Clinton administration officials announced a record-breaking $1-billion settlement with diesel engine manufacturers Thursday, drawing threats of lawsuits by environmentalists who want the illegal, exhaust-spewing trucks removed from the roads immediately.
In the largest civil penalty ever imposed for violations of an environmental law, seven large engine manufacturers agreed to pay $83.4 million in fines, $109.5 million to fund research into clean fuel projects, and at least $850 million to produce new, cleaner engines over the next few years.
Environmental Protection Agency Administrator Carol Browner said 1.3 million trucks on U.S. roads are emitting massive, illegal amounts of smog-causing exhaust because the engine manufacturers committed high-tech cheating that violated the Clean Air Act. She said the companies designed engine software with "defeat devices" that illegally bypassed emission control equipment.
The software devices control the timing of when fuel is injected into the engine. A change in the timing caused fuel efficiency to improve but emissions to surge.
Environmentalists on Thursday were angry about the deal, saying that it will allow the illegally polluting trucks to remain on the road for years without repairs.
Led by the Sierra Club, several national environmental groups said they will sue the EPA to block the settlement. They charge that the trucks should be immediately fixed because under the Clean Air Act, a recall is mandatory when emissions equipment is faulty.
Browner said she did not order a recall of the truck engines, produced since 1988, because it would be hard to enforce and disruptive to truckers to take fleets off the road and hold up important cargo.
Instead, under the terms of the deal, the manufacturers must fix the software when the truck engines are rebuilt, typically after three years.
The companies also must start using tougher tests for certifying new engines, which will decrease emissions in the future. Also, all new engines manufactured after October 2002 will have to meet standards that cut nitrogen oxides in half. Those standards were supposed to go into effect in January 2004.
This year, the illegal engines will emit 1.3 million excess tons of nitrogen oxides, the equivalent of 65 million cars, and almost 70% more than they were supposed to, EPA officials said. Nitrogen oxides are a main ingredient of the smog that is widespread throughout urban areas, especially the Los Angeles Basin.
U.S. Atty. Gen. Janet Reno said the companies designed the engine software so that anti-smog equipment worked only during the EPA tests in laboratories and was switched off when the engines were actually in use on highways. As a result, emissions were up to three times higher than legal limits.
"Today, we're sending a clean message: If you illegally pollute, you will pay," Browner said.
The engine manufacturers deny any wrongdoing. They contend that they did not install defeat devices and that they had complied with the EPA's testing procedure, which they said was never designed to test highway emissions. They said they settled because they did not want the legal case to drag out.
The seven diesel companies are Detroit Diesel, Cummins Engine Co. Inc., Navistar International, Caterpillar Inc., Mack Trucks Inc., Renault Vehicules Industriels and Volvo Truck Corp. Cummins, Detroit Diesel and Caterpillar will pay most of the penalties because they produced most of the engines.
EPA officials said the agreement will eliminate an estimated 75 million tons of nitrogen oxides by 2025, equivalent to three years' worth of the pollutant from all sources in the United States.
Browner said the terms are more sensible than a recall because they will not penalize truckers, who she stressed were not to blame for the violations.
Still, trucking companies were vehemently opposed to the terms of the settlement.
American Trucking Assn. President Walter B. McCormick Jr. wrote President Clinton that the required changes in new truck engines "will send shock waves through the economy in the next year." He said the new engines may lose up to 10% of their fuel efficiency, which cuts heavily into truckers' profits.
The EPA's Browner, however, said the loss of fuel efficiency would be more like 1% to 2%, "very, very minor."
One-quarter of the $83.4 million in civil penalties will go to California, which has a related settlement with the companies because it conducts its own emissions tests.
California Air Resources Board officials said they don't know whether the settlement will offset the entire increase in pollution caused by the illegal engines, which is estimated at 1.5 million tons in California over the lifetime of the vehicles. That is considered a massive amount in a state that has struggled for decades to meet smog standards.