[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Proposed Rules]
[Pages 73992-73997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27624]


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 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.
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  Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / 
Proposed Rules  

[[Page 73992]]



DEPARTMENT OF ENERGY

10 CFR Part 474

[EERE-2021-VT-0033]


Petroleum Equivalence Factor, Notification of Petition for 
Rulemaking

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notification of petition for rulemaking; request for comments.

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SUMMARY: This document announces receipt of a petition for rulemaking 
received by the Department of Energy (DOE) on October 22, 2021, from 
the Natural Resources Defense Council (NRDC) and Sierra Club requesting 
that DOE update its regulations concerning procedures for calculating a 
value for the petroleum-equivalent fuel economy of electric vehicles 
(EVs) for use in the Corporate Average Fuel Economy (CAFE) program 
administered by the Department of Transportation (DOT). This document 
summarizes the substantive aspects of this petition and requests public 
comments on the merits of the petition.

DATES: DOE will accept comments, data, and information with respect to 
the NRDC and Sierra Club Petition until February 28, 2022.

ADDRESSES: You may submit comments, identified by docket number ``EERE-
2021-VT-0033,'' by the following method:
    Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    Email: [email protected]. Include the docket number 
and/or RIN in the subject line of the message.
    Although DOE has routinely accepted public comment submissions 
through a variety of mechanisms, including the Federal eRulemaking 
Portal, postal mail and hand delivery/courier, the Department has found 
it necessary to make temporary modifications to the comment submission 
process in light of the ongoing coronavirus 2019 (``COVID-19'') 
pandemic. DOE is currently suspending receipt of public comments via 
postal mail and hand delivery/courier. If a commenter finds that this 
change poses an undue hardship, please contact Vehicle Technologies 
Program staff to discuss the need for alternative arrangements. Once 
the COVID-19 pandemic health emergency is resolved, DOE anticipates 
resuming all of its regular options for public comment submission, 
including postal mail and hand delivery/courier.
    Docket: The docket, which includes Federal Register notices, 
comments, and other supporting documents/materials, is available for 
review at www.regulations.gov. All documents in the docket are listed 
in the www.regulations.gov index. However, some documents listed in the 
index, such as those containing information that is exempt from public 
disclosure, may not be publicly available.
    The docket web page can be found at: www.regulations.gov/docket/EERE-2021-VT-0033.
    The docket web page will contain simple instructions on how to 
access all documents, including public comments, in the docket.

FOR FURTHER INFORMATION CONTACT: Mr. Kevin Stork, U.S. Department of 
Energy, Vehicle Technologies Program, EE-3V, 1000 Independence Avenue 
SW, Washington, DC 20585-0121. Telephone: (202) 586-8306. Email: 
[email protected].
    Mr. Peter Cochran, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0103. 
Telephone: (202) 586-9496. Email: [email protected].

SUPPLEMENTARY INFORMATION: The Administrative Procedure Act (APA), 5 
U.S.C. 551 et seq., provides, among other things, that ``[e]ach agency 
shall give an interested person the right to petition for the issuance, 
amendment, or repeal of a rule.'' (5 U.S.C. 553(e)) DOE received a 
petition for rulemaking from the Natural Resources Defense Council 
(NRDC) and Sierra Club requesting that DOE update its regulations at 10 
CFR part 474 concerning procedures for calculating a value for the 
petroleum-equivalent fuel economy of electric vehicles (EVs) for use in 
the Corporate Average Fuel Economy program administered by the 
Department of Transportation (DOT). DOE last updated the petroleum 
equivalence factor (PEF) for EVs in 2000. 65 FR 36985 (June 12, 2000)
    In their petition, the petitioners propose that DOE should update 
regulations for calculating the PEF for electric vehicles. Petitioners 
assert that the data underlying the current regulation are outdated, 
resulting in higher imputed values of fuel economy for electric 
vehicles. The petitioners assert that with this higher imputed value, a 
smaller number of EVs enable fleetwide compliance at lower real-world 
average fuel economy across an automaker's overall fleet. The 
petitioners assert that the PEF should be based upon statutory factors 
at 49 U.S.C 32904, rather than the existing regulatory approach based 
upon 49 U.S.C. 32905. The petitioners request that DOE review the PEF 
calculation and approach and work with the National Highway Traffic 
Safety Administration to ensure PEF regulations support the goals of 
the CAFE program.
    The petition is available in the docket at www.regulations.gov/docket/EERE-2021-VT-0033. Through this document, DOE is seeking views 
on whether it should grant the petition and undertake a rulemaking to 
update the PEF. By seeking comment on whether to grant this petition, 
DOE takes no position at this time regarding the merits of the 
suggested rulemaking or the assertions made by the petitioners.
    DOE welcomes comments and views of interested parties on any aspect 
of the petition for rulemaking and on whether DOE should proceed with 
the rulemaking.

Submission of Comments

    DOE invites all interested parties to submit in writing by the date 
under the DATES heading, comments and information regarding this 
petition.
    Submitting comments via/www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information prior to submitting comments. Your contact 
information will be viewable to DOE Vehicles Technologies staff only. 
Your contact information will not be publicly viewable except for your 
first and last names, organization name (if any), and submitter 
representative name (if any). If your comment is not processed

[[Page 73993]]

properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
www.regulations.gov cannot be claimed as CBI. Comments received through 
the website will waive any CBI claims for the information submitted. 
For information on submitting CBI, see the Confidential Business 
Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email. Comments and documents submitted via 
email also will be posted to www.regulations.gov. If you do not want 
your personal contact information to be publicly viewable, do not 
include it in your comment or any accompanying documents. Instead, 
provide your contact information in a cover letter. Include your first 
and last names, email address, telephone number, and optional mailing 
address. The cover letter will not be publicly viewable as long as it 
does not include any comments.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide only documents 
that are: Not secured, written in English, and free of any defects or 
viruses. Documents should not contain special characters or any form of 
encryption and, if possible, they should carry the electronic signature 
of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: One copy of the document marked 
``Confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``Non-confidential'' 
with the information believed to be confidential deleted. Submit these 
documents via email, if feasible. DOE will make its own determination 
about the confidential status of the information and treat it according 
to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).
    DOE considers public participation to be a very important part of 
its process for considering rulemaking petitions. DOE actively 
encourages the participation and interaction of the public during the 
comment period. Interactions with and between members of the public 
provide a balanced discussion of the issues and assist DOE in 
determining how to proceed with a petition. Anyone who wishes to be 
added to DOE mailing list to receive future notices and information 
about this petition should contact Vehicle Technologies Program staff 
at [email protected].

Signing Authority

    This document of the Department of Energy was signed on December 
16, 2021, by Kelly J. Speakes-Backman, Principal Deputy Assistant 
Secretary for Energy Efficiency and Renewable Energy, pursuant to 
delegated authority from the Secretary of Energy. That document with 
the original signature and date is maintained by DOE. For 
administrative purposes only, and in compliance with requirements of 
the Office of the Federal Register, the undersigned DOE Federal 
Register Liaison Officer has been authorized to sign and submit the 
document in electronic format for publication, as an official document 
of the Department of Energy. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on December 16, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

Petition for Rulemaking To Update Department of Energy Regulations at 
10 CFR Part 474: Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Petroleum-Equivalent Fuel Economy Calculation 
Date:

October 22, 2021
Submitted via email

    Natural Resources Defense Council and Sierra Club submit the 
following petition for rulemaking to update Department of Energy 
regulations at 10 CFR part 474 that contain procedures for calculating 
a value for the petroleum-equivalent fuel economy of electric vehicles 
for use in the Department of Transportation's Corporate Average Fuel 
Economy program, as required by 49 U.S.C. 32904(a)(2). The subject 
regulations have not been updated in more than twenty years and must be 
revised to account for the best available current data so as to not 
undermine the effectiveness of federal fuel economy standards.
    Natural Resources Defense Council and Sierra Club submit this 
petition under 5 U.S.C. 553(e) for the Department of Energy (DOE) to 
update its regulations at 10 CFR part 474 concerning procedures for 
calculating a value for the petroleum-equivalent fuel economy of 
electric vehicles (EVs) for use in the Corporate Average Fuel Economy 
program administered by the Department of Transportation (DOT).\1\ The 
existing DOE regulations were promulgated via the final rule Electric 
and Hybrid Vehicle Research, Development, and Demonstration Program; 
Petroleum-Equivalent Fuel Economy Calculation, 65 FR 36986 (Jun. 12, 
2000). As explained below, DOE is required to review these regulations 
annually and determine appropriate petroleum equivalent fuel economy 
values for EVs based on enumerated statutory factors. DOE has not 
revised these regulations in more than twenty

[[Page 73994]]

years and the current values are based on outdated data and 
circumstances. The regulations are also based on an outdated 
application of the statutory factors, with the result that existing 
regulations undermine the CAFE program they are supposed to support. 
DOE should grant this petition and update the regulations.
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    \1\ 5 U.S.C. 553(e) provides that ``each agency shall give an 
interested person the right to petition for the issuance, amendment, 
or repeal of a rule.''
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Background

    In 1975, Congress passed the Energy Policy and Conservation Act 
(EPCA), which required the National Highway Traffic Safety 
Administration (NHTSA) to set corporate average fuel economy (CAFE) 
standards for automobiles as part of a suite of measures to reduce 
energy consumption.\2\ Congress also directed the Secretary of 
Transportation to submit a report with a recommendation on ``whether or 
not electric vehicles'' should be included in the CAFE program, 
including ``the manner in which energy requirements of [EVs] may be 
compared with energy requirements of [internal combustion] vehicles.'' 
\3\ That report recommended against making EVs subject to CAFE 
standards.\4\ As to comparing the energy requirements of EVs to 
internal combustion engine vehicles (ICEVs), the report observed that 
there were a number of different ways this question could be answered. 
The agency proposed comparing vehicles ``on the basis of overall energy 
efficiency from primary source to final utilization in the vehicle,'' 
but observed that this approach ``will not account for differences in 
the `social value' of various primary energy sources'' and that 
vehicles could also be compared ``on the basis of petroleum 
consumption,'' which, for EVs, might include petroleum used to generate 
electricity.\5\
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    \2\ Public Law 94-163 Sec.  2(5), 89 Stat. 871, 874, 902 (1975). 
The statute assigns this task to the Secretary of Transportation, 
who has delegated it to NHTSA. 49 CFR 1.94(c).
    \3\ Public Law 94-163 Sec.  301.
    \4\ Department of Transportation, Report, Advisability of 
Regulating Electric Vehicles for Energy Conservation at S-1 (August 
1976). The recommendation stemmed in significant part from a 
determination that contemporary EVs would have a similar energy 
efficiency as internal combustion engine vehicles (ICEVs), but that 
there was less available potential technology to improve EV 
efficiency compared to the available potential technology to improve 
ICEV technology. E.g. id. at 3-8. According to the report, 
regulating EVs under CAFE ``would therefore reduce their already 
marginal competitiveness.'' Id. at 6-6.
    \5\ E.g. id. at 6-5 to 6-7.
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    Notwithstanding DOT's recommendations, in 1980 Congress directed 
DOE ``to conduct a seven-year evaluation program of the inclusion of 
electric vehicles . . . in the calculation of average fuel economy [in 
the CAFE program] . . . to determine the value and implications of such 
inclusion as an incentive for the early initiation of industrial 
engineering development and initial commercialization of electric 
vehicles.'' \6\ DOE was also directed to determine ``equivalent 
petroleum based fuel economy values for various classes of electric 
vehicles,'' taking into account:
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    \6\ Chrysler Corporation Loan Guarantee Act of 1979, Public Law 
96-185 Sec.  18, 93 Stat. 1324 (Jan 7. 1980). In the late 1970s, one 
of the leading U.S. automakers, the Chrysler Corporation, was facing 
huge financial losses due in part to the company's decision ``to 
become specialists in large, gas-guzzling cars . . . right at the 
time . . . [of] oil boycotts and crises with the price of 
gasoline.'' Nat'l Public Radio, Examining Chrysler's 1979 Rescue, 
NPR.ORG (Nov. 12, 2008), available at https://www.npr.org/templates/story/story.php?storyId=96922222. In exchange for Chrysler 
committing to an operating plan that included ``an energy efficiency 
plan setting forth steps to be taken by the Corporation to reduce 
United States dependence on petroleum,'' Congress extended to 
Chrysler about $1.5 billion in loan guarantees. See Public Law 96-
185 Sec. Sec.  2(8), 4.
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    (i) The approximate electrical energy efficiency of the vehicles 
considering the vehicle type, mission, and weight;
    (ii) the national average electricity generation and transmission 
efficiencies;
    (iii) the need of the Nation to conserve all forms of energy, and 
the relative scarcity and value to the Nation of all fuel used to 
generate electricity; and
    (iv) the specific driving patterns of electric vehicles as compared 
with those of petroleum fueled vehicles.\7\
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    \7\ Id. Sec.  18.
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    DOE promulgated procedures for calculating EV CAFE values in April 
1981.\8\ To account for factor 1, the agency chose test procedures to 
measure the electrical efficiency of an EV.\9\ The remaining factors 
were ostensibly captured as subcomponents of a petroleum-equivalency 
factor (PEF), which varied annually with changes in the subcomponent 
terms. The PEF included generation and transmission efficiency terms to 
account for factor 2.\10\ To account for ``the relative value'' of 
generation fuels required by factor 3, DOE weighted each type of input 
fuel in the generation efficiency term by the ratio of that fuel's 
marginal price to the marginal price of gasoline (per Btu).\11\ The 
1981 rule did not account specifically for ``the need of the Nation to 
conserve all forms of energy'' or for ``the relative scarcity'' of 
generation fuels. As to ``the specific driving patterns'' of EVs in 
factor 4, DOE determined that there was insufficient data available and 
assigned the driving pattern factor at a unity value of 1.0.\12\ The 
agency also included an accessory factor (AF) that accounted for 
petroleum-powered accessories (such as cabin heaters) found in some 
EVs.\13\
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    \8\ See Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Equivalent Petroleum-Based Fuel Economy 
Calculation, Final Rule, 46 FR 22747 (April 21, 1981).
    \9\ Id. at 22,748-22749.
    \10\ Id. at 22,748.
    \11\ Id. at 22,748-22,749.
    \12\ Id. at 22,750.
    \13\ Id.
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    In 1987, DOE completed the mandated seven-year evaluation, 
concluding that the EV CAFE provision was not effective at 
incentivizing early industrial development or initial commercialization 
of EVs.\14\ The agency noted, however, that there was little apparent 
downside in having Congress provide for inclusion of EVs in the CAFE 
program in the future.\15\ The calculation of the annual petroleum 
equivalency factors was not extended past 1987.\16\
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    \14\ DOE, Electric and Hybrid Vehicles Program, 11th Annual 
Report to Congress at 30 (March 1988).
    \15\ Id.
    \16\ See Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Equivalent Petroleum-Based Fuel Economy 
Calculation, Proposed Rule, 59 FR 5336, 5337 (Feb. 4, 1994). 17 E.g. 
Public Law 100-494 Sec.  6(a), 102 Stat. 2411 (Oct. 14, 1988); 
Public Law 102-486 Sec.  403, 106 Stat. 2776 (Oct. 24, 1992).
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    Over time, Congress amended various aspects of the statutes 
governing the CAFE program,\17\ and in 1994, codified the program as 
amended within title 49, United States Code.\18\ As then codified, 
NHTSA was directed to set ``maximum feasible'' average fuel economy 
standards for each model year.\19\ In carrying out that determination, 
however, NHTSA was prohibited from ``consider[ing] the fuel economy of 
dedicated automobiles,'' which, as defined, included EVs.\20\ But if an 
automaker in fact produced any EVs, the agency was directed to include 
in the CAFE compliance calculation equivalent petroleum based fuel 
economy values determined by [DOE]'' for those EVs.\21\ DOE, in turn, 
was required to ``review those values each year and determine and 
propose necessary revisions based on'' the four statutory factors 
listed above.\22\
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    \17\ Public Law 103-272 Sec. Sec.  1(a); (e), 108 Stat. 745 
(July 5, 1994).
    \18\ Public Law 103-272 Sec. Sec.  1(a); (e), 108 Stat. 745 
(July 5, 1994).
    \19\ Id. Sec.  1(e), adding 49 U.S.C. 32902(a), (c), (f), (g).
    \20\ Id. Sec.  1(e), adding 49 U.S.C. 32901(a)(1), (8); 32902 
(h)(1).
    \21\ Id. Sec.  1(e), adding 49 U.S.C. 32904(a)(2).
    \22\ Id.
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    In February 1994, ``[d]ue to continued technology development and a 
strong interest in the corporate average fuel economy of electric 
vehicles from

[[Page 73995]]

industry,'' DOE proposed to revive and update the method of calculating 
EV CAFE values.\23\ The agency proposed a suite of changes from the 
1981 rule, including to ``change the way the electricity generation 
output, input, and relative value terms are calculated,'' to 
``incorporat[e] off-peak electric vehicle charging and the relative 
scarcity of electricity generation fuel sources,'' and to change the 
test procedure used to determine the electrical efficiency of EVs.\24\ 
DOE noted that ``[w]hile the determination of the energy efficiency of 
an [EV] . . . is a straightforward task based on physical testing,'' 
the remaining required factors were ``subject to less precise 
quantification.'' \25\ As proposed, the PEF would no longer have 
included the ``relative value'' weighting of fuels by marginal price 
per BTU, and would instead have added a ``relative scarcity'' factor 
derived from the U.S. share of the world reserve market and ``the rate 
at which the U.S. [was] depleting each fuel source's reserves.'' \26\ 
These proposed regulations did not meaningfully account specifically 
for ``the need of the Nation to conserve all forms of energy'' or for 
``the relative . . . value'' of generation fuels. The 1994 proposal was 
never finalized.
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    \23\ Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Equivalent Petroleum-Based Fuel Economy 
Calculation, Proposed Rule, 59 FR 5336, 5337 (Feb. 4, 1994).
    \24\ Id.
    \25\ Id.
    \26\ Id. at 5338.
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    In 1999, DOE withdrew the 1994 proposal and proposed an alternative 
PEF methodology.\27\ Noting ``criticisms related to the scarcity 
factor,'' ``DOE elected to perform an additional search of the 
literature'' and ``determined that the fuels used to produce 
electricity'' ``are quite abundant'' such that ``scarcity [did] not 
appear to be a concern'' and ``should not be a guiding factor in the 
rulemaking at [that] time.'' \28\ ``DOE then examined existing law [at 
49 U.S.C. 32905] for determining the petroleum-equivalent fuel economy 
of other types of alternative fuel vehicles.'' \29\ ``Two of the most 
common liquid alternative fuels,'' M85 and E85, contained 85% 
alternative fuel and ``15 percent unleaded gasoline by volume,'' so the 
statute ``deemed'' ``[t]he petroleum equivalent fuel economy of E85 and 
M85 powered vehicles'' to be ``the measured fuel economy value'' 
divided by 0.15.\30\ DOE then noted that Section 32905(c) ``extends 
this approach to gaseous fueled vehicles,'' ``divid[ing] by 0.15,'' 
even though the gaseous fuel ``contains no gasoline whatsoever.'' \31\
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    \27\ Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Petroleum-Equivalent Fuel Economy 
Calculation, Proposed Rule, 64 FR 37905 (July 14, 1999).
    \28\ Id. at 37907.
    \29\ Id.
    \30\ Id.
    \31\ Id.
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    Observing that ``the methods specified in [Section 32905]'' 
``intentionally and substantially overstated'' the ``true energy 
efficiency of'' those vehicles, DOE proposed an EV PEF ``conceptually 
based on the [provisions] at 49 U.S.C. 42905(c).'' \32\ The agency 
contended that this approach would ``help to accelerate the early 
commercialization of electric vehicles'' and be ``more consistent with 
the regulatory treatment of other alternative fuel vehicles.'' \33\ DOE 
thus proposed eliminating the relative value and scarcity factors from 
the 1981 rule and the 1994 proposal and instead including a ``fuel 
content'' factor of 1/0.15 in the PEF.\34\ In effect, the fuel content 
factor added ``a multiple of 6.67'' to every EV's imputed fuel 
economy.\35\ DOE justified this multiplier, drawn from statutory 
provisions applicable to gaseous fueled vehicles, as providing 
``consistency,'' ``similar treatment to manufacturers of all types of 
alternative fuel vehicles,'' and ``simplicity and directness.'' \36\
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    \32\ Id. at 37907.
    \33\ Id. at 37906.
    \34\ Id. at 37907-908.
    \35\ Id. at 37908.
    \36\ Id.
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    The agency finalized the proposal in 2000 without substantial 
modification.\37\ DOE also committed to review the regulations after 
five years and ``publish the findings of the review.'' \38\ Petitioners 
have been unable to locate this publication, and it is not clear if the 
review occurred.
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    \37\ Electric and Hybrid Vehicle Research, Development, and 
Demonstration Program; Petroleum-Equivalent Fuel Economy 
Calculation, Final Rule, 65 FR 36986 (June 12, 2000).
    \38\ See 10 CFR 474.5.
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DOE Should Update Regulations for Calculating EV CAFE Values

    DOE's regulations for calculating CAFE program fuel economy values 
for EVs are long overdue to be updated. Statute requires the agency to 
``review those values each year and determine and propose necessary 
revisions'' based on the enumerated statutory factors.\39\ The 
regulations have not been updated in more than twenty years and the 
data underlying the extant regulations are materially--and 
increasingly--inaccurate. Further, the statute requires that the 
equivalency values be ``based on'' the statutory factors.\40\ The 
extant EV equivalency values are instead based on other statutory 
provisions applicable to gaseous fueled vehicles, with the consequence 
that EV CAFE values are driven by the seven-fold multiplier of the 
``fuel content factor'' \41\ rather than the statutory factors 
applicable to EVs. The effect is that EV CAFE values are significantly 
inflated beyond what the relevant statutory factors contemplate.
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    \39\ 49 U.S.C. 32904(a)(2)(B) (emphasis added).
    \40\ 49 U.S.C. 32904(a)(2)(B).
    \41\ 65 FR at 36987.
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    The consequences of outdated regulations are not academic. Because 
NHTSA is prohibited from considering the fuel economy of EVs when 
determining the maximum feasible CAFE standards for a given model 
year,\42\ but must include EVs when calculating compliance with those 
standards,\43\ excessively high imputed fuel economy values for EVs 
means that a relatively small number of EVs will mathematically 
guarantee compliance without meaningful improvements in the real-world 
average fuel economy of automakers' overall fleets.
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    \42\ 49 U.S.C. 32902(h).
    \43\ 49 U.S.S. Sec.  32904(a)(2)(B).
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DOE Should Update Its Regulations To Include the Best Available Data

    The values for several component terms in the PEF equation are no 
longer accurate. For example, the ``gasoline-equivalent energy content 
of electricity factor'' (Eg) is determined by combining various values 
for the efficiency of national electricity and petroleum generation and 
distribution.\44\ The efficiency of many of these processes has 
improved over the last twenty years. When DOE last updated regulations 
in 2000, the ``U.S. average fossil-fuel electricity generation 
efficiency'' (Tg) was 0.328, but the actual current efficiency is 
closer to 0.389.\45\
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    \44\ 65 FR at 36987.
    \45\ Compare id. with, e.g., U.S. Energy Information 
Administration (EIA), Electric Power Annual, Data Tables, https://www.eia.gov/electricity/annual/ (last visited October 22, 2021); 
EPA, eGRID: Download Data, https://www.epa.gov/egrid/download-data 
(last visited October 22, 2021).
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    Further, the generation fuel mix has changed significantly since 
2000. In 2000, fossil fuels made up about 71% of the generation mix, 
while renewables made up only about 9% and nuclear power provided the 
remaining 20%.\46\ In 2020, fossil fuels made up only about 60%, and 
within that pool natural gas is increasingly supplanting coal and 
petroleum.\47\ Renewables made up 20%

[[Page 73996]]

and will continue to grow, and nuclear energy made up the remaining 
20%.\48\ DOE should consider whether, in light of the required 
statutory factors, using a fossil-fuel only efficiency term is 
appropriate. DOE should also determine how, in light of the statutory 
scarcity, value, and conservation considerations, fuel sources such as 
wind and solar should be treated in terms of generation efficiency.
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    \46\ EIA, Total Energy, https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0802a (last visited October 8, 2021).
    \47\ EIA, Electricity explained, https://www.eia.gov/energyexplained/electricity/electricity-in-the-us-generationcapacity-and-sales.php (last visited October 8, 2021).
    \48\ Id.
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    Other real-world changes since 2000 should also inform the agency's 
regulations. For example, data on the harms of fossil-fuel driven 
climate change, on the scale of petroleum consumption by regulated 
vehicles, and on the projected fleet share of EVs, have all changed 
over the past twenty years. DOE should ensure that its regulations are 
based on the best available data fitted to the required statutory 
considerations.

DOE Should Update Its Regulations To Comport With the Required 
Statutory Factors and To Support the Goals of DOT's CAFE Program

    Existing regulations are arguably inconsistent with DOE's statutory 
mandate. The statute provides that EV CAFE values should be ``based 
on'' the statutory factors at 49 U.S.C. 32904. But current regulations 
are actually ``based on the existing regulatory approach at 49 U.S.C. 
32905 for determining the petroleum-equivalent fuel economy of 
alternative [gaseous] fueled vehicles.'' \49\ The result is that the 
magnitude of the PEF is primarily driven by the 1/0.15 multiplier 
applicable to those vehicles rather than being driven by the 
considerations mandated for EVs.
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    \49\ 65 FR at 36987.
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    To illustrate, the value of the PEF currently attributable to the 
Section 32904 EV factors is only 12,307 Wh/gal.\50\ But with the 
addition of the Section 32905 multiplier, the PEF becomes 82,049 Wh/
gal.\51\ In practical terms, the EV fuel economy used for CAFE 
compliance is seven-fold higher due to the inclusion of the Section 
32905 multiplier. So, for example, for the bestselling 2021 Tesla Model 
Y (Standard Range RWD) measured at 260 Wh/mile,\52\ the CAFE value 
under DOE's current treatment of the Section 32904 factors alone would 
be 51 mpg,\53\ but with the multiplier the same vehicle is imputed a 
315 mpg value for CAFE compliance purposes.\54\
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    \50\ Id.
    \51\ Id.
    \52\ DOE, Compare Side-by-Side for 2021 Tesla Model Y Standard 
Range RWDhttps://www.fueleconomy.gov/feg/Find.do?action=sbs&id=43880 
(last visited October 6, 2021).
    \53\ Updating the underlying data from the 2000 rule values and 
reconsidering the appropriate application of the statutory factors 
in light of current circumstances and program goals will likely 
increase this value.
    \54\ These values come from dividing the PEF (in Wh/gal) by the 
EPA-measured combined electrical energy consumption value (in Wh/
mile). See 10 CFR part 474, App.
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    The entire delta from 51 mpg to 315 mpg is virtual. It does not 
reflect any efficiency characteristic of the EV or of the national 
electricity generation system, nor does it reflect any discretionary 
adjustment tied to the relevant statutory factors. Because CAFE is a 
fleet average standard,\55\ the virtual increase in EV fuel economy far 
above the average means that automakers do not need to improve the 
fleet efficiency of their below-average ICEVs nearly as much to comply 
with the standard. And NHTSA is constrained from fully compensating for 
the virtual increase because the statute prohibits NHTSA from 
``consider[ing] the fuel economy of [EVs]'' when determining what 
average standard is maximum feasible for a model year.\56\
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    \55\ 49 U.S.C. 32902.
    \56\ See 49 U.S.C. 32901(a)(1), (8), Sec.  32902(h).
---------------------------------------------------------------------------

    If the 1/0.15 multiplier was accounting for a real-world 
improvement in fuel conservation or had the effect of causing net 
improvements in real-world fuel efficiency, then the multiplier might 
be more defensible. But DOE justified its inclusion primarily on the 
basis of affording similar treatment to EVs as gaseous fueled 
vehicles.\57\ As a purely legal matter, this justification is 
questionable, as the statute expressly provides for different treatment 
between these types of vehicles.\58\
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    \57\ 65 FR at 36987.
    \58\ Cf., e.g., Russello v. United States, 464 U.S. 16, 23 
(1983) (``Where Congress includes particular language in one section 
of a statute but omits it in another section of the same Act, it is 
generally presumed that Congress acts intentionally and purposely in 
the disparate inclusion or exclusion.'') (cleaned up).
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    DOE should holistically review its approach to calculating the PEF 
to ensure its regulations comport with the relevant statutory language. 
For example, the statute provides that DOE should account for ``the 
need of the United States to conserve all forms of energy.'' \59\ But 
current PEF regulations do not appear to meaningfully address the need 
for national scale energy conservation, with DOE only citing this 
consideration in passing as a justification for including the 
``accessory factor'' in the PEF equation.\60\ It is not plausible that 
Congress intended the sweeping direction to consider ``the need of the 
United States to conserve all forms of energy'' to be satisfied merely 
by minor PEF adjustments for the ``minority of electric vehicles . . . 
in colder climates'' that ``may be equipped'' with petroleum-powered 
cabin heaters.\61\ Particularly given the ongoing and increasing threat 
from fossil-fuel-driven climate change, DOE's regulations should more 
meaningfully address the need to conserve all forms of energy.\62\
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    \59\ 49 U.S.C. 32904(a)(2)(B)(iii).
    \60\ 65 FR at 36987; cf. 59 FR at 5338.
    \61\ Compare 49 U.S.C. 32904(a)(2)(B)(iii) with 65 FR at 36987.
    \62\ As another example, the statute contemplates that the 
procedure for calculating the PEF might be different across 
``various classes of electric vehicles,'' 49 U.S.C. 32904(a)(2)(B), 
but DOE has only issued regulations equally applicable to all 
classes of EVs. DOE should consider whether it is appropriate to 
differentiate among different classes of EVs for purposes of 
calculating CAFE values.
---------------------------------------------------------------------------

    DOE should also work with NHTSA to ensure PEF regulations further 
the goals of the CAFE program. By way of illustration, DOE historically 
suggested that EV CAFE values should be high to help with ``early 
commercialization'' of EVs.\63\ But that idea originates from now 
obsolete language in the 1979 Chrysler Corporation Loan Guarantee Act 
that directed DOE to evaluate whether including EVs in CAFE would have 
such an effect.\64\ The agency reported to Congress that the EV CAFE 
provision was not effective at incentivizing early 
commercialization,\65\ and when Congress consolidated the CAFE program 
in title 49 in 1994, it did not include that language from the Chrysler 
Loan Act.\66\ In any event, any consideration of extra-textual 
incentives must not undermine the CAFE program's ``overarching goal of 
fuel conservation'' for all light-duty vehicles.\67\
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    \63\ 64 FR at 37906.
    \64\ Id.; compare Public Law 96-185 Sec.  18(1) with Sec.  
18(3).
    \65\ DOE, Electric and Hybrid Vehicles Program, 11th Annual 
Report to Congress at 30 (March 1988).
    \66\ See Public Law 103-272 Sec. Sec.  1(a); (e), 108 Stat. 745 
(July 5, 1994).
    \67\ Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172, 1195 
(9th Cir. 2008) (quoting Ctr. for Auto Safety v. NHTSA, 793 F.2d 
1322, 1340 (D.C. Cir. 1986)).
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    The early commercialization of EVs has already occurred and EVs 
comprise a significant and increasing share of new motor vehicle sales 
each model year.\68\ DOE should account for these changed 
circumstances, and work with

[[Page 73997]]

NHTSA to ensure that the fuel economy imputed to EVs pursuant to 49 
U.S.C. 32904 is not set at a level that undermines the overarching 
statutory goals of energy and fuel conservation. To be sure, 
Petitioners believe that producing significant and increasing numbers 
of EVs should be an available means for automakers to comply with 
increasingly stringent CAFE standards. But the relative energy 
efficiency of EVs compared to ICEVs, coupled with the ongoing shift to 
increasingly efficient electricity generation from renewable sources, 
should ensure that baseline EV CAFE values will compare favorably to 
leading ICEVs. The statute further provides DOE additional discretion--
through consideration of factors ``subject to less precise 
quantification'' \69\ such as ``the need of the United States to 
conserve all forms of energy,'' and ``the relative scarcity and value 
to the Nation of all fuel used to generate electricity'' \70\--to 
adjust that baseline value to a level that will optimize the overall 
real-world reduction in fuel consumption and achieve the core purpose 
of EPCA's fuel-economy chapter.
---------------------------------------------------------------------------

    \68\ E.g. The White House, Press Release, FACT SHEET: President 
Biden Announces Steps to Drive American Leadership Forward on Clean 
Cars and Trucks (Aug. 5, 2021) (``President Biden Outlines Target of 
50% Electric Vehicle Sales Share in 2030 . . . .''), available at 
https://www.whitehouse.gov/briefing-room/statementsreleases/2021/08/05/fact-sheet-president-biden-announces-steps-to-drive-american-leadership-forward-onclean-cars-and-trucks/.
    \69\ 59 FR at 5337.
    \70\ 49 U.S.C. 32904(a)(2)(B)(iii).
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Conclusion

    For the above reasons, Petitioners ask that DOE grant this petition 
and initiate a rulemaking process to revise and update the regulations 
at 10 CFR part 474 for calculating equivalent petroleum-based fuel 
economy values for EVs. Petitioners thank DOE for its consideration.

Respectfully submitted,

Pete Huffman

Natural Resources Defense Council.

Joshua Berman,

Vera P. Pardee,

Law Office of Vera Pardee,
Counsel for Sierra Club.

[FR Doc. 2021-27624 Filed 12-28-21; 8:45 am]
BILLING CODE 6450-01-P