Off-Road Emissions Control

Sept. 28, 2010

The “greening of America” has come to the off-road market. Fleet-management professionals from Hawaii to the Mainland are finding out that governmental regulations that have jumped the gap from the transportation industry to the off-road segment are affecting how equipment is managed and maintained.

Lorne Fleming, CEM, director of the equipment division of Grace Pacific, a paving contractor in Honolulu, puts it this way: “As fleet professionals, we have two responsibilities. One is to maintain and operate our fleets efficiently and productively to ensure as much equipment as possible is available to operations. The second is to operate our fleets in an environmentally responsible way.”

Once upon a time it wasn't unusual to see engine oil, transmission fluid or fuel spilled on the ground at jobsites.

“Now, of course, that's not done,” says Fleming. “As a result, an entire cottage industry of recovery and regeneration has been created by the technology that goes along with cleaning up the environment.”

According to Fleming, there's a power struggle going on in Washington, D.C., and elsewhere in the country over who will run the show.

“For example, the California Air Resources Board (CARB) operates pretty much outside the purview of the Environmental Protection Agency (EPA),” he says. “CARB is proposing some of the most restrictive and onerous regulations out there. The question is, are the regulations appropriate?”

CARB has prompted dramatic state-wide reform.

“What the off-road industry has to ask itself now is does CARB know what it's doing or are they restricting our business so much that we won't be able to compete anymore?” says Fleming. “I think the answer lies somewhere in between.”

Not surprisingly, controlling emissions and reducing environmental pollution comes with a hefty price tag.

”There are going to be added costs,” says Thad Pirtle, vice president and equipment manager for Traylor Bros. “By that, I mean in the cradle-to-grave cost of equipment. If you take a piece of equipment and expect the engine to run 15,000 to 20,000 hours and state regulation won't allow that, you won't get the full life out of that engine. To comply with state regulations, you either have to rebuild the engine or repower. That's just one area that will cost us.”

Kevin Fritzinger, CEM, at America Infrastructure's Independence Construction Materials Division agrees.

“I hear horror stories coming out of California where fleet managers have repowered their fleets, in one case to the tune of $62 million,” he says. “Tougher regulations are going to trigger a cost increase from manufacturers; that's for sure.”

Another added cost will result from increased technician training.

“Now technicians have to be trained in the repair of Tier 1 through Tier 4 engines,” says Pirtle. ”We've already seen California change to Tier 3 regulations and soon they'll change to Tier 4. As it stands now, we have four series of engines operating, and we have to train technicians on all of them. That's a tremendous amount of training.”

In fact, Pirtle says, training is becoming an increasingly larger portion of the total equipment cost.

“I'd say it's about 30 percent,” he says. “The biggest problem is that every manufacturer has its own components; Cummins, Mack, Volvo, Caterpillar – each has its own style. For those of us with mixed fleets working across state lines on a national scale, this is a real issue. You have to train one person on everything.”

Another concern with the new regulations is the ability of manufacturers to provide the necessary training, information, parts, rebuilds and service for Tier 1 through Tier 4 engines.

“Right now, OEMs are struggling because there are so many different engines that must be built in a short period of time,” says Pirtle. “There's no way they can keep up. The costs associated with that are going to be passed along to the end user.”

Fleming is convinced the latest, more stringent CARB regulations may well bankrupt a lot of smaller companies.

“When you look at what the costs of the latest regulations are going to be, you're looking at tens of billions of dollars to replace current equipment,” he says. “New regulations will obsolete many machines with 1, 2 and 3 compliant engines. That's a lot of equipment that you won't be able to do anything with. We're repowering five pieces of equipment right now under an American Lung Association grant administered by the EPA, and it's costing us $170,000. Although you can make a case that that's not much for a piece of equipment worth a million bucks, it's still a substantial amount of money being put back into the machine. We'll recover some of it, but we're still looking at a three-year payback.”

According to Fleming, Hawaii has a task force looking into CARB regulations and there's a good chance some of the standards will be instituted.

“Whether they'll go all the way or not, I don't know,” he says. “There are various organizations in our business that have taken a position against CARB. Rumors are flying that they're trying to put together a task force to negotiate with CARB.”

The move toward cleaner engines didn't start yesterday.

“We've all seen the clean air changes in on-road equipment and realized it would only be a matter of time before they migrated to off-road equipment,” says Fritzinger. “Our purchase decisions over the last few years have been moving us in that direction, positioning us to have a more balanced fleet. In my view, without an obsolescence plan in place, we would have to make some very tough and costly decisions, to remain competitive.

Replace or repower?

“An older fleet can replace or repower,” says Fritzinger. “Sounds simple, but the cost of new or nearly new equipment may be a challenge for some companies, depending on the size and age of the fleet. Repowering is an option if a replacement engine is available. In many cases, however, the replacement engine won't be just a drop-in; it will require extensive and expensive modifications to the mounting area, frame and cooling system.”

And there will be another cost: lower re-sale value.

“The demand for cleaner engines will negatively affect the re-marketing of older engines, especially in a weak market,” says Fritzinger. “The old days are gone; there's no longer a dumping ground for tired iron internationally. Peak interest now is in low-hour late-model machines.”

Like the other fleet managers, Fritzinger sees tougher emissions standards forcing fleet operators to dispose of engines prematurely.

“Big 50- to 60-ton haul trucks are a good example,” he says. “If you bought those trucks five or six years ago and they need an engine, transmission or torque converter rebuild, those repairs will cost significantly more because of emissions regulations. “In a case like that, the fleet manager will have to repower with an engine that is in compliance – which is a totally different engine – or get rid of the truck. The used equipment market isn't going to be what it once was. No one will want to buy that truck and put it in a fleet.”

Pirtle also expects a decline in resale values.

“In the past, you could expect, at a minimum, to get 50 percent of the cost of the equipment back when you sold it,” he says. “That's not going to be the case anymore. It will be less than 50 percent, so fleet professionals need to make sure they receive enough revenue to pay for the ownership of that equipment.”

Tougher emissions regulations will also require assigning someone to manage the repowering of vehicles.

“That is a big change in how fleets are managed,” Pirtle says. “We didn't use to have to worry about that cost, but we do now, especially for the next five to seven years.”

After that, he says, attrition will take care of the situation.

“As you buy new equipment,” says Pirtle, “naturally it has new engines in it, so the repower process problem will eventually be eliminated. Once you repower, you're repowered.”

More restrictive emissions regulations will also change how long a fleet keeps a piece of equipment.

“One of the things we're doing is instituting a five-year equipment turn,” says Fleming. “In a couple of years, we won't own a piece of equipment that's older than five years.

“We've got a pretty good cost-analysis system now that tells us what it really costs to run a piece of equipment. We're beginning to see that the cost of operating a Tier 4-compliant engine is lower than running a mechanical engine. When you start showing that data to the bean counters, you make believers out of them. We try to show our financial people that this is a good business decision, not just something that we can't afford.”

Pirtle says it's critical that you know the true cost of the power unit: electric, gas or diesel.

“Instead of just considering diesel, for instance, you have to open the scope a little,” he says. “You might want to go to gasoline or drop a line at a jobsite to run the lighting. Cost is going to be a bigger issue now just because of emissions regulations.”

CARB'S “Eco Trip”

Wherever the California Air Resources Board (CARB) dares to tread, the rest of the U

CARB'S “Eco Trip”

Wherever the California Air Resources Board (CARB) dares to tread, the rest of the United States is sure to follow – at least part of the way.

CARB regulations are often far stricter than those of the Environmental Protection Agency, and, as such, the agency many times sets the standard for environmental regulation nationwide. Rigid regulations designed to reduce engine emissions started with on-highway vehicle engines; then in November 2005, the CARB switched its attention to off-road diesel engines. Public meetings and workshops were organized for the purpose of developing emission-reducing regulations for off-road equipment engines used in construction, mining and other industries operating in California.

On July 26, 2007, CARB voted to adopt regulations targeted at small, medium and large off-road fleets operating in California.

The California agency uses total fleet horsepower to determine whether a fleet is small, medium or large. Small fleets are defined as having up to 2,500 total hp, medium fleets use 2,501-5,000 hp and large fleets use 5,001 hp or more. The only exceptions are low-use vehicles that operate less than 100 hours a year.

Certification by California's Secretary of State, making the off-road fleet regulations effective, is expected in the spring of 2008. After that comes a phase-in of fleet compliance. Smaller fleets have longer to comply. Here is the time line:

  • April-August 2009 – First reporting requirements for all fleets in California with affected vehicles.
  • March 1, 2010 – First compliance due for large fleets.
  • March 11, 2013 – First compliance due for medium fleets.
  • March 2, 2015 – First compliance due for small fleets.

A fleet, regardless of its size, is deemed in compliance when it meets the fleet average emissions rate target for particulate matter or applies the highest level verified diesel emission control system to 20 percent of its horsepower.

Small fleets are exempt from the NOx fleet average portion of the regulations. However, medium and large fleets are required to meet NOX average emissions rates or turn over a certain percent of its horsepower (9 percent in early years and 10 percent in later years).

Annual reporting for all fleets is required beginning April 1, 2009.

A fleet's particulate matter emissions can be reduced either by applying exhaust retrofits that capture pollutants before they are emitted into the air or by accelerating turnover to equipment with newer, cleaner engines.

Doing Business on the Islands

For the most part, operating a fleet in the Hawaiian Islands is pretty much the same as on the Mainland, according to Lorne Fleming, CEM, director of the equipment division of Grace Pacific in Honolulu.

For example, new emissions regulations from the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) have just as great an impact on fleet management and vehicles in Hawaii as they do anywhere else on the Mainland.

But, says Fleming, there are a few differences.

“When you do business here, you have to keep in mind that there are no natural deposits of anything in Hawaii except salt,” he says. “We're just an island built on a volcano. There isn't anything here that wasn't – literally – heaved out of the ground.”

The first thing you have to recognize is that if you use it, buy it or run it, it came from somewhere else.

“For example, on this island we have only a three-day supply of food,” he says. “That's all. We have a one-week supply of fuel. A big part of what we do is planning and logistics.”

Among other considerations, fleet managers have to determine how much in extra parts inventory to stock to make sure the fleet continues operating.

“At Grace Pacific, that's a little better than $1 million,” he says. “You can't just go down to the corner to the local Caterpillar dealer and get a hydraulic pump. They can get one in two or three days sometimes, but that means my machine is down two or three days.

Although Grace Pacific operates on other islands, it keeps its parts inventory in Honolulu, making components available wherever they are needed. “There are hourly flights to and from the other islands,” he says. “The first one leaves at 5:20 a.m. and the last one leaves at 10 p.m. It's a bit pricy, but when you've got a piece of equipment down, that cost is pretty irrelevant.” Another business management area that's a little different in the islands is on the personnel side. Fleming says, as a result, he probably keeps some personnel he really shouldn't keep because of the lack of skilled labor.

“Drug testing has probably impacted our business more than anything else,” he says. “It cost us some pretty good people; but in retrospect, we're probably better off without them.”

When the company conducted a massive drug test at one of its divisions, Fleming says, half failed.

“That puts a hole in your operation,” he says. “You've got work to do, but all of a sudden you only have 30 people to do the work. That's a problem.”

CARB Verified Manufacturers

In addition to the Environmental Protection Agency, the California Air Resources Board (CARB) has compiled its own list of currently verified retrofit technology manufacturers. Here is a partial list provided by CARB at

  • Cleaire Horizon (conditionally verified for off-road engines)
  • Cummins
  • Donaldson
  • EGR Technologies (conditional)
  • Engine Control Systems
  • Environmental Solutions
  • HUSS
  • International Truck & Engine
  • Johnson Matthey
  • Lubrizol PuriNOX
  • Miratech
  • Paceco
  • Rypos
  • Sud-Chemie.
  • Thermo-King
  • Vycon Regen System

EPA Verified Technology Manufacturers

The Environmental Protection Agency (EPA) has designated certain manufacturers as having currently verified retrofit technology. Here is a partial list from the EPA website,

  • Caterpillar
  • Clean Diesel Technologies
  • Cummins Emission Solutions
  • Donaldson
  • Engelhard
  • Engine Control Systems
  • International Truck & Engine
  • Johnson Matthey
  • Lubrizol
  • Paceco
  • Purem
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