19372 Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules

DEPARTMENT OF ENERGY

Office of Energy Efficiency and

Renewable Energy

10 CFR Part 490

[Docket No. EE–RM–98–507]

RIN 1904–AA98

Alternative Fueled Vehicle Acquisition

Requirements for Private and Local

Government Fleets

AGENCY: Department of Energy (DOE).

ACTION: Advance notice of proposed

rulemaking and notice of public

hearings.

SUMMARY: The Department of Energy is

today publishing an advance notice of

proposed rulemaking, as required by the

Energy Policy Act of 1992 (the Act),

Pub. L. 102–486, that begins a process

to determine whether alternative fueled

vehicle acquisition requirements for

certain private and local government

automobile fleets should be

promulgated under the terms of section

507(g) of the Act. The establishment of

such an acquisition program is reliant

on whether this program is necessary for

achieving the Act’s replacement fuel

goals and whether this program will

enable the actual realization of these

goals. Thus, this notice requests

comments on the replacement fuel goals

set forth in section 502(b)(2) of the Act,

identifying the problems with achieving

the goals, assessing the adequacy and

practicability of the goals, and

considering all actions necessary to

meet the goals. Additionally, this notice

requests comments on whether DOE

should propose the inclusion of

alternative fueled urban bus acquisition

requirements for private and local

government fleets in conjunction with a

fleet requirement program that may be

established under section 507(g) of the

Act. This notice is intended to stimulate

comments that will inform DOE’s

decisions concerning future rulemaking

actions and non-regulatory initiatives to

promote alternative fuels and alternative

fueled vehicles.

DATES: Written comments (8 copies)

must be received by DOE by July 16,

1998. Where possible, commenters

should identify the specific section and

question number to which they are

responding.

Oral views, data, and arguments may

be presented at the public hearings,

which are scheduled as follows:

1. In Los Angeles, CA, beginning at 9:30

a.m. on May 20, 1998.

2. In Minneapolis, MN, beginning at

9:30 a.m. on May 28, 1998.

3. In Washington, DC, beginning at 9:30

a.m. on June 4, 1998.

The hearings will end after all persons

who have requested an opportunity to

speak have made oral presentations.

Requests to speak at any of the hearings

should be phoned to Andi Kasarsky,

(202) 586–3012, and received no later

than 4:00 p.m., May 18, 1998, for the

Los Angeles, CA, hearing; May 26, 1998,

for the Minneapolis, MN, hearing; and

June 2, 1998, for the Washington, DC,

hearing. Each oral presentation is

limited to 10 minutes.

ADDRESSES: The hearings will be held at

the following addresses:

1. Los Angeles, CA—Roybal Federal

Building, 255 E. Temple Street (at Los

Angeles Street), 2nd Floor Conference

Room, Los Angeles, CA.

2. Minneapolis, MN—U.S. Court House,

300 South 4th Street (at 3rd Avenue),

Skyway Conference Center (Room

259—2nd level), Minneapolis, MN.

3. Washington, DC—U.S. Department of

Energy, Room 1E–245, 1000

Independence Avenue, SW.,

Washington, DC 20585.

Written comments should be

addressed to: U.S. Department of

Energy, Office of Transportation

Technologies, EE–34, Docket No. EE–

RM–98–507, 1000 Independence

Avenue, SW., Washington, DC 20585,

telephone (202) 586–3012. Copies of the

public hearing transcripts, written

comments received, technical reference

materials mentioned in the notice, 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., SW.,

Washington, DC 20585, telephone (202)

586–3142, 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–RM–98–507.’’

For more information concerning

public participation in this rulemaking

proceeding, see section V of this notice

(Public Comment Procedures).

FOR FURTHER INFORMATION CONTACT:

Kenneth R. Katz, Office of Energy

Efficiency and Renewable Energy,

EE–34, U.S. Department of Energy,

1000 Independence Avenue, SW.,

Washington, DC 20585, afvdeployment@hq.doe.gov; or phone

(202) 586–9171.

Vivian S. Lewis, Office of the General

Counsel, GC–72, U.S. Department of

Energy, 1000 Independence Avenue,

SW., Washington, DC 20585.

For information concerning the public

hearings, requests to speak at a hearing,

submission of written comments, and to

obtain copies of materials referenced in

this notice, contact Andi Kasarsky, (202)

586–3012.

SUPPLEMENTARY INFORMATION:

I. Introduction

A. Authority

B. Program Background and Goals

C. Required Rulemaking

D. Law Enforcement Vehicle and Urban

Bus Optional Rulemakings

II. General Issues Relating to Replacement

Fuel Goals

III. Issues Related to Fleet Requirement

Determinations

IV. Issues Related to the Inclusion of Urban

Buses in a Fleet Requirement Program

V. Review and Analysis Requirements

VI. Public Comment Procedures

a. Participation in Rulemaking

b. Written Comment Procedures

c. Public Hearings

1. Procedure for Submitting Requests to

Speak

2. Conduct of Hearing

I. Introduction

A. Authority

The Energy Policy Act of 1992

(Pub. L. 104–486) authorizes DOE to

pursue a rulemaking concerning

alternative fueled vehicle acquisition

requirements for private and local

government fleets on two distinct

schedules. First, section 507(b) provides

for an early rulemaking, which was to

be completed by December 15, 1996. As

part of that rulemaking, section 507

(a)(3) of the Act required DOE to publish

an Advance Notice of Proposed

Rulemaking (ANOPR) to begin a

rulemaking process for determining

whether alternative fueled vehicle

(AFV) acquisition requirements for

private and local government fleets are

necessary to achieve the Act’s energy

security and other goals. 42 U.S.C.

13256(a)(3). If no rule was promulgated

by December 15, 1996, then sections

507(b)(3), (c), and (e) require a later

rulemaking to determine by January 1,

2000, whether vehicle acquisition

requirements are ‘‘necessary,’’ as

described in section 507(e). 42 U.S.C.

13256(b)(3), (c) and (e).

DOE published an ANOPR for the

purposes described in section 507(a)

and (b) on August 7, 1996. 61 FR 41032.

This notice was intended to stimulate

comments to assist DOE in making

decisions concerning future rulemaking

actions and non-regulatory initiatives to

promote alternative fuels and alternative

fueled vehicles. Three hearings were

held to receive oral comments on the

ANOPR. They were held on September

17, 1996, in Dallas, Texas; on September

25, 1996, in Sacramento, California; and

on October 9, 1996, in Washington, DC.

A total of 70 persons spoke at the three
Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules 19373

hearings, and 105 written comments

were received by November 5, 1996.

On April 23, 1997, DOE published a

Notice of Termination stating that DOE

would not promulgate regulations to

implement alternative fueled vehicle

requirements for certain private and

local government fleets according to the

early schedule of section 507(a)(1) of the

Act. 62 FR 19701. As required by

sections 507(b)(3), (c), and (e), DOE

today begins a rulemaking under section

507(g) of the Act to determine, no later

than January 1, 2000, whether

alternative fueled vehicle acquisition

requirements for private and local

government automobile fleets under the

later schedule of section 507(g) are

considered ‘‘necessary’’ to achieve the

Act’s ‘‘replacement fuel’’ goals. (A

‘‘replacement’’ fuel is the nonpetroleum portion of an ‘‘alternative

fuel’’ as those terms are defined in

section 301 of the Act. (42 U.S.C.

13211).)

Section 504(c) of the Act provides

additional, albeit limited, rulemaking

authority to develop and implement

programs, other than regulatory

alternative fueled vehicle acquisition

mandates, to meet the general program

goals set forth in section 502(a) of the

Act. (42 U.S.C. 13254(c).) Section 502(a)

describes goals to promote availability

of domestic replacement fuels to the

maximum extent practicable in order to

have the greatest impact in reducing oil

imports, improving the Nation’s

economy, and reducing greenhouse gas

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

predicate for using the rulemaking

authority under section 504(c) is a

determination that achievement of the

specific numerical goals in section

502(b)(2) would result in a ‘‘significant

and correctable’’ failure to meet the

general program goals in section 502(a).

Section 504(c) precludes DOE from

promulgating rules that would mandate:

production of alternative fueled

vehicles; vehicle marketing or pricing

practices, policies, or strategies; and

production or delivery of alternative

fuels. In preparing a notice of proposed

rulemaking following evaluation of

comments received in response to this

advance notice, DOE will be considering

whether to propose rules under section

504(c).

From prior rulemaking activities

under title V of the Act, DOE knows that

there are diverse interests with strongly

held views about the general program

goals of the Act and the role that

Government should play in achieving

those goals. Broad acceptance of final

rules setting forth an affirmative

program would be desirable and, to that

end, DOE may use a neutral and

experienced convener under the

Negotiated Rulemaking Act of 1990 to

assist DOE in determining whether to

develop proposed rules using consensus

rulemaking procedures. 5 U.S.C. 563.

B. Program Background and Goals

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. A virtual one-to-one

relationship exists between additional

gasoline and diesel fuel consumption

and America’s increased use of

imported oil. The gap between the

transportation sector’s demand for

petroleum and our domestic petroleum

production continues to widen. Today,

the U.S. consumes 4 million barrels per

day more than it produces for

transportation purposes alone; that gap

is projected to rise to 8 million barrels

per day by the year 2010. According to

the latest projections by the Energy

Information Administration (EIA), the

transportation sector will consume 15.8

million barrels per day of petroleum in

2010, if no significant changes are made

to usage patterns and vehicle efficiency.

About 8.4 million of these barrels are

projected to be used by light duty

vehicles. The transportation sector

represents one of the major sources of

energy vulnerability for American

society and the American economy

today.

U.S. dependence on imported

petroleum has also grown since the

Act’s enactment. In 1992, 41 percent of

total U.S. petroleum consumption was

derived from foreign sources. By 1996,

imports had increased to 46 percent.

EIA projects U.S. petroleum import

dependence to reach approximately 52

percent of consumption by 2000 and 60

percent of petroleum consumption by

2010. Congress enacted the Act, in part,

to address these energy security

concerns, many of which are more

critical now than at the time of passage.

Titles III, IV, V, and VI of the Act

contain provisions requiring DOE to

establish a variety of programs aimed at

displacing substantial quantities of oil

consumed by motor vehicles.

Title III sets forth mandatory

requirements for Federal fleet

acquisitions of alternative fueled

vehicles, which began in fiscal year

1993. Since that time, approximately

30,000 alternative fueled vehicles have

been acquired by the Federal fleet.

Federal agencies have gained

considerable experience with many

types of alternative fuels and alternative

fueled vehicles.

Title IV directs DOE to establish a

program to certify alternative fuel

technicians, acquire data about

alternative fuels and alternative fueled

vehicles, and establish a public

information program. DOE has

established a cooperative program with

the auto service industry and numerous

technical colleges to develop and

implement national standards for

certification of alternative fuel training

programs.

Title IV also includes programs

related to demonstrating the feasibility

of the commercial application of using

alternative fuels for urban buses and

other motor vehicles used for mass

transit. Since 1992, many fleets across

the country have begun replacing their

buses with alternative fueled buses.

Currently, alternative fueled transit

buses are operated in thirty-eight States.

According to the American Public

Transit Association and the Federal

Transit Association, more than 2,600

alternative fueled buses were in use in

1996. That number is estimated to

increase to about 4,500 in 1998.

Approximately 22 percent of new buses

on order for the January 1998 through

April 1998 time frame will be operated

on alternative fuels. In comparison, 14

percent of new buses ordered in 1996

operated on alternative fuels.

Over the last several years, DOE has

analyzed the costs and benefits of

alternative fuel and AFV use in the

transportation sector. A series of

technical reports recorded the results of

these analyses and is entitled

‘‘Assessment of Costs and Benefits of

Flexible and Alternative Fuel Use in the

U.S. Transportation Sector.’’ These

reports will be placed in the public

docket for this rulemaking in DOE’s

Freedom of Information Reading Room.

Section 502 requires DOE to establish

a program to promote development and

use of replacement fuels, especially

domestic replacement fuels, in light

duty motor vehicles. DOE is required to

focus on those replacement fuels having

the most impact in: Reducing oil

imports, improving the health of the

Nation’s economy, and reducing

emissions of greenhouse gases. DOE is

in the process of performing analytical

work to guide the design of this

replacement fuel demand and supply

program. Section 502(b) requires DOE to

assess, among other things, the

feasibility of producing adequate

replacement fuels to displace 10 percent

of U.S. motor fuel by 2000 and 30

percent by 2010. DOE has undertaken

such a study, the partial results of

which have been published by DOE’s

Office of Policy as Technical Report

Fourteen: Market Potential and Impacts

of Alternative Fuel Use in Light-Duty

Vehicles: A 2000/2010 Analysis. This
19374 Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules

analysis was conducted in 1994 under

a set of premises (i.e., estimated future

oil prices) that were more favorable to

alternative fuel use than the

expectations found in the Annual

Energy Outlook 1998 (DOE/EIA–

0383(98)). This report is available by

calling the National Alternative Fuels

Hotline at 1–800–423–1DOE or 703–

528–3500. A copy will be placed in the

docket file for this rulemaking.

The following key results and

conclusions emerged from the analysis

contained in this report:

• For the year 2000, ten percent

replacement of light duty motor fuel use

with alternative and replacement fuels

is feasible and appears likely with

existing practices and policies.

• Displacing thirty percent of light

duty motor fuel use by 2010 also

appears feasible, however, feasibility is

based on several assumptions that may

not be realized without additional

alternative fuel incentives.

• With a fully established refueling

infrastructure and sufficient vehicle

availability, market forces would

continue to support 30 percent use of

alternative fuels and would sustain even

higher levels as alternative fueled

vehicles assume an increasingly larger

share of the total light duty vehicle

population.

• In long-run equilibrium, making

alternative fuels and alternative fueled

vehicles available would provide an

estimated net annual economic benefit

of up to $10.3 billion in 2010. Much of

this benefit—$4.2 billion—consists of an

increase in consumer satisfaction from

the availability of new classes of

vehicles and less expensive fuels; the

remaining $6.1 billion reflects dollar

cost savings from alternative fuel use,

mainly through the reduced cost of fuel

imports.

• Benefits from reduced emissions of

criteria pollutants are estimated to be up

to $3.7 billion annually.

Although this analysis indicates that a

free market could sustain a large volume

of alternative fuel use, it does not

appear at the present that the market

will move toward such a scenario

without Government action. The report

states that in order to realize any

substantial use of alternative fuels by

2010, the Federal and/or State

governments will have to take steps

soon to encourage the increased use of

alternative fuels and vehicles.

DOE is also required by section 506 to

prepare a Technical and Policy Analysis

of various issues related to replacement

fuels and alternative fueled vehicles for

submission to the President and

Congress. On October 27, 1997, DOE

published a Notice of Availability and

Request for Comments (62 FR 55622) on

a proposed analysis on these issues,

prior to its final transmission to the

President and Congress. Comments were

due to DOE by January 26, 1998. Copies

of the proposed Technical and Policy

Analysis may be obtained from the

National Alternative Fuels Hotline, 9300

Lee Highway, Fairfax, VA 22301–1207,

(800) 423–1DOE, or electronically from

the Office of Energy Efficiency and

Renewable Energy’s Transportation

Technologies website at: http://

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

is required by section 506(c) to preserve

all comments received on the analysis

for use in required rulemaking

proceedings under section 507,

including the rulemaking, covered in

today’s notice, for determining whether

local government and private fleets

should be required to acquire alternative

fueled vehicles. Public comments on the

section 506 Technical Analysis can be

reviewed at DOE’s Freedom of

Information Reading Room under

Docket Number EE–NOA–97–506.

Currently, twelve written comments

have been received on the analysis.

The preliminary partial results of the

section 506 Technical Analysis indicate

that the potential use of replacement

fuels sustainable by the market could be

as high as 30 to 38 percent under

various scenarios and ultimately could

be greater than 50 percent. In order to

reach these levels of replacement fuel

use, major transitional impediments

would have to be overcome, including

changes in the relative fuel/vehicle

prices to consumers. Changes to the

price that customers pay for alternative

fueled vehicles and alternative fuels

may require the establishment of

additional financial, and non-financial,

incentives both for the end user and for

the vehicle and fuel providers.

For example, the analysis states that

the Act’s 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 enough to meet the

2010 goal.

If the 30 percent goal applied to year

2020, instead of 2010, the analysis states

that 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 sales in the

period from 2005 through 2010.

Under this scenario, the AFV

population in 2020 would be large

enough so that 30 percent of light duty

vehicle motor fuel would be

replacement fuel. This scenario is

believed to be more representative of

new vehicle technology market

introduction generally, than the growth

paths necessary to meet the Act’s

suggested goals. However, the draft

analysis indicates that it is unlikely that

the estimated growth in alternative

fueled vehicles and alternative fuel use

will occur solely due to the Federal,

State, local government, and fuel

provider alternative fueled vehicle

acquisition requirements of the Act. The

draft analysis suggests that new policies

may need to be established before these

projections of alternative fuel and

alternative fueled vehicle use can be

realized. These policies could result in

additional grant programs, budget

increases for existing grant programs,

additional financial and non-financial

incentives, additional excise tax

changes, and/or the establishment of

new programs.

In addition to the hearings, reports

and analyses required by Title V, DOE

held two stakeholder forums in 1997 for

the purpose of discussing the

replacement fuel goals, the potential

private and local government fleet

acquisition requirements, and the issue

of mandates versus incentives. These

forums took place on June 24, 1997, in

Long Beach, CA, and on November 19,

1997, in Dallas, TX. Issues discussed at

these forums included the current

availability and use of alternative fuels

and alternative fueled vehicles; existing

governmental incentives, both financial

and non-financial; taxes on alternative

fuels; alternative fuel economics; and

the need for additional programs and

incentives that will catalyze the

alternative fuels market. In preparation

for the Dallas forum, DOE produced a

‘‘Fleet Forum White Paper’’ that

summarized the current status of these

issues, characterized the types of

incentives and provided a basis for

discussion. This document will be

placed in the docket for this rulemaking

and can be reviewed at DOE’s Freedom

of Information Reading Room.

Pursuant to section 505 of the Act, 42

U.S.C. 13255, DOE is promoting

voluntary use of alternative fueled

vehicles through its Clean Cities

Program. Under this program, DOE joins

with local governments and

organizations in public/private

partnerships aimed at developing

markets for alternative fueled vehicles.
Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules 19375

The program aims to bring together

enough participants in each local area to

reach the necessary volume of

alternative fueled vehicle use to justify

installation of refueling infrastructure

and other joint facilities, as well as to

promote other forms of cooperation. As

of March 1998, 61 U.S. communities

have signed agreements to participate.

Title V also contains nondiscretionary alternative fueled vehicle

acquisition requirements. Sections 501

and 507(o) of the Act require certain

alternative fuel provider and State

government fleets to include increasing

percentages of alternative fueled

vehicles in their annual acquisitions of

new light duty vehicles. DOE published

a final rule to implement these vehicle

acquisition requirements on March 14,

1996. 61 FR 10621. As a result of these

requirements, alternative fuel provider

and State fleets have reported, to date,

the acquisition of approximately 5,000

alternative fueled vehicles to DOE. This

quantity is expected to increase after

additional reports are received and

tabulated.

The use of alternative fueled vehicles,

alternative fuels, and replacement fuels

has been steadily growing since 1992.

According to the EIA report entitled,

‘‘Alternatives to Traditional

Transportation Fuels 1996’’ (December

1997), the following estimates apply in

respect to the use of alternative fueled

vehicles, alternative fuels, and

replacement fuels:

◆ More than 380,000 alternative

fueled vehicles were in use in 1997; a

51 percent increase since 1992.

◆ An additional 50,000 alternative

fueled vehicles are expected to be in use

by the end of 1998.

◆ From 1992 to 1996, gasolineequivalent gallon consumption of

alternative and replacement fuels

increased by 76 percent, while

consumption of traditional fuels

increased just 10 percent.

◆ From 1992 to 1996, alternative and

replacement fuel consumption

increased from 2,106,000 to 3,707,000

billion gasoline-equivalent gallons,

while consumption of traditional fuels

increased from 134,000,000 to

148,000,000 billion gasoline-equivalent

gallons.

◆ United States consumption of

alternative fuels is expected to grow by

more than 45 million gasolineequivalent gallons from 1996 to 1998.

The availability of alternative fueled

vehicles from Original Equipment

Manufacturers (OEMs) has been

increasing steadily. Several types of

alternative fueled vehicles, including

light-, medium-, and heavy-duty

vehicles are available from OEMs.

Alternative fueled vehicles are available

from Chrysler, Ford, General Motors,

Honda, and Toyota. Manufacturers have

announced plans for new offerings of

alternative fueled vehicles in the next

few years. Both Chrysler and Ford

announced that they intend to produce

large numbers of flexible-fuel vehicles

(including sedans, minivans, and

compact pickup trucks) that are capable

of operating on E85, a blend of 85

percent ethanol and 15 percent gasoline,

and/or gasoline. Currently, available

model types include compact and fullsize pickup trucks; cargo and passenger

vans; minivans; compact sport utility

vehicles; delivery trucks; and

subcompact, compact, mid-size, and

full-size passenger cars. Available fuel

types include 85 percent ethanol (E85),

85 percent methanol (M85), compressed

natural gas (CNG), liquefied natural gas

(LNG), propane (liquefied petroleum gas

or LPG), and electricity.

C. Required Rulemaking

This advance notice of proposed

rulemaking is the first step in a required

rulemaking under section 507(g) of the

Act for determining whether local

government and private fleets (other

than alternative fuel providers subject to

section 501) should be required to

acquire alternative fueled vehicles. 42

U.S.C. 13257(g). A DOE decision to

impose alternative fueled vehicle

acquisition requirements on private and

local government fleets is dependent on

a determination that such requirements

are ‘‘necessary’’ to achieve the

replacement fuel goals of section

502(b)(2)(B), or as modified by DOE

under section 504 or 507(e), and that the

requirements would enable the actual

realization of these goals. If the

replacement fuel goals, as modified,

cannot be met by the imposition of these

acquisition requirements, the Act does

not permit DOE to go forward with such

a program.

Such a fleet mandate would cover

local government and private fleets

(excluding alternative fuel provider

fleets covered by section 501 of the Act)

of 20 or more light duty motor vehicles

(including passenger cars and trucks

under 8500 lbs. gross vehicle weight

rating), which are:

• Centrally fueled or capable of being

centrally fueled;

• Operated primarily within a

metropolitan statistical area with a

population of at least 250,000 according

to the 1980 census; and

• Owned, leased, operated or

otherwise controlled by an entity which

owns or operates 50 or more such

vehicles in the United States.

Various classes of light duty motor

vehicles are excluded from the basis for

determining coverage. Excluded

categories are listed in section 490.3 of

DOE’s final rule for State government

fleets and certain alternative fuel

providers. 10 CFR part 490. Appendix A

to subpart A of 10 CFR part 490

provides a list of the 125 metropolitan

statistical areas with a population of at

least 250,000, according to the 1980

Census.

The statutory authority for the

required rulemakings is described

below. Each may require a separate

rulemaking action, or may be combined

into a single rulemaking. Additionally,

a third optional rulemaking, as

described below in section D, may

require a separate rulemaking, or may be

included in this single rulemaking

action.

1. Advance Notice of Proposed

Rulemaking

Section 507(c) of the Act requires

DOE to publish an advance notice of

proposed rulemaking for the purposes

of: (a) evaluating progress toward the

goals of producing replacement fuels to

replace, on an energy equivalent basis,

at least 10 percent of motor fuel

consumption by the year 2000 and at

least 30 percent by the year 2010; (b)

identifying the problems with achieving

those goals; (c) assessing the adequacy

and practicability of those goals; and (d)

considering all actions necessary to

achieve those goals. Today’s notice is

issued to comply with this statutory

requirement.

2. Later Rulemaking

Sections 507(e) and (g) of the Act

require DOE to initiate a rulemaking to

determine if the statutory conditions for

a later mandate, beginning in model

year 2002 or thereafter, are met. In order

to determine that a mandate is

‘‘necessary,’’ section 507(e) of the Act,

42 U.S.C. 13257(e), requires that DOE

make the following findings by rule:

(a) The goal of replacement fuel use

described in section 502(b)(2)(B), or as

modified by section 504, is not expected to

be actually achieved by 2010 by voluntary

means or pursuant to Title V or any other law

without such a fleet requirement program,

taking into consideration the status of the

achievement of the interim goal described in

section 502(b)(2)(A); and

(b) Such goal is practicable and actually

achievable within periods specified in

section 502(b)(2) (or such other date as is

established under section 504) through

implementation of such a fleet requirement

program in combination with voluntary

means and the application of other programs

relevant to achieving such goals.
19376 Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules

Section 507(g) provides the following

alternative fueled vehicle acquisition

schedule for a program established by

this later rulemaking:

20 percent of the light duty motor

vehicles acquired in model year 2002;

40 percent of those acquired in model

year 2003;

60 percent of those acquired in model

year 2004; and

70 percent of those acquired in model

year 2005 and thereafter.

Under section 507(e)(2), these

percentages can be reduced by rule, to

no less than 10 percent. Additionally,

section 507(g)(2) allows DOE the option

of starting the acquisition schedule later

than model year 2002.

If DOE were eventually to determine

under section 507(f) that a fleet

requirement program is unnecessary,

DOE would be required by section 509

of the Act to submit to Congress

recommendations for possible

requirements or incentives applying to

fuel suppliers, vehicle suppliers, and

motorists that would achieve the Act’s

fuel replacement goals.

D. Law Enforcement Vehicle and Urban

Bus Optional Rulemakings

Section 507(k)(1) allows the Secretary,

by rule, to include fleets of law

enforcement vehicles in a fleet

requirement program established under

section 507(g), if it is determined that

this inclusion would contribute to

achieving the goal described in section

502(b)(2)(B) (or such other date as is

established under section 504). 42

U.S.C. 13257(k)(1). A DOE decision to

include law enforcement motor vehicles

in a fleet requirement program

established under section 507(g) is

dependent upon a determination that

this inclusion will not hinder the use of

motor vehicles for law enforcement

purposes. Only one rulemaking may be

initiated under section 507(k)(1). Under

section 507(k)(3), this rulemaking may

not occur unless a rulemaking is carried

out under section 507(g).

Many law enforcement agencies

currently are using alternative fueled

vehicles satisfactorily. In some cases,

alternative fuels can reduce life-cycle

operation costs for high-mileage patrol

vehicles. The operational characteristics

of many administrative law enforcement

vehicles create a good match with those

of alternative fueled vehicles. However,

DOE recognizes that many law

enforcement agencies have unique

operational practices and requirements

that would reduce opportunities for

alternative fueled vehicles. DOE is

interested in receiving comments as to

whether acquisition requirements for

alternative fueled law enforcement

motor vehicles should be included in a

fleet requirement program and how this

program should be structured, including

the program start date and acquisition

percentages.

Section 507(k)(2) allows the Secretary,

by rule, to include new urban buses, as

defined by the Environmental

Protection Agency (EPA), under title II

of the Clean Air Act, in a fleet

requirement program established under

section 507(g), if it is determined that

this inclusion would contribute to

achieving the goal described in section

502(b)(2)(B) (or such other date as is

established under section 504). 42

U.S.C. 13257(k)(2). An urban bus is

defined by EPA as:

A heavy-duty diesel-powered passengercarrying vehicle with a load capacity of

fifteen or more passengers and intended

primarily for intra-city operation, i.e., within

the confines of a city or greater metropolitan

area. Urban bus operation is characterized by

short rides and frequent stops. To facilitate

this type of operation, more than one set of

quick-operating entrance and exit doors

would normally be installed. Since fares are

usually paid in cash or tokens rather than

purchased in advance in the form of tickets,

urban buses would normally have equipment

installed for collection of fares. Urban buses

are also typically characterized by the

absence of equipment and facilities for long

distance travel, e.g., rest rooms, large luggage

compartments, and facilities for stowing

carry-on luggage. The useful life for urban

buses is the same as the useful life for other

heavy-duty diesel engines. 40 CFR 86.091–2.

A DOE decision to include new urban

buses in a fleet requirement program

established under section 507(g) is

dependent upon a determination that

this inclusion will be consistent with

energy security goals and the needs and

objectives of encouraging and

facilitating the greater use of such urban

buses by the public, taking into

consideration the impact of such

application on public transit entities.

Only one rulemaking may be initiated

under section 507(k)(2). Under section

507(k)(3), this rulemaking may not

occur unless a rulemaking is carried out

under section 507(g).

II. General Issues Relating to

Replacement Fuel Goals

As explained in Section I of this

notice, section 507(c) of the Act requires

DOE to publish an advance notice of

proposed rulemaking for the purposes

of: Evaluating progress toward the

replacement fuel goals of producing

replacement fuels to replace, on an

energy equivalent basis, at least 10

percent of motor fuels consumption by

the year 2000 and at least 30 percent by

the year 2010 (or as modified under

section 504); identifying the problems

with achieving those goals; assessing the

adequacy and practicability of those

goals; and considering all actions

necessary to achieve those goals.

Section 502(a) lays out a specific goal

for a ‘‘Replacement Fuel Supply and

Demand Program’’: To promote the

development and use in light duty

motor vehicles of domestic replacement

fuels to substitute for imported

petroleum motor fuels to the maximum

extent practicable. 42 U.S.C. 13252.

In designing the program, DOE is to

focus on those replacement fuels having

the most impact in reducing oil imports,

improving the health of the Nation’s

economy, and reducing emissions of

greenhouse gases. Section 502(b)(2)

further requires DOE to assess, among

other things, the feasibility of producing

adequate replacement fuels to displace

10 percent of U.S. motor fuel by 2000

and 30 percent by 2010. 42 U.S.C.

13252(b)(2).

DOE invites comments on the

following general issues related to

achieving the Act’s suggested

replacement fuel goals:

1. Can the goal of replacing 30 percent

of motor fuel consumption be achieved

by 2010? What are the problems with

achieving the goal?

2. If the 30 percent goal cannot be

achieved by 2010, then what is an

achievable goal in terms of percentage

and time frame?

3. What methods or criteria should

DOE use to assess the adequacy and

practicality of specific replacement fuel

goals (i.e., the 10 percent and 30 percent

targets) or for determining whether the

goals should be modified?

4. What type of a replacement fuels

program should DOE establish that

would maximize usage of alternative

fuels, replacement fuels, and energy

efficient vehicles? How should such a

program be structured and

implemented?

5. What types of programs could be

employed in combination with, or in

place of, mandated fleet AFV

acquisitions to help achieve the 30

percent replacement fuel goal in 2010?

6. What specific types of incentives,

should be employed to help achieve the

30 percent replacement fuel goal in

2010? What form should these

incentives take (e.g., financial, nonfinancial)? Who should benefit from

these incentives (e.g., consumers, fleet

operators, vehicle manufacturers, fuel

providers, equipment suppliers) and

how?

7. How should the potential for

dramatic changes in the price and

availability of petroleum (e.g., due to a

sharp curtailment in world petroleum
Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules 19377

supplies) be factored into the design of

a replacement fuels program?

8. How should DOE estimate the fuel

replacement impacts from other Federal

or State alternative fueled vehicle

mandates, voluntary commitments, use

of dual fueled vehicles (that operate

only part time on alternative fuels), and

other measures?

9. What methods are currently being

used by fleets for tracking the use of

alternative fuel in dual fueled vehicles?

How should DOE use this data to verify

alternative fuel use?

10. How should DOE encourage

alternative fuel use in dual fueled

vehicles?

11. What factors should DOE take into

account when estimating the impact of

replacement fuels on reducing oil

imports, improving the health of the

Nation’s economy, and reducing

greenhouse gas and other emissions?

III. Issues Related to Fleet Requirement

Determinations

Sections 507(e) and (g) require that

DOE publish a rule in the Federal

Register, no later than January 1, 2000,

for the purpose of determining whether

a fleet requirement for local government

and private fleets to acquire alternative

fueled vehicles is necessary. Such a

program shall be considered necessary if

the Secretary finds that:

(a) the goal of replacement fuel use

described in section 502(b)(2)(B) (or as

modified under section 504) is not

expected to be actually achieved by

2010 (or other such date as established

under section 504) by voluntary means

or pursuant to Title V or any other law

without such a fleet requirement

program; and

(b) the goal (or as modified under

section 504) is practicable and actually

achievable through implementation of

such a fleet requirement program in

combination with voluntary means and

the application of other programs

relevant to achieving the goal.

Section 507(e)(2) requires that the rule

published under section 507(g) also

must modify the goal described in

section 502(b)(2)(B) and establish a

revised goal pursuant to section 504 if

the Secretary determines that the 30

percent motor fuel replacement goal by

2010 is inadequate or impracticable, and

not expected to be achieved. The goal as

modified and established is applicable

in making these findings.

Under section 507(e)(2), if DOE

modifies the suggested 30 percent motor

fuel replacement by 2010 goal, it also

may modify the annual fleet acquisition

requirements with the minimum

percentage being no less than 10 percent

of new light duty vehicle acquisitions.

Likewise, section 507(g)(2) provides

that DOE may, by rule, establish a lesser

AFV acquisition requirement for any

model year and that DOE may establish

a fleet requirement program start date

later than 2002. However, DOE may not

establish acquisition percentages greater

than those in section 507(g)(1).

Regarding local government entities,

section 507(i)(1)(C) provides an

exemption for a local government entity

if it can demonstrate to DOE that a fleet

requirement program, under section

507(g), would pose an unreasonable

financial hardship on the entity. The

Act does not provide a similar

exemption for private fleets that may be

covered. However, for all fleets, sections

507(i)(1)(A) and (B) allow an exemption

if the fleet demonstrates that alternative

fueled vehicles that meet the normal

requirements and practices of the

principal business of the fleet owner are

not reasonably available for acquisition

or the alternative fuels that meet the

normal requirements and practices of

the principal business of the fleet owner

are not available in the area in which

the vehicles are to operated.

DOE seeks comment on the following

issues that may be relevant to any future

DOE decision to propose alternative

fueled vehicle acquisition requirements

for local government and private fleets:

1. If a fleet requirement program is

established, should the acquisition

percentages be the same as those

provided in section 507(g) for the

acquisition of new light duty motor

vehicles or should a different

acquisition schedule apply? If a

different schedule should apply, what

should the schedule look like (e.g.,

program start date, acquisition

percentages)?

2. If the Act’s suggested goal of

replacing 30 percent of the motor fuel

used by 2010 is impracticable and not

expected to be achieved, what should

the modified fuel replacement goal be in

terms of percentage replacement and the

year the goal is expected to be achieved?

3. What methods or criteria should

DOE use to determine the contribution

of a fleet requirement program towards

meeting the fuel replacement goal as

modified?

4. What types of programs should be

established, instead of a fleet

requirement program, that will result in

market penetration of alternative fueled

vehicles and alternative fuels to the

maximum extent practicable? And what

market penetration(s) would be possible

with the establishment of these

programs?

5. What types of voluntary and

incentive measures should be

undertaken, either in conjunction with

fleet AFV requirements or in lieu of

such mandates, such as a program that

awarded credits for the amount of

petroleum displaced or replaced, that

would encourage progress toward the

fuel replacement goals?

6. DOE is required by section 507(l) to

take into consideration the following

factors: energy security, costs, safety,

lead time requirements, vehicle miles

traveled annually, effect on greenhouse

gases, technological feasibility, energy

requirements, economic impacts

including impacts on fleets, workers,

and consumers, such as users of the

alternative fuels for other (nontransportation) purposes, and the

availability of alternative fuels and

alternative fueled vehicles.

What bearing or weighting factor, if

any, should these factors have on a DOE

determination as to whether it should

impose alternative fueled vehicle

acquisition requirements on local

government and private fleets?

IV. Issues Related to the Inclusion of

Urban Buses in a Fleet Requirement

Program

DOE seeks comment on the following

issues that may be relevant to any future

DOE decision to propose the inclusion

of alternative fueled urban bus

acquisition requirements for local

government and private fleets under a

fleet requirement program that may be

established under section 507(g) of the

Act:

1. What methods or criteria should

DOE use in determining whether the

inclusion of alternative fueled urban

buses in a fleet requirement program

under section 507(g) would contribute

to achieving the goal of section

502(b)(2)(B) (or other such goal as

modified by section 504)?

2. What methods or criteria should

DOE use in determining whether the

inclusion of alternative fueled urban

buses in a fleet requirement program

will be consistent with the energy

security goals and the needs and

objectives of encouraging and

facilitating the greater use of alternative

fueled buses by the public?

3. What factors should DOE take into

consideration when estimating the

impact on public transit entities of a

program requiring the acquisition of

alternative fueled buses?

4. If a fleet requirement program is

established, should requirements for the

acquisition of alternative fueled urban

buses apply to both local government

and private fleets? Or, should

requirements only apply to local

government fleets?

5. Should the acquisition percentages

be the same as those that apply to local
19378 Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Proposed Rules

government and private fleets for new

light duty vehicles under section 507(g)

or should a different acquisition

schedule apply? If a different schedule

should apply to the acquisition of

alternative fueled urban buses, what

should the schedule look like (e.g.,

program start date, acquisition

percentages)?

6. What types of exemptions and/or

exclusions should be included in such

a fleet requirement program?

V. Review and Analysis Requirements

DOE provided to the Office of

Information and Regulatory Affairs

(OIRA) in the Office of Management and

Budget a copy of this notice for

comment. At the proposal stage for this

rulemaking, DOE and OIRA will

determine whether this rulemaking is a

significant regulatory action under

Executive Order 12866, Regulatory

Planning and Review, 58 FR 51735 (Oct.

4, 1993). Were DOE to propose

alternative fueled vehicle acquisition

requirements for local government and

private fleets, the rulemaking could

constitute an economically significant

regulatory action, and DOE would

prepare and submit to OIRA for review

the assessment of costs and benefits

required by section 6(a)(3) of Executive

Order 12866. Other procedural and

analysis requirements in other

Executive Orders and statutes also may

apply to such future rulemaking action,

including the requirements of the

Regulatory Flexibility Act, 5 U.S.C. 601

et seq.; the Paperwork Reduction Act, 44

U.S.C. 3501 et seq.; and the Unfunded

Mandates Act of 1995, Pub. L. 104–4;

and the National Environmental Policy

Act, 42 U.S.C. 4321 et seq.

VI . Public Comment Procedures

A. Participation in Rulemaking

DOE encourages the maximum level

of public participation possible in this

rulemaking. Individual fleet operators;

representatives of trade groups; local

governments; consumers of fleet

services; vehicle manufacturers; fuel

providers, including producers;

distributors and service station

operators; associations; States or other

governmental entities; and others are

urged to submit written comments on

the proposal. DOE also encourages

interested persons to participate in the

public hearings to be held at the times

and places indicated at the beginning of

this notice.

DOE has established a period of 90

days following publication of this notice

for persons and organizations to

comment on this advance notice of

proposed rulemaking. All public

comments, public hearing transcripts,

and other docket material will be

available for review and copying in the

DOE Freedom of Information Reading

Room at the address shown at the

beginning of this notice. The docket file

material will be filed under ‘‘EE–RM–

98–507.’’

B. Written Comment Procedures

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. Where possible, commenters

should identify the specific section and

question number to which they are

responding.

Comments (8 copies) should be

labeled both on the envelope and on the

documents, ‘‘Fleet AFV Acquisition

Requirements Rulemaking (Docket No.

EE–RM–98–507),’’ 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 the

subsequent stages of the rulemaking

process.

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. DOE will make its

own determination with regard to the

confidential status of the information or

data and treat it according to its

determination.

C. Public Hearings

1. Procedure for Submitting Requests to

Speak

The dates, times and places of the

public hearings are indicated at the

beginning of this notice. DOE invites

any person who has an interest in these

proceedings, or who is a representative

of a group or class of persons having an

interest, to make a request for an

opportunity to make an oral

presentation at the public hearings.

Requests may be telephoned to the

telephone number given at the

beginning of this notice. The person

making the request should give a

telephone number where he or she may

be contacted. Persons will be notified by

DOE as to the approximate time they

will be speaking.

Each person is requested to submit 8

copies of his/her statement at the

registration desk prior to the beginning

of the hearing. In the event any person

wishing to testify cannot meet this

requirement, that person may make

alternative arrangements by calling

(202) 586–3012 in advance.

2. Conduct of Hearing

DOE reserves the right to select the

persons to be heard at the hearings, to

schedule the respective presentations,

and to establish the procedures

governing the conduct of the hearings.

Each presentation is limited to 10

minutes.

A DOE official will be designated to

preside at the hearings. The hearings

will not be judicial or evidentiary-type

hearings, but will be conducted in

accordance with the Administrative

Procedure Act, 5 U.S.C. 553, and section

501 of the DOE Organization Act, 42

U.S.C. 7191. At the conclusion of all

initial oral statements, each person who

has made an oral statement will be

given the opportunity to make a rebuttal

or clarifying statement, subject to time

limitations. Any further procedural

rules regarding proper conduct of the

hearings will be announced by the

presiding official.

Transcripts of the hearings will be

made and the entire record of this

rulemaking, including the transcripts,

will be retained by DOE and made

available for inspection at the DOE

Freedom of Information Reading Room

as provided at the beginning of this

notice. Any person may purchase a copy

of the transcripts from the transcribing

reporter.

Issued in Washington, DC, on April 8,

1998.

Dan W. Reicher,

Assistant Secretary, Energy Efficiency and

Renewable Energy.

[FR Doc. 98–10239 Filed 4–16–98; 8:45 am]

BILLING CODE 6450–01–P