International Newsmaker Q&A: Allen Schaeffer
With global automotive industry suppliers such as BASF, BorgWarner, Bosch, Delphi, Dow, Honeywell and Tenneco being on the membership roster of the Diesel Technology Forum, efforts are continuing to raise awareness in the U.S. among consumers and government officials concerning the value and importance of diesel engines, fuel and technology.
A particular piece of legislation that could have a positive impact on parts providers and repairers is the Diesel Emissions Reduction Act, known as DERA.
Instituted by Congress in 2005 to encourage retrofitting and replacing existing diesel engines to reduce emissions and improve air quality, full funding of the initiative remains under debate, much to the dismay of Allen Schaeffer, the Diesel Technology Forum’s executive director.
“Diesel retrofit has become a ‘term of art’ reflecting a number of strategies and choices for modernizing and upgrading existing diesel engines,” Schaeffer recently told the U.S. Senate Subcommittee on Clean Air and Nuclear Safety. “These primarily include retrofitting with an emissions control device; repowering, or replacing, an older engine with a new one; rebuilding an older engine to a higher emissions tier level; refueling with cleaner fuels; or replacing an entire vehicle or machine with a newer one.”
Schaeffer addresses a series of questions that have been raised about the measure:
Is the DERA program over?
No. The DERA program was originally authorized for five years until through FY2011. In December 2010, Congress passed and President Obama signed legislation to extend the program for another five years based upon its cost-effectiveness and past success. In recognition of national budget strains, the program was reauthorized for only half of its original amount.
President Obama ‘s FY2012 budget proposed a termination of the DERA program, claiming that it had achieved its short term objective of removing or retrofitting the dirtiest diesel engines in use. In a debate on the House floor regarding the DERA program, Rep. Richardson who authored the bill in Congress to reauthorize the program noted on the House floor that DERA “has not been terminated, it is merely a recommendation by the President at this time.”
While funding for DERA in FY2012 remains under debate, 71 projects are being implemented across the country thanks to $84 million provided in FY09 and FY10, along with others in all 50 states as a result of the state grant program. Funding for FY2011 remains subject to congressional action on a continuing resolution, however the House of Representatives have voted to maintain $50 million of the $60 million that was originally proposed. If this figure is maintained, new projects could be announced across the country later this fall.
Haven’t most of the oldest vehicles been retrofitted during the program’s first five years?
No. EPA estimates that there are over 11 million existing diesel engines in use across the country and that by the end of 2011, it expects to have funded the replacement or retrofit of approximately 50,000 engines. Although DERA funds have leveraged other dollars in support of additional retrofits, there is no question that the number of engines retrofitted or replaced to date represents only the tip of the iceberg. EPA Administrator Lisa Jackson affirmed the ongoing need of the DERA program during her testimony before the Senate Environment and Public Works Committee on March 2, 2011.
Won’t emission levels be sufficiently reduced through the natural turnover of vehicles to new ones using today’s clean diesel technology?
Fleet turnover is influenced by many factors, but most importantly economic circumstances which create demand for more activity using diesel engines, fleet and equipment owners’ access to credit, and confidence in the general business environment. The recession impacted each of these factors and has resulted in delays in equipment replacement in all industry sectors as fleets hold on to existing equipment for longer. Experienced dealers are noticing an overall increase of 1-2 years in the average age of equipment which is being traded in. Even trucks and buses which tend to have a shorter lifespan are turning over more slowly. According to research by R.L. Polk, the average age of registered class 8 trucks increased 1.7 years between 2005 and 2010.
Because of their more intermittent use, diesel engines such as those in construction and agriculture typically have a longer natural life than other diesel engines used in highway vehicles. Some applications such as locomotives and marine work boats have useful lives measured in decades, meaning many pieces of equipment still in use today have engines that have significantly higher emissions than those being sold today. Retrofitting these larger pieces of equipment is costly, and thus only a small percentage of the existing population has been completed to date.
Aren’t there other funds besides those from DERA that can be used to retrofit diesel vehicles?
While it is true that there are other federal and some state programs that provide financial support for upgrading engines, the Diesel Emissions Reduction Program offers the only federal, dedicated source of funds for this purpose. Diesel retrofits represent only a very small portion of the projects that are funded under the Department of Transportation (Congestion Mitigation and Air Quality Program, CMAQ) and the Department of Agriculture (Environmental Quality Improvement Program, EQIP), and the EQIP program is limited to only one category of diesel equipment (agricultural). Only two states, California and Texas, have significant ongoing programs that provide funding for diesel retrofit projects. Supplemental Environmental Projects (SEPs) offer a third category of funding, however these are based on unknown environmental enforcement receipts and thus not a sustainable source.
Is the program still supported in Congress?
Yes. Last year, both the House of Representatives and the Senate overwhelmingly, and without objection, approved the extension of DERA for another five years. In February 2011 the House of Representatives strongly rejected an effort to reallocate FY2011 EPA funds out of the DERA program by a vote of 372 to 52. At the time, Rep. Calvert described DERA as “a win-win program….(which) supports green American jobs and improves the air quality for all Americans.” In March Senator Inhofe noted that terminating DERA “is irresponsible and, if followed, bad for public health.” Senator Carper added, “Funding DERA is a no-brainer and I will work with the Administration and my colleagues to find ways to fund this effective program.”
Didn’t the Inspector General just issue a report criticizing the effectiveness of the DERA program?
As part of administration’s broad oversight on expenditures under the American Recovery and Reinvestment Act of 2009, an audit of some retrofit projects under DERA was conducted. On March 1 EPA’s Office of the Inspector General issued a final report from this audit, which found problems in only 3 of 26 subgrants that were reviewed and commended EPA for quickly and sufficiently addressing the recommendations for stronger oversight and reporting procedures, clearer project guidance and addressing unsupported expenditures.
For more information, visit www.dieselforum.org.
With global automotive industry suppliers such as BASF, BorgWarner, Bosch, Delphi, Dow, Honeywell and Tenneco being on the membership roster of the Diesel Technology Forum, efforts are continuing to raise awareness in the U.S. among consumers and government officials concerning the value and importance of diesel engines, fuel and technology.
A particular piece of legislation that could have a positive impact on parts providers and repairers is the Diesel Emissions Reduction Act, known as DERA.
Instituted by Congress in 2005 to encourage retrofitting and replacing existing diesel engines to reduce emissions and improve air quality, full funding of the initiative remains under debate, much to the dismay of Allen Schaeffer, the Diesel Technology Forum’s executive director.
“Diesel retrofit has become a ‘term of art’ reflecting a number of strategies and choices for modernizing and upgrading existing diesel engines,” Schaeffer recently told the U.S. Senate Subcommittee on Clean Air and Nuclear Safety. “These primarily include retrofitting with an emissions control device; repowering, or replacing, an older engine with a new one; rebuilding an older engine to a higher emissions tier level; refueling with cleaner fuels; or replacing an entire vehicle or machine with a newer one.”
Schaeffer addresses a series of questions that have been raised about the measure:
Is the DERA program over?
No. The DERA program was originally authorized for five years until through FY2011. In December 2010, Congress passed and President Obama signed legislation to extend the program for another five years based upon its cost-effectiveness and past success. In recognition of national budget strains, the program was reauthorized for only half of its original amount.
President Obama ‘s FY2012 budget proposed a termination of the DERA program, claiming that it had achieved its short term objective of removing or retrofitting the dirtiest diesel engines in use. In a debate on the House floor regarding the DERA program, Rep. Richardson who authored the bill in Congress to reauthorize the program noted on the House floor that DERA “has not been terminated, it is merely a recommendation by the President at this time.”
While funding for DERA in FY2012 remains under debate, 71 projects are being implemented across the country thanks to $84 million provided in FY09 and FY10, along with others in all 50 states as a result of the state grant program. Funding for FY2011 remains subject to congressional action on a continuing resolution, however the House of Representatives have voted to maintain $50 million of the $60 million that was originally proposed. If this figure is maintained, new projects could be announced across the country later this fall.
Haven’t most of the oldest vehicles been retrofitted during the program’s first five years?
No. EPA estimates that there are over 11 million existing diesel engines in use across the country and that by the end of 2011, it expects to have funded the replacement or retrofit of approximately 50,000 engines. Although DERA funds have leveraged other dollars in support of additional retrofits, there is no question that the number of engines retrofitted or replaced to date represents only the tip of the iceberg. EPA Administrator Lisa Jackson affirmed the ongoing need of the DERA program during her testimony before the Senate Environment and Public Works Committee on March 2, 2011.
Won’t emission levels be sufficiently reduced through the natural turnover of vehicles to new ones using today’s clean diesel technology?
Fleet turnover is influenced by many factors, but most importantly economic circumstances which create demand for more activity using diesel engines, fleet and equipment owners’ access to credit, and confidence in the general business environment. The recession impacted each of these factors and has resulted in delays in equipment replacement in all industry sectors as fleets hold on to existing equipment for longer. Experienced dealers are noticing an overall increase of 1-2 years in the average age of equipment which is being traded in. Even trucks and buses which tend to have a shorter lifespan are turning over more slowly. According to research by R.L. Polk, the average age of registered class 8 trucks increased 1.7 years between 2005 and 2010.
Because of their more intermittent use, diesel engines such as those in construction and agriculture typically have a longer natural life than other diesel engines used in highway vehicles. Some applications such as locomotives and marine work boats have useful lives measured in decades, meaning many pieces of equipment still in use today have engines that have significantly higher emissions than those being sold today. Retrofitting these larger pieces of equipment is costly, and thus only a small percentage of the existing population has been completed to date.
Aren’t there other funds besides those from DERA that can be used to retrofit diesel vehicles?
While it is true that there are other federal and some state programs that provide financial support for upgrading engines, the Diesel Emissions Reduction Program offers the only federal, dedicated source of funds for this purpose. Diesel retrofits represent only a very small portion of the projects that are funded under the Department of Transportation (Congestion Mitigation and Air Quality Program, CMAQ) and the Department of Agriculture (Environmental Quality Improvement Program, EQIP), and the EQIP program is limited to only one category of diesel equipment (agricultural). Only two states, California and Texas, have significant ongoing programs that provide funding for diesel retrofit projects. Supplemental Environmental Projects (SEPs) offer a third category of funding, however these are based on unknown environmental enforcement receipts and thus not a sustainable source.
Is the program still supported in Congress?
Yes. Last year, both the House of Representatives and the Senate overwhelmingly, and without objection, approved the extension of DERA for another five years. In February 2011 the House of Representatives strongly rejected an effort to reallocate FY2011 EPA funds out of the DERA program by a vote of 372 to 52. At the time, Rep. Calvert described DERA as “a win-win program….(which) supports green American jobs and improves the air quality for all Americans.” In March Senator Inhofe noted that terminating DERA “is irresponsible and, if followed, bad for public health.” Senator Carper added, “Funding DERA is a no-brainer and I will work with the Administration and my colleagues to find ways to fund this effective program.”
Didn’t the Inspector General just issue a report criticizing the effectiveness of the DERA program?
As part of administration’s broad oversight on expenditures under the American Recovery and Reinvestment Act of 2009, an audit of some retrofit projects under DERA was conducted. On March 1 EPA’s Office of the Inspector General issued a final report from this audit, which found problems in only 3 of 26 subgrants that were reviewed and commended EPA for quickly and sufficiently addressing the recommendations for stronger oversight and reporting procedures, clearer project guidance and addressing unsupported expenditures.
For more information, visit www.dieselforum.org.
About the Author
James Guyette
James E. Guyette is a long-time contributing editor to Aftermarket Business World, ABRN and Motor Age magazines.