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33 Policy Impacts they have offset these effects with other types of improve- ments. The emission-control equipment has also necessitated The addition of emission control technologies undoubt- a shift to ultra-low-sulfur diesel fuel, which costs about edly raises the cost of new trucks, locomotives, and vessels. It 5 cents more per gallon. can also increase maintenance and operating costs for vehicle A related effect of the 2007 truck standards was the large owners. In addition, the advent of new emission standards "pre-buy" that occurred in 2006. Fearing maintenance can disrupt normal purchasing patterns, with carriers buying problems and a decline in fuel economy, many carriers pur- more or fewer new pieces of equipment in a given year than chased large quantities of new trucks before the 2007 stan- they otherwise would. dards took effect. This caused disruption for the truck mak- To date, the effect of emission standards on new equip- ers, and sales of new trucks dropped off significantly in 2007 ment purchase price has been small. EPA estimated that the as a result. 2007 truck standards would result in additional costs of about $2,300 per engine in 2007, or roughly 3 percent of the pur- chase price of a new Class 8 truck.22 The locomotive and ma- Unexpected Impacts rine vessel standards currently in effect are less stringent than the truck standards, and their effect on purchase price is con- The impacts of emissions standards on equipment costs sidered to be quite small. The actual effect on prices is diffi- are expected. EPA regularly performs cost-benefit analyses of cult to quantify because the changes occurred concurrently their regulations, which include estimates of impacts on new with other improvements. equipment costs as well as operation and maintenance costs. The most stringent level of standards, not yet in effect, will In their regulatory documents, EPA makes the case that the likely require use of SCR and have a significantly larger effect economic benefits of the policies (improved public health) on equipment prices. For example, the Tier 4 locomotive stan- exceed the costs to industry. dards, which take effect in 2015, may require a separate urea Some would argue that EPA underestimates the impacts to rail car and development of urea fueling stations. EPA esti- industry, particularly the impacts of the recent truck stan- mates a price impact of $84,000 per locomotive, or 4 percent dards on maintenance costs. Anecdotal evidence supports of the price of a new locomotive.23 For marine vessels with large these claims, although there is very limited information from (Category 2) engines, the effect on price is expected to be ap- objective neutral parties on the issue. proximately $250,000, or 7 percent of vessel purchase price.24 The magnitude of the 2006 truck "pre-buy" appears to be The effect of emission standards on maintenance and op- unexpected and unintended. Some industry observers note erating costs is probably more important than the effect on that EPA could have structured the regulations differently so purchase price. EPA originally estimated that the 2007 truck as to minimize this impact. Although it caused disruption to standards would increase operating costs by $3,800 over the truck and engine manufacturers, there is little evidence that lifetime of the engine. Some fleet owners believe the actual the pre-buy had significant impacts on the freight transporta- costs have been higher. For example, one large truckload car- tion system. rier has claimed that the cost of maintaining engines compli- ant with the 2002/04 standards (using EGR) is about $8,000 California In-Use Truck more than earlier engines, and the maintenance cost for Emission Standards 2007-compliant engines (using DPFs) has been an additional $9,000.25 Manufacturers acknowledge some maintenance Policy Description cost increases, but note that the changes deliver better per- California is the only state with authority to set its own formance and some of the initial bugs have now been fixed. motor vehicle emission standards. Air quality problems as- Most of the emission reduction technologies cause a slight sociated with diesel emissions have been particularly acute reduction in fuel economy, although manufacturers claim in California; in response, the state has pursued policies to reduce diesel emissions. In recent years, California's stan- dards for new vehicles have mirrored USEPA standards. 22USEPA, Regulatory Impact Analysis: Heavy-Duty Engine and Vehicle Standards However, because of the relatively slow turnover of the and Highway Diesel Fuel Sulfur Control Requirements, EPA420-R-00-026, De- cember 2000. truck fleet, it can take many years to fully realize the bene- 23USEPA, Regulatory Impact Analysis: Control of Emissions of Air Pollution from fits of emission standards affecting only new trucks. To Locomotive Engines and Marine Compression Ignition Engines Less than 30 Liters speed the introduction of low-emission technologies for Per Cylinder, EPA420-R-08-001, March 2008. trucks, California broke new ground in December 2008 by 24Ibid. 25Daniel P. Bearth, "Fleets Find Higher Costs, Uncertain Life Cycles," Transport adopting emission standards for in-use (existing) on-road Topics, Oct. 20, 2008. trucks. (A similar set of in-use standards for off-road equip-