[Federal Register Volume 61, Number 64 (Tuesday, April 2, 1996)]
[Rules and Regulations]
[Pages 14507-14512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7828]



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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 538

[Docket No. 94-96; Notice 2]
RIN 2127-AF18


Manufacturing Incentives for Alternative Fuel Vehicles

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: This rule establishes minimum driving range standards for dual 
energy and natural gas dual energy passenger automobiles on non-
petroleum fuel and establishes gallons equivalent measurements for 
certain gaseous fuels. Promulgation of minimum driving range standards 
for these vehicles is required by the 1992 Energy Policy Act (P.L. 102-
486).

DATES: These requirements are effective June 3, 1996. Petitions for 
reconsideration must be submitted within 45 days of publication.

ADDRESSES: Petitions for reconsideration should be submitted to the 
Administrator, National Highway Traffic Safety Administration, 400 
Seventh Street, SW., Washington, DC 20590.

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:

1. Statutory Background

    Section 6 of the Alternative Motor Fuels Act of 1988 (AMFA) (P.L. 
100-494) amended the fuel economy provisions of the Motor Vehicle 
Information and Cost Savings Act (Cost Savings Act) by adding a new 
section, ``Manufacturing Incentives for Automobiles,'' now codified as 
49 U.S.C. Sec. 32901(c). The section provided incentives for the 
manufacture of vehicles designed to operate on alcohol or natural gas, 
including dual energy vehicles, i.e., vehicles capable of operating on 
one of those alternative fuels and either gasoline or diesel fuel.
    Dual energy 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 issued by NHTSA under 
49 U.S.C. Chapter 329. 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 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 
clear that the driving ranges were to be low enough to

[[Page 14508]]
encourage the production of dual energy 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) of the Cost Savings Act, now codified as 49 U.S.C. 
Sec. 32901(c)(2)(B), provided that the minimum driving range 
established by the agency for dual energy passenger automobiles could 
not be less than 200 miles. Section 513(h)(2)(B) of the Cost Savings 
Act, now codified as 49 U.S.C. Sec. 32901(c)(2)(A), 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.
    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 energy 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.
    The Energy Policy Act of 1992 (EPACT) (P.L. 102-486) amended 
section 513 of the Cost Savings Act to expand the scope of the 
alternative fuels it promoted. In addition to the incentives for 
alcohol and natural gas, the amended section provided incentives for 
the production of vehicles using liquefied petroleum gas (LPG), 
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.
    As amended, 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 continued to require dual fueled passenger automobiles 
to meet specified criteria, including meeting a minimum driving range, 
in order to qualify for 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 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 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.
    The Motor Vehicle and Cost Savings Act was rescinded in 1994 
through legislation (P.L. 103-272) recodifying the Cost Savings Act in 
Chapter 329 ``Automobile Fuel Economy'' of Title 49 of the United 
States Code (49 U.S.C. Sec. 32901 et. seq.) This recodification adopted 
the provisions of the Cost Savings Act without substantive change, 
inluding those amendments contained in the 1992 Energy Policy Act.

2. Regulatory Background

    NHTSA published a notice of proposed rulemaking (NPRM) on December 
19, 1994 (59 FR 65295) which proposed setting the minimum driving range 
for all dual fueled passenger automobiles other than electric vehicles 
at 200 miles. In that notice, NHTSA also proposed removing the petition 
procedures until it sets a minimum driving range for electric dual 
fueled passenger automobiles.
    The NPRM stated that 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, 
required NHTSA to address 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 NPRM also proposed to amend Part 538's gallons equivalent 
measurements for compressed natural gas, liquefied natural gas, 
liquefied petroleum gas, hydrogen, and hythane.
    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, liquefied petroleum gas 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.

3. Dual Energy Driving Range Requirements

    NHTSA received comments regarding the driving range proposed in the 
NPRM from Minnegasco, Taylor-Wharton, the American Automobile 
Manufacturers Association (AAMA), the Southern

[[Page 14509]]
California Gas Company (the Gas Company), and the American Gas 
Association/Natural Gas Vehicle Coalition (AGA/NGV).
    Minnegasco, a natural gas utility, is concerned about the increase 
of the minimum driving range for natural gas dual fueled vehicle 
because a large share of the fleet vehicles in its territory do not 
need a 200 mile range. Minnegasco also stated its concerns that the 
size of the tanks required to achieve a 200 mile range in compressed 
natural gas vehicles would require significant and costly vehicle 
modifications. The company believes that requiring a 200 mile or 
greater range would discourage the production of natural gas dual 
fueled vehicles.
    Taylor-Wharton, a manufacturer of gas equipment, indicated that a 
minimum driving range of 200 miles would be detrimental to the 
compressed natural gas industry. Taylor-Wharton is concerned that 
setting the minimum driving range above 100 miles for CNG dual fueled 
vehicles would require the installation of two CNG fuel tanks, causing 
increased weight and cost. Taylor-Wharton also believes that by 
increasing the range, certain safe and cost effective CNG fuel tanks 
would be eliminated from the market. This will also decrease the CNG 
fuel tank competition and, therefore, increase fuel tank costs. Taylor-
Wharton indicated that, in the future, a minimum driving range should 
not be mandated for fleet vehicles, since these vehicles do not require 
traveling long distances, and these vehicles' bases are equipped with 
refueling infrastructure.
    The American Automobile Manufacturers Association (AAMA) believes 
that the minimum driving requirement of 200 miles is too stringent for 
natural gas vehicles but achievable for LPG and alcohol dual fueled 
vehicles. The AAMA further discussed the uniqueness of natural gas and 
the marketability and productivity of alternative vehicles. AAMA 
contended that natural gas stored at 3,000 pounds per square inch (psi) 
requires roughly four times the storage space to achieve a driving 
range equivalent to gasoline vehicles. Further, because natural gas is 
stored in cylinders that present greater challenges for installation 
than gasoline tanks, less than optimum usage of space is achieved.
    AAMA believes that the market for alternative fuel vehicles (AFVs) 
remains limited. AAMA stated that in 1995 the purchases by mandated 
federal fleets would result in less than 15,000 AFV sales or 
conversions, and in 1999 and later, an estimated 40,000 units. AAMA 
also noted that market growth remains uncertain, as do implementation 
of further mandates under the Energy Policy Act of 1992. AAMA stated 
that even though incentives, such as CAFE credits for AFVs, help offset 
the cost of product programs, a 200 mile minimum driving range may 
remove this support factor for most dual fueled natural gas 
automobiles.
    Southern California Gas Company (the Gas Company) indicated that it 
believed the minimum driving range for dual-fueled natural gas vehicles 
should not be raised above 200 miles. The Gas Company believes that use 
of the congressionally-mandated minimum will allow for the 
participation of the greatest number of natural gas vehicles.
    The American Gas Association and the Natural Gas Vehicle Coalition 
submitted joint comments (AGA/NGV). AGA/NGV believe that the increased 
driving range requirement of 200 miles will act as a disincentive for 
manufacturers to produce natural gas vehicles. AGA/NGV contends that a 
200 mile minimum driving range would increase vehicle costs by 
necessitating additional and/or larger storage cylinders on natural gas 
vehicles, which could require structural changes and possibly separate 
safety testing. In their comments, the AGA/NGV stated that the natural 
gas vehicle industry is conducting research to expand fuel storage 
capacity without increasing weight or limiting storage space on these 
vehicles; however, these cylinders cost more and require more space 
than steel cylinders. They also observed that most natural gas vehicles 
will be owned and operated by large fleets. Fleet vehicles typically 
are refueled daily at a single location. Thus, a limited driving range 
does not serve as a major disincentive for these operators. AGA/NGV 
also commented that natural gas is more widely available and the need 
for dual fueled NGVs use of gasoline is decreasing rapidly. For these 
reasons, the intent of the statute--to ensure fueling on natural gas--
is not likely to be subverted if NHTSA maintains the minimum driving 
range at 100 miles.
    AGA/NGV believes that the congressional history associated with the 
1992 amendment to Section 513(h)(2) does not demonstrate an intention 
on the part of Congress to change the status of the manufacturing 
incentives for natural gas vehicles and urged NHTSA not to increase the 
requirements to 200 miles.
    Two commenters, AAMA and AGA/NGV, believe that the minimum driving 
range of 200 miles for natural gas dual fueled vehicles is too 
stringent. Therefore, these vehicles should be allowed to maintain a 
100-mile driving range. Taylor-Wharton and Minnegasco agreed that 200 
miles would serve as a disincentive to the natural gas industry. 
Taylor-Wharton's argument focused on the limited space availability in 
these natural gas dual fueled vehicles and the increased cost and 
safety concerns for these vehicles' fuel tanks.
    Although the agency realizes that natural gas dual fueled vehicles' 
driving range is shorter than that of gasoline-fueled vehicles and 
several other alternative fuels, (CNG driving range is one-third to 
one-half that of comparable gasoline-fueled vehicles, and LNG fuel tank 
range is just under two-thirds that of gasoline), NHTSA's examination 
of the 1992 amendments and the legislative history of these amendments 
indicates that the agency is required by the amendment to Section 
513(h)(2) to set a minimum driving range of not less than 200 miles for 
all alternative fueled passenger automobiles other than electric 
vehicles. The agency trusts that this 200-mile driving range for 
natural gas dual fueled passenger vehicles is low enough to encourage 
the production of these vehicles, yet not so low that motorists would 
be discouraged by a low driving range from actually fueling their 
vehicles with these alternative fuels.
    In the NPRM, NHTSA asked for comments on whether there are any 
potentially available liquid alternative fuels that have 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. The agency received no such comments; therefore, NHTSA elects to 
set the minimum driving range for dual fueled passenger automobiles 
other than electric vehicles at 200 miles.
    NHTSA believes that although the majority of commenters preferred a 
lower minimum driving range for dual fueled passenger vehicles, the law 
requires the minimum driving range to be set at not less than 200 
miles. NHTSA is therefore setting the minimum driving range for all 
dual fueled vehicles other than electric vehicles at 200 miles to 
encourage development of these vehicles to the maximum extent possible 
permitted by law.

4. Proposed Gallon Equivalents for Gaseous Fuels

    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 gallon equivalent measurement. The 1992 
amendments specified that 100 cubic feet of natural gas is deemed

[[Page 14510]]
to contain 0.823 gallon equivalent of natural gas. The 1992 amendments 
required NHTSA to determine the appropriate gallon 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.
    The NPRM examined gallon equivalency measurements for five gaseous 
fuels: (1) compressed natural gas; (2) liquified natural gas; (3) 
liquified propane gas; (4) hydrogen; and (5) hythane (Hy5). NHTSA 
received comments regarding the gallon equivalency measurements 
proposed in the NPRM from Minnegasco, the American Gas Association/
Natural Gas Vehicle Coalition (AGA/NGV), Reliance and the Propane 
Vehicle Council.
    A. Liquefied Natural Gas. 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 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.
    AGA/NGV recommended that NHTSA not apply the conversion ratio used 
for CNG to LNG. However, AGA/NGV failed to describe what conversion 
factor the agency should use for LNG.
    AGA/NGV's comments also suggested that a different gallon 
equivalency be used for CNG. AGA/NGV indicated that the current 
conversion ratio of 0.823 is inappropriate for use with CNG and 
presented data suggesting that a conversion ratio of 0.809 (92,370 low 
heating value Btu per 100 SCF divided by 114,118.8 Btu for gasoline) 
would be more accurate. The different energy contents of liquefied 
natural gas and liquid methane (99.6% purity) is another issue of 
concern to AGA/NGV and it suggested that the conversion ratio for 
liquid methane should be 0.793 (based on 99.6% pure methane). The 
differences in energy content, according to AGA/NGV, could have a 
significant impact on vehicle range.
    There were also concerns raised by AGA/NGV about potential 
confusion caused by the conversion factor of 0.823 value for CNG. AGA/
NGV indicated that the National Conference of Weights and Measures 
(NCW&M) is establishing a standard method of measuring amounts of 
compressed natural gas sold at retail fueling stations. The NCW&M 
measurement compares pounds, not cubic feet, of compressed natural gas 
to gallons of gasoline. As this standard of equating natural gas to 
gasoline differs from that used for calculating fuel economy, AGA/NGV 
is concerned that the continued use of the cubic foot equivalency for 
CAFE purposes will cause confusion. AGA/NGV believes that other 
regulatory agencies and consumers could misconstrue that the 100 SCF of 
compressed natural gas equals one gallon of gasoline. Therefore, AGA/
NGV urged NHTSA to note in its final rule that its calculations for the 
cited gaseous fuels are only being promulgated for purposes of 
performing CAFE calculations and should not be relied upon for other 
purposes, such as establishing units of measurement for the dispensing 
of fuel or taxation of alternative fuels.
    The divergence between the gallon equivalent for CAFE purposes and 
as a unit of measure for retail sales and other purposes was also 
raised in the submission given by Minnegasco. Minnegasco observed that 
the National Conference of Weights and Measures (NCW&M) adopted 100 
Standard Cubic Feet (SCF) as the Gasoline Gallon Equivalent (GGE) for 
the sale for CNG engine fuel. Minnegasco contends that it would reduce 
confusion if this gallon equivalent was adopted for purposes of fuel 
economy determination. Minnegasco also suggested that a similar GGE 
should be determined for LNG which takes into account temperature, 
purity and density using standard industry references.
    NHTSA believes that it does not have the discretion to assign 
different gallon equivalency values for LNG and CNG. Both the 
Alternative Motor Fuels Act and the Energy Policy Act direct that the 
0.823 gallon equivalency ratio be used with ``natural gas.'' As CNG and 
LNG are both natural gases that differ principally in the way they are 
stored, it is the agency's view that they are both subject to the 
legislative determination that, for CAFE purposes, 100 SCF of these 
gases are equivalent to 0.823 gallons of gasoline. Therefore, NHTSA 
will continue to apply the conversion factor of 0.823 gallon equivalent 
for LNG and CNG.
    B. 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. In the NPRM, NHTSA proposed that one gallon of LPG, grade HD-
5, is equivalent to 0.732 gallon of gasoline, using a lower heating 
value. Two commenters addressed the proposed gallon equivalent 
measurement for LPG. The Propane Vehicle Council and Reliance stated 
that they supported a gallon equivalency measurement of 0.732 for LPG.
    The 0.732 gallon equivalency published in the NPRM was based on a 
lower heating value recommended in the first Abacus report. After 
publication of the NPRM, The Department of Energy suggested that the 
use of a lower heating value for propane was inconsistent with the use 
of a higher heating value in calculating the gallon equivalency for 
natural gas. In addition, DOE also indicated that the use of a higher 
heating value was more consistent with the heating values used by DOE 
in compiling other energy related information and statistics.
    NHTSA believes that the use of a higher heating value for 
calculation of the gallon equivalency for propane is consistent with 
the use of higher heating values for natural gas in AMFA and EPACT. 
Therefore, the agency is setting the gallon equivalency for propane at 
0.726 gallons of gasoline per gallon of propane.
    C. Hydrogen. NHTSA did not receive any comments regarding the 
proposed gallon equivalent of 100 SCF of hydrogen of 0.240 contained in 
the NPRM. As is the case with the gallon equivalency for propane 
contained in the same NPRM, the proposed value was based on a lower 
heating value. The agency believes that the use of a lower heating 
value to calculate the gallon equivalency for hydrogen is inconsistent 
with the use of a higher heating value for natural gas. NHTSA is 
therefore setting the gallon equivalency for hydrogen at 0.259 gallons 
of gasoline per 100 SCF of hydrogen.
    D. Hythane. Hythane is a combination of two gaseous fuels: hydrogen 
and natural gas. 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 did not receive any comments regarding the 
proposed gallon equivalent for hythane. The agency is adopting a value 
of 0.741 gallons of gasoline per 100 SCF of hythane. This value 
represents the equivalency at a higher heating value. As is the case 
with hydrogen and propane, NHTSA believes that the use of this higher 
heating value is consistent with the use of higher heating values in 
calculating the gallon equivalency for natural gas.

[[Page 14511]]


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 final 
rule, the agency is setting the minimum driving range for all dual 
fueled passenger automobiles other than electric vehicles at 200 miles 
and is establishing gallon equivalents for specified gaseous fuels. 
None of these changes will result in an additional burden on 
manufacturers. They do not impose any mandatory requirements but 
implement statutory incentives to encourage the manufacture of 
alternative fuel vehicles. For these reasons, NHTSA believes that any 
impacts on manufacturers are 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 rule 
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 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.

List of Subjects in 49 CFR Part 538

    Energy conservation, Gasoline, Imports, Motor vehicles.

    In consideration of the foregoing, 49 CFR part 538 is revised to 
read as follows:

PART 538--MANUFACTURING INCENTIVES FOR ALTERNATIVE FUEL VEHICLES

Secs.
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 useable 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

[[Page 14512]]
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................................         0.823    
Liquefied Natural Gas.................................         0.823    
Liquefied Petroleum Gas (Grade HD-5)*.................         0.726    
Hydrogen..............................................         0.259    
Hythane (Hy5).........................................         0.741    
------------------------------------------------------------------------
* Per gallon unit of measure.                                           

    Issued on: March 21, 1996.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-7828 Filed 4-1-96; 8:45 am]
BILLING CODE 4910-59-P