Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 12041 

DEPARTMENT OF ENERGY 

Office of Energy Efficiency and 

Renewable Energy 

10 CFR Part 490 

RIN 1904–AB67 

Alternative Fuel Transportation 

Program; Replacement Fuel Goal 

Modification 

AGENCY: Office of Energy Efficiency and 

Renewable Energy (EERE), Department 

of Energy (DOE). 

ACTION: Final rule. 

SUMMARY: DOE is publishing this final 

rule pursuant to the Energy Policy Act 

of 1992 (EPAct 1992). DOE is extending 

the EPAct 1992 goal of achieving a 

production capacity for replacement 

fuels sufficient to replace 30 percent of 

the projected U.S. motor fuel 

consumption (Replacement Fuel Goal) 

to 2030. DOE determined through its 

analysis that the 30 percent 

Replacement Fuel Goal cannot be met 

by 2010, as established in section 

502(b)(2)(B). DOE has determined that 

the 30 percent goal can be achieved by 

2030. 

DATES: Effective Date: This rule is 

effective June 1, 2007. 

FOR FURTHER INFORMATION CONTACT: To 

request a copy of this Final Rule notice 

or arrange on-site access to paper copies 

of other information in the docket, or for 

further information, contact Mr. Dana V. 

O’Hara, Office of Energy Efficiency and 

Renewable Energy (EE–2G), U.S. 

Department of Energy, 1000 

Independence Avenue, SW., 

Washington, DC 20585–0121; (202) 586–

9171; regulatory_info@afdc.nrel.gov; or 

Mr. Chris Calamita, Office of the 

General Counsel, U.S. Department of 

Energy, 1000 Independence Avenue, 

SW., Washington, DC 20585–0121; (202) 

586–9507. Copies of this final rule and 

supporting documentation for this 

rulemaking will be placed at the 

following Web site address: http:// 

www1.eere.energy.gov/vehiclesandfuels/ 

epact/private/index.html. Interested 

persons may also access these 

documents using a computer in DOE’s 

Freedom of Information (FOI) Reading 

Room, U.S. Department of Energy, 

Forrestal Building, Room 1E–190, 1000 

Independence Avenue, SW., 

Washington, DC 20585–0121, (202) 586–

3142, between the hours of 9 a.m. and 

4 p.m., Monday through Friday, except 

Federal holidays. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

II. Background 

A. Replacement Fuel Program 

B. Replacement Fuel Goals 

C. Definitions 

D. Previous Review of Goals 

E. Previous Rulemakings and Court Order 

F. Notice of Proposed Rule (NOPR) for the 

Replacement Fuel Goal 

III. Comments 

A. Comments Received 

B. Discussion of Comments 

C. Assessment of Comments 

IV. Determination that the Congressional 

Goals are Unachievable 

V. Goal Modification Analysis 

A. Approach 

B. Building Blocks 

C. Replacement Fuel Scenarios 

D. DOE’s VISION Model Analysis 

E. Annual Energy Outlook (AEO) 2007 

Results 

F. Additional Reports 

G. Other Issues 

VI. Modified Goal 

A. 30 Percent by 2030 

B. Interim Goal 

VII. Regulatory Review 

A. Review under Executive Order 12866 

B. Review under Regulatory Flexibility Act 

C. Review under the Paperwork Reduction 

Act 

D. Review Under the National Policy Act 

of 1969 (NEPA) 

E. Review Under Executive Order 12988 

F. Review Under Executive Order 13132 

G. Review of Impact on State 

Governments—Economic Impact on 

States 

H. Review of Unfunded Mandates Reform 

Act of 1995 

I. Review of Treasury and General 

Appropriations Act, 1999 

J. Review of Treasury and General 

Appropriations Act, 2001 

K. Review Under Executive Order 13175 

L. Review Under Executive Order 13211 

M. Congressional Notification 

VIII. Approval by the Office of the Secretary 

I. Introduction 

On September 19, 2006, DOE 

published a notice of proposed 

rulemaking (NOPR) announcing its 

proposed determination that the EPAct 

1992 (Pub. L. 102–486) Replacement 

Fuel Goal of 30 percent by 2010 is not 

achievable and announcing its proposal 

to extend the time for achieving the 30 

percent replacement fuel production 

capacity goal to 2030. 71 FR 54771, 

Sept. 19, 2006. 

EPAct 1992, section 502(a) directed 

DOE to establish a replacement fuel 

program. (42 U.S.C. 13252(a)) The 

purpose of this program is to ‘‘promote 

the replacement of petroleum motor 

fuels with replacement fuels to the 

maximum extent practicable.’’ (Id., 

emphasis added.) The focus of this 

program, as indicated in section 

502(b)(2), is on expanding replacement 

fuels production capacity. (42 U.S.C. 

13252(b)(2)) Further, section 502(b)(2) 

specifies an interim Replacement Fuel 

Goal of producing sufficient 

replacement fuels to replace 10 percent 

by 2000 of the projected consumption of 

motor fuels in the United States and a 

final goal of 30 percent by 2010. (42 

U.S.C. 13252(b)(2)(A) and (B)) Under 

section 504, DOE was tasked with 

evaluating these goals and if DOE finds 

the goals to be unachievable, then DOE 

is directed to modify the goals so that 

they are achievable. (42 U.S.C. 13254(a) 

and (b)) In modifying the goals DOE can 

either modify the goal percentage or 

timeframe or both. (42 U.S.C. 13254(b)) 

In evaluating and modifying the goals, 

DOE must balance considerations in 

order to establish goals that are 

‘‘achievable.’’ (42 U.S.C. 13254(b)) The 

Replacement Fuel Goals must promote 

replacement fuels to the ‘‘maximum 

extent possible’’ while remaining 

technologically and economically 

feasible. (42 U.S.C. 13254(a) and (b)(2)) 

The revised goal adopted today meets 

these requirements, for several reasons. 

First, DOE based its analysis on the best 

information available, from published 

and peer-reviewed sources. In 

particular, much of DOE’s analysis was 

based on the Energy Information 

Administration’s (EIA) Annual Energy 

Outlook (AEO) 2005 through 2007. 

Second, DOE’s analysis generally was 

based on the current budget and policy 

framework, under which many 

technologies show reasonable potential 

for success and market penetration. 

Thus, the analysis assumed virtually no 

major new policies or funding 

initiatives beyond those already in 

place. Third and last, the modified goal 

balances the minimum and maximum 

projected replacement fuel production 

capacities from several reasonable 

scenarios. 

In the NOPR, DOE evaluated four 

scenarios, which identified projected 

replacement fuel capacities of 8.65 

percent, 17.84 percent, 35.25 percent, 

and 47.06 percent, by 2030. (Updated 

analyses conducted in this final rule 

resulted in the first and third of these 

becoming 7.38 percent and 33.13 

percent, respectively.) These projections 

reflect considerations of numerous 

variables including oil prices, 

technological breakthroughs, and 

market acceptance. The goal proposed 

by DOE fell in the mid-range among 

these scenarios. Also, the proposed goal 

did not rest upon a single technology, 

but instead relied on a portfolio of 

options. Explicit in this approach is the 

assumption that not all of the 

technologies will achieve the same 

measure of success; some will be more 

successful than others. Similarly, the 

proposed goal did not rely on the most 

advantageous market conditions. 


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Therefore, DOE determined that the 

proposed goal would meet the 

requirement to balance the objective of 

section 502(a) to promote replacement 

fuels to the ‘‘maximum extent 

practicable’’ and the section 504(b) 

requirement that the Replacement Fuel 

Goal be ‘‘achievable.’’ (42 U.S.C. 

13252(a) and 13254(b)) 

In today’s Final Rule, DOE determines 

that the EPAct 1992 goal of establishing 

sufficient replacement fuel production 

capacity to replace 30 percent on an 

energy equivalent basis of all U.S. motor 

fuel by 2010 is not achievable. This 

determination is based on a similar 

evaluation of the projected U.S. 

production capacity of replacement 

fuels as was presented in the NOPR. 71 

FR 54711. Further, today’s Final Rule 

extends the 30 percent Replacement 

Fuel Goal out to 2030 based on an 

analysis similar to that presented in the 

NOPR and discussed further below. 

Today’s Final Rule complies with DOE’s 

obligation under section 504(b) of EPAct 

1992 to ‘‘establish goals that are 

achievable, for the purposes of this 

title.’’ (42 U.S.C. 13254(b)) 

Today’s final rule also implements the 

March 6, 2006 order of the U.S. District 

Court for Northern District of California 

to prepare and publish a final rule to 

modify EPAct 1992’s replacement fuel 

production goal for 2010. See Center for 

Biological Diversity v. U.S. Department 

of Energy et. al., 419 F.Supp. 2d 1166 

(N.D. Cal. 2006). 

DOE reminds interested parties that 

the Replacement Fuel Goal is an 

administrative goal guiding the 

replacement fuel program, including 

administering the EPAct 1992 title V 

fleet mandates. It is not a program plan, 

implementation plan, national policy, or 

any other type of major program for 

achievement of the Replacement Fuel 

Goal. In addition, the statutory 

requirement for the Replacement Fuel 

Goal is potential production capacity. 

This does not require the fuel quantities 

implied by this goal actually be 

produced or used. 

II. Background 

A. Replacement Fuel Program 

Section 502(a) of EPAct 1992 requires 

the Secretary of Energy (Secretary) to 

establish a program to promote the 

development and use of ‘‘domestic 

replacement fuels’’ and to ‘‘promote the 

replacement of petroleum fuels with 

replacement fuels to the maximum 

extent practicable’’ (42 U.S.C. 13252(a)). 

Section 502(a) states: 

The Secretary shall establish a program to 

promote the development and use in light 

duty motor vehicles of domestic replacement 

fuels. Such a program shall promote the 

replacement of petroleum fuels to the 

maximum extent practicable. Such program 

shall, to the extent practicable, ensure the 

availability of those replacement fuels that 

will have the greatest impact in reducing oil 

imports, improving the health of our Nation’s 

economy and reducing greenhouse gas 

emissions. 

(42 U.S.C. 13252(a)) 

Since 1992, DOE has taken a number 

of steps to implement EPAct 1992’s 

replacement fuel programs, under the 

authority provided in titles III, IV and V 

of the Act. DOE coordinates various 

aspects of the Federal fleet’s efforts to 

comply with the vehicle acquisition 

requirements established under section 

303 of EPAct 1992. (42 U.S.C. 13212). 

DOE has also promulgated and 

implemented regulations and guidance 

for alternative fuel providers and State 

government fleets, which are subject to 

the fleet provisions contained in 

sections 501 and 507(o) (42 U.S.C. 

13251 and 13257(o), respectively). 10 

CFR Part 490. DOE also established the 

Clean Cities initiative, which supports 

public and private partnerships that 

deploy alternative fueled vehicles 

(AFVs) and build supporting 

infrastructure. Clean Cities works 

closely with both voluntary and 

regulated fleets in specific geographic 

areas, to bring together the necessary 

‘‘critical mass’’ of demand for 

alternative fuels to support expansion of 

the refueling infrastructure. In addition, 

DOE conducts research and 

development on replacement fuels 

production and utilization technologies 

in conjunction with other Federal 

agencies (such as the U.S. Department of 

Agriculture (USDA)), States, private 

industry, and universities. All of these 

programs work together to increase the 

production and utilization of 

replacement fuels and improve the 

efficiency of vehicles. 

In particular, the regulatory fleet 

programs have been successful in 

moving fleets covered under EPAct 1992 

toward the use of AFVs and alternative 

fuels and reducing the use of petroleum 

fuels. The regulatory fleet programs 

established under EPAct 1992 have seen 

extremely high levels of compliance. 

Nearly all individual Federal agencies 

have met their AFV acquisition 

requirements, and the Federal fleet as a 

whole has exceeded the required 75 

percent acquisition level for the last four 

years. Among State and alternative fuel 

provider fleets, compliance has also 

been high and DOE has been able to 

work out nearly all the relatively few 

instances of deficient acquisitions with 

the involved fleets, either through the 

fleets purchasing credits or agreeing to 

acquire additional AFVs in future years. 

Original equipment manufacturers 

(OEMs) have expanded the number and 

type of AFV models offered, mostly due 

to the demand from EPAct regulated 

fleet programs, regulatory incentives 

(Corporate Average Fuel Economy 

(CAFE) credits), and coordinated 

voluntary activities (Clean Cities). In 

model year 1993, OEMs were only 

offering a handful of different AFVs 

models. The availability of models and 

fuel types has increased substantially 

over the past decade. During model year 

2006, there were over 20 light-duty fuel/ 

vehicle model combinations available 

(with more models promised over the 

next several years). Virtually all of these 

were E85 flexible fuel vehicles (FFVs). 

Overall, there are now on the order of 

one million FFVs manufactured 

annually in the U.S., largely to take 

advantage of the CAFE benefits. At the 

same time, the regulated fleets do 

acquire many of these vehicles each 

year. 

The Replacement Fuel Program efforts 

have also assisted in expanding the 

infrastructure for alternative fuels. In 

1992 when EPAct was passed, there 

were not that many alternative fuel 

refueling stations in operation 

(approximately 3,600) and nearly all 

were for propane. Today, there are 

approximately 5,400 alternative fuel 

refueling stations in the U.S., including 

over 1,000 E85 stations in operation, 

with several hundred coming on-line 

each year over past few years. There are 

also many more compressed natural gas 

(CNG) stations than in 1992, although 

this number has begun to decrease 

slightly in the last few years as OEM 

offerings have dwindled. (For the 

current number and location of 

alternative fuel refueling stations, visit 

the Alternative Fuel Data Center (AFDC) 

station locator, http:// 

www.eere.energy.gov/afdc/ 

infrastructure/refueling.html.) This 

overall growth in stations has been 

primarily through the demand generated 

through the regulated fleets and related 

voluntary efforts under Clean Cities. 

The number of alternative fuel refueling 

stations remains small when compared 

to the 180,000 total refueling stations 

Nationwide, but is projected to continue 

increasing. 

In the State of the Union address in 

January 2006, the President announced 

the Advanced Energy Initiative (AEI), 

which focuses on increasing the use of 

non-conventional fuels like replacement 

fuels in all sectors of the U.S. economy, 

with a central focus on the 

transportation sector. AEI sets out an 

aggressive course for reducing the 


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1The President’s initiative notes that given the 

changing nature of the marketplace for both cars 

and light trucks, the Secretary of Transportation 

would determine in a flexible rulemaking process 

the actual fuel economy standard and 

accompanying fuel savings. Additionally, under the 

Twenty in Ten initiative the EPA Administrator and 

the Secretaries of Agriculture and Energy will have 

authority to waive or modify the required levels of 

alternative and renewable fuel use if they deem it 

necessary, and the new fuel standard will include 

an automatic ‘‘safety valve’’ to protect against 

unforeseen increases in the prices of alternative 

fuels or their feedstocks. 

Nation’s dependence on foreign 

petroleum, setting a national goal of 

replacing more than 75 percent of the 

U.S. imports from foreign sources by 

2025. AEI emphasizes technology 

developments as the key to reducing 

energy dependence, including several of 

the same technologies such as efficiency 

improvements, biofuels, and hydrogen. 

These appear under the portion of the 

Initiative focused on ‘‘Changing the way 

we fuel our vehicles.’’ AEI is available 

on the White House Web site at the 

following location: http:// 

www.whitehouse.gov/stateoftheunion/ 

2006/energy/. 

On January 23, 2007, the President, in 

the State of the Union Address, 

proposed replacing 20 percent of the 

projected gasoline usage in 10 years 

(‘‘Twenty in Ten’’ initiative). Twenty in 

Ten builds on the foundation 

established by the AEI from the 

previous year’s State of the Union 

Address with two major elements 

relevant to today’s final rule. The first 

element is to increase the use of 

alternative fuels to 35 billion gallons in 

2017, reducing projected gasoline 

consumption by 15 percent, through 

advancements in many fields including 

cellulosic ethanol, butanol, and 

biodiesel. In the second element of 

Twenty in Ten, the President has asked 

Congress to give the Administration 

authority to reform the fuel efficiency 

system for passenger cars, as was 

recently done for light trucks and sport 

utility vehicles (SUVs). It is estimated 

that the projected gains in mileage for 

passenger cars could save another 5 

percent of our projected gasoline usage 

in 2017. 

The Twenty in Ten initiative, which 

sets a goal for 2017, is consistent with 

the Replacement Fuel Goal adopted 

today. However, there are several 

notable differences. First, DOE notes 

that the Twenty in Ten initiative relates 

to projected gasoline consumption, 

whereas today’s final goal relates to 

projected gasoline and diesel fuel 

consumption. Second, the Replacement 

Fuel Goal is established in terms of 

energy equivalency, where as the 

Twenty in Ten initiative is in terms of 

absolute volume. Third, while the 

Twenty in Ten initiative emphasizes the 

same elements as the Replacement Fuel 

Goal, the Twenty in Ten initiative is 

more aggressive than the revised goal in 

terms of assumptions of increased fuel 

efficiency of light trucks and passenger 

cars and increased use of renewable and 

alternative fuels to replace a significant 

portion petroleum usage.1

The more aggressive components of 

the Twenty in Ten initiative are based 

on policy and legislative actions 

proposed by the President that were not 

considered in today’s final rule. The 

final rule generally considered only 

policies and programs currently in 

place, and therefore the policies 

proposed in the Twenty in Ten 

initiative were not considered in today’s 

final rule. DOE intends to continue 

monitoring the Twenty in Ten initiative 

as policies and programs begin to 

develop, and will determine if the 

Replacement Fuel Goal requires 

additional modification. The Twenty in 

Ten initiative is available on the White 

House Web site at: http:// 

www.whitehouse.gov/stateoftheunion/ 

2007/initiatives/energy.html. 

B. Replacement Fuel Goals 

As previously discussed, section 

502(a) requires DOE to implement a 

replacement fuel program. Under such 

program the Secretary is required to 

review appropriate information and 

estimate the production capacity for 

replacement fuels and AFVs. The 

Secretary also has to determine the 

technical and economical feasibility of 

achieving the capacity to produce on an 

energy equivalent basis, 10 percent of 

the projected motor fuel in the U.S. in 

2000 and 30 percent in 2010. Section 

502(b) established production goals for 

replacement fuels, and states: 

(b) Development Plan and Production 

Goals—[T]he Secretary * * * shall review 

appropriate information and—

* * * * * 

(2) Determine the technical and economic 

feasibility of achieving the goals of producing 

sufficient replacement fuels to replace, on an 

energy equivalent basis—

(A) At least 10 percent by the year 2000; 

and 

(B) At least 30 percent by the year 2010, 

of the projected consumption of motor fuel 

in the United States for each such year, with 

at least one half of such replacement fuels 

being domestic fuels[.] 

(42 U.S.C. 13252(b)(2)) (Emphasis 

added.) Thus section 502(b) sets two 

goals, an interim goal of developing 

sufficient U.S. domestic replacement 

fuel production capacity to replace 10 

percent of projected total motor fuel use 

by the year 2000, and a final goal of 30 

percent by the year 2010, with at least 

one half of such replacement fuels being 

domestic fuels. (42 U.S.C. 

13252(b)(2)(A) and (B)) 

While the goals in section 502(b) and 

the programs established under section 

502(a) are related, the goals are not 

mandates for the programs. Today’s 

review of the Congressional goals is in 

the context of the section 502(a) 

programs. Section 502(b) states that, 

‘‘under the programs established under 

subsection (a), the [DOE] * * * shall 

review appropriate information and’’

evaluate the achievability of the goals. 

(42 U.S.C. 13252(b)) Further, in the 

context of the section 502(a) programs, 

DOE must ‘‘determine the most suitable 

means and methods of developing and 

encouraging the production, 

distribution, and use of replacement 

fuels and alternative fueled vehicles[.]’’

(42 U.S.C. 13252(b)(3)) As discussed 

above, DOE has established various 

programs to implement the goals of 

sections 502(a) and (b). However, no 

where in the text of section 502 are the 

goals established as mandates for the 

section 502(a) programs. 

Pursuant to section 504 of EPAct 

1992, DOE is required to review these 

goals periodically and publish the 

results and provide opportunities for 

public comments. (42 U.S.C. 13254(a)) If 

DOE determines that the goals are not 

achievable, section 504(b) directs DOE 

to modify, by rule, the percentage 

requirements and/or dates, so that the 

goals are achievable. (42 U.S.C. 

13254(b)) DOE has determined that in 

order for a goal to be achievable, there 

must be a reasonable expectation that 

the desired level of replacement fuels 

production capacity will develop within 

the relevant timeframe. 

While DOE has authority to modify 

the section 502(b) goals, DOE’s authority 

to establish requirements under the 

replacement fuel and alternative fuel 

programs is limited. Section 504(c) 

provides DOE the authority to issue 

regulations if the achievement of the 

Replacement Fuel Goals contained in 

section 502(b) are likely to lead to ‘‘a 

significant and correctable failure’’ to 

meet the overall program goals 

established by section 502(a). (42 U.S.C 

13254(c)) However, EPAct 1992 does 

not provide DOE the authority ‘‘to 

mandate marketing or pricing practices, 

policies or strategies for alternative fuel, 

or to mandate the production or 

delivery of such fuels.’’ (42 U.S.C. 

13254(c)) Further, DOE’s authority to 


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2Fleets are not required to use alternative or 

replacement fuel in their AFVs (except for 

alternative fuel providers and Federal Fleet, which 

are required by section 501(a)(4) and 303 of EPAct, 

respectively). 

require the use of alternative fuels is 

limited.2

C. Definitions 

The term ‘‘replacement fuel’’ is 

defined by EPAct 1992 to mean ‘‘the 

portion of any motor fuel that is 

methanol, ethanol, or other alcohols, 

natural gas, liquefied petroleum gas, 

hydrogen, coal derived liquids, fuels 

(other than alcohols) derived from 

biological materials, electricity 

(including electricity from solar energy), 

ethers,’’ or any other fuel that the 

Secretary determines meets certain 

statutory requirements. (42 U.S.C. 

13211(14)) (Emphasis added.) 

The term ‘‘alternative fuel’’ is defined 

to include many of the same types of 

fuels (such as ethanol, natural gas, 

hydrogen, and electricity), but also 

includes certain ‘‘mixtures’’ of 

petroleum-based fuels and other fuels as 

long as the ‘‘mixture’’ is ‘‘substantially 

not petroleum.’’ (42 U.S.C. 13211(2) and 

10 CFR 490.2) Thus, a certain mixture 

might constitute an ‘‘alternative fuel,’’

but only the portion of the fuel that falls 

within the definition of ‘‘replacement 

fuel’’ would actually constitute a 

‘‘replacement fuel.’’ For example, M85, 

a mixture of 85 percent methanol and 15 

percent gasoline, would, in its entirety, 

constitute an ‘‘alternative fuel,’’ but only 

the 85 percent that was methanol would 

constitute ‘‘replacement fuel.’’ Also by 

way of example, gasohol (a fuel blend 

typically consisting of approximately 10 

percent ethanol and 90 percent gasoline) 

would not qualify as an ‘‘alternative 

fuel’’ because it is not ‘‘substantially not 

petroleum,’’ but the 10 percent that is 

ethanol would qualify as ‘‘replacement 

fuel.’’

Section 301(12) of EPAct 1992 defines 

‘‘motor fuel’’ as ‘‘any substance suitable 

as fuel for a motor vehicle.’’ (42 U.S.C. 

13211(12)) Moreover, the term motor 

vehicle is defined in EPAct 1992 section 

301(13), through reference to 42 U.S.C. 

7550(2), as a self-propelled vehicle that 

is designed for transporting persons or 

property on a street or highway. (42 

U.S.C. 13261(13)) The goals established 

in section 502(b)(2) require that DOE 

evaluate the capacity of producing 

sufficient replacement fuels to offset a 

certain percentage of U.S. ‘‘motor fuel’’

consumption. Therefore, DOE, for the 

purposes of Title V of EPAct 1992, has 

interpreted the term motor fuel to 

include all fuels that are used in motor 

vehicles. This includes fuels used in 

light-, medium-, and heavy-duty onroad vehicles. 71 FR 54771 (September 

19, 2006). 

D. Previous Review of the Goals 

Section 504(a) of EPAct 1992 requires 

DOE to periodically ‘‘examine’’ the 

goals established in section 502(b)(2) 

and determine whether they should be 

modified. (42 U.S.C. 13254(a)) The 

examination of the goals is to be made 

taking into account the program goals 

stated under section 502(a), namely to 

promote the development and use of 

‘‘domestic replacement fuels’’ and to 

‘‘promote the replacement of petroleum 

fuels with replacement fuels to the 

maximum extent practicable.’’ (42 

U.S.C. 13254(a)) 

As an initial matter, DOE notes that it 

is unaware of any analysis or technical 

data that was used by Congress in 1992 

as a basis for setting the 10 percent and 

30 percent Replacement Fuel Goals set 

forth in EPAct 1992. DOE is also not 

aware of any affirmative determination 

by Congress or by any agency that, at the 

time they were set, the statutory goals 

were explicitly considered achievable. 

Thus, DOE has treated these 

replacement fuel production capacity 

levels as the starting point for future 

goal analyses. Regardless of the original 

rationale for the goals, and as described 

and discussed below, DOE periodically 

has evaluated the feasibility of the goals 

as provided by Congress in EPAct 1992. 

Several previous efforts were made by 

DOE to analyze the Replacement Fuel 

Goal. The first effort was in 1996, as part 

of the Assessment of Costs and Benefits 

of Flexible and Alternative Fuel Use in 

the U.S. Transportation Sector, 

Technical Report Fourteen: Market 

Potential and Impacts of Alternative 

Fuel Use in Light-Duty Vehicles: a 2000/ 

2010 Analysis (U.S. Department of 

Energy, Office of Policy and Office of 

Energy Efficiency and Renewable 

Energy, January 1996, report number 

DOE/PO–0042), to be referred to as 

Technical Report 14. 

The second major attempt by DOE to 

evaluate the replacement fuel picture 

was made at the end of the last decade, 

in the report Replacement Fuel and 

Alternative Fuel Vehicle Analysis 

Technical and Policy Analysis, Pursuant 

to Section 506 of the Energy Policy Act 

of 1992 (U.S. Department of Energy, 

Energy Efficiency and Renewable 

Energy, Office of Transportation 

Technologies, December 1999 with 

amendments September 2000), 

hereinafter section 506 report. The 

report is available at http:// 

www.eere.energy.gov/vehiclesandfuels/ 

epact/pdfs/plf_docket/section506.pdf. 

The next report to consider the 

achievability of the Replacement Fuel 

Goals was the Transitional Alternative 

Fuels and Vehicles (TAFV) Model 

Report. See The Alternative Fuel 

Transition: Results from the TAFV 

Model of Alternative Fuel Use in LightDuty Vehicles 1996–2000 

(ORNL.TM2000/168) (September 17, 

2000). This report was completed 

shortly after the section 506 report. It 

examined multiple pathways toward 

increased replacement and alternative 

fuel use. The major difference between 

the TAFV report and earlier reports is 

that it used a dynamic transitional 

model to analyze potential replacement 

fuel pathways. Many of the earlier 

studies and analyses used single-period 

equilibrium models and also assumed 

no transitional barriers to increased 

alternative fuel and replacement fuel 

use. The TAFV report includes a 

number of scenarios that assume no 

transitional barriers but it also includes 

multiple pathways that do include 

analysis of transitional barriers. The 

report is available for review at: http: 

//www.eere.energy.gov/ 

vehiclesandfuels/epact/pdfs/plf_docket/ 

tafv99report31a_ornltm.pdf. 

In summary, Technical Report 14, 

prepared only three years after EPAct 

1992’s passage, did indicate that the 

2010 goal could be achieved, albeit only 

under several scenarios relying upon 

extensive policy additions. The section 

506 report and TAFV Report both 

concluded that it would be difficult and 

unlikely, but not impossible, to achieve 

the 30 percent EPAct 1992 Replacement 

Fuel Goal by 2010. In neither of the 

latter reports, issued in mid to late 2000, 

did DOE make a determination under 

EPAct 1992 section 504(b) that the 

statutory Replacement Fuel Goals were 

not achievable. If DOE had made such 

a determination, it would have triggered 

a statutory obligation to set a new, 

achievable, Replacement Fuel Goal. 

Instead, DOE chose to take a ‘‘wait and 

see’’ approach regarding the need to 

revise the 2010 goal. A much more 

detailed discussion on each of the three 

reports and their conclusions was 

provided in section III. of the NOPR. 71 

FR 54773, Sept. 19, 2006. 

E. Previous Rulemakings and Court 

Order 

Section 507(c) directed DOE to issue 

an Advanced Notice of Proposed 

Rulemaking (ANOPR) that, in part, 

would evaluate the progress toward 

achieving the Replacement Fuel Goal 

and assess the adequacy and 

practicability of the goal. (42 U.S.C. 

13257(c)) In response to that directive, 

DOE issued an ANOPR on April 17, 

1998, 63 FR 19372. DOE conducted 

three public hearings (Minneapolis, 


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Minnesota; Los Angeles, California; and 

Washington, DC) and solicited written 

comments from the public on the 

ANOPR. More than 110 interested 

parties responded by providing written 

and oral comments. Comments were 

received through July 16, 1998. 

In the ANOPR, DOE requested 

comments on 23 specific questions 

covering three broad areas: replacement 

fuels, fleet requirements, and urban 

transit buses. Only the first set of 

questions is relevant to today’s 

rulemaking. A detailed discussion of 

these comments was previously 

provided in the NOPR for the Private 

and Local Government Fleet 

Determination (68 FR 10320, 10326–

10328; March 3, 2003) and a summary 

of those comments was provided in the 

Replacement Fuel Goal NOPR. 71 FR 

54771, Sept. 19, 2006. 

Additionally, DOE previously 

addressed the issue of whether to revise 

the replacement fuel production goal for 

2010 in the context of its determination 

that an AFV acquisition mandate for 

private and local government fleets was 

not necessary. 69 FR 4219 (January 29, 

2004). Section 507(e) directs DOE to 

consider whether a fleet requirement 

program for private and local fleets is 

‘‘necessary’’ for the achievement of the 

Replacement Fuel Goals. (42 U.S.C. 

13257(e)) As part of DOE’s decision 

under that directive, DOE stated in its 

notice of final rulemaking that a private 

and local government fleet rule would 

‘‘not appreciably increase the 

percentage of alternative fuel and 

replacement fuel used by motor 

vehicles.’’ 69 FR 4220, Jan. 29, 2004. 

DOE further concluded that ‘‘adoption 

of a revised goal would not impact its 

determination that a private and local 

government rule * * * would not 

provide any appreciable increase in 

replacement fuel use.’’ 69 FR 4221, Jan. 

29, 2004. DOE, therefore, did not revise 

the Replacement Fuel Goal at the time 

but indicated that it would continue to 

evaluate the need to revise the statutory 

goal in the future. 

Subsequent to the publication of the 

January 29, 2004 final rule, DOE was 

sued in Federal court by the Center for 

Biological Diversity (CBD) and Friends 

of the Earth for failing to impose a 

private and local government fleet 

acquisition mandate and for not revising 

the replacement fuel production goal for 

2010 as part of its determination. On 

March 6, 2006, the U.S. District Court 

for the Northern District of California 

vacated DOE’s final determination 

regarding the private and local 

government fleet mandate and ordered 

DOE to revise the replacement fuel 

production goal for 2010. (See Center for 

Biological Diversity, 419 F.Supp. 2d 

1166.) In its order, the Court directed 

DOE to prepare notices of proposed 

rulemaking and final rules on both the 

Replacement Fuel Goal for 2010 and the 

private and local government fleets 

determination. (Id. at 1171.) 

F. NOPR for the Replacement Fuel Goal 

DOE proposed to revise the 30 percent 

by 2010 goal by extending the goal date 

to 2030. 71 FR 54771, Sept. 19, 2006. 

DOE based the proposed revised goal on 

an analysis which focused on projected 

production capacity for replacement 

fuels through 2030. DOE based the 

proposal on four reference cases, which 

were based on three building blocks. 

The three building blocks are: (1) The 

reference case projected by EIA in AEO 

2006; (2) the high price case presented 

in AEO 2006; and (3) projections from 

the DOE programs conducting research 

and development on replacement fuel 

and vehicle technologies. These 

building blocks provide the basis for the 

reference cases which project varying 

levels of potential replacement fuel 

production capacity. 

The four scenarios relied upon in the 

NOPR analysis were: (1) The reference 

case projected by EIA in AEO 2006; (2) 

the high price scenario presented in 

AEO 2006; (3) a combination of the AEO 

2006 reference case with achievement of 

program goals (designated as program 

developments); and (4) a combination of 

the AEO 2006 high price case with 

program developments. The different 

scenarios represent the potential bounds 

for proposing a revised replacement fuel 

production goal under sections 502 and 

504 of EPAct 1992. Under a 2030 

timeframe, these scenarios projected a 

replacement fuel production capacity as 

a percent of on-road fuel use of 8.65 

percent, 17.84 percent, 35.25 percent, 

and 47.06 percent, respectively. 71 FR 

54782–3, Sept. 19, 2006. 

As presented in the NOPR, DOE 

proposed to maintain the 30 percent 

goal and move the goal date out 20 

years, to 2030. 71 FR 54785, Sept. 19, 

2006. Given the uncertainties inherent 

in projecting fuel prices and technology 

achievements, DOE tentatively 

determined that a goal slightly above the 

midpoint of the projections of the four 

reference cases represented an 

‘‘achievable’’ goal as required by section 

504(b). (42 U.S.C. 13254(b)) 

A detailed discussion of the building 

blocks and the reference cases is 

provided in section V. of the NOPR. 71 

FR 54776, Sept. 19, 2006. Today’s final 

rule relies on essentially the same 

analysis framework, with updated 

projections by the EIA. The analysis 

framework and results are summarized 

below. 

III. Comments 

A. Comments Received 

The NOPR solicited comments on the 

proposed Replacement Fuel Goal 

modification. Written comments were 

received from a total of sixteen 

organizations. This included the 

following four specific organizations 

providing substantive comments: 

• The American Automotive Leasing 

Association (AALA), 

• The CBD/Friends of the Earth, 

• The National Association of Fleet 

Administrators (NAFA), and 

• NGVAmerica. 

The other twelve sets of comments 

were from Clean Cities coordinators or 

stakeholders, or were organizations that 

were not identified specifically as 

related to Clean Cities, but which 

provided similar type or level of 

comments to those received from the 

Clean Cities organizations. Thus, for 

most of the discussion below, these 

Clean Cities and related comments were 

grouped together. These organizations 

included: 

• Central Texas Clean Cities. 

• City of Victoria. 

• DieselGreen/Austin Biodiesel 

Cooperative. 

• Granite State Clean Cities. 

• Greater New Haven Clean Cities 

Coalition, Inc. 

• Greater New Orleans Regional 

Planning Commission. 

• Kansas City Clean Cities. 

• Maine Clean Communities. 

• Norwich Clean Cities. 

• Public Solutions Group, Ltd./ 

Central Texas Clean Cities. 

• St. Louis Clean Cities. 

• Synetek Research Co. 

It should be noted that within these 

comments, most Clean Cities 

organizations utilized a common 

framework for their comments, relying 

upon shared key points. Within these 

organizations, however, two (Granite 

State Clean Cities and Maine Clean 

Communities) provided somewhat more 

expansive and detailed comments. 

On October 3, 2006, DOE held a 

hearing at DOE headquarters in 

Washington, DC. Approximately one 

dozen people attended, including 

representatives from AALA, 

NGVAmerica, several media 

organizations, and DOE program staff 

and related personnel. In addition, one 

member of the general public also 

attended. A list of attendees is available 

at http://www1.eere.energy.gov/ 

vehiclesandfuels/epact/pdfs/ 

plg_docket/hearing_attendee_list.pdf. 


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Program technical staff presented a 

short overview of the rulemaking 

process (available at http:// 

www1.eere.energy.gov/vehiclesandfuels/ 

epact/pdfs/plg_docket/ 

ohara_presentation.pdf). No entities 

prepared or delivered detailed 

testimony at this hearing. Discussions 

during the hearing were relatively short 

and of a much more general nature with 

all points raised also included within 

the written comments received. 

Therefore, no separate discussion of the 

comments from the hearing is necessary. 

The transcript from this hearing is 

available at http:// 

www1.eere.energy.gov/vehiclesandfuels/ 

epact/pdfs/plg_docket/ 

hearing_transcript.pdf. 

Due to technical difficulties in 

receiving comments on the NOPR 

electronically, on January 18, 2007, DOE 

published a limited re-opening of the 

comment period; 72 FR 2212, Jan. 18, 

2007. This notice re-opened the 

comment period until January 31, 2007. 

During this additional period, one 

additional set of comments was received 

from the National Propane Gas 

Association (NPGA). 

B. Discussion of Comments 

In order to address the comments in 

a clear manner, they were split out into 

several basic categories. These include: 

• Approach—comments concerning 

DOE’s approach to addressing its 

requirements concerning evaluating and 

modifying the Replacement Fuel Goal; 

• Goal—comments concerning the 

level and time-frame for the proposed 

modified goal, schedule for review of 

the modified goal, and whether an 

interim goal was necessary; 

• Assumptions—comments 

concerning the detailed assumptions 

made by DOE in its analysis; and 

• Programmatic/DOE’s Role—

comments concerning possible 

programs or DOE’s overall role 

concerning achievement of the 

Replacement Fuel Goal. 

In addition to identifying the 

comments in each section below, the 

discussion of the final analysis further 

addresses, where appropriate, specific 

issues raised by commenters. 

Approach 

One commenter indicated that DOE’s 

interpretation of ‘‘achievable’’ was 

reasonable, and that the current goal 

needed to be modified. This commenter 

also indicated that DOE was correct to 

focus on more than just a single 

technology, and on the entire fuel 

supply chain. Another commenter also 

indicated that DOE should base the 

revised goal upon reductions across the 

entire transportation sector, and not just 

regulated fleets. In response, DOE 

reiterates that it did base its approach 

upon a number of technologies and 

fuels, and did look at fuel savings and 

substitution within the entire on-road 

transportation sector. As indicated in 

the NOPR, DOE looked at the entire 

highway transportation sector in 

determining the Replacement Fuel Goal. 

DOE also looked at technologies such as 

hybrids, fuel cell vehicles, advanced 

energy efficient vehicles, and dual-fuel/ 

FFVs. The fuels used in the analysis 

included ethanol, biodiesel, natural gas, 

coal to liquids, gas to liquids, and 

hydrogen. 71 FR 54771, Sept. 19, 2006. 

Different opinions were expressed 

concerning DOE’s approach with 

respect to determining if the Private and 

Local Government Fleets Rule is 

necessary. One commenter specifically 

indicated its satisfaction with the 

approach taken by DOE, while another 

specifically indicated its objection. A 

third commenter simply cautioned DOE 

to resist the urge to set a new 

Replacement Fuel Goal level solely for 

the purpose of justifying a Private and 

Local Government Fleet Rule. This same 

commenter spent the majority of its 

comments stating why such a fleet rule 

is wrong. 

In response, DOE is focused only on 

the development of an achievable goal 

that meets the requirements of sections 

502(a) and 504(b) of EPAct 1992 in this 

rule. DOE is not predisposed to any 

outcome beyond setting the goal. The 

Private and Local Government Fleet 

Rule determination is a separate 

rulemaking process from the 

Replacement Fuel Goal modification, 

and DOE is continuing to treat these as 

separate processes. The fleet rule 

determination will not be commenced 

until the revised Replacement Fuel Goal 

is set, and the determination process 

will specifically include an opportunity 

for comment on a proposed 

determination prior to development of 

the final determination. 

Goal/Schedule/Interim Goal 

Two specific commenters plus a 

number of the Clean Cities and related 

organizations objected to what they 

stated is a 20-year delay in the goal, 

from 2010 to 2030. They indicated that 

a more progressive goal is needed, and 

one that has a stronger focus upon 

program development and 

implementation. Similarly, one of the 

individual commenters indicated that it 

did not understand why the inability to 

meet the goal in 2010 permits a 20-year 

delay. While a number of these 

commenters indicated that they wanted 

to see DOE set a ‘‘higher goal,’’ few 

offered concrete proposals as to what 

that goal should be and how it would be 

achievable. Two Clean Cities 

coordinators did specifically suggest 

that DOE select one of the more 

accelerated paths included within its 

NOPR analysis, such as utilizing one of 

the ‘‘program development’’ cases. At 

the same time, one commenter felt that 

DOE’s proposed goal was reasonable, 

based upon comparison to similar 

actions of States and several foreign 

governments. 

In response to commenters requesting 

a more aggressive goal than what was 

proposed, DOE notes that it has a 

statutory obligation to balance certain 

considerations in order to establish 

goals that are ‘‘achievable.’’ (42 U.S.C. 

13254(b)) The replacement fuel 

production capacity goals must promote 

replacement fuels to the ‘‘maximum 

extent possible’’ while at the same time 

remaining technologically and 

economically feasible. (42 U.S.C. 

13254(a) and (b)(2)) DOE interprets 

‘‘achievable’’ to mean that there is a 

reasonable expectation of reaching the 

goal in the time period specified. DOE 

considered the various options within 

the current budgetary and policy 

framework and selected what DOE 

determined is a goal which is set at the 

‘‘maximum extent practical’’ and still 

‘‘achievable.’’ The current EIA baseline 

projection for replacement fuels by 2030 

is only 7.38 percent. Today’s analysis 

indicated that if all DOE’s technical 

programs were as successful as 

predicted and the technologies were 

fully adopted in the marketplace, the 

maximum replacement fuel that could 

be achieved is 33 to 47 percent. To 

expect DOE to be 100 percent successful 

in its development programs is 

unreasonable. By their very nature, 

many of the research programs are high 

risk. 

One individual commenter and 

several Clean Cities and related 

organizations generally claimed that 

there are significant environmental, 

energy security, and economic impacts 

in delaying the goal. However, the 

commenters did not provide specific 

estimates of these potential impacts or 

how moving the goal to 2030 would 

result in such impacts. 

One individual commenter and two 

Clean Cities coordinators specifically 

called for DOE to set an interim goal. 

DOE notes that in the Court’s order 

directing DOE to revise the Replacement 

Fuel Goal, the Court focused almost 

entirely upon the 2010 goal. (Center for 

Biological Diversity, 419 F.Supp. 2d 

1166.) Further, the Court clearly 

directed DOE to revise the ‘‘goal.’’

(Center for Biological Diversity v. U.S. 


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Dept. of Energy et. al., No. 05–cv–

01526–WHA Document 54 p. 2 (N.D. 

Cal. March 30, 2006) (Order re Timing 

of Relief)) The Court’s use of ‘‘goal’’ in 

the singular provides direction to revise 

the 2010 goal, and DOE developed the 

NOPR accordingly. 

To the extent that an ‘‘interim goal’’

allows the public to understand the 

trajectory of the replacement fuel 

production necessary to meet the 2030 

goal, DOE’s analysis developed data 

points at 2020, 2025 and 2030 for all 

four scenarios evaluated. The charts 

provided below indicate a range of 

percentages which provide benchmarks 

for evaluating progress towards the 

achieving the goal. Moreover, the 

annual publication of EIA analyses of 

replacement fuel contributions in the 

Annual Energy Review (AER) and AEO 

provides an indication of progress. For 

example, the replacement fuel 

production capacity levels were 

estimated in the range between 

approximately 6 and 17 percent in the 

NOPR for 2020. As updated in the 

analysis for this final rule, the two 2020 

reference case-based scenarios project a 

replacement fuel capacity between 5 

and 14 percent. DOE and the public will 

be able to compare the AEO projections 

and AER data to the Replacement Fuel 

Goal analysis presented in today’s final 

rule and the NOPR. 

Two commenters specifically 

requested that DOE provide a specific 

schedule for reviewing the Replacement 

Fuel Goal in the future. These 

commenters stated that the information 

resulting from such reviews should be 

published more frequently. The 

statutory requirement in section 504(a) 

is for periodic review. As discussed 

above, EIA publishes the AEO report 

annually, which estimates the 

replacement fuel production capacity of 

the U.S. DOE will review the annual 

AEO reports and based in part on these 

reports determine whether a more 

comprehensive review of the 

Replacement Fuel Goal is warranted. 

Finally, a commenter specifically 

indicated that ‘‘DOE should note that 

future reviews may also result in 

modifying the goal to reduce the 

timeframe or increase the replacement 

fuel percentage if achievable in order to 

effectuate the intent of the Act and the 

Replacement Fuel Program.’’ DOE 

acknowledges that if future reviews 

show results more or less favorable to 

achievement of the goal, then DOE 

could increase/decrease the level or 

accelerate/push out the date. DOE has 

no pre-conceived concepts as to what 

any future reviews of progress toward 

the goal will show. The statutory 

requirement of the periodic review is for 

DOE to evaluate the goal and determine 

if the goal is practical and achievable. If 

the goal is not achievable, DOE has the 

responsibility to develop an achievable 

goal that is ‘‘technically and 

economically feasible’’ and promotes 

replacement fuels to the ‘‘maximum 

extent practicable’’ in a specific 

timeframe, whatever that may be. 

Analysis Assumptions 

One individual commenter and two 

Clean Cities coordinators stated that the 

future oil prices upon which DOE based 

its analyses should have been much 

higher. Therefore, these commenters 

asserted, the decision on replacement 

fuel penetration levels should have been 

closer to the EIA high price case, or 

even based on prices higher than EIA’s 

high price case. In response, DOE 

determined that it was inappropriate to 

assume significantly higher fuel prices 

than those presented in the AEO reports 

without a sufficient basis upon which to 

determine such prices. A case in point: 

there has been a significant drop in the 

cost of crude oil since the publication of 

the NOPR on September 19, 2006. Last 

summer crude prices were over $70 per 

barrel, but prices had fallen below $50 

per barrel by late January, 2007. (EIA 

Petroleum Navigator at http:// 

tonto.eia.doe.gov/dnav/pet/ 

pet_pri_wco_k_w.htm) In addition, EIA 

analysis from AEO Reports indicates 

that higher oil prices do encourage more 

replacement fuel usage and increased 

energy efficiency. However, higher oil 

prices also cause drivers to use less 

petroleum overall. This coupled with 

the increased use of replacement fuels 

and increased energy efficiency can 

cause oil prices to fall. 

DOE is required to develop a goal that 

is achievable. Commenters did not 

provide any data to justify reliance on 

abnormally high oil prices for a 

sustained period or years. Therefore, 

DOE based its analysis upon EIA 

analyses. If projections for future prices 

increase significantly, DOE will review 

the annual AEO and based in part on 

these reports determine whether further 

review of the Replacement Fuel Goal is 

warranted. 

One commenter indicated that it felt 

DOE underestimated the contribution of 

conservation in the overall analysis. In 

response, DOE did address 

conservation, and believes that 

conservation was given a sizable role in 

both of the program development cases. 

The program development cases 

included energy efficiency gains from 

hybrids, advanced diesels, and fuel cell 

vehicles. The EIA data only takes into 

account the annual energy efficiency 

gains that vehicles have gained 

historically, typically around 1.2 

percent. As presented in the NOPR, 

DOE analyzed two cases that 

incorporated savings of approximately 3 

million barrels per day in 2030, above 

and beyond any conservation efforts 

already taken into account in EIA data. 

One commenter stated that DOE’s 

assertion that research and development 

programs will accomplish their goals is 

unrealistic, and thus contradicts DOE’s 

approach to ‘‘achievable.’’ DOE notes 

that it used approximately a 50 percent, 

not 100 percent, success rate for all of 

DOE’s programs in arriving at the final 

Replacement Fuel Goal. As reflected in 

the NOPR, estimates for the maximum 

contributions from successful 

commercialization of technologies 

resulting from DOE research and 

development to the overall goal by 2030 

were no more than 30 percent 

replacement fuel. The two EIA base 

cases (reference and high price (NOPR 

Tables 1 and 2)) projected levels of 

approximately 9 to 18 percent 

replacement fuel. Adding approximately 

half of the DOE research and 

development technologies to the EIA 

base cases results in projected levels of 

approximately 24 to 33 percent 

replacement fuel. Therefore, DOE 

proposed in the NOPR a goal within the 

range of the identified scenarios, and 

did not rely upon DOE research and 

development programs achieving all of 

their goals. 

One commenter plus a number of 

Clean Cities-related organizations 

specifically questioned the 

Department’s exclusion of plug-in 

hybrid electric vehicles (PHEVs) as 

inadequate, and disagreed with 

projections showing that the 

contribution from electricity would not 

grow significantly during the period of 

the analysis. No commenter submitted 

any data supporting a more concrete 

role for these vehicles, or what their 

overall effect would be. As stated in the 

NOPR, DOE has determined that it is 

premature to specifically evaluate this 

new technology, especially to the level 

of detail of the analysis done for this 

action. DOE recognizes that PHEVs offer 

a significant potential for reducing 

petroleum use in the U.S. transportation 

sector. As such, PHEVs were evaluated 

as part of the total hybrid vehicle market 

analysis. Modeling used for this analysis 

indicates that conventional, flex-fuel, 

and PHEVs as well as fuel-cell hybrids 

will be vying for the same market 

segments by 2030. The entire market 

segment was evaluated and significant 

gains in fuel efficiency and replacement 

fuels were indicated. However, DOE 

does not have sufficient data to evaluate 

the specific contributions to petroleum 


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reduction attributable to PHEVs. 

Furthermore, DOE notes that its analysis 

is based upon replacement fuels 

competing in the marketplace. Nothing 

in the 30 percent goal prevents PHEVs 

from capturing a larger share of the 

replacement fuel market than is 

indicated by DOE’s analysis. If PHEVs 

develop quickly and impact the relative 

contributions of electricity and energy 

efficiency relied upon in the current 

analysis, DOE will take notice and 

determine if the Replacement Fuel Goal 

requires additional modification. 

Considerable analysis was done in the 

NOPR scenario 3 to determine what the 

vehicle sales would have to be in order 

to generate a demand for replacement 

fuel commensurate with a 35 percent 

Replacement Fuel Goal by 2030. 71 FR 

54783. The VISION results are in 

Figures 5 and 6 in the NOPR. 71 FR 

54784. For a level of replacement fuel 

demand that would be equivalent to the 

replacement fuel production capacity 

under a 35 percent by 2030 

Replacement Fuel Goal, the VISION 

model projected that non-conventional 

light-duty vehicles would comprise 99 

percent of new LDV sales in that model 

year. The breakdown of the LDVs were 

FFVs—24 percent of new vehicle sales; 

Hybrids—37 percent of new vehicle 

sales; Diesels—22 percent of new 

vehicle sales; Fuel Cell Vehicles—15 

percent of new vehicle sales; and other 

AFVs—1 percent of new vehicle sales. 

Similarly, two commenters and 

several Clean Cities-related 

organizations indicated that they felt the 

potential from natural gas and gas-toliquids (GTL) was underestimated. One 

of these commenters also raised 

environmental concerns about GTL. 

Thus it was unclear whether this 

particular commenter wanted a greater 

role shown for this technology or not. In 

response to the overall concerns about 

potential for any particular technology, 

DOE relied upon the best information it 

had available, relying primarily upon 

the EIA AEO data. Neither commenter 

nor the Clean Cities-related 

organizations submitted specific data on 

these or other technologies. 

In general, however, even if the 

contribution of a particular technology 

(whether natural gas, GTL, PHEVs, or 

others) were increased, DOE would 

anticipate that much of this change 

might be at the expense of another 

included technology. As presented 

above, the total level of replacement fuel 

usage is relatively fixed. Thus, the gains 

for one technology will likely be offset 

by reductions in another technology, as 

opposed to increasing the number of 

non-conventionally fueled motor 

vehicles. Therefore, given that other 

replacement fuels may have a larger 

share of the market than our analysis 

might otherwise indicate, the overall 

results for replacement fuel production 

capacity will remain the same. Should 

better data become available DOE will 

review it and revise the goal as 

necessary. 

One commenter also questioned EIA’s 

projections about coal-to-liquids (CTL), 

since current oil prices already appear 

above the level needed for economic 

parity, but plants have not been built. 

As discussed in the NOPR, having 

economic parity now or achieving it 

only recently does not mean that the 

plants would already be in place. As 

DOE indicated in the NOPR, financial 

investors often need to see current and 

projected conditions that appear 

favorable for several years before they 

are moved to act. Once investment 

begins, it can be a number of years 

before any plants are on-line. Today, 

some of this initial investment appears 

to be happening, since conditions now 

appear favorable, but it may be many 

years before significant contributions 

are anticipated from this technology. In 

addition, as shown in section V.E. 

below, under the updated analysis 

based upon the AEO 2007, the projected 

contribution from CTL decreased 

significantly. 

One commenter indicated that it was 

unclear if DOE used Government 

Performance and Results Act (GPRA) 

analyses, or if not, why not. DOE did 

use GPRA analyses for a number of the 

program developments technologies, as 

indicated in the NOPR. 71 FR 54777, 

54778, 54781. Two such examples are 

the energy efficiency gains from the 

FreedomCAR and Vehicle Technologies 

(FCVT) program and in the Hydrogen 

Fuel Cell and Infrastructure 

Technologies (HFCIT) Program 

(commonly referred to as the ‘‘Hydrogen 

Program’’) in the building blocks section 

(V.B.3) of the NOPR. 71 FR 54777. 

Where current analyses existed for 

technology programs, they were used. 

Item D11 in the electronic docket 

(available at http:// 

www1.eere.energy.gov/vehiclesandfuels/ 

epact/private/plg_docket.html) 

specifically provides a link to EERE’s 

GPRA analyses for all relevant 

technology programs. 

One commenter questioned whether 

DOE’s analysis assumed new Federal 

incentives for certain fuels, but not for 

others (particularly natural gas). This 

commenter also indicated that DOE 

needed to explain how different fuels 

react differently to higher prices. 

Generally, DOE did not assume new 

incentives or policies that would 

promote a specific alternative fuel. In 

the limited instances in which a new 

policy was assumed, DOE identified its 

assumptions, which were based upon 

information received from EIA or the 

relevant technology programs. 

One instance in which policies 

beyond those existing were assumed 

was for the hydrogen and fuel cell 

technologies. These technologies were 

identified as an exception because DOE 

recognizes that they will need 

additional support later in getting the 

technology into the market. Most of the 

other replacement fuels and 

technologies are viable in the market or 

they have or are getting tax breaks, 

subsidies, or other price supports until 

they become market viable. In order for 

fuel cell technologies to have the same 

opportunities in the market they may 

require similar types of support as 

previous technologies as well as 

potentially new types of assistance. 

One commenter indicated that DOE 

did not adequately address the benefits 

of other Federal, State, local, and private 

efforts, including other EERE, FCVT, 

and USDA activities. In particular, this 

commenter indicated that DOE should 

include a discussion of other efforts and 

indicate how the President’s AEI fits in. 

The commenter did not indicate specific 

programs that should be included in 

DOE’s analysis that would contribute 

significantly to the Replacement Fuel 

Goal. It should be noted that DOE did 

much of what this commenter claims it 

did not. In particular, the ‘‘program 

developments’’ scenarios were 

specifically based upon EERE and FCVT 

efforts, and DOE did discuss the AEI in 

section VI.B. of the NOPR. 71 FR 54786. 

DOE also is working with USDA in 

development of biofuels especially in 

the area of cellulosic ethanol. In 

preparing this final rule, DOE has taken 

into account the Renewable Fuel 

Standard (RFS) from EPAct 2005 and 

also considered the Twenty in Ten 

initiative. 

The same commenter indicated that 

DOE did not address the utilization side 

of the equation sufficiently. Again, the 

Replacement Fuel Goal is a production 

capacity goal, not a utilization goal. 

However, DOE recognizes that 

production and use are related. DOE did 

look at utilization in the VISION 

modeling, provided in tables 5 and 6 of 

the NOPR. 71 FR 54784. Moreover, the 

commenter failed to provide data for a 

revised analysis to reflect the 

commenter’s concern. 

One commenter pointed out 

perceived discrepancies between the 

EIA and VISION model analyses 

concerning the makeup of the LDV 

market. While DOE acknowledges that 

these two analyses differ somewhat in 


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their pathways, they are in relative 

agreement on the overall destination 

points. DOE analysis looked at the 

potential capacity to produce 

replacement fuels as required by section 

502(a) and (b). In order to validate that 

data, a second analysis was performed 

using a fuel usage model. The VISION 

model looked at what replacement fuels 

could be used in what type of vehicles 

based on available knowledge of the 

different vehicle technologies. The total 

replacement fuel figures were very 

similar even though there were slight 

variations of the fuel mix and vehicle 

technologies. These simply show two 

different paths to the same result, based 

upon the particular assumptions of their 

analysts and the mechanisms within the 

models. DOE is not stating any one 

specific fuel or technology 

advancement, or specific set of 

advancements, has to occur for the 

Replacement Fuel Goal to be achieved. 

DOE believes that a portfolio of 

technologies, some indicated here, as 

well as possibly some that were not 

included, are required to achieve any 

goal. 

Finally, one commenter took 

particular issue with DOE’s approach to 

its greenhouse gas (GHG) analysis. This 

commenter stated that DOE used the 

wrong baseline for assessing GHG 

emissions. The commenter indicated 

that DOE should have used the levels 

‘‘the U.S. would have achieved if DOE 

had implemented Congress’s original 

fuel replacement goals.’’

In response, DOE believes that the 

commenter’s assertion is incorrect on 

several counts. First, DOE does not have 

authority to mandate achievement of the 

goal. DOE has authority to conduct 

programs in accordance with the goals, 

to review the goals, and modify the 

goals. The commenter’s implication that 

DOE could have mandated achievement 

of the 30 percent goal by 2010 is 

therefore incorrect. Second, a GHG 

analysis as suggested by the commenter 

would require the establishment of a 

fictitious baseline based upon a 

completely fabricated fuel mix that 

possibly could be used to meet the goal 

in 2010 whether or not a 2010 goal was 

ever achievable. Since DOE has found 

that the goal is unachievable, it does not 

know what the fuel mix would have 

been in 2010 if the 30 percent goal had 

been achieved, which is critical to 

determining the baseline contribution of 

GHGs. Without such a breakdown, no 

such estimate can be made. 

This commenter further asserted that 

DOE was required to perform an 

environmental assessment as part of this 

rulemaking. As discussed below in 

section VII, Regulatory Review, DOE has 

not conducted an environmental 

assessment, which is consistent with the 

Court’s holding in Center for Biological 

Diversity. (419 F. Supp 2d at 1173.) 

Programmatic/DOE’s Role 

Three commenters and several Clean 

Cities-related organizations specifically 

called for DOE to promote programs or 

incentives and make recommendations 

to further the goals of the Replacement 

Fuel Programs. This Final Rule requires 

DOE to select a specific goal that is 

achievable. DOE notes that the 

Administration is making proposals and 

recommendations relevant to alternative 

fuel production and use. The President’s 

2007 State of the Union Address on 

January 23, 2007, made two clear and 

strong recommendations. Twenty in Ten 

proposed increasing the RFS to 35 

billion gallons of renewable and 

alternative fuel in 2017 and giving 

Department of Transportation (DOT) 

authority to set CAFE standards for 

passenger vehicles based on vehicle 

attributes consistent with DOT’s recent 

rule for light-duty trucks. Thus, the 

President’s ‘‘Twenty in Ten’’ initiative 

contains replacement fuel and energy 

efficiency as its main elements, which is 

the same approach employed by the 

Replacement Fuel Goal established 

today. 

In addition, one of the previous 

commenters cited CAFE standards as an 

opportunity for DOE to take action. As 

part of his Twenty in Ten initiative, the 

President has called for reforms in the 

CAFE standards. However, concerning 

CAFE, Congress has limited authority in 

this area to itself and the DOT, not DOE. 

While DOT does confer with DOE in 

this area, Congress has established the 

authority for CAFE regulations within 

DOT. (49 U.S.C. 32902). 

Two commenters called for DOE to 

establish a replacement fuel program 

and develop a plan for its 

implementation. In addition, one of 

these specifically called for DOE to 

solicit input from stakeholders 

concerning measures to advance 

replacement fuels. In response, DOE 

notes that the research and development 

programs provided the data and 

development plans relied on for the 

analysis. As for a replacement fuel 

program under the context of EPAct 

1992 (particularly section 502(a)), DOE 

has, for more than a decade, been 

conducting a program focused on the 

replacement of petroleum in the 

transportation sector. These on-going 

efforts include activities such as the 

Federal Fleet requirements, the State 

and Alternative Fuel Provider Fleets 

Regulations, and the Clean Cities 

initiative. As for soliciting input from 

stakeholders, the NOPR specifically 

provided opportunity for comment by 

stakeholders interested in replacement 

fuels, both through written comments 

and testimony at the hearing. In 

addition, DOE continues an open dialog 

in this area with interested stakeholders, 

particularly through the Clean Cities 

initiative. 

One commenter specifically called for 

DOE to work with the Environmental 

Protection Agency (EPA) to ensure that 

regulations for conversions ‘‘are not 

overly burdensome for those wishing to 

convert vehicles * * * to alternative 

fuels.’’ DOE has a history of working 

with EPA in alternative fuel-related 

areas, and will continue to do so. 

One commenter disagreed with DOE’s 

assertion that its authority under this 

rulemaking is limited by EPAct 1992. It 

cited EPAct’s section 504(c), which 

states that: 

If the Secretary determines that the 

achievement of goals described in section 

502(b)(2) of this title would result in a 

significant and correctable failure to meet the 

program goals described in section 502(a) of 

this title, the Secretary shall issue such 

additional regulations as are necessary to 

remedy such failure. 

(42 U.S.C. 13254(c)). 

DOE has read this clause to mean that, 

if the numerical Replacement Fuel Goal 

(30 percent in 2010 from 502(b)(2)) 

conflicts with the overall replacement 

fuel program goal of replacing motor 

fuels to the maximum extent practical 

(from 502(a)), then DOE has additional 

regulatory authority to rectify the 

conflict. However, DOE’s additional 

authority to establish regulations under 

EPAct 1992 is limited. Section 504(c) 

continues: 

The Secretary shall have no authority 

under this Act to mandate the production of 

alternative fueled vehicles or to specify, as 

applicable, the models, lines, or types of, or 

marketing or pricing practices, policies, or 

strategies for, vehicles subject to this Act. 

Nothing in this Act shall be construed to give 

the Secretary authority to mandate marketing 

or pricing practices, policies, or strategies for 

alternative fuels or to mandate the 

production or delivery of such fuels. 

(42 U.S.C. 13254(c)). 

Finally, several Clean Cities related 

organizations called for DOE generally 

to enforce EPAct, support mandated 

fleets with funding, increase funding to 

Clean Cities coalitions, and to ‘‘propose 

real solutions.’’ An additional 

commenter also raised the issue of 

funding for relevant programs. In 

response, DOE asserts that it is indeed 

enforcing EPAct fleet programs, through 

programs focused specifically on 

regulated fleets under titles III and V of 

EPAct. These programs, as mentioned 


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above, have been highly successful at 

accomplishing their missions within the 

context of the scope and authority 

provided by Congress. DOE remains 

committed to Clean Cities as a key 

element of its replacement fuel efforts. 

DOE intends to continue to utilize Clean 

Cities to identify new opportunities for 

success in the implementation of 

replacement fuel and energy efficiency 

technologies as they become available 

for deployment. As for the non-specific 

request that DOE propose ‘‘real 

solutions,’’ DOE has provided its 

detailed analysis supporting its decision 

concerning modification of the 

Replacement Fuel Goal, which also 

incorporates the technology 

development plans of many of its 

research and development programs. 

C. Assessment of Comments 

There are several important 

observations that can be made about the 

comments received. First, no 

commenter supplied any data to dispute 

DOE’s analysis. Commenters did discuss 

the potential of particular technologies, 

but data from which DOE could make 

projections of the technology impacts 

was not provided, nor were any 

indications that modifying the analysis 

as generally proposed by several 

commenters would result in any 

significant net changes to the results of 

DOE’s analysis. Second, a number of 

commenters (especially the Clean Cities 

and related organizations) merely 

asserted an objection to delaying the 

goal by 20 years, without any comment 

on the achievability of the proposed 

goal or an alternative goal. Third, many 

commenters did not appear to fully 

understand the purpose of the goal and 

the purpose of this rulemaking. As 

indicated in the NOPR and in the 

discussion above, DOE is directed by 

statute to analyze the existing goal of 30 

percent replacement in 2010, and if 

found not to be achievable, modify the 

goal. However, many commenters 

discussed issues beyond the scope of 

this rulemaking, e.g., funding policies, 

establishment of particular programs, 

and other wide-ranging regulatory 

actions. 

In conclusion, the comments received 

have not persuaded DOE that it erred in 

its analysis or in its choice of revised 

goal, as included in the NOPR. DOE 

does note its continuing responsibility 

to periodically conduct analyses of the 

progress toward this goal, and to modify 

the goal again if and when appropriate. 

Such modification could include 

proposing either earlier or later 

achievement, or also a higher or lower 

replacement fuel level. 

IV. Determination That Congressional 

Goals Are Unachievable 

DOE has determined that the 2000 

goal was not achieved and that the 2010 

goal is not achievable. DOE notes that it 

is unaware of any analysis or technical 

data that was used by Congress in 1992 

as a basis for setting the 10 percent and 

30 percent Replacement Fuel Goals set 

forth in EPAct 1992. DOE is also not 

aware of any affirmative determination 

by Congress or by any agency that, at the 

time they were set, the statutory goals 

were reasonably achievable. 

As indicated in the NOPR, the actual 

data reported for 2000 indicated that the 

10 percent Replacement Fuel Goal was 

not achieved. Replacement fuel use in 

that year totaled about 4.7 billion 

gallons, or only about 2.9 percent of the 

162 billion gallons of motor fuel 

consumed. Of this amount, oxygenates 

in the form of ethanol and Methyl 

Tertiary Butyl Ether (MTBE) supplied 

about 92 percent of the replacement fuel 

production. (See Transportation Energy 

Data Book—26th Edit., Table 2.3 (2006) 

(replacement fuel use) and FHWA 

Motor Fuel Use Report, Table MF–21; 

http://199.79.179.101/ohim/hs00/ 

mf.htm.) 

Based on EIA’s AER 2005 (the last 

such review completed prior to this 

final rule), replacement fuels supply 

approximately 2.5 percent of the total 

motor vehicle fuel used in motor 

vehicles. The amount of replacement 

fuel used, as a percent of total motor 

fuel consumed, has essentially been flat 

for the past decade despite some 

increased use of alternative and 

replacement motor fuels. There are two 

reasons for this trend. First, as discussed 

in the NOPR, the recently accelerated 

phase-out of MTBE as an additive in 

gasoline has limited the total amount of 

replacement fuels consumed since 

MTBE previously accounted for a 

significant portion of these fuels. 

Because a gallon of MTBE contains 

more energy than a gallon of ethanol, 

replacing MTBE with ethanol may result 

in more gallons of ethanol used, but not 

in a higher replacement fuel level, since 

the level of replacement (percentage) is 

calculated on an energy content basis. 

This replacement of MTBE with ethanol 

partly explains why replacement fuels 

have not garnered a larger share of the 

on-road fuels market on an energy basis, 

even as ethanol use has increased quite 

significantly in the past several years, 

increasing from a level of slightly more 

than 1 billion gallons in 2002 to 4 

billion gallons in 2005. (AER 2005.) 

Second, the comparatively small growth 

in total replacement fuels production 

and use has been matched by the growth 

in petroleum-based motor fuel use. 

The EIA AEO 2007 reference case 

projected that replacement fuels in 2010 

will account for approximately 4.5 

percent of total motor fuel use, or 

approximately 8.7 billion gallons of 

gasoline equivalent replacement fuel 

(although it is possible higher oil prices 

and the President’s recent proposals 

will result in greater use of biofuels 

during this period). Given the shortterm nature of the 2010 goal, it appears 

that ethanol would be the primary 

replacement fuel option to consider. 

Some production capacity for ethanol 

now exists, with increases in capacity 

projected over the next few years. The 

changes in distribution and 

infrastructure needed for other fuels 

(e.g., gaseous fuels or electricity) to 

make major contributions would be 

much longer term in nature, and thus 

largely impractical for serious 

consideration before 2010. Therefore, 

ethanol in blends are expected to 

account for about 85 percent of the 

replacement fuels produced in 2010, 

with the remaining balance made up of 

mostly natural gas and propane. 

DOE did not receive any data or 

information from commenters as to the 

projected production capacities of 

replacement fuel by 2010. In addition, 

the commenters did not provide any 

data or information to indicate how the 

replacement fuel production capacity of 

30 percent in 2010 could be achievable. 

DOE therefore determines that the 

EPAct 1992 Replacement Fuel Goal of 

10 percent for 2000 was not met and 

that the goal of 30 percent for 2010 is 

not achievable, considering all 

information available and the economic 

and technical feasibility of achieving the 

2010 goal. 

V. Goal Modification Analysis 

As part of its preparation for the 

NOPR, DOE conducted an analysis 

focused on projecting potential 

production capacity for replacement 

fuels through 2030. This was necessary 

to determine how the Replacement Fuel 

Goal should be modified. DOE has 

relied upon this analysis and other more 

recent information and data currently 

available in the development of this 

final rule. DOE has identified and 

reviewed relevant internal and external 

reports, studies, and analyses on 

alternative and replacement fuel use 

and projected production. The pertinent 

information was compiled to assist in 

the development of an ‘‘achievable 

goal.’’

Because of the detailed analytical 

description provided in the NOPR 

concerning this analysis, and because 


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today’s notice relies on substantially 

similar analytical framework (e.g., 

building blocks and scenarios, and 

assumptions), a discussion of the 

analysis conducted by DOE will 

primarily be provided in summary form 

here. For more detail on the analysis, 

consult section V. of the NOPR. 71 FR 

54776. During the period since the 

publication of the NOPR, EIA released 

portions of the AEO 2007. In order to 

meet the court ordered deadline and 

because the full AEO 2007 is 

unavailable, DOE could not update all 

of its analysis described in the NOPR. 

DOE does provide a comparison of the 

results using AEO 2006 and the 

available portions of AEO 2007 at the 

end of this section. 

A. Approach 

As discussed previously, DOE has two 

statutory criteria for modification of the 

Replacement Fuel Goal. First, the goal 

has to be aggressive enough to meet the 

intent of the program goal to promote 

replacement fuels to the ‘‘maximum 

extent practicable.’’ (42 U.S.C. 

13252(a)). Secondly, the Replacement 

Fuel Goal has to be ‘‘achievable.’’ (42 

U.S.C. 13254(b)). 

In meeting these criteria, DOE had 

several options in modifying the 

Replacement Fuel Goal, in accordance 

with the authority provided in section 

504 of EPAct 1992. First, DOE could 

modify the goal level to what it believed 

was achievable in the 2010 timeframe, 

probably around the 4.5 percent 

projected in the AEO 2007. Second, 

DOE could move the goal out in time, 

since the potential contributions from 

replacement fuels increase over time. A 

third option would be to combine the 

two primary options and modify both 

the replacement fuel level and date. In 

analyzing the data, DOE looked at all of 

these options. DOE’s evaluated credible 

data, projections, and other information 

covering approximately the next 25 

years, to see what could be achievable. 

DOE’s evaluation and analysis went out 

to 2030, since that is the last date for 

which credible input existed, 

particularly in the form of data from 

AEO 2006 and the recently released 

portions of AEO 2007. 

In general, the analytical framework 

included only existing statutory 

authorities and incentives in the 

development of the technologies. The 

only exception was in hydrogen and 

fuel cell technologies which did 

consider some level of additional or 

new incentives and/or mandates in the 

future. Therefore, the primary variables 

in DOE’s analysis were projected 

technological and cost improvements. 

Hydrogen and fuel cell technologies 

were specifically identified as an 

exception because DOE recognizes that 

the hydrogen economy will require 

additional support later in the market 

introduction phase. Most of the other 

replacement fuels and technologies are 

viable in the market or they are getting 

or have gotten tax breaks, subsidies, or 

other price supports until they become 

viable in the market. 

One commenter claimed that DOE’s 

analysis assumes continued support in 

terms of tax credits and other incentives 

that are currently provided but are 

scheduled to expire before 2030. In 

response, DOE believes it was careful to 

keep such variations to a minimum. 

Most of the technologies did not assume 

continue price support or other 

incentives. The projected results from 

technology programs were primarily 

based upon reaching technology cost 

goals that would result in cost 

competitiveness without subsidies. 

Therefore, DOE did not assume any new 

policies for nearly all technologies. The 

only exception, as indicated above, was 

hydrogen and fuel cell technologies, 

which embedded a higher level of 

support into its GPRA projections. 

B. Building Blocks 

The Replacement Fuel Goal proposed 

in this action was developed after 

careful consideration of existing market 

factors, energy forecasts, and programs 

directed by DOE and its national 

laboratories. Three combined building 

blocks were considered: (1) The 

reference case projected by EIA in the 

AEO 2006 with updates from AEO 2007; 

(2) the high price case presented in the 

AEO 2006; and (3) projections from the 

DOE programs conducting research and 

development on replacement fuel and 

vehicle technologies. The outcome of 

this effort is several different cases 

under which varying levels of 

replacement fuel are potentially 

achieved. 

These building blocks include 

replacement fuel and vehicle 

technologies, with projected 

contributions based on either the high 

or reference prices from the AEO, or the 

DOE program development projections. 

Some of the building blocks are relevant 

to all of the scenarios, while others 

appear in a limited number of scenarios. 

As indicated above, DOE evaluated data 

out through 2030, at periodical 

intervals. In all cases, the highest levels 

of replacement fuels appear in 2030. 

Below is a description of the building 

blocks and ‘‘cases’’ which were used to 

develop the four scenarios, described in 

the subsequent section. 

AEO Reference Case Description 

The AEO reference case is the base 

case prepared by EIA. It takes into 

account developments that are likely to 

occur as a result of policies that existed 

at the time the forecast was developed. 

AEO takes into account expected 

improvements and cost reductions in 

many technologies, but does not attempt 

to project the impact of DOE technology 

development programs. It does not 

account for potentially new policies, or 

legislation. The reference case also 

includes a number of other critical 

assumptions including economic 

growth rates and oil prices. The AEO 

2006 reference case assumes a U.S. 

economic growth rate of 3 percent per 

year. Oil prices in this case are projected 

to fluctuate from the high $40 range to 

mid $50 range and peak at $57 in 2030 

under AEO 2006. AEO 2006, which was 

first released in late 2005, indicates that 

the oil price projection in the reference 

case represents EIA’s ‘‘current judgment 

regarding the expected behavior of the 

Organization of Petroleum Exporting 

Countries (OPEC) producers in the long 

term, adjusting production to keep 

world oil prices in a range of $40 to $50 

per barrel’’. (AEO 2006, p. 206.) 

In the AEO 2007 Reference Case 

update, EIA estimated that ‘‘the average 

world crude oil price declines slowly in 

real terms (2005 dollars), from a 2006 

average of more than $69 per barrel 

* * * to just under $50 per barrel * * * 

in 2014 as new supplies enter the 

market, then rises slowly to about $59 

per barrel * * * in 2030.’’ Thus the 

2030 world oil price in the AEO 2007 

reference case is slightly above the 2030 

price in the AEO 2006 reference case 

($59 versus $57). It should be noted that 

EIA specifically used the same rationale 

in developing its projections in the AEO 

2007 as it had in the AEO 2006, 

indicating the following: 

The world oil price in AEO2007 is defined 

as the average price of low-sulfur, light crude 

oil imported into the United States—the 

same definition used in AEO2006. This price 

is approximately equal to the price of the 

light, sweet crude oil contract traded on the 

New York Mercantile Exchange (NYMEX) 

and the price of West Texas Intermediate 

(WTI) crude oil delivered to Cushing, 

Oklahoma. The weighted average U.S. 

refiners’ acquisition cost of imported crude 

oil is $5 to $8 per barrel less than the price 

of imported low-sulfur, light crude oil. 

(AEO 2007.) For more information on 

the AEO 2007 (Early Release), see 

http://www.eia.doe.gov./oiaf/aeo/ 

index.html. 

AEO High Price Case Description 

The high price case makes ‘‘more 

pessimistic assumptions for worldwide 


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3On all summary results tables, the AEO 2006 

cases have some fuel efficiency savings built into 

the forecasts, as a result of gradual improvements 

in vehicle technologies. The fuel efficiency savings 

reflected in the line below in each table represent 

those additional savings due to FCVT program 

developments. 

crude oil and natural gas resources than 

in the reference case’’ (AEO 2006, p. 

204). In particular, OPEC resources and 

production capacity are projected to be 

lower in this case. As a result, oil prices 

rise to nearly $90/barrel by 2030. Even 

in the high price case, however, some of 

the projected prices are lower than 

recent levels, rising to $70/barrel in 

2013 and $80/barrel in 2018. The high 

oil price forecast for the next several 

years ranges from $50 to $60, roughly 

comparable to today’s prices. In this 

case, transportation energy demand also 

is reduced because of high petroleum 

prices, which tend to encourage fuel 

efficiency. At the same time, higher oil 

prices in general also encourage more 

replacement fuel use. It should be noted 

that at the time of preparation of this 

final rule, EIA had not yet released its 

updated High price case for the AEO 

2007. 

DOE Program Development Case 

Description 

Section 504(b) of EPAct 1992 requires 

that the goal, as modified, be achievable. 

(42 U.S.C. 13254(b)) As part of the 

determination as to whether a goal 

would be achievable, DOE considered 

technologies that are technically and 

economically feasible today. DOE also 

considered technologies that currently 

may not be technologically or 

economically feasible, but that may be 

reasonably expected to be 

technologically and economically 

feasible given the achievement of 

certain conditions in the timeframes 

necessary to contribute to the goal. 

Many of these technologies are currently 

being developed under DOE’s own 

programs. 

The DOE program development case 

represents the estimated potential 

replacement fuel levels achieved if 

industry commercializes in significant 

amounts the new technologies and new 

fuels being developed by DOE and its 

industry partners through research and 

development programs. These estimated 

levels are predicated on continuing 

existing research and development 

activities and the achievement of 

technology goals/milestones that have 

been set. They also depend on economic 

targets being achieved and market 

acceptance of the technologies and fuels 

reviewed; however, for the most part, 

they do not rely upon new policy or 

regulatory initiatives. Information to 

support these cases came primarily from 

the relevant EERE and Fossil Energy 

programs, and included GPRA (Public 

Law 103–62; August 3, 1993) analyses 

and recently released technical reports 

identifying potential contributions of 

various fuel and vehicle technologies. 

(For more information concerning GPRA 

analyses, see http://www1.eere.doe.gov/ 

ba/pba/gpra_estimates/fy_07.html.) 

The technologies and fuels for which 

information was received from DOE 

program offices include fuel efficiency 

measures, ethanol, gas-to-liquid fuels, 

hydrogen, and electricity in PHEVs. The 

GPRA analysis was specifically relied 

on for the figures used for the Hydrogen 

Program and the fuel-efficiency savings 

rates projected for technologies arising 

from the EERE’s FCVT Program. It 

should be noted that the GPRA figures 

are based on the AEO 2005 forecast and 

not AEO 2006 or AEO 2007 because 

AEO 2006 and AEO 2007 were not 

available when the most recent GPRA 

analysis was conducted. The GPRA 

analyses are updated every 2 or 3 years 

and have not been updated since the 

publication of the NOPR. In the case of 

hydrogen, therefore, this means that the 

analysis presented here is based on AEO 

2007. In the case of energy efficient 

vehicle technology savings, DOE 

calculated a savings rate based on the 

2007 GPRA report and applied this 

figure to AEO 2006’s (or for the updated 

Reference Case analysis for AEO 2007’s) 

projection of on-road motor fuel use. 

The analysis conducted by DOE 

addressed a number of programs and 

fuels that contribute to the Replacement 

Fuel Goal, including energy efficiency 

measures, ethanol, biodiesel, coal-toliquid fuels, gas-to-liquid fuels, 

hydrogen, and other alternative fuels. 

These programs and fuels were 

described in section V. of the NOPR. 71 

FR 54776. 

C. Replacement Fuel Scenarios 

The previous section summarized the 

building blocks reviewed by DOE. This 

section describes how the various 

building blocks are combined into 

separate and distinct scenarios. Four 

scenarios were considered: (1) The 

reference case projected by EIA in AEO 

2006; (2) the high price scenario 

presented in AEO 2006; (3) a 

combination of the AEO 2006 reference 

case with achievement of program goals 

(designated as program developments); 

and (4) a combination of the AEO 2006 

high price case with program 

developments. The different scenarios 

represent the potential bounds for 

proposing a revised replacement fuel 

production goal under sections 502 and 

504 of EPAct 1992. The analysis 

performed looked at values for 

replacement fuel penetrations in the 

2020, 2025, and 2030 timeframes. Near 

the end of this section, a comparison of 

the reference case analyses based upon 

the AEO 2006 and AEO 2007 is 

provided. 

Reference Case Scenario 

As discussed earlier, the reference 

case represents the base case, or the 

most conservative approach to 

projecting potential replacement fuel 

production. The total projected 

replacement fuel production level by 

the year 2030 is approximately 8.65 

percent in this scenario based upon 

AEO 2006. This level of petroleum 

replacement further assumes that all 

CTL fuel is used for transportation 

purposes. Aside from this assumption, 

the most noticeable difference between 

this scenario and the ones that include 

the program development case is the 

relatively low amount of biofuels that is 

projected to be used. (This is due to 

assumptions made about technological 

progress of ethanol production 

technologies in the program 

development case.) Results for this 

scenario are provided in Figure 1. 

FIGURE 1.—SUMMARY OF RESULTS FOR REFERENCE CASE SCENARIO

Reference 2020 2025 2030 

On-road Fuel Use 3 .............................................................................................................................................. 14.42 15.36 16.46 

Additional Fuel Efficiency Savings (FCVT) ......................................................................................................... 0.00 0.00 0.00 

OnRoad Fuel Use w/Additional Fuel Efficiency Savings .................................................................................... 14.42 15.36 16.46 

Ethanol ................................................................................................................................................................. 0.49 0.51 0.51 

Biodiesel .............................................................................................................................................................. 0.02 0.02 0.02 

Hydrogen/FCVs ................................................................................................................................................... 0.001 0.001 0.002 

Coal to Liquids ..................................................................................................................................................... 0.23 0.58 0.76 


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FIGURE 1.—SUMMARY OF RESULTS FOR REFERENCE CASE SCENARIO—Continued 

Reference 2020 2025 2030 

Gas to Liquids ...................................................................................................................................................... 0.00 0.00 0.00 

Other Alternative Fuels ........................................................................................................................................ 0.10 0.11 0.12 

Petroleum Use ..................................................................................................................................................... 13.58 14.14 15.03 

Total Replacement Fuel ............................................................................................................................... 0.84 1.22 1.42 

Portion Replacement Fuel ................................................................................................................................... 5.83% 7.95% 8.65% 

[Note: Results in million barrels per day (mbpd) unless otherwise noted] 

High Price Case Scenario 

The high price case, which predicts 

higher oil prices throughout the 

forecast, indicates a potential for 

replacement fuel production level that 

is double that in the reference case. By 

2030, replacement fuel production 

potentially accounts for 2.65 million 

petroleum equivalent barrels per day, 

providing a replacement fuel production 

level of 17.84 percent. The most notable 

changes in this forecast are the 

reduction in total motor fuel 

consumption, dropping from 16.46 to 

14.86 million barrels a day as a result 

of reduced demand, and the significant 

increase in potential CTL production, 

which increases from a level of 0.76 

million barrels a day in the reference 

case to 1.69 million barrels a day in the 

high price case. Results for this scenario 

are provided in Figure 2. 

FIGURE 2.—SUMMARY OF RESULTS FOR HIGH PRICE CASE SCENARIO

High price 2020 2025 2030 

On-road Fuel Use ................................................................................................................................................ 13.20 13.97 14.86 

Additional Fuel Efficiency Savings (FCVT) ......................................................................................................... 0.00 0.00 0.00 

OnRoad Fuel Use w/Additional Fuel Efficiency Savings .................................................................................... 13.20 13.97 14.86 

Ethanol ................................................................................................................................................................. 0.54 0.60 0.62 

Biodiesel .............................................................................................................................................................. 0.03 0.03 0.03 

Hydrogen/FCVs ................................................................................................................................................... 0.001 0.001 0.002 

Coal to Liquids ..................................................................................................................................................... 0.29 0.81 1.69 

Gas to Liquids ...................................................................................................................................................... 0.04 0.19 0.19 

Other Alternative Fuels ........................................................................................................................................ 0.09 0.10 0.11 

Petroleum Use ..................................................................................................................................................... 12.21 12.24 12.21 

Total Replacement Fuel ............................................................................................................................... 0.99 1.73 2.65 

Portion Replacement Fuel ................................................................................................................................... 7.49% 12.37% 17.84% 

(Note: Results in mbpd unless otherwise noted). 

Reference Case With Program 

Developments Scenario 

This scenario combined the reference 

case assumptions regarding 

transportation energy demand with 

projections for successful DOE research 

and development programs. As in the 

reference case discussed above, this case 

assumes that all the CTL production 

capacity forecasted in the reference case 

is used for transportation purposes. The 

reference case with program 

developments further assumes 

additional fuel efficiency savings over 

and above those included in the 

reference case based on the fuel 

efficiency improvements and change in 

vehicle penetration rates attributed to 

commercialization of technologies 

undergoing research and development 

at DOE. Each of the other program 

initiatives discussed in this notice are 

factored into this scenario so that 

estimates for replacement fuel 

production potential of GTL, ethanol, 

biodiesel, and hydrogen are included. 

The potential impact of combining these 

forecasts with the individual program 

goals results in a replacement fuel 

production level potential of 35.25 

percent in 2030. The most significant 

differences from the two previous 

forecasts (reference and high price 

stand-alone) are the incorporation of 

additional efficiency savings and 

significant biofuels (ethanol and 

biodiesel) production. The additional 

fuel efficiency improvements represent 

over 3 mbpd savings by 2030. The two 

biofuels also combine to replace more 

than 3 mbpd equivalent in this scenario. 

Results for this scenario are provided in 

Figure 3. 

FIGURE 3.—SUMMARY OF RESULTS FOR REFERENCE CASE WITH PROGRAM DEVELOPMENT SCENARIO

Reference/program goals 2020 2025 2030 

On-road Fuel Use ................................................................................................................................................ 14.42 15.36 16.46 

Additional Fuel Efficiency Savings (FCVT) ......................................................................................................... 0.55 1.11 3.04 

OnRoad Fuel Use w/ Additional Fuel Efficiency Savings ................................................................................... 13.88 14.25 13.42 

Ethanol ................................................................................................................................................................. 1.33 1.95 2.58 

Biodiesel .............................................................................................................................................................. 0.37 0.51 0.65 

Hydrogen/FCVs ................................................................................................................................................... 0.001 0.16 0.47 

Coal to Liquids ..................................................................................................................................................... 0.23 0.58 0.76 

Gas to Liquids ...................................................................................................................................................... 0.05 0.15 0.15 


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FIGURE 3.—SUMMARY OF RESULTS FOR REFERENCE CASE WITH PROGRAM DEVELOPMENT SCENARIO—Continued 

Reference/program goals 2020 2025 2030 

Other Alternative Fuels ........................................................................................................................................ 0.10 0.11 0.12 

Petroleum Use ..................................................................................................................................................... 11.81 10.79 8.64 

Total Replacement Fuel ............................................................................................................................... 2.07 3.46 4.73 

Portion Replacement Fuel ................................................................................................................................... 14.94% 24.27% 35.25% 

(Note: Results in mbpd unless otherwise noted). 

High Price Case With Program 

Developments 

This scenario combines the high price 

case assumptions with the program 

developments. It includes the same 

assumptions regarding CTL use as 

discussed above. The program 

development assumptions regarding 

potential replacement fuels and fuel 

efficiency savings are the same as used 

in the previous scenario. The major 

difference in this scenario is that CTL 

production more than doubles due to 

higher oil prices. Ethanol and biodiesel 

again demonstrate the potential to 

replace a significant amount of 

petroleum. The higher oil prices, 

however, have the effect of reducing 

overall motor fuel use, which magnifies 

the potential replacement fuel levels. 

The result in this scenario is a 

maximum potential replacement fuel 

level of 47.06 percent. Results for this 

scenario are provided in Figure 4. 

FIGURE 4.—SUMMARY OF RESULTS FOR HIGH PRICE CASE WITH PROGRAM DEVELOPMENT SCENARIO

High price/program goals 2020 2025 2030 

On-Road Fuel Use ............................................................................................................................................... 13.20 13.97 14.86 

Additional Fuel Efficiency Savings (FCVT) ......................................................................................................... 0.50 1.01 2.74 

On-Road Fuel Use w/Additional Fuel Efficiency Savings ................................................................................... 12.70 12.96 12.12 

Ethanol ................................................................................................................................................................. 1.33 1.95 2.58 

Biodiesel .............................................................................................................................................................. 0.37 0.51 0.65 

Hydrogen/FCVs ................................................................................................................................................... 0.001 0.16 0.47 

Coal to Liquids ..................................................................................................................................................... 0.29 0.81 1.69 

Gas to Liquids ...................................................................................................................................................... 0.05 0.15 0.20 

Other Alternative Fuels ........................................................................................................................................ 0.09 0.10 0.11 

Petroleum Use ..................................................................................................................................................... 10.58 9.28 6.41 

Total Replacement Fuel ............................................................................................................................... 2.12 3.68 5.70 

Portion Replacement Fuel ................................................................................................................................... 16.710% 28.400% 47.060% 

Note: Results in mbpd unless otherwise noted. 

D. DOE’s VISION Model Analysis 

To validate the results of its analysis, 

DOE used the VISION model to look at 

what the vehicle mix would have to be 

for the replacement fuel production 

levels suggested by the different 

scenarios considered. The Replacement 

Fuel Goal is a production capacity goal 

not a fuel use goal. However, production 

capacity (supply) is tightly linked with 

fuel usage (demand). The primary 

purpose of the VISION modeling 

exercise was to verify the replacement 

fuel production levels were reasonable 

given various potential vehicle mixes 

and fuel availability. The secondary use 

was to project the greenhouse emission 

impacts under each of the scenarios. 

(For more information on VISION, see 

http://www.transportation.anl.gov/

software/VISION/index.html.) 

The VISION model results matched 

very closely with those from the 

analysis for this rule. In most cases the 

VISION model projected slightly higher 

replacement fuel levels due to 

differences in assumptions about overall 

petroleum consumption, efficiency 

gains, and heating values for fuels. The 

projected emission results indicated that 

the annual emissions will decrease from 

approximately 846 million metric tons 

of carbon equivalent (MMTCe) for the 

AEO 2006 reference case scenario, to 

just under approximately 500 MMTCe 

for the AEO 2006 reference case with 

program development scenario. 

Additional results and discussion on the 

VISION results for vehicle mix and 

greenhouse emissions impact can be 

found in section V.D. of the NOPR. 71 

FR 54783. 

One commenter pointed out apparent 

discrepancies between the EIA and 

VISION model analyses concerning the 

makeup of the LDV market. While DOE 

acknowledges that these two analyses 

differ somewhat in their pathways, they 

are in relative agreement on the overall 

destination points. Comparison of the 

VISION model with the combined 

scenarios validates that the combination 

of replacement fuels analyzed by DOE, 

is achievable under the framework of 

this rule. 

E. AEO 2007 Results 

DOE utilized AEO 2006 in conducting 

the analysis for the NOPR. In December 

2006, EIA began to make available 

portions of its AEO 2007. (See http:// 

www.eia.doe.gov/oiaf/aeo/index.html.) 

EIA released its reference case update, 

which allowed DOE to conduct 

comparative analysis of its Replacement 

Fuel Goal analysis, namely the two 

scenarios based specifically upon the 

reference case. At the time of 

preparation of this final rule, EIA had 

not yet released its high price case, thus 

DOE could not update all four scenarios. 

Overall, the AEO 2007 update did 

result in a few differences in the 

Replacement Fuel Goal analysis, 

although overall (net) impacts were 

relatively minor. Figure 5 below shows 

a comparison of the year 2030 results for 

the reference case scenario and the 

reference case with program 

developments scenario (portrayed in the 

table as ‘‘Reference/Program Goals’’). 


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FIGURE 5.—SUMMARY OF RESULTS FOR REFERENCE CASE AND REFERENCE CASE WITH PROGRAM DEVELOPMENT

SCENARIOS FOR 2030 

AEO 

Reference 

case 

Reference 

case 

Reference/ 

program 

goals 

Reference/ 

program 

goals 

2006 2007 2006 2007 

On-Road Fuel Use ................................................................................................................... 16.46 16.27 16.46 16.27 

Additional Fuel Efficiency Savings (FCVT) .............................................................................. 0.00 0.00 3.04 3.01 

On-Road Fuel Use w/Additional Fuel Efficiency Savings ....................................................... 16.46 16.27 13.42 13.26 

Ethanol ..................................................................................................................................... 0.51 0.62 2.58 2.58 

Biodiesel .................................................................................................................................. 0.02 0.03 0.65 0.65 

Hydrogen/FCVs ....................................................................................................................... 0.002 0.002 0.47 0.47 

Coal to Liquids ......................................................................................................................... 0.76 0.44 0.76 0.44 

Gas to Liquids .......................................................................................................................... 0.00 0.00 0.15 0.15 

Other Alternative Fuels ............................................................................................................ 0.12 0.11 0.12 0.11 

Petroleum Use ......................................................................................................................... 15.03 15.07 8.64 8.87 

Total Replacement Fuel ................................................................................................... 1.42 1.20 4.73 4.39 

Portion Replacement Fuel ....................................................................................................... 8.65% 7.38% 35.25% 33.13% 

(Note: Results in mbpd unless otherwise noted.) 

The first change seen from the AEO 

2007 reference case update is that motor 

fuel use drops from 16.46 to 16.27 

mbpd. As for the replacement fuels, 

ethanol and biodiesel increase slightly, 

while CTL drops significantly. This 

change in the biofuels reflects EIA’s 

readjusting for the RFS and the 

accompanying increased use of blends. 

EIA has indicated that the primary 

cause for the change to the CTL 

projection is higher capital costs. 

Discussions with industry indicated that 

the capital costs for CTL facilities were 

higher than originally anticipated, 

resulting in less facilities being built. 

Other alternative fuels are relatively flat 

however, and within this number 

electricity actually grows by nearly 40 

percent over the AEO 2006 with a 

corresponding reduction in liquid 

petroleum gas. Overall these figures are 

very small and the changes are a 

reflection of minor adjustments in EIA’s 

earlier assumptions. AEI also indicated 

that PHEVs were incorporated in their 

modeling analysis but that the resulting 

electricity use was negligible. The 

overall impact on the reference case 

replacement fuel percentage is to reduce 

the replacement fuel contribution from 

8.65 percent down to 7.38 percent, a 

change of approximately 1.3 percentage 

points or 15 percent. 

The impact of the 2007 AEO reference 

case update has much less overall 

significance to the reference case plus 

program developments scenario. This is 

because the efficiency contribution and 

many of the replacement fuel 

contributions in this scenario were the 

result of programmatic inputs, such as 

from GPRA or other technical analyses 

conducted by DOE’s research and 

development programs. These did not 

change, as new analyses have not been 

conducted by the programs since 

publication of the NOPR. The 

programmatic inputs include additional 

fuel efficiency savings (implemented 

solely as an unchanging percentage of 

overall on-road fuel use), ethanol, 

biodiesel, hydrogen, and GTL. Thus, the 

biggest impact on this scenario came 

from the EIA change to its reference case 

projection for CTL (which was used in 

both the reference case and reference 

case plus program developments 

scenarios of this analysis). The resulting 

impact was to reduce the replacement 

fuel contribution under the reference 

case plus program developments 

scenario slightly from 35.25 percent to 

33.13 percent, a reduction of just over 

2 percentage points or 6 percent. 

In summary, overall, the changes due 

to the use of the AEO 2007 reference 

case did not result in major impacts on 

the replacement fuel analysis as 

included in the NOPR. Thus, DOE did 

not see sufficient changes to warrant 

modifying the Replacement Fuel Goal as 

proposed in the NOPR. 

F. Additional Reports 

DOE also reviewed additional reports 

and analyses released during the period 

since the NOPR that are relevant to the 

development of the final rule. DOE 

notes three such reports. 

In October 2006, the Council on 

Foreign Relations (CFR) released 

National Security Consequences of U.S. 

Oil Dependency, Report of an 

Independent Task Force (CFR Report). 

The CFR task force is chaired by John 

Deutsch (former director of Central 

Intelligence and Deputy Secretary of 

Defense) and James R. Schlesinger 

(former Secretary of Defense and the 

first Secretary of Energy). This report 

was focused on examining ‘‘the 

consequences of dependence on 

imported energy for U.S. foreign 

policy.’’ In doing so, it focused its 

attention on ‘‘how oil consumption (or 

at least growth in consumption) can be 

reduced and why and how energy issues 

must become better integrated with 

other aspects of U.S. foreign oil policy.’’

(See CFR Report p. xi.) Consistent with 

DOE’s analysis supporting today’s final 

rule, the Council’s analysis 

‘‘concentrates on the next twenty years, 

a period long enough to put necessary 

policy measures into place but not so 

distant as to encounter a wider range of 

future geopolitical or technological 

uncertainties.’’ (See CFR Report p. 4.) 

The Council then went on to emphasize 

many of the same technologies that DOE 

relies upon in today’s action, such as 

energy efficiency, batteries, fuel cells, 

and biofuels. The Council also pointed 

out, as DOE did in the NOPR, that 

energy market forces are now leading to 

innovation by encouraging 

entrepreneurs to invest in new energy 

products and services, particularly 

research and development. While 

focusing on a different objective than 

today’s final rule, the CFR Report relied 

on many assumptions and analyses that 

appear consistent with those employed 

by DOE in today’s action. 

In November 2006, the President’s 

Council of Advisors on Science and 

Technology (PCAST) released The 

Energy Imperative: Technology and the 

Role of Emerging Companies (PCAST 

Report). PCAST was formed under 

Executive Order 13226 in September 

2001 to advise the President ‘‘on matters 


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involving science and technology 

policy.’’ The PCAST Report 

recommendations focus on ‘‘immediate 

steps that could be taken to reduce our 

Nation’s reliance on foreign oil and to 

reduce atmospheric emissions from 

energy production and use.’’ (PCAST 

Report cover letter.) For transportation, 

PCAST suggests ‘‘steps for a major 

transition to biofuels and to electric or 

hydrogen-powered vehicles.’’ (PCAST 

Report cover letter.) The major 

transportation-related recommendations 

focus specifically on increasing 

production of and demand for biofuels, 

as well as reviewing CAFE standards to 

make needed reforms and encourage 

non-fossil-fuel use. Thus, the PCAST 

report highlights two of the more 

important elements of DOE’s 

replacement fuel analysis, biofuels and 

energy efficiency, and is also generally 

consistent with the President’s recent 

State of the Union Address. 

The Energy Security Leadership 

Council (ESLC) released 

Recommendations to the Nation on 

Reducing U.S. Oil Dependence in 

December 2006. ESLC is chaired by 

General P.X. Kelley, USMC (Ret.), the 

former Commandant of the Marine 

Corps, and Frederick W. Smith, 

Chairman, President, and CEO, FedEx 

Corporation. Other Council members 

include various leaders of industry as 

well as former Defense and Homeland 

Security officials and high-ranking 

military officers. As in today’s action, 

the Council used the year 2030 as its 

focal point for analysis. Consistent with 

the DOE’s Replacement Fuel Goal 

analysis, ESLC focused heavily upon 

improved efficiency of vehicles and 

increasing supply and demand of 

biofuels. Its corollary recommendations 

included suggestions relating to 

improving the efficiency of mediumand heavy-duty trucks (through both 

hybrid technologies and fuel efficiency 

standards) and carbon sequestration (to 

enable coal-to-liquids and other fuels 

production). Thus, the ESLC’s portfolio 

also appears to be generally consistent 

with the portfolio relied upon by DOE. 

Each of these reports provides 

interesting and thoughtful perspectives 

on issues that are closely related to 

those addressed in this final rule. While 

the reports do not include quantitative 

analyses that would either support or 

undercut DOE’s analysis, they do use 

approaches that are similar to those 

used by DOE and they draw conclusions 

that appear to be generally consistent 

with those reached by DOE in this final 

rule. For example, each focused on a 

portfolio of options, with the greatest 

emphasis on energy efficiency, biofuels, 

and other non-petroleum fuels. They 

also considered 20–25 year time-frames, 

similar to those used by DOE. 

G. Other Issues 

Domestic Content 

Section 502(b)(2) of EPAct 1992 

directs that of the replacement fuels 

counted in the goal, at least half must 

be domestic replacement fuels. (42 

U.S.C. 13252(b)(2)) The replacement 

fuels analyzed for today’s final goal are 

assumed to be primarily domestic in 

nature. The only replacement fuels 

analyzed that showed potential for 

being imported are GTL, which 

represent a relatively small contribution 

to the overall goals. In addition, the 

small amount of GTL fuels included in 

the analysis was assumed to be based 

solely upon domestic resources. Ethanol 

imports are also assumed to be small. 

All biodiesel, CTL, and hydrogen are 

assumed to be domestic. Thus, DOE has 

assumed that the overwhelming 

majority of the replacement fuels 

included in its analyses will be 

domestic in nature. However, since the 

actual contribution of imports to the 

supply of these replacement fuels will 

be determined by markets, DOE intends 

to closely monitor the development of 

markets in this area. If it determines that 

these assumptions are not valid, it will 

consider whether changes in the 

Replacement Fuel Goal are warranted. 

One commenter did indicate a 

concern about any assumptions that 

may have been made about exports of 

replacement fuels, and that any decision 

to reduce exports might constitute a 

major shift in trade policy. It should be 

remembered that the Replacement Fuel 

Goal is a production capacity goal. 

Therefore, for the purposes of the 

analysis, DOE was concerned with 

whether there would be sufficient 

capacity to produce a given amount of 

replacement fuels. A consideration of 

whether some portion of those fuels 

might ultimately be exported, if export 

was the opportunity that made the most 

sense, was outside the scope of DOE’s 

analysis. 

GHG 

As part of its analysis of the 

replacement fuel levels considered in 

this Final Rule, DOE evaluated the 

overall GHG implications of the various 

scenarios. All scenarios show reduced 

carbon emissions over the reference 

case. Carbon emissions are reduced 

because more fuel efficient vehicles are 

used in these scenarios and the 

replacement fuels in general are less 

carbon intensive than petroleum motor 

fuels. The exception is the GHG 

emissions associated with CTL fuels if 

the carbon dioxide emitted during fuel 

production is not captured and 

sequestered. EIA indicates that there are 

currently no plans to sequester the 

carbon associated with CTL production 

absent new policies or requirements, so 

DOE has not assumed such emissions 

will be sequestered. Even with the 

increased emissions of GHG from CTL, 

the net effect of the replacement fuel 

production goal proposed in today(s 

notice is a substantial reduction in GHG 

emissions. 

On a life cycle basis, replacement fuel 

percentages projected by the VISION 

model goal would achieve a reduction 

in GHG emissions of over 40 percent 

compared to the reference case. The 

annual emissions are projected to 

decrease from 846.5 million metric tons 

of carbon equivalent (MMTCe) from fuel 

mix represented by the AEO 2006 

reference case scenario, to just under 

500 MMTCe from the fuel mix 

represented by the fuel mix that most 

closely represents the AEO 2006 

reference case with program 

development scenario. This projected 

reduction is primarily due to the high 

utilization of biofuels, most of which 

have significantly lower carbon 

emissions than petroleum-based fuels, 

especially when derived from biomass. 

As noted earlier, the exact carbon 

emissions cannot be pinpointed as the 

mix of fuels may ultimately be different 

than that projected; however, it is 

expected that significant reductions 

would occur. 

The full VISION model is typically 

not updated until the middle of the 

calendar year, several months after 

release of all of the Annual Energy 

Outlook. Therefore, it was not possible 

to conduct a complete update to the 

GHG emission analysis conducted for 

the NOPR. A preliminary effort was 

made, focusing primarily upon the 

contribution from CTL because it was 

the only component of the analysis that 

changed significantly that could have a 

detrimental impact on GHG. Initial 

estimates indicate that GHG emissions 

from CTL are significantly greater than 

previously estimated. Additional 

studies since the original NOPR analysis 

indicated that the life-cycle GHG 

emissions from CTL produced was 

underestimated. At the same time, 

however, the updated analyses based 

upon the AEO2007 reference case 

indicate that the CTL contribution in the 

2030 time-frame will be considerably 

less than estimated in the NOPR. The 

increase in per unit GHG emissions was 

of a comparable degree to the decrease 

in the projected contribution of CTL to 

the replacement fuel market. Thus, 

according to the most current analysis, 


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the net result is that there is no change 

in GHG emissions as compared to the 

estimates in the NOPR. There is still a 

projected 40 percent drop in GHG 

emissions versus the baseline reference 

case. 

One commenter took particular issue 

with DOE’s approach to its GHG 

analysis. This commenter claimed that 

DOE used the wrong baseline for 

assessing GHG emissions. The 

commenter indicated that DOE should 

have used the levels ‘‘the U.S. would 

have achieved if DOE had implemented 

Congress’s original fuel replacement 

goals.’’ DOE disagrees with this 

comment. 

First, as stated above, the goal 

established by Congress and modified 

today is not a mandate. DOE’s authority 

is limited to supporting achievement of 

the goal, reviewing the goal, and 

modifying the goal. As such, the 

commenter’s suggestion that DOE was 

required to implement the goals is a 

mischaracterization. 

Second, the baseline suggested by the 

commenter would be based upon a 

hypothetical fuel mix used to meet the 

goal in 2010. Since DOE has found that 

the goal is unachievable, it does not 

know what the fuel mix would have 

been in 2010 to achieve a 30 percent 

level. This fuel mix is critical for 

determining the baseline contribution of 

GHGs. Without such a breakdown, no 

such estimate can be made. 

VI. Modified Goal 

A. 30 Percent by 2030 

DOE is establishing a modified 

Replacement Fuel Goal of 30 percent by 

2030. The modified Replacement Fuel 

Goal is based primarily on the 

evaluation of four scenarios across a 

range of probable market conditions and 

involves a portfolio of technology 

options as presented in the NOPR. The 

four scenarios project a replacement fuel 

percentage that ranges from just over 7 

percent to a little above 47 percent in 

the 2030 timeframe. DOE selected a goal 

that falls near the middle of this range, 

providing a balance between the most 

optimistic and pessimistic scenarios 

analyzed by DOE. Based on the analysis 

as presented in the NOPR and 

summarized in this notice DOE 

determines that a fuel production 

capacity of 30 percent by 2030 is 

achievable. 

Section 504 makes clear that 

achievability of the goal is key, both for 

analysis of the goal as well as modifying 

the goal. (42 U.S.C. 13245(b).) EPAct 

1992, however, does not define 

‘‘achievable’’ for the purpose of 

modifying the goal. Section 502(b)(2) 

directs DOE to consider the 

technological and economic feasibility 

of the statutory goal in determining the 

goal’s achievability under the initial 

review (42 U.S.C. 13242(b)(2).) As stated 

in the NOPR, DOE has determined that 

in order for a goal to be achievable there 

must be a reasonable expectation, based 

on technological and economic 

feasibility, that the desired level of 

production capacity will be created 

within the relevant timeframe. In order 

to further ensure that the final goal is 

achievable, as discussed above, the final 

rule generally considered only policies 

and programs that are currently in 

place. 

In establishing the Replacement Fuel 

Goal adopted today, DOE assumed that 

not all technologies would be fully 

adopted into the marketplace. This 

assumption is consistent with 

statements provided by one commenter, 

who stated that to assume that research 

and development programs will 

accomplish all of their goals is 

unrealistic. This assumption provides 

an appropriate balance between the 

statutory requirements of the 

‘‘maximum extent practicable’’ and 

‘‘achievable.’’

DOE has determined that a timeframe 

of 2030 is necessary to achieve the 30 

percent level of the Replacement Fuel 

Goal adopted today. There are important 

reasons why a timeframe extending out 

to 2030 is required to make major 

changes in motor fuel consumption 

patterns and thus production levels—

the lead-time for investments to begin 

and bear fruit, and the retirement cycles 

for U.S. vehicles. 

Major investments of capital are 

required to establish industrial capacity 

to produce replacement fuels. Such 

investments are typically focused over 

the entire operating life of a production 

facility (often 30 years) and potential 

investors may require a high degree of 

certainty that the cost of competing 

fuels will be higher than the cost of 

fuels produced by the subject plant far 

into the future, thus allowing a positive 

return on investment. Barriers to such 

major investments include uncertainty 

of world oil prices, high cost of 

production coupled with high initial 

capital cost, and the long decision-toproduction lead times. 

Once investments are made to 

develop replacement fuel production, 

production facilities must be built. It 

can take five years or more from the 

start of construction on a new facility 

until full operation is achieved, 

depending on the complexity and size 

of the production facility involved. 

Achievement of the 30 percent 

Replacement Fuel Goal is projected to 

require a substantial number of new 

production facilities (such as plants to 

produce cellulosic ethanol and CTL 

fuels). Construction of production 

facilities is not expected to occur 

simultaneously, thereby resulting in an 

additional five or even ten years until 

production capacity is at a level 

necessary to achieve the Replacement 

Fuel Goal. 

Many of the investments anticipated 

in 1992 have only recently begun. 

Recent high oil prices are beginning to 

spur more investment in alternative and 

replacement fuels, but not fast enough 

to allow DOE to set a 2010 replacement 

fuel production goal at levels any higher 

than the AEO 2007 ( ∼4.5 percent). 

Although the Replacement Fuel Goal 

is production (supply) based, 

production is closely linked to fuel 

usage (demand). On the vehicle side, a 

similar period of lead-time is typically 

required to make a significant impact on 

U.S. fuel consumption patterns. This is 

because it takes more than 25 years to 

turn over the U.S. fleet of in-use motor 

vehicles. According to the 25th Edition 

of the Transportation Energy Data Book 

(TEDB 25, U.S. DOE and Oak Ridge 

National Laboratory, ORNL–6974, 

2006), after 30 years, approximately 93 

percent of the 1990 model year vehicles 

are projected to be retired, and slightly 

less than 96 percent of the 1990 model 

year light trucks will have been 

scrapped. The median lifetime for 1990 

cars is now 16.9 years, and 15.5 years 

for 1990 light trucks. While the truck 

numbers are relatively consistent 

(compared to 1970 and 1980 model 

years), the car numbers have increased 

substantially (from 11.5 years in 1970 

and 12.5 years in 1980). 

The effects of this can be seen by a 

U.S. vehicle population of 226 million 

in 2003, with annual new LDV sales of 

approximately 16.5–17 million/year (or 

approximately equal to 7 percent of the 

size of the in-use fleet). Thus, any 

replacement fuel or higher efficiency 

technology which requires actual 

replacement of vehicles must be phased 

into the U.S. fleet of vehicles over a 

number of years to eventually account 

for a significant portion of in-use 

vehicles. (See TEDB, Tables 3.8, 3.9, 4.5, 

4.6, and 8.1.) 

DOE has determined to maintain the 

level of the goal at 30 percent for two 

reasons. First, when Congress passed 

EPAct 1992, it indicated that it believed 

the level of 30 percent replacement fuel 

was appropriate. Second, this level of 

replacement fuel production is both 

consistent with the overall goals of the 

President’s AEI and Twenty in Ten 

initiatives, to promote replacement fuels 

and energy efficiency. 


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12058 Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 

Since DOE’s analysis of the 

Replacement Fuel Goal was originally 

published in the NOPR, DOE has 

continued to review relevant data and 

published reports to inform today’s 

decision. Overall, the reports appear to 

rely on an analytical framework 

consistent with that relied upon for 

today’s final rule, further supporting the 

reasonableness of DOE’s approach. 

DOE also reviewed comments 

received in response to the NOPR and 

found that none included data to 

support a Replacement Fuel Goal other 

than that adopted in this final rule. It 

should be noted that nearly all of the 

public comments agreed with the need 

to modify the goal, but a majority 

disagreed with the Department’s choice 

to move the goal to 2030. As discussed 

above in section III, a variety of 

commenters requested that DOE 

establish a more aggressive goal with a 

stronger focus upon program 

development and implementation. 

While a number of these commenters 

indicated that they wanted to see DOE 

set a ‘‘higher goal,’’ few offered concrete 

proposals as to what that goal should be 

and how it could be achieved. 

DOE is required to set a goal that is 

deemed achievable. As illustrated in the 

analysis above and that provided in the 

NOPR, DOE has set out a rational 

pathway to the achievement of a goal, 

based upon widely accepted forecasts 

(such as the EIA forecast) and 

information provided by DOE research 

and development programs. In addition, 

the documents provided by the research 

and development programs and 

included within the docket, include the 

individual pathways for contributing to 

the achievement of the modified 

Replacement Fuel Goal. As for utilizing 

either of the ‘‘program developments’’

cases as the specific goal level, DOE 

explicitly rejected a goal based solely on 

these levels because of the fact that not 

all research and development programs 

can be expected to achieve all 

milestones. DOE is unable to set a more 

accelerated pathway based upon the 

information it has at this time. 

In summary, due to both lead-times 

for fuel supply investments and the time 

required to turn over nearly all of the 

U.S. fleet of vehicles, a significant 

change in the utilization of U.S. motor 

fuel consumption patterns could take 

more than two decades. Today’s 

decision is based primarily on the 

existing budgetary and policy 

framework. Therefore, it is largely a 

reflection of existing and expected 

conditions. In and of itself, it is not an 

action plan or roadmap for expanding 

replacement fuel production capacity. 

Nothing in this action precludes 

appropriate parties (such as Federal, 

State, or local governments, or private 

industry) from taking steps to accelerate 

achievement of the goal. 

B. Interim Goal 

As proposed, today’s final rule adopts 

a revised the Replacement Fuel Goal for 

2030. Today’s rule does not adopt an 

interim Replacement Fuel Goal. The 

court order under which today’s final 

rule is being issued, directed DOE to 

‘‘revise the goal for replacement fuels 

contained in the Energy Policy Act of 

1992.’’ Center for Biological Diversity v. 

U.S. Dept. of Energy et. al., No. 05–cv–

01526–WHA Document 54 p. 2 (N.D. 

Cal. March 30, 2006) (Order Re Timing 

of Relief); emphasis added. As indicated 

by the court, DOE is only required to 

revise a single goal, and not the final 

goal and the interim goal. 

Several commenters urged DOE to 

establish a revised interim goal in 

conjunction with a revised final goal. 

Commenters stated that Congress 

established the ten percent by 2000 

interim goal as a method of evaluating 

the Nation’s progress in achieving the 

original thirty percent by 2010 final 

goal. Commenters further stated that a 

revised interim goal is necessary to 

provide for an evaluation of progress 

towards achieving the revised goal, and 

is necessary so that DOE may identify 

difficulties in achieving the revised goal 

earlier in the process. 

A revised interim goal is not 

necessary for evaluating the progress in 

achieving the revised final goal adopted 

in today’s final rule. The EIA AEO 

provides the current production 

capacity of alternative fuel in 

comparison to the consumption of 

motor fuel in the Untied States. The EIA 

AEO provides a de facto report on the 

progress in achieving the revised 

Replacement Fuel Goal. As such, DOE 

determined that an interim goal is not 

needed to monitor the progress of the 

Replacement Fuel Goal. 

Further, DOE will periodically 

evaluate the prospects for achieving the 

Replacement Fuel Goal set in today’s 

rule, including tracking the levels 

projected for intervening years, and will 

publish the results of its evaluations as 

appropriate. If the AEO projections 

should indicate that the goal, as revised 

in this action, no longer meets the 

criteria of achievable, or if it appears 

that the goal can be achieved earlier or 

a greater level can be achieved, DOE 

will institute a rulemaking process to 

modify the goal at that time. 

VII. Regulatory Review 

A. Review Under Executive Order 12866 

Today’s final rule action has been 

determined to be a ‘‘significant 

regulatory action’’ under Executive 

Order 12866, Regulatory Planning and 

Review, 58 FR 51735 (October 4, 1993). 

Accordingly, this action was subject to 

review under the Executive Order by the 

Office of Information and Regulatory 

Affairs in the Office of Management and 

Budget. 

B. Review Under Regulatory Flexibility 

Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601–612, requires preparation of 

a regulatory flexibility analysis for any 

rule that is likely to have a significant 

economic impact on a substantial 

number of small entities. Today’s action 

merely modifies the Replacement Fuel 

goal, with no requirements imposed 

upon any entity. Therefore, this action 

will not result in compliance costs on 

small entities. DOE certifies that this 

final rule will not have a significant 

economic impact on a substantial 

number of small entities, and 

accordingly, no regulatory flexibility 

analysis has been prepared. 

C. Review Under the Paperwork 

Reduction Act 

No new record keeping requirements, 

subject to the Paperwork Reduction Act, 

44 U.S.C. 3501, et seq., are imposed by 

this final rule. 

D. Review Under the National 

Environmental Policy Act of 1969 

(NEPA) 

DOE has not prepared an 

environmental impact statement (EIS) or 

an environmental assessment (EA) for 

the final rule, as neither is required. The 

final rule implements the March 6, 

2006, Order of the U.S. District Court of 

California to modify the EPAct 1992 

Replacement Fuel Goal. Center for 

Biological Diversity, 419 F.Supp 2d 

1166. In its order, the Court determined 

that EPAct 1992 imposed mandatory 

action on the Secretary in requiring that 

the goal be modified, if the Secretary 

determines the goal is unachievable. 

Since DOE lacked discretion, the Court 

determined that NEPA did not apply. In 

the final rule, DOE has determined that 

the ‘‘30 percent by 2010’’ goal is 

unachievable. Therefore, modification 

of the goal is mandatory, and consistent 

with the Court’s Order, neither an EA or 

EIS is required. 

E. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 


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Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 12059 

new regulations, section 3(a) of 

Executive Order 12988, Civil Justice 

Reform, 61 FR 4729 (February 7, 1996), 

imposes on Executive agencies the 

general duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. With regard to 

the review required by sections 3(a) and 

3(b) of Executive Order 12988 

specifically requires that Executive 

agencies make every reasonable effort to 

ensure that the regulation: (1) Clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing Federal law or regulation; (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive effect, if any; (5) 

adequately defines key terms; and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of Executive Order 12988 requires 

Executive agencies to review regulations 

in light of applicable standards in 

sections 3(a) and 3(b) to determine 

whether they are met or it is 

unreasonable to meet one or more of 

them. Executive Order 12988 does not 

apply to this rulemaking notice because 

DOE is merely modifying the 

Replacement Fuel Goal provided in 

section 502(b)(2) of EPAct 1992, and is 

not establishing any regulations that 

would impose any requirements on any 

person or entity. 

F. Review Under Executive Order 13132 

Executive Order 13132, Federalism, 

64 FR 43255 (August 4, 1999), imposes 

certain requirements on agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and carefully assess the necessity 

for such actions. DOE has examined 

today’s modification of the Replacement 

Fuel Goal and has determined that it 

will not preempt State law and will not 

have a substantial direct effect on the 

States, on the relationship between the 

national government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. 

G. Review of Impact on State 

Governments—Economic Impact on 

States 

Section 1(b)(9) of Executive Order 

12866, Regulatory Planning and Review, 

58 FR 51735 (September 30, 1993), 

established the following principle for 

agencies to follow in rulemakings: 

‘‘Wherever feasible, agencies shall seek 

views of appropriate State, local, and 

tribal officials before imposing 

regulatory requirements that might 

significantly or uniquely affect those 

governmental entities. Each agency shall 

assess the effects of Federal regulations 

on State, local, and tribal governments, 

including specifically the availability of 

resources to carry out those mandates, 

and seek to minimize those burdens that 

uniquely or significantly affect such 

governmental entities, consistent with 

achieving regulatory objectives. In 

addition, as appropriate, agencies shall 

seek to harmonize Federal regulatory 

actions with regulated State, local and 

tribal regulatory and other governmental 

functions.’’

Because DOE is modifying the 

Replacement Fuel Goal under section 

502(b)(2) of EPAct 1992, and is not 

establishing any requirements, no 

significant impacts upon State and local 

governments are anticipated. The 

position of State fleets currently covered 

under the existing EPAct 1992 fleet 

program is unchanged by this action. 

H. Review of Unfunded Mandates 

Reform Act of 1995 

Title II of the Unfunded Mandates 

Reform Act of 1995, Public Law 104–4, 

requires each Federal agency to assess 

the effects of Federal regulatory actions 

on State, local and tribal governments 

and the private sector. The Act also 

requires a Federal agency to develop an 

effective process to permit timely input 

by elected officials on a proposed 

‘‘significant intergovernmental 

mandate,’’ and requires an agency plan 

for giving notice and opportunity for 

timely input to potentially affected 

small governments before establishing 

any requirements that might 

significantly or uniquely affect small 

governments. On March 18, 1997, DOE 

published in the Federal Register a 

statement of policy on its process for 

intergovernmental consultation under 

the Act. 62 FR 12820. The final rule 

published today does not establish or 

contain any Federal mandate, so the 

requirements of the Unfunded Mandates 

Reform Act do not apply. 

I. Review of Treasury and General 

Government Appropriations Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999, Public Law 105–277, requires 

Federal agencies to issue a Family 

Policymaking Assessment for any 

proposed rule that may affect family 

well-being. Today’s final rule does not 

have any impact on the autonomy or 

integrity of the family as an institution. 

Accordingly, DOE has concluded that it 

is not necessary to prepare a Family 

Policymaking Assessment. 

J. Review of Treasury and General 

Government Appropriations Act, 2001 

The Treasury and General 

Government Appropriations Act, 2001 

(44 U.S.C. 3516 note) provides for 

agencies to review most disseminations 

of information to the public under 

guidelines established by each agency 

pursuant to general guidelines issued by 

the Office of Management and Budget 

(OMB). OMB’s guidelines were 

published at 67 FR 8452 (February 22, 

2002), and DOE’s guidelines were 

published at 67 FR 62446 (October 7, 

2002). DOE has reviewed today’s final 

rule under the OMB and DOE 

guidelines, and has concluded that it is 

consistent with applicable policies in 

those guidelines. 

K. Review Under Executive Order 13175 

Under Executive Order 13175, 

Consultation and Coordination with 

Indian Tribal Governments, 65 FR 

67249 (November 9, 2000), DOE is 

required to consult with Indian tribal 

officials in development of regulatory 

policies that have tribal implications. 

Today’s final rule does not have such 

implications. Accordingly, Executive 

Order 13175 does not apply. 

L. Review Under Executive Order 13211 

Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy, Supply, 

Distribution, or Use, 66 FR 28355 (May 

22, 2001) requires preparation and 

submission to OMB of a Statement of 

Energy Effects for significant regulatory 

actions under Executive Order 12866 

that are likely to have a significant 

adverse effect on the supply, 

distribution, or use of energy. A 

modification to the Replacement Fuel 

Goal under EPAct 1992 section 502(b)(2) 

does not require fleets, suppliers of 

energy, or distributors of energy to do or 

to refrain from doing anything. 

Consequently, DOE has concluded there 

is no need for a Statement of Energy 

Effects. 


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12060 Federal Register / Vol. 72, No. 50 / Thursday, March 15, 2007 / Rules and Regulations 

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

submit to Congress a report regarding 

the issuance of today’s Final Rule prior 

to the effective date set forth at the 

outset of this Final Rule. The report will 

state that it has been determined that 

the rule is not a ‘‘major rule’’ as defined 

by 5 U.S.C. 801(2). 

VIII. Approval by the Office of the 

Secretary 

The issuance of this Final Rule for the 

Replacement Fuel Goal modification has 

been approved by the Office of the 

Secretary. 

List of Subjects in 10 CFR Part 490 

Administrative practice and 

procedure, Energy conservation, Fuel 

economy, Gasoline, Motor vehicles, 

Natural gas, Penalties, Petroleum, 

Reporting, and recordkeeping 

requirements. 

Issued in Washington, DC, on March 6, 

2007. 

Alexander A. Karsner, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

■ For the reasons set forth in the 

Preamble, the Department of Energy is 

amending Chapter II of title 10 of the 

Code of Federal Regulations as set forth 

below: 

PART 490—ALTERNATIVE FUEL 

TRANSPORTATION PROGRAM 

■ 1. The authority citation for part 490 

is revised to read as follows: 

Authority: 42 U.S.C. 7191 et seq.; 42 U.S.C. 

13201, 13211, 13220, 13251 et seq. 

■ 2. In § 490.1 of subpart A, paragraph 

(b) is revised to read as follows: 

§ 490.1 Purpose and Scope. 

* * * * * 

(b) The provisions of this subpart 

cover: 

(1) The definitions applicable 

throughout this part; 

(2) Procedures to obtain an 

interpretive ruling and to petition for a 

generally applicable rule to amend this 

part; and 

(3) The goal of the replacement fuel 

supply and demand program 

established under section 502(a) of the 

Act (42 U.S.C. 13252(a)). 

■ 3. Subpart A is amended by adding 

§ 490.8 to read as follows: 

§ 490.8 Replacement fuel production goal. 

The goal of the replacement fuel 

supply and demand program 

established by section 502(b)(2) of the 

Act (42 U.S.C. 13252(b)(2)) and revised 

by DOE pursuant to section 504(b) of the 

Act (42 U.S.C. 13254(b)) is to achieve a 

production capacity of replacement 

fuels sufficient to replace, on an energy 

equivalent basis, at least 30 percent of 

motor fuel consumption in the United 

States by the year 2030. 

[FR Doc. E7–4324 Filed 3–14–07; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2007–27267; Directorate 

Identifier 2002–NE–40–AD; Amendment 39–

14991; AD 2007–06–10] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

plc RB211–524 Series Turbofan 

Engines 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The FAA is superseding an 

existing airworthiness directive (AD) for 

Rolls Royce plc (RR) RB211–524 series 

turbofan engines with certain part 

number (P/N) intermediate pressure 

compressor (IPC) stage 5 disks installed. 

That AD currently requires new reduced 

IPC stage 5 disk cyclic limits. This AD 

requires the same reduced IPC stage 5 

disk cyclic limits, requires removal from 

service of affected disks that already 

exceed the new reduced cyclic limit, 

and, removal from service of other 

affected disks before exceeding their 

cyclic limits using a drawdown 

schedule. This AD also exempts disks 

reworked to RR Service Bulletin (SB) 

No. RB.211–72–E182, Revision 1, dated 

July 30, 2004, and allows an on-wing 

eddy current inspection (ECI) on 

RB211–524G and RB211–524H series 

engines. This AD results from the 

manufacturer issuing a revised Alert 

Service Bulletin (ASB) to remove certain 

disks from applicability, and to allow an 

on-wing ECI on RB211–524G and 

RB211–524H series engines. We are 

issuing this AD to prevent failure of the 

IPC stage 5 disk, which could result in 

uncontained engine failure and possible 

damage to the airplane. 

DATES: This AD becomes effective April 

19, 2007. The Director of the Federal 

Register approved the incorporation by 

reference of certain publications listed 

in the regulations as of April 19, 2007. 

ADDRESSES: You can get the service 

information identified in this AD from 

Rolls-Royce plc, P.O. Box 31 Derby, 

DE248BJ, United Kingdom; telephone 

011–44–1332–242424; fax 011–44–

1332–249936. 

You may examine the AD docket on 

the Internet at http://dms.dot.gov or in 

Room PL–401 on the plaza level of the 

Nassif Building, 400 Seventh Street, 

SW., Washington, DC. 

FOR FURTHER INFORMATION CONTACT: Ian 

Dargin, Aerospace Engineer, Engine 

Certification Office, FAA, Engine and 

Propeller Directorate, 12 New England 

Executive Park, Burlington, MA 01803; 

telephone (781) 238–7178; fax (781) 

238–7199; e-mail: ian.dargin@faa.gov. 

SUPPLEMENTARY INFORMATION: The FAA 

proposed to amend 14 CFR part 39 with 

a proposed AD. The proposed AD 

applies to RR RB211–524 series turbofan 

engines with certain P/N IPC stage 5 

disks installed. We published the 

proposed AD in the Federal Register on 

July 11, 2006 (71 FR 39025). That action 

proposed to require: 

• Establishing new reduced IPC stage 

5 disk cyclic limits. 

• Removing from service affected 

disks that already exceed the new 

reduced cyclic limit. 

• Removing from service other 

affected disks before exceeding their 

cyclic limits, using a drawdown 

schedule. 

• Allowing optional inspections at 

each shop visit or an on-wing ECI to 

extend the disk life beyond the specified 

life. 

Examining the AD Docket 

You may examine the docket that 

contains the AD, any comments 

received, and any final disposition in 

person at the Docket Management 

Facility between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The Docket Office (telephone 

(800) 647–5227) is located on the plaza 

level of the Department of 

Transportation Nassif Building at the 

street address stated in ADDRESSES. 

Comments will be available in the AD 

docket shortly after the DMS receives 

them. 

Comments 

We provided the public the 

opportunity to participate in the 

development of this AD. We have 

considered the comments received. 

Request To Add a Note 

One commenter, Rolls-Royce plc, 

requests that we add a note, just above 

compliance paragraph (j)(5), that states: 

‘‘To qualify for maximum alleviation 

since last NDT inspection (see Table 5 

of this AD) it is recommended that discs 

be ECI inspected using paragraph 3.D. of 

the Accomplishment Instructions of RR 


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