[Federal Register Volume 64, Number 94 (Monday, May 17, 1999)]
[Rules and Regulations]
[Pages 26822-26829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12250]
[[Page 26821]]
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Part II
Department of Energy
_______________________________________________________________________
Office of Energy Efficiency and Renewable Energy
_______________________________________________________________________
10 CFR Part 490
Alternative Fuel Transportation Program; P-series Fuels; Final Rule
Federal Register / Vol. 64, No. 94 / Monday, May 17, 1999 / Rules and
Regulations
[[Page 26822]]
DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 490
[Docket No. EE-RM-98-PURE]
RIN 1904-AA99
Alternative Fuel Transportation Program; P-Series Fuels
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy (DOE).
ACTION: Notice of final rulemaking.
-----------------------------------------------------------------------
SUMMARY: In response to a petition filed by Pure Energy Corporation,
DOE is amending the rules for the statutory program that requires
certain alternative fuel providers and State government fleets to
acquire alternative fueled vehicles. The regulatory amendments add
three specific blends of methyltetrahydrofuran, ethanol and
hydrocarbons (known as ``P-series'' fuels) to the definition of
``alternative fuel.''
EFFECTIVE DATE: June 16, 1999.
FOR FURTHER INFORMATION CONTACT: Kenneth R. Katz, Office of Energy
Efficiency and Renewable Energy, (EE-34), U.S. Department of Energy,
1000 Independence Avenue, S.W., Washington, D.C. 20585, (202) 586-9171.
SUPPLEMENTARY INFORMATION:
I. Introduction and Background
A. Fuel Characteristics
On June 30, 1997, Pure Energy Corporation petitioned DOE for a
rulemaking to add its proprietary fuel products to the definition of
``alternative fuel'' under the Alternative Fuel Transportation Program
(Program) regulations (10 CFR part 490). DOE published in the Federal
Register the proposed rulemaking on July 28, 1998, 63 FR 40202. Pure
Energy Corporation's P-series fuels are blends of ethanol,
methyltetrahydrofuran (MTHF), and pentanes plus, with butane added to
blends that would be used in severe cold-weather conditions to meet
engine cold start requirements. Pure Energy Corporation has represented
that both the ethanol and the MTHF will be derived from renewable
resources, such as cellulosic biomass from waste paper, agricultural
waste and urban/industrial wood waste. Pure Energy Corporation plans to
use pentanes plus derived from the processing and production of natural
gas, as opposed to those derived from petroleum refining processes.
Pure Energy Corporation holds the exclusive worldwide license to
manufacture and distribute the P-series fuels, which were developed by
Dr. Stephen Paul of Princeton University. The P-series fuels were
awarded Patent number 5,697,987 by the United States Patent and
Trademark Office on December 16, 1997. DOE's evaluation of Pure Energy
Corporation's petition is restricted to three of the formulations
covered under this patent.
To make the P-series fuels, Pure Energy Corporation will be
producing ethanol and MTHF through an integrated process. The company
expects to use commercially proven concentrated acid hydrolysis as its
base technology for this integrated production process. MTHF is
currently produced in limited quantities from furfural (derived from
both biomass and petroleum feedstocks) for use as a specialty chemical
in consumer products and/or process industries. Pure Energy Corporation
has developed a thermochemical technology to produce MTHF from
cellulosic feedstocks through a levulinic acid pathway. Levulinic acid
is a crystalline keto acid obtained by action of dilute acids on
hexoses (six-carbon sugars like glucose or fructose) and on substances,
such as starch or sucrose, that yield hexoses on hydrolysis. The
company integrates this process with an ethanol production system to
achieve technical and economic efficiencies. In this process, the
lignocellulosic feedstock is converted into both five- and six-carbon
sugars, which are then bifurcated into fermentation and thermochemical
pathways to produce ethanol and MTHF, respectively.
Pure Energy Corporation has developed several formulations of the
P-series fuels. The company proposes to vary the components of its P-
series fuels to meet particular market demands. The three formulations
described in Table 1 (Pure Regular, Pure Premium and Pure Cold Weather)
are those for which Pure Energy Corporation, in its petition, provided
specific energy and emissions data. The company claims that the
volumetric percentages of each of the components of the P-series fuels
can range from 10 percent to 50 percent for pentanes plus; from 15
percent to 55 percent for MTHF; from 25 percent to 55 percent for
ethanol; and from zero to 15 percent for normal butane. Table 1
provides the compositions, by volume, of the three specific P-series
fuel formulations which are the subject of this rulemaking.
Table 1--Volume Composition of the P-series Fuels
----------------------------------------------------------------------------------------------------------------
Premium Cold weather
Constituent Regular (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Pentanes plus................................................... 32.5 27.5 16.0
MTHF............................................................ 32.5 17.5 26.0
ethanol......................................................... 35.0 55.0 47.0
normal butane................................................... 0.0 0.0 11.0
----------------------------------------------------------------------------------------------------------------
Based on the data supplied in the petition, the composition of P-
series fuels varies from 60 to 100 percent non-petroleum, on an energy
basis, depending on the source of the pentanes plus and n-butane
components of the blends.
Pure Energy Corporation intends to market the P-series fuels to
owners of flexible fuel vehicles (FFVs) designed to operate on E-85 (85
percent ethanol/15 percent gasoline), on gasoline, or on any blend of
those two fuels. Flexible fuel vehicles are currently available from
two major domestic auto manufacturers as mid-size sedans, minivans and
compact pickup trucks.
B. Patent
On December 16, 1997, the United States Patent and Trademark Office
issued U.S. Patent No. 5,697,987, titled Alternative Fuel, to Princeton
University on a new non-petroleum fuel, for spark-ignition engines,
called the P-series. The United States Patent and Trademark Office's
abstract for this patent reads:
A spark ignition motor fuel composition consisting essentially
of: a hydrocarbon component containing one or more hydrocarbons
selected from five to eight carbon atoms straight-chained or
branched alkanes essentially free of olefins, aromatics, benzene and
sulfur, wherein the hydrocarbon component has a minimum anti-knock
index of 65 as measured by ASTM D-2699 and D-2700 and a maximum DVPE
of 15 psi as measured by ASTM D-5191; a fuel grade
[[Page 26823]]
alcohol; and a co-solvent for the hydrocarbon component and the fuel
grade alcohol; wherein the hydrocarbon component, the fuel grade
alcohol and the co-solvent are present in amounts selected to
provide a motor fuel with a minimum anti-knock index of 87 as
measured by ASTM D-2699 and D-2700, and a maximum DVPE of 15 psi as
measured by ASTM D-5191. A method for lowering the vapor pressure of
a hydrocarbon-alcohol blend by adding a co-solvent for the
hydrocarbon and the alcohol to the blend is also disclosed.
C. Background
10 CFR part 490 implements, in part, title V of the Energy Policy
Act of 1992 (EPACT) (Public Law 102-486) which mandates alternative
fueled vehicle acquisition requirements for certain alternative fuel
providers and State government fleets. Part 490 is one of a variety of
EPACT programs to promote alternative and replacement fuels that reduce
reliance on imported oil, reduce criteria pollutant and greenhouse gas
emissions, increase energy efficiency, and help displace 10 percent of
conventional motor fuels by 2000 and 30 percent by 2010.
Title III of EPACT requires Federal fleet acquisitions of
alternative fueled vehicles. Title IV includes specific authority for a
financial incentive program for States, a public information program,
and a program for certifying alternative fueled vehicle technician
training programs. In addition to the mandates for the purchase of
alternative fueled vehicles by certain alternative fuel providers and
State government fleets, title V provides for a possible similar
mandate for certain private and municipal fleets. Title VI provides for
a program to promote electric motor vehicles.
The types of vehicles that satisfy the alternative fuel provider
and State government fleet mandates in title V are determined in part
by the definition of ``alternative fuel'' in section 301(2). That
definition provides: ``Alternative fuel' means methanol, denatured
ethanol, and other alcohols; mixtures containing 85 percent or more (or
such other percentage, but not less than 70 percent, as determined by
the Secretary, by rule, to provide for requirements relating to cold
start, safety, or vehicle functions) by volume of methanol, denatured
ethanol, and other alcohols with gasoline or other fuels; natural gas;
liquefied petroleum gas; hydrogen; coal-derived liquid fuels; fuels
(other than alcohol) derived from biological materials; electricity
(including electricity from solar energy); and any other fuel the
Secretary determines, by rule, is substantially not petroleum, and
would yield substantial energy security benefits and substantial
environmental benefits.'' [Emphasis added.] 42 U.S.C. 13211(2). The
emphasized phrase in the definition of ``alternative fuel'' states the
minimum procedural and substantive requirements for adding a new fuel
blend to the list of fuels enumerated or implicitly covered by the
provisions of section 301(2).
For reasons set forth in detail below, DOE determines that the
three P-series fuels described in Pure Energy Corporation's petition
(Pure Regular, Pure Premium and Pure Cold Weather) and by United States
Patent number 5,697,987, which contain at least 60 percent non-
petroleum energy content derived from MTHF, which must be manufactured
solely from biological materials, and ethanol, which must be
manufactured solely from biological materials, are substantially not
petroleum and would yield substantial energy security benefits and
substantial environmental benefits, and thus are hereby added to the
definition of ``alternative fuel'' in 10 CFR 490.2.
II. Discussion of Public Comments
A. Pure Energy Corporation Comments
Pure Energy Corporation, the petitioner, was among those submitting
comments to DOE in response to the Notice of Proposed Rulemaking (NOPR)
(63 FR 40202). In the NOPR, DOE noted that neither the Energy Policy
Act of 1992 (the Act), nor the language of legislative committee
reports, provides any guidance on how to measure whether a fuel is
``substantially non-petroleum.'' The word ``substantially,'' DOE
observed, ``* * * is sometimes used as a synonym for the word `mainly'
'' and ``* * * at other times as a synonym for the words `considerably'
or `importantly.' '' Whether to construe ``substantially'' in the
first, narrower sense or in the latter, broader one, DOE said, was a
policy question. DOE further said, ``Obviously, a fuel that is more
than 50 percent non-petroleum in energy-equivalent terms is `mainly'
and therefore `substantially non-petroleum.' '' ( 63 FR 40204). Fuels
of less than 50 percent non-petroleum content could still be regarded
as ``substantially non-petroleum'' if ``substantially'' were construed
in the broader sense, DOE reasoned, since such fuels could be regarded
as ``considerably'' or ``importantly'' non-petroleum. Because all three
of the P-series fuel formulations Pure Energy Corporation described in
its petition are more than 60 percent non-petroleum in energy terms,
DOE elected not to address the policy question of whether to construe
``substantially'' in the narrow or broad sense. DOE proposed to
designate P-series fuel blends as alternative fuels if, like the three
P-series blends described in Pure's petition, they are at least 60
percent non-petroleum in energy terms.
In its comments, Pure Energy Corporation endorsed DOE's statement
regarding fuels of 50 percent or greater non-petroleum content. The
company went on to state its belief that ``* * * 50 percent minimum
non-petroleum energy content is the right standard as a matter of law
and public policy * * *'' The company submitted data on a fourth P-
series formulation it claimed meets the standards for ``substantial
energy security benefits'' and ``substantial environmental benefits,''
but which is 52.3 percent non-petroleum in energy content. Pure Energy
Corporation requested that DOE, in its final rulemaking, set a minimum
non-petroleum energy content for P-series fuels at 50 percent, rather
than at the 60 percent level proposed in the NOPR.
The vehicle emissions test data for the fourth P-series blend
submitted by Pure Energy Corporation with its comments were
inconclusive. Therefore, DOE asked the company to submit additional
data. In order to proceed in an expeditious manner, DOE is electing to
proceed with the final rule on the three P-series blends described in
Pure Energy Corporation's original petition, and will address the
fourth formulation when we receive the additional data.
B. Other Public Comments
In addition to Pure Energy Corporation, forty-two other firms,
organizations and individuals submitted comments in response to the
NOPR. The majority of these spoke in favor of granting Pure Energy
Corporation's petition, with none of their comments raising a
significant issue regarding the rule. Three commenters, however, raised
objections to DOE's granting the petition. Their comments and DOE's
responses to them are summarized below.
One commenter raised the possibility that reactions could occur
between the methyltetrahydrofuran (MTHF) component of P-series fuels
and metallic engine components containing molybdenum. (For example,
molybdenum is sometimes used as a ``facing'' material on engine piston
rings.) The commenter expressed concern that such reactions could
degrade those components and lead to the formation of hydrogen which
could in turn lead to hydrogen embrittlement of engine parts. This
commenter cited work reported in the Bulletin of the
[[Page 26824]]
Korean Chemical Society in which molybdenum atoms were observed to
break apart the chemical bonds in MTHF, among other compounds.
DOE's examination of the work cited revealed that the Korean
researchers had vaporized a molybdenum wire with very high electric
currents to produce free molybdenum atoms. Molybdenum's melting point
is over 4750 deg.F. and its boiling point is over 8380 deg.F. These
temperatures are far higher than any actually experienced by any part
of an internal combustion engine. Thus, there is little likelihood that
free molybdenum atoms could be liberated from molybdenum-bearing engine
parts to react in the gas phase with MTHF. Moreover, hydrogen
embrittlement is not a problem in current engines, despite the fact
that free hydrogen may be produced as a combustion intermediate
whenever any hydrogen-bearing fuel is used. Therefore, there is no
reason to expect that P-series fuels will engender hydrogen
embrittlement problems.
The commenter raised the possibility that molybdenum could also
lead to similar hydrogen-related problems in fuel storage systems.
Molybdenum is a key ingredient in hydro treating catalysts. These
catalysts are used in refining processes which remove sulfur from
petroleum and natural gas liquids and otherwise improve their
properties. The commenter suggested that molybdenum would be carried
over from these catalysts in the pentanes plus and subsequently react
with other P-series fuel components to generate hydrogen by the same
reactions the commenter had proposed would occur in engines. This
problem does not exist with other fuels that have undergone hydro
treatment, so it is unlikely it will exist with P-series fuels. In
hydro treating catalyst formulations, molybdenum exists in the form of
molybdenum disulfide, not as metallic molybdenum. The Korean research
that the commenter cited indicates that metallic molybdenum and
extremely high temperatures are needed to promote the reactions the
commenter fears will lead to hydrogen formation.
Finally, noting the high ethanol content of P-series fuels, this
commenter expressed the concern that contamination of the fuels by
water would lead to fuel phase separation. DOE believes the fuels
industry has accumulated ample experience in handling and distributing
fuels containing varying proportions of ethanol over the past 20 or
more years to prevent this from being a concern.
A second commenter, citing P-series' ``wide variation in petroleum
content (the butane and pentanes plus),'' urged DOE to resolve the
issue of ``* * * whether P-series fuel meets the definition of
`substantially non-petroleum.' '' As DOE noted in the NOPR, the P-
series fuels that are the subject of this rulemaking are a minimum of
63.8 percent non-petroleum on an energy basis, and DOE regards this as
sufficient to qualify them as ``substantially non-petroleum.'' Further,
the butane and pentanes plus may as easily be derived from natural gas
processing as from petroleum refining, and hence may also be non-
petroleum. In that case, P-series fuels would be 100 percent non-
petroleum.
The commenter also pointed out that, ``Fuels must also have tightly
controlled specifications for proper combustion and vehicle operation.
It is critical that performance-based fuel specifications be
established and enforced.'' Lack of such specifications, the commenter
said, would increase the difficulty vehicle manufacturers would
encounter in meeting increasingly stringent emissions standards and
permit wide variations of in-use fuel properties. This in turn would
``limit vehicle manufacturer and consumer interest in these fuels.''
DOE recognizes the validity of this concern, but the establishment of
practical, detailed fuel specifications lies outside DOE's authority.
Traditionally, such specifications are arrived at through a consensus
of fuel producers and users, based on economics and performance. The
American Society for Testing and Materials (ASTM) provides one example
of an appropriate forum for achieving such a consensus. DOE will be
available to assist those organizations with the establishment of
detailed fuel specifications for the P-series fuels.
Finally, the commenter pointed out that existing flexible fuel
vehicle products have not been designed to operate on P-series fuels
and have not been validated for operation on these fuels,
notwithstanding the emissions testing carried out by Pure Energy
Corporation. ``It would be inappropriate to state or imply such a
capability,'' the commenter said. The commenter added that use of P-
series fuels in existing flexible fuel vehicles or in future vehicles
not certified with P-series fuels could void the manufacturers'
warranties. DOE also acknowledges the validity of these comments. DOE
has not stated or implied, by granting alternative fuel status to P-
series fuels, that available vehicles were manufactured to operate on
the fuels or that use of the fuels will not void vehicle warranties.
How and under what circumstances to honor product warranties is the
responsibility of the vehicle manufacturers, and DOE's decision to
grant the P-series fuels alternative fuel status in no way limits
manufacturers' prerogatives in this regard. Ultimately, it will be up
to vehicle manufacturers to determine the effects of fuels on their
products and to decide whether they wish to test or certify their
vehicles on those fuels.
A third commenter opposed the designation of P-series fuels as
alternative fuels under the Act. This commenter stated the belief ``* *
* that a fuel mixture that contains only 60 percent non-petroleum fuel
should not be classified as an alternative fuel.'' DOE disagrees with
this statement and stands by the reasoning that led to its initial
affirmative determination to proceed with a rulemaking, as explained in
the NOPR. ``Furthermore,'' the commenter went on, ``there is no
assurance that the fuels under consideration actually will have even
this level of non-petroleum content, since some of the components of
the fuels can come from petroleum or non-petroleum feedstocks.'' This
comment appears to arise from a misreading of the NOPR. In fact, the
minimum non-petroleum content of the P-series fuels that are the
subject of this rulemaking is 63.8 percent (on an energy basis). If the
balance of the blend constituents are from natural gas processing, the
blend will be wholly (100 percent) from non-petroleum sources.
In evaluating the P-series fuels, and in light of feedback received
that expressed concerns similar to those of the above commenter, DOE
became concerned that Pure Energy Corporation would have the ability to
utilize ethanol that is not manufactured from biomass or biological
materials. It is possible to manufacture ethanol from petroleum, for
example, by the hydration of ethylene. DOE believes that Pure Energy
Corporation fully intends to manufacture the ethanol included in the P-
series fuels from biological materials. However, because DOE has some
concerns about the availability of biologically derived ethanol, it was
decided to limit the ethanol feedstock for the P-series fuels to
biological materials. Therefore, the parenthetical phrase
``manufactured solely from biological materials'' has been added to the
regulatory language as a qualifier for the ethanol feedstock.
The commenter also raised several procedural objections to DOE's
proposed granting of alternative fuel status to Pure's P-series fuels.
The first of these is the commenter's contention that ``DOE must define
new alternative fuel blends in the same way existing
[[Page 26825]]
blends are defined.'' According to the commenter, ``In attempting to
expand the list of alternative fuels, DOE has improperly construed the
statute's requirement that new fuels must be `substantially non-
petroleum.' Moreover, in interpreting the term `substantially,' DOE has
completely ignored the guidelines established for fuel blends/mixtures
explicitly recognized in the Act.'' The commenter's reference is to
section 301(2) of the Act, which says (in part): ``the term
`alternative fuel' means methanol, denatured ethanol, and other
alcohols; mixtures containing 85 percent or more (or such other
percentage, but not less than 70 percent, as determined by the
Secretary, by rule, to provide for requirements relating to cold start,
safety, or vehicle functions) by volume of methanol, denatured ethanol,
and other alcohols with gasoline or other fuels * * *''
The commenter claims that in identifying specific fuels and fuel
blends deemed to be alternative fuels, the Act established guidelines
that DOE must adhere to in making subsequent determinations. In
particular, the commenter believes section 301(2) of the Act ``* * *
explicitly forbid[s] the inclusion of ethanol fuel blends where the
ethanol component of the mixture is less than 85 percent,'' and that,
``[t]here is no statutory basis for designating as alternative fuels
blends that contain considerably more petroleum than the blends listed
in the statute.''
DOE believes that the commenter has misinterpreted the Act. In
conferring explicit alternative fuel status on ethanol blends of 85
volume percent and above, DOE does not believe Congress intended
implicitly to reject all ethanol blends of less than 85 volume percent.
Indeed, the Secretary of Energy is granted discretion under certain
circumstances to approve ethanol blends containing as little as 70
percent ethanol. Nor does DOE believe that the Congress, by providing a
list of alternative fuels, was enunciating overarching principles that
it intended DOE to follow in future determinations. Rather, Congress
delineated such principles explicitly in section 301(2) when it said
that the definition of ``alternative fuel'' could include ``* * * any
other fuel the Secretary determines, by rule, is substantially non-
petroleum and would yield substantial energy security benefits and
substantial environmental benefits'' [Emphasis added]. The commenter's
inferences regarding Congressional intent cannot be reconciled with
this explicit language. Finally, as noted above, the P-series blends do
not necessarily or always contain any petroleum component.
The three criteria enumerated in section 301(2), which DOE has used
in making this determination (and, as directed by Congress, will be
used in making future determinations) represent a rigorous standard by
which to measure the efficacy of potential alternative fuels in
achieving the overall goals of the Energy Policy Act. DOE believes that
analysis of potential alternative fuels by these criteria is
appropriate and statutorily required.
The commenter also expressed the view that DOE erred in making its
determination of whether a fuel is substantially non-petroleum on the
basis of the fuel's energy content, rather than on the basis of the
volume of the fuel that is non-petroleum. The commenter said, ``DOE's
notice [the NOPR] indicates that, since the energy displacement goals
contained in EPACT are measured in terms of energy equivalent units,
DOE also may evaluate a fuel's non-petroleum content based on energy
displacement rather than volume displacement.'' The commenter went on,
``Section 301(2) actually dictates that the blended fuels recognized in
the Act must contain at least 70 percent by volume of ethanol, methanol
or alcohol. Looking at the statute and the specific section under
review reveals that Congress intended these fuels to be compared based
on volume not energy displacement.'' [Emphasis in original] Here again,
DOE believes the inferences the commenter draws from section 301(2) of
the Act regarding Congressional intent are incorrect. Nothing in the
portion of section 301(2) that lists fuels Congress designated as
alternative fuels at the time of the Act's passage can be read as
establishing rigorous standards DOE is obliged to apply in future
alternative fuel determinations. In addition to the neat and blended
alcohol fuels, Section 301(2) lists natural gas and hydrogen. These
alternative fuels are gases whose volume depends on the pressure and
temperature under which they are stored. Energy content (energy
displacement potential) is the only reasonable basis on which to
compare them to the liquid fuels. This is also an appropriate basis of
comparison since all transportation prime movers which might use any of
these fuels are dependent on fuel energy content, rather than fuel
volume.
III. Statutory Criteria for Designating Additional Alternative
Fuels
Neither section 301(2) nor any other provision of the Act states
specifically or indicates how to measure whether a new fuel: (1) is
``substantially not petroleum'' and (2) would yield ``substantial
energy security benefits;'' and (3) would yield ``substantial
environmental benefits.'' Moreover, the Act does not state that these
criteria are exclusive; in appropriate circumstances, DOE could
consider other criteria related to achievement of the purposes of the
Program.
Legislative committee report language likewise does not identify
specifically what numbers and measures Congress viewed as defining the
minimums that would qualify as substantially not petroleum, and that
would satisfy the substantial energy security and substantial
environmental benefits criteria. However, the report of the House
Committee on Energy and Commerce described the pertinent language in
section 301(2) as providing ``* * * the Secretary with the opportunity
to add alternative and replacement fuels that are not now being
marketed to those specifically identified in the legislation.''
[Emphasis added.] H.R. Rep. No. 474(1), 102nd Cong., 2nd Sess., 182,
reprinted in 1992 U.S. Code Cong. & Admin. News 2005. The word
``opportunity'' suggests that the authority to add fuels to the
definition of ``alternative fuel'' is largely discretionary.
In evaluating the P-series fuels, DOE asked the National Renewable
Energy Laboratory and Argonne National Laboratory to review the data
presented in Pure Energy Corporation's petition against the statutory
criteria for designating an ``alternative fuel.'' Copies of these
evaluations, written comments received, technical reference materials
mentioned in the notice, and any other docket material received may be
read and copied at the DOE Freedom of Information Reading Room, U.S.
Department of Energy, Room 1E-090, 1000 Independence Ave., S.W.,
Washington, DC 20585, telephone (202) 586-3142, between the hours of
8:30 a.m. and 4:30 p.m., Monday through Friday, except Federal
holidays. The docket file material will be filed under ``EE-RM-98-
PURE.''
A. Substantially Not Petroleum
Any standard dictionary or thesaurus indicates that
``substantially'' is an adverb that can be used to convey a variety of
subtly different meanings. ``Substantially'' is sometimes used as a
synonym for the word ``mainly.'' At other times, it is used as a
synonym for the words ``considerably'' or ``importantly.'' See, e.g.,
Webster's New World Thesaurus 725 (Simon & Schuster, 1985). Since this
rulemaking does not involve fuels that are less than
[[Page 26826]]
50 percent non-petroleum, in terms of energy content, it is unnecessary
to address this policy question.
Section 502(b) of the Act establishes goals for replacing the
projected consumption of motor fuel in the U.S. on an energy equivalent
basis. The goals provided by this section are that 10% of the motor
fuel consumed by 2000 and 30% of the motor fuel consumed by 2010 will
be replacement fuels. These goals are the driving force for all the
alternative and replacement fuel provisions in the Act. Because the
achievement of these goals is to be measured on an energy equivalent
basis, DOE believes that, when evaluating a fuel, the determination of
whether it is ``substantially not petroleum'' should be based on an
analysis of the fuel's non-petroleum energy content, rather than a
volumetric analysis of the fuel's non-petroleum content.
Pure Energy Corporation claims that, on an energy basis, its three
P-series fuels will be at least 60 percent derived, and may be up to
100 percent derived, from non-petroleum sources, depending on the
source of the light hydrocarbons in the blends. In its petition, the
Pure Energy Corporation provided DOE with information and analysis to
substantiate these claims. DOE confirms the accuracy of Pure Energy
Corporation's claim regarding the energy-based non-petroleum content of
the P-series fuels. Table 2 summarizes the worst-case (lowest non-
petroleum) makeup of the three P-series fuel formulations, based on the
net (lower) heating value of all constituents.
Table 2--Verified Non-petroleum Energy Content of the P-series Fuels
----------------------------------------------------------------------------------------------------------------
Cold weather
Constituent Regular Premium (percent)
----------------------------------------------------------------------------------------------------------------
Pentanes plus................................................... 36.2 33.3 19.1
MTHF............................................................ 37.7 22.1 32.3
ethanol......................................................... 26.1 44.6 37.5
normal butane................................................... 0.0 0.0 11.2
Non-petroleum (excluding pentanes plus, butane)................. 63.8 66.7 69.8
----------------------------------------------------------------------------------------------------------------
It is evident to DOE that the MTHF and ethanol components of the P-
series fuels, as described in Pure Energy Corporation's petition, will
be non-petroleum, because they will be manufactured from biological
materials. However it is less clear whether the pentanes plus component
is non-petroleum. DOE's Energy Information Administration (EIA), in its
publication Annual Energy Review 1996, 386 ((DOE/EIA-0384(96)) defines
``pentanes plus'' as ``a mixture of hydrocarbons, mostly pentanes and
heavier, extracted from natural gas. [This] includes isopentane,
natural gasoline, and plant condensate.'' This same publication also
defines petroleum products as including ``unfinished oils, liquefied
petroleum gases, pentanes plus, aviation gasoline, motor gasoline,
naphtha-type jet fuel, kerosene-type jet fuel, kerosene, distillate
fuel oil, residual fuel oil, petrochemical feedstocks, special
naphthas, lubricants, waxes, petroleum coke, asphalt, road oil, still
gas, and miscellaneous products.'' However, it is unnecessary to
determine whether to restrict pentanes plus on the basis of source
because the MTHF and ethanol, which must be manufactured solely from
biological materials, are present in all three fuel blends, result in a
non-petroleum energy content for the P-series formulations of at least
63.8 percent. That percentage is the main or predominant portion of the
fuel, and even under the narrow definition of ``substantially,'' the
three fuel blends are ``substantially not petroleum.''
Because U.S. Patent number 5,697,987 does not specifically define
the composition of the three P-series fuels, DOE has determined that
the fuels need to be more specifically described before they can be
added to the regulatory definition of ``alternative fuel.'' Given that
the petition shows that the three P-series fuels will be at least 60
percent derived from non-petroleum sources, and the fact that Pure
Energy Corporation claims that, on an energy basis, its three P-series
fuels will be at least 60 percent derived from non-petroleum sources,
DOE is using that percentage in the rule as a way of more narrowly
defining the three P-series fuels. DOE believes that the amount of MTHF
and ethanol in the fuel blends will result in a non-petroleum content
of at least 60 percent for the three P-series fuels, absent any other
non-petroleum component, if the MTHF and the ethanol are manufactured
solely from biological materials. Although, based on our evaluation,
DOE could have established a non-petroleum content of 63.8 percent for
the P-series fuels, establishing the minimum percentage of 60 percent
provides the company with some processing flexibility.
On the basis of the foregoing, DOE has concluded that the three P-
series fuels, as described by United States Patent number 5,697,987,
which contain at least 60 percent non-petroleum energy content derived
from MTHF, which must be manufactured solely from biological materials,
and ethanol, which must be manufactured solely from biological
materials, are ``substantially not petroleum'' as that phrase is used
in section 301(2) of the Act.
B. Substantial Energy Security Benefits
Pure Energy Corporation claims in its petition that the three P-
series fuels are 100 percent domestic and capable of displacing
gasoline on essentially a gallon-for-gallon basis. Pure Energy
Corporation notes that each gallon of the P-series fuel directly
displaces 0.88 gallons of RFG in vehicle use. Pure Energy Corporation
also states that the energy required to produce a one-gallon-equivalent
of the fuel is approximately 13,800 BTU less than that required to
produce one gallon of RFG.
The petition provides information to support a claim that
production of the P-series fuels results in a positive energy balance.
The process efficiency (BTUs produced per BTU of input) of the P-series
fuels is approximately 2.25 when the ethanol is produced from renewable
resources such as biomass. If, however, the ethanol is produced from
corn, the process efficiency is slightly lower, with a value between
1.75 and 1.88. Although the process efficiency is slightly lower when
the ethanol is derived from corn, production of ethanol from either
feedstock represents a significant energy savings for the life cycle of
the fuel.
DOE analyses support Pure Energy Corporation's claim of significant
petroleum displacement, although the company's claim of 100 percent
domestic content appears to be slightly high.
It is estimated that the P-series fuels (regular grade) with
pentanes plus derived from natural gas would be 96 percent derived from
domestic resources. It is believed that the
[[Page 26827]]
feedstock for ethanol and MTHF production will almost certainly be
wholly domestic. Since the feedstock for the pentanes plus and the
butane will be either natural gas or petroleum, and because a portion
of these feedstocks is currently and will continue to be imported, it
is debatable whether the P-series fuels will ever be wholly derived
from domestic resources. If the pentanes plus were derived from
refining petroleum, at oil import levels projected by EIA for 2015, the
regular grade P-series fuel would still be 80 percent derived from
domestic resources.
DOE also estimates that the P-series fuels could reduce fossil
energy use by 49 to 57 percent, relative to RFG, and that the P-series
fuels could reduce petroleum use by 79 to 81 percent, relative to RFG.
On the basis of the foregoing, DOE has concluded that the three P-
series fuels, as described by United States Patent number 5,697,987,
which contain at least 60 percent non-petroleum energy content derived
from MTHF, which must be manufactured solely from biological materials,
and ethanol, which must be manufactured solely from biological
materials, would yield ``substantial energy security benefits'' as that
phrase is used in section 301(2) of the Act.
C. Substantial Environmental Benefits
Pure Energy Corporation had vehicle tailpipe and evaporative
emissions tests conducted by an Environmental Protection Agency (EPA)
contract automotive test laboratory using both the current Federal Test
Procedure (FTP) and the US06 test. (A description of the US06 test can
be found in the NOPR at 63 FR 40205 and in the Code of Federal
Regulations at 40 CFR part 86.)
Pure Energy Corporation's test vehicles, two 1997 Ford Taurus E-85
flexible-fuel vehicles, were operated on eight fuels: three P-series
fuels (regular, premium and cold weather), E-85, Federal Certification
gasoline, California Phase II RFG and two commercial gasolines (a
summer and a winter blend). The results were submitted to DOE as part
of the company's petition. Pure Energy Corporation also provided an
analysis of greenhouse gas emissions associated with production,
distribution and use of the three P-series fuels and compared them to
those of gasoline and E-85.
Both the criteria pollutant emissions test results and the
greenhouse gas analysis support Pure Energy Corporation's claim of
substantial environmental benefits arising from the use of the P-series
fuels. Criteria pollutant emissions from the P-series fuels were
consistently among the lowest of all test fuels, met Federal Tier 1
standards and statutorily provided Federal Tier 2 standards in every
case, and compared favorably with those from E-85. The premium P-series
fuel had better emission characteristics than the regular P-series
fuel. The P-series fuels reduced emissions of non-methane hydrocarbons
(NMHC) and total hydrocarbons by almost a third compared to Phase 2
RFG. It is worth noting that all of the fuels tested had evaporative
emissions well below the evaporative emissions standard for Federal
Tier 1. Table 3 summarizes the results of the FTP emissions results
(all results in grams per mile). The numbers are averages over both
cars tested and all FTP tests performed, as presented in Pure Energy
Corporation's petition.
Table 3--Comparison of Federal Test Procedure Emission Results
[gram/mile]
----------------------------------------------------------------------------------------------------------------
Carbon Nitrogen
NMHC monoxide oxides
----------------------------------------------------------------------------------------------------------------
Pure Regular.................................................... 0.074 1.081 0.064
Pure Premium.................................................... 0.064 1.062 0.059
Phase II RFG.................................................... 0.115 1.247 0.039
Tier 1 standards................................................ 0.250 3.4 0.4
Tier 2 standards................................................ 0.125 1.7 0.2
----------------------------------------------------------------------------------------------------------------
The Tier 2 standards referenced in Table 3 are the pending standards
identified by Congress in section 202(i) of the Clean Air Act (CAA). A
discussion of the process EPA is undertaking to establish Tier 2
standards can be found in the NOPR.
As noted in Table 4, the P-series fuels had reduced ozone-forming
potential (OFP), carbon monoxide and air toxics emissions. Table 4
compares the emission results of the P-series fuels, Indolene, Phase II
RFG and commercial gasoline to EPA's National Ambient Air Quality
Standards (NAAQS). [40 CFR part 63]
The OFP is a measure of the performance of the fuel-vehicle
combination, calculated by multiplying the fraction of each emissions
compound by its reactivity. The specific reactivity is calculated by
dividing the OFP by the mass of the non-methane organic gaseous
emissions. It is considered a better gauge of the reactivity of the
fuels' emissions profiles. The numbers are averages of both cars tested
and all FTP and US06 tests performed, as presented in Pure Energy
Corporation's petition.
Table 4.--Comparison of Emission Results Related to NAAQS
[gram/mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO NOX OFP Spec. React.
-----------------------------------------------------------------------------------------------
FTP USO6 FTP USO6 FTP USO6 FTP USO6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Indol................................................... 1.421 11.99 0.056 0.040 0.488 0.470 3.248 3.092
RFG II.................................................. 1.247 10.56 0.039 0.049 0.469 0.379 3.640 3.059
Comm. Gas............................................... 1.427 12.07 0.095 0.077 0.522 0.501 3.334 3.070
E85..................................................... 1.218 5.15 0.056 0.079 0.494 0.087 2.410 3.633
Pure Reg................................................ 1.081 6.15 0.064 0.057 0.305 0.161 3.360 3.460
Pure Prem............................................... 1.062 6.23 0.059 0.081 0.282 0.158 2.849 3.568
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 26828]]
The petition stated that the total emissions resulting from the
production of a gallon of P-series fuels are 71 percent lower than
those associated with production of one gallon of Phase II RFG. Of note
are the claims that emissions are reduced, relative to Phase II RFG, by
more than 99 percent for methane, by 85 percent for SOX, by
71 percent for carbon dioxide and by 68 percent for nitrogen oxides.
The petition claims that the P-series fuels perform better than
Phase II RFG or Indolene in terms of direct carbon dioxide emissions
and that P-series fuels will result in significant reductions in carbon
dioxide emissions when considered on a life-cycle basis. If the P-
series fuels are produced from biomass, as Pure Energy Corporation
plans to do, it is claimed that a significant percent of the carbon
emissions associated with the gasoline life-cycle will be avoided.
Specifically, the company estimates that the P-series regular fuel, on
a life-cycle basis, will reduce carbon dioxide emissions by at least 63
percent.
DOE assessed the emissions test results and analyzed the full fuel
cycle greenhouse gas emissions of the P-series fuels. DOE confirmed
that regular and premium formulations of the P-series fuels displayed
carbon monoxide, nitrogen oxides and non-methane hydrocarbon equivalent
emissions that met the Tier 1 and statutorily provided Tier 2
standards, and that their evaporative emissions were well below the
Tier 1 standards. DOE notes that the emissions of air toxics from the
P-series fuels were lower than those from all other test fuels, both in
terms of total mass emissions and in terms of their potency weighted
toxics (PWT) emissions. The PWT weighs each individual component by a
factor that represents its relative toxicity.
DOE's evaluation of the full fuel cycle greenhouse gas emissions of
the P-series fuels confirmed that, over their entire production,
distribution and end-use cycle, the P-series fuels will result in
greenhouse gas emissions 45 to 50 percent below those of reformulated
gasoline. These reductions in greenhouse gas emissions are possible if
both the ethanol and the MTHF components of the P-series fuels are made
from biological materials, which is Pure Energy Corporation's
intention.
On the basis of the foregoing, DOE has concluded that the three P-
series fuels, as described in Pure Energy Corporation's petition and by
United States Patent number 5,697,987, which contain at least 60
percent non-petroleum energy content derived from MTHF, which must be
manufactured solely from biological materials, and ethanol, which must
be manufactured solely from biological materials, would yield
``substantial environmental'' benefits as that phrase is used in
section 301(2) of the Act.
IV. Regulatory and Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993).
Accordingly, this rulemaking has not been reviewed by the Office of
Information and Regulatory Affairs of the Office of Management and
Budget (OMB).
B. Review Under Executive Order 12612
Executive Order 12612, ``Federalism,'' 52 FR 41685 (October 30,
1987) requires that regulations, rules, legislation and other policy
actions be reviewed for any substantial direct effect on States, on the
relationship between the National Government and the States, or in the
distribution of power and responsibilities among various levels of
government. If there are substantial effects, the Executive Order
requires the preparation of a federalism assessment to be used in all
decisions involved in promulgating and implementing policy action. DOE
has analyzed this rulemaking in accordance with the principles and
criteria contained in Executive Order 12612, and has determined there
are no federalism implications that would warrant the preparation of a
federalism assessment. The rule promulgated today would simply allow an
additional fuel to qualify as an alternative fuel for the purposes of
the Energy Policy Act of 1992. The rule would not have a substantial
direct effect on States, the relationship between the States and
Federal Government, or the distribution of power and responsibilities
among various levels of government.
C. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires
preparation of an initial regulatory flexibility analysis for every
rule which by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
Today's rule would provide an additional fuel choice for organizations
which must comply with the requirements of the Alternative Fuel
Transportation Program (10 CFR part 490) and the requirements for
Federal fleets under Title III of EPACT. There is no reason to
anticipate any adverse impact. DOE certified in the notice of proposed
rulemaking that the rule will not have a significant economic impact on
a substantial number of small entities. DOE received no comments on
that certification.
D. Review Under the National Environmental Policy Act
The rule identifies the P-series fuels as ``alternative fuel'' as
that term is defined in the Alternative Fuel Transportation Program
regulations (10 CFR 490.2) and section 301(2) of the Energy Policy Act
(42 U.S.C. 13211(2)). The rule interprets statutory and regulatory
definitions and does not change the environmental effect of the
Alternative Fuel Transportation Program regulations. DOE, therefore,
has determined that the rule is covered under the Categorical Exclusion
in paragraph A5 to Subpart D, 10 CFR part 1021. Accordingly, neither an
environmental assessment nor an environmental impact statement is
required.
E. Review Under the Paperwork Reduction Act
No new collection of information will be imposed by this
rulemaking. Accordingly, no clearance by the Office of Management and
Budget is required under the Paperwork Reduction Act (44 U.S.C. 3501 et
seq.).
F. 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. 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
[[Page 26829]]
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 section 3(b) to
determine whether they are met or it is unreasonable to meet one or
more of them. DOE has completed the required review and determined
that, to the extent permitted by law, the rule meets the relevant
standards of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written assessment of the
effects of any Federal mandate in a proposed or final agency rule that
may result in the expenditure by State, local, and tribal governments,
in the aggregate, or by the private sector, of $100 million in any one
year. The Act also requires a Federal agency to develop an effective
process to permit timely input by elected officers of State, local and
tribal governments 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. The rule published today does not
contain any Federal mandate, so these requirements do not apply.
H. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 801(2).
List of Subjects in 10 CFR Part 490
Administrative practice and procedure, Energy conservation, Fuel,
Motor vehicles.
Issued in Washington, DC on 16 April, 1999.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons set forth in the Preamble, Part 490 of Title 10,
Chapter II, Subchapter D, of the Code of Federal Regulations is amended
as set forth below:
PART 490--ALTERNATIVE FUEL TRANSPORTATION PROGRAM
1. The authority citation for Part 490 continues to read as
follows:
Authority: 42 U.S.C. 7191, 13211, 13235, 13251, 13257, 13258,
13260-3.
2. Section 490.2, Definitions, is amended by revising the
definition of ``Alternative Fuel,'' to read as follows:
Sec. 490.2 Definitions.
* * * * *
Alternative Fuel means methanol, denatured ethanol, and other
alcohols; mixtures containing 85 percent or more by volume of methanol,
denatured ethanol, and other alcohols with gasoline or other fuels;
natural gas; liquefied petroleum gas; hydrogen; coal-derived liquid
fuels; fuels (other than alcohol) derived from biological materials
(including neat biodiesel); three P-series fuels (specifically known as
Pure Regular, Pure Premium and Pure Cold Weather) as described by
United States Patent number 5,697,987, dated December 16, 1997, and
containing at least 60 percent non-petroleum energy content derived
from methyltetrahydrofuran, which must be manufactured solely from
biological materials, and ethanol, which must be manufactured solely
from biological materials; and electricity (including electricity from
solar energy).
* * * * *
[FR Doc. 99-12250 Filed 5-14-99; 8:45 am]
BILLING CODE 6450-01-P