55622 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Notices

of encouraging students to pursue

careers in nuclear-related fields. The

DOE provides such support to ensure

that an adequate supply of highly

qualified, well-trained scientific and

technical professionals are available to

meet current and future research and

development needs.

The DOE will solicit applications

from nonprofit and not-for-profit

organizations with university

associations that are experienced in

academic interactions and relationships.

The applying organizations should have

some knowledge and familiarity with

the Department’s nuclear engineering

research and development interests and

the historical relationship with the

universities involved in nuclear science

and engineering education. The

successful applicant will be expected to:

(1) Provide information and application

material to all qualified individuals; (2)

receive, review and evaluate candidate

applications; (3) arrange for practicum

work and study opportunities at

selected laboratory facilities; (4) provide

approved payments to students and

universities; (5) hold periodic reviews of

fellows’ progress with advisors and

university coordinators; (6) prepare and

review program budgets; (7) prepare

annual reports; and (8) provide program

and manpower information to the

public, to appropriate congressional

offices and other interested parties.

We anticipate that the proposed

financial assistance award will be a fiveyear effort. The estimated cost for the

five year period is anticipated to be

$4,000,000. One agreement will be

awarded with five (5) one-year budget

periods estimated to start on or about

June 1, 1998. The successful recipient

will advertise, evaluate and award DOE

fellowships under the Nuclear

Engineering/Health Physics Fellowship

& Scholarship Program.

Complete solicitation packages will be

available from DOE, hicago Operations

Office as mentioned above. The

complete solicitation package with

information on application preparation,

evaluation procedures and criteria, the

extent of Government participation in

the Cooperative Agreement to be

awarded, and other required data will

be available upon request during the

time the Solicitation is open. All eligible

sources may submit an application

which will be considered. Applications

must be submitted to the DOE-Chicago

Operations Office no later than

December 4, 1997.

Issued in Chicago, Illinois on October 15,

1997.

J.D. Greenwood,

Acquisition and Assistance, Group Manager.

[FR Doc. 97–28400 Filed 10–24–97; 8:45 am]

BILLING CODE 6450–01–P

DEPARTMENT OF ENERGY

Office of Energy Efficiency and

Renewable Energy

[Docket No. EE–NOA–97–506]

Proposed Technical and Policy

Analysis on Replacement Fuels and

Alternative Fuel Vehicles

AGENCY: Office of Energy Efficiency and

Renewable Energy, Department of

Energy (DOE).

ACTION: Notice of availability and

request for comments.

SUMMARY: The Department of Energy is

today publishing this notice of

availability of a proposed analysis, as

required by section 506 of the Energy

Policy Act of 1992, on issues relating to

replacement fuels and alternative fuel

vehicles. The Department is requesting

public comment on the proposed

analysis prior to submission of the final

report to the President and Congress. A

short summary of the proposed analysis

is included in this notice.

DATES: Written comments (5 copies)

must be received by the Department by

January 26, 1998.

ADDRESSES: Copies of the proposed

Technical and Policy Analysis (which is

approximately 75 pages long, singlespaced) may be obtained from the

National Alternative Fuels Hotline, 9300

Lee Highway, Fairfax, Va. 22031–1207,

(800) 423–1DOE, or electronically from

the Office of Energy Efficiency and

Renewable Energy’s Transportation

Technologies website at: http://

www.ott.doe.gov, under the Rules and

Legislation section (http://

www.ott.doe.gov/office.rules.html).

Written comments (5 copies) are to be

submitted to the U.S. Department of

Energy, Office of Transportation

Technologies, EE–34, Docket No. EE–

NOA–97–506, 1000 Independence,

Avenue S.W., Washington, D.C. 20585,

telephone (202) 586–3012.

Commenters are requested to provide

a supplemental electronic copy of

comments (1 copy), if possible, to

facilitate the posting of comments on

the Department’s website. These

optional electronic versions of

comments should be stored in common

text or word processor formats, and

saved on a pc-compatible 3.5’’ diskette

and mailed to the address above; or

emailed directly to afv-deployment

@hq.doe.gov. Electronic versions are

considered supplemental only—the

Department is not able at this time to

guarantee the inclusion in the docket of

comments provided only in electronic

format.

FOR FURTHER INFORMATION CONTACT: Mr.

Paul McArdle, Program Manager, Office

of Energy Efficiency and Renewable

Energy (EE–34), U.S. Department of

Energy, 1000 Independence Avenue,

S.W., Washington, DC 20585, email: afvdeployment@hq.doe.gov, or phone (202)

586–9171.

SUPPLEMENTARY INFORMATION:

I. Purpose

II. Summary of Findings of Technical and

Policy Analysis

III. Availability of Proposed Technical and

Policy Analysis

IV. Public Comment Procedures

I. Purpose

Section 506(c) requires DOE to seek

and consider public comments on the

draft Technical and Policy Analysis on

issues relating to replacement fuels and

alternative fuel vehicles prior to its final

transmission to the President and

Congress. DOE may revise the Analysis

prior to such final submission in light

of comments received. DOE is also

required by section 506(c) to preserve

all comments received on the Analysis

for use in required rulemaking

proceedings under section 507,

including rulemaking to consider

alternative fuel vehicle acquisition

requirements for private and municipal

fleets. In addition, DOE is in the process

of devising a Replacement Fuel Supply

and Demand Program under section

502. Comments received on the

proposed Technical and Policy Analysis

could be very useful in designing this

program.

II. Summary of Findings of Technical

and Policy Analysis

Energy Security Concerns

The geopolitical context surrounding

energy security has changed enormously

since the oil shocks of the 1970s, with

the end of the Cold War, the

Organization of Petroleum Exporting

Countries (OPEC) in disarray, and the

cementing of U.S. security ties to the

most important oil exporting nations.

Unfortunately, these developments have

engendered a complacency on the part

of the American public not unlike that

which preceded previous oil shocks.

Historically, periods of low prices have

been followed by steep price spikes, a

pattern that could well be repeated in

coming years.
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Notices 55623

In contrast to the current geo-strategic

environment, economic realities and

trends seem to be recreating many of the

preconditions for a potential oil shock

in the U.S. sometime in the future.

Economic growth in the Pacific rim is

giving rise to a growth in world oil

demand which could well lead to a

short-supply situation within the next

five to ten years. The world’s oil

resources are as concentrated as ever in

the OPEC nations, notably in the Persian

Gulf. DOE’s Energy Information Agency

(EIA) projects that by 2010, OPEC’s

market share is likely to reach the levels

of the 1970s, as its share of world

exports grows from 41 percent in 1993

to 53 percent in 2010.

The costs to the U.S. economy from a

future oil price shock could be

enormous. Based on analyses of

previous oil shocks, a number of recent

studies have estimated the

macroeconomic impacts as reducing

U.S. economic activity by an average of

over 2 percent per year for three to four

years or more, which translates into

GNP reductions in the range of six

hundred billion dollars over three years,

up to possibly $3 trillion over fifteen

years if the lost economic growth were

not subsequently made up.

Unlike other energy using sectors,

which have introduced substitute fuels

and fuel switching flexibility since the

oil shocks of the 70s and 80s, the

transportation sector remains

overwhelmingly dependent on

petroleum based fuels (approximately

97.5 percent of transportation energy

coming from petroleum) and on

technologies that provide virtually no

flexibility. The transportation sector

currently accounts for approximately

two-thirds of all U.S. petroleum use and

roughly one-fourth of total U.S. energy

consumption.

Substitution of petroleum-based

transportation fuels (gasoline and

diesel) by non-petroleum-based fuels

(‘‘replacement fuels,’’ including

alternative fuels such as electricity,

ethanol, hydrogen, liquefied petroleum

gas, methanol, and natural gas) could be

a key means of reducing the

vulnerability of the U.S. transportation

sector to disruptions of petroleum

supply. Centrally-fueled fleets are

probably critical to the transportation

sector’s transition to alternative fuels

and vehicles. Early introduction of

alternative fuels in these fleets is more

feasible since they generally refuel at a

central facility and operate within a fuel

tank’s driving range of that central

facility. Accordingly, fleets feature

prominently in Title V of EPACT, which

aims to displace substantial amounts of

petroleum based motor fuel with

alternative fuels.

Since EPACT was enacted in 1992,

transportation petroleum consumption

has risen from 10.3 million barrels per

day to 10.7 million barrels per day in

1994. EIA projects this consumption to

rise to 14.0 million barrels per day by

2010. U.S. dependence on imported

petroleum has also grown since EPACT

enactment. In 1992, 41 percent of total

U.S. petroleum consumption was

derived from foreign sources. By 1994,

imports had increased to 45 percent.

EIA projects U.S. petroleum import

dependence to reach approximately 54

percent of consumption by 2000 and 57

percent of petroleum consumption by

2005.

In that dependence of U.S. autos and

trucks on imported oil was one of the

major driving forces behind

Congressional passage of EPACT, the

imperatives are even stronger now than

at the time of passage.

Progress Toward Achieving the Goals

Described in Sec. 502(b)(2)

Section 502(b)(2) of EPACT suggests

tentative goals of displacing 10 percent

of transportation fuel with replacement

fuels by the year 2000 and displacing 30

percent by the year 2010. DOE is making

steady progress in carrying out the

provisions of EPACT Title V and related

programs, which should yield

measurable results in alternative fuel

and AFV usage in the future. DOE

supports and coordinates the Federal

Fleet Program for acquisition of

alternative fuel vehicles (AFVs), which

had put over 25,000 AFVs into the

federal fleet by the end of fiscal year

1996. DOE’s Clean Cities Program

promotes voluntary commitments and

coordinated action by the key groups

within participating city regions for

installation of alternative fuel

infrastructure and acquisition of

vehicles. As of August 1997, 54 cities

and over a thousand stakeholder

organizations were participating. DOE is

also carrying out the rulemaking and

analytical activities prescribed by

EPACT Title V, including its assessment

of the technical and economic feasibility

of reaching the 10 percent and 30

percent goals. The Research,

Development and Demonstration

program has been instrumental in

fostering technology development in its

two spheres, Advanced Vehicle

Propulsion Technologies and

Alternative Fuels Research and

Demonstration. The latter is now

turning its focus to alternative fuels

infrastructure technology. DOE is also

involved with the Environmental

Protection Agency (EPA) in Clean Air

Act programs that promote use of

advanced technology vehicles,

including alternative fuel vehicles, for

use in ozone non-attainment areas.

Many of the programs authorized by

EPACT have not been in place long

enough to allow a credible assessment

of program impacts. The statutory

requirement for this Technical and

Policy Analysis actually precedes the

start of implementation for some of the

EPACT programs.

Actual and Potential Role of

Replacement Fuels and AFVs in

Reducing Oil Imports

While DOE modeling suggests that the

potential use of replacement fuels in the

U.S. is very high, by 1996 the

transportation sector has barely

scratched the surface of this potential.

The actual use of replacement fuels in

1996 in the U.S. is estimated by EIA to

be about 4.6 billion gallons gasoline

equivalent (or 3.1 percent of total

highway transportation fuel). Of this,

4.2 billion equivalent gallons was

oxygenates blended into gasoline (2.9

percent of highway fuel) and 323

million equivalent gallons was

alternative fuel use by AFVs (0.2

percent of highway fuel). The

preliminary partial results of DOE’s

study of the feasibility of reaching the

goals suggested by sec. 502(b) indicate

that the potential use of replacement

fuels sustainable by the market could be

as high as 30 to 38 percent in 2010

under various scenarios and could

ultimately be nearly double that.

In order to reach such levels of

alternative fuel use, however, major

transitional impediments would have to

be overcome, including changes in

relative fuel/vehicle prices to

consumers. For example, the EPACT

suggested goals of displacing 10 percent

of transportation fuels in the year 2000

and 30 percent in the year 2010 would

require that AFV sales—

• Grow to between 35 and 40 percent

of total new light-duty vehicle sales by

1999 to meet the 2000 goal; and

• Stay in the range of 30 to 38 percent

to build an AFV population sufficiently

large to meet the 2010 goal.

Even to meet a 30 percent goal for

year 2020, AFV growth would have to—

• Double every year between 1995

and 2000, going from approximately

30,000 to 500,000 sales per year;

• Increase by 50 percent per year to

4,000,000 in the period from 2001

through 2005; and

• Remain at a constant 32 percent of

total light-duty vehicle (LDV) sales in

the period of 2005 through 2010.

Under this scenario, the AFV

population in 2020 (ten years later than
55624 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Notices

the EPACT 30 percent goal) would be

large enough so that 30 percent of LDV

motor fuel would be replacement fuel

(alternative fuels plus oxygenates used

in conventional vehicle fuel). This

alternative scenario is believed to be

more representative of new vehicle

technology market introduction

generally, than the growth paths

necessary to meet the unmodified

EPACT goals but would still be

enormously ambitious.

Analysis indicates that currently

authorized Federal, state and local AFV

programs could displace approximately

220,000 barrels per day of motor fuel or

roughly 3 percent of the LDV

transportation fuel use projected by EIA

for 2010, while replacement fuels in the

form of oxygenates could contribute an

additional 4.8–6.7 percent of LDV motor

fuel during this period. The gap

between these volumes and those

necessary to reach or approach the

EPACT sec. 502(b)(2)(B) goal of 30

percent fuel displacement by 2010

would have to be met by AFV use by

motorists not covered by these

programs, that is, largely by the general

public.

Examination of international policy

experience shows EPACT fleet programs

to be a unique approach. Nonetheless,

experience of other countries’ programs

does provide the following lessons:

• Spillover into voluntary use of

alternative fuels and AFVs in nonmandated sectors is likely to be

determined by the relative economic

costs and benefits during each stage of

the transition, including (at least for

dedicated AFVs) some differential to

compensate for future uncertainty and

for the operational disadvantages of

dedicated AFVs.

• Merely putting in place novel and

limited infrastructure networks is likely

to be insufficient in generating high

levels of spillover to non-mandated

motorists, even in conjunction with

cognizance of societal benefits and

potential future widespread availability.

Applying these lessons to the U.S.

environment suggests that changes in

the overall economics, access and

convenience factors (or the perception

of such imminent changes) will be

necessary preconditions for AFV

penetration in the general public. Such

changes could occur in various ways,

including policy induced changes,

cyclical price swings or market

disruptions.

Experience of other countries also

suggests that the political will to

support alternative fuel programs is

greatest when oil prices are at peak

levels. When incentives are most critical

to sustaining alternative fuel

momentum, at the low end of the oil

price cycle, governments have often

been least committed.

Actual and Potential Availability of

Replacement Fuels and AFVs

Alternative fuel vehicle technologies

are available for the principal

alternative fuels believed most likely to

play major parts in any transition to

substantial alternative fuel use. Alcohol,

liquefied petroleum gas (LPG), and

natural gas vehicle technologies are

sufficiently developed for such vehicles

to be introduced into the market on

large scales. Electric vehicle technology

per se is also close to market-ready, but

battery cost and range probably limit

penetration to select market niches for

the next five to ten years. Hybrid

electric, fuel cell and hydrogen vehicle

technologies are in various stages of

development and could play significant

roles in the future.

A number of types of vehicles are

currently available for purchase from

original equipment manufacturers

(OEMs) by the public and fleets, but not

the whole range of vehicles for each of

the alternative fuels.

• Passenger cars are available for use

with 85 percent alcohol/15 percent

gasoline mixtures or any mixtures down

to straight gasoline, at the same price as

the same conventional model.

• A minivan will soon be available

for 85 percent ethanol use.

• Pick-up trucks, vans and mini-vans

are available from OEMs for CNG use.

A full sized sedan is available for

dedicated CNG operation and others

may follow. Costs for dedicated CNG

vehicles are generally $3000–$5000

more than conventional models.

• CNG vehicles (bi-fuel and

dedicated) may also be obtained by

conversions of conventional vehicles by

many small conversion firms.

• Electric vehicles are now available,

mostly sub-compact and small pickup

models.

Although alternative fuel refueling

sites have been proliferating in recent

years, none of the alternative fuels are

currently available at retail for vehicle

refueling in adequate networks to

support widespread use. Adequate

refueling sites could be available as a

transition proceeds but would involve

additional capital costs.

All of the major alternative fuels are

available at national and regional levels

in volumes sufficient for transportation

use at levels significantly greater than

the current levels. While this available

supply includes both domestic

production and imports, domestic

supply will be adequate to serve AFV

needs for coming years. If alternative

fuel use were to approach the levels

suggested by the EPACT 30 percent

goal, market pressures could change the

split between domestic and import

supply. Natural gas, ethanol and

electricity have the greatest potential for

domestic production to meet large-scale

transportation use. LPG and methanol

could be available in adequate

quantities either domestically or

internationally.

Key Issues and Perspectives

While available evidence indicates

that substantial spillover from EPACT

Title V programs into household AFV

acquisitions is unlikely in the absence

of some economic incentive to

households to make the shift, such

incentive might occur in any one of a

number of ways. It would not

necessarily have to represent a

government incentive program.

An oil price rise could well cause

dramatic changes in relative prices

between gasoline and a number of

alternative fuels, resulting in natural

fuel-switching if the conditions enabling

motorists to switch fuels are in place.

Comparative historical movements in

relative prices for alternative fuels and

their feedstocks show clear divergences

in price movements from crude oil and

gasoline, particularly for electricity,

ethanol and methanol. There is probably

no way of reliably assessing the impact

of a future oil price rise on the

effectiveness of EPACT programs until

such an event occurs. On the other

hand, it does appear possible to infer

from prior experience that a price spike

is unlikely to result in major fuel

switching in the transportation sector in

the absence of certain preconditions

relating to the availability of AFVs and

alternative fuel infrastructure, which

EPACT Title V begins to address. It

should be noted that most of the fuel

switching in Brazil and the Netherlands,

the two countries where AFV programs

have been most effective, occurred after

an oil shock which had been preceded

by more modest programs promoting the

alternative fuel to which the country

partly switched after the shock.

EPACT also provides incentives to

restrain rising oil demand before it leads

to a run-up in oil prices of the nature

of those discussed above. EPACT

programs could also reduce the

likelihood or magnitude of a future oil

shock in another way. One potential

benefit of developing a fuel switching

capability is the potential to alter the

behavior of primary fuel suppliers. If

viable competing fuels are available, the

likelihood of a restriction of oil supplies

could be diminished. EPACT has the

potential to shorten the time lag
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Notices 55625

1While the U.S. share of world oil imports and

its importance in the world oil market are likely to

be less in the next century than in the 1970s and

80s, U.S. leadership in alternative transportation

fuel policy and technology development could well

catalyze similar developments in other importing

countries.

between an oil price shock and the oil

use reductions following it and to

magnify such reductions in the key

transportation sector, where reductions

have been small compared to other

sectors. The perceived potential of the

U.S. to introduce alternatives in the

event of an oil price increase, may

dampen the price increase sought by oilexporting countries in the event of a

supply disruption.1

It is also possible that a well designed

EPACT-initiated process of fuel

switching could avoid or reduce the

magnitude of problems such as

inflation, involved with the relatively

abrupt technological transitions in

transportation that historically follow

major oil shocks and which have also

characterized historical fuel switches.

Alternative fuel transportation systems

could be more fully ripe for widespread

deployment and the American public

more amenable to fuel switching as a

result of EPACT fleet programs and DOE

RD&D programs.

Despite the many uncertainties, it

preliminarily appears that the programs

authorized by Congress in EPACT will

fall substantially short of the year 2010

goal of 30 percent. DOE may need to

modify that goal under EPACT sec. 504,

possibly by rolling back the target dates.

EPACT provides ample flexibility for

DOE to so scale back the ambitious

statutory goals rather than to adopt

draconian policies. At the same time,

DOE understands that many are

concerned over what is perceived as

EPACT’s excessive reliance on

mandates rather than economic

incentives.

III. Availability of Proposed Technical

and Policy Analysis

The Technical and Policy Analysis

required by EPACT Section 506 is

available in a draft report for pubic

review and comment. Copies of the draft

analysis, written comments, and any

other docket material received may be

read and copied at the DOE Freedom of

Information Reading Room, U.S.

Department of Energy, Room 1E–190,

1000 Independence Ave., S.W.,

Washington, D.C. 20585, telephone 202–

586–6020 between the hours of 8:30

a.m. and 4:00 p.m. Monday through

Friday except Federal holidays. The

docket file material will be filed under

‘‘EE–NOA–97–506 ’’. An electronic

version of the proposed Technical and

Policy Analysis and electronically

compatible portions of the docket

material will be available from the

Office of Transportation Technologies’s

website at: http://www.ott.doe.gov,

under the Rules and Legislation section

(http://www.ott.doe.gov/

office.rules.html). Additional copies of

the proposed Technical and Policy

Analysis may be obtained from the

National Alternative Fuels Hotline and

Data Center, P.O. Box 12316, Arlington,

Va. 22209, (800) 423–1DOE, (703) 528–

3500 (local), Fax: (703) 528–1953.

IV. Public Comment Procedures

The Department of Energy encourages

the maximum level of public

participation in review and comment of

the proposed Technical and Policy

Analysis. The Department has

established a comment period of 90

days following publication of this notice

for persons to provide comment. The

public comment period closes on

January 26, 1998.

All public comments and other docket

material will be available for review in

the DOE Freedom of Information

Reading Room at the address shown at

the beginning of this notice. The docket

material will be filed under ‘‘EE–NOA–

97–506.’’

Interested persons are invited to

participate in this proceeding by

submitting written data, views or

arguments with respect to the subjects

set forth in this notice. Instructions for

submitting written comments are set

forth at the beginning of this notice and

below.

Written comments (5 copies) should

be labeled both on the envelope and on

the documents, ‘‘Section 506 Technical

and Policy Analysis (Docket No. EE–

NOA–97–506),’’ and must be received

by the date specified at the beginning of

this notice. All comments and other

relevant information received by the

date specified at the beginning of this

notice will be considered by DOE.

In addition, commenters are requested

to provide a supplemental electronic

copy of comments (1 copy), if possible,

to facilitate the posting of comments on

the Department’s website. These

optional electronic versions of

comments should be stored in common

text or word processor formats and

saved on a pc-compatible 3.5′′ diskette

and mailed to the address above; or

emailed directly to afv-deployment

@hq.doe.gov. Electronic versions are

considered supplemental only—the

Department is not able at this time to

guarantee the inclusion in the docket of

comments provided only in electronic

format.

Pursuant to the provisions of 10 CFR

1004.11, any person submitting

information or data that is believed to be

confidential and exempt by law from

public disclosure should submit one

complete copy of the document and 3

copies, if possible, from which the

information believed to be confidential

has been deleted. The Department will

make its own determination with regard

to the confidential status of the

information or data and treat it

according to its determination.

Issued in Washington, DC, on September 2,

1997.

Brian T. Castelli,

Chief of Staff, Energy Efficiency and

Renewable Energy.

[FR Doc. 97–28401 Filed 10–24–97; 8:45 am]

BILLING CODE 6450–01–P

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

[Docket No. AC97–185–000]

Aluminum Company of America;

Notice of Filing

October 21, 1997.

Take notice that on September 25,

1997, Aluminum Company of America

(Alcoa), filed a request on behalf of its

wholly-owned subsidiaries Tapoco, Inc.

(Tapoco) and Yadkin, Inc. (Yadkin), for

approval of a change in the method of

depreciating fixed assets. Specifically,

Alcoa proposes to change from a

composite depreciation method for

fixed assets to a traditional straight-line

depreciation method. The proposed

change in depreciation method is for

accounting purposes only, effective

January 1, 1998.

Alcoa states that it is attempting to

standardize and streamline its financial

systems, which will include automating

the fixed asset records of Tapoco, Inc.

and Yadkin, Inc.

Any person desiring to be heard or to

protest said application should file a

motion to intervene or protest with the

Federal Energy Regulatory Commission,

888 First Street, N.E., Washington, D.C.

20426, in accordance with Rules 211

and 214 of the Commission’s Rules of

Practice and Procedure (18 CFR 385.211

and 385.214). All such motions or

protests should be filed on or before

November 20, 1997. Protests will be

considered by the Commission in

determining the appropriate action to be

taken, but will not serve to make the

protestants parties to the proceeding.

Any person wishing to become a party

must file a motion to intervene. Copies