EPA: Control of Emissions of Air Pollution From Highway Heavy-Duty Engines

Published by the Government Accountability Office on 1997-10-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Office of the General Counsel


      October 29, 1997

      The Honorable John H. Chafee
      The Honorable Max Baucus
      Ranking Minority Member
      Committee on Environment and Public Works
      United States Senate

      The Honorable Thomas J. Bliley, Jr.
      The Honorable John D. Dingell
      Ranking Minority Member
      Committee on Commerce
      House of Representatives

      Subject:   Environmental Protection Agency: Control of Emissions of Air Pollution
                 From Highway Heavy-Duty Engines

      Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on
      a major rule promulgated by the Environmental Protection Agency (EPA), entitled
      "Control of Emissions of Air Pollution From Highway Heavy-Duty Engines" (RIN:
      2060-AF76). We received the rule on October 17, 1997. It was published in the
      Federal Register as a final rule on October 21, 1997. 62 Fed. Reg. 54694.

      The final rule establishes a new emission standard and related provisions for diesel
      heavy-duty engines intended for highway operation, beginning with the 2004 model

      Enclosed is our assessment of the EPA's compliance with the procedural steps
      required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.
      Our review indicates that the EPA complied with the applicable requirements.

      If you have any questions about this report, please contact James Vickers, Assistant
      General Counsel, at (202) 512-8210. The official responsible for GAO evaluation

work relating to the Environmental Protection Agency is Peter Guerrero, Director,
Environmental Protection Issues. Mr. Guerrero can be reached at (202) 512-6111.

Robert P. Murphy
General Counsel


cc: Mr. Thomas E. Kelly
    Director, Office of Regulatory
     Management and Information
    Environmental Protection Agency

Page 2                                                            GAO/OGC-98-9

       ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
                                ISSUED BY
                    HIGHWAY HEAVY-DUTY ENGINES"
                             (RIN: 2060-AF76)

(i) Cost-benefit analysis

EPA performed a cost-benefit analysis which is included in its Regulatory Impact
Analysis (RIA), which was forwarded to our Office, and is summarized in the
preamble to the final rule.

Because manufacturers are planning long-term research and development (R&D),
EPA's analysis of costs is based on a significant degree of technological
development. To reflect this improvement and long-term cost savings, EPA has
included $270 million in R&D outlays in the cost analysis.

The costs of the new technologies for meeting the 2004 model-year standards for
light heavy-duty vehicles are estimated to be a purchase price cost increase of $258
and a life-cycle operating cost increase of about $7. For medium heavy-duty
vehicles and heavy heavy-duty vehicles, the purchase price increases are estimated
at $397 and $467 and the additional life-cycle cost increases at $62 and $131,

The aggregate costs to society are projected at $270 million in 2004, $140 million in
2009, and $205 million in 2020.

The benefits to the environment are estimated to be a reduction in oxides of
nitrogen (NOx) of over one million tons by the year 2020 or a 5-percent reduction in
the total NOx inventory. Also, based on two cost-effectiveness scenarios in the RIA,
the range in the cost effectiveness results for 2009 and later model year heavy-duty
diesel vehicles is $100 to $200 per ton.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,
607, and 609

EPA has determined that the final rule will not have a significant economic impact
on a substantial number of small entities because none of the engine manufacturers
affected by the rule is a small entity. In addition, EPA does not find that the
portion of the rule dealing with heavy-duty engine rebuilding processes will have a

significant impact on the small businesses that make up a substantial portion of the
engine rebuilding business. EPA reached this latter decision because the final rule
is not creating a new program regarding engine rebuilding, and the associations
representing the engine rebuilders did not raise concerns that the rule would have a
significant impact on small entities. Also, the comments received from small
rebuilders were supportive of the rulemaking.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform
Act of 1995, 2 U.S.C. §§ 1532-1535

The final rule does not contain a federal mandate on state, local, or tribal
governments but does contain a mandate of $100 million or more on the private
sector. EPA states that it believes the final rule represents the least costly, most
cost-effective approach to achieving the air quality goals of the rule. EPA's actions
taken to comply with the Unfunded Mandates Reform Act of 1995 are discussed in
the RIA.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

Instead of the notice and comment procedures in the Administrative Procedure Act,
EPA promulgated this rule using the procedures, which have similar notice and
comment requirements, contained in section 307(d) of the Clean Air Act, as
amended. 42 U.S.C. § 7607(d). The use of these procedures regarding this rule is
mandated by section 307(d)(1)(K) of the Clean Air Act. 42 U.S.C. § 7607(d)(1)(K).

EPA issued an Advance Notice of Proposed Rulemaking on August 31, 1995 (60 Fed.
Reg. 45580) and a Notice of Proposed Rulemaking on June 27, 1996 (61 Fed. Reg.
33421). A public hearing was held on August 12, 1996. The comments received as a
result of these notices and the hearing are responded to in the preamble to the final

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

The final rule contains an information collection requirement subject to review by
the Office of Management and Budget (OMB) under the Paperwork Reduction Act.

The preamble to the final rule sets forth the information required by the act, which
includes the reason for the requirement and the estimated burden hours. The
information to be collected consists of certification results, durability, maintenance,
and averaging, banking and trading information. Also, recordkeeping procedures for
engine rebuilding companies are formalized consistent with current industry
standards. The average first-year burden hours are estimated to be 4,670 for each

Page 2                                                               GAO/OGC-98-9
of the 20 likely respondents and a total first-year burden hours of 93,410 hours at a
cost of $5,603,280. Subsequent-year burdens are expected to be one-tenth of the
first year because of the practice of engine family carry-over from model year to
model year.

OMB has approved the collection requirement and has issued OMB Control No.

Statutory authorization for the rule

The final rule was issued pursuant to the authority of section 202(a)(3) of the Clean
Air Act, 42 U.S.C. § 7521(a)(3), under which EPA establishes emission standards for
new heavy-duty motor vehicle engines.

Executive Order No. 12866

The final rule was determined to be an "economically significant regulatory action"
under the order and was reviewed and approved by OMB as complying with the
requirements of the order.

Page 3                                                               GAO/OGC-98-9