[Federal Register Volume 79, Number 37 (Tuesday, February 25, 2014)]
[Notices]
[Pages 10601-10602]
[FR Doc No: 2014-03980]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE-2014-11]

Petition for Exemption; Summary of Petition Received

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of petition for exemption received.

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SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of 14 CFR. The purpose of this notice is to
improve the public's awareness of, and participation in, this aspect of
the FAA's regulatory activities. Neither publication of this notice nor
the inclusion or omission of information in the summary is intended to
affect the legal status of the petition or its final disposition.

DATES: Comments on this petition must identify the petition docket
number involved and must be received on or before March 17, 2014.

ADDRESSES: You may send comments identified by Docket Number FAA-2010-
0134 using any of the following methods:
     Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your
comments electronically.
     Mail: Send comments to the Docket Management Facility;
U.S. Department of Transportation, 1200 New Jersey Avenue SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590.
     Fax: Fax comments to the Docket Management Facility at
202-493-2251.
     Hand Delivery: Bring comments to the Docket Management
Facility in

Room W12-140 of the West Building Ground Floor at 1200 New Jersey
Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. Using the search function of our docket Web site, anyone can
find and read the comments received into any of our dockets, including
the name of the individual sending the comment (or signing the comment
for an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78).
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time or to the Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Katherine L. Haley, ARM-203, Federal
Aviation Administration, Office of Rulemaking, 800 Independence Ave.
SW., Washington, DC 20591; email<EMAIL_ADDRESS>(202) 493-
5708.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on February 19, 2014.
Lirio Liu,
Director, Office of Rulemaking.

Petition For Exemption

    Docket No.: FAA-2010-0134.
    Petitioner: Al's Aerial Spraying, LLC.
    Section of 14 CFR Affected: 14 CFR 137.51(b)(4)(i).
    Description of Relief Sought: Petitioner seeks modifications to the
existing conditions and limitations in Exemption No. 10142, which
allows petitioner to use a single-engine turbopropeller-powered Air
Tractor aircraft to make turnarounds over congested areas in a loaded
configuration. The petitioner is requesting conditions and limitations
be changed as follows: (1) The altitude over congested areas where a
turnaround maneuver begins be reduced from 200 feet to 100 feet above
ground level, and (2) the emergency landing area glide distance be
increased from no more than 1 nautical mile to no more than 1.4
nautical miles.
[FR Doc. 2014-03980 Filed 2-24-14; 8:45 am]
BILLING CODE 4910-13-P


White Paper on Natural Gas Vehicle Fuel Economy and CREE Requirements in the 2022 and Later Model Year GHG and CAFE Rule
Submitted by Ingevity Corporation (a member of the Advanced Engine Systems Institute (AESI))
June, 2018

Summary of message:
 We believe the "0.15 divisor" CAFE compliance incentive for dedicated and dual fuel natural gas vehicles has a statutory basis for being reinstated for GHG compliance purposes with further support from the growing supply of renewable natural gas and its environmental benefit as well as the precedent laid out for incentivizing plug-in hybrid electric vehicles (PHEVs).
 The 2:1 range restriction for natural gas dual fuel vehicles to qualify for a utility factor greater than 0.5 is arbitrary and burdensome and makes the construction of a dual fuel natural gas vehicle unaffordable and unpractical.
 The statutory basis for the 0.5 minimum utility factor expires after 2019MY, and this allows the opportunity to level the playing field for dual fuel natural gas vehicles with respect to PHEVs to base the FE/CREE utility factor solely on range on the alternative fuel.

The basis for our perspective lies with the 1988 AMFA, where Congress recognized the need to displace petroleum by incentivizing alternative fuels to accomplish three things: (1) improve national security, (2) reduce energy costs, and (3) reduce GHG emissions, specifically through the use of natural gas.  At the time of the legislation, there were CAFE requirements but no GHG requirements.  Congress provided the so-called "0.15 divisor" for dedicated and dual fuel natural gas vehicle CAFE compliance, and this incentive continues today without expiration.  Congressional intent was clear that the incentive was provided to not only displace petroleum for energy security but equally to provide environmental benefit, specifically including the reduction of greenhouse gas emissions.  We believe that AMFA provides a statutory basis to level the playing field for dedicated and dual fuel NGVs, a policy goal indicated by the Administration.

    Natural gas is an important transportation fuel:
       Natural gas is clean burning, provides energy security, and is inexpensive.
       One of the purposes of the 1988 Alternative Motor Fuels Act (AMFA) was to create incentives for the use of natural gas in vehicles.
       Manufacturers of natural gas vehicles (NGVs) receive a fuel economy incentive whereby a gallon equivalent of natural gas is deemed to have a fuel content of 0.15 gallon of fuel (so-called "0.15 divisor").  This statute has no expiration. [49 USC §32905(c)]
       Unfortunately, use of natural gas as a transportation fuel has been largely limited to heavy duty fleet applications and concentrated fuel corridors, because of the substantial capital and operating costs to reliably compress natural gas to 3600 psi.  As a result, there are fewer than 1,700 centralized CNG refueling stations in the US, and only slightly more than half are available to the public.
       For natural gas to penetrate the light duty fleet, affordable home natural gas refueling is necessary to provide a reliable source of fuel to dual fuel vehicles, in the absence of widespread public refueling options.
   Adsorbed natural gas (ANG) is a new low-pressure gas storage technology that promises to expand the market of light-duty NGVs by enabling affordable and reliable home/business low-pressure refueling.
   While our ANG technology addresses  the refueling challenge that has hindered the penetration of natural gas into the light duty fleet, three aspects of the current GHG rule make it difficult for automakers to implement our technology on dual fuel vehicles and present a non-level playing field versus plug-in hybrid electric vehicles (PHEV):
      The 2-to-1 design-based range restriction on dual fuel natural gas vehicles (and the related drive-to-empty requirement), added because of the lack of high-pressure public refueling infrastructure, are nearly impossible to be met because of cost and vehicle-packaging constraints;
      Incentives for natural gas, statutorily required for fuel economy compliance, were sunset after MY2016 for purposes of GHG compliance, creating non-alignment between fuel economy compliance and GHG compliance;
      Drafting errors in 40 CFR §600.510-12(c)(2)(vii)(A) and/or 40 CFR §600.510-12(g) cause confusion as to whether any range requirements must be met to apply the fuel economy incentive on natural gas, particularly going forward since the statutory driving range of 49 USC §32901(c) and 49 USC §32905(d) expire after 2019MY.
   The reopening of the 2017-2025 GHG/FE rule allows EPA/NHTSA to reconsider regulations and remove burdensome restrictions, level the playing field with PHEVs, and correct confusing drafting errors.
   AESI makes the following recommendations for changes to facilitate new, low-pressure natural gas technologies:
      EPA should repeal the 2:1 range requirement for unlimited use of the utility factor approach for all dual fuel natural gas vehicles and should replace it with, a general requirement that is equivalent to that required of PHEVs, or 10.3 miles on the highway fuel economy cycle.
         The rationale for the onerous range restriction was a lack of available CNG refueling locations, but ANG provides the opportunity for home/business refueling.  With home refueling, the same assumptions that led to a 10.3 mile range requirement for PHEVs should apply to ANG vehicles.
         The 2:1 range requirement does not allow the automakers to make a dual fuel natural gas vehicle that is practical or affordable.
         The expiration of the statutory range requirements of 49 USC §32901(c) and the minimum 0.5 utility factor (UF) of 49 USC §32905(d) after the 2019 model year opens the door to basing the utility factor approach solely on range on the alternative fuel and level the playing field with PHEVs.
      EPA should repeal the "drive-to-empty" restriction for all natural gas vehicles.
         Dual fuel natural gas vehicles, particularly those with home/business refueling opportunities should have the same the same treatment as PHEVs (i.e. no such provision)

      EPA should reinstate the 0.15 multiplier incentive for natural gas vehicles (NGVs) for purposes of GHG compliance for the earliest model years to which changes can be made.
         Congress messaged intent in AMFA that a purpose for the incentive was to reduce greenhouse emissions [Public Law 100-494, Section 2]
         RNG provides an opportunity to cut GHG emissions by over 85%, and a fleet of NGVs, that will utilize fossil natural gas in the short term, is needed to economically drive RNG development.  This is the same argument that EPA made for "promoting the commercialization" of EVs with a 0 g/mile incentive and multipliers.
         The incentive will help level the playing field for NGVs and dual NGVs with EV/PHEVs.
      NHTSA should allow continued use of the 0.15 divisor for dual fuel natural gas vehicles beyond the 2021 MY for future average fuel economy calculations.
         The statutory 0.15 divisor for dedicated natural gas vehicles does not expire, and the incentive should continue to remain for dual fuel natural gas vehicles.
      EPA should allow continued multiplier incentives equivalent to those provided for PHEVs
         Needed to provide a level playing field with EV/PHEVs
      EPA and NHTSA should allow a 10.3-mile minimum driving range on natural gas to define dual-fuel natural gas vehicles.
         The current 150 mile range requirement, defining dual-fuel vehicles, does not extend beyond MY2019
         The proposed change provides clarity for post-2019 model years and aligns with the proposed 10.3-mile range requirement for unlimited use of the utility factor
         Provides a level playing field with PHEVs
      EPA and NHTSA should correct reference errors and omissions in 40 CFR §600.510-12(g)

 UIntroduction

Natural gas (NG) has been a motor vehicle fuel for over 25 years. It is less expensive and provides better fuel economy and 20- 25% lower COR2R emissions than gasoline on a gallon-equivalent basis. While there is significant use of natural gas in the heavy-duty market, its penetration into the light duty fleet has been significantly hampered by the need for high dispensing pressures (3600 psi) for compressed natural gas (CNG). Compression to this pressure from the common carrier pipeline is quite expensive in terms of capital and operation, and CNG vehicles are restricted to using the 1,668 centralized CNG fueling pointsP0FP -- only slightly more than half of which are public access.
      Since 2012, several corporate partners have been working together to develop a new technology for using natural gas as a transportation fuel.  This new technology -- called Adsorbed Natural Gas (ANG) -- involves the use of activated carbon to adsorb and store natural gas at significantly lower pressure than CNG technology, thereby enhancing the opportunity for home and business fueling and expanding the use of natural gas-fueled vehicles (NGVs) into the light duty fleet.
      Regrettably, the existing EPA regulations for light-duty alternative-fueled vehicles contain several provisions which disadvantage CNG vehicles and threaten the viability of the new ANG technology.  First, the existing regulations contain range restrictions for dual fuel NGVs that do not appear to have a sound technical basis and which certainly would not be justified for a home- or business-based refueling technology such as ANG.   Second, EPA eliminated an important "multiplier" factor GHG compliance that is necessary to treat dedicated and dual fuel NGVs on the same basis as battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
      With its finding that the 2022-25 MY standards are not sufficient, EPA is now in a position to address these biases against the use of natural gas as a transportation fuel and create fair and effective incentives for new technologies.
 UThe Development of Adsorbed Natural Gas Technology

The inability of CNG to penetrate the light duty fleet centers around a chicken-and-egg problem.  CNG requires natural gas compression to 3600 psi, and home refueling to this pressure is both too expensive and unreliable to be attractive to the light duty consumer.  The only practical refueling option to the consumer is to be tethered to the sparse number of publicly available CNG locations that offer only incremental fuel cost savings.  This is an unattractive model -- as evidenced by Honda's and GM's relatively unsuccessful forays into the light duty vehicle CNG market;  sales of light duty CNG vehicles have been insignificant.  Because of the lack growth in the CNG vehicle fleet, investment into public CNG fueling locations has been slow at best.  Thus, conditions never improve to drive a market for light duty NGVs or for large investment in CNG refueling infrastructure.  The BEV and PHEV markets would have faced the same dilemma were it not for home charging capabilities.  For natural gas to significantly penetrate the light duty market, affordable and reliable home refueling is necessary as well.
      Since 2012, a corporate coalition has developed a new, low-pressure technology to store natural gas on vehicles that enables home refueling.  This technology is called adsorbed natural gas (ANG).  Natural gas is made up of small hydrocarbons, and ANG uses the adsorptive properties of activated carbon to store natural gas on a vehicle at pressures far below those required of CNG.  On current CNG vehicles, natural gas is dispensed and stored at about 3600 psi.  CNG can be considered "high pressure CNG."  ANG technology, however, stores natural gas at only 900 psi, which allows for lower cost and more reliable dispensing equipment. ANG can alternatively be considered "low pressure CNG."  ANG can be dispensed at sored at pressures one fourth that of CNG, but the activated carbon doubles mass storage capability at the same pressure. This opens the concept of using a reliable natural gas dispenser at homes or businesses to refuel at a price as low as $0.50 per gallon of gasoline equivalent (GGE).  To extend vehicle range, in a manner similar to PHEVs, a dual fuel gasoline/ANG vehicle makes sense.
      For natural gas vehicles to fill their role in addressing energy security and environmental concerns, certain changes are needed to the current regulatory program. These regulatory changes will help to promote the further commercialization of natural gas vehicle technology (as already exists for BEVs and PHEVs) by providing OEMs attractive but reasonable compliance incentives. These regulatory incentives are already in place for BEVs and PHEVs, and this will help to undo previous technological biases in the current rules.
      ANG is now commercialized and is initially being rolled out as an up-fit option on the Ford F-150.  The vehicles are currently completing certification. One manufacturer, with two separate systems, is now offering 900 psi home refueling dispensers.    Over the next several years, our goal is to have OEM-direct ANG options and multiple dispensers available to the market.  Of course, the success of this technology will depend on a level regulatory playing field and equitable incentives.
 UEliminating Design Restrictions for the Use of Natural Gas as a Transportation Fuel

For automakers to embrace ANG technology, they must be able to take full advantage of the improved fuel consumption and reduced GHG emissions possible with natural gas. The value of the alternative fuel technology on dual fuel vehicles, for regulatory compliance purposes, is built on the concept of a utility factor (UF) that is related to driving range.  The longer the driving range on the alternative fuel the greater the value of the UF in the calculation.

However, design restrictions for dual fuel NGVs that were established in the 2017-2025 GHG/FE Final Rule (codified at 40 CFR §600) make it impossible to reasonably and affordably manufacture a dual fuel NGV that can fully utilize the utility factor approach for determining fuel economy and GHG emissions.  Reflecting a bias in favor of electric vehicles and against natural gas, the regulations require that in order to qualify for a UF greater than 0.5 for both GHG and fuel economy compliance purposes, two conditions must be met (1) driving range using natural gas must be at least two times the driving range using gasoline (2:1 ratio)P1FP, and (2) gasoline is used only when the natural gas tank is effectively empty (drive-to-empty), except for limited use of gasoline may be required to initiate combustion.P2FP  PHEVs get the same 0.5 default UF regardless of range, but manufacturers have the option to qualify for a larger UF based on driving range on electricity without the added 2:1 ratio and drive-to-empty requirements.

We are recommending that the 2:1 range requirement for unlimited use of the utility factor approach be eliminated for all dual fuel NGVs and that it be replaced, at least for ANG dual fuel vehicles, by a general requirement that is equivalent to that required of PHEVs, or 10.3 miles on the highway fuel economy cycle.  AESI is also recommending that the "drive-to-empty" restriction be lifted for all natural gas vehicles.

We have four concerns with these restrictions.  First, there is no technical basis in the record for the magnitude of the 2:1 range requirement of the 2012 regulation.  Second, the magnitude of this ratio is so large that it makes fuel storage unaffordable and unable to be packaged for any practical and marketable vehicle configuration.  Third, the EPA's rationale for adding the 2:1 range based on the limited access to the small number of public CNG locations, but this rationale does not apply to ANG because the opportunity for home/business-fueling makes the concern over availability of the alternative fuel much less significant.  Fourth, the drive-to-empty restriction also had no technical or operational basis and was unfairly applied only to NGVs and not to PHEVs.
      A pertinent example demonstrates the challenges with meeting this range requirement and why reform is necessary.  A target market for ANG is the light truck and heavy light truck segments.  A typical fuel economy for a vehicle of these segments is 20 mpg on gasoline, and this dual fuel vehicle would typically have a gasoline fuel tank no smaller than 15 gallons with a range of 300 miles on gasoline [for comparison, a Chevrolet Volt PHEV has an 8.9-gallon gasoline fuel tank and a range of over 350 miles on gasoline plus a 53-mile range on battery].  However, to comply with the 2:1 range requirement and receive a UF of greater than 0.5 (see 40 CFR §600.510-12), the vehicle must have 600 miles range on natural gas and over 25 GGE of natural gas storage.  This required volume of natural gas storage is not only completely unrealistic for packaging on a vehicle, but it is unaffordable as well.  If the manufacturer equipped the same vehicle with 300 miles range on natural gas (not meeting the 2:1 range requirement), they would have to settle for a UF of only 0.50 and would be unable to take make full use of the GHG/FE advantages of natural gas for compliance purposes.  If the 2:1 restriction was not in place, the UF from the table in 40 CFR §600.510-12 would be 0.981 for a dual fuel NGV with 300 miles range on natural gas.
      The record of the existing rule shows that EPA added these restrictions to ensure that a dual fuel CNG vehicle owner has ample opportunity to use natural gas as the primary fuel.  The restrictions trace back to a request for comment on the December 1, 2011, NPRM, in which EPA stated that it
            "... proposes to develop a new approach for dual fuel CNG vehicle GHG emissions compliance that is very similar to the utility factor approach developed and described ... for PHEVs, and for this new approach to take effect with MY 2016. As with PHEVs, EPA believes that owners of dual fuel CNG vehicles will preferentially seek to refuel and operate on CNG fuel as much as possible, both because the owner paid a much higher price for the dual fuel capability, and because CNG fuel is considerably cheaper than gasoline on a per mile basis.  EPA notes that there are some relevant differences between dual fuel CNG vehicles and PHEVs, and some of these differences might weaken the case for using utility factors for dual fuel CNG vehicles.  For example, a dual fuel CNG vehicle might be able to run on gasoline when both fuels are available on board ..., it may be much more inconvenient for some private dual fuel CNG vehicle owners to fuel every day relative to PHEVs, and there are many fewer CNG refueling stations than electrical charging facilities.  On the other hand, there are differences that could strengthen the case as well, e.g., many dual fuel CNG vehicles will likely have smaller gasoline tanks given the expectation that gasoline will be used only as an `emergency' fuel, and it may be easier for a dual fuel CNG vehicle to be refueled during the day than a PHEV (which is most conveniently refueled at night with a home charging unit).  Taking all these considerations into account, EPA believes that the merit of using a utility factor-based approach for dual fuel CNG vehicles is similar to that of doing so for PHEVs, and we propose to develop a similar methodology for dual fuel CNG vehicles."P4F
      In summary, the three potential concerns that EPA had with dual fuel CNG vehicles were: (1) a CNG vehicle might be able to run on gasoline when both fuels are available on board, (2) it may be much more inconvenient for some private dual fuel CNG vehicle owners to fuel every day relative to PHEVs, because there is no home refueling opportunity for CNG vehicles, and (3) there are many fewer CNG refueling stations than electrical charging facilities.  EPA then went on to state:
            "In determining eligibility for the utility factor approach, EPA may consider placing additional constraints on the designs of dual fuel CNG vehicles to maximize the likelihood that consumers will routinely seek to use CNG fuel. Options include, but are not limited to, placing a minimum value on CNG tank size or CNG range, a maximum value on gasoline tank size or gasoline range, a minimum ratio of CNG-to-gasoline range, and requiring an onboard control system so that a dual fuel CNG vehicle is only able to access the gasoline fuel tank if the CNG tank is empty. EPA seeks comments on the merits of these additional eligibility constraints for dual fuel CNG vehicles." P5F

      Three items stand out in EPA's proposal: (1) EPA sought comment on placing additional constraints on the designs of dual fuel CNG (i.e. high-pressure compressed natural gas) vehicles, inferring that any decisions on all natural gas vehicles were based upon the high pressure refueling requirements of CNG technology, and EPA did not consider other forms of low pressure storage that address CNG's limitations, such as ANG; (2) EPA did not ask for comment on the appropriateness of additional design constraints on PHEVs, but only asked for comment  "on whether this minimum range ... [of 10.2 miles] ... (all-electric or equivalent all-electric) should be lower or higher", implying a bias against natural gas vehicles; and (3) EPA was concerned that a dual fuel CNG vehicle might be able to run on gasoline when both fuels are available on board, yet did not raise the same concern with PHEVs (it must be noted that some PHEVs run on gasoline during certain engine loads even when the battery is charged), again implying a bias against natural gas vehicles.
      EPA received 28 sets of comments on the issue of GHG emissions compliance for compressed natural gas vehicles, but only the National Resources Defense Council (NRDC) commented that design constraints should be placed on dual fuel natural gas vehicles.  Within their comments, NDRC recommended a 4-to-1 range requirement but provided no basis for the magnitude.  NRDC wrote:
            "Design constraints help ensure the vehicle preferentially operates on natural gas.  NRDC urges the agency to adopt some or all constraints before making dual fuel natural gas vehicles eligible for NG emission ratings.  The agencies should consider prioritizing a minimum requirement for natural gas to gasoline range of at least 80% on NG." P6F
      In its "U2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards: EPA Response to Comments" document, EPA provided no direct response to NRDC or about eligibility constraints for dual fuel natural gas vehicles.
      Without analysis in the record, EPA then proceeded in the final rule to add the  two design criteria on all dual fuel NGVs to qualify for a UF higher than 0.5 for fuel economy compliance calculation purposes: (1) The driving range using natural gas must be at least two times the driving range using gasoline (2:1 ratio) 40 CFR §600.510-12(c)(vii)(B)(1); and (2) The natural gas dual fuel vehicle must be designed such that gasoline is used only when the natural gas tank is effectively empty, except for limited use of gasoline may be required to initiate combustion 40 CFR §600.510-12(c)(vii)(B)(2).  Similar provisions 40 CFR §600.510-12(j)(vii)(B)(1) and 40 CFR §600.510-12(j)(vii)(B)(2) apply to GHG compliance calculations.
      EPA's policy logic is confused and is seemingly contradictory.  EPA first recognizes that if a PHEV or dual fuel CNG consumer incurs significant cost for a dual fuel vehicle and can use an alternative fuel that has significantly lower cost than gasoline, it is very likely that the consumer will seek to use the lower cost fuel whenever possible.P7FP But EPA then goes on to contradict itself by stating that dual fuel CNG vehicles must meet the additional 2:1 range and drive-to-empty requirements to ensure there is a vehicle range incentive to encourage vehicle owners to seek to use CNG fuel as much as possibleP8FP. (see text below extracted from the October 15, 2012 FFederal URegisterU):

            On page 62653 of the October 15, 2012 UFederalU URegister,U EPA states: "As proposed, UEPA is finalizing provisions which state that CO2 emissions compliance values for plug-in hybrid electric vehicles (PHEVs) and dual fuel compressed natural gas (CNG) vehicles will be based on estimated use of the alternative fuels, recognizing that if a consumer incurs significant cost for a dual fuel vehicle and can use an alternative fuel that has significantly lower cost than gasoline, it is very likely that the consumer will seek to use the lower cost alternative fuel whenever possibleU. Accordingly, for CO2 emissions compliance, EPA is using the Society of Automotive Engineers ``utility factor'' methodology (based on vehicle range on the alternative fuel and typical daily travel mileage) to determine the assumed percentage of operation on gasoline and percentage of operation on the alternative fuel for both PHEVs and dual fuel CNG vehicles, along with the CO2 emissions test values on the alternative fuel and gasoline. Dual fuel CNG vehicles must have a minimum natural gas range-to-gasoline range of 2.0 in order to use this utility factor approach. Any dual fuel CNG vehicles that do not meet this requirement would use a utility factor of 0.50, the value that has been used in the past for dual fuel vehicles under the CAFE program."
            On page 62829 of the October 15, 2012 UFederalU URegisterU, EPA states: "...  the rationale for the required design constraints.  EPA is finalizing, as proposed, the use of SAE fleet-based utility factors for dual fuel CNG vehicles, and is also finalizing some additional requirements in order for a dual fuel CNG vehicle to be able to use the utility factors. Dual fuel CNG vehicles must meet two requirements in order to use the utility factor approach. One, the vehicle must have a minimum natural gas range-to gasoline range of 2.0. UThis is to ensure that there is a vehicle range incentive to encourage vehicle owners to seek to use CNG fuel as much as possible (for example, if a vehicle had equal or greater range on gasoline than on natural gas, the agency is concerned that some owners would fuel more often on gasoline).U While NRDC suggested a minimum natural gas range-to-gasoline range of 4.0, the agency believes that a ratio of 2.0, in concert with a (currently) much less expensive fuel, is very strong incentive to use natural gas fuel. Two, the vehicle must be designed such that gasoline can only be used when the CNG tank is empty, though EPA is permitting a de minimis exemption for those dual fuel vehicle designs where a very small amount of gasoline is used to initiate combustion before changing over to a much greater volume of natural gas to sustain combustion. With these eligibility requirements, EPA believes that there will be strong economic motivation for consumers to preferentially seek out and use CNG fuel in dual fuel CNG vehicles. Consumers will have paid a premium for this feature, and will have greater range on CNG. We also believe that the utility factor approach is the most reasonable approach for projecting the real world use of CNG and gasoline fuels in such dual fuel CNG vehicles. Any dual fuel CNG vehicles that do not meet the above eligibility requirements would use a utility factor of 0.50, the value that has been used in the past for dual fuel vehicles under the CAFE program."
      Although not directly stated, this language clearly picks PHEVs as a technology winner and all dual fuel NGVs, not just CNG vehicles, that it identified as having a concern with, as technology losers. There is no real technical basis for this policy preference.   As shown above, EPA's decision to implement a 2:1 minimum natural gas-to-gasoline range restriction and drive-to-empty on natural gas restriction was adopted without sufficient justification.  No technical analysis or evaluation was conducted to arrive at the 2:1 ratio, and only two subjective points of explanation were given on its derivation: (1) if a vehicle had equal or greater range on gasoline than on natural gas, the agency is concerned that some owners would fuel more often on gasoline, and (2) while NRDC suggested a minimum natural gas range-to-gasoline range of 4.0, the agency believes a ratio of 2.0 ... is a very strong incentive to use natural gas fuel.  EPA just picked the middle between NRDC's recommended 4:1 ratio and the other 27 other commenters who did not recommend a range restriction at all.  It must also be noted that throughout EPA's discussion on the matter, EPA's assessment was clearly based upon the limited fueling options for CNG, because EPA repeatedly uses the term "CNG."  However, the restrictions themselves broaden the scope to include all natural gas vehicles.  Although ANG technology was not available at the time of the original proposal in 2011, ANG vehicles are now captured within the restrictions.  ANG was developed to allow home refueling and overcome the limited refueling options related to CNG vehicles.
      EPA justified a design-based range requirement for natural gas vehicles by only considering CNG technology and the lack of available high pressure CNG refueling locations to encourage the use of the alternative fuel.  For ANG vehicles, consumer savings in fuel costs and the convenience of refueling at home will further incentivize the use of natural gas.  In the 2011 NPRM, EPA argued that "...it may be much more inconvenient for some private dual fuel CNG vehicle owners to fuel every day relative to PHEVs, and there are many fewer CNG refueling stations than electrical charging facilities."  But EPA then noted "EPA assumes that most PHEV owners will charge at home with electrical charging equipment that they purchase and install for their own use."P9FP Obviously, home refueling of natural gas was not considered by EPA in the 2011 NPRM.  As ANG vehicle owners' would purchase their own home dispensers, it would be reasonable for EPA to make the same assumption that most ANG vehicle owners will refuel at home.  Based on such an assumption, it would be appropriate to repeal the 2:1 range and the "drive-to-empty" requirements.
      Economic considerations further support an assumption that ANG vehicle owners would be incentivized to refuel at home in comparison to PHEV owners.  As shown in the following table, the GGE price for natural gas with home refueling is 50-75% below public CNG rates and 60-80% below gasoline.  In comparison with PHEVs, ANG not only has 75% lower energy storage costs, but the home price of natural gas is 25-60% less than the cost of electricity for PHEVs.  There is more economic incentive to refuel on natural gas than for PHEVs to recharge with electricity.
      Even though PHEVs have short driving ranges on electricity and require frequent recharging to maximize operation on the battery, 40 CFR §600.116-12 essentially sets a 10.3-mile range in charge depleting mode on the highway test cycle as a floor to qualify for the utility factor approach. The rule also requires that PHEVs be able to complete a full EPA highway fuel economy test (10.2 miles), without using any conventional fuel, or, alternatively, have a minimum equivalent all-electric range of 10.2 miles as measured on the EPA highway cycle to qualify for multipliers.  As a matter of equity and leveling the playing field, the same requirements should be provided for ANG vehicles, if not all natural gas vehicles.
      ANG vehicles will be refueled at home in a manner consistent with PHEVs.  ANG owners are more economically incentivized to refuel with the alternative fuel than PHEV owners.  Thus, there is no technical justification that warrants placing design restrictions on dual fuel ANG vehicles that are any more burdensome than those required of PHEVs.  As required in 40 CFR §600.116-12, the minimum driving range requirement for PHEVs is essentially 10.3P10FP miles on the highway fuel economy cycle.  We recommend that the 2:1 range requirement for unlimited use of the utility factor approach be eliminated for all dual fuel NGVs and that it be replaced, at least for ANG dual fuel vehicles, by a general requirement that is equivalent to that required of PHEVs, or 10.3 miles on the highway fuel economy cycle.  AESI is also recommending that drive-to-empty restriction be lifted for all natural gas vehicles.  To further align ANG vehicles with PHEVs, AESI recommends that the utility factor for dual fuel ANG vehicles be based entirely on range and does not need to be incentivized by the 0.5 minimum UF.P11F

                                       Table I

Dual Fuel CNG
Dual Fuel ANG
PHEV
Fuel Storage Pressure
3600 psi
900 psi
N/A
Average Fuel Price
$2.00 / GGEP12F
$0.50-$1.00 / GGE at homeP13F
$2.00 / GGE public
$1.33 / GGE*P14F
Fuel/Energy Storage Cost
$200 / GGE
$550 / GGE
$2000 / GGE*
Refueling Options
Public CNG Stations
Home + Public CNG Stations
Home + Public Charging Stations
EPA Range Requirement for Dual Fuel Vehicles to Qualify for Unlimited UF Approach
2 times range on NG as on gasoline
2 times range on NG as on gasoline
10.3 miles
CAFE Incentive
FE on NG divided by 0.15
FE on NG divided by 0.15
PEF on electricity divided by 0.15
GHG Incentive
None
None
0 g/mile GHG
       *Range adjusted
 UComment on 0.15 Multiplier GHG Compliance Incentive for NGVs

We are also recommending reinstatement of the 0.15 multiplier incentive for NGVs for purposes of GHG compliance for the earliest models years to which changes can be made. This 0.15 multiplier was incorporated in the 2012-2016 GHG rule for model years (MY) 2012-2015, but was removed after MY 2015. (Note that the rulemaking documents refer to this as the "0.15 divisor" based on its use as a divisor in the fuel economy program, but for GHG compliance in the regulatory text it is a 0.15 multiplier.)
      A 0.15 divisor for fuel economy was first required in the Alternative Motor Fuels Act (AMFA) of 1988 with the purpose of promoting the use of non-petroleum fuels in motor vehicles.  It was reinforced and extended through the 2019 MY in the 2007 EISA legislation. This factor was initially incorporated into the NHTSA and EPA fuel economy regulations in 40 CFR §600 for the 1993 model year and has been in effect since that time. In the 2012-2016 NHTSA/EPA fuel economy and GHG rule, the divisor was retained for fuel economy purposes for dedicated and dual fuel NGVs.P17FP   Also, as part of that rule, the new carbon related exhaust emissions (CREE) calculations in EPA's GHG requirements for MYs 2012-2015 were aligned with the policy intent of the statutory fuel economy provisions by incorporating a 0.15 multiplier in the CREE compliance calculation for both dedicated and dual fuel vehicle operation on natural gas.P18FP    However, EPA dropped the 0.15 multiplier in the CREE compliance calculation for the 2016 MY, choosing instead to base any credits on the vehicle's measured CREE emissions when evaluated on the alternative fuel and alternative fuel use by the consumer.
      The 0.15 divisor for fuel economy was raised again in the 2017-2025 NPRM, published in 2011. The NPRM proposed and later finalized the 0.15 divisor for fuel economy for 2016 and later model years, pending NHTSA's follow-on fuel economy rule for MYs 2022 and later.
      In this same NPRM, EPA sought comment on the use of incentives and multipliers for NGVs for GHG emissions compliance.  As detailed in section 6 of the Response to Comments document mentioned above, EPA received many comments supporting incentives and multipliers for NGVs, including the use of the 0.15 multiplier.  In a relatively short response in section 6.6 of the Response to Comments document, EPA explained its decision not to reinstate the 0.15 multiplier for GHG compliance.P19FP  First, from EPA's perspective, NGVs do not represent a "game changing" GHG technology relative to electric and fuel cell vehicles (FCVs).  In EPA's view, the overall GHG reductions from natural gas vehicles are not large enough to justify encouraging their use as a part of a long-term GHG strategy.  Second, the fact that Congressional legislation such as AMFA and EISA incentivize the use of NGVs for energy security purposes does not require EPA to do so for GHGs and that an EPA decision not to include a 0.15 multiplier for CREE compliance does not create a policy or regulatory conflict.  Quite simply, as a matter of policy EPA took the position that, "EPA believes that the paramount emission reduction goals of the CAA warrant the difference in approach." P20F
      We have several concerns with this policy.
      First, EPA has sent a mixed policy message on the use of the 0.15 multiplier for GHG compliance.  EISA was enacted in late 2007, four years before compliance with the 2012 GHG standards was required, yet the 2012-2016 NHTSA/EPA fuel economy and GHG rule (finalized in 2010), retained the 0.15 divisor for four model years (2012-2015) then dropped it on the basis that any credits should be based on the view that a vehicle's CREE emissions when evaluated on the alternative fuel and alternative fuel use by the consumer.P21FP   This change in policy sent a negative signal to those manufacturers developing NGVs or considering this technology as part of their overall compliance strategy.
      Second, in our view, the policy thwarts Congressional intent indicated as far back as 1988 when AMFA was enacted and reinforced in the 1992 EPACT and 2007 EISA legislation. These pieces of legislation signaled the intent of Congress to provide an incentive for the development and use of vehicles which do not use petroleum.  Furthermore, the intent of Congress regarding alternative fuels such as natural gas is clearly reflected in the findings listed in paragraphs (4), (6), and (8) of section 2 of AMFA wherein Congress specifically recognized environmental interests as a reason that the Federal government should assist the market penetration of clean burning nonpetroleum transportation fuels and specifically identified GHGs as one of the major environmental interests.  It is indeed puzzling that EPA should create a policy which appears to align with that intent and then change it after four model years.  As part of its justification, the Agency created a new regulatory decision making criterion, outside of the intent in AMFA, known as "game changer" describing it in the NPRM as control of transportation GHG emissions as they can combine an efficient vehicle propulsion system with the potential to use motor fuels produced from low-GHG emissions feedstocks or from fossil feedstocks with carbon capture and sequestration.P22FP Without any significant discussion or justification as to the validity of the use of this new criterion, EPA changed its GHG policy for NGVs  because EPA did not view natural gas as a "game changer" technology from the GHG perspective.  EPA seems to have ignored or missed the language in section 2 of AMFA regarding nonpetroleum transportation fuels and GHGS.
      Third, this "game changer" concept and the policy decisions it has engendered creates winners and losers in the market place.  Not only did EPA de-incentivize NGVs by removing the 0.15 multiplier on their view that the inherent GHG emission reductions were not large enough to qualify as a "game changer", but it heavily rewarded PHEVs and BEVs by ignoring any upstream GHG emissions and assigning a zero g/mile GHG compliance value for all operation on electricity even though the rule indicated an upstream GHG value of 96-156 g/mile. This unprecedented action of picking the technology winner and creating generous incentives for manufacturers to pursue the technology is unprecedented in EPA's mobile source emission standards which have traditionally been based on technology and fuel neutral provisions.  If EPA had set the engine particulate matter standards based on gasoline engine technology back in the early 1990s, we would have no diesel engines.  Similarly, if in the 1980s EPA had set the vehicle evaporative and refueling emission standards based on the characteristics of distillate fuels, we would have no gasoline-powered vehicles.  Is closing the technology door by picking a winner good policy?
      Fourth, the fallacy of this decision is evidenced in developments since the rule was promulgated in 2012.  As a result of progress in response to the Renewable Fuel Standard and California's Low Carbon Fuel Standard, there has been a great increase in the amount of renewable natural gas (RNG) in the market and this is expected to increase. For example, renewable CNG and LNG production increased from 32 million gallons in 2014 to almost 240 million gallons in 2017.P23FP The emergence of domestic RNG as a low carbon fuel for motor vehicles presents a major opportunity for reducing GHG emissions both by eliminating the methane emissions from the source and then with use of this methane as a vehicle fuel in lieu of petroleum-based fuels.  A 2013 report from Argonne National Laboratory for DoE, indicated "Well to Wheels" CO2e reductions as compared to gasoline of 81-82% for RNG derived from landfills, 109-125% for RNG derived from manure anaerobic digestion (dairy and feedlots), and 113-115% for wastewater treatment plant sludge.P24FP A CO2e reduction value of more than 100% indicates that RNG used as a motor vehicle more than offsets a comparable gasoline vehicle. RNG as a motor vehicle fuel source is a major new development since 2011, and this change in circumstances merits a reexamination of the previous decision eliminating the 0.15 multiplier for GHG compliance. Policy and regulatory provisions related to energy security and GHGs should encourage and incentivize the development and use of passenger cars and light-duty trucks which can use natural gas, including RNG.
      Fifth, in their response to comments, EPA indicates that they are not compelled to align energy security and environmental policy. However, as indicated by the fact that they did so for four model years, they clearly are not prohibited from doing so.  The language in AMFA discussed above, seems to indicate that that was Congressional intent.  In our view, national policy must be holistic, and include all relevant factors including environmental concerns, energy security, employment, and economic sustainability.
      In summary, reinstating the 0.15 multiplier for GHG compliance is the correct policy.  It is consistent with the intent of AMFA.  In our view, it appropriately and reasonably aligns energy security and environmental policy, it helps to eliminate the BEV and PHEV bias incorporated into the rule by ignoring electricity upstream emissions, and it sets the stage for future vehicle technology which could use RNG.  EPA should establish a policy which creates incentives to help promote the development and commercialization of advanced technology for CNG vehicles, just as it did in both the 2012-2016 and 2017-2025 final rules for BEVs, PHEVs, and FCVs.P25FP At a minimum, manufacturers should be able to use the 0.15 multiplier for NGV GHG compliance in the same manner that the 0 g/mile vehicle production values are afforded to BEVs, EVs, and FCVs in § 86.1866 - 12 for MYs 2022-2025.  Similarly, if the production multipliers of § 86.1866 - 12 are extended beyond 2021, this should include NGVs.

 UAdditional Important Parity Considerations

EPA sunset the application of the 0.15 multiplier for GHG compliance purposes starting with the 2016 model year for NGVs.  EPA's rationale for removing the incentive was because "tailpipe GHG emissions from most alternative fuel vehicles are not zero or near-zero, and in any case EPA believes that GHG emissions compliance should simply be based on GHG emissions performance.  The primary focus of the GHG standards must be GHG emissions performance.  Adopting the 0.15 factor for GHG emissions compliance for vehicles with substantial tailpipe GHG emissions could yield a significant reduction of GHG programmatic benefits that is not warranted by these vehicles."P26FP  However, this argument for strictly focusing on GHG performance is in direct conflict with the 0 g/mile GHG compliance value that EPA provides for BEVs and PHEVs:

           [I]n summary, EPA continues to believe that finalizing the proposed [0 g/mile] compliance treatment for EV/PHEV/FCVs strikes a reasonable balance between promoting the commercialization of EV/PHEV/FCVs, which have the potential to achieve game-changing GHG emissions reductions in the future, and accounting for upstream emissions once such vehicles reach a reasonable threshold in the market.  The mid-term evaluation will provide an opportunity to review the status of advanced vehicle technology commercialization, the status of upstream GHG emissions control programs, and other relevant factors. P27FP

We have two concerns with this statement: (1) in its 2012 rule, EPA goes as far as directly stating that it is "promoting the commercialization" of EV/PHEV/FCVs while dis-incentivizing NGVs, which means that EPA has abandoned its longstanding policy of being fuel and technology neutral, and (2) EPA has adopted some conceptual target threshold of EV/PHEV/FCVs that it is trying to reach, while light-duty NGV numbers are currently insignificant and will continue to be so unless the playing field is leveled.

In its final 2017-2025 rule, EPA discussed the matter of being technology neutral yet only providing CREE incentives for EVs.  EPA rationalized its approach by:

            Given that internal combustion engines and petroleum based fuels have dominated the U.S. light-duty vehicle market for 100 years, with massive sunk investments, there are major barriers for new vehicle technologies and fuels to be able to gain the opportunity to compete on any type of level playing field. In this context, temporary regulatory incentives do not so much ``pick winners and losers'' (an inefficient or unattractive technology is not going to achieve long-term success based on temporary incentives) as to give new technologies more of an opportunity to compete with the established technologies. The agency recognizes that the temporary regulatory incentives will reduce the short-term benefits of the program, but as noted above believes that it is worth a limited short-term loss of benefits to increase the potential for far-greater game changing benefits in the longer run. EPA also believes that temporary regulatory incentives may help bring some technologies to market more quickly than in the absence of incentives.P28F

The problem lies not so much in providing incentives to bring new technologies to market and an opportunity to compete with petroleum based fuels on a short-term basis.  The problem is that EPA then went on to pick technology winners and losers within the group of technologies that could compete with petroleum fuels.  EPA offered BEV/PHEV/FCVs with 0 g/mile CREE incentives and limited design restrictions by considering these technologies game-changing.  EPA distinguished NGVs as technology losers by requiring burdensome design restrictions and removing existing CREE incentives.  Nowhere does EPA quantify the level of reduction it considers game-changing or point to a statutory basis for such policy.

 As shown in the table below taken from the final rule preamble published in October 2012,P29FP EPA acknowledges and identifies upstream emission rates for EVs.  Even with large upstream GHG values of 96-156 grams per mile, EPA provides the EV a zero g/mile compliance value to provide "an important incentive for potentially enormous emissions reductions from these vehicles in the longer term."  Although EPA claims it is technology neutral in its rulemaking, this is clearly not the case.  EPA is basing its program on the propositions that: (1) at some time in the future, the carbon intensity of the electrical grid will reduce significantly and overall emissions from EVs will reduce significantly, (2) at that time, EPA wants a substantial portion of the fleet to consist of EVs, and (3) in order to attain significant fleet penetration and gain consumer comfort with EVs, EPA must provide short-term incentives.

An argument can be made that NGVs are nearly as clean or cleaner than BEVs and PHEVs, and should also be considered game-changing and incentivized to promote their commercialization as well.  EPA's 2017-2025 GHG rule considers tailpipe emissions and upstream, fuel-related GHG emissions.  However, there is also significant GHG emission differences in the vehicle technology production that should also be considered.  Battery production produces significant GHG emissions, and full lifecycle, cradle-to-grave emissions should be considered when determining those technologies that are considered "game changing" and those that are not.  The US DRIVE Cradle-to-Grave working group and Argonne National Laboratory issued a report in September 2016 that compares full lifecycle GHG emissions, using the GREET model, for a variety of propulsion technologies, including NGVs and BEVs.P30FP  The two figures below, taken from this report,  show: (1) the lifecycle GHG emissions for a CNG ICEV are only 10%  higher than for a BEV with 200 miles range, and (2) the "levelized" cost of driving of a natural gas vehicle is 51% below that of a BEV with 200 miles range.  Furthermore, as renewable natural gas (RNG) takes hold in California, driven by California's Low Carbon Fuel Standard, and elsewhere, the lifecycle GHG emissions for NGVs can even reach negative values when using fuels with negative carbon intensities.P31FP

As mentioned earlier, RNG production has increased from 32 million gallons in 2014 to almost 240 million gallons in 2017, primarily driven by California's LCFS and RFS.  The Environmental and Energy Study Institute reported in September 2017 that biogas is being actively recovered at only 20% of potential 15,700 locations.P32FP  Argonne National Laboratory issued a report on a waste-to-wheels assessment that RNG from biogas reduces GHG by up to 91% versus gasoline.  Biogas is naturally generated as organic wastes decompose.  Major biogas feedstocks include food waste, landfills, livestock waste, wastewater treatment, and crop residues.  Most of the biogas is now vented to the atmosphere, where the methane component will absorb 86 times more heat than COR2R over a period of twenty years.   According to EPA, municipal solid waste landfills are the third-largest source of human-related methane emissions in the United States.P33FP   Only 3% of livestock waste is recycled by anaerobic digesters.  Of 1,269 wastewater treatment plants that use anaerobic digestion, only 860 utilize the biogas.  Tremendous opportunity exists to further capture biogas and utilize RNG as a transportation fuel, but a growing segment of light-duty NGVs is needed to grow the market and provide an incentive for further investment.  This is the same issue that EPA raised for EV/PHEV/FCVs when the 2017-2025 GHG rule was finalized in 2012, and these vehicles were provided with the 0 g/mile incentive to gain market acceptance of the technology and to grow the fleet and infrastructure, so that as electricity production is decarbonized, there is an established fleet of EVs to take advantage of that fuel source instead of petroleum fuels.  According to IHS-Markit data, only 60,000 light duty NGVs are now registered in the United States.  Growing this fleet and its fuel demand will open opportunity to further utilize RNG as a transportation fuel.  NGVs need the same incentives as EVs to create interest from the automakers, significantly increase vehicles sales, and spawn infrastructure investment.  It would be appropriate to reinstate the 0.15 multiplier for CREE emissions in the GHG rule.

 UComment on 0.15 Divisor CAFE Incentive for Natural Gas Vehicles
      We recommend that NHTSA/EPA continue use of the 0.15 divisor beyond the 2021 MY for future average fuel economy calculations. US legislation addressing fuel economy standards and energy security energy go back as far as the Energy Policy and Conservation Act of 1975.  In 1988, the Alternative Motor Fuels Act was passed which, among other elements, gave greater emphasis to the use of alternative fuels such as natural gas as part of the overall national policy for energy independence and improved vehicle fuel economy. This general approach was retained and reinforced in the 1992 Energy Policy Act (EPACT) and the 2007 Energy Independence and Security Act (EISA).  As part of the AMFA legislation, Congress included a provision which incentivized the development of NGVs and the use of natural gas as a motor vehicle fuel by specifying that the average fuel economy values on natural gas measured by EPA be divided by a value of 0.15 for purposes of average vehicle fuel economy values and CAFE compliance calculations.
      This provision was extended through the 2019 model year in the EISA legislation, and DoT opted to continue this approach for 2016 and later model years as part of the joint EPA/NHTSA rule: U2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy StandardsU. It is assumed that the requirements would be re-examined as part of NHTSA's new fuel economy rulemaking for 2022 and later model years.
      As vehicle OEMs consider their technology choices for meeting fuel economy and GHG requirements, the near and long-term availability of these provisions is an important value element. The availability of incentives such as the 0.15 divisor for fuel economy and production multipliers found in current regulations have a positive impact on decisions to invest in vehicle implement technologies which reduce use of petroleum-based fuels and reduces GHG emissions.  We recommend that NHTSA/EPA continue use of the 0.15 divisor in future fuel economy rules.

 Background and Recommendations for Certification of Light-duty dual fuel NGVs

          SUMMARY:
      The primary goals for section VII are twofold: 1) to ensure that the regulations covering light-duty dual fuel NGVs meet the GHG emission and fuel economy objectives efficiently and effectively and 2) that the regulations are easy to implement, correctly drafted, and consistent with Administration policy objectives and specific direction in applicable statutes. After some background discussion, the section examines the fuel economy program, errors in 40 CFR §600.510-12(g), CREE calculation provisions, and the relationship between minimum driving provisions in 49 CFR §538 and the fuel economy provisions for dual fuel NGVs.  We hope to see the fair and equitable application of statutory and regulatory incentives and reasonable requirements to qualify for those incentives, appropriate provisions regarding the future applicability of the 0.5 weighting factor and the full use of the utility factor table, and corrections and clarifications to current regulatory text.  Finally, we want to ensure that there are incentives in both NHTSA's fuel economy program and EPA's GHG requirements for automakers to build dual fuel NGVs and that any regulatory restrictions in the programs are equitable with those for electric dual fuel vehicles.  The changes recommended should be implemented as soon as the 2020 model year.

          BACKGROUND:
      Under current law, the Secretary of Transportation is required to prescribe "average fuel economy standards" for automobiles, 49 USC §32902.  For model years 2021 through 2030, the average fuel economy required to be attained by each fleet of passenger and non-passenger automobiles manufactured for sale in the U.S. must be the maximum feasible average fuel economy standard for each fleet for that model year, 49 USC §32902(b)(2)(B) where the criteria for maximum feasible is defined in 49 USC §32902(f).  This generally means that a manufacturer seeks to produce vehicles that have the highest average fuel economy and are still safe and economically attractive to consumers.
      Similarly, under Sections 202(a) and 206(d) of the Clean Air Act (42 USC §7521 and §7525), EPA has established very aggressive emission standards and regulations covering greenhouse gas (GHG) emissions from light-duty vehicles and light-duty trucks, which includes the passenger and non-passenger automobile groups covered by NHTSA's fuel economy program.  There are six GHG-related pollutants arising from the use of motor vehicles, including CO2, N2O, and CH4.  EPA regulates tailpipe CO2 emissions through a grouping called "carbon related exhaust emissions" (CREE).  CREE calculations include total hydrocarbons (HC), CO2, and CO, and for NGVs, CREE calculations also include methane (CH4) and non-methane hydrocarbons (NMHC).  It is very important to note that on a g/mile basis well over 95% of CREE is made up of CO2.  Since motor vehicle CO2 is generated by fuel combustion, there is an inextricable link between the generation of CREE emissions through fuel combustion (g/mi) and fuel consumption (mi/gal). The primary strategy for addressing CREE emissions is to improve fuel economy, thus it is critical that there is harmony between regulations covering CREE emissions and those covering fuel economy.
      For an automaker to market a dual fuel NGV it must certify the model under the applicable regulations including both fuel economy and GHG.  The regulatory text covering certification requirements for fuel economy and GHGs is found in 40 CFR §600, but the roots are in the portions of titles 42 and 49 of the USC covering these provisions.  At 49 USC §32904(c) the language directs EPA to prescribe testing and calculation procedures for average fuel economy and that these requirements shall be carried out with emission tests.  Toward that end, EPA incorporated these requirements in to 40 CFR §600 with many references to the test procedures and related requirements found in 40 CFR §86 Subpart B.  Prior to the 2012 model year, any amendments to the fuel economy program since the mid-1970s (mostly related to fuel economy labels) are found in 40 CFR §600.  The GHG emission standards are in 40 CFR §86 Subpart S. The procedures for determining a vehicle's CREE emissions for certification are in 40 CFR §600.
          FUEL ECONOMY:
      In 1988, Congress passed the Alternative Motor Fuels Act (AMFA) which addressed fuel economy incentives for dedicated and dual fuel NGVs.  Section 513(d) of AMFA (49 USC §32905(d)) says that the fuel economy of a dual fuel NGV is calculated by using the formula shown as Equation 1:
       (Equation 1):
1.0 divided by the sum of  -
               0.5 divided by the fuel economy measured when operating on gasoline or diesel fuel; and
               0.5 divided by the fuel economy measured under subsection (c) of this section when operating on natural gas.

      Subsection (c) of 49 USC §32905, referred to in point (b) above, provides for treatment of gaseous fuel dedicated automobiles.  "For any model of gaseous fuel dedicated automobile manufactured after model year 1992, the Administrator shall measure the fuel economy for that model based on the fuel content of the gaseous fuel used to operate the automobile."  For calculation purposes, "One hundred cubic feet of natural gas is deemed to contain 0.823 gallons equivalent of natural gas ... [and a] gallon equivalent of gaseous fuel is deemed to have a fuel content of .15 gallon of fuel." This second term is commonly referred to as the "0.15 divisor." This "divisor" has been applied in average fuel economy calculations in 40 CFR §600 for dual fuel NGVs since the 1993 model year.  The 0.15 divisor for average fuel economy calculations for dedicated fuel NGVs has no expiration date within the statute, but Equation 1  -  including the 0.5 weighting and the inclusion of the 0.15 divisor -- is not mandatory for dual fuel NGVs after the 2019 model year.

      Closely related to the use of Equation 1 is the definition of a dual fuel automobile which is found in 49 USC §32901(a)(9). It contains provisions regarding energy efficiency and minimum driving range requirements (discussed below) on the alternative fuel to qualify as a dual fuel automobile. AMFA provides that to be considered a dual fuel NGV for purposes of fuel economy incentives in 49 USC §32905(d), the vehicle must have a minimum driving range of 200 miles; beginning with model year 2016 the vehicle must have a minimum driving range of 150 miles, 49 USC §32901(c)(2)(B).  Determination of compliance with the 150-mile driving range is conducted under the provisions laid out in various sections of 40 CFR §600.  However, the 150-mile range provision was written only for purposes of determining whether a dual fuel NGV is eligible to use Equation 1 (presented above) under §32905(d).  If §32905(d) does not apply to vehicles after model year 2019, then it seems evident that the 150-mile minimum driving range specification has no statutory applicability after model year 2019.  Moreover, if a manufacturer chose to certify a dual fuel NGV with less than 150 miles driving range on natural gas as determined using the provisions in 40 CFR §600, there is no explicit statutory direction on how to determine average combined fuel economy for CAFE compliance purposes.  Thus, there is a question whether there is any statutory direction for establishing the fuel economy of any dual fuel NGV for a model year after 2019. This includes the basic construct of the calculation (i.e., the 0.50 weighting for the calculation), the 0.15 divisor for dual fuel NGVs, and the application of the energy efficiency and minimum driving range provisions.  Meanwhile, the 0.15 divisor incentive on fuel economy for dedicated natural gas vehicles has no expiration.
      In 2012, EPA promulgated regulations to implement requirements on dual fuel NGVs in the future. These regulations were written to apply both to the determination of average fuel economy for NHTSA CAFE purposes and to determine average CREE for EPA GHG purposes. It is important to note that 40 CFR §600.510-12(a) says that average fuel economy will be calculated and reported to the Secretary of Transportation for CAFE purposes, while at the same time, average CREE will be calculated and reported to the EPA Administrator for purposes of complying with applicable CO2 emission standards.  As mentioned above, fuel economy and CREE are linked as a matter of combustion science. The regulations acknowledge this relationship, reinforcing the perspective that the two requirements are inextricably linked and must be considered together.  Average fuel economy regulations will be discussed here and CREE will be discussed below.
      In the 2012 GHG/CAFE final rule, the provisions for calculating average fuel economy for dual fuel NGVs for 2016 and later model years (also applicable for 2020 and later model years) retain the basic calculation approach for average fuel economy in Equation 1, including the use of the 0.15 divisor for dual fuel NGVs and references to the energy efficiency and minimum driving range requirements.
More specifically, 40 CFR §600.510-12(c)(2)(vii) contains explicit direction for determining the fuel economy of dual fuel NGVs manufactured after model year 2016.  A manufacturer seeking to determine the average fuel economy (miles per gallon, mpg) for a new dual fuel NGV model would first look to 40 CFR §600.510(c)(2)(vii)(A), which provides an equation that instructs on how to calculate combined model type fuel economy for model years after 2016:
      MPG= UFMPGCNG+1-UFMPGG-1                                       Equation 2
      Equation 2 provides a weighted (harmonic) average fuel economy for a dual fuel NGV, based upon the combined model type fuel economy for operation on natural gas (MPGCNG) and the combined model type fuel economy for operation on gasoline or diesel fuel (MPGG) and weighted by the utility factor (UF).  Mathematically, Equation 2 is identical to the Equation 1 of 49 USC §32905(d) when the UF is 0.5.
      The addition here is reference to a new term called the utility factor (UF) and reference to a table covering the UF values with the added requirements that the UF is limited to 0.5 unless two conditions are met. The regulations, in 40 CFR §600.510-12(c)(2)(vii)(B), state that for a dual fuel NGV to qualify for a UF greater than 0.5 for purposes of CAFE compliance, the vehicle must meet the following design criteria:
 The driving range using natural gas must be at least two times the driving range using gasoline [so-called 2:1 ratio], and;
 The dual fuel NGV must be designed such that gasoline is used only when the natural gas tank is effectively empty, except for limited use of gasoline that may be required to initiate combustion [so-called drive-to-empty requirement].
      Because CNG fueling opportunities were limited at the time, these provisions were included in the 2012 regulations (applicable in the 2017 model year) to ensure manufacturers of dual fuel NGVs provided range on natural gas to encourage owners of such vehicles to use mostly natural gas.  As discussed above, the perhaps unintended impact of these two new provisions is that it becomes very difficult to build a dual fuel NGV that would be attractive to consumers -- not only because of the cost but also because of the large volume of natural gas storage which must be packaged on the vehicle to meet a 2:1 driving range requirement for a typical light-duty vehicle.
      There is some ambiguity in the regulations regarding what happens if a dual fuel NGV fails to meet the "2:1 ratio" and "drive-to-empty" design criteria.  40 CFR §600.510-12(c)(2)(vii)(A) states that if the criteria are not met, then the "UF shall be 0.5", while 40 CFR §600.510-12(c)(2)(vii)(B) states that if the criteria are not met, then the vehicle does not "qualify for use of a Utility Factor greater than 0.5," perhaps implying that its UF would be dictated by the UF table, if its driving range was less than 30 miles.  These provisions should be reconciled to provide a consistent reading.
      40 CFR §600.510-12(c)(2)(vii)(A) also describes how to calculate range on natural gas for use on the UF table.  The combined fuel economy as determined in 40 CFR §600.208-12(b)(5)(ii) is multiplied by the vehicle's usable fuel storage capacity and rounding to the nearest 10 miles.  Thus, for purposes of identifying range for determining the UF, the 0.15 factor is not used.
      Equation 2 also includes fuel economy terms MPGCNG and MPGG.  For purposes of determining fuel economy of a dual fuel NGV, 40 CFR §600.510-12(c)(2)(vii)(A) provides instruction on how to determine MPGCNG of such a vehicle:

               MPGCNG is "determined in 40 CFR §600.208-12(b)(5)(ii) divided by 0.15."  First, the combined city/highway fuel economy value is measured and calculated per 40 CFR §600.208-12(b) using natural gas as the test fuel.  Next, this combined fuel economy value is divided by 0.15.
      The difference between requirements for dual fuel NGVs and electric dual fuel vehicles is remarkable. In the 2012 GHG/CAFE rule, EPA incorporated provisions for electric dual fuel vehicles where the manufacturer can calculate average combined fuel economy for a PHEV using a percentage utilization, based on the model's electric range (i.e., the UF value).  The percentage utilization values (the UF table) were drawn from the Society of Automotive Engineers (SAE) "utility factor" (UF) methodology, described in SAE J2841 which provides the relationship between range on electricity and the percentage of driving on electricity, the UF.  The use of the UF term in Equation 2 seems to tie to the approach used for electric dual fuel vehicles (see 49 USC §32905(e)), but the language in the code only applies to electric dual fueled automobiles and it also allows the use of Equation 1 with a UF of 0.5 but without the 0.15 divisor for fuel economy. Furthermore, the 150-mile statutory driving range requirement mandated to dual fuel NGVs through 2019, is only 7.5 miles and 10.3 miles on EPA's city and highway fuel economy driving cycles, respectively for electric dual fuel models.

          CORRECTIONS and CLARIFICATIONS FOR 40 CFR §600.510-12(g):

To use the calculation approach for MPGCNG in the formula for MPG for dual fuel NGVs, 40 CFR §600.510-12(c)(2)(vii)(A) states the requirements of 40 CFR §600.510-12(g) must be met.  These requirements are traceable back to the definition of dual fuel vehicle in 49 U.S.C §32901(a)(9)(B) and (D) for purposes of fuel economy. Specifically, 40 CFR §600.510-12(g) contains two sets of restrictions:

          (g)(1) states that the alternative fuel must provide equal or greater energy efficiency while operating on the alternative fuel to obtain both the CAFE credits determined in 40 CFR §600.510-12(c)(2)(iv) and (v) as well as the CREE credit determined in 40 CFR §600.510-12(j)(2)(ii) and (iii).
      These requirements appear straightforward. However, 40 CFR §600.510-12(c)(2)(iv) and (v) address only alcohol dual fuel model types for model years 1993-2019 and model years after 2019, respectively, for CAFE purposes.  Dual fuel NGVs, which are addressed in 40 CFR §600.510-12(c)(2)(vi) and (vii) for CAFE purposes, are not covered by the restriction in (g)(1).  Furthermore, although not mandatory under the statute, (g)(1) also covers CREE compliance. Within EPA's regulations, 40 CFR §600.510-12(g)(1) points to 40 CFR §600.510-12(j)(2)(ii) and (iii), which cover CREE compliance for dedicated alcohol-fueled and dedicated natural gas-fueled model types for 2012-2015 model years, neither of which should be covered because they are dedicated fuel vehicles.  It does not cover CREE for dual fuel alcohol or dual fuel NGVs in any model year.  It seems there is either an error in the references in the regulatory text or that the regulations were not intended to cover CREE since it is not required by statute. It is our view that CREE should not be covered as this requirement is not mandated
         and is largely redundant if it is included for fuel economy.

          (g)(3) states that dual fuel passenger automobiles manufactured during model years 1993-2019 must meet the minimum driving range requirements established by the Secretary of Transportation (49 CFR §538) to obtain the CAFE credit determined in paragraphs 40 CFR §600.510-12(c)(2)(iv) and (v).  The driving range is determined using the calculation procedures in 40 CFR §600. The statutory provisions do not cover CREE emissions.

Just as in (g)(1), the restrictions of (g)(3) point to 40 CFR §600.510-12(c)(2)(iv) and (v).  Therefore, as written, this restriction does not apply to dual fuel NGVs, but only to alcohol dual fuel vehicles.  It should be noted that in the first GHG/CAFE rules published in May, 2010 (88 FR 25323), 40 CFR §600.510-12(g)(3) stated "Alcohol dual fuel passenger automobiles and natural gas dual fuel passenger automobiles manufactured during model years 1993 through 2019 must meet the minimum driving range requirements established ... [in] 49 CFR part 538 ... to obtain the CAFE credit determined in [40 CFR §600.510-12(c)(2)(iv) and (v)]", but in the 2012 GHG/CAFE rule this section was modified to generally refer to dual fuel vehicles, without specifically naming natural gas or alcohol. The references to (iv) and (v) were maintained, so now both refer only to alcohol dual fuel vehicles.  But in the first GHG/CAFE rule May 7, 2010 (75 FR 25323), (c)(2)(iv) referred to model year 1993-2019 alcohol dual fuel vehicles, and (c)(2)(v) referred to model year 1993-2019 natural gas dual fuel vehicles. In the second GHG/CAFE rule published on October 15, 2012 (77 FR 62623), 40 CFR §600.510-12(c)(2)(iv) and (v) were modified and new (vi) and (vii) provisions were added to split model year provisions for both alcohol dual fuel and natural gas dual fuel vehicles.  The effect of these changes is that the reference to the (g)(3) restriction (to meet minimum driving range restrictions) does not apply to dual fuel NGVs.  This may be a drafting error.

So, it appears that the reference in 40 CFR §600.510-12(c)(2)(vii)(A) to meeting the requirements in 40 CFR §600.510-12(g) to enable use of the calculation "40 CFR §600.208-12(b)(5)(ii) divided by 0.15" for MPGCNG, is of no effect.  As written, there are no restrictions on dual fuel NGVs using Equation 2 for average fuel economy calculations.  This may be of no consequence going forward, because the provisions of §32905(b) expire after 2019 and thus meeting the definition of a dual fuel automobile in §32901(a)(9) to qualify for the incentives in §32905(b) may not matter.

In conclusion errors seem to exist, either: (1) the text "provided the requirements of paragraph (g) of this section are met" in 40 CFR §600.510-12(c)(2)(vii)(A) should be omitted in future text to avoid confusion, or (2) 40 CFR §600.510-12(g) was intended to cover 40 CFR §600.510-12(c)(2)(iv), (v), (vi) and (vii) and should be corrected.  Even if (g)(3) was supposed to apply to dual fuel NGVs, as it did as prior to the second GHG /CAFE rule, under §32905(b) the restriction expires after the 2019 model year for purposes of incentives.  It seems that removing the reference to paragraph (g) in 40 CFR §600.510-12(c)(2)(vii)(A) is most sensible for model years after 2019.

          CREE
      As mentioned above CREE, as calculated under the provisions of 40 CFR §600, is how EPA evaluates compliance with the CO2 requirements of 40 CFR §86, Subpart S.  Two items relevant to CREE determination for dual fuel NGVs in 40 CFR §600.510-12(j) should be noted:

          40 CFR §600.510-12(j)(2)(v) covers CREE determination for model years 2012 through 2015. It applies a simple arithmetic average for operation on gasoline and natural gas (i.e., a 0.5 UF). Furthermore, it allows for the CREE value for the combined model type operation on natural gas as determined in 40 CFR §600.208-12(b)(5)(ii) multiplied by 0.15 provided the requirements of paragraph 40 CFR §600.510-12(g) are met.  As mentioned above, as written, neither 40 CFR §600.510-12(g)(1) nor the range requirement of (g)(3) pertains here.  EPA aligned CREE compliance with fuel economy compliance by providing the 0.15-factor multiplier incentive for CREE for model years 2012-2015.  The 2:1 driving range ratio and drive-to-empty restrictions do not apply.

          40 CFR §600.510-12(j)(2)(vii) covers CREE compliance for dual fuel NGVs for model years 2016 and later, using the following equation:
      CREE = [CREECNG x UF] + [CREEGAS x (1  -  UF)]                 Equation 3
             Where:

             CREECNG is the combined CREE value for operation on natural gas as determined in 40 CFR §600.208-12(b)(5)(ii).

             UF is the utility factor (UF) selected from the table in the regulations based on the driving range of the vehicle while operating on natural gas, except for dual fuel NGVs that do not meet the criteria in 40 CFR §600.510-12(j)(2)(vii)(B), the UF shall be 0.5.  This also uses the same 2:1 range and drive-to-empty restrictions as for fuel economy compliance.

The 0.15-factor multiplier in CREECNG no longer applies, so there is no longer incentive alignment for CREE compliance and CAFE compliance.  Also, the reference related to meeting the requirements in 40 CFR §600.510-12(g) is absent.  It is unclear why EPA maintained the minimum 0.5 utility factor for CREE calculations when it has no statutory obligation to do so and opted to include the 2:1 range and drive-to-empty restrictions.  At the same time, it decided to drop both the 0.15-factor multiplier as well as the reference to paragraph (g) that applied to model year 2012 through 2015 dual fuel NGVs (which is probably unnecessary).

This is in stark contrast to the provisions for electric dual fuel vehicles (PHEV) where a 0 g/mi CREE value is assigned when operating on electricity without the driving range ratio or drive-to-empty requirements applicable to dual fuel NGVs. For electric dual fuel models the only requirements are a driving range of 7.5 miles and 10.3 miles on EPA's city and highway fuel economy driving cycles, respectively.

      So, in summary:
 There are several statutory provisions governing the calculation of fuel economy and minimum driving range for dual fuel NGVs. These provisions apply through model year 2019.
 In 2012, EPA promulgated an equation (Equation 2) on how to calculate average fuel economy for dual fuel NGVs that weighs fuel economy based upon the fuel economy on natural gas and the fuel economy on gasoline, using a mandated UF of 0.5.
 For average fuel economy for 2017 and later model years, EPA retained a 0.5 UF minimum, but added additional restrictions to permit the use of the UF value above 0.5. However, these restrictions (2-to-1 range requirements, and drive-to-empty) make it practically impossible to design a dual fuel NGV that is commercially attractive.  No such restrictions exist for electric dual fuel vehicles (i.e., PHEVs) to fully utilize the UF table.
 There are several inconsistent and perhaps incorrect and unnecessary references between 40 CFR §600.510-12(c) and 40 CFR §600.510-12(g) as well as 40 CFR §600.510-12(j), and 40 CFR §600.510-12(g) which need to be addressed. EPA should further evaluate whether any reference to 40 CFR §600.510-12(g) in 40 CFR §600.510-12(j) is needed and whether reference to 40 CFR §600.510-12(g) in 40 CFR §600.510-12(c) is needed after the 2019 model year.
 For CREE, EPA should re-examine the decision to eliminate the 0.15 multiplier and remove, as unnecessary, a redundant application of the 2-to-1 range and drive-to-empty requirements and reference to 40 CFR §600.510-12(g).
 40 CFR §600.510-12(g)(3) points to 49 CFR §538 to identify the minimum driving range requirements established by the Secretary of Transportation to obtain CAFE credits, but as written this now only applies to alcohol dual fueled vehicles.

          MINIMUM DRIVING RANGE REQUIREMENTS FOR DUAL FUEL NGVs
      The minimum driving range requirements arise from 49 USC §32901(a)(9)(D) and §32901(c).  The language, codified in 49 CFR §538, contains three sections that are pertinent to this discussion:
 49 CFR §538.1 informs that the range restrictions of 49 USC chapter 329 apply to model years 1993 through 2019.  Even though the effect of the provisions of 49 CFR §538 expire after model year 2019, the minimum driving range requirement of 49 CFR §538.5 has had no effect on 40 CFR §600.510-12(g) since changes were made to 40 CFR §600.510-12(g) in the GHG/CAFE rule published on October 15, 2012.
 49 CFR §538.5 informs that: (a) the minimum driving range for passenger automobiles to be treated as a dual fuel automobile pursuant to 49 USC §32901(c) is 200 miles when operating on the alternative fuel for vehicles manufactured prior to model year 2016, and (b) beginning in model year 2016, a natural gas passenger automobile must have a minimum driving range of 150 miles when operating on the natural gas to be treated as a dual fuel automobile.
         It should be noted that there is no direction on how to calculate combined fuel economy for natural gas/gasoline vehicles that do not meet the 150-mile criteria.  The regulations and statutes do not prohibit the use of the UF approach in 40 CFR §600.510-12(c)(2)(vii)(A) as vehicles that meet the driving range minimum, and this is effectively how EPA appears to address the matter by no longer referencing 40 CFR §600.510-12(g)(3) to dual fuel NGVs.
 49 CFR §538.6 instructs that driving range on the natural gas is determined by multiplying the combined EPA urban/highway fuel economy rating (mpg) when operating on natural gas by the nominal usable fuel tank capacity (in gallons), of the natural gas fuel tank.  The combined EPA urban/highway fuel economy rating is the value determined by the procedures established by the Administrator of the EPA under 49 USC §32904 and set forth in 40 CFR §600.  The nominal useable fuel tank capacity is defined in 40 CFR §600-02.
      A review of the regulations shows that combined model type fuel economy on natural gas is calculated "per the requirements of 40 CFR §600.208 divided by 0.15" [see 40 CFR §600.510-12(c)(2)(iv) or 40 CFR §600.510-12(c)(2)(vii)(A)].  Thus, the 0.15-incentive divisor is used in the calculation of fuel economy for purposes of range determination for the requirements of 49 USC §32901(c) and 49 CFR §538.5.
      In summary, 49 CFR §538:
          Applies the statutory requirements of 49 USC chapter 329 for fuel economy for model years 1993 through 2019.  However, changes made to 40 CFR §600.510-12(g) in the CAFE/GHG rule published on October 15, 2012 cut the tie with these provisions for dual fuel NGVs.
          Provides a 150-mile range requirement for dual fuel NGVs for model years 2016 and later to be treated as dual fuel vehicles, but provides no direction on how to treat "dual fuel" vehicles with less than a 150-mile range.  EPA may have addressed the matter by no longer referencing 40 CFR §600.510-12(g)(3) to dual fuel NGVs.
          Provides instruction to calculate the driving range for meeting the 150-mile requirement, by using the combined average fuel economy through applying various sections of 40 CFR §600. With the 0.15-divisor, this makes the range requirement on natural gas 22.5 miles.

          RECOMMENDATIONS:
      After model year 2019 the requirements of 49 USC §32905(d) to use Equation 1 (including a minimum UF of 0.5) expire, also ending the statutory 150-mile minimum range on natural gas of 49 USC §32901(c)(2)(B).  The expiration of the statutory requirements provides an opportunity for EPA to address several needed issues for 2020 and later model year dual fuel NGVs:
          Close the loophole that allows vehicles with short range (i.e. less than 30 miles) natural gas tanks to use a 0.5 utility factor for compliance purposes.  This may be accomplished by eliminating the 0.5 minimum UF in 40 CFR §600.510-12(c)(2)(vii)(B) for CAFE compliance and 40 CFR §600.510-12(j)(2)(vii) for CREE compliance when vehicles do not meet the 2:1 range and drive-to-empty requirements.   Establish a requirement that for compliance calculations  vehicles use the UF from the table that matches the range on the alternative fuel.
          Provide consistency and equality (i.e. level the playing field) in the use of the "utility factor approach" between dual fuel NGVs and electric dual fuel vehicles.  As noted above, eliminate the 0.5 minimum utility factor, but also:

             Eliminate the 2:1 range requirement in 40 CFR §600.510-12(c)(2)(vii)(B)(1) and 40 CFR §600.510-12(j)(2)(vii)(B)(1);

             Eliminate the drive-to-empty requirement in 40 CFR §600.510-12(c)(2)(vii)(B)(2) and 40 CFR §600.510-12(j)(2)(vii)(B)(2);

             Replace the minimum driving range requirements of 49 CFR §538 for dual fuel NGVs with minimums similar to those for PHEVs.  The UF for use in calculating average fuel economy and CREE from the UF table based solely on range on natural gas.

          Eliminate confusion on whether the 150-mile range on natural gas is needed to use Equation 2 for determining average fuel economy.  This can be done by editing 40 CFR §600.510-12(c)(2)(vii)(A) by removing the reference to paragraph (g) in the explanation of MPGCNG.
          Provide consistency between the fuel economy and CREE incentives for dedicated and dual fuel natural gas vehicles.  This can be accomplished by reinserting the 0.15 multiplier in 40 CFR §600.510-12(j)(2)(iii) and 40 CFR §600.510-12(j)(2)(vii)(A) to align with the use of the 0.15 divisor in 40 CFR §600.510-12(c)(2)(iii)(A) and 40 CFR §600.510-12(c)(2)(vii)(A).
          Eliminate confusion on whether the alternative fuel energy efficiency requirements of 40 CFR §600.510-12(g)(1) apply to CREE compliance for NGVs by deleting the reference to 40 CFR §600.510-12(j)(2)(iii).
          Remove any reference to CREE calculations (40 CFR §600.510-12(j)) in 40 CFR §600.510-12(g) and vice versa.  These are not required by statute and are largely redundant to any similar restriction for fuel economy.
          To the degree to which the provisions of 40 CFR §600.510-12(g)(1) and (3) are retained after the 2019 model year, be certain that they refer only to provisions in 40 CFR §600.510-12(c)(2) which pertain to fuel economy for dual fuel automobiles.
          For CREE, EPA should re-examine the lack of parity between provisions for dual fuel NGVs and electric dual fuel vehicles (PHEVs).  This includes the gross disparity between the CREE compliance value for dual fuel NGVs (drawn from laboratory testing) and the zero g/mi compliance value assigned to PHEVs. We recommend that the 0.15 multiplier be reinstated for dual fuel NGVs and that the 2:1 range and drive-to-empty requirements needed to fully utilize the UF table be dropped. Driving range requirements should be like those for PHEVs.

 Recommended changes to regulatory text for natural gas vehicles (NGVs)

These revisions should be implemented for the earliest possible model year, (i.e., 2020).  The regulations for items 1 and 2 below do not have a model year designation. For items 3-8 below, depending on the drafting approach used, new sections might be needed.  The provisions drafted below are for changes to the current regulatory text. If the change is to be designated for a section other -12, say for model year 2020, then new subparagraphs might be needed within the current sections or new regulatory sections might be needed for sections 510, e.g. 40 CFR §600.510-20 and 1866, 40 CFR §86.1866-20.

 This changes adds a critically needed definition for compressed natural gas and aligns the part 600 definition for dual fuel automobile with the time-period of the related provisions in 49 CFR 538:

         Amend 40 CFR §600.002 by adding one new definition and revising one definition:

         Compressed Natural Gas (CNG) vehicle means a dedicated or dual fuel vehicle which uses natural gas fuel for propulsion. The natural gas is dispensed and stored onboard the vehicle at pressures greater than 500 psi.

         Dual fueled automobile means an automobile:
         (1) Which is designed to operate on an alternative fuel and on gasoline or diesel fuel; and
         (2) Which provides equal or greater energy efficiency as calculated in accordance with §600.510-08(g)(1) or §600.510-12(g)(1) while operating on the alternative fuel as it does while operating on gasoline or diesel fuel; and
         (3) For passenger automobiles manufactured in model years 1993-2019, meets or exceeds the minimum driving range established by the Department of Transportation in 49 CFR part 538.  For model years after 2019 meets a driving range of 10.3 miles on the EPA highway fuel economy test.

 This simply adds an acronym for CNG which is used in other sections of part 600.

         Amend 40 CFR §600.003 by adding the following abbreviation:

         (f) CNG means compressed natural gas.

 For dual fuel NGVs, this change eliminates the minimum UF value of 0.5 for fuel economy calculations and deletes the 2:1 driving range ratio and drive-to-empty provisions to enable full use of the UF table. With this change the value UF for fuel economy calculations is always drawn from the table and is solely a function of calculated driving range on natural gas. This also eliminates current concerns for gaming of the UF value wherein a dual fuel NGV with very small useable natural gas storage capacity could still get a 0.5 UF value. It retains the 0.15 divisor for fuel economy calculations.

         Amend 40 CFR §600.510-12 (c)(2)(vii) (A) by revising the "UF" explanatory text below the equation, revising paragraph (B), and adding a new paragraph (C):

         UF = A Utility Factor (UF) value selected from the following table based on the driving range of the vehicle while operating on natural gas, except for natural gas dual fuel vehicles that do not meet the criteria in paragraph (c)(2)(vii)(B) the Utility Factor shall be 0.5.  Determine the vehicle's driving range in miles by multiplying the combined fuel economy as determined in §600.208-12(b)(5)(ii) by the vehicle's usable fuel storage capacity (as defined at §600.002 and expressed in gasoline gallon equivalents), and rounding to the nearest 10 miles.
         (B)  Natural gas dual fuel model types must meet the following criteria to qualify for use of a Utility Factor greater than 0.5: Using the tests prescribed in 40 CFR §600 subpart B, and calculated as specified at §600.206(a)(4) (a), (b), and (f) and §600.208-12(b)(5)(ii), natural gas dual fuel model types must have a driving range of 10.3 miles when operated on the EPA highway test cycle to use the utility factor table.
         (1) The driving range using natural gas must be at least two times the driving range using gasoline.
         (2) The natural gas dual fuel vehicle must be designed such that gasoline is used only when the natural gas tank is effectively empty, except for limited use of gasoline that may be required to initiate combustion.

 This change revises the method to get the UF value for CREE calculation purposes. The reference to the provision for a 0.5 weighting factor for vehicles which do not meet the 2:1 driving range ratio and drive-to-empty provisions is deleted.  With this change the UF for CREE purposes is drawn from the table and is solely a function of calculated driving range on natural gas.  It also restores the 0.15 multiplier.

         Amend 40 CFR §600.510-12 (j)(2)(vii)(A) by revising the explanatory text below the equation to read:

         CREE CNG  -  The combined model type carbon related exhaust emission value for operation on natural gas as determined in §600.208-12(b)(5(ii) multiplied by 0.15.

         UF = A Utility Factor (UF) value selected from the following table based on the driving range of the vehicle while operating on natural gas, except for natural gas dual fuel vehicles that do not meet the criteria in paragraph (c)(2)(vii)(B) the Utility Factor shall be 0.5.  Determine the vehicle's driving range in miles by multiplying the combined fuel economy as determined in §600.208-12(b)(5)(ii) by the vehicle's usable fuel storage capacity (as defined at §600.002 and expressed in gasoline gallon equivalents), and rounding to the nearest 10 miles.

 For dual fuel NGVs, this change deletes the 2:1 driving range ratio and drive-to-empty provisions for using the UF table for CREE calculations.  It also sets a 10.3 mile driving range minimum to use the table.

         Amend 40 CFR §600.510-12 (j)(2)(vii)(B) by revising paragraph (B) to read as follows:

         (B) Natural gas dual fuel model types must meet the following criteria to qualify for use of a Utility Factor greater than 0.5: Using the tests prescribed in 40 CFR §600 subpart B, and calculated as specified at §600.206(a)(4) (a), (b), and (f) and §600.208-12(b)(5)(ii), natural gas dual fuel model types must have a driving range of 10.3 miles when operated on the EPA highway test cycle to use the utility factor table:
         (1) The driving range using natural gas must be at least two times the driving range using gasoline. (2) The natural gas dual fuel vehicle must be designed such that gasoline is used only when the natural gas tank is effectively empty, except for limited use of gasoline that may be required to initiate combustion.

         6.   This provision restores the 0.15 multiplier for CREE calculations for dedicated-fuel NGVs.

         Amend 40 CFR §600.510-12 (j)(2)(iii)(A) by revising paragraph (iii) to read as follows:

         (iii) (A) For natural gas-fueled model types, for model years 2012 through 2015, the carbon-related exhaust emissions value calculated for that model type in accordance with paragraph (b)(2) of this section multiplied by 0.15 and rounded to the nearest gram per mile, except that manufacturers complying with the fleet averaging option for N2O and CH4 as allowed under §86.1818 of this chapter must perform this calculation such that N2O and CH4 values are not multiplied by 0.15; or
          (B) For natural gas-fueled model types, for model years 2016 and later, the carbon-related exhaust emissions value calculated for that model type in accordance with paragraph (b)(2) of this section; or

      7.   This change brings puts a driving range minimum in place for dual fuel NGVs to get production multipliers and the 0.15 CREE multiplier.  Similar provisions are in place for PHEVs:

          Amend 40 CFR §86.1866-12 by adding a new paragraph (c) to read as follows:

         (c) A dual fuel natural gas vehicle must have a minimum driving range of 10.3 miles on its useable fuel storage capacity when operated on the EPA highway fuel economy test cycle to qualify for the production multipliers and the 0.15 CREE multiplier of 40 CFR §600.510-12 (j)(2)(vii).

         8.  This change corrects reference errors and omissions in the current text of paragraph (g)(1) regarding energy efficiency requirements for a dual fuel automobile to get use of the 0.15 divisor for fuel economy.  It also eliminates an unnecessary reference to paragraph (j)(2) in paragraph (g)(1). For paragraph (g)(3) it corrects reference errors and omissions in the current text regarding driving range.
         Amend 40 CFR §600.510-12 (g) by revising paragraphs (1) and (3) to read as follows:
         (g)(1) Dual fuel automobiles must provide equal or greater energy efficiency while operating on the alternative fuel as while operating on gasoline or diesel fuel to obtain the CAFE credit determined in paragraphs (c)(2)(iv), (v), (vi), and (vii) and (v) of this section. or to obtain the carbon-related exhaust emissions credit determined in paragraphs (j)(2)(ii) and (iii) of this section. The following equation must hold true:
         * * *
         (3) Dual fuel passenger automobiles manufactured during model years 1993 through 2019 must meet the minimum driving range requirements established by the Secretary of Transportation (49 CFR part 538) to obtain the CAFE credit determined in paragraphs (c)(2)(iv), (v), (vi), and (vii) and (v) of this section.