Following the Associated General Contractors report presented to the California Air Resources Board last week, the board, in response, announced an informal grace period for fleets that have not yet reported their off-road vehicles.

The AGC of California says that fleets that self-report will not face enforcement action if they report all of their vehicles prior to Jan. 1, 2010 (for large and medium fleets) and March 1, 2010 (for small fleets).

The CARB says that the off-road regulation required reporting of all off-road diesel vehicles by Aug. 1, 2009. It says that although the deadlines for all fleets are past, the CARB has extended an informal grace period so that fleets may report their vehicles late without penalty.

The AGC, both national and state, reports that because of the severe economic conditions in California, contractors and other operators of off-road diesel equipment will exceed ambitious new emissions targets set by California officials, so there’s no need to impose costly new diesel retrofit rules that will force contractors to purchase new equipment before 2014.

The AGC presented new data that was provided to the association by CARB. It was compiled as part of an exhaustive inventory conducted this year of construction equipment currently in use statewide. The new inventory found, for example, that the board’s original 2000 estimate overstated the levels of nitrogen oxide and particulate matter emissions from the state’s off-road diesel engines in 2009 by close to 40%.

Based on those erroneous estimates, air resources board officials expected off-road diesel equipment operators would need to reduce nitrogen oxide emissions by 5,200 tons in 2010 and 182,000 tons by 2025. They also expected equipment operators to reduce particulate matter emissions by 910 tons in 2010 and 29,530 tons by 2025.

The AGC says that the new inventory data shows, however, operators of off-road diesel equipment will be 58,400 tons below the state’s target levels for nitrogen oxide from 2010 and 173,000 tons below the state’s target by 2025, the AGC says. Meanwhile, equipment operators will be 2,480 tons below particulate matter target levels in 2010 and will stay below target levels in 2011, 2012 and 2013.

After that, the industry will need to make far smaller cuts than originally estimated, the association adds. For example, in 2025 operators will only need to cut 11,560 tons of particulate matter, less than half as deep a cut as previously estimated.

“The implementation of this regulation is coming at a time when the contractors can ill afford to fork out millions of dollars to retrofit a fleet of vehicles that has an expected life span of over 30 years,” says Thomas Holsman, CEO of the Associated General Contractors of California. “Considering that CARB’s goals have already been met, enforcing the regulation at a time when the majority of these vehicles have already been shut down due to the economy will only exasperate the ability to create jobs and that’s what this state needs right now.”

The association notes state officials failed to anticipate the significant impact of the economic downturn on the construction industry. When state officials wrote their rule, for example, they estimated construction employment would grow by 8,000 jobs a year between 2006 and 2014. They also estimated that construction valuation would increase by $10 billion between 2007 and 2009.

In reality, the state has actually lost 330,000 construction jobs since 2006, a 35% decline, while real GDP originating from California’s construction industry has dropped by $13 billion. In addition, a new analysis conducted by the Transportation Construction Coalition found that 68% of California’s highway and transit builders expect the state’s construction market to decline in 2010.

Meanwhile, William E. Davis, executive vice president of the Southern California Contractors Association, says that CARB’s most likely response to the AGC position is that “the construction industry is made up of a bunch of scofflaws who won’t do anything until they are caught by CARB or local air district enforcement officers.

“They might be right. If any of you have been on a job site lately (given that there aren’t many) you will have noted there is a lot of equipment operating without the ubiquitous red and white engine identification numbers required by the off-road rule. Please let your members know about this additional grace period to get their equipment registered. The consequences for failure are fines of up to $10,000 per day, per machine if they are caught.”

Davis adds that SCCA’s position has been that the initial enforcement operation should feature “fix-it” tickets because the CARB outreach to this large and complex industry is inadequate. 

“Less than 20% of the 314,000 contractor license holders in the state belong to any association and would not have been notified of the new rules,” he says.