The House Transportation and Infrastructure Committee held a hearing about the California Air Resources Board's new regulations for in use locomotive emissions.
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NewsTranscript
00:00:00The Subcommittee on Railroads, Pipelines, and Hazardous Materials will come to order.
00:00:06I ask unanimous consent that the Chairman be authorized to declare recess at any time
00:00:10during today's hearing without objection so ordered.
00:00:13I also ask unanimous consent that the members not on the Subcommittee be permitted to sit
00:00:18with the Subcommittee at today's hearing and ask questions without objection so ordered.
00:00:22And as a reminder, if members wish to insert a document into the record, please also email
00:00:27it to DocumentsTI at mail.house.gov.
00:00:30I now recognize myself for the purposes of an opening statement for five minutes.
00:00:36At almost 145,000 route miles, the United States has one of the most efficient and comprehensive
00:00:42freight rail systems in the world.
00:00:45It is also one of the safest.
00:00:47The benefits of this system aren't just measured in miles and tons of freight shipped.
00:00:51They can also be measured in other benefits, including reduced fuel consumption and associated
00:00:57emissions reductions.
00:00:59Rail is capable of transporting a ton of freight for more than 450 miles on only one gallon
00:01:07– that's right, just one gallon – of diesel fuel.
00:01:10Unfortunately, the Biden Administration and the State of California remain intent on pushing
00:01:15an unwanted, radical Green New Deal agenda on the American people, regardless of the
00:01:22costs and consequences to our economic and national security.
00:01:27While this hearing has been called to discuss the California Air Resource Board's request
00:01:31for authorization for a state-based regulation, we should be very mindful that this proposed
00:01:36regulation is not just confined to California.
00:01:40It's national in both impact and intent.
00:01:44According to CARB's own analysis, the rule would require both BNSF and Union Pacific
00:01:49to replace their entire fleet of locomotives nationwide to comply with the regulation,
00:01:55which will cost billions – with a B – billions of dollars and will make freight transportation
00:02:00and the cost of goods drastically more expensive.
00:02:04We are also concerned about the rule's impact on the short-line operations, which Mr. Olvera
00:02:09will highlight for us in his testimony.
00:02:12As the United States rail transportation system is intrinsically linked and vital to
00:02:17the safe and efficient movement of freight and passengers in interstate commerce, other
00:02:21rail operators would also be forced to adjust their own operations.
00:02:27The importance of rail transportation is so great that Congress has enacted a number of
00:02:32statutes specifically designed to ensure the preservation of this most important mode of
00:02:37transportation.
00:02:39For example, railroads were the first American industry to be regulated under the Interstate
00:02:44Commerce Act of 1887.
00:02:47Many of my colleagues who served in the last Congress are familiar with the Railroad Labor
00:02:51Act of 1927, which was designed to avoid the potential for economically crippling disruptions
00:02:58in interstate commerce caused by labor disputes.
00:03:03Additionally, the Staggers Rail Act of 1980 was enacted to restore the economic health
00:03:09of the industry at a time when the railroads were at the verge of bankruptcy due to the
00:03:15stifling economic government regulation – the very same type of economic burden CARB and
00:03:22the Biden administration is seeking to reimpose.
00:03:25Further, the Interstate Commerce Committee Termination Act created the Surface Transportation
00:03:31Board and explicitly, quote, preempts all state laws that may reasonably be said to
00:03:37have the effect of managing or governing rail transportation.
00:03:41Finally, there is the Clean Air Act itself, which clearly establishes the federal government
00:03:48acting as the sole regulator of emissions from new locomotives.
00:03:53Unfortunately, this CARB request for authorization is an attempt to circumvent the statutory
00:03:58and legal requirements of both the Clean Air Act and the Administrative Procedures
00:04:02Act.
00:04:03Concerningly, falsely considering a matter of this scope as a waiver instead of an agency
00:04:09rule also denies its coverage under the Small Business Regulatory Efficiency Act and the
00:04:15Congressional Review Act.
00:04:17Moreover, CARB's proposal would fail any meaningful cost-benefit analysis.
00:04:23It also fails to fully consider costs associated with the acquisition of still non-existent
00:04:29– and I am going to repeat this point – non-existent zero-emissions locomotives.
00:04:35The cost of building out, much less permitting the necessary infrastructure, including energy
00:04:39infrastructure, is likewise erroneous.
00:04:43It is for these reasons that a broad coalition of railroads, shippers, and union organizations
00:04:49have come out in strong opposition to this rule.
00:04:52This regulation must be rejected by EPA and accompanied by a return to sanity in both
00:04:59Sacramento and right here in Washington, D.C.
00:05:03I look forward to hearing from today's witnesses about the challenges and opportunities for
00:05:08commuter rail service as well as best practices to improve service, realize efficiencies,
00:05:14and increase fare revenues.
00:05:17I now will recognize the Chairman of the full committee.
00:05:21I will now recognize the Ranking Member Larson of the full committee for five minutes.
00:05:25Thank you, Chair.
00:05:26You're getting ahead of yourself.
00:05:28I want to thank Chair Nels and the committee for holding this hearing on railroad locomotive
00:05:33emissions, and I want to commend the Chair on setting a date as well for a rail safety
00:05:38hearing.
00:05:40Now that the NTSB has released its report after the Norfolk Southern derailment in East
00:05:44Palestine, Congress has to act on the NTSB's recommendations to enhance rail safety.
00:05:50Today's hearing addresses how Congress can continue to support freight movement, grow
00:05:53our economy, and reduce emissions from the transportation network.
00:05:57In Washington State, freight is key to long-term economic growth.
00:06:01Nearly one in two jobs statewide is freight-dependent, with almost 40 percent of state's wages generated
00:06:06by freight-dependent industries.
00:06:09According to Washington State Department of Transportation, Washington State's multimodal
00:06:12freight system handles almost 600 million tons of cargo each year, which is valued
00:06:17at $677 billion.
00:06:19In 2022, 15 percent of freight tonnage was moved by rail in my state, including through
00:06:26rail yards in Everett and Bellingham in my district.
00:06:30So while transportation, including freight rail, keeps the economy and supply chains
00:06:33moving, the sector continues to be the largest source of greenhouse gas emissions.
00:06:39Transportation emissions are trending in the wrong direction.
00:06:41For example, U.S. greenhouse gas emissions increased 1.6 percent from 2022 to 2023.
00:06:50According to my own state's Department of Ecology, diesel exhaust is one of the most
00:06:54harmful air pollutants.
00:06:57Diesel exhaust puts healthy people, including more than 4 million people who live and work
00:07:00near diesel emission sources in my state, at risk for respiratory diseases and complicates
00:07:06health conditions for people with asthma, heart, and lung disease.
00:07:11Some of this was running through my mind on Saturday when a diesel locomotive was parked
00:07:15just below my place in Everett, Washington, and spit out diesel emissions for seven straight
00:07:20hours.
00:07:21Thankfully, Washington State is a leader in reducing emissions in transportation.
00:07:26In 2020, Washington enacted its Motor Vehicle Emission Standards Law, which is helping increase
00:07:31the number of zero-emission vehicles on state roads.
00:07:35Washington's ferry system, the largest in the country, yet also the largest source of
00:07:39transportation emissions statewide, is transitioning to a cleaner and greener passenger ferry fleet.
00:07:44Washington's Maritime Blue initiative invests in thriving, world-class, and sustainable
00:07:48maritime industry for the next 30 years.
00:07:50For example, my state's work on maritime batteries resulted in a brand-new Corvus energy facility
00:07:55at the Port of Bellingham, which opened last year.
00:07:58Corvus's expansion in northwest Washington State illustrates a growing regional and global
00:08:03demand for hybrid power and zero-emission energy solutions to transportation needs.
00:08:09Washington State expects to meet its emissions goals for 2030, but more needs to be done
00:08:14to reach our 2040 and 2050 goals for a cleaner and greener future.
00:08:18Congress and the administration want to be partners in this.
00:08:22Thanks to the BIL, communities in my district and in districts across the country are investing
00:08:26in a cleaner and greener future.
00:08:29Last month, the U.S. DOT awarded the Port of Bellingham a nearly $18 million raise grant
00:08:33to modernize a shipping terminal site, returning the site to a fully functioning multimodal
00:08:38terminal with more efficient loading and unloading of rail cars on the terminal, an investment
00:08:43that will reduce emissions while keeping supply chains and the maritime economy moving in
00:08:47northwest Washington and the West Coast.
00:08:50Congress has also invested more than $5 billion in consolidated rail infrastructure and safety
00:08:55improvements, or CRISI grants, in the BIL.
00:08:59These grants can be used to purchase updated rail locomotives, and short-line railroads
00:09:03can directly apply for grants rather than going through public agencies or entities.
00:09:07The BIL also specifically allows recipients to use CRISI to rehabilitate, remanufacture,
00:09:13procure, or overhaul locomotives, provided that such activities result in a significant
00:09:21reduction in emissions.
00:09:23The Federal Railroad Administration is currently reviewing applications for $2.4 billion in
00:09:27CRISI funds, an investment that can fund quite a few new locomotives in communities
00:09:32across the country.
00:09:33I look forward to hearing from today's witnesses about how they're working to build a cleaner
00:09:37and greener freight rail network, and with that, I yield back the balance of my time.
00:09:42Gentleman yields.
00:09:43I now recognize Ranking Member Wilson for five minutes for an opening.
00:09:47Thank you.
00:09:48Thank you, Mr. Chairman, and thank you to our witnesses today.
00:09:52For many, railroad tracks in this country have too often existed as a symbol of division,
00:10:01inequity, and a legacy of racial oppression.
00:10:05In the aftermath of slavery and as a result of redlining, black communities and other
00:10:11underserved communities formed settlements near rail lines.
00:10:17Even though these areas were polluted with hazardous locomotive emissions, which we now
00:10:23know are associated with disease and premature death, they settled there because they had
00:10:30nowhere else to go.
00:10:32This is why when I would ask some of my constituents, where do you live, where do you work, and
00:10:39where do you go to school, they often respond with, across the tracks, which serves not
00:10:46just as an answer but a statement of the persisting injustice and disproportionate
00:10:52burdens placed on so many communities of color.
00:10:57The California Air Resource Board, or CARB, is working to limit harmful emissions from
00:11:05locomotives, including by requiring cleaner engines after 2030 and reducing the time locomotives
00:11:14spend idling.
00:11:16CARB estimates that these efforts would save $32 billion in health costs and prevent over
00:11:243,200 premature deaths in California.
00:11:29This regulation seeks to steer the railroad industry towards doing its part to prevent
00:11:36the worst impacts of the climate crisis.
00:11:40Every year, extreme weather events strike with increasing frequency and severity at
00:11:47sea levels as sea levels continue to rise.
00:11:52For the residents of my district who live in South Florida, these threats are not just
00:11:57concerning, they are existential.
00:12:01We have seen constant flooding in South Florida recently, and seas are projected to rise in
00:12:08Miami-Dade County by over a foot within the next 30 years, dramatically increasing flood
00:12:17risks further and threatening the homes and livelihoods of frontline communities.
00:12:24Just last week, we had our first Category 5 hurricane in the Caribbean, the earliest
00:12:31ever in hurricane season.
00:12:34It is now more important than ever that we protect California's right to implement nation-leading
00:12:42regulations.
00:12:44The industry's response to this regulation should not be to sue CARB.
00:12:50We have had national tier 4 locomotive standards in place since 2015, which the industry seems
00:12:58to have avoided implementing for over 90% of its locomotives.
00:13:04The technology exists.
00:13:07What is missing is the investment, the will, and the commitment to ending the legacy of
00:13:15railroad communities suffocating under the deadly effects of air pollution.
00:13:22It is only this commitment that may begin to make the phrase across the tracks a phrase
00:13:30of the past.
00:13:32In today's hearing, I look forward to learning what the railroad industry is doing to improve
00:13:39our air quality and the health of communities living near rail yards.
00:13:47Mr. Chair, the United States Climate Alliance recently submitted a letter to EPA Administrator
00:13:55Reagan supporting the deployment of zero-emission technologies across all transportation modes.
00:14:04And Mr. Chairman, I'd like to ask for unanimous consent to add this letter to the record.
00:14:10Without objection.
00:14:11And I yield back.
00:14:12The gentlelady yields.
00:14:14I ask for unanimous consent to enter into the record.
00:14:17The letters and statements for record from the Associated Builders and Contractors, the
00:14:21Fertilizer Institute, the American Railroad Association, the U.S. Chamber of Commerce,
00:14:27the Pelican Institute for Public Policy, the Taxpayer Protection Alliance, and a joint
00:14:32letter from the Private Railcar Food and Beverage Association, as well as the National Industrial
00:14:37Transportation League, and a joint letter from the National Stone, Sand, and Gravel
00:14:41Association, and the California Construction and Industrial Materials Association.
00:14:46These letters, without objection, so ordered.
00:14:52I would like to, again, welcome our witnesses and thank you.
00:14:55Thank you all for being here today.
00:14:56Briefly, I'd like to take a moment to explain our lighting system to our witnesses.
00:15:00There are three lights in front of you.
00:15:02Green means go.
00:15:03Obviously, yellow means you're running out of time, and red means to please conclude
00:15:07your remarks.
00:15:08I ask for unanimous consent that the witnesses' full statements be included into the record.
00:15:12Without objection, so ordered.
00:15:13I also ask for unanimous consent that the record of today's hearing remain open until
00:15:17such time as our witnesses have provided answers to any questions that may be submitted to
00:15:22them in writing.
00:15:24Without objection, so ordered.
00:15:25I also ask for unanimous consent that the record remain open for 15 days for any additional
00:15:29comments and information submitted by members or witnesses to be included in the record
00:15:34of today's hearing.
00:15:35Without objection, so ordered.
00:15:37As your written testimony has been made part of the record, the subcommittee asks that
00:15:40you limit your oral remarks to five minutes.
00:15:43With that, I will recognize Representative Duarte of California to introduce Mr. Dylan
00:15:49Oliveira.
00:15:50Well, thank you, Mr. Chairman, for holding this important hearing today, and thank you
00:15:55for inviting Mr. Dylan Oliveira, one of my constituents, to testify on behalf of the
00:15:59American Short Line and Regional Railroad Association.
00:16:02Mr. Oliveira is the President and Chief Executive Officer of Modesto and Empire Traction Company,
00:16:07also known as MET, a short-line railroad operator situated in a bustling 2,000-acre industrial
00:16:14park known as the Beard Industrial District in Modesto, California.
00:16:19That includes globally recognized companies such as Ian J. Gallo Winery, Del Monte Foods,
00:16:25Nestle, Frito-Lay, Plastipac, Graham Packaging, and our local Stanislaus Foods.
00:16:31MET also maintains over 53 miles of track, helping integrate California's 13th Congressional
00:16:37District into the North American supply chain, including Mexico and Canada through connections
00:16:42with BNSF and the Union Pacific Railroad.
00:16:45Mr. Chairman, I'll discuss it more when it's my time for questions, but I'm very appreciative
00:16:49of Mr. Oliveira being here today.
00:16:52He can speak with credible fluency as to the harmful real-world implications of CARB's
00:16:57rule.
00:16:58I yield back.
00:16:59The gentleman yields.
00:17:00Thank you, Mr. Duarte.
00:17:01With that, Mr. Oliveira, you are recognized for five minutes for your testimony.
00:17:05Turn it.
00:17:09Thank you, Congressman Duarte.
00:17:10Good afternoon.
00:17:12My name is Dylan Oliveira, and I'm the President and CEO of Modesto and Empire Traction Company,
00:17:16affectionately called the MET.
00:17:18As a member of the Short Line Railroad Association, I am pleased to represent our nation's small
00:17:24freight railroad community.
00:17:26The MET is a private, family-owned business established in 1911.
00:17:32We have 50 employees and are a Class III short line railroad that provides rail service to
00:17:36approximately 30 customers in Modesto, California.
00:17:40The Central Valley is home to some of the nation's most important food and agricultural
00:17:45shippers, and our railroad provides the first and last mile of service to those customers.
00:17:53We are fortunate to connect to two Class I railroads, the Union Pacific and the BNSF.
00:18:00California short lines move roughly 260,000 carloads of freight each year, and the MET
00:18:06represents 35,000 of these carloads.
00:18:09Each carload carries the equivalent of three to four trucks' worth of goods.
00:18:15California short lines operate approximately 200 locomotives, and our railroad represents
00:18:2111 of those.
00:18:23Most short lines equip their fleets with low-cost but reliable and easy-to-maintain older second
00:18:30hand locomotives acquired from larger Class Is.
00:18:33This practical model is in compliance with federal law, has been in place for decades,
00:18:39and allows short lines to survive.
00:18:41Short line locomotives over 23 years old, which would soon be banned under the CARB
00:18:47rule, are in fact the norm in the industry.
00:18:50These locomotives cost only a few hundred thousand dollars, while new Tier IV locomotives
00:18:55cost a few million dollars each.
00:18:58Railroads are already environmentally friendly.
00:19:00According to EPA data, the nation's freight railroads account for less than 2% of transportation-related
00:19:08greenhouse gas emissions, and short lines make up only a tiny fraction of that 2%.
00:19:14Our trucking competitors, meanwhile, account for 23% of transportation greenhouse gas emissions.
00:19:21The MET has already made great strides in reducing emissions, and we were an early adopter
00:19:26of clean locomotives.
00:19:28Beginning in 2008, our company worked closely with California to apply for state grants.
00:19:35Nine of our 11 locomotives were upgraded from Tier 0 to Tier 3 due to this work.
00:19:41There are three different grants in place today that have obligations that will be completed
00:19:45through 2032.
00:19:49The total cost of these upgrades was $12.5 million, shared between California and the
00:19:53MET.
00:19:54These locomotives have many years of remaining useful life, but would have to be scrapped
00:19:59and replaced with new locomotives per the CARB regulation.
00:20:03This CARB regulation will also force the MET to contribute to a spending account while
00:20:08continuing to complete our grant obligation.
00:20:11This is an unreasonable ask to make of any small business.
00:20:15Our current calculation for the spending account is over $1 million annually.
00:20:21Our grant match and the spending account emission fees would represent a massive increase
00:20:26in our locomotive spend compared to historical levels.
00:20:31We also recently applied and were awarded CRISI grant funding to upgrade two switch
00:20:37engine locomotives from Tier 0 to Tier 4.
00:20:41The total cost for this upgrade is approximately $5 million, again to be split between the
00:20:46federal government and the MET.
00:20:49As we have demonstrated, the MET and short lines in general are perfectly willing to
00:20:54work with CARB and other similar agencies to reduce emissions when they offer reasonable
00:21:00paths forward, but this rule is just not feasible for short lines.
00:21:06The CARB regulation will cause a significant financial impact to the entire short line
00:21:10industry.
00:21:11Railroads are capital intensive and our margins are tight.
00:21:14A well-run short line frequently spends over 80% of revenue on operating expenses and contract
00:21:20provisions and market competition will prevent us from raising prices to cover CARB's regulation
00:21:26costs.
00:21:27If short lines are driven out of business due to CARB's infeasible rule, that freight
00:21:30will move on to trucks, increase traffic congestion and freight costs, and businesses will have
00:21:35lost viable shipping options and move out of California or just vanish.
00:21:42The EPA should deny CARB's authorization request, not only does it mandate the use of locomotive
00:21:47technology that is not currently commercially available, CARB has also publicly acknowledged
00:21:54that the massive compliance costs will force short lines out of business.
00:21:59This would have a catastrophic impact on our freight rail network, the U.S. supply chain,
00:22:04and the environment and highway safety.
00:22:06Thank you and I look forward to our discussion today.
00:22:10Thank you, Mr. Oliveira.
00:22:12I now recognize Mr. Nober for five minutes for your testimony.
00:22:16Yes, sir.
00:22:17Good morning, Subcommittee Chairman Nels, Ranking Member Wilson, Full Committee Ranking
00:22:21Member Larson, and members of the subcommittee.
00:22:24My name is Roger Nober and I am honored to be back testifying on the important topic
00:22:28of today's hearing, an examination of issues related to CARB's in-use locomotive regulations.
00:22:34Earlier this week, I submitted my full written testimony and will not repeat it now.
00:22:38Today, I'd like to draw on my background, my experiences on this committee as the lead
00:22:43staffer on the Interstate Commerce Commission Termination Act of 1994, as well as subsequently
00:22:48chairing the Surface Transportation Board and then as an Executive Vice President at
00:22:51BNSF Railway, and focus on three main points from my written testimony.
00:22:56First, provide you all with a brief history of the Interstate Commerce Act preemption
00:23:00provisions.
00:23:01Second, explain why I believe the CARB regulations, whether or not authorized by EPA under Section
00:23:06209 of the Clean Air Act, are preempted by the Interstate Commerce Act.
00:23:10And third, review effective non-preempted alternatives for lowering locomotive emissions
00:23:16and improving air quality in California today.
00:23:18So let's turn to the Interstate Commerce Act preemption.
00:23:22Section 10501 of the Interstate Commerce Act broadly preempts both state and federal laws
00:23:26or regulations that affect rates, classifications, rules, practices, route services, and the
00:23:31facilities of such carriers.
00:23:34This provision was intentionally written to be extremely broad and reflects the bipartisan
00:23:38desire of committee members to ensure that railroads were exclusively regulated in those
00:23:42areas at the federal level.
00:23:45Importantly, the section preempted other federal laws as well.
00:23:49Over the past 30 years, Section 10501 has been read broadly, although not literally.
00:23:55State and local laws that might be preempted from applying to railroads like sanitation
00:23:58codes and environmental reviews have been found to still apply to them.
00:24:02But state efforts to regulate railroad operations through creative actions such as those we
00:24:06are reviewing today have been disallowed.
00:24:09When another federal law is thought to conflict with Section 10501, the SCB or courts will
00:24:14attempt to harmonize the laws or regulations.
00:24:17If they cannot be harmonized, then the conflicting federal law will be preempted.
00:24:20All right, so the CARB, turning to the CARB in-use locomotive rules, in my view, the CARB
00:24:27regulations are unequivocally preempted by Section 10501.
00:24:31I come to this conclusion when considering the following.
00:24:34The plain language of Section 10501 and its clear and unambiguous intent.
00:24:39The fact that CARB has petitioned the EPA to open a Tier 5 locomotive rulemaking and
00:24:44while the EPA has not yet done so, it is still studying the issue.
00:24:48The broad intent and scope of the CARB regulations and that they effectively apply to equipment
00:24:52entering California and not just equipment local to California.
00:24:57The practical infeasibility of creating a California-only locomotive fleet means that
00:25:02the CARB regulations would become de facto national standards.
00:25:06There's the technical and commercial infeasibility of zero-emissions technology in the CARB regulations
00:25:11timelines and the uncertainty created by two progress evaluations.
00:25:17The attempt by CARB to influence equipment manufacture through definition of in-use and
00:25:21the reality that conforming locomotives do not yet feasibly exist.
00:25:25The economic impact of and the penalty-like nature of spending and as Mr. Olvera just
00:25:31mentioned the impossibility of small railroads compliance with these requirements.
00:25:36I also believe that were EPA to grant CARB Section 209 petition, the CARB regulations
00:25:42could not be harmonized with the Interstate Commerce Act and would be preempted.
00:25:46As a matter of statutory construction, Section 10501 is the later enactment of law.
00:25:51That Section 209e is more specific is not important here.
00:25:55A later enacted broad preemption provision did not list every statute that it might apply
00:26:00to.
00:26:01So what are the alternatives?
00:26:04CARB in its testimony has indicated that the legal prohibitions that give locomotives a
00:26:09quote free pass and conclude that railroads need to do their part to improve air quality
00:26:13in California and I absolutely agree.
00:26:17Improving emissions should be reduced but not on a national and not on a state basis.
00:26:22Going forward, the best step long-term would be an EPA Tier 5 regulation.
00:26:27CARB as I said has sought such a rulemaking as recently as 2017 and EPA has not refused
00:26:32to do so.
00:26:33While a Tier 5 rulemaking might be slow and laborious, EPA would also consider the national
00:26:37implications of such a rule and in balance improving emissions profiles with mode and
00:26:42route shifts that nationally might increase overall emissions exposure to more people.
00:26:48In the short term, CARB in their local air quality districts in California could also
00:26:52negotiate voluntary agreements with railroads.
00:26:55These agencies for decades understood the value of voluntary agreements to reduce locomotive
00:26:59emissions and they produced real benefits to California residents and I believe that
00:27:03they could again.
00:27:05In conclusion, I believe that these regulations are legally preempted and substantively the
00:27:10wrong way to reduce locomotive emissions.
00:27:13I ask the committee not to lose sight of the larger picture, which is that rail is the
00:27:17most environmentally friendly mode of surface transportation.
00:27:20As a result, locomotive emissions regulation should not let the perfect, which is adopting
00:27:25unavailable zero emissions technology by a date certain and penalizing those who don't,
00:27:30be the enemy of the outstanding, which is moving as much freight on rail as possible
00:27:34using the most efficient rail equipment commercially feasible.
00:27:37So thank you again for inviting me to testify this afternoon and I look forward to any questions
00:27:41you might have.
00:27:42Thank you, Mr. Nober.
00:27:43Mr. Yall, you are recognized for five minutes, sir.
00:27:48Thank you.
00:27:49Chairman Nels, Ranking Member Wilson and members of the subcommittee, thank you for inviting
00:27:54me to testify on this important topic.
00:27:55My name is Yural Yall.
00:27:57I'm a senior vice president at Flatiron Construction and a vice president of highway and transportation
00:28:02division at AGC, Associate General Contractors of California.
00:28:05With nearly 900 members specializing in all facets of construction at AGC of California,
00:28:11we believe the construction industry is vital to the success of California.
00:28:14We're passionate about shaping policy, improving our state's infrastructure and developing
00:28:19our workforce.
00:28:21My firm Flatiron Construction is a national infrastructure contractor founded in Colorado
00:28:25in 1947 and we've been operating in California since 1989.
00:28:30With more than 3,500 craft and professional employees, 1,100 of those are in California,
00:28:36we work for public and private clients to deliver essential infrastructure.
00:28:40Our yearly revenues exceed $2.5 billion and more than $1 billion is generated in California.
00:28:45We have worked with passenger and freight rail operators throughout our history with
00:28:49notable projects such as a 68-mile segment of California high-speed rail, Redlands Passenger
00:28:54Rail Project in San Bernardino County, North Coast Corridor Program in San Diego that serves
00:29:00joint Amtrak and BNSF lines, intermodal facility improvements, rail operation and safety improvements
00:29:10such as grade separations and double tracking on passenger and freight rail lines across
00:29:14California and several other states.
00:29:17As a contractor that self-performs majority of our work with our own craft workforce and
00:29:21with rail and transit construction being a major part of our business, maintaining
00:29:25investments in infrastructure spending is very important to us.
00:29:29A more environmentally friendly nation starts with our state and federal agency partners'
00:29:34ability to build while maintaining jobs, ensuring stable material pricing, meeting effective
00:29:39transportation needs and securing the funding required to build the projects our communities
00:29:43need.
00:29:44The construction industry not only creates jobs but also drives economic growth by developing
00:29:49the infrastructure necessary for a sustainable future.
00:29:53While the AGC of California supports the goal of a more environmentally friendly state,
00:29:57the California Air Resource Board in-use locomotive regulation, if granted, will have significant
00:30:03adverse effects on infrastructure development, construction supply chain and job creation.
00:30:09One reason for this adverse effect is available funding.
00:30:12The proposed spending account and useful life requirement within CARB's in-use locomotive
00:30:17regulation present significant financial and operational challenges for our agency
00:30:21partners and operators.
00:30:23These requirements are designed to accelerate the transition to zero-emission locomotives
00:30:27by mandating substantial financial contributions from operators into a spending account and
00:30:32limiting the operational life of existing locomotives.
00:30:36While we support the intent to reduce emissions, these measures impose undue burdens on our
00:30:40transportation agencies and, by extension, the communities they serve.
00:30:45We are concerned that this regulation will have unintended consequences and jeopardize
00:30:49planned infrastructure projects and construction jobs.
00:30:53Another aspect of this regulation is the potential impacts on construction costs.
00:30:57The costs of construction have gone up, including cost of construction materials, construction
00:31:04labor and transportation of materials.
00:31:07Since February 2020, the average cost of construction materials has increased by 39 percent, a rate
00:31:13that is nearly twice as high as the rate of consumer inflation, with notable increases
00:31:17of over 60 percent or more in diesel and milled steel products.
00:31:22The CARB in-use locomotive regulation would further increase these costs and the cost
00:31:27to rebuild the nation's infrastructure, further diminishing what can be built with
00:31:30available funding.
00:31:32The majority of AGC of California members rely on sustained infrastructure funding to
00:31:37keep and develop our workforce and sustain our businesses.
00:31:41Given the already strained funding and infrastructure due to supply chain and inflationary pressures
00:31:45resulting in the recent downscaling of projects due to lack of funding, CARB's in-use locomotive
00:31:50regulation will result in further impacts to our industry.
00:31:54Thank you for allowing me to testify today, and I'm happy to answer any questions you
00:31:58may have.
00:31:59Thank you, Mr. Yall.
00:32:00Ms. Arenas, you are recognized for five minutes.
00:32:03Good afternoon, and thank you for having me today.
00:32:06Chair Randolph asked that I pass along her apologies for not being able to attend.
00:32:11I'm Heather Arias, the Transportation and Toxics Division Chief.
00:32:14My team is the team that developed the locomotive rule that we're discussing today.
00:32:19I also have teams who have developed and are implementing regulations for engines all across
00:32:24California's transportation system.
00:32:27But today, we are focused on the locomotive regulation.
00:32:32Locomotives are one of the largest sources of criteria pollutants in California.
00:32:36Ninety percent of California railroads are within one mile of vulnerable residential
00:32:41communities already highly impacted by nitrogen oxide, or NOx, and toxic diesel particulate
00:32:48matter, of which there is no known safe level of exposure.
00:32:53Reduction of the pollution caused by locomotives operating in the state is critical for California
00:32:58to meet its Clean Air Act obligations.
00:33:02Locomotives represents 31 percent of the NOx reductions needed in California's state implementation
00:33:08plan strategy to meet attainment under the Clean Air Act for highly polluted air basins,
00:33:14such as South Coast and San Joaquin.
00:33:18Locomotives are not entitled to a free pass, and like other regulated industries, railroads
00:33:23operating in California must reduce emissions that are harming Californians.
00:33:28Railroad operations in California continue to use, and are increasing use of, some of
00:33:33the oldest and most polluting engines in California.
00:33:37Although Tier 4 engines have been available since 2015, railroads have continued to operate
00:33:43locomotives in California with emission control technologies over 20 years old, technologies
00:33:50that produce over 80 percent more emissions than the current US EPA Tier 4 emission standard.
00:33:57Even worse, railroads continue to operate locomotives in California that are up to
00:34:0250 years old with no emission controls at all.
00:34:05In the past several years, the average emissions of their locomotive fleets operating in California
00:34:11have gotten worse, not better.
00:34:14California has been taking robust steps pursuant to the Clean Air Act to reduce emissions from
00:34:19other mobile sources, including heavy-duty trucks, passenger cars, off-road equipment,
00:34:25ships docked in California's ports, and more.
00:34:29Locomotives are increasingly the outlier.
00:34:31Today, when comparing the transportation of the same number of shipping containers, locomotives
00:34:37produce more NOx and toxic diesel particulate matter than trucks operating in the state.
00:34:44And soon, locomotives will produce more greenhouse gas emissions than trucks on a per-shipping
00:34:49container basis.
00:34:51In 2023, the California Air Resources Board, or CARB, adopted a locomotive regulation that
00:34:57is estimated to result in $32 billion in health savings to Californians by preventing 3,200
00:35:05premature deaths and 1,500 emergency room visits and hospitalizations.
00:35:10The reg would also decrease cancer risk from exposure to locomotive emissions by up to
00:35:1590 percent.
00:35:19CARB's locomotive regulation follows California's expressly preserved authority under the Clean
00:35:24Air Act to regulate emissions from locomotives operating in the state.
00:35:29It does not set emission standards on new locomotives, nor does it mandate the purchase
00:35:34or use of zero-emission locomotives.
00:35:37Operators may continue to operate Tier 4 locomotives for decades to come.
00:35:41And because nearly every locomotive operating today runs on fully electric motors and could
00:35:46be powered using a fuel source other than its diesel generators, operators may continue
00:35:53using their existing locomotives by configuring them to run on zero-emission power sources.
00:35:58The regulation allows ample time for emission control technologies to continue to advance
00:36:03and for market efficiencies to put downward pressure on prices.
00:36:06It is important to note that zero-emission rail transportation is nothing new.
00:36:12Electrified rail is more than 100 years old, and we once had electrified tracks throughout
00:36:16the nation, coast to coast.
00:36:19Advances in battery and hydrogen fuel technology have given railroads more options than 100
00:36:24years ago.
00:36:25It is saddening and disappointing that railroads remain some of the top polluters in the state,
00:36:29given all the tools available to them to do better.
00:36:33California passenger vehicles, heavy-duty trucks, ocean-going vessels, and heavy off-road
00:36:36equipment, among other emission sectors, are all doing their part.
00:36:40All we ask is that the railroads do their part, too, so Californians can have clean
00:36:44air to breathe.
00:36:46Thank you.
00:36:47Thank you all for your testimony.
00:36:50We will now turn to questions for the panel.
00:36:52I will recognize myself for five minutes.
00:36:55Mr. Oliveira, according to CARB's own analysis, short-line and regional railroads will not
00:37:01be able to comply, won't be able to comply with the costs of the regulation and would
00:37:05cease to operate.
00:37:06I think short lines operate on routes that class ones pretty much they abandoned them,
00:37:11right?
00:37:12They abandoned them.
00:37:13So did CARB consider the unique business structure of short lines?
00:37:22So many short lines in the state of California have very small operations.
00:37:26They operate on very thin margins and don't have the financial wherewithal to invest in
00:37:33Tier 4 and ultimately zero-emission locomotives, even with state and federal funding.
00:37:41Our railroad consists of 11 locomotives, nine of which we proactively signed up for clean
00:37:49air locomotives back in 2008, invested millions of dollars along with the state of California,
00:37:55but now well before the useful lives of those locomotives are over, we're being asked to
00:38:01scrap them and upgrade to more expensive Tier 4 locomotives and put money into a spending
00:38:05account in the tune of about a million dollars annually.
00:38:09Those types of financial requirements really don't fit the financial model of my short
00:38:14line or any others.
00:38:15Very well, thank you.
00:38:16Mr. Nover, is it more accurate to describe this proposed rule as one that regulates new
00:38:23locomotive engines and emission controls and not just the use of locomotives?
00:38:31I think the regulation as technically written really says it only applies to in-use, but
00:38:38I think that it's twisting the definition a little bit of in-use because you can't use
00:38:43anything that hasn't been manufactured.
00:38:46So I would say that the clear goal is to incent and to create and to force manufacturers
00:38:54to be able to produce locomotives that can meet these emission standards or that become
00:38:58zero emission standards.
00:39:00So it is, as a practical matter, regulating manufacture.
00:39:05Sure.
00:39:06On the question of locomotive use, the Interstate Commerce Commission Termination Act and the
00:39:11various Surface Transportation Board decisions and court rulings have found that state and
00:39:16other attempts to regulate railroad operations are preempted by federal law.
00:39:20And as former chairman of the STB, should EPA follow the STB's recommendations and conduct
00:39:26its preemptive analysis and consider interpreting and applying CAA narrowly so as to avoid conflict
00:39:34with the ICCTA?
00:39:38Clearly, in the first blush, and I don't think it's 100 percent clear whether the STB alone
00:39:47in a court or the STB in the EPA alone could apply harmonization analysis.
00:39:51But the EPA certainly has the ability to look at the two statutes and decide whether one
00:39:56is in conflict with another, and we certainly would, if they asked me, I would advocate
00:40:01that they do that.
00:40:02Sure.
00:40:03Finally, in pursuing the regulation of locomotives via a waiver, EPA avoids statutes like the
00:40:08Congressional Review Act or the impaneling of the Small Business Advocacy Panel under
00:40:13the Small Business Regulatory Enforcement Fairness Act.
00:40:17Shouldn't a proposal of this consequence, at a minimum, be conducted as the Administrative
00:40:22Procedure Act rule so the CRA and the SBREFA apply?
00:40:28Well, as now a scholar of regulatory process, I strongly believe that significant actions
00:40:34like this should be done under the most Administrative Procedures Act process, which in this case
00:40:39would be to either do a full rulemaking, which would have notice and comment.
00:40:43Now, they did open a proceeding and people did comment, including many folks who are
00:40:48in the audience and myself, but that legal obligation to consider those comments and
00:40:52then to, again, have it be subject to the Congressional Review Act and cost-benefit
00:40:57analysis and many of the other portions of it would be different if it were a full rulemaking.
00:41:02So the more that it is a rulemaking, the more process there is and the stronger outcome
00:41:08it will be.
00:41:09Very well.
00:41:10Mr. Yao, California AGC is a member of the Rebuild SoCal partnership, which represents
00:41:162,750 contractors and over 90,000 union workers.
00:41:22This group wrote in opposition to the CARB rule for many of the reasons you stated in
00:41:27your testimony, sir.
00:41:29Would it be fair to say that the CARB rule jeopardizes the Barstow Gateway project in
00:41:33San Bernardino County?
00:41:36Yes, that's correct.
00:41:38That's a very large project that's planned by BNSF in that area.
00:41:44It's a big economic engine.
00:41:45It's one of the biggest mega-projects in the area and it's jeopardized by this.
00:41:52That's not what we should be doing here.
00:41:54I want to thank you all.
00:41:55I yield back the balance.
00:41:56I now recognize Ranking Member Wilson for five minutes.
00:42:02Thank you, Mr. Chair.
00:42:04Ms. Arias, communities living near railroads and rail lines, which are most often historically
00:42:12underserved communities, are routinely exposed to high levels of air pollution and emissions
00:42:20stemming from the burning of diesel fuels.
00:42:24In just your state, CARB estimates that reducing locomotive emissions would prevent 3,200 premature
00:42:33deaths and save $32 billion in health care costs.
00:42:39What are the steps that railroads could immediately make to reduce emissions in these communities?
00:42:48Thank you, ma'am.
00:42:49Yes, we are currently working with the rail lines.
00:42:54In fact, I want to actually applaud the Class 3 lines because they are taking immediate
00:42:59steps by, as mentioned earlier, applying for funds.
00:43:03They are coming forward.
00:43:05There are 200 Class 3 engines in our state.
00:43:0930 of those engines are currently under applications for state or federal fund.
00:43:16That is a great step to make progress immediately.
00:43:20There are other things that could be done as far as maximizing use of the newer engines.
00:43:26There are things like ensuring that the engines idle the least amount as possible.
00:43:32There are things like working to utilize cleaner technology in the other equipment that's at
00:43:40the railroads.
00:43:41There are things that can be done now.
00:43:43We've also ensured that there are different pathways in the regs so that if any one of
00:43:48the industries have a different idea that may actually incentivize cleaner technology
00:43:55sooner, they can come to us and work with us on an alternative compliance plan and get
00:43:59credit earlier, which allows for other opportunities later.
00:44:05Can you tell us or synthesize for us how important it is to reduce emissions from
00:44:13locomotives?
00:44:14Yes, ma'am.
00:44:15Thank you.
00:44:16As far as locomotives are concerned in California, the Clean Air Act, as I mentioned earlier,
00:44:22does have requirements for attainment across the state.
00:44:25The locomotives are one-third of our emissions necessary to meet that federal requirement.
00:44:33Outside of that, our state has also identified diesel as a toxics air contaminant in the
00:44:39late 90s.
00:44:41The diesel engines that are running throughout the state are contaminating the nearby neighborhoods.
00:44:47If this rule were to go into place, we would see a 90% reduction from the current diesel
00:44:54exposure to those communities.
00:44:57Thank you.
00:44:59Diesel emissions are known to create higher health risks, childhood asthma and cancer.
00:45:06Tier 4 locomotives have 90% lower particular matter emissions and 80% lower nitrogen oxides
00:45:15emissions than a Tier 2 locomotive.
00:45:18How many Tier 4 locomotives do Class 1 railroads operate?
00:45:24Great question, ma'am.
00:45:25We only have data from UP and BNSF regarding locomotives that come into the South Coast
00:45:32Air Basin.
00:45:33We do not know what their total national fleet is.
00:45:37They have mentioned that they have a lot of Tier 4s.
00:45:41They have said many of them are parked.
00:45:43We have asked multiple times how many they have, and we do not have that data.
00:45:47Well, can you tell us if railroads will be in compliance with this regulation if they
00:45:54operate Tier 4 locomotives or remanufacture existing locomotives to Tier 4 standards?
00:46:02If they operated Tier 4 locomotives, they would certainly make a huge dent in their
00:46:08requirement.
00:46:09Ultimately, over many decades, the goal is to transition to zero-emission operations.
00:46:16What could be done even today is a reconfiguration of their existing engines, so they wouldn't
00:46:23necessarily have to change the engine to a Tier 4.
00:46:28For example, if they're operating a Tier 1 or Tier 2, some of the much older engines
00:46:33that we discussed, they could reconfigure that engine because the locomotive you see
00:46:38that's going down the line is actually all electric.
00:46:42There is a smaller diesel generator on that train that's providing the power.
00:46:47They can reconfigure that to allow for zero-emission operation.
00:46:53There's tender cars or catenary that can do that.
00:46:56That could make that engine a hybrid engine, similar to what you've seen in cars for many,
00:47:02many years.
00:47:04That hybrid engine could operate in zero-emission operations in our state and even in other
00:47:11communities to remove or eliminate the diesel health exposure issue.
00:47:17That can happen today.
00:47:18Those technologies are available today.
00:47:20They're for sale today.
00:47:21Wow.
00:47:22Thank you.
00:47:23I yield back.
00:47:24The gentlelady yields.
00:47:25I now recognize Mr. Rausser for five minutes.
00:47:29Thank you, Mr. Chairman.
00:47:30Mr. Nobre, the California Air Resources Board claims railroads should do their part when
00:47:35it comes to emissions reductions, which sounds like a pretty subjective mission statement
00:47:41to me.
00:47:43Your testimony points out that if such regulations are necessary, then EPA should open a proceeding.
00:47:49Can you talk about why that's important and what the fundamental difference is between
00:47:52agency rulemaking and the waiver process is?
00:47:58A waiver process is, strictly speaking, what's called an adjudication.
00:48:03It's CARB coming in and asking for the agency to take an action with respect to that request.
00:48:10It's an understanding as if they were any other applicant for something.
00:48:17Parties go to agencies and ask for waivers of rules all the time.
00:48:21A notice and comment rulemaking is doing a rule of general applicability.
00:48:25That's one that is published in the Federal Register.
00:48:29This was too.
00:48:30You open a docket.
00:48:31The agency has an obligation to put out a notice of proposed rulemaking.
00:48:35They then have to take comments.
00:48:38They have to respond to every comment.
00:48:41Since it's EPA, if it's a major rule, it would have to go to OMB.
00:48:45It would have to have a cost-benefit analysis.
00:48:48Most importantly, I think a rule would be able to evaluate national impacts.
00:48:54The issue that I would have as a matter of practice here is that CARB, as a California
00:49:00state agency, its legal obligation, and I may be wrong, Ms. Arias may correct me here,
00:49:05but it's to look at impacts in the state of California.
00:49:10Let's say that the effect of this was to create mode shift so that ships would go farther
00:49:14and go to Houston or Savannah, and that more is going on truck, and that more cargo that
00:49:19is now going by rail through Southern California is going in other places.
00:49:24That might increase diesel emissions to people in other parts of the country.
00:49:27EPA in a rulemaking would have to look at that, and in a waiver proceeding, those kinds
00:49:32of questions would be discretionary, wouldn't automatically have to look at them.
00:49:37It's a much more thorough process.
00:49:39Absolutely.
00:49:40It certainly can be more time-consuming than a waiver process, without a doubt.
00:49:45Probably most stakeholders would be frustrated with the amount of time that most agencies
00:49:49took to do rules, but there's a plus and a minus to that.
00:49:53A Tier 5, a new national locomotive standard would probably take a significant amount of
00:49:59time longer because they would have to study different technologies, different feasibilities,
00:50:04and make a national assessment on overall, the ability to roll them out.
00:50:10Locomotives are difficult.
00:50:12I've seen one of the reasons probably there aren't that many Tier 4 locomotives is that
00:50:18they performed poorly in the beginning when they first came out.
00:50:21Only one manufacturer has ever been able to even produce Tier 4 locomotives.
00:50:24There's two locomotive manufacturers, and one of them was never able to produce a Tier
00:50:284 locomotive.
00:50:30The ones that have performed very poorly for many years, and so those become disincentives,
00:50:35I think, to carriers, perhaps investing more in them.
00:50:40Mr. Yao, I'll move it on slightly.
00:50:43What kind of supply chain disruptions is this going to cause, and what about the effect
00:50:48on inflation?
00:50:49How is this going to affect shippers?
00:50:55A lot of construction materials certainly come through rail, and any disruption into
00:51:00rail transportation traffic is going to impact our supply chain, both on the length of the
00:51:06projects because of delay times in getting the materials, as well as the cost of the
00:51:11materials due to the increased cost in transportation.
00:51:15What happens if there are disruptions in rail traffic is that that starts to shift towards
00:51:22truck traffic, which then has also impacts on cost, the timeliness, and honestly, there's
00:51:30a lot of shortage in the trucking industry currently already that we're experiencing
00:51:36that's just going to overload the system and cause more impacts to us.
00:51:40Thank you.
00:51:41Ms. Arias, I can't help but ask this question.
00:51:44I was in California a couple years ago, and the smoke from the forest fires, I mean, you
00:51:52could hardly see from one end to the other.
00:51:54Not a very pleasant environment to be in.
00:51:57I understand more than a million acres of forest in California is burned in recent years.
00:52:02Is this a focus of your agency at all?
00:52:05It just seems to me like you got a lot of carbon hitting the atmosphere, and if there
00:52:11were a few preventive measures that were put in place, you could prevent a lot of
00:52:16those forest fires from happening.
00:52:18I think if you looked at all the carbon from forest fires versus everything else, it wouldn't
00:52:22even be close.
00:52:25Any thought to that, or any studies, or any work on that front?
00:52:28Yes, sir.
00:52:29Thank you for the question.
00:52:30As a matter of fact, absolutely.
00:52:32The state is looking at all of the emissions, including forest fires.
00:52:38It has been such an important issue that our legislators have also been very involved,
00:52:42and lots of different actions have been passed.
00:52:44We are happy to follow up with you if that would be helpful, to provide a list of actions
00:52:48that the state has done, but absolutely a very critical reduction strategy, as all of
00:52:54this is.
00:52:55We have to make sure that we get reductions across the board.
00:52:59Mr. Chairman, my time has expired.
00:53:01Gentleman yields.
00:53:02I now recognize Mr. Moulton for five minutes.
00:53:07Thank you very much, Mr. Chairman.
00:53:09Mr. Olvera, I once worked for a smaller railroad than yours.
00:53:14Now I wasn't running the books.
00:53:15I was running engines and on a track crew, so I can't speak exactly to the numbers, but
00:53:22it seemed like the railway was barely scraping by, with, of course, hardly any help from
00:53:27the government, in stark contrast to the trucking industry, which runs on roads and highways
00:53:32entirely subsidized by the American taxpayer.
00:53:35You said that your railroad buys used locomotives, most of which don't meet these standards.
00:53:40What effect would buying brand-new Tier 4 or zero-emission locomotives have on your
00:53:45business?
00:53:46Sure.
00:53:47New Tier 4 locomotives cost millions of dollars apiece.
00:53:54Most short lines operate on locomotives that cost a few hundred thousand dollars apiece.
00:53:59My railroad actually purchased Tier 3 locomotives that were about a million and a half dollars
00:54:03apiece back in 2008 and have an extensive amount of usable life left.
00:54:08To be forced in a very abrupt timeline to scrap those Tier 3s and move to Tier 4s would
00:54:16require about a million, with federal and or state funding, would require about a million
00:54:21dollars from Power Railroad for each locomotive.
00:54:26With that, if we were able to comply, other safety-type projects, such as track enhancement
00:54:31and crossing enhancement, would have to be deferred in order to meet that standard.
00:54:37It would be very difficult to comply with.
00:54:39I'm actually amazed your railroad would still be able to stay in business, because there
00:54:42are a lot of railroads that simply wouldn't be in business if that were the case.
00:54:45You noted in your testimony that California short lines move about 260,000 carloads of
00:54:50freight annually.
00:54:51Each carload carries the equivalent of three to four trucks' worth of goods.
00:54:55This means that short lines in California alone keep about one million trucks annually
00:55:00off the highway.
00:55:01Is that right?
00:55:02Is that the right number?
00:55:03Yeah, that's correct.
00:55:05One rail carload typically equates to three or four truck carloads, and so 260,000 times
00:55:14three to four would be that number, north of a million.
00:55:18A lot of the short lines, just on an individual basis in the state of California, move thousands
00:55:23of carloads.
00:55:25My railroad moves 35,000 carloads annually.
00:55:28If those carloads were to be switched on truck and on our roads, that would result
00:55:33in about 120,000 trucks annually on the roads versus on rail.
00:55:38Will that increase emissions?
00:55:41Absolutely.
00:55:42Through congestion, traffic congestion, and current gas house emission percentages, trucks
00:55:50today emit 23% of greenhouse gas emissions, while railroads emit, in total, 2%.
00:55:59And short lines actually are a small fraction of the 2%, so emissions would immediately
00:56:03be impacted.
00:56:04The CARB report actually predicts the fall of the short line industry because of the
00:56:09prohibitive costs of the proposed regulations, noting it is possible some of these businesses
00:56:13would be eliminated.
00:56:15Cost burdens from the rule on small business operators could range from 42% to 208% of
00:56:22their annual revenues.
00:56:23You can't run a business when your costs go up 208% of your annual revenues.
00:56:29Ms. Aria, Europe is well ahead of the United States on climate policy, as I'm sure you
00:56:34well know, and their transportation policy is focused on mode shift.
00:56:40What does mode shift mean in this context?
00:56:43Yeah, we are not interested in shifting the freight from rail to trucks.
00:56:49We absolutely understand the necessity to have both modes in our state.
00:56:54We do have the largest ports in the nation.
00:56:57We are also a huge producer of agricultural products for the nation.
00:57:02We must have all modes of freight to be able to move all of that and serve the nation.
00:57:06Okay, but if you care about emissions, as Xerop does, you should know what their policy
00:57:11is with mode shift.
00:57:13And their mode shift policy is very deliberately to get trucks off the highways and move those
00:57:23freight moves to rail because it's more efficient, because it produces fewer emissions.
00:57:30So Europe, which is ahead of us on climate policy, and look, I'm a Democrat.
00:57:33I care about climate policy.
00:57:35I believe in the science.
00:57:37I want to reduce emissions.
00:57:39But if your rule shifts more traffic from rail to trucks, it will do the opposite of
00:57:46your intention.
00:57:48It'll actually raise emissions, which is why Europe has a policy explicitly in the opposite
00:57:52direction.
00:57:54So let's come up with a policy that shifts traffic off of trucks onto the railroads.
00:58:01It will not only be better for emissions, it'll be better for public safety because
00:58:04accident rates, deaths from accidents on rail are much smaller than by truck.
00:58:11That's the policy that we need.
00:58:13California is going to spend about $30 billion this year subsidizing highways.
00:58:20If you came up with a policy to electrify railroads, you might have a winner.
00:58:25But this seems like a loser to me.
00:58:27Mr. Chairman, I yield back.
00:58:30The gentleman yields.
00:58:31I now recognize Mr. Lamal for five minutes.
00:58:34Mr. Chairman, thank you for this hearing.
00:58:38You know, Ms. Arreaz, when you talk about early on in your conversation that within
00:58:46one mile of the tracks is 90 percent of the emissions, but can't we, don't we have to
00:58:52acknowledge when towns were first built and settled, they were either along the coast
00:58:58with ports, they were along rivers, and when, with the advent of railroads across the country,
00:59:04towns located right next to the railroad, because in any case, they want major sources
00:59:09of transportation to move freight, people, et cetera.
00:59:13And so kind of implied is what you're saying is that maybe all towns need to be at least
00:59:17a mile away from railroad tracks to not have emissions.
00:59:22And then you have to acknowledge too that sometimes the rails were there, sometimes
00:59:27the airport was there first, that property is cheaper next to those is not as desirable,
00:59:32and so they move homes in in those areas that only because they're cheap and people with
00:59:37lower incomes can afford to move into them.
00:59:39So whose fault is it really that people live near these areas, developers or people that
00:59:45choose to buy homes in these areas?
00:59:47We have to look at that on the other side.
00:59:49So, Ms. Arias, when you, when CARB fully acknowledges that people are going to go out
00:59:58of business, especially short line railroads, which are an important integral part of what
01:00:02the long lines can't do and what we don't, you know, what Mr. Moulton's even talking
01:00:06about, do we want to shift this to trucks?
01:00:09How can you, in good faith, develop a policy that you fully acknowledge is going to put
01:00:16an important sector out of business and at the end of the day, drive up emissions?
01:00:23How does that work?
01:00:24Thank you for the question, sir.
01:00:26As it relates to the analysis that we have in our report, that report does not take into
01:00:32account any sort of the incentive programs or other opportunities we might be able to
01:00:37work with the class three railroads.
01:00:40As mentioned earlier, there has been a significant application pool this year to help the class
01:00:45threes get to compliant engines.
01:00:48In addition, we intend to support them and work with them to continue to seek those fundings
01:00:54as we're moving forward.
01:00:55Okay.
01:00:56We're also specifically talking to each of the class lines individually and trying to
01:01:01determine what is the cheapest and easiest way for them to move through the regulation
01:01:06as well.
01:01:07Okay, let me stop you there because maybe there is no way for them to move through the
01:01:09regulation.
01:01:10There are small outfits.
01:01:11They don't make a ton of money in order to change this technology.
01:01:16Mr. Olvera or Mr. Nover as well, when they talk about availability of tier four engines,
01:01:23which my stats here show me if we're at tier four engines, if you just took a breath for
01:01:30a minute at CARB and let everybody come up to tier four, you've achieved 85 to 90% cleaner
01:01:36versus older technology.
01:01:37That sounds like a win to me, but you're already jumping ahead to five or six or all electric,
01:01:42and Ms. Arias, you're saying like, well, we can take this diesel engine out of a tier
01:01:47three or two or whatever, and we'll put this newer one in.
01:01:49You don't say that we're going to put a new diesel engine in.
01:01:52You're talking about putting an all electric thing that doesn't even exist yet.
01:01:56How does that work?
01:01:57Because I want Mr. Nover and Mr. Olvera to talk about that for a moment.
01:02:01How is the tier four availability of those engines coming along here?
01:02:07Can we even replace everything with tier four at this moment?
01:02:09Because Ms. Arias said that it was new technology as of about 2015.
01:02:14That's only a few years ago.
01:02:15We expect all these things have been changed to tier four by now.
01:02:18Tier four engines are limited in availability, and with locomotives or railroads requiring
01:02:25their locomotives to all upgrade in an abrupt timeframe, that limited inventory is going
01:02:30to be taken over very quickly.
01:02:33So we're jumping past tier four with this mandate, right?
01:02:38We haven't even filled out tier four availability.
01:02:40They want five or six or whatever number you want to call it, right?
01:02:43Yeah.
01:02:44There's very few locomotives in the short line industry that are at a tier four level.
01:02:49My railroad was one of the pioneers jumping to tier three engines starting in 2008.
01:02:54At the time, that was the best available or highest tier available, but tier four is just
01:03:00getting started.
01:03:01Well, it's a lot like the trucks in California.
01:03:02They say, hey, get up to this newest tier from 2011 or newer, and you'll be fine for
01:03:08a long time.
01:03:09Then, wham, they change the regs, and those trucks are going to have to be phased out
01:03:11by 2030.
01:03:12Same with people in good faith trying to do their locomotives.
01:03:15Mr. Nober, touch on that, too, please.
01:03:17With tier four availability and the massive 85%, 90% cleaner, if we were just all at tier
01:03:25four?
01:03:26Well, as I indicated before, when tier fours were first required, it took a long time to
01:03:33iron out the operational issues with them, and only one manufacturer has ever actually
01:03:40been able to produce working tier four locomotives.
01:03:42Currently?
01:03:43Currently.
01:03:44Currently.
01:03:45When they first came out, then again, there were many problems with them, and they kept
01:03:48breaking down.
01:03:49For a railroad, at least at BNSF where I used to work, they have to operate in Arizona and
01:03:56120 degrees in the summer in Montana and minus 50 in the winter on a 24 by 7 basis.
01:04:04If there's a failure, that becomes a significant issue in a network industry, and so reliability
01:04:08is a very important factor, I think.
01:04:11Thank you.
01:04:12And here we are jumping past a tier that isn't even ready yet with new regs, with non-diesel
01:04:16engines, right?
01:04:17I don't think that there are, I mean, again, I'm not a locomotive expert, but I don't think
01:04:23that there are feasible locomotives.
01:04:25I got to reclaim my time, sir.
01:04:26Thank you.
01:04:27I'm sorry about that.
01:04:28Yes, the gentleman yields.
01:04:29Thank you so very much.
01:04:30Mr. Carson, you're recognized for five minutes.
01:04:32Thank you, Chairman.
01:04:33Ms. Arias, opponents of California and EPA's clean air standards complain about the costs
01:04:40of compliance as a burden to business profits, but for a valid analysis, there should be
01:04:47a review of the benefits compared to the costs.
01:04:51Yet, I'm not hearing anybody really talk about the cost to human health and well-being in
01:04:58the long-term and short-term, especially of the damage of unchecked air emissions.
01:05:05This is especially a problem with disproportionately negative impacts on minority communities and
01:05:11minority works, quite frankly.
01:05:14Please describe some of the health dangers and costs of failing to fix these toxic emissions.
01:05:20Thank you, sir.
01:05:21When it comes to our regulation, there are multiple health impacts, including premature
01:05:28death, hospitalizations, asthma, lost workdays, on and on, heart issues, it goes on and on.
01:05:37When we did our regulation, we are required to provide an analysis to our board with all
01:05:43the information that we have.
01:05:45We were able to provide a cost of the rule to industry, which we've mentioned, of $13.8
01:05:53billion.
01:05:54We were also able to provide to the board of what we call a monetized health benefit,
01:06:00which is the cost to Californians on their health as we achieve the rule.
01:06:07We were able to calculate that the benefits of this rule would be $32 billion for Californians,
01:06:14so $13.8 billion cost to industry to comply, and we as Californians would save $32 billion.
01:06:23We also added into the rule a cost should the whole fleet have to turn over nationwide.
01:06:30That cost would be $86 billion is our best estimate.
01:06:34We do not have the data to be able to provide you and the other members what the monetized
01:06:39health benefits would be.
01:06:41If you could compel UP and BNSF to give that to us, we'd be happy to do that, but on our
01:06:46best estimate, we believe that this rule could provide $200 to $300 billion health benefits
01:06:57to the nation for just one line, one class, UP and BNSF, not all of them.
01:07:05Thank you.
01:07:06I yield back, Chairman.
01:07:08The gentleman yields.
01:07:09I now recognize Mr. Stauber for five minutes.
01:07:13Thank you very much, Mr. Chair.
01:07:15There's a consistent message from this administration that electrification is good for the environment.
01:07:20However, my good friend, Mr. Westerman, challenged Secretary of the Department of Transportation
01:07:25two weeks ago on whether it really is the most clean and efficient pathway forward.
01:07:33While Secretary Buttigieg and other elites can endorse electrification and feel good
01:07:37driving their EVs, it's really concerning that these people just shut their eyes and
01:07:43ears off to the world around them.
01:07:46Because electrification comes at a cost and the supply chain to get the end product is
01:07:53full of pollution and human suffering.
01:07:57I'm talking about child slave labor to get the cobalt for those batteries.
01:08:03We know with all question that 33 percent of the cobalt is mined by child slave labor,
01:08:08and that's a fact.
01:08:09Nobody disputes that.
01:08:10Fifteen of the 19 mines in the Congo owned by the Chinese Communist Party use child slave
01:08:17labor.
01:08:18Zero environmental standards and zero labor standards.
01:08:23While Secretary Buttigieg admitted that child slave labor in the Democratic Republic of
01:08:29the Congo for critical minerals needed for electrification is wrong, and he committed
01:08:35to eliminating such horrors in our supply chain, the Secretary has not once called on
01:08:43the President to restind the MOU with the DRC.
01:08:48It makes you wonder where the priorities really are.
01:08:51But I digress.
01:08:52But we really can't talk about electrification until we are willing to have an honest conversation
01:08:57about the supply chain in its entirety.
01:09:02Mr. Nober, you made an interesting observation in your testimony about the CARB rule, similar
01:09:06to the one I just made on electrification as a whole, that certain decisions can make
01:09:10one group feel like they're making a good decision, yet completely neglect the fact
01:09:15that it comes at a great cost.
01:09:18Can you speak about the increased emissions we would likely see as a result of this rule?
01:09:25Well, Mr. Stauber, I think that, you know, just to that point, CARB, when they did talk
01:09:33about the health benefits to Californians and the cost in California, and then estimated
01:09:39health benefits nationwide, which could only come if their regulations forced railroads
01:09:48to adopt those technology nationwide.
01:09:51The other alternative, though, is not to adopt technology that doesn't exist nationwide,
01:09:56but instead to divert cargo that currently goes through California to other states.
01:10:01So if cargo comes in and it goes by truck, that creates congestion.
01:10:05The congestion on both California routes and wherever else it might go is going to create
01:10:09pollution.
01:10:11And then if cargo goes on ships longer, it goes to the Gulf Coast and it goes to the
01:10:15East Coast or it goes to other states on the West Coast or to Mexico and Canada, then it's
01:10:20going to travel longer, and then those emissions have to be looked at as well.
01:10:25So yes, there are health benefits nationwide if everyone went if all locomotives were zero
01:10:30emissions, but there aren't nationwide zero emission locomotives.
01:10:34And my understanding is there's not going to be for a very long time.
01:10:37And instead, if you looked at increased truck traffic and increased rail traffic by other
01:10:42communities, would that offset the benefits?
01:10:45And that's what a nationwide rulemaking would look at.
01:10:47What is the effect of mode shift?
01:10:48And try to model that.
01:10:50I don't know what would happen.
01:10:51I'm just...
01:10:52Thank you.
01:10:53You have to look at that.
01:10:54Thank you.
01:10:55Mr. Olvera, when you saw the CARB analysis noting that there would likely be elimination
01:11:00of businesses like yours, what was your reaction and did the analysis feel flippant or apathetic?
01:11:06Yeah, I was obviously concerned for my railroad who employs 50 people in our community, but
01:11:12most of our customers employ thousands of folks in our community.
01:11:16And I think the elimination of a cost effective and efficient rail freight option to our shippers,
01:11:21our customers, would increase their cost and alter their businesses as well, possibly jeopardize
01:11:29job opportunities in our community.
01:11:33I would tell you that in just the last couple of seconds I have left, I think that Ms. Arias,
01:11:39Ms. Arias, you have a tough job selling California standards to the rest of the nation.
01:11:46I've been here going on six years and I want nothing to do with California.
01:11:53I've had an expert sit in that same chair and tell me in northern Minnesota that me
01:11:58and my constituents have to take more scooters to work.
01:12:04It's 35 below.
01:12:06We're not taking scooters to work and from work.
01:12:08This is the problem.
01:12:10We have one state that tries to force this upon our great nation.
01:12:15In fact, sometimes, oftentimes we look at California and do just the opposite.
01:12:20Just the opposite.
01:12:22I think there's, I really do believe you're well intentioned, but I don't agree with the
01:12:29philosophy and how you're going about it.
01:12:31Forcing, Mr. Olvera just said he would lose 60 workers if they shut him down and other
01:12:38tier one suppliers.
01:12:41This is about jobs and economy.
01:12:43And you know what?
01:12:44You can get, you can follow the rules, meet the emissions, and it will still not be good
01:12:50enough for some people.
01:12:51You will still punish those railroads and other small businesses across this nation
01:12:56that want to do right.
01:12:57And I yield back.
01:12:58The gentleman yields.
01:12:59I recognize Ms. Foshee for five minutes.
01:13:04Thank you, Mr. Chairman, and thank you to the witnesses for being here with us today.
01:13:10Recently, Innovative Rail Technologies announced that it will deliver the first of two battery
01:13:16electric switcher locomotives for operational use in Hertford County, North Carolina in
01:13:222024 as part of a public-private partnership between the county and the New Core Steel
01:13:28Corporation.
01:13:30Ms. Arias, can you speak to the current state of zero-emissions locomotives development?
01:13:36And how can, and can you also touch on ways the railroad industry can work with CARB if
01:13:41it cannot meet the timeline set by the current regulation?
01:13:45Yes, ma'am.
01:13:46Thank you.
01:13:47There are today zero-emission locomotives available to be ordered.
01:13:53And in fact, UP, BNSF have ordered them.
01:13:57There are, in fact, switchers available today.
01:14:01There's one operating in our San Pedro Port by PHL line, and in fact, they work with us
01:14:08to apply for four more.
01:14:11We know that today you can buy zero-emission tender cars so that you can do the reconfiguration
01:14:17that we talked about earlier.
01:14:19We know that catenary is available, and you can do the reconfiguration that we talked
01:14:23about earlier.
01:14:25There is zero-emission technology available today.
01:14:28We will continue to track it.
01:14:30We expect that it will continue to increase and costs will continue to go down.
01:14:34However, we also understand that that can be expensive.
01:14:38We understand that it may be harder for our smaller fleets like our class threes.
01:14:44We have built in several opportunities within the reg so that they can come talk to us,
01:14:50work with us on alternative compliance plans.
01:14:53If we are able to approve an alternative compliance plan, they will not have the spending
01:14:57account obligation.
01:14:59There's also an alternative fleet milestone option, which a lot of our passenger train
01:15:07fleets have noted that they will take advantage of.
01:15:09We believe it could also be an option.
01:15:11Same thing.
01:15:12If we are able to work with the fleets and figure out if that path works for them, they
01:15:18will not have the spending account obligation.
01:15:21We also have various extensions in the rule.
01:15:24We do have hardship extensions.
01:15:26We have extensions if the OEMs are not able to deliver on time.
01:15:30We have extensions for manufacturer issues, if any of the other parts they cannot get
01:15:36on time.
01:15:37We have extensions for infrastructure.
01:15:39Last, we have reached out to each and every operator in our state and are trying to work
01:15:45with them one-on-one to ensure the least cost, most health benefit option moving forward
01:15:52so that we can get to zero emission in the least costly way and continue to transition
01:15:58our fleet as we've done with all the other fleets.
01:16:02California has been able to transition our freight to zero in many cases, and we want
01:16:07to continue to do that, and we've been able to do it in a very successful economic way.
01:16:14The EPA introduced Tier 4 locomotives emission standards nearly two decades ago requiring
01:16:20that emissions of particulate matter and nitrogen oxide be reduced by about 90 percent from
01:16:27Tier 3 levels.
01:16:29Since then, Class 1 railroads seem to have avoided making substantial upgrades needed
01:16:34to reduce emissions with only approximately 7 percent of active Class 1 locomotives being
01:16:41Tier 4.
01:16:43Can you speak to why Class 1 railroad companies have failed to make the investments needed
01:16:48to improve locomotive emissions after the current federal standards were enacted?
01:16:53Thank you, ma'am.
01:16:55I wish I could speak to that.
01:16:57They have anecdotally told us multiple times that there are issues with Tier 4, yet every
01:17:02time we ask for any sort of data or information as to what those issues are, we've never been
01:17:09able to receive it.
01:17:10So we can't answer for you what they perceive to be the issues as it relates to Tier 4 engines.
01:17:17One final question.
01:17:19Emissions from the railroad industry in the form of carbon dioxide, nitrogen oxide, and
01:17:25particulate matter have significantly impacted the health of many vulnerable communities
01:17:31that live near rail yards and rail lines across the United States.
01:17:36What effect will carbs-induced locomotive regulations have on the lives and health
01:17:43of these communities?
01:17:44A similar question that has been asked by a couple of my colleagues.
01:17:47Yes, ma'am.
01:17:49Thank you for that.
01:17:51The communities that are directly within a mile of the rail lines and the rail yards,
01:17:5990 percent of those are disadvantaged communities, as you've mentioned.
01:18:05With this rule, the reduction of diesel, of 90 percent reduction, would reduce their
01:18:11cancer risk.
01:18:13On top of it, obviously when we're starting to look at the regional aspects, the emissions
01:18:18from these engines don't stay just within one mile, unfortunately.
01:18:23They do impact the whole basin.
01:18:26That's where we start to look at the premature deaths, the hospital visits, the lost workdays,
01:18:31all the other health benefits.
01:18:33But back to the communities that are within that one mile, they certainly, on top of all
01:18:38these other health benefits that we've mentioned, are a much higher risk of cancer due to this
01:18:45exposure to diesel every day and ongoing.
01:18:47Mr. Chairman, I yield back.
01:18:50Thank you.
01:18:51Mr. Johnson, you're recognized for five minutes.
01:18:53Mr. Chairman, I'd observed that a number of my colleagues have talked about railroads
01:18:58today in really dark, I think starkly dark terms, in essence saying that their existence
01:19:05is a symbol of historic oppression to people of color.
01:19:10And of course, I can't speak to everybody's experience or the experience of every community,
01:19:15but I can speak to my experience and the experience more generally of South Dakota.
01:19:20Growing up in Fort Pier, I grew up near the railroad.
01:19:24Growing up or living in Vermillion, living in Mitchell, living in Pier, in all of these
01:19:28towns, there was the railroad right close to my house.
01:19:33That wasn't a coincidence.
01:19:34That wasn't an accident.
01:19:36If you overlaid a historic map of where did the South Dakota towns go with where the railroad
01:19:42tracks had been built, you would find an almost perfect overlap.
01:19:46Every 10 miles, another town was formed because that's where the locomotives needed to fill
01:19:51up with water.
01:19:52People didn't move there because of oppression.
01:19:57They didn't view this railroad as a symbol of somebody hating them or trying to drag
01:20:00them down.
01:20:01They viewed the railroad as symbol of opportunity and economic activity.
01:20:08And I guess I just want to mention that to provide a little fuller picture of the historic
01:20:13impact of railroads on communities.
01:20:15Without railroads, there would be no South Dakota.
01:20:19In fact, in South Dakota, when you look at those communities, the densest communities
01:20:24of people of color, that would generally be on our Native American reservations.
01:20:28They are not well served by rail, and they are almost, without exception, seeking investments
01:20:33in rail because they do not view that rail as a symbol of oppression.
01:20:37They view that rail as economic opportunity to lift themselves and their communities up.
01:20:44I just want to make sure we provide a fuller context before we move on.
01:20:49So we have a proposed rule before us that would, I think almost ridiculously, cause
01:20:55Class 1 railroads moving goods from South Dakota into California to, once they reach
01:21:01the California border, to stop, take off that locomotive, and instead get a new zero-emission
01:21:07locomotive.
01:21:08A zero-emission locomotive, which, despite some of the other claims we've had today,
01:21:13let's be clear, are not widely available in the commercial sense today, and in fact,
01:21:17we don't really know when they would be widely available.
01:21:20This is all very aspirational.
01:21:23There's also been some discussion about this cost-benefit analysis.
01:21:27Ms. Arias, give us a sense of the $86 billion impact that your agency calculated.
01:21:35What number did that put on the delays that would be felt as secondary and tertiary impacts
01:21:41up the supply chain?
01:21:43Good question.
01:21:44We do not do analysis of secondary impacts to the supply chain.
01:21:50It solely calculates the cost should the UP and BNSF determine that they would need to
01:21:56replace the whole fleet.
01:21:57Okay, so let's be clear.
01:21:59The assumption of your analysis is that this is not a regulation that impacts California.
01:22:06It's a regulation that impacts the entire United States, or in essence, any place that's
01:22:11served by the UP and the BNSF, and I know, ma'am, you know enough about their networks
01:22:15to understand how incredibly far-reaching that is.
01:22:18They have mentioned that they do not prioritize a fleet within the state, so we understand
01:22:24that.
01:22:25Okay, so California is attempting to make a rule not that governs Californians, but
01:22:30that governs the United States of America.
01:22:32So I want to make sure that I understand what you said, ma'am, because your analysis had
01:22:37a zero cost to supply chain impacts.
01:22:42I want to make sure I'm understanding what you said.
01:22:43Did you say that there's not a single instance of a Class 1 railroad providing you any information
01:22:50on the challenges of securing Tier 4 locomotives?
01:22:53Is that accurate?
01:22:54Not a single instance?
01:22:56They have not given us any data to indicate what the actual issues are.
01:23:00They have anecdotally told us that there are issues with Tier 4, but every time we ask,
01:23:04we are not given the data as to what the issues are.
01:23:07Okay, so they have not been forthcoming at all.
01:23:10They just speak in generalities.
01:23:12They have not.
01:23:14So if your evidentiary record is that thin, ma'am, how can you possibly promulgate this
01:23:21far-reaching rule that by your own admission governs America?
01:23:27I would just, I would hope my colleagues, now listen, we don't do it perfectly either,
01:23:32but I would hope we would have a little bit heftier evidentiary record before we decided
01:23:37to govern our country with such a far-reaching decision.
01:23:41Mr. Noble, let's turn to you.
01:23:42I've talked a little bit about the constitutional sort of preemption issues.
01:23:47In 30 seconds, sir, what can you tell us?
01:23:51Well, as I talked about in my testimony, the Interstate Commerce Act is intended specifically
01:23:57to preempt not just state regulation of rail operations, but other federal laws that have
01:24:02the effect of impacting rail operations and regulating them, and that's what would happen
01:24:06here.
01:24:07So you would either have to, the California actions would be, in my opinion, clearly preempted,
01:24:13and if the EPA authorized them, it's really to authorize in use in the state of California,
01:24:18they would have to declare an emergency.
01:24:19They would have to show that there were some other standards that they would have to meet.
01:24:23And then at the same time, they would also have to show that that could be harmonized
01:24:28with the Interstate Commerce Act, which I don't think they could.
01:24:31And just if I could add one more thing, in addition to towns being 10 miles apart in
01:24:34South Dakota, major towns are probably 90 miles apart, because that's how far you had
01:24:38to service a steam locomotive.
01:24:41I yield.
01:24:42The gentleman yields.
01:24:43I now recognize Mr. Desanier for five minutes.
01:24:45Thank you, Mr. Chair.
01:24:48This brings back some fond memories of when I served, I'm sorry, I don't know if you were
01:24:52there when I was on the Air Resources Board.
01:24:54I was, sir.
01:24:55Nice to see you again.
01:24:56Nice to see you.
01:24:57I was a Republican then.
01:24:58I was appointed by Pete Wilson and served under three governors, two Republicans and
01:25:03a Democrat.
01:25:04And that was in an age where there was a different perspective, at least in the California Republican
01:25:09Party and reminded that Richard Nixon signed the U.S. Clean Air Act and Ronald Reagan,
01:25:15Governor Ronald Reagan, signed the California Clean Air Act, which governs all of this that
01:25:20we're talking about.
01:25:21So U.S. EPA, their standard reads, according to the Clean Air Act signed by Richard Nixon,
01:25:29section 209, state standards, EPA shall grant an authorization under section 209 unless
01:25:36the administrator finds that California, quote, was arbitrary and capricious in its finding
01:25:42that its standards are in the aggregate at least as protective or of public health and
01:25:47welfare as applicable to federal standards.
01:25:51Number two, does not need such standards to meet compelling and extraordinary conditions
01:25:57or the California standards and accompanying enforcement procedures are not consistent
01:26:02with this section.
01:26:03Ms. Ruiz, obviously, you and your attorneys feel like you've made that criteria.
01:26:07Yes, sir.
01:26:09We have put it in writing multiple times as to what we believe we have and how we have
01:26:16met those specific requirements.
01:26:20Certainly this has not been an arbitrary effort.
01:26:22As you are very aware, we were working on trying to reduce emissions from rail even
01:26:27when you were on the board.
01:26:29This particular rulemaking has taken over six years to be able to bring to the CARB
01:26:35board for consideration.
01:26:38Certainly the South Coast and San Joaquin air basins as well as long as the toxic diesel
01:26:42contamination warrants and requires this legal action by us for the state.
01:26:49We have, in fact, believe met all of the requirements as necessary and encourage EPA to approve
01:26:56our authorization as soon as possible.
01:26:59Can you speak a little bit to the public health benefits of the rule?
01:27:02Absolutely.
01:27:03The health benefits themselves are going to be a monetized health benefit of $32 billion
01:27:11just for the state of California.
01:27:13That compares to the $13.8 billion that we assume will cost industry.
01:27:17As you know, those costs are very conservative.
01:27:19They definitely could do it cheaper, but we don't want to underestimate.
01:27:25The monetized health benefits are also not all the benefits we know we will achieve.
01:27:31There are other benefits like cancer reduction that we are not currently able to monetize.
01:27:37All we can do is tell the board how much we will reduce the exposure, which in this case
01:27:41is 90%.
01:27:43In reality, the monetized health benefits are certainly a lot higher.
01:27:47We just don't have the data to be able to provide that to the board.
01:27:49You are required to do those cost benefits, as I remember, during Republican administrations
01:27:54by the California Clean Air Act.
01:27:56Yes, we are.
01:27:57It is reviewed by the Department of Finance independently before we take it to the board.
01:28:01In terms of the questions, with all due respect to my friend, the chairman, we already did
01:28:05that.
01:28:06I would have applied a higher level that would have been done under the federal law.
01:28:12I remember years ago sitting in hours in Southern California in the valley on the diesel train
01:28:19idling rule and the EJ issues that the ranking member has brought up.
01:28:23I remember a quote at those hearings saying, you could have spent money on compliance,
01:28:28meaning the industry, or you could have spent money on lobbyists and lawyers.
01:28:34I would add a caveat to campaign contributions.
01:28:39What strikes me is what's going on here.
01:28:42Yes, there is a burden to the industry.
01:28:43I recognize that as a former small business owner.
01:28:47The cost, to my mind, is long overdue.
01:28:49The valley particulate matter has been amongst the worst in the country.
01:28:53You made a comment in your opening comments about carbon.
01:28:57Yes, that carbon is true, but particulate matter is what kills people.
01:29:02People die because of these emissions.
01:29:03The trucking industry didn't want to do it either.
01:29:05It took a long time.
01:29:06I remember sitting in those long hearings where the truckers drove around the EPA building
01:29:11in Sacramento for hours.
01:29:12It was hard for small truckers, but we had them do it.
01:29:16It only seems fair to me for those people who have invested as other stakeholders in
01:29:23dealing with the public health issues and the cost of their business that you are required
01:29:27to do it.
01:29:28Mr. Reyes, just quickly, I have four refineries in the county I represent.
01:29:32Two of them are changing to biodiesel.
01:29:35How soon can we expect that as a fuel that would help with this?
01:29:38We actually have been working on some data as it relates to drop-in fuel opportunities
01:29:44for the rail lines.
01:29:46We are interested in looking at that a little bit more.
01:29:49Again, it gets back to the alternative compliance plan option.
01:29:53None of the rail yards or none of the rail lines have come in and said that they're interested
01:29:58in that, but we certainly are interested in something that can be used now to achieve
01:30:01those additional reductions.
01:30:03Mr. Chairman, I'll just comment.
01:30:04The petroleum companies believe they do have a model to comply and have biodiesel that
01:30:10will work in these locomotives.
01:30:13The gentleman yields.
01:30:15I now recognize Mr. Mann for five minutes.
01:30:19Thank you, Mr. Chairman.
01:30:20Mr. Chairman, thanks for having this hearing.
01:30:21This has been very eye-opening.
01:30:23This is why we do this.
01:30:25You read the materials ahead of time, but it is very eye-opening to me to hear that
01:30:29there's a regulation that's trying to be rolled out in California that there's no way to comply
01:30:34with.
01:30:35Meanwhile, the intentions seem to be to roll this out to the rest of the country of great
01:30:40concern, and that's why we need to have this hearing.
01:30:44I represent a big ag district in Kansas.
01:30:47Kansas is home to 14 individual freight railroads that connect our manufacturers, our farmers,
01:30:52our producers, and our national resources to domestic and foreign customers.
01:30:57Kansas is home to a robust series of short-line operators, with my district alone containing
01:31:02seven operators and 1,777 miles of track.
01:31:06Not 1,776, 1,777 miles of track that facilitate rural communities, terminal operations around
01:31:14the Kansas City area, and the agriculture industries.
01:31:17Combined, these railroads have nearly 40 million tons of freight across Kansas annually and
01:31:22serve as an economic driver for our economy.
01:31:26Railroads across Kansas have been important rail hubs for more than a century, and the
01:31:30implementation of the CARB rule would jeopardize the reliability and affordability of freight
01:31:35rail transportation and disrupt our supply chains in Kansas.
01:31:39It was mentioned earlier, and I think we've got to not overlook the fact that this rule
01:31:44will be inflationary, and there's all this talk about inflation, but one of the reasons
01:31:48is all of these rules and regulations that we have that just drives up costs, this will
01:31:53be inflationary and will be passed on to consumers.
01:31:57A few questions.
01:31:59First couple for you, Mr. Olvera.
01:32:02Please elaborate on the harmful effects that this rule will have on short-line operators
01:32:08for you, and then if it's rolled out nationally, and specifically, will this rule jeopardize
01:32:13short-line operators' ability to stay in business?
01:32:18So I'll first speak to California short lines.
01:32:22The typical California short line is a very small business, small operator, operates on
01:32:27very thin margins.
01:32:30To propose, even with state and federal funding, to upgrade their locomotives to the level
01:32:37that the CARB rule is requiring in such an abrupt period of time, they just financially
01:32:42can't do it.
01:32:43They will go out of business.
01:32:46Using those types of efficient and cost-effective freight options will take their customer's
01:32:51product to be moved at a much higher cost, and that absolutely would pass on a higher
01:32:56cost to the end user, to the customer.
01:32:59For my railroad, we would essentially, in order to comply, have to use all of our capital
01:33:06expenditure dollars, hopefully coupled with federal funding, to transfer and upgrade our
01:33:15current 11 locomotive fleet to Tier 4 fleet.
01:33:19What that does is it jeopardizes the other capital expenditure projects that we would
01:33:23have in place.
01:33:24Most of the projects that we deal with are crossing-related and track-related.
01:33:31Crossing-related, you jeopardize the safety of the public.
01:33:35Thousands of cars in our community go over those crossings, jeopardize the safety of
01:33:39our employees.
01:33:40On track upgrades, typically, we're upgrading those tracks to handle heavier loads and to
01:33:47help get rid of the potential derailments.
01:33:52The feedback I'm getting from short-line railroads that operate in Kansas is exactly that.
01:33:57These are high-capital, low-margin businesses.
01:34:01When you suck up all of their capital improvement dollars going towards just upgrading locomotives
01:34:07instead of making safety improvements on the track and other expansion, there's a cost
01:34:12to that for the overall society.
01:34:15I appreciate that.
01:34:17By the way, short-lines are telling me in Kansas, if this rule goes into effect, they
01:34:20will go out of business, which means all of our farmers and ranchers that are producing
01:34:27crops aren't going to have railheads to take their crop to, which means it's going to have
01:34:33to be trucked, which means more trucks on the road.
01:34:36If your only metric is the environment, it will be bad for the environment, not to mention
01:34:39the fact it's going to dramatically increase our food prices.
01:34:43We've got to be thoughtful about these regulations.
01:34:46Quick question for you, Ms. Arias.
01:34:48You said earlier that you had no interest in mode shifts from rail to truck.
01:34:55Won't this rule do just that?
01:34:57We don't believe so.
01:34:59We have looked at various analyses of mode shift.
01:35:05We've looked at various analyses of deferment of freight to other ports.
01:35:11We believe there is enough profit margin from a container moving on rail to allow for the
01:35:19upgrade of the technology.
01:35:22We also are very aware that there is almost a doubling of the amount of freight that is
01:35:28being projected to come through, and so we'll need all modes, but we need them to go together.
01:35:32Did your analysis look into the safety concerns of this?
01:35:34In other words, when railroads have to divert so many capital dollars to upgrading their
01:35:40engines away from crossings and other things, did the safety aspect of this hit your analysis?
01:35:46It did.
01:35:47It did come up.
01:35:48The railroads provided that information to us, as well as provided it directly to our
01:35:53board.
01:35:54I think I see my time has expired.
01:35:56Thanks, Mr. Chairman.
01:35:57I yield back.
01:35:59Thank you.
01:36:00The gentleman yields.
01:36:01Thank you.
01:36:02Mr. Carter for five minutes.
01:36:03Thank you, Mr. Chairman, and thank you to our witnesses for joining us today.
01:36:06My district in southeast Louisiana, at the mouth of the Mississippi River, is a critical
01:36:11point for our national commerce.
01:36:14It's home to the Port of South Louisiana, one of the nation's leaders in total tonnage,
01:36:19as well as the Port of New Orleans, the only deepwater port served by all six Class 1 railroads.
01:36:27Along with their neighboring deepwater ports near the end of the river, they account for
01:36:32approximately 70 percent of our nation's grain exports, among other critical items.
01:36:39Continued rail operation through these ports is critical for both the local economy and
01:36:44the nation at large.
01:36:45However, we bear the scars of industry and commerce.
01:36:50While I completely support industry, we must continue finding ways to make it safer, cleaner
01:36:57for the people that live in its close proximity.
01:37:00I live in an area that unfortunately is sometimes referred to as, I represent rather, an area
01:37:05that's sometimes referred to as Cancer Alley, a distinction that we don't like, a distinction
01:37:11that we'd like to correct because of the large amount of petrochemical plants and industry
01:37:18and activity in that area.
01:37:21Neighbors are forced to live with things that many other neighbors are not.
01:37:25We know that many of these plants and entities that emit problematic carcinogens or problematic
01:37:35particulates are situated in poorer communities, communities of black and brown.
01:37:43While I support trade and commerce, it cannot continue to be at the expense of the health
01:37:50of our communities.
01:37:52I'm committed to working with both industry to make sure that we have strong economies,
01:37:59but also making sure that we have healthy communities that are economically prosperous.
01:38:05So my question, Ms. Arias, freight train routes run through or parallel to communities of
01:38:12color and low-income communities, which bear disproportionate health burdens due to their
01:38:17proximity to toxic emissions from locomotives.
01:38:21However, according to the EPA, Tier 4 locomotives have 90% lower particulate matter emissions
01:38:27and 80% lower nitrogen oxide emissions than Tier 2.
01:38:33How have communities in California been impacted by the close proximity to these rail yards
01:38:38and rail lines, and how might this change with implementation of cleaner locomotives?
01:38:43Yes, sir.
01:38:44Thank you for the question.
01:38:47Our communities, very much like your community, we see that 90% of the communities within
01:38:54one mile of our rail lines and our rail yards are our disproportionate communities of color.
01:39:02They are at higher risk of cancer.
01:39:06They are at higher risk of other health impacts associated with these diesel engines.
01:39:14All of our communities within the non-attainment areas are also impacted because this pollution
01:39:20does not stay local.
01:39:21It does go regional, also global issues.
01:39:25From our role alone, we're hoping to be able to save 3,200 premature deaths.
01:39:30We're also hoping to save 1,500 ER visits and hospital visits.
01:39:35There are other benefits, as I mentioned earlier, a 90% reduction in exposure to these
01:39:43communities from this diesel toxic.
01:39:47Is there a safe threshold for which people can breathe particulate matter?
01:39:54There's absolutely no safe threshold to diesel, which is why we need to transition to zero
01:40:00emission operations.
01:40:01So when we talk about lowering, we talk about modifying, none of it, none of it is acceptable.
01:40:07No.
01:40:08Is that correct?
01:40:09That's correct.
01:40:10And while commerce is clearly important, and while industry is clearly important, nothing
01:40:15trumps the health of a community because if you have an unhealthy community, you cannot
01:40:19have a healthy economy.
01:40:26Mr. Olvera, you mentioned that Rail Line was the recent recipient of a CRICI grant
01:40:32funding to upgrade your locomotives to low emitting tier four vehicles.
01:40:36The CRICI program is now four times larger than before due to investments from the program
01:40:40of the bipartisan infrastructure law.
01:40:42Would you like to continue to see the program funded at the same level going forward?
01:40:47What would that mean for operators like you who are trying to lower their emissions?
01:40:51First off, it's essential for CRICI funding to continue and hopefully continue even at
01:40:56larger levels.
01:40:57So that's a yes, you do support it and you'd like to see it at higher levels?
01:41:01Absolutely support CRICI funding.
01:41:02The short answer for us is that we're unable to comply with the CARB rule without the assistance
01:41:09of CRICI funding.
01:41:10Even with that, it's a big financial burden on our company and like I mentioned, other
01:41:15short lines just won't be able to comply.
01:41:17It is estimated that short lines in the nation have about $12 billion of needed funds to
01:41:23upgrade infrastructure, rail assets, and modernize their railroads.
01:41:30In the most recent CRICI funding, there was a few hundred million dollars that were allocated
01:41:34to short lines, which is much appreciated, but you can see the discrepancy between the
01:41:39current funding and the ultimate need.
01:41:41We need more often and more of it.
01:41:44Some of my colleagues intimated that they were concerned about these regulations threatening
01:41:49to possibly shut you down.
01:41:51If you did not have access to CRICI funds, would that likely threaten you even further
01:41:58to being in demise?
01:42:00Absolutely.
01:42:01I'll use an average of a new tier four locomotive costs several millions of dollars.
01:42:07When we recently applied and was awarded CRICI funding, our portion is approximately a million
01:42:13dollars.
01:42:14But on a standalone basis, if my railroad had to pay four plus million dollars for each
01:42:18of our 11 locomotives to be upgraded, it's just not feasible.
01:42:22We wouldn't be able to comply.
01:42:23My time has expired.
01:42:24Thank you, sir.
01:42:25I yield back.
01:42:26The gentleman yields.
01:42:27I now recognize Mr. Yacoub for five minutes.
01:42:28Thank you, Mr. Chairman, and thank you to our witnesses for being here and for the time
01:42:33to sound the alarm and sound the alarm bell on this important issue.
01:42:37One of the reasons I love our system of government is that it empowers states to be laboratories
01:42:42of democracy, to experiment with new policies and see what works.
01:42:47My home state of Indiana has a proud tradition of innovative thinking that's allowed us to
01:42:52not just craft policies that work best for Hoosiers, but even to export some of these
01:42:57ideas to other states or even to the federal level.
01:43:00The Railroad Crossing Elimination Program is a great example of us doing just that.
01:43:06California is a state based, blessed with natural beauty and fertile agricultural land,
01:43:12but its laboratory has been littered with, frankly, terrible ideas.
01:43:17It spent $24 billion to fight homelessness over the last five years, but has no data
01:43:22on whether the money actually reduced homelessness.
01:43:26California's high-speed rail boondoggle was initially estimated to cost $33 billion, but
01:43:31nearly 20 years later, there's still no timeline for completion, and it might need another
01:43:35$100 billion.
01:43:37Its defund the police policies have hollowed out once-bustling city centers, and it managed
01:43:41to turn a $100 billion budget surplus into a $45 billion deficit in just two years.
01:43:48That might be a record.
01:43:50What I don't want, and what Hoosiers in my district don't want, is to be subject to yet
01:43:56another one of California's unworkable, radical climate mandates.
01:44:01Mr. Nover, CARB has said that class one railroads like Union Pacific and BNSF will likely pass
01:44:08on the cost of compliance, which is upwards of $800 million per year, quote, across the
01:44:15nation.
01:44:16But CARB also argues that this mandate will only apply to California.
01:44:20Doesn't the fact that the cost will be spread beyond California mean that this rule impacts
01:44:25interstate commerce and is therefore preempted?
01:44:29Well, I don't think there's any question that a rule impacts interstate commerce is in fact
01:44:34preempted, and I think much of the discussion you've heard today has been about the hope
01:44:38for national impact of this.
01:44:41That is, while maybe well-meaning, is exactly what this committee prohibited when it passed
01:44:47the Interstate Commerce Commission Termination Act and set the law out.
01:44:51Now, the fact that the cost would be spread nationwide and the benefits would be local
01:44:57is probably further evidence of the fact that this is an interstate network system and one
01:45:04that is very difficult to have stop at the state border, the same way that aircraft can't
01:45:08stop at the California state border and switch out their engines, just because that's just
01:45:13not the nature of interstate systems like this.
01:45:17Thank you.
01:45:18And Mr. Olvera, CARB argues that freight rail operations like you should just raise rates
01:45:23to compensate for this new mandate.
01:45:25As a shoreline operator, can you tell me what this mandate means to you, your company,
01:45:30and your workers in terms of inflation and employment?
01:45:33Yeah, so my railroad is a handling carrier.
01:45:38We receive our freight rates from our class one operators, so through contract provisions,
01:45:44our shoreline doesn't have the ability to raise rates to cover CARB regulation costs.
01:45:50We have no ability to do that.
01:45:53And the increase in rail freight, if it happens from this CARB rule, which it's been said
01:45:59that it will absolutely happen, then our market competitors, trucking, would have more of
01:46:04an advantage against the railroad and further hurt our business and our ability to achieve
01:46:09profits and growth.
01:46:11Thank you.
01:46:12And Mr. Yall, do you generally agree with Mr. Olvera's assessment?
01:46:15Yes, I do.
01:46:16In fact, the point about these costs, their ability to do capital improvements, safety
01:46:25improvements, and operational improvements, and those budgets going to this instead of
01:46:31going into, from our side, the construction jobs and projects that we rely on, that is
01:46:40also a very real issue.
01:46:42And like Mr. Olvera said, it's just going to shift over to trucking.
01:46:48That's all that's going to happen.
01:46:49Thank you.
01:46:50And Mr. Olvera, is this technology mandated by this rule readily available and feasible
01:46:54for shoreline railroads to acquire?
01:46:57Did you say electric vehicles?
01:46:59For shoreline railroads to acquire.
01:47:01Is the technology readily available and feasible for you to acquire?
01:47:04So first off, on the Tier 4 side, there's one U.S. manufacturer, Cummins, and those
01:47:11engines are limited in inventory manufacturing, and as railroads rush to upgrade, that inventory
01:47:17is going to be depleted.
01:47:19In terms of battery-charged locomotives, those are in prototype stages, as it was called
01:47:26out earlier.
01:47:27There might be a railroad that has one or two and some version of testing, but in terms
01:47:32of it being commercially available, that is not the case.
01:47:35First off, for the concept of a battery-charged locomotive, that requires maybe 24 hours
01:47:42of charging for eight hours of use.
01:47:44My diesel engine runs 24-7.
01:47:46So if I were to replace a diesel engine with a battery-operated locomotive, I may need
01:47:50two or three battery-operated locomotives to accommodate that change with a further
01:47:56larger cost and a limited ability to comply.
01:48:00And finally, it would be accurate to say, then, that they are mandating that you buy
01:48:04something that does not yet exist.
01:48:06That's correct.
01:48:07Thank you.
01:48:08Mr. Chairman, I yield back.
01:48:09The gentleman yields.
01:48:10I now recognize Mr. Berlinson for five minutes.
01:48:12Thank you, Mr. Olvera.
01:48:16The freight rail industry is the most fuel-efficient way of transporting goods across the country.
01:48:23And as we've heard today, even Republicans and Democrats agree that it's the cleanest
01:48:29form of transportation in the country.
01:48:32One would think that we would want to encourage a migration towards – anyone who would care
01:48:39about the environment would want to migrate, would want to move freight to rail.
01:48:46Why do you think that – what do you think is the real motivation behind this mandate?
01:48:54I think one of the biggest issues with the mandate is that there haven't been data
01:49:01analyzed for those who are impacted to truly understand all of the impacts of this Cleaner
01:49:07Air Initiative.
01:49:09Short lines in mine included are not opposed to cleaner locomotives, but the timeframe
01:49:15in which we're asked to do this and before certain technology is commercially available
01:49:20is just not a possibility for us to comply.
01:49:24So I think – so, yes, we're all for – So you're saying this is out of a motivation
01:49:30of an idealistic pipe dream?
01:49:32That's what I would call it.
01:49:33It's aspirational at best.
01:49:34Everybody would be for it, but the way to get there is not what's being proposed in
01:49:37the carburetor.
01:49:38I would say the efforts are delusional at best.
01:49:42So let me ask it in a different way.
01:49:46These efforts are almost so extreme, one might – it has me wondering if there's some
01:49:52rent-seeking occurring.
01:49:54If companies – the few companies that make these class – these tier 4, class 4 engines
01:50:01like KLW, Siemens, EMD, Brookville, I wonder, do they have a relationship with the California
01:50:08Air Resource Board?
01:50:10I'm uncertain what to ask the carb representative, but I'm not – I can't speak to that.
01:50:17But you're saying – so to get a better idea, the cost – I see what's frustrating
01:50:23and Mrs. Arias, I'm not asking a question, I'm just talking to you – is that what's
01:50:28absurd is what California doesn't see that's happening.
01:50:32Across the country, states like Missouri are receiving people who are fleeing like refugees,
01:50:41this draconian state, to the tune of hundreds of thousands of people a year.
01:50:47They're coming at a net loss.
01:50:49California is reducing its size.
01:50:51And why?
01:50:52Because the costs of living are outrageous compared – the most expensive state in the
01:50:58contiguous 48, whether you're talking – at all factors, transportation costs, the most
01:51:03expensive state, housing costs, food costs, everything is more expensive in California,
01:51:11and all you have to do is look at the people that are regulating the hell out of the costs.
01:51:16So Mr. Nover, one might wonder, if you're trying to improve the supply chain, if you're
01:51:21trying to reduce costs, would this be a good avenue to do that?
01:51:28Well, I would come back to the point you made a little bit earlier, Congressman, which is
01:51:33that it's requiring the adoption of technology by a date certain that doesn't exist.
01:51:39And what winds up happening is that that deters the adoption of new technology because businesses
01:51:44don't know if what they're buying is going to be able to – they're going to amortize
01:51:48it over its useful life.
01:51:50And so, you know, I think Mr. Olvera spoke earlier about having bought Tier 3 locomotives
01:51:54and halfway through their useful life, they're now going to be not useful and have to upgrade
01:51:59to Tier 4, and I think folks looking at this regulation might say, why would we invest
01:52:04in any – I'm just speculating, but why would we invest in any locomotive until there
01:52:08are working zero-emission locomotives that are operable in the demands of freight rail,
01:52:13which is 24 by 7 by 365.
01:52:17And the technological hurdles for that are significant, and I don't think there is an
01:52:22end date for when that kind of technology will be available.
01:52:28And you know, the sad part is that the reach – you have these refugees who have migrated
01:52:33to states like Missouri and fleeing all of this regulatory state, and yet now the arm
01:52:40of these California regulators are going to impact people across the United States financially.
01:52:49I think that's the – that will be one – either a goal or certainly an effect of
01:52:53the regulation.
01:52:56Thank you.
01:52:57My time has expired.
01:52:58Back.
01:52:59I now recognize myself for five minutes.
01:53:04Well, Mr. Olvera, let's start with you, my fellow Modestoite.
01:53:10How long have you been in Modesto?
01:53:13Pretty much all my life.
01:53:14Fantastic.
01:53:15You look a little younger than me.
01:53:18Remember a few things in Beard Industrial Tract where you worked that aren't there
01:53:21anymore.
01:53:22I know Tri-Valley Growers has been reformed as signature food products.
01:53:28Signature Foods, another major cannery for peaches, is gone.
01:53:32Del Monte is still there, but we're losing them.
01:53:36I mean, in fact, I just pulled up – you know, my grandfather was a peach grower right
01:53:41there along the highway – right there along the Santa Fe Railroad lines.
01:53:44I didn't like the train whistles, but I never felt as dying from them.
01:53:49I think we've been on that property for five generations, right a mile away from the
01:53:53Beard Industrial Tract as farmers.
01:53:56And we're losing a lot of commerce in Modesto.
01:54:00We're losing it.
01:54:01And it's sad because, as we know, Modesto's got the Modesto Irrigation District, the second
01:54:05oldest irrigation district in the state – 1889, I think it was formed, right after Turlock
01:54:13in 1888.
01:54:15We've got hydroelectric power.
01:54:16We've got fresh surface water.
01:54:18We've got the infrastructure of both the railroads that you serve, to the east and to the west
01:54:22of you, which is critical.
01:54:24And that's why we have the largest canneries, the largest wineries, the largest spaghetti
01:54:28sauce makers.
01:54:29We've got the highest tech Frito-Lay plant.
01:54:32Everyone out there saw the Tesla trucks and all the...
01:54:35But right now, the United States produces 0.66% of the world's canned peaches.
01:54:43It's fallen 16.99% in the last year.
01:54:48And Brazil and Netherlands have gone up.
01:54:52Now, I've always taken pride that Modesto feeds the world.
01:54:56I've taken pride that we have a local food system.
01:55:00Is cutting the last speck of emissions a bigger health priority than a diverse, nutritious
01:55:09diet for Americans, especially if locally or domestically produced, food-secure, domestic
01:55:15diet for Americans, working families especially?
01:55:20I ask that rhetorically to someone.
01:55:22No.
01:55:23We're giving up enormous food resources out of America because of these onerous, idiotic
01:55:30regulatory programs.
01:55:31And Mr. Nober's done a good job today explaining how by doing this through a waiver, this is
01:55:35establishing national policy that disrupts our food supply in one of our most critical
01:55:39food-producing regions in the nation while avoiding the due process that we normally
01:55:46afford.
01:55:47If we had due process, we could take into account the dietary needs of American families
01:55:54and balance them against the air quality needs of American families.
01:55:57But we chose, we chose not to do that because we found a loophole, right, Ms. Arias?
01:56:04Wasn't this convenient, not to have to weigh these matters?
01:56:08No, that is never our intention to ignore impacts associated with the rule.
01:56:16And as we go through our six-year process, we're always interested in any of the impacts
01:56:20associated with our rules.
01:56:22A six-year impact where we know that tier four engines are going to be able to reduce
01:56:26nine-tenths of the air emissions that the tier zero did that Mr. Oliveira invested.
01:56:31You invested in tier three and now you're getting your first tier fours.
01:56:34Yes.
01:56:35We are saying, well, we're agnostic as to whether we go from rail to truck or not, even
01:56:39though trucks are 3X the emissions per ton of food delivered per mile as rail.
01:56:45But in California, we also know if we'd had a full, transparent public policy process
01:56:50and hearing on this, we'd know that California's not building freeways.
01:56:57Highway 5 was built when I was born in 1966.
01:57:00It's two lanes each direction from the Bay Area down to, down to Bakersfield.
01:57:05We're building warehouses all up and down that corridor and we're not building freeways.
01:57:10We're not, we're barely widening 99 to help people get to work.
01:57:13This is our food, this is our food valley.
01:57:15This is, this is the San Joaquin Valley, the fruit bowl of the nation.
01:57:19We're not building the trucks we need.
01:57:21We're outlawing the trains we need.
01:57:24We're weighing the last air quality increment over affordability.
01:57:29Do you believe Mrs. Arreaz that diet is a key health factor for working families, low
01:57:35income families, all families, color, I don't care.
01:57:39Everybody needs a healthy and diverse diet and affordable diet.
01:57:41Yes, as an ag business major from Chico, I can tell you that the agricultural production
01:57:47in our state is very important.
01:57:49Did that show up in your public comment policy, program on this policy proposal?
01:57:56What do you mean, sir?
01:57:57Did it show up?
01:57:58Did people say, we need a domestic, diverse, nutritious food supply?
01:58:02We need a logistic system that will actually meet the needs of a diverse food supply?
01:58:07Or was that bypassed by you going through a waiver and then calculating the benefits
01:58:10nationally, but not taking public input on the cost?
01:58:14The ag industry was very vocal about the necessity to be able to continue to produce
01:58:19agriculture as we promulgated the rule.
01:58:23And did they agree with your idea that the last 1% of emissions needed to be eliminated
01:58:28and that the balance of human health would be benefited by increasing the cost of food,
01:58:34pushing trucks onto overcrowded freeways that we have a policy in California not to increase
01:58:39the capacity of?
01:58:42The ag industry did not come in supportive all the way through of the rule.
01:58:47Yes, they are concerned about the movement of their product, but we are talking about
01:58:52one-third of the emissions necessary to meet the Clean Air Act.
01:58:57Nine-tenths of which you could achieve with Tier 4 engines, and another three-quarters
01:59:01you can take out by not pushing it onto the freeways.
01:59:04We certainly are interested in Tier 4 engines.
01:59:09The industry has told us they are not, and if they were to purchase a Tier 4 engine,
01:59:15they can continue to utilize it well into the 2050s.
01:59:20Thank you.
01:59:21I'll yield back, and I'll recognize Mr. Fong for five minutes.
01:59:31Thank you, Mr. Chair and the witnesses for being here.
01:59:38Ms. Arias, good to see you.
01:59:41I recently got elected and served in the State Assembly on the Transportation Committee and
01:59:46on the Select Committee on Ports and Goods Movement.
01:59:49Let me ask this question.
01:59:51In 2005, CARB entered into a voluntary agreement with BNSF and UP to reduce emissions at rail
01:59:57yards.
01:59:58The agreement stated, quote, the parties recognize that participating railroads are federally
02:00:02regulated and that aspects of state and local authority to regulate railroads are preempted.
02:00:09It further stated, quote, the Federal Clean Air Act, the Interstate Commerce Termination
02:00:12Act and many other laws establish a uniform federal system of equipment and operational
02:00:16requirements.
02:00:18At that time, CARB acknowledged federal preemption.
02:00:21So what's changed since then?
02:00:23Yes, thank you for that question.
02:00:25The biggest change is the technology that's available today.
02:00:30When you look at the opportunity to reconfigure the existing engines with the battery tenders
02:00:35or catenary, that was not an option before and it is today.
02:00:39That allows us to access our authority to be able to promulgate a rule for in use.
02:00:45We are not regulating the engine manufacturers.
02:00:49In some cases, they are providing zero emission technology, but that is not because of our
02:00:54rule.
02:00:55The ability to be able to change the power source of an already electric engine is relatively
02:01:04new and something that now gives us the ability to do an in use role.
02:01:09So I would say that we can't look at this regulation and this issue in a vacuum.
02:01:17CARB is imposing mandates and regulations on all aspects of the supply chain.
02:01:22So we're discussing the rail impacts.
02:01:27CARB has imposed mandates on the trucking industry.
02:01:30CARB is imposing significant mandates on the ports.
02:01:35So together, all of these regulations have devastating impacts on our nation's distribution
02:01:41of goods and products.
02:01:43So my question is, how does the state of California plan to mitigate the supply chain disruptions
02:01:48that are clearly acknowledged and there's a consensus on?
02:01:52And what does CARB say to the consumer when they have to pay more for goods and products?
02:01:56Yeah, good question.
02:01:59We have, over the years, heard of many concerns related to our rules and how it is going to
02:02:06cause diversion of our freight and how it will disrupt the supply chain.
02:02:12However, we have also successfully seen these rules be implemented without supply chain
02:02:18diversion and without supply chain disruptions.
02:02:21Our port continues to be the largest ports in the nation.
02:02:25We continue to process the largest amount of containers for the nation.
02:02:30We continue to provide a lot of food for the nation, all while being able to transition
02:02:35to a cleaner freight transport system.
02:02:37Let me just say, though, I apologize for interrupting, but that empirically is not true.
02:02:42The California ports are losing significant market share to other ports.
02:02:47As mentioned before by the other witnesses, goods and products are now not coming to California.
02:02:55They're going to other states, other ports.
02:02:58And you now are mandating, so our trucking industry can't get engines.
02:03:03Our railroads are struggling to afford new engines, engines that technically are not
02:03:09feasible at this moment.
02:03:11And then the ports are being mandated to the point where probably they can't, there's going
02:03:15to be a volume cap on what goes into the ports, and all of those containers are going
02:03:19to go to other states.
02:03:21So empirically, what you're saying is not true.
02:03:24And the supply chain inflation that has existed has occurred in the past with the supply chain
02:03:29crisis that happened through the pandemic.
02:03:31Consumers paid more.
02:03:33So how does the state of California tell the average consumer they're going to pay more
02:03:37based on this regulation?
02:03:38We have published data that shows that this regulation could cost each household $36 a
02:03:44year.
02:03:46And as a point to the ports, they have actually been having record-breaking years.
02:03:53Yes, there is some diversion of discretionary containers, but the actual containers coming
02:03:59through are much higher than they've ever been.
02:04:01And we continue to project that they will actually double within the next several decades.
02:04:06So does your assessment take into account all of these regulations together?
02:04:10Or you're just taking, or you're taking this into account for just...
02:04:12The $36, sir?
02:04:13No, the $36 is just this reg.
02:04:16Just for rail?
02:04:18Per year, per household.
02:04:19Right.
02:04:20So if you add in the trucking regulations, you add in the port regulations, you add in
02:04:23all the regulations to the entire supply chain, the system of systems that moves products,
02:04:2840% of the goods and products that come into the United States of America come to the port
02:04:32of LA and Long Beach.
02:04:34So does your analysis take into account all of these regulations layered on top of each
02:04:39other to the impact to the average consumer?
02:04:42No, we have not done an analysis that shows the total monetized benefits that we receive
02:04:48from all these rules compared to the cost per household of these rules.
02:04:52As a Californian, I would say that when it comes to strengthening our supply chain, California
02:04:56is not the model.
02:05:04Chair now recognizes Mr. Kiley for five minutes.
02:05:07Thank you, Mr. Chair.
02:05:08Ms. Arias, you're with CARB, you're the chief of the Transportation and Toxics Division,
02:05:13correct?
02:05:14Correct.
02:05:15Thank you for being here with us today.
02:05:16But I did have to ask, are you an elected official?
02:05:19I am not.
02:05:20Is anyone at CARB an elected official?
02:05:23Some of our board members are, yes.
02:05:25But are they acting in an elected capacity when they make policy at CARB?
02:05:31Some of them are elected, but they are all appointed by our Senate and Governor.
02:05:36They're appointed, not appointed?
02:05:37Correct.
02:05:38So they originally may be elected officials.
02:05:39So you took this opportunity upon yourselves to issue this new regulation banning non-electric
02:05:44trains, is that correct?
02:05:45The staff promulgated the rule and took it to the board for their consideration and they
02:05:49adopted it.
02:05:50So it wasn't voted on by the legislature?
02:05:52It was not.
02:05:53It wasn't voted on by the people of California?
02:05:55It was not.
02:05:56So, Mr. Chair, I'm very glad you called this hearing, because we have really a crisis of
02:06:00democratic legitimacy in California, where we have an agency, a massive bureaucracy,
02:06:06CARB, that is making tectonic changes to our society, not just in California, but across
02:06:12the country, without any measure of democratic accountability, and is enacting harebrained
02:06:18scheme after harebrained scheme that wouldn't even survive whatever modicum of rationality
02:06:24might be present in the supermajority legislature.
02:06:28And it's having dramatic impacts on our state.
02:06:32You could flip through the pages of dystopian fiction and not find an entity quite like
02:06:36CARB in terms of just how completely out of control and disconnected from the real world
02:06:43it has become.
02:06:44And I think that this regulation under consideration today, banning non-electric trains, is a perfect
02:06:50example of that.
02:06:52So, Mr. Alvarez, you testified about how currently railroads are already the most environmentally
02:07:00friendly way to transport freight across the country, correct?
02:07:03That's correct.
02:07:04Today, railroads contribute 2% of transportation-related greenhouse gas emissions, while our competitor
02:07:13trucking contributes 23%.
02:07:16And you've also testified that the technology to comply with this regulation is not currently
02:07:20in existence, is that correct?
02:07:22That's correct.
02:07:23And that because of this, short lines such as your company or others may be forced to
02:07:28shut down, is that correct?
02:07:30That's correct.
02:07:31To comply with the CARB rule as written, many short lines in the state of California cannot
02:07:35comply.
02:07:36They'd go bankrupt.
02:07:37And as I explained, my railroad, we'd have to defer lots of other safety-driven projects
02:07:43in order to comply with the locomotive upgrade.
02:07:46So this would shift rate from more environmentally friendly to less environmentally friendly
02:07:50modes of transport, is that correct?
02:07:51That's correct.
02:07:52It'd push more to truck and have a worse impact on emissions.
02:07:54So the whole purpose of this regulation, the ostensible purpose, which is to reduce
02:07:58emissions, would actually do just the opposite, is a self-undermining, self-defeating regulation.
02:08:03But of course, it does a lot more than that in terms of the collateral damage or costs.
02:08:08You testified that this would raise costs for consumers, correct?
02:08:12That's correct.
02:08:13Making the experience of inflation worse in California and across the country, is that
02:08:17correct?
02:08:18That's correct.
02:08:19And in addition to that, you'd have more vehicles on the road, which would create more traffic
02:08:22for drivers, I assume?
02:08:24More traffic, more congestion, and there were 6,000 deaths related to heavy trucks
02:08:29last year, and that's been increasing year over year.
02:08:32To put more trucks on our roads, that number, unfortunately, would probably increase.
02:08:37So more wear and tear on the roads, more accidents, more injuries, more death.
02:08:42That's correct.
02:08:43And then you've also testified, Mr. Yall, about some of the other costs in terms of
02:08:46construction costs, correct?
02:08:49That's correct.
02:08:50Is it fair to say that this regulation, by increasing the cost of construction, both
02:08:54in terms of the cost of materials and the cost of their transport, would increase the
02:08:58already high cost of housing in California?
02:09:01That's correct, yes.
02:09:02And you also testified that it would make it more difficult for us to build new infrastructure,
02:09:05is that correct?
02:09:07Yes.
02:09:08Our concern is that the funds that both form passenger rail operators and freight rail
02:09:13operators that would have been used for capital improvements, which is what we do, what our
02:09:19industry does, is going to get diverted to this effort, and there will be a significant
02:09:25decrease in the available funding through that, in addition to making the cost of projects
02:09:32bigger and more expensive, so your dollar goes just less further.
02:09:38So if I have this right, we have an unelected, not democratically accountable body that has
02:09:43decided on its own to make policy not just for California, but effectively for the entire
02:09:48country, and has done so in the name of reducing emissions, but has come up with a policy
02:09:52that will actually increase emissions while also increasing costs and inflation for consumers
02:09:58by putting more vehicles on the road, creating more traffic, creating more wear and tear
02:10:02on our roads, reducing our road quality, creating more accidents, meaning more injuries and
02:10:06more death, increasing the cost of construction, increasing the cost of housing, and making
02:10:10it more difficult to build new infrastructure.
02:10:13I'm glad we had this hearing, Mr. Chair, because I think this is exactly the wrong policy for
02:10:17California and for our country.
02:10:18I yield back.
02:10:19Gentlemen, yield back.
02:10:20We now recognize Mr. Molinaro for five minutes.
02:10:23Thank you, Mr. Chairman.
02:10:24I do feel a little bit out of place as a New Yorker, but I will offer to you that when
02:10:28California or New York institute rules or regulations or new policy, the rest of the
02:10:34country should likely be afraid.
02:10:35Ms. Arias, I don't want to take issue with where California is as it relates to your
02:10:41economic activity.
02:10:42The state represents 14.5% of the entire national economy, but I do want to tell you the tale
02:10:47of once being the empire.
02:10:49I serve in a state that once was the largest population in the nation, was the largest
02:10:54economy in the nation, once was the ultimate location for cultural and economic activity,
02:11:01once.
02:11:02It's actually one of the reasons that we're referred to as the empire state.
02:11:05We built the Midwest thanks to the great work of the Erie Canal and others, but now we lead
02:11:09the nation in out-migration.
02:11:10More people leave the state of New York to every other state in the nation than any other
02:11:13state in the nation.
02:11:14We shoulder the highest burden of taxation of any people in the country, even more than
02:11:18California.
02:11:19And the answer as to why is because policymakers elected and appointed established rules and
02:11:26regulations that are unachievable without consideration for the actual impact to the
02:11:31end user, the end user being the citizen, the taxpayer, the consumer.
02:11:36You referenced, Ms. Arias, that your analysis, the CARB's analysis, is simply that there
02:11:44may be disruptions to the supply chain, but they're surmountable in the near term.
02:11:48Is that about right?
02:11:49No, we didn't talk about disruption to the supply chain for this.
02:11:53I was referring to the overall supply chain, sorry if that was—
02:11:57So you acknowledge that this regulation, this rule, disrupts the supply chain?
02:12:03No, I would say it transforms the supply chain.
02:12:07It's a lovely word that even I use.
02:12:08I love it because it avoids the actual truth, which is disruption is what happens in order
02:12:15for transformation to occur if you can achieve it.
02:12:18But we recognize it's very hard to achieve the goal.
02:12:22In New York, thanks to California, New York, in establishing the climate leadership policy,
02:12:30CLCPA uses basically the same standard.
02:12:33It looks across the river and says, we're going to cross this wild, roaring river, but
02:12:39we're not going to tell you how to build the bridge, and we don't even care if you can
02:12:42build the bridge.
02:12:44It's an absurd kind of governance.
02:12:45If we want to get to the kind of economic and environmental benefit that perhaps policies
02:12:49like this seem to want to achieve, you must have the path to get there, and you can't
02:12:54get there from here.
02:12:55Mr. Olvera, just a few moments ago, Ms. Arias did suggest that this rule would have a de
02:13:05minimis impact on families across America.
02:13:08I think she said $36 a year.
02:13:10First, I will offer to you that that can't be possible, and second, I would offer to
02:13:14you, Mr. Olvera, that I don't judge what people can or cannot afford.
02:13:17I always appreciate when – and I mean no disrespect, I was once an appointed official
02:13:22as well – but I always appreciate when people who aren't elected say to other people
02:13:27who have to pay the bills, it really won't cost you that much.
02:13:29Sort of like when you say to your kid, it's going to hurt me more than it hurts you.
02:13:32I get that 36 doesn't sound like a lot of money.
02:13:35It's impossible that that's a limited impact, but without question, I'm not going to judge
02:13:38what people can or cannot afford.
02:13:41CARB's own analysis suggests that this rule in and of itself creates an $86 billion in
02:13:47nationwide compliance costs, and that, of course, these costs are going to disrupt,
02:13:51transform, and impact the supply chain.
02:13:53Can you speak to sort of humanize this?
02:13:58How do we expect the CARB rule to impact the cost of, let's say, groceries to the average
02:14:03American family?
02:14:04Sure.
02:14:05So today, rail is a very cost-efficient freight option for our customers.
02:14:12I've heard from different customers at times the savings by going through rail freight
02:14:17versus truck freight is three to four times less.
02:14:22So that freight option, the rail freight option, if it was removed and mandated that our customers
02:14:29had to use a higher expense to move their goods, that decreases their bottom line, and
02:14:35the only way to make up for that is to pass on cost to the customer.
02:14:39That would absolutely increase cost of goods to the end user.
02:14:42Sure.
02:14:43I remember not being here in Congress when the other side of the aisle did control both
02:14:48houses of the legislature, imposed the Inflation Reduction Act, and I remember elected and
02:14:55bureaucratic leaders suggesting there would be no impact on inflation, and yet we experienced
02:14:59the highest rate of inflation in 40 years.
02:15:02I know, Mr. Olvera, and I won't ask you to answer this again, but you spoke to the impact
02:15:08that this rule has on smaller class 2 and 3 railroads.
02:15:12In fact, the rule itself could exceed their annual operating budgets and likely result
02:15:17in the decline of those operations.
02:15:19I don't want to, I have 30 seconds, so Mr. Nobra, I just want to reference for you, obviously
02:15:25other states can impose, and states like New York have imposed similar rules as it relates
02:15:29to vehicle emissions.
02:15:30Can you just suggest to us what are the potential impacts, let's say if New York were to, with
02:15:36a single party governing, Democratic Party governing in New York, what would happen if
02:15:41New York were to adopt a similar rule?
02:15:44Well, I mean, it would again create the kinds of problems that you don't want to see in
02:15:48interstate commerce, which is different operating rules and requirements in different states,
02:15:53so that you can't have interoperable equipment over the 50 states, and that kind of flies
02:16:00in the face of interstate commerce.
02:16:02So that would create more and more patchwork issues and would show why this is preempted.
02:16:08Thank you, Mr. Nobra.
02:16:09Thank you, Mr. Chairman.
02:16:10Thank you.
02:16:11The gentleman yields.
02:16:12Thank you, Mr. Chairman.
02:16:13Are there any further questions from any members of the subcommittee who have not been recognized?
02:16:17We have eight minutes.
02:16:19We are voting right now, so we have eight minutes for the members to get over there.
02:16:22I want to have a second round.
02:16:23I want to respect the hell out of the gentleman to write Mr. LaMalfa, but I don't know.
02:16:28I tell you what, Mr. LaMalfa, you've got two minutes.
02:16:31Two minutes.
02:16:32All right.
02:16:33Thank you, Mr. Chairman.
02:16:34I appreciate it greatly.
02:16:35Ms. Arias, have you taken into account if the requirement was 65 percent of the locomotive
02:16:41fleet would be banned by the year 2030?
02:16:44We've heard repeatedly that the technology for Tier 4, let alone the later tiers, isn't
02:16:49even working yet to any extent to replace that many locomotives.
02:16:54We heard a General Van Ovest, who is the head of the U.S. Transportation Command for our
02:16:59military, military vehicles.
02:17:00Have you taken into account the effect of being able to deploy military vehicles and
02:17:05equipment across the country where it needs to be in this study, in this idea?
02:17:12If we can't move that because an electric train can only go 100 miles or something,
02:17:16what's going to happen with that?
02:17:17Have you taken that into account, as well as perishable ag goods?
02:17:21Yes.
02:17:22Military is exempt.
02:17:23And they said it's okay?
02:17:26Yes.
02:17:28Military is exempt from the role.
02:17:29Oh, they're exempt from it.
02:17:31Okay.
02:17:32Touch on, please, to wrap it up, on the available – you know, we've heard it glossed over.
02:17:39Oh, we have the technology.
02:17:40We'll just take the Tier 3 or 4 diesel engine out and put electric in, basically.
02:17:45How is that even close to practical?
02:17:50Electric locomotive is not currently commercially available.
02:17:53And as I mentioned before, the replacement of an electric vehicle replacing a diesel
02:18:00locomotive is completely different.
02:18:02Charge time on a battery-operated locomotive is 24 hours for 8 hours of use.
02:18:07My diesel engine runs 24-7.
02:18:09I may need two to three electric locomotives to replace one diesel engine.
02:18:14So to replace 65 percent of the locomotives by 2030, no way, right?
02:18:19Quickly.
02:18:20I don't see how that's commercially feasible and possible.
02:18:23Mr. Yaw, we're talking about this special account where they want to take mass amounts
02:18:26of money from the railroad operators and put it into a special account that is unavailable
02:18:30for capital for you.
02:18:32You have a very big project that is being looked at in Barstow, which would massively
02:18:36increase efficiency for railroads.
02:18:39What is this special account thing tying up all your – our finances going to do to you?
02:18:44The project is a $1.5 billion intermodal railroad facility.
02:18:49It's to be built by BNSF.
02:18:51And this – the concern is that the spending account is going to divert resources from
02:18:59BNSF's capital improvement fund, which funds these intermodal facilities.
02:19:02This one and there are – Quickly, because it means you're probably
02:19:04not going to build it because your money is all tied up?
02:19:06That's what we're hearing, yes.
02:19:07Yeah.
02:19:08So we're going to lose efficiency of that new project.
02:19:09Yeah.
02:19:10Correct.
02:19:11Thank you, Mr. Chairman.
02:19:12I greatly appreciate the indulgence.
02:19:13Thank you.
02:19:14Thank you.
02:19:15The gentleman yields.
02:19:16Mr. Desangier is going to get the last word.
02:19:17If I gave you a chance to have more time, just briefly, there are elected officials
02:19:20on CARB.
02:19:21One, it has been – it's required by the California Clean Air Act.
02:19:24Again, Ronald Reagan is governor.
02:19:26I was one of those representing the districts.
02:19:28Correct.
02:19:29Number two, just because CARB passes this doesn't mean that every state gets to – has
02:19:34to go on it as well.
02:19:35They have to – And in fact, we've never had any other state
02:19:38pick up our off-road rules.
02:19:39Right.
02:19:40So they have to go through their own legislative process and then ask for – so if it's
02:19:44a national trend, it's not by statute.
02:19:47Correct.
02:19:48So you're doing what's required by statute because you have to comply and get these reductions.
02:19:53You can also use the alternative plan to get to those reductions.
02:19:57Correct.
02:19:58So all of those things I just wanted to clear up.
02:20:00And thank you, Mr. LaMalfa and the chairman, for letting me talk.
02:20:03Absolutely.
02:20:04Any further questions from any members of the subcommittee who have not been recognized?
02:20:08Seeing none, that concludes our hearing.
02:20:09I'd like to thank each one of you for being here.
02:20:11I thought this was very informative, very insightful.
02:20:15Thank you for your testimony.
02:20:16The subcommittee stands adjourned.