Construction industry foresees loss of jobs and businesses. Other
states may adopt California Air Resources Board rules.
By Loren Faulkner -- Associated Construction Publications, 5/19/2008


California's Office of Administrative Law has approved California Air
Resources Board's (CARB) controversial off-road diesel regulations
(Article 4.8, section 2449). The regulations are aimed at drastically
reducing diesel particulates and fumes, allegedly sparing the lives
of thousands each year.

While California construction industry spokesmen agreed during CARB
public discussions that everyone wants to see an improvement in the
air we breathe, some questioned the validity of data showing several
thousand lives would be spared each year by adopting these
regulations. (see public comments and view the entire set of the new
CARB regs at :
http://www.arb.ca.gov/regact/2007/ordiesl07/ordiesl07.htm)

Arguments Rejected

Public testimony by multiple contractors, engineers, and construction
industry experts such as AGC of California, EUCA, SCCA, and
Construction Industry Clean Air Coalition (CIAQC) argued CARB regs
are prohibitively expensive and unrealistic in the time period needed
(2009-2020) to comply. The following CIAQC (www.ciaqc.com) commentary
summarizes much of California's construction industry objections:

Unrealistic Demands

The construction industry supports efforts to clean the emissions
from our equipment, but the solution must be technologically feasible
and economically possible. The technological solution resides with
equipment makers, not equipment owners.
Under the proposed rule, every single piece of construction equipment
in the state must be re-powered, replaced, retired and/or retrofitted
to meet the requirements. It will cost the industry $21 billion over
the next 12 years to replace all 164,000 engines—and in most cases
engine replacement is not possible so expensive new equipment will
have to be purchased to achieve the goals, driving costs even higher.
CARB says—"Charge your customers more to pay for it." This will drive
up the cost of construction on every house, office building, hospital
and highway.

Business Losses

A large share of the 25 percent of companies engaged in public works
construction will go out of business because they will not be able to
afford this regulation. They can't charge their customers more
because every job is competitively bid. Hardest hit will be women-
owned and minority contractors who have smaller capital reserves. The
loss of these companies will have big impacts on public projects.
Construction industry cash flow will drop to zero during this period
as they pour everything they have into acquiring new equipment, which
runs from $92,000 for a backhoe to $3.5 million for a crane.
Job Losses

It will cause the loss of 28,000 to 39,000 jobs based on CARB's
estimated costs of $3.7 billion. If the industry's cost figures are
used the job loses will be much, much higher as equipment
is "retired." Job loss will primarily affect the highly skilled
equipment operators, but other jobs will go as well, including
mechanics, internal staff and among our suppliers.
Manufacturing Shortfalls

The construction equipment manufacturers cannot meet the demand to
replace 164,000 pieces of equipment in 12 years. Manufacturers are
already 18 months to two years behind in meeting current demand. Over
the last decade, they have shipped an average of 7,000 new units in
the state each year. At that pace, it will take 23.5 years to replace
the fleet.
The manufacturers of diesel emission control systems cannot meet the
demand to retrofit the California fleet. Only two are verified by
CARB and they have no distribution chain in the state. These devices
generally must be engineered to each application and there are no
technicians available who could install them.
Extensive Record Keeping Required

The recordkeeping and reporting requirements alone will cost the
industry $65.6 million every year, based on CARB's estimate of cost
from the Portable Engine Registration Program of $400 per engine.
CARB administrators have said non-compliance may cost $10,000 per
day, per violation, but would probably start at only $500 per day per
violation.

States May Follow CARB

Other states are expected to follow in the footsteps of California.
According to the EPA Green Book (www.epa.gov), the following states
are similar in air pollution problems. They may adopt California's
regs, eventually:

Alabama, Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky,
Maryland, Missouri, Montana, New Jersey, New York, North Carolina,
Ohio, Pennsylvania, Tennessee, Virginia, West Virginia.