Daily Rules, Proposed Rules, and Notices of the Federal Government
On September 15, 2011, NHTSA issued a final rule creating fuel efficiency standards for medium- and heavy-duty vehicles (“heavy-duty rule”) (76 FR 57106).
NHTSA received two petitions from POP Diesel. The first petition was dated November 15, 2011, and was received by the agency shortly thereafter. The second petition was dated February 12, 2012, and was received by the agency on February 27, 2012. Both petitions from POP Diesel were styled as petitions for reconsideration of the heavy-duty rule. Under 49 CFR part 553, a petition for reconsideration must be received within 45 days of the publication of a final rule; a petition received after that date is considered to be a petition for issuance, amendment or revocation of a rule under 49 CFR part 552,
In its petition, POP Diesel argued that NHTSA did not specifically consider pure vegetable oil, and POP Diesel's proprietary technology to enable its usage, as a feasible technology in medium- and heavy-duty vehicles. POP Diesel claimed that this, as well as a failure to consider the rebound effect,
POP Diesel made the following specific arguments in support of its request for amending the standards:
1. The standards should have considered GHG emissions on a life-cycle basis, rather than focusing on tailpipe GHG emissions only. If the agencies had considered life-cycle GHG emissions, they would have apportioned credits to certain technologies and fuels differently.
2. The standards did not take into account technology which POP Diesel designs, engineers, manufacturers, and sells, which would enable a diesel engine to operate on pure vegetable oil fuel, and if they had, the agencies could have considered an alternative regulatory approach of imposing a “manufacturer GHG emissions average, like the corporate average fuel economy standards in place for light duty vehicles.”
3. The standards do not accomplish their purpose of reducing greenhouse gas (GHG) emissions because the GHG standards fundamentally regulate fuel efficiency, and increasing fuel efficiency creates a “rebound effect,” which the agencies did not adequately consider as part of their final rule analysis.
To address these concerns, POP Diesel specifically requested that the agency revise the final standards by doing the following:
A. “De-couple fuel efficiency policy from GHG emissions policy;”
B. “Impose a corporate fleet average for GHG emissions on all classes of manufacturers of engines and vehicles as the most effective way to ramp down such emissions across the medium- and heavy-duty market.”
C. Re-evaluate “the weight the Agencies give to various alternative technologies and fuels according to a [life-cycle] approach;”
D. Revise its analysis of the impact of the standards, in terms of GHG emissions, due to the “rebound effect,” given information presented by POP Diesel;
E. “Recognize 100 percent plant oil as a viable renewable diesel engine fuel eligible to receive Renewable Identification Number (`RIN') credits under the Renewable Fuels 2 standard;”
F. “Grant POP Diesel's application for a RIN pathway for 100 percent plant oil derived from jatropha oil feedstock;”
The remainder of POP Diesel's petition contained background information on challenges that POP Diesel says pure vegetable oil has faced in the marketplace, regarding which the petitioner is involved in litigation. NHTSA does not believe that these portions of the petition necessitate a response, as they do not directly relate to or support POP Diesel's petition for rulemaking.
Additionally, POP Diesel's requests regarding obtaining a Renewable Identification Number for plant oil (Requests E and F above) cannot be directed at NHTSA, given that they pertain to EPA's regulations implementing the Renewable Fuel Standard.
NHTSA notes that POP Diesel has requested the agency to revise the “GHG standards” throughout its petition.
The following section will consider POP Diesel's requests, to the extent that they appeared to be directed at NHTSA, in turn.
If POP Diesel meant to argue that the agencies should have chosen to regulate GHG emissions from a life-cycle perspective, or one that included consideration of plant-based fuels like the one utilized by POP Diesel's technology, rather than setting harmonized, performance-based fuel efficiency standards (NHTSA) and tailpipe GHG emissions standards (EPA), then the request is primarily directed at EPA, but NHTSA notes the following in response.
As discussed throughout the final rule, close coordination in this first heavy-duty rule enabled EPA and NHTSA to promulgate complementary standards that allow manufacturers to build one set of vehicles to comply with both agencies' regulations, as envisioned by the President. This coordination was widely supported by stakeholders and provided benefits for industry, government, and taxpayers by increasing regulatory efficiency and reducing compliance burdens. The harmonized structure of the final rule is also consistent with Executive Order 13563.
Second, as stated above, NHTSA's statutory obligation is to create and administer a fuel efficiency improvement program—the agency does not have the option of
And finally, to the extent that POP Diesel argued that fuel efficiency and GHG emissions are not related because of the rebound effect, NHTSA disagrees. Even if it somewhat decreases the degree of the connection, the rebound effect does not make the connection between improved fuel efficiency and reduced GHG emissions any less real. POP Diesel has not demonstrated otherwise.
POP Diesel argued that the agency should have accounted for the “feasibility of equipping engines to operate on 100 percent untransesterified plant oil,” and that if it had, it would have concluded that it should “regulate GHG emissions [by imposing] a manufacturer GHG emissions average, like the corporate average fuel economy standards in place for light duty vehicles * * *.”
As discussed above, for this first regulatory phase of the medium- and heavy-duty vehicle fuel efficiency improvement program, NHTSA has adopted a fuel-neutral approach based on measurement of fuel consumption through measurement of tailpipe CO
POP Diesel also mentioned EPA's Renewable Fuel Standards, and stated that because “pure plant oil is not eligible for the RFS,” therefore the final rule does “not provide any incentive for the use of 100 percent plant oil or an engine specially equipped to run on this fuel.”
NHTSA recognizes the potential benefits of increasing the use of any fuel type that reduces the nation's dependence on petroleum. As the President noted in his March 30, 2011 “Blueprint for a Secure Energy Future,”
POP Diesel's technology allows the use of fuels that it states are less carbon-intensive than other fuels, and POP Diesel argued in its petition that by considering only tailpipe rather than life-cycle GHG emissions of technologies and fuels, the agencies arbitrarily favor certain technologies and fuels and disfavor others. While reducing GHG emissions is a direct outcome of improving the fuel efficiency of the medium- and heavy-duty on-road fleet, the task that Congress gave to NHTSA was specifically to improve fuel efficiency. Therefore, any consideration that NHTSA may give to GHG emissions in general, and life-cycle GHG emissions in particular, is in the context of that directive. The final rule is performance-based and does not dictate particular technology. As the agency noted in the final rule,
As POP Diesel noted, the agency calculates the fuel consumption performance of engines and heavy-duty pickup trucks and vans by measuring tailpipe CO
This approach makes it unnecessary to distinguish among alternative fuel types in setting the standards, and this first phase of NHTSA's medium- and heavy-duty regulation does not include reductions in GHG emissions that do not translate directly to fuel consumption. Even if this were not the case, NHTSA believes that POP Diesel's claims regarding the commercial viability of pure vegetable oil and POP Diesel's proprietary technology to enable its usage in medium- and heavy-duty vehicles are speculative.
NHTSA recognized in the rule that this uniform approach to fuels may not take advantage of potential additional energy and national security benefits of increasing fleet percentages of alternative-fueled vehicles. More alternative-fueled vehicles on the road would arguably displace petroleum-fueled vehicles, and thereby increase both U.S. energy and national security by reducing the nation's dependence on foreign oil. However, for the reasons discussed above, the agency determined that the benefits of a harmonized initial program outweighed those potential benefits for this first phase of heavy-duty vehicle and engine standards.
NHTSA continues to believe that the current fuel-neutral performance measurement is the most appropriate treatment of alternative fuels for this first phase of the heavy-duty fuel efficiency standards. As stated in the final rule, the agency intends to revisit this issue in the future to evaluate whether the fuel-neutral approach continues to provide greater benefits than alternative approaches.
POP Diesel argued that due to the rebound effect, the final standards will in fact increase total GHG emissions beyond what would have occurred in the absence of the standards, rather than achieving the agencies' stated reductions in CO
NHTSA notes that its statutory obligation is to create and administer a fuel efficiency improvement program—the agency does not have the option of
NHTSA believes that its estimates of the increased use of different classes of trucks that are likely to result from the improvements in their fuel efficiency required by the rule are based on sound data and reliable econometric methods. Moreover, the agency is confident that these estimates reflect the various components of the direct rebound effect that POP Diesel alleges they ignore, because the measures of aggregate nationwide truck use from which they are derived fully incorporate historical shifts of freight shipments from other transportation modes to trucking, continuing reorganization of freight logistics toward increased reliance on trucking services, and shifts to more distant sources of supply for raw materials and longer deliveries of finished goods to final markets. The agency's estimates also incorporate the historical response of the use of trucking services to measures of economic activity that generate demands for shipping of raw materials and finished products, including aggregate economic output, foreign trade, and retailing. As the agencies acknowledged in their analysis, however, research on the magnitude of the rebound effect for heavy-duty vehicles has been limited;
NHTSA also notes that any increases in economy-wide energy consumption and GHG emissions resulting from indirect rebound effects cannot reasonably be ascribed to the requirement that vehicle manufacturers achieve higher fuel efficiency levels. If the indirect effects that cause those increases were included in the rulemaking analysis, however, they would undoubtedly add significantly to the economic benefits from the rule. Responses to lower-cost trucking services, such as consumers' use of savings from lower prices of goods that utilize trucking services for their production and distribution to purchase other products that embody energy, as well as any increases in multi-factor productivity or frontier rebound impacts stemming from reduced truck energy consumption and lower shipping costs, represent important sources of
For purposes of the final standards, we believe that the agency's analysis of the rebound effect represents the best available estimate of the increases in commercial truck use that may result from increases in their fuel efficiency, and the extent to which these increases in use will offset the fuel savings (and thus, CO
In consideration of the foregoing, NHTSA is denying the POP Diesel Petition. In accordance with 49 CFR part 552, this completes the agency's review of the petition for rulemaking.
49 U.S.C. 32902; delegation of authority at 49 CFR 1.95.