Federal Register / Vol. 77, No. 166 / Monday, August 27, 2012 / Rules and Regulations 51701 

document so that we can contact you if 

we have questions regarding your 

submission. 

To submit your comment online, go to 

http://www.regulations.gov, click on the 

‘‘submit a comment’’ box, which will 

then become highlighted in blue. In the 

‘‘Keyword’’ box insert ‘‘USCG–2012– 

0774,’’ click ‘‘Search,’’ and then click on 

the balloon shape in the ‘‘Actions’’ 

column. If you submit your comments 

by mail or hand delivery, submit them 

in an unbound format, no larger than 

81⁄2 by 11 inches, suitable for copying 

and electronic filing. If you submit them 

by mail and would like to know that 

they reached the Facility, please enclose 

a stamped, self-addressed postcard or 

envelope. We will consider all 

comments and material received during 

the comment period and may change 

the rule based on your comments. 

Viewing Comments and Documents 

To view comments, as well as 

documents mentioned in this preamble 

as being available in the docket, go to 

http://www.regulations.gov, click on the 

‘‘read comments’’ box, which will then 

become highlighted in blue. In the 

‘‘Keyword’’ box insert ‘‘USCG–2012– 

0774’’ and click ‘‘Search.’’ Click the 

‘‘Open Docket Folder’’ in the ‘‘Actions’’ 

column. You may also visit the Docket 

Management Facility in Room W12–140 

on the ground floor of the Department 

of Transportation West Building, 1200 

New Jersey Avenue SE., Washington, 

DC 20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. We have an agreement with 

the Department of Transportation to use 

the Docket Management Facility. 

Privacy Act 

Anyone can search the electronic 

form of comments received into any of 

our dockets by the name of the 

individual submitting the comment (or 

signing the comment, if submitted on 

behalf of an association, business, labor 

union, etc.). You may review a Privacy 

Act notice regarding our public dockets 

in the January 17, 2008, issue of the 

Federal Register (73 FR 3316). 

Public Meeting 

We do not now plan to hold a public 

meeting. But you may submit a request 

for one using one of the four methods 

specified under ADDRESSES. Please 

explain why one would be beneficial. If 

we determine that one would aid this 

rulemaking, we will hold one at a time 

and place announced by a later notice 

in the Federal Register. 

Basis and Purpose 

The S41 Swingbridge across Wando 

River mile 10.0, Cainhoy, Berkeley 

County, South Carolina has a vertical 

clearance of 6 feet in the closed 

position. The operating schedule as 

published in 33 CFR 117.939 states the 

draw of the S41 bridge shall open on 

signal if at least 12 hours notice is given. 

This regulation has been in effect since 

1965. 

Local mariners have asked the Coast 

Guard to evaluate the operating 

schedule to determine if more frequent 

openings would improve the 

accessibility of the waterway to 

maritime navigation. An estimated 400 

recreational boats use the waterway in 

the local area. However, boaters upriver 

from the bridge have stated that the 

bridge’s low vertical clearance and 

requirement for 12-hours notice 

prevents boaters from accessing 

waterways, like Charleston harbor and 

the ocean, on the downriver side of the 

bridge. The South Carolina Department 

of Transportation has advised that 

approximately 1000 to 3000 vehicles per 

day cross this bridge. The Coast Guard 

anticipates daily bridge openings during 

this test a positive impact on navigation 

with the increased use of the waterway 

by vessel traffic. 

This deviation is effective from 8 p.m. 

on September 1, 2012 through 5 p.m. on 

December 31, 2012. The S41 

Swingbridge shall open on the hour and 

the half hour, 24 hours-a-day, seven 

days-a-week. 

Following the test deviation period, 

the Coast Guard will review the bridge 

logs from the bridge owner to evaluate 

the impact of this test on local marine 

traffic. The Coast Guard will also 

consider all comments and related 

materials submitted in response to this 

test deviation. The Coast Guard will 

then evaluate whether a permanent 

change to the operating schedule of the 

S41 Swingbridge is necessary, and 

under what conditions the bridge 

should open. 

In accordance with 33 CFR 117.35(e), 

the drawbridge must return to its regular 

operating schedule immediately at the 

end of the designated time period. This 

deviation from the operating regulations 

is authorized under 33 CFR 117.35. 

Dated: August 10, 2012. 

B.L. Dragon, 

Bridge Program Director, Seventh Coast 

Guard District. 

[FR Doc. 2012–20978 Filed 8–24–12; 8:45 am] 

BILLING CODE 9110–04–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 85, 86, 600, 1033, 1036, 

1037, 1039, 1065, 1066, and 1068 

[EPA–HQ–OAR–2010–0162; FRL–9720–9] 

EPA’s Denial of the Petition To 

Reconsider the Greenhouse Gas 

Emissions Standards and Fuel 

Efficiency Standards for Medium- and 

Heavy-Duty Engines and Vehicles 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Denial of petition to reconsider. 

SUMMARY: The Environmental Protection 

Agency (EPA or Agency) is denying the 

petition of Plant Oil Powered Diesel 

Fuel Systems, Inc. (‘‘POP Diesel’’) to 

reconsider the final rules establishing 

emissions standards to reduce 

greenhouse gas emissions from on-road 

heavy-duty vehicles. 

DATES: This denial is effective August 

27, 2012. 

ADDRESSES: EPA’s docket for this action 

is Docket ID No. EPA–HQ–OAR–2010– 

0162. All documents in the docket are 

listed on the http://www.regulations.gov 

Web site. Although listed in the index, 

some information is not publicly 

available, e.g., confidential business 

information (CBI) or other information 

whose disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically through 

http://www.regulations.gov or in hard 

copy at EPA’s Docket Center, Public 

Reading Room, EPA West Building, 

Room 3334, 1301 Constitution Avenue 

NW., Washington, DC 20004. This 

Docket Facility is open from 8:30 a.m. 

to 4:30 p.m., Monday through Friday, 

excluding legal holidays. The telephone 

number for the Public Reading Room is 

(202) 566–1744, and the telephone 

number for the Air Docket is (202) 566– 

1742. 

FOR FURTHER INFORMATION CONTACT: 

Steven Silverman, Office of General 

Counsel, Environmental Protection 

Agency, 1200 Pennsylvania Avenue 

NW., Washington, DC 20460; telephone 

number: (202) 564–5523; email address: 

silverman.steven@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Acronyms and Abbreviations. The 

following acronyms and abbreviations 

are used in this Decision. 

CAA Clean Air Act 

CO2 carbon dioxide 

EV electric vehicle 


pmangrum on DSK3VPTVN1PROD with RULES
51702 Federal Register / Vol. 77, No. 166 / Monday, August 27, 2012 / Rules and Regulations 

EPA Environmental Protection Agency 

FR Federal Register 

FCV fuel cell vehicle 

GHG greenhouse gas 

GVWR gross vehicle weight rating 

HD heavy-duty 

N2O nitrous oxide 

NHTSA National Highway Traffic Safety 

Administration 

POP Diesel Plant Oil Powered Diesel Fuel 

Systems, Inc. 

PHEV plug-in hybrid electric vehicle 

RFS Renewable Fuel Standard 

RIN Renewable Identification Number 

VMT vehicle miles travelled 

I. Introduction 

On September 15, 2011, the EPA 

issued final rules establishing standards 

limiting emissions of CO2, methane, 

nitrous oxide (N2O) and 

hydrofluorocarbons (greenhouse gases 

or GHGs) from on-road heavy-duty 

vehicles, including combination 

tractors, heavy-duty pickup trucks and 

vans, and vocational vehicles. 76 FR 

57106 (September 15, 2011). In this joint 

rulemaking the National Highway 

Traffic Safety Administration (NHTSA), 

on behalf of the Department of 

Transportation, issued rules for fuel 

consumption from these vehicles at the 

same time. Together these rules 

comprise a coordinated and 

comprehensive Heavy-Duty (HD) 

National Program designed to address 

the urgent and closely intertwined 

challenges of reduction of dependence 

on oil, achievement of energy security, 

and amelioration of global climate 

change. 

POP Diesel petitioned EPA to 

reconsider its greenhouse standards. 

Because the petition does not state 

grounds which satisfy the requirements 

of section 307(d)(7)(B) of the Act, and 

does not provide substantial support for 

the argument that the promulgated 

regulation should be revised, EPA is 

denying the petition. 

II. Standard for Reconsideration 

Section 307(d)(7)(B) of the Clean Air 

Act (CAA) states that: ‘‘Only an 

objection to a rule or procedure which 

was raised with reasonable specificity 

during the period for public comment 

(including any public hearing) may be 

raised during judicial review. If the 

person raising an objection can 

demonstrate to the Administrator that it 

was impracticable to raise such 

objection within such time or if the 

grounds for such objection arose after 

the period for public comment (but 

within the time specified for judicial 

review) and if such objection is of 

central relevance to the outcome of the 

rule, the Administrator shall convene a 

proceeding for reconsideration of the 

rule and provide the same procedural 

rights as would have been afforded had 

the information been available at the 

time the rule was proposed. If the 

Administrator refuses to convene such a 

proceeding, such person may seek 

review of such refusal in the United 

States court of appeals for the 

appropriate circuit. Such 

reconsideration shall not postpone the 

effectiveness of the rule. The 

effectiveness of the rule may be stayed 

pending such reconsideration, however, 

by the Administrator or the court for a 

period not to exceed three months.’’ 

Thus, for reconsideration to be 

mandated, a petition for reconsideration 

must show why the objection or claim 

could not have been presented during 

the comment period—either because it 

was impracticable to raise the objection 

during that time or because the grounds 

for raising the objection arose after the 

period for public comment but within 

60 days of publication of the final action 

(i.e. ‘‘the time specified for judicial 

review’’). To be of central relevance to 

the outcome of a rule, an objection must 

provide substantial support for the 

argument that the promulgated 

regulation should be revised. See 76 FR 

28318 (May 17, 2011) and other actions 

there cited. 

Because all of the objections or claims 

raised in POP Diesel’s petition could 

have been presented to EPA during the 

rulemaking, EPA is denying the request 

for reconsideration. EPA also finds that 

the petitioner has not provided 

substantial support for the argument 

that the promulgated regulation should 

be revised and is denying the request for 

reconsideration for that reason as well. 

III. POP Diesel’s Petition for 

Reconsideration 

POP Diesel filed a petition for 

reconsideration with EPA on November 

14, 2011 and supplemented this petition 

on February 12, 2012. The company 

produces equipment intended to be 

installed after-market on diesel engines 

to permit the engines to operate on 100 

percent untransestrified plant oil. 

February 12 Petition p. 12. The engine 

starts and shuts down on diesel from an 

original fuel tank during startup and 

shutoff but at all other times would run 

on 100 percent plant oil coming from an 

auxiliary tank. Id POP Diesel states that 

engines operated on vegetable oils with 

its systems incur ‘‘only a modest fuel 

consumption penalty’’ but would have 

superior GHG performance if evaluated 

on a full lifecycle basis. November 14, 

Petition p. 13; February 12 Petition p. 

22. 

The objection raised in POP Diesel’s 

petitions is that EPA failed to 

adequately consider the so-called 

rebound effect during the rulemaking. 

POP Diesel maintains that ‘‘[t]he GHG 

standards will have the effect of making 

diesel engines less expensive to operate 

on petroleum fuel, which may, in fact, 

spur demand and have the result of 

increasing overall energy consumption 

and likely, consumption of fossil fuels.’’ 

November 14, 2011 Petition p. 15. In its 

supplement to its original petition, POP 

Diesel elaborated on this objection, 

maintaining that the rules would 

increase GHG emissions from heavyduty vehicles due to aspects of the 

rebound effect not accounted for in 

EPA’s analysis. Specifically, POP Diesel 

maintains that EPA underestimated the 

direct rebound effect and that a revised 

estimate of the direct rebound effect 

would result in an increase in 

greenhouse gas emissions Also, POP 

Diesel maintains that there are indirect, 

‘‘embedded energy’’ (increased energy 

use as a result of additional goods and 

services produced) and ‘‘frontier’’ 

(creation of new, energy-intense 

products) rebound effects which EPA 

failed to examine, instead only 

analyzing direct effects in the form of 

estimated increase in vehicle miles 

travelled (and increases in GHG and 

criteria pollutant emissions associated 

with that increase). February 12, 2012 

Supplemental Petition p. 12. These 

objections are accompanied by a 

supporting declaration of Dr. Harry 

Duston Saunders (a published 

researcher in energy economics) 

likewise dated February 12, 2012. 

POP Diesel does not address why this 

objection could not have been raised 

during the public comment period, as 

required by section 307(d)(7)(B). EPA 

discussed the rebound effect at length in 

the proposed rule. See 75 FR 74152, 

74316–20 (November 30, 2010). The 

proposal included specific discussions 

of factors affecting the magnitude of the 

rebound effect, options for quantifying 

the effect (including aggregate estimates, 

sector-specific estimates, econometric 

estimates, and other modeling 

approaches), as well as quantified 

estimates of the effect which EPA 

thereupon applied in estimating the 

proposed rules’ impacts on GHG 

emissions, criteria pollutant emissions, 

as well as overall costs and benefits of 

the proposed program. Id. and 75 FR at 

74290, 74313; see also Regulatory 

Impact Analysis: Final Rulemaking to 

Establish Greenhouse Gas Emissions 

Standards and Fuel Efficiency 

Standards for Medium- and Heavy-Duty 

Engines and Vehicles, Docket #EPA– 

HQ–OAR–2010–0162–3634, pages 9–9 

through 9–18. EPA received comments 


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1EPA may permissibly respond to a request for 

reconsideration without triggering additional notice 

and comment opportunities for a petitioner or other 

entities. Coalition for Responsible Regulation v. 

EPA, No. 09–1322 (D.C. Cir. June 26, 2012) slip op. 

p. 39. 

2 Dr. Saunders cites Knittel, Automobiles on 

Steroids, for the proposition that ‘‘in the personal 

transportation sector of the United States, a rebound 

effect of 75% between 1980 and 2006 existing 

because most of the technical engine efficiency 

gains were offset by consumers choosing to take 

improvements in engine efficiency in the form of 

increased vehicle weight and substantial increases 

in average horsepower.’’ Saunders Affidavit para. 

14. The Knittel study does not attribute any fleet 

shifts to a rebound effect, and also discusses the 

light-duty vehicle sector exclusively. The study 

therefore has no apparent relevance to the heavyduty GHG rulemaking, or to a discussion of rebound 

effects. 

3The first analysis, from Cambridge Systematics, 

Inc., was commissioned by the National Academy 

of Sciences and uses a range of freight elasticities 

in the literature combined with technology cost and 

fuel saving scenarios to estimate the potential 

magnitude of the HD rebound effect. See 76 FR 

74328. The second analysis, conducted by NHTSA, 

is an econometric analysis that estimates short-run 

and long-run elasticities of annual VMT with 

respect to fuel cost per mile driven using data on 

national and state VMT and a variety of other 

variables such as GDP, the volume of imports and 

exports, and factors affecting the price of trucking 

services (e.g., driver wages). Id. at 57329. 

4The ‘‘Saunders study’’ discussed in the 

Saunders affidavit (Saunders Affidavit para. 31–36) 

was not presented to EPA during the public 

comment period, it reflects no expert peer review 

and, as Dr. Saunders acknowledges, examines the 

entire transportation sector rather than the mediumand heavy-duty vehicle sector covered under EPA’s 

rule. 

5The Saunders declaration does not provide any 

examples of potential ‘‘frontier’’ rebound effects 

from the heavy-duty GHG rule, besides ‘‘the rise of 

internet shopping’’ that allows people to buy 

products from distant locations instead of 

purchasing products locally. Increased internet 

shopping is a well established market trend, so we 

do not see how it could be reasonably attributed to 

the modest increase in truck fuel efficiency that our 

standards will bring about. Furthermore, there are 

many factors that have contributed to increased 

internet shopping, most notably the widespread use 

of computers and advances in internet applications, 

which took place and would likely continue to take 

place in the absence of any improvements in truck 

efficiency. 

6 Dr. Saunders cited only one published study 

quantifying indirect rebound effects (Druckman et 

al., 2011). Saunders affidavit para. 16. Although this 

UK-based study could offer insights into how to 

estimate indirect rebound effects in some contexts, 

the method may not be appropriate here for many 

Continued 

on its approach to the rebound effect 

and responded to them as part of the 

rulemaking. 76 FR at 57326–30; see also 

Response to Comments Document at 

14–24. It is therefore apparent that POP 

Diesel had the opportunity to present all 

of its objections regarding the rebound 

effect during the rulemaking. Indeed, 

POP Diesel properly acknowledges that 

its objections are ‘‘belate[d]’’. February 

Petition p. 4. 

A second reason that POP Diesel’s 

objections do not require EPA to 

reconsider the rule is that the 

declaration of Dr. Saunders is dated 

February 12, 2012, outside of the period 

specified for judicial review—i.e. 

November 11, 2011. Even if POP 

Diesel’s objections could not have been 

raised during the public comment 

period (which is not the case), the 

grounds for objection did not arise 

‘‘during the time specified for judicial 

review’’, as required by section 

307(d)(7)(B). 

POP Diesel also reiterates a number of 

arguments it already presented to EPA 

in its comments to the proposed rule. 

Specifically, the petition maintains that 

EPA should have evaluated all emission 

control technologies on a lifecycle basis 

(‘‘[i]n considering only tailpipe 

emissions, rather than the full lifecycle 

GHG emissions of a technology and fuel 

that would result from a wells-to-wheels 

analysis, the Regulations arbitrarily 

favor and disfavor some alternatives 

over others’’, February amended 

petition p. 7). EPA addressed these 

issues during the rulemaking. See 75 FR 

at 74198, 255–56 (proposal); 76 FR at 

57246–47 (final rule) and Response to 

Comment Document at 16–157. EPA’s 

proposal likewise addressed the issues 

of whether compliance with the 

standards should be measured on a 

tailpipe or lifecycle basis, and what if 

any incentives were appropriate for 

advanced technologies and alternative 

fuel vehicles. See 75 FR at 74198, 255– 

56. Consequently, these are not issues 

which EPA is compelled to reconsider 

under section 307(d)(7)(B), since these 

objections could have been and were 

raised during the public comment 

period on the proposed rule. EPA also 

rejects the substance of the arguments 

raised in the petitions.1

A. Direct Rebound Effect 

POP Diesel first maintains that EPA 

underestimated the extent of the direct 

rebound effect, and that assigning 

different estimates of rebound effects to 

different heavy-duty vehicle classes 

(medium-duty pickups and vans, 

vocational vehicles, and combination 

tractors) was arbitrary. Saunders 

Affidavit paras. 35–36.2 EPA explained 

its rationale for selecting VMT rebound 

values for these three categories of 

vehicles in both the proposed and final 

rules. In short, the values for vocational 

vehicles and combination tractors fall 

within the range of estimates presented 

in two available analyses of the HD 

rebound effect.3 See 76 FR 57326–330. 

For medium-duty pickups and vans, 

EPA applied the light-duty VMT 

rebound effect estimate from the final 

rule establishing GHG standards for 

MYs 2012–2016 light-duty vehicles. Id. 

at 57329. EPA reasonably did so since 

there were no estimates of the direct 

rebound effect for medium-duty pickup 

trucks and vans (class 2b and 3) cited in 

the literature, and these classes of 

vehicles are used for purposes more 

similar to large light-duty vehicles than 

the other heavy-duty vehicle categories. 

These values are based on the best 

available data and econometric 

methods 4 and reflect many of the 

components of the VMT rebound effect 

that POP Diesel alleges (mistakenly) that 

EPA ignored (e.g., shifts of freight 

shipments from other transportation 

modes to trucking). At proposal, we 

explicitly requested, but did not receive, 

comment on all of the rebound 

estimates and assumptions in our 

proposed rule. 75 FR at 74320. EPA 

continues to believe that its estimate of 

direct VMT rebound effect in the final 

rule is reasonable. 

B. Indirect Rebound Effects 

POP Diesel also maintains that EPA 

should account for the energy and GHG 

emissions impact associated with the 

so-called ‘‘indirect’’ rebound effects 

(distinct from the ‘‘direct’’ rebound 

effect). These effects could arise from 

the decline in fuel costs as a result of 

the rule, which could make goods and 

services transported by the U.S. trucking 

industry less expensive. In turn, less 

expensive goods and services could 

result in increased consumption of 

goods and service in the overall 

economy. Producing extra goods and 

services requires that more energy be 

used. This extra energy use can be 

thought of as ‘‘embodied’’ in the extra 

goods and services. Hence the term for 

this type of indirect rebound effect is 

the ‘‘embodied energy’’ rebound effect. 

The increased energy use from this type 

of indirect rebound effect could result in 

increased greenhouse gas emissions. 

Saunders Affidavit para. 46 Appendix 

A. A further indirect rebound effect 

unaccounted for, according to the 

petition, is the ‘‘frontier’’ rebound effect 

whereby energy efficiency gains enable 

creation of completely new products 

which are themselves energy intensive. 

Id. para. 26.5 POP Diesel maintains that 

these assorted indirect effects are of 

such magnitude as to create a ‘‘backfire’’ 

condition, negating all of the emission 

benefits of the rule. 

EPA is not aware of any data to 

indicate that the magnitude of indirect 

rebound effects, if any, would be 

significant for this rule. Research on 

indirect rebound effects is nascent. The 

magnitude of effects from our rule 

postulated in the Saunders affidavit has 

no support in the literature,6 reflects no 


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reasons. First, the U.S. economy and consumer 

behavior is likely to differ from other countries (e.g., 

Americans have different product and service 

preferences and our products and services have 

different levels of embedded energy). Similar data 

and models may not exist to replicate the UK study 

in a U.S.-context. Second, the study is designed to 

examine behavioral strategies (e.g., lowering 

thermostats, reducing food waste, and biking 

instead of using a car) rather than improving 

technology. Among other things, the study does not 

consider capital expenditures associated with 

energy savings that could dampen any increase in 

consumption of additional goods and services (e.g., 

our rule increases the cost of new vehicles, which 

offsets the fuel cost savings that trucking firms may 

pass along to shippers, which in turn, would 

dampen any decrease in product prices that 

shippers pass along to consumers). Third, the study 

does not consider the potential for economic 

restructuring in response to decreased energy 

consumption (i.e., it does not consider ‘‘general 

equilibrium’’ effects), which could lead to either 

lower or higher energy consumption as a result of 

our rule. Fourth, the authors recognize that there is 

a major limitation of the study: they have only a 

very small number of expenditure categories in 

their model and there is considerable disparity in 

GHG intensities of commodities within each 

category (p. 3578). Fifth, the study does not directly 

explore the market mechanism through which our 

rule could influence the amount of goods and 

services consumed since it focuses on energy 

efficiency improvements that more directly increase 

consumers’ disposable income rather than the more 

complex and indirect pathway where greater truck 

fuel efficiency may result in lower-priced goods and 

services. Finally, the authors do not attempt to 

quantify the additional benefits to consumers 

associated with increased consumption of goods 

and services, which would be important to consider 

if we were assessing the overall costs and benefits 

associated with potential indirect rebound effects 

from our rule. 

7POP Diesel’s statement that the rules arbitrarily 

assign zero emissions and zero fuel consumption to 

electric vehicles (February revised petition, p. 6) is 

also misplaced. In fact, compliance with the 

standards is measured identically for all mediumand heavy-duty vehicles and engines: at the 

tailpipe. See 76 FR at 57247. Electric vehicles have 

zero GHG emissions measured at the tailpipe. POP 

Diesel states further that the standards are arbitrary 

in the GHG-reducing weight given to some 

alternative technologies and fuels. POP Diesel’s 

complaint (February amended petition p. 6) that the 

rule provides incentives for use of certain advanced 

technologies such as hybrid electrification and 

hydrogen fuel cells questions legitimate policy 

choices unrelated to the issue of fuel use. 

8See 76 FR 57124. 

9Even so, the standards for medium- and heavyduty EVs and PHEVs measure performance based 

on tailpipe emissions exclusively. See 76 FR at 

57247. The MYs 2012–2016 standards for light-duty 

EVs and PHEVs do account for greenhouse gas 

emissions attributable to upstream electricity 

generation after a designated number of EVs and 

PHEVs are sold, but this upstream factor does not 

expert peer review, and in the end is 

speculative. It appears highly 

improbable that all of the GHG 

emissions benefits of this rule would be 

negated by putative indirect rebound 

effects. As discussed in the proposed 

and final rules, all of the fuel costs 

savings will not necessarily be passed 

through to the consumer in terms of 

cheaper goods and services. First, there 

may be market barriers that impede 

trucking companies from passing along 

the fuel cost savings from the rule in the 

form of lower rates; see 75 FR at 74320 

and 76 FR at 57329–30. Second, there 

are upfront vehicle costs (and 

potentially transaction or transition 

costs associated with the adoption of 

new technologies) that would partially 

offset some of the fuel cost savings from 

our rule, thereby limiting the magnitude 

of the impact on prices of final goods 

and services. Furthermore, there are 

additional benefits to consumers 

associated with increased consumption 

of goods and services, which would be 

important to consider if we were 

assessing the overall costs and benefits 

associated with potential indirect 

rebound effects from our rule. EPA thus 

does not accept this speculative 

assessment. 

C. Fuel-Based Rule Rather Than a 

Vehicle-Based Rule 

POP Diesel requests EPA to reevaluate the weight given to various 

alternative technologies and fuels 

according to a lifecycle approach, and to 

decouple fuel efficiency policy from 

GHG emissions policy. February 12 

Petition p. 2. In setting emissions 

standards for heavy-duty vehicles, EPA 

reasonably chose to consider the impact 

on GHG emissions of the fuels used by 

the different types of vehicles by 

measuring the tailpipe emissions of 

vehicles, including alternative fuel 

vehicles (which normally emit less GHG 

emissions than gasoline or dieselpowered vehicles).7 In a separate 

program, the Congressionally mandated 

Renewable Fuels Standard (RFS) 

program, there are strong incentives for 

use of renewable diesel fuels and other 

renewable fuels. See 76 FR at 57124. 

This program is specifically designed to 

mandate increasing volumes of 

renewable fuel use in transportation 

fuels, including renewable fuel used in 

heavy-duty diesel vehicles. The 

definition of renewable fuel includes 

thresholds for reductions in lifecycle 

greenhouse gas emissions, compared to 

petroleum fuel. For example, specified 

volumes of biomass-based diesel fuel 

must be used in the diesel 

transportation sector, and biomassbased diesel is defined in part as a 

diesel fuel that achieves a 50 percent 

reduction in lifecycle greenhouse 

emissions compared to baseline 

petroleum diesel fuel. POP Diesel points 

out that its product is not presently 

eligible to receive Renewable 

Identification Number (RIN) credits 

under that program, but this is an issue 

which is properly considered under the 

RFS program, which contains the 

mechanisms for determining whether a 

diesel fuel qualifies as a renewable fuel. 

EPA also does not accept the major 

premise of POP Diesel’s reconsideration 

petition and rulemaking comments. The 

company argues that it is arbitrary that 

EPA has not established greenhouse gas 

emission standards for heavy-duty 

vehicles premised on use of their 

technology and its fuel. Under such a 

standard, the GHG level of a vehicle 

using POP Diesel would be tailpipe 

emissions adjusted by a factor reflecting 

the claimed reduction in lifecycle GHG 

emissions to produce the POP Diesel 

fuel. See, e.g., November 14, 2011 

Petition for Reconsideration pp. 1–2 (‘‘If 

the Regulations did consider this 

technology, they could mandate much 

steeper reductions in greenhouse gas 

* * * emissions by requiring every 

engine and vehicle manufacturer of 

medium- and heavy-duty engines and 

vehicles to comply with a corporate 

average for such emissions’’). 

The heavy-duty vehicle and engine 

GHG standards are fuel neutral in that 

they do not themselves require or 

assume that a vehicle or engine will be 

operated on a particular type of fuel. If 

POP Diesel’s technology helps 

manufacturers reduce tailpipe GHG 

emissions, then it will have the same 

opportunities as any other technology 

that manufacturers will use to meet the 

standards. Moreover, POP Diesel has not 

correctly characterized the agencies’ 

consideration of the interaction between 

the RFS program and the heavy-duty 

GHG standards. As explained in the 

final rule, the tailpipe performance 

measurement of alternative fuels 

provides sufficient incentives for their 

use. While the agencies noted that 

incentives in the RFS pointed to a lack 

of a need for further incentives, the 

rule’s treatment of alternative fuels was 

not premised on each alternative fuel 

being covered by the RFS Standard.8

Indeed, other alternative fuels are 

similarly not covered by the RFS 

standard, such as liquefied natural gas, 

compressed natural gas, propane, 

hydrogen and electricity. 

Only where the vehicle or engine 

technology inherently demands a 

certain type of fuel do the standards 

account for that fuel use, by specifying 

the calculation procedure used to 

determine tailpipe emissions. This is 

the case with electric vehicles (EV), 

plug-in hybrid electric vehicles (PHEV), 

and hydrogen fuel cell vehicles, where 

the technology itself necessitates use of 

electricity rather than petroleum-based 

fuels.9 Unlike EVs, PHEVs, or FCVs, 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 77, No. 166 / Monday, August 27, 2012 / Rules and Regulations 51705 

reflect a single means of generating electricity and 

so differs from POP Diesel’s desired outcome, 

which is fuel specific. See 75 FR 25326, 25436–37 

(May 7, 2010). 

there is nothing inherent in a diesel 

engine that compels use of the POP 

Diesel product. Therefore, a standard 

premised on that product’s use would 

presuppose or require a market outcome 

which need not occur and would be 

infeasible and arbitrary. 

Even if EPA were to assume that POP 

Diesel’s claim of lifecycle emissions 

reductions are valid, and considered 

setting a vehicle emissions standard that 

assumed or required use of the POP 

Diesel technology and fuel, POP Diesel 

admits this would in fact lead to an 

increase in the actual GHG emissions 

from the vehicle. The only decrease in 

emissions would come from the claimed 

reduction in lifecycle GHG emissions 

that POP Diesel says would occur with 

use of their fuel. That would amount to 

adopting a vehicle emissions standard 

to promote a vehicle technology that 

does not reduce but instead increases 

the GHG emissions of the vehicle. The 

vehicle emissions standard would take 

that approach solely as a mechanism to 

mandate the use of a certain diesel fuel, 

based on emissions impacts associated 

with the fuel, not the vehicle. This 

would dramatically distort the purpose 

and structure of the vehicle emissions 

standard program, largely turning it into 

a de facto fuel program. There is no 

good reason to consider such a result 

here, especially where there already is 

a separate fuel based program, the RFS 

program, that is directly aimed at 

achieving the result POP Diesel seeks— 

a fuel program that achieves a reduction 

in lifecycle GHG emissions associated 

with the diesel fuel used by motor 

vehicles, through a mandate to use 

certain renewable diesel fuels. 

A further reason this heavy-duty rule 

does not regulate GHG emissions from 

a lifecycle perspective, or include 

explicit consideration of plant-based 

fuels like the one utilized by POP 

Diesel’s technology, is that it would no 

longer be possible to establish 

harmonized, performance-based tailpipe 

GHG emissions standards (EPA) and 

fuel efficiency standards (NHTSA). As 

discussed throughout the final rule, 

close coordination in this first heavyduty rule enabled EPA and NHTSA to 

promulgate complementary standards 

that appropriately allow manufacturers 

to build one set of vehicles to comply 

with both agencies’ regulations. See, 

e.g., 76 FR at 57107–108. This 

coordination was advocated by the 

President, id., widely supported by 

stakeholders, and provides benefits for 

industry, government, and taxpayers by 

increasing regulatory efficiency and 

reducing compliance burdens. 

D. Fleet-Wide Average Standards 

Finally, the petition maintains that 

EPA should impose corporate fleet 

averages for GHG emissions, asserting 

that EPA did so only for medium-duty 

engines and vehicles. Id. p. 23. In fact, 

the standards are effectively corporate 

averages. See EPA, Heavy-Duty Diesel 

Greenhouse Gas Response to Comment 

Document at p. 16–149—explaining that 

the rule allows averaging, banking, and 

trading of credits within the same 

‘‘averaging set’’, which means a 

manufacturer can comply through 

averaging across (for example) all of its 

vocational vehicles under 19,501 

pounds GVWR; or all of its Class 6 and 

7 vocational vehicles and tractors (that 

is, between all vehicles above 19,500 

pounds GVWR and less than 33,001 

pounds GVWR); or between all vehicles 

with GVWR greater than 33,000 pounds; 

or within the engine averaging sets 

(spark ignition engines, compressionignition light heavy-duty engines, 

compression-ignition medium heavyduty engines, and compression-ignition 

heavy heavy-duty engines). See sections 

1036.740(a) and 1037.740(a). In any 

case, this issue again was one which 

was presented at proposal and 

addressed in the final rule. See 75 FR at 

74250–54 (proposal) and 76 FR at 

57238–240 (final). Consequently, POP 

Diesel has again failed to show why its 

objection can be raised outside the 

period for public comment, and in any 

case is mistaken. CAA section 

307(d)(7)(B). 

Accordingly, because POP Diesel has 

not stated grounds requiring or 

justifying reconsideration under section 

307(d)(7)(B) EPA is denying its petition. 

Dated: August 17, 2012. 

Lisa P. Jackson, 

Administrator. 

[FR Doc. 2012–21032 Filed 8–24–12; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF TRANSPORTATION 

Federal Motor Carrier Safety 

Administration 

49 CFR Part 369 

[Docket No. FMCSA–2012–0020] 

RIN–2126–AB48 

Rescission of Quarterly Financial 

Reporting Requirements 

AGENCY: Federal Motor Carrier Safety 

Administration (FMCSA), DOT. 

ACTION: Withdrawal of direct final rule. 

SUMMARY: FMCSA withdraws its June 

27, 2012, direct final rule eliminating 

the quarterly financial reporting 

requirements for certain for-hire motor 

carriers of property (Form QFR) and forhire motor carriers of passengers (Form 

MP–1). After reviewing the adverse 

comment received from SJ Consulting 

Group in response to the direct final 

rule, the agency has determined that it 

would be inappropriate to allow the 

direct final rule to take effect. The 

FMCSA intends to publish a notice of 

proposed rulemaking in the near future 

proposing the elimination of the 

quarterly financial reporting 

requirements for Form QFR and Form 

MP–1. 

DATES: The direct final rule published at 

77 FR 38211, June 27, 2012 is 

withdrawn, effective August 27, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Vivian Oliver, Office of Research and 

Information Technology, Federal Motor 

Carrier Safety Administration, 1200 

New Jersey Ave. SE., Washington, DC 

20590; Telephone 202–366–2974; email 

Vivian.Oliver@dot.gov. 

SUPPLEMENTARY INFORMATION: 

I. Public Participation and Comments 

A. Viewing Comments and Documents 

To view comments, go to http:// 

www.regulations.gov/ 

#!docketDetail;D=FMCSA-2012-0020. If 

you do not have access to the Internet, 

you may also view the docket online by 

visiting the Docket Management Facility 

in Room W12–140 on the ground floor 

of the Department of Transportation 

West Building, 1200 New Jersey Avenue 

SE., Washington, DC 20590, between 9 

a.m. and 5 p.m. e.t., Monday through 

Friday, except Federal holidays. 

B. Privacy Act 

Anyone can search the electronic 

form of comments received into any of 

our dockets by the name of the 

individual submitting the comment (or 

signing the comment, if submitted on 

behalf of an association, business, labor 

union, etc.). You may review a Privacy 

Act notice regarding our public dockets 

in the January 17, 2008 issue of the 

Federal Register (73 FR 3316). 

II. Background 

On June 27, 2012, FMCSA published 

a direct final rule proposing to eliminate 

the quarterly financial reporting 

requirements for certain for-hire motor 

carriers of property (Form QFR) and forhire motor carriers of passengers (Form 

MP–1), if no adverse comments were 

received by July 27, 2012. After 


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