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New CARB and Fuel Prices
March 20, 2008
How are the following issues hitting your business this year?
New CARB Regulations and Fuel Prices
The final version of California Air Resources Board off-road diesel regulations (CARB) has yet to be signed by Governor Schwarzenegger, but by 2010 fleets with over 5,000 hp must be compliant or face heavy fines. It is still unclear whether certain add-on devices for heavy equipment over 300 hp will be available, and/or viable.
“It’s going to be tough,” Bobeczko said. “Talk to anybody who has calculated the figures. As things exist right now, if you haven’t started re-powering, or re-placing equipment ahead of the game… you are not going to get your return on investment. I think the construction industry has to put some real pressure on manufacturers to develop fuel efficient equipment—things that meet the pollution standards and run more efficiently.”
Ken Simonson, AGC's economist added, “The (CARB) rules as proposed will create extreme and unnecessary hardships on contractors, driving up costs to the point that many projects are canceled or blocked because the required equipment doesn't exist. How quickly the rules go into effect and how drastic they turn out to be is still up in the air…”
High priced fuel continues to be a big factor in bidding jobs.
“Fuel used to be about ten percent of our costs,” said Bobeczko. “Now, with diesel fuel above $2.50 per gallon, fuel is over thirty-percent of our costs, and a major consideration in bidding jobs. And no one can predict what the price will be three months from now.” Kenneth Simonson added, “Elevated petroleum prices mean many construction materials costs will be higher in 2008.”
Posted by Loren Faulkner on March 20, 2008 | Comments (0)
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