AGC Tells EPA that California’s Emissions Rule is Improved and Will Not Oppose it Moving Forward

AGC testified at a hearing this week called by the Environmental Protection Agency (EPA) to consider California’s request for permission to implement it’s off-road diesel engine emissions reduction plan. AGC has in the past submitted over 550 pages of comments to EPA opposing the California rule. At the same time AGC was working with the California Air Resources Board (CARB) pointing out that in developing the rule it had overestimated emissions from off-road diesel construction equipment by at least 340 percent. That miscalculation was one among several “significant errors” that would have been very costly to construction employers if adopted. As a result of AGC’s efforts, CARB modified its proposal to protect both the environment and the construction industry. California officials estimate the revised rule will cost 70 percent less than the original version, which was estimated at $13 billion. Among the several major modifications CARB officials made to the measure was  agreement to: delay the rule by four years, dramatically reduce the amount of construction equipment that construction firms would be required to replace each year, expand “early action” credits contractors could earn and expand exemptions for “low-use” vehicles. AGC’s testimony pointed out that, even as amended in December of 2010, California’s off-road rule will still be a burden for contractors.  California’s construction industry has yet to recover from its sudden and dramatic downturn.  Nationwide, the construction industry continues to shed capacity with anecdotal evidence suggesting that contractor defaults will be higher in 2012 than in any of the previous three years.  In exchange for the modifications made by CARB, AGC agreed to not oppose the rule moving forward. AGC’s General Counsel Mike Kennedy stated in the testimony, “While we are not prepared to support California’s request [for federal approval], we do believe the state’s request can be fairly submitted.” Should EPA grant California the authority to implement the rule, other states would be free to adopt it, unchanged. However, as a result of AGC’s actions with CARB, other states would have a significant administrative burden to fulfill before they could adopt the California rule.