Budget Proposal Would Cut EPA Grants for Emissions Reductions, Other Programs

This story appears in the Feb. 21 print edition of Transport Topics.

President Obama’s proposed 2012 budget for the Environmental Protection Agency would eliminate diesel emissions-reduction grants and shrink other agency programs. But EPA Administrator Lisa Jackson last week vowed to forge full-speed ahead with the agency’s greenhouse gas emissions reduction program, including the agency’s proposed truck fuel-efficiency rule.

The administration’s budget also warned of potential spending cuts or delays for the Department of Energy’s “Super Truck” program, a $115 million DOE-industry cooperative effort to develop a Class 8 truck with 50% better fuel efficiency by 2015.

Overall, the EPA’s $8.9 billion budget calls for spending some $1.3 billion less than the 2010 budget level, a 13% decline that stopped short of House Republican budget writers’ demands for even deeper cuts aimed primarily at crippling the agency’s plans to regulate carbon dioxide emissions.

“We will continue to follow the Clean Air Act in the area of addressing greenhouse gas solutions,” Jackson said during a Feb. 14 telephone news conference.

The diesel grant cuts would come from Diesel Emission Reduction Act funding which in 2010 set aside $80 million for emission reductions from existing diesel engines through engine retrofits, rebuilds and replacements; idling reduction strategies, and other clean diesel strategies.

The administration’s 2012 EPA budget proposal does not allocate a cent to the program, despite a congressional authorization in December for the program to spend $500 million over a five-year period.

Glen Kedzie, a vice president and environmental affairs regulatory counsel for American Trucking Associations, said the diesel retrofit grants were largely directed toward carriers that operate in areas where pollution levels are out of compliance with federal mandates.

That requirement made it difficult for carriers that operate nationwide to compete for the grants, Kedzie said.

“ATA supports all efforts to improve the quality of our nation’s air, including continued funding of the Diesel Emissions Reduction Act,” Kedzie said. “While such monies have largely been directed towards off-road and municipal diesel equipment users, the benefits of the program continue to far outweigh its costs.”

Jackson called the diesel grant decision a tough one, but noted that some states are “stepping up” to offer funding for diesel retrofits and that cleaner diesel engines are now being placed in all new trucks.

Despite the plan to eliminate the diesel funding, Jackson said that about $50 million in earlier authorized funding had yet to be actually spent.

The EPA’s budget also calls for a $4 million in new funding to support the “analysis and potential development and subsequent implementation of greenhouse gas standards for heavy-duty trucks” and other mobile sources, a clear sign that the administration is standing firm in its pledge to regulate greenhouse gases.

The proposed rule would cut greenhouse gas emissions from large trucks by 7% to 20% by 2017, depending on the size and use of the truck, a departure from passenger automobile fuel-economy regulations.

House Republicans have introduced a budget bill that would cut EPA’s budget by $3 billion, which would defund the agency’s attempts to regulate greenhouse gases.

But even with the administration’s overall budget cuts, the EPA will spend an additional $23 million on its climate change program, Jackson said.

“We want to work with House Republicans to cut spending and cut the deficit,” Jackson said. “But we want to make sure that we don’t undermine our ability to protect public health and the environment.”

Nonetheless, Jackson noted that the budgeting process is in the early stages and that it is difficult to predict the final budget numbers approved by Congress.

ATA’s Kedzie compared the upcoming budget fight to a tug of war.

“The EPA budget kept all the climate change stuff in and actually gave it a boost,” Kedzie said. “The House bill goes in the opposite direction. They’re cutting out everything.”

“It’s like we’re over here at this end of the rope and you’re over there at the other end — and now we’re going to pull,” Kedzie said. “I don’t know which side . . . the rope is going to end up on.”

Although it’s too early to tell, the Department of Energy’s Super Truck program could face funding delays in 2012, according to a DOE spokesman.

“In [fiscal year] 2010, the Vehicle Technologies Program initiated three Super Truck awards aimed at improving the efficiency of Class 8 long-haul freight trucks by 50%,” said DOE spokesman Tom Welch. “These projects would receive more than $115 million in funding from the American Recovery and Reinvestment Act and Regular Appropriations, subject to availability of funds, to develop and demonstrate systems-level fuel efficiency technologies by 2015.”

“Depending on the final fiscal year 2012 appropriation, it may be necessary to delay awards funded with regular appropriations,” Welch said.