The National Off-Highway Equipment Environmental Outlook

2. The National Off-Highway Equipment Environmental Outlook 2010 Randall-Reilly Construction Symposium Tuscaloosa, Alabama April 29, 2010

3. The National Off-Highway Equipment Environmental Outlook 2010 Randall-Reilly Construction Symposium Tuscaloosa, Alabama April 29, 2010

4. Construction Equipment Environmental Issues Air Quality EPA Non-Road Emission Regulations Engine Technologies State Initiatives Contracts and Bid Specification Noise Greenhouse Gases Topics Covered Today

5. Off-Highway Equipment • Construction Equipment • Mobile Equipment • Backhoes • Excavators • Loaders • Etc. • Portable Equipment • Generators • Compressors • Pumps • Auxiliary Engines • Etc.

6. Air Quality • Particulate Matter (PM) • Nitrogen Oxide (NOx) • Volatile Organic Compound (VOC) • Non-Methane Hydrocarbons (NMHC) • Sulfur • Opacity

7. Current Non-Attainment Areas PM2.5 208 counties Ozone 347 counties Total 408 counties

8. Non-Attainment Area Facts • 2010+ • PM2.5 ~237 counties (based on latest EPA data) • Ozone ~345 counties (based on latest EPA data) • Total ~440-550 counties

9. 2011+ Non-Attainment Projection

10. NOx • Byproduct of combustion especially at higher temperature • Precursor to Ozone • Lumped with NMHC in many emission standards

11. EPA Manufacturer Standards

12. Exhaust After Treatment Required EPA Non-Road Emission Regulations

13. Technologies to Achieve Standards • Exhaust Gas Recirculation (EGR) • Diesel Oxidation Catalyst (DOC) • Nitrogen Enriched Air (NEA) • Selective Catalytic Reduction (SCR)

14. PM • PM, PM10, PM2.5 • Byproduct of incomplete combustion • Classified as an air toxic in California

15. EPA Manufacturer Standards

16. Exhaust After Treatment Required EPA Non-Road Emission Regulations

17. Technologies to Achieve Standards • Most NOx emission control strategies contribute to a decrease in PM emissions • Diesel Oxidation Catalyst - 25% • Diesel Particulate Filters - >85% • Verified Diesel Emission Control Strategies (VDECS)

18. Exhaust Gas Cooled Air from Intercooler VTG Turbo Air Inlet EGR Valve EGR Cooler Compressed Air from Turbocharger Tier 3 Technical Path • NOx reduction: • Exhaust Gas Recirculation (EGR) • Particulate Matter (PM) reduction: • Advanced Fuel Injection System

19. EGR Valve Larger EGR Cooler Interim Tier 4 Technical Path HC Injection Exhaust Gas DPF DOC Intake Air Throttle VTG Turbo, plus Fixed turbo Air Inlet • NOx reduction: • Additional Exhaust Recirculation • Particulate Matter (PM) reduction: • Higher fuel injection pressure • Diesel Oxidation Catalyst (DOC) • Diesel Particulate Filter (DPF) Compressed Air from Turbocharger

20. Final Tier 4 Possible Technology Urea Injection HC Injection Exhaust Gas DPF SCR DOC Intake Air Throttle VTG Turbo, plus Fixed turbo Air Inlet EGR Valve • Additional NOx reduction with Urea-based Selective Catalytic Reduction (SCR) • Urea injected into exhaust • 80% NOx reduction EGR Cooler Compressed Air from Turbocharger

21. Tier 4 Final (2010 On-Highway, 2014 Non-Road) Selective Catalytic Reduction (SCR) Aftertreatment • Requires urea injection into exhaust • Urea freezes at 11°F

22. Sulfur • Contributor to SOx (acid rain). • Currently transitioning from low sulfur diesel fuel to ultra low sulfur diesel fuel (ULSD) nation wide. • ULSD has 15ppm or less S. • All emission control strategies work best using ULSD but engines do not.

23. Other Emission Reduction Strategies NOx and PM • Emulsified Fuel • Conversion to Natural Gas • Electrification • Hybrid Diesel Electric Designs • Idling Restrictions

24. The Regulatory Movement • California ARB Diesel Regulation Activities • New York City Local Law 77 • Connecticut Clean Air Construction Initiative • Massachusetts Projects • Virginia - Bid to Contractors • Texas TERP

25. California Air Resources Board (ARB) • California Air Resources Board (ARB) • Portable Diesel Engine Air Toxic Control Measure • Stationary Diesel Engine Air Toxic Control Measure • Carl Moyer • Surplus Off-Road Opt- in for NOx (SOON) Program • Off-road (In-Use) Diesel Regulation • Up to 32 States are closely watching this regulation

26. - Connecticut - Delaware - Georgia - Illinois - Indiana - Kentucky - Maryland - Michigan - Missouri - New Jersey - New York - North Carolina - Ohio - Pennsylvania - Tennessee - Virginia - District of Columbia States Expressing an Interest in Adopting California’s Off-Road Rule

27. The Regulatory Movement (cont.) • Lead Time Requirement for California’s Off-Road Rule to Take Effect in Other States • California Adopts Rule • States Must go Through their Rule Adoption Process • The Rule Must be Identical to California’s • The State’s Rule Must Provide a Minimum Two-Year Lead Time After Adoption Note: States donot need to wait for the California Rule to receive a federal preemption waiver before adopting their own Rule. EPA and the courts have consistently taken the position that a non-California state may adopt California standards that have not received a preemption waiver but that the state cannot enforce the rules until the California preemption waiver is granted.

28. New York City Local Law 77 • Requires Best Available Technology (BAT) for construction equipment 50 hp or greater operated by agencies and contractors working within the city. • BAT is technically feasible EPA or CARB verified devices, or others. • Ultra low sulfur diesel fuel (ULSD) is also required.

29. Connecticut Clean Air Construction Initiative • CT Clean Air Construction Bid Specification • Low Sulfur Diesel • Diesel Oxidation Catalysts • Diesel Particulate Filters • Annual Review of CARB/EPA Verifications • New Verifications Included in Following Years’ Bid Specifications

30. Massachusetts Highway Department, Transportation Authority, Department of Environmental Protection all require at least a DOC on all project equipment. Example: The Big Dig more than 200 equipment retrofitted with DOC’s The Regulatory Movement (cont.)

31. The following requirements were included in the bid specification: All Contractor and sub-contractor diesel powered non-road construction equipment with engine horsepower (HP) ratings of 60 HP and above…shall be retrofitted with Emission Control Devices in order to reduce diesel emissions. The Retrofit Emission Control Devices shall consist of oxidation catalysts, or similar retrofit equipment control technology that (1) is included on the Environmental Protection Agency (EPA) Verified Retrofit Technology List and (2) is verified by EPA or certified by the manufacturer to provide a minimum emissions reduction of 20% PM10, 40% CO, and 50% HC. Tier 2, Tier 3 and Tier 4 Engines Exempt from this Requirement No contractor will allow any diesel-fueled commercial motor vehicles or diesel non-road construction equipment to idle for a period greater than 5 minutes. Virginia - Army Relocation of National Capitol Region Facilities to Fort Belvoir, VA

32. Texas Emissions Reductions Plan Provides incentive funding for retrofits and newer cleaner equipment Voluntary Texas Emissions Reductions Plan (TERP)

33. Since the 1972 passage of the Noise Control Act, noise has been regulated at every level of government National standards have been created to limit noise from vehicles and industrial equipment States have also required noise elements in planning documents Local ordinances mainly directed at construction noise are in place in thousands of cities and towns Most noise is treated at the “nuisance” level and not quantified for enforcement purposes Consult your local “noise” expert for additional information Noise

34. CO2, N2O, CH4 EPA mandatory greenhouse gas reporting for large stationary sources starts in 2011 for the 2010 calendar year. Industrial sources which includes construction sources account for 18% of GHG emissions, construction is in this. It is only a matter of time before GHG’s from construction equipment will become subject to direct regulation. Greenhouse Gases (GHG)

35. If you have any questions, please contact me: Drew Delaney Associates Environmental 16882 Bolsa Chica Street, Suite 202 Huntington Beach, CA 92649 Office: (714) 916-4953 x703 Mobile: (949) 322-3739 Fax: (714) 362-9085 ddelaney@associatesenvironmental.com Thank You