406 Dirksen EPW Hearing Room

Stuart Nemser

Founder / Chairman, Compact Membrane Systems, Inc.

Chairman Voinovich, Senator Carper, members of the committee, I thank you for giving me the opportunity to speak here today. I am Stuart Nemser, Founder and CEO of Compact Membrane Systems in Delaware. I am here to provide the Committee with my company’s views concerning S. 1265, the Diesel Emissions Reduction Act of 2005, and its potentially very positive impacts.

Compact Membrane Systems (CMS) is a spin-off company of E.I. DuPont Co., based in Delaware. We currently employ 20 people. CMS has successfully commercialized one family of membrane products which enhance production of ultra-pure water for the semi-conductor field and a second family of products which are used to improve the reliability of electrical transformers. We are now developing a family of membrane products for reducing NOx emissions from diesel engines.

I believe the Diesel Emissions Reduction Act will be very helpful for companies like mine to commercialize our developing technologies. Under the Emerging Technology provisions of the Diesel Emissions Reduction Act, the EPA could allocate up to 10 % of funds every year towards the development and commercialization of emerging technologies. These funds are to be used to retrofit, re-power, or replace a diesel engine for a bus, medium-duty or heavy duty truck, marine engine, or locomotive. In addition, S. 1265, requires that the EPA Administrator establish a program to promote the use of these retrofit technologies. It is my hope that my company will be able to take advantage of this provision very soon.

We began working on our diesel technology because we realized the same need you realized, Senators: the need to reduce the pollution from the existing fleet of diesel engines. EPA’s new regulations will require new diesel engines to use low-sulfur fuel and reduce emissions by 2007. This has focused the diesel engine community more on developing new technologies to incorporate in new engines, not how to address the problem of pollution coming from older diesel engines. Diesel engines last a long time, many running for 25-30 years. In order to reduce air pollution emissions, existing diesel engines need to be retrofitted with after-treatment pollution control devices to achieve sufficient reductions, thus the purpose of your bill and our business opportunity.

Our diesel membrane system reduces nitrogen oxide, one of the most difficult diesel emissions to contend with, by as much as 50% and with no need to introduce and widely distribute hazardous chemicals throughout our country. CMS membranes are ideal for many retrofit situations as they can be placed between the existing turbo-charger and engine. Since the membrane system is installed at the front end of the engine’s system and only needs atmospheric air as the feed, our control technology does not need any special cooling systems or particular levels of sulfur in the fuel.

Our membrane products work best on high-load and high-power diesel engines, so our primary focus has been locomotives, marine engines, and power generators. CMS has made great progress to date including demonstrations of the membrane technology on highway trucks, locomotive engines, power generators, and marine engines. We plan to have completed field demonstrations on a locomotive and a ferry in the next 18 months. If funds are available we will then apply to have the EPA or California Air Resource Board (CARB) certify each platform. Air Liquide/MEDAL, the largest industrial gas company in the world, actively supports this CMS program and encourages the passage of S.1265. They have written a letter expressing their support of S. 1265, which I ask, Mr. Chairman, be submitted to the record. Air Liquide/MEDAL is likely to supply the commercial membrane modules for this program.

These diesel engines are both heavy NOx emission emitters and have very long diesel engine lifetimes. Thus they represent attractive applications under Act S. 1265. Reduction in these diesel NOx emissions will be good for states like Delaware that suffer from severe ozone air quality problems and the Nation as a whole. In addition retrofitting existing diesel engines with energy and emissions improvement technologies will extend the life of the engines and in most cases pay for itself in a relatively short amount of time.

The development of new technologies is critical to the long-term goal of developing the most cost-effective measures for reducing harmful emissions. Without the funding the Diesel Emissions Reduction Act would provide, emerging technologies from companies such as ours will continue to struggle to fully develop into functioning prototypes ready for commercial application. Related to our aging diesel fleet, with only a limited number of prototypes seeking production, key decision makers will be more inclined to delay implementation of emission reduction technology or favor technologies that are already certified by EPA or California Air Resource Board and therefore have lower initial costs but may have higher long term costs. If allowed, this later approach permits continued pollution and ensuing health problems.

At CMS we feel we are on the cusp of full commercialization, and are currently working with our customers to begin larger demonstrations. Unfortunately, certification of specific engine platforms is very expensive. Also, at our pre-commercial stage, costs of prototype system manufacture are significantly higher than at the later commercial stages. Without the funds your bill contemplates for emerging technologies, it will be difficult for CMS to pursue our diesel engine program in a timely and effective manner.

I understand and appreciate that your bill is not a research bill. The focus of your bill is to get pollution control equipment on the ground and cleaning up the air. However, I applaud your vision to realize that there are a lot of possibilities to do more with the development of new technologies. I am looking forward to competing for these funds, and giving my company an opportunity to help advance diesel engine technology in this country. CMS and other companies will be able to pursue the best technologies to reduce emissions not only in all new engines, but also in existing engines if the Diesel Emissions Reduction Act is passed. The Act will allow our company and others to drive forward emerging technologies to be available in the short-term while allowing us to meet our long-term financial and regulatory goals.

Passage of the Diesel Emissions Reduction Act will be a significant step in the right direction toward controlling the harmful effect of NOx, particulate matter, and sulphur dioxide on the environment. We at Compact Membrane Systems fully support this bill and the financial assistance it will afford emerging technologies to develop and become certified with the EPA and the California Air Resources Board. The diesel emissions problem is a national problem that is in need of federal legislation and funding, and I urge you to pass the Act on behalf of Compact Membrane Systems, Delaware, and the entire nation. Thank you.