Energy Policy Act of 1992: Limited Progress in Acquiring Alternative Fuel
Vehicles and Reaching Fuel Goals (Letter Report, 02/11/2000,
GAO/RCED-00-59).

Pursuant to a congressional request, GAO provided information on the
progress towards achieving the goals of the Energy Policy Act's
petroleum replacement programs, focusing on the: (1) progress made in
acquiring alternative fuel vehicles and using alternative fuels to meet
the act's fuel replacement goals; (2) impediments to using alternative
fuel vehicles; and (3) measures that can be taken to address those
impediments to using alternative fuel vehicles and alternative fuels to
help reach the act's replacement goals.

GAO noted that: (1) since the passage of the Energy Policy Act of 1992,
some progress has been made in acquiring alternative fuel vehicles and
reducing the consumption of petroleum fuels in transportation; (2) the
Department of Energy (DOE) estimates about 1 million alternative fuel
vehicles were on the road in 1999; (3) it also estimates that, in 1998,
alternative fuels used in alternative fuel vehicles replaced about 334
million gallons of gasoline; (4) about 3.9 billion gallons of
alternative fuels were blended with gasoline and used in conventional
vehicles in 1998; (5) in total, about 4.23 billion gallons of gasoline
were replaced by alternative fuels or approximately 3.6 percent of all
highway gasoline use--considerably less than the act's goal of 10
percent in 2000; (6) in a 1999 draft report required by the act for
Congress, DOE concluded that the act's goals for replacing petroleum
fuels with alternative fuels would not be achieved under current
conditions; (7) the goals for fuel replacement are not being met
principally because alternative fuel vehicles have significant economic
disadvantages compared to conventional gasoline vehicles; (8)
fundamental economic impediments--such as the relatively low price of
gasoline, the lack of refueling stations for alternative fuels, and the
additional cost to purchase these vehicles--explain much of why both
mandated fleets and the general public are disinclined to acquire
alternative fuel vehicles and use alternative fuels; (9) in addition,
aspects of the act's approach do not directly address its goal to
replace petroleum fuels; (10) the act also limits its focus to
light-duty vehicles and does not include other ways to reduce petroleum
consumption; (11) according to a DOE analysis, even if crude oil prices
doubled from current levels of about $20 per barrel, alternative fuels'
share of the market would not increase; (12) some modest increases in
the use of alternative fuels or reductions in the use of gasoline could
occur if limitations in the act's approach were addressed; (13) the
focus of the act's mandates could shift from acquiring alternative fuel
vehicles to using alternative fuels; (14) the act's scope could broaden
from exclusively promoting alternative fuels to include other ways to
reduce the use of petroleum fuels; and (15) the act could also target
its promotion of alternative fuels to specific areas where a particular
fuel might be plentiful or applications in which the fuels will make
better economic sense.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-59
     TITLE:  Energy Policy Act of 1992: Limited Progress in Acquiring
	     Alternative Fuel Vehicles and Reaching Fuel Goals
      DATE:  02/11/2000
   SUBJECT:  Motor vehicle pollution control
	     Alternative energy sources
	     Gasoline
	     Motor vehicles
	     Environmental policies
	     Energy consumption
	     Cost effectiveness analysis
IDENTIFIER:  DOE Alternative Fuels Program
	     DOE Clean Cities Program

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GAO/RCED-00-59

A
Report to Congressional Requesters
February 2000 ENERGY POLICY ACT OF 1992
Limited Progress in Acquiring Alternative Fuel Vehicles and Reaching Fuel Goals

GAO/RCED-00-59

Letter 3 Appendixes Appendix I: General Characteristics of Alternative Fuels 28
Appendix II: Acquisitions of Alternative Fuel Vehicles by Mandated Federal Agencies, State Governments and Fuel Providers 29
Appendix III: Listing of Stakeholders Contacted During Our Review 31 Appendix IV: Comments From the Department of Energy 33 Appendix V: GAO Contacts and Staff Acknowledgments 37
Related GAO Reports 38 Tables Table 1: Alternative Fuel Vehicle Acquisition Mandates for
Centrally Fueled Fleets of Federal Agencies, State Governments, and Alternative Fuel Providers 6
Figures Figure 1: Percentage of Total Alternative Fuel Vehicles Used by Federal Agencies, State and Local Governments, and Private
Entities, 1998 11 Figure 2: Purchases of Alternative Fuel Vehicles Necessary to
Meet the Act's Fuel Replacement Goals 12 Figure 3: Density of Refueling Stations for Gasoline and Alternative
Fuels, 1999 14
Resources, Community, and Economic Development Division
Lett er
B- 284298 February 11, 2000 Congressional Requesters The effects of the nation's petroleum consumption in the transportation sector on our energy security and environment have long been national concerns. The transportation sector currently accounts for about 67 percent of all petroleum use in the United States and roughly 25 percent of total energy consumption. Each day, vehicles in the United States consume about 10 million barrels of petroleum fuels, primarily gasoline and diesel. The Department of Energy's (DOE) Energy Information Administration projects that this figure will rise to about 15 million barrels by 2010 and that much of this consumption will be met by importing oil. Over the past 25 years, a number of steps have been taken to reduce petroleum consumption in the transportation sector. Numerous laws and policies have been implemented, including encouraging the use of mass transit and high- occupancy vehicles (e. g., carpooling), improving auto efficiency, and developing alternative fuels-either by themselves or as a blend with gasoline.
In 1992, Congress passed the Energy Policy Act (the act) with the objective, among others, of reducing petroleum use in transportation by encouraging the use of alternative fuels in light- duty vehicles (cars and light trucks). Alternative fuels include ethanol, methanol, natural gas, propane, electricity, and biodiesel, among others. Alternative fuel vehicles operate on these fuels, although some of them can also consume gasoline. The act established goals of having alternative fuels replace at least 10 percent of the petroleum fuels projected to be consumed in 2000 and at least 30 percent of projected consumption in 2010. To help reach these goals, it also mandated that a portion of the new vehicles acquired for fleets operated by federal agencies, state governments, and alternative fuel providers must be alternative fuel vehicles. 1 DOE was tasked with a number of responsibilities related to these activities, including monitoring the
1 Alternative fuel providers, as defined by the act, are businesses that are involved in (1) producing, refining, storing, processing, transporting, distributing, importing, or selling at the wholesale or retail level alternative fuels other than electricity; (2) generating, transmitting, importing, or selling wholesale or retail electricity; or (3) producing or importing an average of 50, 000 barrels per day of petroleum.
progress towards the fuel replacement goals and collecting data to measure compliance with the act's fleet mandates.
With the first deadline approaching for the act's petroleum replacement goals, you asked that we review progress towards achieving these goals through the use of alternative fuel vehicles. More specifically, you asked that we determine (1) the progress made in acquiring alternative fuel vehicles and using alternative fuels to meet the act's fuel replacement goals, (2) the impediments to using alternative fuel vehicles, and (3) the measures that can be taken to address those impediments to using alternative fuel vehicles and alternative fuels to help reach the act's replacement goals.
Results in Brief Since the passage of the Energy Policy Act of 1992, some, albeit limited, progress has been made in acquiring alternative fuel vehicles and reducing
the consumption of petroleum fuels in transportation. DOE estimates about 1 million alternative fuel vehicles were on the road in 1999, about 0.4 percent of all vehicles. It also estimates that, in 1998, alternative fuels used in alternative fuel vehicles replaced about 334 million gallons of gasoline, which represents about 0.3 percent of the total gasoline consumed during that year. In addition, about 3.9 billion gallons of alternative fuels (e. g., ethanol and methanol) were blended with gasoline and used in conventional vehicles in 1998. 2 Thus, in total, about 4.23 billion gallons of gasoline were replaced by alternative fuels or approximately 3.6 percent of all highway gasoline use considerably less than the act's goal of 10 percent in 2000. Consistent with this data, in a 1999 draft report required by the act for the Congress, DOE concluded that the act's goals for replacing petroleum fuels with alternative fuels would not be achieved under current conditions.
The goals in the act for fuel replacement are not being met principally because alternative fuel vehicles have significant economic disadvantages compared to conventional gasoline vehicles. Fundamental economic impediments-such as the relatively low price of gasoline, the lack of refueling stations for alternative fuels, and the additional cost to purchase
2 This blend is known as oxygenated gasoline, which consists primarily of gasoline with small additional quantities of oxygenated compounds derived from ethanol or methanol. The act recognizes these compounds as counting towards the fuel replacement goals. This fuel is currently available in a number of states.
these vehicles explain much of why both mandated fleets and the general public are disinclined to acquire alternative fuel vehicles and use alternative fuels. In addition, aspects of the act's approach do not directly address its goal to replace petroleum fuels. For example, because the act mandated federal and state agencies and alternative fuel providers to meet certain acquisition targets for alternative fuel vehicles rather than establish targets for alternative fuel use, some alternative fuel vehicles acquired under the fleet mandate are being fueled with gasoline thereby making no contribution to the fuel replacement goals. The act also limits its focus to light- duty vehicles and does not include other ways to reduce petroleum consumption, such as increasing the use of alternative fuels in heavy- duty vehicles or mandating the use of vehicles that consume gasoline more efficiently.
Any efforts to significantly expand the use of alternative fuel vehicles will need to address their current cost disadvantages relative to vehicles that use gasoline. In general, the economic disadvantages of alternative fuel vehicles relative to conventional fuel vehicles are substantial. According to a DOE analysis performed at our request, using a well- established econometric model, even if crude oil prices doubled from current levels of about $20 per barrel, alternative fuels' share of the market would not increase. While tax credits or other financial incentives could be used to reduce the cost of alternative fuel vehicles and encourage their use, both of these measures would involve very large costs to drivers or taxpayers and, as such, are unlikely to be acceptable. While such dramatic measures would be necessary to meet the act's goals with alternative fuel vehicles, some modest increases in the use of alternative fuels and/ or reductions in the use of gasoline could occur if limitations in the act's approach were addressed. For example, the focus of the act's mandates could shift from acquiring alternative fuel vehicles to using alternative fuels. The act's scope could broaden from exclusively promoting alternative fuels to include other ways to reduce the use of petroleum fuels, such as using more efficient gasoline vehicles. The act could also target its promotion of alternative fuels to specific areas where a particular fuel might be plentiful or applications in which the fuels will make better economic sense.
Background The Energy Policy Act of 1992 contained provisions designed to help reduce the nation's use of petroleum fuels in the transportation sector
through the use of alternative fuel vehicles. The act set goals for replacing the use of petroleum fuels by 10 percent by the year 2000 and by 30 percent by the year 2010. A major component of these goals was mandating the acquisition of light- duty alternative fuel vehicles, such as cars and light trucks, for centrally fueled light- duty vehicle fleets used by federal agencies and state governments as well as fleets used by alternative fuel providers. As shown in table 1, the act required that a certain percentage of the vehicles acquired each year by fleet operators be alternative fuel vehicles. These percentages differed across groups and increased over time. The act designated the type of fuels recognized as alternative or replacement fuels. 3
Table 1: Alternative Fuel Vehicle Acquisition Mandates for Centrally Fueled Fleets of Federal Agencies, State Governments, and Alternative Fuel Providers
Percentage of all acquisitions for groups mandated to acquire vehicles
Federal State
Alternative Year agencies Governments fuel providers
1996 25 N/ A N/ A 1997 33 10 30 1998 50 15 50 1999 75 25 70 2000 75 50 90 2001 and beyond 75 75 90
Note: The act mandated that the federal government had to acquire 5, 000 alternative fuel vehicles in 1993, 7,500 vehicles in 1994, and 10,000 vehicles in 1995. It did not require state governments and alternative fuel providers to acquire alternative fuel vehicles during these years. In addition, the states' and fuel providers' acquisition mandates for 1996 were postponed for 1 year.
Source: Energy Policy Act of 1992 and DOE.
3 The act made a distinction between these fuels. Alternative fuels were alternatives to gasoline and diesel, and replacement fuels were portions of alternative fuels that would be added to gasoline to displace a certain amount of gasoline per gallon of fuel.
The act also identified alternative fuels as methanol, denatured ethanol, and other alcohols; mixtures (85 percent) 4 of these components with gasoline or other fuels; natural gas; liquefied petroleum gas; hydrogen; coalderived liquid fuels; fuels derived from biological materials; electricity, and any other fuels that are substantially not petroleum and that are determined to be acceptable by the Secretary of Energy. Appendix I provides information on some general characteristics of the primary alternative fuels. The act also gave the Secretary of Energy the authority to adjust the act's fuel replacement goals as well as to include other fuels that might meet the purposes of the act. DOE expanded the definition of alternative fuels through a rule- making to include, neat fuels or 100 percent by volume biodiesel and P- series fuels derived from ethanol and other chemicals from plant materials.
The act also established a variety of other authorities and requirements to promote the use of alternative fuel vehicles. Specifically, the act required DOE to establish a program to promote the replacement of petroleum fuels to the maximum extent possible and to determine the technical and economic feasibility of achieving the act's petroleum replacement goals. DOE's efforts have included activities to promote the use of alternative fuels and alternative fuel vehicles; collect and analyze data on related issues and concerns; establish rules and regulations; and develop voluntary partnerships to advance the use of alternative fuel vehicles, such as the Clean Cities Program. 5 For example, Section 506 of the act required that DOE assess the progress made in achieving the act's goals and the role and the availability of alternative fuels and alternative fuel vehicles in reducing the demand for imported petroleum fuels. DOE is currently undertaking these assessments and considering potential changes, such as lowering or delaying the goal or mandating that private sector and local government fleets acquire alternative fuel vehicles.
To help implement the act, on April 21, 1993, the President issued Executive Order 12844, Federal Use of Alternative Fueled Vehicles. This
4 DOE has statutory authority to issue a rule to designate alcohol mixtures below 85 percent, but above 70 percent, as alternative fuels for cold start purposes. DOE has not utilized this authority.
5 The Clean Cities Program was established to stimulate voluntary commitments at the municipality level to develop alternative fuel markets through acquiring alternative fuel vehicles, developing alternative fuel infrastructures, and communicating information on the merits of using these vehicles and alternative fuels.
order is based on the premise that the federal government would provide a significant impetus for developing and manufacturing alternative fuel vehicles and for expanding the fueling infrastructure necessary to support large numbers of privately owned alternative fuel vehicles. To supercede this order, a new Executive Order, 13031, Federal Alternative Fueled Vehicle Leadership, was issued in December 1996. The new order directed agencies to implement aggressive plans to fulfill the act's requirements for the acquisition of alternative fuel vehicles and establish reporting requirements.
Over the last 20 years, GAO has issued many reports on a number of alternative fuel vehicles, including those that use ethanol, methanol, propane, and electricity. These reports discussed the potential for some of these fuels and the importance of their cost- effectiveness compared to gasoline vehicles. Furthermore, we reported that federal and state incentives have played an important role in expanding the use of these fuels. More recently, after the act's passage, we issued a report Alternative Fueled Vehicles: Progress Made in Accelerating Federal Purchases, but Benefits and Costs Remain Uncertain( GAO/ RCED- 94- 161, July 15, 1994). In this report, we noted that the net benefits of alternative fuels would depend heavily on expanding the use of these fuels beyond mandated fleets to the much larger private vehicle market. We also pointed out that this expansion would depend on how alternative fuels compare with gasoline in cost, performance, and convenience. A list of some of our most recent related reports is provided in the back of this report.
Limited Progress Has To date, limited progress has been made towards achieving the act's goals
Been Made Towards of replacing petroleum fuels with alternative fuels. Also, acquisitions of
alternative fuel vehicles by the mandated fleets of federal agencies, state Act's Fuel Replacement
governments, and fuel providers have been mixed, and it is difficult to Goals and
determine if all mandated fleets have been meeting their acquisition Achievement of the
targets. Alternative Fuel Vehicle Mandate Is Uncertain
Fuel Replacement Goals Limited progress has been made in reaching the act's goals to replace 10
Will Not Be Met percent of petroleum fuels in 2000, and it is unlikely the 30- percent goal for
2010 will be met. According to the Energy Information Administration, about 1 million alternative fuel vehicles were on the road in 1999. However, the number of alternative fuel vehicles represented only about 0.4 percent of the estimated 212 million vehicles in the United States in 1998.
DOE estimates that, in 1998, alternative fuels replaced about 334 million gallons of gasoline, which represents 0. 3 percent of the total gasoline consumed during that year. DOE also estimates that about 3.9 billion gallons of alternative fuels (e. g., ethanol and methanol) were blended with gasoline and used in conventional vehicles in 1998. Thus, in total, about 4.23 billion gallons were replaced by alternative fuels or approximately 3. 6 percent of all highway gasoline use considerably less than the act's goal of 10 percent in 2000. Consistent with this data, in a 1999 draft report, Replacement Fuel and Alternative Fuel Technical and Policy Analysis, required by the act for the Congress, DOE concluded that the act's goals for replacing petroleum fuels with alternative fuels would not be achieved under current conditions.
Progress Towards Meeting The act requires that a certain percentage of vehicles in fleets operated by
Acquisition Mandates Is each federal agency, state government, and alternative fuel provider be
Uncertain alternative fuel vehicles. (See appendix II for information on the
acquisition of alternative fuel vehicles by these groups.) DOE officials said that there are mixed results among the federal agencies, with some agencies exceeding their mandates, while others are acquiring very few or no alternative fuel vehicles. For example, in 1998, the U. S. Postal Service acquired 10, 000 ethanol alternative fuel vehicles for mail delivery vehicles. This purchase played a major role in the federal government's collectively meeting the federal mandate for that year. DOE officials believed that most states are in compliance with the mandate. However, they said that the progress of fuel providers is uncertain because of the limited amount of information they currently have on this group.
DOE acknowledged that it does not have a complete inventory of all fleets for each group that would be subject to the act's mandates. DOE believed, however, that it has a good understanding of the fleet inventory of federal agencies and state governments, but has less certainty with the fleets of fuel providers. As a result, a complete and accurate determination of compliance with the mandates is impossible. DOE officials acknowledged that they do not audit or survey the mandated groups to determine whether
each of their fleets subject to the mandate is reporting its acquisitions of alternative fuel vehicles.
However, it is important to recognize that even if all the mandated fleets operated by these groups would fully comply with their acquisition targets, the goals for petroleum fuel replacement would not be met. The number of vehicles in these fleets and their total use of alternative fuels has been relatively small compared to the number of vehicles that would be needed to meet the act's fuel replacement goals. DOE estimated that, if federal agencies, state governments, and alternative fuel providers fully complied with the act's mandates, the vehicles in their fleets would replace less than 1 percent of petroleum fuels in 2010. This amount is far below the act's goals of 10 and 30 percent replacement in 2000 and 2010, respectively. 6
DOE officials acknowledged that the act's mandates were not designed, by themselves, to replace enough petroleum fuel to reach its goals. They stated that the vehicle acquisition mandates were intended to demonstrate the use of alternative fuels and stimulate the acquisition of alternative fuel vehicles by the general public. Two federal officials also told us that some of the act's supporters believed that the demand for alternative fuel vehicles by the fleets specified in the act would be large enough to create a general market for these vehicles. Representatives from auto manufacturers also stated that the fleets subject to the act are too small to significantly affect the market. They made this assertion because the mandated fleets represent a relatively small share of the current market for alternative fuel vehicles. As shown in figure 1, federal, state, and local governments together operated less than 30 percent of the alternative fuel vehicles in 1998.
6 DOE had estimated that if an acquisition mandate were established for the private sector and local governments, their compliance would increase the fuel replacement percentage to about 2 percent.
Figure 1: Percentage of Total Alternative Fuel Vehicles Used by Federal Agencies, State and Local Governments, and Private Entities, 1998
24%  State and local governments  5%
Federal government
71% 
Private entities
Source: Energy Information Administration.
To reach the act's goals of 10 percent and 30 percent replacement in 2000 and 2010, respectively, the general public would have to purchase a very large number of alternative fuel vehicles. For instance, to reach the 10- percent goal, DOE estimates that sales of alternative fuel vehicles would have to grow by about 1.5 to 1. 9 million vehicles per year. By comparison, the entire production of Ford's passenger cars in 1996 was slightly more than 1.4 million. As shown in figure 2, to reach the 30- percent goal, sales of alternative fuel vehicles would have to represent between 35 and 40 percent of all light- duty vehicle sales in 1999, then stay at between 30 and 38 percent of all sales from 2000 to 2010. This rapid market penetration is beyond the auto industry's typical pattern for introducing a conventional model or technology into the marketplace. As a result, DOE concluded in a recent draft report that, under current circumstances, the act's fuel replacement goals will not be met.
Figure 2: Purchases of Alternative Fuel Vehicles Necessary to Meet the Act's Fuel Replacement Goals
40 Alternative fuel vehicles as a percentage of new sales
35 30 25 20 15 10
5 0
1995 2000 2005 2010 Year
Source: DOE.
Economic Limited progress has been made towards reaching the Energy Policy Act's
Impediments Hamper goals for fuel replacement principally because alternative fuel vehicles
have significant economic disadvantages compared with conventional Use of Alternative Fuel
gasoline vehicles. These economic disadvantages explain much of the Vehicles
general public's reluctance to buy the vehicles and the difficulties that fleets subject to the act have in using them. Although our review identified a variety of factors that hinder the acceptance of these vehicles, several economic impediments appear to be fundamental.
First, the cost of gasoline is not high enough to entice consumers to switch to alternative fuel vehicles. The historically low cost of gasoline has sustained an entire refueling infrastructure and auto- manufacturing system dedicated to this fuel. This system has become more developed and entrenched over time. Even if the price of gasoline rose above the price of an alternative fuel, few consumers would switch to alternative fuel vehicles. To induce the general public to discard their conventional vehicles, the price of gasoline would have to reach a level high enough that consumers' increased spending on gasoline also surpassed the other costs associated with alternative fuel vehicles, such as longer trips to refuel
because of the limited number of refueling stations, higher vehicle purchase price, maintenance, limitations in vehicle performance, and consumers unfamiliarity with the vehicles. In addition, because fuel constitutes a relatively small percentage of the total cost of driving, the price of gasoline would have to increase substantially for consumers to discard conventional vehicles for those that run on alternative fuels.
Second, the lack of refueling stations that provide alternative fuels has been a major impediment to using alternative fuel vehicles. Officials from federal agencies and state governments who administer vehicle fleets cited the lack of a refueling infrastructure more than any other impediment to using alternative fuels. Because of the lack of demand for alternative fuel vehicles, owners of refueling stations are reluctant to provide facilities to refuel them. In addition, the high cost of providing some alternative fuels at existing refueling stations reduces station owners' willingness to provide the facilities. For example, building facilities to provide compressed natural gas cost approximately $300, 000 significantly more than the cost of refueling stations for gasoline, ethanol, or methanol. Conversely, the lack of refueling stations for alternative fuels makes it less convenient for the general public to obtain the fuels, and, thus, deters the general public from buying the vehicles.
The number of refueling stations for alternative fuels in the United States is far below the level that would be necessary to support the act's goals for fuel replacement. In the past, DOE has estimated the number of refueling stations that would be necessary if alternative fuel use increased significantly. Under three scenarios provided to GAO that used an alternative fuel model, DOE estimated that the number of alternative fuel refueling stations necessary to reach the act's 30- percent goal by 2010 ranges from 60,000 to 69,300. 7 This represents more than 10 times the number of refueling stations for alternative fuels that were available in 1999.
7 The three scenarios were as follows: (1) World crude oil prices equal those projected in the high case by DOE in its 1999 Annual Energy Outlook, and liquid petroleum gas prices are relatively low; (2) world crude oil prices are $16 above the base case prices projected in the 1999 Annual Energy Outlook, and the prices of alternative fuels contain a subsidy for greenhouse gases avoided; (3) World crude oil prices are $18 above the base case prices projected in the 1999 Annual Energy Outlook, and DOE mandates that private and local fleets acquire alternative fuel vehicles and requires these fleets to run them with at least 50 percent alternative fuels. GAO did not make a detailed review of DOE's modeling of these scenarios.
The number of alternative fuel refueling stations currently available is far less than the approximately 180,000 gasoline refueling stations available in 1999. As shown in figure 3, refueling stations for gasoline are numerous and densely configured throughout the United States. As a result, the general public usually has to travel short distances to refuel their vehicles. By comparison, the number of refueling stations for alternative fuel vehicles is generally sparse.
Figure 3: Density of Refueling Stations for Gasoline and Alternative Fuels, 1999
Gasoline Stations
Alternative Fuel Stations
Source: Energy Information Administration. Note: Each dot represents 10 refueling stations in the state, rounded up to the next highest 10 (e. g., a state with 11 stations would receive 2 dots). The dots in each state do not correspond to the geographic location of stations in the state.
The refueling stations for some alternative fuels are more numerous in specific areas, such as methanol in the West. Refueling stations are more evenly distributed around the country for compressed natural gas. While liquefied petroleum gas has more refueling sites around the U. S. than any other alternative fuel, many of them are designed for other fuel uses, such as heating or recreation, and are located on campgrounds or other remote locations. 8 Because there are significantly fewer refueling stations for alternative fuels compared to gasoline, many owners of alternative fuel vehicles would have to incur significantly higher costs in convenience, limitations in range, and distance traveled to obtain fuel.
Third, according to most stakeholders, the higher costs to purchase alternative fuel vehicles have deterred buyers, although these costs vary by type of vehicle. For example, vehicles that can run on ethanol alone or a mixture of it with gasoline have prices that are often very close to the price of a conventional version of the same vehicle. Conversely, a vehicle that runs on compressed natural gas generally costs from $3,000 to $5,000 more than the conventional version of the same vehicle. In addition, the current price of an electric vehicle generally ranges from the low $30,000s to the mid $40,000s, according to the Electric Vehicle Association of the Americas. Because of the high price, most of the estimated 3,500 electric vehicles they identified as operating today are leased.
The costs for alternative fuel vehicles are often higher because consumer demand for them is not large enough to achieve economies of scale in production. These higher costs pose problems for both the general public and fleets subject to the act. According to several federal officials, the higher cost of these vehicles makes it difficult for an agency's fleet managers to satisfy the act's mandates within their limited budgets. Several fleet managers told us their primary responsibility is to acquire the number of vehicles that will satisfy their agency's mission. Buying alternative fuel vehicles has a lower priority. Thus, when budget constraints make it impossible to satisfy both the agency's mission and the act's mandates to acquire alternative fuel vehicles, fleet managers obtain conventional vehicles.
8 Liquefied petroleum gas is primarily propane. According to a previous GAO report (Energy Policy Act: Including Propane as an Alternative Motor Fuel Will Have Little Impact on Propane Market, (GAO/ RCED- 98- 260, Sept. 28, 1998), officials in the propane industry do not believe the industry has the internal cohesion necessary to promote the use of propane as an alternative fuel.
In addition to these economic impediments, aspects of the Energy Policy Act's approach have hindered the replacement of petroleum fuels with alternative fuels. For example, the act mandates targets for the acquisition of alternative fuel vehicles for fleets operated by federal agencies, state governments, and fuel providers. However, the act does not establish targets for alternative fuel use for these vehicles. As a result, according to some federal officials, fleet managers or drivers often run their alternative fuel vehicles on gasoline. In some cases, fleet managers have had to run the vehicles on gasoline because there were no refueling stations for alternative fuels in the area. In other cases, fleet managers used gasoline because they had concerns about the safety or reliability of alternative fuels or did not realize a vehicle could run on an alternative fuel. Some of these officials also believed that DOE should require all entities covered by the act to use alternative fuels whenever possible in vehicles that can run on them.
The act also limits its mandates by specifying the acquisition of light- duty passenger vehicles. State officials from Maryland and officials from the Natural Gas Vehicle Coalition thought use of heavy- duty vehicles, such as buses or trucks that use alternative fuels, should be included under the mandates. These officials believe that many uses of heavy- duty vehicles are well suited to using alternative fuels because the vehicles use more fuel per vehicle than a light- duty vehicle. 9
Finally, the act seeks to enhance the nation's energy security by substituting petroleum fuels with alternative fuels. Reducing the consumption of petroleum fuels would also support the act's goals, but the act only requires that fleets subject to its mandates acquire alternative fuel vehicles, not that the fleets reduce gasoline consumption. As a result, fleets subject to the act's mandates could not satisfy their requirements by using emerging technologies, such as hybrid electric vehicles, that may also run on gasoline or diesel, but will be very efficient. Honda and Toyota recently have each introduced a hybrid electric vehicle for sale in the United States. 10 Reportedly, these vehicles can achieve fuel efficiencies ranging from 50 to 70 miles per gallon.
9 This assumes the heavy- duty vehicle and light- duty vehicle are travelling the same distance. 10 A hybrid electric vehicle operates on gasoline, diesel, fuel cells, or other fuels in combination with an electric battery. These vehicles are designed to be much more energy efficient than a conventional vehicle and produce much lower emissions.
Increasing Alternative To reach the act's goals for fuel replacement, a large proportion of the
Fuel Use Significantly general public would have to use alternative fuel vehicles and alternative
fuels. However, the economic impediments that deter the public from Will be Costly and May
buying alternative fuel vehicles are significant and fundamental, and the Require Changes in
costs of ameliorating them will be high. Approach
Consumers will purchase alternative fuel vehicles only if gasoline prices became so high that the increased spending on gasoline surpassed all the added costs of using an alternative fuel vehicle. In an analysis conducted for GAO, DOE estimated that even if crude oil prices doubled from the current level of about $20 per barrel, alternative fuels' share of the market among transportation fuels would not increase. According to DOE's analysis, the use of alternative fuels would approach the act's goals only if current world oil prices increase substantially (e. g., to a sustained level that is $18 per barrel above the prices currently projected by DOE) in combination with specific policy initiatives, such as adopting mandates that the fleets of local government and private sector fleets acquire alternative fuel vehicles. 11 Alternatively, tax or other financial incentives could be used to reduce the cost of alternative fuel vehicles and encourage their use. However, given the extent of the economic disadvantages of alternative fuel vehicles compared to gasoline vehicles and the magnitude of the act's goals, the incentives would most likely have to be very large and sustained, making them unlikely to be acceptable.
Overcoming the lack of refueling stations would also be costly. DOE estimated the cost of building these refueling stations. For example, in an analysis provided to GAO, DOE estimated that the nationwide cost of constructing the refueling facilities necessary to reach the act's fuel replacement goal in 2010 would range from $2.7 billion to $10.5 billion, depending on the alternative fuels used.
Changes in the act's approach may also increase the use of alternative fuels. For fleets subject to the act, several agency officials suggested that shifting the act's focus from acquiring alternative fuel vehicles to using alternative fuels would address the problem of acquiring alternative fuel vehicles and operating them with gasoline. Alternatively, the act's focus could be expanded from exclusively promoting alternative fuels to
11 Under this scenario, the mandate would also require that local government and private sector fleets use at least 50 percent alternative fuel in their alternative fuel vehicles.
including other strategies to decrease the use of petroleum fuels in transportation, such as increased fuel efficiency. Currently, the act does not allow for reductions in petroleum consumption to count towards its goals. For example, the act could include vehicles that operate on gasoline or diesel but are very efficient. The act does not allow fleets to satisfy its mandates by acquiring emerging technologies, such as hybrid electric vehicles, because they run on petroleum fuels. Some representatives of the automobile manufacturing industry believe that alternative fuel vehicles may be transitional until these hybrid vehicles become established in the marketplace. Others believe that the role of alternative fuel vehicles will diminish and may never evolve beyond small niche markets.
In addition, the act could target its promotion of specific alternative fuels to areas where they are plentiful or to those applications that make more economic sense. For instance, in the Midwest, ethanol probably has the advantage over other alternative fuels because it is produced there. Some applications, particularly those involving heavy- duty vehicles that do not drive long distances, may make better use of alternative fuels than others. For example, according to state officials, Maryland has successfully used shuttle buses at Baltimore- Washington International Airport that run on compressed natural gas.
Any policies designed to help reach the act's goals will have a greater chance for success if they involve a larger section of the driving public. Currently, if the fleets subject to the act comply fully with its mandates, only 2 percent of gasoline and diesel consumption would be replaced in 2010, according to DOE. Several fleet managers and representatives of the automobile industry acknowledge it is unlikely that usage of alternative fuel vehicles by these fleets will convince the general public to buy them. Furthermore, many federal and state initiatives, primarily tax incentives, currently exist to encourage the general public to purchase alternative fuel vehicles, but purchases by the general public remain small, primarily because of economic disadvantages.
It is important to note that, even with changes in the act's approach, the specific policies (e. g., higher gas taxes, subsidies, or tax incentives) to encourage the significant use of alternative fuels or the conservation of petroleum fuels by the general public will be costly to government and consumers.
Finally, if the act's mandates shift towards a greater focus on using alternative fuels or conserving petroleum fuels, monitoring compliance
would require a shift in performance measures from counting the number of alternative fuel vehicles an agency acquires to monitoring an agency's fuel use. According to agency officials, this shift will not be easy. For example, several federal officials told us that the credit cards the federal government currently uses for refueling cannot be used to track the type of alternative fuel that a driver purchases. According to program officials from the General Services Administration, steps are being taken to address this problem. Officials from the Department of Defense stated that its compressed natural gas vehicles often refuel at the facilities on military bases. Because the fuel from these facilities are used for a variety of applications, determining how much natural gas has been used by these vehicles is difficult.
Conclusions The Energy Policy Act's goals to replace at least 10 percent of petroleum fuel with alternative fuels in 2000 and 30 percent in 2010 will not be
achieved under current economic conditions. Widespread acceptance of alternative fuels will be primarily determined by economics, not by provisions in the act. The general public would shift significantly towards alternative fuels only if there are (1) dramatic and sustained increases in the price of gasoline and/ or (2) very large incentives to reduce the cost of alternative fuel vehicles and encourage their use. Both of these measures would involve high costs, making them unlikely to be acceptable. While such significant measures would be necessary to meet the act's goals with alternative fuel vehicles, some modest increases in the use of alternative fuels and/ or reductions in the use of gasoline could occur if limitations in the act's approach were addressed. Given current authority, the Secretary of Energy can initiate actions to bring about these modest increases in the use of alternative fuels. However, making more substantial progress toward the overall goal of reducing petroleum use by 30 percent in transportation will require the Secretary and the Congress to consider and choose among broader policy alternatives.
Agency Comments and We provided a draft of this report to DOE for its review and comment. (See
Our Evaluation App. IV.) In general, DOE agreed with the key findings and conclusions in
our report. DOE also said that, overall, the report provides an objective review of the progress that has been made in implementing the act's alternative fuel provisions. However, DOE provided additional perspectives on the results of our work in the following four areas: (1) whether the act's fuel replacement goals can be met and the cost to do so, (2) the
acceptability of incentives with significant costs, (3) the act's structural limitations, and (4) the extent to which the economic disadvantages and performance limitations of alternative fuel vehicles deter consumers from acquiring them. In addition, DOE suggested that we point out that U. S. dependence on imported oil is increasing and that this trend is likely to make the economy more vulnerable to disruptions in the supply of oil.
Regarding the act's fuel replacement goals and the cost to reach them, DOE agreed with our conclusion that, under current economic conditions, the act's goal to replace 30 percent of petroleum fuels used for transportation by 2010 will not be achieved. DOE said that this conclusion was consistent with its own analyses. However, DOE noted that some of its analyses also suggest that these goals could be met if the transitional impediments, such as the high cost and low- volume production of alternative fuel vehicles and the limited number of refueling stations, could be overcome. In its comments, DOE mentioned a scenario under which higher oil prices, in combination with policy initiatives, such as fuel tax incentives to address these impediments, would achieve the act's goals. We agree that there are scenarios under which the act's goals could be met and have provided such an example in this report. While we agree that higher oil prices in concert with other measures if large enough have the potential to increase the use alternative fuels, the basic message is the same. Changing a transportation system, which has evolved over many years to take maximum advantage of relatively inexpensive gasoline, is likely to come at substantial cost. We made no changes to our report for this comment.
Regarding the acceptability of incentives, DOE agreed that large incentives would be required to meet the act's goals with alternative fuel vehicles, but differed with our view that the costs of these measures are unlikely to be acceptable. As an example, DOE cited the estimated cost of building enough alternative fuel refueling stations to reach the act's goals between $2. 7 and $10.5 billion as small relative to the public expenditures made for national defense, public roads, and transit. While DOE believes the cost to build refueling stations may be small compared to other major federal expenditures, this cost represents only one of the costs to society of transitioning to alternative fuel vehicles. As we mention in our report, other costs to using alternative fuel vehicles, such as higher vehicle prices, maintenance costs, performance limitations, and consumers' unfamiliarity with these vehicles, may be significant. Consumers consider all these costs when deciding whether to buy an alternative fuel vehicle. We made no changes in our report for this comment.
With regard to the structural limitations in the act, DOE agreed with our statement that modest increases in the use of alternative fuels and/ or reductions in gasoline use could occur if some of these limitations were addressed. For example, DOE believed that, if mandated fleets were required to use alternative fuels, the number of alternative fuel stations available to the public would significantly increase. As we state in our report, mandated fleets are not large enough to substantially increase the market for alternative fuel vehicles nor result in large increases in alternative fuels' share of the market. Thus, although we agree that a requirement that mandated fleets use alternative fuels would slightly increase the use of these fuels, this increase would not be large enough to significantly increase the number of alternative fuel stations. We made no changes in our report for this comment.
Regarding the economic disadvantages of alternative fuel vehicles, DOE agreed with our assessment that consumers will generally choose conventional vehicles because of the economic disadvantages of alternative fuels. However, DOE suggested that these economic disadvantages would be ameliorated if higher volumes of alternative fuel vehicles are used and more alternative fuel stations were available. We agree that overcoming these two significant disadvantages would reduce the cost of using alternative fuel vehicles but these disadvantages are real and the cost to do so would be considerable. Thus, we did not change the report. In another point related to the economics of alternative fuel vehicles, DOE asserted that, with the exception of range, performance limitations-one of the reasons we provide as to why consumers are reluctant to use alternative fuel vehicles-have been remedied over the last 10 years. DOE suggests it is more accurate to state that there is a perception of performance problems. While perception may be a problem, representatives of auto manufacturers told us alternative fuel vehicles still have some performance limitations when compared to conventional vehicles. We, therefore, made no change to this report.
In addition, DOE suggested that we provide greater context for the report by noting that U. S. dependence on imported oil is growing and that this trend makes the nation's economy and its transportation sector more vulnerable to the economic effects of supply disruptions. We have added language to reflect that projected increases in consumption, particularly in the transportation sector, will be met by imported oil, according to the Energy Information Administration. However, as we have noted in previous reports, vulnerability to the effects of these disruptions depends on a number of factors, including dependence on oil, the oil intensity of the U. S.
economy, the availability of strategic stocks, excess worldwide oil production capacity, as well as the likelihood of a supply disruption.
Finally, DOE said that it believes a dialogue with the Congress would be helpful to clarify federal policy and programs to displace and/ or reduce our use of petroleum based fuels in the transportation sector. We agree with DOE that early engagement in such a dialogue is important. DOE also provided technical and other editorial comments, which we incorporated as appropriate.
Scope and Our methodology included (1) interviews of numerous federal and state
Methodology officials as well as officials from alternative fuel providers, industry groups,
trade associations, and automobile manufacturers; (2) reviews of reports and information generated by DOE, other federal agencies, and private sector organizations representing various facets of the industry; (3) a review of the act's Titles III, IV, and V that contained the direction for activities on alternative fuel vehicles and alternative fuels; and (4) previous GAO reports concerning alternative fuels.
To address the progress achieved in meeting the fuel replacement goals and acquiring alternative fuel vehicles, we examined data and reports assembled by DOE and its Energy Information Administration on alternative fuel usage, the availability and the consumption of alternative and replacement fuels, and the mandated and voluntary acquisitions of alternative fuel vehicles. This review was supplemented by interviews with stakeholder groups associated with the issues, including federal officials, fleet program managers, state and municipal government representatives, private sector associations and organizations, and representatives of the automobile industry. Appendix III lists the 8 federal agencies, 11 state governments, 9 Clean Cities Program Participants, and 28 associations we contacted.
To identify impediments to acquiring alternative fuel vehicles and using alternative fuels, we interviewed officials who manage fleets that are subject to the act. We also reviewed reports by DOE, state governments, and industry groups concerning alternative fuels and alternative fuel vehicles. We also reviewed previous GAO reports issued since the act was passed in 1992 (see Related GAO Products). Because of the large number of groups involved with alternative fuels or alternative fuel vehicles, we judgmentally selected groups that represent a cross section of the issue.
To identify potential solutions to the impediments of acquiring alternative fuel vehicles and reducing petroleum fuel consumption, we interviewed various stakeholder groups to obtain their views and reviewed various documents and reports related to the alternative fuel vehicles acquisition program and the use of alternative fuels. In addition, we asked DOE to use its Transitional Alternative Fuel Vehicle model to estimate how much the alternative fuels' share in the marketplace would increase if the price of gasoline increased substantially. Using this model, DOE also estimated the number of alternative fuel stations that would be necessary for alternative fuels, as a group, to meet the act's 2010 goal for replacing petroleum fuels in transportation. In addition, the model projected the cost of providing these refueling stations nationwide. GAO examined the technical documentation of DOE's model, and, in a series of discussions, reviewed the model's characteristics and performance with its authors. Engineering economics estimates are an important component of the model, given the absence of plentiful historical data on alternative fuel vehicles. The limited empirical content of the model makes it difficult to determine how well it forecasts. We conducted this review from March 1999 through January 2000 in accordance with generally accepted government auditing standards.
Copies of this report are being sent to House and Senate Committees with jurisdiction and oversight for energy issues and the Honorable Bill Richardson, Secretary of Energy. Copies will also be made available to others upon request. Please call me at (202) 512- 3841 if you or your staff have any questions about this report. Key contributors to this report are listed in Appendix V.
Jim Wells Director, Energy, Resources, and Science Issues
List of Congressional Requesters The Honorable John D. Rockefeller United States Senate
The Honorable Tim Johnson United States Senate
The Honorable Jeff Bingaman United States Senate
The Honorable Barbara Boxer United States Senate
The Honorable Kent Conrad United States Senate
The Honorable Tom Daschle United States Senate
The Honorable Byron L. Dorgan United States Senate
The Honorable Bob Graham United States Senate
The Honorable Charles E. Grassley United States Senate
The Honorable Jim Jeffords United States Senate
The Honorable Mary L. Landrieu United States Senate
The Honorable Carl Levin United States Senate
The Honorable Daniel P. Moynihan United States Senate
The Honorable Sanford Bishop House of Representatives
The Honorable Edward J. Markey House of Representatives
The Honorable John Shimkus House of Representatives
Appendi Appendi xes xI
General Characteristics of Alternative Fuels This table provides the following general characteristics of several alternative fuels: (1) the components, (2) the source, (3) the chemical state, (4) British thermal units (Btu) per gallon, (5) the energy ratio compared to gasoline, and (6) the estimated cost. We did not attempt to compare emissions information because considerable variation exists in testing procedures and conditions, as well as vehicles used that affects outcomes.
Liquified Compressed
Liquified Ethanol
Methanol Characteristic Gasoline Petroleum Gas Natural Gas Natural Gas (E85) (M85) Electricity
Component Petroleum Propane Methane Methane Denatured Methanol Electric battery Ethanol Source Petroleum Petroleum fuel
Underground Natural gas
Corn, grains, Natural gas,
Electricity power refining and
reserves and production and
and agriculture coal, and
plants natural gas
crude oil refining crude oil
waste woody bio
processing refining
mass Chemical State Liquid Liquid Gas Liquid Liquid Liquid N/ A Btus (per
115,400 82, 450 to 84, 000 19, 760 to 29,000 73, 500 81, 000 to 64,600 to
N/ A gallon) 82, 500 66,100 Energy ratio 1 1. 36 to 1 3. 00 to 1 1. 55 to1 1. 41 to 1 1.77 to 1 N/ A
Price $1. 35 1. 38 .58 to 1.05 .58 to 1. 05 1. 3 to 1.38 1.73 to 2.10 4 cents per kwh
(per gallon) a (15 cents less than gasoline
Notes: According to DOE, fleet tests of E85 and M85 have produced energy ratios lower than reported because both fuels are more efficient in combustion than gasoline. Some of the current prices for alternative fuels are higher than what they would be if the fuels were produced in greater quantities with economies of scale in production, distribution, and storage. a Prices as of January 1, 2000.
Source: DOE.
Acquisitions of Alternative Fuel Vehicles by Mandated Federal Agencies, State
Appendi xII
Governments and Fuel Providers Theoretical universe
Fleet Vehicles
Minimun of vehicles
vehicles required to
Reported mandated
in mandated reported
meet aquisitions Mandated group Year
target (1) fleets (2)
to DOE (3) mandates (4)
of vehicles
Federal fleets 1993 5000 5000 4500 1994 7500 7500 8000 1995 10000 10000 4000 1996 25% 0 6000 1997 33% 15153 15153 5000 3624 1998 50% 24723 24723 12362 14205 1999 75% 26124 26124 19593 18345 2000 75% 20345 20345 15259 15000 2001 75% 20000 20000 15000 15000 2002 75% 20000 20000 15000 15000 State fleets a 1993 0% 695
1994 0% 1178 1995 0% 1555 1996 0% 2110 1997 10% 31207 14320 1432 2817 1998 15% 31588 13482 2022 3307 1999 25% 31974 2000 50% 32365 2001 75% 32760 2002 75% 33160 Fuel provider fleets a 1993 0% 1729
1994 0% 2957 1995 0% 3759 1996 0% 2381 1997 30% 13268 4146 1244 2986 1998 50% 13268 5692 2846 2663 1999 70% 13268 2000 90% 13268 2001 90% 13268 2002 90% 13268
a The mandates for states and fuel providers were delayed until 1997. (1) Mandated quantity or percent targets. (2) This represents the estimated number of mandated fleet vehicles subject to the act from which alternative fuel vehicle acquisition achievements could be
measured. (3) This represents the number of light- duty fleet vehicles reported to DOE. They are less than the estimated number of fleet vehicles subject to the act. (4) This represents the number of light- duty alternative fuel vehicles necessary to meet the mandated acquisition targets. It is calculated on the fleet vehicles reported to DOE, not the estimated number of mandated fleet vehicles.
Source: DOE's Office of Technology Utilization
Listing of Stakeholders Contacted During Our
Appendi xI II
Review Federal Departments Department of Energy and Agencies
General Services Administration Environmental Protection Agency Department of Defense Department of Agriculture Department of Transportation U. S. Postal Service Office of Management and Budget
State Governments Alaska Arizona
California Colorado Georgia Maryland Michigan New York North Dakota Texas Washington
Clean Cities Program Atlanta, GA
Participants Chicago, IL
Denver, CO Detroit. MI Florida Gold Coast, FL Phoenix, AZ Puget Sound, WA Sacramento, CA Wisconsin Southeast Area, WI
Associations and Alliance of Automobile Manufacturers
Organizations American Coalition for Ethanol
American Methanol Institute American Petroleum Institute American Public Power Association American Public Transit Association
American Soybean Association BP Amoco Oil Clean Fuels Development Coalition Daimler- Chrysler Corporation Edison Electric Institute Electric Vehicle Association of Greater Washington Electric Vehicle Association of the Americas Environmental and Energy Study Institute Equilon Enterprises Ford Motor Company General Motors Corporation Natural Gas Vehicle Coalition National Association of Fleet Administrators National Biodiesel Board National Ethanol Vehicle Coalition National Hydrogen Association New World Energy Systems Pacific Gas and Electric Company Propane Vehicle Council Renewable Fuels Association Union of Concerned Scientists West Virginia University
Appendi xI V Comments From the Department of Energy
Appendi xV
GAO Contacts and Staff Acknowledgments GAO Contacts Jim Wells (202) 512- 3841 Daniel Haas (202) 512- 9828 Acknowledgments In addition to those named above, Richard Iager, Daren Sweeney, Charles
Bausell, Phil Amon, Gene Barnes, Daniel Williams, Joseph Kile, and Doreen Feldman made key contributions to this report.
Related GAO Reports E nergy Policy Act: Including Propane as an Alternative Motor Fuel Will Have Little Impact on Propane Market( GAO/ RCED- 98- 260, Sept. 24, 1998).
Energy Policy: Propane Price Increases During the Winter of 1996- 97 (GAO/ RCED- 98- 52R, Dec. 16, 1997).
Energy Security: Evaluating U. S. Vulnerability to Oil Supply Disruptions and Options for Mitigating Their Effects( GAO/ RCED- 97- 6, Dec. 12, 1996).
Tax Policy: Effects of Alcohol Fuels Tax Incentives( GAO/ GGD- 97- 41, Mar. 6, 1997).
Motor Fuels: Issues Related to Reformulated Gasoline, Oxygenated Fuels, and Biofuels( GAO/ RCED- 96- 121, June 27, 1996).
Electric Vehicles: Efforts to Complete Advanced Battery Development Will Require More Time and Funding( GAO/ RCED- 95- 234, Aug. 17, 1995).
Electric Vehicles: Likely Consequences of U. S. and Other Nations' Programs and Policies( GAO/ RCED- 95- 7, Dec. 30, 1994).
Gasohol: Federal Agencies' Use of Gasohol Limited by High Prices and Other Factors( GAO/ RCED- 95- 41, Dec. 13, 1994).
Alternative Fueled Vehicles: Progress Made in Accelerating Federal Purchases, but Benefits and Costs Remain Uncertain( GAO/ RCED- 94- 161, July 15, 1994).
(141287) Lett er
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Appendix I
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Appendix II
Appendix II Acquisitions of Alternative Fuel Vehicles by Mandated Federal Agencies, State Governments and Fuel Providers
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Appendix III
Appendix III Listing of Stakeholders Contacted During Our Review
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Appendix IV
Appendix IV Comments From the Department of Energy
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Appendix IV Comments From the Department of Energy
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Appendix IV Comments From the Department of Energy
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Appendix V
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rc00059 A Report to Congressional Requesters February 2000 ENERGY
POLICY ACT OF 1992 Limited Progress in Acquiring Alternative Fuel
Vehicles and Reaching Fuel Goals   GAO/RCED-00-59  Letter 3
Appendixes Appendix I: General Characteristics of Alternative
Fuels 28 Appendix II: Acquisitions of Alternative Fuel Vehicles by
Mandated Federal Agencies, State Governments and Fuel Providers 29
Appendix III: Listing of Stakeholders Contacted During Our Review
31 Appendix IV: Comments From the Department of Energy 33 Appendix
V: GAO Contacts and Staff Acknowledgments 37 Related GAO Reports
38 Tables Table 1: Alternative Fuel Vehicle Acquisition Mandates
for Centrally Fueled Fleets of Federal Agencies, State
Governments, and Alternative Fuel Providers 6 Figures Figure 1:
Percentage of Total Alternative Fuel Vehicles Used by Federal
Agencies, State and Local Governments, and Private Entities, 1998
11 Figure 2: Purchases of Alternative Fuel Vehicles Necessary to
Meet the Act's Fuel Replacement Goals 12 Figure 3: Density of
Refueling Stations for Gasoline and Alternative Fuels, 1999 14
Resources, Community, and Economic Development Division Lett er B-
284298 February 11, 2000 Congressional Requesters The effects of
the nation's petroleum consumption in the transportation sector on
our energy security and environment have long been national
concerns. The transportation sector currently accounts for about
67 percent of all petroleum use in the United States and roughly
25 percent of total energy consumption. Each day, vehicles in the
United States consume about 10 million barrels of petroleum fuels,
primarily gasoline and diesel. The Department of Energy's (DOE)
Energy Information Administration projects that this figure will
rise to about 15 million barrels by 2010 and that much of this
consumption will be met by importing oil. Over the past 25 years,
a number of steps have been taken to reduce petroleum consumption
in the transportation sector. Numerous laws and policies have been
implemented, including encouraging the use of mass transit and
high- occupancy vehicles (e. g., carpooling), improving auto
efficiency, and developing alternative fuels-either by themselves
or as a blend with gasoline. In 1992, Congress passed the Energy
Policy Act (the act) with the objective, among others, of reducing
petroleum use in transportation by encouraging the use of
alternative fuels in light- duty vehicles (cars and light trucks).
Alternative fuels include ethanol, methanol, natural gas, propane,
electricity, and biodiesel, among others. Alternative fuel
vehicles operate on these fuels, although some of them can also
consume gasoline. The act established goals of having alternative
fuels replace at least 10 percent of the petroleum fuels projected
to be consumed in 2000 and at least 30 percent of projected
consumption in 2010. To help reach these goals, it also mandated
that a portion of the new vehicles acquired for fleets operated by
federal agencies, state governments, and alternative fuel
providers must be alternative fuel vehicles. 1 DOE was tasked with
a number of responsibilities related to these activities,
including monitoring the 1 Alternative fuel providers, as defined
by the act, are businesses that are involved in (1) producing,
refining, storing, processing, transporting, distributing,
importing, or selling at the wholesale or retail level alternative
fuels other than electricity; (2) generating, transmitting,
importing, or selling wholesale or retail electricity; or (3)
producing or importing an average of 50, 000 barrels per day of
petroleum. progress towards the fuel replacement goals and
collecting data to measure compliance with the act's fleet
mandates. With the first deadline approaching for the act's
petroleum replacement goals, you asked that we review progress
towards achieving these goals through the use of alternative fuel
vehicles. More specifically, you asked that we determine (1) the
progress made in acquiring alternative fuel vehicles and using
alternative fuels to meet the act's fuel replacement goals, (2)
the impediments to using alternative fuel vehicles, and (3) the
measures that can be taken to address those impediments to using
alternative fuel vehicles and alternative fuels to help reach the
act's replacement goals. Results in Brief Since the passage of the
Energy Policy Act of 1992, some, albeit limited, progress has been
made in acquiring alternative fuel vehicles and reducing the
consumption of petroleum fuels in transportation. DOE estimates
about 1 million alternative fuel vehicles were on the road in
1999, about 0.4 percent of all vehicles. It also estimates that,
in 1998, alternative fuels used in alternative fuel vehicles
replaced about 334 million gallons of gasoline, which represents
about 0.3 percent of the total gasoline consumed during that year.
In addition, about 3.9 billion gallons of alternative fuels (e.
g., ethanol and methanol) were blended with gasoline and used in
conventional vehicles in 1998. 2 Thus, in total, about 4.23
billion gallons of gasoline were replaced by alternative fuels or
approximately 3.6 percent of all highway gasoline use considerably
less than the act's goal of 10 percent in 2000. Consistent with
this data, in a 1999 draft report required by the act for the
Congress, DOE concluded that the act's goals for replacing
petroleum fuels with alternative fuels would not be achieved under
current conditions. The goals in the act for fuel replacement are
not being met principally because alternative fuel vehicles have
significant economic disadvantages compared to conventional
gasoline vehicles. Fundamental economic impediments-such as the
relatively low price of gasoline, the lack of refueling stations
for alternative fuels, and the additional cost to purchase 2 This
blend is known as oxygenated gasoline, which consists primarily of
gasoline with small additional quantities of oxygenated compounds
derived from ethanol or methanol. The act recognizes these
compounds as counting towards the fuel replacement goals. This
fuel is currently available in a number of states. these vehicles
explain much of why both mandated fleets and the general public
are disinclined to acquire alternative fuel vehicles and use
alternative fuels. In addition, aspects of the act's approach do
not directly address its goal to replace petroleum fuels. For
example, because the act mandated federal and state agencies and
alternative fuel providers to meet certain acquisition targets for
alternative fuel vehicles rather than establish targets for
alternative fuel use, some alternative fuel vehicles acquired
under the fleet mandate are being fueled with gasoline thereby
making no contribution to the fuel replacement goals. The act also
limits its focus to light- duty vehicles and does not include
other ways to reduce petroleum consumption, such as increasing the
use of alternative fuels in heavy- duty vehicles or mandating the
use of vehicles that consume gasoline more efficiently. Any
efforts to significantly expand the use of alternative fuel
vehicles will need to address their current cost disadvantages
relative to vehicles that use gasoline. In general, the economic
disadvantages of alternative fuel vehicles relative to
conventional fuel vehicles are substantial. According to a DOE
analysis performed at our request, using a well- established
econometric model, even if crude oil prices doubled from current
levels of about $20 per barrel, alternative fuels' share of the
market would not increase. While tax credits or other financial
incentives could be used to reduce the cost of alternative fuel
vehicles and encourage their use, both of these measures would
involve very large costs to drivers or taxpayers and, as such, are
unlikely to be acceptable. While such dramatic measures would be
necessary to meet the act's goals with alternative fuel vehicles,
some modest increases in the use of alternative fuels and/ or
reductions in the use of gasoline could occur if limitations in
the act's approach were addressed. For example, the focus of the
act's mandates could shift from acquiring alternative fuel
vehicles to using alternative fuels. The act's scope could broaden
from exclusively promoting alternative fuels to include other ways
to reduce the use of petroleum fuels, such as using more efficient
gasoline vehicles. The act could also target its promotion of
alternative fuels to specific areas where a particular fuel might
be plentiful or applications in which the fuels will make better
economic sense. Background The Energy Policy Act of 1992 contained
provisions designed to help reduce the nation's use of petroleum
fuels in the transportation sector through the use of alternative
fuel vehicles. The act set goals for replacing the use of
petroleum fuels by 10 percent by the year 2000 and by 30 percent
by the year 2010. A major component of these goals was mandating
the acquisition of light- duty alternative fuel vehicles, such as
cars and light trucks, for centrally fueled light- duty vehicle
fleets used by federal agencies and state governments as well as
fleets used by alternative fuel providers. As shown in table 1,
the act required that a certain percentage of the vehicles
acquired each year by fleet operators be alternative fuel
vehicles. These percentages differed across groups and increased
over time. The act designated the type of fuels recognized as
alternative or replacement fuels. 3 Table 1: Alternative Fuel
Vehicle Acquisition Mandates for Centrally Fueled Fleets of
Federal Agencies, State Governments, and Alternative Fuel
Providers Percentage of all acquisitions for groups mandated to
acquire vehicles Federal State Alternative Year agencies
Governments fuel providers 1996 25 N/ A N/ A 1997 33 10 30 1998 50
15 50 1999 75 25 70 2000 75 50 90 2001 and beyond 75 75 90 Note:
The act mandated that the federal government had to acquire 5, 000
alternative fuel vehicles in 1993, 7,500 vehicles in 1994, and
10,000 vehicles in 1995. It did not require state governments and
alternative fuel providers to acquire alternative fuel vehicles
during these years. In addition, the states' and fuel providers'
acquisition mandates for 1996 were postponed for 1 year. Source:
Energy Policy Act of 1992 and DOE. 3 The act made a distinction
between these fuels. Alternative fuels were alternatives to
gasoline and diesel, and replacement fuels were portions of
alternative fuels that would be added to gasoline to displace a
certain amount of gasoline per gallon of fuel. The act also
identified alternative fuels as methanol, denatured ethanol, and
other alcohols; mixtures (85 percent) 4 of these components with
gasoline or other fuels; natural gas; liquefied petroleum gas;
hydrogen; coalderived liquid fuels; fuels derived from biological
materials; electricity, and any other fuels that are substantially
not petroleum and that are determined to be acceptable by the
Secretary of Energy. Appendix I provides information on some
general characteristics of the primary alternative fuels. The act
also gave the Secretary of Energy the authority to adjust the
act's fuel replacement goals as well as to include other fuels
that might meet the purposes of the act. DOE expanded the
definition of alternative fuels through a rule- making to include,
neat fuels or 100 percent by volume biodiesel and P- series fuels
derived from ethanol and other chemicals from plant materials. The
act also established a variety of other authorities and
requirements to promote the use of alternative fuel vehicles.
Specifically, the act required DOE to establish a program to
promote the replacement of petroleum fuels to the maximum extent
possible and to determine the technical and economic feasibility
of achieving the act's petroleum replacement goals. DOE's efforts
have included activities to promote the use of alternative fuels
and alternative fuel vehicles; collect and analyze data on related
issues and concerns; establish rules and regulations; and develop
voluntary partnerships to advance the use of alternative fuel
vehicles, such as the Clean Cities Program. 5 For example, Section
506 of the act required that DOE assess the progress made in
achieving the act's goals and the role and the availability of
alternative fuels and alternative fuel vehicles in reducing the
demand for imported petroleum fuels. DOE is currently undertaking
these assessments and considering potential changes, such as
lowering or delaying the goal or mandating that private sector and
local government fleets acquire alternative fuel vehicles. To help
implement the act, on April 21, 1993, the President issued
Executive Order 12844, Federal Use of Alternative Fueled Vehicles.
This 4 DOE has statutory authority to issue a rule to designate
alcohol mixtures below 85 percent, but above 70 percent, as
alternative fuels for cold start purposes. DOE has not utilized
this authority. 5 The Clean Cities Program was established to
stimulate voluntary commitments at the municipality level to
develop alternative fuel markets through acquiring alternative
fuel vehicles, developing alternative fuel infrastructures, and
communicating information on the merits of using these vehicles
and alternative fuels. order is based on the premise that the
federal government would provide a significant impetus for
developing and manufacturing alternative fuel vehicles and for
expanding the fueling infrastructure necessary to support large
numbers of privately owned alternative fuel vehicles. To supercede
this order, a new Executive Order, 13031, Federal Alternative
Fueled Vehicle Leadership, was issued in December 1996. The new
order directed agencies to implement aggressive plans to fulfill
the act's requirements for the acquisition of alternative fuel
vehicles and establish reporting requirements. Over the last 20
years, GAO has issued many reports on a number of alternative fuel
vehicles, including those that use ethanol, methanol, propane, and
electricity. These reports discussed the potential for some of
these fuels and the importance of their cost- effectiveness
compared to gasoline vehicles. Furthermore, we reported that
federal and state incentives have played an important role in
expanding the use of these fuels. More recently, after the act's
passage, we issued a report Alternative Fueled Vehicles: Progress
Made in Accelerating Federal Purchases, but Benefits and Costs
Remain Uncertain( GAO/RCED-94-161, July 15, 1994). In this report,
we noted that the net benefits of alternative fuels would depend
heavily on expanding the use of these fuels beyond mandated fleets
to the much larger private vehicle market. We also pointed out
that this expansion would depend on how alternative fuels compare
with gasoline in cost, performance, and convenience. A list of
some of our most recent related reports is provided in the back of
this report. Limited Progress Has To date, limited progress has
been made towards achieving the act's goals Been Made Towards of
replacing petroleum fuels with alternative fuels. Also,
acquisitions of alternative fuel vehicles by the mandated fleets
of federal agencies, state Act's Fuel Replacement governments, and
fuel providers have been mixed, and it is difficult to Goals and
determine if all mandated fleets have been meeting their
acquisition Achievement of the targets. Alternative Fuel Vehicle
Mandate Is Uncertain Fuel Replacement Goals Limited progress has
been made in reaching the act's goals to replace 10 Will Not Be
Met percent of petroleum fuels in 2000, and it is unlikely the 30-
percent goal for 2010 will be met. According to the Energy
Information Administration, about 1 million alternative fuel
vehicles were on the road in 1999. However, the number of
alternative fuel vehicles represented only about 0.4 percent of
the estimated 212 million vehicles in the United States in 1998.
DOE estimates that, in 1998, alternative fuels replaced about 334
million gallons of gasoline, which represents 0. 3 percent of the
total gasoline consumed during that year. DOE also estimates that
about 3.9 billion gallons of alternative fuels (e. g., ethanol and
methanol) were blended with gasoline and used in conventional
vehicles in 1998. Thus, in total, about 4.23 billion gallons were
replaced by alternative fuels or approximately 3. 6 percent of all
highway gasoline use considerably less than the act's goal of 10
percent in 2000. Consistent with this data, in a 1999 draft
report, Replacement Fuel and Alternative Fuel Technical and Policy
Analysis, required by the act for the Congress, DOE concluded that
the act's goals for replacing petroleum fuels with alternative
fuels would not be achieved under current conditions. Progress
Towards Meeting The act requires that a certain percentage of
vehicles in fleets operated by Acquisition Mandates Is each
federal agency, state government, and alternative fuel provider be
Uncertain alternative fuel vehicles. (See appendix II for
information on the acquisition of alternative fuel vehicles by
these groups.) DOE officials said that there are mixed results
among the federal agencies, with some agencies exceeding their
mandates, while others are acquiring very few or no alternative
fuel vehicles. For example, in 1998, the U. S. Postal Service
acquired 10, 000 ethanol alternative fuel vehicles for mail
delivery vehicles. This purchase played a major role in the
federal government's collectively meeting the federal mandate for
that year. DOE officials believed that most states are in
compliance with the mandate. However, they said that the progress
of fuel providers is uncertain because of the limited amount of
information they currently have on this group. DOE acknowledged
that it does not have a complete inventory of all fleets for each
group that would be subject to the act's mandates. DOE believed,
however, that it has a good understanding of the fleet inventory
of federal agencies and state governments, but has less certainty
with the fleets of fuel providers. As a result, a complete and
accurate determination of compliance with the mandates is
impossible. DOE officials acknowledged that they do not audit or
survey the mandated groups to determine whether each of their
fleets subject to the mandate is reporting its acquisitions of
alternative fuel vehicles. However, it is important to recognize
that even if all the mandated fleets operated by these groups
would fully comply with their acquisition targets, the goals for
petroleum fuel replacement would not be met. The number of
vehicles in these fleets and their total use of alternative fuels
has been relatively small compared to the number of vehicles that
would be needed to meet the act's fuel replacement goals. DOE
estimated that, if federal agencies, state governments, and
alternative fuel providers fully complied with the act's mandates,
the vehicles in their fleets would replace less than 1 percent of
petroleum fuels in 2010. This amount is far below the act's goals
of 10 and 30 percent replacement in 2000 and 2010, respectively. 6
DOE officials acknowledged that the act's mandates were not
designed, by themselves, to replace enough petroleum fuel to reach
its goals. They stated that the vehicle acquisition mandates were
intended to demonstrate the use of alternative fuels and stimulate
the acquisition of alternative fuel vehicles by the general
public. Two federal officials also told us that some of the act's
supporters believed that the demand for alternative fuel vehicles
by the fleets specified in the act would be large enough to create
a general market for these vehicles. Representatives from auto
manufacturers also stated that the fleets subject to the act are
too small to significantly affect the market. They made this
assertion because the mandated fleets represent a relatively small
share of the current market for alternative fuel vehicles. As
shown in figure 1, federal, state, and local governments together
operated less than 30 percent of the alternative fuel vehicles in
1998. 6 DOE had estimated that if an acquisition mandate were
established for the private sector and local governments, their
compliance would increase the fuel replacement percentage to about
2 percent. Figure 1: Percentage of Total Alternative Fuel Vehicles
Used by Federal Agencies, State and Local Governments, and Private
Entities, 1998 24%  State and local governments  5% Federal
government 71%  Private entities Source: Energy Information
Administration. To reach the act's goals of 10 percent and 30
percent replacement in 2000 and 2010, respectively, the general
public would have to purchase a very large number of alternative
fuel vehicles. For instance, to reach the 10- percent goal, DOE
estimates that sales of alternative fuel vehicles would have to
grow by about 1.5 to 1. 9 million vehicles per year. By
comparison, the entire production of Ford's passenger cars in 1996
was slightly more than 1.4 million. As shown in figure 2, to reach
the 30- percent goal, sales of alternative fuel vehicles would
have to represent between 35 and 40 percent of all light- duty
vehicle sales in 1999, then stay at between 30 and 38 percent of
all sales from 2000 to 2010. This rapid market penetration is
beyond the auto industry's typical pattern for introducing a
conventional model or technology into the marketplace. As a
result, DOE concluded in a recent draft report that, under current
circumstances, the act's fuel replacement goals will not be met.
Figure 2: Purchases of Alternative Fuel Vehicles Necessary to Meet
the Act's Fuel Replacement Goals 40 Alternative fuel vehicles as a
percentage of new sales 35 30 25 20 15 10 5 0 1995 2000 2005 2010
Year Source: DOE. Economic Limited progress has been made towards
reaching the Energy Policy Act's Impediments Hamper goals for fuel
replacement principally because alternative fuel vehicles have
significant economic disadvantages compared with conventional Use
of Alternative Fuel gasoline vehicles. These economic
disadvantages explain much of the Vehicles general public's
reluctance to buy the vehicles and the difficulties that fleets
subject to the act have in using them. Although our review
identified a variety of factors that hinder the acceptance of
these vehicles, several economic impediments appear to be
fundamental. First, the cost of gasoline is not high enough to
entice consumers to switch to alternative fuel vehicles. The
historically low cost of gasoline has sustained an entire
refueling infrastructure and auto- manufacturing system dedicated
to this fuel. This system has become more developed and entrenched
over time. Even if the price of gasoline rose above the price of
an alternative fuel, few consumers would switch to alternative
fuel vehicles. To induce the general public to discard their
conventional vehicles, the price of gasoline would have to reach a
level high enough that consumers' increased spending on gasoline
also surpassed the other costs associated with alternative fuel
vehicles, such as longer trips to refuel because of the limited
number of refueling stations, higher vehicle purchase price,
maintenance, limitations in vehicle performance, and consumers
unfamiliarity with the vehicles. In addition, because fuel
constitutes a relatively small percentage of the total cost of
driving, the price of gasoline would have to increase
substantially for consumers to discard conventional vehicles for
those that run on alternative fuels. Second, the lack of refueling
stations that provide alternative fuels has been a major
impediment to using alternative fuel vehicles. Officials from
federal agencies and state governments who administer vehicle
fleets cited the lack of a refueling infrastructure more than any
other impediment to using alternative fuels. Because of the lack
of demand for alternative fuel vehicles, owners of refueling
stations are reluctant to provide facilities to refuel them. In
addition, the high cost of providing some alternative fuels at
existing refueling stations reduces station owners' willingness to
provide the facilities. For example, building facilities to
provide compressed natural gas cost approximately $300, 000
significantly more than the cost of refueling stations for
gasoline, ethanol, or methanol. Conversely, the lack of refueling
stations for alternative fuels makes it less convenient for the
general public to obtain the fuels, and, thus, deters the general
public from buying the vehicles. The number of refueling stations
for alternative fuels in the United States is far below the level
that would be necessary to support the act's goals for fuel
replacement. In the past, DOE has estimated the number of
refueling stations that would be necessary if alternative fuel use
increased significantly. Under three scenarios provided to GAO
that used an alternative fuel model, DOE estimated that the number
of alternative fuel refueling stations necessary to reach the
act's 30- percent goal by 2010 ranges from 60,000 to 69,300. 7
This represents more than 10 times the number of refueling
stations for alternative fuels that were available in 1999. 7 The
three scenarios were as follows: (1) World crude oil prices equal
those projected in the high case by DOE in its 1999 Annual Energy
Outlook, and liquid petroleum gas prices are relatively low; (2)
world crude oil prices are $16 above the base case prices
projected in the 1999 Annual Energy Outlook, and the prices of
alternative fuels contain a subsidy for greenhouse gases avoided;
(3) World crude oil prices are $18 above the base case prices
projected in the 1999 Annual Energy Outlook, and DOE mandates that
private and local fleets acquire alternative fuel vehicles and
requires these fleets to run them with at least 50 percent
alternative fuels. GAO did not make a detailed review of DOE's
modeling of these scenarios. The number of alternative fuel
refueling stations currently available is far less than the
approximately 180,000 gasoline refueling stations available in
1999. As shown in figure 3, refueling stations for gasoline are
numerous and densely configured throughout the United States. As a
result, the general public usually has to travel short distances
to refuel their vehicles. By comparison, the number of refueling
stations for alternative fuel vehicles is generally sparse. Figure
3: Density of Refueling Stations for Gasoline and Alternative
Fuels, 1999 Gasoline Stations Alternative Fuel Stations Source:
Energy Information Administration. Note: Each dot represents 10
refueling stations in the state, rounded up to the next highest 10
(e. g., a state with 11 stations would receive 2 dots). The dots
in each state do not correspond to the geographic location of
stations in the state. The refueling stations for some alternative
fuels are more numerous in specific areas, such as methanol in the
West. Refueling stations are more evenly distributed around the
country for compressed natural gas. While liquefied petroleum gas
has more refueling sites around the U. S. than any other
alternative fuel, many of them are designed for other fuel uses,
such as heating or recreation, and are located on campgrounds or
other remote locations. 8 Because there are significantly fewer
refueling stations for alternative fuels compared to gasoline,
many owners of alternative fuel vehicles would have to incur
significantly higher costs in convenience, limitations in range,
and distance traveled to obtain fuel. Third, according to most
stakeholders, the higher costs to purchase alternative fuel
vehicles have deterred buyers, although these costs vary by type
of vehicle. For example, vehicles that can run on ethanol alone or
a mixture of it with gasoline have prices that are often very
close to the price of a conventional version of the same vehicle.
Conversely, a vehicle that runs on compressed natural gas
generally costs from $3,000 to $5,000 more than the conventional
version of the same vehicle. In addition, the current price of an
electric vehicle generally ranges from the low $30,000s to the mid
$40,000s, according to the Electric Vehicle Association of the
Americas. Because of the high price, most of the estimated 3,500
electric vehicles they identified as operating today are leased.
The costs for alternative fuel vehicles are often higher because
consumer demand for them is not large enough to achieve economies
of scale in production. These higher costs pose problems for both
the general public and fleets subject to the act. According to
several federal officials, the higher cost of these vehicles makes
it difficult for an agency's fleet managers to satisfy the act's
mandates within their limited budgets. Several fleet managers told
us their primary responsibility is to acquire the number of
vehicles that will satisfy their agency's mission. Buying
alternative fuel vehicles has a lower priority. Thus, when budget
constraints make it impossible to satisfy both the agency's
mission and the act's mandates to acquire alternative fuel
vehicles, fleet managers obtain conventional vehicles. 8 Liquefied
petroleum gas is primarily propane. According to a previous GAO
report (Energy Policy Act: Including Propane as an Alternative
Motor Fuel Will Have Little Impact on Propane Market, (GAO/RCED-
98-260, Sept. 28, 1998), officials in the propane industry do not
believe the industry has the internal cohesion necessary to
promote the use of propane as an alternative fuel. In addition to
these economic impediments, aspects of the Energy Policy Act's
approach have hindered the replacement of petroleum fuels with
alternative fuels. For example, the act mandates targets for the
acquisition of alternative fuel vehicles for fleets operated by
federal agencies, state governments, and fuel providers. However,
the act does not establish targets for alternative fuel use for
these vehicles. As a result, according to some federal officials,
fleet managers or drivers often run their alternative fuel
vehicles on gasoline. In some cases, fleet managers have had to
run the vehicles on gasoline because there were no refueling
stations for alternative fuels in the area. In other cases, fleet
managers used gasoline because they had concerns about the safety
or reliability of alternative fuels or did not realize a vehicle
could run on an alternative fuel. Some of these officials also
believed that DOE should require all entities covered by the act
to use alternative fuels whenever possible in vehicles that can
run on them. The act also limits its mandates by specifying the
acquisition of light- duty passenger vehicles. State officials
from Maryland and officials from the Natural Gas Vehicle Coalition
thought use of heavy- duty vehicles, such as buses or trucks that
use alternative fuels, should be included under the mandates.
These officials believe that many uses of heavy- duty vehicles are
well suited to using alternative fuels because the vehicles use
more fuel per vehicle than a light- duty vehicle. 9 Finally, the
act seeks to enhance the nation's energy security by substituting
petroleum fuels with alternative fuels. Reducing the consumption
of petroleum fuels would also support the act's goals, but the act
only requires that fleets subject to its mandates acquire
alternative fuel vehicles, not that the fleets reduce gasoline
consumption. As a result, fleets subject to the act's mandates
could not satisfy their requirements by using emerging
technologies, such as hybrid electric vehicles, that may also run
on gasoline or diesel, but will be very efficient. Honda and
Toyota recently have each introduced a hybrid electric vehicle for
sale in the United States. 10 Reportedly, these vehicles can
achieve fuel efficiencies ranging from 50 to 70 miles per gallon.
9 This assumes the heavy- duty vehicle and light- duty vehicle are
travelling the same distance. 10 A hybrid electric vehicle
operates on gasoline, diesel, fuel cells, or other fuels in
combination with an electric battery. These vehicles are designed
to be much more energy efficient than a conventional vehicle and
produce much lower emissions. Increasing Alternative To reach the
act's goals for fuel replacement, a large proportion of the Fuel
Use Significantly general public would have to use alternative
fuel vehicles and alternative fuels. However, the economic
impediments that deter the public from Will be Costly and May
buying alternative fuel vehicles are significant and fundamental,
and the Require Changes in costs of ameliorating them will be
high. Approach Consumers will purchase alternative fuel vehicles
only if gasoline prices became so high that the increased spending
on gasoline surpassed all the added costs of using an alternative
fuel vehicle. In an analysis conducted for GAO, DOE estimated that
even if crude oil prices doubled from the current level of about
$20 per barrel, alternative fuels' share of the market among
transportation fuels would not increase. According to DOE's
analysis, the use of alternative fuels would approach the act's
goals only if current world oil prices increase substantially (e.
g., to a sustained level that is $18 per barrel above the prices
currently projected by DOE) in combination with specific policy
initiatives, such as adopting mandates that the fleets of local
government and private sector fleets acquire alternative fuel
vehicles. 11 Alternatively, tax or other financial incentives
could be used to reduce the cost of alternative fuel vehicles and
encourage their use. However, given the extent of the economic
disadvantages of alternative fuel vehicles compared to gasoline
vehicles and the magnitude of the act's goals, the incentives
would most likely have to be very large and sustained, making them
unlikely to be acceptable. Overcoming the lack of refueling
stations would also be costly. DOE estimated the cost of building
these refueling stations. For example, in an analysis provided to
GAO, DOE estimated that the nationwide cost of constructing the
refueling facilities necessary to reach the act's fuel replacement
goal in 2010 would range from $2.7 billion to $10.5 billion,
depending on the alternative fuels used. Changes in the act's
approach may also increase the use of alternative fuels. For
fleets subject to the act, several agency officials suggested that
shifting the act's focus from acquiring alternative fuel vehicles
to using alternative fuels would address the problem of acquiring
alternative fuel vehicles and operating them with gasoline.
Alternatively, the act's focus could be expanded from exclusively
promoting alternative fuels to 11 Under this scenario, the mandate
would also require that local government and private sector fleets
use at least 50 percent alternative fuel in their alternative fuel
vehicles. including other strategies to decrease the use of
petroleum fuels in transportation, such as increased fuel
efficiency. Currently, the act does not allow for reductions in
petroleum consumption to count towards its goals. For example, the
act could include vehicles that operate on gasoline or diesel but
are very efficient. The act does not allow fleets to satisfy its
mandates by acquiring emerging technologies, such as hybrid
electric vehicles, because they run on petroleum fuels. Some
representatives of the automobile manufacturing industry believe
that alternative fuel vehicles may be transitional until these
hybrid vehicles become established in the marketplace. Others
believe that the role of alternative fuel vehicles will diminish
and may never evolve beyond small niche markets. In addition, the
act could target its promotion of specific alternative fuels to
areas where they are plentiful or to those applications that make
more economic sense. For instance, in the Midwest, ethanol
probably has the advantage over other alternative fuels because it
is produced there. Some applications, particularly those involving
heavy- duty vehicles that do not drive long distances, may make
better use of alternative fuels than others. For example,
according to state officials, Maryland has successfully used
shuttle buses at Baltimore- Washington International Airport that
run on compressed natural gas. Any policies designed to help reach
the act's goals will have a greater chance for success if they
involve a larger section of the driving public. Currently, if the
fleets subject to the act comply fully with its mandates, only 2
percent of gasoline and diesel consumption would be replaced in
2010, according to DOE. Several fleet managers and representatives
of the automobile industry acknowledge it is unlikely that usage
of alternative fuel vehicles by these fleets will convince the
general public to buy them. Furthermore, many federal and state
initiatives, primarily tax incentives, currently exist to
encourage the general public to purchase alternative fuel
vehicles, but purchases by the general public remain small,
primarily because of economic disadvantages. It is important to
note that, even with changes in the act's approach, the specific
policies (e. g., higher gas taxes, subsidies, or tax incentives)
to encourage the significant use of alternative fuels or the
conservation of petroleum fuels by the general public will be
costly to government and consumers. Finally, if the act's mandates
shift towards a greater focus on using alternative fuels or
conserving petroleum fuels, monitoring compliance would require a
shift in performance measures from counting the number of
alternative fuel vehicles an agency acquires to monitoring an
agency's fuel use. According to agency officials, this shift will
not be easy. For example, several federal officials told us that
the credit cards the federal government currently uses for
refueling cannot be used to track the type of alternative fuel
that a driver purchases. According to program officials from the
General Services Administration, steps are being taken to address
this problem. Officials from the Department of Defense stated that
its compressed natural gas vehicles often refuel at the facilities
on military bases. Because the fuel from these facilities are used
for a variety of applications, determining how much natural gas
has been used by these vehicles is difficult. Conclusions The
Energy Policy Act's goals to replace at least 10 percent of
petroleum fuel with alternative fuels in 2000 and 30 percent in
2010 will not be achieved under current economic conditions.
Widespread acceptance of alternative fuels will be primarily
determined by economics, not by provisions in the act. The general
public would shift significantly towards alternative fuels only if
there are (1) dramatic and sustained increases in the price of
gasoline and/ or (2) very large incentives to reduce the cost of
alternative fuel vehicles and encourage their use. Both of these
measures would involve high costs, making them unlikely to be
acceptable. While such significant measures would be necessary to
meet the act's goals with alternative fuel vehicles, some modest
increases in the use of alternative fuels and/ or reductions in
the use of gasoline could occur if limitations in the act's
approach were addressed. Given current authority, the Secretary of
Energy can initiate actions to bring about these modest increases
in the use of alternative fuels. However, making more substantial
progress toward the overall goal of reducing petroleum use by 30
percent in transportation will require the Secretary and the
Congress to consider and choose among broader policy alternatives.
Agency Comments and We provided a draft of this report to DOE for
its review and comment. (See Our Evaluation App. IV.) In general,
DOE agreed with the key findings and conclusions in our report.
DOE also said that, overall, the report provides an objective
review of the progress that has been made in implementing the
act's alternative fuel provisions. However, DOE provided
additional perspectives on the results of our work in the
following four areas: (1) whether the act's fuel replacement goals
can be met and the cost to do so, (2) the acceptability of
incentives with significant costs, (3) the act's structural
limitations, and (4) the extent to which the economic
disadvantages and performance limitations of alternative fuel
vehicles deter consumers from acquiring them. In addition, DOE
suggested that we point out that U. S. dependence on imported oil
is increasing and that this trend is likely to make the economy
more vulnerable to disruptions in the supply of oil. Regarding the
act's fuel replacement goals and the cost to reach them, DOE
agreed with our conclusion that, under current economic
conditions, the act's goal to replace 30 percent of petroleum
fuels used for transportation by 2010 will not be achieved. DOE
said that this conclusion was consistent with its own analyses.
However, DOE noted that some of its analyses also suggest that
these goals could be met if the transitional impediments, such as
the high cost and low- volume production of alternative fuel
vehicles and the limited number of refueling stations, could be
overcome. In its comments, DOE mentioned a scenario under which
higher oil prices, in combination with policy initiatives, such as
fuel tax incentives to address these impediments, would achieve
the act's goals. We agree that there are scenarios under which the
act's goals could be met and have provided such an example in this
report. While we agree that higher oil prices in concert with
other measures if large enough have the potential to increase the
use alternative fuels, the basic message is the same. Changing a
transportation system, which has evolved over many years to take
maximum advantage of relatively inexpensive gasoline, is likely to
come at substantial cost. We made no changes to our report for
this comment. Regarding the acceptability of incentives, DOE
agreed that large incentives would be required to meet the act's
goals with alternative fuel vehicles, but differed with our view
that the costs of these measures are unlikely to be acceptable. As
an example, DOE cited the estimated cost of building enough
alternative fuel refueling stations to reach the act's goals
between $2. 7 and $10.5 billion as small relative to the public
expenditures made for national defense, public roads, and transit.
While DOE believes the cost to build refueling stations may be
small compared to other major federal expenditures, this cost
represents only one of the costs to society of transitioning to
alternative fuel vehicles. As we mention in our report, other
costs to using alternative fuel vehicles, such as higher vehicle
prices, maintenance costs, performance limitations, and consumers'
unfamiliarity with these vehicles, may be significant. Consumers
consider all these costs when deciding whether to buy an
alternative fuel vehicle. We made no changes in our report for
this comment. With regard to the structural limitations in the
act, DOE agreed with our statement that modest increases in the
use of alternative fuels and/ or reductions in gasoline use could
occur if some of these limitations were addressed. For example,
DOE believed that, if mandated fleets were required to use
alternative fuels, the number of alternative fuel stations
available to the public would significantly increase. As we state
in our report, mandated fleets are not large enough to
substantially increase the market for alternative fuel vehicles
nor result in large increases in alternative fuels' share of the
market. Thus, although we agree that a requirement that mandated
fleets use alternative fuels would slightly increase the use of
these fuels, this increase would not be large enough to
significantly increase the number of alternative fuel stations. We
made no changes in our report for this comment. Regarding the
economic disadvantages of alternative fuel vehicles, DOE agreed
with our assessment that consumers will generally choose
conventional vehicles because of the economic disadvantages of
alternative fuels. However, DOE suggested that these economic
disadvantages would be ameliorated if higher volumes of
alternative fuel vehicles are used and more alternative fuel
stations were available. We agree that overcoming these two
significant disadvantages would reduce the cost of using
alternative fuel vehicles but these disadvantages are real and the
cost to do so would be considerable. Thus, we did not change the
report. In another point related to the economics of alternative
fuel vehicles, DOE asserted that, with the exception of range,
performance limitations-one of the reasons we provide as to why
consumers are reluctant to use alternative fuel vehicles-have been
remedied over the last 10 years. DOE suggests it is more accurate
to state that there is a perception of performance problems. While
perception may be a problem, representatives of auto manufacturers
told us alternative fuel vehicles still have some performance
limitations when compared to conventional vehicles. We, therefore,
made no change to this report. In addition, DOE suggested that we
provide greater context for the report by noting that U. S.
dependence on imported oil is growing and that this trend makes
the nation's economy and its transportation sector more vulnerable
to the economic effects of supply disruptions. We have added
language to reflect that projected increases in consumption,
particularly in the transportation sector, will be met by imported
oil, according to the Energy Information Administration. However,
as we have noted in previous reports, vulnerability to the effects
of these disruptions depends on a number of factors, including
dependence on oil, the oil intensity of the U. S. economy, the
availability of strategic stocks, excess worldwide oil production
capacity, as well as the likelihood of a supply disruption.
Finally, DOE said that it believes a dialogue with the Congress
would be helpful to clarify federal policy and programs to
displace and/ or reduce our use of petroleum based fuels in the
transportation sector. We agree with DOE that early engagement in
such a dialogue is important. DOE also provided technical and
other editorial comments, which we incorporated as appropriate.
Scope and Our methodology included (1) interviews of numerous
federal and state Methodology officials as well as officials from
alternative fuel providers, industry groups, trade associations,
and automobile manufacturers; (2) reviews of reports and
information generated by DOE, other federal agencies, and private
sector organizations representing various facets of the industry;
(3) a review of the act's Titles III, IV, and V that contained the
direction for activities on alternative fuel vehicles and
alternative fuels; and (4) previous GAO reports concerning
alternative fuels. To address the progress achieved in meeting the
fuel replacement goals and acquiring alternative fuel vehicles, we
examined data and reports assembled by DOE and its Energy
Information Administration on alternative fuel usage, the
availability and the consumption of alternative and replacement
fuels, and the mandated and voluntary acquisitions of alternative
fuel vehicles. This review was supplemented by interviews with
stakeholder groups associated with the issues, including federal
officials, fleet program managers, state and municipal government
representatives, private sector associations and organizations,
and representatives of the automobile industry. Appendix III lists
the 8 federal agencies, 11 state governments, 9 Clean Cities
Program Participants, and 28 associations we contacted. To
identify impediments to acquiring alternative fuel vehicles and
using alternative fuels, we interviewed officials who manage
fleets that are subject to the act. We also reviewed reports by
DOE, state governments, and industry groups concerning alternative
fuels and alternative fuel vehicles. We also reviewed previous GAO
reports issued since the act was passed in 1992 (see Related GAO
Products). Because of the large number of groups involved with
alternative fuels or alternative fuel vehicles, we judgmentally
selected groups that represent a cross section of the issue. To
identify potential solutions to the impediments of acquiring
alternative fuel vehicles and reducing petroleum fuel consumption,
we interviewed various stakeholder groups to obtain their views
and reviewed various documents and reports related to the
alternative fuel vehicles acquisition program and the use of
alternative fuels. In addition, we asked DOE to use its
Transitional Alternative Fuel Vehicle model to estimate how much
the alternative fuels' share in the marketplace would increase if
the price of gasoline increased substantially. Using this model,
DOE also estimated the number of alternative fuel stations that
would be necessary for alternative fuels, as a group, to meet the
act's 2010 goal for replacing petroleum fuels in transportation.
In addition, the model projected the cost of providing these
refueling stations nationwide. GAO examined the technical
documentation of DOE's model, and, in a series of discussions,
reviewed the model's characteristics and performance with its
authors. Engineering economics estimates are an important
component of the model, given the absence of plentiful historical
data on alternative fuel vehicles. The limited empirical content
of the model makes it difficult to determine how well it
forecasts. We conducted this review from March 1999 through
January 2000 in accordance with generally accepted government
auditing standards. Copies of this report are being sent to House
and Senate Committees with jurisdiction and oversight for energy
issues and the Honorable Bill Richardson, Secretary of Energy.
Copies will also be made available to others upon request. Please
call me at (202) 512- 3841 if you or your staff have any questions
about this report. Key contributors to this report are listed in
Appendix V. Jim Wells Director, Energy, Resources, and Science
Issues List of Congressional Requesters The Honorable John D.
Rockefeller United States Senate The Honorable Tim Johnson United
States Senate The Honorable Jeff Bingaman United States Senate The
Honorable Barbara Boxer United States Senate The Honorable Kent
Conrad United States Senate The Honorable Tom Daschle United
States Senate The Honorable Byron L. Dorgan United States Senate
The Honorable Bob Graham United States Senate The Honorable
Charles E. Grassley United States Senate The Honorable Jim
Jeffords United States Senate The Honorable Mary L. Landrieu
United States Senate The Honorable Carl Levin United States Senate
The Honorable Daniel P. Moynihan United States Senate The
Honorable Sanford Bishop House of Representatives The Honorable
Edward J. Markey House of Representatives The Honorable John
Shimkus House of Representatives Appendi Appendi xes xI General
Characteristics of Alternative Fuels This table provides the
following general characteristics of several alternative fuels:
(1) the components, (2) the source, (3) the chemical state, (4)
British thermal units (Btu) per gallon, (5) the energy ratio
compared to gasoline, and (6) the estimated cost. We did not
attempt to compare emissions information because considerable
variation exists in testing procedures and conditions, as well as
vehicles used that affects outcomes. Liquified Compressed
Liquified Ethanol Methanol Characteristic Gasoline Petroleum Gas
Natural Gas Natural Gas (E85) (M85) Electricity Component
Petroleum Propane Methane Methane Denatured Methanol Electric
battery Ethanol Source Petroleum Petroleum fuel Underground
Natural gas Corn, grains, Natural gas, Electricity power refining
and reserves and production and and agriculture coal, and plants
natural gas crude oil refining crude oil waste woody bio
processing refining mass Chemical State Liquid Liquid Gas Liquid
Liquid Liquid N/ A Btus (per 115,400 82, 450 to 84, 000 19, 760 to
29,000 73, 500 81, 000 to 64,600 to N/ A gallon) 82, 500 66,100
Energy ratio 1 1. 36 to 1 3. 00 to 1 1. 55 to1 1. 41 to 1 1.77 to
1 N/ A Price $1. 35 1. 38 .58 to 1.05 .58 to 1. 05 1. 3 to 1.38
1.73 to 2.10 4 cents per kwh (per gallon) a (15 cents less than
gasoline Notes: According to DOE, fleet tests of E85 and M85 have
produced energy ratios lower than reported because both fuels are
more efficient in combustion than gasoline. Some of the current
prices for alternative fuels are higher than what they would be if
the fuels were produced in greater quantities with economies of
scale in production, distribution, and storage. a Prices as of
January 1, 2000. Source: DOE. Acquisitions of Alternative Fuel
Vehicles by Mandated Federal Agencies, State Appendi xII
Governments and Fuel Providers Theoretical universe Fleet Vehicles
Minimun of vehicles vehicles required to Reported mandated in
mandated reported meet aquisitions Mandated group Year target (1)
fleets (2) to DOE (3) mandates (4) of vehicles Federal fleets 1993
5000 5000 4500 1994 7500 7500 8000 1995 10000 10000 4000 1996 25%
0 6000 1997 33% 15153 15153 5000 3624 1998 50% 24723 24723 12362
14205 1999 75% 26124 26124 19593 18345 2000 75% 20345 20345 15259
15000 2001 75% 20000 20000 15000 15000 2002 75% 20000 20000 15000
15000 State fleets a 1993 0% 695 1994 0% 1178 1995 0% 1555 1996 0%
2110 1997 10% 31207 14320 1432 2817 1998 15% 31588 13482 2022 3307
1999 25% 31974 2000 50% 32365 2001 75% 32760 2002 75% 33160 Fuel
provider fleets a 1993 0% 1729 1994 0% 2957 1995 0% 3759 1996 0%
2381 1997 30% 13268 4146 1244 2986 1998 50% 13268 5692 2846 2663
1999 70% 13268 2000 90% 13268 2001 90% 13268 2002 90% 13268 a The
mandates for states and fuel providers were delayed until 1997.
(1) Mandated quantity or percent targets. (2) This represents the
estimated number of mandated fleet vehicles subject to the act
from which alternative fuel vehicle acquisition achievements could
be measured. (3) This represents the number of light- duty fleet
vehicles reported to DOE. They are less than the estimated number
of fleet vehicles subject to the act. (4) This represents the
number of light- duty alternative fuel vehicles necessary to meet
the mandated acquisition targets. It is calculated on the fleet
vehicles reported to DOE, not the estimated number of mandated
fleet vehicles. Source: DOE's Office of Technology Utilization
Listing of Stakeholders Contacted During Our Appendi xI II Review
Federal Departments Department of Energy and Agencies General
Services Administration Environmental Protection Agency Department
of Defense Department of Agriculture Department of Transportation
U. S. Postal Service Office of Management and Budget State
Governments Alaska Arizona California Colorado Georgia Maryland
Michigan New York North Dakota Texas Washington Clean Cities
Program Atlanta, GA Participants Chicago, IL Denver, CO Detroit.
MI Florida Gold Coast, FL Phoenix, AZ Puget Sound, WA Sacramento,
CA Wisconsin Southeast Area, WI Associations and Alliance of
Automobile Manufacturers Organizations American Coalition for
Ethanol American Methanol Institute American Petroleum Institute
American Public Power Association American Public Transit
Association American Soybean Association BP Amoco Oil Clean Fuels
Development Coalition Daimler- Chrysler Corporation Edison
Electric Institute Electric Vehicle Association of Greater
Washington Electric Vehicle Association of the Americas
Environmental and Energy Study Institute Equilon Enterprises Ford
Motor Company General Motors Corporation Natural Gas Vehicle
Coalition National Association of Fleet Administrators National
Biodiesel Board National Ethanol Vehicle Coalition National
Hydrogen Association New World Energy Systems Pacific Gas and
Electric Company Propane Vehicle Council Renewable Fuels
Association Union of Concerned Scientists West Virginia University
Appendi xI V Comments From the Department of Energy Appendi xV GAO
Contacts and Staff Acknowledgments GAO Contacts Jim Wells (202)
512- 3841 Daniel Haas (202) 512- 9828 Acknowledgments In addition
to those named above, Richard Iager, Daren Sweeney, Charles
Bausell, Phil Amon, Gene Barnes, Daniel Williams, Joseph Kile, and
Doreen Feldman made key contributions to this report. Related GAO
Reports E nergy Policy Act: Including Propane as an Alternative
Motor Fuel Will Have Little Impact on Propane Market( GAO/RCED-98-
260, Sept. 24, 1998). Energy Policy: Propane Price Increases
During the Winter of 1996- 97 (GAO/RCED-98-52R, Dec. 16, 1997).
Energy Security: Evaluating U. S. Vulnerability to Oil Supply
Disruptions and Options for Mitigating Their Effects( GAO/RCED-97-
6, Dec. 12, 1996). Tax Policy: Effects of Alcohol Fuels Tax
Incentives( GAO/GGD-97-41, Mar. 6, 1997). Motor Fuels: Issues
Related to Reformulated Gasoline, Oxygenated Fuels, and Biofuels(
GAO/RCED-96-121, June 27, 1996). Electric Vehicles: Efforts to
Complete Advanced Battery Development Will Require More Time and
Funding( GAO/RCED-95-234, Aug. 17, 1995). Electric Vehicles:
Likely Consequences of U. S. and Other Nations' Programs and
Policies( GAO/RCED-95-7, Dec. 30, 1994). Gasohol: Federal
Agencies' Use of Gasohol Limited by High Prices and Other Factors(
GAO/RCED-95-41, Dec. 13, 1994). Alternative Fueled Vehicles:
Progress Made in Accelerating Federal Purchases, but Benefits and
Costs Remain Uncertain( GAO/RCED-94-161, July 15, 1994). (141287)
Lett er GAO United States General Accounting Office Page 1
GAO/RCED-00-59 Alternative Fuel Vehicles Contents Page 2 GAO/RCED-
00-59 Alternative Fuel Vehicles Page 3 GAO/RCED-00-59 Alternative
Fuel Vehicles United States General Accounting Office Washington,
D. C. 20548 Page 3 GAO/RCED-00-59 Alternative Fuel Vehicles B-
284298 Page 4 GAO/RCED-00-59 Alternative Fuel Vehicles B-284298
Page 5 GAO/RCED-00-59 Alternative Fuel Vehicles B-284298 Page 6
GAO/RCED-00-59 Alternative Fuel Vehicles B-284298 Page 7 GAO/RCED-
00-59 Alternative Fuel Vehicles B-284298 Page 8 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 9 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 10 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 11 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 12 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 13 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 14 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 15 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 16 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 17 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 18 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 19 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 20 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 21 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 22 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 23 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 24 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 25 GAO/RCED-00-59
Alternative Fuel Vehicles B-284298 Page 26 GAO/RCED-00-59
Alternative Fuel Vehicles Page 27 GAO/RCED-00-59 Alternative Fuel
Vehicles Page 28 GAO/RCED-00-59 Alternative Fuel Vehicles Appendix
I Page 29 GAO/RCED-00-59 Alternative Fuel Vehicles Appendix II
Appendix II Acquisitions of Alternative Fuel Vehicles by Mandated
Federal Agencies, State Governments and Fuel Providers Page 30
GAO/RCED-00-59 Alternative Fuel Vehicles Page 31 GAO/RCED-00-59
Alternative Fuel Vehicles Appendix III Appendix III Listing of
Stakeholders Contacted During Our Review Page 32 GAO/RCED-00-59
Alternative Fuel Vehicles Page 33 GAO/RCED-00-59 Alternative Fuel
Vehicles Appendix IV Appendix IV Comments From the Department of
Energy Page 34 GAO/RCED-00-59 Alternative Fuel Vehicles Appendix
IV Comments From the Department of Energy Page 35 GAO/RCED-00-59
Alternative Fuel Vehicles Appendix IV Comments From the Department
of Energy Page 36 GAO/RCED-00-59 Alternative Fuel Vehicles Page 37
GAO/RCED-00-59 Alternative Fuel Vehicles Appendix V Page 38
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