[Federal Register Volume 72, Number 178 (Friday, September 14, 2007)]
[Proposed Rules]
[Pages 52496-52506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18153]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 72, No. 178 / Friday, September 14, 2007 / 
Proposed Rules  

[[Page 52496]]



DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 490

RIN 1904-AB69


Alternative Fuel Transportation Program; Private and Local 
Government Fleet Determination

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy (DOE).

ACTION: Notice of proposed determination and public hearing.

-----------------------------------------------------------------------

SUMMARY: Pursuant to the Energy Policy Act of 1992 (EPAct 1992), the 
Department of Energy (DOE) proposes to determine that a regulatory 
requirement for the owners and operators of certain private and local 
government fleets to acquire alternative fueled vehicles (AFVs) is not 
necessary to achieve the recently modified EPAct 1992 Replacement Fuel 
Goal. DOE therefore also proposes to determine that it cannot issue a 
requirement for certain private and local government fleets to acquire 
alternative fueled vehicles.

DATES: Written comments (eight copies and, if possible, an e-mail copy) 
on the proposed determination must be received by DOE on or before 
November 13, 2007; electronic copies of comments may be sent to the e-
mail address listed below.
    Oral views, data, and arguments may be presented at the public 
hearing, which will be held from 9 a.m. until 4 p.m. on October 17, 
2007. The length of each oral presentation is limited to 10 minutes. 
The public hearing will be held at the U.S. Department of Energy, Room 
GH-019, Forrestal Building, 1000 Independence Avenue, SW., Washington, 
DC 20585-0121. Requests to speak at the hearing must be submitted to 
DOE no later than 4 p.m. on October 10, 2007.

ADDRESSES: Written comments (eight copies) and requests to speak at the 
public hearing should be addressed to: U.S. Department of Energy, 
Office of Energy Efficiency and Renewable Energy, EE-2G, RIN 1904-AB69, 
1000 Independence Avenue, SW., Washington, DC 20585-0121. E-mails may 
be sent to: [email protected]. Comments may also be 
submitted through the Federal Rulemaking Portal at http://www.regulations.gov. DOE is currently using Microsoft Word. 
Organizations are strongly encouraged to submit comments 
electronically, to facilitate timely receipt of comments and ease 
inclusion in the electronic docket.
    Copies of this notice, the transcript from the hearing, and written 
comments will be placed at the following Web site address: http://www1.eere.energy.gov/vehiclesandfuels/epact/private/index.html. 
Interested parties may also access these documents using a computer in 
DOE's Freedom of Information (FOI) Reading Room, U.S. Department of 
Energy, Forrestal Building, Room 1E-190, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121, (202) 586-3142, between the hours of 9 a.m. 
and 4 p.m., Monday through Friday, except Federal holidays. For more 
information concerning public participation in this rulemaking, see the 
``Opportunity for Public Comment'' section found in the SUPPLEMENTARY 
INFORMATION section of this notice.

FOR FURTHER INFORMATION CONTACT: For information concerning this 
notice, contact Mr. Dana V. O'Hara, Office of Energy Efficiency and 
Renewable Energy (EE-2G), U.S. Department of Energy, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121; (202) 586-9171; [email protected]; or Mr. Chris Calamita, Office of the General 
Counsel, U.S. Department of Energy, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121; (202) 586-9507.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Statutory Requirements
    A. Definitions
    B. Key Statutory Requirements
    C. Other Related Requirements
    D. No Fuel Use Requirement Authority
III. Background
    A. History
    B. Previous Rulemakings and Related Court Rulings
IV. Analysis for Private and Local Fleets Rule Determination
    A. Achievability of the Replacement Fuel Goal
    B. Potential Contribution of a Private and Local Government 
Fleet Requirement to the Production Capacity of Alternative Fuel
V. Proposed Determination
VI. Opportunity for Public Comment
    A. Participation in Rulemaking
    B. Written Comment Procedures
    C. Public Hearing Procedures
VII. Regulatory Review
VIII. Approval by the Office of the Secretary

I. Introduction

    Under the Energy Policy Act of 1992 (EPAct 1992; Pub. L. 102-486), 
DOE is required to determine if a requirement for certain private and 
local government vehicle fleets to acquire alternative fueled vehicles 
(AFVs) is necessary, as specified in EPAct 1992. (42 U.S.C. 13257(e)) 
If DOE determines that the Private and Local Government Fleet 
Requirement is ``necessary,'' then DOE must issue regulations requiring 
certain fleets to acquire light-duty AFVs annually. (42 U.S.C. 
13257(g)) Fleets subject to such a mandate would include all fleets 
that have at least 50 light duty motor vehicles, and would exclude 
Federal fleets, State fleets, and fleets covered under the Alternative 
Fuel Provider mandate. (42 U.S.C. 13257(g)(1)) If DOE determines that 
the Private and Local Government Fleet Requirement is not necessary 
then DOE must publish such determination in the Federal Register as a 
final agency action, including an explanation of the findings on which 
such a determination is made and the basis for the determination. (42 
U.S.C. 13257(f))
    Relevant to the evaluation of a Private and Local Government Fleet 
Requirement is the replacement fuel goal established in section 502(b) 
of EPAct 1992. (42 U.S.C. 13252(b)) Section 502(b)(2) establishes goals 
of producing sufficient replacement fuels to replace:
    At least ten percent by the year 2000, and at least thirty percent 
by the year 2010 of the projected consumption of motor fuel in the 
United States for each such year, with at least half of such 
replacement fuels being domestic fuels. (Replacement Fuel Goal; 42 
U.S.C. 13252(b)(2)) Under section 504(b) of EPAct 1992, if DOE 
determines that the

[[Page 52497]]

section 502 goals are unachievable, DOE must establish achievable 
goals. (42 U.S.C. 13254(b))
    In determining whether to establish a Private and Local Government 
Fleet Requirement, DOE is directed to determine if such a requirement 
is ``necessary.'' (42 U.S.C. 13257(e)(1)) The ``necessity'' 
determination is a two part test. First, DOE must determine if the 
Replacement Fuel Goal established under section 502, or as modified 
under section 504 of EPAct 1992, is achievable absent a Private and 
Local Government Fleet Requirement. (42 U.S.C. 13257(e)(1)(A)) Next, 
the ``necessity'' determination requires DOE to determine if such a 
goal is practicable and actually achievable through implementation of a 
Private and Local Government Fleet Requirement in combination with 
voluntary means and other relevant programs. (42 U.S.C. 13257(e)(1)(B)) 
If DOE determines that the Replacement Fuel Goal is not achievable 
absent the Private and Local Fleet Requirement, and that such goal 
would be practicable and actually achievable through implementation of 
such a requirement, DOE must then establish the Private and Local Fleet 
Requirement under section 507(g). (42 U.S.C. 13257(e)(1)) If either of 
these findings cannot be made, then DOE is precluded from establishing 
the Private and Local Fleet Requirement under section 507(g).
    Under the Private and Local Government Fleet provisions, if DOE 
initiates a rulemaking under section 507(g), DOE is again directed to 
determine whether to modify the Replacement Fuel Goal. (42 U.S.C. 
13257(e)(2)) If the Replacement Fuel Goal is not achievable, DOE has to 
set a Replacement Fuel Goal that is achievable. (42 U.S.C. 13257(e)(2))
    In a previous rulemaking, DOE has already determined that the 
original Replacement Fuel Goal of 30 percent in 2010 is not achievable 
and a modified Replacement Fuel Goal of 30 percent by 2030 was 
published March 15, 2007. 72 FR 12042. The purpose of today's document 
is to propose a determination whether or not the Private and Local 
Government Fleet Requirement is necessary to achieve the modified 
Replacement Fuel Goal.
    DOE proposes to determine that it is not ``necessary'' to 
promulgate a regulation requiring private and local government fleets 
to acquire AFVs. DOE has initially determined that establishment of a 
Private and Local Government Fleet Requirement is not required for 
achievement of the Replacement Fuel Goal of 30 percent of U.S. motor 
fuels by 2030, as modified by DOE in March 2007. 72 FR 12041. As 
discussed below, this initial determination is based on DOE's analysis 
in revising the Replacement Fuel Goal, under which DOE demonstrated a 
pathway to achieve the modified Replacement Fuel Goal without 
establishment of a Private and Local Government Fleet Requirement. 72 
FR 12041. Additionally, DOE also provides an analysis initially 
demonstrating that were a Private and Local Government Fleet 
Requirement established, the number of fleets potentially covered by 
such a requirement, the number of AFVs likely to be acquired, and the 
amount of replacement fuel likely displaced would not make an 
appreciable contribution towards achieving the modified Replacement 
Fuel Goal.
    Today's document implements the March 6, 2006 order of the U.S. 
District Court for Northern District of California to prepare and 
publish a proposed determination on the Private and Local Government 
Fleets rule. See Center for Biological Diversity v. U.S. Department of 
Energy et. al., C 05-01526 WHA (N.D. Cal. 2006) (Order Re Timing of 
Relief).

II. Statutory Requirements

A. Definitions

    Under EPAct 1992, an ``alternative fuel vehicle'' is a ``dedicated 
vehicle or a dual fueled vehicle.'' (42 U.S.C. 13211(3))
    A ``dedicated vehicle'' means ``a dedicated automobile, such as the 
term is defined in section 513(h)(1)(D) of the Motor Vehicle 
Information and Cost Savings Act or a motor vehicle other than an 
automobile, that operates solely on alternative fuels.'' (42 U.S.C. 
13211(6))
    A ``dual fuel vehicle'' is one ``capable of operating on 
alternative fuel and on gasoline or diesel fuel.'' (42 U.S.C. 
13211(8)(A)) DOE notes that because a dual fueled vehicle can be 
operated on gasoline or diesel, the purchase of a dual fueled vehicle 
does not assure that ``alternative'' or ``replacement'' fuel will be 
used to operate the vehicle.
    ``Replacement fuel'' is defined by EPAct 1992 under section 301(14) 
to mean ``the portion of any motor fuel that is methanol, ethanol, or 
other alcohols, natural gas, liquefied petroleum gas, hydrogen, coal 
derived liquefied fuels, fuels (other than alcohol) derived from 
biological materials, electricity (including electricity from solar 
energy), ethers, or any other fuel that the Secretary determines meets 
certain statutory requirements.'' (42 U.S.C. 13211(14); emphasis 
added).
    ``Alternative fuel'' is defined to include many of the same types 
of fuels as ``replacement fuel'' (such as methanol, natural gas, 
hydrogen and electricity), but also includes certain ``mixtures'' of 
petroleum-based fuel and other fuels. (10 CFR 490.2 (2002) \1\) Thus, a 
certain mixture might constitute an ``alternative fuel,'' but only the 
portion of the fuel that is within the definition of ``replacement 
fuel'' would actually constitute ``replacement fuel.'' For example, a 
mixture of 85 percent methanol and 15 percent gasoline would, in its 
entirety, constitute ``alternative fuel,'' but only the 85 percent that 
was methanol would constitute ``replacement fuel.'' Also by way of 
example, B20 (a fuel blend typically consisting of approximately 20 
percent biodiesel and 80 percent diesel), considered as a total fuel 
blend, would not qualify as an ``alternative fuel,'' but the 20 percent 
that is biodiesel would qualify as ``replacement fuel.''
---------------------------------------------------------------------------

    \1\ EPAct defines ``alternative fuel'' (see 42 U.S.C. 13211(2)), 
but DOE has exercised its authority to modify, by regulation, this 
definition. Therefore, the currently effective definition of 
``alternative fuel'' is set forth at 10 CFR 490.2 (2006).
---------------------------------------------------------------------------

    For the purpose of considering a Private and Local Government Fleet 
Requirement, the term ``covered fleet'' is a ``fleet, other than 
Federal fleet, State fleet, or fleet owned, operated, leased, or 
otherwise controlled by a covered person under section 501 [of EPAct 
1992].'' (42 U.S.C. 13257(g)) This is interpreted to mean all private 
and local government fleets not already covered under the existing 
fleet requirements program.
    A ``fleet'' is defined in section 301(9) of EPAct 1992 as follows:

    [T]he term ``fleet'' means a group of 20 or more light duty 
motor vehicles, used primarily in a metropolitan statistical area or 
consolidated metropolitan statistical area, as established by the 
Bureau of the Census, with a 1980 population of more than 250,000, 
that are centrally fueled or capable of being centrally fueled and 
are owned, operated, leased, or otherwise controlled by a 
governmental entity or other person who owns, operates, leases, or 
otherwise controls 50 or more such vehicles, by any person who 
controls such person, by any person controlled by such person, and 
by any person under common control with such person, except that 
such term does not include--
    (A) Motor vehicles held for lease or rental to the general 
public;
    (B) Motor vehicles held for sale by motor vehicle dealers, 
including demonstration motor vehicles;
    (C) Motor vehicles used for motor vehicle manufacturer product 
evaluations or tests;
    (D) Law enforcement motor vehicles;
    (E) Emergency motor vehicles;
    (F) Motor vehicles acquired and used for military purposes that 
the Secretary of

[[Page 52498]]

Defense has certified to the Secretary must be exempt for national 
security reasons;
    (G) Nonroad vehicles, including farm and construction motor 
vehicles; or
    (H) Motor vehicles which under normal operations are garaged at 
personal residences at night.

(42 U.S.C. 13211(9))
    The key limitations in this definition include: (1) Only light duty 
vehicles (i.e., vehicles less that 8,500 GVWR) are covered, and all 
medium-duty and heavy duty vehicles are excluded; (2) the vehicles must 
be part of a fleet of 20 vehicles used primarily in a large 
metropolitan area; (3) the vehicles must be centrally fueled or capable 
of being centrally fueled; (4) they must be owned or controlled by a 
local government or an entity that owns at least 50 such vehicles; (5) 
fleets of rental vehicles are excluded; (6) law enforcement and 
emergency vehicles are excluded; and (7) vehicles garaged at personal 
residences are excluded.
    The Replacement Fuel Goal is in terms of producing sufficient 
replacement fuels to replace on an energy equivalent basis, a specified 
percentage of the projected consumption of motor fuel in the United 
States for each such year, with at least one half of such replacement 
fuels being domestic fuels. (42 U.S.C. 13252(b)(2))
    Section 301(12) of EPAct 1992 defines ``motor fuel'' as ``any 
substance suitable as fuel for a motor vehicle.'' (42 U.S.C. 13211(12)) 
Moreover, the term motor vehicle is defined in section 301(13) of EPAct 
1992, through reference to 42 U.S.C. 7550(2), as a self-propelled 
vehicle that is designed for transporting persons or property on a 
street or highway. (42 U.S.C. 13261(13)) As DOE is required to evaluate 
the Replacement Fuel Goals established in section 502(b)(2) in terms of 
the capacity of producing sufficient replacement fuels to offset a 
certain percentage of U.S. ``motor fuel'' consumption, DOE, for the 
purposes of Title V of EPAct 1992, has interpreted the term motor fuel 
to include all fuels that are used in motor vehicles. This includes 
fuels used in light-, medium-, and heavy-duty on-road vehicles. 71 FR 
54771 (September 9, 2006)

B. Key Statutory Requirements

    The issue DOE addresses in this document is whether a Private and 
Local Government Fleet Requirement is ``necessary'' under section 
507(e) of EPAct 1992. (42 U.S.C. 13257(e)(1)) Under section 507(e)(1) a 
Private and Local Government Fleet shall be promulgated if DOE 
determines such a program is ``necessary.'' (42 U.S.C. 13257(e)(1)) A 
Private and Local Government Fleet Requirement ``shall be considered 
necessary'' only if (1) DOE finds that ``the goal of replacement fuel 
use * * * is not expected to be actually achieved * * * without such a 
fleet requirement program;'' and (2) ``such goal is practicable and 
actually achievable * * * through implementation of such a fleet 
requirement program in combination with voluntary means and the 
application of other programs relevant to achieving such goals.'' (42 
U.S.C. 13257(e)(1)(A) and (B))
    EPAct 1992 authorizes DOE to conduct two separate rulemakings in 
order to determine whether to promulgate a Private and Local Government 
Fleet Requirement. First, section 507(b) directs DOE to conduct an 
early rulemaking, to be completed by December 15, 1996. (42 U.S.C. 
13257(b)) The deadline for the ``early rulemaking'' passed without 
final action and has no continuing relevance. The second rulemaking 
provision is under section 507(e), which directs DOE to make a 
``necessity'' determination by January 1, 2000. (42 U.S.C. 13257(e)(1)) 
It is under section 507(e) that DOE issues today's document.

C. Other Related Requirements

    There are a number of other sections of EPAct 1992 which must be 
weighed in considering a potential Private and Local Government Fleet 
Requirement, primarily under the second prong of the ``necessity'' 
determination. These considerations include how such a requirement 
would be limited in application and practice, and other considerations 
and steps related to the determination process.
    Under section 507(i), a promulgated Private and Local Government 
Fleet Requirement must provide for an exemption of a fleet from the 
applicable requirements on grounds of: (1) Non-availability of 
appropriate AFVs and alternative fuels; (2) non-availability of 
appropriate alternative fuels; and (3) with respect to local government 
entities, financial hardship. (42 U.S.C. 13527(i))
    EPAct 1992 furthermore contains a petition provision in section 
507(n). That section provides that:

    As part of the rule promulgated * * * pursuant to subsection * * 
* (g) of this section, the Secretary shall establish procedures for 
any fleet owner or operator or motor vehicle manufacturer to request 
that the Secretary modify or suspend a fleet requirement program * * 
* nationally, by region, or in an applicable fleet area because, as 
demonstrated by the petitioner, the infrastructure or fuel supply or 
distribution system for an applicable alternative fuel is inadequate 
to meet the needs of a fleet.

(42 U.S.C. 13527(n)) As a result, even to the extent a fleet 
constitutes a ``fleet'' under the narrow EPAct 1992 definition, and 
does not otherwise qualify for one of the statutory exemptions, it 
could petition for relief or suspension of a fleet mandate for any one 
of several different reasons.
    Section 507(m) of EPAct 1992 requires DOE to consult with the 
Secretary of Transportation (DOT) and Administrator of the 
Environmental Protection Agency (EPA) and other appropriate agencies in 
carrying out the requirements of section 507. DOE provided a pre-
publication draft of today's notice of proposed rulemaking to DOT, EPA, 
and the Office of Management and Budget for their review.

D. No Fuel Use Requirement Authority

    It is important to note that the ability of a Private and Local 
Government Fleet Requirement to affect petroleum consumption also 
depends, in significant part, on whether DOE can require covered fleets 
to use alternative or replacement fuels in addition to requiring that 
they acquire AFVs. The only explicit requirements for fuel use in EPAct 
1992 are contained in section 501(a)(4), which applies only to 
alternative fuel provider fleets, and section 302(a)(2) (amending 
section 400AA of the Energy Policy and Conservation Act), which applies 
only to Federal fleets. (42 U.S.C. 13251(a)(4) and 6374(a)) Section 507 
of EPAct 1992, which concerns private and local government fleets, does 
not contain any similar provision, nor does it contain a provision 
either authorizing DOE to mandate fuel use or explicitly prohibiting 
DOE from mandating fuel use.
    DOE believes that because Congress specifically required use of 
alternative fuel in sections 501(a)(4) and 302(a)(2) of EPAct 1992, but 
not in section 507, the omission was deliberate. As a result, DOE 
believes that Congress did not intend for DOE, when acting under 
section 507, to have authority to promulgate regulations containing a 
requirement that fleet vehicles use particular types of fuel.
    This interpretation is consistent with Congressman Philip Sharp(s 
remarks when he called up the conference report on EPAct 1992 for U.S. 
House of Representatives approval. Congressman Sharp was one of the key 
architects of EPAct 1992, and the floor manager for the bill in the 
House of Representatives. Congressman Sharp said:

    Under section 501, covered persons must actually run their 
alternative fueled vehicles on alternative fuels when the vehicle is

[[Page 52499]]

operating in an area where the fuel is available. This requirement 
was not included in the fleet requirement program under section 507, 
because the conferees were concerned that the alternative fuel 
providers might charge unreasonable fuel prices to the fleets that 
are not alternative fuel providers if such fleets were required to 
use the alternative fuel.

138 Cong. Rec. H11399 at H11400 (October 5, 1992).

III. Background

    On August 7, 1996, and as required by EPAct 1992 sections 507(a)(3) 
and (b), DOE published in the Federal Register an advance notice of 
proposed rulemaking (ANOPR) to evaluate progress toward achievement of 
the Replacement Fuel Goals in EPAct 1992, identify problems with 
achieving those goals, assess the adequacy and practicability of the 
goals, and consider actions needed to achieve the goals. 61 FR 41032. 
DOE intended this notice to stimulate comments to assist DOE in making 
decisions concerning future rulemaking actions and non-regulatory 
initiatives to promote alternative fuels and AFVs. Three hearings were 
held to receive oral comments on the ANOPR. They were held on September 
17, 1996, in Dallas, Texas; on September 25, 1996, in Sacramento, 
California; and on October 9, 1996, in Washington, DC. A total of 70 
persons spoke at the three hearings, and 105 written comments were 
received by November 5, 1996.
    On April 23, 1997, DOE published in the Federal Register a Notice 
of Termination stating that DOE would not promulgate regulations to 
implement AFV requirements for private and local government fleets 
pursuant to the early rulemaking schedule of EPAct 1992 section 
507(a)(1). 62 FR 19701.
    On April 17, 1998, and for the purposes of EPAct 1992 sections 
507(e), (g), and (k), DOE published in the Federal Register an ANOPR 
that asked for comments to assist DOE in making decisions concerning 
future rulemaking actions and non-regulatory initiatives to promote 
alternative fuels and alternative fueled vehicles. 63 FR 19372. DOE 
held three hearings to receive oral comments on the ANOPR. They were 
held on May 20, 1998, in Los Angeles, California; on May 28, 1998, in 
Minneapolis, Minnesota; and on June 4, 1998, in Washington, DC. A total 
of 110 persons spoke at the three hearings, and/or submitted written 
comments.
    On January 12, 2000, consistent with section 507(h) of EPAct 1992 
(42 U.S.C. 13257(h)), DOE published in the Federal Register a notice, 
stating that it was extending by 90 days the January 1, 2000, deadline 
contained in section 507(e) in order to provide additional time for 
consultations with State and local officials, as required by Executive 
Order 13132. 65 FR 1831. On July 20, 2000, DOE published in the Federal 
Register a notice further extending the comment period in order to 
provide an opportunity for additional public comment, particularly 
comment from State and local governments, regarding the section 507 
rulemaking proceedings. 65 FR 44987. DOE held workshops on August 1, 
2000 in Chicago, Illinois; on August 22, 2000, in Denver, Colorado; and 
on September 26, 2000, in Washington, DC.
    On January 2, 2002, EarthJustice, on behalf of the Center for 
Biological Diversity, Bluewater Network, and Sierra Club, filed a 
lawsuit in the U.S. District Court for the Northern District of 
California which, in part, sought to compel DOE to ``issue a proposed 
rule and final determination on the necessity of a private and 
municipal fleet program.'' (Plaintiffs Complaint for Injunctive and 
Declaratory Relief, pg 55, paragraph 171 dated January 2, 2002). On 
July 26, 2002, the Court granted plaintiffs' motion for summary 
judgment on the issue of whether DOE had missed the deadline set forth 
in EPAct 1992 section 507(e) for completing the rulemaking. See Center 
for Biological Diversity v. Abraham, et al. (218 F.Supp.2d 1143 (N.D. 
Cal., 2002)). On September 27, 2002, the District Court ordered DOE to 
complete its proposed rulemaking by January 27, 2003, and its final 
rule by November 27, 2003. See Center for Biological Diversity v. 
Abraham, et al., No. C 02-00027 (N.D. Cal., 2002). On January 17, 2003, 
the Court subsequently granted a 30-day extension (to February 26, 
2003) of the deadline for DOE to complete work on this notice of 
proposed rulemaking. (Center for Biological Diversity v. Abraham, et 
al. No. C 02-00027 (N.D. Cal., 2002), Order No. 55 (Entered 01/23/
2003)).
    On March 4, 2003, as required by section 507 of EPAct 1992 and in 
accordance with a Court order under Center for Biological Diversity v. 
Abraham, et al., DOE issued a notice of a proposed determination 
regarding the Private and Local Fleet Requirement, in which DOE 
tentatively determined that a requirement was not ``necessary,'' and 
therefore should not be imposed. 68 FR 10320. DOE finalized the 
proposed determination that a regulation requiring private and local 
government fleets to acquire AFVs is not ``necessary'' and, therefore, 
cannot be promulgated, which was published January 29, 2004. 69 FR 
4219. The necessity determination was based on DOE's findings that a 
private and local government fleet vehicle acquisition mandate would 
not appreciably increase the percentage of alternative fuel or 
replacement fuel used in motor vehicles in the United States and thus 
would make no more than a negligible contribution to the achievement of 
EPAct 1992's existing 2010 Replacement Fuel Goal of 30 percent, or of a 
revised Replacement Fuel Goal were one adopted.
    Subsequent to the publication of the January 29, 2004, final rule, 
DOE was sued in Federal court by the Center for Biological Diversity 
and Friends of the Earth for failing to impose a private and local 
government fleet acquisition mandate and for not revising the 
replacement fuel production goal for 2010 as part of its determination. 
On March 6, 2006, the U.S. District Court for the Northern District of 
California vacated DOE's final determination regarding the Private and 
Local Government Fleet Mandate and ordered DOE to revise the 
replacement fuel production goal for 2010. See Center for Biological 
Diversity v. U.S. Department of Energy et al., 419 F.Supp. 2d 1166 
(N.D. Cal 2006). The Court directed DOE to prepare notices of proposed 
rulemaking and final rules on both the Replacement Fuel Goal for 2010 
and the private and local government fleet determination. (Id. at 
1171.)
    On September 19, 2006, DOE published a notice announcing its 
proposed determination that the EPAct 1992 Replacement Fuel Goal of 30 
percent by 2010 was not achievable and announced its proposal to extend 
the time for achieving the 30 percent replacement fuel production 
capacity goal to 2030. 71 FR 54771. In that notice, DOE evaluated four 
scenarios, which identified projected replacement fuel capacities of 
8.65 percent, 17.84 percent, 35.25 percent, and 47.06 percent, by 2030. 
(Updated analyses conducted for the final rule resulted in the first 
and third of these becoming 7.38 percent and 33.13 percent, 
respectively.) These projections reflected considerations of numerous 
variables including oil prices, technological breakthroughs, and market 
acceptance. The modified goal proposed by DOE fell in the mid-range 
among these scenarios.
    On March 15, 2007, DOE published a final rule for the Replacement 
Fuel Goal. 72 FR 12041. In the final rule, DOE determined that the 
EPAct 1992 goal of establishing sufficient replacement fuel production 
capacity to replace 30 percent on an energy equivalent basis of all 
U.S. motor fuel by 2010 was not achievable. This

[[Page 52500]]

determination was based on a similar evaluation of the projected U.S. 
production capacity of replacement fuels as was presented in the notice 
of proposed rulemaking. The Replacement Fuel Goal final rule extended 
the 30 percent Replacement Fuel Goal out to 2030 based on an analysis 
similar to that presented in the notice of proposed rulemaking. The 
Replacement Fuel Goal final rule complied with DOE's obligation under 
section 504(b) of EPAct 1992 to ``establish goals that are achievable, 
for the purposes of this title.'' (42 U.S.C. 13254(b))
    Today's document revisits the Local and Private Fleet Requirement 
determination in light of the modified Replacement Fuel Goal.

IV. Analysis for Private and Local Fleets Rule Determination

    As stated above, DOE must issue a Private and Local Government 
Fleet Requirement if DOE determines that such a requirement is 
``necessary.'' (42 U.S.C. 13257(e)(1)) For the purpose of this 
determination, a Private and Local Government Fleet Requirement is 
necessary if:
    (1) The Replacement Fuel Goal under section 502(b)(2)(B), or as 
modified under section 504, is not actually expected to be achieved by 
the 2010, or the date established under section 504, without such a 
fleet requirement; and
    (2) Such a goal is practicable and actually achievable within the 
appropriate period, through implementation of such a fleet requirement 
in combination with voluntary means and the application of other 
programs relevant to achieving such goals.

(42 U.S.C. 13257(e)(1)(A) and (B))

A. Achievability of the Replacement Fuel Goal

    As stated above, DOE recently determined that the Replacement Fuel 
Goal of 30 percent by 2010 established under section 502(b)(2)(B) is 
not achievable. 72 FR 12041. Pursuant to its statutory authority to do 
so, DOE established a modified goal by extending out the goal date to 
2030, i.e., establishing a Replacement Fuel Goal of 30 percent by 2030. 
72 FR 12041. In establishing the modified Replacement Fuel Goal, DOE 
determined that such a goal is achievable.
    In evaluating and modifying the goal, DOE was directed to balance 
considerations in order to establish goals that are ``achievable.'' (42 
U.S.C. 13254(b)) The Replacement Fuel Goal must promote replacement 
fuels to the ``maximum extent possible'' while remaining 
technologically and economically feasible. (42 U.S.C. 13254(a) and 
(b)(2)) DOE determined that the modified goal meets these requirements, 
for several reasons. First, DOE based its analysis on the best 
information available, from published and peer-reviewed sources. In 
particular, much of DOE's analysis was based on the Energy Information 
Administration's (EIA) Annual Energy Outlook (AEO) 2005 through 2007. 
Second, DOE's analysis generally was based on the current budget and 
policy framework, under which many technologies show reasonable 
potential for success and market penetration. Thus, the analysis 
assumed virtually no major new policies or funding initiatives beyond 
those already in place. Third and last, the modified goal balances the 
minimum and maximum projected replacement fuel production capacities 
from several reasonable scenarios. A complete discussion of the 
analysis relied on in the final rule for the modified Replacement Fuel 
Goal and the supporting documents can be reviewed at http://www1.eere.energy.gov/vehiclesandfuels/epact/private/plg_docket.html.
    In evaluating a modification to the Replacement Fuel Goal, DOE 
analyzed four scenarios to generate a range of potential replacement 
fuel production capacities. In none of these scenarios did DOE include 
potential increases in alternative fuel production as a result of a 
Private and Local Government Fleet Requirement. As such DOE determined 
that the modified Replacement Fuel Goal of 30 percent by 2030 is 
expected to be achieved without establishing a Private and Local 
Government Fleet Requirement.
    Given the determination in the modified Replacement Fuel Goal final 
rule that the modified goal is expected to be achieved by 2030 without 
a Private and Local Government Fleet Requirement, DOE has tentatively 
determined that the first prong of the ``necessity'' determination has 
not been met.

B. Potential Contribution of a Private and Local Government Fleet 
Requirement to the Production Capacity of Alternative Fuel

    The second prong of the ``necessity'' determination requires DOE to 
find that the Replacement Fuel Goal is actually achievable were a 
Private and Local Fleet Requirement established. (42 U.S.C. 
13257(e)(1)(B)) As stated above, DOE has determined that the modified 
Replacement Fuel Goal is achievable. Although DOE has tentatively 
determined that the Private and Local Government Fleet Requirement is 
not necessary to achieve the modified Replacement Fuel Goal, DOE also 
performed a preliminary analysis to estimate the contribution that such 
a requirement would make to the Replacement Fuel Goal, if such a 
requirement were established.
    In the mid-1990s, DOE's initial estimate was between 1.7 and 7.3 
million AFVs would be acquired over 19 years if a possible Private and 
Local Government Fleet Requirement was implemented. The purchases of 
AFVs under such a fleet program level out at approximately 400,000 to 
500,000 AFVs annually starting in 2010. As discussed below, however, 
more detailed analyses showed DOE's initial estimates were probably too 
high.
    Several follow-up analyses were conducted by DOE from 1996 to 2000 
to attempt to determine not just how many AFVs would be required to be 
acquired, but more importantly, what the potential contribution of a 
Private and Local Government Fleet Requirement would be to replacing 
U.S. motor fuel consumption. The limitations on the potential 
contribution of a private and local government fleet program to the 
Replacement Fuel Goal are discussed in section II above. In brief, 
however, one DOE report issued in 1996 estimated that total fuel use 
from all fleets, including private and local government fleets, 
potentially covered by EPAct 1992 fleet programs to be approximately 
1.2 percent of U.S. gasoline use. See Assessment of Costs and Benefits 
of Flexible and Alternative Fuel Use in the U.S. Transportation Sector, 
Technical Report Fourteen: Market Potential and Impacts of Alternative 
Fuel Use in Light-Duty Vehicles: A 2000/2010 Analysis (DOE/PO-0042) 
(January 1996) [hereinafter Technical Report 14].
    DOE's Section 506 Report \2\ was only slightly more optimistic, 
indicating that ``[a]lternative fuel use by EPAct [1992] covered 
fleets, even with the contingent mandates for private and local 
government fleets, is unlikely to provide more than about 1.5 percent 
replacement fuel use[.]'' Section 506 Report at p. 35. In either case, 
subtracting out the portion of replacement fuel use represented by the 
existing (Federal, State, and alternative fuel provider) fleet programs 
would leave the potential private and local government fleet program 
contribution closer to a maximum of 1 percent.
---------------------------------------------------------------------------

    \2\ See Energy Efficiency and Renewable Energy, DOE, Replacement 
Fuel and Alternative Fuel Vehicle--Technical and Policy Analysis p. 
viii-ix (Dec. 1999--Amendments Sept. 2000); http:// 
www.ccities.doe.gov/pdfs/section506.pdf.
---------------------------------------------------------------------------

    However, both these earlier reports included calculations based 
only upon

[[Page 52501]]

the percentage of light-duty gasoline fuel use. For purposes of the 
goal contained in EPAct 1992, DOE has repeatedly asserted that fuel 
replacement should be considered in the context of all on-highway motor 
fuel use, including heavy-duty vehicle fuel use, because the goal 
contained in section 502 of EPAct 1992 are to be considered in the 
context of the ``projected consumption of motor fuel in the United 
States.'' (42 U.S.C. 13252(b)(2)).
    The figures provided in these earlier reports, when adjusted to 
reflect the impact on all on-highway motor fuel use, show that a 
Private and Local Government Fleet Rule--even with a fuel use 
requirement, which as noted above DOE does not have the authority to 
impose--would provide at most on the order of 0.7-0.8 percent motor 
fuel replacement, assuming virtually complete use of alternative fuel 
in the AFVs required.
    Both the analyses in Technical Report 14 and the Section 506 Report 
were conducted before DOE had much experience with implementation and 
operation of the EPAct 1992 fleet programs. DOE's experience with those 
programs now has shown that the number of fleets originally envisioned 
to be covered was far larger than the number of fleets covered in 
actual practice, and that these fleets could not, in the absence of a 
specific mandate, be assumed to use alternative fuel in their AFVs 100 
percent of the time. Thus, DOE believes that the figures in these 
reports probably overstated the potential impact of a Private and Local 
Government Fleet Rule. This view was supported by analyses contained in 
a later DOE-supported report, The Alternative Fuel Transition: Results 
from the TAFV Model of Alternative Fuel Use in Light-Duty Vehicles 
1996-2000 \3\ (TAFV Model Report), which incorporated more realistic 
assumptions regarding these fleet programs. The TAFV Model Report 
stated that,
---------------------------------------------------------------------------

    \3\ ORNL.TM2000/168) (September 17, 2000) http://pzl1.ed.ornl.gov/tafv99report31a_ornltm.pdf.

    In particular, over all of the price scenarios, we find that the 
[private and local government fleet] rule increases the alternative 
fuel penetration in 2010 from 0.12 % (without the private and local 
government rule) to, at most, 0.37 % [with a private and local 
---------------------------------------------------------------------------
government rule] of total fuel sales.

TAFV Model Report at p. 28. Thus, the analysis in the TAFV Model Report 
placed contributions from the Private and Local Government Fleet Rule 
at 0.25 percent. As with Technical Report 14 and the Section 506 
Report, these percentages were calculated based on the total fuel sales 
of the fuel used by light-duty vehicles only.
    The projected contribution from a potential rule dropped to below 
0.2 percent when evaluated as part of all on-highway motor fuel use and 
can be reconciled somewhat with those found by the earlier reports. As 
indicated in section II above, DOE does not have authority to mandate 
that AFVs acquired actually operate on alternative fuels. Experience 
with the existing State Fleet Program, where fleets are similarly not 
required to use alternative fuel, has shown that alternative fuel use 
rates are typically in the ten to twenty-five percent range. Thus, when 
adjusting the levels found in Technical Report 14 and the Section 506 
Report by such utilization levels, the overall projected impacts likely 
end up in about the 0.2 percent range.
    It also should be noted that during earlier rulemaking processes, 
no commenter presented any persuasive analysis or data to counter or 
dispute the data and conclusions in Technical Report 14, the Section 
506 Report, or the TAFV Model Report. Therefore, DOE concluded from 
these reports that a Private and Local Government Fleet Requirement 
under authority provided to DOE by EPAct 1992 section 507 would be 
expected to contribute, at best, an extremely small amount toward 
achievement of the Replacement Fuel Goal (below 1 percent and likely 
below 0.2 percent of all on-highway motor fuel use). Even without the 
additional statutory limitations described above that EPAct 1992 places 
on such a Private and Local Government Fleet Requirement, the 
contribution from such a mandate to the EPAct 1992 Replacement Fuel 
Goal would be very small.
    When the prior private and local fleets determination was conducted 
in 2003 through 2004, the analyses relied upon by DOE were the most 
recent, relevant analyses that it had. As such, these were all dated 
2000 or earlier. With the passage of several more years between that 
determination and this rulemaking, the DOE believed it was important to 
conduct an updated analysis to determine if circumstances had changed 
sufficiently to warrant imposition of acquisition requirements upon 
fleets. The approach taken was to first conduct a somewhat more 
simplified analysis than the previous ones, and if this analysis 
indicated significantly different results, than a more detailed and 
lengthy analysis would be commissioned.
    To conduct the current analysis, the Department relied, in large 
part, upon fleet industry data developed by Automotive Fleet, a leading 
publisher in the field. Each year, Automotive Fleet publishes an annual 
Fact Book, which includes detailed data on a number of fleet subjects. 
Unfortunately, Automotive Fleet does not provide the specific data 
necessary to support today's draft determination (namely the likely 
number of AFVs that would need to be acquired by fleets meeting EPAct 
1992's coverage criteria). Therefore the Fact Book data was used as a 
starting point, with other information (such as from the EIA Annual 
Energy Outlook) and various assumptions used to further refine the data 
to move closer to the specific types of numbers required for today's 
action.
    For the purpose of today's notice, two analyses were conducted in 
order to determine what portion of U.S. motor fuel use might be 
replaced with replacement fuels by vehicle acquisitions resulting from 
a potential fleet rule. The first method compares annual acquisitions 
under a potential rule to the total annual U.S. acquisitions. The 
second method of analysis compares vehicles in operation due to a 
potential rule to all vehicles in operation. Both methods were used as 
analogs to determine the overall percentage replacement of U.S. motor 
fuel use.
    According to the 2005 Fact Book (which reports data for 2004), 
fleets in the United States acquired 2,849,837 light-duty vehicles 
(cars and light trucks), of which 1,944,581 (68.2 percent) were 
acquired for rental fleets. Since rental vehicles are specifically 
excluded from coverage under EPAct 1992 section 301(9) (42 U.S.C. 
13211(9)), the remaining potentially covered vehicle acquisitions drop 
to 905,256 vehicles. Note that this does not exclude any leased 
vehicles, of which the Fact Book indicates there were another 326,832 
acquired in 2004. Many of these may ultimately be excluded as perhaps 
either shorter term leases or vehicles specifically held for lease to 
others (another excluded class). Since there is no way to determine 
which portion of these leased vehicles would most likely be excluded, 
the DOE chose to rely on the 905,256 value as the number of vehicles 
purchased by fleets that would potentially be subject to a Private and 
Local Government Fleet Requirement.
    Next, the current annual acquisitions of vehicles already subject 
to EPAct 1992 fleet requirements needed to be subtracted. Data was 
obtained from the Department's EPAct 1992 Web sites, at http://www.eere.energy.gov/vehiclesand fuels/epact/. For Federal Fleets, there 
were 18,426 covered light-duty vehicles

[[Page 52502]]

acquired in 2004. For State and Alternative Fuel Provider Fleets, there 
were 13,374 covered light-duty vehicles acquired. Thus, the remaining 
number of potentially covered acquisitions drops to 873,456.
    In 2004, a total of 16,537,440 light-duty vehicles were acquired 
throughout the United States. This means that the maximum potential 
pool of covered light-duty vehicles under a Private and Local Fleet 
Requirement would represent 5.3 percent of total acquisitions for the 
year. Because the maximum acquisition requirement percentage under the 
potential Private and Local Government Fleet Rule is 70 percent (42 
U.S.C. 13257(g)), the maximum potential number of AFVs that would need 
to be acquired on an annual basis would be 611,419. This number 
represents approximately 3.7 percent of all light-duty vehicles 
acquired in the United States.
    DOE's experience, however, is that the maximum potential number of 
required acquisitions is quite different from the actual number of 
required acquisitions. This is because section 301(9) includes several 
basic requirements for coverage of a fleet's acquisitions. (42 U.S.C. 
13211(9)) First, the fleet must be owned or controlled by an entity 
that owns at least 50 light-duty vehicles nationwide, of which 20 must 
reside in one of the 125 covered Metropolitan Statistical Areas (MSAs, 
with 1980 population of more than 250,000) and are centrally fueled or 
capable of being centrally fueled. (42 U.S.C. 13211(9)).
    In arriving at the 50 and 20 light-duty vehicle minimums, several 
classes of vehicles are excluded from consideration, including 
emergency and law enforcement vehicles (42 U.S.C. 13211(9)(D) and (E), 
vehicles taken home at night by employees (42 U.S.C. 13211(9)(H)), and 
non-road vehicles (42 U.S.C. 13211(9)(G)). With these exclusions the 
number of potentially required AFV acquisitions drops even further. For 
example, if just the 2004 acquisitions of Ford Crown Victorias and 
Chevy Impalas are reviewed, the non-rental numbers acquired for 
commercial and government fleets totals nearly 90,000 vehicles 
(according to the 2005 Fact Book). These two vehicles are often 
acquired for use as police vehicles, or else taxicabs (a class of 
vehicles whose status under the program is undetermined for this 
analysis and for which many might not ultimately be covered due to 
fleet size, location, or other reasons).
    Based on DOE's experience with the Federal, State, and Alternative 
Fuel Provider Fleet requirements and the vehicle classes excluded from 
consideration by EPAct 1992, DOE considered two scenarios for this 
analysis, one where 50 percent of the maximum potential annual 
acquisitions are required (305,710 AFVs), and one (considered much more 
likely) where 25 percent of the maximum potential annual acquisitions 
are required (152,855 AFVs). These two scenarios thus represent 1.8 and 
0.9 percent, respectively, of overall annual light-duty acquisitions.
    So the net result of this portion of the analysis is that a fleet 
rule could result in requirements to acquire between 150,000 and just 
over 600,000 AFVs each year, representing between approximately 1 to 
3.7 percent of total annual light-duty vehicle acquisitions, based on 
2004 data. This portion of the annual acquisition analysis is 
summarized below in Figure 1.

    Figure 1.--Summary of Annual Acquisition Analysis, Fleet Vehicles
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total New Cars and Trucks Registered by Fleets in 2004..       2,849,837
Total New Cars and Trucks Registered by Rental Fleets in       1,944,581
 2004...................................................
Percentage in Rental Fleets.............................        \1\ 68.2
Remainder of New Cars and Trucks, not in Rental Fleets           905,256
 2004...................................................
New Covered LDV acquisitions in 2004, Federal Fleet.....          18,426
New Covered LDV acquisitions in 2004, State and Fuel              13,374
 Provider Fleets........................................
Net New Cars/Truck Registered, not in Fleets Already             873,456
 Covered................................................
Total New LDV Registrations, 2004.......................      16,537,440
Max Potential Portion of 2004 Fleet acquisitions covered            5.3%
 out of total registrations.............................
EPAct 1992 Maximum Acquisition Requirement..............             70%
Max Potential AFV Acquisitions per year, numbers of AFVs         611,419
 required...............................................
Max Potential AFV Acquisitions per year, percentage of              3.7%
 total acquisitions.....................................
If 50% of maximum potential actually covered, number of          305,710
 AFVs required..........................................
If 50% of maximum potential actually covered, percentage            1.8%
 of total acquisitions..................................
If 25% of maximum potential actually covered, number of          152,855
 AFVs required..........................................
If 25% of maximum potential actually covered, percentage            0.9%
 of total acquisitions..................................
------------------------------------------------------------------------

    The analysis above is in the context of light-duty vehicles and 
would represent between one and 3.7 percent of motor fuel consumption 
by light-duty vehicles. For the purpose of section 507(e)(1)(B), DOE 
must evaluate the potential contribution of a Private and Local 
Government Fleet Requirement to the Replacement Fuel Goal. (42 U.S.C. 
13257(e)(1)(B)) The Replacement Fuel Goal is in terms of motor fuel 
consumption, including consumption from medium- and heavy-duty 
vehicles. As indicated in the Energy Information Administration's 
Annual Energy Outlook 2007 (AEO 2007), light-duty vehicles only account 
for 75.22 percent of on-road motor fuel use in the U.S., with the 
remainder consumed by medium- and heavy-duty classes, neither of which 
is covered by the Private and Local Government Fleet Requirement. In 
terms of total motor fuel consumption, the contribution of the 
potential AFV acquisitions under a Private and Local Government Fleet 
Requirement must be adjusted down to 0.7 to 2.8 percent.
    The expected contribution of AFVs acquired under a Private and 
Local Government Fleet to alternative fuel consumption must be further 
adjusted. As explained above, EPAct 1992 does not allow DOE to require 
alternative fuel use in the required AFVs, the potential consumption 
values represent the portion of petroleum consumption replaced at an 
alternative fuel use level of 100 percent. Experience with programs for 
which fuel use is not required (such as the State Fleet Program) 
indicates that the assumption of 100 percent alternative fuel use is 
not realistic. DOE has seen alternative fuel usage levels as low as 10 
percent.
    For the purposes of this analysis, DOE looked at cases where 
alternative fuels were used 50, 25, and 10 percent of the time in the 
potentially required AFVs. These results yielded percentages of overall 
motor fuel consumption replaced of 0.1 to 1.4 percent, with the high 
value represented by the maximum potential case (already identified as

[[Page 52503]]

overly optimistic) with a 50 percent alternative fuel use level. Thus, 
the likely range of consumption replaced is better represented by the 
25 and 50 percent of maximum potential acquisition cases, which ranged 
from 0.1 to 0.7 percent.
    The summary for this portion of the analysis is shown in Figure 2, 
where the shaded zone represents the more likely range of results.

          Figure 2.--Summary of Annual Acquisition Analysis, Portion of Overall Motor Fuel Consumption
----------------------------------------------------------------------------------------------------------------
                                                                  Maximum       50% of maximum   25% of  maximum
                                                                 potential         potential         potential
                                                                acquisitions     acquisitions      acquisitions
                                                                 (percent)         (percent)        (percent)
----------------------------------------------------------------------------------------------------------------
AFVs Required, Percentage of Total LDVs.....................              3.7              1.8               0.9
Portion of Total Motor Fuel Use Due to LDVs.................            75.22             75.22            75.22
Potential Maximum Consumption Percentage for Required AFVs                2.8              1.4               0.7
 (100% Alternative Fuel Use)................................
Potential Consumption Percentage for Required AFVs (50%                   1.4              0.7               0.3
 Alternative Fuel Use)......................................
Potential Maximum Consumption Percentage for Required AFVs                0.7              0.3               0.2
 (25% Alternative Fuel Use).................................
Potential Maximum Consumption Percentage for Required AFVs                0.3              0.1               0.1
 (10% Alternative Fuel Use).................................
----------------------------------------------------------------------------------------------------------------

    It should be noted that this likely range of consumption 
replacement under the potential rule, 0.1 to 0.7 percent, is very close 
to that predicted by the TAFV report in 2000 (0.2 to 0.8 percent).
    The second analysis, as indicated above, sought to use the portion 
of the in-use inventory of vehicles on the road in the U.S. that were 
represented by the cumulative numbers of AFVs acquired under the 
potential rule as a way to determine the portion of overall motor fuel 
use replaced. This case then assumes that once the program reaches the 
maximum acquisition requirement (70 percent), and levels off, that all 
relationships between the consumption of the required AFVs and the 
overall on-road fleet are relatively unchanged over time. It also 
explicitly assumes that the AFVs acquired under this potential rule use 
the same amount of fuel, on average, as all other light-duty vehicles 
in operation in the United States.
    This second analysis, therefore, uses the annual AFV acquisition 
requirements identified in the first analysis, ranging from just over 
150,000 AFVs/year (25 percent of maximum potential acquisitions 
covered) to just over 610,000 AFVs/year (for maximum potential 
acquisitions covered). The 2004 Fact Book identifies that the average 
amount of time a light-duty vehicle stays in a fleet ranges from 31 to 
56 months depending on model type, or just a bit less than five years. 
Therefore, in order to provide an estimate of the maximum portion of 
the on-road fleet that could be AFVs due to the potential rule, the DOE 
chose to use a five-year period for AFVs to operate in the covered 
fleets. DOE requests comment on use of a five-year period, and requests 
comment on the use of alternative fuels in AFVs after they leave a 
covered fleet.
    The approach taken was to develop the percentage of the on-road 
vehicles in the United States that would be AFVs, once the potential 
Private and Local Government Fleet Requirements reached maximum, 
steady-state requirements. (Under section 507(g), the requirements 
actually include a ramp-up of the AFV acquisition requirements, 
starting at 20 percent and rising to 70 percent. (42 U.S.C. 13257(g))). 
This steady-state, maximum case status, therefore, would be determined 
by looking at the portion of the on-road fleet that would be AFVs based 
upon five years of acquisitions of the AFVs required under the program. 
For the maximum potential case, this meant roughly three million AFVs, 
while for the 50 percent and 25 percent of maximum potential cases this 
meant 1.5 million and 760,000 AFVs, respectively. Since AEO2007 
identified the on-road inventory of light-duty vehicles in the United 
States in 2004 as just over 215 million vehicles, this means that the 
AFVs under this program would represent 0.4 to 1.4 percent of all 
light-duty vehicles on the road in the United States.
    But, as indicated in the first (annual acquisition) analysis above, 
light-duty vehicles only represent approximately 75 percent of U.S. 
motor fuel use. Therefore, even if everything else is equal concerning 
consumption patterns, the percentage of all light-duty vehicles that 
the AFVs under the potential program represent must be adjusted before 
identifying the likely replacement of petroleum consumption. Thus, if 
these AFVs are assumed to use alternative fuels one hundred percent of 
the time, the maximum replacement of petroleum due to these vehicles 
ranges from 0.3 to 1.1 percent.
    There is, however, one final adjustment that needs to be made. Just 
as in the first analysis, it must be noted that DOE cannot mandate 
alternative fuel use in these vehicles. To account for less than 
complete alternative fuel use, DOE further adjusted the analysis, 
developing estimates for alternative fuel use from ten to fifty percent 
of the time. Thus, the more likely contribution from the potential 
fleet rule ranged from 0.03 to 0.3 percent. Figure 3 summarizes these 
results.

                                    Figure 3.--Summary of Cumulative Analysis
----------------------------------------------------------------------------------------------------------------
                                                                   Maximum       50% of maximum   25% of maximum
                                                                  potential        potential        potential
                                                                 acquisitions     acquisitions     acquisitions
----------------------------------------------------------------------------------------------------------------
AFVs Required Annually.......................................          611,419          305,710          152,855
AFVs Added to Fleet over Five Years, at Maximum Fleet                3,057,096        1,528,548          764,274
 Requirement (70%)...........................................
Total Number of Light-Duty Vehicles in Operation in the            215,370,000      215,370,000      215,370,000
 United States, 2004.........................................
Maximum Portion of On-Road LDV Fleet that are AFVs in this             \1\ 1.4          \1\ 0.7          \1\ 0.4
 Program.....................................................
Portion of U.S. Motor Fuel Use from Light-Duty Vehicles......           75.22%        \1\ 75.22           75.22%

[[Page 52504]]

 
Potential Maximum Consumption Percentage for Required AFVs             \1\ 1.1          \1\ 0.5           \1\0.3
 (100% Alternative Fuel Use).................................
Potential Consumption Percentage for Required AFVs (50%               \1\ 0.53         \1\ 0.27         \1\ 0.13
 Alternative Fuel Use).......................................
Potential Maximum Consumption Percentage for Required AFVs            \1\ 0.27         \1\ 0.13         \1\ 0.07
 (25% Alternative Fuel Use)..................................
Potential Maximum Consumption Percentage for Required AFVs            \1\ 0.11         \1\ 0.05         \1\ 0.03
 (10% Alternative Fuel Use)..................................
----------------------------------------------------------------------------------------------------------------
\1\Percent.

    In summary, the updated analysis conducted for today's action does 
not appear to change significantly from those analyses relied upon for 
the previous private and local fleet determination. Under either 
updated analysis approach used now, the potential contribution from a 
Private and Local Government Fleet rule appears to be far below one 
percent, probably on the order of 0.2-0.3 percent, similar to the 
levels identified in the 2003-2004 determination. Therefore no further 
analyses were deemed necessary by DOE.

V. Proposed Determination

    In the Replacement Fuel Goal rulemaking, DOE demonstrated how the 
modified goal could be achieved through a number of replacement fuel 
technologies, including biofuels, other alternative fuels, and energy 
efficiency. In setting the new goal, DOE did not assume imposition of a 
Private and Local Government Fleet Requirement. Indeed, given the 
number of years between now and 2030, and the fact that even if DOE 
were to establish a Private and Local Government Fleet Requirement, the 
overall projected impact would likely be on the order of about 0.2 
percent, DOE believes there is no basis for finding that such a 
requirement is ``necessary.''
    Therefore, DOE has tentatively determined that the Private and 
Local Government Fleet Requirement is not ``necessary'' as specified in 
section 507(e)(1) of EPAct 1992, and DOE is not proposing to establish 
a Private and Local Fleet Requirement.

VI. Opportunity for Public Comment

A. Participation in Rulemaking

    Interested persons are invited to participate in this proceeding by 
submitting written data, views, or comments with respect to the subject 
set forth in this notice and the proposals made by DOE. DOE encourages 
the maximum level of public participation possible in this proceeding. 
Individual consumers, representatives of consumer groups, 
manufacturers, associations, coalitions, States or other government 
entities, and others are urged to submit written comments on the 
proposal. DOE also encourages interested persons to participate in the 
public hearing announced at the beginning of this notice. Whenever 
applicable, full supporting rationale, data and detailed analyses 
should also be submitted.

B. Written Comment Procedures

    Written comments (eight copies) should be identified on the outside 
of the envelope, and on the comments themselves, with the designation: 
``Alternative Fuel Transportation Program: Private and Local Government 
Fleet Determination, NOPR, RIN 1904-AB69'' and must be received by the 
date specified at the beginning of this notice. In the event any person 
wishing to submit written comments and cannot provide eight copies, 
alternative arrangements can be made in advance by calling Mr. Dana 
O'Hara at (202) 586-9171. Additionally, DOE would appreciate an 
electronic copy of the comments to the extent possible. Electronic 
copies should be e-mailed to [email protected]. DOE is 
currently using Microsoft Word.
    All comments received on or before the date specified at the 
beginning of this notice of proposed rulemaking and other relevant 
information will be considered by DOE before final action is taken on 
the proposal. All comments submitted will be made available in the 
electronic docket set up for this rulemaking. This docket will be 
available on the World Wide Web at the following address--http://www1.eere.energy.gov/vehiclesandfuels/epact/private/index.html. 
Pursuant to the provisions of 10 CFR 1004.1, anyone submitting 
information or data that he or she believes to be confidential and 
exempt by law from public disclosure should submit one complete copy of 
the document, as well as seven (7) copies, if possible, from which the 
information has been deleted. DOE will make a determination as to the 
confidentiality of the information and treat it accordingly.

C. Public Hearing Procedures

    The time and place of the public hearing are set forth at the 
beginning of this notice. DOE invites any person who has an interest in 
this proceeding, or who is a representative of a group or class of 
persons that has an interest, to make a request for an opportunity to 
make an oral presentation at the hearing. Requests to speak should be 
sent to the address or phone number indicated in the ADDRESSES section 
of this notice and should be received by the time specified in the 
DATES section of this notice.
    The person making the request should briefly describe his or her 
interest in the proceeding and, if appropriate, state why that person 
is a proper representative of the group or class of persons that has 
such an interest. The person also should provide a phone number where 
he or she may be reached during the day. Each person selected to speak 
at the public hearing will be notified as to the approximate time that 
he or she will be speaking. A person wishing to speak should bring ten 
copies of his or her statement to the hearing. In the event any person 
wishing to speak at the hearing cannot meet this requirement, 
alternative arrangements can be made in advance by calling Mr. Dana 
O'Hara, at (202) 586-9171.
    DOE reserves the right to select persons to be heard at the 
hearing, to schedule their presentations, and to establish procedures 
governing the conduct of the hearing. The length of each presentation 
will be limited to ten minutes, or based on the number of persons 
requesting to speak.
    A DOE official will be designated to preside at the hearing. The 
hearing will not be a judicial or an evidentiary-type hearing, but will 
be conducted in accordance with 5 U.S.C. 553 and section 501 of the 
Department of Energy Organization Act. (42 U.S.C. 7191) At

[[Page 52505]]

the conclusion of all initial oral statements, each person may, if time 
allows, be given the opportunity to make a rebuttal statement. The 
rebuttal statements will be given in the order in which the initial 
statements were made.
    Any further procedural rules needed for the proper conduct of the 
hearing will be announced by the Presiding Officer at the hearing.
    If DOE must cancel the hearing, DOE will make every effort to 
publish an advance notice of such cancellation in the Federal Register. 
Notice of cancellation will also be given to all persons scheduled to 
speak at the hearing. The hearing may be canceled in the event no 
public testimony has been scheduled in advance.

VII. Regulatory Review

A. Review Under Executive Order 12866

    This proposed regulatory action has been determined to be a 
``significant regulatory action'' under Executive Order 12866, 
Regulatory Planning and Review. 58 FR 51735 (October 4, 1993). 
Accordingly, today's action was subject to review under the Executive 
Order by the Office of Information and Regulatory Affairs (OIRA). A 
draft of today's action and any other documents submitted to OIRA for 
review are a part of the rulemaking record and are available for public 
review as provided in the ADDRESSES section of this notice of proposed 
rulemaking.

B. Review Under Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires 
preparation of a regulatory flexibility analysis for any rule that is 
likely to have a significant economic impact on a substantial number of 
small entities. The proposed negative determination under EPAct 1992 
section 507(e) would not result in compliance costs on small entities. 
Therefore, DOE certifies that today's proposed determination will not 
have a significant economic impact on a substantial number of small 
entities, and accordingly, no initial regulatory flexibility analysis 
has been prepared.

C. Review Under the Paperwork Reduction Act

    Because DOE has proposed not to promulgate requirements for private 
and local government fleets, no new recordkeeping requirements, subject 
to the Paperwork Reduction Act, 44 U.S.C. 3501, et seq., would be 
imposed by today's regulatory action.

D. Review Under the National Environmental Policy Act of 1969 (NEPA)

    DOE has not prepared an environmental impact statement (EIS) or an 
environmental assessment (EA) for this rulemaking, and has tentatively 
determined that neither is required. This notice implements the March 
6, 2006, Order of the U.S. District Court of California to issue a 
proposed determination under section 507(e) of EPAct 1992. Center for 
Biological Diversity, 419 F.Supp 2d 1166. The Court order held that the 
Secretary is not ``obligated to prepare an impact statement under NEPA 
in either accepting or rejecting a fleet rule.'' Id. at 1173.
    EPAct 1992 requires DOE to issue a Private and Local Government 
Fleet Requirement if such a requirement is necessary. (42 U.S.C. 
13257(e)) Today's notice tentatively determines that a Private and 
Local Government Fleet Requirement is not necessary, and therefore DOE 
is not proposing a requirement. Once the Secretary has made the 
determination, the Secretary has no discretion as whether to issue the 
requirement. See Center for Biological Diversity, 419 F.Supp. 2d 1166, 
1173.

E. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. With regard to the review 
required by section 3(a), section 3(b) of Executive Order 12988 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under any guidelines issued by the Attorney 
General. Section 3(c) of Executive Order 12988 requires Executive 
Agencies to review regulations in light of applicable standards in 
section 3(a) and 3(b) to determine whether they are met or it is 
unreasonable to meet one or more of them. Executive Order 12988 does 
not apply to this rulemaking notice because DOE is not proposing any 
regulations and instead is proposing to determine that regulations are 
not ``necessary'' under section 507(e) of EPAct 1992.

F. Review Under Executive Order 13132

    Executive Order 13132, Federalism, 64 FR 43255 (August 4, 1999), 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined today's proposed 
determination and has determined that it would not have a substantial 
direct effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.
    Because DOE is proposing to determine that a private and local 
government fleet AFV program is not ``necessary'' under section 507(e) 
and therefore is not proposing the promulgation of such a program, no 
significant impacts upon State and local governments are anticipated. 
The position of State fleets currently covered under the existing EPAct 
1992 fleet program is unchanged by this action.

G. Review of Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4, requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local and tribal governments and the 
private sector. The Act also requires a Federal agency to develop an 
effective process to permit timely input by elected officials on a 
proposed ``significant intergovernmental mandate,'' and requires an 
agency plan for giving notice and opportunity for timely input to 
potentially affected small governments before establishing any 
requirements that might significantly or uniquely affect small 
governments. On March 18, 1997, DOE published in the Federal Register a 
statement of policy on its process for intergovernmental consultation 
under the Act (62 FR 12820). Today's notice does not propose or contain 
any Federal mandate, so the requirements of the

[[Page 52506]]

Unfunded Mandates Reform Act do not apply.

H. Review of Treasury and General Government Appropriations Act, 1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999, Public Law 105-277, requires Federal agencies to issue a 
Family Policymaking Assessment for any proposed rule that may affect 
family well-being. Today's notice of proposed determination would not 
have any impact on the autonomy or integrity of the family as an 
institution. Accordingly, DOE has concluded that it is not necessary to 
prepare a Family Policymaking Assessment.

I. Review of Treasury and General Government Appropriations Act, 2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516 note) provides for agencies to review most disseminations 
of information to the public under guidelines established by each 
agency pursuant to general guidelines issued by OMB. OMB's guidelines 
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines 
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed 
today's notice under the OMB and DOE guidelines, and has concluded that 
it is consistent with applicable policies in those guidelines.

J. Review Under Executive Order 13211

    Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy, Supply, Distribution, or Use, 66 FR 28355 
(May 22, 2001) requires preparation and submission to OMB of a 
Statement of Energy Effects for significant regulatory actions under 
Executive Order 12866 that are likely to have a significant adverse 
effect on the supply, distribution, or use of energy. A determination 
that a private and local government fleet AFV acquisition program is 
not ``necessary'' under EPAct 1992 section 507(e) does not require 
private and local government fleets, suppliers of energy, or 
distributors of energy to do or to refrain from doing anything. Thus, 
although today's proposed negative determination is a significant 
regulatory action, if finalized the determination is not expected to 
have a significant adverse impact on the supply, distribution, or use 
of energy.

K. Review Under Executive Order 13432

    Executive Order 13432, Cooperation Among Agencies in Protecting the 
Environment With Respect to Greenhouse Gas Emissions from Motor 
Vehicles, Nonroad Vehicles, and Nonroad Engines, 72 FR 27717 (May 16, 
2007) requires DOE to work with DOT and EPA when conducting rulemakings 
that could be considered to affect emissions. In particular, this 
Executive Order requires that ``the head of an agency undertaking a 
regulatory action that can reasonably be expected to directly regulate 
emissions, or to substantially and predictably affect emissions, of 
greenhouse gases from motor vehicles, nonroad vehicles, nonroad 
engines, or the use of motor vehicle fuels, including alternative 
fuels, shall'' conduct the rulemaking jointly with other agencies, to 
the extent permitted by law; consider, as appropriate, laws, 
information, and recommendations of the other agencies; exercise the 
agency's authority effectively; and obtain concurrence or other views 
by the other agencies throughout the rulemaking process. In meeting 
this requirement, the Department has consulted with both the Department 
of Transportation and the Environmental Protection Agency throughout 
development of this proposed determination.

VIII. Approval by the Office of the Secretary

    The issuance of the proposed determination for the Private and 
Local Government Fleet Determination has been approved by the Office of 
the Secretary.

    Issued in Washington, DC, on September 6, 2007.
Alexander A. Karsner,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. E7-18153 Filed 9-13-07; 8:45 am]
BILLING CODE 6450-01-P