Mon, Nov 13, 2006 - Page 9 News List

Cummins' story suggests EPA regulations are an opportunity


Executives at Cummins Inc did not expect their blessings to come in disguise, particularly when they were disguised as US governmental regulations.

So, when engineers at Cummins, a diesel engine maker, first saw the suggested new federal clean-air standards for their engines in the early 1990s, they argued that the standards would be impossible to meet. After the standards became official in 2000, Cummins sued, and industry insiders started placing bets on whether the company would be one of the few to meet the technical challenges -- and survive.

But last month, when the US Environmental Protection Agency (EPA) needed a place to trumpet the success of the standards, it came here, to Cummins' headquarters. A day after the EPA event, Cummins followed with more good news, announcing that it would invest US$250 million to revive a partially idled plant and hire 600 workers to build state-of-the-art light-duty diesel engines.

What had changed at Cummins, and at other diesel engine manufacturers, was not just that they had learned to adapt to tougher environmental regulations. Instead, the new, cleaner engines have become a point of pride.

"Cummins is the Mark Twain of the engine business," said Mike Osega, the publisher of the trade magazine Diesel Progress. "Their demise has been predicted by everyone in the last 20 years. But they keep getting better."

Indeed, Cummins, along with companies like Caterpillar, has led an unexpected industry revival.

"Columbus, Peoria, these were all supposed to become ghost towns," Osega added. "But this whole industry has prospered. Cummins is a microcosm of what the industry is going through."

The main market in the US for diesel engines remains trucks and heavy equipment for construction, mining and off-road transportation, like locomotive engines. But new engines, with pollution-control technology, open the way for more diesel-powered light trucks and sport utility vehicles.

Diesel engines, the muscle T-shirts of the automotive world, may be the new black. Much of the clatter of the old diesel engines is gone.

Pickup is improved. Light-duty diesel engines can get 30 percent more from a full tank of fuel than their gasoline counterparts. Almost half the cars sold in Europe last year were diesel-powered. And the new generation of diesel engines, compliant with the standards that take effect on Jan. 1, may eventually compete with hybrids for the energy-conscious consumer in the US.

Cummins' revived local factory, for instance, will make light-duty engines for as-yet-unspecified new Chrysler vehicles -- probably light trucks, maybe sport utility vehicles.

The engine manufacturers lobbied heavily for the petroleum refiners to reduce the sulfur in diesel fuel. Without much cleaner fuel, the engine manufacturers argued, the essential pollution control devices would not work and the new standards could not be achieved.

Thanks in part to the diesel engine makers' arguments, the EPA mandated that the sulfur content of diesel fuel be cut to 15 parts per million from 500. Sulfur is a major factor in stopping the cleansing action of pollution equipment like catalytic converters. The result is the formation of microscopic soot, which can penetrate deep into lungs and cause serious illness. This tiny soot, or particulate matter, is the deadliest air pollutant regulated by the federal government.

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