Are regulations killing our industry? Part I: Emission regualtions

Visitors to the Los Angeles area in recent years may have noticed that change is in the air--literally. Smog no longer hangs over the city like a shroud. On sunny days, blue skies are bright, and the mountains to the east of the city are clearly visible.

In years past, this wasn't always the case. I remember talking with a friend who was visiting the area several years ago. He had specifically requested--and paid for--a hotel room with a view of the famous "Hollywood" sign that sits in the foothills of the San Gabriel mountains. After checking into his room, he pulled open the curtains. The "Hollywood" sign was nowhere in sight. He called the front desk to complain that they had put him in a room on the wrong side of the hotel. After checking his room assignment, the desk clerk reassured him. "Your room faces the sign," he said. "You simply can't see it today because of the smog."

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The Clean Air Act is the main reason Los Angeles' air smells so much sweeter today. The 1990 Clean Air Act specifically directs the U.S. Environmental Protection Agency (EPA) to study, and regulate if needed, the contribution of non-road engines--as well as other types of engines--to urban air pollution.

The passage--and eventual benefits--of the Clean Air Act has not come without a price, particularly for the grounds-care industry. A 1991 EPA study documented higher-than-expected emission levels across a broad spectrum of engines and equipment, including the small types of engines used on outdoor power equipment. (EPA refers to them as "non-road" engines.) As a result of such studies, EPA has initiated a variety of regulations over the last several years. For example, last July, just hours before a court-imposed deadline, EPA published final revisions to the National Ambient Air Quality Standards for ozone and particulate matter. Opponents to these regulations have been quite vocal in their disapproval. More specific to our industry, in July 1995, EPA finalized the first federal regulations affecting small, non-road, spark-ignition engines at or below 19 kW, or 25 hp. The regulations, commonly known as Phase I, took effect for most new hand-held and non-hand-held engines beginning in model year 1997. EPA expects them to result in a 32-percent reduction in hydrocarbon emissions from these engines.

The Phase-II proposed rule follows several years of negotiations between EPA, engine manufacturers and environmental groups. The proposal is based closely on two Statements of Principles (SOPs) signed by EPA and industry groups. EPA published an Advance Notice of Proposed Rulemaking (NPRM) in March 1997 that announced the signing of the two SOPs and requested comments on all aspects of the SOPs for the purpose of developing the proposed rule. As a result of a lawsuit by the Sierra Club, EPA is under a court-ordered deadline to complete the final Phase-II rule for these engines by this December. (EPA held public hearings last month and was expected to accept public comments through March 13.)

California, because of its unique air-quality problems, developed its own standards for emissions. Its version of EPA's Phase-I standards is known as Tier I. While EPA's and California's Phase-I/Tier-I standards for these engines were essentially the same, California also is pursuing its own version of Phase-II standards--known as Tier-II--which would be substantially more stringent than EPA's.

Hand-held engines within our industry that the Phase-II/Tier-II regulations affect include spin trimmers, blowers and chain saws. Non-hand-held engines in our industry that the standards cover include walk-behind trim mowers, larger commercial mowers and garden tractors. Of particular importance, the proposed rule tightens emission standards and requires engine and equipment manufacturers to participate in a compliance program that is designed to ensure that all new engines continue to meet the standards over the engines' useful lives.

Phase-II standards basically require manufacturers to build cleaner engines that will remain that way as they age. Manufacturers also must conduct in-house testing of running engines to prove that the engines' performance meets the standards. In essence, EPA is "encouraging" engine manufacturers to design new and improved uses of automotive-style overhead-valve (OHV) technology in non-hand-held engines. EPA's hope is to improve emissions, durability and fuel economy.

EPA has estimated that compliance costs would range from a dollar per engine for smaller, lower-priced engines to about $18 for larger, more expensive engines. So how realistic are EPA's expectations? And how necessary are they?

Some ways in which we're affected

The Outdoor Power Equipment Institute (OPEI) is one industry organization trying to address the topic of emissions. OPEI even has developed a page on its web site specifically devoted to "Commonly asked questions and answers about engine emissions" (http://opei.mow.org/yard/emission.html). OPEI includes some of the same information repeated industry-wide in trying to explain how emissions for lawn and garden equipment affect the environment. "Gasoline engines produce three types of emissions: hydrocarbons (HC), nitrogen oxides (NOx) and carbon monoxide (CO)," OPEI's information explains. Hydrocarbons react with nitrogen oxides to form ozone. Small engines in our industry account for 2.6 percent of hydrocarbon emissions. Of that 2.6 percent, 67 percent comes from the tail pipe or exhaust, 23 percent from evaporation and 10 percent from gasoline spillage. OPEI says, "Nitrogen oxides are formed when nitrogen and oxygen are combined at high temperatures during engine combustion. It reacts with hydrocarbons to form ozone. These small engines contribute to 0.2 percent of man-made emissions.

"Carbon monoxide is a product of incomplete combustion and can be a hazard, particularly if confined to small spaces. It does not contribute to ozone. These small engines account for 4.8 percent of all anthropogenic CO emissions," OPEI states.

Many in the industry feel that the contribution made by small engines in our industry is not worth regulating. OPEI points out that, compared to other sources, 4-stroke gasoline- and diesel-powered engines in our industry contribute to only 2.6 percent of the total volatile organic compound (VOC) emissions. By contrast, all non-road engines account for 9.7 percent; highway emissions (automotive) account for 33.3 percent; and other sources (power plants, paints, solvents, waste disposal) account for 57 percent.

In the February issue of Grounds Maintenance, John Liskey, director of statistical and technical services for OPEI, wrote in the "Opposing Views" column that the industry believes it already has improved the environment by reducing emissions from grounds-care equipment by more than 70 percent since 1990. "Industry already has spent tens of millions of dollars. It's time to let the regulations take effect and for the environment to benefit from the actions we've already taken," Liskey said.

Of course, others have a different view. John Dunlap, chairman of the California Air Resources Board (CARB), addressed the same topic as Liskey last month. He said, "Manufacturers sometimes claim this equipment's contribution to air pollution is so small that it's a waste of time and money to control. This is an argument...CARB hears frequently. Motor vehicles account for about half of California's air emissions. The rest comes from many 'small' sources, many of which have groups arguing they are too insignificant to regulate. But ignoring these smaller sources means ignoring a significant segment of California's emissions problem, precluding our ability to reach state and federal clean-air standards."

Like OPEI, other industry groups have developed web sites to disseminate information on how the Clean Air Act affects the grounds-care industry. Briggs & Stratton's web site, for example, provides information on how consumers can help reduce emissions, such as by avoiding gasoline spills and fuel evaporation, as well as reducing mowing time by operating equipment efficiently. Briggs also provides its position statement on the topic of emissions regulations. It states: "Briggs & Stratton recognizes the need to do its part to help improve air quality. We realize this must be done without sacrificing the power and performance our customers have come to expect. The company already has made a significant investment in capital and human resources dedicated to emissions reduction. Meeting future emissions regulations is one of the biggest challenges Briggs & Stratton has ever faced. The new standards will have a significant impact on the small-engine industry in the coming years. We have recognized the need to do our part in improving the air quality and have made a commitment to meet the challenge."

Specific effects to our industry EPA's principle reason for controlling emissions from small spark-ignition engines is because of the role their hydrocarbon emissions play in forming ozone, the primary component of smog. According to EPA, the proposed Phase-II standards will generate significant reductions in emissions from these engines at very low costs. Further, they will result in fuel-economy improvements that will offset much of the emission reductions.

The Phase-II regulations will require engine manufacturers to:

* Build cleaner, more durable engines

* Certify that those engines will meet standards for their full, regulatory useful lives

* Conduct testing of in-use engines to prove their performance in-use.

As mentioned, many manufacturers in our industry have joined with EPA in signing an SOP concerning the engines being regulated. The SOP, signed by most major engine and equipment manufacturers, states that "further control of hydrocarbon and oxides of nitrogen emissions from these engines, beyond the Phase-I levels, is achievable in future model years and that air-quality considerations warrant this further control."

The Portable Power Equipment Manufacturers Association also has signed an SOP with EPA. In a statement made after signing the SOP, PPEMA President Donald E. Purcell said, "The significance of this agreement for the American public and the manufacturers of hand-held outdoor power products is enormous. With this agreement, everyone benefits. The American public benefits by having cleaner air, and the portable-power-equipment industry benefits because we can now proceed with confidence to build gasoline-powered products into the next century."

Despite the enormous costs involved in improving engine technology, most of the engine and equipment manufacturers with whom Grounds Maintenance spoke support EPA's efforts. Though some might dispute EPA's claim that the Phase-II regulations won't cost the manufacturers much in terms of developing the products, most did note that any cost increases basically will be offset for the end-user by the fuel savings the engines will generate.

Engine manufacturers, in particular, have carried a great deal of the burden in accepting increased costs. "The regulations have increased prices," says George Thompson, vice president, corporate communications and community relations, Briggs & Stratton (Milwaukee, Wis.). "They have come as a result of research and development, particularly in areas that affect the environment. They have been very costly. A lot of times, we've been starting from scratch meeting new requirements, as we've had to in this situation with EPA. It should be noted, however, that since 1990, including the last few years with the regulations in place, that general engine emissions have been reduced 70 percent. I don't know that that is common knowledge among consumers. And I don't know that we--speaking for Briggs & Stratton and other engine manufacturers--are getting credit for that."

Kohler (Kohler, Wis.) is another company that has been forced to increase the price of its engines to develop the technology for meeting these regulations. Cameron Litt, product manager--twin cylinder engines at Kohler, says, "First and foremost, emission regulations are here to stay, and it appears they will only get more stringent. Because of increased and continued emission testing and developing components for engines to make them run cleaner, the overall cost of the engine has increased."

Jeffrey D. Shetler, manager of government relations for Kawasaki (Irvine, Calif.), echoes similar concerns to those mentioned by Briggs' Thompson. "When you're adding automotive technology to an engine in a lawn mower, what is fair share?" he asks, referring to EPA's and CARB's Phase-II requirements that engine manufacturers develop more small engines with OHV technology. "When you compare [small-engine emissions] to other on-road sources, you want to do your fair share--but not so much that it's going to cause you to go out of business."

At Tecumseh (Grafton, Wis.), Product Line Manager for walk-behind rotary mowers Steve Ditter admits his company also has been forced to face cost increases. "There is a cost to compliance to meet the emission regulations," he says. "It varies from engine to engine, but it generally involves a range of costs across the product line."

How manufacturers have dealt with the regs Engine companies aren't the only ones to face cost increases. Obviously, equipment companies--which purchase the new engines--have had to increase retail prices as well. Steven J. Yolitz, vice president, strategic product planning, Jacobsen Division of Textron Inc. (Racine, Wis.), says, "In general, the engines are more expensive [because of the] greater technology [that] goes into [them]. We have tried to recover that in the market place." Yolitz notes that price increases for his company's products have not been a "huge amount." But, he adds, "It's important to recognize that there are some costs to getting cleaner air in our environment. Cleaner air has a price."

At Ransomes Division of Textron Inc. (formerly Ransomes America Corp., Lincoln, Neb.), Director of Marketing Peter Whurr points out that one reason for increased pricing is the testing manufacturers must put equipment through to ensure it is within the regulations' guidelines. "We have more stringent testing, and that costs more, and we have to pass that cost along to the consumer," he explains. But, those costs have been very minimal--"Maybe 1 percent," he says. "We're trying to get our suppliers to meet some of these costs, and we aretrying to keep these costs down so that the customer doesn't have the regulators' full burden fall on them to meet the legislation."

Don St. Dennis, director of public relations for The Toro Co. (Minneapolis), views the price increases similarly. "From an R&D point of view, we don't really have a number that we break out specifically to [attribute to costs from environmental regulations]," he explains. "We include that as part of our normal research and development. We consider that a marketing feature that we just need to have in our engines."

However, at the other end of the spectrum, Mark Michaels, director of marketing with Husqvarna (Charlotte, N.C.), says his company has spent a lot of engine dollars on emissions technologies. "We're the only company in the U.S. that has a catalytic converter on hand-held products." But, he adds, his company did not make these changes only because of Phase-I requirements. "We've been pursuing this technology before and regardless of those regulations," he notes. Michaels makes a point that the end-user will endure some fallout from these regulations. "The user wasn't who demanded this," Michaels notes. "Has it put a burden on him? It has because of increased weight and cost--as an industry statement and not in regards necessarily to our products," he adds. "Meeting Phase-II will be harder just because the bar has been raised. But we already had the technology in place, and it just needs to be fine-tuned. It all depends on products, sizes of engines, etc."

As Michaels points out, manufacturers of both engines and equipment have been working for many years to develop the technology to meet these regulations. So the Phase-II regs have not been as much of a burden as you might imagine. (At least in terms of EPA's Phase-II regs. CARB's Tier-II regs are an entirely different matter. See boxed information, "The challenge of CARB's Tier II," page 18.) St. Dennis at Toro agrees that his company has been working toward meeting environmental regs for several years. "We've been working closely with EPA and their various national and regional offices," he says. "We consider ourselves an environmental company." In fact, he says, "We've just recently adopted seven principles that guide us from an environmental point of view from how we do business and how we design products."

Kevin Kokrda, manager, emission standards, with Kubota's Engine Division (Rolling Meadows, Ill.), says his company has followed a similar path, performing much of its initial R&D several years ago, "Back when considering exhaust emissions compliance to the CARB ULGE (utility lawn and garden equipment) Tier-I regulations," he explains. "Therefore, costs associated with moving product lines in to EPA Phase-I compliance were more related to expanding our programs from [only] California to a federal 50-state regulatory scope." He adds that pricing of Kubota engines has remained consistent with CARB-ULGE-compliant configurations, which have been in the marketplace since mid-1995.

Echo (Lake Zurich, Ill.) is one firm that says it has not increased its prices. But it has an advantage that some of the other equipment manufacturers don't: It manufactures most of its parts and products in the United States. "The cost of development in terms of retail costs haven't been passed along to the consumer," says Robin Pendergrast, Echo spokesman. "There've been price increases, but none have been directly attributable to the Phase-I regulations. We've been able to hold the line 'cause all our design is done in Lake Zurich. We took the strategic position to do this [design and manufacture products in the U.S.] in the mid-'80s, and it's paid off handsomely for the customers because you can control costs better in your own backyard," Pendergrast says. "It's been cheaper to make most of our products and manufacture them here in the U.S. because of the yen vs. dollar situation."

Admitting to regulatory benefits As mentioned, most of the manufacturers interviewed admit that today's products are much improved over those of a few years ago. "If anything, the regulations [are] going to provide [the consumer] with a more fuel-efficient engine," points out Tom Bingham, chief engineer, standards/regulations, for American Honda Motor Inc. (Torrance, Calif.). "For someone whose business is [commercial], the incidental cost of fuel alone [will probably] be a benefit to them." Bingham also sees the Phase-II regulations as being a benefit. "Engines as a result of that regulation--across the board--are more durable and more fuel efficient. For awhile, there may be cost increases from them. [But] EPA's assessment of the [cost increases] probably is directionally correct, and the end use is a benefit. So I think, directionally, it will end up being a benefit to the user."

Ryobi North America also is proud of the technology it has achieved from reacting to the regulations. It has had great success in developing both 2-stroke and 4-stroke hand-held gas engines for its own products, as well as for products sold by other manufacturers. Some of the inherent problems in using 4-stroke engines on small, hand-held equipment have included difficulties with lubrication, power, engine size and heat exhaust. Frank Coots, Ryobi's public relations director, says, "[Our company] solved the 4-stroke lubrication problem with a centrifugal oil-gas separation system. This new lubrication system will be introduced with our 1998 commercial products. It allows all-position operation of the engine, which makes it appropriate for all hand-held products, including chain saws." Plus, Coot adds, the new Ryobi 4-stroke engine weighs just 7 pounds, "so weight is no longer an issue with the 4-stroke."

Tecumseh's Ditter says, "We like to put a proactive spin on what's happened [with the regulations]," he says. "We don't like to look at it as a negative, though it's taken considerable time and effort to achieve because there's a lot of benefits we've achieved....What the consumer gets is more reliability in a product because of the improvement in internal engine components. Also less fuel consumption, and more efficient cooling." Ditter also points out that today's engines have tighter tolerances and more consistency.

Toro's St. Dennis' reaction to the regulations is similarly positive. "Our goal--and EPA's goal--is to have a cleaner, healthier planet for people to live in. That's basically the way Toro has approached it."

And, of course, that is the ultimate benefit of regulations. As Ditter sums up the regulations' benefits: "We get cleaner air to breathe."

CARB's Tier II standards might be laughable if they weren't so unbelievable. In fact, OPEI says, "The Tier-II standards, currently scheduled to become effective in 1999, are regarded as technologically infeasible." OPEI, discussing the regulations in its Executive Update newsletter (November 1997), wrote, "Industry is attempting to obtain relaxation of these proposed exhaust standards through some type of spillage control." The reason for the strong language is that CARB's proposal requires Class-1 engines (less than 225 cc) to convert to improved OHV technology in 2000 and to use catalysts in 2004. EPA's Phase II does not require these same stipulations. And trying to meet them constitutes some major design problems for small, hand-held equipment manufacturers.

Last September, several industry representatives met with CARB officials to work out some ideas on "trading" some type of spillage control (such as the use of non-spill nozzles and gasoline cans) for relaxed exhaust standards. "The CARB staff has indicated a willingness to work with industry on this approach and, currently, industry is exploring various options," OPEI said.

Briggs & Stratton moved to the forefront of spillage control with the introduction of a new gasoline can. Designed so that flow won't begin until you insert the nozzle into the gasoline tank, the gas can automatically shuts off when the tank is full. It won't spill no matter which way the user holds it or tips it.

Even so, until it is clear what California plans to do, manufacturers of hand-held equipment are working frantically to come up with solutions. Mark Michaels, director of marketing with Husqvarna, points out the difficulty in meeting Tier-II requirements in terms of equipment such as chain saws. "It will be much more difficult [to meet the regulations on] chain saws because they need so much more power than trimmers," he says. He also is concerned because of safety factors. "We feel that the fatigue factor could be much more dangerous," Michaels says, referring to increased weight from the potentially larger engines that might be required to meet the proposed Tier-II regs. "So we're very concerned with keeping all of the benefits we've developed over the last few years [such as reduced weight and increased power]. And we don't want to see [the industry] take several steps backward in order to take a half-step forward" to reduce some emissions, he says.

George Thompson, vice president, corporate communications and community relations of Briggs & Stratton, feels both EPA and CARB have unfairly targeted the small-engine industry as a way to decrease emissions. "We're talking 2 percent or less of man-made VOCs [volatile organic compounds] that are contributed by 4-cycle engines that we and others make that have come under this type of scrutiny," he explains. "This is as compared to other sources, such as on-road vehicles and fossil-fuel plants.

"Many do think it is a situation of big brother looking over our shoulders. It's a popular misconception that, in some way, small gasoline engines can be compared to automotive engines. That's a totally erroneous comparison," Thompson states emphatically. "We're talking major cc's vs. engines with very small cc's--engines that typically are operated only 25 hours in a season. That's a very small output compared to [automotive engines]. The volume and time of use are totally different things," Thompson says, adding that we use our cars, to varying degrees, nearly 365 days of the year.

"There have been some scare tactics and general misconceptions put out there," Thompson notes, "which is generally the case when it stands that one individual tends to benefit and one tends to lose" in a situation.

Fingers are crossed that CARB will accept some compromise. Robin Pendergrast, Echo's spokesman, is hopeful. He says, "Things going on with CARB right now sound like they are going to be loosening up the reins quite a bit. That makes it a whole new ball game." If that doesn't happen, however, Pendergrast says hand-held equipment manufacturers may have to find a different tactic to sell products in California. "It might be more appropriate to have fewer models available in California," he says. "There's lots of companies going after [developing] 4-cycle engines," he says, "but nobody has the answer right now."

Several companies--notably American Honda and Ryobi--have already begun offering 4-cycle technology on some of their equipment. The companies describe the equipment as being comparable in weight and power to similar 2-cycle units. (Some of their competitors refute this.) If they do cost a little more, the companies say the 4-cycle technology is worth it. "If you use a string trimmer for a year [with a 4-cycle engine], it's almost paid for itself because of fuel savings," says Tom Bingham, chief engineer, standards/regulations, with American Honda Motor Sales.

The next few months will likely reveal what Tier II has in store for the industry. Until then, manufacturers will no doubt continue pursuing changes necessary to decrease emissions as much as possible.

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