California Moves On
By Bill Moore
Sacramento - January 27, 2001. "It's been a hectic week," said Dr. Alan Lloyd, the chairman of California's Air Resource Board, the guardians of the Golden State's air. That would be an understatement considering CARB, as it is known, had just met to review suggestions by its staff and other interested parties on how to implement the state's controversial Zero Emission Vehicle (ZEV) mandate, set to take effect in less than two years time.
EV World caught Dr. Lloyd at his office on Saturday morning finishing up some work and preparing for a trip to Brussels to brief European Union officials on this week's momentous decisions. What was decided in a basement boardroom this past Thursday, January 25 th will have far reaching consequences both on the State of California, the world's carmakers and traveling public worldwide.
Dr. Lloyd sounded clearly relieved that the review process is now behind him. He made a point of stating that there will be no further biannual reviews, a contentious process that pitted environmentalists and EV activists against powerful automobile manufacturers and their lobbyists. In Lloyd's words, "The gold standard has been restored."
The "gold standard" refers to any electric-drive vehicles that generate no emissions either from its tailpipe or by evaporation, and it is the long-range goal of the ZEV mandate. Not that everyone is convinced of that CARB's decisions this week were 24 caret because the Board did relax its requirements for ZEVs starting in 2003 in several important areas.
Originally when the ZEV mandate was made law in California in the early 1990s, carmakers where going have to make sure that 10% of the vehicles they sold starting in 1998 where zero emission. In the early 90's this meant battery-powered vehicles and so carmakers reluctantly responded with a few hundred cars and trucks, some engineered specifically for the mandate and others modified versions of gasoline vehicles. Carmakers lobbied vociferously that there was no market for such vehicles and that the technology simply wasn't there.
By 1998, automakers had gotten CARB to compromise by dropping the 10% quota in favor of a Memorandum of Agreement (MOA). That agreement required carmakers to continue good faith efforts to develop zero emission vehicles while also voluntarily placing an agreed upon number of ZEVs in operation within the state. In turn, CARB would postpone implementation of the 10% quota until 2003. This was further modified to permit 6% of the 10% quota to be made up of partial zero emission vehicles and 4% to be zero emission.
After the 2000 biannual review, CARB's staff proposed letting carmaker's substitute up to 2% of the 4% ZEV quota with what it called Advanced Technology Partial Zero Emission Vehicles, noting the progress being made in hybrids and fuel cells. This was perhaps the most irksome aspect of the proposal for environmentalists and EV advocates. In it they saw the number of EVs being reduced from 22,000 vehicles a year to as few as 4,650 vehicles. While this represents at least twice the number of EVs that are currently on the road in California, it isn't enough to make EVs truly affordable. Advocates have long argued that the only way the price of an EV -- which carmakers have continually insisted cost $20,000 more than a comparable gasoline vehicle to manufacture -- can be brought down is by mass manufacturing. Battery makers like Ovonics have testified that at volumes as low as 20,000 units yearly, it could dramatically reduce the price of its advanced performance batteries, batteries that give cars like the EV1 a range of at least 140 miles or more between charges.
In an effort to mollify carmakers, CARB agreed to let advanced versions of hybrids like the Toyota Prius and Honda Insights to earn partial ZEV credits and count towards part of the 10% quota, but Lloyd insisted that the Board voted to preserve the 2% ZEV inviolable. There had been a suggestion that would have let grid-connected hybrids qualify, but this was vetoed because the Board did not want any fossil fuel vehicles encroaching on the "Gold Standard". Lloyd stated that even the cleanest hybrid or gasoline engine vehicle will begin to polluted with age.
Dr. Lloyd confirmed in the strongest terms that one way or the other, carmakers are going to have to comply with the mandate. He said that if they can't meet half of the 4% ZEV quota with AT-PZEVs, then they will have to do it with battery-powered electric vehicles. In fact, Dr. Lloyd said that at least one carmaker will have no AT-PZEVs available and will have to sell battery EVs.
Lloyd also emphasized the word "sell" and not just "offer" EVs for sale. He said carmakers will earn ZEV credits only when a vehicle is actually placed in service. It cannot sit in a storage yard, as has been alleged happened with some EVs during the MOA period. But he also recognized that carmakers are going to need assistance in selling the vehicles. He pledged that CARB would assist in the education and marketing process.
A Fair Market Test Designed to Fail
Prior to the meeting this week in Sacramento, the Automobile Manufacturers Alliance had proposed what it called a "Fair Market Test" of EVs. Under this proposal, some 2,500 different types of EVs from highway capable cars like the EV1 to small neighborhood EVs like the Th!nk Neighbor due out this Spring would be placed in one California city and studied to see if a market actually existed for them. CARB outright rejected this proposal because, in Lloyds words, " it was not really a fair market test. It was designed for failure."
According to Lloyd, the number of vehicles was too small. "If you looked at all the strings attached, there would be an independent body, it would take a long time to set up. We felt that the fair market test was the memorandum of agreementÉ As we saw from what happened (during the MOA period), rather than what we hoped would be a ramp up, that was a ramp down."
One of the recommendations to come out of this week's Board meeting was the suggestion that carmakers get credits for any zero emission trucks and buses that they put into service. Presumably, an electric or fuel cell bus would qualify for multiple credits, with a truck qualifying for less. In the case of ZEV buses, these vehicles would have to be above the number required to be placed in demonstration service in 2003 and to be sold starting in 2008.
"I don't think there will be any credit for something they are required to do under another regulation," Lloyd stated. "But if they went above that, we've asked Staff to look at that."
In order to keep the pressure on carmakers to continue R&D efforts into cleaner technology vehicles, CARB set 2007 as the date when the numbers of ZEVs will begin a rapid ramp-up, topping out at 14,000 annual sales by 2012. While this is still less than what was proposed under the original 10% mandate, it is actually double the number proposed by the Staff.
But What About Rolling Blackouts?
Going into Thursday's meeting, automakers had contended that given California's energy problems, CARB has no business promoting electric cars when rolling blackouts are a reality in the State.
You could palpably sense Dr. Lloyd's frustration, even irritation with this suggestion. He told EVWorld that not only did it have zero impact on the Board's decision, but that it actually incensed some of the Board members. "We had David Freeman who is head of the department of water and power testifying that this is such a red herring." Lloyd added that he saw a newspaper story quoting Mr. Freeman as saying, "Look, if we haven't solved (the energy problem) by 2003 in California, nobody will be able to buy cars, let alone electric cars."
When it comes to the question of the impact of electric cars on the state's utility grid, Dr. Lloyd said that they had looked at this issue and concluded that EVs would have only a negligible impact. In fact, he revealed that CARB has commissioned Alec Brooks of AC Propulsion and Tim Lippman of UC Davis to study the potential role of EVs (both battery and fuel cell-powered) as energy storage devices which could feed electricity back into the grid at times of high demand.
Lloyd stressed that the ZEV mandate is not a short term program, but a long-term project to stimulate technology that can efficiently "couple" advances in transportation, information and mobile power generation. "This is a very viable and exciting area," he stated.
Besides the obvious clean air advantages of ZEVs, Lloyd told EV World that they also allow the state to be more flexible in the fuels it uses. "We have refineries here going at full capacity. We have continued growth. It's very prudent for us to look at additional diversity through electricity for (charging an EV) battery and fuel cells which can use a variety of fuels." He pointed to one EV owner who testified that he had replaced the roofing shingles on his house with solar electric tiles and was now charging his car with electricity produced by sunlight.
Impact of Mandate on Other States
California's ZEV mandate will not only impact the 33 million citizens of the Golden State, but millions of people living in four northeast states including New York and Massachusetts which have chosen to adapt California's mandate for their own populations. Dr. Lloyd said that CARB would work with these states so that can implement their versions of the mandate in a way that doesn't place an undue burden on carmakers. Without this cooperation, carmakers would be compelled to not only build tens of thousands of EVs and PZEVs for California starting in 2003 but also for these states.
"The irony here is we're not talking about replacing (all gasoline cars). We're talking just two in every hundred," Lloyd said, "That's not to little to demand for stimulating technology or for clean air. And the other thing is, it's just not clean air. We've just gone the MTBE issueÉ all the stuff associated with these different fuels." The disastrous oil spill off the Galapagos Islands this week only re-enforced that view for Lloyd.
So, come what may, California is moving ahead and setting the pace of the rest of the nation. Now it's up to carmakers to respond or give up two of their most lucrative markets. It's going to be an interesting and possibly bumpy ride from here to 2003 and beyond.
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