As previously blogged, the Associated General Contractors of America met with the California Air Resources Board and declared that 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.

In a media conference call, Mike Kennedy, chief counsel for the association, says that builders and contractors won’t have to retrofit, repower or replace a single piece of functional, modern and paid-for construction equipment to meet the state’s emissions targets for years to come.

“The state’s contractors, with help from the economy, are far more effective at cutting emissions than state officials ever anticipated,” he adds.

The new data, which was provided to the association by CARB (yes, from CARB itself!), 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%.

The AGC says that 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 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, the AGC says. 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.

The analysis also concluded that more than 44% of the state’s transportation construction companies plan to lay off year-round employees next year. Significant for diesel emissions, less than one-third of the state’s transportation construction companies say they expect to be able to purchase new construction equipment next year.

“Looking at the economic picture, it is clear the state’s construction industry has little capacity to absorb the cost of replacing otherwise fully functional equipment,” says Ken Simonson, the trade association’s chief economist. “Just because the economy is doing CARB’s work in cutting diesel emissions doesn’t mean the state needs to do the economy’s work in cutting construction employment.”

In light of the new inventory data and the bleak economic forecast for the state’s construction industry, association officials urged the members of the California Air Resources Board to reconsider their plan to require costly retrofits and equipment replacements next year.

In a follow-up letter to the CARB’s Michael Terris, Michael Jacob Steel of the law firm Morrison/Foerster in San Francisco requests the board to:

Streamline the regulation, eliminating the distinctions between small, medium and large fleets, and regulating all fleets over the same period and to the same extent that the CARB originally sought to regulate the small fleets;

Genuinely exempt the individual vehicles that the current regulation merely purports to exempt, excluding such vehicles from the calculation of fleet averages and compliance with target rates, and excluding the horsepower of such vehicles from the calculation of fleet horsepower;

Create a “safe harbor” for fleet owners at risk of suffering serious financial harm, limiting the direct expense that any fleet owner would have to incur in any one year to comply with the regulation (perhaps to a percentage of the owner’s net revenue in the preceding year);

At least two years before the first deadline for compliance with any fleet average requirements, re-evaluate the costs and benefits of those requirements, and modify them at least to the extent that CARB can do so and still meet its original emission reduction targets; and

At least two years before the first deadline for compliance with any fleet requirements, evaluate and report on the technical feasibility of installing VDECs on the broad array of vehicles that an amended regulation would still require fleet owners to retrofit.