BUSINESS, Page 50Yearning to Breathe FreeMobilized by growing public disgust over smog, a House panelproposes strict new emission limits that have automakersgrinding their teethBy John Greenwald
Over the years, California has given the rest of the country
everything from health food to a taxpayers' revolt. Now it has
bequeathed another far-reaching legacy to its sister states: a
clampdown on auto-emission standards that could help transform the
American car and the fuel that makes it run. To the discomfort of
U.S. automakers, a House Energy and Commerce subcommittee voted
unanimously last week to adopt California's strict limits for the
1990s as the law of the land. The measure, which seemed certain to
win House approval, would cut existing levels of tail-pipe
pollutants as much as 60% from 1994 to 1996 and could phase out
much of the remainder by 2006. The Senate is considering an even
stronger bill.
The House proposal brought a swift protest from U.S. carmakers,
who contended that the clean-air standards would raise car prices
and strain technical resources. The companies argued that auto
exhaust is already 96% cleaner than it was before pollution-control
measures were introduced two decades ago. Noting that the House
limits would be tougher than those President Bush put forward in
his clean-air package last summer, General Motors President Robert
Stempel asserted, "For our business it would be extremely tough.
It went further than the President proposed, and we're deciding how
to handle it."
As predictable as the grumbling from Detroit was the calm
reaction in Japan, whose share of the U.S. market has climbed from
15% in 1979 to 25% today. "It's not that tough technologically, but
we'll need some lead time," said a Japanese auto-company official.
He added that the new standards would raise sticker prices "only
marginally" because Japanese firms typically rely on thinner profit
margins than their U.S. counterparts.
The House vote marked a truce between feuding Democrats John
Dingell of Michigan, a dogged opponent of auto regulation, and
California's Henry Waxman, a champion of even stricter standards
for clean air. The compromise proposal would cut emissions of
nonmethane hydrocarbons, a key ingredient in smog, which can now
average no more than 0.41 gram per mile for a carmaker's fleet. The
House action would place a limit of 0.25 gram per mile on all cars
by 1996; the output of nitrogen oxide, another source of smog,
would be required to fall from 1 gram per mile to 0.4 gram. Unless
the Environmental Protection Agency ruled otherwise, automakers
would then be ordered to slash the reduced levels in half by 2006.
Car companies could meet such standards by upgrading their
current pollution controls rather than developing expensive new
systems. For example, the bill would require that catalytic
converters, now guaranteed to be effective for 50,000 miles, be
beefed up to last 100,000 miles. Other alterations would range from
adding a microchip to monitor a car's pollution controls to
expanding a charcoal canister that catches evaporating gasoline
fumes when a car's engine is off. The EPA estimates that such
improvements could raise car prices as much as $200 by 1996 and
$500 more by 2006.
Although Detroit railed against the proposed standards, the
fact is that some cars already meet or exceed part of the
requirements. Reason: automakers have complied since 1983 with
California's pollution laws, which are the strictest in the U.S.
and will become even tighter in the 1990s, when they are to serve
as models for the rest of the country. Such 1989 cars as the South
Korean-built Pontiac LeMans and Japan's Nissan Maxima emit less
than 0.2 gram of nitrogen oxide per mile. At the same time,
Chrysler sells its California dealers a $100 pump that helps cars
meet restrictions by recirculating exhaust through the engine and
catalytic converter to reduce toxic emissions.
Nonetheless, U.S. automakers insist that California standards
would become burdensome if adopted nationwide. GM's Stempel argued
that the stricter requirements would raise car prices in regions
that are free of smog. Declared a Chrysler spokesman: "If you lived
in Resume Speed, N. Dak., you would be paying for a piece of
equipment that you simply did not need to keep your air clean."
A clampdown could create conflict between automakers and the
oil industry, as each side seeks to pass responsibility for meeting
the standards on to the other. "The carmakers want to say
`reformulate the gasoline,'" says William Randol, an oil-industry
analyst for First Boston. "But who will make the investment to do
this?" He noted that Shell Oil has estimated that it would cost
billions of dollars to develop new clean-burning gasolines.
Oil companies may have little choice. While the House
subcommittee did not take up the question of alternative fuels last
week, it is expected to do so this month. On the table is a White
House proposal that would require automakers to start selling cars
that run on gasoline substitutes by 1995. Car companies would be
told to produce 500,000 such vehicles the first year and 1 million
units a year beginning in 1997. Among possible substitutes:
methanol, a high-octane alcohol derived from wood; ethanol, or
"gasohol," a blend of gasoline and grain alcohol; and compressed
natural gas.
So far, most oil companies have seemed more eager to denounce
the alternative fuels than to develop new products. Mobil has run
ads attacking methanol as polluting, expensive and more dangerous
than gasoline if accidentally swallowed. Although the fuel produces
far fewer smog ingredients than gasoline, it releases more
formaldehyde, a suspected cause of cancer. Cars would get less
mileage from methanol because it burns faster than gasoline. Yet
Indianapolis 500 racers have used methanol for years because it
boosts horsepower and is less flammable in accidents; U.S.
automakers have developed experimental cars that run on both
methanol and gasoline.
Other alternative fuels are gaining popularity around the
world. In smog-choked Sao Paulo, Brazilian drivers tank up with an
ethanol blend that is 78% gasoline and 22% alcohol distilled from
sugarcane. According to Illinois-based Archer Daniels Midland,
ethanol blends account for 8% of all U.S. motor fuel. The mixture
is readily available in parts of the Midwest at stations that
display the gasohol symbol, an ear of corn.
To the north, more than 20,000 Canadian vehicles are powered
by compressed natural gas, which virtually eliminates the sources
of smog. The relatively low price of the fuel -- some 80 cents per
gal., vs. $1.75 for gasoline -- tempts bus and taxi owners to pay
the $2,500 that it costs to convert a vehicle to natural gas. In
Washington the American Gas Association calls the fuel "a viable
option for fleets." One drawback: to carry the gas, vehicles must
be fitted with bulky tanks. In a cross-border experiment, Canada's
Ontario Bus Industries and Brooklyn Union Gas are testing two
gas-fueled buses in Brooklyn, N.Y.
U.S. oil companies have been slow to respond to such
initiatives. Atlantic Richfield was the first in Southern
California; last summer it introduced a clean-burning unleaded
gasoline designed to power older vehicles built to use leaded fuel.
The Los Angeles-based company said the new brand, Emission
Control-1, has been favorably -- if not overwhelmingly -- received
since it replaced Arco's leaded gas last month. Edward Reilly,
senior vice president for marketing, said EC-1 sales were slightly
ahead of previous levels for leaded gas, although the two fuels
cost the same.
Ironically, some California air-quality officials have raised
strong objections to last week's House vote. They complain that a
fine-print provision in the federal action would end California's
right to impose even tougher standards on off-road vehicles such
as lawn mowers, dune buggies and construction equipment, which
account for an estimated 16% of the state's smog. Says a spokesman
for the California Air Resources Board: "While the bill applauds
California's leadership, it ties our hands to control pollution in
our own backyard."
Ultimately, the fate of the proposed federal standards depends
on the public's concern over the air people breathe. Even corporate
giants recognize that they can no longer simply dig in their heels
and resist demands for clean air. Chrysler vice chairman Gerald
Greenwald noted in August that automakers had hurt their
credibility by stubbornly opposing most new regulations. And while
GM's Stempel attacked the House vote last week, he acknowledged
that the subcommittee had at least cleared up confusion over what
the new tail-pipe standards would be. For all its past
intransigence, Detroit may be ready to concede that compromise is
a two-way street.
-- Glenn Garelik/Washington and Joe Szczesny/Detroit
