Manufacturing Incentives for Alternative Fuel Vehicles |
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Topics: National Highway Traffic Safety Administration
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Barry Felrice
Federal Register
December 19, 1994
[Federal Register: December 19, 1994]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 538
[Docket No. 94-96; Notice 1]
RIN 2127-AF18, 2127-AF38
Manufacturing Incentives for Alternative Fuel Vehicles
AGENCY: National Highway Traffic Safety Administration, DOT (NHTSA),
Department of Transportation (DOT).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: Under the corporate average fuel economy program, certain
incentives are provided for the manufacture of alternative fuel
vehicles, including dual fuel vehicles. Among other things, dual fuel
passenger automobiles which meet a minimum driving range qualify for
special treatment in the calculation of fuel economy. In order to
implement a new statutory requirement, NHTSA is proposing to amend its
existing regulation concerning minimum driving range. The minimum
driving range for all dual fuel passenger automobiles other than
electric vehicles would be set at 200 miles. The agency is also
proposing to establish gallons equivalent measurements for certain
gaseous fuels. These measurements are needed to calculate the fuel
economy of alternative fueled vehicles.
DATES: Comments must be received on or before February 17, 1995.
ADDRESSES: Comments must refer to the docket and notice numbers set
forth above and be submitted (preferably in 10 copies) to Docket
Section, National Highway Traffic Safety Administration, Room 5109, 400
Seventh Street SW, Washington, DC 20590. The Docket is open 9:30 a.m.
to 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Ms. Henrietta L. Spinner, Motor
Vehicle Requirements Division, Office of Market Incentives, National
Highway Traffic Safety Administration, 400 Seventh Street SW.,
Washington, DC 20590, (202) 366-4802.
SUPPLEMENTARY INFORMATION:
Background
A. Alternative Motor Fuels Act of 1988
Section 6 of the Alternative Motor Fuels Act of 1988 amended the
fuel economy provisions of the Motor Vehicle Information and Cost
Savings Act (Cost Savings Act) by adding a new section 513,
``Manufacturing Incentives for Automobiles.'' Section 513 contained
incentives for the manufacture of vehicles designed to operate on
alcohol or natural gas, including dual fuel vehicles, i.e., vehicles
capable of operating on one of those alternative fuels and either
gasoline or diesel fuel.
Section 513 provided that dual fuel vehicles meeting specified
criteria qualify for special treatment in the calculation of their fuel
economy for purposes of the corporate average fuel economy (CAFE)
standards. The fuel economy of a qualifying vehicle is calculated in a
manner that results in a relatively high fuel economy value, thus
encouraging its production as a way of facilitating a manufacturer's
compliance with the CAFE standards. One of the qualifying criteria for
passenger automobiles was to meet a minimum driving range, which was to
be established by NHTSA.
NHTSA was required to establish two minimum driving ranges, one for
``dual energy'' (alcohol/gasoline or diesel fuel) passenger automobiles
when operating on alcohol, and the other for ``natural gas dual
energy'' (natural gas/gasoline or diesel fuel) passenger automobiles
when operating on natural gas. In establishing the driving ranges,
NHTSA was required to consider the purposes of the Alternative Motor
Fuels Act, consumer acceptability, economic practicability, technology,
environmental impact, safety, driveability, performance, and any other
factors deemed relevant.
The Alternative Motor Fuels Act and its legislative history made it
clear that the driving ranges were to be low enough to encourage the
production of dual fuel passenger automobiles, yet not so low that
motorists would be discouraged by a low driving range from actually
fueling their vehicles with the alternative fuels. Section 513(h)(2)(C)
provided that the minimum driving range for ``dual energy'' passenger
automobiles may not be less than 200 miles. Section 513(h)(2)(B)
allowed passenger automobile manufacturers to petition the agency to
set a lower range for a particular model or models than the range
established by the agency for all models. However, the minimum driving
range could not be reduced to less than 200 miles for any model of
``dual energy'' passenger automobile.
B. Establishment of Part 538
On April 26, 1990, NHTSA published in the Federal Register (55 FR
17611) a final rule establishing 49 CFR part 538, Driving Ranges for
Dual Energy and Natural Gas Dual Energy Passenger Automobiles. The
agency established a minimum driving range of 200 miles for ``dual
energy'' passenger automobiles, and a minimum driving range of 100
miles for ``natural gas dual energy'' passenger automobiles. NHTSA did
not specify higher ranges because it was concerned that such ranges
could discourage manufacturers from producing dual fueled vehicles,
since the manufacturers would need to redesign their vehicles to
accommodate additional or larger fuel tanks in order to meet the higher
ranges.
In part 538, NHTSA also established procedures by which
manufacturers may petition the agency to establish a lower driving
range for a specific model or models of ``natural gas dual energy''
passenger automobiles and by which the agency may grant or deny such
petitions.
C. Energy Policy Act of 1992
The Energy Policy Act of 1992 amended section 513 of the Cost
Savings Act to expand the scope of the alternative fuels it promotes.
The amended section provided incentives for the production of vehicles
using, in addition to alcohol and natural gas, liquified petroleum gas,
hydrogen, coal derived liquid fuels, fuels (other than alcohol) derived
from biological materials, electricity (including electricity from
solar energy), and any fuel NHTSA determines, by rule, is substantially
not petroleum and would yield substantial energy security benefits and
substantial environmental benefits.
Section 513 continued to provide incentives for the production of
dual fuel vehicles, i.e., vehicles that operate on one of a now
expanded list of alternative fuels and on gasoline or diesel fuel.
NHTSA notes that some statutory terminology was changed by the 1992
amendments. Among other things, the terms ``dual energy'' and ``natural
gas dual energy'' were dropped, and the terms ``alternative fueled
automobile,'' ``dedicated automobile,'' and ``dual fueled automobile''
were added.
Section 513 also continued to require dual fueled passenger
automobiles to meet specified criteria, including meeting a minimum
driving range, in order to qualify for the special treatment in the
calculation of their fuel economy for purposes of the CAFE standards.
One change made by the 1992 amendments concerning driving ranges
was that, under section 513(h)(2), the minimum driving range set by
NHTSA may not be less than 200 miles for dual fueled passenger
automobiles other than electric vehicles. The amendments also provided
that the agency may not, in response to petitions from manufacturers,
set an alternative range for a particular model or models that is lower
than 200 miles, except for electric vehicles.
The 1992 amendments necessitate amending part 538. First, the
existing 100 mile minimum driving range for vehicles previously
categorized as ``natural gas dual energy'' vehicles must be raised to
at least 200 miles. Also, NHTSA must establish a minimum driving range
for the expanded scope of dual fueled vehicles. Part 538's petition
procedures also need to be amended to conform to the new statutory
provisions.
In addition to necessitating amendments to part 538's driving range
provisions, the 1992 amendments also require NHTSA to ``determine the
appropriate gallons equivalent measurement for gaseous fuels other than
natural gas * * *.'' Such a measurement is needed to carry out the
special fuel economy calculations that apply to alternative fuel
vehicles.
Proposal
In this document, NHTSA is proposing to amend part 538 to make it
consistent with the 1992 amendments to the Cost Savings Act. As
discussed below, the agency is proposing to set the minimum driving
range for all dual fueled passenger automobiles other than electric
vehicles at 200 miles. NHTSA is also proposing to remove the petition
procedures until it sets a minimum driving range for electric dual
fueled passenger automobiles.
The agency notes that, due to the complexity of the issues relating
to establishment of a minimum driving range for electric dual fueled
passenger automobiles, otherwise known as hybrid electric vehicles, it
is addressing that issue in a separate rulemaking. On September 22,
1994, NHTSA published in the Federal Register (59 FR 48589) a request
for comments seeking information that would help it develop a proposal
in that area.
The agency is also proposing in this document to add to Part 538,
gallons equivalent measurements for compressed natural gas, liquefied
natural gas, liquefied petroleum gas, hydrogen, and hythane.
NHTSA notes that, on July 5, 1994, the Cost Savings Act was revised
and codified ``without substantive change.'' The provisions formerly
found in section 513 of the Cost Savings Act are now at 49 U.S.C.
32901, 32905, and 32906.
A. Minimum Driving Range for Dual Fueled Passenger Automobiles Other
Than Electric Vehicles
In light of the 1992 amendments to the Cost Savings Act, NHTSA is
proposing to set the minimum driving range for dual fueled passenger
automobiles other than electric vehicles at 200 miles.
As before, the agency is required to consider the following factors
in prescribing a minimum driving range: The purposes of the Alternative
Motor Fuels Act of 1988, consumer acceptability, economic
practicability, technology, environmental impact, safety, driveability,
performance, and any other factors considered relevant. Moreover, given
the purposes of the Alternative Motor Fuels Act and its legislative
history, NHTSA continues to believe that the minimum driving ranges
should be low enough to encourage the production of dual fueled
passenger automobiles, yet not so low that motorists would be
discouraged by a low driving range from actually fueling their vehicles
with the alternative fuels.
As discussed above, NHTSA addressed the appropriate level for
minimum driving range in April 1990. The agency believes that the only
relevant changed conditions since that time are: (1) the decision by
Congress to require the minimum driving range for dual fueled passenger
automobiles other than electric vehicles to be at least 200 miles, and
(2) the expanded scope of dual fueled passenger automobiles for which a
minimum driving range must be established.
Part 538 currently specifies a minimum driving range of 200 miles
for alcohol dual fueled passenger automobiles. The agency does not
believe that any relevant events have occurred since that range was
established that should lead to a different range. NHTSA notes that
alcohol dual fueled vehicles are designed so that the same fuel tank is
used for either alcohol or gasoline. The available space in a passenger
automobile for fuel tanks is limited. In setting a driving range of 200
miles for these vehicles, the agency was concerned that a higher
minimum range could require some automobiles to be redesigned to
accommodate larger fuel tanks, thereby discouraging the production of
such vehicles.
NHTSA believes that the same considerations that apply to alcohol
dual fueled vehicles also apply to ones fueled by other liquids. The
agency is unaware of any other potentially available liquid alternative
fuels that would have a significantly higher energy content than
alcohol on a volume basis. Assuming that other liquid alternative fuels
do not have a significantly higher energy content, a driving range
greater than 200 miles for dual fueled passenger automobiles using any
liquid fuel could necessitate redesign of the vehicles to accommodate a
larger fuel tank. The agency requests comments on whether there are any
potentially available liquid alternative fuels that do have a
significantly higher energy content than alcohol on a volume basis,
and, if so, whether a driving range higher than 200 miles should be set
for such fuels. Depending on the comments, the agency may set a higher
driving range for such vehicles.
The above discussion assumes that the same fuel tank could be used
for both the alternative liquid fuel and gasoline, as is the case for
alcohol dual fueled vehicles. If a separate fuel tank were required for
the alternative liquid fuel, the limited available space in a passenger
automobile for such an additional tank would be an even more critical
reason not to set the minimum driving range above 200 miles.
Gaseous fuels always require a separate fuel tank from gasoline or
diesel fuel. In the previous rulemaking concerning minimum driving
range, the agency's concerns about the limited available space in a
passenger automobile for additional fuel tanks led it to establish a
100 mile minimum driving range for natural gas dual fueled vehicles.
Given the 1992 amendments to the Cost Savings Act, NHTSA has
tentatively concluded that the minimum driving range for these vehicles
should be increased to 200 miles. As discussed above, the agency cannot
set a lower minimum driving range for these vehicles. Moreover, NHTSA
believes that the minimum range should not be greater than 200 miles
because such a range could discourage manufacturers from producing
natural gas dual fueled vehicles, given the limited available space for
additional fuel tanks. The agency notes that the concerns it expressed
in 1990 about a driving range greater than 100 miles for these vehicles
would be of even greater significance for ranges above 200 miles.
The same considerations that apply to natural gas dual fueled
vehicles also apply to dual fueled vehicles using other gaseous fuels,
since all of these vehicles require a separate fuel tank from gasoline
or diesel fuel. Therefore, the agency is proposing to establish a 200
mile driving range for these vehicles as well.
B. Proposed Gallon Equivalents for Gaseous Fuels
In order to carry out the special procedures for fuel economy
calculations that apply to alternative fuel vehicles, it is necessary,
for gaseous fuel vehicles, to have a gallons equivalent measurement.
The 1992 amendments to the Cost Savings Act specified that 100 cubic
feet of natural gas is deemed to contain 0.823 gallon equivalent of
gasoline. The 1992 amendments required NHTSA to determine the
appropriate gallons equivalent measurement for gaseous fuels other than
natural gas, and a gallon equivalent of such gaseous fuel shall be
considered to have a fuel content of 15 one-hundredths of a gallon of
fuel.
As part of determining appropriate gallons equivalent measurements
for gaseous fuels, NHTSA consulted with the Department of Energy (DOE)
Fuels Utilization Data and Analysis Division. NHTSA and DOE agreed that
the following gaseous fuels could be potential transportation fuels by
2008: liquefied natural gas (LNG), liquefied petroleum gas (LPG), and
hydrogen.
Pursuant to a contract with DOE, Abacus Technology Corporation
prepared a report titled ``Energy Equivalent Values of Three
Alternative Fuels: Liquefied Natural Gas, Liquefied Petroleum Gas, and
Hydrogen.'' This report is available for review at the docket number
cited in the heading of this notice. The Abacus report develops gallons
equivalent measurements for LNG, LPG, and hydrogen gaseous fuels.
After reviewing the Abacus report, the Environmental Protection
Agency (EPA) Office of Mobile Sources recommended adding hythane fuel
(a mixture of hydrogen and natural gas (principally methane)) as a
gaseous fuel for which a gallon equivalent should be calculated. EPA
stated that although hythane is currently being used and evaluated on a
limited basis, there is a possibility that hythane fuel may become
commercially available as a gaseous fuel. In a follow-up report, which
is also available in the docket, Abacus developed an appropriate gallon
equivalent measurement for hythane.
NHTSA notes that Abacus recommended using lower heating values for
deriving the gallons equivalent measurements for gaseous fuels because
this value represents the energy available from combustion in an
engine.
1. Liquefied Natural Gas (LNG)
The first Abacus report noted that the Alternative Motor Fuels Act
of 1988 included natural gas as an alternative fuel, but did not
specify its physical state as a compressed gas or a liquefied gas. The
report assumed that the Act was referring to compressed natural gas,
which was the more familiar technology when the Act was passed. The
Abacus report recommended that the same 0.823 gallon equivalent of
natural gas established in the Alternative Motor Fuels Act be applied
to LNG based on energy content in British Thermal Unit (BTU)/Standard
Cubic Feet (SCF), because LNG composition and heat of combustion are
similar to compressed natural gas.
2. Liquefied Propane Gas (LPG)
The Gas Processors Association Standard 2140-92 specifies four
grades of LPG. They are commercial propane, commercial butane,
commercial butane-propane mixtures, and propane HD-5. Propane HD-5 is
recognized as the most suitable fuel for internal combustion engines
operating at moderate to high engine severity. The Abacus report
concluded that one gallon of LPG, grade HD-5, is equivalent to 0.732
gallon of gasoline, using a lower heating value.
3. Hydrogen
The Abacus report concluded that the gallon equivalent of 100 SCF
of hydrogen is 0.240, using a lower heating value.
4. Hythane
Hythane is a combination of two gaseous fuels: hydrogen and natural
gas. Most of the experimental engine work involves the mixtures of 85
volume percent natural gas and 15 volume percent hydrogen (Hy5). The
maximum concentration of hydrogen that can be used without potentially
causing engine problems, such as backfiring, is 15 percent (5 percent
energy content). The second Abacus report concluded that the gallon
equivalent of 100 SCF of this hythane mixture is 0.725 using the lower
heating value.
NHTSA is proposing to adopt the gallons equivalent measurements for
LNG, LPG, hydrogen, and hythane recommended by the Abacus reports. The
agency requests comments on the methodology used to determine the
proposed gallons equivalent measurements. NHTSA also requests comments
on whether any other gaseous fuel may potentially be used in
automobiles in the foreseeable future, and thus, whether gallons
equivalents for any other gaseous fuels should be established.
NHTSA plans to add the gallons equivalent measurements to Part 538.
The agency is proposing a new name for this part to reflect its
expanded scope.
Regulatory Impacts
A. Executive Order 12866 and DOT Regulatory Policies and Procedures
This notice has not been reviewed under Executive Order 12866.
NHTSA has considered the impact of this rulemaking action and has
determined that the action is not ``significant'' under the Department
of Transportation's regulatory policies and procedures. In this NPRM,
the agency proposes to set the minimum driving range for all dual
fueled passenger automobiles other than electric vehicles at 200 miles
and to establish gallon equivalents for specified gaseous fuels. None
of the proposed changes will result in an additional burden on
manufacturers. They would not impose any mandatory requirements but
would instead implement statutory incentives to encourage the
manufacture of alternative fuel vehicles. For these reasons, NHTSA
believes that any impacts on manufacturers will be so minimal as not to
warrant preparation of a full regulatory evaluation.
B. Regulatory Flexibility Act
The agency has also considered the effects of this rulemaking
action under the Regulatory Flexibility Act. I certify that this
proposed rule, if made final, will not have a significant economic
impact on a substantial number of small entities. The rationale for
this certification is that, to the extent that any passenger automobile
manufacturers qualify as small entities, their number would not be
substantial. Moreover, conversion of vehicles to dual fuel status with
the minimum ranges that would be established by this regulation would
be voluntarily undertaken in order to achieve beneficial CAFE treatment
of those vehicles. Therefore, no significant costs would be imposed on
any manufacturers or other small entities.
C. National Environmental Policy Act
The agency has also analyzed this rule for the purpose of the
National Environmental Policy Act, and determined that it would not
have any significant impact on the quality of the human environment.
Increased evaporative emissions due to added fuel volume would be the
most important environmental impact of this rulemaking if it induced
manufacturers to enlarge the size of existing fuel tanks in order to
produce dual fuel vehicles operating on alcohol or other liquid fuel.
However, the proposed minimum range would not make it necessary for
these dual fuel vehicles to have enlarged fuel tanks. Natural gas and
other gaseous dual fueled automobiles will not expect to increase
evaporative emissions since gaseous tanks do not normally vent to the
atmosphere.
D. Paperwork Reduction Act
The procedures in this proposed rule for passenger automobile
manufacturers to petition for lower driving ranges are considered to be
information collection requirements as that term is defined by the
Office of Management and Budget (OMB) in 5 CFR part 1320. The
information collection requirements for part 538 have been submitted to
and approved by the OMB, pursuant to the Paperwork Reduction Act (44
U.S.C. 3501 et seq.) This collection of information has been assigned
OMB Control No. 2127-0554. (Minimum Driving Ranges for Dual Energy
Passenger Automobiles) and has been approved for use through June 30,
1996.
E. Federalism
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612, and it has been determined
that the rule does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment.
F. Civil Justice Reform
This proposed rule would not have any retroactive effect and it
does not preempt any State law. 49 U.S.C. 32909 sets forth a procedure
for judicial review of automobile fuel economy regulations. That
section does not require submission of a petition for reconsideration
or other administrative proceedings before parties may file suit in
court.
Public Comments
NHTSA solicits public comments on the issues presented in this
notice. It is requested, but not required, that 10 copies be submitted.
All comments must not exceed 15 pages in length (49 CFR 553.21).
Necessary attachments may be appended to these submissions without
regard to the 15 page limit. This limitation is intended to encourage
commenters to detail their primary arguments in a concise fashion.
If a commenter wishes to submit certain information under a claim
of confidentiality, three copies of the complete submission, including
purportedly confidential business information, should be submitted to
Chief Counsel, NHTSA, at the street address given above, and seven
copies from which the purportedly confidential information has been
deleted should be submitted to the Docket Section. A request for
confidentiality should be accompanied by a cover letter setting forth
the information specified in the agency's confidential business
information regulation (49 CFR part 512).
All comments received before the close of business on the comment
closing date indicated above for the NPRM will be considered, and will
be available for examination in the docket at the above address both
before and after that date.
To the extent possible, comments filed after the closing date will
also be considered. Comments received too late in regard to the final
rule will be considered as suggestions for further rulemaking action.
Comments on this notice will be available for inspection in the docket.
NHTSA will continue to file relevant information as it becomes
available in the docket after the closing date, and it is recommended
that interested persons continue to examine the docket for new
material.
Those persons desiring to be notified upon receipt of their
comments in the rules docket should enclose a self-addressed, stamped
postcard in the envelope with their comments. Upon receiving the
comments, the docket supervisor will return the postcard by mail.
List of Subjects in 49 CFR Part 538
Energy conservation, Gasoline, Imports, Motor vehicles.
In consideration of the foregoing, 49 CFR part 538 would be revised
to read as follows:
PART 538--[REVISED]
1. Part 538 would be revised to read as follows:
PART 538--MANUFACTURING INCENTIVES FOR ALTERNATIVE FUEL VEHICLES
Sec.
538.1 Scope.
538.2 Purpose.
538.3 Applicability.
538.4 Definitions.
538.5 Minimum driving range.
538.6 Measurement of driving range.
538.7 [Reserved]
538.8 Gallon Equivalents for Gaseous Fuels.
Authority: 49 U.S.C. 32901, 32905, and 32906; delegation of
authority at 49 CFR 1.50.
Sec. 538.1 Scope.
This part establishes minimum driving range criteria to aid in
identifying passenger automobiles that are dual fueled automobiles. It
also establishes gallon equivalent measurements for gaseous fuels other
than natural gas.
Sec. 538.2 Purpose.
The purpose of this part is to specify one of the criteria in 49
U.S.C. chapter 329 ``Automobile Fuel Economy'' for identifying dual
fueled passenger automobiles that are manufactured in model years 1993
through 2004. The fuel economy of a qualifying vehicle is calculated in
a special manner so as to encourage its production as a way of
facilitating a manufacturer's compliance with the Corporate Average
Fuel Economy Standards set forth in part 531 of this chapter. The
purpose is also to establish gallon equivalent measurements for gaseous
fuels other than natural gas.
Sec. 538.3 Applicability.
This part applies to manufacturers of automobiles.
Sec. 538.4 Definitions.
(a) Statutory terms. (1) The terms alternative fuel, alternative
fueled automobile, and dual fueled automobile, are used as defined in
49 U.S.C. 32901(a).
(2) The terms automobile and passenger automobile, are used as
defined in 49 U.S.C. 32901(a), and in accordance with the
determinations in part 523 of this chapter.
(3) The term manufacturer is used as defined in 49 U.S.C.
32901(a)(13), and in accordance with part 529 of this chapter.
(4) The term model year is used as defined in 49 U.S.C.
32901(a)(15).
(b)(1) Other terms. The terms average fuel economy, fuel economy,
and model type are used as defined in subpart A of 40 CFR part 600.
(2) The term EPA means the U.S. Environmental Protection Agency.
Sec. 538.5 Minimum driving range.
(a) The minimum driving range that a passenger automobile must have
in order to be treated as a dual fueled automobile pursuant to 49
U.S.C. 32901(c) is 200 miles when operating on its nominal usable fuel
tank capacity of the alternative fuel, except when the alternative fuel
is electricity.
(b) [Reserved]
Sec. 538.6 Measurement of driving range.
The driving range of a passenger automobile model type is
determined by multiplying the combined EPA city/highway fuel economy
rating when operating on the alternative fuel, by the nominal usable
fuel tank capacity (in gallons), of the fuel tank containing the
alternative fuel. The combined EPA city/highway fuel economy rating is
the value determined by the procedures established by the Administrator
of the EPA under 49 U.S.C. 32904 and set forth in 40 CFR part 600.
Sec. 538.7 [Reserved]
Sec. 538.8 Gallon equivalents for gaseous fuels.
The gallon equivalent of gaseous fuels, for purposes of
calculations made under 49 U.S.C. 32905, are listed in Table I:
Table I.--Gallon Equivalent Measurements for Gaseous Fuels per 100
Standard Cubic Feet
------------------------------------------------------------------------
Gallon
Fuel equivalent
measurement
------------------------------------------------------------------------
Compressed natural gas..................................... .823
Liquefied natural gas...................................... .823
Liquefied petroleum gas (grade HD-5)....................... .732
Hydrogen................................................... .240
Hythane (Hy5).............................................. .725
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Issued on: December 13, 1994.
Barry Felrice,
Associate Administrator for Rulemaking.
[FR Doc. 94-31079 Filed 12-16-94; 8:45 am]
BILLING CODE 4910-59-P