Navigating the Emissions Maze
Tailpipe regulations placed on early-model diesel machines have engineers lost in a fog over compliance logistics and costs, but some fleet owners are making headway without any road maps

By Bruce Buckley
High-horsepower machines require costly retrofits, such as this D10, upgraded in January to a Tier-3 engine and passive filter to the tune of $275,000.
High-horsepower machines require costly retrofits, such as this D10, upgraded in January to a Tier-3 engine and passive filter to the tune of $275,000.
Ecco Equipment Corp.
High-horsepower machines require costly retrofits, such as this D10, upgraded in January to a Tier-3 engine and passive filter to the tune of $275,000.

Contractors are in a bit of a fog over what to do about clean-air rules. With federal, state, regional and local agencies aiming at a wide range of emission targets, owners of off-road diesel equipment are wondering if their older machines will soon be endangered. The mix of reduction plans and uncertain solutions has left many puzzled.

"As far as [regulations] go, our industry is unfortunately caught at the end of many strings, and we're getting tugged in a lot of directions," says Bob Lanham, vice president at Williams Bros. Construction, Houston. "We're not in a position to control much. The industry isn't anti-environment, but we do get frustrated when we're asked to do things and we have no control."

Thousands of contractors will face tough decisions on how to improve emissions within their fleets. Hundreds of counties, particularly those with dense urban areas, violate federal eight-hour ozone standards that address smog and particulates. States are scrambling to develop implementation plans to help them comply with these standards under threat of losing federal funding. Off-road diesel fleets are among the prime targets.

Related Links:
  • Carl Moyer Program
  • EPA-verified diesel retrofit technologies
  • CARB-verified diesel emission control systems
  • CARB diesel emissions rules fact sheets and fleet-emissions average calculators
  • Diesel Technology Forum
  • But states are responding with a patchwork quilt of approaches. New York, for example, requires ultra-low-sulfur diesel or "best-available" retrofit technology on all state-funded projects. In some cases, large-scale public projects such as Chicago's Dan Ryan Expressway and Boston's Central Artery/Tunnel have imposed contract requirements that call for retrofits. Some states, like California, are proposing more comprehensive, statewide mandates.

    Contractors are left to figure out how to comply using still-emerging technology while keeping costs down. For its part, Williams Bros. has tried to be proactive. Although not yet facing new regulations, the company has made nearly $4.5 million in upgrades, repowering more than 150 pieces of equipment. The driving force was the Texas Emissions Reduction Program, which offers grants toward voluntary retrofits. "Without the TERP program, we would have had to pick up about $3 million that it covered," Lanham says. "There's no way we could have done this without TERP."

    Even with financial assistance, the program was a major undertaking. The work took five machine shops two years to complete. Depending on the complexity of the job, individual machines had to be sidelined for up to a month, requiring the company to rent replacement equipment. Although retrofitting equipment with emissions controls can be less expensive than repowering, it's not always easier, Lanham says.

    "You can buy [particulate] filters that will do a good job, but every application has to be engineered," Lanham explains. "Is it equipment that's mounted behind or in front of the operator? What are the human engineering aspects? You can't just run down and buy 100 [filters] and put them on. You're dealing with specialty vendors, and there are a relatively limited number of businesses involved in that technology. There are no simple answers to this."

    988F Cat loader with a Tier-2 engine and HUSS particulate filters
    Ecco Equipment Corp.
    California supplier ECCO last year repowered a 988F Cat loader with a Tier-2 engine and HUSS particulate filters mounted in series. The filters have to be serviced every eight hours with a 30-minute burn-off.

    The efforts of Williams Bros. are echoed by contractors throughout California. The state is proposing the most aggressive standards in the U.S. that would apply to all off-road diesel owners there. Beginning in 2010, the California Air Resources Board would require large fleet owners to meet average emission-rate fleet targets for particulate matter, and in some cases nitrogen oxides, or apply the highest-level, state-verified control system to 20% of their fleet horsepower. For existing fleets, that could mean repowering, retrofitting with tailpipe controls or simply retiring equipment. Medium-size fleets with between 2,501 and 5,000 total horsepower would need to meet the standards by 2013, and fleets of 2,500 hp or less would have to comply by 2015.

    The effort has established California as a key battleground in the fight between regulators and industry. Opponents charge the cost of compliance could overwhelm contractors. According to CARB estimates, more than half of the 180,000 pieces of equipment in the state have pre-early-model "Tier-0" engines. CARB estimates the cost of the regulation could hit $3.4 billion in 2006 dollars, while the Associated General Contractors estimates the cost at $13 billion.

    "With the market in California as depressed as it is right now, this is potentially going to be devastating," says one California-based contractor executive who asked not to be named. "It's expensive, and CARB refuses to listen to the industry's viewpoint of the impact."

    Some of the state's largest fleet owners have been working for years to improve emissions even before regulations have been finalized and approved. As with TERP, some have tapped California's Carl Moyer program for grants. The program is approved to provide up to $141 million in annual funding for repowers or retrofits. The catch is that Carl Moyer only applies to voluntary efforts and is not available for fleets facing state mandates, starting three years before any regulation takes effect.

    As large fleet owners eye a 2010 compliance date in the state, Moyer funds dried up last year. Sukut Construction, Santa Ana, in 2000 began efforts to green its fleet. To date, the company has spent millions to retrofit more than 90% of its fleet, replacing more than 175 engines at an average cost of $75,000 each. The firm estimates it has reduced average emissions by 75%.

    Ecco Equipment Corp.
    Ecco Equipment Corp.

    To streamline the process, Sukut found ways to do the work in-house, such as designing hydraulic-hose and electrical harnesses as machines moved from analog to computer controls. Most of the work was done by bringing engines to the jobsite and completing the work within five days.

    Sukut bought itself some time, but it did not solve compliance issues. Mike Crawford, president of Sukut, says the company used the best available technology for emissions control in recent years, but it will not be sufficient to meet future standards.

    "They moved forward with the regulations faster than the technology has become available," Crawford explains. "The technology we bought in the last several years will be obsolete in the next few years by CARB rules. We're still going to have to put some sort of device on our scrapers, like filters, and we're not even convinced those are ready yet."

    Contractors like Sukut argue that CARB's plan is based on technology that hasn't been sufficiently vetted and, once available, could be expensive. By February, the state had only approved three diesel particulate filters for use under the new program. The state's Mobile Source Air Pollution Reduction Review Committee is sponsoring a showcase of 30 emission control devices from 16 manufacturers in the hopes of expanding that list.

    In January, Caterpillar's Diesel Particulate Filter System earned conditional verification from CARB. The passive filter system achieves at least an 85% reduction in particulate-matter exhaust emissions and works with Tier-1, 2 and 3 engines in the 175 to 300 hp range.

    Kim Heroy-Rogalski, manager of the off-road implementation section at CARB, says the agency recognizes there are few options for retrofit filters today, but as regulation deadlines approach, CARB "expect[s] there to be many more choices than there currently are."

    Contractors worry that may not be enough time to prove the technology. ECCO Equipment Corp., a large fleet rental company in Santa Ana, Calif., has experimented with CARB-approved filters, including one manufactured by Germany-based HUSS LLC. Last year, the company replaced the engine in a 1993 Caterpillar 988F loader with a Tier-2 engine at a cost of $112,000. The company later spent $55,000 to install the HUSS system on the equipment. After nearly eight hours of use, the filters must be serviced with a 30-minute burn-off. In January, the company spent $220,000 to repower a Caterpillar D10 dozer with a Tier-3 engine and another $55,000 to add a Cat passive filter system.

    After repowering or retrofitting 28 pieces of equipment through the Carl Moyer program, Gary Rohman, vice president of ECCO, says compliance will only become more challenging in the coming years. The company expects to grapple with funding upgrades even as the it is seeing its rental business drop off by nearly 50% in some areas due to California's residential building market slowing to a crawl.

    "The problem is the money we had [under Carl Moyer] doesn't exist anymore," he says. "We might have re-powered 20 engines last year, but our budget this year includes none. We're in survival mode now."

    As business falls off across the state, Rohman says many who used the Carl Moyer program may also struggle with meeting its requirements. Under the program, fleet owners agree to log a certain number of annual hours on a piece of upgraded equipment.

    "If you've got equipment that's only being used 25% of the amount under your Carl Moyer contract, what happens at the end of the contract?" he explains. "It's going to be a problem for a lot of people."

    The alternative to retrofits and repowering could be worse. Many contractors are concerned that the value of existing equipment could plummet once CARB rules take effect, as fleet owners flood the market with Tier-0 equipment.

    "All of the Tier-0 and Tier-1 equipment out there represents an asset," Rohman says. "As we get closer to the regulation, their value decreases and so does [a fleet owner's] asset value. Even if they sell it at a discount, how can they afford to replace it, especially in a down market?"

    The issues in California could have implications elsewhere. California is the only state allowed under the Clean Air Act to set emissions standards. Other states may implement the same standards, but only if they adopt the same system. Given the concerns among California's fleet owners, industry groups say the prospect of adopting CARB's approach nationwide, could doom the construction industry.

    But most states would find it too difficult to follow California's lead, says Debbi Edelstein, manager of the Northeast Diesel Collaborative in Boston. Edelstein says the complexity of the program and the administrative requirements would prove too costly for most states.

    "It's too big of a program," she says. "It requires an agency to track every single engine in a fleet and none of the states are willing to set up that kind of bureaucratic mechanism."

    Instead, Edelstein says the Northeast Diesel Collaborative is pushing for public agencies and institutional owners to require emissions controls as a contractual requirement on their construction projects.

    Dana Lowell, a senior consultant with MJ Bradley Associates, agrees. The Concord, Mass.-based firm works with government agencies and non-profit organizations on environmental policies and programs.

    "So far, most states have not shown any real inclination to make it a mandate for private contracting," he says. "If the public sector is a large enough slice to reduce emissions statewide, then in effect that's enough."

    The Connecticut Dept. of Transportation required diesel oxidation catalyst retrofits as part of its New Haven Harbor Corridor Crossing Improvement Program. Nearly 150 pieces of equipment are likely to be retrofitted by the time the project completes in 2014, including 60 by O&G Industries of Torrington, Conn., at a cost of $1,000 to $7,000 per retrofit.

    Under the contract specifications promoted by groups like the NEDC, contractors are expected to build compliance costs into their bids, as notion that AGC has flatly denounced.

    "Contractors will not be able to pass-through compliance costs," AGC argued in June 21 comments on NEDC's model construction contract specifications. "Construction is a highly competitive business. Most construction contracts are awarded on a ‘low-bid' basis. A job can be lost over a $1,000 difference in bids. Any contractor who has spent substantial dollars to retrofit or replace his fleet will be at a distinct disadvantage in the bidding process."

    While increased regulation could force compliance on contractors in the future, some early adopters are hoping to reap the upside. In recent years, McAninch Corp. of West Des Moines, Iowa, has replaced, re-powered and retrofitted much of its earthmoving fleet and now boasts more than 200 machines with Tier-1 engines or better. The company also uses low-sulfur diesel with a 7% blend of biodiesel in its off-road equipment. As a result, McAninch was selected as the first earthmoving contractor to join the EPA's Blue Skyways Collaborative.

    Tom Holtz, McAninch spokesman, says the company is able to better promote itself as a "green" contractor, drawing greater interest from owners looking to build projects that are LEED-certified or otherwise environmentally sensitive.

    "This isn't just something that's good for the environment, it's good for business," Holtz says. "Some people want to wait around for mandates or for programs to pay for this. We're going to do this now and we think we can reap the benefits today."

    Sponsor Profiles
    Hilti USA Hyundai
    Liebherr Group Caterpillar