[Federal Register Volume 63, Number 61 (Tuesday, March 31, 1998)]
[Rules and Regulations]
[Pages 15322-15324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8364]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 538
[Docket No. NHTSA-98-3433]
RIN 2127-AG63
Manufacturing Incentives for Alternative Fuel Vehicles
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Denial of petition for reconsideration.
-----------------------------------------------------------------------
SUMMARY: This document denies a petition for reconsideration of the
agency's decision to set a 200 mile minimum driving range for dual
fueled passenger automobiles other than electric vehicles.
FOR FURTHER INFORMATION CONTACT: The following persons at the National
Highway Traffic Safety Administration, 400 Seventh Street, S.W,
Washington, DC 20590.
For non-legal issues: Ms. Henrietta L. Spinner, Consumer Programs
Division, Office of Planning and Consumer Programs, National Highway
Traffic Safety Administration, 400 Seventh Street SW, Washington, DC
20590, (202) 366-4802.
For legal issues: Otto Matheke, Office of the Chief Counsel, NCC-
20, telephone (202) 366-5253, facsimile (202) 366-3820.
SUPPLEMENTARY INFORMATION:
I. Establishment of a Minimum Driving Range for Dual Fueled
Passenger Automobiles
On April 2, 1996, NHTSA published a final rule in the Federal
Register (61 FR 14507) establishing a minimum driving range for dual
fueled passenger automobiles other than electric vehicles. The rule
also established gallons equivalent measurements for gaseous fuels
other than natural gas and eliminated provisions relating to the
granting of alternative range requirements for alternative fueled
passenger automobiles not powered by electricity.
The agency promulgated this rule in response to amendments in the
Energy Policy Act of 1992 (EPACT) (Pub. L. 102-486) that expanded the
number of alternative fuels in the corporate average fuel economy
(CAFE) law, now recodified as Chapter 329 of title 49, U.S.C. As
amended, section 32901(c) requires dual fueled passenger automobiles to
meet specified criteria, including meeting a minimum driving range, in
order to qualify for special treatment under sections 32905 and 32906
in the calculation of their fuel economy for purposes of the CAFE
standards.
One change made by EPACT concerning driving ranges was that, under
section 32901(c), the minimum driving range set by NHTSA for dual
fueled passenger automobiles other than electric passenger automobiles
could not be less than 200 miles. The EPACT 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 passenger automobiles.
The EPACT amendments necessitated amending part 538. In the final
rule, the agency established gallons equivalent measurements for the
wider range of alternative fuels included in the EPACT amendments and
deleted provisions relating to the establishment of alternative minimum
driving ranges for non-electric alternative-fueled passenger
automobiles. In regard to the minimum driving range, NHTSA concluded
that both the text and the legislative history of these amendments
indicated that the agency was required to set a minimum driving range
of not less than 200 miles for all dual fueled passenger automobiles
other than electric passenger automobiles.
II. Petition for Reconsideration of the Minimum Driving Range
On May 24, 1996, the agency received a petition from the National
Biodiesel Board (NBB) requesting reconsideration of NHTSA's decision to
set a minimum driving range of 200 miles for all dual fueled passenger
automobiles other than electric vehicles.
NBB requested that the agency (1) clarify the status of biodiesel
as an alternative fuel, (2) adopt a definition of dual fueled vehicles
to include vehicles operating on a mixture of alternative fuel and
gasoline or diesel fuel, and (3) find that a passenger vehicle
operating on a mixture of alternative fuel and gasoline or diesel fuel
has satisfied the minimum driving range requirement of 200 miles if the
alternative fuel component of the mixture in the vehicle's fuel system
would propel the
[[Page 15323]]
passenger automobile a distance of 200 miles.
The agency notes that the three points raised by NBB in its
petition are outside of the scope of the rulemaking NBB asks the agency
to reconsider. The April 2, 1996 final rule did not address the
definition of alternative fuels, alternative fuel vehicle, or prescribe
the manner in which an alternative fuel passenger automobile may meet
the minimum driving range. Therefore, each of these issues may be more
properly viewed as a request for interpretation rather than a request
for reconsideration. The agency has, however, examined NBB's requests
and will address them below.
III. Response To Petition for Reconsideration
The petitioner's first request essentially asked that the agency
confirm that biodiesel is an alternative fuel. NBB contends that
biodiesel is an alternative fuel, that its status as an alternative
fuel was recognized by Congress when the EPACT amendments were adopted,
and that NHTSA should amend Section 538.4(a) to include biodiesel and
neat biodiesel as alternative fuels.
Part 538.4(a) reads as follows:
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).
NBB requests that 538.4(a) be amended to repeat the statutory
definitions incorporated by reference and further seeks to have an
explanatory parenthetical added to the definition of alternative fuel
as set forth in section 32901(a)(1)(I), 49 U.S.C. 32901(a)(1)(I). This
section defines alternative fuel as ``fuels (except alcohol) derived
from biological materials * * * '' NBB requests that the parenthetical
``(including neat biodiesel)'' be inserted in this definition following
the phrase ``biological materials.''
NHTSA regards such an amendment as unnecessary. The agency notes
that neat biodiesel, which is a fuel entirely derived from biological
materials, is already within the definition of an alternative fuel
under section 32901(a)(1)(I). The agency also notes that elsewhere in
NBB's petition, NBB contends that biodiesel blends such as B20, a
mixture of 20% biodiesel and 80% petroleum derived diesel, should be
accorded the status of an alternative fuel. Section 32901(a)(1)(K)
grants the agency the authority to designate as alternative fuels ``any
other fuel * * * that is not substantially petroleum and that would
yield substantial energy security and environmental benefits.'' Thus,
the agency may, by regulation, establish that certain fuels are
alternative fuels when such a determination is appropriate. However,
B20 is substantially derived from petroleum. NHTSA concludes that to
deem B20 as an alternative fuel would be in direct contravention of
Chapter 329. Biodiesel that is derived entirely from organic material
(neat biodiesel) is, under section 32901(a)(1)(I), clearly an
alternative fuel and NHTSA believes that the existing definition and
regulations leave no doubt on this point. Biodiesel blends which are
substantially petroleum, such as B20, are not alternative fuels under
section 32901(a)(1)(K) and the agency cannot deem them as such. As
NBB's petition does not seek clarification regarding other biodiesel
blends, NHTSA will not presently exercise its authority to establish
the concentration at which these fuels are not substantially derived
from petroleum.
The petitioner also requests that NHTSA issue regulations
establishing that vehicles operating on a mixture of an alternative
fuel and a petroleum based fuel are alternative fuel vehicles. In
support of its request, NBB asserts that in regulations issued pursuant
to the Alternative Fuel Transportation Program, the Department of
Energy (DOE) has recognized that dual fueled vehicles operating on a
mixture of alternative and petroleum fuels are dual fueled vehicles.
The agency notes that EPACT broadened the scope of the incentives
contained in Chapter 329, encouraging the production of alternative
fuel vehicles, as part of a national effort to reduce the dependence of
the United States on petroleum based fuels. While other statutory
schemes may recognize that vehicles operating on a mixture of
alternative fuels and petroleum are alternative fuel vehicles, NHTSA
concludes that such vehicles do not qualify as alternative fuel
vehicles for the purposes of Chapter 329. Section 32901(a)(2) defines
an alternative fuel vehicle as either a dedicated vehicle or a dual
fueled vehicle. Dedicated vehicles are defined in section 32901(a)(7)
as automobiles that operate only on an alternative fuel. Dual fueled
vehicles are defined in section 32901(a)(8) as follows:
(8) dual fueled automobile means an automobile that--
(A) is capable of operating on alternative fuel and on gasoline
or diesel fuel;
(B) provides equal or superior energy efficiency, as calculated
for the applicable model year during fuel economy testing for the
United States Government, when operating on alternative fuel as when
operating on gasoline or diesel fuel;
(C) for model years 1993-1995 for an automobile capable of
operating on a mixture of an alternative fuel and gasoline or diesel
fuel and if the Administrator of the Environmental Protection Agency
decides to extend the application of this subclause, for an
additional period ending not later than the end of the last model
year to which section 32905(b) and (d) of this title applies,
provides equal or superior energy efficiency, as calculated for the
applicable model year during fuel economy testing for the
Government, when operating on a mixture of alternative fuel and
gasoline or diesel fuel containing exactly 50 percent gasoline or
diesel fuel as when operating on gasoline or diesel fuel; and
(D) for a passenger automobile, meets or exceeds the minimum
driving range prescribed under subsection (c) of this section.
Examination of this section compels the conclusion that Congress
intended that for the purposes of Chapter 329's incentive program that
dual fueled vehicles are, with one limited exception, vehicles
operating either on an alternative fuel or a petroleum fuel but not on
a mixture of the two. Subsection (A) describes a vehicle that operates
on a petroleum or alternative fuel but not a mixture of both.
Subsection (B) limits dual fuel vehicles to those vehicles that offer
equal or superior energy efficiency when operating on an alternative
fuel, thereby indicating that the two modes of operation are exclusive.
Subsection (C) indicates that vehicles operating on a mixture of
alternative fuel and gasoline or diesel fuel may only be considered as
dual fueled automobiles for the 1993-1995 model years (unless extended
by the Administrator of the Environmental Protection Agency to the 2004
model year) when such vehicles offer equal or superior energy
efficiency when operating on a 50/50 mix of alternative fuel and diesel
fuel or gasoline. Therefore, the statutory text of section 32901(a)(8)
indicates that Congress did not intend to make incentives available for
dual fueled vehicles operating on a mix of fuels except under the
limited circumstances enunciated in 32901(a)(8)(C). As the period set
by Congress in which such vehicles could be considered as dual fueled
vehicles has expired and the EPA has not extended this period by
regulation, NHTSA concludes that under Chapter 329 a dual fueled
vehicle is one that is capable of operating on either an alternative
fuel or gasoline or diesel fuel but not a mixture of both
simultaneously. This is not to say, however, that a vehicle using a
fuel that is composed of gasoline or diesel fuel and an alternative
fuel cannot be a dual
[[Page 15324]]
fueled vehicle; under section 32901(a)(1)(K) a mix of gasoline or
diesel fuel and another substance may be an alternative fuel if it is
not substantially petroleum and yields substantial environmental and
energy benefits.
NBB's petition also requests that NHTSA determine that a vehicle
operating on a mix of biodiesel and diesel fuel be deemed to have met
the minimum driving range requirement of 200 miles if the biodiesel
fuel portion of the mixture in the vehicle's fuel tank would propel the
vehicle that distance. As noted above, the agency concludes that
Congress did not intend that vehicles operating on a mixture of
alternative and petroleum fuel be eligible as alternative fuel vehicles
under Chapter 329's incentive program unless that mix is itself an
alternative fuel. NBB contends that the energy content of the
alternative fuel is the relevant criteria for determining range and
further argues that there is no practical difference between a vehicle
operating on a 30 percent biodiesel mix and one with two separate fuel
systems where the biodiesel tank holds 30 percent of the total fuel
capacity. In the latter case, NBB submits, the vehicle would clearly
meet the range requirement if the biodiesel propelled it 200 miles. If,
according to NBB, the vehicle that mixes the two fuels in one tank
cannot be deemed to meet the range requirement, the purposes of the
incentive program will be frustrated and lead to an unequitable result.
However, NBB's argument fails in that a vehicle operating on a mixture
of 30 percent biodiesel and 70 percent diesel is not using an
alternative fuel. In the absence of data demonstrating otherwise, such
a fuel is substantially petroleum and therefore not an alternative fuel
under section 32901(a)(1). The passenger automobile operating with a
dual fuel system would, however, qualify as a dual fueled passenger
automobile if it could reach 200 miles on 100 percent biodiesel because
such a fuel is an alternative fuel.
In response to the petition, the agency has reconsidered its
decision to set a 200 mile minimum driving range for non-electric dual
fueled passenger automobiles when operating on an alternative fuel. As
explained below, the agency is, on reconsideration, reaffirming that
decision.
The petition raises points that are beyond the scope of the final
rule establishing the 200 mile minimum driving range. The agency has
nonetheless examined the merits of the petitioner's requests and
concludes that the relief requested would have been denied even if it
had been within the scope of the final rule. NHTSA concludes that the
existing text of part 538 and the statutory definitions incorporated
therein by reference include neat biodiesel as an alternative fuel. The
agency also concludes that vehicles operating simultaneously on a
mixture of an alternative fuel and gasoline or diesel fuel are not dual
fueled vehicles for the purposes of Chapter 329's incentive program
unless that mixture qualifies as an alternative fuel under section
32901(a)(1)(K). Similarly, NHTSA also concludes that a dual fueled
passenger automobile may not meet the range requirements simply by
virtue of having a percentage of alternative fuel that may propel it
200 miles. The range requirement may only be met by passenger
automobiles that may travel the required distance while being propelled
by a fuel or a fuel mixture that is, by itself, an alternative fuel as
defined by Congress or by NHTSA regulation. Accordingly, the agency is
denying the petition.
Issued on: March 26, 1998.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 98-8364 Filed 3-30-98; 8:45 am]
BILLING CODE 4910-59-P