From: William Charmley/AA/USEPA/US 

To: "Achanta, Chandana L." <Chandana_L._Achanta@omb.eop.gov> 

Cc: Ed Nam/AA/USEPA/US@EPA, Elizabeth Kopits/DC/USEPA/US@EPA, james.tamm@dot.gov, Paul Balserak/DC

Ed Nam/AA/USEPA/US@EPA 

Date: 03/26/2010 12:12 AM 

Subject: Two preamble text edits discussed today - AEO 2010 discussion and the 41 sq. foot and smaller part of the passe

Chandana - 

As we disussed Thursday afternoon, EPA and NHTSA will be getting OMB revisions to the entire 

rulemaking package later in the day on Friday. However, we agreed to try and get you the 

specific edits on a few issues by mid-morning Friday. 

Two of those issue are in the attachment. These are our suggested edits to Preamble Section II 

discussing the agencies use of AEO 2010 early release, as well as expanding the discussion of 

the 41 square foot cut point for flattening the footprint curves. 

thanks 

Bill 

[attachment "Text edit excerpts for interagency review on 3.26.2010, final.doc" deleted by Tad 

Wysor/AA/USEPA/US] 
Text edit excerpts for interagency review.

The following are two of the text edits which EPA and NHTSA agreed to provide by Friday morning.

Discussion of the use of AEO 2010 early release in Section II.B.  of the preamble:

II.B.3. How Did the Agencies Develop the Projected MY 2011-2016 Vehicle Fleet? 

EPA and NHTSA have based the projection of total car and total light truck sales for MYs 2011-

2016 on projections made by the Department of Energy’s Energy Information Administration (EIA). EIA 

publishes a mid-term projection of national energy use called the Annual Energy Outlook (AEO). This 

projection utilizes a number of technical and econometric models which are designed to reflect both 

economic and regulatory conditions expected to exist in the future. In support of its projection of fuel use 

by light-duty vehicles, EIA projects sales of new cars and light trucks. In the proposal, the agencies used 

the three reports published by EIA as part of the AEO 2009. We also stated that updated versions of these 

reports could be used in the final rules should AEO timely issue a new version. EIA published an early 

version of its AEO 2010 in December 2009, and the agencies are making use of it in this final 

rulemaking. The differences in projected sales in the 2009 report (used in the NPRM) and the early 2010 

report are very small, so NHTSA and EPA have decided to simply scale the NPRM volumes for cars and 

trucks (in the aggregate) to match those in the 2010 report. We thus employ the sales projections from the 

scaled updated 2009 Annual Energy Outlook, which is equivalent to AEO 2010 Early Release, for the 

final rule. The scaling factors for each model year are presented in Chapter 1 of the Joint TSD for this 

final rule. 

The agencies recognize that AEO 2010 Early Release does include some impacts of future 

projected increases in CAFE stringency. We have closely examined the difference between AEO 2009 

and AEO 2010 Early Release and we believe the differences in total sales and the car/truck split attributed 

to considerations of the standard in the final rule are small. 1

In the AEO 2010 Early Release, EIA projects that total light-duty vehicle sales will gradually 

recover from their currently depressed levels by around 2013. In 2016, car sales are projected to be 9.4 

million (57 percent) and truck sales are projected to be 7.1 million (43 percent). Although the total level 

of sales of 16.5 million units is similar to pre-2008 levels, the fraction of car sales is projected to be 

higher than that existing in the 2000-2007 timeframe. This projection reflects the impact of higher fuel 

prices, as well as EISA’s requirement that the new vehicle fleet average at least 35 mpg by MY 2020. 

                                                           

1

 The agencies have also looked at the impact of the rule in EIA’s projection, and concluded that the impact was 

small. EPA and NHTSA have evaluated the differences between the AEO 2010 (early draft) and AEO 2009 and 

found little difference in the fleet projections (or fuel prices). This analysis can be found in the memo to the docket: 

(Docket EPA-HQ-OAR-2009-0472). 
The agencies note that AEO does not represent the fleet at a level of detail sufficient to explicitly account 

for the reclassification—promulgated as part of NHTSA’s final rule for MY 2011 CAFE standards—of a 

number of 2-wheel drive sport utility vehicles from the truck fleet to the car fleet for MYs 2011 and after. 

Sales projections of cars and trucks for future model years can be found in the Joint TSD for these final 

rules. 

Expanded discussion of the 41 square‐foot cutpoint for passenger cars in Section II.C.  of the

preamble:

II.C. Development of Attribute-Based Curve Shapes 

In the NPRM, NHTSA and EPA proposed to set attribute-based CAFE and CO2 standards that are 

defined by a mathematical function for MYs 2012-2016 passenger cars and light trucks. EPCA, as 

amended by EISA, expressly requires that CAFE standards for passenger cars and light trucks be based 

on one or more vehicle attributes related to fuel economy, and be expressed in the form of a mathematical 

function.2

 The CAA has no such requirement, though in past rules, EPA has relied on both universal and 

attribute-based standards (e.g., for nonroad engines, EPA uses the attribute of horsepower). However, 

given the advantages of using attribute-based standards and given the goal of coordinating and 

harmonizing CO2 standards promulgated under the CAA and CAFE standards promulgated under EPCA, 

EPA also proposed to issue standards that are attribute-based and defined by mathematical functions. 

There was consensus in the public comments that EPA should develop attribute-based CO2 standards. 

 Comments received in response to the agencies’ decision to base standards on vehicle footprint 

were largely supportive. Several commenters (BMW, NADA, NESCAUM) expressed support for 

attribute-based (as opposed to flat or universal) standards generally, and agreed with EPA’s decision to 

harmonize with NHTSA in this respect. Many commenters (Aluminum Association, BMW, ICCT, 

NESCAUM, NY DEC, Schade, Toyota) also supported the agencies’ decision to continue setting CAFE 

standards, and begin setting GHG standards, on the basis of vehicle footprint, although one commenter 

(NJ DEP) opposed the use of footprint due to concern that it encourages manufacturers to upsize vehicles 

and undercut the gains of the standard. Of the commenters supporting the use of footprint, several 

focused on the benefits of harmonization—both between EPA and NHTSA, and between the U.S. and the 

rest of the world. BMW commented, for example, that many other countries use weight-based standards 

rather than footprint-based. While BMW did not object to NHTSA’s and EPA’s use of footprint-based 

standards, it emphasized the impact of this non-harmonization on manufacturers who sell vehicles 

globally, and asked the agencies to consider these effects. NADA supported the use of footprint, but 

cautioned that the agencies must be careful in setting the footprint curve for light trucks to ensure that 

manufacturers can continue to provide functionality like 4WD and towing/hauling capacity. 

                                                           

2

 49 U.S.C. 32902(a)(3)(A). 
 Some commenters requested that the agencies consider other or more attributes in addition to 

footprint, largely reiterating comments submitted to the MYs 2011-2015 CAFE NPRM. Cummins 

supported the agencies using a secondary attribute to account for towing and hauling capacity in large 

trucks, for example, while Ferrari asked the agencies to consider a multi-attribute approach incorporating 

curb weight, maximum engine power or torque, and/or engine displacement, as it had requested in the 

previous round of CAFE rulemaking. An individual, Mr. Kenneth Johnson, commented that weightbased standards would be preferable to footprint-based ones, because weight correlates better with fuel 

economy than footprint, because the use of footprint does not necessarily guarantee safety the way the 

agencies say it does, and because weight-based standards would be fairer to manufacturers. 

 In response, EPA and NHTSA continue to believe that the benefits of footprint-attribute-based 

standards outweigh any potential drawbacks raised by commenters, and that harmonization between the 

two agencies should be the overriding goal on this issue. As discussed by NHTSA in the MY 2011 

CAFE final rule,3

 the agencies believe that the possibility of gaming is lowest with footprint-based 

standards, as opposed to weight-based or multi-attribute-based standards. Specifically, standards that 

incorporate weight, torque, power, towing capability, and/or off-road capability in addition to footprint 

would not only be significantly more complex, but by providing degrees of freedom with respect to more 

easily-adjusted attributes, they would make it less certain that the future fleet would actually achieve the 

average fuel economy and CO2 levels projected by the agencies. The agencies recognize that based on 

economic and consumer demand factors that are external to this rule, the distribution of 

footprints in the future may be different (either smaller or larger) than what is projected in this 

rule. However, the agencies continue to believe that there will not be significant shifts in this 

distribution as a direct consequence of this rule. The agencies are therefore finalizing MYs 2012-

2016 CAFE and GHG standards based on footprint.” 

...... [late in this same section II.C ] 

Before fitting the sloped portion of the constrained linear form, NHTSA and EPA selected 

footprints above and below which to apply constraints (i.e., minimum and maximum values) on the 

function. The agencies believe that the linear form performs well in describing the observed relationship 

between footprint and fuel consumption or CO2 emissions for vehicle models within the footprint ranges 

covering most vehicle models, but that the single (as opposed to piecewise) linear form does not perform 

well in describing this relationship for the smallest and largest vehicle models. For passenger cars, the 

agency noted that several manufacturers offer small, sporty coupes below 41 square feet, such as the 

BMW Z4 and Mini, Honda S2000, Mazda MX-5 Miata, Porsche Carrera and 911, and Volkswagen New 

Beetle. Because such vehicles represent a small portion (less than 10 percent) of the passenger car 

market, yet often have performance, utility, and/or structural characteristics that could make it 

technologically infeasible and/or economically impracticable for manufacturers focusing on such vehicles 

                                                           

3

 See 74 FR 14359 (Mar. 30, 2009). 
to achieve the very challenging average requirements that could apply in the absence of a constraint, EPA 

and NHTSA proposed to “cut off” the linear portion of the passenger car function at 41 square feet. The 

agencies recognize that for manufacturers who make small vehicles in this size range, there is 

some incentive to downsize to make it easier to meet the target. However, at the same time, the 

agencies believe that there is a limit to the market for ever-smaller cars. Most consumers likely

have some minimum expectation about interior volume, among other things. The agencies thus 

believe that the number of consumers who will want vehicles smaller than 41sq ft to be 

downsized even further is extremely small, and that the incentive to downsize, if present, will be 

minimal. For consistency, the agency proposed to ”cut off” the light truck function at the same footprint, 

although no light trucks are currently offered below 41 square feet. The agencies further noted that above 

56 square feet, the only passenger car model present in the MY 2008 fleet were four luxury vehicles with 

extremely low sales volumes—the Bentley Arnage and three versions of the Rolls Royce Phantom. 

NHTSA and EPA therefore also proposed to “cut off” the linear portion of the passenger car function at 

56 square feet. Finally, the agencies noted that although public information is limited regarding the sales 

volumes of the many different configurations (cab designs and bed sizes) of pickup trucks, most of the 

largest pickups (e.g., the Ford F-150, GM Sierra/Silverado, Nissan Titan, and Toyota Tundra) appear to 

fall just above 66 square feet in footprint. EPA and NHTSA therefore proposed to “cut off” the linear 

portion of the light truck function at 66 square feet. 

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