STATEMENT OF
MARY E. PETERS, ADMINISTRATOR
FEDERAL HIGHWAY ADMINISTRATION
UNITED STATES DEPARTMENT OF TRANSPORTATION
BEFORE THE
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
HEARING ON TRANSPORTATION AND AIR QUALITY
JULY 30, 2002

Mr. Chairman and Members of the Committee, thank you for this opportunity to discuss implementation of the transportation and air quality provisions of the Clean Air Act (CAA) and the Transportation Equity Act for the 21^st Century (TEA-21).

Meeting the dual challenges of congestion relief and air quality improvement is a high priority for all of us at the Department of Transportation, as I know it is for members of this Committee. In TEA-21, you gave us new tools and authorities to assist us in achieving this goal, and we are proud of the progress that has been made. In reauthorization, the Department wants to continue to build upon the successes of TEA-21 and the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). Yet, as Secretary Mineta stated at a hearing before you earlier this year, we have an obligation to do much more to address surface transportation concerns. Secretary Mineta has also noted that one of the core principles of the Department's reauthorization efforts is ensuring an efficient infrastructure while retaining environmental protections that enhance our quality of life.

In my testimony today, I will address three main points. First, I want to assure you that progress has been made in reducing transportation-related emissions of pollutants, and that the Department of Transportation is committed to doing its part to ensure progress continues. Second, I will describe how the Congestion Mitigation and Air Quality Improvement Program (CMAQ) has assisted States and localities in addressing their mobility, air quality, and quality of life concerns. Finally, I want to restate the commitment of the Federal Highway Administration and the Department to work with our transportation planning and air quality planning partners for effective coordination of the transportation and air quality planning processes.

CONTINUED FOCUS ON AIR QUALITY IMPROVEMENTS

As a Nation, we have made remarkable improvements in reducing air pollution, especially pollution that comes from transportation sources. Where transportation is a significant source of pollutants, the Environmental Protection Agency (EPA) reports that ozone (formed by the reaction of volatile organic compounds (VOC) and oxides of nitrogen (NOx)), carbon monoxide (CO), and particulate matter (PM), have all decreased substantially since 1970. A majority of the areas designated as nonattainment since 1990 now meet national air quality standards. Air quality monitoring data through 2000 shows that 76 out of 78 carbon monoxide nonattainment areas, 69 out of 85 coarse particulate matter (PM-10) areas, and 81 out of 101 ozone areas no longer show air pollution levels that exceed the national ambient air quality standards. And, while the CAA has led to reduced pollutant emissions from all air pollution sources, the greatest success can be found in the reduction of motor vehicle emissions: CO emissions have been reduced by 43 percent since 1970, PM-10 emissions reduced by 33 percent, and VOC emissions by 59 percent from motor vehicles (see Attachment). While NOx emissions increased by 16% over the period, the rate of increase was less than the increase from all sources (21%). And, NOx emissions from automobiles (excluding sport utility vehicles (SUVs) and light trucks) decreased by 31%. For VOC and CO, motor vehicle emission reductions were greater than the reductions from all other sources. Thus, motor vehicle emissions now make up a smaller percentage of total emissions. In 1970, motor vehicles contributed 59 percent of total emissions of carbon monoxide, NOx, VOCs, and PM-10, when compared to stationary, area, and non-road mobile sources. However, by 1999, the motor vehicle portion of emissions of these pollutants dropped to 48 percent. Most of these emissions reductions have resulted from stricter emissions standards, improved engine technology, and cleaner fuels.

It is especially important to note that these reductions in emissions were accomplished during a period of 33 percent increase in population, 147 percent growth in gross domestic product (GDP), and 143 percent increase in vehicle miles traveled. The automotive, fuels, highway, and transit communities have managed to achieve this success in improving air quality while at the same time working to address increasing demands to improve mobility.

The downward trend achieved in emissions is expected to continue into the future. Engines and fuels are to become even cleaner under recent EPA-issued regulations for emissions standards and cleaner fuel requirements. Between 2004 and 2007, more protective tailpipe emissions standards will be phased in for all passenger vehicles, including SUVs, minivans, vans, and pick-up trucks. This regulation marks the first time that larger SUVs and other light-duty trucks will be subject to the same national pollution standards as cars. In addition, the EPA tightened standards for sulfur in gasoline, which will ensure the effectiveness of low-emission control technologies in vehicles and reduce harmful air pollution. When the new tailpipe and sulfur standards are implemented, Americans will benefit from the clean-air equivalent of removing 164 million cars from the road. These new standards require all passenger vehicles sold after the phase-in period to be 77 to 95 percent cleaner than those on the road today, and will reduce the sulfur content of gasoline by up to 90 percent.

We expect that motor vehicle emissions will be reduced as new heavy-duty vehicles that meet the 2004 emissions standards for heavy-duty engine standards enter the fleet. Beginning with the 2007 model, heavy-duty engines for trucks and buses must meet even tighter emissions standards, and the level of sulfur in diesel fuel must be reduced by 97 percent by mid-2006. As a result, after a phase-in period, each new truck and bus will be more than 90 percent cleaner than current models. In addition to tighter standards, the Federal Transit Administration (FTA) has been working with industry to develop and demonstrate low- and zero-emissions advanced propulsion technologies for transit buses, including hybrid-electric, battery electric, and fuel cell-powered buses. Under FTA/DOT leadership, a national program is underway to accelerate the development and commercial viability of these advanced technologies.

However, despite dramatic improvements in air quality, some of the nation's largest metropolitan areas still face challenges in meeting the current ozone standard (also known as the 1-hour standard due to the averaging time for the ozone concentration levels). Furthermore, the Nation as a whole, and the transportation community in particular, face additional challenges as new air quality standards are implemented. The new eight-hour ozone and fine particulate (PM-2.5) standards will be more stringent, and many areas across the eastern U.S. and in California have pollution levels now exceeding these standards. Some of these areas, including small urban and rural areas, may be designated nonattainment for the first time. Other existing nonattainment areas may become larger and involve more jurisdictions under the new standards. The Department and EPA are working with these areas to increase their capacity to deal with new nonattainment designations.

CONGESTION MITIGATION AND AIR QUALITY IMPROVEMENT PROGRAM

We have learned a great deal about transportation and air quality over the last 30 years, and over the last 10 years in particular. One thing we have learned is that there is no one "right way" to address transportation needs that meets the requirements of the entire nation. The transportation needs of Houston differ markedly from those of Chicago. This is doubly true when trying to reduce congestion and improve air quality. We have also learned that if we are to address our mobility and air quality needs simultaneously, we must incorporate national approaches, State and local planning, and project-level investments.

The CMAQ Program was established in 1992 by ISTEA as one of the programs designed to provide States and metropolitan areas flexibility to better address their particular needs. The CMAQ program is the only Federal transportation program specifically targeted at air quality improvements. Through this program, we have provided $6 billion during the life of ISTEA and $8 billion under TEA-21 (1998-2003) to States and local governments for innovative programs and projects that demonstrate an air quality benefit and contribute to attainment of a national ambient air quality standard.

The concept of the CMAQ program is to provide needed flexibility to fund transportation improvements, whether they be highway, transit, shared ride, bicycle and pedestrian or other types of projects. This flexible approach allows for investments that cross traditional boundaries of the Federal-aid program to support projects focused on transit systems, alternative fuels and vehicles, intermodal highway facilities, emissions inspection and maintenance (I&M) programs, and a host of other projects.

The CMAQ program has also supported more highway and systems management improvements that contribute to emissions reductions through traffic flow enhancements or other means, and has been an important funding source in the implementation of Intelligent Transportation Systems (ITS). In Arizona, for example, CMAQ funding accounted for 87 percent of the Federal funds used for ITS investments.

Overview of CMAQ-Funded Projects

Through FY 2001, about $9.5 billion had been obligated under the CMAQ program. According to the latest data, the majority of CMAQ funding goes for new and enhanced transit services and traffic flow improvements that ease congestion, reduce starts and stops, and reduce emissions. These two categories are the backbone of any metropolitan area's transportation system, but they are also the most capital-intensive of the types of projects eligible under the program.

A breakdown of CMAQ funding is provided in the table below.

CMAQ Funding by Type of Project

1992 - 1999

In recent years, there has been a significant increase in the amount of CMAQ funding used for emissions I&M programs. Both Illinois and New Jersey have used CMAQ funding extensively for this purpose. In fact, 75 percent of New Jersey's recent CMAQ funding has been used for its I&M program. This is noteworthy because I&M programs have proven to be important strategies for meeting Federal air quality standards, demonstrating relatively large emission reductions, especially in acute ozone nonattainment areas.

The Benefits of the CMAQ Program

Some CMAQ projects and programs, for example those supporting vehicle I&M programs, have registered notable emissions reductions. According to the States' annual CMAQ reports, I&M programs can yield about 5 tons per day in VOC in Illinois to over 40 tons per day in New Jersey. Regional projects, like traffic management centers and other projects that contribute to a modern, intelligent transportation system, also demonstrate larger emissions reductions than local or corridor level projects. Finally, we foresee greater potential for projects that advance new vehicle and fuel technologies. On the transit side, funding for bus replacement, removing older higher polluting vehicles from city streets in favor of newer models, has shown results, as have heavy-duty diesel retrofit programs and the introduction of alternative fuels.

Further, even the more traditional transportation control measures (TCMs), such as High Occupancy Vehicle Lanes (HOV), turn lanes, and new buses, funded under the CMAQ program can help our State and local partners achieve other goals in addition to improving air quality. They improve our quality of life, by reducing pollution, by relieving congestion, and by allowing us to walk or bike in a more pleasant environment.

Finally, the flexibility of the CMAQ program supports experimentation by our partners in the States and metropolitan planning organizations (MPOs) to meet travel demand in the most environmentally-sensitive ways. In addition to ITS services, intermodal projects, and I&M programs, the CMAQ program has funded:

• Station cars and car-sharing programs
• Telecommuting
• Parking cash-out programs
• New vehicle technologies, including fuel cell vehicles
• Alternative fuels
• Public-private partnerships
• Transit-oriented development

The National Academy of Sciences (NAS) recently released a comprehensive assessment of the CMAQ program. A number of findings and recommendations were offered, with the study concluding the program is valuable to State and local governments and should be continued. The assessment highlighted in particular the importance of the program's flexibility, encouragement of innovative approaches to reduce emissions, and support for new partnerships across jurisdictions.

Recent Issues

In recent discussions, our stakeholders have raised several issues about the CMAQ program and its role in the overall surface transportation program. The first involves concerns about the CMAQ funding formula. The statutory formula apportions funds to the States based on the population living in nonattainment and maintenance areas and the severity of the ozone and CO pollution problem. However, the statutory formula does not include factors for the EPA's new air quality standards. Thus, a State whose nonattainment population will grow under the new EPA standards will receive no comparable increase in CMAQ funding. The NAS report and others in the air quality community have also pointed out the importance of addressing the new fine particulate matter standard, because of the mortality impacts associated with this type of pollution.

Expanding the eligible use of CMAQ funding for operating assistance constitutes a second issue. One of the current strengths of the program is the focus on improvement projects, which could be diminished by providing assistance for routine operations. Currently, we provide operating assistance for up to three years under the CMAQ program for new services to help them get established

A third issue that has been raised is whether to expand CMAQ funding to areas outside of existing nonattainment and maintenance areas. In January of this year, we published a Federal Register notice maintaining our current policy of limiting funding to nonattainment and maintenance areas, but allowing projects to be funded that are in close proximity to, and primarily benefiting, a nonattainment or maintenance area. Comments to the docket revealed that our stakeholders are divided on the issue of funding outside of existing nonattainment and maintenance areas, although the majority of States and MPOs favored retention of our current policy.

We will consider these issues as we develop our reauthorization recommendations.

THE TRANSPORTATION CONFORMITY PROCESS: COORDINATING TRANSPORTATION AND AIR QUALITY PLANNING

Conformity refers to a requirement of the CAA that is designed to ensure that Federally-funded or approved highway and transit projects conform to the air quality goals and priorities established in a State's implementation plan (SIP). For programs administered by the Federal Highway Administration and the Federal Transit Administration, we determine whether highway and transit projects conform to a State's SIP by comparing the total expected air quality emissions from the whole transportation system within the nonattainment or maintenance area, including the expected emissions that would result from projects contained in the transportation plan and transportation improvement program (TIP), with the emissions budget for motor vehicles in the SIP.

A failure or inability to make a conformity determination by the required deadline is referred to as a "conformity lapse." During a conformity lapse, the use of Federal highway and transit funds is restricted. Currently, most areas of the country are in conformity. But, as of July 22, 2002, five areas are in a conformity lapse.

Fulfilling the transportation conformity requirements has created stronger institutional links between two sets of agencies - transportation and air quality - that operated quite independently of each other prior to enactment of the Clean Air Act Amendments of 1990 (CAAA). This interagency consultation has played a crucial role in the development of more realistic and achievable transportation and air quality plans. In addition, the transportation conformity provisions have been instrumental in fostering improvements to the travel demand and emissions modeling processes, because of the specificity of data necessary to meet conformity requirements.

We now have almost a decade of experience in implementing the transportation conformity provisions of the CAAA and, despite successes, our stakeholders indicate that there remain opportunities to improve the transportation conformity process. Transportation conformity was intended to form strong linkages between the transportation and air quality planning processes. However, there is a concern among transportation agencies-and even some air quality agencies-that transportation plans and SIPs are not synchronized with one another due to different planning horizons and update frequencies. This sometimes causes "lapses" in conformity, often disrupting the transportation funding process. While transportation plans have very long planning horizons and have to be updated frequently, most air quality plans have comparatively shorter planning horizons and are updated less frequently.

TEA-21 and the CAA require that transportation plans must cover at least 20 years and be found conforming for that entire time period. However, air quality plans have much shorter planning horizons, often only 5-10 years, resulting in a "mismatch" in which transportation plans must consider emissions controls in the absence of comprehensive air quality planning. Without comprehensive air quality planning, there is no analysis of the most cost-effective emissions controls across all sources beyond the end of the SIP timeframe. If an MPO has a conformity problem in the time frame beyond that covered by the SIP, it has limited options for achieving substantive emissions reductions with programs over which the transportation agencies have control. Traditional TCMs have little impact on regional emissions levels, and such strategies will provide even fewer reductions in the future, as technology continues to reduce total mobile source emissions. Although MPOs bear the responsibility of assuring that plans conform to air quality budgets, they do not have the authority under current law to establish more effective measures, like I&M programs or reformulated fuels. That process of identifying future control strategies is the intended purpose of the SIP.

This "mismatch" can be further aggravated by differences in the frequency with which transportation plans and air quality plans are updated. Conformity determinations for transportation plans must be made at least every three years, must be based on the latest demographic and travel information, and must use the latest emissions estimation model. However, air quality plans are not updated on a regular cycle, and may reflect out-of-date assumptions or may have been developed using an outdated emissions estimation model. When a conformity analysis is performed in such a situation, it is impossible to determine whether the emissions associated with the transportation plan are truly consistent with the emissions budget in the air quality plan. This may be because the transportation plan emissions were estimated under one set of assumptions and model, while the emissions budget was developed under another. Our stakeholders have reported that such situations have occurred and are likely to happen again with the recent release of a new emissions estimation model.

EPA, in coordination with U.S. DOT, has allowed a 2-year grace period before States have to use the new emission model, MOBILE6, for conformity. EPA also requires that SIPs that are started after the official release use MOBILE6. While the Clean Air Act does not require SIP updates in all cases, EPA guidance encourages States to evaluate the effects of MOBILE6 early to plan for any needed SIP updates to accommodate change.

Our stakeholders indicate that conformity lapses have occurred because areas could not complete the complex, comprehensive transportation planning and conformity processes within the required time frames, even though they met their emissions budgets. Data collection, model development, public outreach, and consensus building can all take a considerable amount of time and resources. MPOs also face other daily challenges of ever-increasing congestion, transportation needs due to economic growth, protection of water quality and other environmental resources, efficient freight management, safety, and security.

Many of our stakeholders have suggested bringing the planning horizons and frequency of updates of both the transportation plans and air quality plans much closer together. Some have suggested a shorter planning horizon, and less frequent updates, while others have suggested a longer air quality planning horizon. We note that some area have opted to voluntarily extend their air quality planning horizons.

In any case, some stakeholders have suggested it is in the best interests of an effective, integrated process that the air quality plans and the transportation plans are both using the latest, and most consistent, set of planning assumptions, and that the air quality plans include the necessary control measures to ensure timely attainment of the standards. Stakeholders have stated that this would also help us anticipate air quality problems and correct them in a more proactive and coordinated transportation and air quality planning process.

The "mismatch" issue also extends to the consequences associated with an area's failure to demonstrate conformity versus an area's failure to submit or implement an adequate SIP. When an area is unable to demonstrate conformity and enters into a conformity lapse, the consequences of the lapse on Federally funded or approved highway and transit projects, as well as regionally significant non-Federal projects, can be immediate. Alternatively, under the CAA, if an area fails to submit or implement an adequate SIP, there is a range of time, a minimum of 18 to 24 months, before sanctions are imposed, during which the State can remedy any problems. Some of our stakeholders suggest that a similar delay in impacts should be considered for the conformity process.

The Department recognizes the value of transportation conformity, and is committed to reducing motor vehicle emissions. Over the years, we have worked closely with EPA and our State and local stakeholders to improve the transportation conformity process. We are committed to better coordinating the transportation and air quality planning processes and will continue to work with EPA and our stakeholders to identify ways to remedy the mismatch issues, including consideration of possible remedies in the development of our reauthorization proposal.

CONCLUSION

In conclusion, the Department of Transportation is committed to continuing the progress made over the last thirty years in reducing motor vehicle emissions and strongly supports the goals of the Clean Air Act's transportation conformity provisions. Improving transportation safety and mobility, while protecting the environment and enhancing the quality of life for all of our communities, are compatible goals. I am proud of the successes we have achieved under the CMAQ program by providing flexible funding for innovative transportation projects that improve air quality and by improving interagency cooperation between transportation and air quality agencies. However, I also recognize that additional improvement in the coordination of the transportation and the air quality planning processes can be achieved.

Integrating transportation and environmental decision-making can effectively advance environmental stewardship and improve our efficiency in meeting our nation's mobility needs.

The American public demands and deserves both mobility and clean air, and we must remain focused on providing the highest level of service and environmental protection that we can provide.

Mr. Chairman and members of the Committee, this concludes my statement. I again thank you for the opportunity to testify today and I look forward to working with you as we prepare for reauthorization of the surface transportation programs.

I will be pleased to answer any questions you may have.