Emissions Credits Go Mobile

Brook Raflo

Adding a new dimension to the fledgling market of emissions reductions credit trading, three companies have joined forces for a project that will use liquified natural gas (LNG) refuse trucks to enable construction of a power plant in San Diego County.

In a $33 million deal announced this September, Waste Management Inc. of San Diego has agreed to replace its existing fleet of refuse collection trucks with 120 LNG trucks from Mack Trucks Inc., Lehigh Valley, Pa. The switch should reduce nitrogen oxide (NOx) emissions by more than 35 tons per year, for which Waste Management will receive "credits." These credits will be used to offset future emissions from San Francisco-based PG&E Corp.'s proposed Otay Mesa power plant. In return for the credits, PG&E will:

- Pay for the construction of a 45,000-gallon liquified natural gas fueling station at Waste Management's El Cajon, Calif.-based hauling facility;

- Pay the difference between purchasing updated diesel hauling vehicles and purchasing the new LNG trucks, which according to a Mack spokesperson is approximately $40,000 per truck; and

- Pay Waste Management for emissions reduction credits earned by replacing the San Diego County refuse fleet.

To receive a permit for its proposed 500-megawatt power plant in San Diego County, PG&E must reduce overall county emissions by 120 percent of the plant's projected lifetime emissions. Usually, this is done by paying for equipment that will reduce emissions at stationary sites such as manufacturing facilities. But in San Diego, where dot-com companies outnumber stationary polluters, reducing emissions is not so easy, says Sandra McDonough, vice president of external affairs for PG&E National Energy Group, Bethesda, Md.

To overcome this challenge, PG&E met with representatives from local and national regulatory agencies and discovered that using mobile emissions credits could offset plant emissions.

In total, more than one-third of the emissions reduction credits PG&E needs will come from the Waste Management deal. The rest will come from various other stationary and mobile sources, including the conversion of two San Diego Harbor Excursions vessels to cleaner-burning fuel.

Waste Management's new LNG fleet, set to replace the existing fleet during the next 18 months, will emit 49 percent less NOx than conventional diesel models, Mack reports.

"Removing these diesel trucks is the equivalent of taking 9,200 new [passenger] cars off the street, permanently," Alan Walsh, district manager for Waste Management's San Diego County solid waste operation, says.

The newest of Waste Management's existing San Diego collection fleet will be transferred to other Waste Management locations throughout the western United States. Older trucks that are near the end of their operating life will be scrapped and the engines destroyed, Walsh says.

Walsh hopes this deal will mean not only cleaner air but also lower utility costs for a county that currently imports much of its power. "The shortage of electricity, combined with deregulation, has tripled our electric bills," he says.

However, not everyone in San Diego is as enthusiastic about Otay Mesa. For example, William Claycomb, executive director of Save Our Bay Inc., Imperial Bay, Calif., says the county doesn't need a new power plant.

"We can put in a 25-mile transmission line and have enough power to last us until at least 2006 according to the San Diego Chamber of Commerce," Claycomb says. "The only emissions [these companies] are talking about reducing are NOx emissions, but the plant will put out 4,896 tons per day of carbon dioxide, which causes global warming."

Claycomb and others had a chance to express opposing and supporting opinions at a public pre-hearing, hosted by the California Energy Commission (CEC), Sacramento, Calif., on October 30. Following this hearing and others set to take place during the next few months, a committee from the CEC will decide whether to issue a "license to build" the proposed plant.

Otay Mesa is the first new power plant to be sited in San Diego County in three decades, and PG&E's McDonough says she expects to receive a final permit early in 2001, pending the CEC's approval. Construction is planned to occur in stages, with completion targeted for 2003, McDonough says.