Deal Near on Fines for Diesel Truck Pollution

In a deal that could impose one of the largest environmental penalties in history, the Clinton administration and diesel engine companies are expected today to settle a lawsuit that alleges that truck engines have been illegally spewing massive volumes of smog-causing exhaust.

Seven large companies, including Mack Trucks, Detroit Diesel, Cummins Engine Co. and Navistar International, are expected to pay $185 million in fines and other costs to the U.S. Environmental Protection Agency and agree to manufacture new engines that substantially reduce emissions, sources told The Times on Wednesday.

The EPA and the Justice Department charged in June that engine companies violated the Clean Air Act by intentionally equipping engine software with “defeat devices” that put out substantially more nitrogen oxides on the road than they did during the EPA’s emission tests. Nitrogen oxides are a main ingredient of the lung-damaging photochemical smog that is pervasive in California and nearly every urban area in the United States.

Under the expected settlement, sources say, the engine manufacturers would pay $85 million in fines and fund $100 million in environmental projects that would target pollution from diesel engines.

The companies, however, would not have to recall or fix the polluting trucks. Instead, they would have to meet tougher requirements for new trucks coming on line in the future. In a draft document, the EPA estimated the total cost to the companies at $1 billion.

The trucks produced by the companies are illegally emitting an extra 3 million tons of pollution during their lifetime, 40% of it in California, air quality sources say.

EPA officials and representatives of the engine companies refused to comment on the settlement talks until a final deal is struck.

“We are currently in negotiations with several diesel engine manufacturers, and for that reason we cannot comment,” said EPA spokesman David Cohen.

But word of the imminent settlement was already leaking out, and it enraged environmentalists as well as trucking companies.

In a letter sent Wednesday, the American Trucking Assn. asked President Clinton to intervene and block the settlement because it “will have a devastating effect on the economy, the environment and energy security in the next 12 months.”

However, environmentalists say that if the deal is struck as expected, the engine companies are getting off easy because they will not have to repair the trucks. And, they say, the required steps might not remove enough pollution to compensate for the excess tons of pollution.

“Every pound of pollution coming from these illegal trucks has to be made up so people don’t breathe one ounce more of dirty truck fumes. EPA is legally required to do a recall,” said Gail Ruderman Feuer of the Natural Resources Defense Council. “We are outraged by the illegal activity from these companies.”

In the Los Angeles Basin, especially, the ramifications of the large volumes of exhaust are severe, since the region must clean up its smog by 2010 and is relying heavily on reduction of diesel truck emissions, a leading source of smog.

A consortium of air quality officials from Northeastern states told the EPA that the illegal pollution would cost $5 billion to $15 billion to eliminate. Under that estimate, the EPA’s expected settlement, even if it reaches $1 billion, would fall far short.

The $100 million that would be set aside for environmental projects would most likely be used to fund the purchase of cleaner burning, alternative-fuel trucks in urban areas.

When the EPA’s case against Mack Trucks was filed in June, Lois Schiffer, assistant attorney general in charge of the environment division, said: “Those who break the law will pay a high price.” EPA and Justice Department officials said at the time that manufacturers would have to clean up the trucks.

But under the expected deal, the trucks would not be recalled, as cars are when emissions are excessive.

Stephanie Williams of the California Trucking Assn. said “a recall would just shut down the country” as thousands of trucks hauling important cargo were pulled out of service.

Instead of a recall, if the agreement is signed, the companies will have to start using tougher tests for new engines that measure emissions as if the trucks were actually on highways. They also would agree to make all engines after October 2002 meet emission standards that were supposed to go into effect 14 months later, in 2004.

American Trucking Assn. President Walter B. McCormick Jr. wrote Clinton that the required changes in new truck engines “will send shock waves through the economy in the next year, affecting manufacturing, sales and service sectors of the heavy duty truck and engine market.”

He said the new engines may lose up to 10% of their fuel efficiency, which would cut into truckers’ profits so deeply that it “leaves trucking companies with little choice but to delay or cancel orders for new trucks and engines.” He said if truckers keep their old vehicles longer than they intended, the settlement could have the effect of making air quality worse.

McCormick urged Clinton to expand the deadlines for when the new engines are required “to soften the economic impact for both manufacturers and users alike.”

Environmentalists say that the EPA is violating the Clean Air Act by failing to order a recall of the trucks.

In June, EPA and Justice Department officials said the companies designed the engine software so that anti-smog equipment worked only during the EPA tests and was bypassed when the engines were actually in use. As a result, emissions were three or four times higher than legal limits, and fuel efficiency shot up.

But engine manufacturers have argued that it wasn’t illegal or intentional, and that the EPA’s testing procedure was to blame. The problem focused on when during combustion the computer software injected fuel into the engine.

The smog caused by nitrogen oxides is especially hazardous to children, the elderly and people with respiratory disease, who can lose some of their lung capacity. The pollutant also causes acid rain, which harms wildlife.