GM Takes CARB to Court Over ZEV Mandate
By Bill Moore
Two weeks ago, General Motors filed a lawsuit in California against the state's Air Resources Board seeking, ultimately, to have the courts throw out the state's ZEV mandate, a move that shocked and angered the CARB board, environmentalists and EV advocates.
"We were required to file this lawsuit," Dennis Minano, GM's vice president for Environmental Affairs told EV World, "because about two weeks ago the California Air Resources Board denied a petition that we had filed for a hearing that would have allowed a discussion within the CARB process on several key consumer and technical issues that were proposed by the revised rule that CARB had approved."
"Given that fact and the fact that there were certain statutory limits that expired the following day, it was necessary for us to go forward with the action there in Contra Costa County."
And so, GM has fired the first opening salvo in what could become a bitter and protracted legal battle that pits the car manufacturer against the Air Resources Board. More troubling is the potential specter of this action devolving into a struggle of ideals versus economics, environmentalists versus car dealers or even worse, rich versus poor. Already the argument has been made that the mandate would be unfair to the state's ethnic minorities, diverting needed funds from cleaner buses for poorer neighborhoods to a handful of wealthy, white collar professionals who can afford costly leases on a relative handful of very expensive, sophisticated battery electric cars.
But First, Some Background
Starting in the 2003 model year, just a little over a year away now, the world's biggest auto manufacturers are going to be required to sell thousands of zero emission vehicles in the state of California. This is because of a regulation passed by the California legislature in the early 1990's called the Zero Emission Vehicle mandate, over which the state's Air Resources Board has jurisdiction.
Every since the passage of the mandate, car companies and their allies have sought, by various means some would consider both fair and fowl, to delay, alter or eliminate the mandate. They have consistently argued both in public and before the Air Resources Board that there is no market for ZEVs or that there are better, less expensive ways to achieve the same end, cleaner air for the state.
In the decade since the enactment of the mandate, which was originally scheduled to take effect in 1998, carmakers have persuaded the Board to push back the implementation to 2003. They have also succeeded in reducing the number of vehicles required, as well as changing the definition of what is a zero or nearly-zero emission vehicle. While CARB has compromised in some areas, recognizing that battery research has not lead to any dramatic breakthroughs, and that cleaner, more efficient vehicle technology is beginning to manifest itself beyond that originally envisioned a decade ago, it has remained firm in its resolution to push for a truly zero emission vehicle.
This commitment on the part of CARB and its associated Air Quality Basin partners has paid off. The air in California's major cities has gotten cleaner, though there is still lots of room for improvement. This is a trend that has more to do with improving emissions technology both in industry and automobiles then the ZEV mandate, which hasn't really taken effect, as yet.
The reasons ARB continues to adhere to a ZEV policy are many. As the population of the state continues to grow, so does the total numbers of vehicles being driven, as well as the total number of miles drivers put on them. The rate of improvement, up to now, in conventional emissions technology has only just kept pace with the growth in total vehicle numbers and miles traveled. In addition, CARB argues that even the best catalyst and emissions technology will eventually begin to deteriorate as these vehicles age.
Finally, the Board recognizes that it's unwise to rely too heavily on a single fuel source to power its transportation system. EV technology in its many forms can accommodate multiple fuel and energy sources, including non-polluting renewables like wind and solar. Gasoline-powered internal combustion engines can't make that claim. In addition, they rely on an energy resource that comes from politically unstable parts of the world and adds excessive amounts of carbon dioxide and other greenhouse gases to the planet's gossamer-thin envelope of air.
Keeping the Dialog Going...
From GM's perspective, it's lawsuit is simply an attempt to keep CARB engaged in open dialog about what GM considers are more workable and affordable alternatives to the mandate.
"The important point (of the lawsuit)...was it was continuing an effort to have a full discussion of the alternatives that were presented to CARB to the ZEV mandated approach," Minano explained, "yet keep our eye on (meeting) California's clean air goals and divine a way together on how we could meet them without the approach CARB had imposed.
In GM's view, there are three key factors that it sees as serious stumbling blocks to the success of the mandate; chief among them is consumer acceptance.
"As you know, we are very, very proud of our electric vehicle," Minano stated, referring to GM's much admired (by the handful who have actually had a chance to drive it) EV1. "It is a remarkable and extraordinary vehicle."
"The information we've been sharing with CARB is there has been a great reluctance in terms of consumer acceptance of this vehicle and there are a couple of very clear reasons," he continued. "And these reasons have been understood and also evaluated by CARB. First and foremost, the CARB study shows those vehicles, at a minimum, are $20,000 more in purchase price from a comparable gasoline vehicle. Secondly, there is limited range even with our advanced nickel-metal hydride battery. The CARB evaluation by their independent panel indicated that there is a really low likelihood that there will be increased battery development and therefore the range issue is a real problem."
"The third, and I think importantly in terms of trying to reduce the impact on air quality that the CARB analysis demonstrated is that it's about $1.8 million dollars a ton for the emission reduction versus some of their prior rules in CARB's history that were about, sometimes, $400 a ton. And we thought that these discrepancies really needed to be aired out in a much better fashion."
According to Minano, GM also takes issue with the way the current CARB rules encourage the introduction of NEVs, neighborhood electric vehicles with a top speed of 25 mph. He said that GM is concerned about the safety issues associated with allowing these small, relatively low speed vehicles to operate on California roads alongside of "very large vehicles like Explorers, Excursions, Lexuses and etc..."
He said that the way the rule is presently structured, " it really encourages a great deal of credit so that many of these vehicles can get on the road." Continuing, he stated, "There is a significant concern about (the) safety (of) these vehicles and, therefore, that issue must be aired and evaluated, and that was our concern."
(Editor's comment: NEVs have been approved by both the US and Canadian federal governments for use on each nation's streets as long as they meet clearly defined safety equipment criteria. So, it would seem that on this issue, GM's concerns about the safety of NEVs would be better addressed in a federal court).
Quick Re-engagement or Protracted Legal Wrangle?
As most Americans are aware, law suits of this nature can take years, sometimes decades to resolve themselves, so EV World asked Minano what his expectations where for this suit.
"We would very much like to find a way to re-engage with the state in a full dialog to replace the mandate with a more balanced and commercially-feasible means that achieves California clean air." Minano pointed to three initiatives underway in the Los Angeles air basin to demonstrate his point, noting that GM has a very good and constructive working relationship with the South Coast Air Quality Management District which oversees this region.
The first program he mentioned is the "Adopt-a-Bus" program in which GM has contributed money to put emissions after-treatment equipment on school buses in the region. In a related program, GM now has two of its Allison diesel hybrid-electric buses in commercial operation with the Orange County, California transit authority. "Those buses are on the road, they're revenue producing for Orange County and are making real, tangible air quality benefits."
The third program targets the emissions of diesel locomotives that operate in the South Coast Air Quality basin, he said. "We think that those are the kind of things that are directed to the urban area and working in partnership with respected agencies like the South Coast agency. We can see the air quality results and continue the important trends that have been achieved and do it together."
GM's Hybrid EV Programs
Of course, GM's cleaner vehicle efforts aren't focused solely on buses and trains as David Barthmouth, who also participated in the interview from GM's Washington, D.C. office, pointed out. Barthmouth is responsible for GM's environmental communications initiatives.
"We have announced several advanced technology programs like GM's recently announced ParadiGM hybrid propulsion systems that we think will provide sustainable transportation, achieve the same air quality goals and will be more commercially feasible in the long run."
(Editors note: We talk in more detail about GM HEV programs in more detail in Part 2 of this interview).
Minano picked up on this thread pointing to GM's full-sized hybrid-electric pickup program slated to go into production for the 2004 model year. "When you look at that (vehicle) it is one of our more important high volume vehicles and we put a hybrid system on that vehicle with the whole intent to try to improve fuel economy, improve emissions and bring that in a vehicle that has absolutely high volumes. It's not just a few hundred, but it's literally thousands and thousands of vehicles," Minano emphasized.
"Let me tell you how that potentially can work and what that numbers really mean," he continued, using the Allison-hybrid buses in Orange County as an example. "Do you know in the United States today, that if... municipalities replaced the 13,000 or so buses with our hybrid system that that is the same as having a half a million or 500,000 hybrid (passenger) vehicles (on the road). So the potential of working together in achieving major air quality results can be achieved with a couple of different means and it is now time to have that discussion and cooperation and we did not see that with the final rule that CARB proposed,"
Minano told EV World that he believes GM has articulated its position well both to CARB and the people of California. "This, to General Motors, is not about whether we will meet California's air goals but it's really about how we will meet them," he stated. "We think people are reacting favorably to that approach."
Assuming GM is successful in compelling CARB to "re-engage" on the ZEV mandate issue, Minano believes the opportunity exists to address the state's air quality concerns using multiple approaches and not just that mandated by CARB.
"There is opportunity here to re-engage and achieve with multiple approaches," Minano continually emphasized, "whether with cars, trucks, buses or trains or other approaches to achieve those air quality goals that need to be talked through and re-engaged with a full dialog with CARB."
He added that other carmakers share GM's reservations regarding the mandate, and have expressed their support for GM. "All the other auto companies have been very supportive of the fact that alternatives that were presented on behalf of the industry it wasn't just one company are really the better approach." When EV World asked Minano what GM hoped to accomplish with the suit, was the company looking simply to "re-engage" CARB in dialog or something more, Minano replied, "The nature of the suit, if it prevails, would have the mandate become invalidated. That's the nature of the lawsuit." Clearly, GM hopes the threat of its winning the suit will compel CARB to re-evaluate its position and re-opening discussions.
Assuming the court sees the argument in GM's favor (and one can certainly envision a long, protracted appeals process, regardless of which way the court decides), we asked Minano what incentive would there be for car makers to continue their efforts to build cleaner, more energy efficient vehicles?
"I think this is a wonderful time in the automotive industry... For example, there is nothing that mandated our commitment to come forward with a 2004 hybrid on our pickup truck... There was nothing that drove our commitment to advanced technologies on urban buses everywhere in the country. There is nothing that drove a commitment to find ways to reduce emissions from diesel locomotives to improve air quality. There is such a commitment to advanced technology that is fundamental to GM and it is an area that we are committed to and it is an area where some have recognized our technical leadership in that area. I think that is our commitment and we are trying to demonstrate that in everything we do."
David Barthmouth joined in again at this point to remind Minano that the energy GM expends on development, manufacture and marketing of low volume EV1s only reduces the company's ability to apply its resources to these more promising technologies.
Barthmouth commented on what he called the "irony" of the situation where, "the cost of a battery-powered car only depletes our resources for more meaningful, long-term solutions like advanced hybrids and ultimately, fuel cells. We have always supported the effort for clean air and GM believes the industry should be expected to meet reasonable standards. But I don't think we support regulatory agencies forcing technologies by mandating the time, volume and type of technology, irrespective of whether those technologies are viable."
Minano concurred, observing that the ZEV mandate forces car makers to commit its engineering talent and financial resources to a particular type of technology, one which may, in fact, prove unworkable. "No one has that crystal ball," he commented. "As we know, technology is just exploding. We are seeing the development of hybrid technology. We are committed to an extensive fuel cell development program that drove our participating in the California Fuel Cell partnership, and we think those long-term technologies are the appropriate place to devote more and more resources."
"We have had experience with the electric vehicle in California, we've learned a great deal, but we think we need to be looking at the new and emerging technologies and devote our resources there and work cooperatively to achieve those."
Assuming GM loses the suit, is the company prepared to meet its ZEV mandate requirements, EV World asked?
"This question was never about the ability to have the technological ability as a company to meet these requirements. Obviously a company that produced the (EV1) electric vehicle first and (is) recognized as one of the finest pieces of technology out there, is really not a question. The issue is how do we achieve these air quality goals together. And we clearly want to achieve those goals is what our direction is."
Continued next week.... Did GM make a good faith effort to sell the EV1? Wasn't the MOA period a "fair market test"? How will GM price its hybrids and will they be affordable?
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