[Federal Register: March 14, 2008 (Volume 73, Number 51)]
[Rules and Regulations]
[Page 13729-13740]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr08-1]
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[[Page 13729]]
DEPARTMENT OF ENERGY
10 CFR Part 490
RIN 1904-AB69
Alternative Fuel Transportation Program; Private and Local
Government Fleet Determination
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy (DOE).
ACTION: Final determination.
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SUMMARY: Pursuant to the Energy Policy Act of 1992 (EPAct 1992), the
Department of Energy (DOE) has determined that a regulatory requirement
for the owners and operators of certain private and local government
fleets to acquire alternative fueled vehicles (AFVs) is not necessary
to achieve the recently modified EPAct 1992 Replacement Fuel Goal. DOE
therefore has determined that it cannot issue a requirement for certain
private and local government fleets to acquire alternative fueled
vehicles.
DATES: Effective Date: This determination is effective April 1, 2008.
FOR FURTHER INFORMATION CONTACT: For information concerning this final
determination, contact Mr. Dana V. O'Hara, Office of Energy Efficiency
and Renewable Energy (EE-2G), U.S. Department of Energy, 1000
Independence Avenue, SW., Washington, DC 20585-0121; (202) 586-9171;
regulatory_info@afdc.nrel.gov; or Mr. Chris Calamita, Office of the
General Counsel, U.S. Department of Energy, 1000 Independence Avenue,
SW., Washington, DC 20585-0121; (202) 586-9507.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Background
III. Discussion of Public Comments
A. Comments on Proposed Determination
B. Comments on Analysis for the Potential Impact of the Rule
C. Comments on What Fleets and Other Organizations Are Doing To
Reduce Petroleum Use
D. Comments Providing Suggestions for DOE, Other Agencies, or
Congress
IV. Definitions and Statutory Requirements
A. Definitions
B. Key Statutory Requirements
C. Other Relevant Requirements
D. No Fuel Use Requirement Authority
V. Analysis for Private and Local Fleets Rule Determination
A. Achievability of the Replacement Fuel Goal
B. Potential Contribution of a Private and Local Government
Fleet Requirement to the Production Capacity of Alternative Fuel
VI. Determination
VII. Regulatory Review
VIII. Approval By the Office of the Secretary
I. Introduction
Under the Energy Policy Act of 1992 (EPAct 1992; Pub. L. 102-486),
DOE is required to determine if a requirement for certain private and
local government vehicle fleets to acquire alternative fueled vehicles
(AFVs) is necessary, as specified in EPAct 1992. (42 U.S.C. 13257(e))
If DOE determines that the Private and Local Government Fleet
Requirement is ``necessary,'' then DOE must issue regulations requiring
certain fleets to acquire light-duty AFVs annually. (42 U.S.C.
13257(g)) Fleets subject to such a mandate would include all fleets
that have at least 50 light duty motor vehicles, and would exclude
Federal fleets, State fleets, and fleets covered under the Alternative
Fuel Provider mandate. (42 U.S.C. 13257(g)(1)) If DOE determines that
the Private and Local Government Fleet Requirement is not necessary
then DOE must publish such determination in the Federal Register as a
final agency action, including an explanation of the findings on which
such a determination is made and the basis for the determination. (42
U.S.C. 13257(f))
Relevant to the evaluation of a Private and Local Government Fleet
Requirement is the replacement fuel goal established in section 502(b)
of EPAct 1992. (42 U.S.C. 13252(b)) Section 502(b)(2) establishes goals
of producing sufficient replacement fuels to replace:
at least ten percent by the year 2000, and
at least thirty percent by the year 2010
of the projected consumption of motor fuel in the United States for
each such year, with at least half of such replacement fuels being
domestic fuels. (Replacement Fuel Goal; 42 U.S.C. 13252(b)(2)) Under
section 504(b) of EPAct 1992, if DOE determines that the section 502
goals are unachievable, DOE must establish achievable goals. (42 U.S.C.
13254(b))
In determining whether to establish a Private and Local Government
Fleet Requirement, DOE is directed to determine if such a requirement
is ``necessary.'' (42 U.S.C. 13257(e)(1)) The ``necessity''
determination is a two part test. First, DOE must determine if the
Replacement Fuel Goal established under section 502, or as modified
under section 504 of EPAct 1992, is achievable absent a Private and
Local Government Fleet Requirement. (42 U.S.C. 13257(e)(1)(A)) Next,
the ``necessity'' determination requires DOE to determine if such a
goal is practicable and actually achievable through implementation of a
Private and Local Government Fleet Requirement in combination with
voluntary means and other relevant programs. (42 U.S.C. 13257(e)(1)(B))
If DOE determines that the Replacement Fuel Goal is not achievable
absent the Private and Local Fleet Requirement, and that such goal
would be practicable and actually achievable through implementation of
such a requirement, DOE must then establish the Private and Local Fleet
Requirement under section 507(g). (42 U.S.C. 13257(e)(1)) If either of
these findings cannot be made, then DOE is precluded from establishing
the Private and Local Fleet Requirement under section 507(g).
Under the Private and Local Government Fleet provisions, if DOE
initiates a rulemaking under section 507(g), DOE is again directed to
determine whether to modify the Replacement Fuel Goal. (42 U.S.C.
13257(e)(2)) If the Replacement Fuel Goal is not achievable, DOE has to
set a Replacement Fuel Goal that is achievable. (42 U.S.C. 13257(e)(2))
In a previous rulemaking, DOE has already determined that the
original Replacement Fuel Goal of 30 percent in 2010 is not achievable
and a modified Replacement Fuel Goal of 30 percent by 2030 was
published March 15, 2007. 72 FR 12042. The purpose of today's document
is to determine whether or
[[Page 13730]]
not the Private and Local Government Fleet Requirement is necessary to
achieve the modified Replacement Fuel Goal.
DOE has determined that it is not ``necessary'' to promulgate a
regulation requiring private and local government fleets to acquire
AFVs. DOE has determined that establishment of a Private and Local
Government Fleet Requirement is not required for achievement of the
Replacement Fuel Goal of 30 percent of U.S. motor fuels by 2030, as
modified by DOE in March 2007. 72 FR 12041. As discussed below, this
determination is based on DOE's analysis in revising the Replacement
Fuel Goal, under which DOE demonstrated a pathway to achieve the
modified Replacement Fuel Goal without establishment of a Private and
Local Government Fleet Requirement. 72 FR 12041. Additionally, DOE also
provides an analysis demonstrating that were a Private and Local
Government Fleet Requirement established, the number of fleets
potentially covered by such a requirement, the number of AFVs likely to
be acquired, and the amount of U.S. motor fuel likely displaced would
not make an appreciable contribution towards achieving the modified
Replacement Fuel Goal.
Today's document implements the March 6, 2006, order of the U.S.
District Court for Northern District of California to prepare and
publish a determination on the Private and Local Government Fleets
rule. See Center for Biological Diversity v. U.S. Department of Energy
et al., C 05-01526 WHA (N.D. Cal. 2006) (Order Re Timing of Relief).
II. Background
On January 2, 2002, EarthJustice, on behalf of the Center for
Biological Diversity, Bluewater Network, and Sierra Club, filed a
lawsuit in the U.S. District Court for the Northern District of
California that, in part, sought to compel DOE to ``issue a proposed
rule and final determination on the necessity of a private and
municipal fleet program.'' (Plaintiffs Complaint for Injunctive and
Declaratory Relief, pg 55, paragraph 171, dated January 2, 2002). On
July 26, 2002, the Court granted plaintiffs' motion for summary
judgment on the issue of whether DOE had missed the deadline set forth
in EPAct 1992 section 507(e) for completing the rulemaking. See Center
for Biological Diversity v. Abraham, et al., (218 F.Supp.2d 1143 (N.D.
Cal., 2002)). On September 27, 2002, the District Court ordered DOE to
complete its proposed rulemaking by January 27, 2003, and its final
rule by November 27, 2003.See Center for Biological Diversity v.
Abraham, et al., No. C 02-00027 (N.D. Cal., 2002). On January 17, 2003,
the Court subsequently granted a 30-day extension (to February 26,
2003) of the deadline for DOE to complete work on the notice of
proposed rulemaking. (Center for Biological Diversity v. Abraham, et
al., No. C 02-00027 (N.D. Cal., 2002), Order No. 55 (Entered 01/23/
2003)).
On March 4, 2003, as required by section 507 of EPAct 1992 and in
accordance with the Court order under Center for Biological Diversity
v. Abraham, et al., DOE issued a notice of a proposed determination
regarding the Private and Local Fleet Requirement, in which DOE
tentatively determined that a requirement was not ``necessary,'' and
therefore should not be imposed. 68 FR 10320. DOE finalized the
proposed determination that a regulation requiring private and local
government fleets to acquire AFVs is not ``necessary'' and, therefore,
cannot be promulgated, which was published January 29, 2004. 69 FR
4219. The necessity determination was based on DOE's findings that a
private and local government fleet vehicle acquisition mandate would
not appreciably increase the percentage of alternative fuel or
replacement fuel used in motor vehicles in the United States and thus
would make no more than a negligible contribution to the achievement of
EPAct 1992's existing 2010 Replacement Fuel Goal of 30 percent, or of a
revised Replacement Fuel Goal were one adopted.
Subsequent to the publication of the January 29, 2004, final rule,
DOE was sued in Federal court by the Center for Biological Diversity
and Friends of the Earth for failing to impose a private and local
government fleet acquisition mandate and for not revising the
replacement fuel production goal for 2010 as part of its determination.
On March 6, 2006, the U.S. District Court for the Northern District of
California vacated DOE's final determination regarding the Private and
Local Government Fleet Mandate. See Center for Biological Diversity v.
U.S. Department of Energy et al., 419 F.Supp. 2d 1166 (N.D. Cal 2006).
The Court directed DOE to prepare notices of proposed rulemaking and
final rules on both the Replacement Fuel Goal for 2010 and the private
and local government fleet determination. See Center for Biological
Diversity v. U.S. Department of Energy et al., C 05-01526 WHA (N.D.
Cal. 2006) (Order Re Timing of Relief).
On September 19, 2006, DOE published a notice announcing its
proposed determination that the EPAct 1992 Replacement Fuel Goal of 30
percent by 2010 was not achievable and announced its proposal to extend
the time for achieving the 30 percent replacement fuel production
capacity goal to 2030. 71 FR 54771. In that notice, DOE evaluated four
scenarios that identified projected replacement fuel capacities of 8.65
percent, 17.84 percent, 35.25 percent, and 47.06 percent, by 2030.
(Updated analyses conducted for the final rule resulted in the first
and third of these becoming 7.38 percent and 33.13 percent,
respectively.) These projections reflected considerations of numerous
variables including oil prices, technological breakthroughs, and market
acceptance. The modified goal proposed by DOE fell in the mid-range
among these scenarios.
On January 23, 2007, the President, in his State of the Union
Address, proposed replacing 20 percent of the projected gasoline usage
in 10 years (``Twenty in Ten'' initiative). The first element was to
increase the use of alternative fuels to 35 billion gallons in 2017,
reducing projected gasoline consumption by 15 percent, through
advancements in many fields including cellulosic ethanol, butanol, and
biodiesel. In the second element of ``Twenty in Ten,'' the President
asked Congress to give the Administration authority to reform the fuel
efficiency standards for passenger cars, which could save another 5
percent of U.S. projected gasoline usage in 2017.
On March 15, 2007, DOE published a final rule for the Replacement
Fuel Goal. 72 FR 12041. In the final rule, DOE determined that the
EPAct 1992 goal of establishing sufficient replacement fuel production
capacity to replace 30 percent on an energy equivalent basis of all
U.S. motor fuel by 2010 was not achievable. This determination was
based on a similar evaluation of the projected U.S. production capacity
of replacement fuels as was presented in the notice of proposed
rulemaking. The Replacement Fuel Goal final rule extended the 30
percent Replacement Fuel Goal out to 2030 based on an analysis similar
to that presented in the notice of proposed rulemaking. The Replacement
Fuel Goal final rule complied with DOE's obligation under section
504(b) of EPAct 1992 to ``establish goals that are achievable, for the
purposes of this title.'' (42 U.S.C. 13254(b))
On September 14, 2007, DOE published a proposed determination in
which DOE preliminarily determined that a Private and Local Government
Fleet Rule was not necessary to meet the revised Replacement Fuel Goal.
72 FR
[[Page 13731]]
52496. DOE requested comment on the proposed determination and held a
public meeting. The comments received are discussed below.
Following publication of the proposed notice of a determination,
and partially in response to the President's Twenty in Ten initiative,
Congress passed and on December 19, 2007, President Bush signed into
law the Energy Independence and Security Act of 2007 (Pub. L. 110-140;
EISA 2007). The most significant elements of EISA 2007 in the context
of the EPAct 1992 fleet programs follow the framework of Twenty in Ten,
by calling for greater use of non-petroleum fuels and increases in
light-duty vehicle fuel economy. Specifically, EISA 2007 calls for:
An increase in the Renewable Fuel Standard required under
Clean Air Act to 36 billion gallons per year by 2022 (42 U.S.C.
7545(o)(2));
An increase in Corporate Average Fuel Economy (CAFE) to 35
miles per gallon by 2020 (42 U.S.C. 32902(b));
Extending CAFE credits for flexible fuel vehicle
manufacturing through 2019 (fully through 2014, and ramping down in
amount of credit through 2019);
Federal fleets to reduce petroleum consumption, increase
alternative fuel use, and install renewable fuel infrastructure; and
The inclusion of certain vehicle types and activities
(e.g., hybrids, neighborhood electric vehicles, alternative fuel
refueling infrastructure, and investments in technology development) to
the list of vehicles and activities that can qualify for acquisition
credit for certain EPAct fleets.
Each of these elements, but in particular the significant expansion
of the Renewable Fuel Standard and the revised CAFE requirements, will
greatly increase the achievability of the revised Replacement Fuel
Goal, thus strengthening DOE's preliminary determination that a Private
and Local Government Fleet Rule would not be necessary to meet the
revised Replacement Fuel Goal. For this reason, DOE concluded that the
provisions of EISA 2007 did not materially affect the analysis or
conclusions described in the September 2007 NOPR or in this final
determination.
III. Discussion of Public Comments
In response to DOE's September 2007 NOPR, four statements were
provided at the public hearing, and twelve written comments were
submitted. The following organizations provided statements at the
hearing: American Automotive Leasing Association (AALA), Donlen
Corporation, the National Association of Fleet Administrators (NAFA),
and PHH/Arval. AALA; Associated Builders and Contractors, Inc.; the
Automotive Fleet and Leasing Association (AFLA); Automotive Resources
International (ARI); General Electric; LeasePlan USA; Mohawk
Industries, Inc.; Natural Gas Vehicle America (NGVAmerica); PHH Arval;
ServiceMaster; Small Business and Entrepreneurship Council; and Wheels,
Inc. submitted written statements. It should be noted that the Mohawk
Industries, Inc. comments were submitted three days after the deadline.
While DOE chose to review Mohawk's comments, they were in line with
virtually all the other comments submitted, and therefore did not
materially impact DOE's decision in this final determination.
All statements and comments submitted agreed with the Department's
preliminary determination that a Private and Local Government Fleet
Requirement is not ``necessary'' and that a fleet rule is not to be
promulgated. It should be noted, however, that six of the written
submissions appeared to largely be form letters with slight variations,
based upon the rationale provided by AALA. These included: AFLA;
LeasePlan USA; Mohawk Industries, Inc; PHH/Arval; ServiceMaster; and
Wheels, Inc.
A. Comments on Proposed Determination
In general, all of the comments received, both through the public
meeting and the comment period, supported DOE's proposed determination
not to promulgate a Private and Local Government Fleet Rule. All but
one commenter agreed that a Private and Local Government Fleet Rule was
not necessary to meet the Replacement Fuel Goal (as modified to 30
percent by 2030, 72 FR 12041), and that this goal was achievable. One
commenter, NGVAmerica, did not comment directly on whether such a rule
would be necessary, and instead focused solely on the potential impact
of a Private and Local Government Fleet Rule. NGVAmerica agreed with
DOE's initial conclusion that such a rule would result in a small
amount of additional replacement or alternative fuel use. NGVAmerica
stated that ``such a rule, by itself, would not appreciably increase
levels of alternative fuel use.'' [See NGVAmerica comments, page 3.]
NGVAmerica went on to discuss the many limitations on the overall scope
of and DOE's authority under the Private and Local Government Fleet
Rule (only light-duty vehicles are covered, take-home vehicles are
excluded, alternative fuel use cannot be required, etc.).
Of the other commenters that addressed the potential impact of the
rule in replacement and alternative fuel use, all of these commenters
also agreed with DOE's initial conclusion. No commenters expressed
support for promulgating a fleet rule.
B. Comments on Analysis for the Potential Impact of the Rule
In preparing the NOPR, DOE updated the analysis of the potential
impact of a Private and Local Government Fleet Rule originally
presented as part of a previous determination in 2003, discussed later
in this document. The result of this analysis compared closely with
previously conducted analyses, indicating an expected replacement fuel
contribution of 0.1-0.7 percent. 72 FR 52503.
Three of the four statements provided at the public meeting and
eight of the twelve written comments submitted specifically referred to
this analysis. All but one stated that the analysis is reasonable
without detailed comment. AALA, in more detailed written comments,
conducted a more thorough review of the analysis. While AALA expressed
its general agreement with the approach taken in the analysis, AALA
stated that it believes that the lowest (10 percent) alternative fuel
use rate in the analysis was the most likely scenario given the lack of
DOE's ability to mandate alternative fuel use instead of the modest 25
percent. It then cited a General Accountability Office (GAO) report
(U.S. Postal Service: Vulnerability to Fluctuating Fuel Prices Requires
Improved Tracking and Monitoring of Consumption Information, GAO-07-
244, February 16, 2007) on alternative fuel use by the United States
Postal Service (USPS), pointing out that given USPS' alternative fuel
usage rate of 1.5%, even the 10% utilization rate in the NOPR might be
optimistic. [See AALA written comments, pages 3-10.]
All statements and comments indicated that there was a probable
additional impact from a potential rule, which was not explicitly taken
into account in the analysis provided in the NOPR. This was the
potential of fleets disbanding and changing over to employee
reimbursement programs in the event of a fleet rule. NGVAmerica also
pointed out that it might be expected that some fleets would simply
acquire larger vehicles (above the 8,500 pound Gross Vehicle Weight
Rating cut-off) to avoid acquisition requirements. AALA indicated that
decisions whether to continue fleet operations are highly cost-
sensitive, and thus any change to
[[Page 13732]]
the economics (such as from a rule) could drive fleets to employee
reimbursement. In general, the vast majority of the comments and
statements (including all of those from fleets or fleet management/
leasing organizations) more or less agreed with the rationale provided
for not imposing a rule, AALA contended that fleets would continue to
be able to make the decisions concerning operating fleets and
incorporating AFVs that make sense based upon their particular
circumstances.
AALA also stated that energy and environmental impacts are
typically much less under a managed fleet than under employee
reimbursement programs, because under reimbursement there is no control
over vehicle types utilized or frequency of maintenance. Because
managed fleets have a specific interest in keeping costs down, they are
more likely to acquire the most cost-effective vehicle necessary to
complete a job, and maintain it in a responsible manner. AALA contended
that better maintained vehicles are generally more efficient and have
lower tailpipe emissions.
C. Comments on What Fleets and Other Organizations are Doing To Reduce
Petroleum Use
While all of the fleet organizations who commented on the NOPR
agreed with the proposed determination to not promulgate a rule, they
expressed support for efforts to reduce petroleum use or minimize
environmental impacts emissions from fleet operations. Many indicated
in their comments that they have initiated voluntary efforts within
their organizations to accomplish these objectives.
For example, PHH noted that it is voluntarily implementing a
Greenfleet program (that it established with Environmental Defense). As
described by PHH, it works with fleets to identify ways to reduce
emissions without increasing costs (which actually often results in
lower costs), and focuses on overall outcomes rather than specific
technologies. The key component of the program is the creation of a
greenhouse gas baseline, along with recommendations for reducing or
offsetting emissions through vehicle choice or operation. PHH further
stated that it makes information on the most fuel efficient or cleanest
vehicles easily available to fleets, to help decision-making.
Similarly, Donlen noted that it has already implemented a fuel
management program for customers that monitors fuel economy and can
reduce consumption by up to 15 percent per year. Donlen stated that it
maintains a call center to ensure that vehicles are maintained properly
to reduce consumption, and is collaborating with the Sierra Club on
voluntary measuring and reducing CO2.
GE indicated in its comments that it has developed programs to help
customers reduce energy consumption. ARI indicated that some of its
clients are already reducing carbon emissions, both voluntarily and to
meet government-set goals. LeasePlan has launched GreenPlan, in
partnership with American Forests, which is focused on ``carbon
neutralizing'' its corporate fleet and planting trees in Atlanta and
Chicago. ServiceMaster noted that it is already testing and evaluating
electric lawn care equipment, mild hybrids, and idle reduction
technologies; has already started introducing smaller vehicles; and
will continue to evaluate alternative fuel and advanced technologies.
Mohawk Industries, Inc. noted that it has established programs to
reduce energy and water consumption, and is promoting recycling.
D. Comments Providing Suggestions for DOE, Other Agencies, or Congress
In addition to discussing existing voluntary efforts to reduce
petroleum use or environmental impacts, several organizations provided
suggestions to DOE, other agencies, or Congress to encourage the use of
alternative fuels and to reduce petroleum consumption.
AALA ended its written comments with several recommendations and
statements of principles. First, it indicated that government policies
concerning fleets need to be consistent, which AALA believes they have
not been. AALA indicated that more intergovernmental coordination is
required. Second, AALA stated that future programs should build upon
successful efforts, like EPA's SmartWay program. AALA stated that it
simply does not believe that mandates have been successful. Third, AALA
stated that lack of access to alternative fuel is the current ``choke
point'', and efforts are underway to improve this. Fourth, AALA
expressed a preference for broad-based solutions that include the
general public, not a focus on a narrow band of the market that fleets
represent. Fifth, AALA stated that transitional approaches must be
selected to lessen disruptions. It indicated that a desired path would
be if cost-effective after-market devices were available to allow
retrofitting existing vehicles.
ARI suggested that to encourage petroleum reduction in fleets, the
Federal Government should focus on incentives for deployment of new
vehicle technologies and fuels.
The most extensive list of recommendations was provided by
NGVAmerica, which indicated that such recommendations should be
reported to Congress. In general, NGVAmerica recommended the
development of further support for natural gas as an alternative fuel.
NGVAmerica also recommended that DOE carefully review the recent
California Energy Commission (CEC) report list of policy measures and
regulatory actions. [See State Alternative Fuels Plan--FINAL Committee
Report, publication number CEC-600-2007-011-CTF, October 2007,
available at http://www.energy.ca.gov/2007publications/CEC-600-2007-
011/CEC-600-2007-011-CTF.PDF. In particular, NGVAmerica expressed its
support for CEC's assessment concerning continued needs for incentives,
the benefits of focusing on medium- and heavy-duty vehicles, the need
for R&D, the need for incentives for utilities to increase involvement,
and the need for dedicated funding for infrastructure. All of
NGVAmerica's recommendations are provided in its comment, which can be
viewed at http://www1.eere.energy.gov/vehiclesandfuels/epact/private/
plg-ab69--docket.html.
The suggestions provided by commenters on possible efforts to
reduce petroleum consumption and increase alternative fuel use are
outside the scope of this determination. However, DOE will consider all
of the recommendations under the alternative fuel programs, as
appropriate. DOE will take notice of this information, and review it
and include it as relevant when preparing the report to Congress under
section 509 of EPAct 1992 (42 U.S.C. 13259).
IV. Definitions and Statutory Requirements
A. Definitions
Under EPAct 1992, an ``alternative fuel vehicle'' is a ``dedicated
vehicle or a dual fueled vehicle.'' (42 U.S.C. 13211(3))
A ``dedicated vehicle'' means ``a dedicated automobile, such as the
term is defined in section 513(h)(1)(D) of the Motor Vehicle
Information and Cost Savings Act or a motor vehicle other than an
automobile, that operates solely on alternative fuels.'' (42 U.S.C.
13211(6))
A ``dual fuel vehicle'' is one ``capable of operating on
alternative fuel and on gasoline or diesel fuel.'' (42 U.S.C.
13211(8)(A)) DOE notes that because a dual fueled vehicle can be
operated on
[[Page 13733]]
gasoline or diesel, the purchase of a dual fueled vehicle does not
assure that ``alternative'' or ``replacement'' fuel will be used to
operate the vehicle.
``Replacement fuel'' is defined by EPAct 1992 under section 301(14)
to mean ``the portion of any motor fuel that is methanol, ethanol, or
other alcohols, natural gas, liquefied petroleum gas, hydrogen, coal
derived liquefied fuels, fuels (other than alcohol) derived from
biological materials, electricity (including electricity from solar
energy), ethers, or any other fuel that the Secretary determines meets
certain statutory requirements.'' (42 U.S.C. 13211(14); emphasis added)
``Alternative fuel'' is defined to include many of the same types
of fuels as ``replacement fuel'' (such as methanol, natural gas,
hydrogen and electricity), but also includes certain ``mixtures'' of
petroleum-based fuel and other fuels. (10 CFR 490.2 (2002) \1\) Thus, a
certain mixture might constitute an ``alternative fuel,'' but only the
portion of the fuel that is within the definition of ``replacement
fuel'' would actually constitute ``replacement fuel.'' For example, a
mixture of 85 percent methanol and 15 percent gasoline would, in its
entirety, constitute ``alternative fuel,'' but only the 85 percent that
was methanol would constitute ``replacement fuel.'' Also by way of
example, B20 (a fuel blend typically consisting of approximately 20
percent biodiesel and 80 percent diesel), considered as a total fuel
blend, would not qualify as an ``alternative fuel,'' but the 20 percent
that is biodiesel would qualify as ``replacement fuel.''
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\1\ EPAct defines ``alternative fuel'' (see 42 U.S.C. 13211(2)),
but DOE has exercised its authority to modify, by regulation, this
definition. Therefore, the currently effective definition of
``alternative fuel'' is set forth at 10 CFR 490.2 (2006).
---------------------------------------------------------------------------
For the purpose of considering a Private and Local Government Fleet
Requirement, the term ``covered fleet'' is a ``fleet, other than
Federal fleet, State fleet, or fleet owned, operated, leased, or
otherwise controlled by a covered person under section 501 [of EPAct
1992].'' (42 U.S.C. 13257(g)) This is interpreted to mean all private
and local government fleets not already covered under the existing
fleet requirements program.
A ``fleet'' is defined in section 301(9) of EPAct 1992 as follows:
[T]he term ``fleet'' means a group of 20 or more light duty motor
vehicles, used primarily in a metropolitan statistical area or
consolidated metropolitan statistical area, as established by the
Bureau of the Census, with a 1980 population of more than 250,000,
that are centrally fueled or capable of being centrally fueled and
are owned, operated, leased, or otherwise controlled by a
governmental entity or other person who owns, operates, leases, or
otherwise controls 50 or more such vehicles, by any person who
controls such person, by any person controlled by such person, and
by any person under common control with such person, except that
such term does not include--
(A) Motor vehicles held for lease or rental to the general
public;
(B) Motor vehicles held for sale by motor vehicle dealers,
including demonstration motor vehicles;
(C) Motor vehicles used for motor vehicle manufacturer product
evaluations or tests;
(D) Law enforcement motor vehicles;
(E) Emergency motor vehicles;
(F) Motor vehicles acquired and used for military purposes that
the Secretary of Defense has certified to the Secretary must be
exempt for national security reasons;
(G) Nonroad vehicles, including farm and construction motor
vehicles; or
(H) Motor vehicles which under normal operations are garaged at
personal residences at night.
(42 U.S.C. 13211(9))
EPAct 1992 defines the Replacement Fuel Goal in terms of producing
sufficient replacement fuels to replace, on an energy equivalent basis,
a specified percentage of the projected consumption of motor fuel in
the United States for each such year, with at least one half of such
replacement fuels being domestic fuels. (42 U.S.C. 13252(b)(2))
Section 301(12) of EPAct 1992 defines ``motor fuel'' as ``any
substance suitable as fuel for a motor vehicle.'' (42 U.S.C. 13211(12))
Moreover, the term motor vehicle is defined in section 301(13) of EPAct
1992, through reference to 42 U.S.C. 7550(2), as a self-propelled
vehicle that is designed for transporting persons or property on a
street or highway. (42 U.S.C. 13261(13)) As DOE is required to evaluate
the Replacement Fuel Goals established in section 502(b)(2) in terms of
the capacity of producing sufficient replacement fuels to offset a
certain percentage of U.S. ``motor fuel'' consumption, DOE, for the
purposes of Title V of EPAct 1992, has interpreted the term motor fuel
to include all fuels that are used in motor vehicles. This includes
fuels used in light-, medium-, and heavy-duty on-road vehicles. 71 FR
54771 (September 9, 2006)
B. Key Statutory Requirements
The issue DOE addresses in this final determination is whether a
Private and Local Government Fleet Requirement is ``necessary'' under
section 507(e) of EPAct 1992. (42 U.S.C. 13257(e)(1)) Under section
507(e)(1) a Private and Local Government Fleet shall be promulgated if
DOE determines such a program is ``necessary.'' (42 U.S.C. 13257(e)(1))
A Private and Local Government Fleet Requirement ``shall be considered
necessary'' only if (1) DOE finds that ``the goal of replacement fuel
use * * * is not expected to be actually achieved * * * without such a
fleet requirement program;'' and (2) ``such goal is practicable and
actually achievable * * * through implementation of such a fleet
requirement program in combination with voluntary means and the
application of other programs relevant to achieving such goals.'' (42
U.S.C. 13257(e)(1)(A) and (B))
EPAct 1992 authorizes DOE to conduct two separate rulemakings to
determine whether to promulgate a Private and Local Government Fleet
Requirement. First, section 507(b) directs DOE to conduct an early
rulemaking, to be completed by December 15, 1996. (42 U.S.C. 13257(b))
The deadline for the ``early rulemaking'' passed without final action
and has no continuing relevance. The second rulemaking provision is
under section 507(e), which directs DOE to make a ``necessity''
determination by January 1, 2000. (42 U.S.C. 13257(e)(1)) It is under
section 507(e) that DOE issues today's final determination.
C. Other Relevant Requirements
There are a number of other sections of EPAct 1992 that must be
weighed in considering a potential Private and Local Government Fleet
Requirement, primarily under the second prong of the ``necessity''
determination. These considerations include how such a requirement
would be limited in application and practice, and other considerations
and steps related to the determination process.
Under section 507(i), a promulgated Private and Local Government
Fleet Requirement must provide for an exemption of a fleet from the
applicable requirements on grounds of: (1) Non-availability of
appropriate AFVs and alternative fuels; (2) non-availability of
appropriate alternative fuels; and (3) with respect to local government
entities, financial hardship. (42 U.S.C. 13527(i))
EPAct 1992 furthermore contains a petition provision in section
507(n). That section provides that:
As part of the rule promulgated * * * pursuant to subsection * *
* (g) of this section, the Secretary shall establish procedures for
any fleet owner or operator or motor vehicle manufacturer to request
that the Secretary modify or suspend a fleet requirement program * *
* nationally, by region, or in an applicable fleet area because, as
demonstrated by the petitioner, the infrastructure or fuel supply or
distribution system for an applicable alternative fuel is inadequate
to meet the needs of a fleet.
[[Page 13734]]
(42 U.S.C. 13527(n)) As a result, even to the extent a fleet
constitutes a ``fleet'' under the narrow EPAct 1992 definition, and
does not otherwise qualify for one of the statutory exemptions, it
could petition for relief or suspension of a fleet mandate for any one
of several different reasons.
Section 507(m) of EPAct 1992 requires DOE to consult with the
Secretary of Transportation (DOT), Administrator of the Environmental
Protection Agency (EPA), and other appropriate agencies in carrying out
the requirements of section 507. DOE provided a pre-publication draft
of the proposed determination to DOT, EPA, and the Office of Management
and Budget (OMB) for their review. The analysis presented in today's
final determination is essentially the same as that previously provided
to DOT, EPA, and OMB.
D. No Fuel Use Requirement Authority
It is important to note that the ability of a Private and Local
Government Fleet Requirement to affect petroleum consumption also
depends, in significant part, on whether DOE can require covered fleets
to use alternative or replacement fuels in addition to requiring that
they acquire AFVs. The only explicit requirements for fuel use in EPAct
1992 are contained in section 501(a)(4), which applies only to
alternative fuel provider fleets, and section 302(a)(2) (amending
section 400AA of the Energy Policy and Conservation Act), which applies
only to Federal fleets. (42 U.S.C. 13251(a)(4) and 6374(a)) While not
modifying the specific alternative fuel use requirement for Federal
Fleets under EPAct 1992 Section 302(a)(2) (as modified by EPAct 2005
Section 701), EISA 2007 did include a related provision. Section 141 of
EISA 2007 appears to incorporate into legislation the primary elements
of Executive Order 13423, which required Federal Fleets to reduce
petroleum consumption by 20 percent (2015 vs. 2005), while increasing
use of alternative fuels by 10 percent per year. Thus, while not
specifically going beyond the existing Federal alternative fuel use
requirement from EPAct 1992 and 2005, EISA 2007 did add an additional
overall metric for Federal fleets based upon alternative fuel use.
Section 507 of EPAct 1992, which concerns private and local government
fleets, does not contain any similar provision, nor does it contain a
provision either authorizing DOE to mandate fuel use or explicitly
prohibiting DOE from mandating fuel use.
DOE believes that because Congress specifically required use of
alternative fuel in sections 501(a)(4) and 302(a)(2) of EPAct 1992, but
not in section 507, the omission was deliberate. As a result, DOE
believes that Congress did not intend for DOE, when acting under
section 507, to have authority to promulgate regulations containing a
requirement that fleet vehicles use particular types of fuel.
This interpretation is consistent with Congressman Philip Sharp's
remarks when he called up the conference report on EPAct 1992 for U.S.
House of Representatives approval. Congressman Sharp was one of the key
architects of EPAct 1992, and the floor manager for the bill in the
House of Representatives. Congressman Sharp said:
Under section 501, covered persons must actually run their
alternative fueled vehicles on alternative fuels when the vehicle is
operating in an area where the fuel is available. This requirement
was not included in the fleet requirement program under section 507,
because the conferees were concerned that the alternative fuel
providers might charge unreasonable fuel prices to the fleets that
are not alternative fuel providers if such fleets were required to
use the alternative fuel.
138 Cong. Rec. H11399 at H11400 (October 5, 1992).
V. Analysis for Private and Local Fleets Rule Determination
As stated above, DOE must issue a Private and Local Government
Fleet Requirement if DOE determines that such a requirement is
``necessary.'' (42 U.S.C. 13257(e)(1)) For the purpose of this
determination, a Private and Local Government Fleet Requirement is
necessary if:
i. The Replacement Fuel Goal under section 502(b)(2)(B), or as
modified under section 504, is not actually expected to be achieved
by 2010, or the date established under section 504, without such a
fleet requirement; and
ii. Such a goal is practicable and actually achievable within
the appropriate period, through implementation of such a fleet
requirement in combination with voluntary means and the application
of other programs relevant to achieving such goals.
(42 U.S.C. 13257(e)(1)(A) and (B))
A. Achievability of the Replacement Fuel Goal
As stated above, DOE recently determined that the Replacement Fuel
Goal of 30 percent by 2010 established under section 502(b)(2)(B) is
not achievable. 72 FR 12041. Pursuant to its statutory authority to do
so, DOE established a modified goal by extending the goal date to 2030,
i.e., establishing a Replacement Fuel Goal of 30 percent by 2030. 72 FR
12041. In establishing the modified Replacement Fuel Goal, DOE
determined that such a goal is achievable.
In evaluating and modifying the goal, DOE was directed to balance
considerations to establish goals that are ``achievable.'' (42 U.S.C.
13254(b)) The Replacement Fuel Goal must promote replacement fuels to
the ``maximum extent possible'' while remaining technologically and
economically feasible. (42 U.S.C. 13254(a) and (b)(2)) DOE determined
that the modified goal meets these requirements, for several reasons.
First, DOE based its analysis on the best information available, from
published and peer-reviewed sources. In particular, much of DOE's
analysis was based on the Energy Information Administration's (EIA)
Annual Energy Outlook (AEO) 2005 through 2007. Second, DOE's analysis
generally was based on the current budget and policy framework, under
which many technologies show reasonable potential for success and
market penetration. Thus, the analysis assumed virtually no major new
policies or funding initiatives beyond those already in place. Third
and last, the modified goal balances the minimum and maximum projected
replacement fuel production capacities from several reasonable
scenarios. A complete discussion of the analysis relied on in the final
rule for the modified Replacement Fuel Goal and the supporting
documents can be reviewed at http://www1.eere.energy.gov/
vehiclesandfuels/epact/private/plg--docket.html.
In evaluating a modification to the Replacement Fuel Goal, DOE
analyzed four scenarios to generate a range of potential replacement
fuel production capacities. In none of these scenarios did DOE include
potential increases in alternative fuel production as a result of a
Private and Local Government Fleet Requirement. As such, DOE determined
that the modified Replacement Fuel Goal of 30 percent by 2030 is
expected to be achieved without establishing a Private and Local
Government Fleet Requirement.
Given the determination in the modified Replacement Fuel Goal final
rule that the modified goal is expected to be achieved by 2030 without
a Private and Local Government Fleet Requirement, DOE has determined
that the first prong of the ``necessity'' determination has not been
met.
With the enactment of EISA 2007, the Renewable Fuel Standard has
been significantly expanded to 36B gallons by 2022. In addition,
consumption of petroleum fuels will decrease through the increased CAFE
requirements as a
[[Page 13735]]
result of the Act. Thus, the probability of achieving the revised
Replacement Fuel Goal has been greatly increased, further negating the
need for a Private and Local Government Fleet Rule to meet the Goal.
B. Potential Contribution of a Private and Local Government Fleet
Requirement to the Production Capacity of Alternative Fuel
The second prong of the ``necessity'' determination requires DOE to
determine whether the Replacement Fuel Goal is actually achievable were
a Private and Local Fleet Requirement established. (42 U.S.C.
13257(e)(1)(B)) As stated above, DOE has determined that the modified
Replacement Fuel Goal is achievable. Although DOE has determined that
the Private and Local Government Fleet Requirement is not necessary to
achieve the modified Replacement Fuel Goal, DOE also performed an
initial analysis to estimate the contribution that such a requirement
would make to the Replacement Fuel Goal, if such a requirement were
established. This analysis was revised with the latest information
available for the Final determination.
In the mid-1990s, DOE initially estimated that between 1.7 and 7.3
million AFVs would be acquired over 19 years if a possible Private and
Local Government Fleet Requirement was implemented. The purchases of
AFVs under such a fleet program level out at approximately 400,000 to
500,000 AFVs annually starting in 2010. As discussed below, however,
more detailed analyses showed DOE's initial estimates were probably too
high.
Several follow-up analyses were conducted by DOE from 1996 to 2000
to attempt to determine not just how many AFVs would be required to be
acquired, but more importantly, what the potential contribution of a
Private and Local Government Fleet Requirement would be to replacing
U.S. motor fuel. The limitations on the potential contribution of a
private and local government fleet program to the Replacement Fuel Goal
are discussed in section II above. In brief, however, one DOE report
issued in 1996 estimated that total fuel use from all fleets, including
private and local government fleets, potentially covered by EPAct 1992
fleet programs to be approximately 1.2 percent of U.S. gasoline use.
See Assessment of Costs and Benefits of Flexible and Alternative Fuel
Use in the U.S. Transportation Sector, Technical Report Fourteen:
Market Potential and Impacts of Alternative Fuel Use in Light-Duty
Vehicles: A 2000/2010 Analysis (DOE/PO-0042) (January 1996)
[hereinafter Technical Report 14].
DOE's Section 506 Report \2\ was only slightly more optimistic,
indicating that ``[a]lternative fuel use by EPAct [1992] covered
fleets, even with the contingent mandates for private and local
government fleets, is unlikely to provide more than about 1.5 percent
replacement fuel use[.]'' Section 506 Report at p. 35. In either case,
subtracting the portion of replacement fuel use represented by the
existing (Federal, State, and alternative fuel provider) fleet programs
would leave the potential private and local government fleet program
contribution closer to a maximum of 1 percent.
---------------------------------------------------------------------------
\2\ See Energy Efficiency and Renewable Energy, DOE, Replacement
Fuel and Alternative Fuel Vehicle--Technical and Policy Analysis p.
viii-ix (Dec. 1999--Amendments Sept. 2000); http://
www1.eere.energy.gov/vehiclesandfuels/epact/pdfs/plf--docket/
section506.pdf.
---------------------------------------------------------------------------
However, both these earlier reports included calculations based
only upon the percentage of light-duty gasoline fuel use. For purposes
of the goal contained in section 502 of EPAct 1992, DOE has repeatedly
asserted that fuel replacement should be considered in the context of
all on-highway motor fuel use, including heavy-duty vehicle fuel use,
because the goal is to be considered in the context of the ``projected
consumption of motor fuel in the United States.'' (42 U.S.C.
13252(b)(2)) Therefore, the figures provided in these earlier reports,
when adjusted to reflect the impact on all on-highway motor fuel use,
show that a Private and Local Government Fleet Rule--even with a fuel
use requirement, which as noted above, DOE does not have the authority
to impose--would provide at most on the order of 0.7-0.8 percent motor
fuel replacement, assuming virtually complete use of alternative fuel
in the AFVs required.
Both the analyses in Technical Report 14 and the Section 506 Report
were conducted before DOE had much experience with implementation and
operation of the EPAct 1992 fleet programs. DOE's experience with those
programs now has shown that the number of fleets originally envisioned
to be covered was far larger than the number of fleets covered in
actual practice, and that these fleets could not, in the absence of a
specific mandate, be assumed to use alternative fuel in their AFVs 100
percent of the time. Thus, DOE believes that the figures in these
reports probably overstated the potential impact of a Private and Local
Government Fleet Rule. This view was supported by analyses contained in
a later DOE-supported report, The Alternative Fuel Transition: Results
from the TAFV Model of Alternative Fuel Use in Light-Duty Vehicles
1996-2000 \3\ (TAFV Model Report), which incorporated more realistic
assumptions regarding these fleet programs. The TAFV Model Report
stated that,
\3\ ORNL.TM2000/168) (September 17, 2000) http://
pzl1.ed.ornl.gov/tafv99report31a--ornltm.pdf.
In particular, over all of the price scenarios, we find that the
[private and local government fleet] rule increases the alternative
fuel penetration in 2010 from 0.12% (without the private and local
government rule) to, at most, 0.37% [with a private and local
---------------------------------------------------------------------------
government rule] of total fuel sales.
TAFV Model Report at p. 28. Thus, the analysis in the TAFV Model
Report placed contributions from the Private and Local Government Fleet
Rule at 0.25 percent. As with Technical Report 14 and the Section 506
Report, these percentages were calculated based on the total fuel sales
of the fuel used by light-duty vehicles only. Thus, the projected
contribution from a potential rule dropped to below 0.2 percent when
evaluated as part of all on-highway motor fuel use and can be
reconciled somewhat with those found by the earlier reports. As
indicated in section II above, DOE does not have authority to mandate
that AFVs acquired actually operate on alternative fuels. Experience
with the existing State Fleet Program, where fleets are similarly not
required to use alternative fuel, has shown that alternative fuel use
rates are typically in the ten to twenty-five percent range. Thus, when
adjusting the levels found in Technical Report 14 and the Section 506
Report by such utilization levels, the overall projected impacts likely
end up in about the 0.2 percent range.
It also should be noted that during earlier rulemaking processes,
no commenter presented any persuasive analysis or data to counter or
dispute the data and conclusions in Technical Report 14, the Section
506 Report, or the TAFV Model Report. Therefore, DOE concluded from
these reports that a Private and Local Government Fleet Requirement
under authority provided to DOE by EPAct 1992 section 507 would be
expected to contribute, at best, an extremely small amount toward
achievement of the Replacement Fuel Goal (below 1 percent and likely
below 0.2 percent of all on-highway motor fuel use). Even without the
additional statutory limitations described above, which EPAct 1992
places on such a Private and Local Government Fleet Requirement, the
contribution from such a mandate to the EPAct 1992
[[Page 13736]]
Replacement Fuel Goal would be very small.
When the prior private and local fleets determination was conducted
in 2003 through 2004, the analyses relied upon by DOE were the most
recent, relevant analyses that it had. As such, these were all dated
2000 or earlier. With the passage of several more years between that
determination and this rulemaking, DOE believed it was important to
conduct an updated analysis to determine if circumstances had changed
sufficiently to warrant imposition of acquisition requirements upon
fleets. The approach taken was to first conduct a somewhat more
simplified analysis than the previous ones, and if this analysis
indicated significantly different results, than a more detailed and
lengthy analysis would be commissioned. (Note that at the end of this
section, the discussion of the analysis is included which was updated
for today's final action.)
To conduct the current analysis, the Department relied, in large
part, upon fleet industry data developed by Automotive Fleet, a leading
publisher in the field. Each year, Automotive Fleet publishes an annual
Fact Book, which includes detailed data on a number of fleet subjects.
Unfortunately, Automotive Fleet does not provide the specific data
necessary to support today's draft determination (namely the likely
number of AFVs that would need to be acquired by fleets meeting EPAct
1992's coverage criteria). Therefore the Fact Book data was used as a
starting point, with other information (such as from the EIA Annual
Energy Outlook) and various assumptions used to further refine the data
to move closer to the specific types of numbers required for today's
action.
For the purpose of today's final determination, two analyses were
conducted to determine what portion of U.S. motor fuel use might be
replaced with replacement fuels by vehicle acquisitions resulting from
a potential fleet rule. The first method compares annual acquisitions
under a potential rule to the total annual U.S. acquisitions. The
second method of analysis compares vehicles in operation due to a
potential rule to all vehicles in operation. Both methods were used as
analogs to determine the overall percentage replacement of U.S. motor
fuel.
According to the 2005 Fact Book (which reports data for 2004),
fleets in the United States acquired 2,849,837 light-duty vehicles
(cars and light trucks), of which 1,944,581 (68.2 percent) were
acquired for rental fleets. Because rental vehicles are specifically
excluded from coverage under EPAct 1992 section 301(9) (42 U.S.C.
13211(9)), the remaining potentially covered vehicle acquisitions drop
to 905,256 vehicles. Note that this does not exclude any leased
vehicles, of which the Fact Book indicates there were another 326,832
acquired in 2004. Many of these may ultimately be excluded as perhaps
either shorter term leases or vehicles specifically held for lease to
others (another excluded class). Because there is no way to determine
which portion of these leased vehicles would most likely be excluded,
DOE chose to rely on the 905,256 value as the number of vehicles
purchased by fleets that would potentially be subject to a Private and
Local Government Fleet Requirement.
Next, the current annual acquisitions of vehicles already subject
to EPAct 1992 fleet requirements needed to be subtracted. Data was
obtained from the Department's EPAct 1992 Web sites, at http://
www1.eere.energy.gov/vehiclesandfuels/epact/. For Federal Fleets, there
were 18,426 covered light-duty vehicles acquired in 2004. For State and
Alternative Fuel Provider Fleets, there were 13,374 covered light-duty
vehicles acquired. Thus, the remaining number of potentially covered
acquisitions drops to 873,456.
In 2004, a total of 16,537,440 light-duty vehicles were acquired
throughout the United States. This means that the maximum potential
pool of covered light-duty vehicles under a Private and Local Fleet
Requirement would represent 5.3 percent of total acquisitions for the
year. Because the maximum acquisition requirement percentage under the
potential Private and Local Government Fleet Rule is 70 percent (42
U.S.C. 13257(g)), the maximum potential number of AFVs that would need
to be acquired on an annual basis would be 611,419. This number
represents approximately 3.7 percent of all light-duty vehicles
acquired in the United States.
DOE's experience, however, is that the maximum potential number of
required acquisitions is quite different from the actual number of
required acquisitions. This is because section 301(9) includes several
basic requirements for coverage of a fleet's acquisitions. (42 U.S.C.
13211(9)) The fleet must be owned or controlled by an entity that owns
at least 50 light-duty vehicles nationwide, of which 20 must reside in
one of the 125 covered Metropolitan Statistical Areas (MSAs, with 1980
population of more than 250,000) and are centrally fueled or capable of
being centrally fueled. (42 U.S.C. 13211(9))
In arriving at the 50 and 20 light-duty vehicle minimums, several
classes of vehicles are excluded from consideration, including
emergency and law enforcement vehicles (42 U.S.C. 13211(9)(D) and (E)),
vehicles taken home at night by employees (42 U.S.C. 13211(9)(H)), and
non-road vehicles (42 U.S.C. 13211(9)(G)). With these exclusions the
number of potentially required AFV acquisitions drops even further. For
example, if just the 2004 acquisitions of Ford Crown Victorias and
Chevy Impalas are reviewed, the non-rental numbers acquired for
commercial and government fleets totals nearly 90,000 vehicles
(according to the 2005 Fact Book). These two vehicles are often
acquired for use as police vehicles, or else taxicabs (a class of
vehicles whose status under the program is undetermined for this
analysis and for which many might not ultimately be covered due to
fleet size, location, or other reasons).
Based on DOE's experience with the Federal, State, and Alternative
Fuel Provider Fleet requirements and the vehicle classes excluded from
consideration by EPAct 1992, DOE considered two scenarios for this
analysis, one where 50 percent of the maximum potential annual
acquisitions are required (305,710 AFVs), and one (considered much more
likely) where 25 percent of the maximum potential annual acquisitions
are required (152,855 AFVs). These two scenarios thus represent 1.8 and
0.9 percent, respectively, of overall annual light-duty acquisitions.
So the net result of this portion of the analysis is that a fleet
rule could result in requirements to acquire between 150,000 and just
over 600,000 AFVs each year, representing between approximately 1 to
3.7 percent of total annual light-duty vehicle acquisitions, based on
2004 data. This portion of the annual acquisition analysis is
summarized below in Figure 1.
Figure 1.--Summary of Annual Acquisition Analysis, Fleet Vehicles
------------------------------------------------------------------------
------------------------------------------------------------------------
Total New Cars and Trucks Registered by Fleets in 2004.. 2,849,837
Total New Cars and Trucks Registered by Rental Fleets in 1,944,581
2004...................................................
[[Page 13737]]
Percentage in Rental Fleets............................. 68.2%
Remainder of New Cars and Trucks, not in Rental Fleets 905,256
2004...................................................
New Covered LDV acquisitions in 2004, Federal Fleet..... 18,426
New Covered LDV acquisitions in 2004, State and Fuel 13,374
Provider Fleets........................................
Net New Cars/Truck Registered, not in Fleets Already 873,456
Covered................................................
Total New LDV Registrations, 2004....................... 16,537,440
Max Potential Portion of 2004 Fleet acquisitions covered 5.3%
out of total registrations.............................
EPAct 1992 Maximum Acquisition Requirement.............. 70%
Max Potential AFV Acquisitions per year, numbers of AFVs 611,419
required...............................................
Max Potential AFV Acquisitions per year, percentage of 3.7%
total acquisitions.....................................
If 50% of maximum potential actually covered, number of 305,710
AFVs required..........................................
If 50% of maximum potential actually covered, percentage 1.8%
of total acquisitions..................................
If 25% of maximum potential actually covered, number of 152,855
AFVs required..........................................
If 25% of maximum potential actually covered, percentage 0.9%
of total acquisitions..................................
------------------------------------------------------------------------
The analysis above is in the context of light-duty vehicles and
would represent between one and 3.7 percent of motor fuel consumption
by light-duty vehicles. For the purpose of section 507(e)(1)(B), DOE
must evaluate the potential contribution of a Private and Local
Government Fleet Requirement to the Replacement Fuel Goal. (42 U.S.C.
13257(e)(1)(B)) The Replacement Fuel Goal is in terms of motor fuel
consumption, including consumption from medium- and heavy-duty
vehicles. As indicated in the Energy Information Administration's
Annual Energy Outlook 2007 (AEO 2007), light-duty vehicles only account
for 75.22 percent of on-road motor fuel use in the United States, with
the remainder consumed by medium- and heavy-duty classes, neither of
which is covered by the Private and Local Government Fleet Requirement.
In terms of total motor fuel consumption, the contribution of the
potential AFV acquisitions under a Private and Local Government Fleet
Requirement must be adjusted down to 0.7 to 2.8 percent.
The expected contribution of AFVs acquired under a Private and
Local Government Fleet to alternative fuel consumption must be further
adjusted. As explained above, EPAct 1992 does not allow DOE to require
alternative fuel use in the required AFVs, the potential consumption
values represent the portion of petroleum consumption replaced at an
alternative fuel use level of 100 percent. Experience with programs for
which fuel use is not required (such as the State Fleet Program)
indicates that the assumption of 100 percent alternative fuel use is
not realistic. DOE has seen alternative fuel usage levels as low as 10
percent.
For the purposes of this analysis, DOE looked at cases where
alternative fuels were used 50, 25, and 10 percent of the time in the
potentially required AFVs. These results yielded percentages of overall
motor fuel consumption replaced of 0.1 to 1.4 percent, with the high
value represented by the maximum potential case (already identified as
overly optimistic) with a 50 percent alternative fuel use level. Thus,
the likely range of consumption replaced is better represented by the
25 and 50 percent of maximum potential acquisition cases, which ranged
from 0.1 to 0.7 percent.
The summary for this portion of the analysis is shown in Figure 2,
where the shaded zone represents the more likely range of results.
Figure 2.--Summary of Annual Acquisition Analysis, Portion of Overall Motor Fuel Consumption
[In Percent]
----------------------------------------------------------------------------------------------------------------
Maximum 50% of maximum 25% of maximum
potential potential potential
acquisitions acquisitions acquisitions
----------------------------------------------------------------------------------------------------------------
AFVs Required, Percentage of Total LDVs...................... 3.7 1.8 0.9
--------------------------------------------------
Portion of Total Motor Fuel Use Due to LDVs.................. 75.22
--------------------------------------------------
Potential Maximum Consumption Percentage for Required AFVs 2.8 1.4 0.7
(100% Alternative Fuel Use).................................
--------------------------------------------------
Potential Consumption Percentage for Required AFVs (50% 1.4 0.7 0.3
Alternative Fuel Use).......................................
--------------------------------------------------
Potential Maximum Consumption Percentage for Required AFVs 0.7 0.3 0.2
(25% Alternative Fuel Use)..................................
--------------------------------------------------
Potential Maximum Consumption Percentage for Required AFVs 0.3 0.1 0.1
(10% Alternative Fuel Use)..................................
----------------------------------------------------------------------------------------------------------------
It should be noted that this likely range of consumption
replacement under the potential rule, 0.1 to 0.7 percent, is very close
to that predicted by the TAFV report in 2000 (0.2 to 0.8 percent).
The second analysis, as indicated above, sought to use the portion
of the in-use inventory of vehicles on the road in the United States
that were represented by the cumulative numbers of AFVs acquired under
the potential rule as a way to determine the portion of overall motor
fuel use replaced. This case then assumes that once the program reaches
the maximum acquisition requirement (70 percent), and levels off, all
relationships between
[[Page 13738]]
the consumption of the required AFVs and the overall on-road fleet are
relatively unchanged over time. It also explicitly assumes that the
AFVs acquired under this potential rule use the same amount of fuel, on
average, as all other light-duty vehicles in operation in the United
States.
This second analysis, therefore, uses the annual AFV acquisition
requirements identified in the first analysis, ranging from just over
150,000 AFVs/year (25 percent of maximum potential acquisitions
covered) to just over 610,000 AFVs/year (for maximum potential
acquisitions covered). The 2004 Fact Book identifies that the average
amount of time a light-duty vehicle stays in a fleet ranges from 31 to
56 months depending on model type, or just a bit less than five years.
Therefore, to provide an estimate of the maximum portion of the on-road
fleet that could be AFVs due to the potential rule, DOE chose to use a
five-year period for AFVs to operate in the covered fleets.
The approach taken was to develop the percentage of the on-road
vehicles in the United States that would be AFVs, once the potential
Private and Local Government Fleet Requirements reached maximum,
steady-state requirements. (Under section 507(g), the requirements
actually include a ramp-up of the AFV acquisition requirements,
starting at 20 percent and rising to 70 percent. (42 U.S.C. 13257(g))
This steady-state, maximum case status, therefore, would be determined
by looking at the portion of the on-road fleet that would be AFVs based
upon five years of acquisitions of the AFVs required under the program.
For the maximum potential case, this meant roughly three million AFVs,
while for the 50 percent and 25 percent of maximum potential cases this
meant 1.5 million and 760,000 AFVs, respectively. Because AEO2007
identified the on-road inventory of light-duty vehicles in the United
States in 2004 as just over 215 million vehicles, this means that the
AFVs under this program would represent 0.4 to 1.4 percent of all
light-duty vehicles on the road in the United States.
But, as indicated in the first (annual acquisition) analysis above,
light-duty vehicles only represent approximately 75 percent of U.S.
motor fuel use. Therefore, even if everything else is equal concerning
consumption patterns, the percentage of all light-duty vehicles that
the AFVs under the potential program represent must be adjusted before
identifying the likely replacement of petroleum consumption. Thus, if
these AFVs are assumed to use alternative fuels one hundred percent of
the time, the maximum replacement of petroleum due to these vehicles
ranges from 0.3 to 1.1 percent.
There is, however, one final adjustment that needs to be made. Just
as in the first analysis, it must be noted that DOE cannot mandate
alternative fuel use in these vehicles. To account for less than
complete alternative fuel use, DOE further adjusted the analysis,
developing estimates for alternative fuel use from ten to fifty percent
of the time. Thus, the more likely contribution from the potential
fleet rule ranged from 0.03 to 0.3 percent. Figure 3 summarizes these
results.
Figure 3.--Summary of Cumulative Analysis
----------------------------------------------------------------------------------------------------------------
Maximum 50% of maximum 25% of maximum
potential potential potential
acquisitions acquisitions acquisitions
----------------------------------------------------------------------------------------------------------------
AFVs Required Annually....................................... 611,419 305,710 152,855
--------------------------------------------------
AFVs Added to Fleet over Five Years, at Maximum Fleet 3,057,096 1,528,548 764,274
Requirement (70%)...........................................
--------------------------------------------------
Total Number of Light-Duty Vehicles in Operation in the
United States, 2004......................................... 215,370,000
--------------------------------------------------
Maximum Portion of On-Road LDV Fleet that are AFVs in this 1.4% 0.7% 0.4%
Program.....................................................
--------------------------------------------------
Portion of U.S. Motor Fuel Use from Light-Duty Vehicles...... 75.22%
--------------------------------------------------
Potential Maximum Consumption Percentage for Required AFVs 1.1% 0.5% 0.3%
(100% Alternative Fuel Use).................................
--------------------------------------------------
Potential Consumption Percentage for Required AFVs (50% 0.53% 0.27% 0.13%
Alternative Fuel Use).......................................
--------------------------------------------------
Potential Maximum Consumption Percentage for Required AFVs 0.27% 0.13% 0.07%
(25% Alternative Fuel Use)..................................
--------------------------------------------------
Potential Maximum Consumption Percentage for Required AFVs 0.11% 0.05% 0.03%
(10% Alternative Fuel Use)..................................
----------------------------------------------------------------------------------------------------------------
In preparing today's final action, the Department revisited the
analysis conducted for the NOPR. During the interim between the
proposed determination and today's action, some additional information
was released. To ensure that the analysis is still accurate and correct
with the latest data available, DOE updated the analysis. The revised
analysis was done with data representing primarily 2006, rather than
2004 in the previous action. The 2006 data showed some changes of
relevance to the analysis, such as an increase in the number of light-
duty vehicles acquired by fleets during the year from about 2.8 million
in 2004 to nearly 3.3 million in 2006, as well as a drop in the overall
acquisition of light-duty vehicles by the U.S. market, from
approximately 16.5M in 2004 to just under 16.2M in 2006. Thus the
maximum potential AFV acquisitions rose from 611,000 and 3.7 percent of
total light-duty acquisitions to approximately 760,000 and 4.7 percent
of total light-duty acquisitions. In addition, the portion of overall
motor (on highway) fuel use represented by light-duty vehicles rose
from 75.22 percent to 78.34 percent.
Overall, however, these changes did not impact the analysis results
significantly. Under the annual acquisition approach, potential impact
from the Rule changed from 0.1 to 0.7 percent in the NOPR analysis to
0.1 to
[[Page 13739]]
0.9 percent. Again, this result was not far off from the TAFV result in
2000 of 0.2 to 0.8 percent. Under the cumulative (inventory) analysis
approach, the changes were even less. While the NOPR analysis had
indicated that a realistic range for the impact was 0.03 to just under
0.3 percent, the updated analysis based upon 2006 data indicated that
this range would be 0.03 to just over 0.3 percent. Thus, neither
analysis method as revised showed sufficiently significant changes to
impact today's determination.
It should be noted, however, that one other relevant change
occurred in the interim between the NOPR and today's final
determination. When Congress passed EISA 2007, it included in section
133 an expansion of the vehicle types and other actions that qualified
for credit as AFVs under EPACT's Title V fleet programs. In doing so,
it included such vehicle types or actions as hybrid vehicles, plug-in
hybrid electric vehicles, investments in refueling infrastructure,
investments in advanced technologies, and other elements. While
improving the flexibility for covered fleets, this change could
ultimately decrease the estimated contribution from a potential Private
and Local Government Fleet Rule even further, by allowing fleets to
comply with currently-available hybrid vehicles. These vehicles, while
generally representing an increase in efficiency, do not allow for the
use of alternative fuels as do AFVs, and thus would not contribute
significant use of replacement fuels beyond low-level blends. They also
do not help to build demand for alternative fuel refueling
infrastructure, which is a key to greater displacement of petroleum.
Thus, this change would be expected in many cases to result in
replacement of even less petroleum fuel, probably reducing the levels
estimated in the analyses even further.
In summary, the updated analysis conducted for today's action does
not appear to change significantly from those analyses relied upon for
the previous private and local fleet determination. Under either
updated analysis approach used now, the potential contribution from a
Private and Local Government Fleet rule appears to be far below one
percent, probably on the order of 0.2-0.3 percent, similar to the
levels identified in the 2003-2004 determination. Therefore no further
analyses were deemed necessary by DOE.
VI. Determination
In establishing a revised Replacement Fuel Goal, DOE demonstrated
how the modified goal could be achieved through a number of replacement
fuel technologies, including biofuels, other alternative fuels, and
energy efficiency. In demonstrating the achievability of the new goal,
DOE did not assume imposition of a Private and Local Government Fleet
Requirement. Given that DOE has demonstrated the achievability of the
Replacement Fuel Goal absent a Private and Local Government Fleet
requirement, DOE has determined that a Private and Local Government
Fleet requirement is not necessary under the EPAct Fleet program.
Moreover, were DOE to establish such a requirement, its projected
impact would likely be on the order of about 0.2 percent of U.S. motor
fuel consumption.
Therefore, DOE has determined that the Private and Local Government
Fleet Requirement is not ``necessary'' as specified in section
507(e)(1) of EPAct 1992, and DOE is not proposing to establish a
Private and Local Government Fleet Requirement.
VII. Regulatory Review
A. Review Under Executive Order 12866
This action has been determined to be a ``significant regulatory
action'' under Executive Order 12866, Regulatory Planning and Review.
58 FR 51735 (October 4, 1993). Accordingly, today's action was reviewed
under the Executive Order by the Office of Information and Regulatory
Affairs (OIRA).
B. Review Under Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires
preparation of a regulatory flexibility analysis for any rule that is
likely to have a significant economic impact on a substantial number of
small entities. The negative determination under EPAct 1992 section
507(e) will not result in compliance costs on small entities.
Therefore, DOE certifies that today's determination will not have a
significant economic impact on a substantial number of small entities,
and accordingly, no initial regulatory flexibility analysis has been
prepared.
C. Review Under the Paperwork Reduction Act
Because DOE is not promulgating requirements for private and local
government fleets, no new recordkeeping requirements, subject to the
Paperwork Reduction Act, 44 U.S.C. 3501, et seq., would be imposed by
today's determination.
D. Review Under the National Environmental Policy Act of 1969 (NEPA)
DOE has not prepared an environmental impact statement or an
environmental assessment for this rulemaking, and has determined that
neither is required. This final determination implements the March 6,
2006, Order of the U.S. District Court of California to issue a final
determination under section 507(e) of EPAct 1992. Center for Biological
Diversity, 419 F.Supp 2d 1166. The Court order held that the Secretary
is not ``obligated to prepare an impact statement under NEPA in either
accepting or rejecting a fleet rule.'' Id. at 1173.
EPAct 1992 requires DOE to issue a Private and Local Government
Fleet Requirement if such a requirement is necessary. (42 U.S.C.
13257(e)) Today's final determination establishes that a Private and
Local Government Fleet Requirement is not necessary, and therefore DOE
is not issuing a requirement. Once the Secretary has made the
determination, the Secretary has no discretion whether to issue the
requirement. See Center for Biological Diversity, 419 F.Supp. 2d 1166,
1173.
E. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
Agencies to review regulations in light of applicable standards in
section 3(a) and 3(b) to
[[Page 13740]]
determine whether they are met or it is unreasonable to meet one or
more of them. Today's final action does not establish a new regulation.
F. Review Under Executive Order 13132
Executive Order 13132, Federalism, 64 FR 43255 (August 4, 1999),
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. DOE has examined today's determination and
has determined that it would not have a substantial direct effect on
the States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.
Because DOE is determining that a private and local government
fleet AFV program is not ``necessary'' under section 507(e) and
therefore is not promulgating such a program, no significant impacts
upon State and local governments are anticipated. The position of State
fleets currently covered under the existing EPAct 1992 fleet program is
unchanged by this action.
G. Review of Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995, Public Law
104-4, requires each Federal agency to assess the effects of Federal
regulatory actions on State, local and tribal governments and the
private sector. The Act also requires a Federal agency to develop an
effective process to permit timely input by elected officials on a
proposed ``significant intergovernmental mandate,'' and requires an
agency plan for giving notice and opportunity for timely input to
potentially affected small governments before establishing any
requirements that might significantly or uniquely affect small
governments. On March 18, 1997, DOE published in the Federal Register a
statement of policy on its process for intergovernmental consultation
under the Act (62 FR 12820). Today's final determination does not
contain any Federal mandate, so the requirements of the Unfunded
Mandates Reform Act do not apply.
H. Review of Treasury and General Government Appropriations Act, 1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999, Public Law 105-277, requires Federal agencies to issue a
Family Policymaking Assessment for any rule that may affect family
well-being. Today's determination will not have any impact on the
autonomy or integrity of the family as an institution. Accordingly, DOE
has concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review of Treasury and General Government Appropriations Act, 2001
The Treasury and General Government Appropriations Act, 2001 (44
U.S.C. 3516 note) provides for agencies to review most disseminations
of information to the public under guidelines established by each
agency pursuant to general guidelines issued by OMB. OMB's guidelines
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed
today's final determination under the OMB and DOE guidelines, and has
concluded that it is consistent with applicable policies in those
guidelines.
J. Review Under Executive Order 13211
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy, Supply, Distribution, or Use, 66 FR 28355
(May 22, 2001) requires preparation and submission to OMB of a
Statement of Energy Effects for significant regulatory actions under
Executive Order 12866 that are likely to have a significant adverse
effect on the supply, distribution, or use of energy. A determination
that a private and local government fleet AFV acquisition program is
not ``necessary'' under EPAct 1992 section 507(e) does not require
private and local government fleets, suppliers of energy, or
distributors of energy to do or to refrain from doing anything. Thus,
although today's determination is a significant regulatory action, the
determination will not have a significant adverse impact on the supply,
distribution, or use of energy.
K. Review Under Executive Order 13432
Executive Order 13432, Cooperation Among Agencies in Protecting the
Environment With Respect to Greenhouse Gas Emissions from Motor
Vehicles, Nonroad Vehicles, and Nonroad Engines, 72 FR 27717 (May 16,
2007) requires DOE to work with DOT and EPA when conducting rulemakings
that could be considered to affect emissions. In particular, this
Executive Order requires that ``the head of an agency undertaking a
regulatory action that can reasonably be expected to directly regulate
emissions, or to substantially and predictably affect emissions, of
greenhouse gases from motor vehicles, nonroad vehicles, nonroad
engines, or the use of motor vehicle fuels, including alternative
fuels, shall'' conduct the rulemaking jointly with other agencies, to
the extent permitted by law; consider, as appropriate, laws,
information, and recommendations of the other agencies; exercise the
agency's authority effectively; and obtain concurrence or other views
by the other agencies throughout the rulemaking process. In meeting
this requirement, the Department consulted with both DOT and EPA during
development of the proposed determination. The analysis reviewed by the
DOT and EPA is essentially the same as that presented in the final
determination.
VIII. Approval by the Office of the Secretary
The issuance of the Private and Local Government Fleet
Determination has been approved by the Office of the Secretary.
Issued in Washington, DC, on March 6, 2008.
Alexander A. Karsner
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. E8-5143 Filed 3-13-08; 8:45 am]
BILLING CODE 6450-01-P