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Strong-arming, fear-mongering

DON MILLS, Ont. - The U.S. Environmental Protection Agency (EPA) is looking into the pre-buy phenomenon rippling through truck order boards.Although the EPA's investigation is still in an early phase,...

DON MILLS, Ont. – The U.S. Environmental Protection Agency (EPA) is looking into the pre-buy phenomenon rippling through truck order boards.

Although the EPA’s investigation is still in an early phase, there is some question as to whether seven major truck-engine manufacturers have improperly encouraged customers to buy engines before October, when clean-air regulations – widely expected to degrade engine performance – are to take effect.

The diesel manufacturers, including industry leaders Caterpillar and Cummins are prohibited from encouraging pre-buying under terms of a 1998 consent decree.

In a battle similar to that between VHS and Beta VCR manufacturers, some observers say the two varying strategies employed by the engine giants has turned the current engine business into a winner-take-all grudge-match.

Cummins has satisfied the EPA requirements using cooled exhaust gas recirculation (EGR) in combination with a variable geometry turbocharger – fairly well-understood technology that is theorized by some prone to performance issues.

Cat, on the other hand, is trying to jump to next generation smog-reducing technology with its ACERT system. In the near term, however, the Peoria-based company faces what could be hundreds of millions of dollars in EPA penalties because its new engine won’t be ready by Oct. 1, and its existing engines aren’t able to meet the EPA standards.

According to company officials, Cummins hasn’t encouraged any pre-buying of its engines.

Caterpillar theoretically does stand to benefit financially if engine orders are front-loaded, because the company faces EPA non-compliance penalties on every engine it produces after October.

A company spokesman flatly denied the company has encouraged any pre-buying.

Whether they’ve been encouraged to or not, fleet owners have clearly been ordering trucks at an unusually rapid rate in recent months, as they scramble to get trucks with present-generation engines that don’t incorporate the new emission-reducing technology.

The big bulge in pre-deadline orders obviously diminishes the hoped-for environmental benefits of the clean-engine directive more than pushing back the date would.

A person at the EPA familiar with the situation has been quoted as saying the inquiry was started after the EPA received “some reports from other manufacturers that some companies might be circumventing the consent decree by offering extraordinary incentives” or other encouragement.

There’s nothing improper about buying engines in advance of the deadline, the EPA insider emphasized; the engine-makers simply can’t encourage such behavior among their customers.

In fact the EPA may be doing the encouraging. Based on data the agency released in January, the new engines are expected to cost about US$4,000 or $5,000 more than the standard $14,000 a truck engine currently goes for.

Fuel mileage, a matter of great concern for fleet operators, is expected to decline by about a significant 2.5 per cent. In addition, the EPA data suggests the new engines will require more-frequent maintenance servicing; that’s also a problem for fleet operators, which often put a million miles or more on their truck engines.

Totals provided by the same technical paper estimate the total life-cycle costs on the new engines at an additional $14,600.

The standard test period for fleets trying out new engines is between 12 to 18 months – only then would they decide whether to order large numbers or not. Thanks to the technical challenges of developing the less-polluting engines on such a short timeline, truck manufacturers are just getting the redesigned power plants now and in some cases are still trying to incorporate them into their vehicles.

The consent decree, which created this situation, dates back to 1998. Under the Clinton administration, the EPA moved against Cat, Cummins and five other diesel makers. It claimed companies had circumvented clean-air rules by employing “defeat devices.” Engines were able to meet standards in lab tests, while belching out massive amounts of pollution on-highway the EPA argued. While denying any wrongdoing, the makers settled those allegations by agreeing, among other things, to ensure their truck engines would satisfy clean-air standards set for 2004 by this October.

As part of the investigation, a letter sent out by the EPA asks each of the companies that signed the decree if they have taken any action to encourage pre-buying, and requests extensive documentation in the form of copies of written communication with customers and similar information.

Truck News

Truck News

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.
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