions from the existing fleet of diesel engines. Finally, many of the companies operating in states and communities suffering from poor air quality have voluntarily entered into Memoranda of Understanding (MOUs) designed to ensure that the cleanest technologies are used first in regions with the most challenging air quality issues.

Together, these approaches can augment the regulations being proposed today helping states and communities achieve larger reductions sooner in the areas of our country that need them the most. The Agency remains committed to furthering these programs and others so that all of our citizens can breathe clean healthy air.

(2) Advanced Technology Solutions

Air pollution from locomotive and marine diesel exhaust is a challenging problem. However, we believe it can be addressed effectively through the use of existing technology to reduce engine-out emissions combined with high-efficiency catalytic aftertreatment technologies. As discussed in greater detail in section III.D, the development of these aftertreatment technologies for Start Printed Page 15945highway and nonroad diesel applications has advanced rapidly in recent years, so that very large emission reductions in PM and NOX (in excess of 90 and 80 percent, respectively) can be achieved.

High-efficiency PM control technologies are being broadly used in many parts of the world, and in particular to comply with EPA's heavy-duty truck standards now taking effect with the 2007 model year. These technologies are highly durable and robust in use, and have also proved extremely effective in reducing exhaust hydrocarbon (HC) emissions. However, as discussed in detail in section III.D, these emission control technologies are very sensitive to sulfur in the fuel. For the technology to be viable and capable of controlling an engine's emissions over the long term, we believe it will require diesel fuel with sulfur content capped at the 15 ppm level.

Control of NOX emissions from locomotive and marine diesel engines can also be achieved with high-efficiency exhaust emission control technologies. Such technologies are expected to be used to meet the stringent NOX standards included in EPA's heavy-duty highway diesel and nonroad Tier 4 programs, and have been in production for heavy duty trucks in Europe since 2005, as well as in many stationary source applications throughout the world. These technologies are also sensitive to sulfur.

Section III.D discusses additional engineering challenges in applying these technologies to newly-built locomotive and marine engines, as well as the development steps that we expect to be taken to resolve the challenges. With the lead time available and the assurance of ULSD for the locomotive and marine sectors in 2012, as provided by our 2004 final rule for nonroad engines and fuel, we are confident the proposed application of advanced technology to locomotives and marine diesels will proceed at a reasonable rate of progress and will result in systems capable of achieving the proposed standards on the proposed schedule.

(3) Basis for Action Under the Clean Air Act

Authority for the actions promulgated in this documents is granted to the Environmental Protections Agency (EPA) by sections 114, 203, 205, 206, 207, 208, 213, 216, and 301(a) of the Clean Air Act as amended in 1990 (CAA or “the Act”) (42 U.S.C. 7414, 7522, 7524, 7525, 7541, 7542, 7547, 7550 and 7601(a)).

EPA is promulgating emissions standards for new marine diesel engines pursuant to its authority under section 213(a)(3) and (4) of the Clean Air Act (CAA). EPA is promulgating emission standards for new locomotives and new engines used in locomotives pursuant to its authority under section 213(a)(5) of the CAA.

CAA section 213(a)(3) directs the Administrator to set NOX, VOCs, or carbon monoxide, standards for classes or categories of engines that contribute to ozone or carbon monoxide concentrations in more than one nonattainment area, like marine diesel engines. These “standards shall achieve the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available for the engines or vehicles, giving appropriate consideration to cost, lead time, noise, energy, and safety factors associated with the application of such technology.”

CAA section 213(a)(4), authorizes the Administrator to establish standards to control emissions of pollutants which “may reasonably be anticipated to endanger public health and welfare,” where the Administrator determines, as it has done for emissions of PM, that nonroad engines as a whole contribute significantly to such air pollution. The Administrator may promulgate regulations that are deemed appropriate, taking into account costs, noise, safety, and energy factors, for classes or categories of new nonroad vehicles and engines which cause or contribute to such air pollution, like diesel marine engines.

Finally, section 213(a)(5) directs EPA to adopt emission standards for new locomotives and new engines used in locomotives that achieve the “greatest degree of emissions reductions achievable through the use of technology that the Administrator determines will be available for such vehicles and engines, taking into account the cost of applying such technology within the available time period, the noise, energy, and safety factors associated with the applications of such technology.” Section 213(a)(5) does not require any review of the contribution of locomotive emissions to pollution, though EPA does provide such information in this proposal. As described in section III of this Preamble and in Chapter 4 of the draft RIA, EPA has evaluated the available information to determine the technology the will be available for locomotives and engines proposed to be subject to EPA standards.

EPA is also acting under its authority to implement and enforce both the marine diesel emission standards and the locomotive emissions standards. Section 213(d) provides that the standards EPA adopts for both new locomotive and marine diesel engines “shall be subject to sections 206, 207, 208, and 209” of the Clean Air Act, with such modifications that the Administrator deems appropriate to the regulations implementing these sections. In addition, the locomotive and marine standards “shall be enforced in the same manner as [motor vehicle] standards prescribed under section 202” of the Act. Section 213(d) also grants EPA authority to promulgate or revise regulations as necessary to determine compliance with, and enforce, standards adopted under section 213.

As required under section 213(a)(3), (4), and (5) we believe the evidence provided in section III.D of this Preamble and in Chapter 4 of draft RIA indicates that the stringent emission standards proposed today for newly-built and remanufactured locomotive engines and newly-built marine diesel engines are feasible and reflect the greatest degree of emission reduction achievable through the use of technology that will be available in the model years to which they apply. We also believe this may be the case for the alternative identified for existing marine engines in section VII.A(2) of this preamble. We have given appropriate consideration to costs in proposing these standards. Our review of the costs and cost-effectiveness of these standards indicate that they will be reasonable and comparable to the cost-effectiveness of other emission reduction strategies that have been required. We have also reviewed and given appropriate consideration to the energy factors of this rule in terms of fuel efficiency as well as any safety and noise factors associated with these proposed standards.

The information in section II of this Preamble and Chapter 2 of the draft RIA regarding air quality and public health impacts provides strong evidence that emissions from marine diesel engines and locomotives significantly and adversely impact public health or welfare. EPA has already found in previous rules that emissions from new marine diesel engines contribute to ozone and carbon monoxide (CO) concentrations in more than one area which has failed to attain the ozone and carbon monoxide NAAQS (64 FR 73300, December 29, 1999). EPA has also previously determined that it is appropriate to establish standards for PM from marine diesel engines under section 213(a)(4), and the additional information on diesel exhaust carcinogenicity noted above reinforces Start Printed Page 15946this finding. In addition, we have already found that emissions from nonroad engines as a whole significantly contribute to air pollution that may reasonably be anticipated to endanger public welfare due to regional haze and visibility impairment (67 FR 68241, Nov. 8, 2002). We propose to find here, based on the information in section II of this preamble and Chapters 2 and 3 of the draft RIA that emissions from the new marine diesel engines likewise contribute to regional haze and to visibility impairment.

The PM and NOX emission reductions resulting from the standards proposed in this action would be important to states' efforts in attaining and maintaining the Ozone and the PM2.5 NAAQS in the near term and in the decades to come. As noted above, the risk to human health and welfare would be significantly reduced by the standards proposed today.

II. Air Quality and Health Impacts

The locomotive and marine diesel engines subject to today's proposal generate significant emissions of particulate matter (PM) and nitrogen oxides (NOX) that contribute to nonattainment of the National Ambient Air Quality Standards (NAAQS) for PM2.5 and ozone. These engines also emit hazardous air pollutants or air toxics which are associated with serious adverse health effects. Finally, emissions from locomotive and marine diesel engines cause harm to the public welfare, contribute to visibility impairment, and contribute to other harmful environmental impacts across the U.S.

By 2030, the proposed standards are expected to reduce annual locomotive and marine diesel engine PM2.5 emissions by 28,000 tons; NOX emissions by 765,000 tons; and volatile organic compound (VOC) emissions by 42,000 tons as well as reductions in carbon monoxide (CO) and toxic compounds known as air toxics.[12]

We estimate that reductions of PM2.5, NOX, and VOC emissions from locomotive and marine diesel engines would produce nationwide air quality improvements. According to air quality modeling performed in conjunction with this proposed rule, if finalized, all 39 current PM2.5 nonattainment areas would experience a decrease in their 2020 and 2030 design values. Likewise all 116 mandatory class I federal areas would see improvements in their visibility. This rule would also result in substantial nationwide ozone benefits. The air quality modeling conducted for ozone estimates that in 2020 and 2030, 114 of the current 116 ozone nonattainment areas would see improvements in ozone air quality as a result of this proposed rule.

A. Overview

From a public health perspective, we are concerned with locomotive and marine diesel engines' contributions to atmospheric levels of particulate matter in general, diesel PM2.5 in particular, and various gaseous air toxics, and ozone. Today, locomotive and marine diesel engine emissions represent a substantial portion of the U.S. mobile source diesel PM2.5 and NOX emissions accounting for approximately 20 percent of mobile source NOX and 25 percent of mobile source diesel PM2.5. These proportions are even higher in some urban areas. Over time, the relative contribution of these diesel engines to air quality problems is expected to increase as the emission contribution from other mobile sources decreases and the usage of locomotives and marine vessels increases. By 2030, without further emissions controls beyond those already adopted for these engines, locomotive and marine diesel engines nationally will emit more than 65 percent of the total mobile source diesel PM2.5 emissions and 35 percent of the total mobile source NOX emissions.

Based on the most recent data available for this rule, air quality problems continue to persist over a wide geographic area of the United States. As of October 2006 there are approximately 88 million people living in 39 designated areas (which include all or part of 208 counties) that either do not meet the current PM2.5 NAAQS or contribute to violations in other counties, and 157 million people living in 116 areas (which include all or part of 461 counties) designated as not in attainment for the 8-hour ozone NAAQS. These numbers do not include the people living in areas where there is a significant future risk of failing to maintain or achieve either the PM2.5 or ozone NAAQS. Figure II-1 illustrates the widespread nature of these problems. This figure depicts counties which are currently designated nonattainment for either or both the 8-hour ozone NAAQS and PM2.5 NAAQS. It also shows the location of mandatory class I federal areas for visibility.

Start Printed Page 15947

The engine standards proposed in this rule would help reduce emissions of PM, NOX, VOCs, CO, and air toxics and their associated health and Start Printed Page 15948environmental effects. Emissions from locomotives and diesel marine engines contribute to PM and ozone concentrations in many, if not all, of these nonattainment areas.[13] The engine standards being proposed today would become effective as early as 2008 making the expected PM2.5, NOX, and VOC inventory reductions from this rulemaking critical to states as they seek to either attain or maintain the current PM2.5 or ozone NAAQS.

Beyond the impact locomotive and marine diesel engines have on our nation's ambient air quality the diesel exhaust emissions emanating from these engines are also of particular concern since diesel exhaust is classified as a likely human carcinogen.[14] Many people spend a large portion of time in or near areas of concentrated locomotive or marine diesel emissions, near rail yards, marine ports, railways, and waterways. Recent studies show that populations living near large diesel emission sources such as major roadways,[15] rail yards [16] and marine ports [17] are likely to experience greater diesel exhaust exposure levels than the overall U.S. population, putting them at a greater health risk. We are currently studying the size of the U.S. population living near a sample of approximately 60 marine ports and rail yards, and will place that information in the docket upon completion prior to the final rule. The diesel PM2.5 reductions which occur as a result of this proposed rule would benefit the population near these sources and also assist state and local governments as they work to meet the NAAQS.

In the following three sections we review important public health effects linked to pollutants emitted from locomotive and marine diesel engines first describing the human health effects and the current and expected future ambient levels of direct or indirectly caused pollution. Following the discussion of health effects, we will discuss the modeled air quality benefits which are estimated to result from regulating these engines. We also discuss a number of other welfare effects associated with emissions from diesel engines. These effects include visibility impairment, ecological and property damage caused by acid deposition, eutrophication and nitrification of surface waters, environmental threats posed by polycyclic organic matter (POM) deposition, and plant and crop damage from ozone.

Finally, in section E we describe the locomotive and marine engine emission inventories for the primary pollutants affected by the proposal. We present current and projected future levels of emissions for the base case, including anticipated reductions from control programs already adopted by EPA and the States, but without the controls proposed today. Then we identify expected emission reductions from nonroad locomotive and marine diesel engines. These reductions would make important contributions to controlling the health and welfare problems associated with ambient PM and ozone levels and with diesel-related air toxics.

Taken together, the materials in this section describe the need for tightening emission standards from both locomotive and marine diesel engines and the air quality and public health benefits we expect as a result of this proposed rule. This section is not an exhaustive treatment of these issues. For a fuller understanding of the topics treated here, you should refer to the extended presentations in Chapter 2 of the Draft Regulatory Impact Analysis (RIA) accompanying this proposal.

B. Public Health Impacts

(1) Particulate Matter

The proposed locomotive and marine engine standards would result in significant reductions of primary PM2.5 emissions from these sources. In addition, locomotive and marine diesel engines emit high levels of NOX which react in the atmosphere to form secondary PM2.5, ammonium nitrate. Locomotive and marine diesel engines also emit SO2 and HC which react in the atmosphere to form secondary PM2.5 composed of sulfates and organic carbonaceous PM2.5. This proposed rule would reduce both the directly emitted diesel PM and secondary PM emissions.

(a) Background

Particulate matter (PM) represents a broad class of chemically and physically diverse substances. It can be principally characterized as discrete particles that exist in the condensed (liquid or solid) phase spanning several orders of magnitude in size. PM is further described by breaking it down into size fractions. PM10 refers to particles generally less than or equal to 10 micrometers (μm). PM2.5 refers to fine particles, those particles generally less than or equal to 2.5 μm in diameter. Inhalable (or “thoracic”) coarse particles refer to those particles generally greater than 2.5 μm but less than or equal to 10 μm in diameter. Ultrafine PM refers to particles less than 100 nanometers (0.1 μm). Larger particles tend to be removed by the respiratory clearance mechanisms (e.g. coughing), whereas smaller particles are deposited deeper in the lungs.

Fine particles are produced primarily by combustion processes and by transformations of gaseous emissions (e.g., SOX, NOX and VOCs) in the atmosphere. The chemical and physical properties of PM2.5 may vary greatly with time, region, meteorology, and source category. Thus, PM2.5, may include a complex mixture of different pollutants including sulfates, nitrates, organic compounds, elemental carbon and metal compounds. These particles can remain in the atmosphere for days to weeks and travel through the atmosphere hundreds to thousands of kilometers.

The primary PM2.5 NAAQS includes a short-term (24-hour) and a long-term (annual) standard. The 1997 PM2.5 NAAQS established by EPA set the 24-hour standard at a level of 65 μg/m3 based on the 98th percentile concentration averaged over three years. (This air quality statistic compared to the standard is referred to as the “design value.”) The annual standard specifies an expected annual arithmetic mean not to exceed 15 μg/m3 averaged over three years. EPA has recently finalized PM2.5 nonattainment designations for the 1997 standard (70 FR 943, Jan 5, 2005).[18] All areas currently in nonattainment for Start Printed Page 15949PM2.5 will be required to meet these 1997 standards between 2009 and 2014.

As can be seen in Figure II-1 ambient PM2.5 levels exceeding the 1997 PM2.5 NAAQS are widespread throughout the country. As of October 2006 there were approximately 88 million people living in 39 areas (which include all or part of 208 counties) that either do not meet the 1997 PM2.5 NAAQS or contribute to violations in other counties. These numbers do not include the people living in areas where there is a significant future risk of failing to maintain or achieve the PM2.5 NAAQS.

EPA has recently amended the NAAQS for PM2.5 (71 FR 61144, October 17, 2006). The final rule, signed on September 21, 2006 and published in the Federal Register on October 17, 2006, addressed revisions to the primary and secondary NAAQS for PM to provide increased protection of public health and welfare, respectively. The level of the 24-hour PM2.5 NAAQS was revised from 65 μg/m3 to 35 μg/m3 to provide increased protection against health effects associated with short-term exposures to fine particles. The current form of the 24-hour PM2.5 standard was retained (e.g., based on the 98th percentile concentration averaged over three years). The level of the annual PM2.5 NAAQS was retained at 15 μg/m3, continuing protection against health effects associated with long-term exposures. The current form of the annual PM2.5 standard was retained as an annual arithmetic mean averaged over three years, however, the following two aspects of the spatial averaging criteria were narrowed: (1) The annual mean concentration at each site shall be within 10 percent of the spatially averaged annual mean, and (2) the daily values for each monitoring site pair shall yield a correlation coefficient of at least 0.9 for each calendar quarter.

With regard to the secondary PM2.5 standards, EPA has revised these standards to be identical in all respects to the revised primary standards. Specifically, EPA has revised the current 24-hour PM2.5 secondary standard by making it identical to the revised 24-hour PM2.5 primary standard and retained the annual PM2.5 secondary standard. This suite of secondary PM2.5 standards is intended to provide protection against PM-related public welfare effects, including visibility impairment, effects on vegetation and ecosystems, and material damage and soiling.

The 2006 standards became effective on December 18, 2006. As a result of the 2006 PM2.5 standard, EPA will designate new nonattainment areas in early 2010. The timeframe for areas attaining the 2006 PM NAAQS will likely extend from 2015 to 2020.

Table II-1 presents the number of counties in areas currently designated as nonattainment for the 1997 PM2.5 NAAQS as well as the number of additional counties which have monitored data that is violating the 2006 PM2.5 NAAQS. In total more than 106 million U.S. residents, in 257 counties are living in areas which either violate either the 1997 PM2.5 standard or the 2006 PM2.5 standard.

Table II-1.—Fine Particle Standards: Current Nonattainment Areas and Other Violating Counties

Number of countiesPopulation a
1997 PM2.5 Standards: 39 areas currently designated20888,394,000
2006 PM2.5 Standards: Counties with violating monitors b4918,198,676
Total257106,595,676
a Population numbers are from 2000 census data.
b This table provides an estimate of the counties violating the 2006 PM2.5 NAAQS based on 2003-05 air quality data. The areas designated as nonattainment for the 2006 PM2.5 NAAQS will be based on 3 years of air quality data from later years. Also, the county numbers in the summary table includes only the counties with monitors violating the 2006 PM2.5 NAAQS. The monitored county violations may be an underestimate of the number of counties and populations that will eventually be included in areas with multiple counties designated nonattainment.

EPA has already adopted many emission control programs that are expected to reduce ambient PM2.5 levels and as a result of these programs, the number of areas that fail to achieve the 1997 PM2.5 NAAQS is expected to decrease. Even so, EPA modeling projects that in 2015, with all current controls, up to 52 counties with 53 million population may not attain some combination of the current annual standard of 15 μg/m[3] and the revised daily standard of 35 μg/m[3] , and that even in 2020 up to 48 counties with 54 million population will still not be able to attain either the annual, daily, or both the annual and daily PM2.5 standards.[19] This does not account for additional areas that have air quality measurements within 10 percent of the 2006 PM2.5 standard. These areas, although not violating the standards, would also benefit from the additional reductions from this rule ensuring long term maintenance of the PM NAAQS.

States have told EPA that they need the reductions this proposed rule would provide in order to meet and maintain both the current 1997 PM2.5 NAAQS and the 2006 PM2.5 NAAQS. Based on the final rule designating and classifying PM2.5 nonattainment areas, most PM2.5 nonattainment areas will be required to attain the 1997 PM2.5 NAAQS in the 2009 to 2015 time frame, and then be required to maintain the NAAQS thereafter. The emissions standards for engine remanufacturing being proposed in this action would become effective as early as 2008, but no later than 2010, and states would rely on these expected PM2.5 reductions to help them to either attain or maintain the 1997 PM2.5 NAAQS. In the long term, the emission reductions resulting from the proposed locomotive and marine diesel engine standards would be important to states efforts to attain and maintain the 2006 PM2.5 NAAQS.

(b) Health Effects of PM2.5

Scientific studies show ambient PM is associated with a series of adverse health effects. These health effects are discussed in detail in the 2004 EPA Particulate Matter Air Quality Criteria Document (PM AQCD) for PM, and the 2005 PM Staff Paper.[20] [21] [22] Further discussion of health effects associated Start Printed Page 15950with PM can also be found in the draft RIA for this proposal.

Health effects associated with short-term exposures (hours to days) to ambient PM include premature mortality, increased hospital admissions, heart and lung diseases, increased cough, adverse lower-respiratory symptoms, decrements in lung function and changes in heart rate rhythm and other cardiac effects. Studies examining populations exposed to different levels of air pollution over a number of years, including the Harvard Six Cities Study and the American Cancer Society Study, show associations between long-term exposure to ambient PM2.5 and both total and cardio respiratory mortality.[23] In addition, a reanalysis of the American Cancer Society Study shows an association between fine particle and sulfate concentrations and lung cancer mortality.[24] The locomotive and marine diesel engines, covered in this proposal contribute to both acute and chronic PM2.5 exposures. Additional information on acute exposures is available in Chapter 2 of the draft RIA for this proposal.

These health effects of PM2.5 have been further documented in local impact studies which have focused on health effects due to PM2.5 exposures measured on or near roadways.[25] Taking account of all air pollution sources, including both spark-ignition (gasoline) and diesel powered vehicles, these latter studies indicate that exposure to PM2.5 emissions near roadways, dominated by mobile sources, are associated with potentially serious health effects. For instance, a recent study found associations between concentrations of cardiac risk factors in the blood of healthy young police officers and PM2.5 concentrations measured in vehicles.[26] Also, a number of studies have shown associations between residential or school outdoor concentrations of some constituents of fine particles found in motor vehicle exhaust and adverse respiratory outcomes, including asthma prevalence in children who live near major roadways.[27] [28] [29] Although the engines considered in this proposal differ with those in these studies with respect to their applications and fuel qualities, these studies provide an indication of the types of health effects that might be expected to be associated with personal exposure to PM2.5 emissions from large marine diesel and locomotive engines. The proposed controls would help to reduce exposure, and specifically exposure near marine ports and rail yard related PM2.5 sources.

Recently, new studies [30] from the State of California provide evidence that PM2.5 emissions within marine ports and rail yards contribute significantly to elevated ambient concentrations near these sources. A substantial number of people experience exposure to locomotive and marine diesel engine emissions, raising potential health concerns. Additional information on marine port and rail yard emissions and ambient exposures can be found in section.B.3 of this preamble.

(c) PM2.5 Air Quality Modeling Results

Air quality modeling performed for this proposal shows that in 2020 and 2030 all 39 current PM2.5 nonattainment areas would experience decreases in their PM2.5 design values. For areas with PM2.5 design values greater than 15 μg/m3 the modeled future-year PM2.5 design values are expected to decrease on average by 0.06 μg/m3 in 2020 and 0.14 μg/m3 in 2030. The maximum decrease for future-year PM2.5 design values in 2020 would be 0.35 μg/m3 and 0.90 μg/m3 in 2030. The reductions are discussed in more detail in Chapter 2 of the draft RIA.

The geographic impact of the proposed locomotive and marine diesel engine controls in 2030 on PM2.5 design values (DV) in counties across the US, can be seen in Figure II-2.

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Figure II-2 illustrates that the greatest emission reductions in 2030 are projected to occur in Southern California where 3 counties would experience reductions in their PM2.5 design values of −0.50 to −0.90 μg/m3. The next level of emission reductions would occur among 13 counties geographically dispersed in the southeastern U.S., southern Illinois, and southern California. An additional 325 counties spread across the U.S. would see a decrease in their PM2.5 DV ranging from −0.05 to −0.24 μg/m3.

(d) PM Air Quality Modeling Methodology

A national scale air quality modeling analysis was performed to estimate future year annual and daily PM2.5 concentrations and visibility for this proposed rule. To model the air quality benefits of this rule we used the Community-Scale Air Quality (CMAQ) model. CMAQ simulates the numerous physical and chemical processes involved in the formation, transport, and destruction of ozone and particulate matter. In addition to the CMAQ model, the modeling platform includes the emissions, meteorology, and initial and boundary condition data which are inputs to this model. Consideration of the different processes that affect primary directly emitted and secondary PM at the regional scale in different locations is fundamental to understanding and assessing the effects of pollution control measures that affect PM, ozone and deposition of pollutants to the surface. A complete description of the CAMQ model and methodology employed to develop the future year impacts of this proposed rule are found in Chapter 2.1 of the draft RIA.

It should be noted that the emission control scenarios used in the air quality and benefits modeling are slightly different than the emission control program being proposed. The differences reflect further refinements of the regulatory program since we performed the air quality modeling for this rule. Emissions and air quality modeling decisions are made early in the analytical process. Chapter 3 of the draft RIA describes the changes in the inputs and resulting emission inventories between the preliminary assumptions used for the air quality modeling and the final proposed regulatory scenario. These refinements to the proposed program would not significantly change the results summarized here or our conclusions drawn from this analysis.

(2) Ozone

The proposed locomotive and marine engine standards are expected to result in significant reductions of NOX and VOC emissions. NOX and VOC contribute to the formation of ground-level ozone pollution or smog. People in many areas across the U.S. continue to be exposed to unhealthy levels of ambient ozone.

(a) Background

Ground-level ozone pollution is formed by the reaction of volatile organic compounds (VOCs) and nitrogen oxides (NOX) in the atmosphere in the presence of heat and sunlight. These two pollutants, often referred to as ozone precursors, are emitted by many types of pollution sources, such as highway and nonroad motor vehicles and engines, power plants, chemical plants, refineries, makers of consumer and commercial products, industrial facilities, and smaller “area” sources.

The science of ozone formation, transport, and accumulation is complex.[31] Ground-level ozone is produced and destroyed in a cyclical set of chemical reactions, many of which are sensitive to temperature and sunlight. When ambient temperatures and sunlight levels remain high for several days and the air is relatively stagnant, ozone and its precursors can build up and result in more ozone than typically would occur on a single high-temperature day. Ozone also can be transported from pollution sources into areas hundreds of miles upwind, resulting in elevated ozone levels even in areas with low local VOC or NOX emissions.

The highest levels of ozone are produced when both VOC and NOX emissions are present in significant quantities on clear summer days. Relatively small amounts of NOX enable ozone to form rapidly when VOC levels are relatively high, but ozone production is quickly limited by removal of the NOX. Under these conditions NOX reductions are highly effective in reducing ozone while VOC reductions have little effect. Such conditions are called “NOX-limited.” Because the contribution of VOC emissions from biogenic (natural) sources to local ambient ozone concentrations can be significant, even some areas where man-made VOC emissions are relatively low can be NOX-limited.

When NOX levels are relatively high and VOC levels relatively low, NOX forms inorganic nitrates (i.e., particles) but relatively little ozone. Such conditions are called “VOC-limited.” Under these conditions, VOC reductions are effective in reducing ozone, but NOX reductions can actually increase local ozone under certain circumstances. Even in VOC-limited urban areas, NOX reductions are not expected to increase ozone levels if the NOX reductions are sufficiently large.

Rural areas are usually NOX-limited, due to the relatively large amounts of biogenic VOC emissions in many rural areas. Urban areas can be either VOC- or NOX-limited, or a mixture of both, in which ozone levels exhibit moderate sensitivity to changes in either pollutant.

Ozone concentrations in an area also can be lowered by the reaction of nitric oxide with ozone, forming nitrogen dioxide (NO2); as the air moves downwind and the cycle continues, the NO2 forms additional ozone. The importance of this reaction depends, in part, on the relative concentrations of NOX, VOC, and ozone, all of which change with time and location.

The current ozone National Ambient Air Quality Standards (NAAQS) has an 8-hour averaging time.[32] The 8-hour ozone NAAQS, established by EPA in 1997, is based on well-documented science demonstrating that more people were experiencing adverse health effects at lower levels of exertion, over longer periods, and at lower ozone concentrations than addressed by the previous one-hour ozone NAAQS. The current ozone NAAQS addresses ozone exposures of concern for the general population and populations most at risk, including children active outdoors, outdoor workers, and individuals with pre-existing respiratory disease, such as asthma. The 8-hour ozone NAAQS is met at an ambient air quality monitoring site when the average of the annual fourth-highest daily maximum 8-hour average ozone concentration over three years is less than or equal to 0.084 ppm.

Ozone concentrations exceeding the level of the 8-hour ozone NAAQS occur over wide geographic areas, including most of the nation's major population centers.[33] As of October 2006 there are approximately 157 million people living in 116 areas (which include all or part Start Printed Page 15953of 461 counties) designated as not in attainment with the 8-hour ozone NAAQS. These numbers do not include the people living in areas where there is a future risk of failing to maintain or achieve the 8-hour ozone NAAQS.

EPA has already adopted many emission control programs that are expected to reduce ambient ozone levels. These control programs are described in section I.B.(1) of this preamble. As a result of these programs, the number of areas that fail to meet the 8-hour ozone NAAQS in the future is expected to decrease.

Based on recent ozone modeling performed for the CAIR analysis,[34] which does not include any additional local ozone precursor controls, we estimate that in 2010, 24 million people are projected to live in 37 Eastern counties exceeding the 8-hour ozone NAAQS. An additional 61 million people are projected to live in 148 Eastern counties expected to be within 10 percent of violating the 8-hour ozone NAAQS in 2010.

States with 8-hour ozone nonattainment areas will be required to take action to bring those areas into compliance in the future. Based on the final rule designating and classifying 8-hour ozone nonattainment areas (69 FR 23951, April 30, 2004), most 8-hour ozone nonattainment areas will be required to attain the 8-hour ozone NAAQS in the 2007 to 2013 time frame and then be required to maintain the 8-hour ozone NAAQS thereafter.[35] We expect many of the 8-hour ozone nonattainment areas will need to adopt additional emission reduction programs. The expected NOX and VOC reductions from the standards proposed in this action would be important to states as they seek to either attain or maintain the 8-hour ozone NAAQS.

(b) Health Effects of Ozone

The health and welfare effects of ozone are well documented and are assessed in EPA's 2006 ozone Air Quality Criteria Document (ozone AQCD) and EPA staff papers.[36 37 38] Ozone can irritate the respiratory system, causing coughing, throat irritation, and/or uncomfortable sensation in the chest. Ozone can reduce lung function and make it more difficult to breathe deeply, and breathing may become more rapid and shallow than normal, thereby limiting a person's activity. Ozone can also aggravate asthma, leading to more asthma attacks that require a doctor's attention and/or the use of additional medication. Animal toxicological evidence indicates that with repeated exposure, ozone can inflame and damage the lining of the lungs, which may lead to permanent changes in lung tissue and irreversible reductions in lung function. People who are more susceptible to effects associated with exposure to ozone include children, the elderly, and individuals with respiratory disease such as asthma. There is also suggestive evidence that certain people may have greater genetic susceptibility. People can also have heightened vulnerability to ozone due to greater exposures (e.g., children and outdoor workers).

The recent ozone AQCD also examined relevant new scientific information which has emerged in the past decade, including the impact of ozone exposure on such health effect indicators as changes in lung structure and biochemistry, inflammation of the lungs, exacerbation and causation of asthma, respiratory illness-related school absence, hospital admissions and premature mortality. In addition to supporting and building further on conclusions from the 1996 AQCD, the 2006 AQCD included new information on the health effects of ozone. Animal toxicological studies have suggested potential interactions between ozone and PM with increased responses observed to mixtures of the two pollutants compared to either ozone or PM alone. The respiratory morbidity observed in animal studies along with the evidence from epidemiologic studies supports a causal relationship between acute ambient ozone exposures and increased respiratory-related emergency room visits and hospitalizations in the warm season. In addition, there is suggestive evidence of a contribution of ozone to cardiovascular-related morbidity and non-accidental and cardiopulmonary mortality.

EPA typically quantifies ozone-related health impacts in its regulatory impact analyses (RIAs) when possible. In the analysis of past air quality regulations, ozone-related benefits have included morbidity endpoints and welfare effects such as damage to commercial crops. EPA has not recently included a separate and additive mortality effect for ozone, independent of the effect associated with fine particulate matter. For a number of reasons, including (1) advice from the Science Advisory Board (SAB) Health and Ecological Effects Subcommittee (HEES) that EPA consider the plausibility and viability of including an estimate of premature mortality associated with short-term ozone exposure in its benefits analyses and (2) conclusions regarding the scientific support for such relationships in EPA's 2006 Air Quality Criteria for Ozone and Related Photochemical Oxidants (the CD), EPA is in the process of determining how to appropriately characterize ozone-related mortality benefits within the context of benefits analyses for air quality regulations. As part of this process, we are seeking advice from the National Academy of Sciences (NAS) regarding how the ozone-mortality literature should be used to quantify the reduction in premature mortality due to diminished exposure to ozone, the amount of life expectancy to be added and the monetary value of this increased life expectancy in the context of health benefits analyses associated with regulatory assessments. In addition, the Agency has sought advice on characterizing and communicating the uncertainty associated with each of these aspects in health benefit analyses.

Since the NAS effort is not expected to conclude until 2008, the agency is currently deliberating how best to characterize ozone-related mortality benefits in its rulemaking analyses in the interim. For the analysis of the proposed locomotive and marine standards, we do not quantify an ozone mortality benefit. So that we do not provide an incomplete picture of all of the benefits associated with reductions in emissions of ozone precursors, we have chosen not to include an estimate of total ozone benefits in the proposed RIA. By omitting ozone benefits in this proposal, we acknowledge that this analysis underestimates the benefits associated with the proposed standards. For more information regarding the quantified benefits included in this analysis, please refer to Chapter 6 of this RIA.Start Printed Page 15954

(c) Air Quality Modeling Results for Ozone

This proposed rule would result in substantial nationwide ozone benefits. The air quality modeling conducted for ozone as part of this proposed rulemaking projects that in 2020 and 2030, 114 of the current 116 ozone nonattainment areas would see improvements in ozone air quality as a result of this proposed rule.

Results from the air quality modeling conducted for this rulemaking indicates that the average and population-weighted average concentrations over all U.S. counties would experience broad improvement in ozone air quality. The decrease in average ozone concentration in current nonattainment counties shows that the proposed rule would help bring these counties into attainment. The decrease in average ozone concentration for counties below the standard, but within ten percent, shows that the proposed rule would also help those counties to maintain the standard. All of these metrics show a decrease in 2020 and a larger decrease in 2030, indicating in four different ways the overall improvement in ozone air quality. For example, in nonattainment counties, on a population-weighted basis, the 8-hour ozone design value would decrease by 0.29 ppb in 2020 and 0.87 ppb in 2030.

The impact of the proposed reductions has also been analyzed with respect to those areas that have the highest design values at or above 85 ppb in 2030. We project there would be 27 U.S. counties with design values at or above 85 ppb in 2030. After implementation of this proposed action, we project that 3 of these 27 counties would drop below 85 ppb. Further, 17 of the 27 counties would be at least 10 percent closer to a design value of less than 85 ppb, and on average all 27 counties would be about 30 percent closer to a design value of less than 85 ppb.

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Figure II-3 shows those U.S. counties in 2030 which are projected to experience a change in their ozone design values as a result of this Start Printed Page 15956proposed rule. The most significant decreases, equal or greater than −2.0 ppb, would occur in 7 counties across the U.S. including: Grant (−2.1 ppb) and Lafayette (−2.0 ppb) Counties in Louisiana; Montgomery (−2.0 ppb), Galveston (−2.0 ppb), and Jefferson (−2.0 ppb) Counties in Texas; Warren County (−2.9 ppb) in Mississippi; and Santa Barbara County (−2.7 ppb) in California. One hundred eighty-seven (187) counties would see annual ozone design value reductions from −1.0 to −1.9 ppb while an estimated 217 additional counties would see annual design value reductions from −0.5 to −0.9 ppb. Note that 5 counties including: Suffolk (+1.5 ppb) and Hampton (+0.8 ppb) Counties in Virginia; Cook County (+0.7 ppb) in Illinois; Lake County (+0.2 ppb) in Indiana; and San Bernardino County (+0.1 ppb) in California are projected to experience an increase in ozone design values because of the NOX disbenefit that occurs under certain conditions.[39] It is expected that future local and national controls that decrease VOC, CO, and regional ozone will mitigate any localized disbenefits.

EPA's review of the ozone NAAQS is currently underway and a proposed decision in this review is scheduled for May 2007 with a final rule scheduled for February 2008. If the ozone NAAQS is revised then new nonattainment areas could be designated. While EPA is not relying on it for purposes of justifying this proposal, the emission reductions from this rulemaking would also be helpful to states if there is an ozone NAAQS revision.

(d) Ozone Air Quality Modeling Methodology

A national scale air quality modeling analysis was performed to estimate future year ozone concentrations for this proposed rule. To model the air quality benefits of this rule we used the Community-Scale Air Quality (CMAQ) model. CMAQ simulates the numerous physical and chemical processes involved in the formation, transport, and destruction of ozone and particulate matter. In addition to the CMAQ model, the modeling platform includes the emissions, meteorology, and initial and boundary condition data which are inputs to this model. Consideration of the different processes that affect primary directly emitted and secondary PM at the regional scale in different locations is fundamental to understanding and assessing the effects of pollution control measures that affect PM, ozone and deposition of pollutants to the surface. A complete description of the CAMQ model and methodology employed to develop the future year impacts of this proposed rule are found in Chapter 2.1 of the draft RIA.

It should be noted that the emission control scenarios used in the air quality and benefits modeling are slightly different than the emission control program being proposed. The differences reflect further refinements of the regulatory program since we performed the air quality modeling for this rule. Emissions and air quality modeling decisions are made early in the analytical process. Chapter 3 of the draft RIA describes the changes in the inputs and resulting emission inventories between the preliminary assumptions used for the air quality modeling and the final proposed regulatory scenario. These refinements to the proposed program would not significantly change the results summarized here or our conclusions drawn from this analysis.

(3) Air Toxics

People experience elevated risk of cancer and other noncancer health effects from exposure to air toxics. Mobile sources are responsible for a significant portion of this risk. According to the National Air Toxic Assessment (NATA) for 1999, mobile sources were responsible for 44 percent of outdoor toxic emissions and almost 50 percent of the cancer risk. Benzene is the largest contributor to cancer risk of all 133 pollutants quantitatively assessed in the 1999 NATA. Mobile sources were responsible for 68 percent of benzene emissions in 1999. Although the 1999 NATA did not quantify cancer risks associated with exposure to this diesel exhaust, EPA has concluded that diesel exhaust ranks with the other air toxic substances that the national-scale assessment suggests pose the greatest relative risk.

According to 1999 NATA, nearly the entire U.S. population was exposed to an average level of air toxics that has the potential for adverse respiratory health effects (noncancer). Mobile sources were responsible for 74 percent of the noncancer (respiratory) risk from outdoor air toxics in 1999. The majority of this risk was from acrolein, and formaldehyde also contributed to the risk of respiratory health effects. Although not included in NATA's estimates of noncancer risk, PM from gasoline and diesel mobile sources contribute significantly to the health effects associated with ambient PM.

It should be noted that the NATA modeling framework has a number of limitations which prevent its use as the sole basis for setting regulatory standards. These limitations and uncertainties are discussed on the 1999 NATA Web site.[40] Even so, this modeling framework is very useful in identifying air toxic pollutants and sources of greatest concern, setting regulatory priorities, and informing the decision making process.

The following section provides a brief overview of air toxics which are associated with nonroad engines, including locomotive and marine diesel engines, and provides a discussion of the health risks associated with each air toxic.

(a) Diesel Exhaust (DE)

Locomotive and marine diesel engine emissions include diesel exhaust (DE), a complex mixture comprised of carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide, nitrogen compounds, sulfur compounds and numerous low-molecular-weight hydrocarbons. A number of these gaseous hydrocarbon components are individually known to be toxic including aldehydes, benzene and 1,3-butadiene. The diesel particulate matter (DPM) present in diesel exhaust consists of fine particles (<2.5 μm), including a subgroup with a large number of ultrafine particles (<0.1 μm). These particles have large surface area which makes them an excellent medium for adsorbing organics and their small size makes them highly respirable and able to reach the deep lung. Many of the organic compounds present on the particles and in the gases are individually known to have mutagenic and carcinogenic properties. Diesel exhaust varies significantly in chemical composition and particle sizes between different engine types (heavy-duty, light-duty), engine operating conditions (idle, accelerate, decelerate), and fuel formulations (high/low sulfur fuel). Also, there are emissions differences between on-road and nonroad engines because the nonroad engines are generally of older technology. This is especially true for locomotive and marine diesel engines.[41]

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After being emitted in the engine exhaust, diesel exhaust undergoes dilution as well as chemical and physical changes in the atmosphere. The lifetime for some of the compounds present in diesel exhaust ranges from hours to days.

(i) Diesel Exhaust: Potential Cancer Effect of Diesel Exhaust

In EPA's 2002 Diesel Health Assessment Document (Diesel HAD),[42] diesel exhaust was classified as likely to be carcinogenic to humans by inhalation at environmental exposures, in accordance with the revised draft 1996/1999 EPA cancer guidelines. A number of other agencies (National Institute for Occupational Safety and Health, the International Agency for Research on Cancer, the World Health Organization, California EPA, and the U.S. Department of Health and Human Services) have made similar classifications. However, EPA also concluded in the Diesel HAD that it is not possible currently to calculate a cancer unit risk for diesel exhaust due to a variety of factors that limit the current studies, such as limited quantitative exposure histories in occupational groups investigated for lung cancer.

For the Diesel HAD, EPA reviewed 22 epidemiologic studies on the subject of the carcinogenicity of workers exposed to diesel exhaust in various occupations, finding increased lung cancer risk, although not always statistically significant, in 8 out of 10 cohort studies and 10 out of 12 case-control studies within several industries, including railroad workers. Relative risk for lung cancer associated with exposure ranged from 1.2 to 1.5, although a few studies show relative risks as high as 2.6. Additionally, the Diesel HAD also relied on two independent meta-analyses, which examined 23 and 30 occupational studies respectively, which found statistically significant increases in smoking-adjusted relative lung cancer risk associated with diesel exhaust, of 1.33 to 1.47. These meta-analyses demonstrate the effect of pooling many studies and in this case show the positive relationship between diesel exhaust exposure and lung cancer across a variety of diesel exhaust-exposed occupations.[43] [44] [45]

In the absence of a cancer unit risk, the Diesel HAD sought to provide additional insight into the significance of the diesel exhaust-cancer hazard by estimating possible ranges of risk that might be present in the population. An exploratory analysis was used to characterize a possible risk range by comparing a typical environmental exposure level for highway diesel sources to a selected range of occupational exposure levels. The occupationally observed risks were then proportionally scaled according to the exposure ratios to obtain an estimate of the possible environmental risk. A number of calculations are needed to accomplish this, and these can be seen in the EPA Diesel HAD. The outcome was that environmental risks from diesel exhaust exposure could range from a low of 104 to 105 to as high as 103, reflecting the range of occupational exposures that could be associated with the relative and absolute risk levels observed in the occupational studies. Because of uncertainties, the analysis acknowledged that the risks could be lower than 104 or 105, and a zero risk from diesel exhaust exposure was not ruled out.

Retrospective health studies of railroad workers have played an important part in determining that diesel exhaust is a likely human carcinogen. Key evidence of the diesel exhaust exposure linkage to lung cancer comes from two retrospective case-control studies of railroad workers which are discussed at length in the Diesel HAD.

(ii) Diesel Exhaust: Other Health Effects

Noncancer health effects of acute and chronic exposure to diesel exhaust emissions are also of concern to the Agency. EPA derived an RfC from consideration of four well-conducted chronic rat inhalation studies showing adverse pulmonary effects.[46] [47] [48] [49] The RfC is 5 μg/m 3 for diesel exhaust as measured by diesel PM. This RfC does not consider allergenic effects such as those associated with asthma or immunologic effects. There is growing evidence, discussed in the Diesel HAD, that diesel exhaust can exacerbate these effects, but the exposure-response data are presently lacking to derive an RfC. The EPA Diesel HAD states, “With DPM [diesel particulate matter] being a ubiquitous component of ambient PM, there is an uncertainty about the adequacy of the existing DE [diesel exhaust] noncancer database to identify all of the pertinent DE-caused noncancer health hazards. (p. 9-19).

Diesel exhaust has been shown to cause serious noncancer effects in occupational exposure studies. One study of railroad workers and electricians, cited in the Diesel HAD,[50] found that exposure to diesel exhaust resulted in neurobehavioral impairments in one or more areas including reaction time, balance, blink reflex latency, verbal recall, and color vision confusion indices. Pulmonary function tests also showed that 10 of the 16 workers had airway obstruction and another group of 10 of 16 workers had chronic bronchitis, chest pain, tightness, and hyperactive airways. Finally, a variety of studies have been published subsequent to the completion of the Diesel HAD. One such study, published in 2006 [51] found that railroad engineers and conductors with diesel exhaust exposure from operating trains had an increased incidence of chronic obstructive pulmonary disease (COPD) mortality. The odds of COPD mortality increased with years on the job so that those who had worked more than 16 years as an engineer or conductor after 1959 had an increased risk of 1.61 (95% confidence interval, 1.12—2.30). EPA is assessing the significance of this study within the context of the broader literature.

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(iii) Ambient PM2.5 Levels and Exposure to Diesel Exhaust PM

The Diesel HAD also briefly summarizes health effects associated with ambient PM and discusses the EPA's annual National Ambient Air Quality Standard (NAAQS) of 15 μg/m 3. There is a much more extensive body of human data showing a wide spectrum of adverse health effects associated with exposure to ambient PM, of which diesel exhaust is an important component. The PM2.5 NAAQS is designed to provide protection from the noncancer and premature mortality effects of PM2.5 as a whole, of which diesel PM is a constituent.

(iv) Diesel Exhaust PM Exposures

Exposure of people to diesel exhaust depends on their various activities, the time spent in those activities, the locations where these activities occur, and the levels of diesel exhaust pollutants in those locations. The major difference between ambient levels of diesel particulate and exposure levels for diesel particulate is that exposure accounts for a person moving from location to location, proximity to the emission source, and whether the exposure occurs in an enclosed environment.

1. Occupational Exposures

Occupational exposures to diesel exhaust from mobile sources, including locomotive engines and marine diesel engines, can be several orders of magnitude greater than typical exposures in the non-occupationally exposed population.

Over the years, diesel particulate exposures have been measured for a number of occupational groups resulting in a wide range of exposures from 2 to 1,280 μg/m [3] for a variety of occupations. Studies have shown that miners and railroad workers typically have higher diesel exposure levels than other occupational groups studied, including firefighters, truck dock workers, and truck drivers (both short and long haul).[52] As discussed in the Diesel HAD, the National Institute of Occupational Safety and Health (NIOSH) has estimated a total of 1,400,000 workers are occupationally exposed to diesel exhaust from on-road and nonroad vehicles including locomotive and marine diesel engines.

2. Elevated Concentrations and Ambient Exposures in Mobile Source-Impacted Areas

Regions immediately downwind of rail yards and marine ports may experience elevated ambient concentrations of directly-emitted PM2.5 from diesel engines. Due to the unique nature of rail yards and marine ports, emissions from a large number of diesel engines are concentrated in a small area. Furthermore, emissions occur at or near ground level, allowing emissions of diesel engines to reach nearby receptors without fully mixing with background air.

A recent study conducted by the California Air Resources Board (CARB) examined the air quality impacts of railroad operations at the J.R. Davis Rail Yard, the largest rail facility in the western United States.[53] The yard occupies 950 acres along a one-quarter mile wide and four mile long section of land in Roseville, CA. The study developed an emissions inventory for the facility for the year 2000 and modeled ambient concentrations of diesel PM using a well-accepted dispersion model (ISCST3). The study estimated substantially elevated concentrations in an area 5,000 meters from the facility, with higher concentrations closer to the rail yard. Using local meteorological data, annual average contributions from the rail yard to ambient diesel PM concentrations under prevailing wind conditions were 1.74, 1.18, 0.80, and 0.25 μg/m 3 at receptors located 200, 500, 1000, and 5000 meters from the yard, respectively. Several tens of thousands of people live within the area estimated to experience substantial increases in annual average ambient PM2.5 as a result of rail yard emissions.

Another study from CARB evaluated air quality impacts of diesel engine emissions within the Ports of Long Beach and Los Angeles in California, one of the largest ports in the U.S.[54] Like the earlier rail yard study, the port study employed the ISCST3 dispersion model. Also using local meteorological data, annual average concentrations were substantially elevated over an area exceeding 200,000 acres. Because the ports are located near heavily-populated areas, the modeling indicated that over 700,000 people lived in areas with at least 0.3 μg/m3 of port-related diesel PM in ambient air, about 360,000 people lived in areas with at least 0.6 μg/m 3 of diesel PM, and about 50,000 people lived in areas with at least 1.5 μg/m 3 of ambient diesel PM directly from the port.

Overall, while these studies focus on only two large marine port and railroad facilities, they highlight the substantial contribution these facilities make to elevated ambient concentrations in populated areas.

We have recently initiated a study to better understand the populations that are living near rail yards and marine ports nationally. As part of the study, a computer geographic information system (GIS) is being used to identify the locations and property boundaries of these facilities nationally, and to determine the size and demographic characteristics of the population living near these facilities. We anticipate that the results of this study will be complete in 2007 and we intend to add this report to the public docket.

(a) Gaseous Air Toxics—Benzene, 1,3-butadiene, Formaldehyde, Acetaldehyde, Acrolein, POM, Naphthalene

Locomotive and marine diesel engine exhaust emissions contribute to ambient levels of other air toxics known or suspected as human or animal carcinogens, or that have non-cancer health effects. These other compounds include benzene, 1,3-butadiene, formaldehyde, acetaldehyde, acrolein, polycyclic organic matter (POM), and naphthalene. All of these compounds, except acetaldehyde, were identified as national or regional risk drivers in the 1999 National-Scale Air Toxics Assessment (NATA) and have significant inventory contributions from mobile sources. That is, for a significant portion of the population, these compounds pose a significant portion of the total cancer and noncancer risk from breathing outdoor air toxics. The reductions in locomotive and marine diesel engine emissions proposed in this rulemaking would help reduce exposure to these harmful substances.

Air toxics can cause a variety of cancer and noncancer health effects. A number of the mobile source air toxic pollutants described in this section are known or likely to pose a cancer hazard in humans. Many of these compounds also cause adverse noncancer health effects resulting from chronic,[55] Start Printed Page 15959subchronic,[56] or acute [57] inhalation exposures. These include neurological, cardiovascular, liver, kidney, and respiratory effects as well as effects on the immune and reproductive systems.

Benzene: The EPA's Integrated Risk Information (IRIS) database lists benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice.[58 59 60] EPA states in its IRIS database that data indicate a causal relationship between benzene exposure and acute lymphocytic leukemia and suggests a relationship between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocytic leukemia. A number of adverse noncancer health effects including blood disorders, such as preleukemia and aplastic anemia, have also been associated with long-term exposure to benzene.[61 62] The most sensitive noncancer effect observed in humans, based on current data, is the depression of the absolute lymphocyte count in blood.[63 64] In addition, recent work, including studies sponsored by the Health Effects Institute (HEI), provides evidence that biochemical responses are occurring at lower levels of benzene exposure than previously known.[65 66 67 68] EPA's IRIS program has not yet evaluated these new data.

1,3-Butadiene: EPA has characterized 1,3-butadiene as carcinogenic to humans by inhalation.[69 70] The specific mechanisms of 1,3-butadiene-induced carcinogenesis are unknown. However, it is virtually certain that the carcinogenic effects are mediated by genotoxic metabolites of 1,3-butadiene. Animal data suggest that females may be more sensitive than males for cancer effects; while there are insufficient data in humans from which to draw conclusions about sensitive subpopulations. 1,3-Butadiene also causes a variety of reproductive and developmental effects in mice; no human data on these effects are available. The most sensitive effect was ovarian atrophy observed in a lifetime bioassay of female mice.[71]

Formaldehyde: Since 1987, EPA has classified formaldehyde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkeys.[72] EPA is currently reviewing recently published epidemiological data. For instance, recently released research conducted by the National Cancer Institute (NCI) found an increased risk of nasopharyngeal cancer and lymphohematopoietic malignancies such as leukemia among workers exposed to formaldehyde.[73 74] NCI is currently performing an update of these studies. A recent National Institute of Occupational Safety and Health (NIOSH) study of garment workers also found increased risk of death due to leukemia among workers exposed to formaldehyde.[75] Based on the developments of the last decade, in 2004, the working group of the International Agency for Research on Cancer (IARC) concluded that formaldehyde is carcinogenic to humans (Group 1), on the basis of sufficient evidence in humans and sufficient evidence in experimental animals—a higher classification than previous IARC evaluations.

Formaldehyde exposure also causes a range of noncancer health effects, including irritation of the eyes (tearing of the eyes and increased blinking) and mucous membranes.

Acetaldehyde: Acetaldehyde is classified in EPA's IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes.[76] The primary acute effect of exposure to acetaldehyde vapors is irritation of the eyes, skin, and respiratory tract.[77] The agency is currently conducting a reassessment of the health hazards from inhalation exposure to acetaldehyde.

Acrolein: Acrolein is intensely irritating to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation and congestion. EPA determined in 2003 using the 1999 draft cancer guidelines that the human carcinogenic potential of acrolein could not be determined because the available data were inadequate. No information was Start Printed Page 15960available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity.[78]

Polycyclic Organic Matter (POM): POM is generally defined as a large class of organic compounds which have multiple benzene rings and a boiling point greater than 100 degrees Celsius. Many of the compounds included in the class of compounds known as POM are classified by EPA as probable human carcinogens based on animal data. One of these compounds, naphthalene, is discussed separately below.

Recent studies have found that maternal exposures to PAHs in a population of pregnant women were associated with several adverse birth outcomes, including low birth weight and reduced length at birth, as well as impaired cognitive development at age three.[79 80] EPA has not yet evaluated these recent studies.

Naphthalene: Naphthalene is found in small quantities in gasoline and diesel fuels but is primarily a product of combustion. EPA recently released an external review draft of a reassessment of the inhalation carcinogenicity of naphthalene.[81] The draft reassessment recently completed external peer review.[82] Based on external peer review comments, additional analyses are being considered. California EPA has released a new risk assessment for naphthalene, and the IARC has reevaluated naphthalene and re-classified it as Group 2B: possibly carcinogenic to humans.[83] Naphthalene also causes a number of chronic non-cancer effects in animals, including abnormal cell changes and growth in respiratory and nasal tissues.[84]

In addition to reducing substantial amounts of NOX and PM2.5 emissions from locomotive and marine diesel engines, the standards being proposed today would also reduce air toxics emitted from these engines. This will help mitigate some of the adverse health effects associated with operation of these engines.

C. Other Environmental Effects

There is a number of public welfare effects associated with the presence of ozone and PM2.5 in the ambient air. In this section we discuss the impact of PM2.5 on visibility and materials and the impact of ozone on plants, including trees, agronomic crops and urban ornamentals.

(1) Visibility

Visibility can be defined as the degree to which the atmosphere is transparent to visible light.[85] Visibility impairment manifests in two principal ways: as local visibility impairment and as regional haze.86 Local visibility impairment may take the form of a localized plume, a band or layer of discoloration appearing well above the terrain as a result of complex local meteorological conditions. Alternatively, local visibility impairment may manifest as an urban haze, sometimes referred to as a “brown cloud”. This urban haze is largely caused by emissions from multiple sources in the urban areas and is not typically attributable to only one nearby source or to long-range transport. The second type of visibility impairment, regional haze, usually results from multiple pollution sources spread over a large geographic region. Regional haze can impair visibility in large regions and across states.

Visibility is important because it has direct significance to people's enjoyment of daily activities in all parts of the country. Individuals value good visibility for the well-being it provides them directly, where they live and work, and in places where they enjoy recreational opportunities. Visibility is also highly valued in significant natural areas such as national parks and wilderness areas and special emphasis is given to protecting visibility in these areas. For more information on visibility see the final 2004 PM AQCD as well as the 2005 PM Staff Paper.87 88

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Fine particles are the major cause of reduced visibility in parts of the United States. EPA is pursuing a two-part strategy to address visibility. First, to address the welfare effects of PM on visibility, EPA set secondary PM2.5 standards which would act in conjunction with the establishment of a regional haze program. In setting this secondary standard EPA concluded that PM2.5 causes adverse effects on visibility in various locations, depending on PM concentrations and factors such as chemical composition and average relative humidity. Second, section 169 of the Clean Air Act provides additional authority to address existing visibility impairment and prevent future visibility impairment in the 156 national parks, forests and wilderness areas categorized as mandatory class I federal areas (62 FR 38680-81, July 18, 1997).[89] In July 1999 the regional haze rule (64 FR 35714) was put in place to protect the visibility in mandatory class I federal areas. Visibility can be said to be impaired in both PM2.5 nonattainment areas and mandatory class I federal areas.90

Locomotives and marine engines contribute to visibility concerns in these areas through their primary PM2.5 emissions and their NOX emissions which contribute to the formation of secondary PM2.5.

Current Visibility Impairment

Recently designated PM2.5 nonattainment areas indicate that, as of March 2, 2006, almost 90 million people live in nonattainment areas for the 1997 PM2.5 NAAQS. Thus, at least these populations would likely be experiencing visibility impairment, as well as many thousands of individuals who travel to these areas. In addition, while visibility trends have improved in mandatory class I federal areas the most recent data show that these areas continue to suffer from visibility impairment. In summary, visibility impairment is experienced throughout the U.S., in multi-state regions, urban areas, and remote mandatory class I federal areas.[91] [92] The mandatory federal class I areas are listed in Chapter 2 of the draft RIA for this action. The areas that have design values above the 1997 PM2.5 NAAQS are also listed in Chapter 2 of the draft RIA for this action.

Future Visibility Impairment

Recent modeling for this proposed rule was used to project visibility conditions in the 116 mandatory class I federal areas across the U.S. in 2020 and 2030 resulting from the proposed locomotive and marine diesel engine standards. The results suggest that improvement in visibility would occur in all class I federal areas although areas would continue to have annual average deciview levels above background in 2020 and 2030. Table II-2 groups class I federal areas by regions and illustrates that regardless of geographic area, reductions in PM2.5 emissions from this rule would benefit visibility in each region of the U.S. in mandatory class I federal areas.

Table II-2.—SUmmary of Modeled 2030 Visibility Conditions in Mandatory Class I Federal Areas

[Annual average deciview]

RegionPredicted 2030 visibility baseline w/o rule rulePredicted 2030 visibility with rule controlChange in annual average deciview
Eastern
Southeast17.5217.45.07
Northeast/Midwest14.8514.80.05
Western
Southwest9.369.32.04
West (CA-NV-UT)9.999.92.07
Rocky Mountain8.378.33.04
Northwest9.119.05.06
National Class I Area Average10.9710.91.06
Notes:
(a) Background visibility conditions differ by regions: Eastern natural background is 9.5 deciview (or visual range of 150 kilometers) and the West natural background is 5.3 deciview (or visual range of 230 kilometers).
(b) The results average visibility conditions for mandatory Class I Federal areas in the regions.
(c) The results illustrate the type of visibility improvements for the primary control options. The proposal differs based on updated information; however, we believe that the net results would approximate future PM emissions.

(2) Plant and Ecosystem Effects of Ozone

Ozone contributes to many environmental effects, with impacts to plants and ecosystems being of most concern. Ozone can produce both acute and chronic injury in sensitive species depending on the concentration level and the duration of the exposure. Ozone effects also tend to accumulate over the growing season of the plant, so that even lower concentrations experienced for a longer duration have the potential to create chronic stress on vegetation. Ozone damage to plants includes visible injury to leaves and a reduction in food production through impaired photosynthesis, both of which can lead to reduced crop yields, forestry production, and use of sensitive ornamentals in landscaping. In addition, the reduced food production in plants and subsequent reduced root growth and storage below ground, can result in Start Printed Page 15962other, more subtle plant and ecosystems impacts. These include increased susceptibility of plants to insect attack, disease, harsh weather, interspecies competition and overall decreased plant vigor. The adverse effects of ozone on forest and other natural vegetation can potentially lead to species shifts and loss from the affected ecosystems, resulting in a loss or reduction in associated ecosystem goods and services. Lastly, visible ozone injury to leaves can result in a loss of aesthetic value in areas of special scenic significance like national parks and wilderness areas. The final 2006 Criteria Document presents more detailed information on ozone effects on vegetation and ecosystems.

As discussed above, locomotive and marine diesel engine emissions of NOX contribute to ozone and therefore the proposed NOX standards will help reduce crop damage and stress on vegetation from ozone.

(3) Acid Deposition

Acid deposition, or acid rain as it is commonly known, occurs when NOX and SO2 react in the atmosphere with water, oxygen and oxidants to form various acidic compounds that later fall to earth in the form of precipitation or dry deposition of acidic particles. It contributes to damage of trees at high elevations and in extreme cases may cause lakes and streams to become so acidic that they cannot support aquatic life. In addition, acid deposition accelerates the decay of building materials and paints, including irreplaceable buildings, statues, and sculptures that are part of our nation's cultural heritage.

The proposed NOX standards would help reduce acid deposition, thereby helping to reduce acidity levels in lakes and streams throughout the country and helping accelerate the recovery of acidified lakes and streams and the revival of ecosystems adversely affected by acid deposition. Reduced acid deposition levels will also help reduce stress on forests, thereby accelerating reforestation efforts and improving timber production. Deterioration of historic buildings and monuments, vehicles, and other structures exposed to acid rain and dry acid deposition also will be reduced, and the costs borne to prevent acid-related damage may also decline. While the reduction in nitrogen acid deposition will be roughly proportional to the reduction in NOX emissions, the precise impact of this rule will differ across different areas.

(4) Eutrophication and Nitrification

The NOX standards proposed in this action will help reduce the airborne nitrogen deposition that contributes to eutrophication of watersheds, particularly in aquatic systems where atmospheric deposition of nitrogen represents a significant portion of total nitrogen loadings.

Eutrophication is the accelerated production of organic matter, particularly algae, in a water body. This increased growth can cause numerous adverse ecological effects and economic impacts, including nuisance algal blooms, dieback of underwater plants due to reduced light penetration, and toxic plankton blooms. Algal and plankton blooms can also reduce the level of dissolved oxygen, which can adversely affect fish and shellfish populations. In recent decades, human activities have greatly accelerated nutrient impacts, such as nitrogen and phosphorus, causing excessive growth of algae and leading to degraded water quality and associated impairment of fresh water and estuarine resources for human uses.[93]

Severe and persistent eutrophication often directly impacts human activities. For example, losses in the nation's fishery resources may be directly caused by fish kills associated with low dissolved oxygen and toxic blooms. Declines in tourism occur when low dissolved oxygen causes noxious smells and floating mats of algal blooms create unfavorable aesthetic conditions. Risks to human health increase when the toxins from algal blooms accumulate in edible fish and shellfish, and when toxins become airborne, causing respiratory problems due to inhalation. According to the NOAA report, more than half of the nation's estuaries have moderate to high expressions of at least one of these symptoms “ an indication that eutrophication is well developed in more than half of U.S. estuaries.[94]

(5) Materials Damage and Soiling

The deposition of airborne particles can reduce the aesthetic appeal of buildings and culturally important articles through soiling, and can contribute directly (or in conjunction with other pollutants) to structural damage by means of corrosion or erosion.[95] Particles affect materials principally by promoting and accelerating the corrosion of metals, by degrading paints, and by deteriorating building materials such as concrete and limestone. Particles contribute to these effects because of their electrolytic, hygroscopic, and acidic properties, and their ability to adsorb corrosive gases (principally sulfur dioxide). The rate of metal corrosion depends on a number of factors, including the deposition rate and nature of the pollutant; the influence of the metal protective corrosion film; the amount of moisture present; variability in the electrochemical reactions; the presence and concentration of other surface electrolytes; and the orientation of the metal surface.

The PM2.5 standards proposed in this action will help reduce the airborne particles that contribute to materials damage and soiling.

D. Other Criteria Pollutants Affected by This NPRM

Locomotive and marine diesel engines account for about 1 percent of the mobile sources carbon monoxide (CO) inventory. Carbon monoxide (CO) is a colorless, odorless gas produced through the incomplete combustion of carbon-based fuels. The current primary NAAQS for CO are 35 ppm for the 1-hour average and 9 ppm for the 8-hour average. These values are not to be exceeded more than once per year. As of October 2006, there are 15.5 million people living in 6 areas (10 counties) that are designated as nonattainment for CO.

Carbon monoxide enters the bloodstream through the lungs, forming carboxyhemoglobin and reducing the delivery of oxygen to the body's organs and tissues. The health threat from CO is most serious for those who suffer from cardiovascular disease, particularly those with angina or peripheral vascular disease. Healthy individuals also are affected, but only at higher CO levels. Exposure to elevated CO levels is associated with impairment of visual perception, work capacity, manual dexterity, learning ability and performance of complex tasks. Carbon monoxide also contributes to ozone nonattainment since carbon monoxide reacts photochemically in the atmosphere to form ozone. Additional information on CO related health effects Start Printed Page 15963can be found in the Air Quality Criteria for Carbon Monoxide.[96]

E. Emissions From Locomotive and Marine Diesel Engines

(1) Overview

The engine standards being proposed in this rule would affect emissions of particulate matter (PM2.5), oxides of nitrogen (NOX), volatile organic compounds (VOCs), and air toxics. Carbon monoxide is not specifically targeted in this proposal although the technologies applied to control these other pollutants are expected to also reduce CO emissions.

Locomotive and marine diesel engine emissions are expected to continue to be a significant part of the mobile source emissions inventory both nationally and in ozone and PM2.5 nonattainment areas in the coming years. In the absence of new emissions standards, we expect overall emissions from these engines to decrease modestly over the next ten to fifteen years than remain relatively flat through 2025 due to existing regulations such as lower fuel sulfur requirements, the phase in of locomotive and marine diesel Tier 1 and Tier 2 engine standards, and the Tier 0 locomotive remanufacturing requirements. Beginning thereafter, emission inventories from these engines would once again begin increasing due to growth in the locomotive and marine sectors. Under today's proposed standards, by 2030, annual NOX emissions from these engines would be reduced by 765,000 tons, PM2.5 emissions by 28,000 tons, and VOC emissions by 42,000 tons.

In this section we first present base case emissions inventory contributions for locomotive and marine diesel engines and other mobile sources assuming no further emission controls beyond those already in place. The 2001 inventory numbers were developed and used as an input into our air quality modeling. Individual sub-sections which follow discuss PM2.5, NOX, and VOC pollutants, in terms of expected emission reductions associated with the proposed standards. The tables and figures illustrate the Agency's analysis of current and future emissions contributions from locomotive and marine diesel engines.

(2) Estimated Inventory Contribution

Locomotive and marine diesel engine emissions contribute to nationwide PM, NOX, VOC, CO, and air toxics inventories. Our current baseline and future year estimates for NOX and PM2.5 inventories (50-state) are set out in Tables II-3 and II-4. Based on our analysis undertaken for this rulemaking, we estimate that in 2001 locomotives and marine diesel engines contributed almost 60,000 tons (18 percent) to the national mobile source diesel PM2.5 inventory and about 2.0 million tons (16 percent) to the mobile source NOX inventory. In 2030, absent the standards proposed today, these engines would contribute about 50,000 tons (65 percent) to the mobile source diesel PM2.5 inventory and almost 1.6 million tons (35 percent) to the mobile source NOX inventory.

The national locomotives and marine diesel engine PM2.5 and NOX inventories in 2030 would be roughly twice as large as the combined PM2.5 and NOX inventories from on-highway diesel and land-based nonroad diesel engines. In absolute terms—locomotives and marine diesel engines, in 2030, would annually emit 22,000 more tons of PM2.5 and 890,000 more tons of NOX than all highway and nonroad diesels combined. This occurs because EPA has already taken steps to bring engine emissions from both on-highway and nonroad diesels to near-zero levels, while locomotives and marine diesel engines continue to meet relatively modest emission requirements. Table II-4 shows that in 2001 the land-based nonroad diesel category contributed about 160,000 tons of PM2.5 emissions and by 2030 they drop to under 18,000 tons. Likewise, in 2001, annual PM2.5 emissions from highway diesel engines totaled about 110,000 tons falling in 2030 to about 10,000 tons. Table II-3 shows a similar downward trend occurring for annual NOX emissions. In 2001, NOX emissions from highway diesel engines' amounted to over 3.7 million tons but by 2030 they fall to about 260,000 tons. Finally, land-based nonroad diesels in 2001 emitted over 1.5 million tons of NOX but by 2030 these emissions drop to approximately 430,000 tons.

Marine diesel engine and locomotive inventories were developed using multiple methodologies. Chapter 3 of the draft RIA provides a detailed explanation of our approach. In summary, the quality of data available for locomotive inventories made it possible to develop more detailed estimates of fleet composition and emission rates than we have previously done. Locomotive emissions were calculated based on estimated current and projected fuel consumption rates. Emissions were calculated separately for the following locomotive categories: line-haul locomotives in large railroads, switching locomotives in large railroads (including Class II/III switch railroads owned by Class I railroads), other line-haul locomotives (i.e., local and regional railroads), other switch/terminal locomotives, and passenger locomotives. Our inventories for marine diesel engines were created using the inventory for marine diesel engines up to 30 liters per cylinder displacement including recreational, commercial, and auxiliary applications was developed by using a methodology based on engine population, hours of use, average engine loads, and in-use emissions factors.

Table II-3.—Nationwide Annual NOX Baseline Emission Levels

Category20012030
NOX short tonsPercent of mobile sourcePercent of totalNOXPercent of mobile sourcePercent of total short tons
Locomotive1,118,7869.05.1854,22619.08.1
Recreational Marine Diesel40,4370.30.248,1551.10.5
Commercial Marine (C1 & C2)833,9636.73.8679,97315.16.4
Land-Based Nonroad Diesel1,548,23612.57.1434,4669.74.1
Commercial Marine (C3)*224,1001.81.0531,64111.85.0
Small Nonroad SI100,3190.80.5114,2872.51.1
Recreational Marine SI42,2520.30.292,1882.10.9
SI Recreational Vehicles5,4880.00.020,1360.40.2
Large Nonroad SI (>25hp)321,0982.61.546,2531.00.4
Start Printed Page 15964
Aircraft83,7640.70.4118,7402.61.1
Total Off Highway4,318,44334.819.82,940,06665.527.7
Highway Diesel3,750,88630.217.2260,9155.82.5
Highway non-diesel4,354,43035.020.01,289,78028.712.2
Total Highway8,105,31665.237.21,550,69534.514.6
Total Diesel (distillate) Mobile7,292,30858.733.52,277,73550.721.5
Total Mobile Sources12,423,75810057.04,490,76110042.4
Stationary Point and Area Sources9,355,659-43.06,111,866-57.6
Total Man-Made Sources21,779,418-10010,602,627-100
* This category includes emissions from Category 3 (C3) propulsion engines and C2/3 auxiliary engines used on ocean-going vessels.

Table II-4.—Nationwide Annual PM2.5 Baseline Emission Levels

Category20012030
PM2.5 short tonsPercent of diesel mobilePercent of mobile sourcePM2.5 short tonsPercent of diesel mobilePercent of mobile source
Locomotive29,6608.96.3625,10932.210.01
Recreational Marine Diesel1,0960.30.241,1411.50.45
Commercial Marine (C1 & C2)28,7288.66.1623,75830.59.47
Land-Based Nonroad Diesel164,18049.235.217,93423.07.1
Commercial Marine (C3)20,0234.3052,68220.99
Small Nonroad SI25,5755.535,76114.3
Recreational Marine SI17,1013.76,3782.5
SI Recreational Vehicles12,3012.69,9534.0
Large Non road SI (>25hp)1,6100.32,8441.1
Aircraft5,6641.228,5693.41
Total Off Highway305,93965.6184,12973.4
Highway Diesel109,95233.023.610,07212.94.0
Highway non-diesel50,27710.856,73422.6
Total Highway160,22934.466,80626.6
Total Diesel (distillate) Mobile333,61810071.678,01410031.1
Total Mobile Sources466,168100250,934100
Stationary Point and Area Sources Diesel3,1892,865
Stationary Point and Areas Sources non-diesel1,963,2641,817,722
Total Stationary Point and Area Sources1,966,4531,820,587
Total Man-Made Sources2,432,6212,071,521

(3) PM2.5 Emission Reductions

In 2001 annual emissions from locomotive and marine diesel engines totaled about 60,000 tons. Table II-4 shows the distribution of these PM2.5 emissions: locomotives contributed about 30,000 tons, recreational marine diesel roughly 1,000 tons, and commercial marine diesel (C1 and C2) 29,000 tons. Due to current standards, annual PM2.5 emissions from these engines drop to 50,000 tons in 2030 with roughly proportional emission reductions occurring in both the locomotive and commercial marine diesel categories while the recreational marine diesel category experiences a slight increase in PM2.5 emissions. Both Tables II-5 and Figure II-4 show PM2.5 emissions nearly flat through 2030 before beginning to rise again due to growth in these sectors.

Table II-5 shows how the proposed rule would begin reducing PM2.5 emissions from the current national inventory baseline starting in 2015 when annual reductions of 7,000 tons would occur. By 2020 that number would grow to 15,000 tons of PM2.5, by 2030 to 28,000 annual tons, and reductions would continue to grow through 2040 to about 39,000 tons of PM2.5 annually.

Table II-5.—Locomotive and Marine Diesel PM2.5 Emissions

[Short tons/year]

2015202020302040
Without Proposed Rule51,00050,00050,00054,000
With Proposed Rule44,00035,00022,00015,000
Reductions From Proposed Rule7,00015,00028,00039,000
Start Printed Page 15965

Although this proposed rule results in large nationwide PM2.5 inventory reductions, it would also help urban areas that have significant locomotive and marine diesel engine emissions in their inventories. Table II-6 shows the percent these engines contribute to the mobile source diesel PM2.5 inventory in a variety of urban areas in 2001 and 2030. In 2001, a number of metropolitan areas saw locomotives and marine diesel engines contribute a much larger share to their local inventories than the national average including Houston (42 percent), Los Angeles (32 percent), and Baltimore (23 percent). In 2030, each of these metropolitan areas would continue to see locomotive and marine diesel engines comprise a larger portion of their mobile source diesel PM2.5 inventory than the national average as would other communities including Cleveland (72 percent), Chicago (70 percent) and Chattanooga (70 percent).

Table II-6.—Locomotive and Marine Diesel Contribution to Mobile Source Diesel PM2.5 Inventories in Selected Metropolitan Areas in 2001 and 2030

Metropolitan area (MSA)2001 Percent2030 Percent
National Average1865
Los Angeles, CA3273
Houston, TX4285
Chicago, IL2570
Philadelphia, PA2064
Cleveland-Akron-Lorain, OH2672
St. Louis, MO2268
Seattle, WA1761
Kansas City, MO2168
Baltimore, MD2368
Cincinnati, OH2470
Boston, MA841
Huntington-Ashland WV-KY-OH5391
New York, NY421
San Joaquin Valley, CA939
Minneapolis-St. Paul, MN1148
Atlanta, GA630
Phoenix-Mesa, AZ527
Birmingham, AL1758
Detroit, MI526
Chattanooga, TN2270
Indianapolis, IN530

(4) NOX Emissions Reductions

In 2001 annual emissions from locomotive and marine diesel engines totaled about 2.0 million tons. Table II-3 shows the distribution of these NOX emissions: locomotives contributed about 1.1 million tons, recreational marine diesel roughly 40,000 tons, and commercial marine diesel (C1 and C2) 834,000 tons. Due to current standards, annual NOX emission from these engines drop to 1.6 million tons in 2030 with roughly proportional emission reductions occurring in both the locomotive and commercial marine diesel categories while the recreational marine diesel category experiences an increase in PM2.5 emissions. Both Table II-7 and Figure II-5 show NOXStart Printed Page 15966emissions remaining nearly flat through 2030 before beginning to rise again due to growth in these sectors.

Table II-7 shows how the proposed rule would begin reducing NOX emissions from the current national inventory baseline starting in 2015 when annual reductions of 84,000 tons would occur. By 2020 that number would grow to 293,000 tons of NOX, by 2030 to 765,000 annual tons, and reductions would continue to grow through 2040 to about 1.1 million tons of NOX annually.

These numbers are comparable to emission reductions projected in 2030 for our already established nonroad Tier 4 program. Table II-8 provides the 2030 NOX emission reductions (and PM reductions) for this proposed rule compared to the Heavy-Duty Highway rule and Nonroad Tier 4 rule. The 2030 NOX reductions of about 740,000 tons for the Nonroad Tier 4 are similar to those from this proposed rule.

Table II-7.—Locomotive and Marine Diesel NOX Emissions

[Short tons/year]

2015202020302040
Without Proposed Rule1,633,0001,582,0001,582,0001,703,000
With Proposed Rule1,549,0001,289,000817,000579,000
Reductions From Proposed Rule84,000293,000765,0001,124,000

Table II-8.—Projected 2030 Emissions Reductions From Recent Mobile Source Rules

[Short tons]

RuleNOXPM2.5
Proposed Locomotive and Marine765,00028,000
Nonroad Tier 4738,000129,000
Heavy-Duty Highway2,600,000109,000

Although this proposed rule results in large nationwide NOX inventory reductions, it would also help urban areas that have significant concentrations of locomotive and marine diesel engines in their inventories. Table II-9 shows the percent these engines contribute to the mobile source diesel NOX inventory in a variety of urban areas in 2001 and 2030. In 2001, a number of metropolitan areas saw locomotives and marine diesel engines contribute a much larger share to their local inventories than the national average including Houston (32 percent), Kansas City (20 percent), and Los Angeles (19 percent). In 2030, each of these metropolitan areas would continue to see locomotive and marine diesel engines comprise a larger portion of their mobile source diesel PM2.5 inventory than the national average as would other communities including Birmingham (43 percent), Chicago (42 percent) and Chattanooga (40 percent).Start Printed Page 15967

Table II-9.—Locomotive and Marine Diesel Engine Contribution to Mobile Source NOX Inventories in Selected Metropolitan Areas in 2001 and 2030

Metropolitan areas (MSA)2001 Percent2030 Percent
National Average1635
Los Angeles, CA1938
Houston, TX3245
Chicago, IL2042
Philadelphia, PA1419
Cleveland-Akron-Lorain, OH1940
New York, NY58
St. Louis, MO1637
Seattle, WA1431
Kansas City, MO2044
Cincinnati, OH1839
Huntington-Ashland, WV-KY-OH3937
Boston, MA711
San Joaquin Valley, CA926
Minneapolis-St. Paul, MN920
Atlanta, GA513
Birmingham, AL1743
Baltimore, MD810
Phoenix-Mesa, AZ615
Detroit, MI39
Chattanooga, TN1640
Indianapolis, IN513

(5) Volatile Organic Compounds Emissions Reductions

Emissions of volatile organic compounds (VOCs) from locomotive and marine diesel engines based on a 50-state inventory are shown in Table II-10, along with the estimates of the reductions in 2015, 2020, 2030 and 2040 we expect would result from the VOC exhaust emission standard in our proposed rule. In 2015 15,000 tons of VOCs would be reduced and by 2020 reductions would almost double to 27,000 tons annually from these engines. Over the next ten years annual reductions from controlled locomotive and marine diesel engines would produce annual VOC reductions of 42,000 tons in 2030 and 54,000 tons in 2040.

Figure II-6 shows our estimate of VOC emissions between 2005 and 2040 both with and without the proposed standards of this rule. We estimate that VOC emissions from locomotive and marine diesel engines would be reduced by 60 percent by 2030 and by 70 percent in 2040.

Table II-10.—Locomotive and Marine Diesel VOC Emissions

[short tons/year]

2015202020302040
Without Proposed Rule72,00071,00072,00078,000
With Proposed Rule57,00044,00030,00024,000
Reductions From Proposed Rule15,00027,00042,00054,000

III. Emission Standards

This section details the emission standards, implementation dates, and other major requirements of the proposed program. Following brief summaries of the types of locomotives and marine engines covered and of the existing standards, we describe the proposed provisions for setting:

  • Tier 3 and Tier 4 standards for newly-built locomotives,
  • Standards for remanufactured Tier 0, 1, and 2 locomotives,Start Printed Page 15968
  • Standards and other provisions for diesel switch locomotives,
  • Requirements to reduce idling locomotive emissions, as well as possible ways to encourage emission reductions through the optimization of multi-locomotive teams (consists), and
  • Tier 3 and Tier 4 standards for newly-built marine diesel engines.

As discussed in sections I.A(2) and VII.A(2), we are also soliciting comment on setting standards for remanufactured marine diesel engines.

A detailed discussion of the technological feasibility of the proposed standards follows the description of the proposed program. The section concludes with a discussion of considerations and activities surrounding emissions from large Category 3 engines used on ocean-going vessels, although we are not proposing provisions for these engines in this rulemaking.

To ensure that the benefits of the standards are realized in-use and throughout the useful life of these engines, and to incorporate lessons learned over the last few years from the existing test and compliance program, we are also proposing revised test procedures and related certification requirements. In addition, we are proposing to continue the averaging, banking, and trading (ABT) emissions credits provisions to demonstrate compliance with the standards. These provisions are described further in section IV.

A. What Locomotives and Marine Engines Are Covered?

The regulations being proposed would affect locomotives currently regulated under part 92 and marine diesel engines and vessels currently regulated under parts 89 and 94, as described below.[97]

With some exceptions, the regulations apply for all locomotives that operate extensively within the United States. See section IV.B for a discussion of the exemption for locomotives that are used only incidentally within the U.S. The exceptions include historic steam-powered locomotives and locomotives powered solely by an external source of electricity. In addition, the regulations generally do not apply to existing locomotives owned by railroads that are classified as small businesses.[98] Furthermore, engines used in locomotive-type vehicles with less than 750 kW (1006 hp) total power (used primarily for railway maintenance), engines used only for hotel power (for passenger railcar equipment), and engines that are used in self-propelled passenger-carrying railcars, are excluded from these regulations. The engines used in these smaller locomotive-type vehicles are generally subject to the nonroad engine requirements of Parts 89 and 1039.

There are currently three tiers of locomotive emission standards. The Tier 0 standards apply only to locomotives originally manufactured before 2002, the Tier 1 standards apply to new locomotives manufactured in 2002-2004, and the Tier 2 standards apply to new locomotives manufactured in 2005 and later. Under the existing regulations, the applicability of the Tier 1 and Tier 2 standards is based on the date of manufacture of the locomotive, rather than the engine. Thus, a newly manufactured engine in 2005 that is used to repower a 1990 model year locomotive would be subject to the Tier 0 emission standards, which are also applicable to all other 1990 model year locomotives. As described in section IV.B, we are proposing some changes to this approach.

The marine diesel engines covered by this rule would include propulsion engines used on vessels from recreational and small fishing boats to super-yachts, tugs and Great Lakes freighters, and auxiliary engines ranging from small gensets to large generators on ocean-going vessels.[99] Marine diesel engines are categorized both by per cylinder displacement and by rated power. Consistent with our existing marine diesel emission control program, the proposed standards would apply to any marine diesel engine with per cylinder displacement below 30 liters installed on a vessel flagged or registered in the United States. According to our existing definitions, a marine engine is defined as an engine that is installed or intended to be installed on a marine vessel.

While marine diesel engines up to 37 kW (50 hp) are currently covered by our nonroad Tier 1 and Tier 2 standards, they were not included in the nonroad Tier 3 and Tier 4 programs. Instead, they are covered in this rule, making this a comprehensive control strategy for all marine diesel engines below 30 liters per cylinder displacement. This is a very broad range of engines and they are grouped into several categories for the existing standards, as described in detail in Chapter 1 of the draft RIA.

Consistent with our current marine diesel engine program, the standards described in this proposal would apply to engines manufactured for sale in the United States or imported into the United States beginning with the effective date of the standards. Any engine installed on a new vessel flagged or registered in the U.S. would be required to meet the appropriate emission limits. Also consistent with our current marine diesel engine program, the standards would also apply to any engine installed for the first time in a marine vessel flagged or registered in the U.S. after having been used in another application subject to different emission standards. In other words, an existing nonroad diesel engine would become a new marine diesel engine, and subject to the marine diesel engine standards, when it is marinized for use in a marine application.

Our current marine diesel engine emission controls do not apply to marine diesel engines on foreign vessels entering U.S. ports. At this time we believe it is appropriate to postpone consideration of the application of our national standards to engines on foreign vessels to a future rulemaking that would consider controls for Category 3 engines on ocean-going vessels. This will allow us consider the engines on foreign vessels as an integrated system, to better evaluate the regulatory options available for controlling their overall emission contribution to U.S. ambient air quality.

Nevertheless, we are soliciting comment on whether the emission standards we are proposing in this action should apply to engines below 30 liters per cylinder displacement installed on foreign vessels entering U.S. ports, and to no longer exclude these engines from the emission standards under 40 CFR 94.1(b)(3). Commenters are also invited to suggest when the standards should apply to foreign vessels. For example, the standards could apply based on the date the engine is built or, consistent with MARPOL Annex VI, the date the vessel is built.

B. Existing EPA Standards

NOX emission levels from newly-built locomotives have been reduced over the past several years from unregulated levels of over 13 g/bhp-hr (17 g/kW-hr) to the current Tier 2 standard level for newly-built locomotives of 5.5 g/bhp-hr Start Printed Page 15969(7.3 g/kW-hr)—a 60 percent reduction.[100] PM reductions on the order of 50 percent have also been achieved under a Tier 2 standard level of 0.20 g/bhp-hr (0.27 g/kW-hr). EPA emission standards for marine diesel engines vary somewhat due to the ranges in size and application of engines included; however Tier 2 levels for recreational and commercial marine engines are generally comparable in stringency to those adopted for locomotives, and are now in the process of phasing in over 2004-2009. See Chapter 1 of the draft RIA for a complete listing of the existing standards, including standards for remanufactured locomotives.

The Tier 2 emissions reductions have been achieved largely through engine calibration optimization and engine hardware design changes (such as improved fuel injectors and turbochargers, increased injection pressure, intake air after-cooling, combustion chamber design, reduced oil consumption and injection timing) Although these reductions in locomotive and marine emissions are important, they only bring today's cleanest locomotives and marine diesels to roughly the emissions levels of new trucks in the early 1990's, on the basis of grams per unit of work done.

C. What Standards Are We Proposing?

(1) Locomotive Standards

(a) Line-Haul Locomotives

We are proposing new emission standards for newly-built and remanufactured line-haul locomotives. Our proposed standards for newly-built line-haul locomotives would be implemented in two tiers: First, a new Tier 3 PM standard of 0.10 g/bhp-hr (0.13 g/kW-hr) taking effect in 2012, based on engine design improvements; second, new Tier 4 standards of 0.03 g/bhp-hr (0.04 g/kW-hr) for PM, 0.14 g/bhp-hr (0.19 g/kW-hr) for HC (both taking effect in 2015), and 1.3 g/bhp-hr (1.8 g/kW-hr) for NOX (taking effect in 2017), based on the application of the high-efficiency catalytic aftertreatment technologies now being developed and introduced in the highway diesel sector. Our proposed standards for remanufactured line-haul locomotives would apply to all Tier 0, 1, and 2 locomotives and are based on engine design improvements. The feasibility of the proposed standards and the technologies involved are discussed in detail in section III.D. Table III-1 summarizes the proposed line-haul locomotive standards and implementation dates. See section III.C(3) for a discussion of the HC standards.

Table III-1.—Proposed Line-Haul Locomotive Standards

[g/bhp-hr]

Standards apply to:DatePMNOXHC
Remanufactured Tier 0 & 12008 as Available, 2010 Required0.22a 7.4a 0.55
Remanufactured Tier 22008 as Available, 2013 Required0.105.50.30
New Tier 320120.105.50.30
New Tier 4PM and HC 2015 NOX 20170.031.30.14
a For Tier 0 locomotives originally manufactured without a separate loop intake air cooling system, these standards are 8.0 and 1.00 for NOX and HC, respectively.

(i) Remanufactured Locomotive Standards

We have previously regulated remanufactured locomotive engines under section 213(a)(5) of the Clean Air Act as new locomotive engines and we propose to continue to do so in this rule. Under our proposed standards, the existing fleet of locomotives that are currently subject to Tier 0 standards (our current remanufactured engine standards) would need to comply with a new Tier 0 PM standard of 0.22 g/bhp-hr (0.30 g/kW-hr). They would also need to comply with a new Tier 0 NOX line-haul standard of 7.4 g/bhp-hr (9.9 g/kW-hr), except that Tier 0 locomotives that were built without a separate coolant loop for intake air (that is, using engine coolant for this purpose) would be subject to a less stringent Tier 0 NOX standard of 8.0 g/bhp-hr (10.7 g/kW-hr) on the line-haul cycle.

These non-separate loop locomotives were generally built before 1993, though some are of more recent model years. Because of their age, many of them are likely to be retired and not remanufactured again, and many are entering lower use applications within the railroad industry. Correspondingly, their contribution to the locomotive emissions inventory is diminishing. Our analysis indicates that it is feasible to obtain a NOX reduction for them on the order of 15 percent, from the current Tier 0 line-haul NOX standard of 9.5 g/bhp-hr to the proposed 8.0 g/bhp-hr standard. However, we expect that any further reduction would require the addition of a separate intake air coolant loop, which provides more efficient cooling and therefore lower NOX. This would be a fairly expensive hardware change and could have sizeable impacts on the locomotive platform layout and weight constraints. We are aware that this group of older, non-separate loop Tier 0 locomotives is fairly diverse, and that achieving even a 8.0 g/bhp-hr NOX standard along with a stringent Tier 0 PM standard will be more difficult on some of these models than on others. We request comment on whether there are any locomotive families within this group for which meeting the proposed 8.0 g/bhp-hr standard may not be feasible, especially considering the cost of doing so and the age of the locomotives involved. Commenters should discuss feasibility and projected costs, and should also discuss the extent to which this concern is mitigated by the prospect that these locomotives will be retired rather than remanufactured anyway, or will be moved to lower usage switcher or small railroad applications, and therefore will be less likely to be remanufactured under the new Tier 0 standards.

We propose to apply the new Tier 0 standards (and corresponding switch-cycle standards) when the locomotive is remanufactured on or after January 1, 2008. However, if no certified emissions Start Printed Page 15970control system exists for the locomotive before October 31, 2007, these standards will instead apply 3 months after such a system is certified, but no later than January 1, 2010. This would provide an incentive to develop and certify systems complying with these standards as early as possible, but allow the railroad to avoid having to delay planned rebuilds if a certified system is not available when the program is expected to begin in 2008. We also propose to include a reasonable cost provision, described in section IV.B, to protect against the unlikely event that the only certified systems made available when this program starts in 2008 will be exorbitantly priced.

Although under this approach, certification of new remanufacture systems before 2010 is voluntary, we believe that developers would strive to certify systems to the new standards as early as possible, even in 2008, to establish these products in the market, especially for the higher volume locomotive models anticipated to have significant numbers coming due for remanufacture in the next few years. This focus on higher volume products also maximizes the potential for large emission reductions very early in this program, greatly offsetting the effect of slow turnover to new Tier 3 and Tier 4 locomotives inherent in this sector.

We are also proposing to set new more stringent standards for locomotives currently subject to Tier 1 and Tier 2 standards, to apply at the point of next remanufacture after the proposed implementation dates. Tier 1 locomotives would need to comply with the same new PM standard of 0.22 g/bhp-hr (0.30 g/kW-hr) required of Tier 0 locomotives (they are already subject to the 7.4 g/bhp-hr (9.9 g/kW-hr) NOX standard). This in essence expands the model years covered by the Tier 1 standards from 2002-2004 to roughly 1993-2004, greatly increasing the size of the Tier 1 fleet while at the same time reducing emissions from this broadened fleet. Under the proposal, Tier 2 locomotives on the rails today or built prior to the start of Tier 3 would need to comply with a new Tier 2 PM line-haul standard of 0.10 g/bhp-hr (0.13 g/kW-hr). Because this is equal to the Tier 3 standard, it essentially adds the entire fleet of Tier 2 locomotives to the clean Tier 3 category over a period of just a few years, as they go through a remanufacture cycle.

The implementation schedule for the new Tier 1 standard would be the same as the 2008/2010 schedule discussed above for Tier 0 locomotives. Meeting the new Tier 2 standard would be required somewhat later, in 2013, reflecting the additional redesign challenge involved in meeting this more stringent standard, and the need to spread the redesign and certification workload faced by the manufacturers overall. However, as for Tier 0 and Tier 1 locomotives, we are proposing that if a certified Tier 2 remanufacture system meeting the new standard is available early, anytime after January 1, 2008, this system would be required to be used, starting 3 months after it is certified, subject to a reasonable cost provision as with early Tier 0 and Tier 1 remanufactures. We request comment on whether use of certified Tier 2 remanufacture systems should be required on the same schedule as Tier 3, that is, starting in 2012, given that we expect the upgraded Tier 2 designs to be very similar to newly-built Tier 3 designs, and the likelihood that substantial numbers of Tier 2 locomotives may be approaching their first scheduled remanufacture by 2012.

These proposed remanufactured locomotive standards represent PM reductions of about 50 percent, and (for Tier 0 locomotives with separate loop intake air cooling) NOX reductions of about 20 percent. Significantly, these reductions would be substantial in the early years. This would be important to State Implementation Plans (SIPs) being developed to achieve attainment with national ambient air quality standards (NAAQS), owing to the 2008 start date and relatively rapid remanufacture schedule (roughly every 7 years, though it varies by locomotive model and age).

(ii) Newly-Built Locomotive Standards

We are requesting comment on whether additional NOX emission reductions would be feasible and appropriate for Tier 3 locomotives in the 2012 timeframe. There are proven diesel technologies not currently employed in Tier 2 locomotives that can significantly reduce NOX emissions, most notably cooled exhaust gas recirculation (EGR). Although employed successfully in the heavy-duty highway diesel sector since 2003, a considerable development and redesign program would need to be undertaken by locomotive manufacturers to apply cooled EGR to Tier 3 locomotives. This development work would not be limited to the engine but would include substantial changes to the locomotive chassis to handle the higher levels of heat rejection (engine cooling demand) required for cooled EGR. We project that it would require a similar degree of engineering time and effort to develop a cooled EGR solution for locomotive diesel engines as it will to develop the urea SCR based solution upon which we are basing our proposed Tier 4 NOX standard. Therefore, we have not considered the application of cooled EGR in setting our proposed Tier 3 standard.

It may be possible to reoptimize existing Tier 2 NOX control technologies, most notably injection timing retard (used to some degree on all diesel locomotives), to achieve a more modest NOX reduction of 10 to 20 percent from the current Tier 2 levels. In fact, a version of General Electric's Tier 2 locomotive is available today that achieves such NOX reductions for special applications such as the California South Coast Locomotive Fleet Average Emissions Program. In general, the use of injection timing retard to control NOX emissions comes with a tradeoff against fuel economy, durability and increased maintenance depending upon the degree to which injection timing retard is applied. Experience with on-highway trucks suggests that a 20 percent NOX reduction based solely on injection timing retard could result in an increase of fuel consumption as much as 5 percent. We request comment on the feasibility and other impacts of applying technologies such as these in the Tier 3 timeframe. We also request comment on the extent to which any workload-based impediments to applying such technologies in Tier 3 could be addressed via balancing it by obtaining less than the proposed NOX reductions from remanufactured locomotives. We believe that a Tier 3 NOX standard below 5 g/bhp-hr might be achievable with a limited impact if additional engineering resources were invested to optimize such a system for general line-haul application. We encourage commenters supporting lower NOX levels for Tier 3 locomotives to address whether some tradeoff in engineering development (or emissions averaging) between new Tier 3 locomotives and remanufactured Tier 0 locomotives might be appropriate. For example, would it be appropriate to set a Tier 3 NOX standard at 4.5 g/bhp-hr, but relax the NOX standard for later model Tier 0 locomotives to 8.0 g/bhp-hr instead of 7.4 g/bhp-hr?

We are proposing that a manufacturer may defer meeting the Tier 4 NOX standard until 2017. However, we expect that each manufacturer will undertake a single comprehensive redesign program for Tier 4, using this allowed deferral to work through any implementation and technology prove-out issues that might arise with advanced NOX control technology, but relying on the same basic locomotive platform and overall emission control space allocations for all Tier 4 product years. For this reason we are proposing Start Printed Page 15971that locomotives certified under Tier 4 in 2015 and 2016 without Tier 4 NOX control systems have this system added when they undergo their first remanufacture, and be subject to the Tier 4 NOX standard thereafter.

We are proposing that, starting in Tier 4, line-haul locomotives will not be required to meet standards on the switch cycle. Line-haul locomotives were originally made subject to switch cycle standards to help ensure robust control in use and in recognition of the fact that many line haul locomotives have in the past been used for switcher service later in life. As explained in section III.C(1)(b), the latter is of less concern today. Also, we expect that the aftertreatment technologies used in Tier 4 will provide effective control over a broad range of operation, thus lessening the need for a switch cycle to ensure robust control. We propose that newly-built Tier 3 locomotives and Tier 0 through Tier 2 locomotives remanufactured under this program be subject to switch cycle standards, set at levels above the line-haul cycle standards (Table III-1) in the same proportion that the original Tier 0 through Tier 2 switch cycle standards are above their corresponding line-haul cycle standards. See section III.C(1)(b) for details.

(b) Switch Locomotives

Our 1998 locomotive rule included some provisions aimed at addressing emissions from switch locomotives. We adopted a set of switcher standards and a switcher test cycle. This cycle made use of the same notch-by-notch test data as the line haul cycle, but reweighted these notch-specific emission results to correspond to typical switcher duty. In addition to controlling emissions from dedicated switchers, we viewed this cycle as adding robustness to the line-haul emissions control program. For this reason, and because aging line-haul locomotives have often in the past found utility as switchers, we subjected all regulated locomotives to the switch cycle. We also allowed for dedicated switch locomotives, defined as locomotives designed or used primarily for short distance operation and using an engine with rated power at 2300 hp (1700 kW) or less, to be optionally exempted from the line-haul cycle standards.

There have been a number of changes in the rail industry since our 1998 rulemaking that are relevant to switchers. First, locomotives marketed for line-haul service have continued to increase in size, to a point where today's 4000+hp (3000+kW) line-haul locomotives are too large for practical use in switching service. Second, there have been practically no U.S. sales of newly-built switchers by the primary locomotive builders, EMD and GE, for many years. Third, smaller builders have entered this market, selling new or refurbished locomotives with one to three newly-built diesel engines originally designed for the nonroad equipment market, but recertified under Part 92, or sold under the 40 CFR 92.907 provisions that allow limited sales of locomotives using nonroad-certified engines. Fourth, although this new generation of switchers has shown great promise, their purchase prices on the order of a million dollars or more, compared to the relatively low cost of maintaining old switchers, have limited sales primarily for use in California and Texas where state government subsidies are available.

All of these factors together have produced a situation in which the current fleet of old switchers, including many pre-1973 locomotives not subject to any emissions standards, is maintained and kept in service. Because they have relatively light duty cycles and generally operate very close to repair facilities, they can be maintained almost indefinitely. Though many have poor fuel economy, this alone is not of great enough concern to the railroads to warrant replacing them because even very busy switchers consume a fraction of the fuel used by long-distance line-haul locomotives.

At the same time, these older switch locomotives have come under increasing public scrutiny. When operated in railyards located in urban neighborhoods, they have often become the focus of complaints from citizens groups about noise, smoke, and other emissions, and state and local governments have begun to place a higher priority on reducing their emissions.[101]

We note that switchers (or any other locomotives) that have not been remanufactured to EPA standards are not considered covered by the full preemption of state and local emission standards in section 209(e)(1) of the Clean Air Act, which applies to standards relating to the control of emissions from new locomotive engines. Similarly, the preemption that does apply for locomotives that are certified to EPA standards does not generally apply for any locomotive that has significantly exceeded its useful life. The provisions of section 209(e)(2) pertaining to other nonroad engines would apply for such engines, as well as other engines used in locomotives excluded from the definition of “new.” Such engines may be subject to regulation by California and other states.

As discussed in section II.B, we too are concerned that emissions from locomotives in urban railyards, many of which are switch locomotives, are causing substantial adverse health effects. Some railroads have been attempting to address these concerns, adopting voluntary idling restrictions and, where government subsidies are available, replacing older switchers with cleaner, quieter new-generation switchers. In light of these trends and market realities, we believe it is appropriate to propose standards and other provisions specific to switch locomotives, aimed at obtaining substantial overall emission reductions from this important fleet of locomotives.

We are proposing Tier 3 and 4 emission standards for newly-built switch locomotives, shown in Table III-2, based on the capability of the Tier 3 and 4 nonroad engines that will be available to power switch locomotives in the future under our clean nonroad diesel program. We propose to retain the existing switch locomotive test cycle upon which compliance with these standards would be measured, but not to apply the line-haul standards and cycle to Tier 3 and 4 switchers, in light of the divergence that has occurred in the design of newly-built switch and line-haul locomotives. We also propose that Tier 0, 1, and 2 switch locomotives certified only on the switch cycle (as allowed in our Part 92 regulations), be subject to a set of remanufactured locomotive standards equivalent to our proposed program for remanufactured line-haul locomotives, with proportional levels of emission reductions. These standards are also the switch cycle standards for the Tier 3 and earlier line-haul locomotives that are subject to compliance requirements on the switch cycle. In the case of the Tier 3 line-haul locomotives, we are proposing that the Tier 2 switch cycle standards be applied rather than the Tier 3 standards for dedicated switchers because the latter are based on nonroad engines.Start Printed Page 15972

Table III-2.—Proposed Emission Standards for Switch Locomotives

[g/bhp-hr]

Switch locomotive standards apply to:PMNOXHCDate
Remanufactured Tier 00.2611.82.102008 as available, 2010 required.
Remanufactured Tier 10.2611.01.202008 as available, 2010 required.
Remanufactured Tier 20.138.10.602008 as available, 2013 required.
Tier 30.105.00.602011.
Tier 40.031.30.142015.

Standards and implementation dates for large nonroad engines vary by horsepower and by whether or not the engine is designed for portable electric power generation (gensets), as shown in Table III-3. This is significant for the switch locomotive program because it has been the practice for switch locomotive builders to use a variety of nonroad engine configurations. For example, a manufacturer building a 2100 hp switcher using nonroad engines in 2011 could team three 700 hp engines designed to the nonroad Tier 4 standards of 0.01 g/bhp-hr PM and 0.30 g/bhp-hr NOX, or two 1050 hp engines at 0.075/2.6 g/bhp-hr PM/NOX, or a single 2100 hp engine at 0.075/0.50 or 0.075/2.6 g/bhp-hr PM/NOX, depending on if the engine is a genset engine or not.

As discussed in the nonroad Tier 4 rulemaking in which we set these standards, we believe that the standards set for all of these nonroad engines achieve the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available, with appropriate consideration to factors listed in the Clean Air Act. There are reasons for a switcher manufacturer to choose one configuration of engines over another related to function, packaging, reliability and other factors. We believe that limiting a manufacturer's choice to only the cleanest configuration in any given year would hinder optimum designs and thereby would tend to work against our goal of encouraging the turnover of the current fleet of old switchers. Furthermore, we note that there is no single large engine category that consistently has the most stringent nonroad Tier 4 PM and NOX standards from year to year. We also note that, because State subsidies for the purchase of new switch locomotives have been clearly tied to their lower emissions, and also because the use of lower-emitting engines can generate valuable ABT credits, there is likely to be continuing pressure driving the industry toward the cleanest nonroad engines available in whatever new switcher market does develop.

Table III-3.—Large Nonroad Engine Tier 4 Standards

[g/bhp-hr]

Rated powerPMNOXModel year
≦750 hp0.01 0.01a 3.0 (NOX+NMHC) 0.302011 2014
750-1200 hp0.075 0.022.6 b 0.502011 2015
>1200 hp0.075 0.02b 0.50 b 0.502011 2015
a 0.30 NOX for 50% of sales in 2011-2013, or alternatively 1.5 g NOX for 100% of sales.
b 2.6 for non-genset engines—setting the long-term Tier 4 standard for these engines was deferred in the Nonroad Tier 4 Rule.

There is one exception to this approach that we consider necessary. In the Tier 4 nonroad engine rule, we deferred setting a final Tier 4 NOX standard for non-genset engines over 750 hp. These are typically used in large bulldozers and mine haul trucks. This was done in order to allow additional time to evaluate the technical issues involved in adapting NOX control technology to these applications and engines (69 FR 38979, June 29, 2004). We believe it is appropriate to propose a Tier 4 NOX standard for switch locomotives in 2015 based on SCR technology, as we are proposing for line-haul locomotives in 2017. We believe this to be feasible because the switch locomotive designer will have a variety of nonroad engine choices equipped with SCR available in 2015, such as multiple <750 hp engines or larger genset engines, an opportunity that is not available to large nonroad machine designers due to functional and packaging constraints. To set a non-SCR based standard for switch locomotives indefinitely, or to wait to do so after we set the final Tier 4 NOX standard for mobile machine engines above 750 hp, would create significant uncertainty for the manufacturers and railroads, and would be contrary to our intent to reduce locomotive emissions in switchyards. We note too that SCR introduction in the fairly limited fleet of newly-built switchers likely to exist in 2015 and 2016 provides an opportunity for railroads to become familiar with urea handling and SCR operation in accessible switchyards, before large scale introduction in the far-ranging line-haul fleet.

Although we are factoring the current practice of building new switchers powered by nonroad-certified engines into the design of the program, it is not our intent to discourage the development and sale of traditional medium-speed engine switch locomotives. We have evaluated the proposed Tier 3 and 4 standards in this context and have concluded that they will be feasible for switchers using medium-speed engines as well as higher-speed nonroad engines.

Because in today's market the certifying switch locomotive manufacturer is typically a purchaser of nonroad engines and not involved in their design, we see the value in providing a streamlined option to help in the early implementation of this program. As described in Section IV, we are proposing that, for a program start-Start Printed Page 15973up period sufficient to encourage the turnover of the existing switcher fleet to the new cleaner engines, switch locomotives may use nonroad-certified engines without need for certification under the locomotive program. Because of large differences in how the locomotive and nonroad programs operate in such areas as useful life and in-use testing, we do not believe it appropriate to allow locomotive ABT credits to be generated or used by locomotives sold under this option, though of course this would not preclude nonroad engine ABT credits under that program. For the same reasons, we also think it makes sense to eventually sunset this option after it has served its purpose of encouraging the early introduction of new low-emitting switch locomotives. We propose that the streamlined path be available for 10 years, through 2017, and ask for comment on whether a shorter or longer interval is appropriate, taking into account the turnover incentive provisions described below. We are proposing other compliance and ABT provisions relevant to switch locomotives as discussed in section IV.B(1), (2), (3), and (9).

Finally, we are proposing a rewording of the definition of a switch locomotive to make clear that it is the total switch locomotive power rating that must be below 2300 hp to qualify, not the engine power rating, and to drop the unnecessary stipulation that it be designed or used primarily for short distance operation. This clears up the ambiguity in the current definition over multi-engine switchers.

(c) Reduction of Locomotive Idling Emissions

Even in very efficient railroad operations, locomotive engines spend a substantial amount of time idling, during which they emit harmful pollutants, consume fuel, create noise, and increase maintenance costs. A significant portion of this idling occurs in railyards, as railcars and locomotives are transferred to build up trains. Many of these railyards are in urban neighborhoods, close to where people live, work, and go to school.

Short periods of idling are sometimes unavoidable, such as while waiting on a siding for another train to pass. Longer periods of idling operation may be necessary to run accessories such as cab heaters/air conditioners or to keep engine coolant (generally water without anti-freeze to maximize cooling efficiency) from freezing and damaging the engine if an auxiliary source of heat or power is not installed on the locomotive. Locomotive idling may also occur due to engineer habits of not shutting down the engine, and the associated difficulty in determining just when the engine can be safely shut down and for how long.

Automatic engine stop/start (AESS) systems have been developed to start or stop a locomotive engine based on parameters such as: ambient temperature, battery charge, water and oil temperature, and brake system pressure. AESS systems have been proven to reliably and safely reduce unnecessary idling. Typically they will shutdown the locomotive after a specified period of idling (typically 15-30 minutes) as long as the parameters are all within their required specifications. If one of the aforementioned parameters goes out of its specified range, the AESS will restart the locomotive and allow it to idle until the parameters have returned to their required limits. Although developed primarily to save fuel, AESS systems also reduce idling emissions and noise by reducing idling time. Any emissions spike from engine startup has been found to be minor, and thus idle emissions are reduced in proportion to idling time eliminated. It is expected that overall PM and NOX idling emission reductions of up to 50 percent can be achieved through the use of AESS.

A further reduction in idling emissions can be achieved through the use of onboard auxiliary power units (APUs), either as standalone systems or in conjunction with an AESS. There are two main manufacturers of APUs, EcoTrans which manufacturers the K9 APU, and Kim Hotstart which manufactures the Diesel Driven Heating System (DDHS). In contrast to AESS, which works to reduce unnecessary idling, the APU goes further by also reducing the amount of time when locomotive engine idling is necessary, especially in cold weather climates. APUs are small (less than 50 hp) diesel engines that stop and start themselves as needed to provide heat to both the engine coolant and engine oil, power to charge the batteries and to run necessary accessories such as those required for cab comfort. This allows the much larger locomotive engine to be shut down while the locomotive remains in a state of readiness thereby reducing fuel consumption without the risk of the engine being damaged in cold weather. If an APU does not have the capability of an AESS built in, it may need to be installed in conjunction with one in order to receive the full complement of idle reductions that the combination of technologies can provide. The APUs are nonroad engines compliant with EPA or State of California nonroad engine standards, and emit at much lower levels than an idling locomotive.

Installation of an APU today costs approximately $25,000 to $35,000; while an AESS can cost anywhere from $7,500 to $15,000.[102] The costs vary depending on the model and configuration of the locomotive on which the equipment is being installed, and would likely be substantially lower if incorporated into the design of a newly-built locomotive. The amount of idle reduction each system can provide is also dependent on a number of variables, such as what the function of the locomotive is (e.g. a switcher or a line-haul), where it operates (i.e. geographical area), and what its operating characteristics are (e.g. number of hours per day it operates). The duty cycles in 40 CFR 92.132, based on real world data available at the time they were adopted in 1998, indicate a line haul locomotive idles nearly 40% of its operating time, and a switcher locomotive idles nearly 60% of its operating time. This idling time can be further divided into low idle (when there is no load on the engine) and normal idle (when there is a load on the engine). Only low idle can be reduced by an AESS, while an APU can reduce normal idle (or idle in a higher notch such as notch 3 which can burn up to 11 gallons per hour). Another difference between the two types of idle is the fuel consumption rate which is less at low idle than normal idle (2.4-3.6 gallons per hour vs. 2.9-5.4 gallons per hour, based on Tier 2 certification data).

Although there is a gradual trend in the railroad industry toward wider use of these types of idle control devices, we believe it is important for ensuring air quality benefits to propose that idle controls be required as part of a certified emission control system. We are proposing that at least an AESS system be required on all new Tier 3 and Tier 4 locomotives, and also installed on all existing locomotives that are subject to the new remanufactured engine standards, at the point of first remanufacture under the new standards, unless the locomotive is already equipped with idle controls. Specifically, we are requiring that locomotives equipped with an AESS device under this program must shut down the locomotive engine after no more than 30 continuous minutes of idling, and be able to stop and start the engine at least six times per day without Start Printed Page 15974causing engine damage or other serious problems. The system must prevent the locomotive engine from being restarted to resume extended idling unless one of the following conditions necessitates such idling: to prevent engine damage such as damage caused by coolant freezing, to maintain air brake pressure, to perform necessary maintenance, or to otherwise comply with applicable government regulations. EPA approval of alternative criteria could be requested provided comparable idle emissions reduction is achieved.

As described in the RIA, it is widely accepted that for most locomotives, the fuel savings that result in the first several years after installation of an AESS system will more than offset the cost of adding the system to the locomotive. Given these short payback times for adding idle reduction technologies to a typical locomotive, normal market forces have led the major railroads to retrofit many of their locomotives with such controls. However, as is common with pollution, market forces generally do not account for the external social costs of the idling emissions. This proposal addresses those locomotives for which the railroads determine that the fuel savings are insufficient to justify the cost of the retrofit. We believe that applying AESS to these locomotives is appropriate when one also considers the very significant emissions reductions that would result, as well as the longer term fuel savings. We request comment on the need for this requirement. We also request comment regarding the reasons why a railroad might choose not to apply AESS absent this provision. Are there costs for AESS and retrofits that are higher than our analysis would suggest? Are there other reasons that would lead a railroad to not adopt AESS universally?

Even though we are proposing to require only AESS systems, we encourage the additional use of APUs by providing in our proposed test regulations a way for the manufacturer to appropriately account for the emission benefits of greater idle reduction. See Section IV.B(8) for further discussion. We are not proposing that APUs must be installed on every locomotive because it is not clear how much additional benefit they would provide outside of regions and times of the year where low temperatures or other factors that warrant the use of an APU exist, and they do involve some inherent design and operational complexities that could not be justified without commensurate benefits. We are however asking for comment on requiring that some subset of new locomotives be equipped with APUs where feasible and beneficial. We are also asking for comments on whether to adopt a regulatory provision that would exempt a railroad from AESS and/or APU requirements if it demonstrated that it was achieving an equal or greater degree of idle reduction using some other method.

(d) Load Control in a Locomotive Consist

A locomotive consist is the linking of two or more locomotives in a train, typically where the lead locomotive has control over the power and dynamic brake settings on the trailing locomotives. For situations where locomotives are operated in a consist, EPA is requesting comment on how the engine loads could be managed in a way which reduces the combined emissions of the consist, and in what way our program can be set up to encourage such reductions. Consists are commonly used in long trains to achieve the power and traction levels necessary to move, stop, and control the train. The trailing locomotives can be directly-coupled to the lead locomotive, or, they may be placed anywhere along the train and controlled remotely by the lead. The load settings of the individual locomotives that make up a consist are not always equal—for example, if the train has crested a hill, the leading locomotive(s) could be operating under dynamic brake (to control the speed of the train) while the trailing locomotives could be producing propulsion power (to reduce strain on the couplers). Depending on the load, track, terrain, and weather conditions, it is conceivable that the engine loads of a consist could be managed to provide the lowest fuel consumption for the power/traction needed. For example, the train power can be distributed so that the lead engine is operating at its optimum brake-specific fuel consumption point while trailing engines are operated at reduced power settings and/or shut down. The capability to manage and distribute engine power in a locomotive consist is available on the market today.

We have been made aware that it may be possible to optimize the configuration of locomotives in a consist for emissions performance without compromising other key goals such as fuel economy and safety. Our proposed regulations do not explicitly take such possible optimization into account. However, if commenters believe that significant emission reductions can be attained by controlling the engine loads in a consist (beyond those attained by the current practice of operating the consist to achieve the lowest fuel consumption rate), we would solicit their views on how to calculate the emissions reduction and on how the in-use operation of the consist could be logged and reported. For example, it may be appropriate to allow a manufacturer to use alternative notch weightings tailored to operation in an emissions-optimized consist in demonstrating compliance with the emissions standards, thus providing added flexibility in designing such locomotives to meet the standards.

(2) Marine Standards

We are also proposing new emissions standards for newly-built marine diesel engines with displacements under 30 liters per cylinder, including those used in commercial, recreational, and auxiliary power applications. As for locomotives, our ANPRM described a one-step marine diesel program that would bring about the introduction of high-efficiency exhaust aftertreatment in this sector. Just as for locomotives, our analyses of the technical issues related to the application of aftertreatment technologies to marine engines, informed by our many discussions with stakeholders, have resulted in a proposal for new standards in multiple steps, focused especially on the engines with the greatest potential for large PM and NOX emission reductions. Our technical analyses are summarized in section III.D and are detailed in the draft RIA.

In contrast to the locomotive sector, the marine diesel sector covered by this rule is quite diverse. Commercial propulsion applications range from small fishing boats to Great Lakes freighters. Recreational propulsion applications range from sailboats to super-yachts. Similarly, auxiliary power applications range from small gensets, to generators used on barges, to large power-generating units used on ocean-going vessels. Many of the propulsion engines are used to propel high-speed planing boats, both commercial and recreational, where low weight and high power density are critically important. Some engines are situated in crowded engine compartments accessed through a hatch in the deck, while others occupy relatively spacious engine rooms. All of them share a high premium on reliability, considering the potentially serious ramifications of engine failure while underway.

The resulting diversity in engine design characteristics is correspondingly large. Sizes range from a few horsepower to thousands of horsepower. Historically, we have categorized marine engines for standards-setting purposes based on Start Printed Page 15975cylinder displacements: C1 engines of less than 5 liters/cylinder, C2 from 5 to 30 liters/cylinder, and Category 3 (C3) at greater than 30 liters/cylinder. (These C3 engines typically power ocean-crossing ships and burn residual fuel; we are not including such engines in this proposal). Our past standard-setting efforts have found it helpful to make further distinctions as well, considering small (less than 37 kW (50 hp)) engines and C1 recreational engines as separate categories.

Recreational engines typically power recreational vessels designed primarily for speed, and this imposes certain constraints on the type of engine they can use. For a marine vessel to reach high speeds, it is necessary to reduce the surface contact between the vessel and the water, and consequently these vessels typically operate in a planing mode. Planing imposes important design requirements, calling for low vessel weight and short periods of very high power— and thus prompting a need for high power density engines. The tradeoff is less durability, and recreational engines are correspondingly warranted for fewer hours of operation than commercial marine engines. These special characteristics are represented in EPA duty-cycle and useful life provisions for recreational marine engines.

Unlike the locomotive sector, the vast majority of marine diesel engines are derivatives of land-based nonroad diesel engines. Marine diesel engine sales are significantly lower (by 10 or even 100 fold) than the sales of the land-based nonroad engines from which they are derived. For this reason, changes to marine engine technology typically follow the changes made to the parent nonroad engine. For example, it may be economically infeasible to develop and introduce a new fuel system for a marine diesel engine with sales of 100 units annually, while being desirable to do so for a land-based nonroad diesel engine with sales of 10,000 or more units annually. Further, having developed a new technology for land-based diesel engines, it is often cheaper to simply apply the new technology to the marine diesel engine rather than continuing to carry a second set of engine parts within a manufacturing system for a marginal number of additional sales. Recognizing this reality, our proposed marine standards are phased in to follow the introduction of similar engine technology standards from our Nonroad Tier 4 emissions program. In most cases, the corresponding marine diesel standards will follow the Nonroad Tier 4 standards by one to two years.

We are proposing to retain the per-cylinder displacement approach to establishing cutpoints for standards, but are revising and refining it in several places to ensure that the appropriate standards apply to every group of engines in this very diverse sector, and to provide for an orderly phase-in of the program to spread out the redesign workload burden:

(1) We are proposing to move the C1/C2 cutpoint from 5 liters/cylinder to 7 liters/cylinder, because the latter is a more accurate cutpoint between today's high- and medium-speed diesels (in terms of revolutions per minute (rpm)), with their correspondingly different emissions characteristics.

(2) We also propose to revise the per-cylinder displacement cutpoints within Category 1 to better refine the application of standards.

(3) An additional differentiation is proposed between high power density engines typically used in planing vessels and standard power density engines, with a cutpoint between them set at 35 kW/liter (47 hp/liter). In addition to recreational vessels, the high power-density engines are used in some commercial vessels, including certain kinds of crew boats, research vessels, and fishing vessels. Unlike most commercial vessels, these vessels are built for higher speed, which allows them to reach research fields, oil platforms, or fishing beds more quickly. This proposal addresses the technical challenges related to reducing emissions from engines with high power density.

(4) In the past, we did not formally include marine diesels under 37 kW (50 hp) in Category 1, but regulated them separately as part of the nonroad engine program, referring to them elsewhere as “small marine engines”. They are typically marinized land-based nonroad diesel engines. Because we are now proposing to include these engines in the current marine diesel rulemaking, this distinction is no longer needed and so we are including these engines in Category 1 for Tier 3 and Tier 4 standards.

(5) Finally, we would further group engines by total rated power, especially in regard to setting appropriate long-term aftertreatment-based standards.

Note that we are retaining the differentiation between recreational and non-recreational marine engines within Category 1 because there are differences in the proposed standards for them.

Although this carefully targeted approach to standards-setting results in a somewhat complicated array of emissions standards, we believe it is justified because it maximizes overall emission reductions by ensuring the most stringent standards feasible for a given group of marine engines, and it also helps engine and vessel designers to implement the program in the most cost effective manner. The proposed standards and implementation schedules are shown on Tables III-4-7.

Briefly summarized, the proposed marine diesel standards include stringent engine-based Tier 3 standards, phasing in over 2009-2014. In addition, the proposed standards include aftertreatment-based Tier 4 standards for engines at or above 600 kW (800 hp), phasing in over 2014-2017, except that Tier 4 would not apply to recreational engines under 2000 kW (2670 hp). For engines of power ratings not included in the Tier 3 and Tier 4 tables, the previous tier of standards (Tier 2 or Tier 3, respectively) continues to apply.

Table III-4.—Proposed Tier 3 Standards for Marine Diesel C1 Commercial Standard Power Density

Rated kWL/cylinderPM g/bhp-hrNOX+HC g/bhp-hrModel year
<19 kW<0.90.305.62009
19-<75 kWa <0.90.225.62009
b 0.22b 3.52014
75-3700 kW<0.90.104.02012
0.9-<1.20.094.02013
1.2-<2.5c 0.084.22014
2.5-<3.5c 0.084.22013
3.5-<7.0c 0.084.32012
a <75 kW engines at or above 0.9 L/cylinder are subject to the corresponding 75-3700 kW standards.
b Option: 0.15 PM/4.3 NOX in 2014.Start Printed Page 15976
c This standard level drops to 0.07 in 2018 for <600 kW engines.

Table III-5.—Proposed Tier 3 Standards for Marine Diesel C1 Recreational and Commercial High Power Density

Rated kWL/cylinderPM g/bhp-hrNOX+HC g/bhp-hrModel year
<19 kW<0.90.305.62009
19-<75 kWa <0.90.225.62009
b 0.22b 3.52014
<0.90.114.32012
75—3700 kW0.9-<1.20.104.32013
1.2-<2.50.094.32014
2.5-<3.50.094.32013
3.5-<7.00.094.02012
a <75 kW engines at or above 0.9 L/cylinder are subject to the corresponding 75-3700 kW standards.
b Option: 0.15 PM/4.3 NOX+HC in 2014.

Table III-6.—Proposed Tier 3 Standards for Marine Diesel C2

Rated kWL/cylinderPM g/bhp-hrNOX+HC g/bhp-hrModel year
=<3700 kW7-<150.104.62013
15-<20a 0.20a 6.52014
20-<250.207.32014
25-<300.208.22014
a For engines at or below 3300 kW in this group, the PM/NOX+HC Tier 3 standards are 0.25/5.2.

Table III-7.—Proposed Tier 4 Standards for Marine Diesel C1 and C2

Rated kWPM g/bhp-hrNOX g/bhp-hrHC g/bhp-hrModel year
>3700 kWa 0.091.30.142014
0.041.30.14b 2016
1400-3700 kW0.031.30.14c 2016
600-<1400 kW0.031.30.14b 2017
a This standard is 0.19 for engines with 15-30 liter/cylinder displacement.
b Optional compliance start dates are proposed within these model years; see discussion below.
c Option for engines with 7-15 liter/cylinder displacement: Tier 4 PM and HC in 2015 and Tier 4 NOX in 2017.

The proposed Tier 3 standards for engines with rated power less than 75 kW (100 hp) are based on the nonroad diesel Tier 2 and Tier 3 standards, because these smaller marine engines are largely derived from (and often nearly identical to) the nonroad engine designs. The relatively straightforward carry-over nature of this approach also allows for an early implementation schedule, model year 2009, providing substantial early benefits to the program. However, some of the less than 75 kW nonroad engines are also subject to aftertreatment-based Tier 4 nonroad standards, and our proposal would not carry these over into the marine sector, due to vessel design and operational constraints discussed in Section III.D. Because of the preponderance of both direct- and indirect-injection diesel engines in the 19 to 75 kW (25-100 hp) engine market today, we are proposing two options available to manufacturers for meeting Tier 3 standards on any engine in this range, as indicated in Table III-4. One option focuses on lower PM and the other on lower NOX, though both require substantial reductions in both PM and NOX and would take effect in 2014.

With important exceptions, we propose that marine diesel engines at or above 75 kW (100 hp) be subject to new emissions standards in two steps, Tier 3 and Tier 4. The proposed Tier 3 standards are based on the engine-out emission reduction potential of the nonroad Tier 4 diesel engines which will be introduced beginning in 2011. Tier 3 standards for C1 engines would generally take effect in 2012, though for some engines, they would start in 2013 or 2014. We are not basing our proposed marine Tier 3 emission standards on the existing nonroad Tier 3 emission standards for two reasons. First, the nonroad Tier 3 engines will be replaced beginning in 2011 with nonroad Tier 4 engines, and given the derivative nature of marine diesel manufacturing, we believe it is more appropriate to use those Tier 4 engine capabilities as the basis for the proposed marine standards. Second, the advanced fuel and combustion systems that we expect these Tier 4 nonroad engines to apply will allow approximately a 50 percent reduction in PM when compared to the reduction potential of the nonroad Tier 3 engines. The proposed Tier 3 standards levels would vary slightly, from 0.08 to 0.11 g/bhp-hr (0.11 to 0.15 g/kW-hr) for PM and from 4.0 to 4.3 g/bhp-hr (5.4 to 5.8 g/kW-hr) for NOX+HC. Tier 3 standards for C2 engines would take effect in 2013 or 2014, depending on engine displacement, and standards levels would also vary, from 0.10 to 0.25 g/bhp-hr (0.14 to 0.34 g/kW-hr) for PM and 4.6 to 8.2 g/bhp-hr (6.2 to 11.0 g/kW-hr) for NOX+HC. For the largest C2 engines, those above 3700 kW (4900 hp), the NOX+HC standard would remain at the Tier 2 levels until Tier 4 begins for these engines in 2014.

We are proposing that high-efficiency aftertreatment-based Tier 4 standards be Start Printed Page 15977applied to all commercial and auxiliary C1 and C2 engines over 600 kW (800 hp). These standards would phase in over 2014-2017. Marine diesels over 600 kW, though fewer in number, are the workhorses of the inland waterway and intercoastal marine industry, running at high load factors, for many hours a day, over decades of heavy use. As a result they also account for the very large majority of marine diesel engine emissions. However, for engines at or below 600 kW, our technical analysis indicates that applying aftertreatment to them appears at this time not to be feasible. There are many reasons for this preliminary conclusion, varying in relative importance with engine size and application, but generally including insufficient space in below-deck engine compartments, catalyst packaging limitations for water-injected exhaust systems, poor catalyst performance in water-jacketed exhaust systems, and weight constraints in planing hull vessels.

Although with time and investment these issues may be resolvable for some under 600 kW (800 hp) applications, we are not, at this time, proposing Tier 4 standards for these engines. We may do so at some point in the future, such as after the successful prove-out of aftertreatment in the larger marine engines and in nonroad diesel engines have established a clearer technology path for extension to these engines. The approach taken in this proposal concentrates Tier 4 design and development efforts into the engine and vessel applications where they can do the most good.

We are confident that there is a subset of recreational vessels that are large enough to accommodate the added size of engines equipped with aftertreatment and that have appropriate maintenance procedures to ensure that the aftertreatment systems are appropriately maintained, for example, because they have a professional crew as opposed to being maintained by the owner. Based on a review of publicly available sales literature, we believe that at least the subset of recreational vessels with engines at rated power above 2000 kW (2760 hp) have the space and design layout conducive to aftertreatment and professional crews such that aftertreatment-based standards are feasible. Therefore, we are proposing to apply the Tier 4 standards to recreational marine diesel engines at rated power above 2000 kW, but we request comment on whether this is the appropriate threshold, along with any available information supporting the commenter's view. We also request comment on the issue of ULSD availability for these vessels in places that they may visit outside the United States. The rapid pace at which the industrial nations are shifting to ULSD has surpassed expectations. By no means does this ensure its availability in every port that might be frequented by large U.S. yachts, but it does give confidence that ULSD will be a global product, and certainly not confined to the coastal U.S. when Tier 4 yachts begin to appear in 2016. These large yachts are operated by professional crews who plan their itineraries ahead of time and are unlikely to put in for fuel without checking out the facility ahead of time, though quite possibly this may require somewhat more diligence in the early years of the program while the ULSD-needing fleet is ramping up in size. We also expect that, from the marinas' perspective, those frequented by these affluent visitors typically covet this business today, and will likely be reticent to leave ULSD off the list of offerings and amenities aimed at attracting them.

We are setting the Tier 4 standards for most engines above 600 kW (800 hp) at 0.03 g/bhp-hr (0.04 g/kW-hr) for PM, based on the use of PM filters, and 1.3 g/bhp-hr (1.8 g/kW-hr) for NOX based on the use of urea SCR systems. The largest marine diesel engines, those above 3700 kW (4900 hp), would be subject to this SCR-based NOX standard in 2014, along with a new engine-based PM standard. The Tier 4 PM standard for these engines would then start in 2016, with the addition of a filter-based 0.04 g/bhp-hr (0.06 g/kW-hr) standard. See section III.C(3) for a discussion of the Tier 4 HC standard.

Note that the implementation schedule in the above marine standards tables is expressed in terms of model years, consistent with past practice and the format of our regulations. However, in two cases we believe it is appropriate to provide a manufacturer the option to delay compliance somewhat, as long as the standards are implemented within the indicated model year. Specifically, we are proposing to allow a manufacturer to delay Tier 4 compliance within the 2017 model year for 600-1000 kW (800-1300 hp) engines by up to 9 months (but no later than October 1, 2017) and, for Tier 4 PM, within the 2016 model year for over 3700 kW (4900 hp) engines by up to 12 months (but no later than December 31, 2016). We consider this option to delay implementation appropriate in order to give some flexibility in spreading the implementation workload and ensure a smooth transition to the long-term Tier 4 program.

The proposed Tier 4 standards for locomotives and C2 diesel marine engines of comparable size are at the same numerical levels but differ somewhat in implementation schedule, with locomotive Tier 4 starting in 2015 for PM and 2017 for NOX, and diesel marine Tier 4 for both PM and NOX starting in 2016 (for engines in the 1400-3700 kW (1900-4900 hp) range). We consider these implementation schedules to be close enough to warrant our providing an option to meet either schedule for these marine engines, aimed at facilitating the development of engines for both markets, a common practice today. Because the locomotive Tier 4 phase-in is offset by only one year on either side of the marine Tier 4 2016 date, we do not expect this option to introduce major competitiveness issues between manufacturers who will be designing engines for both markets and those who will be designing for only the marine market. Furthermore, we see no reason to make this option available only those who make locomotive products, and are therefore proposing its availability to any manufacturer. Comment is requested on the need for the option, and on whether it should be limited to a particular subset of engines.

We note too that the Tier 3 marine standards for locomotive-like marine engines (that is, in the 7-15 liters/cylinder group) although having the same implementation date and numerical PM standard level as locomotive Tier 3, includes a 4.6 g/bhp-hr (6.1 g/kW-hr) NOX+HC standard, compared to the 5.5 g/bhp-hr (7.3 g/kW-hr) NOX standard for locomotive Tier 3. We request comment on whether some provision is needed to avoid the need for designing an engine primarily used in locomotives to meet the marine standard in order to have both ready for Tier 3, on whether sufficient ABT credits are likely to be available to deal with this, and on how to ensure we do not lose environmental benefits or inadvertently create competitiveness problems.

Some marine engine families include engines of the same basic design and emissions performance but achieving widely varying power ratings in engine models marketed through varying the number of cylinders, for example 8 to 20. These families can and do straddle power cutpoints, most notably at the 3700 kW (4900 hp) cutpoint, above which NOX aftertreatment is expected to be needed in 2014 under our proposed standards, and at the 600 kW (800 hp) cutpoint for application of the proposed Tier 4 standards. We understand that manufacturers have concerns about additional design and certification work Start Printed Page 15978needed for an engine family falling into two categories, especially with regard to the 600 and 3700 kW cutpoints which involve very different standards or start dates on either side of the cutpoint. We request comment on whether this concern is a serious one for the manufacturers, on suggestions for how to address it fairly without a loss of environmental benefit, and on whether our not addressing it would cause undesirable shifts in ratings offered in the market in order to stay on one side or the other of the cutpoints. One particular idea on which we request comment is allowing engines above 3700 kW an option to meet the Tier 4 PM requirement in 2014 and the Tier 4 NOX requirement December 31, 2016, similar to the less than 3700 kW option discussed above.

We are concerned that applying the Tier 4 standards to engines above 600 kW (800 hp) may create an incentive for vessel builders who would normally use engines greater than 600 kW to instead use a larger number of smaller engines in a vessel to get the equivalent power output. Generally, the choice of engines for a vessel is directly a function of the work that vessel is intended to do. There may be cases, however, in which a vessel designer that might have used, for example, two 630 kW engines, chooses instead to use three 420 kW engines to avoid the Tier 4 standards. We have concerns about the environmental impacts of such a result. There also may be competitiveness concerns. Therefore, we are seeking comment on whether substitution of several smaller engines for one or two larger engines is likely to occur as a result of differential standards, and on what can be done to avoid it. For example, the Tier 4 standards could be applied to engines in multi-engine vessels with a total power above a certain threshold, such as 1100 kW (1500 hp). We recognize that this would result in a need to equip engines somewhat below 600 kW with aftertreatment devices, but we believe the feasibility concerns such as space constraints discussed above for engines below this cutpoint are diminished in multi-engine vessel designs. Alternatively, we could require vessel manufacturers seeking to use more than two engines to make a demonstration to us that they are not attempting to circumvent the aftertreatment-based requirements, for example by showing that the vessel design they are using traditionally incorporates three or more engines or that there is a specific design requirement that leads to the use of several smaller engines. A third option would be to base the Tier 4 standards on the size (or other characteristics) of the vessel, for vessels that have two or more propulsion engines. Commenters on this issue should address the feasibility and potential market impacts of these potential solutions and are asked to offer their own suggestions as well.

(3) Carbon Monoxide, Hydrocarbon, and Smoke Standards

We are not proposing new standards for CO. Emissions of CO are typically relatively low in diesel engines today compared to non-diesel pollution sources. Furthermore, among diesel application sectors, locomotives and marine diesel engines are already subject to relatively stringent CO standards in Tier 2—essentially 1.5 and 3.7 g/bhp-hr, respectively, compared to the current heavy-duty highway diesel engine CO standard of 15.5 g/bhp-hr. Therefore, under our proposal, the Tier 3 and Tier 4 CO standards for all locomotives and marine diesel engines would remain at current Tier 2 levels and remanufactured Tier 0, 1 and 2 locomotives would likewise continue to be subject to the existing CO standards for each of these tiers. Although we are not setting more stringent standards for CO in Tier 4, we note that aftertreatment devices using precious metal catalysts that we project will be employed to meet Tier 4 PM, NOX and HC standards would provide meaningful reductions in CO emissions as well.

As discussed in section II, HC emissions, often characterized as VOCs, are precursors to ozone formation, and include compounds that EPA considers to be air toxics. As for CO, emissions of HC are typically relatively low in diesel engines today compared to non-diesel sources. However, in contrast to CO standards, the line-haul locomotive Tier 2 HC standard of 0.30 g/bhp-hr, though comparable to emissions from other diesel applications in Tier 2 and Tier 3, is more than twice that of the long-term 0.14 g/bhp-hr standard set for both the heavy-duty highway 2007 and nonroad Tier 4 programs. For marine diesel engines the Tier 2 HC standard is expressed as part of a combined NOX+HC standard varying by engine size between 5.4 and 8.2 g/bhp-hr, which clearly allows for high HC levels. Our proposed more stringent Tier 3 NOX+HC standards for marine diesel engines would likely provide some reduction in HC emissions, but we expect that the catalyzed exhaust aftertreatment devices used to meet the proposed Tier 4 locomotive and marine NOX and PM standards would concurrently provide very sizeable reductions in HC emissions. Therefore, in accordance with the Clean Air Act section 213 provisions outlined in section I.B(3) of this preamble, we are proposing that the 0.14 g/hp-hr HC standard apply for locomotives and marine diesel engines in Tier 4 as well.

We are proposing that the existing form of the HC standards be retained through Tier 3. That is, locomotive and marine HC standards would remain in the form of total hydrocarbons (THC), except for gaseous- and alcohol-fueled engines (See 40 CFR § 92.8 and § 94.8). Consistent with this, the Tier 3 marine NOX+HC standards are proposed to be based on THC, except that Tier 3 standards for less than 75 kW (100 hp) engines would be based on NMHC, consistent with their basis in the nonroad engine program. However, we propose that the Tier 4 HC standards be expressed as NMHC standards, consistent with aftertreatment-based standards adopted for highway and nonroad diesel engines.

As in the case of other diesel mobile sources, we believe that existing smoke standards are of diminishing usefulness as PM levels drop to very low levels, as engines with PM at these levels emit very little or no visible smoke. We are therefore proposing to drop the smoke standards for locomotives and marine engines for any engines certified to a PM family emission limit (FEL) or standard of 0.05 g/bhp-hr (0.07 g/kW-hr) or lower. This allows engines certified to Tier 4 PM or to an FEL slightly above Tier 4 to avoid unnecessary testing for smoke.

D. Are the Proposed Standards Feasible?

In this section we describe the feasibility of the various emissions control technologies we project would be used to meet the standards proposed today. Because of the range of engines and applications we cover in this proposal, and because of the technology that will be available to them for emissions control, our proposed standards span a range of emissions levels. We have identified a number of different emissions control technologies we would expect to be used to meet the proposed standards. These technologies range from incremental improvements to existing engine components for the proposed remanufacturing program to highly advanced catalytic exhaust treatment systems similar to those expected to be used to control emissions from heavy-duty diesel trucks and nonroad equipment.

In this section we first describe the feasibility of emissions control technologies we project would be used Start Printed Page 15979to meet the standards we are proposing for existing engines that are remanufactured as new (i.e., Tier 0, Tier 1, Tier 2). We also describe how these same technologies would be applied to meet our proposed interim standards for new engines (i.e., Tier 3). We conclude this section with a discussion of catalytic exhaust treatment technologies projected to be used to meet our proposed Tier 4 standards. A more detailed analysis of these technologies and the issues related to their application to locomotive and marine diesel engines can be found in the draft Regulatory Impact Analysis (RIA).

(1) Emissions Control Technologies for Remanufactured Engine Standards and for New Tier 3 Engine Standards

In the locomotive sector, emissions standards already exist for engines that are remanufactured as new. Some of these engines were originally unregulated (i.e. Tier 0), and others were originally built to earlier emissions standards (Tier 1 and Tier 2). We are proposing more stringent standards for these engines that apply whenever the locomotives are remanufactured as new. Our proposed remanufactured standards apply to locomotive engines that were originally built as early as 1973.

We project that incremental improvements to existing engine components would be feasible to meet our proposed locomotive remanufactured engine standards. In many cases, similar improvements to these have already been implemented on newly built locomotives to meet our current new locomotive standards. To meet the lower NOX standard proposed for the Tier 0 locomotive remanufacturing program, we expect that improvements in fuel system design, engine calibration and optimization of existing after-cooling systems may be used to reduce NOX from the current 9.5 g/bhp-hr Tier 0 standard to 7.4 g/bhp-hr. These are the same technologies used to meet the current Tier 1 NOX emission standard of 7.4 g/bhp-hr. In essence, locomotive manufacturers will duplicate current Tier 1 locomotive NOX emission solutions and adapt those same solutions to the portion of the existing Tier 0 fleet that can accommodate them. For older Tier 0 locomotives manufactured without separate-circuit cooling systems for intake air charge air cooling, reaching the Tier 1 NOX level will not be possible. For these engines 8.0 g/hp-hr NOX emissions represents the lowest achievable level.

To meet all of our proposed PM standards for the remanufacturing program and for the new locomotive Tier 3 interim standard, we expect that lubricating oil consumption controls will be implemented, along with the ultra low sulfur diesel fuel requirement for locomotive engines (which was previously finalized in our nonroad clean diesel rulemaking). Because of the significant fraction of lubricating oil present in PM from today's locomotives, we believe that existing low-oil-consumption piston ring-pack designs, when used in conjunction with improvements to closed crankcase ventilation systems, will provide significant, near-term PM reductions. These technologies can be applied to all locomotive engines, including those built as far back as 1973. And based upon our on-highway and nonroad clean diesel experience, we also believe that the use of ultra low sulfur diesel fuel in the locomotive sector will assist in meeting the Tier 2 remanufacturing and Tier 3 PM standards. We believe that the combination of reduced sulfate PM and improvement of oil and crankcase emission control to near Tier 3 nonroad or 2007 heavy-duty on-highway levels will provide an approximately 50% reduction in PM emissions.

We believe that some fraction of the remanufacturing systems can be developed and certified as early as 2008, so we are proposing the required usage of Tier 0, Tier 1 and Tier 2 emission control systems as soon as they are available starting in 2008. However, we estimate that it will take approximately 3 years to complete the development and certification process for all of the Tier 0 and Tier 1 emission control systems, so we have proposed full implementation of the Tier 0 and Tier 1 remanufactured engine standards in 2010. We base this lead time on the types of technology that we expect to be implemented, and on the amount of lead time locomotive manufacturers needed to certify similar systems for our current remanufacturing program. The new engine changes necessary to meet the Tier 3 and remanufactured Tier 2 PM emission standards will require additional engine changes leading us to propose an implementation date for those engines of 2012 for Tier 3 engines and 2013 for remanufactured Tier 2 engines. These changes include further improvements to ring pack designs—especially for two-stroke engines, and the implementation of high efficiency crankcase ventilation systems. These technologies are described and illustrated in detail in our draft Regulatory Impact Analysis.

In the marine sector, emissions standards do not currently exist for engines that are remanufactured as new. In today's proposal, we are requesting comment on a marine diesel engine remanufacturing program that would apply to some of these marine engines whenever they are remanufactured as new (see section VII.A(2)). Because we are requesting comment on a marine engine remanufacturing program that essentially parallels our locomotive remanufacturing program, we expect that the same emissions control technologies described above would be implemented for remanufactured marine diesel engines just as for remanufactured locomotive engines.

We are proposing more stringent emissions standards for all newly built marine diesel engines that have a displacement of less than thirty liters per cylinder. For marine diesel engines that are either used in recreational vessels or are rated to produce less than 600 kW of power, we are proposing emissions standards that likely would not require the use of catalytic exhaust treatment technology. We are also proposing similar standards, as interim standards, for marine diesel engines that are used in commercial vessels and are rated to produce 600 kW of power or more (except if greater than 3700 kW). Collectively, we refer to these standards as our Tier 3 marine diesel engine standards.

To meet our proposed Tier 3 marine diesel engine standards, we believe that engine manufacturers will utilize incremental improvements to existing engine components. To meet the lower NOX standards we expect that improvements in fuel system design and engine calibration will be implemented. For Category 1 engines from 75 kW through 560 kW, these technologies would be similar to designs and calibrations that likely will be used to meet our nonroad Tier 4 standards for engines. For Category 1 engines below 75 kW and greater than 560kW, and for Category 2 engines that have cylinder displacements less than 15 L/cylinder, these technologies are similar to designs that will be used to meet our nonroad Tier 3 standards, and our proposed locomotive Tier 3 standards.

In almost all instances, marine diesel engines are derivative of land based nonroad engines or locomotive engines. In order to meet our nonroad Tier 4 emission levels (phased in from 2011-2015), nonroad engines will see significant base engine improvements designed to reduce engine-out emissions. Refer to our nonroad Tier 4 rulemaking for details on the designs and calibrations we expect to be used to meet the Tier 3 standards we are proposing for the lower horsepower marine engines. For example, we expect Start Printed Page 15980marine engines to utilize high-pressure, common-rail fuel injection systems or improvements in unit injector design. When such fuel system improvements are used in conjunction with engine mapping and calibration optimization, the Tier 3 marine diesel engine standards can be met. Since this technology and these components already have been implemented on on-highway, nonroad, and some locomotive engines, they can be applied to marine engines beginning as early as 2009.

Because some marine engines are not as similar to on-highway, nonroad or locomotive engines as others, we believe that full implementation of these technologies for marine engines cannot be accomplished until 2012. We expect that the PM emissions control technologies that will be used to meet our proposed Tier 3 marine diesel engine standards will be similar to the technology used to meet our nonroad Tier 3 PM standards and our proposed locomotive Tier 3 PM standards. That is, we believe that a combination of fuel injection improvements, plus the use of existing low-oil-consumption piston ring-pack designs and improved closed crankcase ventilation systems will provide significant PM reductions. And based upon our on-highway and non-road clean diesel experience, we also believe that the use of ultra low sulfur diesel fuel in the marine sector will assist in meeting the Tier 3 PM standards.

Because all of the aforementioned technologies to reduce NOX and PM emissions can be developed for production, certified, and introduced into the marine engine sector without extended lead-time, we believe that these technologies can be implemented for some engines as early as 2009, and for all engines by 2014. We believe that this later date is needed only for those marine engines that are not similar to other on-highway, nonroad, or locomotive engines.

(2) Catalytic Exhaust Treatment Technologies for New Engines

For marine diesel engines in commercial service that are greater than 600 kW, for all marine engines greater than 2000 kW, and for all locomotives, we are proposing stringent Tier 4 standards based on the use of advanced catalytic exhaust treatment systems to control both PM and NOX emissions. There are four main issues to address when analyzing the application of this technology to these new sources: the efficacy of the fundamental catalyst technology in terms of the percent reduction in emissions given certain engine conditions such as exhaust temperature; its applicability in terms of packaging; its long-term durability; and whether or not the technology significantly impacts an industry's supply chain infrastructure—especially with respect to supplying urea reductant for SCR to locomotives and vessels. We have carefully examined these points, and based upon our analysis (detailed in our draft Regulatory Impact Analysis), we believe that we have identified robust PM and NOX catalytic exhaust treatment systems that are applicable to locomotives and marine engines that also pose a manageable impact on the rail and marine industries' infrastructure.

(a) Catalytic PM Emissions Control Technology

The most effective exhaust aftertreatment used for diesel PM emissions control is the diesel particulate filter (DPF). More than a million light diesel vehicles that are OEM-equipped with DPF systems have been sold in Europe, and over 200,000 DPF retrofits to diesel engines have been conducted worldwide.[103] Broad application of catalyzed diesel particulate filter (CDPF) systems with greater than 90 percent PM control is beginning with the introduction of 2007 model year heavy-duty diesel trucks in the United States. These systems use a combination of both passive and active soot regeneration. CDPF systems utilizing metal substrates are a further development that trades off a degree of elemental carbon soot control for reduced backpressure, improvements in the ability of the trap to clear oil ash, greater design freedom regarding filter size/shape, and greater robustness. Metal-CDPFs were initially introduced as passive-regeneration retrofit technologies for diesel engines designed to achieve approximately 60 percent control of PM emissions. Recent data from further development of these systems for Euro-4 truck applications has shown that metal-CDPF trapping efficiency for elemental carbon PM can exceed 70 percent for engines with inherently low elemental carbon emissions.[104] Data from locomotive testing confirms a relatively low elemental carbon fraction and relatively high organic fraction for PM emissions from medium-speed Tier 2 locomotive engines.[105] The use of an oxidizing catalyst with platinum group metals (PGM) coated directly to the CPDF combined with a diesel oxidation catalyst (DOC) mounted upstream of the CDPF would provide 95 percent or greater removal of HC, including the semi-volatile organic compounds that contribute to PM. Such systems would reduce overall PM emissions from a locomotive or marine diesel engine by upwards of 90 percent.

We believe that locomotive and marine diesel engine manufacturers will benefit from the extensive development taking place to implement DPF technologies in advance of the heavy-duty truck and nonroad PM standards in Europe and the U.S. Given the steady-state operating characteristics of locomotive and marine engines, DPF regeneration strategies will certainly be capable of precisely controlling PM under all conditions and passively regenerating whenever the exhaust gas temperature is >250 °C. Therefore, we believe that the Tier 4 PM standards we are proposing for locomotive and marine diesel engines are technologically feasible. And given the level of activity in the on-highway and nonroad sectors to implement DPF technology, we believe that our proposed implementation dates for locomotive and marine diesel engines are appropriate and achievable.

(b) Catalytic NOX Emissions Control Technology

We have analyzed a variety of technologies available for NOX reduction to determine their applicability to diesel engines in the locomotive and marine sectors. As described in more detail in our draft RIA, we are assuming locomotive and marine diesel engine manufacturers will choose to use—Selective Catalytic Reduction, or SCR to comply with our proposed standards. SCR is a commonly used aftertreatment device for meeting stricter NOX emissions standards in diesel applications worldwide. Stationary power plants fueled with coal, diesel, and natural gas have used SCR for three decades as a means of controlling NOX emissions, and currently, European heavy-duty truck manufacturers are using this technology to meet Euro 5 emissions limits. To a lesser extent, SCR has been introduced on diesel engines in the U.S. market, but the applications have been limited to marine ferryboat and stationary electrical power generation demonstration projects in California and Start Printed Page 15981several of the Northeast states. However, by 2010, when 100 percent of the heavy-duty diesel trucks are required to meet the NOX limits of the 2007 heavy-duty highway rule, several heavy-duty truck engine manufacturers have indicated that they will use SCR technology.[106] [107] While other promising NOX-reducing technologies such as lean NOX catalysts, NOX adsorbers, and advanced combustion control continue to be developed (and may be viable approaches to the standards we are proposing today), our analysis assumes that SCR will be the technology of choice in the locomotive and marine diesel engine sectors.

An SCR catalyst reduces nitrogen oxides to elemental nitrogen (N2) and water by using ammonia (NH3) as the reducing agent. The most-common method for supplying ammonia to the SCR catalyst is to inject an aqueous urea-water solution into the exhaust stream. In the presence of high-temperature exhaust gasses (>200 °C), the urea hydrolyzes to form NH3 and CO2. The NH3 is stored on the surface of the SCR catalyst where it is used to complete the NOX-reduction reaction. In theory, it is possible to achieve 100 percent NOX conversion if the NH3-to-NOX ratio (α) is 1:1 and the space velocity within the catalyst is not excessive. However, given the space limitations in packaging exhaust aftertreatment devices in mobile applications, an α of 0.85-1.0 is often used to balance the need for high NOX conversion rates against the potential for NH3 slip (where NH3 passes through the catalyst unreacted). The urea dosing strategy and the desired α are dependent on the conditions present in the exhaust gas; namely temperature and the quantity of NOX present (which can be determined by engine mapping, temperature sensors, and NOX sensors). Overall NOX conversion efficiency, especially under low-temperature exhaust gas conditions, can be improved by controlling the ratio of two NOX species within the exhaust gas; NO2 and NO. This can be accomplished through use of an oxidation catalyst upstream of the SCR catalyst to promote the conversion of NO to NO2. The physical size and catalyst formulation of the oxidation catalyst are the principal factors that control the NO2-to-NO ratio, and by extension, improve the low-temperature performance of the SCR catalyst.

Recent studies have shown that an SCR system is capable of providing well in excess of 80 percent NOX reduction efficiency in high-power, diesel applications.[108110] SCR catalysts can achieve significant NOX reduction throughout much of the exhaust gas temperature operating range observed in locomotive and marine applications. Collaborative research and development activities between diesel engine manufacturers, truck manufacturers, and SCR catalyst suppliers have also shown that SCR is a mature, cost-effective solution for NOX reduction on diesel engines in other mobile sources. While many of the published studies have focused on highway truck applications, similar trends, operational characteristics, and NOX reduction efficiencies have been reported for marine and stationary applications as well.[111] Given the preponderance of studies and data—and our analysis summarized here and detailed in the draft RIA—we believe that this technology is appropriate for locomotive and marine diesel applications. Furthermore, we believe that locomotive and marine diesel engine manufacturers will benefit from the extensive development taking place to implement SCR technologies in advance of the heavy-duty truck NOX standards in Europe and the U.S. The urea dosing systems for SCR, already in widespread use across many different diesel applications, are expected to become more refined, robust, and reliable in advance of our proposed Tier 4 locomotive and marine standards. Given the steady-state operating characteristics of locomotive and marine engines, SCR NOX control strategies will certainly be capable of precisely controlling NOX under all conditions whenever the exhaust gas temperature is greater than 150 °C.

To ensure that we have the most up-to-date information on urea SCR NOX technologies and their application to locomotive and marine engines, we have met with a number of locomotive and marine engine manufacturers, as well as manufacturers of catalytic NOX emissions control systems. Through our discussions we have learned that some engine manufacturers currently perceive some risk regarding urea injection accuracy and long-term catalyst durability, both of which could result in either less efficient NOX reduction or ammonia emissions. We have carefully investigated these issues, and we have concluded that accurate urea injection systems and durable catalysts already exist and have been applied to urea SCR NOX emissions control systems that are similar to those that we expect to be implemented in locomotive and marine applications.

Urea injection systems applied to on-highway diesel trucks and diesel electric power generators already ensure accurate injection of urea, and these applications have similar—if not more dynamic—engine operation as compared to locomotive and marine engine operation. To ensure accurate urea injection across all engine operating conditions, these systems utilize NOX sensors to maintain closed-loop feedback control of urea injection. These NOX sensor-based feedback control systems are similar to oxygen sensor-based systems that are used with catalytic converters on virtually every gasoline vehicle on the road today. We believe these NOX sensor based control systems are directly applicable to locomotive and marine engines.

Ammonia emissions, which are already minimized through the use of closed-loop feedback urea injection, can be all-but-eliminated with an oxidation catalyst downstream of the SCR catalyst. Such catalysts are in use today and have been shown to be 95% effective at reducing ammonia emissions.

Catalyst durability is affected by sulfur and other chemicals that can be present in some diesel fuel and lubricating oil. These chemicals have been eliminated in other applications by the use of ultra-low sulfur diesel fuel and low-SAPS (sulfated ash, phosphorous, and sulfur) lubricating oil. Locomotive and marine operators already will be using ultra low sulfur diesel by the time urea NOX SCR systems would be needed, and low SAPS oil can be used in locomotive and marine engines. Thermal and mechanical vibration durability of catalysts has been addressed through the selection of proper materials and the design of support and mounting structures that are capable of withstanding the shock and vibration levels present in locomotive and marine applications. More details on catalyst durability and urea injection accuracy are available in the remainder of this section and also in our draft RIA.Start Printed Page 15982

Even though we believe that the issues of catalyst durability and urea injection accuracy have been addressed in existing NOX SCR emissions control systems, we invite comments and the submission of additional information and data regarding catalyst durability and urea injection accuracy.

(c) Durability of Catalytic PM and NOX Emissions Control Technology

Published studies indicate that SCR systems should experience very little deterioration in NOX conversion throughout the life-cycle of a diesel engine.[112] The principal mechanism of deterioration in an SCR catalyst is thermal sintering—the loss of catalyst surface area due to the melting and growth of active catalyst sites under high-temperature conditions (as the active sites melt and combine, the total number of active sites at which catalysis can occur is reduced). This effect can be minimized by design of the SCR catalyst washcoat and substrate for the exhaust gas temperature window in which it will operate. Another mechanism for catalyst deterioration is catalyst poisoning—the plugging and/or chemical de-activation of active catalytic sites. Phosphorus from the engine oil and sulfur from diesel fuel are the primary components in the exhaust stream which can de-activate a catalytic site. The risk of catalyst deterioration due to sulfur poisoning will be all but eliminated with the 2012 implementation of ULSD fuel (<15 ppm S) for locomotive and marine applications. Catalyst deterioration due to phosphorous poisoning can be reduced through the use of engine oil with low sulfated-ash, phosphorus, and sulfur content (low-SAPS oil) and through reduced engine oil consumption. The high ash content in current locomotive and marine engine oils is related to the need for a high total base number (TBN) in the oil formulation. Because today's diesel fuel has relatively high sulfur levels, a high TBN in the engine oil is necessary today to neutralize the acids created when fuel-borne sulfur migrates to the crankcase. With the use of ULSD fuel, acid formation in the crankcase will not be a significant concern. The low-SAPS oil will be available for on-highway use by October 2006 and is specified by the American Petroleum Institute as “CJ-4.” We also expect that Tier 3 locomotive and marine engine designs will have reduced oil consumption in order to meet the Tier 3 PM standards, and that the Tier 4 designs will be an evolutionary development that will apply catalytic exhaust controls to the Tier 3 engine designs. The durability of other exhaust aftertreatment devices, namely the DOC and CDPF, will also benefit from the use of ULSD fuel, reduced oil consumption and low-SAPS engine oil because the reduction in exposure of these devices to sulfur and phosphorous will improve their effectiveness and the reduction in ash loading will increase the CDPF ash-cleaning intervals.

(d) Packaging of Catalytic PM and NOX Emissions Control Technology

We project that locomotive manufacturers will need to re-package/re-design the exhaust system components to accommodate the aftertreatment system. Our analysis shows the packaging requirements for the aftertreatment system are such that they can be accommodated within the envelope defined by the Association of American Railroads (AAR) Plate “L” clearance diagram for freight locomotives.[113] Typical volume required for the SCR catalyst and post-SCR ammonia slip catalyst for Euro V and U.S. 2010 heavy-duty truck applications is approximately 2 times the engine displacement, and the upstream DOC/CDPF volume is approximately 1-1.5 times the engine displacement. Due to the longer useful life and maintenance intervals required for locomotive applications, we estimate that the SCR catalyst volume will be sized at approximately 2.5 times the engine displacement, and the combined DOC/CDPF volume will be approximately 1.7 times the engine displacement. For an engine with 6 ft3 of total displacement, the volume requirement for the aftertreatment components would be approximately 25 ft3. EPA engineers have examined Tier 2 EMD and GE line-haul locomotives and conclude that there is adequate space to package these components. This conclusion also applies to new switcher locomotives, which, while being shorter in length than line-haul locomotives, will also be equipped with smaller, less-powerful engines—resulting in smaller volume requirements for the aftertreatment components. Given the space available on today's locomotives, we feel that packaging catalytic PM and NOX emissions control technology on-board locomotives is actually less challenging than packaging similar technology on-board other mobile sources such as light-duty vehicles, heavy-duty trucks, and nonroad equipment. Given that similar exhaust systems are either already implemented on-board these vehicles or will be implemented on these vehicles years before similar systems would be required on-board locomotives, we believe that any packaging issues would be successfully addressed early in the locomotive redesign process.

For commercial vessels that use marine diesel engines greater than 600 kW, we expect that marine vessel builders will need to re-package and re-design the exhaust system components to accommodate the aftertreatment components expected to be necessary to meet the proposed standards. Our discussions with marine architects and engineers, along with our review of vessel characteristics, leads us to conclude for commercial marine vessels, adequate engine room space can be made available to package aftertreatment components. Packaging of these components, and analyzing their mass/placement effect on vessel characteristics, will become part of the design process undertaken by marine architecture firms.[114]

We did determine, however, that for recreational vessels and for vessels equipped with engines less than 600 kW, catalytic PM and NOX exhaust treatment systems were less practical from a packaging standpoint than for the larger, commercially operated vessels. We did identify catalytic emissions control systems that would significantly reduce emissions from these smaller vessels. However, after taking into consideration costs, energy, safety, and other relevant factors, we identified a number of reasons why we are not proposing at this time any standards that would likely require catalytic exhaust treatment systems on these smaller vessels. One reason is that most of these vessels use seawater (fresh or saltwater) cooled exhaust systems, and even seawater injection into their exhaust systems, to cool engine exhaust to prevent overheating materials such as a fiberglass hull. This current practice of cooling and seawater injection could reduce the effectiveness of catalytic exhaust treatment systems. This is significantly more challenging than for gasoline catalyst systems due to much larger relative catalyst sizes and cooler exhaust temperatures typical of diesel engines. In addition, because of these Start Printed Page 15983vessels' small size and their typical design to operate by planing high on the surface of the water, catalytic exhaust treatment systems pose several significant packaging and weight challenges. Normally, such packaging and weight challenges would be addressed by the use of lightweight hull and superstructure materials. However, the currently accepted lightweight vessel materials are incompatible with the temperatures required to sustain catalyst effectiveness. One solution could be new lightweight hull and superstructure materials which would have to be developed, tested and approved prior to their application on vessels using catalytic exhaust treatment systems. Given these issues, we believe it is prudent to not propose catalytic exhaust treatment-based emission standards for marine diesel engines below 600 kW at this time.

(e) Infrastructure Impacts of Catalytic PM and NOX Emissions Control Technology

For PM trap technology the locomotive and marine industries will have minimal impact imposed upon their industries' infrastructures. Since PM trap technology relies on no separate reductant, any infrastructure impacts would be limited to some minor changes in maintenance practices or maintenance facilities. Such maintenance would be limited to the infrequent process of removing lubricating oil ash buildup from within a PM trap. This type of maintenance might require facilities to remove PM traps for cleaning. This might involve the use of a crane or other lifting device. We understand that much of this kind of infrastructure already exists for other locomotive and marine engine maintenance practices. We have toured shipyards and locomotive maintenance facilities at rail switchyards, and we observed that such facilities are generally already adequate for any required PM trap maintenance.

We do expect some impact on the railroad and marine sectors to accommodate the use of a separate reductant for use in a NOX SCR system. For light-duty, heavy-duty, and nonroad applications, the preferred reductant in an SCR system is a 32.5 percent urea-water solution. The 32.5 percent solution, also known as the “eutectic” concentration, provides the lowest freezing point (−11 °C or 12 °F) and assures that the ratio of urea-to-water will not change when the solution begins to freeze.[115] Heated storage tanks and insulated dispensing equipment may be necessary to prevent freeze-up in Northern climates. In addition, the urea dosing apparatus (urea storage tank, pump, and lines) onboard the locomotive or marine vessel may require similar protections. Locomotives and marine vessels are commonly refueled from large, centralized fuel storage tanks, tanker trucks, or tenders with long-term purchase agreements. Urea suppliers will be able to distribute urea to the locomotive and marine markets in a similar manner, or they may choose to employ multi-compartment diesel fuel/urea tanker trucks for delivery of both products simultaneously. The frequency that urea needs to be added will be dependent on the urea storage capacity, duty-cycle, and urea dosing rate for each application. Discussions concerning the urea infrastructure in North America and specifications for an emissions-grade urea solution are now under way amongst light- and heavy-duty on-highway diesel stakeholders.

Although an infrastructure for widespread transportation, storage, and dispensing of SCR-grade urea does not currently exist in the U.S., the affected stakeholders in the light- and heavy-duty on-highway and nonroad diesel sectors are expected to follow the European model, in which diesel engine/truck manufacturers and fuel refiners/distributors formed a collaborative working group known as “AdBlue.” The goal of the AdBlue organization is to resolve potential problems with the supply, handling, and distribution of urea and to establish standards for product purity.[116] Concerning urea production capacity, the U.S. has more-than-sufficient capacity to meet the additional needs of the rail and marine industries. For example, in 2003, the total diesel fuel consumption for Class I railroads was approximately 3.8 billion gallons.[117] If 100 percent of the Class I locomotive fleet were equipped with SCR catalysts, approximately 190 million gallons-per-year of 32.5 percent urea-water solution would be required.[118] It is estimated that 190 million gallons of urea solution would require 0.28 million tons of dry urea (1 ton dry urea is needed to produce 667 gallons of 32.5 percent urea-water solution). Currently, the U.S. consumes 14.7 million tons of ammonia resources per year, and relies on imports for 41 percent of that total (of which, urea is the principal derivative). In 2005 domestic ammonia producers operated their plants at 66 percent of rated capacity, resulting in 4.5 million tons of reserve production capacity.[119] In the hypothetical situation above, where 100 percent of the locomotive fleet required urea, only 6.2 percent of the reserve domestic capacity would be needed to satisfy the additional demand. A similar analysis for the marine industry, with a yearly diesel fuel consumption of 2.2 billion gallons per year, would not significantly impact the urea demand-to-reserve capacity equation. Since the rate at which urea-SCR technology is introduced to the railroad and marine markets will be gradual—and the reserve urea production capacity is more-than-adequate to meet the expected demand in the 2017 timeframe—EPA does not project any urea cost or supply issues will result from implementing the proposed Tier 4 standards.

(3) The Proposed Standards Are Technologically Feasible

Our proposal covers a wide range of engines and the implementation of a range of emissions controls technologies, and we have identified a range of technologically feasible emissions control technologies that likely would be used to meet our proposed standards. Some of these technologies are incremental improvements to existing engine components, and many of these improved components have already been applied to similar engines. The other technologies we identified involve catalytic exhaust treatment systems. For these technologies we carefully examined the catalyst technology, its applicability to locomotive and marine engine packaging constraints, its durability with respect to the lifetime of today's locomotive and marine engines, and its impact on the infrastructure of the rail and marine industries. From our analysis, which is presented in detail in our draft RIA, we conclude that incremental improvements to engine components and the implementation of catalytic PM and NOX exhaust treatment technology would be feasible to meet our proposed emissions standards.Start Printed Page 15984

(4) A Request for Detailed Technical Comments

We have carried out an extensive outreach program with the regulated industry to understand the potential impacts and technical challenges to the application of aftertreatment technology to diesel locomotives and marine engines. We are requesting comments on all parts of our resulting analyses summarized in the preceding sections and presented in greater detail in the Draft RIA.

Further, we request comment on the following list of detailed questions provided to the Agency by a stakeholder regarding particular challenges in applying aftertreatment technologies to diesel locomotives. Some of these questions raise concerns about the feasibility of the proposed Tier 4 standards under specific environmental conditions. We present theses questions without endorsing the appropriateness of applying these conditions to locomotive catalyst designs. The reader should refer to the preceding sections and the draft RIA for our analyses of the relevant issues.

(1) How do the following attributes of the locomotive exhaust environment impact the ability of a Zeolite SCR type catalyst to operate within 10% of its “as new” conversion efficiency (~94%) after 34,000 MW-hours of operation?

○ 150 hours per year operation at 600 Celsius exhaust temperature at the inlet to the SCR, due to DPF regeneration.” (20-minute regeneration every 20 hours of operation).

○ 120 minutes per year operation at 700 Celsius.

○ Soot exposure equal to 0.03 g/bhp-hr.

○ Shock loading averaging 1,000 mechanical shock pulses per year due to hard coupling.

○ Extended periods of vibration where the vibration load on the catalysts can reach 6G and 1000 Hz.

○ Water exposure due to rains, icing, water spray and condensed frozen or liquid water during 20% of its life.

○ Salt fog consisting of 5 ± 1% salt concentration by weight with fallout rate between 0.00625 and 0.0375 ml/cm2/hr.

○ The catalysts will be subject to sands composed of 95% of SiO2 with particle size between 1 to 650 microns in diameter with sand concentration of 1.1 ± 0.25 g/m3 and air velocity of 29 m/s (104 km/h).

○ Exposure to dusts comprised of red china clay and silicon flour of particle sizes that are between 1 to 650 microns in diameter with dust concentration of 10.6 ± 7 g/m3 with a velocity equal to locomotive motion velocity on catalyst surfaces.

(2) Is it feasible for a Zeolite SCR catalyst (as compared to the Vanadium-based catalysts) to operate within 10% of its as new conversion efficiency (~94%) after sustained exposure to real exhaust? If it is, why is it feasible? If it is not feasible, please explain why it is not.

(3) Is it feasible to maintain the conversion efficiency of a diesel oxidation catalyst at least at 45% in the same catalyst environment described in (1) above? In your comments, please explain why or why not.

(4) The feasibility of achieving low ammonia slip, i.e., less than 5 ppm, from urea-based SCR systems that dose at or above 1:1 ratios when applied to an exhaust stream with 500-600 ppm NOX under both steady state and transient load conditions.

(5) The feasibility of a reliable NOX sensor with 5% accuracy to control urea dosing sufficiently to achieve a 95% NOX conversion efficiency using a Zeolite-based SCR when not kinetically limited.

(6) The expected level of ammonia slip catalyst selectivity back to NOX when a Zeolite-based SCR is dosed at 1:1 ratios and applied to diesel engines above 3.0 MW with an exhaust stream of 500-600 ppm NOX.

(7) The effect on overall locomotive weight and balance when applying DPF and SCR devices with a weight in excess of 8000 lbs and volume in excess of 40 cubic feet mounted above the engine.

(8) The expected effect on locomotive operating range when adding urea storage equal to 5% of locomotive fuel capacity and a 2% decrease in locomotive fuel efficiency.

(9) Incidental emissions generation resulting from the production and distribution of urea for railroad usage (200,000,000 gallons/year).

(10) The comparative performance of a given engine on the marine v. locomotive duty cycle to include an assessment of SCR technologies (i.e., Zeolilte v. Vanadium), expected effectiveness for each application, and any considerations that may be unique for one application versus the other that could impact overall NOX conversion effectiveness.

(11) The impact of the proposed Tier 4 NOX limit of 1.3 g/hp-hr versus incrementally higher limits on fuel burn and greenhouse gas emissions.

EPA notes that many of these issues are addressed elsewhere in the preamble and in the draft RIA. We invite comment on these questions in the context of the information provided elsewhere on these issues. In providing comments to these eleven questions, we ask that commenters provide information both directly responsive to the individual question and further to the relevance of the question in determining the appropriate emission standard for diesel locomotives. For example, question 1 lists a wide range of conditions for catalyst systems on a diesel locomotive. In that context, EPA also invites comment on the following questions.

  • How do the shock loading, vibration loading, soot exposure, and temperature exposure conditions listed in Question 1 compare to conditions faced by other applications of Zeolite-type urea SCR systems that are either under development or that have been developed for on-highway diesel, nonroad diesel, marine and stationary gas turbine applications?
  • Question 1 asserts that a locomotive catalyst design would directly expose catalyst substrates to rain water, icing, water spray and condensed frozen or liquid water during 20% of its life. Are there catalyst packaging and installation issues that would necessitate any direct exposure of catalyst substrates to weather?
  • Question 1 implies that a locomotive catalyst design would directly expose catalyst substrates to salt fogs consisting of 5 ± 1% salt concentration by weight with fallout rate between 0.00625 and 0.0375 ml/cm2/hr. What salt concentrations in salt fogs and what fallout rates have SCR systems applied to ocean-going vessels been exposed to? How would the systems designs, exposures and impacts be similar to or different from locomotive applications? Are there unique characteristics of locomotive catalyst installations that would increase their exposure to salt fog relative to other applications operated near or in ocean environments? What direct experiences have ocean-going vessels had regarding the durability of their catalytic emission control systems?
  • Question 1 implies that locomotive catalyst systems must withstand exposure to sand ingested by the engine at a rate of up to 50 pounds per hour at notch 8. The question also implies that locomotive catalyst substrates must withstand exposure to a combination of red china clay and silicon flour at a rate of up to one-quarter ton per hour at notch 8. Are these appropriate metrics that reasonably take into consideration the design of the locomotive air-intake and filtration system and the ability of the engine and turbocharger systems to withstand such extreme exposure to ingestion of abrasive materials? Are tests replicating this condition routinely Start Printed Page 15985conducted to demonstrate the durability of the engine and turbocharger systems and emissions compliance following such high rates of engine ingestion of abrasive materials?
  • Questions 2 and 3 imply that greater than 45% DOC oxidation efficiency is required to maintain Zeolite SCR catalyst efficiency at greater than 94% NOX efficiency, and that 94% NOX efficiency is required to meet the proposed Tier 4 NOX standard. Is greater than 45% oxidation efficiency for an upstream DOC necessary for locomotives to meet the 1.3 g/bhp-hr NOX standard over the range of exhaust temperature encountered by locomotives over the line-haul duty cycle when using a Zeolite-based SCR system? Is 94% NOX efficiency from the current Tier 2 locomotive baseline even necessary to achieve 1.3 g/bhp-hr NOX emissions when using a Zeolite SCR catalyst system over the line-haul duty-cycle?
  • What level of ammonia slip is achievable from modern urea-SCR systems using closed-loop feedback control? Is 5 ppm an appropriate level to set for maximum ammonia slip under any conditions?
  • Is 5% of point the limit of zirconia-NOX sensor accuracy? Does NOX sensor accuracy currently limit NOX conversion efficiency of feedback controlled SCR systems, and if so by how much? What level of NOX conversion efficiency using a Zeolite-based SCR when not kinetically limited is achievable using current feedback control systems using of zirconia-NOX sensors? What level of NOX conversion efficiency can be expected taking into consideration projected NOX sensor and feedback control system development over the next ten to fifteen years?

Comments submitted should provide detailed technical information and data to the extent possible. The EPA solicits comment on the extent to which any factor may impact the ability to achieve the proposed standard and if the proposed standard cannot be achieved in the commenter's view, what standard can be achieved.

E. What Are EPA's Plans for Diesel Marine Engines on Large Ocean-Going Vessels?

Today's proposal covers marine diesel engines up to 30 l/cyl displacement installed on vessels flagged or registered in the U.S. There are two additional significant sources of air pollution from diesel marine engines which are not covered by today's proposal: first, marine diesel engines of any size (Category 1, 2 or 3) installed on foreign-flagged vessels; and second, marine diesel engines at or above 30 l/cyl displacement (Category 3) installed on U.S. flagged vessels. The largest environmental concern for these types of engines are the large, ocean-going marine vessels (OGV), which are typically larger than 2,000 gross tons and involved primarily in international commerce. Ocean-going marine vessels typically are powered by one or more Category 3 diesel engines for propulsion of the vessel, and they typically also have several Category 2 engines to provide auxiliary power. Engines on OGV are predominately fueled by residual fuel (often called “heavy fuel oil”), which is a by-product of distilling crude oil to produce lighter petroleum products such as gasoline, distillate diesel fuel, and kerosene and has a high sulfur content, up to 45,000 ppm.[120] Ocean-going vessels are a significant contributor to air pollution in the United States, in particular in coastal areas and ports. Current projections indicate that on a national level, OGVs flagged in the U.S. and other countries will contribute about 21 percent of mobile source PM, 12 percent NOX and 76 percent of SOX in the year 2030. These contributions can be much higher in some coastal and port areas. However, recent inventory estimates performed for the California Air Resources Board and the Commission for Environmental Cooperation in North America suggest that we are significantly underestimating the emissions for C3 engines, by as much as a factor of 2 or 3.[121]

EPA has a number of activities underway which hold promise for reducing air pollution from OGVs. These include: a future rulemaking action on C3 engine standards; negotiations underway at the International Maritime Organization to establish a new set of environmentally protective international emission standards for OGVs; studies to assess the feasibility of establishing one or more SOX Emission Control Areas adjacent to North America to reduce SOX and particulate matter from OGVs; and voluntary actions through our Clean Ports USA program.

(1) Future C3 Marine Rule

In 2003 we issued a final rule for new C3 engines installed on U.S. flagged vessels. That final action established NOX limits for new C3 engines which are equal to the current international NOX standards for C3 engines established through Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78). The MARPOL standards are based on the capabilities of emission control technologies from the early 1990s, and are significantly higher then emission standards for any other mobile source in the United States. In the 2003 final rule, we identified the technical challenges associated with the application of after-treatment technologies to these engines and vessels, but committed to revisiting the issue of the appropriate long-term emission standards for C3 marine engines, both those which are on vessels flagged in the U.S. and those which are installed on foreign flagged vessels. In revisiting the standards we indicated that we would consider the state of technology that may permit deeper emission reductions and the status of international action for more stringent standards. We committed to a final Agency action by April 27, 2007.

In 2003, we believed the next round of emission standard discussions at the IMO would be well underway, if not concluded, by April of 2006. In 2003, we also believed the IMO deliberations would be one of the avenues to explore improvements in emission control technology for C3 engines and ocean-going vessels, and would provide valuable technical input for EPA's C3 rulemaking.

Despite efforts by the United States Government at IMO, deliberations regarding future emission standards for OGV did not begin until April 2006. The current round of negotiations at IMO is expected to continue through 2007. The discussions thus far at IMO have yielded new technical information which EPA will be able to make use of in our future C3 rulemaking. We expect to issue a revised schedule for the C3 rule in the next few months as well as solicit comments on the appropriate technologies, standards, and lead time EPA should consider for C3 standards.

(2) International Standards Deliberation at IMO

With respect to the discussions currently underway at the IMO, the United States Government is actively Start Printed Page 15986engaged in the negotiation of a new set of international standards for Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL Annex VI). Since the current Annex VI NOX limits have entered into effect, and in the time frame since EPA issued our 2003 rule, improvements in both in-cylinder and external emission control technologies have been demonstrated, both in the laboratory and on-board OGVs. These technologies offer the potential to substantially reduce NOX emissions from OGVs. In addition, the use of lower sulfur residual or distillate fuels and/or the use of SOX scrubbing technologies offer the potential to substantially reduce PM and SOX emissions from OGVs. We believe the member states of the IMO, including the United States, have a unique opportunity to establish appropriate long-term standards to address air pollution from OGVs.

The current discussions for the next tier of engine emission standards at IMO also provide an opportunity to apply emission reduction technologies to existing vessels. EPA is a strong supporter of reducing pollution of existing vessels through mandatory rebuild/retrofit requirements and we will continue to pursue this objective at the IMO.

(3) SOX Emission Control Areas

The existing international agreements adopted by the IMO provide the opportunity for signatories to Annex VI of the International Convention for the Prevention of Pollution from Ships to propose the designation of one or more SOX Emission Control Areas (SECA). When operating in a SECA, all OGVs must either use fuel with a maximum sulfur content of 15,000 ppm or use emission control technology such that the vessel meets a SOX limit of 6 g/kW-hr (a value deemed equivalent to 15,000 ppm sulfur). This represents only approximately a 45 percent reduction in SOX emissions compared to the world-wide fuel sulfur average for heavy-fuel oil of about 27,000 ppm. EPA is currently performing environmental impact and economic analyses that will assist the federal government in making a determination whether the U.S. Government should consider a proposal designating a SECA to one or more areas adjacent to North America. We are working closely with the Canadian Government Canada) on these efforts, and we also intend to coordinate our actions with Mexico. This could allow for the inclusion of additional coastal areas within SECAs for North American. It must be noted that the United States has not yet ratified Annex VI and any decision regarding whether the United States will pursue the designation of a SECA will be influenced by where the United States stands with respect to ratification of MARPOL Annex VI.

(4) Clean Ports USA

As part of EPA's National Clean Diesel Campaign, Clean Ports USA is an incentive-based, public-private partnership designed to reduce emissions from existing diesel engines and vessels at ports. The Clean Ports USA team works to bring together partners and build coalitions to identify and develop cost-effective diesel emission reduction projects that address the key issues affecting ports today. EPA provides technical support in verifying the effectiveness of retrofit technology, to ensure through rigorous testing that the emissions reductions promised by vendors are in fact achieved in the field.

Clean Ports USA is providing incentives to port authorities, terminal operators, cargo interests, trucking fleets, and maritime fleet owners to:

  • Retrofit and replace older diesel engines with verified technologies such as diesel oxidation catalysts (DOCs), diesel particulate filters (DPFs).
  • Use cleaner fuels (ultra-low sulfur diesel fuel, emulsions).
  • Increase operational efficiency, including environmental management systems, logistics, and appointment systems.
  • Reduce engine idling.
  • Replace older engines with new, cleaner engines.

Additional information is available on the Clean Ports USA Web site at www.epa.gov/​cleandiesel/​ports.

IV. Certification and Compliance Program

This section describes the regulatory changes proposed for the locomotive and marine compliance programs. The most obvious change is that the proposed regulations have been written in plain language. They are structured to contain the provisions that are specific to locomotives in a new proposed part 1033 and contain the provisions that are specific to marine engines and vessels in a new proposed part 1042. We also propose to apply the general provisions of existing parts 1065 and 1068.[122] The proposed plain language regulations, however, are not intended to significantly change the compliance program, except as specifically noted in today's notice (and we are not reopening for comment the substance of any part of the program that remains unchanged substantively). As proposed, these plain language regulations would supersede the regulations in part 92 and 94 (for Categories 1 and 2) as early as the 2008 model year. See section III for the starting dates for different engines. The changes from the existing programs are described below along with other notable aspects of the compliance program. Note: The term manufacturer is used in this section to include locomotive and marine manufacturers and locomotive remanufacturers. It would also include marine remanufacturers if we finalize remanufacture standards.

A. Issues Common to Locomotives and Marine

For many aspects of compliance, we are proposing similar provisions for marine engines and locomotives, which are discussed in this section. Also included in this section are issues which are similar, but where we are proposing different provisions. The other compliance issues are discussed in sections IV. B. (for locomotives) and IV. C. (for marine).

(1) Modified Test Procedures

(a) Incorporation of Part 1065 Test Procedures for Locomotive and Marine Diesel Engines

As part of our initiative to update the content, organization and writing style of our regulations, we are revising our test procedures. We have grouped all of our engine dynamometer and field testing test procedures into one part entitled, “Part 1065: Test Procedures.” For each engine or vehicle sector for which we have recently promulgated standards (such as land-based nonroad diesel engines or recreational vehicles), we identified an individual part as the standard-setting part for that sector. These standard-setting parts then refer to one common set of test procedures in part 1065. We intend in this proposal to continue this process of having all our engine programs refer to a common set of procedures by applying part 1065 to all locomotive and marine diesel engines.

In the past, each engine or vehicle sector had its own set of testing procedures. There are many similarities in test procedures across the various sectors. However, as we introduced new regulations for individual sectors, the Start Printed Page 15987more recent regulations featured test procedure updates and improvements that the other sectors did not have. As this process continued, we recognized that a single set of test procedures would allow for improvements to occur simultaneously across engine and vehicle sectors. A single set of test procedures is easier to understand than trying to understand many different sets of procedures, and it is easier to move toward international test procedure harmonization if we only have one set of test procedures. We note that procedures that are particular for different types of engines or vehicles, for example, test schedules designed to reflect the conditions expected in use for particular types of vehicles or engines, would remain separate and would be reflected in the standard-setting parts of the regulations.

As compared to the existing locomotive and marine diesel test procedures found in parts 92 and 94, part 1065 test procedures are organized and written for improved clarity. In addition, we are proposing part 1065 for locomotive and marine diesel engines to improve the content of their respective testing specifications, including the following:

  • Specifications and calculations written in the international system of units (SI).
  • Procedures by which manufacturers can demonstrate that alternate test procedures are equivalent to specified procedures.
  • Specifications for new measurement technology that has been shown to be equivalent or more accurate than existing technology.
  • Procedures that improve test repeatability.
  • Calculations that simplify emissions determination.
  • New procedures for field testing engines.
  • More comprehensive sets of definitions, references, and symbols.
  • Calibration and accuracy specifications that are scaled to the applicable standard, which allows us to adopt a single specification that applies to a wide range of engine sizes and applications.

Some emission-control programs already rely on the test procedures in part 1065. These programs regulate land-based on-highway heavy-duty engines, land-based nonroad diesel engines, recreational vehicles, and nonroad spark-ignition engines over 19 kW.

We are adopting the lab-testing and field-testing specifications in part 1065 for all locomotive and marine diesel engines. These procedures replace those currently published in parts 92 and 94. We are making a gradual transition from the part 92 and 94 procedures. For several years, manufacturers would be able to optionally use the part 1065 procedures. Part 1065 procedures would be required for any new testing by the model year in which the Tier 4 standard applies to a locomotive or marine diesel engine or by 2012 for a locomotive or marine diesel engine that is not proposed to be subject to a Tier 4 standard. For any testing completed for any emissions standard that is less stringent than the respective Tier 4 standard, manufacturers may continue to rely on carryover test data based on part 92 or 94 procedures to certify engine families in later years. In addition, for any other programs that refer to the test procedures in parts 92 or 94, we are including updated references for all these other programs to refer instead to the appropriate cite in part 1065.

Part 1065 is also advantageous for in-use testing because it specifies the same procedures for all common parts of field testing and laboratory testing. It also contains new provisions that help ensure that engines are tested in a laboratory in a way that is consistent with how they operate in use. These new provisions would ensure that engine dynamometer lab testing and field testing are conducted in a consistent way.

In the future, we may apply the test procedures specified in part 1065 to other types of engines, so we encourage companies involved in producing or testing other engines to stay informed of developments related to these test procedures.

(b) Revisions to Part 1065

Part 1065 was originally adopted on November 8, 2002 (67 FR 68242), and was initially applicable to standards regulating large nonroad spark-ignition engines and recreational vehicles under 40 CFR parts 1048 and 1051. The recent rulemaking adopting emission standards for nonroad diesel engines has also made part 1065 optional for Tier 2 and Tier 3 nonroad standards and required for Tier 4 standards. The test procedures initially adopted in part 1065 were sufficient to conduct testing, but on July 13, 2005 (70 FR 11534) we promulgated a final rule that reorganized these procedures and added content to make various improvements. In particular, we reorganized part 1065 by subparts as shown below:

  • Subpart A: General provisions; global information on applicability, alternate procedures, units of measure, etc.
  • Subpart B: Equipment specifications; required hardware for testing.
  • Subpart C: Measurement instruments.
  • Subpart D: Calibration and verifications; for measurement systems.
  • Subpart E: Engine selection, preparation, and maintenance.
  • Subpart F: Test protocols; step-by-step sequences for laboratory testing and test validation.
  • Subpart G: Calculations and required information.
  • Subpart H: Fuels, fluids, and analytical gases.
  • Subpart I: Oxygenated fuels; special test procedures.
  • Subpart J: Field testing and portable emissions measurement systems.
  • Subpart K: Definitions, references, and symbols.

The regulations now prescribe scaled specifications for test equipment and measurement instruments by parameters such as engine power, engine speed and the emission standards to which an engine must comply. That way this single set of specifications would cover the full range of engine sizes and our full range of emission standards. Manufacturers would be able to use these specifications to determine what range of engines and emission standards may be tested using a given laboratory or field testing system.

The content of part 1065 is mostly a combination of content from our most recent updates to other test procedures and from test procedures specified by the International Organization for Standardization (ISO). In some cases, however, there is new content that never existed in previous regulations. This new content addresses very recent issues such as measuring very low concentrations of emissions, using new measurement technology, using portable emissions measurement systems, and performing field testing. A detailed description of the changes is provided in a memorandum to the docket.[123]

The new content also reflects a shift in our approach for specifying measurement performance. In the past we specified numerous calibration accuracies for individual measurement instruments, and we specified some verifications for individual components, such as NO2 to NO converters. We have shifted our focus away from individual instruments and toward the overall performance of complete measurement systems. We did this for several reasons. First, some of what we specified in the Start Printed Page 15988past precluded the implementation of new measurement technologies. These new technologies, sometimes called “smart analyzers”, combine signals from multiple instruments to compensate for interferences that were previously tolerable at higher emissions levels. These analyzers are useful for detecting low concentrations of emissions. They are also useful for detecting emissions from raw exhaust, which can contain high concentrations of interferences, such as water vapor. This is particularly important for field testing, which will most likely rely upon raw exhaust measurements. Second, this new “systems approach” challenges complete measurement systems with a series of periodic verifications, which we feel will provide a more robust assurance that a measurement system as a whole is operating properly. Third, the systems approach provides a direct pathway to demonstrate that a field test system performs similarly to a laboratory system. This is explained in more detail in item 10 below. Finally, we feel that our systems approach will lead to a more efficient way of assuring measurement performance in the laboratory and in the field. We believe that this efficiency will stem from less frequent individual instrument calibrations, and higher confidence that a complete measurement system is operating properly.

We have organized the new content relating to measurement systems performance into subparts C and D. We specify measurement instruments in subpart C and calibrations and periodic system verifications in subpart D. These two subparts apply to both laboratory and field testing. We have organized content specific to running a laboratory emissions test in subpart F, and we separated content specific to field testing in subpart J.

In subpart C we specify the types of acceptable instruments, but we only recommend individual instrument performance. We provide these recommendations as guidance for procuring new instruments. We feel that the periodic verifications that we require in subpart D will sufficiently evaluate the individual instruments as part of their respective overall measurement systems. In subpart F we specify performance validations that must be conducted as part of every laboratory test. In subpart J we specify similar performance validations for field testing that must be conducted as part of every field test. We feel that the periodic verifications in subpart D and the validations for every test that we prescribed in subparts F and J ensure that complete measurement systems are operating properly.

In subpart J we also specify an additional overall verification of portable emissions measurement systems (PEMS). This verification is a comprehensive comparison of a PEMS versus a laboratory system, and it may take several days of laboratory time to set up, run, and evaluate. However, we only require that this particular verification must be performed at least once for a given make, model, and configuration of a field test system.

Below is a brief description of the content of each subpart, highlighting some of the most important content.

(i) Subpart A: General Provisions

In Subpart A we identify the applicability of part 1065 and describe how procedures other than those in part 1065 may be used to comply with a standard-setting part. In § 1065.10(c)(1), we specify that testing must be conducted in a way that represents in-use engine operation, such that in the rare case where provisions in part 1065 result in unrepresentative testing, other procedures would be used.

Other information in this subpart includes a description of the conventions we use regarding units and certain measurements; and we discuss recordkeeping. We also provide an overview of how emissions and other information are used to determine final emission results. The regulations in § 1065.15 include a figure illustrating the different ways we allow brake-specific emissions to be calculated.

In this same subpart, we describe how continuous and batch sampling may be used to determine total emissions. We also describe the two ways of determining total work that we approve. Note that the figure indicates our default procedures and those procedures that require additional approval before we will allow them.

(ii) Subpart B: Equipment Specifications

Subpart B first describes engine and dynamometer related systems. Many of these specifications are scaled to an engine's size, speed, torque, exhaust flow rate, etc. We specify the use of in-use engine subsystems such as air intake systems wherever possible in order to best represent in-use operation when an engine is tested in a laboratory.

Subpart B also describes sampling dilution systems. These include specifications for the allowable components, materials, pressures, and temperatures. We describe how to sample crankcase emissions. Subpart B also specifies environmental conditions for PM filter stabilization and weighing.

The regulations in § 1065.101 include a diagram illustrating all the available equipment for measuring emissions.

(iii) Subpart C: Measurement Instruments

Subpart C specifies the requirements for the measurement instruments used for testing. In subpart C we recommend accuracy, repeatability, noise, and response time specifications for individual measurement instruments, but note that we only require that overall measurement systems meet the calibrations and verifications in Subpart D.

In some cases we allow instrument types to be used where we previously did not allow them in parts 92 or 94. For example, we now allow the use of a nonmethane cutter for NMHC measurement, a nondispersive ultraviolet analyzer for NOX measurement, a zirconia sensor for O2 measurement, various raw-exhaust flow meters for laboratory and field testing measurement, and an ultrasonic flow meter for CVS systems.

(iv) Subpart D: Calibrations and Verifications

Subpart D describes what we mean when we specify accuracy, repeatability and other parameters in Subpart C. We are adopting calibrations and verifications that scale with engine size and with the emission standards to which an engine is certified. We are replacing some of what we have called “calibrations” in the past with a series of verifications, such as a linearity verification, which essentially verifies the calibration of an instrument without specifying how the instrument must be initially calibrated. Because new instruments have built-in routines that linearize signals and compensate for various interferences, our existing calibration specifications in parts 92 and 94 sometimes conflicted with an instrument manufacturer's instructions. In addition, there are new verifications in subpart D to ensure that the new instruments we specify in Subpart C are used correctly.

(v) Subpart E: Engine Selection, Preparation, and Maintenance

Subpart E describes how to select, prepare, and maintain a test engine.

(vi) Subpart F: Test Protocols

Subpart F describes the step-by-step protocols for engine mapping, test cycle generation, test cycle validation, pre-test preconditioning, engine starting, emission sampling, and post-test validations. We allow modest corrections for drift of emission analyzer Start Printed Page 15989signals within a certain range. We recommend a step-by-step procedure for weighing PM samples.

(vii) Subpart G: Calculations and Required Information

Subpart G includes all the calculations required in part 1065. Subpart G includes definitions of statistical quantities such as mean, standard deviation, slope, intercept, t-test, F-test, etc. By defining these quantities mathematically we intend to resolve any potential mis-communication when we discuss these quantities in other subparts. We have written all calculations for calibrations and emission calculations in international units. For our standards that are not completely in international units (i.e., grams/horsepower-hour, grams/mile), we specify in part 1065 the correct use of internationally recognized conversion factors.

We also specify emission calculations based on molar quantities for flow rates, instead of volume or mass. This change eliminates the frequent confusion caused by using different reference points for standard pressure and standard temperature. Instead of declaring standard densities at standard pressure and standard temperature to convert volumetric concentration measurements to mass-based units, we declare molar masses for individual elements and compounds. Since these values are independent of all other parameters, they are known to be universally constant.

(viii) Subpart H: Fuels, Fluids, and Analytical Gases

Subpart H specifies test fuels, lubricating oils and coolants, and analytical gases for testing. We eliminated the Cetane Index specification for all diesel fuels, because the existing specification for Cetane Number sufficiently determines the cetane levels of diesel test fuels. We do not identify any detailed specification for service accumulation fuel. Instead, we specify that service accumulation fuel may be either a test fuel or a commercially available in-use fuel. We include a list of ASTM specifications for in-use fuels as examples of appropriate service accumulation fuels. We include an allowance for engine manufacturers to use in-use test fuels that do not meet all of the specifications, provided that the in-use fuel does not adversely affect the manufacturer's ability to demonstrate compliance with the applicable standard. For example a fuel that would result in lower emissions versus the certification fuel would generally adversely affect a manufacturers ability to demonstrate compliance with the applicable standards. We also allow the use of ASTM test methods specified in 40 CFR Part 80 in lieu of those specified in part 1065. We did this because we more frequently review and update the ASTM methods in 40 CFR Part 80 versus those in part 1065.

(ix) Subpart I: Oxygenated Fuels

Subpart I describes special procedures for measuring certain hydrocarbons whenever oxygenated fuels are used. We allow the use of the California NMOG test procedures to measure alcohols and carbonyls.

(x) Subpart J: Field Testing and Portable Emissions Measurement Systems

As described in Subpart J, Portable Emissions Measurement Systems (PEMS) must generally meet the same specifications and verifications that laboratory instruments must meet, according to subparts B, C, and D. However, we allow some deviations from laboratory specifications. In addition to meeting many of the laboratory system requirements, a PEMS must meet an overall verification relative to a series of laboratory measurements. This verification involves repeating a duty cycle several times. This is a comprehensive verification of a PEMS. We are also adopting a procedure for preparing and conducting a field test, and we are adopting drift corrections for PEMS emission analyzers. Given the evolving state of PEMS technology, the field-testing procedures provide for a number of known measurement techniques. We have added provisions and conditions for the use of PEMS in an engine dynamometer laboratory to conduct laboratory testing.

(xi) Subpart K: Definitions, References, and Symbols

In Subpart K we define terms frequently used in part 1065. For example we have defined “brake power”, “constant-speed engine”, and “aftertreatment” to provide more clarity, and we have definitions for things such as “300 series stainless steel”, “barometric pressure”, and “operator demand”. There are definitions such as “duty cycle” and “test interval” to distinguish the difference between a single interval over which brake-specific emissions are calculated and the complete cycle over which emissions are evaluated in a laboratory. We also present a thorough and consistent set of symbols, abbreviations, and acronyms in subpart K.

(2) Certification Fuel

It is well-established that measured emissions may be affected by the properties of the fuel used during the test. For this reason, we have historically specified allowable ranges for test fuel properties such as cetane and sulfur content. These specifications are intended to represent most typical fuels that are commercially available in use. This helps to ensure that the emissions reductions expected from the standards occur in use as well as during emissions testing. Because we have reduced the upper limit for locomotive and marine diesel fuel sulfur content for refiners to 15 ppm in 2012, we are proposing to establish new ranges of allowable sulfur content for diesel test fuels. See section C.(5) for information about testing marine engines designed to use residual fuel.

For marine diesel engines, we are proposing the use of ULSD fuel as the test fuel for Tier 3 and later standards (when the new plain language regulations begin to apply). We believe this would correspond to the fuels that these engines will see in use over the long term. We recognize that this approach would mean that some marine engines would use a test fuel that is lower in sulfur than in-use fuel during the first few years, and that other Tier 2 marine engines would use a test fuel that is higher in sulfur than fuel already available in use when they are produced. However, we believe that it is more important to align changes in marine test fuels with changes in the PM standards than strictly with changes in the in-use fuel. Nevertheless, we are proposing to allow certification with fuel meeting the 7 to 15 ppm sulfur specification for Tier 2 to simplify testing, but would require PM emissions to be corrected to be equivalent to testing conducted with the specified fuel.

For locomotives, we are proposing to require that Tier 4 engines be certified based on ULSD test fuels. We are also proposing to require that these locomotives use ULSD in the field. We would continue to allow older locomotives to use in the field low sulfur diesel (LSD) fuel, which is the intermediate grade of fuel with sulfur levels between 15 and 500 ppm. Thus, we are proposing to require that remanufacture systems for most of these locomotives be certified on LSD test fuel. We are proposing to allow the use of test fuels other than those specified here. Specifically, we would allow the use of ULSD during emission testing for locomotives otherwise required to use LSD, provided they do not use sulfur-Start Printed Page 15990sensitive technology (such as oxidation catalysts). However, as a condition of this allowance, the manufacturer would be required to add an additional amount to the measured PM emissions to make them equivalent to what would have been measured using LSD. For example, we would allow a manufacturer to test with ULSD if they adjusted the measured PM emissions upward by 0.01 g/bhp-hr (which would be a relatively conservative adjustment).

We are proposing special fuel provisions for Tier 3 locomotives and Tier 2 remanufacture systems. We are proposing that the test fuel for these be ULSD without sulfur correction since these locomotives will use ULSD in use for most of their service lives. However, unlike Tier 4 locomotives, we would not require them to be labeled to require the use of ULSD, unless they included sulfur sensitive technology.

We are proposing a new flexibility for locomotives and Category 2 marine engines to reduce fuel costs for testing. Because these engines can consume 200 gallons of diesel fuel per hour at full load, fuel can represent a significant fraction of the testing cost, especially if the manufacturer must use specially blended fuel rather than commercially available fuel. To reduce this cost, we are proposing to allow manufacturers to perform testing of locomotives and Category 2 engines with commercially available diesel fuel.

For both locomotive and marine engines, all of the specifications described above would apply to emission testing conducted for certification, selective enforcement audits, and in-use, as well as any other testing for compliance purposes for engines in the designated model years. Any compliance testing of previous model year engines would be done with the fuels designated in our regulations for those model years.

(3) Supplemental Emission Standards

We are proposing to continue the supplemental emission standards for locomotives and marine engines. For locomotives, this means we would continue to apply notch emission caps, based on the emission rates in each notch, as measured during certification testing. We recognize that for our Tier 4 proposed standards it would not be practical to measure very low levels of PM emissions separately for each notch during testing, and thus we are proposing a change in the calculation of the PM notch cap for Tier 4 locomotives. All other notch caps would be determined and applied as they currently are under 40 CFR 92.8(c). See § 1033.101(e) of the proposed regulations for the detailed calculation.

Marine engines would continue to be subject to not-to-exceed (NTE) standards, however, we are proposing certain changes to these standards based upon our understanding of in-use marine engine operation and based upon the underlying Tier 3 and Tier 4 duty cycle emissions standards that we are proposing. As background, we determine NTE compliance by first applying a multiplier to the duty-cycle emission standard, and then we compare to that value an emissions result that is recorded when an engine runs within a certain range of engine operation. This range of operation is called an NTE zone (see 40 CFR 94.106). The first regulation of ours that included NTE standards was the commercial marine diesel regulation, finalized in 1999. After we finalized that regulation, we promulgated other NTE regulations for both heavy-duty on-highway and nonroad diesel engines. We also finalized a regulation that requires heavy-duty on-highway engine manufacturers to conduct field testing to demonstrate in-use compliance with the on-highway NTE standards. Throughout our development of these other regulations, we have learned many details about how best to specify NTE zones and multipliers that would ensure the greatest degree of in-use emissions control, while at the same time would avoid disproportionately stringent requirements for engine operation that has only a minor contribution to an engine's overall impact on the environment. Based upon the Tier 3 and Tier 4 standards we are proposing—and our best information of in-use marine engine operation—we are proposing certain improvements to our marine NTE standards.

For marine engines we are proposing a broadening of the NTE zones in order to better control emissions in regions of engine operation where an engine's emissions rates (i.e. grams/hour, tons/day) are greatest; namely at high engine speed and high engine load. This is especially important for commercial marine engines because they typically operate at steady-state at high-speed and high-load operation. This proposed change also would make our marine NTE zones much more similar to our on-highway and nonroad NTE zones. Additionally, we analyzed different ways to define the marine NTE zones, and we determined a number of ways to improve and simplify the way we define and calculate the borders of these zones. We feel that these improvements would help clarify when an engine is operating within a marine NTE zone. Please refer to section 1042.101(c) of our draft proposed regulations for a description of our proposed NTE standards. Note that we currently specify different duty cycles to which a marine engine may be certified, based upon the engine's specific application (e.g., fixed-pitch propeller, controllable-pitch propeller, constant speed, etc.). Correspondingly, we also have a unique NTE zone for each of these duty cycles. These different NTE zones are intended to best reflect an engine's real-world range of operation for that particular application. Because we are proposing changes to the shapes of these NTE zones, we request comment as to whether or not these changes best reflect actual in-use operation of marine engines.

We are also proposing changes to the NTE multipliers. We have analyzed how our proposed Tier 3 and Tier 4 emissions standards would affect the stringency of our current marine NTE standards, especially in comparison to the stringency of the underlying duty cycle standards. We recognized that in certain sub-regions of our proposed NTE zones, slightly higher multipliers would be necessary because of the way that our more stringent proposed Tier 3 and Tier 4 emissions standards would affect the stringency of the NTE standards. For comparison, our current marine NTE standards contain multipliers that range in magnitude from 1.2 to 1.5 times the corresponding duty cycle standard. In the changes we are proposing, the new multipliers would range from 1.2 to 1.9 times the standard. Even with these slightly higher NTE multipliers, we are confident that our proposed changes to the marine NTE standards would ensure the greatest degree of in-use emissions control. We are also confident that our proposed changes to the marine NTE standards would continue to ensure proportional emissions reductions, across the full range of marine engine operation. Because we are proposing changes to the NTE multipliers, we request comment as to whether or not these changes best reflect actual in-use emissions profiles of marine engines throughout the NTE zones we are proposing.

We are also proposing to adopt other NTE provisions for marine engines that are similar to our existing heavy-duty on-highway and nonroad diesel NTE standards. We are proposing these particular changes to account for the implementation of catalytic exhaust treatment devices on marine engines and to account for when a marine engine rarely operates within a limited region of the NTE zone (i.e. less than 5 percent of in-use operation). We feel that these provisions have been effective Start Printed Page 15991in our on-highway and nonroad NTE programs; therefore, we are proposing to adopt them for our marine NTE standards as well.

We are also proposing for the first time auxiliary marine engine NTE standards, effective for both Tier 3 and Tier 4 auxiliary marine engines. Since these engines are similar to nonroad constant speed engines, we propose to adopt the same NTE standards for auxiliary marine engines as we have already finalized for nonroad constant speed engines. Specifically, these engines are engines certified to the ISO 8178-1 D2 test cycle, illustrated in 40 CFR § 94.105, Table B-4. Refer to 40CFR § 1039.101(e) for our constant speed nonroad engine NTE standards. Because we are proposing marine diesel Tier 3 implementation dates in the 2012 timeframe, we request comment as to whether or not additional lead-time might be necessary to marinize and certify NTE-compliant nonroad engines to the marine diesel Tier 3 standards, especially since it will be within that same timeframe that the similar nonroad Tier 4 engines will be NTE-certified for nonroad use.

We request comment regarding the changes we are proposing for the marine NTE standards.

(4) Emission Control Diagnostics

As described below, we are requesting comment on (but not proposing) a requirement that all Tier 4 engines include simple engine diagnostic system to alert operators to general emission-related malfunctions. (See section IV.A.(7) for related requirements involving SCR systems.) We are, however, proposing special provisions for locomotives that include emission related diagnostics. First, we would require locomotive operators to respond to malfunction indicators by performing the required maintenance or inspection. Second, locomotive manufacturers would be allowed to repair such malfunctioning locomotives during in-use compliance testing (they would still be required to include a description of the malfunction in the in-use testing report.). This approach would take advantage of the unique market structure with two major manufacturers and only a few railroads buying nearly all of the freshly manufactured locomotives. The proposed provisions would create incentives for both the manufacturers and railroads to work together to develop a diagnostic system that effectively revealed real emission malfunctions. Our current regulations already require that locomotive operators complete all manufacturer-specified emission-related maintenance and this new requirement would treat repairs indicated by diagnostic systems as such emission-related maintenance. Thus, the railroads would have a strong incentive to make sure that they only had to perform this additional maintenance when real malfunctions were occurring. On the other hand, manufacturers would want to have all emission malfunctions revealed so that when they test an in-use locomotive they could repair identified malfunction before testing if the railroad had not yet done it.

At this time, we are requesting comment on a adopting a detailed regulatory program to require that all Tier 4 locomotives and marine engines include a specific engine diagnostic system. We believe that most of these engines will be equipped with a basic diagnostic system for other purposes, so codifying a uniform convention based largely on these preexisting systems could be appropriate. Manufacturers would generally not be required to monitor actual emission levels, but rather would be required to monitor functionality. Such systems could be very helpful in maintaining emission performance during the useful life and ensuring that malfunctioning marine catalysts would be replaced. However, we also believe that it might be more appropriate to address this issue in a future rulemaking in the broader context of all nonroad diesel engines.

(5) Monitoring and Reporting of Emissions Related Defects

We are proposing to apply the defect reporting requirements of § 1068.501 to replace the provisions of subparts E in parts 92 and 94. This would result in two significant changes for manufacturers. First, § 1068.501 obligates manufacturers to tell us when they learn that emission control systems are defective and to conduct investigations under certain circumstances to determine if an emission-related defect is present. Manufacturers must initiate these investigations when warranty information, parts shipments, and any other information which is available and indicates that a defect investigation may be fruitful. For this purpose, we consider defective any part or system that does not function as originally designed for the regulatory useful life of the engine or the scheduled replacement interval specified in the manufacturer's maintenance instructions. The parts and systems are those covered by the emissions warranty, and listed in Appendix I and II of part 1068. As we noted in previous rulemakings, we believe the investigation requirement is necessary because it will allow both EPA and the engine manufacturers to fully understand the significance of any unusually high rates of warranty claims and parts replacements for parts or parameters that may have an impact on emissions. We believe that as part of its normal product quality practices, prudent engine manufacturers already conduct a thorough investigation when available data indicate recurring parts failures. Such data is valuable and readily available to most manufacturers and, under this proposal it must be considered to determine whether or not there is a possible defect of an emission-related part.

The second change is related to reporting thresholds. Defect reports submitted in compliance with the current regulations are based on a single threshold applicable to engine families of all production volumes. The single threshold in the existing regulations rarely results in reporting of defects in the smallest engine families covered by this regulation because a relatively high proportion of such engines would have to be known to be defective before reporting is required under a fixed threshold scheme. Therefore, under § 1068.501, the threshold for reporting for the smallest engine families would generally be decreased as compared to the current requirements. These thresholds were established during our rulemaking adopting Tier 4 standards for nonroad diesel engines.[124] Those engines are substantially similar to the engines used in the marine and locomotive sectors, and thus, we believe that these thresholds will also be appropriate for these engines.

We are aware that accumulation of warranty claims and part shipments will likely include many claims and parts that do not represent defects, so we are establishing a relatively high threshold for triggering the manufacturer's responsibility to investigate whether there is, in fact, a real occurrence of an emission-related defect. Manufacturers are not required to count towards the investigation threshold any replacement parts they require to be replaced at specified intervals during the useful life, as specified in the application for certification and maintenance instructions to the owner, because shipments of such parts clearly do not represent defects. All such parts would be excluded from investigation of potential defects and reporting of defects, whether or not any specific part was, in fact, shipped for specified replacement. This proposal is intended to require manufacturers to use Start Printed Page 15992information we would expect them to keep in the normal course of business. We believe in most cases manufacturers would not be required to institute new programs or activities to monitor product quality or performance. A manufacturer that does not keep warranty or replacement part information may ask for our approval to use an alternate defect-reporting methodology that is at least as effective in identifying and tracking potential emissions related defects as the proposed requirements. However, until we approve such a request, the proposed thresholds and procedures continue to apply.

The thresholds for investigation are generally ten percent of total production to date with special limits for small volume engine families. Please note, manufacturers would not investigate for emission related defects until either warranty claims or parts shipments separately reach the investigation threshold. We recognize that a part shipment may ultimately be associated with a particular warranty claim in the manufacturer's database and, therefore, warranty claims and parts shipments would not be aggregated for the purpose of triggering the investigation threshold under this proposal.

The second threshold in this proposal specifies when a manufacturer must report that there is an emission-related defect. This threshold involves a smaller number of engines because each potential defect would have been screened to confirm that it is an emission-related defect. In counting engines to compare with the defect-reporting threshold, the manufacturer would consider a single engine family and model year. However, when a defect report is required, the manufacturer would report all occurrences of the same defect in all engine families and all model years which use the same part. For engines subject to this proposal, the threshold for reporting a defect is two percent of total production for any single engine family with special limits for small volume engine families. It is important to note that while we regard occurrence of the defect threshold as proof of the existence of a reportable defect, we do not regard that occurrence as conclusive proof that recall or other action is merited.

If the number of engines with a specific defect is found to be less than the threshold for submitting a defect report, but information, such as warranty claims or parts shipment data, later indicates additional potentially defective engines, under this proposal the information must be aggregated for the purpose of determining whether the threshold for submitting a defect report has been met. If a manufacturer has actual knowledge from any source that the threshold for submitting a defect report has been met, a defect report would have to be submitted even if the trigger for investigating has not yet been met. For example, if manufacturers receive information from their dealers, technical staff or other field personnel showing conclusively that there is a recurring emission-related defect, they would have to submit a defect report if the submission threshold is reached.

For both the investigation and reporting thresholds, § 1068.501 specifies lower thresholds for very large engines over 560 kW. A defect in these engines can have a much greater impact than defects in smaller engines due to their higher gram per hour emission rates and the increased likelihood that such large engines will be used more continuously.

(6) Rated Power

We are proposing to specify how to determine maximum engine power in the regulations for both locomotives and marine engines. The term “maximum engine power” would be used for marine engines instead of previously undefined terms such as “rated power” or “power rating” to specify the applicability of the standards. We are not proposing to define these terms for our purposes because they already have commercial meanings. The addition of this definition is intended to allow for more objective applicability of the standards. More specifically, for marine engines, we are proposing that maximum engine power would mean the maximum brake power output on the nominal power curve for an engine.

Currently, rated power and power rating are undefined and are specified by the manufacturer during certification. This makes the applicability of the standards unnecessarily subjective and confusing. One manufacturer may choose to define rated power as the maximum measured power output, while another may define it as the maximum measured power at a specific engine speed. Using this second approach, an engine's rated power may be somewhat less than the true maximum power output of the engine. Given the importance of engine power in defining which standards an engine must meet and when, we believe that it is critical that a singular power value be determined objectively according to a specific regulatory definition.

For locomotives, the term “rated power” will continue to be used, but would be explicitly defined to be the brakepower of the engine at notch 8. We would continue to use the term “rated power” because this definition is consistent with the commercial meaning of the term.

We are also adding a clarification to the regulations for both locomotives and marine engines to recognize that actual engine power varies to some degree during production. Manufacturers would specify maximum engine power (or rated power for locomotives) based on the design specifications for the engine (or locomotive). Measured power from actual production engines would be allowed to vary from that specification to some degree based on normal production variability. The expected production variability would be described by the manufacturer in its application. If the engines that are actually produced are different from those described in the application for certification, the manufacturer would be required to amend its application.

Finally, we are requesting comment on whether we need to specify more precisely how to determine alternator/generator efficiency for locomotive testing. In locomotive testing, engine power is not generally measured directly, but rather is calculated from the measured electrical output of the onboard alternator/generator and the alternator/generator's efficiency. Thus, it is important that the efficiency be calculated in a consistent manner. Specifically, we are requesting comment on whether to require that the efficiency be determined (and applied) separately for each notch, and whether a specific test procedure is necessary.

(7) In-Use Compliance for SCR Operation

As discussed in section III.D, we are projecting that manufacturers would use urea-based SCR systems to comply with the proposed Tier 4 emission standards. These systems are very effective at controlling NOX emissions as long as the operator continues to supply urea of acceptable quality. Thus we have considered concepts put forward by manufacturers in other mobile source sectors in dealing with this issue that include design features to prevent an engine from being operated without urea if an operator ignores repeated warnings and allows the urea level to run too low. EPA has recently issued a proposed guidance document for urea SCR systems discussing the use of such features on highway diesel vehicles.

Although we request comment on our adopting requirements for manufacturers on the design of SCR systems to ensure use of urea, we Start Printed Page 15993believe that the nature of the locomotive and large commercial marine sectors supports a different in-use compliance approach. This approach would focus on requirements for operators of locomotives and marine diesel engines that depend on urea SCR to meet EPA standards, aided by onboard alarm and logging mechanisms that engine manufacturers would be required to include in their engine designs. Except in the rare instance that operation without urea may be necessary, the regulatory provisions proposed here put no burden on the end-user beyond simply filling the urea tank with appropriate quality urea. Specifically, we are proposing:

  • That it be illegal to operate without acceptable quality urea when the urea is needed to keep the SCR system functioning properly.
  • That manufacturers must include clear and prominent instructions to the operator on the need for, and proper steps for, maintaining urea, including a statement that it is illegal to operate the engine without urea.
  • That manufacturers must include visible and audible alarms at the operator's console to warn of low urea levels or inadequate urea quality.
  • That engines and locomotives must be designed to track and log, in nonvolatile computer memory, all incidents of engine operation with inadequate urea injection or urea quality.
  • That operators must report to EPA in writing any incidence of operation with inadequate urea injection or urea quality within 30 days of each incident.
  • That, when requested, locomotive and vessel operators must provide EPA with access to, and assistance in obtaining information from, the electronic onboard incident logs.

We understand that in extremely rare circumstances, such as during a temporary emergency involving risk of personal injury, it may be necessary to operate a vessel or locomotive without adequate urea. We would intend such extenuating circumstances to be taken into account when considering what penalties or other actions are appropriate as a result of such operation. The information from SCR compliance monitoring systems described above may also be useful for state and local air quality agencies and ports to assist them in any marine engine compliance programs they implement. States and localities could require operators to make this information available to them in implementing such programs.

We propose that what constitutes acceptable urea solution quality be specified by the manufacturers in their maintenance instructions, with the requirement that the certified emission control system must meet the emissions standards with any urea solution within stated specifications. This will be facilitated by an industry standard for urea quality, which we expect will be generated in the future as these systems move closer to market. We recognize that requiring onboard detection of inadequate urea quality implies the need for automated sensing of some characteristic indicator such as urea concentration or exhaust NOX concentration. We request comment on how this can be best managed to minimize the complexity and cost while at the same time precluding tampering through such means as adding water to the urea tank. We request comment on additional compliance provisions, such as mandatory recordkeeping of fuel and urea consumption for each SCR-equipped locomotive or vessel, with periodic reporting requirements.

We believe these proposed provisions can be an effective tool in ensuring urea use for locomotives and large commercial marine vessels because of the relatively small number of railroads and operators of large commercial vessels in the U.S., especially considering that the number of SCR-equipped locomotives and vessels will ramp up quite gradually over time. In-use compliance provisions of the sort we are proposing for locomotives and large commercial marine engines would be much less effective in other mobile source sectors such as highway vehicles because successful enforcement involving millions of vehicle owners would be extremely difficult. The incident logging or recordkeeping requirements could be effective tools for detecting in-use problems besides no-urea or poor-quality urea, such as other tampering or malmaintenance, or operation with broken or frozen urea dosing systems. We request comment on all aspects of the urea maintenance issue, including other measures we should require of manufacturers and operators of SCR-equipped engines, and on the definition of a temporary emergency.

(8) Fuel Labels and Misfueling

In our previous regulation of in-use locomotive and marine diesel fuel, we established a 15 ppm sulfur standard at the refinery gate for locomotive and marine (LM) diesel fuel beginning June 1, 2012. However, we set the downstream standard for LM diesel fuel at 500 ppm sulfur. In this way the LM diesel fuel pool could remain an outlet for off-specification distillate product and interface/transmix material. Because refiners cannot intentionally produce off-specification fuel for locomotives, most in-use locomotive and marine diesel fuel will be ULSD (which contains less than 15 ppm sulfur). Nevertheless, we expect that some fuel will be available with sulfur levels between 15 and 500 ppm.

The advance emission controls that would be used to comply with many of the new standards will require the use of ULSD. Therefore, we are proposing a requirement that manufacturers notify each purchaser of a Tier 4 locomotive or marine engine that it must be fueled only with the ultra low-sulfur diesel fuel meeting our regulations. We also propose to apply this requirement for locomotives and engines having sulfur-sensitive technology and certified using ULSD. We are also proposing that all of these locomotives and vessels must be labeled near the refueling inlet to say: “Ultra-Low Sulfur Diesel Fuel Only”. These labels would be required to be affixed or updated any time any engine on a vessel is replaced after the proposed program goes into effect.

We are proposing to require the use of ULSD in locomotives and vessels labeled as requiring such use, including all Tier 4 locomotives and marine engines. More specifically, we are proposing that use of the wrong fuel for locomotives or marine engines would be a violation of 40 CFR 1068.101(b)(1) because use of the wrong fuel would have the effect of disabling the emission controls. We request comment on the need for these measures and on additional ideas for preventing misfueling.

(9) Emission Data Engine Selection

Some marine manufacturers have expressed concern over the current provisions in our regulation for selection of an emission data engine. Part 94 specifies that a marine manufacturer must select for testing from each engine family the engine configuration which is expected to be worst-case for exhaust emission compliance on in-use engines. Some manufacturers have interpreted this to mean that they must test all the ratings within an engine family to determine which is the worst-case. Understandably, this interpretation could cause production problems for many manufacturers due to the lead time needed to test a large volume of engines. Our view is that the current provisions do not necessitate testing of all ratings within an engine family. Rather, manufacturers are allowed to base their selection on good engineering judgment, taking into consideration Start Printed Page 15994engine features and characteristics which, from experience, are known to produce the highest emissions. This methodology is consistent with the provisions for our on-highway and nonroad engine programs. Therefore, we are proposing to keep essentially the same language in part 1042 as is in part 94.

We are proposing to adopt similar language for locomotives and apply it in the same manner as we do for marine engines.

(10) Deterioration Factor Plan Requirements

In this rulemaking, we are proposing to amend our deterioration factor (DF) provisions to include an explicit requirement that DF plans be submitted by manufacturers for our approval in advance of conducting engine durability testing, or in the case where no new durability testing is being conducted, in advance of submitting the engine certification application. We are not proposing to fundamentally change either the locomotive or marine engine DF requirements other than to require advance approval.

An advance submittal and approval format would allow us sufficient time to ensure consistency in DF procedures, without the need for manufacturers to repeat any durability testing or for us to deny an application for certification should we find the procedures to be inconsistent with the regulatory provisions. We would expect that the DF plan would outline the amount of service accumulation to be conducted for each engine family, the design of the representative in-use duty cycle on which service will be accumulated, and the quantity of emission tests to be conducted over the service accumulation period. We request comment on other items that should be included in the DF plan.

(11) Labeling Simplification

Our current engine regulations (i.e., Part 86, Part 89, Part 94, etc.) have similar but not identical provisions for emission certification labels. These requirements can vary from regulation to regulation and in many cases may request labeling information that manufacturers feel is either not relevant for modern electronic engines or can be made readily available through other sources. In response to manufacturer concerns, we request comment on the concept of developing a common labeling regulation, similar to our consolidation of testing and compliance provisions into part 1068. Commenters supporting a common labeling requirement for diesel engines, should address in detail the requirements of 40 CFR 1039.135 and 86.007-35 (including reserved text) along with the labeling sections being proposed in this notice (1033.135 and 1042.135).

(12) Production Line Testing

We propose to continue the existing production line testing provisions that apply to manufacturers. Some manufacturers have suggested that we should eliminate this requirement on the basis that very low noncompliance rates are being detected at a high expense. We disagree. As we move toward more stringent emission standards with this rulemaking, we anticipate that the margin of compliance with the standards for these engines is likely to decrease. Consequently, this places an even greater significance on the need to ensure little variation in production engines from the certification engine, which is often a prototype engine. For this reason, it is important to maintain our production line testing program. However, the existing regulations allow manufacturers to develop alternate programs that provide equivalent assurance of compliance on the production line, and to use such programs instead of the specified production line testing program. For example, given the small sales volumes associated with marine engines it may be appropriate to include a production verification program for marine engines as part of a manufacturer's broader production verification programs for its nonmarine engines. We believe these existing provisions already address the concerns raised to us by the manufacturers. Nevertheless, we welcome comments regarding the appropriateness of the current provisions.

We are asking for comment on whether manufacturers should be allowed to use special procedures for production line testing of catalyst-equipped engines. For example, should we allow the use of a previously stabilized catalyst instead of an unstabilized (or green) catalyst? If we allow this approach, should we require some additional procedure for ensuring proper in-use operation of the production catalysts? Should we allow manufacturers to demonstrate that the diagnostic system is capable of verifying proper function of the emission controls? Alternatively for locomotives, should we allow a locomotive selected for testing to be introduced into service before testing, provided that it is tested within the first 10,000 miles of operation?

(13) Evaporative Emission Requirements

While nearly all locomotives currently subject to part 92 are fueled with diesel fuel, § 92.7 includes evaporative emission provisions that would apply for locomotives fueled by a volatile liquid fuel such as gasoline or ethanol. These regulations do not specify test procedures or specific numerical limits, but rather set a “good engineering” requirements. We propose to adopt these same requirements in part 1033 and request comment on the need to specify a test procedure and specific numerical limits.

We are also proposing to adopt similar requirements for marine engines and vessels that run on volatile fuels. We are not aware of any marine engines currently being produced that would be subject to these requirements, but believe that it would be appropriate to adopt these requirements now, rather than waiting until such engines are produced because it would provide manufacturers certainty. Specifically, we are proposing that if someone were to build a marine vessel to use a compression-ignition engine that runs on a volatile liquid fuel, the engine would be subject to the exhaust standards of part 1042, but the fuel system would be subject to the evaporative emission requirements of the recently proposed part 1045.[125]

(14) Small Business Provisions

There are a number of small businesses that would be subject to this proposal because they are locomotive manufacturers/remanufacturers, railroads, marine engine manufacturers, post-manufacture marinizers, or vessel builders. We are proposing to largely continue the existing provisions that were adopted previously for these small businesses in the 1998 Locomotive and Locomotive Engines Rule (April 16, 1998; 63 FR 18977); our 1999 Commercial Marine Diesel Engines Rule (December 29, 1999; 64 FR 73299); and our 2002 Recreational Diesel Marine program (November 8, 2002; 67 FR 68304). These provisions, which are discussed below, are designed to minimize regulatory burdens on small businesses needing added flexibility to comply with emission standards while still ensuring the greatest emissions reductions achievable. (See section VIII.C of this proposed rule for discussion of our outreach efforts with small entities.) We request comment on whether continuing these provisions is appropriate. We also request comment Start Printed Page 15995on whether additional flexibilities are needed.

(a) Locomotive Sector

A significant portion of the locomotive remanufacturing and railroad industry is made up of small businesses. As such, these companies do not tend to have the financial resources or technical expertise to quickly respond to the requirements contained in today's proposed rule. Therefore, as mentioned earlier, we would continue the existing provisions described below.

(i) Production-Line and In-Use Testing Does Not Apply

Production-line and in-use testing requirements would not apply to small locomotive remanufacturers until January 1, 2013, which would be up to five calendar years after this proposed program becomes effective. The advantage of this approach would be to minimize compliance testing during the first five calendar years.

In the 1998 Locomotive Rule (April 16, 1998; 63 FR 18977), the in-use testing exemption was provided to small remanufacturers with locomotives or locomotive engines that became new during the 5-year delay, and this exemption was applicable to these locomotives or locomotive engines for their entire useful life (the exemption was based on model years within the delay period, but not calendar years as we are proposing today). As an amendment to the existing in-use testing exemption, we are proposing that small remanufacturers with these new locomotives or locomotive engines would be required to begin complying with the in-use testing requirements after the five-year delay, January 1, 2013 (exemption based on calendar years). Thus, they would no longer have an exemption from in-use testing for the entire useful life of a locomotive or a locomotive engine. We want to ensure that small remanufacturers would comply with our standards in-use, and subsequently, the public can be assured they are receiving the air quality benefits of the proposed standards. In addition, this proposed amendment would provide a date certain for small remanufacturers on when the in-use testing requirements would begin to apply.

(ii) Small Railroads Exempt From New Standards for Existing Fleet

For locomotives in their existing fleets, the Tier 0 remanufacturing requirements would not apply to railroads qualifying as small businesses. The definition of small business currently used by EPA is same as the definition used by the Small Business Administration, which is based on employment. For line-haul railroads the threshold is 1,500 or fewer employees, and for short-haul railroads it is 500 or fewer employees. Previously we believed that small railroads were not likely to remanufacture their locomotives to “as new” condition in most cases, so their locomotives would be generally excluded from the definition of “new”.

We are requesting comment on whether the current provisions for railroads qualifying as small businesses have been effective and appropriate, on whether they should continue under the new program, and, if so, on whether the existing employee thresholds are appropriate for the purpose of this rulemaking or whether a new threshold based on revenue would be appropriate. Based on the increased efficiencies associated with railroad operations, we believe a railroad with 500 or fewer employees can be viewed as a medium to large business. We believe a different approach based on annual revenues may be more appropriate. For example, should we limit the category of “small railroad” to only those railroads that qualify as Class III railroads and that are not owned by a larger company? Under the current classification system, this would limit the exemption to railroads having total revenue less than $25 million per year.

We are clarifying in our definition that intercity passenger or commuter railroads are not included as railroads that are small businesses because they are typically governmental or are large businesses. Due to the nature of their business, these entities are largely funded through tax transfers and other subsidies. Thus, the only passenger railroads that could qualify for the small railroad provisions would be small passenger railroads related to tourism. We invite comment on whether any intercity passenger or commuter railroads would need this exemption for locomotives in their existing fleet.

(iii) Small Railroads Excluded From In-Use Testing Program

The railroad in-use testing program would continue to only apply to Class I freight railroads, and thus, no small railroads would be subject to this testing requirement. It is important to note that most, but not all Class II and III freight railroads qualify as small businesses. This provision provides flexibility to all Class II and III railroads, which includes small railroads. All Class I freight railroads are large businesses.[126]

(iv) Hardship Provisions

Section 1068.245 of the existing regulations in title 40 contains hardship provisions for engine and equipment manufacturers, including those that are small businesses. We are proposing to apply this section for locomotives as described below.

Under this unusual circumstances hardship provision, locomotive manufacturers may apply for hardship relief if circumstances outside their control cause the failure to comply and if the failure to sell the subject locomotives would have a major impact on the company's solvency. An example of an unusual circumstance outside a manufacturer's control may be an “Act of God,” a fire at the manufacturing plant, or the unforeseen shut down of a supplier with no alternative available. The terms and time frame of the relief would depend on the specific circumstances of the company and the situation involved. As part of its application for hardship, a company would be required to provide a compliance plan detailing when and how it would achieve compliance with the standards.

(b) Marine Sector

There are numerous small businesses that marinize engines for marine use or build vessels. These businesses do not necessarily have the financial resources or technical expertise to quickly respond to the requirements contained in today's proposed rule. To address this issue, we propose to continue most of the existing provisions, as described below.

(i) Revised Definitions of Small-Volume Manufacturer and Small-Volume Boat Builder

We propose to revise the definitions of small-volume manufacturer (SVM) and small-volume boat builder to include worldwide production. Currently, an SVM is defined as a manufacturer with annual U.S.-directed production of fewer than 1,000 engines (marine and nonmarine engines), and a small-volume boat builder is defined as a boat manufacturer with fewer than 500 employees and with annual U.S.-directed production of fewer than 100 boats. By proposing to include worldwide production in these Start Printed Page 15996definitions, we would prevent a manufacturer or boat builder with a large worldwide production of engines or boats, or a large worldwide presence, from receiving relief from the requirements of this program. As discussed above, the provisions that apply to small-volume manufacturers and small-volume boat builders as described below are intended to minimize the impact of this rule for those entities that do not have the financial resources to quickly respond to requirements in the proposed rule.

(ii) Broader Engine Families and Testing Relief

Broader engine families: Post-manufacture marinizers (PMMs) and SVMs would be allowed to continue to group all commercial Category 1 engines into one engine family for certification purposes, all recreational engines into one engine family, and all Category 2 engines into one family. As with existing regulations, these entities would be responsible for certifying based on the “worst-case” emitting engine. The advantage of this approach is that it would minimize certification testing because the marinizer and SVMs can use a single engine in the first year to certify their whole product line. In addition, marinizers and SVMs could then carry-over data from year to year until changing engine designs in a way that might significantly affect emissions.

We understand that this broad engine family provision still would require a certification test and the associated burden for small-volume manufacturers. We realize that the test costs are spread over low sales volumes, and we recognize that it may be difficult to determine the worst-case emitter without additional testing. We would require testing because we need a reliable, test-based technical basis to issue a certificate for these engines. However, manufacturers would be able to use carryover to spread costs over multiple years of production.

Production-line and deterioration testing: In addition, SVMs producing engines less than or equal to 800 hp (600 kW) would be exempted from production-line and deterioration testing for the proposed Tier 3 standards. We would assign a deterioration factor for use in calculating end-of-useful life emission factors for certification. This approach would minimize compliance testing since production-line and deterioration testing would be more extensive than a single certification test. The Tier 3 standards proposed for these engines are expected to be engine-out standards and would not require the use of aftertreatment—similar to the existing Tier 1 and Tier 2 standards. The Tier 4 standards proposed for engines greater than 800 hp (600 kW) are expected to require aftertreatment emission-control devices. Currently, we are not aware of any SVMs that produce engines greater than 800 hp (600 kW), except for one marinizer that plans to discontinue their production in the near future.[127] As a proposed revision to the existing provisions, we would not apply these production-line and deterioration testing exemptions to SVMs that begin producing these larger engines in the future due to the sophistication of manufacturers that produce engines with aftertreatment technology. These manufacturers would have the resources to conduct both the design and development work for the aftertreatment emission-control technology, along with production-line and deterioration testing. We invite comments on this proposed revision.

(iii) Delayed Standards

One-year delay: Post-manufacture marinizers generally depend on engine manufacturers producing base engines for marinizing. This can delay the certification of the marinized engines. There may be situations in which, despite its best efforts, a marinizer cannot meet the implementation dates, even with the provisions described in this section. Such a situation may occur if an engine supplier without a major business interest in a marinizer were to change or drop an engine model very late in the implementation process, or was not able to supply the marinizer with an engine in sufficient time for the marinizer to recertify the engine. Based on this concern, we propose to allow a one-year delay in the implementation dates of the Tier 3 standards for post-manufacture marinizers qualifying as small businesses (the definition of small business used by EPA for these provisions for manufacturers of new marine diesel engines—or other engine equipment manufacturing—is 1,000 or fewer employees) and producing engines less than or equal to 800 hp (600 kW). As described earlier, the Tier 4 standards proposed for engines greater than 800 hp (600 kW) are expected to require aftertreatment emission-control devices. We would not apply this one-year delay to small PMMs that begin marinizing these larger engines in the future due to the sophistication of entities that produce engines with aftertreatment technology. We would expect that the large base engine manufacturer (with the needed resources), not the small PMM, would conduct both the design and development work for the aftertreatment emission-control technology, and they would also take on the certification responsibility in the future. Thus, the small PMM marinizing large engines would not need a one-year delay. We invite comments on this proposed revision.

Three-year delay for not-to-exceed (NTE) requirements: Additional lead time is also appropriate for PMMs to demonstrate compliance with NTE requirements. Their reliance on another company's base engines affects the time needed for the development and testing work needed to comply. Thus, PMMs qualifying as small businesses and producing engines less than or equal to 800 hp (600 kW) could also delay compliance with the NTE requirements by up to three years, for the Tier 3 standards. Three years of extra lead time (compared to one year for the primary certification standards) would be appropriate considering their more limited resources. As described earlier, the Tier 4 standards proposed for engines greater than 800 hp (600 kW) are expected to require aftertreatment emission-control devices. We would not apply this three-year delay to small PMMs that begin marinizing these larger engines in the future due to the sophistication of entities that produce engines with aftertreatment technology. We would expect that the large base engine manufacturer (with the needed resources), not the small PMM, would conduct both the design and development work for the aftertreatment emission-control technology, and they would also take on the certification responsibility in the future. Thus, the small PMM marinizing large engines would not need a three-year delay for compliance with the NTE requirements. We invite comments on this proposed revision.

Five-year delay for recreational engines: For recreational marine diesel engines, the existing regulations (2002 Recreational Diesel Marine program; November 8, 2002, 67 FR 68304) allow small-volume manufacturers up to a five-year delay for complying with the standards. However, we do not plan to continue this provision. As discussed earlier, the Tier 3 standards proposed for these engines are expected to be engine-out standards and would not require the use of aftertreatment—similar to the existing Tier 1 and Tier 2 standards. The Tier 4 standards Start Printed Page 15997proposed for engines greater than 800 hp (600 kW) are expected to require aftertreatment emission-control devices. For the recreational marine sector, most of the engines are less than or equal to 800 hp (kW). To meet the Tier 3 standards, the design and development effort is expected to be for recalibration work, which is much less than the work for Tier 4 standards. Also, Tier 3 engines are expected to require far less in terms of new hardware, and in fact, are expected to only require upgrades to existing hardware (i.e., new fuel systems). In addition, manufacturers have experience with engine-out standards from the existing Tier 1 and Tier 2 standards, and thus, they have learned how to comply with such standards. Thus, small-volume manufacturers of recreational marine diesel engines do not need more time to meet the new standards. For small PMMs of recreational marine diesel engines, the one-year delay described earlier would provide enough time for these entities to meet the proposed standards. We invite comment on discontinuing this provision for a 5-year delay.

(iv) Engine Dressing Exemption

Marine engine dressers would continue to be exempted from certification and compliance requirements. Many marine diesel engine manufacturers take a new, land-based engine and modify it for installation on a marine vessel. Some of the companies that modify an engine for installation on a vessel make no changes that might affect emissions. Instead, the modifications may consist of adding mounting hardware and a generator or reduction gears for propulsion. It can also involve installing a new marine cooling system that meets original manufacturer specifications and duplicates the cooling characteristics of the land-based engine, but with a different cooling medium (such as sea water). In many ways, these manufacturers are similar to nonroad equipment manufacturers that purchase certified land-based nonroad engines to make auxiliary engines. This simplified approach of producing an engine can more accurately be described as dressing an engine for a particular application. Because the modified land-based engines are subsequently used on a marine vessel, however, these modified engines would be considered marine diesel engines, which would then fall under these requirements.

To clarify the responsibilities of engine dressers under this proposed rule, while we would continue to consider them to be manufacturers of a marine diesel engine, they would not be required to obtain a certificate of conformity (as long as they ensure that the original label remains on the engine and report annually to EPA that the engine models that are exempt pursuant to this provision). This would be an extension of § 94.907 of the existing regulations. For further details of engine dressers responsibilities see § 1042.605 of the proposed regulations.

(v) Vessel Builder Provisions

For recreational marine engines, the existing regulations (2002 Recreational Diesel Marine program; November 8, 2002, 67 FR 68304) allow manufacturers with a written request from a small-volume boat builder to produce a limited number of uncertified engines (over a five-year period)—an amount equal to 80-percent of the vessel manufacturer's sales for one year. For boat builders with very small production volumes, this 80-percent allowance could be exceeded, as long as sales do not exceed 10 engines in any one year nor 20 total engines over five years and applies only to engines less than or equal to 2.5 liters per cylinder. However, we do not plan to continue this provision. The vast majority of the recreational marine engines would be subject only to the Tier 3 engine-out standards that are not expected to change the physical characteristics of engines (Tier 3 standards would not result in a larger engine or otherwise require any more space within a vessel). This is similar to the Tier 2 engine-out standards, and thus, we believe this provision is not necessary anymore as boat builders are not expected to need to redesign engine compartments of boats, for engines meeting Tier 3 standards. We invite comment on discontinuing this provision for boat builders.

(vi) Hardship Provisions

Sections 1068.245, 1068.250 and 1068.255 of the existing regulations in title 40 contain hardship provisions for engine and equipment manufacturers, including those that are small businesses. We are proposing to apply these sections for marine applications which would effectively continue existing hardship provisions as described below.

PMMs and SVMs: We are proposing to continue two existing hardship provisions for PMMs and SVMs. They may apply for this relief on an annual basis. First, under an economic hardship provision, PMMs and SVMs may petition us for additional lead time to comply with the standards. They must show that they have taken all possible business, technical, and economic steps to comply, but the burden of compliance costs will have a major impact on their company's solvency. As part of its application of hardship, a company would be required to provide a compliance plan detailing when and how it would achieve compliance with the standards. Hardship relief could include requirements for interim emission reductions and/or purchase and use of emission credits. The length of the hardship relief decided during initial review would be up to one year, with the potential to extend the relief as needed. We anticipate that one to two years would normally be sufficient. Also, if a certified base engine is available, the PMMs and SVMs must generally use this engine. We believe this provision would protect PMMs and SVMs from undue hardship due to certification burden. Also, some emission reduction can be gained if a certified base engine becomes available. See the proposed regulatory text in 40 CFR 1068.250 for additional information.

Second, under the unusual circumstances hardship provision, PMMs and SVMs may also apply for hardship relief if circumstances outside their control cause the failure to comply and if the failure to sell the subject engines would have a major impact on their company's solvency. An example of an unusual circumstance outside a manufacturer's control may be an “Act of God,” a fire at the manufacturing plant, or the unforeseen shut down of a supplier with no alternative available. The terms and time frame of the relief would depend on the specific circumstances of the company and the situation involved. As part of its application for hardship, a company would be required to provide a compliance plan detailing when and how it would achieve compliance with the standards. We consider this relief mechanism to be an option of last resort. We believe this provision would protect PMMs and SVMs from circumstances outside their control. We, however, would not envision granting hardship relief if contract problems with a specific company prevent compliance for a second time. See the proposed regulatory text in 40 CFR 1068.245 for additional information.

Small-volume boat builders: We are also continuing the unusual circumstances hardship provision for small-volume boat builders (those with less than 500 employees and worldwide production of fewer than 100 boats). Small-volume boat builders may apply for hardship relief if circumstances Start Printed Page 15998outside their control cause the failure to comply and if the failure to sell the subject vessels would have a major impact on the company's solvency. An example of an unusual circumstance outside a manufacturer's control may be an “Act of God,” a fire at the manufacturing plant, or the unforeseen shut down of a supplier with no alternative available. This relief would allow the boat builder to use an uncertified engine and is considered a mechanism of last resort. The terms and time frame of the relief would depend on the specific circumstances of the company and the situation involved. As part of its application for hardship, a company would be required to provide a compliance plan detailing when and how it would achieve compliance with the standards. See the proposed regulatory text in 40 CFR 1068.245 for additional information.

In addition, small-volume boat builders generally depend on engine manufacturers to supply certified engines in time to produce complying vessels by the date emission standards would begin to apply. We are aware of other applications where certified engines have been available too late for equipment manufacturers to adequately accommodate changing engine size or performance characteristics. To address this concern, we are proposing to allow small-volume boat builders to request up to one extra year before using certified engines if they are not at fault and would face serious economic hardship without an extension. See the proposed regulatory text in 40 CFR 1068.255 for additional information.

(15) Alternate Tier 4 NOX+HC Standards

We are proposing new Tier 4 NOX and HC standards for locomotives and marine engines, and proposing to continue our existing emission averaging programs. However, the existing averaging programs do not allow manufacturers to show compliance with HC standards using averaging. Because we are concerned that this could potentially limit the benefits of our averaging program as a phase-in tool for manufacturers, we are proposing an alternate NOX+HC standard of 1.3 g/bhp-hr that could be used as part of the averaging program.[128] Manufacturers that were unable to comply with the Tier 4 HC standard would be allowed to certify to a NOX+HC FEL, and use emission credits to show compliance with the alternate standard instead of the otherwise applicable NOX and HC standards. For example, a manufacturer may choose to use banked emission credits to gradually phase in its Tier 4 1200 kW marine engines by producing a mix of Tier 3 and Tier 4 engines during the early part of 2014. We are proposing that NOX+HC credits and NOX credits could be averaged together without discount.

(16) Other Issues

We are also proposing other minor changes to the compliance program. For example, we are proposing that engine manufacturers be required to provide installation instructions to vessel manufacturers and kit installers to ensure that engine cooling systems, aftertreatment exhaust emission controls, and other emission controls are properly installed. Proper installation of these systems is critical to the emission performance of the equipment. Vessel manufacturers and kit installers would be required to follow the instructions to avoid improper installation that could render emission controls inoperative. Improper installation would subject them to penalties equivalent to those for tampering with the emission controls.

We are also clarifying the general requirement that no emission controls for engines subject to this final rule may cause or contribute to an unreasonable risk to public health, welfare, or safety, especially with respect to noxious or toxic emissions that may increase as a result of emission-control technologies. The proposed regulatory language, which addresses the same general concept as the existing §§ 92.205 and 94.205, implements sections 202(a)(4) and 206(a)(3) of the Act and clarifies that the purpose of this requirement is to prevent control technologies that would cause unreasonable risks, rather than to prevent trace emissions of any noxious compounds. This requirement prevents the use of emission-control technologies that produce pollutants for which we have not set emission standards, but nevertheless pose a risk to the public.

B. Compliance Issues Specific to Locomotives

(1) Refurbished Locomotives

Section 213(a)(5) of the Clean Air Act directs EPA to establish emission standards for “new locomotives and new engines used in locomotives.” In the previous rulemaking, we defined “new locomotive” to mean a freshly manufactured or remanufactured locomotive.[129] We defined “remanufacture” of a locomotive as a process in which all of the power assemblies of a locomotive engine are replaced with freshly manufactured (containing no previously used parts) or reconditioned power assemblies. In cases where all of the power assemblies are not replaced at a single time, a locomotive is considered to be “remanufactured” (and therefore “new”) if all of the power assemblies from the previously new engine had been replaced within a five-year period.

The proposed regulations clarify the definition of “freshly manufactured locomotive” when an existing locomotive is substantially refurbished including the replacement of the old engine with a freshly manufactured engine. The existing definition in § 92.12 states that freshly manufactured locomotives are locomotives that do not contain more than 25 percent (by value) previously used parts. We allowed freshly manufactured locomotives to contain up to 25 percent used parts because of the current industry practice of using various combinations of used and unused parts. This 25-percent value applies to the dollar value of the parts being used rather than the number because it more properly weights the significance of the various used and unused components. We chose 25 percent as the cutoff because setting a very low cutoff point would have allowed manufacturers to circumvent the more stringent standards for freshly manufactured locomotives by including a few used parts during the final assembly. On the other hand, setting a very high cutoff point could have required remanufacturers to meet standards applicable to freshly manufactured locomotives, but such standards may not have been feasible given the technical limitations of the existing chassis.

We are proposing to add a definition of “refurbish” which would mean the act of modifying an existing locomotive such that the resulting locomotive contains less than 50 percent (by value) previously used parts, (but more than 25 percent). We believe that where an existing locomotive is improved to this degree, it is appropriate to consider it separately from locomotives that are simply remanufactured in a conventional sense. As described in section IV.B.(3) we are proposing to set the credit proration factor for Start Printed Page 15999refurbished switch locomotives equal to the proration factor for 20-year old switchers (0.60).

We are requesting comment on whether refurbished locomotives should be required to meet more stringent standards than locomotives that are simply remanufactured. For example, would it be feasible and cost-effective to require refurbished switch locomotives to meet latest applicable emission standards (i.e., the highest tier of standards that is applicable to freshly manufactured switch locomotives at the time of the remanufacture) rather than the old standards? If not, should they be required to at least meet the Tier 1 or Tier 2 standards?

We recognize that the issues are somewhat different for refurbished line-haul locomotives because of different design constraints that are not present with switchers. If we required refurbished line-haul locomotives to meet very stringent standards, should we allow railroads to refurbish a limited number of line-haul locomotives to less stringent standards? For example, if we required refurbished line-haul locomotives to meet the Tier 3 standards, should we allow railroads to refurbish up to 10 line-haul locomotives per year to the Tier 2 standards.

(2) Averaging, Banking and Trading

We are proposing to continue the existing averaging banking and trading provisions for locomotives. In general, we will continue the historical practice of capping family emission limits (FELs) at the level of the previously applicable standard. However, we are requesting comment on whether we should set lower caps for Tier 4 locomotives similar to what was done for highway engines.[130] We recognize that it would be appropriate to allow the use of emission credits to smooth the transition from Tier 3 to Tier 4, and this requires the FELs to be set at the level of the Tier 3 standards.

In order to ensure that the ABT program is not used to delay the implementation of the Tier 4 technology, we are also proposing to carry over an averaging restriction that was adopted for Tier 2 locomotives in the previous locomotive rulemaking. We would restrict to number of Tier 4 locomotives that could be certified using credits to no more than 50 percent of a manufacturer's annual production. As was true for the earlier restriction, this would be intended to ensure that progress is made toward compliance with the advanced technology expected to be needed to meet the Tier 4 standards. This would encourage manufacturers to make every effort toward meeting the Tier 4 standards, while allowing some use of banked credits to provide needed lead time in implementing the Tier 4 standards by 2015, allowing them to appropriately focus research and development funds. We request comment on the need for this or other restriction on the application of credits to Tier 4 locomotives.

We are proposing to prohibit the carryover of PM credits generated from Tier 0 or Tier 1 locomotives under part 92. The Tier 0 and Tier 1 PM standards under part 92 were set above the average baseline level to act as caps on PM emissions rather than technology-forcing standards. Thus, credits generated against these standards can be considered to be windfall credits. We believe that allowing the carryover of such PM credits would not be appropriate. We would allow credits generated from Tier 2 locomotives to be used under part 1033. We request comment on this prohibition as well as an alternative approach in which part 92 PM credits are discounted significantly rather than prohibited completely.

We are also proposing to update the proration factors for credits generated or used by remanufactured locomotives. The updated proration factors better reflect the difference in service time for line-haul and switch locomotives. The ABT program is based on credit calculations that assume as a default that a locomotive will remain at a single FEL for its full service life (from the point it is originally manufactured until it is scrapped). However, when we established the existing standards, we recognized that technology will continue to evolve and that locomotive owners may wish to upgrade their locomotives to cleaner technology and certify the locomotive to a lower FEL at a subsequent remanufacture. We established proration factors based on the age of the locomotive to make calculated credits for remanufactured locomotives consistent with credits for freshly manufactured locomotive in terms of lifetime emissions. The proposed proration factors are shown in § 1033.705 of the proposed regulations. These would replace the existing proration factors of § 92.305. For example, using the proposed proration factors, a 15 year old line-haul locomotive certified to a new FEL that was 1.00 g/bhp-hr below the applicable standard would generate the same amount of credit as a freshly manufactured locomotive that was certified to an FEL that was 0.43 g/bhp-hr below the applicable standard because the proration factor would be 0.43. For comparison, under the existing regulations, the proration factor would be 0.50. See section IV.B.(3) for additional discussion of proration factor issues related to refurbished switchers.

We are also requesting comment on how to assign emission credits. Under the current regulations, credits can be held by the manufacturer, railroad, or other entities. Since remanufacturing is frequently a collaborative process between the railroad and either a manufacturer or other remanufacturer, there can be multiple entities that are considered to be remanufacturers, and thus allowed to hold the certificate for the remanufactured locomotive. The regulations presume that credits are held by the certificate holder, but they can be transferred to the railroad at the point of sale or the point of remanufacture. We are requesting comment on whether it would be more appropriate to require that credits be transferred to the railroads for some or all cases. Automatically transferring credits to the railroad at the time of remanufacture would be a way of applying the standards on a fleet-average basis. Would this be a better approach for ensuring that the industry applies low emission technology in the most equitable and cost effective manner? Would it reduce the potential for market disruptions? Would it have any other beneficial or adverse consequences not discussed here?

Finally, we are requesting comment on how to treat credits generated and used by Tier 3 and later locomotives. Under the current part 92 ABT program, credits are segregated based on the cycle over which they are generated but not by how the locomotive is intended to be used (switch, line-haul, passenger, etc.). Line-haul locomotives can generate credits for use by switch locomotives, and vice versa, because both locomotives are subject to the same standards. However, for the Tier 3 and Tier 4 programs, switch and line-haul locomotives would be subject to different standards with emissions generally measured only for one test cycle. We are proposing to allow credits generated by Tier 3 or later switch locomotives over the switch cycle to be used by line-haul locomotives to show compliance with line-haul cycle standards. We are requesting comment on (but not proposing) allowing such cross-cycle use of line-haul credits (or switch credits generated by line-haul locomotives) by Tier 3 or later switch locomotives.

To make this approach work, we are also proposing a special calculation Start Printed Page 16000method where the credit using locomotive is subject to standards over only one duty cycle while the credit generating locomotive is subject to standards over both duty cycles (and can thus generate credits over both cycles). In such cases, we would require the use of credits under both cycles. For example, for a Tier 4 line-haul engine family needing 1.0 megagrams of NOX credits to comply with the line-haul emission standard, the manufacturer would have to use 1.0 megagrams of line-haul NOX credits and 1.0 megagrams of switch NOX credits if the line-haul credits were generated by a locomotive subject to standards over both cycles.

Commenters supporting cross-cycle credit averaging should also address uncertainty due to cycle differences and the different ways in which switch and line-haul locomotives are likely to be used. For example, the two cycles are very different and reflect average duty cycles for the two major types of operation. Moreover, because switch locomotive generally spend more time in low-power operation than line-haul locomotives, they tend to last much longer in terms of years. This means that the full benefits of emission reductions from switch locomotives will likely occur further into the future than will the benefits of emission reductions from line-haul locomotives. Should such credits be adjusted to account for this difference? If so, how? Are there other factors that would warrant applying some adjustment to the credits to make them more equivalent to one another?

(3) Switch Credit Calculation

We are proposing to correct the existing ABT program to more appropriately give credits to railroads for upgrading old switchers to use clean engines, rather than to continue using the old high emission engines indefinitely. As with the existing program, credits would be calculated from the difference between the emissions of the old switcher and the emissions of the new replacement switcher, adjusted to account for the projected time the old switcher would have otherwise remained in service. We are also requesting comment on whether other changes need to be made to the switch credit calculation.

The proposed correction would affect the proration factor that is used in the credit calculation to account for the locomotive's emissions projected for the remainder of its service life, relative to a freshly manufactured locomotive. More specifically, the correction we are proposing would create a floor for the credit proration factor for refurbished switch locomotives equal to the proration factor for 20 year old switchers (0.60). For example, under the proposed program, refurbishing a 35 year old switch locomotive to an FEL 1.0 g/bhp-hr below the Tier 0 standard would generate the same amount of credit as a conventional remanufacture of a 20 year old switch locomotive to an FEL 1.0 g/bhp-hr below the Tier 0 standard. This is because we believe that such refurbished switch locomotives will almost certainly operate as long as a 20 year old locomotive that was remanufactured at the same time. Such credits can be generated under the existing program, but not to the full degree that they should be. That original program was designed to address line-haul locomotives, and no special consideration was made for switchers or for substantially refurbishing the locomotive. Most significantly, the existing regulations assume that any locomotive 32 years old or older would only be remanufactured one additional time (i.e., only have one remaining useful life). This is true without regard to how many additional improvements are made to the locomotive to extend its service life. Based on this assumption, any credits generated by such a locomotive are discounted by 86 percent relative to credits generated or used by a freshly manufactured locomotive. While this kind of discount appropriately reflected the differences in future emissions for line-haul locomotives, it greatly underestimates the emission reduction achieved by refurbishing switch locomotives.

The existing and proposed credit programs allow for remanufacturers to generate emission credits by refurbishing an existing old switch locomotive so that it will use engines meeting the standards for freshly manufactured locomotives. However, they do not allow for any credits to be generated by simultaneously creating a freshly manufactured locomotive and scrapping an existing old switch locomotive, even though the emissions impact of the two scenarios may be identical. We request comment on whether it is appropriate to maintain this distinction. Commenters supporting allowing credits to be generated by scrapping old locomotives should address how to ensure that allowing it would not result in windfall credits being generated from old locomotives that would have been scrapped anyway.

(4) Phase-in and Reasonable Cost Limit

We are proposing that the new Tier 0 and 1 emission standards become applicable on January 1, 2010. We are also proposing a requirement for 2008 and 2009 when a remanufacturing system is certified to these new standards. If such system is available before 2010 for a given locomotive at a reasonable cost, remanufacturers of those locomotives may no longer remanufacture them to the previously applicable standards. They must instead comply with the new Tier 0 or 1 emission standards. Similarly, we are proposing a requirement to use certified Tier 2 systems for 2008 through 2012 when a remanufacturing system is certified to the new Tier 2 standards. We are requesting comment on how best to define reasonable cost.

As part of this phase-in requirement, we would allow owners/operators a 90-day grace period in which they could remanufacture their locomotives to the previously applicable standards. This would allow them to use up inventory of older parts. It would also allow sufficient time to find out about the availability of kits and to make appropriate plans for compliance.

We are also requesting comment on whether this requirement will cause any disadvantage to non-OEM remanufacturers who may be unable to develop remanufacture systems in time.

(5) Recertification Without Testing

Once manufacturers have certified an engine family, we have historically allowed them to obtain certificates for subsequent model years using the same test data if the engines remain unchanged from the previous model year. We refer to this type of certification as “carryover.” We are proposing to continue this allowance. We are also requesting comment on extending this allowance to owner/operators. Specifically, we request comment on adding the following paragraph to the end of the proposed § 1033.240:

An owner/operator remanufacturing its locomotives to be identical to its previously certified configuration may certify by design without new emission test data. To do this, submit the application for certification described in § 1033.205, but instead of including test data, include a description of how you will ensure that your locomotives will be identical in all material respects to their previously certified condition. You have all of the liabilities and responsibilities of the certificate holder for locomotives you certify under this paragraph.

Several railroads have expressed concern that once they purchase a compliant locomotive, they are at the mercy of the original manufacturer at the time of remanufacture if there are no other certified kits available for that model. The regulatory provision shown Start Printed Page 16001above would make it somewhat simpler for a railroad to obtain the certificate because it would eliminate the need to certification testing.

(6) Railroad Testing

Section 92.1003 requires Class I freight railroads to annually test a small sample of their locomotives. We are proposing to adopt the same requirements in § 1033.810. We are requesting comments on whether this program should be changed. In particular, we request suggestions to better specify how a railroad selects which locomotives to test, which has been a source of some confusion in recent years. Commenters suggesting changes should also address when such changes should take effect.

(7) Test Conditions and Corrections

In our previous rule, we established test conditions that are representative of in-use conditions. Specifically, we required that locomotives comply with emission standards when tested at temperatures from 45 °F to 105 °F and at both sea level and altitude conditions up to about 4,000 feet above sea level. One of the reasons we established such a broad range was to allow outdoor testing of locomotives. While we only required that locomotives comply with emission standards when tested at altitudes up to 4,000 feet for purposes of certification and in-use liability, we also required manufacturers to submit evidence with their certification applications, in the form of an engineering analysis, that shows that their locomotives were designed to comply with emission standards at altitudes up to 7,000 feet. We included correction factors that are used to account for the effects of ambient temperature and humidity on NOX emission rates.

We are proposing to change the lower limit for testing to 60 °F and eliminate the correction for the effects of ambient temperature. In implementing the current regulations, we have found that the broad temperature range with correction, which was established to make testing more practical, was not workable. Given the uncertainty with the existing correction, manufacturers have generally tried to test in the narrower range being proposed today. However, under the proposed regulations, we would allow manufacturers to test at lower temperatures, but would require them to develop correction factors specific to their locomotive designs. We would continue the other existing test condition provisions in the proposed regulations.

(8) Duty Cycles

We are not proposing any changes to the weighting factors for the locomotive duty cycles. However, we are requesting comment on whether such changes would be appropriate in light of the proposed idle reduction requirements. The existing regulations (§ 92.132(a)(4)) specifies an alternate calculation for locomotive equipped with idle shutdown features. Specifically, the regulatory language states:

For locomotives equipped with features that shut the engine off after prolonged periods of idle, the measured mass emission rate Mi1 (and Mi1a as applicable) shall be multiplied by a factor equal to one minus the estimated fraction reduction in idling time that will result in use from the shutdown feature. Application of this adjustment is subject to the Administrator's approval.

This provision allows a manufacturer to appropriately account for the inclusion of idle reduction features as part of its emission control system. There are three primary reasons why we are not proposing to change the calculation procedures with respect to the proposed idle requirements. First, different shutdown systems will achieve different levels of idle reduction in use. Thus, no single adjustment to the cycle would appropriately reflect the range of reductions that will be achieved. Second, the existing calculation provides an incentive for manufacturers to design shutdown systems that will achieve in the greatest degree of idle reduction that is practical. Finally, our feasibility analysis is based in part on the emission reductions achievable relative to the existing standards. Since some manufacturers already rely on the calculated emission reductions from shutdown features incorporated into many of their locomotive designs, our feasibility is based in part on allowing such calculations.

While we are proposing to continue this approach, we are requesting comment on whether we should be more specific in our regulations about what level of adjustment is appropriate. For example, should we specify that idle emission rates for locomotives meeting our proposed minimum shutdown requirements in § 1033.115 be reduced by 20 percent, unless the manufacturer demonstrates that greater idle reduction will be achieved?

We also recognize that the potential exists for locomotives to include additional power notches, or even continuously variable throttles and that the standard FTP sequence for such locomotives would result in an emissions measurement that does not accurately reflect their in-use emissions performance. Moreover, some locomotives may not have all of the specified notches, making it impossible to test them over the full test. Under the existing regulations, we handle such locomotives under our discretion to allow alternate calculations (40 CFR 92.132(e)). We are requesting comment on whether we need detailed regulations to specify duty cycles for such locomotives. In general, for locomotives missing notches, we believe the existing duty cycle weighting factors should be reweighted without the missing notches. For locomotives without notches or more than 8 power notches, commenters should consider the following information provided to us by manufacturers for the previous rulemaking that shows that typical notch power levels expressed as a percentage of the rated power of the engine as shown in Table IV-below.

Table IV-1.—Typical Locomotive Notch Power Levels

Notch
12345678
Percent of Rated Power4.511.523.535.048.564.085.0100.0

(9) Use of Engines Certified Under 40 CFR Parts 89 and 1039

Section 92.907 currently allows the use of a limited number of nonroad engines in locomotive applications without certifying under the locomotive program. We placed limits on the number of nonroad engines that can be used for four primary reasons:

  • The locomotive program is uniquely tailored to the railroad industry to ensure emission reductions for actual locomotive operation over 30-60 year service lives.Start Printed Page 16002
  • At sufficiently high sales levels, the per locomotive cost of certifying under part 92 become less significant.
  • It is somewhat inequitable to allow nonroad engine manufacturers the option of certifying the engines in whichever program they believe to be more advantageous to them, considering factors such as compliance testing requirements.
  • States and localities have much less ability to regulate locomotives than other engine types, and thus EPA has an obligation to monitor locomotive performance more closely.

We believe that these reasons remain valid and are proposing to continue this type of allowance. However, we are proposing some changes to these procedures. In general, manufacturers have not taken advantage of these existing provisions. In some cases, this was because the manufacturer wanted to produce more locomotives than allowed under the exemption. However, in most cases, it was because the customer wanted a full locomotive certification with the longer useful life and additional compliance assurances. We are proposing new separate approaches for the long term (§ 1033.625) and the short term (§ 1033.150), each of which addresses at least one of these issues.

For the long term, we are proposing to replace the existing allowance to rely on part 89 certificates with a design-certification program that would make the locomotives subject to the locomotive standards in-use, but not require new testing to demonstrate compliance at certification. Specifically, this program would allow switch manufacturers using nonroad engines to introduce up to 15 locomotives of a new model prior to completing the traditional certification requirements. While the manufacturer would be able to certify without new testing, the locomotives have locomotive certificates. Thus, purchasers would have the compliance assurances that they seem to desire.

The short term program is more flexible and would not require that the locomotives comply with the switch cycle standards, and instead the engines would be subject to the part 1039 standards. The manufacturer would be required to use good engineering judgment to ensure that the engines' emission controls will function properly when installed in a locomotive. Given the relative levels of the part 1039 standards and those being proposed in 1033, we do believe there is little environmental risk with this short-term allowance, and thus propose to not have any limits of the sales of such locomotives. Nevertheless, we are proposing that this allowance be limited to model years through 2017. This will provide sufficient time to develop these new switchers. We are not proposing that these locomotives would be exempt from the part 1033 locomotive standards when remanufactured, unless the remanufacturing of the locomotive took place prior to 2018 and involved replacement of the engines with certified new nonroad engines. Otherwise, the remanufactured locomotive would be required to be covered by a part 1033 remanufacturing certificate.

We are also requesting comment on whether specific regulatory language is needed to describe how to test locomotives that have multiple propulsion engines, and when it is appropriate to allow single engine testing for certification.

(10) Auxiliary Emission Control Devices Triggered by GPS Data

Some manufacturers have developed software which can use latitude and longitude to change engine operating characteristics including emissions. Such software fits our definition of an auxiliary emission control device (AECD). If for example, the software were to increase emissions when the locomotive was operated in Mexico; this would cause the locomotive to fail emission standards when in Mexico. Moreover, the emissions from such a locomotive would likely be harmful to both Mexican and U.S. citizens due to emissions transport. AECDs (except those approved during certification) which cause emission exceedences when a locomotive crosses the U.S. border into a foreign country are considered defeat devices and are not permitted. When a locomotive is certified, it should comply with U.S. standards and requirements during all operation. It does not matter where the locomotive goes after it is introduced into commerce. In addition, since emission labels have to contain an unconditional statement of compliance, non-compliant operation in any area, including a foreign country, would render the label language false, and this is not allowed.

(11) Mexican and Canadian Locomotives

Under the existing regulations, Mexican and Canadian locomotives are subject to the same requirements as U.S. locomotives if they operate extensively within the U.S. The regulations 40 CFR 92.804(e) states:

Locomotives that are operated primarily outside of the United States, and that enter the United States temporarily from Canada or Mexico are exempt from the requirements and prohibitions of this part without application, provided that the operation within the United States is not extensive and is incidental to their primary operation.

We are proposing to change this exemption to make it subject to our prior approval, since we have found that the current language has caused some confusion. When we created this exemption, it was our understanding that Mexican and Canadian locomotives rarely operated in the U.S. and the operation that did occur was limited to within a short distance of the border. We are now aware that there are many Canadian locomotives that do operate extensively within the U.S. and relatively few that would meet the conditions of the exemption. We have also learned that some Mexican locomotives may be operating more extensively in the United States. Thus, it is appropriate to make this exemption subject to our prior approval. To obtain this exemption, a railroad would be required to submit a detailed plan for our review prior to using uncertified locomotives in the U.S. We would grant an exemption for locomotives that we determine will not be used extensively in the U.S. and that such operation would be incidental to their primary operation. Mexican and Canadian locomotives that do not have such an exemption and do not otherwise meet EPA regulations may not enter the United States.

(12) Temporary In-Use Compliance Margins and Assigned Deterioration Factors

The Tier 4 standards would be challenging for manufacturers to achieve, and would require manufacturers to develop and adapt new technologies. Not only would manufacturers be responsible for ensuring that these technologies would allow engines to meet the standards at the time of certification, they would also have to ensure that these technologies continue to be highly effective in a wide range of in-use environments so that their engines would comply in use when tested by EPA. However, in the early years of a program that introduces new technology, there are risks of in-use compliance problems that may not appear in the certification process or during developmental testing. Thus, we believe that for a limited number of model years after new standards take effect it is appropriate to adjust the compliance levels for assessing in-use compliance for diesel engines equipped with aftertreatment. This would provide assurance to the manufacturers that they would not face recall if they exceed Start Printed Page 16003standards by a small amount during this transition to clean technologies. This approach is very similar to that taken in the highway heavy-duty rule (66 FR 5113-5114) and general nonroad rule (69 FR 38957), both of which involve similar approaches to introducing the new technologies.

Table IV-2 shows the in-use adjustments that we propose to apply. These adjustments would be added to the appropriate standards or FELs in determining the in-use compliance level for a given in-use hours accumulation. Our intent is that these add-on levels be available only for highly-effective advanced technologies such as particulate traps and SCR. Note that these in-use add-on levels apply only to engines certified through the first few model years of the new standards. During the certification demonstration, manufacturers would still be required to demonstrate compliance with the unadjusted Tier 4 certification standards using deteriorated emission rates. Therefore, the manufacturer would not be able to use these in-use standards as the design targets for the engine. They would need to project that engines would meet the standards in-use without adjustment. The in-use adjustments would merely provide some assurance that they would not be forced to recall engines because of some small miscalculation of the expected deterioration rates.

To put these levels in context, the difference between the NOX standard with and without the end of life add-on is equivalent to the end of life catalyst efficiency being about 20 percent lower than expected. Our feasibility analysis projects that the SCR catalyst would need to be approximately 80 percent efficient over the locomotive duty cycle at the end of the locomotive's useful life to comply with the 1.3 g/bhp-hr standard. However, if this efficiency dropped to 60 percent, the cycle-weighted emissions would essentially double, increasing by up to 1.3 g/bhp-hr.

Table IV-2.—Proposed In-Use Add-Ons

[g/bhp-hr]

For useful life fractionsNOX (2017-2019)PM (2015-2017)
<50% UL0.70.01
50%-75% UL1.0
>75% UL1.3

C. Compliance Issues Specific to Marine Engines

(1) Useful Life

We specify in 40 CFR 94.9 minimum values for the useful life compliance period. We require manufacturers to specify longer useful lives for engines that are designed to last longer than these minimum values. We also allow manufacturers to ask for shorter useful lives where they can demonstrate that the engines will rarely exceed the requested value in use. Some manufacturers have proposed that the useful life scheme in our regulation be modified to more closely reflect the design lives of current marine engines and the fact that design life inherently varies with engine cylinder size and power density. Our existing regulations do account for this variation by specifying nominal minimum useful life values which most engines are certified to. Manufacturers are required to certify to longer useful lives if their engines are designed to last significantly longer than this minimum. The regulations also include provisions for a manufacturer to request a shorter useful life. This was recently amended to include a more prescriptive basis for manufacturers to demonstrate that a shorter useful life is more appropriate.[131] Specifically, our regulations used to require that the demonstration include data from in-use engines. Manufacturers were concerned that they generally do not (and cannot) have the data from in-use engines that is needed to justify an alternate useful life prior to obtaining certification and putting engines into service. The amended regulations allow manufacturers to use information equivalent to in-use data, such as data from research engines or similar engine models that are already in production. Additionally, the demonstration currently required must include recommended overhaul intervals, any mechanical warranties offered for the engine or its components, and any relevant customer design specifications. Given the above amendments, we do not feel that a sweeping change to our useful life scheme is warranted at this time. We would be willing to consider modifying our scheme in the future should manufacturers provide data for characteristics used to design engine overhaul intervals (e.g., compression loss, oil consumption increase, engine component wear, etc.) in specific cylinder size and power density categories.

(2) Replacement Engines

Under the provisions of our current marine diesel engine program, when an engine on an existing vessel is replaced with a new engine, that new engine must be certified to the standards in existence when the vessel is repowered. These repower requirements apply to both propulsion and auxiliary engines. We are proposing to apply this approach under the new regulations rather than the provisions of § 1068.240.

We provided an exemption in 40 CFR 94.1103(b)(3) which allows a vessel owner to replace an existing engine with a new uncertified engine or a new engine certified to an earlier standard engine in certain cases. This is only allowed, however, if it can be demonstrated that no new engine that is certified to the emission limits in effect at that time is produced by any manufacturer with the appropriate physical or performance characteristics needed to repower the vessel. In other words, if a new certified engine cannot be used, an engine manufacturer may produce a new replacement engine that does not meet all of the requirements in effect at that time. For example, if a vessel has twin Tier 1 propulsion engines and it becomes necessary to replace one of them after the Tier 3 standards go into effect, the vessel owner can request approval for an engine manufacture to produce a new Tier 1 engine if it can be demonstrated that the vessel would not function properly if the engines are not identically matched.

There are certain conditions for this exemption. The replacement engine must meet standards at least as stringent as those of the original engine. So, for example, if the original engine is a pre-Tier 1 engine, then the replacement engine need not meet any emission limits. If the old engine was a Tier 1 engine, the new engine must meet at Start Printed Page 16004least the Tier 1 limits. As described in this section, the new engine does not necessarily need to meet stricter limits that may otherwise apply when the replacement occurs. Also as a condition for the exemption, the engine manufacturer must take possession of the original engine or make sure it is destroyed. In addition, the replacement engine must be clearly labeled to show that it does not comply with the standards and that sale or installation of the engine for any purpose other than as a replacement engine is a violation of federal law and subject to civil penalty. Our regulations specify the information that must be on the label. In this proposal, we are adding a provision to cover the case where the engine meets a previous tier of standards.

As described above, this provision requires EPA to make the determination that no certified engine would meet the required physical or performance needs of the vessel. However, we recently revised this provision to allow the engine manufacturer to make this determination in cases of catastrophic engine failure. In these cases, the vessel is not usable until a replacement engine is found and installed. The engine manufacturers and vessel owners were concerned that our review would take a considerable amount of time. In addition, they were also concerned that reviewing all potential replacement engines for suitability would also take a lot of time. Note that in cases where a vessel owner simply wants to replace an engine with a new version of the same engine as part of a vessel overhaul for example, it would still be necessary to obtain our approval.

In catastrophic failure situations, our regulations now allow an engine manufacturer to determine that no compliant engine can be used for a replacement engine, provided that certain conditions are met. First, the manufacturer must determine that no certified engine is available, either from its own product lineup or that of the manufacturer of the original engine (if different). Second, the engine manufacturer must document the reasons why an engine of a newer tier is not usable, and this report must be made available to us upon request. Finally, no other significant modifications to the vessel can be made as part of the process of replacing the engine, or for a period of 6 months thereafter. This is to avoid the situation where an engine is replaced prior to a vessel modification that would otherwise result in the vessel becoming “new” and its engines becoming subject to the new engine standards. In addition, the replacement of important navigation systems at the same time may actually allow the use of a newer tier engine.

We are returning to this provision to add an additional requirement. Specifically, the determination (either by the engine manufacturer in the case of a catastrophic failure or by us in all other cases) must show that no engine of the current or any previous tier would meet the physical or performance requirements of the engine. In other words, after the Tier 4 standards go into effect, it must be demonstrated that no other Tier 4, or Tier 3, Tier 2, or Tier 1 engines would work. Similarly, when the Tier 3 standards are in effect it must be demonstrated that no other Tier 3, or Tier 2 or Tier 1 engine would work. If there are engines from two or more previous tiers of standards that would meet the performance requirements, then the requirement would be to use the engine from the cleanest tier of standards.

(3) Personal Use Exemption

The existing control program provides for exemptions from the standards, including testing, manufacturer-owned engines, display engines, competition engines, national security, and export. We also provide an engine dresser exemption that applies to marine diesel engines that are produced by marinizing a certified highway, nonroad, or locomotive engine without changing it in any way that may affect the emissions characteristics of the engine.

In addition to these existing exemptions we are also proposing a new provision that would exempt an engine installed on a vessel manufactured by a person for his or her own use (see 40 CFR 1042.630). This proposal is intended to address the hobbyists and fishermen who make their own vessel (from a personal design, for example, or to replicate a vintage vessel) and who would otherwise be considered to be a manufacturer subject to the full set of emission standards by introducing a vessel into commerce. The exemption is intended to allow such a person to install a rebuilt engine, an engine that was used in another vessel owned by the person building the new vessel, or a reconditioned vintage engine (to add greater authenticity to a vintage vessel). The exemption is not intended to allow such a person to order a new uncontrolled engine from an engine manufacturer. We expect this exemption to involve a very small number of vessels, so the environmental impact of this proposed exemption would be negligible.

Because the exemption is intended for hobbyists and fishermen, we are setting additional requirements for it. First, the vessel may not be used for general commercial purposes. The one exception to this is that the exemption allows a fisherman to use the vessel for his or her own commercial fishing. Second, the exemption would be limited to one such vessel over a ten-year period and would not allow exempt engines to be sold for at least five years. We believe these restrictions would not be unreasonable for a true hobby builder or comparable fisherman. Moreover, we would require that the vessel generally be built from unassembled components, rather than simply completing assembly of a vessel that is otherwise similar to one that will be certified to meet emission standards. The person also must be building the vessel him- or herself, and not simply ordering parts for someone else to assemble. Finally, the vessel must be a vessel that is not classed or subject to Coast Guard inspections or surveys.

We are requesting comment on all aspects of this proposed exemption. We also request comment on whether this application of the exemption should be limited to fishing vessels under a certain length (e.g., 36 feet), to ensure that it is limited to small operators, and/or whether it should be limited to vessels that are engaged only in seasonal fishing and not used year-round.

(4) Gas Turbine Engines

While gas turbine engines [132] are used extensively in naval ships, they are not used very often in commercial ships. Because of this and because we do not currently have sufficient information, we are not proposing to regulate marine gas turbines in this rulemaking. Nevertheless, we believe that gas turbines could likely meet the proposed standards (or similar standards) since they generally have lower emissions than diesel engines and will reconsider gas turbines in a future rulemaking. We are requesting that commenters familiar with gas turbines provide to us any emissions information that is available. We would also welcome comments on whether it would be appropriate to regulate turbines and diesels together. Commenters supporting the regulation of turbines should also address whether any special provisions would be needed for the testing and certification of turbines.

Start Printed Page 16005

(5) Residual Fuel Engines

Our Category 1 and Category 2 marine diesel engine standards, both the existing emission limits (Tiers 1 and 2) and the proposed emission limits (Tiers 3 and 4) apply to all newly built marine diesel engines regardless of the fuel they are designed to use. In the vast majority of cases, this fuel would be distillate diesel fuel similar to diesel fuel used in highway or land-based nonroad applications. However, there are a small number of Category 1 and Category 2 auxiliary engines that are designed to use residual fuel. Residual fuel is a by-product of distilling crude oil to produce lighter petroleum products such as gasoline, DM-grade diesel fuel (also called “distillate diesel” which is used in on-highway, land-based nonoroad, and marine diesel engines), and kerosene. Residual fuel possesses a high viscosity and density, which makes it harder to handle (usage requires special equipment such as heaters, centrifuges, and purifiers). It typically has a high ash, nitrogen, and sulfur content compared to distillate diesel fuels. It is not produced to a set of narrow specifications, and so fuel parameters can be highly variable. All of these characteristics of residual fuel make it difficult to handle, and it is typically used only in Category 3 engines on ocean-going vessels or in very large (above 30 l/cylinder) generators used in land-based power plants. Residual fuel is traditionally not used in Category 1 or Category 2 propulsion engines because of the fuel handling equipment required onboard and because it can affect engine responsiveness. However, it may be used in Category 1 or Category 2 auxiliary engines used on ocean-going vessels, to simplify the fuel requirements for the vessel (both propulsion and auxiliary engines would operate on the same fuel).

In contrast to the federal program, the engine testing and certification provision in Annex VI allow manufacturers to test engines on distillate fuel even if they are intended to operate on residual fuel. This approach was adopted because it was thought that the use of residual fuel would not affect NOX, and the Annex VI standards are NOX only. At the same time, however, the NOX Technical Code allows a ten percent allowance for in-use testing on residual fuel, to accommodate any marginal impact on NOX and also to reflect the fact that the engine would be adjusted differently to operate on residual fuel.

The Annex VI approach was rejected for our national Category 1 and Category 2 engines standards. We noted in our 1999 FRM that residual fuel is sufficiently different from distillate as to be an alternative fuel. We also noted that changes to an engine to make it operable on residual fuel could constitute a violation of the tampering prohibition in § 94.1103(a)(3). More importantly, however, all of our emission control programs are predicated on an engine meeting the emission standards in use. We have a variety of provisions that help ensure this outcome, including specifying the useful life of an engine, specification of an emission deterioration factor, durability testing, and not-to-exceed zone requirements to ensure compliance over the range of operations an engine is likely to see in-use. These provisions are necessary to ensure that the emission reductions we expect from the emission limits actually occur. This would not be the case with the Annex VI approach. While an engine may pass the certification requirements using distillate fuel, it is unclear what emission reductions would actually occur from engines using residual fuel. So, for example, while the Annex VI NOX limits were expected to achieve a 30 percent reduction from uncontrolled levels for marine diesel engines, we estimated the actual reduction for residual fuel Category 3 engines to be closer to 20 percent (see 68 FR 9777, February 28, 2003).

For these reasons, our existing requirements for engines less than 30 l/cyl displacement require certification that specifies that if a Category 1 or Category 2 engine is designed to be capable of using a fuel other than or in addition to distillate fuel (e.g., natural gas, methanol, or nondistillate diesel, or a mixed fuel), exhaust emission testing must be performed using a commercially available fuel of that type, with fuel specifications approved by us (40 CFR 94.108(b)(1)).

In recent months, shipbuilders have notified us that they are unable to obtain certified Category 1 or Category 2 residual fuel auxiliary engines for installation on newly built vessels with Category 3 propulsion engines. The standard building practice for these vessels is to install auxiliary engines that use the same fuel, residual fuel, as the propulsion engine. This approach is common throughout the industry because it simplifies the fuel handling systems for the vessel (only one grade of fuel is required for the vessel's primary power plants, although there may be one or two smaller distillate fuel auxiliary engines for emergency purposes) and it reduces the costs of operating the vessel (residual fuel is less expensive than distillate fuel). Shipbuilders indicated they have been unable to find Category 1 or Category 2 auxiliary engines certified to the Tier 2 standards on residual fuel. Engine manufacturers have indicated that they have not certified these engines on residual fuel because it is not profitable to do this for only the U.S. market (according to the U.S. Maritime Administration, while the U.S. fleet of ocean-going vessels above 10,000 deadweight tons is 13th largest in the world with 295 vessels, there were only 13 vessels built in 2005).[133] Engine manufacturers also informed us that they are not sure they could meet the PM limits for the Category 1 engines on residual fuel.

The most obvious solution for vessels in this situation is to install and use certified distillate fuel engines. Ship builders have indicated that this option would be prohibitively expensive for ship owners and have asked EPA to reconsider the control program for these engines. We are requesting comment on this issue, and especially on the costs associated with installing and using distillate auxiliary engines instead of residual auxiliary engines on these vessels. We are particularly interested in data that would indicate whether such additional costs would represent an undue burden to the owners of these vessels and whether the additional cost in terms of tons of PM and NOX reduced would be significantly higher than what is required of users of non-residual fuel auxiliary engines.

One possibility to address the shipbuilders' concerns would be to create a compliance flexibility for auxiliary engines intended to be installed on vessels with Category 3 propulsion engines. The flexibility could consist of pulling ahead NOX aftertreatment for these engines by setting a tighter NOX limit (1.8 g/kW-hr) while setting an alternative PM limit (0.5 g/kW-hr) equivalent to the Tier 2 Category 2 limit. These engines would still be required to be certified on residual fuel, for the reasons described above. However, we could allow alternative PM measurement procedures, such as a two-step approach that would remove the water component of the exhaust, which would take into account the difficulty in measuring PM Start Printed Page 16006when the sulfur levels of the test fuel are high.

Controlling emissions from residual fuelled engines is inherently difficult due to the characteristics of residual fuels. In particular, the high levels of sulfur and other metals present in residual fuel lead to high levels of PM emissions and can damage catalyst based emission control technologies. Urea SCR catalyst systems have been developed to work under similar conditions for coal fired power plants and some marine applications. We project that these solutions could be used to enable a residual fuelled marine diesel engine to meet the same emission NOX emission standard as distillate fuelled engines of 1.8 g/kWhr. Unfortunately, the high levels of sulfur and other metals in residual fuels make it impossible to apply catalyst based emission control systems to reduce PM emissions. Stationary residual fuelled engines have demonstrated that PM emission levels around 0.5 g/kWhr are possible, and we believe similar solutions can be applied to these same engines in marine applications.

Such a compliance flexibility would not be automatic; engine manufacturers would have to apply for it. This is necessary to ensure that the questions of test fuel and PM measurement are resolved before the certification testing begins. In addition, engines would have to be labeled as intended for use only as auxiliary engines onboard vessels with Category 3 propulsion engines.

We are requesting comment on all aspects of this compliance flexibility, including the need for it and how it should be structured.

V. Costs and Economic Impacts

In this section, we present the projected cost impacts and cost effectiveness of the proposed standards, and our analysis of potential economic impacts on affected markets. The projected benefits and benefit-cost analysis are presented in Section VI. The benefit-cost analysis explores the net yearly economic benefits to society of the reduction in mobile source emissions likely to be achieved by this rulemaking. The economic impact analysis explores how the costs of the rule will likely be shared across the manufacturers and users of the engines and equipment that would be affected by the standards.

The total monetized benefits of the proposed standards, when based on published scientific studies of the risk of PM-related premature mortality, these benefits are projected to be more than $12 billion in 2030, assuming a 3 percent discount rate (or $11 billion assuming a 7 percent discount rate). Our estimate of total monetized benefits based on the PM-related premature mortality expert elicitation is between $4.6 billion and $33 billion in 2030, assuming a 3 percent discount rate (or $4.3 and $30 billion assuming a 7 percent discount rate). The social costs of the proposed program are estimated to be approximately $600 million in 2030.[134] The impact of these costs on society are estimated to be minimal, with the prices of rail and marine transportation services estimated to increase by less about 0.4 percent for locomotive transportation services and about 0.6 percent for marine transportation services.

Further information on these and other aspects of the economic impacts of our proposal are summarized in the following sections and are presented in more detail in the Draft RIA for this rulemaking. We invite the reader to comment on all aspects of these analyses, including our methodology and the assumptions and data that underlie our analysis.

A. Engineering Costs

The following sections briefly discuss the various engine and equipment cost elements considered for this proposal and present the total engineering costs we have estimated for this rulemaking; the reader is referred to Chapter 5 of the draft RIA for a complete discussion of our engineering cost estimates. When referring to “equipment” costs throughout this discussion, we mean the locomotive and/or marine vessel related costs as opposed to costs associated with the diesel engine being placed into the locomotive or vessel. Estimated new engine and equipment engineering costs depend largely on both the size of the piece of equipment and its engine, and on the technology package being added to the engine to ensure compliance with the proposed standards. The wide size variation of engines covered by this proposal (e.g., small marine engines with less than 37 kW (50 horsepower, or hp) through locomotive and marine C2 engines with over 3000 kW (4000 hp) and the broad application variation (e.g., small pleasure crafts through large line haul locomotives and cargo vessels) that exists in these industries makes it difficult to present an estimated cost for every possible engine and/or piece of equipment. Nonetheless, for illustrative purposes, we present some example per engine/equipment engineering cost impacts throughout this discussion. This engineering cost analysis is presented in detail in Chapter 5 of the draft RIA.

Note that the engineering costs here do not reflect changes to the fuel used to power locomotive and marine engines. Our Nonroad Tier 4 rule (69 FR 38958) controlled the sulfur level in all nonroad fuel, including that used in locomotives and marine engines. The sulfur level in the fuel is a critical element of the proposed locomotive and marine program. However, since the costs of controlling locomotive and marine fuel sulfur have been considered in our Nonroad Tier 4 rule, they are not considered here. This analysis considers only those costs associated with the proposed locomotive and marine program. Also, the engineering costs presented here do not reflect any savings that are expected to occur because of the engine ABT program and the various flexibilities included in the program which are discussed in section IV of this preamble. As discussed there, these program features have the potential to provide savings for both engine and locomotive/vessel manufacturers. We request comment with supporting data and/or analysis on the engineering cost estimates presented here and the underlying analysis presented in Chapter 5 of the draft RIA.

(1) New Engine and Equipment Variable Engineering Costs

Engineering costs for exhaust emission control devices (i.e., catalyzed DPFs, urea SCR systems, and DOCs) were estimated using a methodology consistent with the one used in our 2007 heavy-duty highway rulemaking. In that rule, surveys were provided to nine engine manufacturers seeking information relevant to estimating the engineering costs for and types of emission-control technologies that might be enabled with ultra low-sulfur diesel fuel (15 ppm S). The survey responses were used as the first step in estimating the engineering costs of advanced emission control technologies anticipated for meeting the 2007 heavy-duty highway standards. We then built upon these engineering costs using input from members of the Manufacturers of Emission Controls Association (MECA). We also used this information in our recent nonroad Tier 4 (NRT4) rule. Because the anticipated emission control technologies expected to be used on locomotive and marine engines are the same as or similar to Start Printed Page 16007those expected for highway and nonroad engines, and because the expected suppliers of the technologies are the same for these engines, we have used that analysis as the starting point for estimating the engineering costs of these technologies in this rule.[135] Importantly, the analysis summarized here and detailed in the draft RIA takes into account specific differences between the locomotive and marine products when compared to on-highway trucks (e.g., engine size).

Engineering costs of control include variable costs (for new hardware, its assembly, and associated markups) and fixed costs (for tooling, research, redesign efforts, and certification). We are projecting that the Tier 3 standards will be met by optimizing the engine and emission controls that will exist on locomotive and marine engines in the Tier 3 timeframe. Therefore, we have estimated no hardware costs associated with the Tier 3 standards. For the Tier 4 standards, we are projecting that SCR systems and DPFs will be the most likely technologies used to comply. Upon installation in a new locomotive or a new marine vessel, these devices would require some new equipment related hardware in the form of brackets and new sheet metal. The annual variable costs for example years, the PM/NOX split of those engineering costs, and the net present values that would result are presented in Table V-1.[136] As shown, we estimate the net present value for the years 2006 through 2040 of all variable costs at $1.4 billion using a three percent discount rate, with $1.3 billion of that being engine-related variable costs. Using a seven percent discount rate, these costs are $630 million and $586 million, respectively.

Table V-1.—New Engine and Equipment Variable Engineering Costs

[$Millions]

YearEngine variable engineering costsEquipment variable engineering costsTotal variable engineering costsTotal for PMTotal for NOX+NMHC
201100000
201200000
201532436342
2020876944945
203010581135954
204010481125953
NPV at 3%1,297991,395749646
NPV at 7%58644630342288

We can also look at these variable engineering costs on a per engine basis rather than an annual total basis. Doing so results in the costs summarized in Table V-2. These costs represent the engineering costs for a typical engine placed into a piece of equipment within each of the given market segments and, where applicable, power ranges on a one-to-one basis (i.e., one engine per locomotive or vessel). For a vessel using two engines, the costs would be double those shown. The costs shown represent the total engine-related engineering hardware costs associated with all of the proposed emissions standards (Tier 3 and Tier 4) to which the given power range and market segment would need to comply. For example, a commercial marine engine below 600 kW (805 hp) would need to comply with the Tier 3 standards as its final tier and would, therefore, incur no new hardware costs. In contrast, while a commercial marine engine over 600 kW is expected to comply with both Tier 3 and then Tier 4 and would, therefore, incur engine hardware costs associated with the Tier 4 standards. The costs also represent long term costs or those costs after expected learning effects have occurred and warranty costs have stabilized.

Table V-2.—2 Long-Term Variable Engineering Cost per New Engine to Comply With the Final Tier of Standards

[$/engine]

Power rangeLocomotive line haulLocomotive switcher aC1 MarineC2 MarineRecreational marine bSmall marine
<50 Hp (<37 kW)(c)d$0
50≤hp<75 (37<=kW<56)00
75≤hp<200 (56<=kW<149)00
200≤hp<400 (149≤kW<298)00
400≤hp<800 (298≤kW<597)00
800≤hp<2000 (597≤kW<1492)11,56029,9800
≥2000 Hp (≥1492 kW)54,65013,64020,55055,7700
a Locomotive switchers generally use land based nonroad engines (i.e., NRT4 engines); therefore, we have used NRT4 cost estimates for locomotive switchers in this rulemaking.
b Recreational marine engines >2000 kW are considered within the C1 Marine category.
c A blank entry means there are no engines in that market segment/power range.
d $0 means costs are estimated at $0.
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(2) New Engine and Equipment Fixed Engineering Costs

Because these technologies are being researched for implementation in the highway and nonroad markets well before the locomotive and marine emission standards take effect, and because engine manufacturers will have had several years complying with the highway and nonroad standards, we believe that the technologies used to comply with the locomotive and marine standards will have undergone significant development before reaching locomotive and marine production. In fact, we believe that this transfer of learning—from highway to nonroad to locomotive and marine—is real and have quantified it. Chapter 5 of the draft RIA details our approach and we seek comment on the 10 percent and 70 percent factors we have employed at each transfer step. We anticipate that engine manufacturers would introduce a combination of primary technology upgrades to meet the new emission standards. Achieving very low NOX emissions requires basic research on NOX emission-control technologies and improvements in engine management. There would also have to be some level of tooling expenditures to make possible the fitting of new hardware on locomotive and marine engines. We also expect that locomotives and marine vessels being fitted with Tier 4 engines would have to undergo some level of redesign to accommodate the aftertreatment devices expected to meet the Tier 4 standards. The total of fixed engineering costs and the net present values of those costs are shown in Table V-3.[137] As shown, we have estimated the net present value for the years 2006 through 2040 of all fixed engineering costs at $424 million using a three percent discount rate, with $381 million of that being engine-related fixed costs. Using a seven percent discount rate, these costs are $324 million and $297 million, respectively.

Table V-3.—Engine and Equipment Fixed Engineering Costs

($Million)

YearEngine researchEngine toolingEngine certificationEquipment redesignTotal fixed engineering costsTotal for PMTotal for NOX+NMHC
2011751950993959
201255000551837
20155117122903456
20200004422
20300000000
20400000000
NPV at 3%34133743424155269
NPV at 7%26724627324118206

Some of the estimated fixed engineering costs would occur in years prior to the Tier 3 standards taking affect in 2012. Engine manufacturers would need to invest in engine tooling and certification prior to selling engines that meet the standards. Engine research is expected to begin five years in advance of the standards for which the research is done. We have estimated some engine research for both the Tier 3 and Tier 4 standards, although the research associated with the Tier 4 standards is expected to be higher since it involves work on aftertreatment devices which only the Tier 4 standards would require. By 2017, the Tier 4 standards would be fully implemented and engine research toward the Tier 4 standards would be completed. Similarly, engine tooling and certification efforts would be completed. We have estimated that equipment redesign, driven mostly by marine vessel redesigns, would continue for many years given the nature of the marine market. Therefore, by 2017 all engine-related fixed engineering costs would be zero, and by 2024 all equipment-related fixed engineering costs would be zero.

(3) Engine Operating Costs

We anticipate an increase in costs associated with operating locomotives and marine vessels. We anticipate three sources of increased operating costs: urea use; DPF maintenance; and a fuel consumption impact. Increased operating costs associated with urea use would occur only in those locomotives/vessels equipped with a urea SCR engine. Maintenance costs associated with the DPF (for periodic cleaning of accumulated ash resulting from unburned material that accumulates in the DPF) would occur in those locomotives/vessels that are equipped with a DPF engine. The fuel consumption impact is anticipated to occur more broadly—we expect that a one percent fuel consumption increase would occur for all new Tier 4 engines, locomotive and marine, due to higher exhaust backpressure resulting from aftertreatment devices. We also expect a one percent fuel consumption increase would occur for remanufactured Tier 0 locomotives due to our expectation that the tighter NOX standard would be met using retarded timing. These costs and how the fleet cost estimates were generated are detailed in Chapter 5 of the draft RIA and are summarized in Table V-4.[138]

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Table V-4.—Estimated Increased Operating Costs

($Millions)

YearUrea useDPF maintenanceFuel consumption impactTotal operating costsTotal for PMTotal for NOX+MHC
201100111155
201200131366
20154021251115
20208535013728110
203030089940757350
20404581114261182528
NPV at 3%2,850741,1164,0396313,408
NPV at 7%1,090294771,5952671,328

As shown, we have estimated the net present value for the years 2006 through 2040 of the annual operating costs at $4 billion using a three percent discount rate and $1.6 billion using a seven percent discount rate. The urea and DPF maintenance costs are zero until Tier 4 engines start being sold since only the Tier 4 engines are expected to add these technologies. Urea use represents the largest source of increased operating costs. Because urea use is meant for controlling NOX emissions, most of the operating costs are associated with NOX+NMHC control.

(4) Engineering Costs Associated With the Remanufacturing Program

We have also estimated engineering costs associated with the locomotive remanufacturing program. The remanufacturing process is not a low cost endeavor. However, it is much less costly than purchasing a new engine. The engineering costs we have estimated associated with the remanufacturing program are not meant to capture the remanufacturing process but rather the incremental engineering costs to that process. Therefore, the remanufacturing costs estimated here are only those engineering costs resulting from the proposed requirement to meet a more stringent standard than the engine was designed to meet at its original sale. These engineering costs and how the fleet cost estimates were generated are detailed in Chapter 5 of the draft RIA and are summarized in Table V-5.[139] As shown, we have estimated the net present value for the years 2006 through 2040 of the annual engineering costs associated with the locomotive remanufacturing program at $1.4 billion using a three percent discount rate and $682 million using a seven percent discount rate.

Table V-5.—Estimated Engineering Costs Associated With the Locomotive Remanufacturing Program

($Millions)

YearRemanu- facturing Program CostsTotal for PMTotal for NOX+NMHC
2011974949
2012753737
2015311515
20201588
2030854343
20401537777
NPV at 3%1,374687687
NPV at 7%682341341

(5) Total Engineering Costs

The total engineering costs associated with today's proposal are the summation of the engine and equipment engineering costs, both fixed and variable, the operating costs, and the engineering costs associated with the locomotive remanufacturing program. These costs are summarized in Table V-6.

Table V-6.—Total Engineering Costs of the Proposal

[$Millions]

YearEngine related engineering costsEquipment related engineering costsOperating costsEngineering costs of the remanufacturing programTotal engineering costsTotal PM costsTotal NOX+NMHC costs
2011990119720793113
201255013751426280
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20151002525311819388
2020871018715250836164
2030105840785605159446
20401048611153876218658
NPV at 3%1,6781414,0391,3747,2332,2225,011
NPV at 7%883711,5956823,2311,0682,163

As shown, we have estimated the net present value of the annual engineering costs for the years 2006 through 2040 at $7.2 billion using a three percent discount rate and $3.2 billion using a seven percent discount rate. Roughly half of these costs are operating costs, with the bulk of those being urea related costs. As explained above in the operating cost discussion, because urea use is meant for controlling NOX emissions, most of the operating costs and, therefore, the majority of the total engineering costs are associated with NOX+NMHC control.

Figure V-1 graphically depicts the annual engineering costs associated with today's proposed program. The engine costs shown represent the engineering costs associated with engine research and tooling, etc., and the incremental costs for new hardware such as DPFs and urea SCR systems. The equipment costs shown represent the engineering costs associated with equipment redesign efforts and the incremental costs for new equipment-related hardware such as sheet metal and brackets. The remanufacturing program costs include incremental engineering costs for the locomotive remanufacturing program. The operating costs include incremental increases in operating costs associated with urea use, DPF maintenance, and a one percent fuel consumption increase for Tier 4 engines and remanufactured Tier 0 locomotives. The total program engineering costs are shown in Table V-6 as $7.2 billion at a three percent discount rate and $3.2 billion at a seven percent discount rate.

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B. Cost Effectiveness

One tool that can be used to assess the value of the proposed program is the engineering costs incurred per ton of emissions reduced. This analysis involves a comparison of our proposed program to other measures that have been or could be implemented. As summarized in this section and detailed in the draft RIA, the locomotive and marine diesel program being proposed today represents a highly cost effective mobile source control program for reducing PM and NOX emissions.

We have calculated the cost per ton of our proposed program based on the net present value of all engineering costs incurred and all emission reductions generated from the current year 2006 through the year 2040. This approach captures all of the costs and emissions reductions from our proposed program including those costs incurred and emissions reductions generated by the locomotive remanufacturing program. The baseline case for this evaluation is the existing set of engine standards for locomotive and marine diesel engines and the existing locomotive remanufacturing requirements. The analysis timeframe is meant to capture both the early period of the program when very few new engines that meet the proposed standards would be in the fleet, and the later period when essentially all engines would meet the new standards.

Table V-7 shows the emissions reductions associated with today's proposal. These reductions are discussed in more detail in section II of this preamble and Chapter 3 of the draft RIA.

Table V-7.—Estimated Emissions Reductions Associated With the Proposed Locomotive and Marine Standards

[Short tons]

YearPM2.5PM10aNOXNMHC
20157,0007,00084,00014,000
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202015,00015,000293,00025,000
203028,00029,000765,00039,000
204038,00040,0001,123,00050,000
NPV at 3%315,000325,0007,869,000480,000
NPV at 7%136,000140,0003,188,000216,000
a Note that, PM2.5 is estimated to be 97 percent of the more inclusive PM10 emission inventory. In Section II we generate and present PM2.5 inventories since recent research has determined that these are of greater health concern. Traditionally, we have used PM10 in our cost effectiveness calculations. Since cost effectiveness is a means of comparing control measures to one another, we use PM10 in our cost effectiveness calculations for comparisons to past control measures.

Using the engineering costs shown in Table V-6 and the emission reductions shown in Table V-7, we can calculate the $/ton associated with today's proposal. These are shown in Table V-8. The resultant cost per ton numbers depend on how the engineering costs presented above are allocated to each pollutant. Therefore, as described in section V.A, we have allocated costs as closely as possible to the pollutants for which they are incurred. These allocations are also discussed in detail in Chapter 5 of the draft RIA.

Table V-8.—Proposed Program Aggregate Cost per Ton and Long-Term Annual Cost per Ton

Pollutant2006 thru 2040 discounted lifetime cost per ton at 3%2006 thru 2040 discounted lifetime cost per ton at 7%Long-term cost per ton in 2030
NOX+NMHC$600$630$550
PM6,8407,6405,560

The costs per ton shown in Table V-8 for 2006 through 2040 use the net present value of the annualized engineering costs and emissions reductions associated with the program for the years 2006 through 2040. We have also calculated the costs per ton of emissions reduced in the year 2030 using the annual engineering costs and emissions reductions in that year alone. These numbers are also shown in Table V-8 and represent the long-term annual costs per ton of emissions reduced.[140] All of the costs per ton include costs and emission reductions that will occur from the locomotive remanufacturing program.

In comparison with other emissions control programs, we believe that the proposed locomotive and marine program represents a cost effective strategy for generating substantial NOX+NMHC and PM reductions. This can be seen by comparing the cost effectiveness of this proposed with the cost effectiveness of a number of standards that EPA has adopted in the past.Table V-9 and Table V-10 summarize the cost per ton of several past EPA actions to reduce emissions of NOX+NMHC and PM from mobile sources.

Table V-9.—Proposed Locomotive and Marine Standards Compared to Previous Mobile Source

[Programs for NOX+NMHC]

Program$/ton NOX+NMHC
Today's locomotive & marine proposal600
Tier 4 Nonroad Diesel (69 FR 39131)1,010
Tier 2 Nonroad Diesel (EPA420-R-98-016, Chapter 6)630
Tier 3 Nonroad Diesel (EPA420-R-98-016, Chapter 6)430
Tier 2 vehicle/gasoline sulfur (65 FR 6774)1,400-2,350
2007 Highway HD (66 FR 5101)2,240
2004 Highway HD (65 FR 59936)220-430
Note: Costs adjusted to 2002 dollars using the Producer Price Index for Total Manufacturing Industries.

Table V-10.—Proposed Locomotive and Marine Standards Compared to Previous Mobile Source

[Programs for PM]

Program$/ton PM
Today's locomotive & marine proposal6,840
Tier 4 Nonroad Diesel (69 FR 39131)11,200
Tier 1/Tier 2 Nonroad Diesel (EPA420-R-98-016, Chapter 6)2,390
2007 Highway HD (66 FR 5101)14,180
Note: Costs adjusted to 2002 dollars using the Producer Price Index for Total Manufacturing Industries.

C. EIA

We prepared an Economic Impact Analysis (EIA) to estimate the economic impacts of the proposed emission control program on the locomotive and marine diesel engine and vessel markets. In this section we briefly describe the Economic Impact Model (EIM) we developed to estimate the market-level changes in price and outputs for affected markets, the social costs of the program, and the expected distribution of those costs across stakeholders. We also present the results of our analysis. We request comment on Start Printed Page 16013all aspects of the analysis, including the model and the model inputs.

We estimate the net social costs of the proposed program to be approximately $600 million in 2030.[141 142] The rail sector is expected to bear about 64 percent of the social costs of the program in 2030, and the marine sector is expected to bear about 36 percent. In each of these two sectors, these social costs are expected to be born primarily by producers and users of locomotive and marine transportation services (63.3 and 33.2 percent, respectively). The remaining 3.5 percent is expected to be borne by locomotive, marine engine, and marine vessel manufacturers and fishing and recreational users.

With regard to market-level impacts in 2030, the average price of a locomotive is expected to increase about 2.6 percent ($49,100 per unit), but sales are not expected to decrease. In the marine markets, the expected impacts are different for engines above and below 800 hp (600 kW). With regard to engines above 800 hp and the vessels that use them, the average price of an engine is expected to increase by about 8.4 percent for C1 engines and 18.7 percent for C2 engines ($13,300 and $48,700, respectively). However, the expected impact of these increased prices on the average price of vessels that use these engines is smaller, at about 1.1 percent and 3.6 percent respectively ($16,200 and $141,600). The decrease in engine and vessel production is expected to be negligible, at less than 10 units. For engines less than 800 hp and the vessels that use them, the expected price increase and quantity decrease are expected to be negligible, less than 0.1 percent. Finally, even with the increases in the prices of locomotives and large marine diesel engines, the expected impacts on prices in the locomotive and marine transportation service markets are small, at 0.4 and 0.6 percent, respectively.

(1) What Is an Economic Impact Analysis?

An EIA is prepared to inform decision makers about the potential economic consequences of a regulatory action. The analysis consists of estimating the social costs of a regulatory program and the distribution of these costs across stakeholders. These estimated social costs can then be compared with estimated social benefits presented above. As defined in EPA's Guidelines for Preparing Economic Analyses, social costs are the value of the goods and services lost by society resulting from (a) the use of resources to comply with and implement a regulation and (b) reductions in output.[143] In this analysis, social costs are explored in two steps. In the market analysis, we estimate how prices and quantities of goods and services affected by the proposed emission control program can be expected to change once the program goes into effect. In the economic welfare analysis, we look at the total social costs associated with the program and their distribution across key stakeholders.

(2) What Is the Economic Impact Model?

The EIM is the behavioral model we developed to estimate price and quantity changes and total social costs associated with the emission controls under consideration. The EIM simulates how producers and consumers of affected products can be expected to respond to an increase in production costs as a result of the proposed emission control program. In this EIM, compliance costs are directly borne by producers of affected goods. Producers of affected products will try to pass some or all of the increased production costs on to the consumers of these goods through price increases. In response to the price increases, consumers will decrease their demand for the affected good. Producers will react to the decrease in quantity demanded by decreasing the quantity they produce; the market will react by setting a higher price for those fewer units. These interactions continue until a new market equilibrium price and quantity combination is achieved. The amount of the compliance costs that can be passed on to consumers is ultimately limited by the price sensitivity of purchasers and producers in the relevant market (represented by the price elasticity of demand and supply). The EIM explicitly models these behavioral responses and estimates new equilibrium prices and output and the resulting distribution of social costs across these stakeholders (producers and consumers).

(3) What Economic Sectors Are Included in This Economic Impact Analysis?

In this EIA we estimate the impacts of the proposed emission control program on two broad sectors: rail and marine. The markets analyzed are summarized in Table V-11.

Table V-11.—Economic Sectors Included in the Loco/Marine Economic Impact Model

SectorMarketDemandSupply
RailRail Transportation ServicesEntities that use rail transportation services as production input or for personal transportationRailroads.
LocomotivesRailroadsLocomotive manufacturers (integrated manufacturers).
MarineMarine Transportation ServicesEntities that use marine transportation services as production inputEntities that provide marine transportation services. • Tug/tow/pushboat companies. • Cargo companies. • Ferry companies. • Supply/crew companies. • Other commercial users.
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Marine VesselsEntities that provide marine transportation services • Tug/tow/pushboat companies. • Cargo companies. • Ferry companies. • Supply/crew companies. • Other commercial users. • Fishing persons. • Recreation users.Vessel manufacturers.
Marine Diesel EnginesVessel manufacturersEngine manufacturers.

(a) Rail Sector Component

The rail sector component of the EIM is a two-level model consisting of suppliers and users of locomotives and rail transportation services.

Locomotive Market. The locomotive market consists of locomotive manufacturers (line haul, switcher, and passenger) on the supply side and railroads on the demand side. The vast majority of locomotives built in any given year are for line haul applications; a small number of passenger locomotives are built every year, and even fewer switchers. The locomotive market is characterized by integrated manufacturers (the engine and locomotive are made by the same manufacturer) and therefore the engine and equipment impacts are modeled together. The EIM does not distinguish between power bands for locomotives. This is because while there is some variation in power for different engine models, the range is not large. On average line haul locomotives are typically about 4,000 hp, passenger locomotives are about 3,000 hp, and switchers are about 2,000 hp.

Recently, a new switcher market is emerging in which manufacturers are expected to be less integrated, and the manufacturer of the engine is expected to be separate from the manufacturer of the switcher.[144] Because the characteristics of this new market are speculative at this time, the switcher market component of the EIM is modeled in the same way as line haul locomotives (integrated manufacturers; same behavioral parameters), but uses separate baseline equilibrium prices and quantities. The compliance costs used for switchers reflect the expected design characteristics for these locomotives and their lower total power. We request comment on the switcher aspect of the model. Consistent with the engineering cost analysis, the passenger market is combined with the switcher market in this EIA because we do not have separate compliance costs estimates for each of those two market segments. We request comment on this, and on whether it would be more appropriate to model the passenger market like the line haul market.

Rail Transportation Services. The rail transportation services market consists of entities that provide and utilize rail transportation services. On this supply side, these are the railroads. On the demand side, these are rail transportation service users such as the chemical and agricultural industries and the personal transportation industry. The EIM does not estimate the economic impact of the proposed emission control program on ultimate finished goods markets that use rail transportation services as inputs. This is because transportation services are only a small portion of the total variable costs of goods and services manufactured using these bulk inputs. Also, changes in prices of transportation services due to the estimated compliance costs are not expected to be large enough to affect the prices and output of goods that use rail transportation services as an input.

(b) Marine Sector Component

The marine sector component of the EIM distinguishes between engine, vessel, and ultimate user markets (marine transportation service users, fishing users, recreational users). This is because, in contrast to the locomotive market, manufacturers in the diesel marine market are not integrated. Marine engines and vessels are manufactured by different entities.

Marine Engine Market. The marine engine markets consist of marine engine manufacturers on the supply side and vessel manufacturers on the demand side. The model distinguishes between three types of engines, commercial propulsion, recreational propulsion, and auxiliary. Engines are broken out into eight categories based on rated power and displacement: small engines below 50 hp (37 kW); five C1 engine categories (50-200 hp, 200-400 hp, 400-800 hp, 800-2,000 hp, >2,000 hp); and two C2 engine categories (800-2,000 hp, >2,000 hp). For the purpose of the EIA, the C1/C2 threshold is 5 l/cyl displacement, even though the new C1/C2 threshold is proposed to be 7 l/cyl displacement. The 5 l/cyl threshold was used because it is currently applicable limit. In addition, there is currently only one engine family in the 5 to 7 l/cyl range, and it is not possible to project what future sales will be in that range or if more engine families will be added.

Marine Vessel Market. The marine vessel market consists of marine vessel manufacturers on the demand side and marine vessel users on the supply side. The model distinguishes between seven vessel categories: Recreational, fishing, tow/tug/push, ferry, supply/crew, cargo, and other. Each of these vessels would have at least one propulsion engine and at least one auxiliary engine. For fishing and recreational vessels, the purchasers of those vessels are the end users and so the EIM is a two-level model for those two markets. For the fishing market, this approach is appropriate because demand for fishing vessels comes directly from the fishing industry; fishing vessels are a fixed capital input for that industry. For the recreational market, demand for vessels comes directly from households that use these vessels for recreational activities and acquire them for the personal enjoyment of the owner. For the other commercial vessel markets (tow/tug/push, ferry, supply/crew, cargo, other), demand is derived from the transportation services they provide, and so demand is from the transportation service market and the providers of those services more specifically. Therefore it is necessary to Start Printed Page 16015include the marine transportation services market in the model.

Marine Transportation Services. The marine transportation services market consists of entities that provide and utilize marine transportation services: vessel owners on the supply side and marine transportation service users on the demand side. The firms that use these marine transportation services are very similar to those that use locomotive transportation services: those needing to transport bulk chemicals and minerals, coal, agricultural products, etc. These transportation services are production inputs that depend on the amount of raw materials or finished products being transported and thus marine transportation costs are variable costs for the end user. Demand for these transportation services will determine the demand for vessels used to provide these services (tug/tow/pushboats, cargo, ferries, supply/crew, other commercial vessels).

(c) Market Linkages

The individual levels of the rail and marine components of the EIM are linked to provide feedback between consumers and producers in relevant markets. The locomotive and marine components of the EIM are not linked however, meaning there is no feedback mechanism between the locomotive and marine sectors. Although locomotives and marine vessels such as tugs, towboats, cargo, and ferries provide the same type of transportation service, the characteristics of these markets are quite different and are subject to different constraints that limit switching from one type of transportation service to the other. For the limited number of cases where there is direct competition between rail and marine transportation services, we do not expect this rule to change the dynamics of the choice between marine or rail providers of these services because (1) the estimated compliance costs imposed by this rule are relatively small in comparison with the total production costs of providing transportation services, and (2) both sectors would be subject to the new standards.

(4) What Are the Key Features of the Economic Impact Model?

A detailed description of the features of the EIM and the data used in this analysis is provided in Chapter 7 of the RIA prepared for this rule. The model methodology is firmly rooted in applied microeconomic theory and was developed following the methodology set out in OAQPS's Economic Analysis Resource Document.[145]

The EIM is a computer model comprised of a series of spreadsheet modules that simulate the supply and demand characteristics of each of the markets under consideration. The initial market equilibrium conditions are shocked by applying the compliance costs for the control program to the supply side of the markets (this is done by shifting the relevant supply curves by the amount of the compliance costs). The EIM uses the model equations, model inputs, and a solution algorithm to estimate equilibrium prices and quantities for the markets with the regulatory program. These new prices and quantities are used to estimate the social costs of the model and how those costs are shared among affected markets.

The EIM uses a multi-market partial equilibrium approach to track changes in price and quantity for the modeled markets. As explained in EPA's Guidelines for Preparing Economic Analyses, “partial equilibrium” means that the model considers markets in isolation and that conditions in other markets are assumed to be either unaffected by a policy or unimportant for social cost estimation. Multi-market models go beyond partial equilibrium analysis by extending the inquiry to more than just a single market and attempt to capture at least some of the interaction between markets.[146] In the marine sector, the model captures the interactions between the engine markets, the vessel markets, and the marine transportation service markets; in the rail sector, it captures the interactions between the locomotive markets and the rail transportation service markets.

The EIM uses an intermediate run time frame. This means that some factors of production are fixed and some are variable. In very short analyses, all factors of production would be assumed to be fixed, leaving the producers with no means to respond to the increased production costs associated with the regulation (e.g., they cannot adjust labor or capital inputs). Under this time horizon, the costs of the regulation fall entirely on the producer. In the long run, all factors of production are variable and producers can adjust production in response to cost changes imposed by the regulation (e.g., using a different labor/capital mix) and changes in consumer demand due to price changes. In the intermediate run there is some resource immobility which may cause producers to suffer producer surplus losses, but they can also pass some of the compliance costs to consumers.

The EIM assumes a perfectly competitive market structure. The perfect competition assumption is widely accepted for this type of analysis, and only in rare cases are other approaches used.[147] It should be noted that the perfect competition assumption is not about the number of firms in a market; it is about how the market operates. The markets included in this analysis do not exhibit evidence of noncompetitive behavior: These are mature markets; there are no indications of barriers to entry for the marine transportation, fishing, and recreational markets; the firms in the affected markets are not price setters; and there is no evidence of high levels of strategic behavior in the price and quantity decisions of the firms. The perfect competition assumption is discussed in more detail in Chapter 7 of the RIA.

The perfect competition assumption has an impact on the way the EIM is structured. In a competitive market the supply curve is based on the industry marginal cost curve; fixed costs do not influence production decisions at the margin. Therefore, in the market analysis, the model is shocked by variable costs only. However, an argument can be made that fixed costs must be recovered; otherwise manufacturers would go out of business. This analysis assumes that manufacturers cover their fixed costs through their current product development budgets. If this is the case, then the rule would have the effect of shifting product development resources to regulatory compliance from other market-based investment decisions. Thus, fixed costs are a cost to society because they displace other product development activities that may improve the quality or performance of engines and equipment. Therefore these costs are included in the social welfare costs, as a social cost that accrues to producers. We request comment on the extent to which manufacturers can be expected to use current product development resources to cover the fixed costs associated with the standards (thus foregoing product development projects in the short term), Start Printed Page 16016and whether current product development budgets would cover the compliance costs in the year in which they occur. We also request comment on whether companies would instead attempt to pass on these fixed costs as an additional price increase and, if the latter, how much of the fixed costs would be passed on, and for how long.

The EIM is a market-level analysis that estimates the aggregate economic impacts of the control program on the relevant markets. It is not a firm-level analysis and therefore the supply elasticity or individual compliance costs facing any particular manufacturer may be different from the market average. This difference can be important, particularly where the rule affects different firms' costs over different volumes of production. However, to the extent there are differential effects, EPA believes that the wide array of flexibilities provided in this rule are adequate to address any cost inequities that may arise.

Finally, consistent with the proposed emission controls, this EIA covers locomotives and marine diesel engines and vessels sold in 50 states.

(5) What Are the Key Model Inputs?

Key model inputs for the EIM are the behavioral parameters, the market equilibrium quantities and prices, and the compliance costs estimates.

The model's behavioral paramaters are the price elasticities of supply and demand. These parameters reflect how producers and consumers of the engines and equipment affected by the standards can be expected to change their behavior in response to the costs incurred in complying with the standards. More specifically, the price elasticity of supply and demand (reflected in the slope of the supply and demand curves) measure the price sensitivity of consumers and producers. The price elasticities used in this analysis are summarized in V-12 and are described in more detail in Chapter 7 of the RIA. An “inelastic” price elasticity (less than one) means that supply or demand is not very responsive to price changes (a one percent change in price leads to less than one percent change in demand). An “elastic” price elasticity (more than one) means that supply or demand is sensitive to price changes (a one percent change in price leads to more than one percent change in demand). A price elasticity of one is unit elastic, meaning there is a one-to-one correspondence between a change in price and change in demand.

Table V-12.—Behavioral Parameters Used in Loco/Marine Economic Impact Model

SectorMarketDemand elasticitySourceSupply elasticitySource
RailRail Transportation Services−0.5 (inelastic)Literature Estimate0.6 (inelastic)Literature Estimate.
Locomotives (all types)DerivedN/A2.7 (elastic)Calibration Method Estimate.
MarineMarine Transportation Services−0.5 (inelastic)Literature Estimate0.6 (inelastic) Literature Estimate.
Vessels Commercial aDerivedN/A2.3 (elastic)Econometric Estimate.
Fishing−1.4 (elastic)Econometric Estimate1.6 (elastic)Econometric Estimate.
Recreational−1.4 (elastic)Econometric Estimate1.6 (elastic)
EnginesDerivedN/A3.8 (elastic)Econometric Estimate.
a Commercial vessels include tug/tow/pushboats, ferries, cargo vessels, crew/supply boats, and other commercial vessels.

Initial market equilibrium quantities for these markets are simulated using the same current year sales quantities used in the engineering cost analysis. The initial market equilibrium prices were derived from industry sources and published data and are described in Chapter 7 of the RIA.

The compliance costs used to shock the model, to simulate the application of the control program, are the same as the engineering costs described in Section V.A. However, the EIM uses an earlier version of the engineering costs developed for this rule. The engineering costs for 2030 presented in Section V.A. are estimated to be $605 million, which is $37 million more than the compliance costs used in this EIA. Over the period from 2007 through 2040, the net present value of the engineering costs in Section V.A. is $7.2 billion while the NPV of the estimated social costs over that period based on the compliance costs used in his chapter is $6.9 billion (3 percent discount rate). The differences are primarily in the form of operating costs ($22 million for the rail sector, $10 million for the marine sector). The variable costs for locomotives are slightly smaller ($4.0 million) and for marine are somewhat higher ($5.0 million). The difference for marine engines occurs in part because the engineering costs in Section V.A. include Tier 4 costs for recreational marine engines over 2,000 kW. There are also small differences for the estimated operating costs. As a result of these differences, the amount of the social costs imposed on producers and consumers of rail and marine transportation services as a result of the proposed program would be larger than estimated in this section, while the impacts on the prices and quantities of locomotives would be slightly less. In addition, there would be larger social costs for the recreational marine sector. Nevertheless, the estimated market impacts and the distribution of the social costs among stakeholders would be about the same as those presented below.

There are four types of compliance costs associated with the program: fixed costs, variable costs, operating costs, and remanufacturing costs. The timing of these costs are different and, in some cases, overlap.

Fixed costs are not included in the market analysis (they are not used to shock the model). However, the fixed costs associated with the standards are a cost to society (in the form of foregone product development) and therefore must be reflected in the total social costs as a cost to producers. In this EIA, fixed costs are accounted for in the year in which they occur and are attributed to the respective locomotive, marine engine, and vessel manufacturers. These manufacturers are expected to see losses of producer surplus as early as 2007.Start Printed Page 16017

Variable costs are the driver of the market impacts. There are no variable costs associated with the Tier 3 new engine standards because the Tier 3 standards are engine-out emission limits and engine manufacturers are expected to comply by maximizing the emission reduction potential of controls they are already using rather than adding new components. The variable costs associated with Tier 4 begin to apply in 2015, for locomotive PM standards; 2016, for marine PM and NOX standards; and 2017, for locomotive NOX standards.

Operating costs are the additional costs for associated with urea use and DPF maintenance as well as additional fuel consumption for both Tier 4 engines and remanufactured locomotive Tier 0 engines. These begin to occur when the standards go into effect. In the EIM, operating costs are attributed to railroads and vessel owners. On the marine side, all marine operating costs are applied to the marine transportation services market even though there will be Tier 4 engine in the recreational and fishing markets. This approach was taken because the operating costs (fuel and urea consumption) were estimated based on fuel consumption and we believe that most of the fuel consumed in the marine sector is by vessels in the marine transportation services sector. As a result of this assumption, the impacts on the marine transportation service market may be somewhat over-estimated. We request comment on this simplifying assumption.

Remanufacturing costs are incurred when locomotives are remanufactured (there is no corresponding remanufacture requirement for marine diesel, although we are requesting comment on such a program). These costs represent the difference between the cost of current remanufacture kits and those that will be required pursuant to the standards. In the EIM, these costs are allocated to the railroads; the remanufacture market is not modeled separately. This is appropriate because railroads are required to purchase these kits when they rebuild their locomotives. Their sensitivity to price changes is likely to be very inelastic because they cannot operate the relevant locomotives without using a certified remanufacture kit. This means the kit manufacturers would be able to pass most if not all of the costs of these kits to the railroads. We request comment on this approach for including remanufacture costs in the model.

(6) What Are the Results of the Economic Impact Modeling?

Using the model and data described above, we estimated the economic pacts of the proposed emission control program. The results of our analysis are summarized in this section. Detailed results for all years are included in the appendices to Chapter 7 of the RIA. Also included in Appendix 7H to that chapter are sensitivity analyses for several key inputs.

The EIA consists of two parts: a market analysis and welfare analysis. The market analysis looks at expected changes in prices and quantities for affected products. The welfare analysis looks at economic impacts in terms of annual and present value changes in social costs.

We performed a market analysis for all years and all engines and equipment types. Detailed results can be found in the appendices to Chapter 7 of the RIA. In this section we present summarized results for selected years.

Due to the structure of the program (see section V.C.5 above), the estimated market and social costs impacts of the program in the early years are small and are primarily due to the locomotive remanufacturing program. By 2016, the impacts of the program are more significant due to the operational costs associated with the Tier 4 standards (urea usage). Consequently, a large share of the social costs of the program after the Tier 4 standards to into effect fall on the marine and rail transportation service sectors. These operational costs are incurred by the providers of these services, but they are expected to pass along some of these costs to their customers.

(a) Market Analysis Results

In the market analysis, we estimate how prices and quantities of goods affected by the proposed emission control program can be expected to change once the program goes into effect. The analysis relies on the baseline equilibrium prices and quantities for each type of equipment and the price elasticity of supply and demand. It predicts market reactions to the increase in production costs due to the new compliance costs (variable, operating, and remanufacturing costs). It should be noted that this analysis does not allow any other factors to vary. In other words, it does not consider that manufacturers may adjust their production processes or marketing strategies in response to the control program.

A summary of the market analysis results is presented in Table V-13 for 2011, 2016, and 2030. These years were chosen because 2011 is the first year of the Tier 3 standards, 2016 is when the Tier 4 standards begin for most engines, and 2030 illustrates the long-term impacts of the program. Results for all years can be found in Chapter 7 of the RIA.

The estimated market impacts are designed to provide a broad overview of the expected market impacts that is useful when considering the impacts of the rule. Absolute price changes and relative price/quantity changes reflect production-weighted averages of the individual market-level estimates generated by the model for each group of engine/equipment markets. For example, the estimated marine diesel engine price changes are production-weighted averages of the estimated results for all of the marine diesel engine markets included in the group.[148] The absolute change in quantity is the sum of the decrease in units produced across sub-markets within each engine/equipment group. For example, the estimated marine diesel engine quantity changes reflect the total decline in marine diesel engines produced. The aggregated data presented in Table V-13 is intended to provide a broad overview of the expected market impacts that is useful when considering the impacts of the rule on the economy as a whole and not the impacts on a particular engine or equipment category.

Locomotive Sector Impacts. On the locomotive side, the proposed program is expected to have a negligible impact on locomotive prices and quantities. In 2011, the expected impacts are mainly the result of the operating costs associated with locomotive remanufacturing standards. These standards impose an operating cost on railroad transportation providers and are expected to result in a slight increase in the price of locomotive transportation services (about 0.1 percent, on average) and a slight decrease in the quantity of services provided (about 0.1 percent, on average). The locomotive remanufacturing program is also expected to have a small impact on the new locomotive market. The remanufacturing program will increase railroad operating costs, which expected to result in an increase in the price of transportation services. This increase will results in a decrease in demand for rail transportation services and Start Printed Page 16018ultimately in a decrease in the demand for locomotives and a decrease in their price. In other words, the market will contract slightly. We estimate a reduction in the price of locomotives of about $425, or about 0.02 percent on average.

Beginning in 2016, the market impacts are affected by both the operating costs and the direct costs associated with the Tier 4 standards. As a result of both of these impacts, the price of a new locomotive is expected to increase by about 1.9 percent ($35,900), on average and the quantity produced is expected to decrease by about 0.1 percent, on average (less than one locomotive). Locomotive transportation service prices are expected to decrease by about 0.1 percent). By 2030, the price of new locomotives is expected to increase by about 2.6 percent ($49,000), on average, and the quantity expected to decrease by about 0.2 percent (less than one locomotive). The price of rail transportation services is expected to increase by about 0.4 percent.

Marine Sector Impacts. On the marine engine side, the expected impacts are different for engines above and below 800 hp (600 kW). With regard to engines above 800 hp and the vessels that use them, the proposed program does not begin to affect market prices or quantities until the Tier 4 standards go into effect, which is in 2016 for most engines. For these engines, the price of a new engine in 2016 is expected to increase between 11.0 and 24.6 percent, on average ($17,300 for C1 engines above 800 hp and $64,100 for C2 engines above 800 hp), depending on the type of engine, and sales are expected to decrease less than 2.0 percent, on average. The price of vessels that use them is expected to increase between 1.7 and 1.0 percent ($20,900 for vessels that use C1 engines above 800 hp and $188,600 for vessels that use C2 engines above 800 hp) and sales are expected to decrease less than 2.0 percent. The percent change in price in the marine transportation sector is expected to be about 0.1 percent. By 2030, the price of these engines is expected to increase between 8.4 and 18.7 percent, on average ($13,200 for C1 engines above 800 hp and $48,700 for C2 engine above 800 hp), depending on the type of engine, and sales are expected to decrease by less than 2 percent, on average. The price of vessels is expected to increase between 1 and 3.6 percent ($16,200 for vessels that use C1 engines above 800 hp and $141,600 for vessels that use C2 engines above 800 hp) and sales are expected to decrease by less than 2 percent. The percent change in price in the marine transportation is expected to be about 0.6 percent.

With regard to engines below 800 hp, the market impacts of the program are expected to be negligible.[149] This is because there are no variable costs associated with the standards for these engines. The market impacts associated with the program are indirect effects that stem from the impacts on the marine service markets for the larger engines that would be subject to direct compliance costs. Changes in the equilibrium outcomes in those marine service markets may lead to reductions for marine services in other marine engine and vessel markets, including the markets for smaller marine diesel engines and vessels. The result is that in some years there may be small declines in the equilibrium price in the markets for marine diesel engines less than 800 hp. This would occur because an increase in the price and a decrease in the quantity of marine transportation services provided by vessels with engines above 800 hp that results in a change in the price of marine transportation services may have follow-on effects in other marine markets and lead to decreases in prices for those markets. For example, the large vessels used to provide transportation services are affected by the rule. Their compliance costs lead to a higher vessel price and a reduced demand for those vessels. This reduced demand indirectly affects other marine transportation services that support the larger vessels, and leads to a decrease in price for those markets as well.

Table V-13.—Estimated Market Impacts for 2011, 2016, 2030 (2005$)

MarketAverage variable engineering cost per unitChange in priceChange in variable
AbsolutePercentAbsolutePercent
2011
Rail Sector
Locomotives$0−$425−0.020−0.1
Transportation ServicesNANA a0.1NA a0.1
Marine Sector
Engines:
C1>800 hp000.0000.0
C2>800 hp000.0000.0
Other marine000.0000.0
Vessels:
C1>800 hp000.0000.0
C2>800 hp000.0000.0
Other marine000.0000.0
Transportation ServicesNANA a0.00NA a0.0
2016
Rail Sector
Locomotives36,36335,9291.90−0.1
Start Printed Page 16019
Transportation ServicesNANA a0.1NA a−0.1
Marine Sector a
Engines:
C1>800 hp18,10517,33011.0−7−1.7
C2>800 hp64,73564,07324.6−1−0.9
Other marine000.0000.0
Vessels:
C1>800 hp2,98020,8981.5−9−1.7
C2>800 hp6,515188,5594.8−1−0.9
Other marine0−10.00−00.0
Transportation ServicesNANA a0.1NAa−0.1
2030
Rail Sector
Locomotives50,29149,0872.60−0.2
Transportation ServicesNANA a0.4NA a−0.2
Marine Sector
Engines:
C1>800 hp13,88513,2618.4−6−1.4
C2>800 hp49,36048,69218.7−1−0.9
Other marine000.000.0
Vessels:
C1>800 hp2,97916,1551.1−8−1.5
C2>800 hp6,516141,5633.6−1−0.9
Other marine0−40.0−20.0
Transportation ServicesNANA a0.6NA a−0.3
a The prices and quantities for transportation services are normalized ($1 for 1 unit of services provided) and therefore it is not possible to estimate the absolute change price or quanitity; see 7.3.1.5.

(b) Economic Welfare Analysis

In the economic welfare analysis we look at the costs to society of the proposed program in terms of losses to key stakeholder groups that are the producers and consumers in the rail and marine markets. The estimated surplus losses presented below reflect all engineering costs associated with the proposed program (fixed, variable, operating, and remanufacturing costs). Detailed economic welfare results for the proposed program for all years are presented in Chapter 7 of the RIA.

A summary of the estimated annual net social costs is presented in Table V-14. This table shows that total social costs for each year are slightly less than the total engineering costs. This is because the total engineering costs do not reflect the decreased sales of locomotives, engines and vessels that are incorporated in the total social costs. In addition, in the early years of the program the estimated social costs of the proposed program are not expected to increase regularly over time. This is because the compliance costs for the locomotive remanufacture program are not constant over time.

Table V-14.—Estimated Annual Engineering and Social Costs, Through 2040 (2005)

YearEngineering costsTotal social costs
Marine operating costsMarine engine and vessel costsRail operating costsRail remanuf. costsRail new locomotive costsTotal
2007$0.0$25.0$0.0$0.0$3.2$28.2$28.2
2008$0.0$25.0$1.3$56.7$3.2$86.1$86.1
2009$0.0$25.0$1.4$33.2$3.2$62.7$62.7
2010$0.0$25.0$3.8$51.5$7.3$87.5$87.5
2011$0.0$86.0$7.9$96.9$10.8$201.6$201.5
2012$0.0$41.2$9.7$74.3$12.3$137.5$137.5
2013$0.0$41.2$12.0$62.4$12.3$127.9$127.9
2014$2.8$41.2$12.6$40.0$16.9$113.5$113.5
2015$5.6$74.1$14.9$29.1$48.8$172.5$172.5
2016$14.8$48.6$19.0$55.5$55.3$193.1$192.6
2017$23.9$44.9$32.7$39.3$66.5$207.3$206.7
2018$36.0$33.9$44.6$41.9$67.9$224.3$223.9
2019$48.0$34.2$56.5$36.7$61.9$237.4$236.9
2020$60.0$34.5$68.5$12.9$64.0$239.9$239.5
Start Printed Page 16020
2021$72.0$34.8$80.8$14.9$66.2$268.7$268.2
2022$83.9$35.1$93.6$37.4$68.1$318.1$317.6
2023$95.7$35.4$106.7$83.2$69.8$390.8$390.2
2024$107.5$35.7$120.1$72.0$70.8$406.0$405.4
2025$119.1$35.9$133.8$76.5$72.5$437.9$437.2
2026$130.6$36.2$147.7$63.2$73.5$451.2$450.4
2027$141.9$33.6$161.5$64.6$74.7$476.3$475.5
2028$153.0$33.9$175.5$80.3$75.6$518.2$517.3
2029$163.3$34.2$189.4$81.8$76.3$544.9$544.0
2030$172.6$34.5$203.3$81.2$76.8$568.3$567.3
2031$181.2$34.8$217.1$81.4$77.6$592.1$591.1
2032$189.0$35.1$231.1$77.2$78.5$610.9$609.8
2033$196.4$35.4$244.9$133.5$78.9$689.2$688.0
2034$203.6$35.7$258.7$142.6$79.6$720.1$718.8
2035$210.4$36.0$272.4$150.1$79.8$748.8$747.4
2036$216.9$36.4$285.8$143.2$77.5$759.7$758.3
2037$222.7$36.7$299.2$145.9$75.8$780.3$778.8
2038$227.9$37.0$312.0$148.8$73.9$799.6$798.1
2039$232.4$37.3$324.4$152.0$71.8$818.0$816.4
2040$236.3$37.7$336.3$155.0$69.5$834.7$833.2
2040 NPV at 3% a,b$6,907.8$6,896.8
2040 NPV at 7% a,b$3,107.7$3,103.2
2030 NPV at 3% a,b$3,938.7$3,932.6
2030 NPV at 7% a,b$2,175.5$2,172.5
a EPA EPA presents the present value of cost and benefits estimates using both a three percent and a seven percent social discount rate. According to OMB Circular A-4, “the 3 percent discount rate represents the ‘social rate of time preference’* * * * * [which] means the rate at which ‘society’ discounts future consumption flows to their present value”; “the seven percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy “ [that] approximates the opportunity cost of capital.
bNote: These NPV calculations are based on the period 2006-2040, reflecting the period when the analysis was completed. This has the consequence of discounting the current year costs, 2007, and all subsequent years are discounted by an additional year. The result is a smaller stream of social costs than by calculating the NPV over 2007-2040 (3% smaller for 3% NPV and 7% smaller for 7% NPV).

Table V-15 shows how total social costs are expected to be shared across stakeholders, for selected years. According to these results, the rail sector is expected to bear most of the social costs of the program, ranging from 57.3 percent in 2011 to 67.3 percent in 2016. Producers and consumers of locomotive transportation services are expected to bear most of those social costs, ranging from 51.9 percent in 2011 to 63.3 percent in 2030. As explained above, these results assume the railroads absorb all remanufacture kit compliance costs (the remanufacture kit manufacturers pass all costs of the new standards to the railroads). The marine sector is expected to bear the remaining social costs, ranging from 42.7 percent in 2011 to 32.7 percent in 2016. Producers of marine diesel engines are expected to bear more of the program costs in the early years (42.7 percent in 2011), but by 2020 producers and consumers in the marine transportation services market are expected to bear a larger share of the social costs, 31.5 percent.

Table V-15.—Summary of Estimated Social Costs for 2011, 2016, 2020, 2030

[2005$, $million]

Stakeholder group20112016
Surplus changePercentSurplus changePercent
Locomotives
Locomotive producers−$11.15.5−$13.47.0
Rail transportation service providers−$47.523.6−$52.927.5
Rail transportation service consumers−$57.028.3−$63.533.0
Total locomotive sector−$115.657.3−$129.767.3
Marine
Marine engine producers−$86.042.7−$0.90.5
C1 > 800 hp−$22.8−$0.7
C2 > 800 hp−$27.8−$0.2
Other marine−$35.4−$0.0
Start Printed Page 16021
Marine vessel producers−$00.0−$18.09.3
C1 > 800 hp−$0−$13.6
C2 > 800 hp−$0−$4.4
Other marine−$0−$0.0
Recreational and fishing vessel consumers−$00.0−$9.65.0
Marine transportation service providers−$00.0−$15.68.1
Marine transportation service consumers−$00.0−$18.79.7
Total marine sector−$86.042.7−$62.932.7
Total Program−$201.5−$192.6
Stakeholder group20202030
Surplus changePercentSurplus changePercent
Locomotives
Locomotive producers−$0.70.3−$1.80.3
Rail transportation service providers−$65.827.5−$163.228.8
Rail transportation service consumers−$78.932.9−$195.934.5
Total locomotive sector−$145.360.7−$360.963.6
Marine
Marine engine producers−$0.80.3−$0.90.2
C1 > 800 hp−$0.6−$0.7
C2 > 800 hp−$0.2−$0.2
Other marine−$0.0−$0.0
Marine vessel producers−$10.14.2−$8.21.4
C1 > 800 hp−$7.8−$6.4
C2 > 800 hp−$2.3−$1.6
Other marine−$0.1−$0.1
Recreational and fishing vessel consumers−$7.83.3−$8.51.5
Marine transportation service providers−$34.314.3−$85.815.1
Marine transportation service consumers−$41.217.2−$103.018.2
Total marine sector−$94.139.3−$206.536.4
Total Program−$239.5100.0−$567.3100.0

Table V-16 provides additional detail about the sources of surplus changes, for 2020 when the per unit compliance costs are stable. On the marine side, this table shows that engine and vessel producers are expected to pass along much of the engine and vessel compliance costs to the marine transportation service providers who purchase marine vessels. These marine transportation service providers, in turn, are expected to pass some of the costs to their customers. This is also expected to be the case in the rail sector.

Table V-16.— Distribution of Estimated Surplus Changes by Market and Stakeholder for 2020

[2005$, million$]

Total engineering costsSurplus change
Marine Markets
Engine Producers$29.3−$0.8
Vessel Producers$5.2−$10.1
Engine price changes−$8.1
Equipment cost changes−$2.0
Recreational and Fishing Consumers−$7.8
Engine price changes−$6.2
Equipment cost changes−$1.6
Transportation Service Providers$60.0−$34.3
Increased price vessels−$6.9
Start Printed Page 16022
Operating costs−$27.4
Users of Transportation Service−$41.2
Increased price vessels−$8.2
Operating costs−$32.9
Rail Markets
Locomotive Producers$64.0−$0.7
Rail Service Providers$81.4−$65.8
Increased price new locomotives−$28.8
Remanufacturing costs$9.5−$8.1
Operating costs$63.6−$28.9
Users of Rail Transportation Service−$78.9
Increased price new locomotives−$34.6
Remanufacturing costs−$9.7
Operating costs−$34.7
Total$239.9$239.6

The present value of net social costs of the proposed standards through 2040, shown in Table V-14, is estimated to be $6.9 billion (2005$).[150] This present value is calculated using a social discount rate of 3 percent and the stream of social welfare costs from 2006 through 2040. We also performed an analysis using a 7 percent social discount rate.[151] Using that discount rate, the present value of the net social costs through 2040 is estimated to be $3.1 billion (2005$).

Table V-17 shows the distribution of total surplus losses for the program from 2006 through 2040. This table shows that the rail sector is expected to bear about 65 percent of the total program social costs through 2040, and that most of the costs are expected to be borne by the rail transportation service producers and consumers. On the marine side, most of the marine sector costs are expected to be borne by the marine transportation service providers and consumers. This is consistent with the structure of the program, which leads to high compliance costs for those stakeholder groups.

Table V-17.—Estimated Net Social Costs Through 2040 by Stakeholder

($million, 2005$)

Stakeholder groupsSurplus change NPV 3%Percent of total surplusSurplus change NPV 7%Percent of total surplus
Locomotives
Locomotive producers$92.81.3%$63.52.0%
Rail transportation service providers$1,988.828.8%$878.128.3%
Rail transportation service consumers$2,386.434.6%$1,053.733.9%
Total locomotive sector$4,468.164.8%$1,995.464.4%
Marine
Marine engine producers$313.34.5%$242.37.8%
C1 > 800 hp$102.1$73.9
C2 > 800 hp$112.4$84.4
Other marine$98.7$84.0
Marine vessel producers$143.82.1%$71.32.3%
C1 > 800 hp$110.1$54.3
C2 > 800 hp$32.4$16.5
Other marine$1.3$0.5
Recreational and fishing vessel consumers$110.01.6%$51.01.6%
Marine transportation service providers$846.212.3%$338.210.9%
Marine transportation service consumers$1,015.414.7%$405.913.1%
Total marine sector$2,428.735.2%$1,107.735.7%
Total Program$6,896.8$3,103.1
Start Printed Page 16023

(7) What Are the Significant Limitations of the Economic Impact Analysis?

Every economic impact analysis examining the market and social welfare impacts of a regulatory program is limited to some extent by limitations in model capabilities, deficiencies in the economic literatures with respect to estimated values of key variables necessary to configure the model, and data gaps. In this EIA, there three potential sources of uncertainty: (1) Uncertainty resulting from the way the EIM is designed, particularly from the use of a partial equilibrium model; (2) uncertainty resulting from the values for key model parameters, particularly the price elasticity of supply and demand; and (3) uncertainty resulting from the values for key model inputs, particularly baseline equilibrium price and quantities.

Uncertainty associated with the economic impact model structure arises from the use of a partial equilibrium approach, the use of the national level of analysis, and the assumption of perfect competition. These features of the model mean it does not take into account impacts on secondary markets or the general economy, and it does not consider regional impacts. The results may also be biased to the extent that firms have some control over market prices, which would result in the modeling over-estimating the impacts on producers of affected goods and services.

The values used for the price elasticities of supply and demand are critical parameters in the EIM. The values of these parameters have an impact on both the estimated change in price and quantity produced expected as a result of compliance with the proposed standards and on how the burden of the social costs will be shared among producer and consumer groups. In selecting the values to use in the EIM it is important that they reflect the behavioral responses of the industries under analysis.

Where possible, the EIA relies on published price elasticities of supply and demand. For those cases where there are no published sources, we estimated these parameters (see Appendix 7F of the RIA prepared for this rule). The methods used for estimation include a production fuction approach using data at the industry level (engines and recreational vessels) and a calibration approach (locomotiove supply). These methods were chosen because of limitations with the available data, which was limited to industry-level data. However, the use of aggregate industry level data may not be appropriate or an accurate way to estimate the price elasticity of supply compared to firm-level or plant-level data. This is because, at the aggregate industry level, the size of the data sample is limited to the time series of the available years and because aggregate industry data may not reveal each individual firm or plant production function (heterogeneity). There may be significant differences among the firms that may be hidden in the aggregate data but that may affect the estimated elasticity. In addition, the use of time series aggregate industry data may introduce time trend effects that are difficult to isolate and control.

To address these concerns, EPA intends to investigate estimates for the price elasticity of supply for the affected industries for which published estimates are not available, using an alternative method and data inputs. This research program will use the cross-sectional data model at either the firm level or the plant level from the U.S. Census Bureau to estimate these elasticities. We plan to use the results of this research provided the results are robust and they are available in time for the analysis for the final rule.

Finally, uncertainty in measurement of data inputs can have an impact on the results of the analysis. This includes measurement of the baseline equilibrium prices and quantities and the estimation of future year sales. In addition, there may be uncertainty in how similar engines and equipment were combined into smaller groups to facilitate the analysis. There may also be uncertainty in the compliance cost estimations.

To explore the effects of key sources of uncertainty, we performed a sensitivity analysis in which we examine the results of using alternative values for the price elasticity of suppy and demand and alternative methods to incorporate operational costs (across a larger group of marine vessels). The results of these analyses are contained in Appendix 7H of the RIA prepared for this rule.

Despite these uncertainties, we believe this economic impact analysis provides a reasonable estimate of the expected market impacts and social welfare costs of the proposed standards in future. Acknowledging benefits omissions and uncertainties, we present a best estimate of the social costs based on our interpretation of the best available scientific literature and methods supported by EPA's Guidelines for Preparing Economic Analyses and the OAQPS Economic Analysis Resource Document.

VI. Benefits

A. Overview

This section presents our analysis of the health and environmental benefits that can be expected to occur as a result of the proposed locomotive and marine engine standards throughout the period from initial implementation through 2030. Nationwide, the engines that are subject to the proposed emission standards in this rule are a significant source of mobile source air pollution. The proposed standards will reduce exposure to NOX and direct PM emissions and help avoid a range of adverse health effects associated with ambient ozone and PM2.5 levels. In addition, the proposed standards will help reduce exposures to diesel PM exhaust, various gaseous hydrocarbons and air toxics. As described below, the reductions in ozone and PM from the proposed standards are expected to result in significant reductions in premature deaths and other serious human health effects, as well as other important public health and welfare effects.

To estimate the net benefits of the proposed standards, we use the estimated costs presented in section V and sophisticated air quality and benefit modeling tools. The benefit modeling is based on peer-reviewed studies of air quality and health and welfare effects associated with improvements in air quality and peer-reviewed studies of the dollar values of those public health and welfare effects. These methods are generally consistent with benefits analyses performed for the recent analysis of the Clean Air Interstate Rule (CAIR) standards and the recently finalized PM NAAQS analysis.[152] ,[153] They are described in detail in the RIA prepared for this rule.

EPA typically quantifies PM- and ozone-related benefits in its regulatory impact analyses (RIAs) when possible. In the analysis of past air quality regulations, ozone-related benefits have included morbidity endpoints and welfare effects such as damage to commercial crops. EPA has not recently included a separate and additive mortality effect for ozone, independent of the effect associated with fine particulate matter. For a number of Start Printed Page 16024reasons, including (1) advice from the Science Advisory Board (SAB) Health and Ecological Effects Subcommittee (HEES) that EPA consider the plausibility and viability of including an estimate of premature mortality associated with short-term ozone exposure in its benefits analyses and (2) conclusions regarding the scientific support for such relationships in EPA's 2006 Air Quality Criteria for Ozone and Related Photochemical Oxidants (the CD), EPA is in the process of determining how to appropriately characterize ozone-related mortality benefits within the context of benefits analyses for air quality regulations. As part of this process, we are seeking advice from the National Academy of Sciences (NAS) regarding how the ozone-mortality literature should be used to quantify the reduction in premature mortality due to diminished exposure to ozone, the amount of life expectancy to be added and the monetary value of this increased life expectancy in the context of health benefits analyses associated with regulatory assessments. In addition, the Agency has sought advice on characterizing and communicating the uncertainty associated with each of these aspects in health benefit analyses.

Since the NAS effort is not expected to conclude until 2008, the agency is currently deliberating how best to characterize ozone-related mortality benefits in its rulemaking analyses in the interim. For the analysis of the proposed locomotive and marine standards, we do not quantify an ozone mortality benefit. So that we do not provide an incomplete picture of all of the benefits associated with reductions in emissions of ozone precursors, we have chosen not to include an estimate of total ozone benefits in the proposed RIA. By omitting ozone benefits in this proposal, we acknowledge that this analysis underestimates the benefits associated with the proposed standards. Our analysis, however, indicates that the rule's monetized PM2.5 benefits alone substantially exceed our estimate of the costs.

The range of benefits associated with the proposed program are estimated based on the risk of several sources of PM-related mortality effect estimates, along with all other PM non-mortality related benefits information. These benefits are presented in Table VI-1. The benefits reflect two different sources of information about the impact of reductions in PM on reduction in the risk of premature death, including both the American Cancer Society (ACS) cohort study and an expert elicitation study conducted by EPA in 2006. In order to provide an indication of the sensitivity of the benefits estimates to alternative assumptions, in Chapter 6 of the RIA we present a variety of benefits estimates based on two epidemiological studies (including the ACS Study and the Six Cities Study) and the expert elicitation. EPA intends to ask the Science Advisory Board to provide additional advice as to which scientific studies should be used in future RIAs to estimate the benefits of reductions in PM. These estimates, and all monetized benefits presented in this section, are in year 2005 dollars.

Table VI-1.—Estimated Monetized PM-Related Health Benefits of the Proposed Locomotive and Marine Engine Standards

Total benefits abcd (billions 2005$)
20202030
PM mortality derived from the ACS cohort study; Morbidity functions from epidemiology literature
Using a 3% discount rate$4.4+B$12+B
Confidence Intervals (5th-95th %ile)($1.0-$10)($2.1-$27)
Using a 7% discount rate$4.0+B$11+B
Confidence Intervals (5th-95th %ile)($1.0-$9.2)($1.8-$25)
PM mortality derived from lower bound and upper bound expert-based result; e Morbidity functions from epidemiology literature
Using a 3% discount rate$1.7+B − $12+B$4.6+B − $33+B
Confidence Intervals (5th-95th %ile)($0.2 − $8.5) − ($2.0 − $27)($1.0 − $23) − ($5.4 − $72)
Using a 7% discount rate$1.6+B − $11+B$4.3+B − $30+B
Confidence Intervals (5th-95th %ile)($0.2 − $7.8) − ($1.8 − $24)($1.0 − $21) − ($4.9 − $65)
a Benefits include avoided cases of mortality, chronic illness, and other morbidity health endpoints.
b PM-related mortality benefits estimated using an assumed PM threshold of 10 μ/m3. There is uncertainty about which threshold to use and this may impact the magnitude of the total benefits estimate. For a more detailed discussion of this issue, please refer to Section 6.6.1.3 of the RIA.
c For notational purposes, unquantified benefits are indicated with a “B” to represent the sum of additional monetary benefits and disbenefits. A detailed listing of unquantified health and welfare effects is provided in VI-4.
d Results reflect the use of two different discount rates: 3 and 7 percent, which are recommended by EPA's Guidelines for Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant digits for ease of presentation and computation.
e The effect estimates of nine of the twelve experts included in the elicitation panel fall within the empirically-derived range provided by the ACS and Six-Cities studies. One of the experts fall below this range and two of the experts are above this range. Although the overall range across experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. The twelve experts' judgments as to the likely mean effect estimate are not evenly distributed across the range illustrated by arraying the highest and lowest expert means. Likewise the 5th and 95th percentiles for these highest and lowest judgments of the effect estimate do not imply any particular distribution within those bounds. The distribution of benefits estimates associated with each of the twelve expert responses can be found in Tables 6.4-3 and 6.4-4 in the RIA.

B. Quantified Human Health and Environmental Effects of the Proposed Standards

In this section we discuss the PM2.5 benefits of the proposed standards. We discuss how these benefits are monetized in the next section. It should be noted that the emission control scenarios used in the air quality and benefits modeling are slightly different than the emission control program being proposed. The differences reflect further refinements of the regulatory program since we performed the air quality modeling for this rule. Emissions and air quality modeling decisions are made early in the analytical process. Section 3.6 of the RIA describes the changes in the inputs and resulting emission inventories between the preliminary Start Printed Page 16025assumptions used for the air quality modeling and the final proposed emission control scenario.

(1) Estimated PM Benefits

To model the PM air quality benefits of this rule we used the Community Multiscale Air Quality (CMAQ) model. CMAQ simulates the numerous physical and chemical processes involved in the formation, transport, and deposition of particulate matter. This model is commonly used in regional applications to estimate the PM reductions expected to occur from a given set of emissions controls. The meteorological data input into CMAQ are developed by a separate model, the Penn State University/National Center for Atmospheric Research Mesoscale Model, known as MM5. The modeling domain covers the entire 48-State U.S., as modeled in the Clean Air Interstate Rule (CAIR).[154] The grid resolution for the PM modeling domain was 36 x 36 km. More detailed information is included in the air quality modeling technical support document (TSD), which is located in the docket for this rule.

The modeled ambient air quality data serves as an input to the Environmental Benefits Mapping and Analysis Program (BenMAP).[155] BenMAP is a computer program developed by EPA that integrates a number of the modeling elements used in previous Regulatory Impact Analyses (e.g., interpolation functions, population projections, health impact functions, valuation functions, analysis and pooling methods) to translate modeled air concentration estimates into health effects incidence estimates and monetized benefits estimates.

Table VI-2 presents the estimates of reduced incidence of PM-related health effects for the years 2020 and 2030, which are based on the modeled air quality improvements between a baseline, pre-control scenario and a post-control scenario reflecting the proposed emission control strategy.

Since the publication of CAIR, we have completed the full-scale expert elicitation assessing the uncertainty in the concentration-response function for PM-related premature mortality. Consistent with the recommendations of the National Research Council (NRC) report “Estimating the Public Health Benefits of Proposed Air Pollution Regulations,” [156] we are integrating the results of this probabilistic assessment into the main benefits analysis as an alternative to the epidemiologically-derived range of mortality incidence provided by the ACS and Six-cities cohort studies (Pope et al., 2002 and Laden et al., 2006). Of the twelve experts included in the panel of experts, average premature mortality incidence derived from eleven of the experts are larger than the ACS-based estimate. One expert's average effect estimate falls below the ACS-based estimate. Details on the PM-related mortality incidence derived from each expert are presented in the draft RIA.

The use of two sources of PM mortality reflects two different sources of information about the impact of reductions in PM on reduction in the risk of premature death, including both the published epidemiology literature and an expert elicitation study conducted by EPA in 2006. In 2030, based on the estimate provided by the ACS study, we estimate that PM-related annual benefits would result in 1,500 fewer premature fatalities. When the range of expert opinion is used, we estimate between 460 and 4,600 fewer premature mortalities in 2030. We also estimate 940 fewer cases of chronic bronchitis, 3,300 fewer non-fatal heart attacks, 1,100 fewer hospitalizations (for respiratory and cardiovascular disease combined), one million fewer days of restricted activity due to respiratory illness and approximately 170,000 fewer work-loss days. We also estimate substantial health improvements for children from reduced upper and lower respiratory illness, acute bronchitis, and asthma attacks. These results are based on an assumed cutpoint in the long-term mortality concentration-response functions at 10 μg/m3, and an assumed cutpoint in the short-term morbidity concentration-response functions at 10 μg/m3. The impact using four alternative cutpoints (3 μg/m3, 7.5 μg/m3, 12 μg/m3, and 14 μg/m3) has on PM2.5-related mortality incidence estimation is presented in Chapter 6 of the draft RIA.

Table VI-2 Estimated Reduction in Incidence of Adverse Health Effects Related to the Proposed Locomotive and Marine Engine Standards a

20202030
Health effectMean incidence reduction (5th-95th percentile)
PM-Related Endpoints
Premature Mortality—Derived from Epidemiology Literature b c Adult, age 30±Range based on ACS cohort study (Pope et al. 2002570 (220-920)1,500 (590-2,400)
Infant, age <1 year—Woodruff et al. 19971 (1-2)2 (1-4)
Premature Mortality—Derived from Expert Elicitation c d Adult, age 25±Lower and Upper Bound EE Results, Respectively180-1,700 (0-830)—(870-2,600)460-4,600 (0-2,200)-(2,300-6,900)
Chronic bronchitis (adult, age 26 and over)370 (68- 670)940 (170-1,700)
Acute myocardial infarction (adults, age 18 and older)1,200 (640-1,700)3,300 (1,800-4,800)
Hospital admissions—respiratory (all ages) e130 (65-200)350 (170-510)
Hospital admissions—cardiovascular (adults, age >18) f270 (170-380)770 (490-1,100)
Start Printed Page 16026
Emergency room visits for asthma (age 18 years and younger)460 (270-650)1,000 (620-1,500)
Acute bronchitis (children, age 8-12)1,000 (0-2,100)2,600 (0-5,300)
Lower respiratory symptoms (children, age 7-14)11,000 (5,400-17,000)28,000 (14,000-43,000)
Upper respiratory symptoms (asthmatic children, age 9-18)8,300 (2,600-14,000)21,000 (6,600-35,000)
Asthma exacerbation (asthmatic children, age 6-18)10,000 (1,100-29,000)26,000 (2,800-74,000)
Work loss days (adults, age 18-65)71,000 (62,000-81,000)170,000 (150,000-190,000)
Minor restricted-activity days (adults, age 18-65)420,000 (360,000-490,000)1,000,000 (850,000-1,200,000)
a Incidence is rounded to two significant digits. PM estimates represent benefits from the proposed standards nationwide.
b Based on application of the effect estimate derived from the ACS study.157 Infant premature mortality based upon studies by Woodruff, et al. 1997.158
c PM-related mortality benefits estimated using an assumed PM threshold at 10 μg/m3. There is uncertainty about which threshold to use and this may impact the magnitude of the total benefits estimate. For a more detailed discussion of this issue, please refer to Chapter 6 of the RIA.
d Based on effect estimates derived from the full-scale expert elicitation assessing the uncertainty in the concentration-response function for PM-related premature mortality (IEc, 2006).159 The effect estimates of 11 of the 12 experts included in the elicitation panel falls estimate derived from the ACS study. One of the experts fall below the ACS estimate.
e Respiratory hospital admissions for PM include admissions for COPD, pneumonia, and asthma.
f Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and heart failure.

C. Monetized Benefits

Table VI-3 presents the estimated monetary value of reductions in the incidence of health and welfare effects. Total annual PM-related health benefits are estimated to be between $4.6 and $33 billion in 2030, using a three percent discount rate (or $4.3 and $30 billion assuming a 7 percent discount rate). This estimate is based on the opinions of outside experts on PM and the risk of premature death, along with other non-mortality related benefits results. When the range of premature fatalities based on the ACS cohort study is used, we estimate the total benefits related to the proposed standards to be approximately $12 billion in 2030, using a three percent discount rate (or $11 assuming a 7 percent discount rate). All monetized estimates are stated in 2005 dollars. These estimates account for growth in real gross domestic product (GDP) per capita between the present and the years 2020 and 2030. As the table indicates, total benefits are driven primarily by the reduction in premature fatalities each year, which accounts for well over 90 percent of total benefits.

The above estimates of monetized benefits include only one example of non-health related benefits. Changes in the ambient level of PM2.5 are known to affect the level of visibility in much of the U.S. Individuals value visibility both in the places they live and work, in the places they travel to for recreational purposes, and at sites of unique public value, such as at National Parks. For the proposed standards, we present the recreational visibility benefits of improvements in visibility at 86 Class I areas located throughout California, the Southwest, and the Southeast. These estimated benefits are approximately $150 million in 2020 and $400 million in 2030, as shown in Table VI-3.

Table VI-3 also indicates with a “B” those additional health and environmental benefits of the rule that we were unable to quantify or monetize. These effects are additive to the estimate of total benefits, and are related to two primary sources. First, there are many human health and welfare effects associated with PM, ozone, and toxic air pollutant reductions that remain unquantified because of current limitations in the methods or available data. A full appreciation of the overall economic consequences of the proposed standards requires consideration of all benefits and costs projected to result from the new standards, not just those benefits and costs which could be expressed here in dollar terms. A list of the benefit categories that could not be quantified or monetized in our benefit estimates are provided in Table VI-4. Second, the CMAQ air quality model only captures the benefits of air quality improvements in the 48 states and DC; benefits for Alaska and Hawaii are not reflected in the estimate of benefits.Start Printed Page 16027

Table VI-3.—Estimated Monetary Value in Reductions in Incidence of Health and Welfare Effects

[in millions of 2005$]a,b

20202030
PM2.5-related health effectEstimated mean value of reductions (5th and 95th %ile)
Premature mortality—Derived from Epidemiology Studiesc,d,e
Adult, age 30+—ACS study (Pope et al. 2002)
3% discount rate$3,900 ($500-$8,800)$10,000 ($1,500-$24,000)
7% discount rate$3,700 ($500-$7,900)$9,400 ($1,300-$21,000)
Infant Mortality,<1 year —Woodruff et al. 1997
3% discount rate$8 ($1-$18)$17 ($3-$37)
7% discount rate$7 ($1-$16)$15 ($2-$33)
Premature mortality—Derived from Expert Elicitationc,d,e,f
Adult, age 25+—Lower bound EE result
3% discount rate$1,200 ($0-$7,200)$3,300 ($0-$20,000)
7% discount rate$1,100 ($0-$6,500)$3,000 ($0-$18,000
Adult, age 25+—Upper bound EE result
3% discount rate$12,000 ($1,800-$25,000)$31,000 ($4,800-$68,000)
7% discount rate$11,000 ($1,600-$23,000)$28,000 ($4,400-$62,000)
Chronic bronchitis (adults, 26 and over)$200 ($10-$800)$500 ($26-$2,100)
Non-fatal acute myocardial infarctions
3% discount rate$123 ($32-$270)$330 ($80-$730)
7% discount rate$119 ($30-$270)$320 ($76-$720)
Hospital admissions for respiratory causes$2.7 ($1.3-$4.0)$7.2 ($3.6-$11)
Hospital admissions for cardiovascular causes$7.3 ($4.6-$10)$21 ($13-$28)
Emergency room visits for asthma$0.16 ($0.09-$0.26)$0.37 ($0.20-$0.60)
Acute bronchitis (children, age 8-12)$0.44 ($0-$1.2)$1.1 ($0-$3.1)
Lower respiratory symptoms (children, 7-14)$0.21 ($0.07-$0.43)$0.53 ($0.18-$1.1)
Upper respiratory symptoms (asthma, 9-11)$0.24 ($0.05-$0.59)$0.62 ($0.14-$1.5)
Asthma exacerbations$0.53 ($0.04-$2.0)$1.4 ($0.10-$5.1)
Work loss days$11 ($9.6-$12)$27 ($23-$30)
Minor restricted-activity days (MRADs)$12 ($0.61-$25)$29 ($1.5-$60)
Recreational Visibility, 86 Class I areas$150 (na)f$400 (na)
Monetized Total—PM-Mortality Derived from ACS Study; Morbidity Functions
3% discount rate$4.4 ($1.0-$10)$12 Billion ($2.1-$27)
7% discount rate Billion$4.0 Billion ($1.0-$9.2)$11 Billion ($1.8-$25)
Monetized Total—PM-Mortality Derived from Expert Elicitationg; Morbidity Functions
3% discount rate$1.7-$12 Billion ($0.2-$8.5)—($2.0-$27)$4.6-$33 Billion ($1.0-$23)—($5.4-$72)
7% discount rate$1.6-$11 Billion ($0.2-$7.8)—($1.8-$24)$4.3-$30 Billion ($1.0-$21)—($4.9-$65)
a Monetary benefits are rounded to two significant digits for ease of presentation and computation. PM benefits are nationwide.
b Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2020 or 2030)
c PM-related mortality benefits estimated using an assumed PM threshold of 10 μ/m3. There is uncertainty about which threshold to use and this may impact the magnitude of the total benefits estimate.
d Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. Results reflect the use of 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic analyses (EPA, 2000; OMB, 2003).Start Printed Page 16028
e The valuation of adult premature mortality, derived either from the epidemiology literature or the expert elicitation, is not additive. Rather, the valuations represent a range of possible mortality benefits.
f We are unable at this time to characterize the uncertainty in the estimate of benefits of worker productivity and improvements in visibility at Class I areas. As such, we treat these benefits as fixed and add them to all percentiles of the health benefits distribution.
g It should be noted that the effect estimates of nine of the twelve experts included in the elicitation panel falls within the scientific study-based range provided by Pope and Laden. One of the experts fall below this range and two of the experts are above this range.

Table V1-4.—Unquantified and Non-Monetized Potential Effects of the Proposed Locomotive and Marine Engine Standards

Pollutant/effectsEffects not included in analysis—changes in:
Ozone Health aPremature mortality: short-term exposures
Hospital admissions: respiratory
Emergency room visits for asthma
Minor restricted-activity days
School loss days
Asthma attacks
Cardiovascular emergency room visits
Acute respiratory symptoms
Chronic respiratory damage
Premature aging of the lungs
Non-asthma respiratory emergency room visits
Exposure to UVb (+/−) d
Ozone WelfareYields for
-commercial forests
-some fruits and vegetables
-non-commercial crops
Damage to urban ornamental plants
Impacts on recreational demand from damaged forest aesthetics
Ecosystem functions
Exposure to UVb (+/−)
PM Health bPremature mortality—short term exposures c
Low birth weight
Pulmonary function
Chronic respiratory diseases other than chronic bronchitis
Non-asthma respiratory emergency room visits
Exposure to UVb (+/−)
PM WelfareResidential and recreational visibility in non-Class I areas
Soiling and materials damage
Damage to ecosystem functions
Exposure to UVb (+/−)
Nitrogen and Sulfate Deposition WelfareCommercial forests due to acidic sulfate and nitrate deposition
Commercial freshwater fishing due to acidic deposition
Recreation in terrestrial ecosystems due to acidic deposition
Existence values for currently healthy ecosystems
Commercial fishing, agriculture, and forests due to nitrogen deposition
Recreation in estuarine ecosystems due to nitrogen deposition
Ecosystem functions
Passive fertilization
CO HealthBehavioral effects
HC/Toxics Health eCancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde)
Anemia (benzene)
Disruption of production of blood components(benzene)
Reduction in the number of blood platelets (benzene)
Excessive bone marrow formation (benzene)
Depression of lymphocyte counts (benzene)
Reproductive and developmental effects (1,3- butadiene)
Irritation of eyes and mucus membranes(formaldehyde)
Respiratory irritation (formaldehyde)
Asthma attacks in asthmatics (formaldehyde)
Asthma-like symptoms in non-asthmatics(formaldehyde)
Irritation of the eyes, skin, and respiratory tract(acetaldehyde)
Upper respiratory tract irritation and congestion(acrolein)
HC/Toxics WelfareDirect toxic effects to animals
Bioaccumulation in the food chain
Damage to ecosystem function
Odor
a In addition to primary economic endpoints, there are a number of biological responses that have been associated with ozone health effects including increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to respiratory infection. The public health impact of these biological responses may be partly represented by our quantified endpoints.
b In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including morphological changes and altered host defense mechanisms. The public health impact of these biological responses may be partly represented by our quantified endpoints.Start Printed Page 16029
c While some of the effects of short-term exposures are likely to be captured in the estimates, there may be premature mortality due to short-term exposure to PM not captured in the cohort studies used in this analysis. However, the PM mortality results derived from the expert elicitation do take into account premature mortality effects of short term exposures.
d May result in benefits or disbenefits.
e Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the Clean Air Act.

D. What Are the Significant Limitations of the Benefit-Cost Analysis?

Every benefit-cost analysis examining the potential effects of a change in environmental protection requirements is limited to some extent by data gaps, limitations in model capabilities (such as geographic coverage), and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Limitations of the scientific literature often result in the inability to estimate quantitative changes in health and environmental effects, such as potential increases in premature mortality associated with increased exposure to carbon monoxide. Deficiencies in the economics literature often result in the inability to assign economic values even to those health and environmental outcomes which can be quantified. These general uncertainties in the underlying scientific and economics literature, which can lead to valuations that are higher or lower, are discussed in detail in the RIA and its supporting references. Key uncertainties that have a bearing on the results of the benefit-cost analysis of the proposed standards include the following:

  • The exclusion of potentially significant and unquantified benefit categories (such as health, odor, and ecological benefits of reduction in air toxics, ozone, and PM);
  • Errors in measurement and projection for variables such as population growth;
  • Uncertainties in the estimation of future year emissions inventories and air quality;
  • Uncertainty in the estimated relationships of health and welfare effects to changes in pollutant concentrations including the shape of the C-R function, the size of the effect estimates, and the relative toxicity of the many components of the PM mixture;
  • Uncertainties in exposure estimation; and
  • Uncertainties associated with the effect of potential future actions to limit emissions.

As Table VI-3 indicates, total benefits are driven primarily by the reduction in premature fatalities each year. Some key assumptions underlying the premature mortality estimates include the following, which may also contribute to uncertainty:

  • Inhalation of fine particles is causally associated with premature death at concentrations near those experienced by most Americans on a daily basis. Although biological mechanisms for this effect have not yet been completely established, the weight of the available epidemiological, toxicological, and experimental evidence supports an assumption of causality. The impacts of including a probabilistic representation of causality were explored in the expert elicitation-based results of the recently published PM NAAQS RIA. Consistent with that analysis, we discuss the implications of these results in the draft RIA for the proposed standards.
  • All fine particles, regardless of their chemical composition, are equally potent in causing premature mortality. This is an important assumption, because PM produced via transported precursors emitted from locomotive and marine engines may differ significantly from PM precursors released from electric generating units and other industrial sources. However, no clear scientific grounds exist for supporting differential effects estimates by particle type.
  • The C-R function for fine particles is approximately linear within the range of ambient concentrations under consideration (above the assumed threshold of 10 μg/m3). Thus, the estimates include health benefits from reducing fine particles in areas with varied concentrations of PM, including both regions that may be in attainment with PM2.5 standards and those that are at risk of not meeting the standards.

Despite these uncertainties, we believe this benefit-cost analysis provides a conservative estimate of the estimated economic benefits of the proposed standards in future years because of the exclusion of potentially significant benefit categories. Acknowledging benefits omissions and uncertainties, we present a best estimate of the total benefits based on our interpretation of the best available scientific literature and methods supported by EPA's technical peer review panel, the Science Advisory Board's Health Effects Subcommittee (SAB-HES). EPA has also addressed many of the comments made by the National Academy of Sciences (NAS) in a September 26, 2002 report on its review of the Agency's methodology for analyzing the health benefits of measures taken to reduce air pollution in our analysis of the final PM NAAQS.[160] The analysis of the proposed standards incorporates this most recent work to the extent possible.

E. Benefit-Cost Analysis

In estimating the net benefits of the proposed standards, the appropriate cost measure is ‘social costs.’ Social costs represent the welfare costs of a rule to society. These costs do not consider transfer payments (such as taxes) that are simply redistributions of wealth. Table VI-5 contains the estimates of monetized benefits and estimated social welfare costs for the proposed rule and each of the proposed control programs. The annual social welfare costs of all provisions of this proposed rule are described more fully in section V of this preamble.[161]

The results in Table VI-5 suggest that the 2020 monetized benefits of the proposed standards are greater than the expected social welfare costs. Specifically, the annual benefits of the total program would be $4.4 + B billion annually in 2020 using a three percent discount rate (or $4.2 billion assuming a 7 percent discount rate), compared to estimated social costs of approximately $250 million in that same year. These benefits are expected to increase to $12 + B billion annually in 2030 using a three percent discount rate (or $11 billion assuming a 7 percent discount rate), while the social costs are estimated to be approximately $600 million. Though there are a number of health and environmental effects associated with the proposed standards that we are unable to quantify or monetize (represented by “+B”; see Table VI-4), the benefits of the proposed standards far outweigh the projected costs. When we examine the benefit-to-Start Printed Page 16030cost comparison for the rule standards separately, we also find that the benefits of the specific engine standards far outweigh their projected costs.

Table VI-5.—Summary of Annual Benefits, Costs, and Net Benefits of the Proposed Locomotive and Marine Engine Standards

(Millions, 2005$)a

Description20202030
Estimated Social Costs b
Locomotive$150$380
Marine100220
Total Social Costs250605
Estimated Health Benefits of the Proposed Standardsc d e
Locomotive
3 percent discount rate2,300+B4,700+B
7 percent discount rate2,100+B4,300+B
Marine
3 percent discount rate2,100+B7,100+B
7 percent discount rate1,900+B$6,400+B
Total Benefits
3 percent discount rate4,400+B12,000+B
7 percent discount rate4,000+B11,000+B
Annual Net Benefits (Total Benefits—Total Costs)
3 percent discount rate4,150+B11,000+B
7 percent discount rate3,750+B10,000+B
a All estimates represent annualized benefits and costs anticipated for the years 2020 and 2030. Totals may not sum due to rounding.
b The calculation of annual costs does not require amortization of costs over time. Therefore, the estimates of annual cost do not include a discount rate or rate of return assumption (see Chapter 7 of the RIA). In Section D, however, we do use both a 3 percent and 7 percent social discount rate to calculate the net present value of total social costs consistent with EPA and OMB guidelines for preparing economic analyses.
c Annual benefits analysis results reflect the use of a 3 percent and 7 percent discount rate in the valuation of premature mortality and nonfatal myocardial infarctions, consistent with EPA and OMB guidelines for preparing economic analyses (U.S. EPA, 2000 and OMB, 2003).162 163
d Valuation of premature mortality based on long-term PM exposure assumes discounting over the SAB recommended 20-year segmented lag structure described in the Regulatory Impact Analysis for the Final Clean Air Interstate Rule (March, 2005). Note that the benefits in this table reflect PM mortality derived from the ACS (Pope et al., 2002) study.
e Not all possible benefits or disbenefits are quantified and monetized in this analysis. B is the sum of all unquantified benefits and disbenefits. Potential benefit categories that have not been quantified and monetized are listed in Table V-13.

VII. Alternative Program Options

The program we have described in this proposal represents a broad and comprehensive approach to reduce emissions from locomotive and marine diesel engines. As we have developed this proposal, we have evaluated a number of alternatives with regard to the scope and timing of the standards. We have also examined an alternative that would require emission reductions from a significant fraction of the existing marine diesel engine fleet. This section presents a summary of our analysis of these alternative control scenarios. We are interested in comments on all of the alternatives presented. For a more detailed description of our analysis of these alternatives, including a year by year breakout of expected costs and emission reductions, please refer to Chapter 8 of the draft RIA prepared for this rulemaking.

A. Summary of Alternatives

We have developed emission inventory impacts, cost estimates and benefit estimates for two types of alternatives. The first type looks at the impacts of varying the timing and scope of our proposed standards. The second considers a programmatic alternative that would set emission standards for existing marine diesel engines.

(1) Alternatives Regarding Timing, Scope

(a) Alternative 1: Exclusion of Locomotive Remanufacturing

Alternative 1 examines the potential impacts of the locomotive remanufacturing program by excluding it from the analysis (see section III.C.(1)(a)(i) for more details on the remanufacturing standards). Compared to the primary program, this analysis shows that through 2040 the locomotive remanufacturing program by itself would reduce PM2.5 emissions by 65,000 tons NPV 3% (35,000 tons NPV 7%) and NOX emissions by nearly 690,000 tons NPV 3% (400,000 tons NPV 7%) at a cost of $800 million NPV 3% ($530 million NPV 7%). The monetized health and welfare benefits of the locomotive remanufacturing program in 2030 are $2.9 billion at a 3% discount rate (DR) or $2.7 at a 7% DR. While this alternative could have the advantage of enabling industry to focus its resources on Tier 3 and Tier 4 technology development, given its substantial benefits in the early years of the program which are critical for NAAQS achievement and maintenance, we have decided to retain the locomotive remanufacturing program in our proposal.

(b) Alternative 2: Tier 4 Advanced One Year

Alternative 2 considers the possibility of pulling ahead the Tier 4 standards by one year for both the locomotive and marine programs, while leaving the rest of the proposed program unchanged. This alternative represents a more environmentally protective set of standards, and we have given strong consideration to proposing it. However, our review of the technical challenges to introduce the Tier 4 program, especially considering the locomotive remanufacturing program and the Tier 3 standards which go before it, leads us to Start Printed Page 16031conclude that introducing Tier 4 a year earlier is not feasible. We have included this alternative analysis here because of the strong consideration we have given it, and to provide commenters with an opportunity to comment on the timing of the Tier 4 standards within the context of the additional benefits that such a pull ahead could realize. Our analysis suggests that introducing Tier 4 one year earlier than our proposal could reduce emissions by an additional 9,000 tons of PM2.5 NPV 3% (5,000 tons NPV 7%) and 420,000 tons of NOX NPV 3% (210,000 tons NPV 7%) through 2040. We are unable to make an accurate estimate of the cost for such an approach since we do not believe it to be feasible at this time. However, we have reported a cost in the summary table reflecting the same cost estimation method we have used for our primary case and have denoted unestimated additional costs as ‘C’. These additional unestimated costs would include costs for additional engine test cells, engineering staff, and engineering facilities necessary to introduce Tier 4 one year earlier. While we are unable to conclude that this alternative is feasible at this time, we request comment on that aspect of this alternative including what additional costs might be incurred in order to have Tier 4 start one year earlier.

(c) Alternative 3: Tier 4 Exclusively in 2013

Alternative 3 most closely reflects the program we described in our Advanced Notice of Proposed Rulemaking, whereby we would set new aftertreatment based emission standards as soon as possible. In this case, we believe the earliest that such standards could logically be started is in 2013 (3 months after the introduction of 15 ppm ULSD in this sector). Alternative 3 eliminates our proposed Tier 3 standards and locomotive remanufacturing standards, while pulling the Tier 4 standards ahead to 2013 for all portions of the Tier 4 program. As with alternative 2, we are concerned that it may not be feasible to introduce Tier 4 technologies on locomotive and marine diesel engines earlier than the proposal specifies. However, eliminating the technical work necessary to develop the Tier 3 and locomotive remanufacturing programs would certainly go a long way towards making such an approach possible. This alternative would actually result in substantially higher PM emissions than our primary case although it would provide additional reductions in NOX emissions. Through 2040 this alternative would decrease PM2.5 reductions by more than 60,000 NPV 3% tons (31,000 NPV 7%) while only adding approximately 180,000 additional tons NPV 3% (100,000 NPV 7%) of NOX reductions. As a result in 2030 alone, this alternative realizes approximately $0.6 billion less at a 3% DR ($0.5 billion less at a 7% DR) in public health and welfare benefits than does our proposal. As was the case with alternative 2, we have used the same cost estimation approach for this alternative as that of our proposal, and have denoted the unestimated costs that are necessary to accelerate the development of Tier 4 technologies with a ‘C’ in the summary tables. While alternative 3 could have been considered the Agency's leading option going into this rulemaking process, our review of the technical challenges necessary to introduce Tier 4 technologies and the substantial additional benefits that a more comprehensive solution can provide has lead us to drop this approach in favor of the comprehensive proposal we have laid out today.

(d) Alternative 4: Elimination of Tier 4

Alternative 4 would eliminate the Tier 4 standards and retain the Tier 3 and locomotive remanufacturing requirements. This alternative allows us to consider the value of combining the Tier 3 and locomotive remanufacturing standards together as one program, and conversely, allows us to see the additional benefits gained when combining them with the Tier 4 standards. As a stand-alone alternative, the combined Tier 3 and locomotive remanufacturing program is very attractive, resulting in large emission reductions through 2040 of 207,000 tons of PM2.5 NPV 3% (94,000 NPV 7%) and 2,910,000 tons NPV 3% (1,310,000 NPV 7%) of NOX at an estimated cost of $950 million NPV 3% ($650 million NPV 7%) through the same time period. In 2030 alone, such a program is projected to realize health and welfare benefits of $6.2 billion at a 3% DR ($5.7 billion at a 7% DR). Yet, this alternative falls well short of the total benefits that our comprehensive program is expected to realize. Elimination of Tier 4 would result in the loss of 108,000 tons NPV 3% (41,000 tons at NPV 7%) of PM2.5 reductions and almost 4,960,000 tons NPV 3% (1,870,000 tons at NPV 7%) of NOX reductions as compared to our proposal through 2040. Through the addition of the Tier 4 standards, the estimated health and welfare benefits are nearly doubled in 2030. As these alternatives show, each element of our comprehensive program: The locomotive remanufacturing program, the Tier 3 emission standards, and the Tier 4 emission standards, represent a valuable emission control program on its own, while the collective program results in the greatest emission reductions we believe to be possible giving consideration to all of the elements described in today's proposal.

(2) Standards for Engines on Existing Vessels

We are also considering a fifth alternative that would address emissions from certain marine diesel engines installed on vessels that are currently in the fleet. Many of the large marine diesel engines installed on commercial vessels remain in the fleet in excess of 20 years and the contribution of these engines to air pollution inventories can be substantial. This alternative seeks to reduce these impacts.

This section describes the background for such a program and discusses how it could be designed. While this is an alternative under active consideration, we are seeking further information about this market to develop a complete regulatory program. We obtained information from marine transportation stakeholders about their remanufacturing practices that leads us to believe that, for engines above 800 hp, these practices are very similar to those in the rail transportation sector. However, the information we have about the structure of marine remanufacturing market does not provide a complete picture regarding the economic response of the market to such a program. Therefore, we request comment on the characteristics of the marine remanufacturing market with regard to its sensitivity to price changes. We also encourage comments on all aspects of the program described below, including the need for it and the design of its components.

(a) Background

As discussed in section III.C.(1)(b), we currently regulate remanufactured locomotive engines under section 213(a)(5) of the Clean Air Act as new locomotive engines. Specifically, in our 1998 rule we defined “new locomotive” and “new locomotive engine” to mean a locomotive or locomotive engine which has been remanufactured. Remanufactured was defined as meaning (i) to replace, or inspect and qualify each and every power assembly of a locomotive or locomotive engine, whether during a single maintenance event or cumulatively within a five-year period; or (ii) to upgrade a locomotive or locomotive engine; or (iii) to convert a locomotive or locomotive engine to Start Printed Page 16032enable it to operate using a fuel other than it was originally manufactured to use; or (iv) to install a remanufactured engine or a freshly manufactured engine into a previously used locomotive. As we explained in that rule, any of these events would result in a locomotive that is essentially new.

We believe a similar situation exists for large marine diesel engines installed on certain types of commercial marine vessels, including tugs, towboats, ferries, crewboats, and supply boats. The engines used for propulsion power in these vessels are often large and are used at high load to provide power for pulling or pushing barges or for assisting ocean-going vessels in harbor. These engines tend to be integral to the vessel and are therefore designed to last the life of the vessel, often 30 or more years. These engines are also relatively expensive, costing from tens of thousands of dollars for a small tug or ferry to several hundred thousand dollars for larger tugs, ferries, and cargo vessels. Because it is very difficult to remove the engines from these vessels (the engines are typically below deck and replacement requires cutting the hull or the deck), owners insist that these marine diesel engines last as long as the vessel. Therefore, these engines are usually characterized by an extremely durable engine block and internal parts.

Marine propulsion engines are frequently remanufactured to provide dependable power, and it is not unusual for an older vessel to have its original propulsion engines which have been remanufactured. Those parts or systems that experience high wear rates are designed to be easily replaced so as to minimize the time that the unit is out of service for repair or remanufacture. This includes power assemblies, which consists of the pistons, piston rings, cylinder liners, fuel injectors and controls, fuel injection pump(s) and controls, and valves. The power assemblies can be remanufactured to bring them back to as-new condition or they can be upgraded to incorporate the latest design configuration for that engine. As part of the routine remanufacturing process, power assemblies and key engine components are disassembled and replaced or requalified (i.e. determined to be within original manufacturing tolerances).

Marine engine remanufacturing procedures have improved to the point that engine performance for rebuilt engines is equivalent to that of new engines. Therefore, we believe it may be appropriate to consider a program that would set emission requirements for certain types of marine diesel engines that would apply when they are remanufactured. The program under consideration is described below. We request comment on whether marine remanufacturing processes should subject remanufactured engines to standards under the Act. We also request comment on any and all aspects of the program described below, including the appropriateness of applying such a program, the standards, and its certification and compliance procedures.

(b) Other Marine Engine Remanufacture Programs

The impact of engines on existing vessels on ambient air quality was recognized in MARPOL Annex VI. Although not specifically referred to as a remanufacturing program, Regulation 13 contains requirements for existing engines by requiring that the Regulation 13 NOX limits apply to any engine above 130 kW that undergoes a major conversion on or after January 1, 2000. Major conversion is defined as (i) replacing the engine with a new engine (i.e., a repower); (ii) increasing the maximum continuous rating of the engine by more than 10 percent; or (iii) making a substantial modification to the engine (i.e., a change to the engine that would alter its emission characteristics).

EPA also recognized the importance of the inventory contribution from existing marine engines in our 1999 rule, and we requested comment on national requirements for existing marine diesel engines that would be similar to the locomotive remanufacturing program.[164] While we noted the potential advantages of such a program, we did not finalize a remanufacturing program for existing marine diesel engines. At the time we did not have a good understanding of the differences between the large marine diesel engines used on tugs, towboats, crew and supply boats, cargo boats, and ferries and the smaller engines used on fishing vessels and patrol boats, and the lack of uniformity in the remanufacturing practices used by owners of smaller engines led us to conclude that the industry was too fractured to allow a remanufactured engine program. However, we acknowledged the continuing importance of the contribution of existing marine diesel engines and noted in section VI of our 1999 rule (Areas for Future Action) that we would consider this issue again in the future.

Since we finalized our 1999 rule many states have continued to express concern about emissions from existing marine diesel engines and the impact of these emissions on their ability to attain and maintain their air quality goals. More recently, these states submitted comments to the ANPRM and letters to the Agency expressing the need for controlling existing engines. California is considering a program that would require all existing harborcraft (including tug/tow, ferries, crew, supply, pilot, work, and other vessels) to repower with an engine certified to the then-applicable federal standards. They are considering effective dates from 2008 through 2014, depending on the age of an existing vessel and its size. Alternatively, California would allow vessel owners to apply a retrofit technology that achieves equivalent emission reductions, or adopt an alternative compliance plan. The requirements under consideration for fishing vessels would be less stringent and phase in from 2011 through 2018.

We've also received information from vessel owner groups that suggests that the obstacles to a marine diesel engine remanufacturing program we noted in our 1999 rule may be less than critical, particularly for larger engines. Specifically, as noted above, many owners of large marine diesel engines have their engines rebuilt on a routine schedule and this maintenance is often performed by companies that also remanufacture locomotive engines. In addition, many owners of marinized locomotive engines use parts from the same remanufacturing kits that would apply to locomotives. Various retrofit programs, such as the Carl Moyer program in California, the TERP program in Texas, and EPA's retrofit program, may also make it easier to identify and install retrofit technologies on existing marine engines when they are remanufactured.

(c) Marine Diesel Engines To Be Included in the Program

The program for remanufactured marine diesel engines described below would apply to engines above 800 hp. We believe this threshold is appropriate because discussions with various user groups have indicated that these engines are most likely to be subject to the regular remanufacturing events described above. Engines below 800 hp are more likely to be installed on vessels used in fishing or recreational applications. These vessels often do not Start Printed Page 16033have the intense usage as tug/tow/pushboats, ferries, crew/supply vessels or cargo vessels. Maintenance is more likely to be ad hoc and performed only when there is a problem with the performance of the engine. These vessels are also most likely to be owner operated, and any maintenance that occurs may be performed by the owner. In addition, as explained elsewhere in this preamble, marine diesel engines above 800 hp are the largest contributors to national inventories of NOX and PM emissions. Many of the vessels that use these engines, including tugs, ferries, crew and supply boats and cargo vessels, are in direct competition with locomotives, providing transportation services for passengers or bulk goods and materials.

A random sample of nearly 400 vessels from the Inland River Record (2006) suggests that the average age of vessels in that fleet is 30 years (with vessels built between 1944 and 2004), and the average horsepower of these vessels is 1709 hp (with a range of 165 to 9,180 hp). About 72 percent of the vessels have horsepower at or above 800 hp, with about 75% of those being built after 1973. In addition, about 60 percent of the vessels with engines at or above 800 hp have engines derived from locomotive engines. This suggests that there are significant emission reductions that may be achieved by setting requirements similar to the locomotive program for these engines.

Although the analysis of this alternative includes all engines above 800 hp, this remanufacturing program for marine diesel engines could further be limited to a subset of engines above 800 hp, for example those manufactured after 1973. The locomotive remanufacturing program has this age limitation, reflecting the fact that older locomotives are expected to be retired out of the Class I line haul fleet relatively soon. However, this may not make sense in the marine sector as there are a lot of vessels older than 1973 in the fleet (about 130 in our sample of about 400 vessels), and they are not systematically retired to lower use applications.

On the other hand, this option could be expanded to include other marine diesel engines including those below 800 horsepower. We do not believe this expansion is appropriate, for the reasons outlined above (i.e., maintenance may be more ad hoc and performed by the owner/operator instead of by a professional remanufacturer at a shipyard). However, we request comment on this issue.

The program described in this alternative could be further modified by specifying that all engines on a vessel would be considered to be subject to the remanufacturing requirements if the main propulsion engine falls under the scope of the program. In essence, this approach would treat all engines onboard a vessel as a system. While remanufacture kits may not be available for smaller auxiliary engines, it may be possible to retrofit them with emission controls that will achieve the 25 percent PM reduction. In addition, repowering auxiliary engines onboard these vessels may not be a limiting factor as these engines are often removed to be rebuilt and other engines installed in their place. We request comment on this aspect of expanding the program.

(d) Alternative 5: Existing Engines

Due to the impact of marine diesel engines on the environment, the need for reductions for states to achieve their attainment goals, and our better understanding of the marine remanufacturing sector, we are considering a programmatic alternative that would set emission requirements for marine diesel engines on existing vessels when they are remanufactured.

The program under consideration in this alternative would apply to marine diesel engines above 800 hp. We believe this is a reasonable threshold because of the long hours of use of these engines, often at high load, and their long service lives. The program would draw on features of the locomotive remanufacturing program, in that it would apply when a marine diesel engine is remanufactured. It would also draw on the certification requirements of the urban bus retrofit program (see 58 FR 21359 (April 21, 1993), 63 FR 14626 (March 26, 1998), 40 CFR part 85 subpart O), in that the standard would in part be a function of the emissions from the base engine and that the standard might be subject to a cost threshold.

This marine engine remanufacturing alternative consists of a two-part program. In the first part, which could begin as early as 2008, vessel owners and rebuilders (also called remanufacturers) would be required to use a certified kit when the engine is rebuilt (or remanufactured) if such a kit is available. Initially, these kits would be expected to be locomotive kits and therefore applicable only to those engines derived from similar locomotive engines. Eventually, however, it is expected that the large engine manufacturers would also provide kits for their engines. Kit availability would be expected to track the relative share of models to the total population of engines, so that kits for the most popular engine models would be made available first. Because the potential for emission reductions are expected to be quite varied across the diverse range of existing marine diesel engines, we could consider setting a multi-stepped emission standard similar to the Urban Bus program. For example, the program could set standards based on reductions of 60%, 40% and 20% with a requirement that a rebuilder must use a certified kit meeting the most stringent of these three standards if available. If no kit is available meeting the 60% reduction, then the rebuilder can use one meeting the 40% reduction, and similarly, if no kits are available meeting the 40% or 60% standards, then the rebuilder can use a kit meeting the 20% reduction. In this way, engines which can achieve a 60% reduction are likely to realize that reduction because a kit builder will be motivated to develop a kit meeting the most stringent standard possible. We request comment regarding the appropriateness of such an approach, and were we to adopt such a structure, the need for greater or less stratification across the potential emission standards.

In the second part, which could begin in 2013, the remanufacturer/owner of a marine diesel engine identified by the EPA as a high-sales volume engine model would have to meet specified emission requirements when the engine is remanufactured. Specifically, the remanufacturer or owner would be required to use a system certified to meet the standard; if no certified system is available, he or she would need to either retrofit an emission reduction technology for the engine that demonstrates at least a 25 percent reduction or repower (replace the engine with a new one). The mandatory use of an available kit is intended to create a market for kits to help ensure their development over the initial five years of the program.

To ensure that the program results in the expected emission reductions, an emission threshold could be set as well such that the retrofit technology would be required to demonstrate a 25 percent reduction with emissions not to exceed 0.22 g/kW-hr PM (equivalent to the new Tier 0/1 PM limit). We believe a threshold, if one is included, should focus on PM emissions over NOX because PM reductions can be accomplished through the use of improved engine components, for example changing cylinder rings or liners to reduce oil consumption and PM emissions. We do not believe a NOX threshold is appropriate because technologies to reduce NOX may not be as amenable to a remanufacturing kit Start Printed Page 16034approach. However, we would welcome comments regarding the need for a threshold, and the limit at which it should be set, and the appropriateness of a NOX standard as well.

The second part of the program is contingent on EPA developing a list of high volume marine diesel engines for which a remanufacture certificate must be available by 2013. EPA will continue to work with engine manufactures and other interested stakeholders to develop such a list, and seeks comment on the engine models that should be included. The goal of this list is to identify those engine models that occur frequently enough in the market to justify the development of a remanufacture kit; engine models with just a few units in the population may not be required to comply with the requirements.

Finally, the second step of the program could be made subject to a technical review in 2011. The object of such a review would be for EPA to assess the current and future availability of certified kits and to determine if any adjustments are necessary for the program including the effective date of the mandatory repower requirement and whether any change in the list of high-volume engine models is warranted due to new information.

With regard to technological feasibility, we believe engine manufacturers would utilize incremental improvements to existing engine components. Because such a remanufactured marine engine program would parallel our existing remanufactured locomotive program, we expect a direct transfer of emissions control technology from locomotives to marine engines for similar engines. In fact, in our discussions with vessel operators, they indicated that they are sometimes already using the EPA-certified lower emissions remanufacturing kits that are currently on the market to meet our locomotive remanufacturing program.

Engines that do not have a locomotive counterpart will in many cases start at a cleaner baseline than locomotive-based marine engines. Therefore, the same total reduction that could be expected from the locomotive remanufacture kits could not be expected from these engines. However, we would expect that similar PM emissions control technologies would be used to meet the requirements of the program. Technologies to achieve PM reductions include existing low-oil-consumption piston ring-pack designs and existing closed crankcase systems. Our discussions with marine diesel engine manufacturers suggest reductions of 25 percent with emissions not to exceed 0.22 g/kW-hr PM are feasible. These technologies would provide significant near-term PM reductions. Because all of the aforementioned technologies to reduce emissions already exist or can be developed and introduced into the market within a very short time period, we believe some of this technology could be implemented on a limited basis as early as 2008 on remanufactured marine engines. We also believe that these technologies could be fully implemented in a marine remanufacturing program by the end of 2012. In addition, it may be possible to include NOX emission control technologies in these kits to achieve greater reductions.

To help ensure the remanufacturer's solutions are reasonably priced, the program could set a limit on the price the owner/remanufacturer could be expected to pay for the kit, similar to the urban bus program. Such a limit may be necessary because a program that would require the use of a certified kit may provide a potential short-term monopoly for kit certifiers, at least until other kits are certified. Such a monopoly environment may create the potential for kit prices to be unrelated to actual kit cost. However, unlike the urban bus program, the diverse nature of marine diesel engines makes setting a single cost limit per engine unreasonable. Instead, we would look to develop a factor that corresponds to engine size, power, or emissions. For example, we could consider setting a limit based on the PM reduction (the cost per ton of PM reduced). We could consider a limit of $45,000 per ton of PM reduced. This cost is far below the monetized health and welfare benefits we have estimated will be realized from a reduction in diesel PM emissions. We request comment on such an approach for setting a reasonable cost threshold.

As in the locomotive remanufacturing program, anyone could certify a remanufacturing kit, but only certified kits may be used to comply with the requirement. We expect this to be primarily engine manufacturers or aftermarket part manufacturers. However, a fleet owner with several vessels with the same model engine could choose to certify a kit, the use of which would then become mandatory for all engines of that model, unless another equivalent kit is also available for that model. In addition, certification could be streamlined for kit manufacturers. We would look to the Agency's past practices with the Urban Bus Program and the Voluntary Retrofit Verification Program when designing a certification procedure. However, as in the locomotive remanufacture program, the certifier is deemed to be a “manufacturer” subject to the emission standards and as such would be subject to all of the obligations on such an entity under our primary program, including warranty, recall, in-use liability, among others. With regard to the retrofit requirement, we request comment on how we could streamline the certification for these technologies such that their use will not impose a larger certification burden on the owner of the vessel. We welcome comments on all aspects of the implementation of this possible remanufacturing program.

The costs and benefits of a program as outlined above are included in Table VII-1 and Table VII-2. We estimate that the compliance costs for the marine remanufacturing program would be around $10 million per year in 2030. Using the benefits transfer approach from the primary control scenario to estimate the benefits of these inventory reductions, the additional monetized benefits would be expected to be about $0.3 billion at a 3% DR ($0.3 at a 7% DR) in 2030.

With regard to benefits, the application of locomotive remanufacture kits to similar marine diesel engines would be expected to result in similar reductions in PM and NOX emissions. In some cases, this could be as much as 60 percent reduction for PM and 25 percent reduction for NOX. However, because many marine diesel engines start at a cleaner baseline, we would not expect to accomplish the same reductions from all engines that would be subject to the program. Based on a minimal control case of a 25 percent PM reduction from existing marine diesel engines above 800 hp, we estimate about an additional 27,000 tons NPV 3% (16,000 tons at NPV 7%) of PM2.5 reductions, and an additional 320,000 tons NPV 3% (220,000 tons at NPV 7%) of NOX reductions through 2040.

B. Summary of Results

A summary of the five alternatives is contained in Table VII-1 and Table VII-2 below. Table VII-1 includes the expected emission reductions associated with each alternative, including: the estimated PM and NOX reductions through 2040 for each alternative expressed as a net present value (NPV) using discounting rates of 3% and 7%. It also includes the estimated costs through 2040 associated with each alternative again expressed at 3% NPV and 7% NPV. For additional comparison, Table VII-2 shows the PM and NOX inventory reductions, costs, Start Printed Page 16035and benefits of each alternative estimated for the year 2030.

Table VII-1.—Summary of Inventory and Costs at NPV 3% and 7%

AlternativesStandardsEstimated PM2.5 reductions 2006-2040 NPV 3% (7%)Estimated NOX reductions 2006-2040 NPV 3% (7%)Total costs millions 2006-2040 NPV 3% (7%) a
Primary Case• Locomotive Remanufacturing • Tier 3 Near-term program • Tier 4 Long-term standards315,000 (135,000)7,870,000 (3,180,000)$7,230 ($3,230)
Alternative 1: Exclusion of Locomotive Remanufacturing• Tier 3 Near-term program • Tier 4 Long-term standards250,000 (100,000)7,180,000 (2,780,000)$6,430 ($2,700)
Alternative 2: Tier 4 Advanced One Year• Locomotive Remanufacturing • Tier 3 Near-term program • Tier 4 Long-term standards advanced one year324,000 (140,000)8,290,000 (3,390,000)$7,590+C ($3,440)+C
Alternative 3: Tier 4 Exclusively in 2013• Tier 4 Long-term standards only in 2013255,000 (104,000)8,050,000 (3,280,000)$7,410+C ($3,220)+C
Alternative 4: Elimination of Tier 4• Locomotive Remanufacturing • Tier 3 Near-term program207,000 (94,000)2,910,000 (1,310,000)$950 ($650)
Alternative 5: Inclusion of Marine Remanufacturing• Locomotive Remanufacturing • Tier 3 Near-term program • Tier 4 Long-term standards • Addition of Marine Remanufacturing342,000 (151,000)8,190,000 (3,400,000)$7,650 ($3,510)
a ‘C’ represents the additional costs necessary to accelerate the introduction of Tier 4 technologies that we are unable to estimate at this time.

Table VII-2.—Inventory, Costs and Benefits for 2030

2030 PM2.5 Emissions reductions (tons)2030 NOX Emissions reductions (tons)2030 Total costs (millions)2030 Benefits ab (billions) PM2.5 only 3% (7%)
Primary Case28,000770,000$610$12 ($11)
Alternative 1: Exclusion of Locomotive Remanufacturing25,000740,000$580$8.8 ($8.0)
Alternative 2: Tier 4 Advanced One Year28,000790,000$620$12 ($11)
Alternative 3: Tier 4 Exclusively in 201325,000770,000$630$11 ($10)
Alternative 4: Elimination of Tier 417,000240,000$22$6.2 ($5.7)
Alternative 5: Inclusion of Marine Remanufacturing29,000770,000$620$12 ($11)
a Note that the range of PM-related benefits reflects the use of an empirically-derived estimate of PM mortality benefits, based on the ACS cohort study (Pope et al., 2002).
b Annual benefits analysis results reflect the use of a 3 percent and 7 percent discount rate in the valuation of premature mortality and nonfatal myocardial infarctions, consistent with EPA and OMB guidelines for preparing economic analyses (US EPA, 2000 and OMB, 2003). U.S. Environmental Protection Agency, 2000. Guidelines for Preparing Economic Analyses. http://yosemite.epa.gov/​ee/​epa/​eed.nsf/​webpages/​Guidelines.html.

VIII. Public Participation

We request comment on all aspects of this proposal. This section describes how you can participate in this process.

A. How Do I Submit Comments?

We are opening a formal comment period by publishing this document. We will accept comments during the period indicated in the DATES section at the beginning of this document. If you have an interest in the proposed emission control program described in this document, we encourage you to comment on any aspect of this rulemaking. We also request comment on specific topics identified throughout this proposal.

Your comments will be most useful if you include appropriate and detailed supporting rationale, data, and analysis. Commenters are especially encouraged to provide specific suggestions for any changes to any aspect of the regulations that they believe need to be modified or improved. You should send all comments, except those containing proprietary information, to our Air Docket (see ADDRESSES located at the beginning of this document) before the end of the comment period.

You may submit comments electronically, by mail, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments. If you wish to submit Confidential Business Information (CBI) or information that is otherwise protected by statute, please follow the instructions in section VIII.B.

B. How Should I Submit CBI to the Agency?

Do not submit information that you consider to be CBI electronically through the electronic public docket, http://www.regulations.gov, or by e-mail. Send or deliver information identified as CBI only to the following address: U.S. Environmental Protection Agency, Assessment and Standards Division, 2000 Traverwood Drive, Ann Arbor, MI 48105, Attention Docket ID EPA-HQ-OAR-2005-0036. You may claim information that you submit to EPA as CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD ROM, mark the Start Printed Page 16036outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. If you submit the copy that does not contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does not contain CBI. Information not marked as CBI will be included in the public docket without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT section at the beginning of this document.

C. Will There Be a Public Hearing?

We will hold a public hearing on Tuesday, May 8, 2007 at the Hilton Seattle Airport & Conference Center, 17620 International Boulevard, Seattle, WA 98188-4001, Telephone: 206-244-4800. We will also hold a public hearing on Thursday, May 10, 2007 at the Sheraton Gateway Suites Chicago O'Hare, 6501 North Mannheim Road, Rosemont, IL 60018, Telephone: 847-699-6300. These hearings will both start at 10 a.m. local time and continue until everyone has had a chance to speak.

If you would like to present testimony at the public hearing, we ask that you notify the contact person listed under FOR FURTHER INFORMATION CONTACT at least ten days before the hearing. You should estimate the time you will need for your presentation and identify any needed audio/visual equipment. We suggest that you bring copies of your statement or other material for the EPA panel and the audience. It would also be helpful if you send us a copy of your statement or other materials before the hearing.

We will make a tentative schedule for the order of testimony based on the notifications we receive. This schedule will be available on the morning of the hearing. In addition, we will reserve a block of time for anyone else in the audience who wants to give testimony.

We will conduct the hearing informally, and technical rules of evidence won't apply. We will arrange for a written transcript of the hearing and keep the official record of the hearing open for 30 days to allow you to submit supplementary information. You may make arrangements for copies of the transcript directly with the court reporter.

D. Comment Period

The comment period for this rule will end on July 2, 2007.

E. What Should I Consider as I Prepare My Comments for EPA?

You may find the following suggestions helpful for preparing your comments:

  • Explain your views as clearly as possible.
  • Describe any assumptions that you used.
  • Provide any technical information and/or data you used that support your views.
  • If you estimate potential burden or costs, explain how you arrived at your estimate.
  • Provide specific examples to illustrate your concerns.
  • Offer alternatives.
  • Make sure to submit your comments by the comment period deadline identified.
  • To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your response. It would also be helpful if you provided the name, date, and Federal Register citation related to your comments.

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is an “economically significant regulatory action” because it is likely to have an annual effect on the economy of $100 million or more. Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for review under EO 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action.

In addition, EPA prepared an analysis of the potential costs and benefits associated with this action. This analysis is contained in the draft Regulatory Impact Analysis that was prepared, and is available in the docket for this rulemaking and at the docket internet address listed under ADDRESSES above.

B. Paperwork Reduction Act

The information collection requirements in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) document prepared by EPA has been assigned EPA ICR numbers 1800.04 for locomotives and 1684.10 for marine diesels.

Section 208(a) of the Clean Air Act requires that manufacturers provide information the Administrator may reasonably require to determine compliance with the regulations; submission of the information is therefore mandatory. We will consider confidential all information meeting the requirements of section 208(c) of the Clean Air Act. Recordkeeping and reporting requirements for manufacturers would be pursuant to the authority of section 208 of the Clean Air Act.

The total annual burden associated with this proposal is about 25,209 hours for locomotives and 35,030 hours for marine diesels; $2,724,503 for locomotives, based on a projection of 7 respondents; and $2,018,607 for marine diesels based on a projection of 13 respondents. The estimated burden is a total estimate for both new and existing reporting requirements. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this rule, which includes this ICR, under Docket ID number EPA-HQ-OAR-2003-0190. Submit any comments related to the ICR for this proposed rule to EPA and OMB. See ADDRESSES Start Printed Page 16037section at the beginning of this notice for where to submit comments to EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Office for EPA. Since OMB is required to make a decision concerning the ICR between 30 and 60 days after April 3, 2007, a comment to OMB is best assured of having its full effect if OMB receives it by May 3, 2007. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposal.

C. Regulatory Flexibility Act

(1) Certification

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this action on small entities, small entity is defined as: (1) A small business that meets the default definition for small business (based on SBA size standards), as described in Table IX-1; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The following table provides an overview of the primary SBA small business categories potentially affected by this regulation.

Table IX-1.—Primary SBA Small Business Categories Potentially Affected by This Regulation

IndustryNAICS a CodesDefined by SBA as a small business if less than or equal to: b
Locomotive:
Manufacturers, remanufacturers and importers of locomotives and locomotive engines333618, 3365101,000 employees.
Railroad owners and operators482110, 482111, 4821121,500 employees. 500 employees.
Engine repair and maintenance488210$6.5 million annual sales.
Marine:
Manufacturers of new marine diesel engines3336181,000 employees.
Ship and boat building; ship building and repairing336611, 3466111,000 employees.
Engine repair and maintenance811310$6.5 million annual sales.
Water transportation, freight and passenger483500 employees.
Boat building (watercraft not built in shipyards and typically of the type suitable or intended for personal use)336612500 employees.
Notes: 
a North American Industry Classification System.
b According to SBA's regulations (13 CFR 121), businesses with no more than the listed number of employees or dollars in annual receipts are considered “small entities” for RFA purposes.

The proposed regulations would apply to the business sectors shown in Table IX-1 and not to small governmental jurisdictions or small non-profit organizations.

After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. (Our analysis of the impacts of the proposal on small entities can be found in the docket for this rulemaking.[165] ) We have determined that about six small entities representing less than one percent of the total number of companies affected will have an estimated impact exceeding one percent of their annual sales revenues. About four of these small companies will have an estimated impact exceeding three percent of their annual sales revenues.

Although this proposed rule will not have a significant economic impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this rule on small entities, as described in section IX.C.(2) below.

We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

(2) Outreach Efforts and Special Compliance Provisions for Small Entities

We sought the input of a number of small entities, which would be affected by the proposed rule, on potential regulatory flexibility provisions and the needs of small businesses. For marine diesel engine manufacturers, we had separate meetings with the four small companies in this sector, which are post-manufacture marinizers (companies that purchase a complete or semi-complete engine from an engine manufacturer and modify it for use in the marine environment by changing the engine in ways that may affect emissions). We also met individually with one small commercial vessel builder and a few vessel trade associations whose members include small vessel builders. For locomotive manufacturers and remanufacturers, we met separately with the three small businesses in these sectors, which are remanufacturers. In addition, we met with a railroad trade association whose members include small railroads. For nearly all meetings, EPA provided each small business with an outreach packet that included background information on this proposed rulemaking; and a document outlining some flexibility provisions for small businesses that we have implemented in past rulemakings. (This outreach packet and a complete summary of our discussions with small entities can be found in the docket for this rulemaking.)[166]

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The primary feedback we received from small entities was to continue the flexibility provisions that we have provided to small entities in earlier locomotive and marine diesel rulemakings; and a number of these provisions are listed below. Therefore, we propose to largely continue the existing flexibility provisions finalized in the 1998 Locomotive and Locomotive Engines Rule (April 16,1998; 63 FR 18977); our 1999 Commercial Marine Diesel Engines Rule (December 29,1999; 64 FR 73299) and our 2002 Recreational Diesel Marine program (November 8, 2002; 67 FR 68304). For a complete description of the flexibilities be proposed in this notice, please refer to the Certification and Compliance Program, section IV.A.(14)—Small Business Provisions.

(a) Transition Flexibilities

(i) Locomotive Sector

  • Small locomotive remanufacturers would be granted a waiver from production-line and in-use testing for up to five calendar years after this proposed program becomes effective.
  • Railroads qualifying as small businesses would be exempt from new Tier 0, 1, and 2 remanufacturing requirements for locomotives in their existing fleets.
  • Railroads qualifying as small businesses would continue being exempt from the in-use testing program.

(ii) Marine Sector

  • Post-manufacture marinizers and small-volume manufacturers (annual worldwide production of fewer than 1,000 engines) would be allowed to group all engines into one engine family based on the worst-case emitter.
  • Small-volume manufacturers producing engines less than or equal to 800 hp (600 kW) would be exempted from production-line and deterioration testing (assigned deterioration factors) for Tier 3 standards.
  • Post-manufacture marinizers qualifying as small businesses and producing engines less than or equal to 800 hp (600 kW) would be permitted to delay compliance with the Tier 3 standards by one model year.
  • Post-manufacture marinizers qualifying as small businesses and producing engines less than or equal to 800 hp (600 kW) could delay compliance with the Not-to-Exceed requirements for Tier 3 standards by up to three model years.
  • Marine engine dressers (modify base engine without affecting the emission characteristics of the engine) would be exempted from certification and compliance requirements.
  • Post-manufacture marinizers, small-volume manufacturers, and small-volume boat builders (less than 500 employees and annual worldwide production of fewer than 100 boats) would have hardship relief provisions—i.e., apply for additional time.

EPA invites comments on all aspects of the proposal and its impacts on the regulated small entities.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

This rule contains no federal mandates for state, local, or tribal governments as defined by the provisions of Title II of the UMRA. The rule imposes no enforceable duties on any of these governmental entities. Nothing in the rule would significantly or uniquely affect small governments. EPA has determined that this rule contains federal mandates that may result in expenditures of more than $100 million to the private sector in any single year. Accordingly, EPA has evaluated under section 202 of the UMRA the potential impacts to the private sector. EPA believes that the proposal represents the least costly, most cost-effective approach to achieve the statutory requirements of the rule. The costs and benefits associated with the proposal are included in the Draft Regulatory Impact Analysis, as required by the UMRA. EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments.

E. Executive Order 13132: (Federalism)

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Although section 6 of Executive Order 13132 does not apply to this rule, EPA did consult with representatives of various State and local governments in developing this rule. EPA consulted with representatives from the National Association of Clean Air Agencies (NACAA, formerly STAPPA/ALAPCO), the Northeast States for Coordinated Air Use Management (NESCAUM), and the California Air Resources Board (CARB).

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed rule from State and local officials.

F. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments)

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to Start Printed Page 16039ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This proposed rule does not have tribal implications, as specified in Executive Order 13175. The rule will be implemented at the Federal level and impose compliance costs only on manufacturers of locomotives, locomotive engines, marine engines, and marine vessels. Tribal governments will be affected only to the extent they purchase and use the regulated engines and vehicles. Thus, Executive Order 13175 does not apply to this rule.

EPA specifically solicits additional comment on this proposed rule from tribal officials.

G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks

Executive Order 13045: “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This proposed rule is not subject to Executive Order 13045 because the Agency does not have reason to believe the environmental health risks or safety risks addressed by this action present a disproportionate risk to children. Nonetheless, we have evaluated the environmental health or safety effects of emissions from locomotive and marine diesels on children. The results of this evaluation are contained in the draft RIA for this proposed rule, which has been placed in the public docket under Docket ID number EPA-HQ-OAR-2003-0190.

The public is invited to submit or identify peer-reviewed studies and data, of which EPA may not be aware, that assessed results of early life exposure to the pollutants addressed by this rule.

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)), requires EPA to prepare and submit a Statement of Energy Effects to the Office of Information and Regulatory Affairs, Office of Management and Budget, for certain actions identified as “significant energy actions.” This proposed rule's potential effects on energy supply, distribution, or use have been analyzed and are discussed in detail in section 5.9 of the draft RIA. In summary, while we project that this proposed rule would result in an energy effect that exceeds the 4,000 barrel per day threshold noted in E.O. 13211 in or around the year 2026 and thereafter, the program consists of performance based standards with averaging, banking, and trading provisions that make it likely that our estimated impact is overstated. Further, the fuel consumption estimates upon which we are basing this energy effect analysis, which are discussed in full in section 5.4.3 of the draft RIA, do not reflect the potential fuel savings associated with automatic engine stop/start (AESS) systems or other idle reduction technologies. Such technologies can provide significant fuel savings which could offset our projected estimates of increased fuel consumption. Nonetheless, our projections show that the proposed rule could result in energy usage exceeding the 4,000 barrel per day threshold noted in E.O. 13211.

I. National Technology Transfer Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

The proposed rulemaking involves technical standards. Therefore, the Agency conducted a search to identify potentially applicable voluntary consensus standards. The International Organization for Standardization (ISO) has a voluntary consensus standard that can be used to test engines. However, the test procedures in this proposal reflect a level of development that goes substantially beyond the ISO or other published procedures. The proposed procedures incorporate new specifications for transient emission measurements, measuring PM emissions at very low levels, measuring emissions using field-testing procedures. The procedures we adopt in this rule will form the working template for ISO and national and state governments to define test procedures for measuring engine emissions. As such, we have worked extensively with the representatives of other governments, testing organizations, and the affected industries.

EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

X. Statutory Provisions and Legal Authority

Statutory authority for the controls proposed in today's document can be found in sections 213 (which specifically authorizes controls on emissions from nonroad engines and vehicles), 203-209, 216, and 301 of the Clean Air Act (CAA), 42 U.S.C. 7547, 7522, 7523, 7424, 7525, 7541, 7542, 7543, 7550, and 7601.

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