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EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 24, 1995

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[English]

The Chairman: We have a heavy schedule today, with witnesses morning and afternoon. To facilitate the process there will be a brief five-minute intermission between the first and second set of witnesses this morning. Before that, I will call for a motion for which the chair needs unanimous consent on Bill C-83, the one relating to the commissioner of the environment and sustainable development. But I will leave it until we also have the official opposition present.

This morning our first witnesses are representatives of the Motor Vehicle Manufacturers' Association. They are led by Mr. Mark Nantais, whom I welcome and invite to introduce his colleagues and to make, if possible, a brief presentation so as to allow for more than one round of questions. In that sense I will give the floor to you, sir, and ask you to proceed.

Mr. Mark Nantais (President, Motor Vehicle Manufacturers' Association): Thank you, Mr. Chairman.

I'd like to briefly introduce, before we get under way, the individuals who are here with me today at the table. Mr. Rick Colcomb is the Director of Engineering and Future Product Planning for GM of Canada; Mr. Stuart Perkins is with Chrysler Canada as Director of Engineering; Tayce Wakefield is Vice-President, Corporate Affairs for General Motors of Canada; and Mr. Ron Bright is Director of Environmental Affairs for Ford Motor Company of Canada.

Mr. Chairman, we have provided you with two documents. One, of course, is the actual presentation material, that is, a series of slides that allows you to follow along with us as we take you through a rather complex issue.

The second document is much larger. It's the one that's been bound for you. This is a very comprehensive document, outlining the various views of the Motor Vehicle Manufacturers' Association members on various issues relating to the issue of manganese-based additives.

Before we get under way, I would just like to comment briefly on the importance of the Motor Vehicle Manufacturers' Association members and their contribution to Canada's economy. They are Canada's largest manufacturers of vehicles and trucks, and include the companies you see here, and as well Volvo Canada and heavy truck makers.

We want to thank the committee for seeing us today and providing us with this opportunity to address the importance of Bill C-94, and to explain why, from our perspective, expedient passage of this legislation is essential in order for all Canadians to receive the full environmental benefits of the highly sophisticated controls now available on new passenger cars in Canada.

I think it's also beneficial to understand the level of resources that have been put into the development of current emission control technology for Canada, and indeed those that are necessary for us to meet the current as well as the future emission standards.

Very briefly, however, Canada's auto companies account for about 4% of Canada's gross domestic product, making it the seventh largest producer of vehicles in the world. In the past decade alone the big three automakers have invested more than $15 billion in Canada in terms of new facilities and plant upgrades. The big three alone have also invested approximately $4 billion in the tooling of emission control technology in the onboard diagnostic systems that are needed to meet the level of emission reductions for all new 1996 models.

Mr. Chairman and committee members, the fact of the matter is that Canadians must be able to purchase unleaded gasoline that is free of manganese-based additives, as it is indeed necessary for the proper operation of new vehicles and emission control technology over the course of their full useful life, which is critical in terms of environmental benefit. Otherwise, Canadians will be paying for technology without receiving the desired environmental benefit, and at the same time may incur substantial inconvenience and costs from otherwise unnecessary service and repairs relating to the use of inappropriate fuels.

Maintaining the highest levels of emissions performance in every motor vehicle is in the environmental and economic interest of all Canadians. Failure to do so wastes costs in the investment in the emissions control equipment that vehicle buyers have been required to make.

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At this point I would ask the committee members to turn to their document with the slides,page 1.

Emissions from motor vehicles have been substantially reduced. This bar chart gives you a very dramatic pictorial display of what we've been able to accomplish to date in terms of emission reductions from passenger cars. The 100% represents the uncontrolled period. The very small bar to the right of each segment indicates to you that we've reduced hydrocarbon emissions by 98%, NOx emissions by 90%, and carbon monoxide emissions by 96%.

Turning to the next page, to the chart entitled ``Emissions from Autos in Canada'', we are in fact the only sector in Canada to show a reduction in the emissions from the period 1985 to 2000. These charts are based on Environment Canada data, and we are now projected to be the only sector - it doesn't matter whether it's power generation, fuel combustion, industrial processes, or whatever - to show a significant decline.

We are not stopping there, however. In the next chart, entitled ``NOx Emissions in the Windsor-Quebec Corridor'', these projections show that we are in fact going beyond 2000, and you'll see continued reductions between 2000 and 2005 in NOx emissions in that particular airshed. This line represents the national proposal that we recently made to the CCME, which met yesterday. That proposal is essentially what we call the U.S. 49 state low emission vehicle program, with enhanced evaporative controls on emissions, enhanced inspection and maintenance programs, and the introduction of a fuel that would be equivalent to federal reformulated gasoline.

It is interesting to note on the next page the chart entitled ``Hydrocarbon Emissions in the Windsor-Quebec Corridor'', which shows a similar trend downward, to the year 2010.

Given that the auto industry in Canada is a highly integrated and highly rationalized industry between Canada and the U.S., originally as a result of the autopact, which principles were introduced or enshrined in NAFTA, it is absolutely critical that we adopt a single harmonized approach across North America in terms of vehicle design. It's the best way to achieve further reductions, and it's the best way in terms of achieving the remaining reductions.

However, those remaining reductions are going to be extremely difficult. You can imagine that if we are already 98% clean, the remaining 2% are going to be very difficult and indeed very costly.

It is absolutely essential, therefore, that we adopt not only a single harmonized approach, but an approach that includes the total systems approach, that is, incorporating the fuels with the fuels as one. The fuels must support the technology for the full, useful life of the vehicle.

As a last point on the total systems approach, the introduction of so-called clean fuels provides a significant opportunity for even further reductions in emissions that affect air quality, simply because it won't just be new vehicles that will burn cleaner and operate cleaner, but all vehicles on the road.

In support of that approach we've had many months of discussions with the petroleum industry on the whole issue of the total systems approach and on the principles of harmonization itself. Last year, in October, we signed with the Canadian Petroleum Products Institute, along with the Association of International Automobile Manufacturers of Canada, a document that supported this notion of harmonization in a total systems approach. I'd like to quote specifically from that document:

Secondly:

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That is a very critical step forward with the petroleum industry; however, it's now time that the petroleum industry step up to the plate and put forth their commitment to introduce fuels that will support the technology based on those criteria - emission certification, in-use standards, as well as performance.

Following those brief introductory remarks, Mr. Chairman, I'd like to turn the floor over to Mr. Rick Colcomb to take you through the more technical side of the presentation.

Mr. Richard Colcomb (Member, Motor Vehicle Manufacturers' Association): Good morning. It's a pleasure for all of us to be here today to help you with your understanding of this very complex issue.

I represent the group at large. These aren't just my personal opinions; they're the opinions of a wide group. We have a group of technical experts to help you understand this issue. It's a very difficult task to try to explain 20 years' worth of emission control development in 15 or 20 minutes, but we'll try.

We also have some visual displays here that you may want to take a look at as the day goes on. The physical evidence is very strong, we believe. In reference to the first slide on vehicle emissions, auto manufacturers must certify, warrant and comply with all of the individual regulated exhaust emission constituents on all vehicles. This is more than a NOx issue. We have to control and certify all three constituents.

Hydrocarbons tend to be the toughest and usually the limiting factor in our current and future emission control systems. Hydrocarbon control and NOx control tend to be a trade-off; where one goes up, the other may go down and vice versa.

When we do our control strategies, we need to find the correct balance between NOx control versus hydrocarbon control, and that relies on extremely accurate fuel control and three-way catalyst conversion. Many methods are available to improve individual constituents like NOx, but again all of us have to come to the same basic methodology.

It's an extremely difficult job. I assure you that we're not a bunch of masochists. If there's a better idea, if manganese additives helped us we'd be the first to sign up to use them; in fact, we'd be here pushing them for introduction into the fuels.

On MMT effects on vehicle hardware, I think everybody in the room agrees that the large portion of manganese deposits, about 80%, ends up in the engine emission control system. These deposits affect our onboard diagnostic system, affect spark plug misfire, cause catalyst coating, reduced efficiency and plugging. They also damage our O2 sensors and change the characteristics for which they were designed.

Let me talk about onboard diagnostics for a minute. The systems we had in place up until recently are very basic onboard systems that diagnose component failures. The new systems that we're putting in place, as we speak, are very sophisticated. They monitor virtually all the power train and system components and all of the inputs and outputs of our entire emission system in the order of 100 different variables.

They monitor those to determine if there's any deterioration in the emission system for the life of the vehicle beyond warranty. These systems last forever, as long as your car's on the road, and will diagnose any failure. They are developed based on known scientific knowledge with known systems, known fuel and known environmental conditions. The manufacturers' concerns are that the Canadian fuel formulations are not compatible with these systems.

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Next let's go to the effects on spark plugs. General Motors has run an extensive test program that has determined that severe plug misfire being experienced on our current products is a direct result of MMT usage in Canadian gasoline.

Misfire is defined as the plug not sparking across the normal gap. When severe enough, it will not ignite the mixture, and in many cases it causes drivability concerns.

At the committee's pleasure I'd just like to pass around a couple of pictures. These are spark plugs run on an identical vehicle. This plug is from a vehicle run on non-MMT fuel. The other plug is the same spark plug from the same engine, the same vehicle, with the same mileage, run on MMT fuel. That's what manganese oxide looks like: much like rust, iron oxide. You can take a look at that. That's what we're talking about. That's the kind of thing that's causing effects on our emission system.

The spark plug warranty experience - up to 50 times higher in Canada than in the northern United States regions - led us to investigate this problem. Manganese deposits on the spark plug create a conductive path for the spark to travel down lower in the spark plug instead of across the gap. We have documented this with scientific research and are prepared to back it up with appropriate reports.

The same plug design on all our engines has been designed for 160,000 kilometres and many millions of miles on U.S. clean fuels. With MMT as the only variable, confirmation testing verified that the misfire will occur at low mileage on a number of different engines. Some of our testing shows failure around the 5,000 kilometre range, versus 160,000 kilometres for U.S. fuels. We have verified this. Our 1996 on-board diagnostic systems will immediately detect this misfire and will trigger our malfunction indicator light when MMT is used in the fuel.

Let me next talk about the manganese effect on catalytic converters. Manganese oxides add oxygen storage capacity to the catalyst, changing the known relationship between the oxygen storage and catalyst efficiency, which is used for catalyst monitoring. Therefore the catalyst monitor no longer detects a deteriorated catalyst.

Let me pass around a few pictures of what manganese looks like on the face of the catalyst. Again there is the tell-tale brown manganese oxide. That is a section of the catalytic converter. The exhaust gases pass through that catalytic converter in order to be converted. That is the face of the catalyst coated with manganese oxide.

The picture I have in front of me is a microscopic blow-up of the manganese oxide coating, the precious metal - platinum, palladium and rhodium - which is very expensive material that we use in the catalytic converter to create the optimum conversion. So you might just look at those. They are also demonstrated on the board. We also have some physical samples you might pass around.

I'm talking about manganese, plugs and catalytic converters. Again we have much data. This is just a sampling of data. One of us collected 200 converters at random from the field. As you can see, 40% of those were returned due to manganese deposits and 6% of them were plugged in excess of 30%. Not only does that affect emission control, it affects drivability, fuel economy and performance.

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Let me turn to the page entitled ``MMT Effect on Catalytic Converters''.

Manganese oxide deposits can plug catalytic converters. Manganese oxide deposits impair exhaust emissions control. Close-coupled catalytic converters exposed to higher operating temperatures are more sensitive to these manganese oxides.

We are bringing forward new technology that moves the catalytic converter closer to the engine for more optimum control and at the tighter limits. That is even more susceptible to manganese deposits. These deposits are permanent, not welcome, and can't be removed by using clean fuels afterwards.

Let's talk about MMT, manganese's negative impact on customer satisfaction. This additive increases customer post-warranty costs. Remember that these systems stay in place until the vehicle hits the junkyard.

This is not a system that turns off at the end of the warranty period, at eight years. The system runs forever, so at some point, as that system is out of warranty after eight years, that system is still running. We feel our customers are at risk and will be subject to post-warranty costs.

We feel there would be increased frequency of triggering the malfunction indicator light. We feel there will be increased service requirements for all our emission components - catalytic converters, spark plugs, oxygen sensors - and increased failures of inspection maintenance. As inspection maintenance is put into place, failures will be discovered. These failures will be a direct result of manganese deposits.

Let's talk about warranty for a minute, the manganese negative impact on warranty. MMT has a severe negative impact on our key emission hardware, as I've said. The auto manufacturers data are real world, based on millions of in-service vehicles. There are no millions of in-service vehicles in the United States running on manganese.

This is where the evidence is; this is where the data is. There are many subtle differences, but in this case the key difference is the fuel. The hardware is identical. It may affect the warranty coverage provided by individual manufacturers, and we're all confronted with those issues today.

Let's talk about the environment. Manganese has a negative impact on the environment. Hydrocarbons increase. The scientific reason for that hydrocarbon increase is that the fuel system shifts rich. We do not want this to occur. We like to run at a precise air-fuel ratio to control both hydrocarbons and NOx. The presence of manganese is causing our system to shift rich.

Spark plug misfires result in increased emissions because the fuel is unburned in the combustion chamber and ends up having to be handled in the catalytic converter. We have evidence of increased combustion chamber deposits due to the deposit of manganese. Manganese deposits also mask catalyst degradation and our OBD-II systems do not function as intended.

Let's go to an analysis of Ethyl's test program and study. We've been very interested in the volumes of Ethyl data and have studied them carefully. In order to understand them better we contracted Dr. Jerry Lawless and Dr. Abraham, recognized worldwide experts in the area of statistics, to tell us what they thought of the data. We have two main points to make.

The claim of a 16%-to-20% reduction in tailpipe NOx emissions for in-use vehicles using MMT fuel is not substantiated by the test data. The estimates in the McCann report of the tonnage increases of NOx emissions if MMT is eliminated are not supportable on a reasonable, statistical basis.

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Let's analyse that a little further in the next slide, which deals with the summary of the analysis. We have a detailed report we're prepared to share, as required, and discuss with you.

There is substantial variation in the NOx emission rates. The rates vary from plus or minus 30% to 40% from car to car. If you understand the very low numbers we're working with these days, those kinds of things happen. They are larger than the average emission rate differences that we're talking about here.

There is large model-to-model variation in NOx emission rates, and you might note that 75% of the 16 models tested showed no statistically significant difference in NOx for MMT versus clear-fuel vehicles.

Ethyl's use of an average is not representative of any actual car population and could be misleading. We manufacturers are not allowed to average our data across all different vehicles. We're required to comply on each and every vehicle and emission system under the current Canadian law.

We now turn to a slide on an analysis of Ethyl's test program and study. From what we've seen, the 1992-93 fleet has no significant evidence of increasing NOx emissions with miles for either fuel. We are very careful and design our vehicles for flat emission control performance; in other words, there is no deterioration through the life of the vehicle. That's what we're trying to do here.

Ethyl chose the older 1988 fleet to do future fleet projections through the year 2000, showing a slight increase. This is not valid. Extrapolation of 50,000- to 75,000- and 100,000-kilometre data to 195,000 kilometres, as done in the McCann report, is not supported by available data. There's no basis to assume the test fleet could be used to represent actual vehicles in the field.

An analysis of Ethyl's test program and study regarding advanced emission control vehicles.... There's very little data in that area, given that we are all in the process of inventing those systems as we go forward.

But the TLEV vehicles, which are the transitional low emission vehicles, the newest technology run by Ethyl, in the same 1992-93 fleet show no evidence of a statistically significant NOx reduction. There's a high degree of variation that does not justify the claims. Again, that data and analysis came from the University of Waterloo's statistical department.

Let me turn to Ethyl's test program. The auto manufacturers have serious concerns about elements of the Ethyl Corporation test program that would overwhelm and mask the true emissions impacts.

We don't understand the vehicle parts changes that were made, and they were not disclosed. We do not know the test facilities that were used. We do not know the mileage accumulation schedule used. Vehicles were dropped from the test data - we don't know why - and vehicles were stopped early in the test program.

Let's talk a little about the claims and refute the claims. With respect to the claims of MMT reducing NOx, the facts are that the MMT manganese coats the oxygen sensor, which biases the system rich and in so doing lowers NOx and increases hydrocarbons and CO. That's how the system is designed, that's how it works, that's the science.

The claim of removing MMT necessarily requires increases in aromatics and benzine to replace the lost octane. We have three things to say about that.

There are other alternatives available, such as oxygenates. The U.S. refiners have achieved lower benzines and aromatic content to date without the benefits of MMT. Frankly, the Canadian refiners currently have higher benzine than aromatics, even given the benefit of MMT.

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The last point we'd like to make is that 87 octane is the requirement we have for the majority of vehicle emission systems. We are not asking for the great preponderance of high octane fuels; we assume that's one of the places where manganese is used.

At this point I'm going to turn the table over to Tayce Wakefield to talk about the U.S. situation.

Ms Tayce Wakefield (Member, Motor Vehicle Manufacturers' Association): Thanks, Rick. Let me briefly recap the history of this issue in the States and bring you up to speed on our view of the present situation there.

As you are aware, this is a rationalized auto market across North America, so we watch the U.S. developments - as I'm sure you do - with some interest. Let me give you a little of the history.

MMT was banned from unleaded gasoline in the U.S.A. in 1978. There have been a number of applications for a waiver since that time, and all were denied until very recently.

In the 1980s, frankly there wasn't a lot of research focused on this issue among the automakers in the States simply because MMT was not available and was not prevalent in gasoline. So there is not a great deal of research material to turn to on the U.S. side of the border.

As we've continued to introduce new technologies to motor vehicle emissions to achieve further reductions, to the point where we're now 98% reduced on hydrocarbons and 90% reduced on NOx, we're employing increasingly sophisticated and precise technology. So obviously the interest in the impact of a manganese-based additive on our systems has become increasingly important to us.

There's been a lot of discussion about the issue of cause and contribute, and some quotes were used selectively to suggest that the EPA did not find that MMT causes and contributes to the degradation or failure of emission control equipment. But in fact the EPA has indicated that seven of eight models tested are required to fail under the U.S. test before the pollutant fails its overall test on the pollutant. That's an issue for us because, as you know and as Rick mentioned, in Canada automakers are obliged to have all vehicles pass. There is a very different test standard to be met here.

The agency does consider its existing tests and the criteria it implements to be obsolete under the current conditions. As the science has developed over the last decade, their understanding of how emission control systems work and how test procedures should be implemented to test those has changed. Accordingly they've indicated that the old test data upon which recent decisions have been based are no longer the best data to use.

Recently there was a waiver decision in Ethyl's favour in the U.S.A. It was a very narrow ruling based on an interpretation of the EPA under certain sections of the act. The court did not dismiss the health concerns that had been raised, but basically referenced the fact that the EPA used the wrong section to raise those.

Last Friday there was another U.S. court decision that allowed the previous grandfathering of MMT and so did not require certain hurdles to registration. But, of course, they are still obliged to demonstrate within three years that there are no health effects before they are completely home-free.

So while the MMT may be in U.S. gasoline, that obligation to test for health effects is still going forward.

The EPA continues to be concerned about the impact as we go forward on the on-board-II diagnostic systems that are just being implemented today.

The situation with fuels in the U.S.A. is a little bit different from the Canadian situation as well. Unlike the case in Canada, fuels have been vigorously regulated in the U.S.A. for some 20 years. There has been a recognition in the States that a total systems approach is required, whereas in Canada we have focused primarily on the vehicle hardware side of the coin.

California explicitly bans manganese additives. Reformulated gasolines that are in place and required in most of the high-pollution areas of the U.S.A. also exclude heavy metal additives such as manganese.

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It's anticipated in the U.S.A. as we go forward that even though as of Friday MMT may now be included in gasoline, it will only be used in small amounts as an octane trimmer and not to the degree that it has been used in some parts of Canada.

In the States, as in Canada, individual auto manufacturers may each take steps to encourage the use of MMT-free fuels to indicate to the customers why they think MMT-free fuels are better for their particular vehicles.

We do have some indication as well that in the U.S.A. there will be some competition amongst the petroleum suppliers in terms of health effects and health, safety and environmental issues. Some oil suppliers in the U.S.A. may in fact decide to try to use this as a marketing and competitive advantage and offer the customer MMT-free fuel.

To conclude, we believe that the NOx benefit claims are not supportable. Our data indicates that MMT does have a significant impact on emission control and the on-board-II diagnostic systems.

We cannot compensate for the impact of MMT on an emission control system. There isn't a technology solution to solve the problem. We are concerned that Canadian consumers will be denied the real world benefits of the leading-edge technology we're putting on our vehicles if consumers cannot access the fuel they require on which to run those vehicles.

So our interest in being here today is to support Bill C-94, to ensure that our customers can access the fuel they require to allow their vehicles to operate as cleanly as designed.

Thank you. We're now open to any questions you may have.

The Chairman: We'll start with Mr. Chatters.

Mr. Chatters (Athabasca): Thank you for your presentation. It was again a very convincing presentation, the kind you've presented before.

But the more I hear, the more confused I become. Simply every time this issue has been dealt with through independent research or through the courts in the U.S.A., they've consistently ruled that you failed to prove MMT in gasolines has a negative effect on your OBD-IIs. This has to be combined with the fact that the OBD-II technology has a high failure rate in the U.S.A. The fact that it required some reduction in standards to allow it to be licensed in the U.S., where MMT doesn't exist, raises some questions.

The minister and yourselves put great stock in the spark plug test program, yet independent research in the San Antonio, Texas research institute proved that MMT did not contribute to spark plug failure, that there was a problem with the type of spark plug used in some GM automobile engines. So, as I say, the more we go, the more confused we become.

On the Ethyl side of the argument, they have told us that if this whole issue was simply submitted to independent testing by the Canadian research council or a similar agency, some independent testing that proved MMT was detrimental to the OBD-II, they would accept that ruling and withdraw MMT from the market.

That seems a reasonable position. In the circumstances, when you listen to the evidence from both sides, at least you have to believe there is some doubt about this whole issue and some clarification is needed. Could you just respond to that.

Mr. Colcomb: I can try in a couple of instances. First, with regard to an independent panel, this is an extremely complex field. Probably nobody outside the auto industry really understands how to do an engine calibration, how to do on-board diagnostics, how to put together the whole package. That's our job. I've spent 20 years in this field, and I still don't know all the answers. But the physical evidence is rather overwhelming.

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First, we ran out of time on an independent panel. At best an independent panel could analyse today's available technology. We are moving forward. We are moving forward with transitional low-emission vehicles, and ultra-low-emission vehicles. The technology is moving forward.

There is a great deal of discussion in the United States about a testing program. It will be gigantic and will make conclusions that will be good for that day and the very next day. Something else in the new system will come on-board.

We believe our data, we've shared it, and we haven't hidden it. We've shared it with government and we've shared it with the oil industry. We are convinced the science is there. You don't need to do independent testing to prove that manganese deposits; it does.

You don't need independent testing to take on the spark plug thing. The data Ethyl has used has been testing on a spark plug in conditions that do not represent the environment of the engine.

We have documented evidence on many spark plugs at combustion chamber temperature that shows that manganese oxide is conductive, that the spark tracks down the side of the insulator and across to the base of the spark plug. It does not fire as intended. We are trying to design spark plugs that go 100,000 miles, not 30,000 miles.

So we have extended the range of our systems. In the case of NOx we are implementing a 60% reduction from 1 gram to .4 grams. To do that we've had to change spark plug and combustion chamber designs and catalyst loading.

The amount of dilution in the combustion chamber is much greater than it used to be. Plugs have a harder time firing now because we don't have a pure mixture in there. We have exhaust gas recirculation in there to control NOx; it makes firing a plug more difficult.

So, yes, there is a great deal of independent data and there is a great deal of our data. We're convinced we have the expertise in this particular area. We grant that the fuels experts.... We're the emission control experts, and we're telling you that we don't know how to handle this additive.

Mr. Stuart Perkins (Member, Motor Vehicle Manufacturers' Association): I think there's one more point. The auto company has no vested interest insofar as MMT is in the fuel or not. This is merely a matter of our systems and the technology we have invented being compatible with this additive.

We have nothing to gain or lose by MMT being in the fuel or not being in the fuel. We're merely trying to tell you what's happening with the emissions systems, based on this additive being in the fuel. We have nothing to gain monetarily by MMT being in or out of the fuel.

As far as cooperative studies, I might add that as long ago as 1989 my company tried to participate in a catalyst study with Ethyl Corporation. This was the same catalyst study that was quoted here. They did receive the catalysts after we had examined them. They examined them superficially on our premises. They were sent to catalysts, and we've never heard from them since. They don't even admit that the study ever existed.

We have tried to cooperate with Ethyl at a very early stage before MMT was really a problem. Now with OBD-II in 1996, MMT is a problem to our customers. They will be getting lights on their instrument panel when there's nothing wrong with their vehicles. And when a catalyst is burned out and they should have a catalyst replacement, there's no light that will come on because the manganese oxide that's pointed into the catalyst is showing that the catalyst is just fine.

The customers are going to be very upset when they can't pass an air care program.

Mr. Chatters: All that's true, but no doubt Ethyl has a vested interested, as you have a vested interest. Every time this evidence has gone before an independent body, that body has concluded that you have not been able to prove MMT has a detrimental effect on your OBD-II.

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You have refused to table your studies publicly because of the confidentiality of your warranty information. So while you have released data, you have not released your studies per se.

As you said, the court did have some reservations about the health effects of MMT. The only remaining question in the U.S.A. seems to be about the health effects. Our Department of Health sat at this table and told us they are absolutely convinced beyond any doubt that MMT has no detrimental health effect on Canadians. So that doesn't seem to be an issue, at least in Canada.

So again there just doesn't seem to be any independent study, independent of either side of the argument, that's prepared to back up one side or the other on this issue. It indicates to me there's a need for independent study and an independent conclusion on this issue.

Mr. Ron Bright (Member, Motor Vehicle Manufacturers' Association): If I may, I'd like to take exception to those statements. You said we supplied no data.

Mr. Chatters: No, no, I didn't say that. I said you didn't release your tests. I said you released the data.

Mr. Bright: Well, I guess I don't understand the difference between studies and data. As you recall - and I'm sure you've read it - we at Ford supplied the data we had from a catalyst monitor, dynamometer testing that conclusively showed there was a detrimental effect in the catalyst monitor system.

That was supplied to EPA and was the basis of another statement I was going to take exception to. EPA very definitely did make a notation in their first finding that there was still some reservation on the on-board systems. While they talked about the health issues, they said, yes, as far as we're concerned, the on-board systems are an open issue.

So we did supply that data to them from a very conclusive test we ran. That was supplied and was the basis of their admitting that on-board was a very open issue with them. I believe ``concern'' was the word they used in the first, not the second, pronouncement from the U.S. court system. That was definitely highlighted.

Mr. Chatters: The evidence was inconclusive, I believe. It was -

Mr. Nantais: Mr. Chairman, I think I can help out here. The agency said it knows there to be insufficient time and very little data available, which precluded a definite conclusion within the waiver application timeframe.

It's a far cry from some of the impressions that have been made.

I am quoting from the Federal Register, volume 59, number 158, Wednesday, October 17, 1994:

Mr. Chatters: I accept that more study is needed. That's what you just said.

Mr. Nantais: What that says, in contrast to what you said actually, that they have no concerns about OBD, is that they do have concerns and yes, they do want more data.

The Chairman: Mr. Chatters, I will come back to you on a second round.

Mrs. Kraft Sloan (York - Simcoe): On our first day of hearings on this particular subject, our chair had suggested that we would be going into a very interesting and challenging period of time. The issues seemed to be very polarized, one side against the other.

Contrary to what the member on the other side has suggested, that there haven't been any independent studies, you have brought forward independent studies this morning that refute claims on the other side.

There's one question that puzzles me more than anything else: why would over a dozen automotive manufacturers in Canada unanimously reject the use of MMT?

Are you telling us there is some kind of automative conspiracy around this? What do you have to gain by wanting to see MMT banned from gasoline? Maybe you can answer that for me.

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Mr. Perkins: I'll respond first.

The thing that upset my company, in coordination with the other companies, was that starting in 1996 our customers were going to be affected. Prior to that, in the late 1980s and on through 1995, catalysts, spark plugs, and other diagnostic systems were being contaminated and replaced under warranty. This is a manufacturer's problem.

In 1996, when we have on-board diagnostics - the lights that illuminate the instrument panel and tell the customer to check his engine - and they're getting false indications...they're irritating our customers and we are concerned about that irritation. We weren't happy about the excessive warranty costs in Canada, but we are very upset about our customers being affected, inconvenienced and misled. They won't dislike the EPA, nor Environment Canada, nor Ethyl Corporation, nor even the petroleum producers. They're going to be upset with the auto manufacturers, and that's where I came into the picture and went through this campaign to get MMT out of the fuels.

I'd like to repeat my previous statement, that the auto manufacturers have no vested interest. Ethyl has a vested interest in maintaining MMT because of profits and worldwide distribution that's going to come into effect if they're successful in Europe. The petroleum producers have a vested interest because they can have lower fuel costs by the additive MMT instead of an additional 0.25¢ a litre to refine the fuel to its 1987 octane capacity.

The auto manufacturers have no vested interest. We have nothing to gain monetarily. We do have something very dear to gain, and that's our customer confidence and our customer repeatability.

Mr. Colcomb: I would just add that this is not a new issue for us. We've been talking about MMT since about 1975, I think. We've always had these kinds of conversations, and the government has agreed with us that there's a hydrocarbon effect. They've chosen to allow us to certify without MMT fuels. They've chosen to audit our emission control systems for in-use compliance without MMT fuel.

As the numbers got smaller and smaller, the MMT effect became more and more significant. The 1994 to 1996 standards being as low as they are, and our desires to adopt those standards, were what started to surface the issue.

Stu said, ``Holy smoke, my converters won't work.'' I said, ``Gee, me too, and my spark plugs don't work.'' Ron said, ``Me too; my stuff doesn't work either.'' That's where it all came from. We didn't all get together and say ``Let's go out and find somebody to pick on.'' We have better things to do. We all have full-time jobs here, and this is standing in the way of me getting my job done.

Ms Wakefield: Let me just emphasize that each individual company reached the conclusion independently as to what the impact was on our particular systems. Depending on the particular technology we employ, MMT has marked impacts on slightly different areas of the system that we've been able to document for the government.

But really, the vested interest here is the customer and the environment. That's why we are concerned. We think the customer deserves to have their technology function as designed, and we think the environment can't afford to have unnecessary increases in emissions, particularly hydrocarbon emissions. So those are really the two vested interests that we're here in some way to represent.

Mr. Bright: There's another aspect, too, that I think we have to look at. That is, for the last 15 years, the hardware on the automobile has basically carried the ball on emissions reduction. There's no question of that.

As we mentioned in our presentation, we're down to the point where when you're 98% out, there isn't much left. It's the old curve going down that is the effect, and when the benefit goes down, the cost goes up. We need some help in that area to get that last piece of the 2% out.

That's part of the question I want to lead into. That is, in the future, as we move from 98% to 98.5%, to 99%, to 99.5%, it is super-critical that everything on the vehicle works absolutely perfectly to be able to get there.

.0935

Instead of durability...when I was a kid, we used to replace plugs at 1,000 miles; I'm sure you remember that too. We're now talking 100,000 miles - a phenomenal increase in the thing. So everything has to operate perfectly for that period of time and produce phenomenal durability for the customer. That's our concern as well, not only today but as we move in the future, and by the way, the future is now. We're talking 1998, 2001.... Those designs have been finalized within the companies where they have been worked on.

So we have no more room to move here. We're in a critical stage. Where we had lots of room in the past and could overlook these things, we no longer can. We're right up against that last little bit, and everything has to work perfectly, including the fuel, with nothing to give us any deterioration effect on the components.

Mrs. Kraft Sloan: If I'm hearing you correctly, what you're advocating, as you mentioned earlier, is a whole systems approach. So it's not only the hardware of the automobile but also the fuel that's going into the automobile that has to work together.

In light of the court ruling in the United States on Friday, I'm wondering, in your estimation, what percentage of people who own cars in the United States would actually be going to gasoline that has MMT in it. Do you see a big switch happening?

Mr. Colcomb: Let me try a couple of things. First, MMT is not in California fuel. It's banned by name. So no one in California with the most advanced systems will be using it, nor will the majority of the civilized world elsewhere.

Reformulated fuel in the United States, which is required for non-attainment areas, does not contain MMT. It disallows the use of metal, which manganese is, in fuels. As we said earlier, the octane pool in the United States is higher than the pool in Canada, so not all manufacturers will need the manganese to increase the octane.

Of course, it's an accumulated effect. In Canada, at nearly every pump you fill up at, you get some manganese. In the United States, it will be that sometimes you'll get some and sometimes you don't get any. We'll see what happens to the northeastern states and other areas. But I think the number right now is something like one-third of the United States that will have zero, and we would estimate out of the other two-thirds that it will be somewhat sporadic. So as this is an accumulated effect, the vehicles will go quite a bit longer.

Also, the allowable dosage in the allowable areas right now is half the Canadian amount. So if our cars go 4,000 miles in Canada, maybe they'll go 8,000 miles right out of the chute, and then probably only half the time will they see manganese fuel.

So we're deadly concerned. This thing on Friday hit us hard. The answer is, we don't know. If we knew how to design around this thing, we would have serious customer concerns in the United States. Some of us have taken action in Canada to protect our customers. We don't take this deal lightly. We're not just letting our customers suffer. Some of us are actually making changes to protect our customers. We have no choice, and we'll have to make those decisions in the United States.

The problem is, in the United States it's a catch-22 situation. We're required by law to have on-board diagnostic systems that work, and now we're confronted with a fuel that causes us grave concerns.

Mrs. Kraft Sloan: Will the gasoline be labelled if it contains MMT?

Ms Wakefield: There's no requirement that it be labelled as containing MMT, but we have some indication from at least one major in the U.S. that they intend to indicate to their customers that they have MMT-free fuel available, because they see it as a competitive opportunity for them.

It's hard to speculate how much of a snowball effect that competitiveness in the U.S. market will have, but we are hopeful that it will result in the right kind of fuel being available for consumers. In the end, that's what we want here in Canada, for the MMT-free fuel to be available to our customers here as well.

.0940

Mrs. Kraft Sloan: Thank you.

Mr. Perkins: We ought to also note that MMT is not something that is splash-added at the gas station. It's part of the feedstock at the refinery, and, as you know, refineries do share their gasoline with various distributors.

The Chairman: Mr. Reed, followed by Mr. Finlay.

Mr. Reed (Halton - Peel): Thank you very much, Mr. Chairman.

I appreciate very much the fact that you are here testifying this morning, because you have expanded the basis of a debate that has been going on here, and my part of the debate was limited to the information that the diagnostic system was interfered with, and it seemed to me that in itself was probably sufficient to try to replace MMT with whatever.

I had a very interesting experience this summer. I have an old Dodge one-tonne. It's a '76, with a 400-inch engine, and every summer my wife and I throw the camper on the back. This summer we put a couple of thousand miles on it. On the way home it started to misfire, and the mileage went down, and I got home and I said ``I'm going to change these spark plugs''. I've changed lots of spark plugs in my lifetime, and when I took them out, the funny thing was they were just that colour up on the wall. I had never seen a fouled spark plug that colour before. I've seen them black, I've seen them coated with all sorts of nasties, but never one that colour. So I changed the plugs, and I expect that if we don't get the MMT out, I'll have to change them again pretty soon.

But what you bring up is the subject of the debate over how much a fuel costs, and, really, my interest in terms of the consumer has to do with what should be labelled as ``whole costing''. What does a fuel cost? Is it the price at the pump? Is it the price that comes out the spout? I think, with the evidence that's been displayed, that is not the case. We've learned over the years that there are other costs connected. We learned it with the previous additive in fuel - lead - that there were additional costs that went beyond, and of course with the conscientious efforts of the automotive industry to reduce emissions, there's a realization that there are costs associated with spouting great quantities of whatever - nasties - into the environment. So I'm delighted to have this debate expanded in this way for my information.

The one criticism I have heard of the automotive industry has centred around the argument that the ``studies'' have not been made publicly available, although the results were rather unanimous among all of the automobile companies.

I appreciate and understand the fact that the automobile manufacturers have no vested interest, other than to salvage their own warranties, and so on; there's no interest in the fuel per se. So how do you answer this argument that the studies have not been made public and therefore don't have validity?

Mr. Colcomb: I'm not quite sure what ``make public'' means. As you know, we sat down with all the interested government parties and reviewed the data in some detail. We also had a lengthy session with the petroleum producers, where we shared all data, including the warranty data. We broke out in separate sessions, where, for instance, General Motors said, here's our warranty data, because we don't want to share our dirty laundry with our partners here.

.0945

So we did in fact share that data. Again, it's very sophisticated.

The CCPI group put together a panel of experts. We're of the view that it's very hard to find experts outside the industry.

EPA is having the same issue in trying to put together a test program that's outside the auto industry, when the expertise is inside the auto industry.

You might note that the only person on that CPPI panel that we'd consider an expert, Steve Carter, who has actually done engine emission control systems and is an expert in the field, has concluded as a witness to Environment Canada that he supports our conclusions, based on the science involved in the emission systems.

So I would submit to you that we have shared the data. We don't broadcast it as widely as Ethyl might. Our job is not to go out into the press with volumes of data. We believe it. We're prepared to sit with this committee and review our statistical analysis. We have our spark plug expert here today. We have our General Motors fuel expert here today. We're prepared to debate with the experts on the issues. To sit in front of this committee and give you all the data on 100 years' worth of emission technology or put our customer at risk based on a test program that may or may not represent future technology.... Future technology isn't here; we're inventing it as we speak.

We have buildings full of experts trying to lower emissions, and frankly, it's not as simple as just running a test. Our emission certification programs require a fleet of vehicles. Every single different vehicle with a different emission system has to be run 4,000 miles and tested. Then we have to develop a deterioration factor that goes out to 160,000 kilometres and understand how the vehicle deteriorates. We have to use science and mathematics to predict emission behaviour and catalyst behaviour, based on known evidence. It's not as simple as just taking a car....

What is simple is to go out to any car in the parking lot, unscrew the spark plug and look at it. Tell me whether you actually believe that will run 100,000 miles. We're trying to protect the customer. We don't think all customers change their spark plugs. They don't maintain their vehicles. We put in place a system that will run for the life of the vehicle and ensure clean emissions. We aren't hiding data.

Mr. Nantais: The fact of the matter is that's what Americans are receiving in terms of technology, in emission controls and environmental benefits. We want to do the same thing here in Canada: offer Canadians an equal level of protection by virtue of the same technology.

Mr. Bright: Mark, I just want to make another comment. The lack of data and studies not made public has come up a couple of times. I guess this is one of the problems we have as engineers. We sit pretty close to the technical details and we gloss over the understanding of those details quite often.

One of my former bosses said that engineers basically have two failings in life: dealing with the facts and blurting out the truth. This gets us into a lot of trouble. The basis of a lot of the things, particularly in the catalyst monitor area as on the Ford dynamometer studies, which we felt was very solid.... We provided that to U.S. EPA and it became the basis, as I mentioned earlier, of their comment in the first U.S. court pronouncement. We supplied it to the government and to other people. For clarification, I'd be more than happy to supply that test report to the committee here for distribution. It would help, I think, in the understanding of why we are concerned about this area.

We look on this as a test that you don't have to do 100 times to prove. It's like a chemist working in bases and acids; he doesn't have to do it 1,000 times to find out the two neutralize. He does it once and that's it.

.0950

We think this type of test is much like that. Instead of a 42,700-mile equivalent on the dynamometer test when the light is turned out, it may be 43,000 miles or 41,000 miles. We know it's going to happen in the same area because the circumstances are the same, and when you do the same thing scientifically you get the same result. You don't have to do that test 1,000 times and supply 1,000 pieces of data. You know it's going to be one times 1,000 - it's the same thing.

So my conclusion is that we would be more than happy to supply that report. I will do that for the chairman or anyone else you direct me to. You can read through that, and I think you'll be totally convinced that there is a solid basis for our concern.

The Chairman: Thank you, Mr. Bright.

Mr. Finlay (Oxford): Gentlemen and ladies, we certainly appreciate what you've told us this morning. I appreciate your hands-on displays. Anyone who thinks driving a car in San Antonio, Texas is the same as driving a car in Ontario is simply not in the real world. Having lived and driven a car in both places, I can assure you of that. So if anybody is running on data done in San Antonio, it probably doesn't apply within about 1,000%.

I don't have to know all the science, although I think I understand it at a basic level. When I see the spark plug and catalytic converter you showed us, I know there's an effect. In fact, the catalytic converter looks like my radiator when it doesn't work because of bugs or something else. It simply isn't going to operate properly.

I appreciate your strong statement, and it's a question that's been raised. I cannot see that the automobile companies have a vested interest in whether MMT is in fuel or not.

However, I have invested, as have other members of this committee, about a year and a half and three to five meetings a week looking at the Canadian Environmental Protection Act. We've made what we think is a fairly strong report about that.

I want to remind everyone that we've had a lot of talk about the United States courts and EPA and so on. I want to remind you that it took eight to ten years before the administration in the United States recognized that acid rain was the problem. Thousands of lakes died before it was accepted that the industrial heartland was spewing SO2 into the atmosphere, that it falls as sulphuric acid, and that it kills fish, wildlife, birds, mammals, insects and everything else that depends on water. So it's not a very strong argument.

Canada has made a lot of international commitments, one of the main ones being to reduce hydrocarbon emissions. Another thing we've learned is that heavy metals bioaccumulate in the environment, and that led us to propose or support the concept of a precautionary principle. I want to set the record absolutely straight.

My colleague across the table stated that people from Health Canada said they were absolutely convinced that MMT has no ill-health effects. I was present at that meeting and that is not what Health Canada said. When I questioned them, Health Canada admitted that manganese dioxide is toxic, but they stated that the current level of concentration is below the level of risk for human intake of the metal. So I would err on the side of caution and simply add that as another piece of what we're talking about.

Mr. Chairman, we have representatives from Ford, GM and Chrysler. What is the experience of international car manufacturers? Are we going to hear about that next?

Mr. Nantais: Mr. Chairman, the Motor Vehicle Manufacturers' Association will be appearing this afternoon and they will provide you with their comments and views on the specific issue as well. I think it would be best to wait and hear from them. You will find a great deal of similarity on the problems that they found as well.

However, you've made reference to this committee's report on the amendments to the Canadian Environmental Protection Act. Clearly there is a recommendation in there that takes us a large step forward toward accepting this notion of a total systems approach in Canada - that is, the vehicle and fuels. It is certainly something that our industry welcomes and appreciates.

.0955

Mr. Perkins: I would like to reinforce one point you made about the health study and that it is universally agreed that only 20% of the manganese comes out the tailpipe. Eighty percent of it is retained in the engine and its control equipment. So on one hand, if you argue health effect, health effect is fairly minimal because only 20% gets out in the atmosphere. On the other hand, the corollary of this is that 80% of it stays in the engine and that's why we're here.

The Chairman: I have two brief questions. They are related to your executive summary and also to the body of your submission. I'm referring to the one about the impact of manganese-based fuel additives.

In both questions my attention was drawn by the fact that you used the term ``manipulation of data'' on page 3 of your submission as well as on page 38. In the first one that appears on page 3 you say:

It would be desirable at this point if you could please elaborate on that statement, as well as on your conclusion on page 38, where it says:

This second item was raised quite extensively in debate in second reading in the House of Commons. Therefore, it would also be helpful if you were to elaborate on this conclusion for the sake of the record. Who would like to do that?

Mr. Colcomb: I'll take the generic question. Ethyl has produced great volumes of data and we've always had our opinion on that data. Being a bunch of engineers and scientists we like to pour through the data and have our strong views. It's not the way we put together data. It's not the way we do engine or emission calibrations. It's not the way we do comparisons.

In order to have an independent -

The Chairman: Are you implying then that this is bad science?

Mr. Colcomb: No. In order to have an independent opinion of the data as presented by Ethyl, the MVMA contracted the University of Waterloo, which is known for its statistics work, to analyse the data and tell us whether it was statistically valid. In other words, can you take data sets like that and make conclusions with confidence? Their conclusions are that you cannot.

We have a report here with a lot of math and science in it. You can take it and read it if you like. If you would like to get into the specifics of it, we have Dr. Lawless, who did the work, with us today. But based on these conclusions as stated in our presentation we would not make the same judgments as Ethyl made and neither would the University of Waterloo. We would not take 1988 data. We would not mix 1988 data with 1992 data and come to conclusions on the overall effect on the environment using that methodology. That is reasonably new input because we wanted to bring to this committee a somewhat unbiased view of the reports we've received that Ethyl has made public.

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Mr. Forseth (New Westminster - Burnaby): Could you get us that report?

Mr. Colcomb: Absolutely. We can enter that into the record.

Mr. Forseth: You said that today you have an expert in spark plugs with you. Perhaps he could come to the table. I want to ask some questions about these photographs.

Mr. Colcomb: Sure. Joe Leptich works for General Motors. Joe works for the Delphi Automotive Systems in emission control and is responsible for much of the work that we did on spark plugs.

Mr. Joseph Leptich (Development Engineer, Delphi Automotive Systems, Division of General Motors Corp.): My name is Joe Leptich and I am with Delphi Automotive Systems in Flint, Michigan.

Mr. Forseth: I'm looking at two colour photographs here. One is of a spark plug that looks relatively clean and the other is of one that looks corroded. This is presented as some kind of comparative analysis, so I would like you to outline the surrounding data that sets up this comparison. What are the controls related to? Specifically, what am I looking at with this spark plug that looks contaminated? Is that a derivative of MMT or something else? What is the composition of that? Support these photographs by explaining the surrounding control parameters that would make the kind of conclusions that you're asking me to make by looking at these photographs.

Mr. Leptich: The relatively clean spark plug shown in the photograph was run in the United States on an AMA emission schedule where the fuel is carefully controlled and the mileage is 42,962 kilometres. That fuel is free of MMT additives.

Mr. Forseth: Fuel that's carefully controlled - what was the specific fuel?

Mr. Leptich: It's an AMA certification fuel.

Mr. Forseth: Is it some special concoction or is it available out of the pumps, and where? We know that fuels across the United States are all over the map and vary from state to state.

Mr. Colcomb: We also have a fuels expert. We run the emission tests on a specific fuel called indolene, but when we run mileage accumulation we run a fuel that's known to represent fuel in general use in the United States and is commercially available. In this case it's called Chevron certification mileage accumulation fuel. It's standard industry practice and it's what's used to run emission tests, data and accumulate mileage, so you know what you've got. It's not trumped-up, magic, special, reformulated or anything like that.

Right, Joe?

Mr. Leptich: Right.

Mr. Forseth: Where is that normally available in the United States?

Mr. Colcomb: Everywhere. It is representative of typical fuel in the United States.

Mr. Forseth: I understand that in the United States there are five or six different formulations, varying from season to season, and it's all over the place.

Mr. Perkins: The fuels used are representative of fuels available as road fuels at the pumps in the United States. One specific blend was chosen so that over the years data would be comparable, but that doesn't change with someone adding colouring to their fuel or a special lubricant or some other additive. It's a standard fuel. It's a maintained constant, but it's just like the fuel you'd get out of a pump at a Chevron station.

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Mr. Colcomb: It's meant to be industry average. There are sulphur content changes and aromatics and all kinds of changes, but it is meant to be industry average. If you want more clarification -

Mr. Forseth: So are you telling me now then that to get from that spark plug to this one, the identical fuel was used and the only variable change was the addition of MMT?

Mr. Leptich: Correct.

Mr. Forseth: So what I'm looking at here are MMT deposits only and nothing else. Can you certify that?

Mr. Leptich: I would say that the majority are MMT deposits.

Mr. Forseth: We will present a couple of photographs and I will give you further time without interruption to surround these photographs with the support of parameters to make sure that indeed we're looking at a fair representation of some kind of comparison. So go ahead.

Mr. Colcomb: Why don't you talk about the test program and the fact of how we did back to back with MMT being the only variable and what you found?

Mr. Leptich: We ran the same car with the standard certification fuel, unleaded U.S.A. type fuel, and we also ran comparative tests with the MMT additive in the fuel. The test consisted of drivability, driving the car, monitoring the ignition system or the voltage at the spark plugs and with these plugs the ignition wave forms -

Mr. Forseth: The clean ones.

Mr. Leptich: The ignition wave forms were always normal, let's say.

With the dirty plugs we saw what we call a spark shunting condition where we do not have a definite breakdown in the wave form as we have a normal breakdown or firing of the plug. We see an abnormal firing of the plug with this additive in the fuel.

Mr. Forseth: Are you telling me that these spark plugs are identical spark plugs because they don't look the same? Looking at these photographs, the curvature and the length of the stem, the make-up, the size of the collar look completely different. These look like completely different spark plugs, so I'm wondering how they could be run in the same engine.

It's possible that a particular spark plug that runs well with the engine is used and then an inappropriate spark plug was used.

Mr. Colcomb: If they run in the same vehicle I think you'll see the label at the top. It's an identical....

Mr. Forseth: Are you saying this was run in the same engine in the same vehicle?

Mr. Leptich: Yes, that's right, and I think it's labelled as such on the top - vehicle number 123 or something like that.

Mr. Forseth: It just says engine 313. What does that mean?

Mr. Leptich: It's an engineering vehicle number, 313.

Mr. Forseth: What kind of an engine was this?

Mr. Leptich: This is an LN-2 engine that goes in the J car.

Mr. Nantais: What does that mean?

Mr. Leptich: Count it as Canada's number one selling car, the Cavalier Sunfire.

Mr. Colcomb: There's 100,000 of them.

Mr. Forseth: A V-6?

Mr. Colcomb: That one's a four cylinder. That's one example. You might refer to the boards if they help you explain how the tracking...in some of the other pictures.

Mr. Forseth: In your photographic representations of spark plugs you are saying that you found similar results in other engines with other spark plugs.

Mr. Leptich: Yes, we have other plugs that have come back from the field with similar misfire complaints. This study was done on a four-cylinder engine. There were different plugs involved with the study, but for the plugs that we looked at, those having the MMT deposits showed the shunting or abnormal wave forms and the misfire condition at relatively low mileage.

The Chairman: Please conclude, Mr. Forseth.

Mr. Forseth: Define what you mean by ``relatively low mileage''.

Mr. Leptich: Four thousand miles.

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Mr. Forseth: But I see 42,000 kilometres on this photograph.

Mr. Leptich: This plug was run for a longer period of time on the test program. There were some plugs that were run that had smaller gap sizes, and this is one of them. I believe that is the difference you see here. This one had a smaller gap size than the standard production plug, and it is also a non-platinum plug.

This is a platinum plug.

Mr. Forseth: Okay, so those two plugs are different.

Mr. Leptich: These particular plugs are different, yes, you're right.

Ms Wakefield: The point to make is that the test program clearly identified that plugs run on MMT fuel exhibited misfire conditions as early as 4,000 kilometres, and obviously later on in the cycle, as well as the MMT accumulated, and caused the spark to track down the side of the plug.

Mr. Forseth: I will just make a concluding statement.

When you come to the committee to make comparison studies, it would certainly be helpful to have the surrounding parameters very clearly identified so that we have the same spark plug, the same engine, the conditions, and the before and after, so the variables are controlled and they are obvious.

What's in the presentations you made today - this shows after further questioning - isn't quite as evident as what was first presented in these photographs.

Mr. Colcomb: We have the detailed testing. The purpose of the pictures was to show you visually the difference between a manganese and a non-manganese plug. We have data this thick. We have back-to-back testing in which it is the only difference. We do ongoing development on plugs. We tried all kinds of different plugs to see if we could find our way around this issue and problem.

Any plug that you will unscrew out of a car in the parking lot will have this brown tinge to it. That is not made up or a fantasy; that's real.

Mr. Forseth: Yes, but a car in perfect tune should have a slightly tan brown look on the spark plug. That is what you look for when you know the car is in perfect tune.

Mrs. Kraft Sloan: In the evidence you presented here this morning, you stated that the Ethyl data around the use of MMT in reducing NOx is not really statistically valid. There were concerns around that particular issue. I am wondering if you have any idea of what the reasons behind the reduction in NOx might be, if it is not because of the use of MMT?

Mr. Colcomb: I guess I could comment on that. If there is a reduction in NOx, there is an effect on our emission system. There has to be a cause and effect.

We have seen no good description from Ethyl, or anybody else, that describes their theory on NOx control.

We believe you're biasing our system and pushing it to the rich side, which causes a reduction in nitrous oxide. That's the way the classic three-way catalytic conversion works for emissions.

So when you do go rich, NOx goes down, and hydrocarbons and CO go up. There is a fundamental, scientific, well-understood principle. It is how we calibrate....

We know how to make NOx go lower too. We can go rich all by ourselves. We know how to do that. We can also go lean. There are a lot of control techniques.

So we believe that is the effect. We believe that is what is happening. We have heard no other different scientific reason as to why.

Mrs. Kraft Sloan: That refers back to the balance you were talking about earlier.

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Mr. Colcomb: Trying to do both pollutants simultaneously and getting the optimum of both requires you to run at a given air-to-fuel ratio of 14.7:1, plus or minus a tiny little amount. That's what we're targeting for. That's what the oxygen sensor does. It looks for the air-fuel stream and adjusts around that very tight point. That pushes it off that key operating point and causes NOx to improve and the other constituents to go the other way. Of course, we've got to comply with all three.

Mrs. Kraft Sloan: As you said, that's something you can almost adjust yourself.

Mr. Colcomb: Not almost; we can do it.

Mrs. Kraft Sloan: You can do it perfectly?

Mr. Colcomb: We know how to do that.

Mrs. Kraft Sloan: The other question I had related to the process of trying to reach an agreement between the two sides on this particular issue. We certainly heard a lot from a witness on Thursday who suggested that the automotive manufacturers weren't terribly inclined to negotiate the issue.

I'm just wondering if you could talk from your side. You said that you've been concerned about the use of MMT in gasoline since the 1970s. I'm wondering if you could share with the committee a little bit of what you've been trying to do to resolve the issue.

Mr. Nantais: Maybe I can just give a quick overview and then, Stu, you can step in. The auto industry and the petroleum industry obviously have to work together. There is a sort of symbiosis there between the products.

Over the course of the years, there has been a lot of discussion jointly on fuels issues and customer satisfaction issues. There is a common beneficiary there, which is the customer.

On the issue of MMT, as Rick pointed out much earlier, we've been debating from the mid-1970s through to the early 1980s. The 1988 standards were being contemplated at that time because of what we call the ``head room''. The standard for compliance purposes was much larger there. The Canadian government chose to ignore the effects of MMT on increasing or elevating hydrocarbon emissions.

Off and on, through to more recently, we've had discussions about this issue. But it's only been in the past two years that we've had some very intense discussions, not just on MMT, but on low-sulphur diesel fuel, which was necessary for us to meet the diesel emission standards for 1994.

Oddly enough, we haven't come to an agreement on issues like sulphur in diesel, MMT, or some of the newer problems that we now face with sulphur in gasoline. If we want to move forward on the emission standards in lock step with the United States and provide the same environmental benefits to Canadians, then indeed we better start coming together on these things for the total systems approach.

The statement on the harmonization of fuels compatibility with the technology is a good step forward. We're certainly going to continue to work with them on that, but clearly we've had lots and lots of discussions, with very intense discussions over the last two years, on this particular issue.

Ms Wakefield: We tabled some proposals in the context of those discussions to try to make the fuel available for our customers, because, as we said, that was really our objective.

How can we work together to get to the right place? One of the proposals we tabled was called the green pump proposal. You would have a pump available at each station that has MMT-free fuel.

We understand that created some distribution problems for the petroleum industry. So how do we overcome the problems? How do we get to the place at which MMT fuel can be available and customers can have the choice?

Unfortunately, we weren't able to reach some kind of negotiated agreement that met their needs and our needs. At the same time, of course, we were ticking down the timetable toward 1996 and the OBD-II systems that are coming in this year. So in the end, because we couldn't reach a negotiated solution that got the customer what he and she needed, we ended up where we are today with Bill C-94.

Mr. Perkins: Another form of compromise might be that we would permit a little bit of MMT in the fuel. The current Canadian standard is a maximum of 0.18 grams of MMT per gallon of fuel. Look at this picture of the contaminated plug. Look on the back of it. In this fuel there was 0.05 grams per gallon, which is one quarter of that amount.

Can we permit a little? By the looks of the spark plug, I would say no. But it's only a matter of time. If 80% of the manganese is left in the vehicle and you have less manganese in the fuel additive, then it's just going to take longer to do the same thing. The fuels currently available in Canada would deposit about one-quarter of a pound of manganese in the catalyst in 80,000 kilometres. If you double that to the permissible level you get half a pound in 80,000 kilometres, and if you halve it you get one-eighth of a pound. But bad is bad and it's only a matter of time as to how bad it gets before the customers are affected.

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Mr. Nantais: We end up with a situation much like the leaded fuel situation in the early 1980s, or the sulphur diesel fuel situation: we have a problem in that the fuels are not moving as quickly as the technologies.

Mrs. Kraft Sloan: What is the average level of MMT in gasoline right now?

Mr. Perkins: In the tests that we've seen, it's permitted at 0.18 grams per gallon and the run of the mill is about 0.09.

Mrs. Kraft Sloan: What's the percentage? Does anyone have that information?

Ms Wakefield: If varies across the country, both regionally and by time of year. About half of the allowable amount is the average, but that really doesn't give you a clear picture in some areas. In Windsor, for example, where most of the fuel comes across the border from the U.S., there is virtually none. However, in other areas of the country it can be at the maximum, depending on the refining supply and the local suppliers. There is tremendous variation.

Mr. Colcomb: It's a very small amount, if that's what you're getting at. It's 1/32nd of a gram per litre.

Mrs. Kraft Sloan: Do you have an idea of the percentage?

Mr. Colcomb: You don't measure it on a percentage basis.

Mrs. Kraft Sloan: On Thursday CPPI volunteered to limit MMT to 9%.

Mr. Colcomb: I think they would have said 9 milligrams per litre, which is the U.S. limit and half of what they're currently running.

Mrs. Kraft Sloan: All right, so that's about half.

Mr. Nantais: It's also about the level that was subject to the waiver applications.

Mr. Colcomb: That's the U.S. level.

Mrs. Kraft Sloan: Thank you.

Mr. Reed: Just to get a perspective on the emissions concerns, there is tremendous discussion about nitrous oxide - NOx as we call it. Please tell the committee where NOx emissions fit into the overall perspective of emissions. Is it the highest single emission? Is it the lowest?

Mr. Colcomb: It depends on the area. NOx is an issue because hydrocarbons plus NOx in the presence of sunlight cause ozone. It's a chemical reaction. It requires a certain amount of each constituent and then sunlight. There are areas in this country where there is an excess of NOx and not enough hydrocarbon to make the conversion, and there are other places where it's the other way around. So it's very air chemistry specific. It's not our job to deal with the air chemistry. The lowest numbers given to us are the hydrocarbon numbers in terms of grams-per-mile numbers. Numbers like 0.25 hydrocarbons are what we're working on right now, as compared to 0.4 grams of NOx.

The hydrocarbon numbers are the smallest, while the carbon dioxide numbers are bigger - like 3.4 grams per mile. So from a test-to-test variability/difficulty of design - the new numbers that we're shooting for in terms of low emissions vehicle standards are .075 grams per mile. That's what we're talking about. When you look into our data, Ethyl's data or anybody's data, there's hardly test equipment on the planet that will even measure that number, let alone running the same vehicle and equipment back-to-back and give you - the variation around those tiny numbers is quite huge. We're getting to the point where the test-to-test variation due to the equipment is greater than the actual emissions number itself. These are very tiny numbers. Hydrocarbons is the tiniest of all numbers, but the effect on the atmosphere really depends on what your region and your environmental uptake looks like whether you make ozone or not.

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So it's never only a NOx issue. It's an air chemistry issue and it's complex. Sometimes more NOx makes it worse and sometimes less NOx makes it worse. It just kind of depends on how many hydrocarbons and how many NOx molecules you have out there, and how much sun, which is the Los Angeles situation.

I don't know if anybody wants to add to that.

The Chairman: That is quite adequate. Thank you, Mr. Reed.

We'll go to Mr. Finlay for a short question, then the chair, and then we'll conclude.

Mr. Finlay: I have only one question. What is the situation with warranties for 1996 vehicles now being sold in Canada? That's the year we're dealing with. Will these warranties be honoured by the manufacturers in spite of the MMT problem?

Mr. Nantais: If I could make a comment before we get into that, warranties are a very competitive thing. It's sensitive, so each manufacturer is probably best to answer you individually here, if I may respond to that.

Mr. Perkins: In the case of Chrysler, we will honour the warranty. However, in the vehicles we're producing in Canada - and I'm the responsible party; the buck stops here - I've advised my management to have a fully facilitated system, because it is my belief that MMT will be removed from the fuels of Canada forthwith and will not become a great problem in our 1996 vehicles.

Mr. Colcomb: From a General Motors point of view, of course, we want to protect the customer. That's our job.

That's part of our problem here; all this falls on the manufacturers. Nobody is asking Ethyl, or CPPI, or anybody else to pay warranty when things occur.

So we're 100% behind our customer. We'll help our customer, but we have taken moves to change our emission control system because we're not going to put our customer in between this issue and us. Stu believed the miracle was going to occur and the manganese would be out. I believe the facts were there, but a process had to take place like this and I wasn't prepared to put my customers in the middle of all that. So we've taken some action, but we will obviously stand behind our warranty at our expense.

Mr. Bright: With Ford we believe, much like that, the customer must come first. We believe very firmly in our actions since 1965 in the rationalization of our products.

We believe, on the same basis, our customers all over North America should get the same break as well and not have two grades of customers: one in Canada who gets less warranty than what the U.S. customer does. We're trying desperately to keep that situation in place. As of yet, we still have done that, and again, we're counting on MMT being out of the fuel in Canada so that customers in both countries can get the same break.

Should that not happen, then, of course, we would have to re-evaluate the situation. But at this point in time we are honouring the warranties. They're there and we're hoping they can stay there so that customers in both countries will get exactly the same warranty.

Mr. Perkins: When I made my pitch to Chrysler management to continue warranties and to maintain equipment, some observers have said I did say that, if MMT did not go out of the fuel, I would throw myself on the sword. I'm not sure I said exactly that, but that's what it has been interpreted as.

The Chairman: We are becoming more romantic and competitive by the minute. So can we conclude?

Ms Wakefield: The other thing we've done at General Motors in the hope that MMT-free fuel would be available, that the consumer would have the choice, is put statements in our warranty books, suggesting to the customer that, where MMT-free fuel is available, they use that for their systems.

Mr. Colcomb: You should also understand this doesn't happen in one minute. There's an accumulated effect. So if we get MMT out at some point in time soon, the systems won't be damaged to the extent that it just gets worse and worse.

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The Chairman: Thank you.

Now, Mr. Chatters, followed by the chair.

Mr. Chatters: I just wanted to ask one question. I think the car manufacturers have, as you point out, done a tremendous job in the last number of years towards the anti-pollution equipment. I think we've reached a point in time where there needs to be a harmonized effort between car manufacturers and fuel manufacturers. But I don't think if this is an example of this new harmonization, where Ford, GM and Chrysler simply flex their political muscle to get the kind of fuel they want, that this new harmonized atmosphere between the two bodes very well for the consumer.

Has not the failure of the OBD-II technology in the United States been unacceptably high, requiring considerable warranty expense where MMT fuel does not exist? Was there not in fact a need to reduce standards to allow licensing of these systems in the U.S.?

Ms Wakefield: OBD-II systems are just being fully introduced this year in the United States on the 1996 model years. It's premature to talk about the experience there, and as you know, the MMT-free fuel until now has not been available.

To return to your first issue of the harmonized approach, we very much hope in going forward that we will be able to come together and we won't end up in forums like this. We think it's in the interest of our mutual customer for us to agree on the kinds of fuel and systems and vehicle hardware that the customer requires going forward.

But it very clearly takes two to dance. So while we have a willingness to talk on this issue and to try to find some compromise solution, the dance did not appear to be possible, and that's why we're here today.

As we go forward, for example, on the issue of sulphur in gasoline, which is one of the next big hurdles coming, to allow us to improve beyond the 98% to 99% on hydrocarbon emissions, we are again working with an oil company, particularly in the U.S. where there is a very significant study program under way to identify what the required levels will be. It is a joint program, so hopefully we'll agree on the result in the end, and that will inform the discussion similarly in Canada.

I think there is hope for the future, and it's regrettable that we've reached the point of requiring a legislative solution in this regard, because we would have preferred to have done it voluntarily. We have a strong track record of voluntary approaches in our industry.

Mr. Chatters: You didn't answer my question.

Mr. Colcomb: Let me try to answer. Yes, there are always problems with new technology, and the guys with greyer hair than me sitting back there are guys trying to do on-board diagnostics. It's the toughest challenge we've ever had. It's tougher than when we put on closed loop control in 1981. It requires us, as I said earlier, to monitor every single system in the vehicle. It requires mathematical modelling and understanding of how catalysts are supposed to convert, comparing oxygen storage, and there aren't any pure.... The catalyst works or it doesn't work. It's not a switch. You have to do mathematical calculation. The software in our computer systems is doubled.

We told EPA and CARB when they initially envisioned this requirement that it was extremely difficult to predict emissions for the life of the vehicle and alert the customer in every case of emission failure. This isn't talking about a piece of hardware that doesn't function any more. This is talking about pieces of hardware that are deteriorating, that are plugging or wearing or getting old and tired and not working any more. Yes, there are issues; there are always issues with new technology. MMT only compounds those issues.

We don't know how to do some things with fuel that's as pure as this water. Anything in the fuel hurts us. Sulphur hurts us, manganese hurts us. We're not asking for completely clean fuel. We'll have issues and we'll learn, and it's extremely tough. There are more people working on it at our place than are working on the sum total of the rest of the car. It's a very difficult issue. We'll continue to learn. That's part of the problem - you just can't do an independent study on something that's being invented as we speak, and as we reach those issues.

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Mr. Perkins: Our 1996 vehicles have only been on the road for a couple of months and we don't have a good warranty record of those new systems. However, we wouldn't anticipate that the OBD-II system in and of itself, that is, the black box, would have any higher failure rate than any other electronic equipment that we put on vehicles. It's the spark plugs that fail, it's the catalysts that fail, it's the O2 sensors that fail. In the 1996 systems, these will be detected in the electronics and will indicate to the customer that he must go to his dealer to have his vehicle serviced, and it's that inconvenience that has bothered me.

Mr. Colcomb: The failures have always been there.

Mr. Perkins: The failures have always been there, and it's not the black box that is going to have extraordinary failure; it's the components that are going to have continued failures, and these failures will be identified to the customer rather than just letting these vehicles continue to pollute. Even though the components have failed, the customers will be notified and have them repaired, which is good for anti-pollution but bad for customer relations, for me.

The Chairman: Thank you, Mr. Chatters.

You indicate in your brief that

Would you comment on this? Do you stand by this statement.

Mr. Forseth: Mr. Chairman, from where are you citing?

The Chairman: It's on page 43 of the submission made this morning.

Mr. Nantais: ``Refinery Benefit Claims''.

Mr. Perkins: I told this committee a few minutes ago that my company has been working with Ethyl since prior to 1989 on MMT contamination of our product. For the past two and a half years my colleagues and I have been working with the Canadian Petroleum Products Institute, who you heard from last week. They quoted at the very beginning that the increased price of gasoline at the pump, in order to refine it to the octane required by law, is a quarter of a cent per litre.

We find it hard to imagine, at the very first instance, when we see gasoline price increases on holiday weekends in the order of 10¢ per litre, that a quarter of a cent per litre is really significant in the overall price of gasoline - to refine it without the use of MMT as an additive to enhance octane.

Mr. Nantais: Mr. Chairman, if I may, that statement includes input from a number of different sources, and one is from studies that were conducted by the CCME. The Kilborn study was another source of input. We also got an outside opinion from somebody who is familiar with the refinery industry, and that input was included as well. So what you see there, based on that information, is in our opinion the current situation with respect to the use of alternatives to MMT in the current refinery industry.

The Chairman: Fine. Thank you.

This brings this round to a conclusion. Allow me, on behalf of all of my colleagues, to thank you for your input and your answers, verifications, and elucidations.

Before we leave this table, I would seek your indulgence to stay a couple of minutes so that we can conclude the item that I announced at the beginning of this meeting, so that we then can have a ten-minute break.

I indicated when we started, exactly two hours ago, that representations have been made to me by officials from the Auditor General's office and others, to the effect that Bill C-83 requires some technical changes and that therefore certain clauses of C-83 need to be reconsidered. In order to do that, the chair needs the unanimous consent of this committee in order to have a meeting next week to examine these mostly technical changes. I would therefore appreciate a motion to that effect so that the chair is empowered to call such a meeting.

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Mrs. Kraft Sloan: I so move.

The Chairman: I have a motion by Madam Kraft Sloan.

Mr. Finlay: I second the motion.

The Chairman: The motion is seconded by Mr. Finlay. I seek your unanimous consent.

[Translation]

Mr. Pomerleau (Anjou - Rivière-des-Prairies): Mr. Chairman, I apologize, however, I will not agree to that. I was informed of this matter at the last minute. I have just been more or less brought up to date. I have thought about this for the last 10 minutes and, before making a final decision, I'm wondering whether it would be possible to take a second look at this bill in the House and to amend the provisions that do not comply with the Auditor General's wishes.

The Chairman: We want to do this here in the committee. The changes that we plan to make are not ready yet; however, it is much easier to review these changes at the committee level. It facilitates the dialogue, the review process and the work.

Mr. Pomerleau: That's all that I have to say about that matter. I was very surprised by the Auditor General's report. He told us that, on the whole - and this is written in his report - , the unamended bill would create a great deal of difficulty for him.

It is important that we inform the citizens of this country, through the House, of the fact that the Auditor General will have problems with this matter.

The Chairman: Mr. Pomerleau, I believe that you will be very favourably impressed by the changes that the Auditor General intends to make. Your opinion and that of the Auditor General are very similar. But this work must be done right here in the committee and not at the House. That is the reason!

Mr. Pomerleau: Will the Auditor come here?

The Chairman: That won't be necessary. Committee members will submit the changes following my consultations with the Auditor. The text will be tabled in November, and it will reflect the opinions expressed after the last committee meeting.

Of course, we can invite representatives from the Auditor General's Office to attend this meeting to answer any questions that the members may have.

Mr. Pomerleau: I would agree to this meeting providing that it takes place next week, because of the referendum in Quebec, and providing that it not be held on Tuesday, because we will certainly be tired.

The Chairman: After Tuesday next week.

Mr. Pomerleau: Very well. And either the Auditor or one of his representatives will be in attendance.

The Chairman: Very well.

[English]

Mr. Forseth: Mr. Chairman, will we be getting some kind of advance notice as to what these are so we can properly prepare for them?

The Chairman: Yes, as usual.

Mr. Forseth: Thank you.

The Chairman: Again, we thank you. We will now have a ten-minute break.

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PAUSE

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The Chairman: David Wilson is the president of Ethyl Canada.

We welcome you and invite you to introduce your colleagues.

Mr. David Wilson (President, Ethyl Canada Inc.): Good morning, ladies and gentlemen. I am David Wilson, the president of Ethyl Canada, the company that markets the gasoline additive MMT in Canada.

I would like to introduce my colleagues from Ethyl Canada who will be making brief presentations this morning. Dr. Roos is a senior research scientist, and Mr. Hicks is an Ethyl Canada vice-president. Also joining us is Dr. Lynam, the Vice-President of Air Conservation for Ethyl Canada. He is present to answer any questions you may have on the health issues relating to MMT or its exhaust products.

We have also invited Alison Pollack, who is with the environmental consulting firm ENVIRON International. Ms Pollack will briefly address the air quality issues of nitrogen oxides as they relate to MMT.

My purpose in appearing before the Standing Committee on Environment and Sustainable Development today is to speak to the legislation proposed in Bill C-94 and to address government concerns about the use of MMT as a gasoline fuel additive.

Let me begin by saying that since this bill was tabled, conditions have changed. For example, when the bill was first introduced, MMT was not available for use in the United States in unleaded gasoline. However, the U.S. Court of Appeals decision last Friday permits the imminent sale of MMT to American refineries. This is a significant change. At the time the bill was tabled, MMT could not be sold in the U.S.

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It seems to us that the underlying rationale for Bill C-94 was a desire to harmonize Canadian and American emissions standards. Yet with the current ruling of the U.S. Court of Appeals, harmonization can best be achieved if we continue to use MMT in Canadian fuels.

The Hansard record of June 19, 1995 indicates that the federal government is proposing legislation to ban the importation and interprovincial trade of MMT in order to protect human health, to protect car warranties, and to take advantage of technological change. However, in each of these instances, the rationale does not stand up to scientific review.

Let's look first at the protection of human health. Health Canada, in a study released in December 1994 entitled ``Risk Assessment for the Combustion Products of Methylcyclopentadienyl Manganese Tricarbonyl (MMT) in Gasoline'', strongly stated that MMT's use in gasoline has no health-adverse effect on the Canadian population.

Protection of car warranties was another reason cited for the proposed legislation. However, after its review of the auto industry claims, the EPA ruled that MMT would not cause or contribute to a failure of any emission control device or system. This 1993 decision was reinforced on April 14, 1995 when the U.S. Court of Appeals refuted any notion that MMT contributes to performance problems associated with emission control systems. This ruling, in conjunction with the ruling last Friday, October 20, 1995, permits MMT's reintroduction to the American market by year's end.

Before I move on, I believe it is important to note that the car makers have experienced significant difficulties with OBD performance in the United States where MMT is not even in use.

These comments lead to another important point, the environmental effects of banning MMT. I find it interesting to note that protection of the environment was not one of the reasons the government cited as motivation for the introduction of Bill C-94.

However, we must consider what would happen if MMT was no longer available for use in Canada. Under the testing program conducted in the United States for the U.S. Environmental Protection Agency, test vehicles with MMT showed a 20% decrease in average NOx emissions relative to the same vehicles run without MMT. What this means is that if MMT were removed from our gasoline it would be equivalent to adding a million more cars to our roads.

In conclusion, I'd like to stress that the government has three publicly stated reasons for a ban of MMT, and none of these arguments can be sustained when the scientific evidence is reviewed against the objectives. Ethyl Canada believes a ban on MMT is unnecessary and, as I believe we will demonstrate this morning, is not supported by the scientific evidence.

Before I ask Dr. Roos to speak, I would like to mention that we have prepared for your review a written submission, which contains our remarks in greater detail and which cites the appropriate scientific references.

I would like now to introduce my colleague Dr. Roos to make a brief statement on MMT and vehicle emission systems.

The Chairman: Before you do so, where is the text of the written presentation you just referred to?

Mr. Wilson: I believe the submission has been filed with the clerk.

The Chairman: Is this the one?

Mr. Wilson: I believe so, yes, sir.

The Chairman: Thank you.

Dr. Joe Roos (Senior Research and Development Scientist, Ethyl Canada Inc.): My name is Joe Roos. I'm a senior research and development scientist at Ethyl Canada. I've been studying the emission control systems and on-board diagnostic systems of vehicles in their operation with the fuel additive MMT.

As Dave Wilson mentioned, the U.S. EPA has determined that the use of MMT will not cause or contribute to a failure of any emission device or system, including on-board diagnostics or OBD. The EPA reached this conclusion after reviewing extensive submissions by both Ethyl and the automobile manufacturers. In addition, the EPA noted that testing carried out in support of MMT was the most extensive test program ever carried out on a fuel additive. All of the results from this testing are publicly available and have been provided to Environment Canada and Transport Canada.

What I'd like to do today is briefly summarize the test program for the committee. In the test program, more than 100 paired vehicles - this is 22 models - were tested over 14 million kilometres to evaluate the effect of MMT on vehicle emissions.

A summary of the vehicles used in the testing is included in the handout. You'll see it as table 1. What is listed there are sets of vehicles by model year, engine model, and kilometres accumulated in testing on each of these vehicle sets.

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The testing of these vehicles was designed and operated in consultation with the EPA and the vehicle manufacturers. The vehicles used in the fleet testing were purchased from vehicle car dealers and represent the emission technology used on production vehicles in the real world.

The vehicles were operated using commercial-type gasolines, with the only difference being the use of MMT fuel in half the vehicles. The vehicle maintenance was performed according to manufacturers' specifications at the dealerships.

The operation of the vehicle and the emission testing was performed at an independent EPA-approved laboratory. In fact, the automobile manufacturers themselves use this laboratory for much of their testing.

Fleet operations and emission testing procedures were designed to allow rigorous statistical analysis of the data. The testing was designed to ensure that the only variable was the use of MMT in the fuel.

The vehicles in the initial fleet, which was started in 1988, were chosen to represent the majority of the engine families that were on the road. An additional fleet testing was carried out in 1992-93, following consultation with the EPA and the automobile manufacturers.

The vehicles chosen for this testing were chosen specifically to answer questions raised by the automobile manufacturers. These questions included the effect of MMT on high throughput engines, the effect of high exhaust temperatures, and the operation of forward-looking technologies such as those being used on low-emission vehicles. This fleet was obviously a severe test of MMT compatibility with both present day and the future-looking emission technologies.

The emission data accumulated during the more than 14 million kilometres of testing showed that the use of MMT results in reduced emissions, including a 20% reduction of NOx, without hydrocarbon or CO increases. This is clearly an indication that the emission system components are not adversely affected by an additive, and there has been no rich shift of the operating systems of these vehicles.

In addition, extensive evaluation of the emission components and sensors was also carried out by independent laboratories and Ethyl Corporation. The types of testing performed are summarized in table 2, where we've listed them by different types of systems, and you have a summary here. This is in your handout.

During the testing, many of the components from the vehicles operated on fuel with MMT, such as catalytic converters, displayed less degradation than those used in vehicles that did not use the additive. These evaluations conclusively demonstrated that MMT did not plug, foul or degrade the components or sensors of the emission systems and in many cases actually protected the systems and the components.

Now I wish to move on to the area of vehicle on-board diagnostic systems. The purpose of the OBD system is not to actively lower emissions but to identify gross polluters, vehicles whose emissions have greatly exceeded the emission standards. If the OBD system determines that a vehicle is a gross polluter, the dashboard light on the car is illuminated and it is up to the individual driver to seek the repair.

The on-board diagnostics cannot be installed in vehicles already on the road. Therefore, on-board diagnostics will not have any impact on reducing emissions from the older vehicles that are responsible for the majority of the current tailpipe emissions.

Furthermore, removal of on-board diagnostics from a car would have no effect on that car's emissions. These are diagnostic systems, and the advanced emission components would still be in place in the vehicle.

The current implementation of on-board diagnostics has been carried out using components that have been found in most Canadian vehicles for many years. While it's been beneficial to use components of proven durability, many problems have been noted in the U.S. during the implementation of this monitor. Both the U.S. EPA and the California air resources boards have changed implementation schedules or granted waivers for on-board diagnostic systems.

For instance, many engine families have been granted waivers by CARB when CARB has found that their 1995 and 1996 OBD systems do not meet the minimum requirements for on-board diagnostics. This is not surprising since the auto manufacturers have publicly recognized the severe limitations of many of the systems and have actively petitioned U.S. regulatory agencies for changes.

Despite the problems with on-board diagnostics systems in the U.S., the automakers claim that the system will not work when MMT is used in gasoline.

To respond to these claims, fleet testing has been carried out by an independent EPA-approved facility using real world on-board diagnostic vehicles. During almost 1.5 million kilometres of fleet testing, OBD-certified vehicles fueled with MMT displayed lower emissions than vehicles operating on fuel without the additive. There was no plugging or fouling of the sensors and the on-board diagnostic system did not illuminate the dashboard light. The presence of MMT did not cause false signalling in these systems.

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Additional studies have demonstrated that the production OBD system on vehicles using MMT properly identifies catalyst degradation that leads to emission increases.

The U.S. EPA has reviewed the data on MMT and OBD, including data provided by the automakers, and has concluded that MMT does not adversely affect emission control systems, including on-board diagnostics. The EPA noted that it had questions regarding the limited amount of information supplied by the automobile companies. It added:

In closing, MMT has been the subject of the most extensive test program ever carried out on a fuel or fuel additive. All of the test data is in the public literature that has been provided by Ethyl Canada to the Canadian government and anybody else who has asked for review. The testing conclusively demonstrates that the use of MMT does not harm vehicle emission systems, including the on-board diagnostics.

The Chairman: Thank you.

Ms Alison Pollack (Principal, ENVIRON International Corporation): My name is Alison Pollack and I am a principal with ENVIRON International Corporation, an internationally renowned consulting company. I am a statistician by training, and I've been a consultant on environmental issues for about 20 years. My particular areas of expertise are in emissions and air quality effects of changes in fuels and other vehicle emission control programs, and in the statistical analysis of air quality and emissions data.

My clients currently include the U.S. EPA Office of Mobile Sources, as well as the regulated and affected industries, including auto manufacturers and petroleum refiners. I should also state that I submitted a request to the committee to appear as an independent consultant, but that request wasn't granted, so I'm appearing on Ethyl Canada's time to present my findings.

I want to address two questions this morning. First, what are the effects of MMT on vehicle NOx emissions, and second, what are the consequent effects of these changes in NOx emissions on the environment?

On the effects of MMT on vehicle NOx emissions, Dr. Roos has referred to and partly described Ethyl's extensive testing program, which, as he said, is the most extensive testing program ever conducted for a fuel or fuel additive. It was performed under EPA scrutiny, and from a statistical point of view the most important point of the study was that the vehicles were paired, so that for each vehicle that had MMT in the gasoline there was a matched vehicle that did not. In this way you could isolate and identify the effect of MMT on pollutant emissions independent of any other changes in the vehicles or fuels.

The vehicles tested were 1988 and later model year three-way catalyst-equipped vehicles, which account for the vast majority of Canadian vehicle miles travelled currently and in the future.

I have performed extensive statistical analyses of Ethyl's fleet testing data, and the results on NOx emissions are as follows. There are clearly NOx benefits from the use of MMT, and these NOx benefits can clearly be seen to increase with mileage. For example, there is approximately an 18% benefit at 80,000 kilometres and about 30% at 120,000 kilometres. The overall lifetime benefit for the vehicle is approximately 20%, which is the same as calculated in EPA's analyses in 1994. There was no statistically significant effect on either hydrocarbon or carbon monoxide emissions.

Last week Mr. Frank Vena of Environment Canada stated that there was a 1% NOx reduction for MMT and that this was not for tailpipe emissions but for emissions from refineries. So the changes in terms of tailpipe emissions that would result if MMT were removed would be much larger - in the order of perhaps 20% for three-way catalyst-equipped vehicles.

So what are the environmental and health effects of increased NOx emissions? I don't think anyone will argue that NOx emissions are a significant contributor to poor air quality in regions in Canada.

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There are two primary issues. The first is, as we heard this morning, that NOx and volatile organic compounds - or VOCs - combine in the presence of sunlight to create ground level ozone, or what's commonly referred to as urban smog. In most populated areas of Canada, increased NOx emissions will likely result in increased ozone levels. Ozone is well documented to have effects on health, as well as adverse affects on crops.

Second, NOx emissions contribute significantly to ambient particulate matter, which is an issue of great concern to CCME currently. Health Canada last week said that particulate matter has been directly implicated in the mortality of Canadians. Both ozone and particulate matter have federally regulated targets because of the adverse health affects.

There is currently a federal government initiative sponsored by CCME to control NOx emissions as well as emissions of VOCs. This is loosely referred to as the NOx-VOCs control plan.

The elimination of MMT from gasoline will likely result in NOx increases that run counter to the intent of the NOx control program.

For example, look at the April 1995 workshop notes explaining the NOx-VOCs control plans. Estimates from Environment Canada's pollution data branch are for a projected total NOx reduction across Canada of about 77,000 tonnes for 1990-1995 with the current initiatives as well as with the introduction of new NOx control programs. That's a 77,000-tonne reduction from 1990 to 1995 from all control programs, not just mobile sources.

The environmental analysis shows, in the same period, a potential increase of about 263,000 tonnes, or an increase that's about three and a half times larger if MMT were removed from gasoline.

In summary, the statistical analysis of the extensive fleet-testing data shows approximately a 20% reduction in tailpipe NOx emissions for late model cars and trucks using MMT relative to vehicles operating without MMT. Eliminating MMT from gasoline will increase NOx emissions, which will contribute to increased levels of ambient ozone and particulate matter. Both ozone and particulate matter have federal regulatory targets because of well-documented adverse health affects.

Mr. Christopher Hicks (Vice-President, Ethyl Canada): Mr. Chairman, members of the committee, my name is Chris Hicks. I am a vice-president of Ethyl Canada and of Ethyl Corporation, the parent of Ethyl Canada. I am based in Washington. I am an attorney by training. I am hopeful that the committee will hold neither of those facts against me.

I have a statement to make. Otherwise, I'm here to answer any questions the committee may have to assist it in reconciling its deliberations with related events in the United States.

As I understand the reasons articulated in support of the passage of C-94, every single one of them is based, at least in part, on a misunderstanding of what has or has not happened in the United States.

A true understanding of the U.S. situation will undercut any rationale for the passage of C-94 or, at the minimum, beg the question: what is the rush?

As you are well aware by now, the United States Court of Appeals handed down a decision last Friday. The decision provides ``...a complete remedy for Ethyl...''. The court ordered that:

The effect of this decision is that the last legal obstacle to the reintroduction of MMT into the unleaded gasoline marketplace in the United States has been removed.

I know there are those among the proponents of C-94 - we heard some this morning - who will characterize last Friday's court ruling as insignificant and merely another chapter in the long legal saga of Ethyl Corporation versus the United States, which is a saga that has no end in sight.

This is simply not the case. Any objective reading of the Court of Appeals' most recent pronouncement on this matter will sense the court's obvious frustration with EPA and the court's desire to end this dispute in Ethyl's favour.

Let me briefly summarize the opinion. The court begins with the statement:

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I've left out some of the other stuff, but otherwise this is an accurate rendition of the opinion, which I have here.

I might add that everything you see right there was before EPA at the time.

This is, I think you will agree, hardly ambiguous language: Ethyl wins.

Testimony before this committee last week anticipated this legal outcome in the United States. At least one witness testified that an appeal of this decision could take years.

For example, my colleague at the bar, the general counsel of Environment Canada, Ms Fry, testified last week that should there be a negative decision against EPA, EPA might decide to appeal. That could take a year or two to resolve. There's another higher court. The superior court is the name of the court. EPA might decide they have other legal tools that they want to try. Should there be these, it could take a long time.

With all due respect to Ms Fry, I have to ask: what is she talking about? Like much of what has been put forth in this debate, her statement is a combination of a bit of truth and a lot of unsubstantiated conjecture.

The truth of the matter is that EPA does have the opportunity to appeal last Friday's decision. However, contrary to Ms Fry's statement of ``a year or two'', EPA has no more than 45 days to file an appeal, which is no later than December 4.

If EPA does not appeal - the actual term is filing a motion for rehearing - by December 4, that's it. The court's opinion is final. There are no other options for EPA. MMT goes on the market.

What are EPA's considerations in deciding whether to file a motion for rehearing? Friday's opinion by the three-judge panel was unanimous, as was the April opinion earlier this year. Because of the unanimity of the April panel, EPA did not appeal. In other words, it did not file a motion for the rehearing of that decision.

Because of the unanimity of Friday's panel, there is no reason to believe that EPA will file a motion for rehearing by December 4. In fact, the EPA counsel who argued the case for EPA told our counsel last Friday that he would recommend to the EPA decision-makers that they should not appeal.

The Dow Jones news service yesterday quoted unnamed EPA officials as saying they would not appeal the court's decision.

Having said all that, what if EPA decides to tilt at windmills anyway and file a motion for rehearing? Such motions are rarely granted. In cases in which there is no dissenting opinion, which is the case here and with the one in April, this is almost unheard of. In effect, the EPA would be asking the full fifteen-member court of appeal to overrule two separate, unanimous, three-judge panels on a point of law. This just is not going to happen.

If EPA files a motion for rehearing that is rejected by the court, Ms Fry is correct in stating that there is ``a higher court to which EPA may appeal''. It is not the superior court, as Ms Fry testified; it is the United States Supreme Court.

I've already indicated how remote the possibility is that, first, EPA, based on its reaction to the April opinion and its statement of counsel last Friday, will even file a motion for rehearing, and, second, that a full court of appeal, if EPA did file, would overrule two unanimous, three-judge panels. The odds that the U.S. Supreme Court would agree to hear an appeal of an agency whose motion for rehearing was denied would be astronomical, and if that weren't enough there is no way I know of that EPA could obtain a stay of last Friday's court order pending its appeal to the Supreme Court. In other words, not two years, not one year, not even two months. By mid-December we will all know whether EPA chooses to file a motion for rehearing and, if so, whether or not it has, in Ms Fry's words, found some other legal tools they want to try.

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In light of the fact that EPA has been humiliated by two separate panels of the Court of Appeals within the span of six months, I doubt that EPA has been saving its best for last, a sort of legal Hail Mary pass, if you will.

In any event, we will all know by December 4, 1995, and what I have described is accurate to the best of my ability. I would welcome the opportunity to appear again before this committee or any other forum with Ms Fry or anyone else who believes that I have misstated the facts, as I'm sure the other members of the panel would in their areas of expertise.

The frustration for Ethyl Corporation and Ethyl Canada is that we have consistently hoped that our dedication to presenting the facts, whether they be scientific, legal, political or otherwise would carry the day. Instead, half truths and lack of complete information seem to be prevailing.

In describing my frustration to my wife Sunday night, she quoted to me a passage from a book she was reading, Middlemarch by George Eliot. Published in 1871, 125 years ago, George Eliot stated the following:

In this situation I would point to the presentation we saw earlier today.

The Detroit automobile companies and others who support this bill clearly feel no constraint in making their arguments stop at the ``boundary of knowledge''. Instead, they assume that this committee and this House are the ``vasts of ignorance'' who will meekly not challenge what they have to say because of the importance of the automobile industry to the economic well-being of Canada.

I am proud of Ethyl's conduct in this debate. We have told the truth. We have not exaggerated, and the record will show, unlike the opposition, that every prediction we have made in the outcome of events has come to pass.

Mr. Chairman, Health Canada has repeatedly found that MMT poses no health risk. U.S. EPA found that MMT poses no risk to emission control systems, including so far to OBDs, and I might add that the Court of Appeals rejected the very argument that you heard I believe Miss Wakefield make in the previous opinion this year. The Court of Appeals responded to that argument by saying the AAMA did not come close to making its case.

Finally, the U.S. Court of Appeals says that the United States will be using MMT in unleaded gasoline by the end of the year.

Mr. Chairman and members of the committee, I ask again, what is the rush for this legislation?

Thank you, Mr. Chairman. We'll be happy to answer questions.

The Chairman: Thank you, Mr. Hicks. It's not customary in Canada for witnesses to comment on the degree of knowledge or lack thereof exhibited by witnesses preceding them, and also because they cannot in a way reply. Therefore, it is a part of your presentation that I thought was a bit out of our customary procedure.

On the other hand, the appetite of this committee for new words is insatiable and therefore I would like to ask you whether you looked up the meaning of the word ``ineluctably'' and what the dictionary said?

Mr. Hicks: I did look it up, and it's to flow as a necessary result.

The Chairman: Thank you. Are there any further interventions?

Mr. Wilson: That completes our presentations. We'd be happy to answer your questions.

The Chairman: Thank you very much. We'll start then with Mr. Forseth or Mr. Chatters.

Mr. Forseth: Could you outline first of all what was the original objection of EPA against MMT? Obviously all of that pre-dates this whole business of OBD systems and fouling and plugging and all that. There must be some whole other issue. Can you explain that?

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Mr. Hicks: How far back would you like me to go?

Mr. Forseth: Basically, what's EPA's game? Where are they coming from?

Mr. Hicks: When we filed the initial waiver application of the modern era in this saga, in 1990, EPA was disturbed by some testing they did at their Ann Arbor laboratory that showed increased particulate and other emissions. They said they were going to deny the waiver application if we didn't withdraw it, because they wanted to get to the bottom of this. To make a long story short - and EPA is on the record as acknowledging this - those odd emission results were the result of contaminated test fuel. EPA had inadvertently mixed Freon in the chilling tank into the MMT-gasoline blend and that's why these results came forward.

On the second go-around, in which they actually denied the second waiver application, they expressed concerns from some limited data that the Ford Motor Company had submitted. These data caused them to question whether the driving cycle they had mandated be used was adequate or not. So they denied it.

We did further research and submitted it to EPA while we were appealing the denial to the court, and EPA even acknowledged that this put their concerns to rest and asked the court to remand the case back to EPA for further consideration. It was at the end of that third 180-day period - that's the way the statute works in the United States and that's why the date 30 November 1993 is significant - that EPA finally conceded that MMT does not cause or contribute to the failure of emissions controls systems, including the OBD data as it existed at the time.

So the answer to your question is that initially EPA was concerned that MMT caused particulate or hydrocarbon increases or that EPA's mandated driving cycle test was not accurate. At the end of three separate waiver periods they finally conceded that MMT does not cause or contribute to the failure of emission control systems. Nevertheless, they didn't grant the waiver and asked us to withdraw it again, which we did, in order that they would have another 180 days to consider MMT's impact on public health. At the end of that 180 days, which was a year ago, they denied it, not because they found that MMT posed a public health risk, but because Ethyl hadn't ruled out the possibility of a health risk.

We appealed that decision and that was the result of the April decision by the Court of Appeals. At the same time EPA ruled that MMT wasn't registered. We appealed that - those were at the same time, but the appellate procedure in the courts was staggered. So the April opinion had to deal with its denial on health grounds, and last Friday's opinion dealt with MMT's status as registered or not.

Mr. Wilson: I believe a chronology of the proceedings is attached to your material.

Mr. Forseth: We have a big technical argument here and we have two opposing camps. It's like the O.J. Simpson trial, where we had all kinds of technical evidence, yet a panel of lay people had to evaluate the veracity of that evidence. It looks like we've had a court look at the trail of evidence and attribute one to the other. Our spark plug expert admitted that the photographs presented today were not originally produced for that purpose, that they were only secondarily produced for evidence today.

What about this whole business of fouling and so on? What's going on here? Obviously, somebody is bullshitting us.

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Dr. Roos: During the operation of these fleet tests we described, which would be 14 million kilometres of fleet testing where MMT was the only additive, there were no adverse affects of MMT on the emissions. On evaluation of the components themselves - taking them out of the cars and running them through particular tests to evaluate fouling or plugging - there has been no evidence of fouling or plugging of any kind, when you are comparing apples and apples. There is no basis to support claims of fouling, plugging or clogging of emission control systems. That has been the type of data that Ethyl has presented to the EPA and is available in the literature.

Mr. Hicks: Could I just follow up on that point? Mr. Nantais was correct - I hope it's okay to refer to him in a positive light; tell me if I'm violating protocol - when he said that EPA has not ruled on the impact of MMT on OBD-II systems. He is also correct in saying that EPA has consistently expressed its concern about the issue of the impact of MMT on OBD systems.

But what EPA has also said consistently - it has said this in its denial of our waiver decision in 1994, it reiterated it again in its issue of the waiver earlier this year, and it restated it as recently as September 29 in a letter to us - is that:

In other words, EPA is consistently stating, in public and to us, that it is concerned about the issue, it is looking at anything that anybody wants to give them, but so far the case hasn't been made.

The Chairman: All right. We'll move to Mr. Reed.

I would like to draw to your attention, Mr. Forseth, very tactfully, that the term ``bullshit'' is listed in Beauchesne's at page 144 as unparliamentary language. I would not have done it openly were it not for the fact that it also reflects on representations and submissions made by another delegation, and because of that, and to be consistent, I have to do that.

Mr. Forseth: Let the record show that you're smiling and I'm smiling and that I'm prepared to use parliamentary language.

The Chairman: Sometimes for diplomacy you have to smile.

Mr. Reed: Thanks, Mr. Chairman. I have a number of questions. I might not get through them all in the first go-around so please cut me off if you need to.

How many manufacturers of MMT are there in the world?

Mr. Wilson: There are two that we know of. One, we believe, has his plant shut down and we're the other one.

Mr. Reed: Are they both in the United States?

Mr. Wilson: Yes, they are.

Mr. Reed: So, really, you're the world's only manufacturer.

Mr. Wilson: That's correct, at the current time.

Mr. Reed: Where is MMT manufactured?

Mr. Wilson: Orangeburg, South Carolina.

Mr. Reed: So there's no manufacture of it in Canada.

Mr. Wilson: No, we import the neat MMT into our plant at Sarnia, where we dilute it back for handling and metering purposes.

Mr. Reed: I'm intrigued. Who owns Ethyl Corporation now?

Mr. Wilson: It is publicly traded on the New York Stock Exchange.

Mr. Reed: Is there any particular major shareholder that you know of?

Mr. Wilson: The Gottwald family probably holds a predominant share. I don't know what it would be - perhaps 20% of the shares.

Mr. Reed: It originally started out as a sub of Du Pont years ago, didn't it?

Mr. Wilson: General Motors and Du Pont owned Ethyl 50-50, up through 1962, I believe it was.

Mr. Reed: Right. How do you respond to what's up on the wall there behind you, on the displays? This visual evidence is said to be the result of using MMT in these systems. How do you explain the fact that when I had to change my spark plugs this summer the fouling was exactly the same colour? I have changed hundreds of spark plugs in my lifetime and have never seen fouling like that.

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How do you answer a visual display? I have no way of analysing whether that is manganese oxide on those converters, but I am told it is, and I have no reason to doubt that.

Dr. Roos: Let me address a couple of points. I think there are a couple of questions.

First, when you changed your spark plugs and saw some kind of a red or brownish deposit, it was probably a manganese oxide deposit. There is nothing inherently bad about having manganese oxide deposited on your spark plugs.

The testing referred to at Southwest Research Institute looked at manganese oxide on spark plugs and did not find a problem, nor did they see it causing a problem with the way the spark plugs operated.

Look at the data presented here with colour pictures so you can see the brown deposits. If you went down to the United States and you pulled out spark plugs, you would often find black deposits from oil and that sort of thing.

It has been noted that MMT use in Canada is actually protecting spark plugs from a phenomenon called cold fouling. This is the build-up of carbon deposits on spark plugs. It happens in the U.S. and is almost non-existent in Canada.

Mr. Reed: I've never had my truck misfire before. I've had it for fifteen years and it never misfired before. It started to misfire this summer coming home. The mileage dropped by a third.

Dr. Roos: I'm just curious. How many miles did you have on those spark plugs?

Mr. Reed: I had about 50,000 miles on those spark plugs. I've cleaned them twice. I didn't clean them this time. They were so badly fouled I threw them out.

Dr. Roos: I can't address it. The point may be whether they were at the end of their normal life or not.

As far as the testing on the catalytic converters, again, manganese oxide does deposit in the exhaust system of cars. Manganese oxides are red. If you pulled off any piece of the deposit or the converter system here in Canada where they are using MMT, you would see red deposits. If you went to the U.S. and pulled it off, you would see black deposits, from carbon.

There is no evidence that the manganese oxides are plugging any of the converters. We have pictures. I guess one of these things was looked at and the comment was, hey, you've got red deposits covering the front, and this is evidence the catalyst has been plugged.

If you go to the U.S. and go through any place where they are removing catalysts for warranty or for plugging - whether it is Jiffy Lube or the Chrysler dealership - and look at them, the fronts of these plug converters are all black.

Just looking at a converter and seeing red deposits on it doesn't mean that MMT is causing that plugging. As a matter of fact, our data and Ford's own data published in the open literature and presented in their internal documents all point out that the use of MMT protects these catalysts from the main component of poisoning, which is additives from the oil, the burning zinc and phosphorous. They are actually protected from the poisoning. This has been documented over and over again. All this points to the fact that MMT protects your catalyst and does not cause plugging or fouling.

Mr. Reed: If I have time, Mr. Chairman, I have another question.

Miss Pollack, in the statistical analysis of nitrous oxide emissions and so on that you were dealing with, you came up with this average 20% benefit. Did you do any analysis of emission comparisons, using other fuel additives, such as oxygenates, for comparing the emissions using oxygenates versus those using MMT?

Ms Pollack: No, not as part of this analysis. The focus was on the difference between vehicles operating with MMT and without MMT. There are other test programs that have been analysed - I have been involved in some of them - that look at the emissions benefits of MTBE and other oxygenates, but that wasn't considered here. It focused exclusively on the differences between MMT vehicles and non-MMT vehicles.

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Mr. Reed: The NOx component, which is being dwelt on so heavily - and admittedly it is a contributor to ground-level ozone that we were told a year ago by experts in these ministries wasn't a problem in Canada - is a very small part of the emission package. For instance, if an oxygenate is used as an octane enhancer rather than MMT, you get other very macro reductions in other kinds of emissions such as carbon monoxide and so on. I don't think MMT addresses that problem, does it? Were you dealing with carbon monoxide and carbon dioxide emissions and what impact MMT had on them?

Ms Pollack: No, not with carbon dioxide. The three criteria pollutants that one looks at in tailpipe emissions are NOx, VOCs and carbon monoxide. As we heard this morning, if you simply look at the numbers, grams per mile for example, then typically the hydrocarbon emissions are lowest, followed by NOx emissions, followed by CO2 emissions.

As for ozone and particulate matter, the hydrocarbons and NOx emissions are important when considering ozone, and the NOx emissions are important when looking at particulate matter levels.

Mr. Reed: Was the methodology done using a comparison of numbers? Were you analysing and comparing the sets of numbers that came off?

Ms Pollack: Yes, loosely speaking.

Mr. Reed: Okay.

Mr. Chairman, am I running out of time?

The Chairman: This is your last question.

Mr. Reed: I wonder what methodology was used at Southwest Research on the spark plugs. Can anybody tell me how they would compare to normal use?

Dr. Roos: Yes. The spark plug study at Southwest Research wasn't a vehicle study. I believe a comment was made earlier that a vehicle running at Southwest in San Antonio could not be compared to one in Canada. They were not vehicle studies. They were scientific studies to look at a particular characteristic of the plug, which was whether manganese oxides caused the plug to fail to operate the way it should using the criteria set up by plug manufacturers.

The testing at Southwest in this controlled environment said there was no evidence of MMT causing this problem. And that's not only at Southwest. At a recent conference several other auto manufacturers made an interesting comment when GM brought this up. They asked how it was done, because they tried to repeat the experiment and couldn't either. So it's not just a Southwest comment. That also came from other auto manufacturers.

It was a controlled test down in San Antonio, so what was looked at were the same make of spark plugs each time. There were comparisons of the same make and of a different make. They found that the make GM is using in this engine has some very unusual characteristics. They replaced it. I think they realized this because this year they have replaced that spark plug with another spark plug that does not have these kinds of characteristics. The new spark plug behaves like most of the other ones you would look at in the market.

Mr. Reed: I guess mine are like that, too.

Dr. Roos: At 50,000 miles, if you re-gap them a couple of times, you're probably doing pretty well.

The Chairman: Thank you, Mr. Reed.

We have Mrs. Kraft Sloan, followed by Mr. Wappel.

Mrs. Kraft Sloan: Thank you very much.

To clarify a comment Mr. Forseth made on the spark plugs, I believe that one of the earlier witnesses said he had quite a high stack of evidence to support his claims.

I assume that it costs a lot of money to hire legal advice and expert witnesses and to prepare yourself. Is that correct?

Mr. Wilson: Yes. In attempting to obtain a waiver, Ethyl Corporation has spent well over $20 million over this period.

Mrs. Kraft Sloan: Is that in the United States?

Mr. Wilson: That's in the United States.

Mrs. Kraft Sloan: But even in preparing yourself for a parliamentary hearing, you have to bring on experts, legal....

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Mr. Wilson: The only consultant we have used in these hearings is Alison Pollack, who has written a report on the NOx impacts on air quality.

Mrs. Kraft Sloan: It must take a considerable amount of organizational resources to pursue something like that.

Mr. Wilson: Compared to our efforts with EPA it's minuscule really.

Mrs. Kraft Sloan: I would assume there are similar costs for the automotive manufacturers as well, in terms of preparing for these committees and developing their concerns.

Mr. Wilson: That's possible. I couldn't comment on that.

Mrs. Kraft Sloan: Maybe you can help me with this one. Why would each of the automotive manufacturers independently come to the conclusion that MMT was not good for their products? Why would they go to the expense of putting these demonstrations together if they felt there was a problem with MMT?

Mr. Hicks: Let me try to answer that question. We, of course, don't know what motivates the auto companies. I would just say I'm not sure whether I agree with your premise that they all came to this conclusion independently. But nevertheless -

Mrs. Kraft Sloan: That's what the witnesses stated previously, so I'm only going by what the witnesses have said.

Mr. Hicks: This was helpful to me. We did an Access to Information Act request from Environment Canada on this issue. One of the documents that was produced was heavily redacted, but nevertheless I think it speaks to this issue from Environment Canada's standpoint. It was a briefing document prepared for the deputy minister for a meeting with Dave Wilson and me, actually. One of the things it says here is strategic considerations. As you can see I'm happy to give you a copy of this. It's heavily edited, but the first three bullets here say:

This was written just about a year ago, but I think it indicates, what seems obvious to me, that there are bigger issues at play here than MMT. We just happen to be the first issue up because we're here. It's important to us and we're spending a lot of money defending ourselves because the effect of this legislation would put us out of business. However, beyond Ethyl Canada I agree with Environment Canada that MMT is but the tip of the iceberg on these kinds of issues.

Mrs. Kraft Sloan: The previous witnesses kept making the point that there's only so far you can go with the technological hardware changes and asked how you are going to move it any further until you take a whole system approach.

Are you familiar with the University of Waterloo?

Mr. Wilson: Yes, I know it.

Mrs. Kraft Sloan: Do you think the University of Waterloo has a credible reputation in the field of statistics and science?

Mr. Wilson: I'm sure it does. I'm not familiar with that particular department, but certainly the University of Waterloo is....

Mrs. Kraft Sloan: It's a public institution so it has a certain level of objectivity when it's working in the domain of public interest. Is that something you would agree to?

Mr. Wilson: In what reference?

Mrs. Kraft Sloan: Just generally. It doesn't have a particular vested interest, being a public university.

Mr. Wilson: Generally speaking, I think I could agree with that.

Mrs. Kraft Sloan: I was just wondering about Ms Pollack's reaction to the motor vehicle manufacturers' statement when they talked about the University of Waterloo.

Mr. Chair, if you could just indulge me, I think this is an important issue. We're trying to sort things out here.

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In their report from the University of Waterloo dated October 18, 1995, it states on page (ii):

I was wondering if Ms Pollack could react to that.

Mr. Wilson: Just before Ms Pollack answers, the McCann associates were retained by Ethyl Corporation to look at it. We subsequently retained ENVIRON to look at the same issues. I believe it's fair to say that ENVIRON did look at the McCann report and is somewhat familiar with some of the projections made in its report.

I will turn it over to Alison and let her comment on it.

Ms Pollack: First of all, the Waterloo report was, as you said, dated October 18, 1995, so it's impossible for me to comment on analyses and results of a report I haven't seen, and I'm not sure yet whether I will be able to see it.

Statistics is not an exact science. I guess that's the simplest way to say it. I am not sure if the Waterloo statisticians were provided with exactly the same database I was looking at. That's unclear, since I haven't seen the report. I am not sure exactly what questions they were asked to answer. Even if we had the same database and were asked the identical questions, as I said, statistics is not an exact science. There isn't only one right way to look at a set of numbers.

Mrs. Kraft Sloan: Since this committee is receiving very different information and data on both sides, who are you asking us to believe then?

Mr. Hicks: The U.S. EPA, when it ruled, did not have the McCann report nor obviously the Waterloo report. It was not in the docket. Nevertheless, the EPA analysed our data that came from our test fleet and agreed that the NOx reduction was on average about 20%; also CO reduction. The EPA has bought off on 20%.

Mrs. Kraft Sloan: That's on average.

Mr. Hicks: Yes, that's on average.

I know Environment Canada has done a study that says the NOx reduction is only 5%, but whether it's only 5% or 20% or something in between, depending on how the statisticians massage the numbers, everyone agrees that the removal of MMT will make NOx emissions go up.

I understand Minister Copps has initiated an effort to try to reduce NOx in the ambient air in non-attainment areas. The baseline from which you're trying to reduce will go up in Canada, and I think everyone agrees with that. We can argue about whether it's 5% or 15% or 20%, but it goes in the wrong direction.

Mrs. Kraft Sloan: If this is such a big concern, why is the State of California - and I think we're all familiar with the fact that California has some of the biggest, if not the biggest, smog problems in the United States - banning MMT explicitly?

Dr. Don Lynam (Vice-President, Air Conservation, Ethyl Canada Inc.): I'm Don Lyman, vice-president for air conservation in the health and environmental area.

California banned the use of MMT in about 1978, and I'm not sure if it has looked at the recent data or information.

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The Chairman: Thank you.

We now have Mr. Wappel, please.

Mr. Wappel (Scarborough West): Mr. Chairman, thank you. I have a few questions, but I'm going to make a comment, and, in view of your previous ruling, I don't want the previous witnesses to take the comments that I make as an insult.

I find it interesting, Mr. Wilson, that your first name is David, because this looks to me like a David-and-Goliath situation and there are not too many times David wins in a David-and-Goliath situation.

There is no doubt that the motor vehicle industry is very important for Canada. There is absolutely no doubt about it. My friend has already indicated that MMT is manufactured in South Carolina and is just really reassembled here, or whatever you want to say. But that being the case, I'm always interested in facts and truth, Mr. Hicks, so let's just ask a few questions on that score.

Dr. Roos, you said that the Environmental Protection Agency has said that MMT does not cause or contribute to damage to on-board diagnostic systems. I believe that was your evidence.

Dr. Roos: Their wording was something in the order of ``cause or contribute to emission systems or vehicles to meet the applicable standards'', and in that ruling emission systems and on-board diagnostics were also included.

Mr. Wappel: That's what I'm asking. Was there a specific reference to on-board diagnostic systems?

Mr. Hicks: Let me answer that, Joe.

The EPA defines emission control systems to be the whole package. To have any fuel or fuel additive that is not substantially similar to ``plain vanilla'' unleaded gasoline approved in the United States, the burden is on the manufacturer to come forward - and this is where this ``cause or contribute'' language comes from - to prove to the administrator of the EPA that the fuel or fuel additive does not cause or contribute to the failure of emission control systems for automobiles for the levels for which they're certified. The burden is on us. It's a public docket; it's open for 180 days and anybody - and everybody did - can come and submit their opinions, either for or against.

EPA did two things that were kind of at cross purposes. EPA found that we met our burden of showing that MMT does not cause or contribute to the failure of emission control systems. Included in the docket - including a public hearing, a seminar sponsored by the EPA before its ruling - was as much information as existed at the time on OBDs. There was a seminar that was held specifically for the purpose of the auto companies to come forward and discuss their concerns about OBDs.

Mr. Wappel: Excuse me. What I'm interested in is whether there is a piece of paper, a letter, or a report on the letterhead of the Environmental Protection Agency of the United States that specifically states that MMT does not cause or contribute to damage to on-board diagnostic systems, in exactly those words.

Mr. Hicks: No. However, I think you have to take the EPA's definition of what an emission control system is.

Mr. Wappel: I'll get to that in a second.

Mr. Hicks: Okay.

Mr. Wappel: I've read the court decisions, and I would agree with your characterization that the court appears to be somewhat frustrated, particularly in the second decision.

I want to ask about - and, Dr. Roos, you can answer this, too. In the first decision, the court found that for the purposes of the resubmitted application, EPA determined that Ethyl had demonstrated that the use of MMT at the specified concentration will not cause or contribute to a failure of any emission control device - and here are the operative words I'd like you to explain to me - ``or system to achieve compliance'' with emission standards, pursuant to whatever the section is. Now, is that ``or system to achieve compliance'' what they're talking about? Would that be another term for on-board diagnostic systems or not?

Dr. Roos: Systems are looked at as the complete emission system, the things that EPA has control over from the Clean Air Act, the emissions that come out of the car. It's all an emission system.

Mr. Hicks: The reason it talks about the standards to which they're certified.... The auto companies bring a car forward to EPA and have it certified on a model-by-model basis. So if the car, at the time, had an OBD-II system, that would be part of the package. If it didn't have one, it wouldn't be part of the package. So the question is, if it has such a system, then that's all part of the process.

.1205

Mr. Wappel: Which I take it is why the court on October 20 said that on November 30, 1993 the EPA found that MMT had no adverse effects on automobiles' emission control systems, and didn't go as far as it had in the previous decision by adding ``or a system to achieve compliance''. Is that what you're telling us, that it's all part of one big package, including on-board diagnostics?

Mr. Hicks: That's what I'm telling you. I can't say why the court changed the language. I think it was quoting itself. OBDs and OBD-IIs weren't an issue in this last occurrence.

Mr. Wappel: Manufacturers - and, incidentally, they made certain comments about your research, so you can make comments about theirs; I've got no problem with it - in their evidence talked about on-board diagnostics II. I've got to assume that what we've been talking about, what Dr. Roos has been talking about, and what you've been talking about is on-board diagnostics I, since on-board diagnostics II is just coming on line.

Dr. Roos: It's a matter of nomenclature. In California it's called on-board diagnostics II because they had a previous requirement that they called on-board diagnostics I. The other 49 states are calling it on-board diagnostics. The general requirement between the other 49 states and California is about the same, the difference being that in on-board diagnostics I they had to look at total failure of a system and on-board diagnostics II has to warn a driver when a system has degraded to the point where there are gross increases in the emissions, way beyond the emission standards. That's the same in California and the rest of the U.S.A.

Mr. Wappel: In their submission to us this morning, the manufacturers differentiate between the OBD-I system and the OBD-II system. For me, the bottom line is their statement at the bottom of that slide, as it was called, ``Vehicle Manufacturers Concerned''. To me, this is it in a nutshell. This is the whole case. Canadian fuel formulations are not compatible with OBD-IIs. Never mind the environment, never mind knocks, never mind hydrocarbons - all of that stuff. We've been using it for 17 years up here. Nobody's dropping dead like flies. There's nothing wrong with MMT from a health point of view.

The question is, will it destroy OBD-IIs or will it not? If it does, then we're going to ban it. Otherwise, there's going to be no harmonization.

At least, this is so prior to this case, and I'll have a question to Mr. Hicks about the result of the case.

We're told that the studies of the automobile manufacturers indicate that Canadian fuel formulations - read ``MMT'' - are not compatible with OBD-IIs. What do you have to say about that?

Dr. Roos: Let me comment on the studies that have been put forward that prove conclusively that MMT has a problem with OBD-II. The auto manufacturers have referred to some of these.

The comment was made that a vehicle run in San Antonio is not the same and cannot be compared to something run in Canada. One of the studies that was put forth by the automakers to prove that MMT caused a problem was to compare a fleet of cars run in Toronto to ones run in Las Vegas and Florida. It said that it is evident that the only difference is MMT, and therefore some little differences in the response of the system, things that they don't even claim really to be a difference, they claim were caused by MMT. What they were comparing were apples and oranges.

Other examples: this conclusive dynamometer catalyst test was one catalyst that was in an area where it is admitted in the scientific literature, the technical literature, and in the submissions to the regulatory agencies in the U.S. and California that the catalyst was sitting at a place where there is enormous variability. I'm not a statistician, but I'm sure that most statisticians you ask will agree that if you've got a lot of variability, then the first thing you do is run more than one test, and if you're going to run a test, then you run a baseline so you've got something to compare it to. None of this was done, but this is the conclusive evidence they put forth.

In the data that Ethyl has presented and that we've looked at, we've taken cars that have compliant OBD-II systems, production cars - these are 1994 vehicles - and we have brought them 1.5 million kilometres with no problems: no plugging and nothing else. We've looked at the workings of the systems very closely in a self-consistent manner using statistics, comparisons, and baselines and have published the data and have seen no problem.

Why haven't the automakers produced this kind of evidence? We heard that today, in 1995, they're working on 1997 and 1998 vehicles. The OBD systems had to be working for some vehicles in California in 1994. They've had time since 1991 or 1992, when they knew these systems were coming, to look at MMT and bring this up. They've had four years. Where is the conclusive data? I look at that data and see nothing conclusive. It's like the example of comparing apples and oranges and saying there's a problem here.

.1210

Mr. Wappel: All right. What do you say to the manufacturers - I think that's who it was, whoever it was it will show in the record - who said, look, we have no vested interest here. They asked why they should hassle Ethyl Corporation and the petroleum industry. They said all they want to do is make good cars for their customers, and in their judgment their cars will be compromised and their customers - and I'm one of them - will be irritated if their most sophisticated material is damaged or compromised by this particular additive. What do you say to that?

Dr. Roos: I look at the technical data. That's what I can answer to. I cannot answer as to why they make those statements.

Mr. Wappel: Does anybody have any speculation on motive?

Mr. Hicks: Yes. I'd go back to the stuff I quoted from Environment Canada in this briefing paper. This is really an issue between big oil and big auto and who's going to be responsible for emissions. MMT is only the leading edge. The fact of the matter is the automakers want this systems approach - not the legal definition - for fuels and their automobiles.

They were mandated. They didn't want to do OBDs. California told them they had to develop them and then EPA picked it up. They were told by the U.S. government and by the State of California to come up with a system for OBDs. They've come up with one, and it doesn't work very well. It doesn't work in the United States very well where they say the problem is sulphur. It doesn't work here very well where they say the problem is MMT.

I think it's a matter of the fact that they designed a system that doesn't work, and they don't want to take the responsibility from their customers - I don't blame them a bit - and they're looking for a scapegoat. We just happen to be here.

Let me just -

Mr. Wappel: Just a minute, please. I have limited time.

The Chairman: This is your final question, Mr. Wappel.

Mr. Wappel: Mr. Chairman, come on. I have two questions, one very short one for Dr. Lynam. I don't think he answered my colleague's question. Why did California ban MMT? Not when, why?

Dr. Lynam: It was banned in about 1978, at the same time the clean air agreement came into effect and the federal government -

Mr. Wappel: Yes, but what was the rationale?

Dr. Lynam: The rationale at that point was health -

Mr. Wappel: Which has since been discounted by Environment Canada.

Dr. Lynam: Which has been discounted by Environment Canada.

Mr. Wappel: My final question, Mr. Chairman, is to the president. Assuming, as Mr. Hicks has outlined, that the likelihood of an appeal is next to nil, in 45 days from last Friday what is Ethyl Corporation going to be doing with its product?

Mr. Wilson: We hope to be selling it in the United States to refiners who have already indicated their interest in utilizing the product.

Mr. Wappel: I'm not talking about gas lawnmowers. Let's talk about cars. You're the president of the company in Canada. You're a director of both corporations. What does the corporation see, assuming no appeal, happening to Ethyl Corporation and to MMT in unleaded gasoline in the United States in the next year?

Mr. Wilson: As I say, a significant number of the refining industries have indicated to us that they intend to use MMT in their unleaded gasoline because of the economic, environmental advantages. So we forecast - and of course, that's all it is at this point in time - that inside of twelve to eighteen months we may have perhaps 50% of the gasoline sold in the United States with some degree of MMT in it.

Mr. Wappel: And what are you going to do when the manufacturers say the use of unleaded gasoline with MMT will void the warranty?

Mr. Wilson: I think that would be up to our customers to address that question, and of course -

Mr. Hicks: That's been implied before, in different forms, by the auto companies. They've implied that if this happened in the United States, they would carry through with their threat. I guess they haven't carried through with it in Canada, but they would do it in the United States. It's a little bit of a different situation for them legally and I'm not talking about customer relations.

In the United States, if they in effect voided warranties on cars for using a federally approved fuel, certainly it's one thing to recommend to your customers that if you have the option, use this fuel or that octane or MMT or not. It's another thing to actually void warranties when the customer has done nothing wrong and is using an EPA-approved fuel. I just raise it as a question.

.1215

The Chairman: In the early 1980s the Government of Canada started reducing lead in gasoline. At that time did Ethyl Corporation oppose that move?

Mr. Wilson: In the 1980s?

The Chairman: Some 12 years ago.

Mr. Wilson: I was not in this position at that time, but I believe that's correct.

The Chairman: Could you tell us on what grounds you opposed it?

Mr. Wilson: We felt the evidence at that time did not support that action.

The Chairman: Thank you. Would any of you like to comment? I suppose Dr. Roos has this statement in the submission by MVMA to the effect that running at lower temperatures minimizes the effect of the manganese. Ethyl's tests were performed at 400 degrees and 500 degrees centigrade, significantly below average federal test procedure catalyst mid-bed temperatures. Would you like to comment on that?

Dr. Roos: In what context is that?

The Chairman: This is on page 41 of the submission by the MVMA.

Dr. Roos: I don't have a copy. The reason I'm asking is that a lot of different tests are run at different temperatures, so I'm not sure which test they're actually referring to.

The Chairman: It's on page 41, item (d).

Dr. Roos: This refers to a laboratory testing of the catalyst to measure a property called oxygen storage, which is what they're using in this on-board diagnostic system. It's an inherent property of the catalyst because of the way it's manufactured.

The tests were run at 400 degrees and 500 degrees centigrade to test a hypothesis put forward by Ford Motor Company in one of its papers that said if MMT was on there or manganese was doing something, it would be much more prevalent at 500 degrees centigrade than at 400 degrees centigrade. We did the test and didn't see this kind of thing happening.

The other thing is for most catalysts that is the type of temperature for the inlet gas temperature. That's the way this experiment is run. It's somewhat misleading the way they've paraphrased this, because the experiment was run with the inlet gas at 500 degrees centigrade, so mid-bed temperature was something like 50 degrees to 100 degrees centigrade higher than that. That was clearly written in the paper and doesn't come across in this paraphrase at all.

The Chairman: So the temperatures you tested were not significantly below the average federal test procedure catalyst mid-bed temperatures.

Dr. Roos: No.

The Chairman: Did you say they were only 50 degrees below?

Dr. Roos: No. They're well within the range.

The Chairman: They were always in the range.

Dr. Roos: Yes.

The Chairman: So this assertion is incorrect.

Dr. Roos: Yes.

The Chairman: My next question is on the same page and it's about cores. It reads:

What is your comment on that?

Dr. Roos: I'll comment on that. I see the next thing I'd also like to comment on.

The Chairman: The lab set-up is not representative of the way oxygen storage would be measured in a vehicle, as a complex system.

Dr. Roos: We measured the oxygen storage using new sensors in this set-up. Because they were brand-new, you have no variability; you don't worry about where they've been, where the car has been, or how hot they've previously been. You have no variability at all depending on the sensors.

At the same time, the set-up allowed us to use sensors that were aged in the vehicle for 160,000 kilometres on clear fuel or MMT fuel. That gave us the capability of comparing something that was brand-new, something that was aged with MMT in the fuel, and something that was aged without MMT in the fuel. Those data have been presented in public at SAE meetings, and the EPA has also seen them.

The Chairman: Mr. Roos, you used the sensors aged on MMT fuels.

.1220

Dr. Roos: We've used those also, yes.

The Chairman: In your tests.

Dr. Roos: Yes.

The Chairman: Finally, there is the statement that:

What is your comment?

Dr. Roos: I have two comments.

One is that the procedure we used in the set-up is like a real world system. As a matter of fact, it's very similar to the system that Ford is using on its 1994 vehicles.

It's also a test that is being used by the AAMA in the U.S. to look at oxygen storage. So there's nothing wrong with this test, since the auto manufacturers are also using it.

The other thing is that space velocities of 30,000 per hour are well within the range that is required for the space velocities required for EPA for the monitoring of the period or how the core is operating when monitoring has to occur.

There's just a blanket statement here that storage effects of manganese, which have never been shown, would be greater at 10,000, which has never been shown.

The Chairman: Wouldn't you agree that there is a considerable gap between 30,000 and 10,000 per hour?

Dr. Roos: Twenty thousand.

The Chairman: Is that of no significance to you?

Dr. Roos: During the FTP, the space velocities can go up to 100,000, and during idle they can be down below 10,000. So it's within the range of operations.

The Chairman: Did you test at 10,000?

Dr. Roos: We have not.

The Chairman: You have not.

Dr. Roos: I should say this: the on-board systems on production vehicles have tested over the whole range in which they were designed to test, and there was no effect of MMT on those systems. The laboratory test was not carried out at 10,000, though.

The Chairman: Finally, there is this statement on page 40 to the effect that

What are your comments?

Dr. Roos: First, it was described in the paper, in the details. The paper that was presented was a technical one, and when you are writing technical papers, one of the things you don't want to do is bore people with details that you can reference and they can look up.

This procedure was named by the accepted name for the mathematical procedure and a reference was given so the reader could look up how to do it.

The method was a standard technical one for comparing signals coming from sensors. It's widely accepted, and we used it because we looked at it and said that it gives us a very reproducible signal and it is not subject to the variations of the type of characterization they use on automobiles.

The question is why it isn't used on vehicles. One of the things is that it takes a lot of computing power, something that you readily have in the laboratory but you might not have in a car. It's a scientific test. It's not to replace production.

The Chairman: Would it be fair to conclude, then, that you reject as incorrect these four statements that I read?

Dr. Roos: As they're written, yes.

The Chairman: Mr. Chatters.

Mr. Chatters: Just before we begin the second round, I'd like to ask a question, Mr. Chairman, about the order of questioning. I didn't have an opportunity on the first round. I'm a duly delegated member of the committee.

The Chairman: Then this is your first question on the first round. Go ahead.

Mr. Chatters: It doesn't matter as long as I get my questions in.

Do you know who in fact commissioned and paid for this study at the University of Waterloo?

Mr. Wilson: I believe it was indicated that one or more of the automobile manufacturers did so. That would be in the record. I'm not familiar with the report or who paid for it.

The Chairman: We should have asked this question of the previous group.

Mr. Chatters: Mr. Chairman, I would just submit that if we consider this to be part of our deliberation, then perhaps we should hear the authors of this study as witnesses.

.1225

The Chairman: The researcher draws to my attention that on page 1, first paragraph, the answer to your question is indicated there.

Mr. Chatters: Okay.

Secondly, did you request and were you granted a meeting with the environment minister to discuss this issue?

Mr. Wilson: I believe in two and possibly three letters we did request a meeting with the environment minister over a period of, oh, I would say close to 12 months, when she intervened in this affair, and we never received any response from her office.

Mr. Chatters: Okay. Thank you.

It is my understanding, and can you confirm this, that you are willing to participate and accept the results of a cooperative joint study or an independent study on this issue and that you will accept the results of this?

Mr. Wilson: That's correct. We have stated that, going back to 1993 when the CPPI and the MVMA met and agreed to do independent testing. We certainly have not opposed that and in fact would be willing to participate in it.

Mr. Chatters: You would accept the results as binding upon you. Is that right?

Mr. Wilson: That's correct, as long as we were able to participate.

Mr. Chatters: Yes. Okay.

Mr. Hicks: Mr. Chatters, may I just add? I think it's interesting to note that while MVMA has steadfastly refused to participate in any kind of joint research or independent review of the data in Canada, currently in the United States its sister organization, the American Automobile Manufacturers Association, is planning to undertake research, which will in part focus on the impact of MMT on OBDs.

We have had discussions with AMA. We have offered to participate, we have offered to supply the MMT at our cost, and it seems to be moving toward a cooperative effort to finally do some joint science-based research.

Mr. Chatters: Good.

Could you briefly give us what is the impact upon Ethyl Canada or Ethyl Corporation of this bill, if it proceeds and becomes law?

Mr. Wilson: In the case of Ethyl Canada, the sales revenues from our sale of MMT approximate 50% to 60% of our sales revenue here in Canada and it would have a significant adverse effect on our situation in Canada. As a corporation, of course, we are anticipating, as we've said earlier, that the sale of MMT is imminent, too, in the United States and possibly overseas. Nevertheless, the sales here in Canada are very important to us, certainly from a standpoint of approvals in the rest of the world. So we would hope that would not come to -

Mr. Chatters: Would Ethyl Canada cease to exist?

Mr. Wilson: It's hard to tell. When you lose 50% to 60% of your sales revenue in one fell swoop, that could certainly be a conclusion you could reach.

Mr. Chatters: Just in closing, an observation on one of the other lines of questioning from my colleague across the way in regard to his 400-cubic-inch Ford truck motor with a camper. We've had MMT -

An hon. member: It is a Dodge.

Mr. Chatters: Dodge?

We've had MMT in gasolines for 15 years in this country, and it's never happened before. I would respectfully submit, perhaps a bit with tongue in cheek, that the problem is due to other variables, perhaps a tank full of ethanol-blended gasoline.

Some hon. members: Oh, oh!

Mr. Reed: He cleaned out the engine with ethanol.

Mr. Wilson: I don't have to answer.

Mr. Chatters: Thank you, Mr. Chairman.

The Chairman: On the second round, Mr. Forseth.

Mr. Forseth: Yes. On a different tack, this bill we're being faced with, in essence, is a ban on trade. By direct implication the health issue, then, is not there. What we have is that we're banning trade, and that certainly doesn't present Canada as a trade-friendly nation. We have the free trade agreement, we have NAFTA, the North American Free Trade Agreement.

I'd like your comments about how this bill contravenes the free trade agreement, let alone the spirit of common trade in the so-called market within Canada.

.1230

Just as an aside, I suppose this might be the first no-trade bill against Quebec.

In any event, a ban against a current ongoing commercial activity that's going across our borders...I wonder.

You could turn it around the other way. How would we feel if we had a Canadian manufacturer regularly selling to the States when all of a sudden Congress decided to ban a Canadian product? Maybe you can comment on the trade aspect, because essentially that's what the substance of this bill is.

Mr. Wilson: I'll ask Mr. Hicks to answer your question.

Mr. Hicks: It does seem to be an odd way to go about it. If you all want to ban MMT, I don't understand why you don't just say so. What it talks about is manganese-containing substances that conceivably could include vitamin supplement tablets. It's kind of a silly way to go about it.

But you're right. It is my understanding of GATT and NAFTA that to erect a non-tariff trade barrier for wholly domestic political concerns - however legitimate they may be - violates the spirit if not the letter of those agreements. As a matter of fact, there's a dispute pending right now in the World Trade Organization about that.

The problem for us is that we're not a party to GATT or NAFTA, so we don't have standing to bring the complaint. The Government of the United States would have to bring the complaint. We haven't ruled out that possibility, but they have a lot of other issues on their plate with Canada, like lumber and a dozen such things. I doubt that's going to help.

The Chairman: Thank you.

Next is Mr. Reed, followed by Mrs. Kraft Sloan.

Mr. Reed: I'll be brief. Thank you, Mr. Chairman.

In the words of Yogi Berra, it's déjà vu all over again.

I'll now read a couple of little paragraphs.

This is a quote from Mr. Kenneth Freberg, then President of Ethyl Canada:

This is dated February 25, 1984.

Mr. Wilson: Mr. Chairman, with all due respect, I think we are here to discuss Bill C-94 on MMT, not to discuss some past references of some time ago.

The Chairman: That's fair enough.

Madam Kraft Sloan, please.

Mrs. Kraft Sloan: Thank you. It's those kinds of throw-away comments that I'm quite concerned about. I don't think we're putting vitamin pills in fuel.

Anyway, I was wondering if you could tell me what the mechanism is in MMT that reduces NOx. How does MMT reduce NOx?

Dr. Roos: MMT is the additive that actually goes into gasoline. It's the chemical compound. When gasoline burns, MMT also burns. One combustion product happens to be manganese oxide, so we've been talking about it quite a bit. They go down through the exhaust system, through the exhaust pipe, the catalysts, the sensors and all these areas, and deposit.

One of the results we've talked about is that we have seen protection of catalysts. When they've been taken off, we've seen protection of oxygen sensors. There is evidence of keeping intake valves clean, changing deposits by lowering them in combustion chambers, and all these things. If degradation happens in any one of these areas it leads to increases in emissions.

While it is absolutely, statistically, always there, we have seen this lowering of NOx across these fleets. We've seen that you have some kind of cumulative effect of all these systems being protected across the emission system that leads to these lower NOx emissions.

Mrs. Kraft Sloan: If I understand you correctly here, you're suggesting that the use of MMT protects all of the systems, whereas the motor vehicle manufacturers have suggested that the use of MMT deteriorates and erodes these systems. Is that what I'm hearing you say?

Dr. Roos: When you look at the emissions and you look at the performance of the components, you will see that all emission systems deteriorate with time, mileage and kilometres accumulated. And the emissions go up.

As for MMT fleets and the NOx, while the clear fleets will go up, the MMT fleets do not go up as much. The deterioration is not as quick, and yes, that's evidence of protection of the systems.

.1235

Mrs. Kraft Sloan: What is the actual mechanism within the MMT that reduces the NOx? Are you doing this just because you have A and B and you think A implies B?

Dr. Roos: I'm sorry?

Mrs. Kraft Sloan: Are you suggesting that because MMT exists and emissions are down, that's the reason?

Dr. Roos: When you don't use MMT, the emissions are higher. When you do use MMT, that's a cause and effect. When you look at the emission system components, the catalyst, and they are protected from known poisons, the phosphorous and the zinc, and they have better performance, higher conversion efficiencies, and they are vapour protected and this has always happened when you use MMT, you say that MMT is working there. When you look at sensors and you see less carbon deposit on them, less phosphorous and zinc deposits on them, and these things cause problems with their operation, you say they are protected there. When you do tests with IVD additives and you see that the intake valves are cleaner, you say they protect it there. When you put all of these together and you know that each of these, together or individually, can lead to NOx increases and that you're protecting them more and more, you put it together and you say, ``I have a system that I am protecting or a system that is not deteriorating as quickly'' - however you want to phrase that - ``and the result is across-the-board or average, however you want to look at it, NOx benefit''.

Mrs. Kraft Sloan: Are you suggesting, then, that the efficiency of the catalyst is increased or protected?

Dr. Roos: We've looked at a set of vehicles. Again, this is published. There happen to be these TLEVs and low-emission vehicles, high through-put vehicles. These are the cars, if you look at the number on the sheet we handed out, in table 1, some of the 1992s and 1993s that went to 160,000 kilometres. We performed a test where we took the catalyst off all the vehicles and put them on a representative car. You would evaluate the conversion, how well they worked. So the only variable was this catalyst. When you looked at the conversion efficiency, what you found across the board was that the MMT catalysts had higher conversion efficiencies, in this very controlled test, than the ones without MMT.

So, yes, the implication or what you draw from that is that MMT is protecting them from degradation.

Mrs. Kraft Sloan: Are hydrocarbons and carbon monoxide reduced as well?

Dr. Roos: Statistically, there's no difference in hydrocarbons and CO.

Mrs. Kraft Sloan: You'll have to explain this for me, because if your catalyst is working more efficiently and it's protected, then wouldn't the hydrocarbons and the carbon monoxide also be reduced in the emissions?

Dr. Roos: When we plot them up, the hydrocarbon levels bounce around. COs, if you look at them directionally, are lower across the fleet.

What I said was statistically, because in all these things there is variability, which is why we don't run one car and compare it to nothing or no baseline, or run one car and compare it to another car. When you look at it across a hundred vehicles or so, or twenty vehicles, there's a protection of the catalyst, but the variability is still there. So statistically there is not a difference in the hydrocarbons or CO.

Mrs. Kraft Sloan: Mr. Hicks, you've been talking about Bill C-94 as some tip of the iceberg or whatever, implying that some other agenda is going on here, that the automotive industry wants to have control over the petroleum products industry around emissions.

In the back of your mind, who is responsible for reducing emissions?

Mr. Hicks: I understand very well where I think I would be coming from if I were the automobile companies, because traditionally -

Mrs. Kraft Sloan: No. I'd like to know who is responsible for reducing emissions.

Mr. Hicks: I'm trying to answer your question, because traditionally in the United States the burden has fallen solely on the automobile companies. I understand their plight. They've been told by the United States government over the years to build cleaner cars, to build safer cars, to ratchet down the level of emissions that are allowed.

Other than the phase-out of leaded gasoline back in the 1970s, it was not until the 1990 Clean Air Act amendments, when reformulated fuels, oxygenated fuels, and those types of things came in as a mandate in the United States, that the burden shifted at all to the petroleum sector to help clean up the emissions that come out of cars.

.1240

Mrs. Kraft Sloan: You're suggesting the burden has shifted all to the petroleum industry?

Mr. Hicks: No, I'm saying that was the first time it shifted away from the auto manufacturers at all. I can understand where the auto manufacturers are coming from. They're forced to meet tighter and tighter standards and the burden has always fallen on them. They are quite correct that if they don't meet those standards, whether they're OBD systems, warranty problems or even problems with legal compliance with the EPA.... If I were them, I would try to do the same thing, too, and shift the burden as far to the petroleum industry as I could.

Mrs. Kraft Sloan: But my question is who has the responsibility for reducing emissions? I'm not asking what you feel the automotive industry is trying to do or not trying to do. I'm asking who you think has the responsibility for reducing emissions.

Mr. Hicks: From a legal standpoint?

Mrs. Kraft Sloan: No, I'm asking you in terms of that social responsibility.

Mr. Hicks: Well, it depends on which emissions. In automobiles, the automobile manufacturers have responsibility. In refineries or other stationary sources, the refiners have responsibility. So it depends on what kinds of emissions you're talking about, where they're coming from and what the law says.

If we're talking about regulated automobile emissions, the auto manufacturers have to comply with the Clean Air Act standards.

Mrs. Kraft Sloan: I'm not talking about legal responsibility. I'm talking about any kind of social or environmental responsibility. I guess this is where the problem falls. The automotive industry is talking about a whole system approach, and if we are really trying to think environmentally - if we are really trying to address the kinds of problems we have in regard to environment and our human health - we have to understand who the players are.

I would suggest that people who have responsibility for reducing emissions are not just the automotive industry, but also the petroleum industry, the government and the consumer who uses those, as well. Forgive me if I'm wrong on that.

Mr. Hicks: I agree with you.

Dr. Roos: MMT fits within the system they describe and has benefits you can attribute to the use of MMT. So it fits within the system concept.

Mrs. Kraft Sloan: And there's debate on that one. Thank you.

The Chairman: We'll conclude this round briefly, because we have Question Period at 2 o'clock and then we come back here at 3:30.

Mr. Chatters: I have one short question.

As to this new approach to environmental safety and emissions from automobiles - this idea that we've gone as far as we can from the automobile manufacturers' point of view and now we have to combine in a team effort with the gasoline manufacturers - do you accept that concept, and are you willing to participate in a cooperative venture? This goes back to the joint studies, the cooperative studies. Do you accept the idea that that's the way we have to go?

Mr. Wilson: Absolutely. As I mentioned, going back to August 1993, that was the proposal - to have a cooperative program. I might add that my understanding is the MVMA representative did agree to do additional testing and the MVMA board turned him down. So no testing was done at that time.

Mr. Forseth: I take it what we're talking about here is this methylcyclopentadienyl. Is that how you pronounce it?

Mr. Wilson: Yes.

Mr. Forseth: That is MMT?

Mr. Wilson: Correct.

Mr. Forseth: You somewhere made the statement that if MMT is gone, it's the equivalent of adding a million cars. From the consumer's point of view or from the general environmental perspective, it's catastrophic to all of a sudden have a million cars plunked on our roads. Can you explain and justify that kind of dramatic statement?

Mr. Wilson: It refers to the types of reports ENVIRON has produced. That particular number, I believe, came from the McCann report, which was mentioned earlier. It has to do with the NOx emissions that will happen based on our test programs. If MMT is removed, then those NOx emissions will go up, and that's equivalent to and in the order of magnitude of adding a million more cars to the road in terms of pollutants.

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Mr. Forseth: Is that just on the car side, or is that also related to all the extra stuff that goes into the environment because of the refining process as well?

Mr. Wilson: I believe it applied only to the mobile source emissions, not the stationary source emissions at the refinery.

Mr. Forseth: I take it that there's an environmental price to be paid on the refining side as well.

Mr. Wilson: Yes, there is. But as I think as Ms Pollack mentioned, as to the size of that, the mobile source is by far the larger source, but there is an incremental localized effect. To diminish that effect, I think, certainly if you had three refineries in your locale, that perhaps would be a significant contribution to the environment, if they had to change their processing.

Mr. Forseth: Could I also infer that the addition of MMT in effect raises the octane of gasoline? If it's gone, then I will have to push that car a little harder and use up more fuel or I'll have to pay a higher price. In effect, it's almost like a tax increase.

Mr. Wilson: Certainly, there will be an impact on how the refiner puts his gasoline together. I think, as we heard the other day, there are many ways they can do that. Their primary way would be to add more aromatics to the gasoline, and this in itself has certain environmental disadvantages. Then there are other methods they can use that would also have impact.

Mr. Forseth: I heard the statement that the removal of MMT increases benzene emissions.

Mr. Wilson: The benzene flows from the aromatics. As you increase aromatics in gasoline, you are going to get an increase in benzene. However, I think there is an agreement between the CPPI and Environment Canada to cap benzene emissions.

Mr. Forseth: The minister, I take it, is wanting to go on that agenda as well, to reduce benzene, and this bill seems to go contrary to that.

Mr. Wilson: It certainly could lead in that direction if there weren't some kind of regulations in place.

The Chairman: I think we have succeeded almost to the minute in giving equal time to both teams, and we will conclude now.

Thank you, Mr. Wilson, and your colleagues and associates, for appearing before us today. It was very informative.

The meeting is adjourned.

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