In the Supreme Court of the United States
UNITED STATES DEPARTMENT OF TRANSPORTATION,
ET AL., PETITIONERS
PUBLIC CITIZEN, ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THEODORE B. OLSON
Department of Justice
Washington, D.C. 20530-0001
Counsel of Record
STEPHEN P. BERZON
Counsel of Record
ADAM B. WOLF
NUSSBAUM, RUBIN & DEMAIN
177 Post Street, Suite 300
San Francisco, CA 94108
Attorneys for Respondents
Public Citizen, Inter-
national Brotherhood of
and Environmental Law
(Additional Counsel Listed on Inside Cover)
PETITION FOR WRIT OF CERTIORARI FILED: SEPT. 8, 2003
CERTIORARI GRANTED: DEC. 15, 2003
GAIL RUDERMAN FEUER
ADRIANNA QUINTERO SOMAINI
71 Stevenson Street, Suite 1825
San Francisco, CA 94105
Attorneys for Respondents
Natural ResourceS Defense
Council and Planning and
DAVID C. VLADECK
1600 20th Street, N.W.
Washington, D.C. 20009
Attorneys for Respondent
WEINBERG, ROGER &
1800 Grand Avenue, Suite 1400
Oakland, CA 94612
Attorneys for Respondent
Brotherhood of Teamsters,
Auto and Truck Drivers,
PATRICK J. SZYMANSKI
25 Louisiana Ave., N.W.
Washington, D.C. 20001
Attorney for Respondent
PATRICK J. COUGHLIN
ALBERT H. MEYERHOFF
STANLEY S. MALLISON
MILBERG WEISS BERSHAD
HYNES & LERACH LLP
100 Pine Street, Suite 2600
San Francisco, CA 94111
WILLIAM S. LERACH
MILBERG WEISS BERSHAD
HYNES & LERACH LLP
401 B Street, Suite 1700
San Diego, CA 92101
Attorneys for Respondents
of Teamsters, Brotherhood
of Teamsters, Auto and
Truck Drivers, Local 70,
California Labor Federa-
tion, California Trucking
Association, and Environ-
mental Law Foundation
BILL LOCKYER State of California [SEAL OMITTED]
Attorney General DEPARTMENT OF JUSTICE
DEPT OF TRANSPORTATION
01 Oct - 2 AM 9:09
1300 I STREET SUITE 125
P.O. BOX 944255
SACRAMENTO, CA 92244
Public: (916) 324-5475
Telephone: (916) 324-5475
Facsimile: (916) 327-2319
October 1, 2001
Honorable Julie Anna Cirillo, Deputy Administrator
Federal Motor Carrier Safety Administration
c/o Docket Clerk
U.S. DOT Dockets
400 Seventh Street, S.W.
Washington, D.C. 20590-0001
RE: Docket Nos. FMCSA 98-3297[-279], 3298[-254], and 3299[-259] Request to File Late-filed Comments
TRANSMITTED BY FACSIMILE - HARD COPY TO FOLLOW
Dear Deputy Administrator Cirillo:
California Attorney General Bill Lockyer, acting in his independent capacity to protect the natural resources of the State of California, asks to file these comments on the regulations proposed by the Federal Motor Carrier Safety Administration (FMCSA) that would allow facilitate, and regulate the entry and operation of Mexican carriers in the United States. The undersigned, on September 26, 2001, at 10:40 a.m. Pacific Daylight Time, spoke with Ms. Valerie Height of the FMCSA, who advised me that your agency is continuing to accept late-filed comments, although she cautioned me that the agency might not be able to consider fully comments filed at this point.
Attorney General Lockyer respectfully submit these comments pursuant to his independent authority to protect the public interest under the California Constitution, common law, and statutes. Along with other California agencies, the Attorney General has the power to protect the natural resources of the State from pollution, impairment, or destruction. (See Cal. Const., art., V, § 13, Cal. Gov. Code, §§ 12511, 12600-12; D'Amico v. Board of Medical Examiners (1974) 11 Cal 3d, 14-15.) These comments are made on behalf of the Attorney General and not on behalf of any other California agency or office.
We emphasize at the outset that Attorney General Lockyer does not make these comments in any attempt to prevent Mexican trucks from operating in California when FMCSA has fully complied with statutes and regulation applicable to these regulations. We do not seek to exclude trucks owned by Mexican carriers, but we do seek to have the full environmental and fiscal effects of the proposed regulations analyzed, disclosed, and where possible, mitigated pursuant to the National Environment Policy Act, the Clean Air Act, and the Unfunded Mandates Act before the regulations are issued in final form and become effective.
Our office has reviewed the proposed regulations and Regulatory Analysis. We believe that the proposal, contrary to FMCSA's analysis, is a major federal action with the potential significantly to affect the environment, and that, as such, it must be the subject of full environmental analysis pursuant to the National Environment Policy Act (NEPA), 42 U.S.C. 4321, et seq. Based upon our own, very preliminary analysis, we believe that the FMCSA must prepare a full environmental impact statement (EIS) on the proposals before they can be published in final form. Further, we believe that the FMCSA must prepare a full environmental impact statement (EIS) on the proposals before they can be published in final form. Further, we believe that the FMCSA must prepare and publish a conformity determination, as required by the federal Clean Air Act, 42 U.S.C. § 7506 for the actions that would be permitted and facilitated by the proposed regulations before those regulations may be finally adopted. Finally, we do not believe that the existing Regulatory Analysis supports the finding by FMCSA that the proposed regulations do not violate the Unfunded Mandate Act, and that additional documentation and support for that finding is required before the proposed regulations may be issued in final form. Each of these statutes is discussed more fully below.
National Environmental Policy Act
Allowing Mexican carriers to enter and operate in the United States beyond the existing commercial zone is a change to the status quo that will increase significantly the emission of air pollutants from Mexican trucks in this country, and in California where such trucks are driven in California. The pollutants whose emission will increase include both criteria pollutants such as oxides of nitrogen, and toxic pollutants. Oxides of nitrogen are designated as a criteria pollutant by the Clean Air Act and regulations issue pursuant to it. 42 U.S.C. §7409(a) and (c); 40 C.F.R. § 50.11. The California Air Resources Board has designated particulate exhaust from diesel engines as a toxic air contaminant1, and diesel engine exhaust is listed as a chemical known to the State of California to cause cancer, pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known as Proposition 65).2 The proposed regulations, by allowing the operation of hundreds, perhaps thousands, of trucks in California each day that do not currently operate here, trucks that are not subject to the full panoply of emission control requirements to which California trucks are subject, will allow concomitant increases in pollutant emissions from those trucks.
NEPA's requirements are simple, clear, and apply here. NEPA was passed to ensure that "environmental concerns be integrated into the very process of agency decisionmaking." Andrus v. Sierra Club, 442 U.S. 347, 351; 42 U.S.C. 4321. It requires that an Environmental Impact Statement (EIS) be prepared for all "major Federal actions significantly affecting the quality of the quality of the human environment." 42 U.S.C. § 4332(2)(C). If an agency is not sure whether the action requires preparation of an EIS, it must first prepare an Environmental Assessment (EA) to determine whether the action will have a significant effect on the environment. 40 C.F.R. § 1501.4; Salmon River Concerned Citizens v. Robertson, 32 F.3d 1346, 1356 (9th Cir. 1994). If the EA establishes that the agency's action may have a significant effect upon the . . . environment, then the agency must prepare an EIS on the action. Foundation for North American Wild Sheep v. United States Dep't of Agriculture, 681 F.2d 1172, 1178 (9th Cir. 1982). If it is clear from the EA that the action will not have such a significant effect, the agency issues a Finding of No Significant Impact (FONSI), see Blue Mountains, 161 F.3d at 1212 (quoting Save the Yaak Comm. v. Block, 840 F.2d 714, 717 (9th Cir. 1988). The record here does not show that FMCSA performed an EA, or issued a FONSI.
We believe that it should have. The increased air pollution that will result from allowing Mexican carriers to operate outside the existing commercial zone is a major federal action with more than significant potential to harm the human environment. The Notice of Proposed Rule Making states that "the proposed action does not require any environmental assessment" and the Regulatory Analysis states explicitly that it does not discuss environmental issues. We therefore do not know the basis upon which FMCSA has made its finding that the proposed regulations do not constitute a major federal action significantly affecting the environment. Because our own analysis leads us to conclude that the proposed regulations will significantly harm the environment, we believe that FMCSA must prepare a full EIS in order to comply with NEPA. At the very least, the agency must prepare an EA. If the EA leads FMCSA to again conclude that the proposed regulations have no significant potential to harm the environment, the agency must issue a FONSI setting out the reasons, backed up by documentation and analysis, to support that conclusion. To this point, FMCSA has done neither, placing it in violation of NEPA.
In making an evaluation of the potential effects on the environment of the proposed regulations, FMCSA must consider not only the effects in the immediate future, but those that are reasonably foreseeable over the medium and longer term. "Crystal-ball" analysis of uncertain future consequences is not required by NEPA, but a projection of environmental effects from the federal action that can be predicted with reasonable certainly is required. 40 CFR § 1508.17. This is particularly true for air pollution, where planning horizons for State Implementation Plans (SIP) stretch one to two decades into the future. 42 U.S.C. § 7511. It is in this context that FMCSA must determine whether the proposed regulations are a major federal action significantly affecting the environment.
The regulations isued by the Council on Environmental Quality (CEQ) to interpret NEPA provide that whether an action can be considered "significant" depends on many factors, including "the degree to which the proposed action affects public health and safety" and "[w]hether the action threatens a violation of Federal, State, or local law or requirements imposed for the protection of the environment." 40 CFR 1508.27, (2) and (10). Here, the increased diesel engine emissions that will be caused by authorizing Mexican trucks to operate freely outside the commercial zone will result in increased human exposures to diesel exhaust as a whole, and increased human exposure to known carcinogens, such as benzene, that are constituent chemicals in diesel exhaust. These emissions will cause an increase in the risk of cancer and other human health damage. The CEO regulations also provide that the significance of an action should be judged in context. 40 C.F.R. § 1508.27(a). In California, the increase in diesel exhaust emissions will worsen exposure in areas where there is already very considerable exposure to diesel exhaust, such as the South Coast Air Basin.3 As an indication of how severe the diesel exposure problem currently is, last year the south Coast Air Quality Management District (SCAQMD), the agency that is responsible to reducing air pollution in the greater Los Angeles metropolitan areas, adopted rules that will require public agencies from school districts to sanitation agencies in that air basin to spend cumulatively millions of dollars to buy low-polluting buses and trucks as they replace or augment their fleets, in an attempt to reduce diesel emissions, emissions of the very type that the Mexican trucks will increase. The increase in diesel emissions in such heavily polluted air basins as the South Coast Basin and the San Joaquin basin that a significant influx of additional trucks will cause must be considered significant, and requires full environmental analysis.
Further, the Mexican trucks will also emit increased oxides of nitrogen, one of the precursors of photochemical ozone pollution (what is commonly referred to as smog). This impact will be significant in the South Coast Basin, one of only two areas of the country with an "extreme" ozone problem.4 Any increase in emissions of oxides of nitrogen in that air basin may make it virtually impossible for California and the SCAQMD to amend the SIP and craft regulations that will allow the basin to meet federal air quality standards. Such an impact is significant, and on its own requires a full environmental analysis.
As a threshold matter, we do not believe that FMCSA has provided a sufficient basis in fact to support its estimates, whether high, medium, or low, of the number of carriers currently operating in the commercial zone, or operating without appropriate regulatory documentation, during the moratorium, and has assumed that the universe of Mexican carriers wishing to operate in the United States will not greatly increase when the moratorium ends. With respect, we do not believe that this assumption has been adequately supported. When the moratorium is lifted, a new, legal market for transport will open to Mexican carriers, and we believe that more documentation of the numbers of carriers that may apply for OP-1 or OP-2 status must be provide before FMCSA may rely on its extremely low estimate of the numbers of carriers that will take advantage of the proposed regulations to enter the U.S. Such documentation should include economic analyses of the transport market in Mexico, and analysis of the possible entry into the Mexican market of foreign companies, including the possibility of American trucking companies establishing Mexican firms or affiliates.
We are aware that, in many respects, the emission standards for new Mexican trucks are the same as California standards. However, this is misleading; there are many differences that will cause the Mexican commercial carrier fleet, which includes far more older than new trucks, to emit greater amounts of particulate and nitrogen oxide emissions than California trucks. We have had a preliminary examination of the differences made, and summarize the most significant ones below. The technical report from which these facts are drawn will be submitted under separate cover:
1. Mexican trucks were not subject to emissions control regulations prior to 1993, while federal5 and California trucks were subject to such regulations as of 1987. Thus, while current emissions standards for California and Mexican trucks may be the same (at least, on paper), there were no regulations to ensure, and no assurance is possible, that Mexican trucks manufactured before the advent of emissions regulations in Mexico are controlled to the same level that 1987-93 federal and California trucks are.
2. The overall emission from any given fleet depend to a large degree on the ages of the vehicles that comprise the fleet. Here, not only were Mexican trucks not subject to emissions standards prior to 1993, but the Mexican fleet is, as a whole, of a far greater average age than the federal or California fleet. That is, there is a much higher percentage of vehicles in the Mexican fleet that are older than ten years than there is in the federal or California fleet, a higher percentage that is older than 20 years, and so on, including a higher percentage of trucks that are forty-five years old6 than can be found in the federal or California fleet. The greater age of the Mexican fleet makes it higher-emitting as a whole.
3. Specifically, the Mexican fleet emits more nitrogen oxides than the California fleet, and will continue to do so into the future. For the year 2010, the Mexican fleet will emit between 10% and 68% more nitrogen oxides than the California fleet, depending on the age distribution of the Mexican fleet at that time. The situation is even worse for emissions of particulates (the chief cancer risk): in 2010, the Mexican fleet can be expected to emit between 17% and 80% more than the California fleet, again depending on the age distribution of the Mexican fleet. These figures alone constitute a potential for significant environment impacts, and require preparation of an EIS on the proposed regulations.
4. As background, and as the FMCSA must be aware, heavy-duty truck engines are often, perhaps usually, rebuilt during the life of the vehicle. Recently, the U.S. EPA and the California Air Resources Board (CARB) entered into a consent decree with major manufacturers of heavy-duty diesel engines. This consent decree requires that, when heavy-duty engines are rebuilt in the U.S. (including California), they must be rebuilt using low-nitrogen oxide kits supplied by the settling manufacturers. These kits will lower nitrogen oxide emissions from the levels emitted when the trucks were new. However, Mexican trucks are not subject to the consent decree. Presumably, these trucks will be rebuilt with standard techniques, and not using the low-nitrogen oxide kits. Certainly, there is no regulatory requirement that they be rebuilt with low-nitrogen oxide rebuild kits, and FMCSA has no basis to assume that they will be. Accordingly, as truck engines are rebuilt, nitrogen oxide emissions from Mexican trucks will be greater than the corresponding emissions from California trucks of the same model year, and that difference will continue throughout the life of the rebuild. The current expectation is that the rebuilt trucks will emit about 36% less than the pre-rebuild trucks, meaning that Mexican trucks will emit about 36% more than corresponding California trucks from the date of rebuild for the life of the rebuild.7 Again considering how long Mexican trucks tend to be driven, this will constitute a continuing, and significant, increase in emissions over time, and will harm the environment in which the trucks are driven. In the South Coast Basin, such an increase in nitrogen oxides emissions over currently projected emissions (i.e., those now expected from the operation the truck fleet as it is currently configured in the area) will endanger the attainment of federal and state air quality standards for many years into the future. This constitutes another significant impact that requires an EIR.
5. California has in place a diesel inspection and maintenance program, to ensure that diesel engines in trucks and buses have their emissions control systems periodically inspected, and properly maintained. This program applies only to California diesels, and has been shown to reduce particulate emissions by about 30% on a fleetwide basis, and up to 50% in the case of vehicles that fail roadside tests. Because the program does not apply to Mexican trucks, those trucks will emit, and continue over time to emit, proportionately more than the California trucks that are subject to the program.
6. Emission from the trucks and buses are directly related to the fuel they burn. Federal and California regulations are now moving to limitations on sulfur in diesel fuel, limiting the sulfur content to 15 parts per million. There is no guarantee that Mexico will adopt and enforce a corresponding limitation on sulfur in diesel fuel available in Mexico. Since excess sulfur can permanently damage and corrupt emission control systems, the difference between California/federal fuel and Mexican fuel presents a serious potential for increased emissions from Mexico trucks.
This list illustrates the variety, and gives an indication of the number and magnitude, of the ways in which Mexican emission standards are not identical with California or federal emissions standards. It is clear that the Mexican truck fleet will emit significantly more nitrogen oxides and particulate matter than the California or federal truck fleets.8 Before the proposed regulations allow these trucks to release this added pollution in California, FMCSA must comply with NEPA and prepare environmental documentation. We believe that a full EIS is required, and that the regulations cannot legally be finalized until this is done.
In addition to the air pollutant emission questions, we also believe that circumstances with respect to transportation of hazardous materials have changed since the time the regulations were proposed. As many news stories have reported, there may now be a terrorist threat from the deliberate misuse of hazardous materials, and terrorists may have sought licenses to transport such materials in order to release or otherwise do harm with them. We understand that your agency is now charged with making a thorough investigation of the potential for terrorist use of hazardous materials in transport. We respectfully suggest that this investigation ought to include an examination of the potential for transport of hazardous materials from Mexico, in Mexican carriers' trucks, and that the potential for harm to the environment from any release of such materials ought to be examined in the EIR that we believe is legally require for these proposed regulations.
The Clear Air Act
The Clear Air Act, 42 U.S.C. 7401, et seq., at 42 U.S.C. section 7506, forbids any federal agency from taking any action that is not conformity with the State Implementation Plans (SIP) that is the overall plan for meeting and maintaining federal air quality standards. This requirement proscribes all federal agencies from permitting or requiring any action that would cause pollutant emissions in excess of those emissions that have been projected and provided for by the States and local governments in the relevant SIP. This is known as "conformity" with the SIP, and all federal agencies are under the affirmative duty to evaluate their actions for such conformity. The FMCSA presents no conformity determination in its proposed rule making, and it does not appear that any was performed. The Clear Air Act makes a consistency determination the affirmative responsibility of federal agency. Environmental Defense Fund v. EPA, 167 F.3d 641, 643 (D.C. Cir. 1999).9 Without repeating the list of reasons why the Mexican fleet will emit significant greater amounts of nitrogen oxides than the federal or California fleets, as set forth above, the numbers set out in this letter show that emissions increases to be expected from Mexican trucks are sufficiently large as to be inconsistent with the current emissions inventory and emissions "budget" reflected in the California SIP. This requires a conformity determination by FMCSA, and that determination must be done prior to final agency action, i.e., prior to the issuance of final regulations. We are concerned both with the potential adverse health effects of the increased emissions and with fairness. The ozone problem in California's South Coast Air Basin is truly extreme, and sources that contribute only perhaps one-tenth of one percent of the total pollution inventory are often considered significant. Sources that are not controlled at all in less polluted areas are tightly regulated in the South Coast Basin.10 The additional emissions put out by Mexican carriers' trucks will require equivalent decreases in emissions from some other source or sources, putting additional burdens on already heavily regulated California industries. Before the regulations are issued that would require such sacrifices from California, FMCSA must perform and certify a full conformity analysis.
Unfunded Mandates Act
The Notice of Proposed Rule Making states that there will be less than $100 million in costs to tribes, states, localities, and the private sector from the carrying out of the proposed regulations, and that therefore the regulations do not fall under the requirements of the Unfunded Mandates Act Reform Act of 1995. 2 U.S.C. § 1532, et seq. With all due respect, we do not believe that FMCSA has provided sufficient documentation to support this conclusion. It is clear from the proposed regulations that FMCSA will rely upon border or roadside inspections to determine whether Mexican carriers are actully complying with the safety programs whose documentation FMCSA reviews. However, the Government Accounting Office and the Department of Transportation's own Inspector General have made clear in recent reports that federal inspection of Mexican trucks is woefully underfunded, and that the greatest part of the burden of inspection falls on the States.11 We believe that FMCSA must develop and disclose a reasonable estimate, supported by appropriate documentation, of the number, length, and cost of inspections, both at the border and at the roadside, that States will be required to perform in order for the federal regulations to provide the assurance of compliance that FMCSA projects and relies upon in calculating the benefits and burdens of the proposed regulations. FMCSA must assure, pursuant to 2 U.S.C. § 1535, subdivision (a), that the alternative regulatory approach that is least burdensome alternative to the States has been chosen. The Inspector General's report cited above shows that California now performs the most inspections of Mexican trucks crossing the border, and we anticipate that it is on California that the greatest burden of inspection will fall under the proposed regulations. FMCSA is obligated under the Unfunded Mandates Act to properly calculate and disclose the extent of this burden, and to ensure that it has used the least burdensome regulatory approach. We do not believe that FMCSA has complied with these requirements.
Grave and serious questions about public health, environmental harm, potential for terrorism, and financial impacts on already stretched State budgets are presented by the proposed regulations, and have not been adequately analyzed or answered by FMCSA. We believed that the regulations cannot be lawfully adopted in final form until the statutes discussed above have been fully complied with. Attorney General Lockyer thanks the FMCSA for the opportunity to file these comments, and we hope that FMCSA will fully consider them and carry out the actions we have requested herein, including preparation of an EIR, preparation of a conformity determination, and revision of the Unfunded Mandates analysis.
Please feel free to contact my office with any questions.
/s/ SUSAN L. DURBIN
SUSAN L. DURBIN
Deputy Attorney General
For BILL LOCKYER
1 Cal. Code of Regs., tit. 17, sec. 93000.
2 Cal. Code of Regs., tit. 22, sec. 126000.
3 See Los Angeles Times, January 13, 2000 (Metro Section), and Orange County Register, February 5, 2001.
4 The other extreme ozone area is Houston, Texas.
5 This letter uses the term "federal" to refer to trucks and buses that were certified to federal standards issued by the U.S. Environmental Protection Agency, and "California" to refer to trucks and buses certified to California's emissions standards by the California Air Resources Board.
6 As seen in the Mexican trucks now being operated in Imperial and San Diego Counties in California, within the existing commercial zone.
7 Development and Use of Heavy-Duty Nox Defeat Device Emission Effects for MOBILE5 and MOBILE6", M6HDE Report, US EPA, October 1999.
8 While any individual carrier's truck may not emit a significant amount by themselves, the CEQ regulations at 40 C.F.R. sec. 1508.27(b)(7) require that actions be evaluated cumulatively with other actions to determine their significance. Thus, FMCSA is required to look at the cumulative emissions that would be caused by all the Mexican carriers' trucks that would increase their operations in California under the proposed regulations in determining whether the action is "significant."
9 Although the EDF case dealt with transportation projects, consistency is a requirement imposed on all federal agencies and activities.
10 In the South Coast Air Quality Management District, controls have been enacted on consumer products such a spray deodorants, bakeries, and pleasure boats, all sources whose control was not anticipated even a few years before. Daniel Selmi, Impacts of Air Quality Regulation on Economic Development, 13 Fall Nat. Resources & Env't 382 (1998).
11 DOT Office of Inspector General, Interim Report on Status of Implementing the North American Free Trade Agreement's Cross-Border Trucking Provisions. IG Report No. MH- 2001-059 (May 8, 2001); General Accounting Office, Commercial Trucking, Safety and Infrastructure Issues Under the North American Free Trade Agreement, GAO No. RCED-96-61 (February, 1996)
United States General Accounting Office
GAO Report to Congressional Requesters
December 2001 NORTH AMERICAN
Needed to Ensure
Compliance With U.S.
* * * * *
Since NAFTA's implementation, trade between the United States and Mexico has more than doubled, growing from $100 billion in 1994 to $248 billion in 2001.12 Enhanced trade has increased the number of northbound truck crossing from 2.7 million in fiscal year 2001. According to DOT, about 80, 000 trucks crossed the border in fiscal year 2000, 63,000 of which were estimated to be of Mexican origin. Trucks from Mexico enter the United States at border crossing points in four U.S. states (see fig. 1), but most of the crossings occurred at five ports entry in fiscal 2001: Laredo, El Paso, Hidalgo/Pharr in Texas, and Calexico and Otay Mesa in California.
Figure 1: Commercial Ports of Entry Along the U.S.-Mexico Border
Note: Numbers in parenthesis indicate the number of ports of entry for those with more than one.
Source: GSA and DOT.
Commercial truck traffic at Texas and California ports of entry, which handle approximately 91 percent of truck crossings from Mexico, has grown just over 60 percent since NAFTA went into effect. Table 1 lists the principal commercial ports of entry and the number of truck crossings that occurred at each port in fiscal year 2001.
Table 1: Truck Crossings From Mexico into the United States, Fiscal Year 2001
Percentage of total crossing
Source: U.S. Customs Service.
Under NAFTA, barriers have gradually been reduced for trade in goods and services among Canada, Mexico, and the United States. Among other things, NAFTA allows Mexican commercial vehicles greater access to U.S. highways to facilitate trade between the two countries. Under NAFTA's original timeline, Mexico and the United States agreed to permit commercial trucks to operate within both countries' border states no later than December 18, 1995, and beyond the border states by January 1, 2000.13
However, due to U.S. concerns about the safety of Mexican trucks and the adequacy of Mexico's truck safety regulatory system, the United States postponed implementation of NAFTA's cross-border trucking provisions and only permitted Mexican trucks to continue to operate in designated commercial zones within Arizona, California, New Mexico, and Texas.14
DOT's Office of Inspector General and GAO have reported that out-of-service rates for Mexican trucks operating in the commercial zones exceeded those of U.S. trucks in the nation as a whole. The Inspector General has also reported that the percentage of Mexican trucks placed out-of-service in the commercial zones declined from 44 percent in fiscal year 1997 to 36 percent in fiscal year 2000.
In 1998, Mexico challenged the United States' delay in implementing NAFTA's schedule for cross-border trucking. In February 2001, a NAFTA arbitration panel ruled that the United States' blanket refusal to review and consider Mexican motor carrier applications for operating authority to provide cross-border trucking services beyond the commercial zones violated its NAFTA obligations. The panel indicated that under NAFTA, the United States is permitted to establish its own safety standards and ensure that Mexican trucking firms and drivers comply with U.S. safety and operating regulations. However, the panel also noted that due to differing regulatory regimes in each country, the United States need not treat Mexican carriers or drivers exactly the same as those from the United States or Canada, provided that such different treatment is imposed in good faith with respect to a legitimate safety concern and conforms with relevant NAFTA provisions.
In February 2001, the administration announced that it would comply with its NAFTA obligations and allow Mexican commercial carriers to operate beyond the commercial zones by January 2002. In May 2001, DOT issued three proposed rules that would revise existing regulations and application forms and establish a two-tiered application process for Mexican carriers seeking authority to operate within and beyond the commercial zones.15 Under the proposed rules, a carrier's authority would be conditioned on satisfactory completion of a safety audit within 18 months of receiving conditional operating authority.16
* * * * *
The small scale and size of Mexican trucking operations could also limit travel beyond the commercial zones. Mexico's truck fleet is relatively small compared with that of the United States, and Mexican trucking association representatives said that their members' fleets have fewer trucks than their U.S. counterparts. For example, there are nearly 600,000 trucking companies with approximately 6.3 million tractors and trailers in the United States, according to DOT. Mexico, in contrast, in 200010 had approximately 83,000 federally registered commercial cargo carriers with approximately 277,000 tractors and trailers (trucks may also be registered by Mexican states if they do not drive on federal highways).11 Further, the overall age of the Mexican commercial vehicle fleet may also limit the number of Mexican carriers able to operate beyond the commercial zones. According to Mexican registration data, in 2000 only 20 percent of the commercial cargo trucks registered for use on Mexican federal highways were manufactured after 1994. Mexican industry officials told us that trucks manufactured in Mexico prior to this date were not built to U.S. safety and emissions standards. Mexican carriers can apply to have older vehicles certified to be in compliance with U.S. safety standards. However, Mexican industry officials told us that these vehicles might have difficulties meeting U.S. emissions standards.
Uncertainty about DOT's final rules for obtaining operating authority has reduced the number of Mexican carriers that will initially apply for authority to operate beyond the commercial zones, according to Mexican government and private sector representatives. According to these officials, this uncertainty makes it difficult to plan for the future since union contracts allowing traveling beyond the commercial zones and distribution ties must be established in advance.
Emissions Inspection of Commercial Trucks
Vary by State
Under the 1990 Clean Air Act, EPA is required to establish minimum national standards for air pollution and individual states are assigned primary responsibility to ensure compliance with the standards through state implementation plans. Such plans can include truck emissions inspections. Since 1994, EPA's primary role in regulating commercial truck emissions has been to certify compliance of commercial truck engines at the factories where they are manufactured. EPA relies on the commercial truck engine manufacturers to certify that their products meet air emissions standards and conducts spot checks at engine factories.
Some U.S. states have implemented emissions testing requirements for heavy-duty diesel trucks as part of their efforts to meet EPA air quality standards for non-attainment areas.12 State testing programs differ significantly, with some states requiring yearly checks of trucks and others operating both annual and more frequent roadside inspection programs. California, which has a large number of areas that do not meet federal air quality standards, including the state's two southern border counties, conducts emissions tests at the border. Since 1999, California has assigned two inspectors each to the ports of entry at Calexico and Otay Mesa to monitor the emissions of U.S. and Mexican heavy-duty vehicles. According to California state officials, in 2000, the failure rate for U.S. trucks was approximately 8 percent, while the failure rate for Mexican trucks was 12 percent.
Arizona also operates an emissions testing program for commercial trucks, but testing is conducted on a yearly basis for trucks registered in the state's two non-attainment areas, Phoenix and Tucson-neither of which are located at the border. Neither Texas nor New Mexico performs emissions inspections at the border.
12 NAFTA was agreed to by Canada, Mexico, and the United States in 1992 and implemented in 1994.
13 Canada and the United States have permitted each other's truck complete access to all highways since 1982.
14 Commercial zones are designated areas where Mexican commercial vehicles are allowed to (1) transfer their cargo to U.S. carriers or (2) unload their cargo for later pick-up by U.S. carriers. Commercial zones generally encompass areas extending between 3 and 20 miles north of U.S. border cities.
15 Among other things, the rules would require carriers to
(1) describe their operations, (2) self-certify that they understand and will comply with U.S. safety standards, and (3) describe their recordkeeping procedures relating to drivers and accidents.
16 These safety audits are expected to focus on reviewing a carrier's records and not individual truck inspections.
10 Secretariat of Communication and Transportation, Estadistica Basica del Autoransporte Federal. (Mexico City, Mexico: 2000).
11 An additional 23,000 vehicles of all types are operated by private trucking companies. Private trucking companies own and operate their own fleet.
12 EPA defines a non-attainment area as a geographical region that exceeds scientifically accepted levels for certain air pollutants.
NORTH AMERICAN FREE TRADE AGREEMENT
ARBITRAL PANEL ESTABLISHED PURSUANT TO CHAPTER TWENTY
IN THE MATTER OF
CROSS-BORDER TRUCKING SERVICES
(Secretariat File No. USA-MEX-98-2008-01)
Final Report of the Panel
February 6, 2001
J. Martin Hunter (Chair)
Luis Miguel Diaz
David A. Gantz
C. Michael Hathaway
* * * * *
B. The United States' Contentions
153. According to the United States:
[t]he Mexican safety regime lacks core components, such as comprehensive truck equipment standards and fully functioning roadside inspection or on-site review systems. In light of these important differences in circum-stances, and given the experience to-date with the safety compliance record of Mexican trucks operating in the U.S. border zone, the United States decision to delay processing Mexican carriers' applications for operating authority until further progress is made on cooperative safety efforts is both prudent and consistent with U.S. obligations under the NAFTA.142
154. Thus, the United States is not obligated to grant Mexican trucking firms operating authority when there are not yet adequate regulatory measures in place in Mexico to ensure U.S. highway safety.143 The United States asserts "that NAFTA contains no such requirement. To the contrary, under NAFTA's national treatment and most-favored-nation obligations, a NAFTA Party may treat service providers differently in order to address a legitimate regulatory objective."144
155. According to the United States, Mexican carrier safety cannot be assured on a case by case basis: "A carrier-by-carrier approach, however, cannot effectively ensure safety compliance by Mexican motor carriers operating in the United States. Rather, as the United States has explained, highway safety can only be assured through a comprehensive, integrated safety regime. It is for this reason that the United States is working with Mexican officials to develop comparable motor carrier safety systems."145 Nor can the United States, as a practical matter, inspect every truck as it crosses the border.146
156. The United States notes the deficiencies of the Mexican oversight system:
The Government of Mexico cannot identify its carriers and drivers so that unsafe conduct can be properly assigned and reviewed. While we understand that the Government of Mexico is engaged in an extensive effort to register all of its motor carriers and place them in a database that would facilitate the assignment of safety data, that database does not contain any safety data. Therefore, Mexico cannot track the safety fitness of its carriers and drivers. . . . Without such carrier safety performance history, the United States cannot conduct a meaningful safety fitness review of Mexican carriers at the application stage.147
157. The United States also contends that it would be futile to try to perform inspections of Mexican carriers in Mexico because "Mexican carriers are not required to keep the types of records that are typically reviewed in these inspections." Even if an effort were made, it "could not be corroborated until the Government of Mexico develops and implements information systems to collect and make available that information."148 Nor has there been any U.S. verification experience in Mexico: "The United States has never performed a compliance review or any other type of carrier or truck inspection in Mexico or issued any 'qualification or approval' to a Mexican carrier based on a visit to a carrier's offices."149
158. The United States also disagrees with Mexico's reliance on Article 105. According to the United States," the intent of Article 105 is simply to clarify that each NAFTA Party is responsible for ensuring that its state and provincial governments are in compliance with NAFTA obligations." Moreover, "Nothing in Article 105 suggests that measures entailing cooperation between NAFTA Parties are somehow forbidden or excluded."150
159. The United States (and Canadian) truck safety programs are the key to providing like circumstances in which trucks operate: they "provide a high degree of assurance that U.S. and Canadian trucks operating on U.S. highways each day meet minimum safety standards." The principal elements of the U.S. truck safety program include:
a comprehensive system of rigorous vehicle and operator safety standards; enforcement through road side inspections and onsite compliance reviews; strict record-keeping rules; electronic databases that promptly provide inspectors in the field with safety-related data on drivers and motor carriers; and a substantial commitment of enforcement resources and personnel.151
160. According to the United States," Adequate assurances of safety also require that Mexico, as Canada has done, adopt safety controls within its own borders. The United States has been engaged in extensive cooperative efforts with Mexico to assist in the development of the Mexican safety system. Although Mexico has made substantial progress, work remains undone." Under these factual circumstances, "NAFTA's national treatment and most-favored-nation obligations do not, as Mexico argues, require the United States to treat Mexican trucking firms in the same manner as U.S. and Canadian firms."152
161. In particular, NAFTA does not obligate:
the United States to license the operation of Mexican trucking firms in circumstances in which: (1) serious concerns persist regarding their overall safety record; (2) Mexico is still developing first-line regulatory and enforcement measures needed to address trucking safety standards; and (3) essential bilateral cooperative arrangements are not fully in place.153
162. Moreover, the United States contends that under Rule 33 of the Chapter Twenty Rules of Procedure, the burden of proving violations of Article 1202 and 1203, is on Mexico, "including the burden of proving relevant regulatory circumstances and demonstrating that those circumstances are 'like'."154
163. The United States suggests that:
to prove that a particular measure adopted or maintained by another NAFTA Party is inconsistent with Articles 1202 and 1203, the complaining Party must demonstrate each of the material elements of those [a]rticles. Those include showing: 1) the existence of one or more measures adopted or maintained by a Party; 2) that the measure(s) relate to crossborder trade in services; 3) the treatment accorded by the measure(s); 4) the extent to which that treatment may favor domestic, or certain foreign, service providers over the providers of the complaining Party; 5) the relevant "circumstances" under which that treatment is accorded; and 6) whether those circumstances are "like".155
164. Mexico is faulted for failing to address all of these elements: Most importantly, it has failed to describe the "circumstances" under which the United States is treating Mexican Firms for safety purposes. Moreover, Mexico has also neglected to demonstrate that those circumstances are "like" the circumstances that pertain to the regulation of U.S. and Canadian trucking companies.156
165. The inclusion of the qualifying "like circumstances" language "permits NAFTA Parties to accord differential, and even less favorable, treatment where appropriate to meet legitimate regulatory objectives."157 The United States quotes with approval from Mexico's opening submission, "even if Mexican carriers were somehow not exactly 'like' U.S. and Canadian carriers, it was within the power of the United States to impose requirements that would make them 'like.'"158 However, the United States differs with Mexico on the fundamental issue of whether "Mexican carriers are 'like' U.S. and Canadian carriers for purposes of applying NAFTA's national treatment and MFN provisions."159
166. The United States reviews the use of the term "like circumstances" in U.S. bilateral investment treaties, arguing that NAFTA language is derived fromthem, even though the BIT language is "in like situations."160 Here and in the FTA, national treatment does not mean that a particular measure must in every case accord exactly the same treatment to U.S. and Canadian Service providers. Under paragraph three of FTA Article 1402, covered service providers from the two countries may be treated differently to the extent necessary for prudential, fiduciary, health and safety, or consumer protection reasons, as long as the treatment is equivalent in effect to that accorded to domestic service providers and the party adopting the measure provides advance notice to the other in conformity with Article 1803.161
167. According to the United States, NAFTA negotiating history confirms this earlier approach to the "in like circumstances" language, adopting "in like circumstances" on the understanding that it had similar meaning to "like services and services providers," as preferred originally by Canada and Mexico.162
168. Further support for the U.S. position is found in the U.S. Statement of Administration Action, which provides in pertinent part that "Foreign service providers can be treated differently if circumstances warrant. For example, a state may impose special requirements on Canadian and Mexican service providers if necessary to protect consumers to the same degree as they are protected in respect of local firms."163 Similarly, the Canadian Statement of Implementation provides that " a Party may impose different legal requirements on other NAFTA service providers to ensure that domestic consumers are protected to the same degree as they are in respect of domestic firms."164 Thus, "the 'like circumstances' language of Articles 1202 and 1203 makes clear that the United States may make and apply legitimate regulatory distinctions for purposes of ensuring the safety of U.S. roadways."165
169. The United States also contends that "The regulatory environment in which U.S., Canadian, and Mexican trucking firms operate is a critical 'circumstance' relevant to U.S. treatment of those firms because it helps to establish industry safety practices in the three countries. As elaborated in the Statement of Facts [of the U.S. submission], Mexican carriers in fact operate within a less stringent regulatory regime than that in place in either Canada or the United States."166 The problem areas include driver hours of service: "U.S. and Canadian safety rules strictly limit drivers' hours of service. Mexican truck drivers are only governed by the more general rules of Mexican labor laws, with no safety regulation directly applicable to the time a drivermay spend behind the wheel."167
170. Also, "U.S. and Canadian safety regulations require drivers to keep logbooks, the only practicable way to enforce hours of service regulations. Other than for hazardous materials, Mexico has no logbook requirements."168 Moreover, "U.S. and Canadian safety regulations include exhaustive equipment regulations address to truck safety. Mexico, however, lacks specific regulations gov-erning the condition and maintenance of CMV safety equipment."169 Other problematic aspects of Mexico's motor carrier regulatory system relate to inspections by the motor carrier itself and government safety inspections.170
171. The United States observes that "[a]nother circumstance relevant to the treatment of U.S., Canadian, and Mexican trucking firms is the ability of U.S. transportation safety authorities to enforce U.S. safety regulations with respect to those carriers."171 While the "maintenance of government databases of accident and safety records, with respect to both firms and drivers, is an important element of safety regulation in the United States (and Canada) . . . the United States has no access to similar data for Mexican firms ordrivers."172 Moreover, "U.S. highway safety regulators rely in part on their ability to conduct on-site audits and inspections of U.S. firms and, where appropriate, to impose civil or criminal penalties." However, "U.S. regulators have no right to conduct inspections or audits in Mexico, only limited and recent experience with Mexico on joint inspections (by contrast with a long track record with Canada), and limited ability to impose and collect civil or criminal penalties with respect to Mexican firms that might ignore U.S. safety regulations."173
172. A further major U.S. concern regarding "treatment of U.S., Canadian, and Mexican carriers is available evidence regarding the comparative safety records of firms operating in the United States. . . . Mexican trucks operating in the United States have a significantly higher incidence of being placed out of service for safety problems uncovered in random inspections. In particular, the available data show that the out-of-service rate for Mexican carriers is over 50 percent higher than the rate for U.S. carriers."174
173. In contrast to Mexico's system, the United States notes that "Canada's truck safety rules and regulations are highly compatible with those of the United States."175 Thus, "when Canadian-based commercial trucks cross into the United States, federal and state transportation authorities can have a high level of confidence that those trucks comply with U.S. standards and requirements at least to the same degree as U.S.-based trucks. That confidence level is bolstered by a fully functioning, computerized bilateral data exchange program."176 Under these circumstances, "when Mexican trucks cross into the United States, there is no assurance that, based on the regulatory regime in place in Mexico, those trucks already meet U.S. highway safety standards."177
174. Given all of these considerations, the "United States has . . . concluded that the 'circumstances' relevant to the treatment of Mexican-based trucking firms for safety purposes are not 'like' those applicable to the treatment of Canadian and U.S. carriers."178 Accordingly, "the United States may apply more favorable treatment to U.S. and Canadian trucking firms than to their Mexican counterparts without running afoul of Chapter Twelve's national treatment or most-favored-nation rules."179
175. The United States further notes that Mexico has presented no data on truck safety enforcement in Mexico, and states that although "Mexico does allege that 'it was within the power of the United States to impose requirements' that make Mexican carriers 'like' U.S. and Canadian carriers," Mexico has failed to explain "what those requirements might be nor how such requirements would be practicable or effective."180 According to the United States, "this absence of contrary evidence reinforces that the United States, in delaying the processing of Mexican applications until truck safety can be ensured, is acting reasonably, appropriately, and consistently with its NAFTA obligations."181
176. With regard to the question of whether high out-of-service rates for Mexican drayage trucks in the border zone are relevant to long-haul experience, the United States contends that "In terms of safety, the service provided by drayage trucks is no different from that provided by long-haul trucks-they haul goods on the same roads, through the same cities and towns through which long-haul trucks operate."182 In any event, Mexico has not demonstrated that their long-haul trucks are safer. Issuance by the United States of long-haul authority to Mexican trucks "would not, standing alone, prevent a defective drayage truck from operating in the United States beyond the border commercial zone."183
177. The United States explains certain carriers are permitted to "transit" U.S. territory from Mexico to Canada because the Congress has not granted the U.S. Department of Transportation ("DOT" or "Department") the authority to require such transit carriers to seek operating authority. Therefore, transit operations are unaffected by the moratorium on the issuance of operating authority to Mexican motor carriers for operations outside the commercial zone. All firms operating in the United States, however, regardless of whether they are subject to such registration requirements, are subject to DOT's safety jurisdiction.184
U.S.-owned, Mexican-domiciled carriers and "grandfathered" carriers are unaffected by the statutory moratorium and thus are also permitted to transport goods from Mexico to the United States beyond the border zone.185
178. However, the United States does not believe that the exemption of these groups from the moratorium "demonstrates that the United States does not have authentic safety concerns about Mexican carriers."186 "The number of carriers entitled to these exemptions represents only a small fraction-about two percent-of Mexican firms engaged in cross-border operations. Specifically, 8,400 Mexican firms have authority to operate in the commercial zones, while a total of only 168 Mexican carriers are entitled to the above discussed exemptions."187
179. Mexican motor carriers operating in the border commercial zones are required to obtain special certificates of registration. These carriers are fully subject to all U.S. safety regulations. They must also have trip insurance, must carry evidence of the insurance in their trucks, and must have U.S. registered agents.188 The United States denies that the use of trip insurance instead of continuous insurance reflects any lack of concern over differences in the safety of U.S. and Mexican carriers operating in the commercial zones. Rather, "[a]n insurer's potential liability arising from trip insurance is just the same as that arising from continuous insurance, and in both cases the insurer has the same incentives to reduce its potential liability."189
180. The United States also explains its alleged lack of concern with trailers: "In practice, however, the safety of Mexican trailer components has not been a major issue, because eighty to ninety percent of the trailers used in crossborder trade are in fact U.S.-owned."190
181. With regard to national treatment and most-favored-nation obligations, according to the United States, the relevant issue is whether the U.S. actions are consistent with its Chapter Twelve national treatment and MFN obligations in light of the different circumstances applicable to U.S. and Canadian trucking firms, on the one hand, and Mexican trucking firms on the other . . . it is acting reasonably and appropriately by delaying the processing of Mexican firms' applications for operating authority while U.S. and Mexican transportation officials work cooperatively to establish adequate safety enforcement tools to ensure that the grant of additional operating authority to Mexican firms does not undermine highway safety. Applying NAFTA's national treatment and MFN obligations to this set of facts turns on a close analysis of highway safety issues, not abstract arguments regarding "conditionality".191
182. According to the United States, Mexico has failed to meet its burden of proof regarding denial of investment benefits, "because Mexico had not shown that any Mexican national meets the definition of 'investor' in Chapter Eleven."192 In this respect, the United States disagrees with Mexican reliance on WTO doctrines under which a complaining Party does not have to show trade impact. Moreover, the United States believes under WTO principles "complaining parties bear the burden of proving an alleged violation by a WTO Member of its WTO obligations."193
183. The United States, which emphasizes that it has not raised Chapter Nine as a defense,194 also expresses its disagreement with Mexico's relating of the "in like circumstances" language to Chapter Nine. A NAFTA Party, according to the United States, does not need any NAFTA provision to serve as a "vehicle for" (which, presumably, Mexico means "to authorize") any particular governmental regulation. In applying governmental regulations, NAFTA only comes into play when a particular NAFTA obligation is relevant to the regulation at issue. Chapter Nine imposes certain obligations (such as MFN and national treatment obligations) with respect to standards-related measures, but Chapter Nine is not "the vehicle for application" of standards.
184. According to the United States, if Mexico's argument is predicated on the theory that only NAFTA Chapter Nine could "permit" differential treatment between domestic and foreign service providers, the argument is both circular and inconsistent with the plain text of the agreement.
185. Also, the United States contends that the Parties could not, as Mexico suggests, have intended Chapter Nine to serve as the exclusive "vehicle" for applying standards-related measures because the scope of Chapter Nine is limited to goods and only two services sectors: telecommunications and land transportation services. Chapter Nine does not apply to measures affecting any other services nor to measures affecting investment. Mexico's interpretation would lead to the untenable result that the Parties neglected to provide any "vehicle" for the application of standards-related measures applicable to most services covered by NAFTA and to all investments covered by NAFTA.195
186. The United States contends that its position is confirmed by Article 2101, one of the general exceptions, which provides:
that 'nothing in . . . Chapter Twelve (Cross-Border Trade in Services) . . . shall be construed to prevent the adoption or enforcement by any Party of measures necessary to secure compliance with laws or regulations that are not inconsistent with the provisions of this Agreement, including those relating to health and safety and consumer protection.'196
187. Similarly, in the Preamble to NAFTA, the Parties explicitly state their resolve under NAFTA to "preserve their flexibility to safeguard the public welfare."197 "These provisions illustrate that NAFTA Parties contemplated that their regulatory authorities would retain their ability to make regulatory distinctions with regard to cross-border services trade necessary to protect human health and safety in their territories."198
188. The United States also contests Mexico's assertion that a government may not "condition . . . market access of its goods and services on the exporting country's adoption of the rules and laws of the importing country."199 The United States disclaims the applicability of the unadopted GATT Panel report in Tuna,200 and argues that the controlling case is the Appellate Body Report in United States - Import Prohibition of Certain Shrimp and Shrimp Products. It appears to the United States, however, that conditioning access to a Member's domestic market on whether exporting Members comply with, or adopt, a policy or policies unilaterally prescribed by the importing Member may, to some degree, be a common aspect of measures falling within the scope of one or another of the exceptions (a) to (j) of Article XX of GATT 1994.201
189. The United States concludes, "Mexico has no support for its proposition that some general principle of international law prohibits the United States from taking account of the exporting Party's regulatory regime."202
190. The United States also asserts that Mexico has made no case for nullification or impairment under NAFTA Annex 2004, noting some similarity to the Korean Procurement case in the WTO.203 According to the United States, Mexico has the burden of showing nullification or impairment and has made no such argument. Also, the United States declares that under NAFTA, a nullification or impairment claim may not be made if it would be subject to an Article 2101 exception. As the United States has shown, differential treatment for Mexican carriers is warranted by safety concerns, and is thus consistent with the U.S. obligations under the national treatment and MFN provisions of Chapter Twelve. For the very same reasons, (and in the event that the Panel had needed to examine this issue in response to a nullification or impairment claim), the U.S. measure would fall squarely within the scope of Article 2101(2).204
191. The United States asserts that the "subjective" motivation for the alleged U.S. violations-as argued by Mexico-should not be the basis for the Panel's analysis. WTO Appellate Body decisions support the position of the United States that the pertinent issue here is whether safety concerns warrant the differential treatment provided to Mexican carriers, and not-as Mexico claims-the subjective motivations of U.S. decision-makers in December 1995.205
192. The United States cites to Japan - Alcoholic Beverages,206 where the Appellate Body determined that "This is not an issue of intent" and determined "an examination in any case of whether dissimilar taxation has been applied so as to afford protection requires a comprehensive and objective analysis of the structure and application of the measure in question on domestic as compared to imported products."207
193. Also, in Chile - Alcoholic Beverages,208 the Appellate Body noted that
The subjective intentions inhabiting the minds of individual legislators or regulators do not bear upon the inquiry, if only because they are not accessible to treaty interpreters. It does not follow, however, that the statutory purposes or objectives-that is, the purpose or objectives of a Member's legislature and government as a whole-to the extent that they are given objective expression in the statute itself, are not pertinent.209
194. Consequently, the Panel in this case should "likewise examine U.S. compliance with national treatment obligations based on a fact-specific analysis of the U.S. measure and all of the relevant circumstances, and not-as the Appellate Body wrote-on the 'subjective intentions inhabiting the minds of individual . . . regulators.'"210
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VII. FINDINGS, DETERMINATIONS AND RECOMMENDATIONS
A. Findings and Determinations
295. On the basis of the analysis set out above, the Panel unanimously determines that the U.S. blanket refusal to review and consider for approval any Mexican-owned carrier applications for authority to provide cross-border trucking services was and remains a breach of the U.S. obligations under Annex I (reservations for existing measures and liberalization commitments), Article 1202 (national treatment for cross-border services), and Article 1203 (most-favored-nation treatment for cross-border services) of NAFTA. An exception to these obligations is not authorized by the "in like circumstances" language in Articles 1202 and 1203, or by the exceptions set out in Chapter Nine or under Article 2102.
296. The Panel unanimously determines that the inadequacies of the Mexican regulatory system provide an insufficient legal basis for the United States to maintain a moratorium on the consideration of applications for U.S. operating authority from Mexican-owned and/or domiciled trucking service providers
297. The Panel further unanimously determines that the United States was and remains in breach of its obligations under Annex I (reservations for existing measures and liberalization commitments), Article 1102 (national treatment), and Article 1103 (most-favored-nation treatment) to permit Mexican nationals to invest in enterprises in the United States that provide transportation of international cargo within the United States.
298 It is important to note what the Panel is not determining. It is not making a determination that the Parties to NAFTA may not set the level of protection that they consider appropriate in pursuit of legitimate regulatory objectives. It is not disagreeing that the safety of trucking services is a legitimate regulatory objective. Nor is the Panel imposing a limitation on the application of safety standards properly established and applied pursuant to the applicable obligations of the Parties under NAFTA. Furthermore, since the issue before the Panel concerns the so-called "blanket" ban, the Panel expresses neither approval nor disapproval of past determinations by appropriate regulatory authorities relating to the safety of any individual truck operators, drivers or vehicles, as to which the Panel did not receive any submission or evidence.
299. The Panel recommends that the United States take appropriate steps to bring its practices with respect to cross-border trucking services and investment into compliance with its obligations under the applicable provisions of NAFTA.
300. The Panel notes that compliance by the United States with its NAFTA obligations would not necessarily require providing favorable consideration to all or to any specific number of applications from Mexican-owned trucking firms, when it is evident that a particular applicant or applicants may be unable to comply with U.S. trucking regulations when operating in the United States. Nor does it require that all Mexican-domiciled firms currently providing trucking services in the United States be allowed to continue to do, if and when they fail to comply with U.S. safety regulations. The United States may not be required to treat applications from Mexican trucking firms in exactly the same manner as applications from U.S. or Canadian firms, as long as they are reviewed on a case by case basis. U.S. authorities are responsible for the safe operation of trucks within U.S. territory, whether ownership is U.S., Canadian or Mexican.
301. Similarly, it may not be unreasonable for a NAFTA Party to conclude that to ensure compliance with its own local standards by service providers from another NAFTA country, it may be necessary to implement different procedures with respect to such service providers. Thus, to the extent that the inspection and licensing requirements for Mexican trucks and drivers wishing to operate in the United States may not be "like" those in place in the United States, different methods of ensuring compliance with the U.S. regulatory regime may be justifiable. However, if in order to satisfy its own legitimate safety concerns the United States decides, exceptionally, to impose requirements on Mexican carriers that differ from those on U.S. or Canadian carriers, then any such decision must (a) be made in good faith with respect to a legitimate safety concern and (b) implement differing requirements that fully conform with all relevant NAFTA provisions.
302. These consideration are inapplicable with regard to the U.S. refusal to permit Mexican nationals to invest in enterprises in the United States that provide transportation of international cargo within the United States, since both Mexico and the United States have agreed that such investment does not raise issues of safety.
* * * * *
142 USPHS at 2-3.
143 USCS at 2.
144 USCS at 2.
145 USPHS at 3.
146 USPHS at 4.
147 USPHS at 5.
148 USPHS at 6.
149 USPHS at 7. Although the United States asserts that it has never been able to perform compliance reviews in Mexico, Mexico disputes this fact. In its initial submission, Mexico observed that in 1997, USDOT officials, accompanied by Mexican officials, did indeed make visits to several Mexican motor carriers. According to Mexico, these U.S. officials were satisfied with the conditions they found during these inspections. MIS at 44-45.
150 USSS at 19-20.
151 USCS at 2.
152 USCS at 2-3.
153 USCS at 35.
154 USCS at 42.
155 USCS at 39.
156 USCS at 39.
157 USCS at 39.
158 MRS at 13.
159 USSS at 6.
160 USSS at 6-7.
161 USSS at 9-10, citation omitted.
162 USSS at 11-12.
163 USCS at 40-41, emphasis supplied by U.S.
164 USCS at 41.
165 USCS at 42.
166 USCS at 43.
167 USCS at 43.
168 USCS at 44.
169 USCS at 44.
170 USCS at 44.
171 USCS at 45.
172 USCS at 45.
173 USCS at 45.
174 USCS at 45-46.
175 USCS at 47.
176 USCS at 47-48.
177 USCS at 48.
178 USCS at 49.
179 USCS at 49.
180 USSS at 3-4.
181 USSS at 4.
182 USPHS at 7.
183 USPHS at 8.
184 USSS at 20-21.
185 USSS at 21-22, citations omitted.
186 USSS at 22.
187 USSS at 22.
188 USSS at 24.
189 USSS at 24-25.
190 USSS at 25-26.
191 USSS at 17.
192 USSS at 26.
193 USSS at 26-27, quotation and citation omitted.
194 Comments of the United States on the Initial Report of the Panel, December 19, 2000, at 2.
195 USSS at 14-16, citations omitted.
196 NAFTA Article 2101(2).
197 USCS at 40.
198 USCS at 40.
199 USPHS at 17, quoting Mexico.
200 United States - Prohibition of Imports of Tuna and Tuna Products from Canada (Report of the Panel adopted on Feb. 22, 1982, L/5198-29S/91 [hereinafter Tuna].
201 USPHS at 17-18.
202 USPHS at 18.
203 USPHS at 10-11.
204 USPHS at 13.
205 USPHS at 14-17.
206 Japan - Taxes on Alcoholic Beverages, Panel Report adopted Oct. 4, 1996, WT/DS8/AB/R.
207 Id. at 28-29, as cited in USPHS at 16.
208 Chile- Taxes on Alcoholic Beverages, Panel Report adopted Dec. 13, 1999, WT/DS87/AB/R.
209 Id. at para. 62, as cited in USPHS at 16, emphasis in original.
210 USPHS at 17.
FRIENDS OF THE EARTH**NATURAL RESOURCES DEFENSE
COUNCIL**SIERRA CLUB**CENTER FOR INTERNATIONAL ENVIRONMENTAL LAW
VIA FACSIMILE AND FEDERAL EXPRESS
U.S. Dept. of Transportation
Docket Management Facility, Room PL-401
400 Seventh Street, SW
Washington, DC 20590-0001
Re: Comments on Dockets:
1. Proposed Rules for the Revision of Regulations and Applications for Mexican-Domiciled Motor Carriers To Operate in U.S. Municipalities and Commercial Zones on the U.S.-Mexico Border, Fed. Reg. Vol. 66, No. 86 (May 3, 2001). FMCSA-98-3297
2. Proposed Rules for the Application by Certain Mexican Motor Carriers To Operate Beyond U.S. Municipalities and Commercial Zones on the U.S.-Mexico Border, Fed. Reg. Vol. 66, No. 86 (May 3, 2001) FMSC-98-3298
3. Proposed Rules for a Safety Monitoring and Compliance Initiative for Mexican Motor Carriers Operating in the United State, Fed. Reg. Vol. 66, No. 86 (May 3, 2001) FMCSA-98-3299
Dear Comment Clerk:
These comments are submitted on behalf of Friends of the Earth, Natural Resources Defense Council, Center for International Environmental Law, and Sierra Club for inclusion in the dockets of each of the proposed rules and draft guidance referenced above.
Friends of the Earth ("FoE") is an environmental advocacy organization established in 1969 with U.S. offices in Washington, DC, Seattle, WA and Burlington, VT. Friends of the Earth has more than 20,000 members nation-wide, and is dedicated to protecting the planet from environmental degradation; preserving biological, cultural, and ethnic diversity; and empowering citizens to have an influential voice in decisions affecting the quality of their environment-and their lives. A major program of FoE is to advocate for appropriate consideration of environmental consequences stemming from free trade agreements.
The Natural Resources Defense Council ("NRDC") is a national nonprofit environmental organization with more than 500,000 members. Since 1970, our lawyers, scientists, and other environmental specialists have been working to protect the world's natural resources and to improve the quality of the human environment. NRDC has offices in New York City; Washington, D.C.; Los Angeles; and San Francisco.
The Sierra Club is a national environmental advocacy group, founded in 1892, with more than 700,000 members.
The Center for International Environmental Law ("CIEL") is a public interest environmental law organization founded in 1989 to bring the energy and experience of the public interest environmental law movement to the critical task of strengthening and developing international and comparative international environmental law, policy, and management throughout the world. Through its offices in Washington, D.C. and Geneva, CIEL's Trade Program works to ensure that the governance of trade and investment rules integrates environmental protection and promotes sustainable development.
In these rules, the U.S. Department of Transportation's ("DOT") Federal Motor Carrier Safety Administration ("FMCSA") authorizes Mexican-owned trucks to operate on U.S. highways throughout the United States, including within and beyond communities on or near the U.S.-Mexico border. DOT's proposed action raises serious environmental issues that require appropriate consideration and mitigation where possible.
BACKGROUND AND SUMMARY
The comments of FoE, NRDC, Sierra Club, and CIEL concentrate on two concerns: 1) DOT must comply with the National Environmental Policy Act prior to finalizing these proposed rules, and 2) DOT must consider the disproportionate impact these rules will have on the health and safety of children pursuant to Executive Order 13045.
Beginning with the start of its implementation in 1994, The North American Free Trade Agreement ("NAFTA"), has liberalized trade among its signatories the United States, Mexico, and Canada. Among the many legal and policy changes NAFTA required of its signatories to take were new rules governing the shipment of goods and materials by truck. Specifically, NAFTA required that by 1995, Mexican trucks be permitted to drive throughout the U.S.-Mexico border states. NAFTA countries agreed to virtually completely open borders by requiring that trucks from any NAFTA country could drive anywhere in all NAFTA countries.
Limits on the operation of motor carries from Canada were lifted by a Presidential Memorandum from September 20, 1982. However, despite NAFTA's requirements, the Memorandum continued the moratorium for Mexican trucks, citing concerns over the safety of Mexican trucks. The U.S. only permitted them to travel in designated U.S. communities located with 20 miles of the U.S.-Mexico border. These designated communities are used by trucking companies to transfer freight among U.S. and Mexican trucks.
The procedures and regulations of the U.S. and Mexico which apply to motor carriers vary widely. The DOT grants motor carrier authority to operate through an application procedure, and regulates and enforces compliance with laws pertaining to safety and environmental issues through roadside inspections and compliance reviews at a truck company's place of business. Mexico's regulations are different than those in the U.S. as they relate to driver hours of service, driver logbooks, driver qualifications, transport and handling of hazardous substances, and equipment.
After several years of negotiations between Mexico and the U.S. to lift the U.S. moratorium were unsuccessful, on September 22, 1998, Mexico requested the formation of an arbitral panel to resolve the dispute pursuant to NAFTA Article 2008(1). On February 6, 2001, the arbitral panel issued its ruling In the Matter of Cross-Border Trucking Services (Secretariat File No. USA-Mex-98-2008-1). The arbitral panel ruled that the U.S. must allow Mexican commercial trucks to carry and deliver cargo throughout the U.S. or else pay trade sanctions for refusal to comply.
This increased truck traffic will result in significant impacts to the environment and raises serious safety issues, including, but not limited to, impacts to air quality, emissions of gasses that cause climate change, transport, handling, and release of hazardous materials. For instance, less stringent air emission standards apply to Mexican trucks, including diesel fuel standards that allow a higher sulfur content. It is estimated that Mexican trucks produce higher levels of Nitrogen Oxides ("NOx"), volatile organic compounds ("VOC"), carbon monoxide ("CO"), particulate matter less than 10 microns ("PM-10")1, and carbon dioxide (CO2).2 In addition, major differences exist between US and Mexico regulations pertaining to the transport and handling of hazardous substances. Mexico's regulations, for example, do not provide detailed construction, inspection, and operating requirements for commercial motor carriers, such as the regulations in the U.S.
DOT MUST PREPARE AN ENVIRONMENTAL ASSESSMENT AND SHOULD PREPARE AN ENVIRONMENTAL IMPACT STATEMENT PRIOR TO FINALIZING PROPOSED FEDERAL RULES IMPLEMENTING THE NAFTA PANEL'S DECISION
DOT's actions will be arbitrary and capricious if it promulgates these proposed regulations without first complying with NEPA, Counsel on Environmental Quality ("CEQ") regulations, and DOT's own procedures.
Enacted in 1970, NEPA requires all federal agencies to identify the harmful effects of projects they undertake, fund, or approve and to consider adoption of alternatives and mitigating measures that will avoid or reduce such impacts. To these ends, Section 102(2)(C) of the Act declares:
The Congress authorizes and directs that, to the fullest extent possible . . . (2) all agencies of the Federal Government shall-. . . (C) include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on-(i) the environmental impact of the proposed action . . . ." 42 U.S.C. § 4332(2)(C).
This mandate is intended to "inject environmental considerations into the federal agency's decision making process" and "to inform the public that the agency considered environmental concerns in its decision making process." Weinberger v. Catholic Action of Hawaii/Peace Education Project, 454 U.S. 139, 143 (1981). Because of its importance, the EIS provision only gives way in the face of a "clear and unavoidable conflict in statutory authority." See Flint Ridge Development Co. v. Scenic Rivers Ass'n of Oklahoma, 426 U.S. 776, 788 (1976).
To implement the EIS requirement and other provisions of NEPA, the CEQ issued regulations in 1978 that are binding on all federal agencies. 40 C.F.R. Parts 1500-1508. Those rules established certain basic requirements governing preparation and public review of an EIS, and they required each agency to publish its own rules to supplement those of the CEQ. 40 C.F.R. § 1505.1.
Environmental Impact Statements ("EIS") are required for any "major federal action significantly affecting the quality of the human environment."3 Accordingly, if the DOT decides to grant Mexican trucking companies motor carrier authority under existing regulations or under new regulations, it must determine whether such action constitutes "a major federal action significantly affecting the quality of the human en-vironment." If the determination is affirmative, the agency will be required to prepare an EIS.
Currently, there is nothing in record supporting DOT's proposed decision not to comply with NEPA. If DOT is not certain that an EIS must be prepared, then it must first prepare an EA.4 Such an assessment is to provide sufficient evidence and analysis for determining whether an EIS is needed, or a finding that the proposed federal action does not have significant environmental impact, and therefore no EIS is needed.5 In preparing an environmental assessment, the agency must consult with other environmental agencies, applicants, and the public, "to the extent practicable."6
DOT's decision to not comply with NEPA is inconsistent with its own rules, CEQ regulations, and the statute itself. The Department of Transportation implemented its NEPA/CEQ requirements pursuant to an order ("DOT Order")7 that sets out procedures for all constituent agencies within DOT, and delegates responsibility for full compliance to each constituent agency. The DOT Order applies to all rulemaking and regulatory actions, including notices of proposed rules.
Under the DOT Order, an EIS shall be prepared for "any proposed major federal action significantly affecting the environment."8 The DOT also identifies a non-exhaustive list of categorical exclusions which do not require either an EIS or an EA. In addition, the DOT Order requires each constituent agency to provide further guidance and instructions to comply with NEPA (the "implementing instructions").
The implementing instructions may be either (i) detailed instructions or regulations issued by a constituent agency which provides guidance on applying environmental considerations to its programs;9 or (ii) adoption of the DOT Order itself as its implementing instructions, plus the issuance of supplementary guidance which "at a minimum applies the environmental process to the administration's programs." The supplementary guidance must include, among other things:
- a list of actions which normally require preparation of an EIS,
- a list of actions which are not normally major Federal actions significantly affecting the environment and as such do not require an EA or EIS (i.e., categorical exclusions), and
- identification of the decision-making process.10
Moreover, notwithstanding the foregoing, the implementing instructions must provide for the preparation of an EA or EIS for actions that would otherwise be categorical exclusions, if those actions are likely to involve a significant impact on the environment or create substantial controversy.
The FMCSA, as a constituent agency within DOT, has not complied with these requirements in issuing its Proposed Rules. Rather, the Proposed Rules only say . . . . (something that indicates briefly how limited they are, then go into specifics of what they fail to do). It has failed to issue detailed instructions or regulations to provide guidance on its environmental process; nor has it adopted supplementary guidance to the DOT Order. It has failed to identify a decision-making process, a list of categorical exclusions, or a list of actions which normally require an EA or EIS. And, the FMCSA has failed to otherwise analyze these rules pursuant to NEPA. The FMCSA is therefore not in compliance with the DOT Order.
DOT may not base its decision that compliance with NEPA is not required for these regulations on the argument that the "impacts to the human environment" are a result of a decision to lift the moratorium on Mexico-owned trucks. The CEQ regulations define a "major federal action" under NEPA as, among other things, "systematic and connected agency decisions allocating agency resources to implement a specific statutory directive or executive directive." 40 C.F.R. § 1508.18(b)(3). CEQ also defines a "major federal action" as "new and continuing activities, including projects and programs entirely or partly financed, assisted, conducted, regulated, or approved by federal agencies; new or revised agency rules, regulations, plans, policies, or procedures; and legislative proposals." 40 C.F.R. § 1508.18(a).
Accordingly, there is no doubt that these rules trigger the need for NEPA compliance.11
DOT MUST COMPLY WITH EXECUTIVE ORDER 13045 BECAUSE THE INCREASED POLLUTION AND SAFETY CONCERNS PRESENTED BY THESE RULES CAUSE A DISPROPOTIONATE RISK TO CHILDREN
DOT has determined that it need not prepare identify and assess the health and safety risks that these proposed rules could have on children. In each of the Federal Register notices at issue, DOT asserts that these proposed rules are "not economically significant" and do "not concern an environmental risk to health or safety that may disproportionately affect children." Sufficient evidence exists to compel DOT to reverse this determination, and complete the required analysis under Executive Order 13045.
The purpose of Executive Order 13045 is to assess and consider how federal actions and decision may disproportionately impact children. It requires that each federal agency "(a) shall make it a high priority to identify and assess environmental health risks and safety risks that may disproportionately affect children; and (b) shall ensure that its policies, programs, activities, and standards address disproportionate risks to children that result from environmental health risks and safety risks."12 The Executive order requires that for each regulatory action subject to it, agencies must conduct "an evaluation of the environmental health or safety effects of the planned regulation on children" and include "an explanation of why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the agency."13 These findings are to be submitted to the Office of Management and Budget's Office of Information and Regulatory Affairs for review.
Air pollution, especially particulate matter, affect children more seriously than others in the population. Several U.S. Environmental Protection Agency ("EPA") studies confirm this fact.14 For instance, EPA finds that air pollution, such as ozone, particulate matter, carbon monoxide, nitrogen dioxide, and sulfur dioxide, "are particularly unhealthy for children." EPA finds that these pollutants cause a disproportionate risk to children because "children breathe more rapidly and inhale more pollutants per pound of body weight than adults, and their airways are more narrow than those of adults and their respiratory systems are still developing."15 Therefore, an assessment of the risks these proposed rules present to children is required.
DOT has failed to address the disproportionate impacts the environmental health and safety risks resulting from these proposed rules. DOT's conclusory statement that these proposed rules do "not concern and environmental risk to health or safety that may disproportionately affect children" is not supported by the facts now in the record. Accordingly, DOT must prepare the analysis required by Executive Order 13045 prior to finalizing these rules.
DOT must comply with NEPA before finalizing these proposed rules that would allow Mexican-owned trucks to drive throughout the United States resulting in increased air pollution and other environmental hazards. The requirements for agency compliance with NEPA are outlined by the CEQ Regulations. The DOT Order outlines general NEPA procedures and then requires its constituent agencies to issue detailed instructions or supplementary guidance reporting environmental considerations. The FMCSA has not issued either detailed instructions or regulations on its environmental processes or supplemented the DOT Order, nor has it evaluated these rules under NEPA. Therefore, the FMCSA is not in compliance with either the DOT Order, the CEQ Regulations or NEPA.
In addition, the increased air pollution and other environmental risks resulting from these proposed rules presents health and safety risks that would disproportionately affect children. Therefore, compliance with Executive Order 13045 is required.
By failing to consider the environmental and health effects of these rules, both DOT and FMCSA violate NEPA and the Executive Order 13045. These rules constitute agency action and must comply fully with the requirements of the law. Therefore, DOT should prepare the necessary analysis prior to issuing final rules.
SHEMS & DUNKIEL, PLLC
87 College Street
Burlington, VT 05401
Attorney for Friends of the
Milberg Weiss Bershad Hynes & Lerach LLP
100 Pine Street, 26th Floor, San Francisco, CA 94111
(415) 288-4545 Fax: (415) 288-4534
April 17, 2002
U.S. Department of Transportation
Dockets Management Facility
400 Seventh Street, S.W.
Washington, D.C. 20590
Re: 1. Docket No. FMCSA-98-3298; Application by Certain Mexico-Domiciled Motor Carriers To Operate Beyond United States Municipalities and Commercial Zones on the United States-Mexico Border, Interim Final Rule; Request for Comments, 67 Fed. Reg. 12702 (2002)
2. Docket No. FMCSA-98-3299; Safety Monitoring System and Compliance Initiative for Mexico-Domiciled Motor Carriers Operating in the United States, Interim Final Rule, Request for Comments, 67 Fed. Reg. 12758 (2002)
On behalf of the International Brotherhood of Teamsters, the California Federation of Labor, Public Citizen and Natural Resources Defense Council, we submit the following comments on the above-listed actions of the Federal Motor Carrier Safety Administration (FMCSA). Not only will these federal actions significantly increase the overall commerce by truck between Mexico and the U.S., thereby greatly increasing emissions of air pollutants beyond those amounts that would otherwise be emitted, but they will also allow entry to thousands of Mexico-domiciled trucks, nearly all of which emit higher amounts of air pollutants than the U.S. trucks that they will displace.
These increased emissions will delay timely attainment of the national primary air quality standard (NAAQS) for photochemical oxidants (ozone) in several areas in California and Texas that are currently non-attainment for that standard, and they may delay the attainment of the national primary ambient air quality standard (NAAQS) for particulates (PM10) in several areas in California that are currently nonattainment for that standard. The increased emissions from the influx of Mexico-domiciled trucks allowed by the above-listed actions will also increase the frequency or severity of existing violations of the NAAQS for ozone and particulates. Further, the increased emissions from the Mexico-domiciled trucks will cause or contribute to new violations of the recently issued NAAQS for ozone and fine particulates.
FMCSA has prepared an Environmental Assessment (EA) that purportedly addressed the adverse environmental impacts of above-listed actions, and it has made a finding of no significant impact (FONSI) based upon that assessment. However, the EA is woefully inadequate and by no means supports the associated FONSI. We are enclosing for your review a technical report (hereinafter the "Sierra Research Report")'1, prepared by Sierra Research, a highly-regarded consulting firm that specializes in air pollution assessments on behalf of public and private clients. The authors of this report are recognized experts in the field of air pollution research, particularly from mobile sources. The resumes of the principal authors, James Lyons, Philip Heirigs, and Lori Williams, are enclosed for your consideration.
The Sierra Research Report demonstrates that the above-listed actions constitute a major federal action significantly affecting the quality of the human environment. As such, it is an action for which FMCSA must prepare a full-fledged Environmental Impact Statement ("EIS").
Moreover, aside from failing to prepare an EIS, FMCSA has not prepared a conformity analysis pursuant to section 176 of the Clean Air Act, 42 U.S.C. § 7506, so as to determine the extent to which the influx of Mexico-domiciled trucks will increase emissions in nonattainment areas, the emissions reduction from other sources that will be needed to offset the increased emissions from Mexico-domiciled trucks, and the steps necessary to achieve the offsets. Since the above-listed actions do not conform to the Texas and California implementation plans ("SIPS"), the FMCSA may not engage in or support those actions in any way. The FMCSA also cannot approve any actions by private entities (i.e., the owners and operators of the Mexico-domiciled trucks) that result in the increased emissions described above.
I. The FMCSA's Environmental Assessment Is Grossly Inadequate and Should Be Replaced With a Full-Fledged EIS Prior to Proceeding with the Above-Listed Actions.
Under the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321, et seq., when a federal agency proposed to undertake a "major federal action significantly affecting the quality of the human environment," it must prepare an EIS detailing its environmental impact, any unavoidable adverse environmental effects, alternatives to the action, local short-term uses versus long-term productivity, and the commitment of any irreversible and irretrievable resources. In 1978, the Council on Environmental Quality ("CEQ") promulgated regulations that federal agencies are required to follow in implementing NEPA. 40 C.F.R. §§ 1500 et seq. In determining whether to prepare in EIS, the agency must ordinarily prepare an environmental assessment (EA). 40 C.F.R. § 1501.4(b). If the EA leads the agency to conclude that an EIS is not necessary, it must prepare a finding of no significant impact (FONSI). 40 C.F.R. § 1501.4(e).
The FMCSA has prepared an EA and a FONSI for the actions that it proposed on May 3, 2001.2 We assume that the agency intends the EA and FONSI to cover the interim final rules listed above. In any event, the EA and FONSI are legally defective in numerous respects.
For example, the CEQ regulations define the term "effects" to include "[d]irect effects which are caused by the action and occur at the same time and place" and "indirect effects, which are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable." 40 C.F.R. § 1508.8(b). In particular, "indirect effects" may include growth inducing effects . . . and related effects on air and water and other natural systems, including ecosystems." 40 C.F.R. § 1508.8(b). As the agency's EA apparently recognizes, the adverse air quality impacts of the increase in the number of Mexico-domiciled trucks that will come into existing ozone and particulate nonattainment areas and areas that are potentially nonattainment for ozone and fine particulates are clearly indirect effects of the above-listed actions. Yet the EA dismisses these effects, completely disregarding the technical evidence demonstrating that the increased emissions will be substantial.
The EA is also defective in terms of defining the areas that will be impacted. The CEQ regulations define the terms "significantly" to require considerations of both "context" and "intensity." In considering the "context" of the action, the agency must analyze "several contexts" including both "society as a whole" and the "affected region." 40 C.F.R. § 1508.27(a).
Incredibly, the EA prepared by the FMCSA examined only the overall percentage increases in emissions nationwide and entirely failed to assess the air quality impact of increased emissions and increased ambient pollutant levels in those areas where the impacts of the no action and proposed action scenarios are likely to be greatest. This approach directly conflicts with the agency's obligation to consider the "affected region." The Sierra Research Report demonstrates that many specific regions and geographic areas will be hard hit as a result of the interim final rules.
In considering the "context" of the action, the CEQ regulations provide that "[b]oth short and long-term effects are relevant." 40 C.F.R. § 1508.27(a). Yet as shown in the Sierra Research Report, the EA prepared by FMCSA considered only the exceedingly short-term impacts of the actions on air quality in the year 2002, at least half of which will be over by the time that the trucks begin to move across the country. The use of such a short time frame is preposterous in the context of regulatory decisions that will have such a long life span.
In considering the "intensity" or "severity" of the impact, the agency must examine "the degree to which the proposed action affects public health or safety," "[u]nique characteristics of the geographic area," "[t]he degree to which the effects on the quality of the human environment are likely to be highly controversial," "[t]he degree to which the possible effects on the human environment are highly uncertain or involve unique or unknown risks," and, importantly, "[w]hether the action threatens a violation of Federal, State, or local law or requirements imposed for the protection of the environment." 40 C.F.R. § 1508.27(b). Yet the consideration of these and other critical factors in the EA prepared for FMCSA was grossly inadequate.
More particularly, Sierra Research found that the EA contained the following specific flaws:
( Failing to account for emissions differences between Mexico-domiciled and U.S.-domiciled trucks that exist now and that will become even more significant in the future;
( Improperly assessing the air quality impact of the no action and proposed action scenarios by comparing the associated increase in emissions to total nationwide emissions from trucks;
( Failing to assess the air quality impact of increased emissions and increased ambient pollutant levels in those areas where the impacts of the no action and proposed action scenarios are likely to be greatest, which include many areas that current do not comply with existing federal air quality requirements and are likely to be out of compliance with future federal requirements;
( Failing to assess the localized air quality impacts of increased numbers of safety inspections;
( Failing to consider increases in emissions of toxic air contaminants resulting from the no action or proposed action alternatives, particularly within the context of the increase in local emissions due to increased numbers of safety inspections; and
( Failing to assess the air quality impacts of the no action and proposed action alternatives over more than a single year or beyond 2002.
The Sierra Research Report found that both the "no action" and "proposed action" alternatives examined in the EA would foreseeably result in adverse air quality impacts in two ways. First, both alternatives would "allow the direct substitution of higher-emitting Mexico-domiciled-domiciled trucks for lower-emitting U.S.-domiciled trucks for freight carrying in the United States." Second, both alternatives would "have the potential to increase overall U.S. truck traffic." Sierra Research concluded that the actions would "present a particularly significant issue in those areas of the southwestern U.S. that currently violate and are likely to continue to violate health-based federal National Ambient Air Quality Standards (NAAQS) applicable to ozone and fine PM."
Clearly, much more work is necessary before the above listed actions may legally go into effect. The key assumptions underlying the EA are completely flawed. Contrary to the EA, existing research concludes and knowledgeable experts state that the federal actions being proposed through these regulations will indeed significantly increase U.S. truck traffic beyond historical levels. See, e.g., Comment Letter of Mark J. Spalding dated April 17, 2002. The same is true with respect to the potential displacement of U.S. domiciled-trucks by Mexico-domiciled trucks: existing research concludes and reputable sources state that a significant displacement is likely to occur. See Id.; "North America Trade and Transportation Corridors: Environmental Impacts and Mitigation Strategies, "prepared for the North American Commission for Environmental Cooperation by ICF Consulting (February 21, 2001) (copy enclosed).
The Sierra Research Report and simple common sense suggest that an action that will have the effect of allowing thousands of heavily polluting Mexico-domiciled trucks to travel through some of the most seriously polluted cities in the United States-cities that are struggling to bring air quality up to healthy levels-will significantly affect the quality of the human environment. The FMCSA must therefore prepare a full-fledged EIS detailing the adverse environmental effects on the most affected regions of the country.
II. The Above-Listed Actions Do Not Conform to the Approved SIPs for California and Texas and Therefore Cannot Be Implemented.
Section 176 of the Clean Air Act provides that "[n]o department, agency, or instrumentality of the Federal Government shall engage in, support in any way or provide financial assistance for, license or permit, or approve, any activity which does not conform to" a State Implementation Plan (SIP) promulgated pursuant to section 110 of the Clean Air Act. 42 U.S.C. § 7506(c)(1). The statute further defines "conformity to an implementation plan" to mean conformity to the plan's purpose of eliminating or reducing the severity and number of violations of the national ambient air quality standards. 42 U.S.C. § 7506(c)(1)(A). It is also defined to mean that "such activities will not-(i) cause or contribute to any new violation of any standard in any area; (ii) increase the frequency or severity of any existing violation of any standard in any area; or (iii) delay timely attainment of any standard or any required interim emission reductions or other milestones in any area." 42 U.S.C. § 7506(c)(1)(B).
EPA's implementing regulations require federal agencies to make a determination that an action conforms to the relevant SIPs based upon a written conformity analysis before taking the action if the action will cause direct or indirect emissions that exceed de minimis levels. 40 C.F.R. § 51.850(b), 51.(b), 51.854. The de minimis level of VOC and Nox emissions vary, depending upon the extent of nonattainment. For serious areas the de minimis level is 50 tons per year (tpy). For severe areas (including Houston, Northwest Los Angeles County, Ventura County, and San Diego) it is 25 tpy, and for extreme areas (Los Angeles), it is 10 tpy. 40 C.F.R. § 51.853(b).
The Sierra Research Report graphically demonstrates the difference in emissions rates between U.S. trucks and Mexico-domiciled trucks and shows how those differences grow dramatically from 2010 to 2020 to the point at which Mexico-domiciled truck emissions will be almost 4.5 times U.S. truck emissions for both oxides of nitrogen (an ozone precursor) and particulate matter. The emissions will far exceed the de minimis thresholds set out in the EPA regulations. For example, Sierra Research has calculated that if we make the reasonable assumption that 50 percent of the U.S. trucks currently traveling through Houston are replaced by Mexico-domiciled trucks, the increase in Nox emissions by the critical attainment year of 2007 will be 84 tons per day, more than three times the de minimis level for annual Nox emissions in a serious nonattainment area.
These staggeringly high increases in Nox and particulate emissions must be accounted for the in the emissions budgets for Houston, Dallas/Ft Worth, San Diego, Los Angeles, San Francisco and intervening nonattainment areas, and federally enforceable offsetting emissions reductions must be located and implemented before the FMCSA and NHTSA actions may be allowed to go forward. At the very least, the agencies must prepare their own conformity analysis that assesses the impact over the years of their actions on the nonattainment areas through which the Mexico-domiciled trucks will travel.
The easily foreseeable result of implementing the above-described regulations is a large influx of trucks from Mexico that do not conform to the emissions standards with which U.S. trucks must by law comply. Just as foreseeable is a large increase in emissions of NOx, particulate matter, and other toxic air pollutants. Before FMCA may lawfully allow the above-listed regulations to go into effect, the agencies must prepare an EIS detailing the adverse environmental impacts of these increases in emissions. Furthermore, the FMCSA cannot lawfully allow the regulations to go into effect until it has prepared an adequate conformity analysis under section 176 of the Clean Air Act and ensured that the actions will not cause or contribute to any new violation of any standard in any area, increase the frequency or severity of any existing violation of any standard in any area, or delay timely attainment of any standard or any required interim emission reductions or other milestones in any area.
We urgently request that FMCSA not allow the above-listed actions to go into effect until the agency has complied with its legal obligations under the National Environmental Policy Act and the Clean Air Act.
/s/ STANLEY S. MALLISON
STANLEY S. MALLISON
1 The release of smaller particulate matter is also released on average at a higher rate by Mexican trucks.
2 North American Trade and Transportation Corridors: Environmental Impacts and Mitigation Strategies, North American Commission for Environmental Cooperation (February 21, 2001) at 9.
3 40 C.F.R. §1502.3.
4 40 C.F.R. §1501.3(b).
5 40 C.F.R. §§ 1508.9(a)(1), 1501.4(b)-(c).
6 40 C.F.R. § 1501.4(b).
7 Department of Transportation Order 5610.1C, as amended (July 30, 1985).
8 See also 40 C.F.R. § 1502.3.
9 DOT Order at pg 19, Subparagraph 20 (a)(1).
10 Id. at pg. 20, Subparagraph 20 (b).
11 DOT may not finalize these regulations prior to complying with NEPA. According to CEQ regulations, "no action concerning the proposal shall be taken which would: 1) Have an adverse environmental impact; or 2) Limit the choice of reasonable alternatives. 40 C.F.R. § 1506.1.
12 Executive Order 13045, Fed. Reg. Vol. 62, No. 78, (April 23, 1997).
1 The full title of the Sierra Research Report is "Critical Review of "Safety Oversight for Mexico-Domiciled Commercial Motor Carriers, Final Programmatic Environmental Assessment," Prepared by John A. Volpe Transportation Systems Center, January 2002" (Report No. SR02-04-01).
2 John A. Volpe Transportation Systems Center, Safety Oversight for Mexico-Domiciled Commercial Motor Carriers, Final Programmatic Environmental Assessment (January 2000).
REPORT NO. SR02-04-01
CRITICAL REVIEW OF
"SAFETY OVERSIGHT FOR
MOTOR CARRIERS, FINAL
PROGRAMMATIC ENVIRONMENTAL ASSESSMENT," PREPARED BY JOHN A VOLPE TRANSPORTATION SYSTEMS CENTER, JANUARY 2002
April 16, 2002
Sierra Research, Inc.
1801 J Street
Sacramento, CA 95814
Critical Review of
"Safety Oversight for Mexico-Domiciled Commercial Motor Carriers, Final Programmatic Environmental Assessment," Prepared by John A Volpe Transportation Systems Center, January 2002
Table of Contents
Freight Transport and Truck Emissions
Relevant Air Quality Issues in the United States
Critical Review of FMCSA EA
Summary of FMCSA EA
Flawed Air Quality Analysis Methodolgy
Inappropriate Analysis Period
Differences in Emission Rates of Mexican-
and U.S.-Domiciled Class8b Trucks
Failure to Consider Toxic Air Contaminant
Failure to Properly Assess the Impacts of Air
Quality in Specific Areas and to Perform
Transportation Conformity Analyses
Appendix A - Estimating the Impacts of Mexican Truck Travel on Emissions from Heavy-Duty Diesel Vehicles in Houston and San Diego
The Federal Motor Carrier Safety Administration (FMCSA) is proposing several actions that may dramatically increase the number of Mexican-domiciled heavy-duty Diesel vehicles operating in the United States and that would lift current restrictions that limit operation of such vehicles to the immediate border. Under the National Environmental Policy Act ("NEPA"; 42 U.S.C. 4371 et seq., enacted in 1969), responsible federal officials must prepare, prior to undertaking "major Federal actions significantly affecting the quality of the human environment," a "detailed statement" (referred to as an Environmental Impact Statement, or EIS) addressing the following aspects of the proposed action: its environmental impact, any unavoidable adverse environmental effects, alternatives to the action, local short-term uses versus long-term productivity, and the commitment of any irreversible and irretrievable resources.
The threshold question in the NEPA process is whether the action is one that "significantly" affects the environment. In 1978, the Council on Environmental Quality (CEQ) adopted formal regulations (40 CFR 1500-1508) governing the NEPA process. The regulations contain a brief description of the process agencies must follow in determining the threshold question of significance. The key definitions are those for "effects" and "significantly." The definition of "effects" (40 CFR 1508.8) requires an examination of direct effects, and also indirect effects that are "reasonably foreseeable" as well as "cumulative." In addition to ecological impacts, the examination must consider "aesthetic, historic, cultural, economic, social and health impacts." The term "significantly" is defined (40 CFR 1508.27) in terms of two main general parameters, "context" and "intensity," with the latter broken down into ten distinct categories. If the answer to the threshold question of significance is in the affirmative, then an EIS must be prepared; if not, then a Finding of No Significant Impact (FONSI) is permitted.
The CEQ regulations (40 CFR 1501.3, 1501.4 and 1508.9) specify that, unless the project falls into a predetermined category under the lead agency's internal NEPA procedures, the preliminary question of significance is to be addressed through the preparation of an "Environmental Assessment", or EA. The EA is a "concise public document" that must (1) "briefly provide sufficient evidence and analysis" for determining whether an EIS or a FONSI must be prepared, (2) aid the agency in complying with NEPA when no EIS is prepared, and (3) facilitate preparation of an EIR when one is necessary. The EA must also include "brief discussions" of the need for the proposed action, alternatives, environmental impacts of the proposal and
In this case, the FMCSA has made a FONSI based on an EA.* This report presents a detailed critical review of that EA, demonstrating that the EA is both inadequate in terms of scope as well as fatally flawed in terms of the methodology used to assess the significance of the air quality impacts associated with the proposed actions. Because of the inadequacy of the EA, we conclude that the FONSI is incorrect with respect to air quality impacts and that, based on NEPA, a complete EIS must be prepared for the proposed action.
The specific flaws in the FMCSA EA include the following:
Failing to assess the air quality impacts of the no action and proposed action alternatives over more than a single year or beyond 2002;
Improperly assessing the air quality impacts of the no action and proposed action scenarios by comparing the associated increase in emissions to total nationwide emissions from trucks;
Failing to account for emissions differences between Mexican-domiciled and U.S.-domiciled trucks that exist now and that will become even more significant in the future;
Failing to assess the air quality impacts of increased emissions and increased ambient pollutant levels in those areas where the impacts of the no action and proposed action scenarios are likely to be greatest, which include many areas that currently do not comply with existing federal air quality requirements and are likely to be out of compliance with future federal requirements;
Failing to consider increases in emissions of toxic air contaminants resulting from the no action or proposed action alternatives, particularly within the context of the increase in local emissions due to increased numbers of safety inspections; and
Failing to assess the localized air quality impacts of increased numbers of safety inspections.
The overall impact of both the no action and proposed action alternatives will be to allow the substitution of higher-emitting Mexican-domiciled trucks for lower- emitting U.S.-domiciled trucks for freight-carrying in the United States. In addition, the alternatives have the potential to increase overall U.S. truck traffic. Based on the available data, this will present a particularly significant issue in those areas of the southwestern U.S. that currently violate and are likely to continue to violate current and future health-based federal National Ambient Air Quality Standards (NAAQS) applicable to ozone and fine PM.
Both the no action and proposed action alternatives are in direct conflict with federal law that requires compliance with the NAAQS by specific dates. Heavy- duty Diesel vehicles are widely recognized as contributing to high ambient levels of ozone and fine particulate matter and for that reason have been required to meet increasingly stringent and costly emission standards established by the U.S. EPA. Allowing higher-emitting Mexican-domiciled trucks that do not have to comply with the same emission standards as comparable U.S.-domiciled trucks will not only undercut the U.S. EPA standards but also promote the use of Mexican-domiciled trucks for hauling freight in the U.S.
In addition to the NEPA process, the U.S. EPA has promulgated conformity regulations (§51 and §93 of Title 40 Code of Federal Regulations) to assure that actions taken by the federal government are consistent with air quality goals in that they do not cause or contribute to any violation of a NAAQS in any area, or delay attainment with a NAAQS in any area. The FMSCA has not performed any conformity analyses for the current project despite the fact that the no action and proposed action alternatives are very likely to lead to emission increases that exceed the threshold levels above which a conformity analysis would be required in many existing nonattainment areas.
Freight Transport and Truck Emissions
Most freight carried by trucks in the United States is transported by heavy-duty Diesel vehicles. In turn, most of the freight carried by heavy-duty Diesel vehicles is transported by trucks with gross vehicle weight ratings of more than 60,000 pounds,* which are referred to as Class 8b trucks in most air quality arenas. The pollutants emitted by these vehicles that are of greatest concern from an air quality perspective are oxides of nitrogen (NOx) and particulate matter (PM). Emissions of volatile organic compounds (VOC) from heavy-duty Diesel vehicles are also of some concern although emission levels are generally much lower than applicable emission standards.
It is expected that both the no action and proposed action scenarios considered by FMCSA will result in an immediate increase in the use of Mexican-domiciled Class 8b trucks in the United States outside of the existing border areas as indicated in the EA. In addition, the use of Mexican-domiciled trucks in the United States outside of border areas is expected to increase in the future.** It is also expected that the no action and proposed action scenarios will result in Mexican-domiciled vehicles being used to carry freight that is currently being carried by U.S.-domiciled trucks and that it is possible that they may actually increase total truck traffic in the U.S. by reducing the costs associated with shipping freight by truck.***
If the emission levels of Mexican-domiciled trucks were equal to those of U.S.-domiciled vehicles in the past, present, and future, the only potential air quality impact associated with the no action and proposed action scenarios would be an increase in total truck traffic in the U.S. However, in general, emission levels of Mexican-domiciled trucks have not been, are not now, and will not be the same as those of U.S.-domiciled trucks for at least two reasons. First, as discussed in more detail later, the emission standards that have applied and will apply to Mexican-domiciled trucks are, in general, higher than those for comparable U.S.- domiciled trucks. Based on the best current information, it appears that there will be a large difference in NOx, PM, and VOC emission levels between new U.S. trucks and new Mexican trucks beginning in 2007 when stringent new U.S. emission standards and a U.S. nationwide requirement for production of ultra-low sulfur Diesel fuel begin to be phased in. Secondly, Mexican-domiciled trucks tend, on average, to be older than those domiciled in the U.S. This, coupled with the fact that older trucks have higher emissions than newer vehicles, again leads to a situation where even if all other things were equal, Mexican-domiciled trucks would have higher emissions than comparable U.S.-domiciled trucks.
Based on the above, there are two air quality issues of concern with respect to the proposed action:
1. Higher emissions in the United States resulting from the operation of Mexican-domiciled trucks as replacements for U.S.-domiciled trucks, and
2. Higher emissions in the United States resulting from an increase in freight demand due to the lower costs associated with freight shipping with Mexican-domiciled trucks.
Although not properly addressed in the FMCSA EA, these issues are of concern both now as well as into the foreseeable future.
Relevant Air Quality Issues In the United States
In the United States, the federal government has established National Ambient Air Quality Standards (NAAQS) for a number of pollutants in order to protect public health. The NAAQS set exposure limits that are generally cast in terms of limits on the maximum concentration of pollutants that the public can be exposed to during some period of time. Compliance with the NAAQS is determined for relatively small geographical areas (rather than the United States as a whole) based on air quality monitoring data. Areas in which pollutant concentrations exceed those allowed are described as being in "nonattainment" with respect to the NAAQS.
With respect to the matter at hand-the EA for the proposed FMCSA action-potential adverse impacts on the ability of areas to achieve and maintain compliance with NAAQS for ambient ozone and fine particulate matter (PM)* represent significant air quality issues. Ozone is formed by a complex series of reactions between HC and NOx in the presence of sunlight. It is a strong irritant to the lungs and eyes and at high concentrations causes shortness of breath and also aggravates asthma, emphysema, and other conditions. Fine PM can penetrate deep into the lungs where it becomes deposited, which causes and aggravates respiratory problems, decreases in lung function, and premature death. It should also be noted that there are two types of fine PM: (1) particles that are directly emitted from sources such as the exhaust of Diesel engines, and (2) so-called "secondary" particles that form in the atmosphere due to gas to particle conversion. NOx can be an important chemical species with respect to secondary particle formation.
It should also be noted that, although delayed by litigation, it appears that new NAAQS for both ozone and fine PM (in this case PM2.5) will be enforced by the U.S. EPA. These new NAAQS are considered to be more stringent than the existing NAAQS for ozone and fine PM (PM10). There are different degrees of "nonattainment" with the NAAQS that have been established. For the current one-hour ozone NAAQS, in order of increasing nonattainment, these are marginal, moderate, serious, severe, and extreme. For the current one-hour PM10 NAAQS, the categories are moderate and serious.
States in which nonattainment areas are located are required pursuant to federal law to develop plans that specify the actions that will be taken to reduce pollutant levels to the degree required to comply with the NAAQS prior to deadlines specified by federal law. Once compliance with the NAAQS is achieved, additional plans are required under federal law that specify the actions that will be taken to control emissions so that compliance with the NAAQS will be maintained in the future. Failure to come into compliance with NAAQS by the required deadlines and to maintain compliance can lead to the imposition of economic sanctions by the federal government and, in some cases, intervention by the federal government that involves the development and enforcement of a plan to bring the area into compliance.
In addition to the legal requirements regarding the attainment of the NAAQS in given areas, there are legal requirements that compel federal government agencies to assess the impact of their actions on emissions levels in areas where there are currently or have been violations of the NAAQS. These requirements are referred to as "conformity" and the applicable provisions with respect to the no action and proposed action scenarios are found in §51 and 93 of Title 40, Code of Federal Regulations. As set forth in those sections, a conformity analysis may be required if the emission increases associated with an action equal or exceed the values shown in Table 1.
Currently, there are a number of areas of the country that are in nonattainment for either or both the ozone and PM10 NAAQS. These areas are shown in Figures 1 and 2 for ozone and PM10, respectfully. All areas of the U.S. are required to come into attainment with the current ozone standard by 2010 and no later than 2007 (considering possible extensions) for PM10.
As shown in Figure 1, many urban areas in the Southwestern U.S.-including the San Diego, Los Angeles, and Central Valley areas of California, Phoenix, Arizona; and Houston, Dallas, and El Paso, Texas-are currently in nonattainment with the existing ozone NAAQS. Similarly, Figure 2 shows that many of these areas and others are also in nonattainment with the current PM10 NAAQS.
Similar figures showing likely nonattainment areas for the new federal ozone and PM2.5 NAAQS are shown in Figures 3 and 4, respectively. As shown in Figures 3 and 4, these and more areas are projected to be in nonattainment with the new ozone and PM2.5 NAAQS when the U.S. EPA make formal determinations. Compliance deadlines with the new standards have not yet been set, although they are sure to extend beyond the deadlines for the current NAAQS.
Figure 5 depicts the expected U.S. freight corridors for U.S./Mexico truck traffic resulting from NAFTA as projected by the U.S. Federal Highway Administration for 2020. As seen by comparing this figure with the nonattainment area maps in Figures 1-4, major freight routes, where the amount of freight carried by Mexican-domiciled trucks may increase substantially, pass directly through many of the areas that are and will be in nonattainment of the ozone and fine PM NAAQS. Similar data for 1996 also show the same major freight routes for U.S./Mexico truck traffic.*
In addition to the NAAQS, the U.S. EPA also states in the preamble to the 2007 standards that it believes that Diesel exhaust "is likely to be carcinogenic in humans by inhalation" and notes that reductions in fine PM emissions along with emissions of the Toxic Air Contaminants (TACs) benzene, 1,3-butadiene, formaldehyde, and acetaldehyde resulting from the 2007 standards will reduce public exposure to this hazard.
As Mexican-domiciled trucks will not be subject to the same standards as U.S.-domiciled trucks, absent changes in Mexican requirements, they will present a great toxics risk.
Finally, it should be noted that the state of California has established its own ambient air quality standards, which are in general more stringent than the federal NAAQS. The California Air Resources Board (CARB) is charged with reducing emissions sufficiently to attain both the federal and state standards. This is a difficult challenge as evidenced by CARB's recent release of a comprehensive Clean Air Plan* that indicates that the agency will be required to adopt increasingly costly emission reduction measures in order to achieve its goals. Increase in emissions associated with the operating of Mexican-domiciled trucks in California will hinder the state's ability to achieve those goals and require the adoption of even more costly measures than would otherwise be necessary.
As outline above, many areas in the Southwestern and Southern United States currently violate and are likely to continue to violate health-based federal NAAQS applicable to ozone and fine PM. Federal law requires those areas to develop plans for reducing emissions to lower ambient concentrations of these pollutants and to come into compliance with the NAAQS by specific dates. Heavy-duty Diesel vehicles are widely recognized as contributing to high ambient levels of ozone and fine particulate matter and for that reason have been required to meet increasingly stringent emission standards established by the U.S. EPA. In addition, in light of this fact, the U.S. EPA recently adopted dramatically more stringent emission standards for Diesel vehicles and specifications for Diesel fuel to enable compliance with those standards, specifically to aid area such as these in their quest to comply with the NAAQS.*
Now, in almost diametric opinion to the above, the federal government is proposing an action that may result in the operation of large numbers of higher-emitting Mexican-domiciled Diesel trucks operating in nonattainment areas. This clearly undercuts the recent U.S. EPA rulemaking and will make compliance with the NAAQS more difficult than it would otherwise be (or perhaps impossible) for those areas. Further, the FMCSA EA upon which the FONSI with respect to air quality is based either ignores or improperly addresses these issues.
CRITICAL REVIEW OF FMCSA EA
Summary of FMCSA EA
The air quality related portion of the FMCSA EA is found on pages 3-9 through 3-12 of Section 3 entitled "Affected Environment" and on pages 4-14 through 4-24 of Section 4 entitled "Environmental Consequences," with additional details presented in Appendix C.
In Section 3, the EA recognizes the NAAQS and the air quality planning process for nonattainment areas (including the related transportation planning requirements), and notes that some of the counties directly on the Mexican border and in the location of the busiest border crossings are in nonattainment with either the current ozone or PM NAAQS or both.
The EA also notes correctly both that mobile sources make a significant contribution to total emissions of VOC, NOx, and PM emissions and that heavy-duty Diesel vehicles are of concern from an air quality perspective primarily because they emit substantial amounts of NOx and PM.
In Section 4, the potential impacts of the proposed action on air quality are addressed. The basic methodology employed in the EA compares emissions from Mexican-domiciled vehicles operating in the U.S. in 2002 under each scenario to total U.S. emissions from all on-road vehicles in the U.S. and then to total emissions from all sources in the U.S. based on data developed by the U.S. EPA for 1999. Emissions of Mexican-domiciled vehicles were assumed to be equal to those of U.S.-domiciled vehicles. The numbers of Mexican-domiciled vehicles assumed to be operating in the U.S. under each scenario during 2002 were estimated by FMCSA. These estimates indicate that on the order of 30,000 Mexican-domiciled trucks will begin to operate inside the U.S. beyond the current border areas in 2002 alone.
Emissions associated with proposed safety inspections of Mexican-domiciled vehicles are estimated separately for 2002 using the U.S. EPA MOBILE5b and PART5 emission factor models and are also compared to total U.S. emissions in 1999. Again, estimates of the numbers of vehicles tested and the characteristics of those inspections were developed by FMCSA and are not documented in the EA. In addition, emissions from Mexican trucks were apparently assumed to be the same as comparable U.S. trucks although it appears that the older age of Mexican-domiciled vehicles was taken into account to some degree in this limited section of the EA air quality impacts analysis.
Flawed Air Quality Analysis Methodology
The air quality analysis methodology used in the EA is fatally flawed due to a number of serious methodological deficiencies and the use of a number of erroneous assumptions. As a result, the methodology used in the EA is completely inappropriate for assessing the air quality impacts of the no action and proposed action scenarios. Because the air quality analysis is fatally flawed, the FONSI with respect to air quality is inappropriate because it is not supported.
The fundamental flaws with the air quality analysis contained in the EA include the following:
1. Failure to consider impacts in the proper geographical regions;
2. Failure to consider impacts over the proper time horizon;
3. Failure to account for differences in emissions between Mexican- and U.S.-domiciled trucks;
4. Failure to consider impacts of emissions of toxic air contaminants (TACs); and
5. Failure to properly assess the impacts on air quality.
The nature and import of these flaws are outlined below and should be addressed through an EIS. In addition, an assessment of the potential emission impacts of the no action and proposed action alternatives indicates that those impacts generally exceed the thresholds beyond which transportation conformity analysis requirements are triggered for affected nonattainment and maintenance areas.
Inappropriate Analysis Areas
The FMCSA EA evaluates the emission impacts of the no action and proposed action scenarios in light of annual nationwide emissions from on-road trucks. This approach is invalid and the results are meaningless with respect to the assessment of the significance of air quality impacts.
Air quality issues, including ozone and fine PM concentrations, are usually evaluated for relatively small geographical areas. For example, attainment and nonattainment designations with respect to the various NAAQS may be areas that represent only a portion of a single county. The reason for this is that local air quality particularly is determined primarily by local emissions and local meteorological conditions.
As shown previously in Figure 5 and the maps in Figures 1-4, the impacts of the no action and proposed action alternatives are likely to occur along major trucking corridors that pass through areas that are not in attainment with the current and future ozone and fine PM NAAQS. It is in these areas where the assessment of impacts needs to be performed. Obviously, even if an increase in emissions that represents only a small fraction of nationwide emissions occurs in an localized area with pre-existing air quality problems -such as San Diego, El Paso, Houston, or Dallas-that increase could either prevent or substantially delay attainment with the NAAQS.
The magnitude of the potential impacts of Mexican-domiciled trucks must be investigated in each of the major urban areas in the Southwest that are currently in nonattainment with ozone and PM NAAQS as well as those likely to be in nonattainment with the new ozone and fine PM standards and those where maintenance plans are in effect. In addition, analyses may need to be performed for other nonattainment areas that are much further from the border, including Baton Rouge, St. Louis, and potentially the major urban areas of the eastern seaboard. Again, it should also be noted that the purpose of U.S. EPA conformity requirements that apply in localized areas is to ensure that federal actions such as this do not result in the exceedance of delayed compliance with applicable NAAQS.
Inappropriate Analysis Period
The EA analyzes the impact of the no action and proposed action alternatives for only a single year-2002. No explanation is provided for why this is appropriate or how an analysis performed for only a single year is satisfactory to assess the impacts of the alternatives that will extend into the future and will change over time. As noted previously, the areas that may be adversely affected by the alternatives must come into compliance with current federal air quality standards late in this decade and with future standards probably sometime during the next decade. Therefore, the analysis should be carried out over a much longer period, in our opinion through at least 2020.
As shown above, Mexican-domiciled trucks will have higher emissions than U.S.-domiciled trucks, with the differences in emissions increasing over time. This fact must be taken into account in the EA. Further, it is clear from Section 3 of the EA that Mexican imports and northbound border crossings of trucks from Mexico are increasing over time. Further, the FHWA data shown in Figure 5 incorporate an estimated 3.4% annual increase in freight traffic into and out of Mexico from the U.S. in developing the estimates for 2020. This means that even without a shift in freight from U.S.- to Mexican-domiciled trucks, there will be greater numbers of the latter operating in the U.S. in the future.
It is also likely that there will be a shift in freight from U.S.- to Mexican-domiciled trucks that will further in
crease their operation in the U.S. over time. There are several reasons for this, including the following:
1. New Mexican trucks will likely be less expensive to purchase and operate than comparable new U.S. trucks because they will not be required to certify to the same stringent emission standards (which require the use of expensive aftertreatment devices) and will not suffer the associated fuel economy penalties; and
2. The ability of U.S. trucks designed to comply with the 2007 U.S. EPA standards and to operate on ultra-low sulfur Diesel fuel will likely be limited (because of the required after treatment devices) if that fuel is not available in Mexico, as engine manufacturers probably will not honor warranties for vehicles that have been misfueled with higher sulfur Diesel fuels.
Therefore, any assessment of the actual operation of Mexican-domiciled trucks operating in the U.S. needs to consider both the short- and long-term impacts since there are likely to be significant changes in the amount of freight traffic handled by Mexican trucks operating in the U.S. over time. Again, the existing EA completely ignores this significant issue.
Differences In Emission Rates of Mexican- and U.S.-Domiciled Class8b Trucks
The EA assumes that the amount of emissions that results from the per-mile operation of Mexican- and U.S.-domiciled trucks is the same. This assumption is incorrect for two reasons. First, for a given model year, the U.S. truck will have been required, in general, to meet more stringent emissions standards. Second, based on available data, the average Mexican truck is older than the average U.S. truck and, again in general, will have higher emissions regardless of its state of repair because older trucks are certified to less stringent emission standards.
Dealing first with the issue of different emission rates and standards, Table 2 shows how, on the basis of emissions, Mexican-domiciled trucks translate to U.S.-domiciled trucks as a function of model year. The development of this table and the sources of information are described in detail in Appendix A, along with all required assumptions.
The data in Table 2 were then used in combination with the latest versions of the U.S. EPA (MOBILE6 and PART5) and California Air Resources Board (EMFAC 2001) emission models.* assuming that the vehicles operated in the Houston or San Diego areas, respectively, to generate gram per mile travel ed emission rates for the average Mexican-
Emissions Equivalency Between Mexican- and U.S.-Domiciled Heavy-Duty Diesel Vehicles as a Function of Model Year
Equivalent U.S. Truck Model
Year(s) for Emissions
and U.S.-domiciled class8b heavy-duty Diesel trucks. Rates were calculated for 2000, 2002, 2007, 2010, 2015, and 2020. As shown in Tables 3 and 4, the composite emission rates for U.S.-domiciled trucks are lower in all years using both models.
The data presented in Tables 3 and 4 do not consider differences in the average age of Mexican- domiciled trucks versus U.S.-domiciled trucks. Data regarding the differences in the ages of the two fleets were developed for use in estimating emissions of Mexican trucks from a "Mexicanized" version of the U.S. EPA MOBILE5 model prepared by Radian International under contract to the Western Governor's Association.*
Those data were used in combination with the data and models used to develop the information presented in Tables 3 and 4 to estimate the combined impact of different emission standards and older average ages on the relative per-mile emissions of Mexican-
Comparison of Per-Mile Emission Rates of Mexican- and U.S.-Domiciled Class8b Heavy-Duty Diesel Vehicles Accounting for Different Emission Standards Using MOBILE6/PART5
Emission Rates (grams per mile of operation)
Comparison of Per-Mile Emission Rates of Mexican- and U.S.-Domiciled
Class8b Heavy-Duty Diesel Vehicles
Accounting for Different Emission Standards Using EMFAC2001 for San Diego
Emission Rates (grams per mile of operation)
and U.S.-domiciled class8b trucks. The results are shown in Tables 5 and 6. As shown, the difference in average emission rates between the two fleets of vehicles becomes larger when both the effect of differences in emission rates and standards as well as the average age of the fleet are taken into account.
Additional details regarding the development of data presented in Tables 3-6 can be found in Appendix A.
Comparison of Per-Mile Emission Rates of Mexican- and U.S.-Domiciled Class8b Heavy-Duty Diesel Vehicles Accounting for Both Different Emission Standards and Differences in Average Vehicle Age Using MOBILE6/PART5
Emission Rates (grams per mile of operation)
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