\793\ Oil and Natural Gas Sector: New Source Performance
Standards and National Emission Standards for Hazardous Air
Pollutants Reviews; Final Rule, 40 CFR parts 60 and 63,
Environmental Protection Agency, August 16, 2012.
    \794\ www.epa.gov/gasstar/.
---------------------------------------------------------------------------

    Emission estimates in the GHG Inventory are generally bottom-up
estimates which are per-unit (compressor, pneumatic valve, etc.)
emission estimates based on measured or calculated emission rates from
such emission sources.
    In addition to the national-level data available through the GHG
Inventory, facility-level petroleum and natural gas systems data are
also available through EPA's Greenhouse Gas Reporting Program (GHGRP).
This data represents a significant step forward in understanding GHG
emissions from this sector and EPA expects that this data will be an
important tool for the agency and the public to analyze emissions, and
understand emission trends. For some sources, EPA has already used
GHGRP data to update emission estimates in the GHG inventory, and EPA
plans to continue to leverage GHGRP data to update future GHG
Inventories.
    The EPA-promulgated 2012 New Source Performance Standards (NSPS)
will reduce emissions of ozone precursors from natural gas facilities
and have methane and hazardous air pollutant reduction co-benefits. The
NSPS standards require that natural gas wells which are hydraulically
fractured control emissions using flaring or reduced emission
completion (REC) technology from completions and workovers starting in
2012. RECs used by natural gas well drillers capture the natural gas
emissions that occur during well completion, instead of venting or
flaring the emissions. Starting January 2015, RECs are required for
natural gas well completions and workovers. The NSPS also regulates the
emissions from certain new natural gas production equipment, including
dehydrator vents and condensate tanks. In the 2013 Climate Action Plan,
EPA projects future emissions of methane to increase modestly, by about
4 percent between now and 2025. As estimated for the recent power plant
proposed rulemaking, natural gas production is expected to increase by
about 20 percent during this timeframe, thus, methane emissions in 2025
are expected to be 14 percent lower than in 2012 based on an equivalent
volume of natural gas being produced. As announced by the White House,
EPA will further regulate methane emissions from new natural gas
production facilities.795 796
---------------------------------------------------------------------------

    \795\ FACT SHEET: Administration Takes Steps Forward on Climate
Action Plan Announcing Actions to Cut Methane Emissions, The White
House, January 14, 2015.
    \796\ FACT SHEET; EPA's Strategy for Reducing Methane and Ozone-
Forming Pollution from the Oil and Natural Gas Industry;
Environmental Protection Agency, January 14, 2015.
---------------------------------------------------------------------------

    In the GHG Inventory, emissions associated with powering the units
or equipment (i.e., compressors, pumps) used in natural gas production,
processing, transmission and distribution are aggregated with all the
other fossil fuel combustion activities. Rather than attempt to
disaggregate those specific GHG emissions from the rest of the process
emissions in the GHG Inventory, we instead used the estimated emissions
for these sources provided by GREET.
(2) Downstream Emissions
    Natural gas can be used by vehicles either as a compressed gas
(CNG) or as liquefied natural gas (LNG). We discuss the emissions of
both below.
(a) Compressed Natural Gas (CNG)
    The natural gas that comprises CNG is typically off-loaded from the
natural gas system where the vehicles using CNG are refueled. This is
because the natural gas used as CNG is compressed at the retail
stations that sell the CNG and the fleet facilities which fuel the CNG
fleet vehicles. To get the natural gas to the CNG retail facilities
which are mostly located in or near urban areas, the natural gas is
expected to be shipped through the distribution system downstream of
the natural gas transmission system. CNG trucks are then refueled at
the retail stations providing CNG. Each time a CNG refueling event
occurs, a small amount of natural gas is released to the environment.
Because of a lack of data or an estimate by GREET or CARB, this small
amount of natural gas has not been estimated and therefore are not
included in the lifecycle analysis presented here. Since these systems
are designed to have no leaks, the CNG could remain stored in the CNG
tanks indefinitely. However, the very high pressure at which CNG is
stored dramatically increases fugitive emissions if a fitting were to
develop a leak. The level of fugitive emissions for a certain sized
hole is directly proportional to the pressure. We do not have any data
on the fugitive emissions from CNG trucks. In our lifecycle analysis,
we assume that CNG fugitive emissions are zero, which likely
underestimates the methane emissions.
    When CNG is stored at high pressure (i.e., 3600 psi) it contains
only about 25 percent the energy density of diesel fuel. This low fuel
storage density is a disincentive for using CNG in long haul trucks. An
adsorbent for natural gas (ANG),\797\ called metal organic framework
(MOF) for storing CNG, has been invented and is being tested for large
scale use. The technology involves filling the CNG tank with a
specially designed substance that looks similar to a pelletized
catalyst. The substance establishes a matrix which causes the methane
molecules to become better organized and store the same quantity of
natural gas in a smaller volume at the same pressure (about 60 percent
of the energy density of diesel fuel), or store the same density of
natural gas at a lower pressure. This MOF could improve the energy
density of CNG which would make it a better candidate for natural gas
storage for long range combination trucks. Or, if used to store CNG at
the same density, could reduce the compression energy required to
compress the CNG since it could be stored at a lower pressure.
---------------------------------------------------------------------------

    \797\ Menon, V.C., Komarneni, S. 1998 ``Porous Adsorbents for
Vehicular Natural Gas Storage: A Review'', Journal of Porous
Materials 5, 43-58 (1998); Burchell, T ``Carbon Fiber Composite
Adsorbent Media for Low Pressure Natural Gas Storage'' Oak Ridge
National Laboratory.
---------------------------------------------------------------------------

(b) Liquified Natural Gas (LNG)
    A primary reason for liquefying natural gas is that it allows
storing the natural gas at about 60 percent of the density of diesel
fuel. For this reason, LNG is a primary fuel being considered by long
haul trucks.

    The first step downstream of the natural gas production, processing
and distribution system for making LNG available to trucks is the
liquefaction step. This step involves the removal of heat from the
natural gas until it undergoes a phase change from a gas to a liquid at
a low pressure. LNG plants are configured depending on their ultimate
capacity. World class LNG plants produce 5 million metric tons, or
more, per year of LNG and the economy of scale of these large plants
supports the significant addition of capital to reduce their operating
costs and energy use. An LNG plant solely producing LNG for truck fuel
is expected to be significantly smaller than the world class LNG export
plants with a poorer economy of scale. Their energy efficiency would be
expected to be much lower on a percentage basis. The California Air
Resources Board estimates the liquefaction plants used for producing
truck LNG fuel are 80 percent efficient, compared to 90 percent
efficient for world class LNG plants.\798\ In our lifecycle analysis of
LNG as a truck fuel, we also assumed that LNG plants are 80 percent
efficient. The LNG producer is not only responsible for the LNG
fugitive emissions at the plant, but it is also responsible for the GHG
and other process emissions emitted when liquefying the natural gas.
Because LNG plants are located separate from the retail facilities,
they can be located to access the lowest cost feedstock. This means the
natural gas for LNG can be sourced from the larger natural gas
transmission pipelines which are upstream of the distribution
pipelines. Once the natural gas is liquefied at the liquefaction plant,
it is stored in an insulated storage tank to keep the LNG liquefied.
---------------------------------------------------------------------------

    \798\ Detailed California-Modified GREET Pathway for Liquid
Natural Gas (LNG) from North American and Remote Natural Gas
Sources, Version 1.0, California Air Resources Board, July 20, 2009.
---------------------------------------------------------------------------

    To transport the LNG to the retail station, the LNG is loaded into
an insulated horizontal trailer designed specifically for transporting
LNG. If the LNG in the truck trailer were to warm sufficiently to cause
the LNG to reach the pressure relief valve venting pressure, there
would be boil-off emissions from the truck trailer. However, since the
LNG is super cooled, boil off events are likely to be rare. We did not
have access to any specific data to estimate these emissions so we used
a CARB estimate of boil-off emissions for LNG transportation by the
tanker truck between the LNG plant and retail outlets.\799\
---------------------------------------------------------------------------

    \799\ Ibid.
---------------------------------------------------------------------------

    LNG is stored in an insulated storage tank at the retail facility.
Heat gain in the storage tank could eventually lead to boil-off
emissions. Service stations with little LNG demand are at a higher risk
of boil-off emissions compared to service stations which have a
significant throughput volume. LNG stations could be configured to
avoid boil-off events to the atmosphere, such as venting to a co-
located CNG facility, or venting to a nearby natural gas pipeline. We
did not have access to any specific data to estimate these emissions so
we used a CARB emission estimates for the boil-off emissions from LNG
retail facilities.\800\
---------------------------------------------------------------------------

    \800\ Ibid.
---------------------------------------------------------------------------

    Vehicles requiring LNG fuel drive up to an LNG retail outlet or
fleet refueling facility and fill up with LNG fuel. When the refueling
nozzle is disconnected from the LNG tank nozzle, a small amount of
methane is released to the environment. In addition, it may be
necessary prior to refueling, due to high pressure in the truck's LNG
tank, to reduce the pressure in the truck's LNG tank to speed up the
refueling process. In some cases the retail station is equipped with
another hose and associated piping to vent the excess gas to the retail
stations' storage tank where it would usually condense back to a liquid
due to the lower temperature of that tank, or perhaps be vented to a
natural gas pipeline. However, for those retail outlets without such
vent lines to the storage tank, the truck driver may simply vent the
truck's storage tank to the atmosphere. As part of a sensitivity
analysis for our lifecycle analysis, we estimate the emissions for
venting an LNG tank prior to refueling.
(c) Comparing CNG to LNG
    There is an important difference in providing CNG and LNG which is
important to highlight. For making CNG available to trucks, only a
single facility, the retail outlet, is required for distributing CNG,
while LNG requires both a liquefaction plant and a retail outlet and a
means for transporting the LNG from the liquefaction plant to retail.
Relying on a single facility simplifies the logistics of providing CNG
and reduces the opportunity for methane leakage to the environment.
However, this emissions disadvantage of LNG compared to CNG is offset
somewhat because LNG is expected to access the lower priced natural gas
from the upstream transmission system, therefore, the methane emissions
associated with the downstream natural gas distribution system are
avoided.
(d) Vehicle Emissions
    There are several different ways that diesel heavy duty engines can
be configured to use natural gas as a fuel. The first is a spark
ignition natural gas (SING), Otto cycle SING heavy duty engine burns
the fuel stoichiometrically and uses a three-way catalyst, and some
also add an oxidation catalyst to provide the greatest emissions
reduction. In this case the engine compression ratio is reduced similar
to that of a gasoline engine and thus its thermal efficiency is lower
than a diesel-like engine by about 10-15 percent.
    The second is a direct injection natural gas (DING), diesel cycle.
The DING engine uses a small quantity of diesel fuel (pilot injection)
or a glow plug as ignition sources. As the injection system for the
diesel fuel does not have the capability of greater injection
quantities, this option has no dual-fuel properties. On the other hand,
an optimization of the pilot injection can be made to achieve lower
emissions. An advanced high pressure direct injection (HPDI) fuel
system combining the injection of both diesel fuel and natural gas can
be used for lean burn combustion. This enables the engine to maintain
the efficiency advantage of a compression ignition engine while running
mainly CNG/LNG.
    The third is a mixed-fuel natural gas (MFNG), diesel cycle. In a
mixed-fuel engine, natural gas is mixed with intake air before
induction to the cylinder and diesel fuel is used as ignition source.
Mixed-fuel vehicle/engine means any vehicle/engine engineered and
designed to be operated on the original fuel(s), or a mixture of two or
more fuels that are combusted together. Engine results showed that the
efficiency of the engine could decrease by about 2-5 percent in mixed-
fuel mode compared to diesel mode and that the diesel replacement was
approximately 40-60 percent.
    Each of these natural gas engine types has its merits. The SING
engine is less costly, but is less fuel efficient and because of the
lower compression ratio it has less torque than the two diesel cycle
engines. The DING engine is likely the most expensive because of the
special natural gas/diesel fuel injection system and large required
amount of natural gas (LNG or CNG) storage since the truck must run on
natural gas. However, because the truck can run almost completely on
natural gas, the DING engine has the potential to more quickly pay down
the higher investment cost of the natural gas truck. The MFNG engine
provides the truck owner the

flexibility to operate on natural gas or diesel fuel, but at the
expense of a slower natural gas investment pay down rate because it can
operate at most 50 percent of the time on natural gas.
    When assessing the methane emissions from both CNG and LNG trucks,
it is important to separate those trucks built or converted before 2014
to those built or converted in 2014 and later. The trucks built before
2014 only needed to meet a nonmethane hydrocarbon (NMHC) standard,
which means that the methane emissions from these trucks are
unregulated. Our certification data show that the methane tailpipe
emissions from these trucks/buses ranges from 2-5 g/bhp-hr for both
spark ignition (gasoline type) and compression ignition (diesel type)
engines.
    For 2014 and later OEM compression ignition natural gas trucks or
natural gas conversions of 2014 and later diesel trucks, the trucks
must meet a 0.1 g/bhp-hr methane emission standard in the case of a
larger truck engine tested with an engine dynamometer, and a 0.05 g/
mile methane emission standard in the case of smaller trucks tested on
a chassis dynamometer. For spark ignition (gasoline style) engines, the
standards take effect in 2016.\801\ Natural gas truck manufacturers are
allowed to offset methane emissions exceeding the methane emission
standard by converting the methane emission exceedances into
CO2 equivalent emissions and using CO2 credits.
For the initial natural gas engine certifications that EPA received for
2014, the truck manufactures chose to continue to emit high levels of
methane (around 2 g/bhp-hr) and use carbon dioxide credits to offset
those emissions. We don't know if this practice of will continue in the
future, however, for evaluating the lifecycle impacts of natural gas
heavy-duty trucks, the 2014 and later natural gas heavy-duty trucks may
in fact have an emissions profile more like the pre-2014 trucks and not
like the 2014 and later trucks as depicted below in the figures. It is
worth noting that the potential exists for deterioration or malfunction
of the engines, fuel supplies, or associated emission control devices
on these trucks to occur in such a manner to result in higher methane
emissions in actual use. We have not specifically accounted for the
potential for increased methane emissions caused from high emitter
natural gas trucks. See generally Section II above.
---------------------------------------------------------------------------

    \801\ See 76 FR 57192, 40 CFR 1036.108(a)(2) and 1037.104(c)
(which is proposed to be redesignated as 40 CFR 86.189-14(k)(5)).
---------------------------------------------------------------------------

    The crankcase of these engines receives leakage from across the
piston rings, which can contain methane. The crankcase of the spark
ignition engines is normally vented into the intake of the engines,
thus, any methane emissions from the crankcase which is not combusted
in the engine would be accounted for in the tailpipe emissions. For
compression ignition engines, however, the crankcase emissions are
allowed to be vented into the exhaust pipe downstream of the
aftertreatment devices, and therefore the crankcase emissions are
released to the atmosphere even though they are included in the
emissions test for the Methane standard that was introduced in Phase 1
on the rule. Another potential source of methane emissions from CNG and
LNG trucks is fugitive emissions from the engine and the piping which
routes the fuel to the engine. Thus, either while parked or operated,
this part of the vehicle fuel and engine systems could leak methane to
the environment (which is different from boil-off emissions from LNG
trucks discussed below). We do not have data nor did we develop an
estimate for these potential fugitive emissions from these types of in-
use leaks. If the natural gas vehicles are well maintained, these
emissions are likely to be very low.
    The thermal efficiency (the ratio of energy converted to work
versus energy consumed) of the natural gas engine also plays a role in
the lifecycle emissions of the truck. Natural gas engines are generally
less efficient than their gasoline and diesel counterparts.
Furthermore, manufacturers choose to produce spark-ignition
stoichiometric natural gas engines for use in diesel applications.
Spark-ignition natural gas engines can be as much as 15 percent less
efficient than compressed ignition engines which operate on diesel
fuel. In our lifecycle analysis, we provide two different sensitivities
for natural gas vehicles assuming that they may be 5 percent and 15
percent less efficient.
    An important difference between CNG and LNG is way in which the
fuels are stored on the vehicle. The CNG is contained in a sealed
system while the LNG system is ultimately open to the environment.
Providing that there are no leaks in the storage system, the CNG truck
is inherently low (zero) emitting and a parked truck would contain the
CNG indefinitely. An LNG truck is inherently high emitting since if the
truck were to be parked long enough its entire contents would be
emitted to the environment.
    Thus, a major GHG issue for LNG trucks is boil-off emissions from
the truck's fuel storage systems. When the liquefied natural gas is
pumped into the truck LNG tanks, it is ``supercooled,'' meaning that
the pressure of the LNG is well below the pressure at which the natural
gas vent valve would relieve the LNG pressure. If the truck is driven
extensively, the drawdown of liquid level will cause a vacuum which
will cause some of the fuel to boil off and the heat of vaporization
would thus cool the rest of the liquid in the LNG storage tank. It is
possible that the fuel would maintain its supercooled temperature, or
possibly even cool further below its supercooled temperature, the
entire time until the LNG is completely consumed.
    If the truck is not driven at all or is driven very little, the
very low temperature and low pressure LNG warms due to the ambient
temperature gradient through the tank wall, and vaporizes, causing the
temperature and pressure of the LNG to rise. When the pressure reaches
a maximum of 230 psi a safety release valve releases the methane gas to
vent excess pressure. There are two industry standards used to design
tanks to reduce the temperature increase, one for a 3 day hold time
\802\ and one for a 5 day hold time.\803\ Hold time is the time elapsed
between the LNG refueling and venting.
---------------------------------------------------------------------------

    \802\ National Fire Protection Association 52, Compressed
Natural Gas (CNG) Vehicular Fuel System Code, 2002 Edition.
    \803\ SAE International (2008) SAE J2343: Recommended Practice
for LNG Medium and Heavy-Duty Powered Vehicles. Warrendale,
Pennsylvania.
---------------------------------------------------------------------------

    If there is a boil-off event, a large amount of methane would be
released. If aware of the impending boil-off, such as when the truck is
being maintained, the truck driver could hook up the LNG tank to a hose
which would vent the natural gas emissions to a CNG system which could
reuse the boil-off natural gas as CNG, or vent the natural gas emission
to a natural gas pipeline. Otherwise the boil-off emission would simply
vent to the atmosphere. If the truck had 200 gallons of LNG storage
capacity, the estimated quantity of boil-off emissions would range from
3 to 9 gallons of LNG for each boil off event depending on the fill
level of the LNG tank. Each boil off event has the potential to release
on the order of 5,300-15,800 grams of CH4 which equates to
132-400K grams of CO2 equivalent emissions, assuming that
methane has a global warming potential (GWP) of 25 (assessed over 100
years). If the vehicle continues to sit for five more days and boil-off
events occur each day to several times per day as the tank vents and
rebuilds in pressure, the sum total of the boil-off events can

result in over a million grams of CO2-equivalent emissions.
(3) Results of Life Cycle Analysis
    To estimate the lifecycle impact of natural gas used by heavy-duty
trucks, we totaled the carbon dioxide, methane (CH4) and the
nitrous oxide (N2O) emissions for the upstream and
downstream portions of the natural gas system. The methane and nitrous
oxide emissions are converted to carbon dioxide-equivalent emissions
using the appropriate GWP conversion factors. The GWP conversion
factors EPA currently uses are for a 100-year timeframe, are 25 and 298
for methane and nitrous oxide, respectively.\804\
---------------------------------------------------------------------------

    \804\ These global warming potential values are based on the
Fourth Assessment Report authored by the Intergovernmental Panel on
Climate Change.
---------------------------------------------------------------------------

    To establish the impacts of natural gas use in the heavy-duty
fleet, it was necessary to compare the lifecycle impacts of natural gas
against the base fuel it is replacing, which is diesel fuel. The
lifecycle impact of diesel fuel was estimated by the National Energy
Technology Laboratory (NETL) for the production and use of diesel fuel
in 2005. EPA used this lifecycle assessment for the 2010 Renewable Fuel
Standard Rulemaking and we are using this NETL diesel fuel lifecycle
estimate as the reference for comparison with the natural gas lifecycle
assessment. NETL is in the process of revising its lifecycle analysis
of diesel fuel to 2009, which should be available sometime in 2015.
According to the lead analyst, the 2009 lifecycle analysis appears to
be similar in magnitude to the 2005 analysis.\805\ However, the 2009
analysis will not capture the lifecycle effects of the large increase
in hydraulically fractured crude oil (i.e., Bakken, Eagle Ford) which
has occurred in the U.S. during the first part of this decade.
---------------------------------------------------------------------------

    \805\ Conversation with Timothy J. Skone P.E., National Energy
Technology Laboratory, Department of Energy, June 2014.
---------------------------------------------------------------------------

    To illustrate the relative full lifecycle impact of natural gas-
fueled heavy-duty vehicles compared to diesel fueled heavy-duty
vehicles, we assessed several different scenarios. The first is a
conversion of a diesel engine to use compressed natural gas. Of the
tens of thousands of heavy-duty natural gas trucks currently in use,
over 90 percent are of this type. These are conversions of older trucks
so they are not regulated by the 2014 methane standard. For future year
heavy-duty trucks, we also estimated the lifecycle emissions if the
trucks were meeting a 0.1 g/bhp-hr or a 0.05 g/mile methane tailpipe
standard. We provide two sensitivities to capture the lower thermal
efficiencies of natural gas trucks: 5 percent less thermally efficient
(thermal low) and 15 percent less energy efficient (thermal high, which
is 10 percent worse thermal efficiency than the 5 percent less
thermally efficient case). The relative life cycle assessment is shown
in Figure XI-1.
[GRAPHIC] [TIFF OMITTED] TP13JY15.019

    The first two bars of Figure XI-1 show that based solely on
CO2 tailpipe emissions (with and without thermal efficiency
adjustments and assuming no increased methane emissions at the truck),
CNG trucks are estimated to emit about 20 percent less GHG emissions
than diesel engines. But this advantage decreases if the natural gas
engine is less thermally efficient. The three full lifecycle analyses
represented by the right three bars in the figure show that pre-2014
CNG trucks are estimated to emit less GHG emissions as diesel trucks,
although if their thermal efficiency is much lower (15 percent less
than the diesel fueled engine) they could emit about the same GHG
emissions. When such trucks are complying with the 2014 and later
methane emission standards, their methane emissions are much lower and
these trucks are expected to be lower emitting than diesels, even if
they are less thermally efficient.
    The second scenario presented in Figure X1-2 is a combination LNG
truck

which in one case is assumed to be emitting methane at pre-2014
emission standards and in another case is assumed to comply with the
2014 methane standard. It is an OEM natural gas truck with a high
pressure direct injection engine, and because of the extensive mileage,
the truck most realistically would use LNG as a fuel to provide the
necessary range for the dedicated natural gas engine. We make two
different assumptions with respect to refueling and boil off emissions.
In the LNG average case, we assume a modest quantity of refueling and
boil-off methane emissions which is estimated by GREET. The second
boil-off emission estimate (assumed to be complying with the 2014
methane emission standard) is based on venting the LNG storage tank to
the atmosphere each time the driver refills his tank, and one LNG boil-
off event between each time the driver must refuel his tank. As
discussed above, we do not expect such high refueling and boil-off
emissions to be common practices for newer trucks that are operated
regularly. However, as the use of these trucks decreases as they age
and are sold into the secondary market, the risk for refueling and
boil-off emission events increases--this estimate provides a simple
sensitivity emission estimate. The lifecycle assessment is shown in
Figure XI-2.
[GRAPHIC] [TIFF OMITTED] TP13JY15.020

    Figure XI-2 shows that LNG trucks have about the same greenhouse
gas footprint as diesel trucks providing that they are complying with
the methane emission standard and providing we assume a low quantity of
refueling and boil-off emissions. In comparing CNG to LNG, the LNG
trucks appear higher emitting than CNG trucks because of the low
thermal efficiency of the small liquefaction facilities. If these LNG
trucks emit high levels of methane when refueling and by experiencing
boil-off events or if they emit methane at pre-2014 emission standard
levels, their GHG emissions can potentially be much greater than that
from diesel trucks.
    It is important to point out the uncertainties associated with the
lifecycle estimates provided in the above figures. As discussed above,
there is uncertainty in both the upstream and downstream methane
emission estimates for natural gas facilities and equipment, and the
trucks that consume natural gas. There is also uncertainty in the
diesel fuel lifecycle analysis conducted by NETL. As new information
becomes available, we can update our lifecycle emission estimates which
would reduce the uncertainty of this analysis. A number of studies are
being conducted to quantify the methane emissions (upstream and
downstream) and life cycle impacts of natural gas by the Environmental
Defense Fund (EDF). The final reports for these studies have not yet
been released but we will review them once they are available. Finally,
the lifecycle analysis is sensitive to the GWP factor used to assess
methane and nitrous oxide, and if a different GWP value were to be
used, it would affect the relative lifecycle impact of natural gas
relative to diesel in heavy-duty trucks (see Chapter 13 of the draft
RIA for sensitivity analyses regarding upstream methane emissions and
the use of different GWP factors).
    We compared our lifecycle emission estimates for natural gas,
relative to diesel fuel, with the estimates provided by the California
Air Resources Board (CARB) for its Low Carbon Fuel Standard (LCFS). For
our emissions estimate used in the comparison we used the carbon
dioxide-equivalent (CO2 eq) emissions estimated for 2014 and
later engines, which must comply with a methane tailpipe emissions
standard, and assumed that the engine was 5 percent less thermally
efficient than a

comparable diesel engine. For the CARB emissions estimates, we used the
estimates made for illustrative purposes using the 2013 version of the
CARB GREET model as published in August, 2014.806 807 CARB
estimates that CNG engines emit 76 percent of the CO2 eq
emissions as a diesel truck, while our analysis estimates that CNG
engines emit 81 percent of the CO2 eq emissions as a diesel
truck. The most likely explanation for CARB's lower estimated
CO2 eq emissions for CNG engines is that a much larger
portion of the electricity used to compress natural gas is renewable in
California than the rest of the country. CARB estimates LNG engines
emit 94.5 percent of the CO2 eq emissions as a diesel truck
while our analysis estimates LNG trucks emit 96 percent of the
CO2 eq emissions as a diesel truck. CARB assumes no boil-off
or venting emissions for LNG trucks and for this comparison, we used
our more modest boil-off and venting assumption, as described above,
which is close to CARB's. Overall, our estimates are very similar to
those estimated by CARB and when there are differences, the differences
are as expected.
---------------------------------------------------------------------------

    \806\ Low Carbon Fuel Standard Reconsideration: CA-GREET Model
Update, California Air Resources Board, August 22, 2014.
    \807\ Per Anthy Alexiades of CARB: CARB is planning to propose a
new draft lifecycle analysis for CNG and LNG trucks at an April 2015
public meeting. While the CNG lifecycle GHG emissions are expected
to be about the same, the LNG lifecycle emissions are expected to be
lower based on using a 90% efficiency for liquefaction plants
instead of the 80% efficiency that CARB was using previously.
Lifecycle emissions for both CNG and LNG trucks will be adjusted to
be 10% higher if using a spark ignition engine to account for their
lower thermal efficiency. These estimates are solely for
hypothetical analyses. LCFS credits are awarded based on GHG
emissions for each specific application.
---------------------------------------------------------------------------

    A UC Davis report recently released estimated that CNG and LNG
trucks using spark ignition engines (SING) emit about the same amount
of CO2 -equivalent emissions, and these emissions are
slightly higher than that of diesel engines.\808\ The HPDI engines
(DING) fueled by LNG are estimated to be the lowest emitting of the
several scenarios analyzed by the study. Because the study did not
discuss vehicle boil-off emissions, it is likely that the study either
assumed that these emissions are zero or assumed the default vehicle
boil-off emission estimates made by GREET. It is likely that the study
assumed that the liquefaction plants are 90 percent efficient as this
is the default assumption in GREET, which leads to lower GHG emissions
by LNG trucks.
---------------------------------------------------------------------------

    \808\ Jaffe, Amy Myers, Exploring the role of Natural Gas in
U.S. Trucking, NextSTEPS Program, UC Davis Institute of
Transportation Studies, February 18, 2015.
---------------------------------------------------------------------------

C. Projected Use of LNG and CNG

    We reviewed several sources to estimate how much natural gas is
currently being used and is projected to be used by heavy-duty trucks.
Projections for this emerging technology range from 7 percent of new
heavy-duty vehicle sales to over 40 percent by 2040. Large
uncertainties exist even since the 2014 NAS First Report was
written.\809\ Among the range of projections we assessed, that produced
by the Energy Information Administration (EIA) seemed the most credible
for capturing recent trends, and for projecting future natural gas use
by heavy-duty trucks. There are several factors that support this
assessment.
---------------------------------------------------------------------------

    \809\ B. Tita, Slow Going for Natural-Gas Powered Trucks; Wall
Street Journal, 8/26/2014.
---------------------------------------------------------------------------

    First, in its 2014 Annual Energy Outlook, EIA estimates that
natural gas fueled 0.4 percent of the energy use of heavy-duty trucks
in 2014. This estimate is consistent with the fraction of the heavy-
duty fleet which is fueled by natural gas as estimated by the
industry.\810\ Conversely, other studies referenced by the NAS report
assume that current use is already about 2 percent (the DRIA contains
more discussion about these other projections).
---------------------------------------------------------------------------

    \810\ NGV America estimates that there are 62,000 natural gas
fueled heavy-duty trucks and buses operating in the U.S. out of a
total of 12.3 million heavy-duty trucks and buses operating in the
U.S., which equates to 0.5%.
---------------------------------------------------------------------------

    Second, the EIA projection is based on an economic analysis which
considers the increased cost of manufacturing a natural gas truck over
a diesel truck, the fuel savings for using natural gas instead of
diesel fuel, and whether the payback time of the fuel savings against
the increased truck cost would result in purchases of natural gas
trucks. As part of this analysis, EIA assumes that lighter heavy-duty
trucks would use CNG, which is a lower cost technology suited for the
shorter driving distances for these trucks. The long haul trucks,
however, require larger on-board stores of fuel to extend the driving
range which is satisfied by storing the natural gas as a liquid. LNG
has about 60 percent of the energy density of diesel fuel, compared to
CNG which has only 25 percent of the energy density of diesel fuel. To
satisfy the long driving range of the long haul trucks, EIA assumed
that they would use LNG as a fuel. The assumptions used by EIA for
conducting its economic analysis all seem reasonable.
    Third, EIA is one of the several organizations in the world which
collects fuel pricing data and projects future fuel prices using a
sophisticated modeling platform. One of the most important assumptions
in projecting the future use of natural gas in the transportation
sector is the relative price of natural gas to the price of diesel
fuel. In 2014, the natural gas price purchased by industrial users was
about $6 per million BTU. The price of crude oil has been volatile
during 2014 as the Brent crude oil price started at about $110 per
barrel, but decreased to under $50 per barrel. From EIA's Web site, the
average retail diesel fuel price in the first part of 2014 was about
$3.80 cents per gallon. When comparing the natural gas spot market
price on a diesel equivalent basis to the diesel fuel price, it appears
that natural gas is priced about one quarter of the diesel fuel price.
However, if used as compressed natural gas, the natural gas must be
distributed through smaller distribution pipeline system that exists in
cities, which increases the price of the natural gas. Then the natural
gas must be compressed and stored at a retail outlet, and then
dispensed to CNG trucks. The estimated retail price of CNG is $2.35 on
a diesel gallon equivalent (DGE) basis, or about $1.45 DGE less than
diesel fuel. LNG plants are assumed to be located close to large
transmission pipelines away from cities, thus, it is sourced from lower
cost natural gas. However, for producing LNG, the natural gas must be
liquefied, shipped to retail outlets, stored and then dispensed to LNG
trucks. These steps add substantially to the price of the LNG and the
estimated retail price of LNG is $2.65 DGE, or $1.15 DGE less than
diesel fuel.
    In its 2014 AEO projections, EIA estimates that crude oil prices in
the upcoming years will decline modestly until after 2020 when they
start increasing until they reach $140/bbl in 2040. Natural gas prices
are expected to only slightly increase over this period.
    Fifth, the assumptions regarding payback used by EIA seemed
reasonable. EIA projects that natural gas trucks begin to be purchased
when the payback times are 4 years or less based on a survey conducted
by the American Trucking Association. This is consistent with
conversations the agencies have had with some fleet owners. Since EIA
does not report the payback times as an output of its projections, it
is useful to understand payback times. The 2014 NAS Phase 2 First
Report cites the payback for the extra cost of natural gas trucks as 2
years, but other sources

report a longer return closer to 4 years.\811\
---------------------------------------------------------------------------

    \811\ Early LNG Adopters Experience Mixed Results; Truck News,
October 1, 2013.
---------------------------------------------------------------------------

    EPA assessed the time required for the lower fuel cost of CNG and
LNG to payback the incremental truck cost of using LNG and CNG. The CNG
tank plus fuel weighs on the order of four times as much as the diesel
counterpart, and typically adds $40,000-$50,000 to the cost of a heavy-
duty truck. In 2014, we estimated the payback time to be over 5 years
when we assessed the payback at the higher crude oil prices at the
beginning of the year. The payback rates would be even higher if we
would have assessed the payback rates at the end of the year when the
crude oil prices were much lower. However, for many fleets, even the
payback rates at the higher crude oil prices would not be sufficiently
attractive, and generally explains the low penetration of natural gas
in the heavy-duty sector today. It appears that when the payoff time is
longer than 4 years, few fleets are interested in purchasing natural
gas trucks without subsidies to compensate for the higher purchase
price of natural gas trucks. According to EIA, half the natural gas
consumption by cars and trucks is in California, a state that
subsidizes the purchase price of natural gas vehicles, and also
subsidizes the cost of natural gas dispensing stations. The Low Carbon
Fuel Standard in place in California also incentivizes natural gas use
because natural gas is considered to cause less of an impact on the
climate than petroleum-based gasoline and diesel fuel.\812\ The
majority of the other half of the NG fleet resides in states which
subsidize the cost of using natural gas by motor vehicles.
---------------------------------------------------------------------------

    \812\ CARB currently estimates for the LCFS that CNG and LNG
trucks reduce GHG-equivalent emissions by 32% and 17%, respectively,
compared to gasoline and diesel fuel. In August 2014, CARB proposed
reducing the GHG-equivalent benefit of CNG and LNG trucks to 22% and
3%, respectively, compared to gasoline and diesel fuel.
---------------------------------------------------------------------------

    Based on the EIA projections for crude oil and natural gas prices,
the payoff time of LNG trucks is expected to remain long (more than 5
years) until sometime after 2020 when crude oil prices are projected to
begin increasing. Thus, natural gas use by heavy-duty trucks is not
projected by EIA to increase above 1 percent of the heavy-duty fuel
demand until after 2025.
    If the apparent payback time for CNG and LNG trucks use is
favorable to fleet owners, fuel availability could still slow the
transition to CNG and LNG. This is because CNG and LNG availability at
service stations is currently 1 percent or less of the availability of
gasoline and diesel fuel and therefore not available for most fleets.
LNG availability is particularly challenging because in addition to an
LNG service station, a LNG liquefaction plant would be needed as well.
    To the extent that natural gas displaces diesel fuel and impacts
truck greenhouse gas emissions, either positive or negative, there
would be little impact on overall greenhouse gas emissions because of
the low natural gas truck sales that are expected to occur over the
next decade. The low natural gas use by the heavy-duty sector during
the Phase 2 timeframe will give us time to learn more about both
upstream and downstream methane emissions to gain a better
understanding of the lifecycle impacts of natural gas use by heavy-duty
trucks. It will allow us more time to consider the best additional
steps to take to further reduce upstream and downstream methane
emissions to improve the lifecycle impacts of natural gas use by heavy-
duty trucks should the heavy duty truck fleet begin consuming natural
gas in much larger quantities.

D. Natural Gas Emission Control Measures

    As interest in the potential use of natural gas as a heavy-duty
fuel has increased, industry has begun to investigate how to improve
the overall emission performance of natural gas vehicles, especially
with respect to reducing methane leaks. EPA is proposing two control
measures which are discussed in Section XI. There are additional items
discussed in Section XI. D. (2) on which we request comment. Included
in this list are several control options.
(1) Proposed Control Measures
    As is discussed earlier in this preamble in Sections II and XIII.
EPA is proposing some control measures to reduce potential methane
emissions from natural gas vehicles. These are summarized here. Note
that since these controls are being proposed to address GHG emissions
rather than fuel consumption, NHTSA is not proposing equivalent
requirements.
(a) Proposed Closed Crankcase Requirement for NG Fueled Engines and
Vehicles
    EPA is proposing to require that all natural gas engines have
closed crankcases, rather than continuing the provision that allows
compression-ignition engines to separately measure and account for
crankcase emissions that are vented to the atmosphere. This allowance
has historically been in place to account for the technical limitations
related to recirculating crankcase gases with high PM emissions back
into the engine's air intake. Natural gas engines have inherently low
PM emissions, so there is no technological limitation that would
prevent manufacturers from closing the crankcase and recirculating all
crankcase gases into the engine's air intake. The methane standard that
was introduced in Phase 1 of this rule accounts for crankcase
emissions, but when the system is sealed and emissions are routed to
the engine intake, those emissions will be considered in determining
the deterioration factor. See the Preamble Section II. D. for a
description of the proposed closed crankcase requirement for natural
gas fueled engines. This requirement would apply to the manufacturer
responsible for criteria emission compliance: The vehicle manufacturer
for complete pickups and vans, and the engine manufacturers for all
other vehicles.
(b) Proposal To Require 5 Day Hold Time for LNG Vehicles
    Boil-off emissions from LNG vehicles were not addressed in the
Phase 1 rulemaking. As more testing has been done in this area since
that time for this rising issue, as described in the Preamble Section
XII, EPA is proposing to require manufacturers to follow current
industry recommended practice, SAE J2343 for five day hold time to
limit boil-off emissions from LNG vehicles. The specifications of this
safety related standard has an effect which helps new LNG vehicles
prevent boil-off. This SAE standard will only affect new LNG vehicles.
It will not address aging vehicles as their insulating properties
diminish such as loosing vacuum over time and may eventually result in
much shorter hold times.\813\
---------------------------------------------------------------------------

    \813\ The LNG storage tanks achieve some of their insulating
properties due to a vacuum created between the two walls of the
double-walled LNG storage tank.
---------------------------------------------------------------------------

    EPA proposes to require the certificate holder for the chassis to
also comply with the proposed requirements for LNG fuel systems, but to
apply the delegated assembly and secondary manufacturer allowances for
these requirements. We request comment on this approach generally, as
well as on:
     The need for additional requirements for manufacturers not
holding certificates, such as requiring that fuel system manufacturers
participate in recalls for defects in their components.
     The appropriateness of requiring or allowing separate
certification of fuel

systems (or similar provisions) where they are installed by
manufacturers not holding the certificate for the chassis with respect
to CO2 and fuel consumption.
(2) Additional Natural Gas Topics for Comment
    In this section we request comment on several additional areas
related to potential regulatory requirements for natural gas fueled
vehicles. See Chapter 13 of the Draft RIA for additional details on
these topics.
(a) Request for Comment on Changing Global Warming Potential Values in
the Credit Program for CH4 (See Also Preamble Section
II.(D)(5)(b))
    The phase 1 heavy-duty vehicle rulemaking establishing greenhouse
gas emission standards included a compliance alternative allowing
heavy-duty manufacturers and conversion companies to comply with the
respective methane or nitrous oxide standards by means of over-
complying with CO2 standards (40 CFR 85.525). The heavy-duty
rules allow averaging only between vehicles or engines of the same
designated type (referred to as an ``averaging set'' in the rules).
Specifically, the phase 1 heavy-duty rulemaking added a CO2
credits program which allowed heavy-duty manufacturers to average and
bank pollutant emissions to comply with the methane and nitrous oxide
requirements after adjusting the CO2 emission credits
(generated from the same averaging set) based on the relative GHG
equivalents. To establish the GHG equivalents used by the
CO2 credits program, the phase 1 heavy-duty vehicle
rulemaking incorporated the IPCC Fourth Assessment Report global
warming potential (GWP) values of 25 for CH4 and 298 for
N2O, which are assessed over a 100 year lifetime.
    Since the Phase 1 rule was finalized, a new IPCC report has been
released (the Fifth Assessment Report), with new GWP estimates. This is
prompting us to look again at the relative CO2 equivalency
of methane and to seek comment on whether the methane GWP used to
establish the GHG equivalency value for the CO2 Credit
program should be updated to those established by IPCC in its Fifth
Assessment Report. The Fifth Assessment Report provides four 100 year
GWPs for methane ranging from 28 to 36. Therefore, we not only request
comment on whether to update the GWP for methane to that of the Fifth
Assessment Report, but also on which value to use from this report.
(b) Request for Comment on Appropriate Deterioration Factors for NG
Tailpipe Emissions
    The current assigned deterioration factors for CO2,
N2O, and CH4 are based on diesel technology.
While EPA still believes this is likely appropriate, we would welcome
data to support this policy or other comments on how appropriate these
factors are applied to NG engines and vehicles.
(c) Request for Comment on LNG Vehicle Boil-Off Warning System
    A simple means to help limit boil-off emissions would be to require
that natural gas truck drivers be alerted to expected near-future boil-
off events. Such an alert could be in the form of a warning light and
associated audible alarm that would indicate that the LNG storage tank
is approaching a pressure which would require the tank to vent. Knowing
this, the truck driver could take action to prevent such a release,
such as starting to drive the vehicle, which likely would reduce the
pressure in the tank, or connecting the vent line to either a LNG
storage tank or natural gas pipeline for venting. EPA requests comment
on the feasibility and appropriateness of a regulatory requirement that
LNG fueled vehicles include a warning system that would notify the
driver of a pending boil-off event as one means reduce the frequency of
such events and thus limit the release of methane.
(d) Request for Comment on Extending the 5 Day Hold Time for LNG
Vehicles
    The specifications of the proposed 5 Day Hold Time SAE 2343 safety
related standard will only affect new LNG vehicles to prevent boil-off
initially and does not address aging vehicles as their insulating
properties diminish such as loosing vacuum over time that may
eventually result in much shorter hold times. LNG tank manufacturers
are further developing their technologies for improvement of hold times
and reducing boil-off from LNG storage tanks on trucks. These
improvements can be incorporated by requiring longer hold times. EPA is
soliciting comment on the ability of these emerging technologies to
address an extension of 5 days to a longer period of time such as 10
days and the ability to achieve the hold times for the duration of the
vehicle's useful life.
(e) Capturing and/or Converting Methane Refueling or Boil-Off Emissions
    We would like input on how effective and feasible the following
potential emissions control technologies are for achieving longer hold
times in LNG vehicles.
    A methane canister using adsorbents such as ANG (adsorbed natural
gas) could be added to capture the methane which otherwise would be
released to the environment during a refueling or boil-off event. Once
captured, steps could be taken to route the methane to the engine
intake once the vehicle is operating again, or to take steps to
converting the methane to less GHG-potent CO2.
    Instead of discharging methane to the environment, the methane
potentially could be burned to CO2 using a burner. Another
potential option would be to convert the methane capture in a canister
to CO2 over a catalyst.
(f) Request for Comment on Reducing Refueling Emissions
    When refueling a natural gas vehicle, methane is vented to the
atmosphere. As of Tier 3 it is required by EPA to use the ANSI-NGV1-206
standard practice to meet the evaporative emissions refueling
requirement. Small puffs of up to 200 cc/hr (which equates to 72 grams
of methane per hour) of leakage are allowed with these tests. Often
there is a vent line which carries these puffs away from the nozzle
interface for safety reasons but is then vented to the atmosphere. EPA
is requesting comment on ways to eliminate or reduce these losses. If
there must be allowances for losses, then how can this methane gas be
captured during refueling using systems that route methane emissions
back to the fuel storage tank, whether it is a CNG tank, a CNG pipeline
or re-liquefying system for LNG. For LNG, in addition to the boil-off
issue is the recurrence of manual venting at refueling by truck
operators. Under high pressure circumstances, such as when the vehicle
has been sitting for some time period in warmer temperatures, it is
necessary to decrease the pressure in the fuel tank before new fuel can
enter the tank. The recommended practice is to transfer the extra
vaporized fuel to the gas station or natural gas pipeline, but this can
take extra time. In some areas it has turned into common practice to
just vent to the atmosphere to keep the down time at the refueling
station to a minimum. In other areas there is an incentive to reroute
the gas into the station storage tank or natural gas pipeline with
credit towards the fuel purchase. EPA is requesting comment on
approaches to reduce refueling emissions for LNG vehicles.

(g) On-Board Monitoring Requirements for Boil-Off Events and Venting at
Refueling
    Onboard diagnostics for engines used in vehicle applications
greater than 14,000 lbs GVWR are already required to detect and provide
a warning for when methane leaks occur due to wear of connections and
components of the CNG or LNG fuel system (74 FR 8310, February 24,
2009). We are requesting comments on requiring on-board monitoring to
track boil-off events as well as whether the excess vapors were
properly vented to the station storage tanks or NG pipeline, or whether
the gaseous methane emissions were vented to atmosphere during
refueling events. Each boil off event has the potential to release on
the order of 5,300-15,800 grams of CH4 which translates to
132K-400K grams CO2 equivalent with a GWP of 25 for 100
years.
(h) Separate Standards for Natural Gas Vehicles
    As described above, the climate impact of leaks and other methane
emissions that occur upstream of the vehicle can potentially be large
enough to more than offset the CO2 benefit of natural gas
vehicles as measured at the vehicle tailpipe. EPA is considering
separate action to control these upstream emissions. Nevertheless, we
have some concern that the impact of upstream emissions for natural gas
much higher than for gasoline or diesel fuel because of the high Global
Warming Potential (GWP) for methane that makes even small leaks of
natural gas of concern. In this way, natural gas is very different than
other alternative fuels.
    While we are not proposing any provisions to address this, we may
consider adopting such provisions in the final rule and are asking for
comments on this topic. Would it be appropriate to adjust the tailpipe
GHG emission standard for natural gas vehicles by a factor to reflect
the life cycle emissions of natural gas vehicles relative to diesel
vehicles? For example, if we were to determine that the life-cycle
climate impacts of natural gas vehicles were 150 percent of the
tailpipe GHG emissions, while the life-cycle climate impacts of diesel
vehicles were 135 percent of the tailpipe GHG emissions, we could
approximate the relative climate impacts by setting the natural gas
tailpipe emission standard 10 percent lower than the diesel tailpipe
standard. We recognize that there is significant uncertainty is
assessing these relative climate impacts, and that they could change as
new production methods and/or regulations go into effect. Thus
commenters supporting making such an adjustment are encouraged to
address this uncertainty. Commenters are also encouraged to address how
such an adjustment for GHG emissions would impact the closely
coordinated EPA and NHTSA heavy-duty Phase 2 program including how a
potential adjustment for upstream methane emissions for natural gas
fueled vehicles would impact the coordination of EPA GHG regulations
with the NHTSA fuel consumption regulations.

E. Dimethyl Ether

    Although NAS (2014) focused its recommendations on natural gas, it
also discussed dimethyl ether (DME), which is a potential heavy-duty
truck fuel sourced from natural gas. Dimethyl ether has a high cetane
number (more than 55), although its energy density is about 60 percent
of that of diesel fuel. Dimethyl ether is a volatile fuel, like liquid
petroleum gas, that can be stored as a liquid at normal ambient
temperatures under moderate pressure. Typical DME fuel tanks would be
designed to prevent any significant evaporative emissions.
    A DME fueled truck is only modestly more expensive than a diesel
fuel truck. The fuel tank is more expensive than a diesel fuel tank,
but much less expensive than an LNG tank since it does not need to be
heavily insulated. The engine modifications to enable using DME are
also modest. Because DME does not have carbon-carbon bonds that form
particulate matter particles during combustion, the particulate filter,
which is standard equipment on new diesel trucks, can be eliminated.
This offsets some of the engine and fuel tank costs.
    Although DME is sourced from cheap natural gas, the conversion of
natural gas to DME and moving the fuel to retail outlets greatly
increases the cost of the fuel. DME is more expensive than LNG, but
still lower in cost than diesel fuel based on the fuel prices in early
2014. DME is estimated to cost $3.50/DGE, or $0.30 DGE less than diesel
fuel.
    Because there is very little DME use in the U.S. (there is only a
very small fleet of trucks in California), we did not conduct a
lifecycle assessment of DME, but note here a few aspects of a lifecycle
analysis for DME. First, since DME is sourced from natural gas, the
upstream methane emissions from the natural gas industry would still be
allocated to DME. Second, there are not venting issues associated with
DME as with LNG or CNG refueling. Third, DME itself has a much lower
global warming potential than methane. DME's global warming potential
is estimated to be 0.3 when assessed over a 100 year lifetime, which is
about 1 percent of methane's GWP.

XII. Agencies' Response to Recommendations From the National Academy of
Sciences

A. Overview

    As part of the Phase 1 standards, the agencies were informed by a
report generated by the National Academy of Sciences (NAS), as required
by Congress in EISA.\814\ In addition to that initial report, Section
107 of EISA requires that the report be updated in five year intervals
through 2025.\815\ On September 24, 2016, NAS will release its updated
report under Congress' quinquennial update requirement. However,
because the Phase 2 rules will be completed prior to the issuance of
the first update, NAS issued an interim report in the form of a First
Report (NAS HD Phase 2 First Report) published on April 3, 2014.\816\
The agencies have consulted the report and considered its findings in
creating this proposal. The National Research Council formed the
Committee on Technologies and Approaches for Reducing the Fuel
Consumption of Medium- and Heavy-Duty Vehicles, Phase Two (the
Committee or NAS Committee) in order to prepare the NAS HD Phase 2
First Report. In its Phase 2 First Report, the Committee seeks to
advise NHTSA on the HD Phase 2 rules while meeting the agencies'
objectives of:
---------------------------------------------------------------------------

    \814\ Energy Independence and Security Act of 2007, Public Law
110-140, section 108(a).
    \815\ EISA further states that the NAS must submit the report to
DOT, the Senate Committee on Commerce, Science, and Transportation,
and the House Committee on Energy and Commerce not later than one
year after the date on which the Secretary executed the agreement
with the NAS.
    \816\ Transportation Research Board 2014. ``Reducing the Fuel
Consumption and Greenhouse Gas Emissions of Medium- and Heavy-Duty
Vehicles, Phase Two.'' (``Phase 2 First Report'') Washington, DC,
The National Academies Press. Cooperative Agreement DTNH22-12-00389.
Available electronically from the National Academy Press Web site at
http://www.nap.edu/catalog.php?record_id=12845 (last accessed
December 2, 2014).

 Reducing in-use emissions of carbon dioxide from medium- and
heavy-duty vehicles
 Reducing in-use emissions of other GHGs from medium- and
heavy-duty vehicles
 Improving the in-use efficiency of fuel use in medium- and
heavy-duty vehicles--by driving innovation, advancement, adoption, and
in-use balance of technology through regulation

    In providing the First Report recommendations, the committee
acknowledged the following constraints:

 Holding life-cycle cost of technology change or technology
addition to an acceptable level
 Holding capital cost of acquiring required new technology to
an acceptable level
 Acknowledging the importance of employing a balance of energy
resources that offers national security
 Avoiding near-term, precipitous regulatory changes that are
disruptive to commercial planning
 Ensuring that the vehicles offered for sale remain suited to
their intended purposes and meet user requirements
 Ensuring that the process used to demonstrate compliance is
accurate, efficient, and not excessively burdensome
 Not eroding control of criteria pollutants or unregulated
species that may have health effects

    Although the Phase 2 First Report was developed and written in
terms of reducing fuel consumption, its findings and recommendations in
general apply equally to a program that reduces GHG emissions, given
the close relationship between the two.

B. Major Findings and Recommendations of the NAS Phase 2 First Report

    While the agencies have addressed many NAS recommendations as they
pertain to individual areas of the Phase 2 standards, this section
consolidates all of the recommendations from the NAS HD Phase 2 First
Report and discusses the extent to which the agencies' proposed program
is consistent with them. The NAS HD Phase 2 First Report contains more
than 40 recommendations to the agencies. All of the Committee's
recommendations have been considered, and many of them have been
incorporated in the Phase 2 standards. In some instances, the agencies
have chosen a different course from the one charted by the NAS
Committee's recommendations.
    Instead of discussing the NAS report findings and recommendations
in the order presented in the Phase 2 First Report itself, this section
divides the NAS findings and recommendations in three categories:
Findings and recommendations with which (1) the Phase 2 standards are
consistent; (2) the Phase 2 Standards are significantly inconsistent;
and (3) the Phase 2 standards are less-significantly inconsistent.
(1) NAS Findings and Recommendations With Which Phase 2 Standards Are
Consistent
(a) How should the agencies address standards for trailers in the phase
2 rulemaking?
    Given the exclusion of trailers from the Phase 1 standards, the
Committee focused on a wide array of opportunities by which the
agencies could reduce fuel consumption and GHG emissions. The Committee
evaluated potential fuel consumption- and GHG-reducing technologies
that can be incorporated on a trailer as well as components of a
trailer, such as tire-related technologies.
    The Committee found that many opportunities exist for trailers to
reduce fuel consumption and GHG emissions of the pulling tractor. More
specifically, the Committee evaluated trailer aerodynamics, tire
rolling resistance, and tire pressure monitoring systems.
    Despite the fuel consumption- and GHG-reducing possibilities of the
trailer technologies the Committee evaluated, a survey it conducted
found that only 40 percent of new van trailers came equipped with fuel-
saving aerodynamic devices.\817\ Further, the Committee found that most
trailer devices on average, within one year, saved enough in fuel cost
to pay for the added cost of the device. The Committee observed that
when a trailer is not owned by the tractor operator, there is no
incentive for the trailer owner to purchase fuel-saving devices.
Moreover, the Committee stated that in absence of regulation, many
trailer owners do not choose to employ fuel saving devices.
---------------------------------------------------------------------------

    \817\ See Note [3] at 78.
---------------------------------------------------------------------------

    The Committee recommended that NHTSA, in coordination with EPA,
adopt a regulation requiring that all 53 foot and longer dry van and
refrigerated van trailers meet performance standards that reduce fuel
consumption and GHG emissions.\818\ It also recommended that NHTSA
assess the benefit of using GEM to address all tractors in combination
with trailers.\819\ The Committee also recommended the agencies collect
real-world data on fleet use of aerodynamic trailers to help inform
standards.\820\
---------------------------------------------------------------------------

    \818\ Id., Recommendation 6.1.
    \819\ Id., Recommendation 3.12.
    \820\ Id., Recommendation 6.1.
---------------------------------------------------------------------------

    As discussed in more detail in Section IV, the agencies are
proposing to adopt Phase 2 standards for all new dry van and
refrigerated van trailers, including both those above and below 53 feet
in length. The agencies have carefully evaluated the lead time for
implementation of this potential program to take into consideration
factors such as existing market conditions and the fact that a
regulation of new trailers will include companies that have not
previously been regulated for fuel consumption and GHG emissions. To
the degree that it is available, the agencies are gathering data on
real world fleet use of aerodynamic devices, both to understand the
overall context of the rules and for specific analytical purposes such
as the appropriate role of aerodynamic devices on the reference trailer
used for tractor aerodynamic assessment. The agencies have also
assessed the benefit of using GEM to address all tractors in
combination with trailers and are proposing that, for the long-term
program, GEM be used to demonstrate compliance with both the tractor
and the trailer requirements of the Phase 2 program.
    In addition to the Committee's recommendation that NHTSA and EPA
regulate 53 foot and longer box trailers, the Committee recommended
that NHTSA and EPA assess the practicability and cost-effectiveness of
including pups, flat-beds, and container chassis.\821\ The Committee
found that pups, flat-beds, and container chassis demonstrated fuel
savings, however, factors such as average speed, mileage, and practical
concerns such as access to equipment underneath the trailer needed to
be assessed.\822\
---------------------------------------------------------------------------

    \821\ Id., 6.2.
    \822\ Id. at 83.
---------------------------------------------------------------------------

    The agencies have evaluated whether it would be practical and cost
effective to include pups (in tandem or separately), other box trailers
of lengths between that of pups and standard 53-foot trailers,
flatbeds, container chassis (with and without containers attached),
tankers, and other trailer types in the Phase 2 regulation. As a result
of this analysis, the agencies are proposing to include pups as well as
box vans between 28 feet and 53 feet long in Phase 2. With regard to
other types of trailers, such as tankers, flatbeds, and container
chassis, the agencies have evaluated issues such as trailer plumbing,
flat bed ground clearance, chassis stacking, trailer duty cycles, cost
of technologies, and other issues. The agencies are proposing that
these and other non-box trailers be included in Phase 2 requirements.
However the agencies are assuming compliance with the Phase 2 program
for these non-box trailers will be limited to tire technologies.
    Finally, the Committee examined the use of GEM for tractor and
trailer compliance. It asserted that tractors and trailers are
fundamentally inseparable

when addressing aerodynamic drag and design. As applied to GEM
simulation, the Committee opined that considering tractors and trailers
separately for simulation purposes might prove counterproductive,
because components on a tractor and trailer might compromise
aerodynamic optimization. The Committee recommended that NHTSA assess
the benefit of using GEM to address all tractors in combination with
trailers.\823\
---------------------------------------------------------------------------

    \823\ Id. at 38, Recommendation 3.12.
---------------------------------------------------------------------------

    As stated above, the agencies have assessed the benefit of using
GEM to address all tractors in combination with trailers and are
proposing to use GEM for both tractors and trailers for the Phase 2
program for tractors and trailers, similar to what was done in Phase 1.
In Phase 1, which did not regulate trailers, this meant simulating each
tractor being certified as being used in combination with a standard
reference trailer. For these rules, we are proposing to simulate each
trailer being certified as being used in combination with a standard
reference tractor.
(b) Have the agencies revisited dieselization of Class 2b through 7
vehicles?
    The Committee reiterated a recommendation from its Phase 1 report
regarding the study of dieselization of Class 2b through 7
vehicles.\824\ The Committee stated that diesel engines present an
opportunity for incremental fuel efficiency gains. The NAS Committee
recommended that NHTSA conduct a study of Class 2b to 7 vehicles to
consider the incremental fuel consumption reduction of diesels, the
price of diesel versus gasoline, and the diesel advantage in
durability.\825\
---------------------------------------------------------------------------

    \824\ Id. at 14-15.
    \825\ Id.
---------------------------------------------------------------------------

    As part of the Phase 2 proposed rule analysis, the agencies
evaluated many potential fuel efficiency and greenhouse gas reduction
(FE/GHG) technologies for both gasoline and diesel fueled vehicles. As
will be discussed in detail in later responses, NHTSA sponsored
research at Southwest Research Institute (SwRI) included simulations of
baseline and projected Phase 2 FE/GHG technologies for Class 2b through
7 vehicles over a range of appropriate duty cycles.\826\ A HD pickup
truck (Class 2b), the Dodge Ram 2500, was modeled using a 385-hp 6.7-
liter diesel engine as the baseline. The vehicle's baseline performance
and the effectiveness of FE/GHG technologies with the diesel engine
were compared over identical duty cycles to two gasoline engines, a
6.2-liter naturally aspirated gasoline V-8 and 3.5-liter turbocharged
direct injection V-6, with their corresponding engine technologies.
Similarly, two medium-duty trucks (Class 6), the Ford F-650 and
Kenworth T-270, were modeled using a 300-hp 6.7-liter diesel engine as
the baseline and compared to the two aforementioned medium-duty V-8 and
V-6 gasoline engines.
---------------------------------------------------------------------------

    \826\ See the 2015 NHTSA Technology Study, Note 289 above.
---------------------------------------------------------------------------

    Many of the diesel engine technologies evaluated in supporting
Phase 2 research are currently available, proven, and on the path to
increased penetration across the fleet. Other technologies are still in
development and looking for the opportunity to enter the mainstream
production lifecycle. For the latter, the agencies believe, as informed
through the proposed rule development research, that costs,
reliability, durability, and clear user benefits are important when
determining potential future technology applications to achieve
attainable standards resulting in real-world reductions. As identified
in the proposal, the agencies considered these important factors when
developing the proposed standards and, included in the analysis, are
technologies that recognize the value of the current and future fleet
dieselization.
    However, the agencies recognize that there are valid reasons for
why medium and heavy-duty vehicle purchasers sometimes choose gasoline
engines over diesels. Gasoline engines are generally lighter and less
expensive than diesels, although they typically do not last as long in
heavy-service. For applications in which the vehicle is not expected to
travel many miles each year, gasoline engines may be the best choice.
On the other hand, for applications in which the vehicle is expected to
travel many miles each year, diesels can be a more appropriate choice.
(c) What kind of analyses are the agencies doing on upstream emissions
related to natural gas?
    The NAS Committee discussed the potential natural gas presents for
reducing fuel consumption and GHG emissions in medium- and heavy-duty
vehicles. The Committee stated that while tailpipe emissions are often
the most observable instance of fuel consumption and tailpipe
emissions, the fuel production, distribution, and processing components
of obtaining natural gas for use in vehicles also factors into any
calculation of overall benefits derived from natural gas vehicles.\827\
The Committee recommended that NHTSA, in coordination with EPA, begin
to consider the well-to-wheel, life-cycle energy consumption and
greenhouse emissions associated with different vehicle and energy
technologies to ensure future rulemakings best accomplish their overall
goals.\828\
---------------------------------------------------------------------------

    \827\ Id. at 19-20.
    \828\ Id. at 20, Recommendation 1.10.
---------------------------------------------------------------------------

    The agencies recognize that understanding the life-cycle
implications of vehicle and energy technologies is important to ensure
that the rulemaking accomplishes its overall goals. In the Draft and
Final Environmental Impact Statement (EIS) prepared for the 2017 and
Later Model Year Light-Duty Vehicle GHG Emissions and CAFE Standards
rulemaking, NHTSA introduced a literature synthesis of life-cycle
environmental impacts of certain vehicle materials and technologies.
Consistent with that approach, in the Draft EIS for Phase 2, NHTSA has
again provided a literature synthesis of life-cycle environmental
impacts, focusing on the unique vehicle technologies for the HD sector
and incorporating by reference the literature synthesis prepared for
the MY 2017 and beyond CAFE Final EIS. The Draft EIS also uses the
GREET fuel-cycle model to assess upstream emissions from extraction,
refining, and transportation of medium- and heavy-duty vehicle fuels.
This information in the Draft EIS informs both the agency and the
public about the potential life-cycle implications of the various
technologies under consideration in this rulemaking. NHTSA invites
comments on the Draft EIS and its literature synthesis of life-cycle
environmental impacts.
    EPA has also evaluated the lifecycle impact of heavy-duty trucks
being fueled with natural gas in comparison to other heavy-duty trucks.
This analysis is presented in Section XI along with a discussion of
projections for future use of natural gas by heavy-duty trucks.
(d) How have the agencies evaluated aerodynamic testing methods for the
Phase 2 program?
    With regard to aerodynamic devices, the NAS Committee reviewed
aerodynamic test procedures related to evaluating aerodynamic
effectiveness. The Committee found that industry testing procedures can
vary widely because of the precision of the standards themselves.\829\
Further, the Committee found that fidelity of test results from
coastdown procedures versus results from a powered on-track test is not
known. The Committee recommended that NHTSA and EPA evaluate the

relative fidelities of the coast-down procedure and candidate powered
procedures to define and optimum prescribed full-vehicle test procedure
and process and validate the improved procedure against real world
vehicle testing.\830\ It also recommended that NHTSA and EPA assess
whether adding yaw loads provides significantly increased value to the
Cd result. The Committee recommended providing updated test data to
manufacturers to increase consumer confidence in the accuracy (and
real-world applicability) of the testing measures as related to
aerodynamic devices.831 832
---------------------------------------------------------------------------

    \829\ Id. at 83-84.
    \830\ Id. at 84, Recommendation 6.3.
    \831\ Id. at 36, Recommendation 3.5.
    \832\ Id. at 84, Recommendation 6.3.
---------------------------------------------------------------------------

    The agencies have undertaken a coordinated research program to
inform the Phase 2 certification test procedure for aerodynamic drag
and tire rolling resistance. The U.S. EPA and its contractors have
evaluated coastdown, constant speed, CFD, and scale wind tunnel testing
for tractors and trailers. The goals of this research effort were to:
Assess variability between test methods; assess how yaw impacts
aerodynamic performance; evaluate correlation of different test methods
one to another; assess the impact of different tractor/trailer design
attributes on the test results; examine how differences between
manufacturers' products impact aerodynamics; and measure Cd
improvements from a variety of aerodynamic devices in combination and
alone. NHTSA and its contractors conducted simulation modeling to:
Evaluate aerodynamic drag and tire rolling resistance improvements in
combination with other vehicle and engine technologies, and determine
the impact of different duty cycles on aerodynamic drag performance.
Finally, EPA has conducted an analysis to determine whether or not
adding yaw adjustments to the certification process improves the Cd
result. As a result, the agencies are proposing to add yaw adjustments
to the certification process for tractors. The agencies are
disseminating the results of these test programs and conclusions at
association meetings and public meetings such as SAE COMVEC.
    Through the research programs described above, the agencies have
evaluated aerodynamic data that better reflects real-world experience.
And, to the extent available, the agencies have collected aerodynamic
performance data that reflect real-world experience. This information
has informed the Phase 2 proposal. For example, in addition to the
agencies are proposing to account for yaw in the aerodynamic assessment
for Cd, we are also proposing changes to vehicle speeds used in the
aerodynamic reference test procedure to facilitate improved estimation
of Cd.
(e) What kind of new modeling research has been conducted to inform
Phase 2?
    With a wide range of potential fuel consumption- and GHG emissions
reducing technologies, the NAS Committee found that it is proper to
assess the various combinations of technologies in real-world testing
and in modeling. The Committee recommended that NHTSA conduct detailed
simulation modeling in addition to physical testing.\833\
---------------------------------------------------------------------------

    \833\ Id. at 24, Recommendation 2.1.
---------------------------------------------------------------------------

    In September 2012, NHTSA contracted with the Southwest Research
Institute (SwRI) to conduct research in support of the next phase of
Federal fuel efficiency (FE) and GHG standards.\834\ Tasks included
determining the baseline fuel efficiency and emissions levels and
technologies of current model year commercial medium- and heavy-duty
on-highway vehicles and work trucks, as well as projections of Phase 2
fuel efficiency and emission reduction technologies for diesel and
gasoline powered vehicles. The scope encompassed technologies for
chassis and final-stage manufacturer vehicles and trailers, maintenance
cost, material application, future design, capital investment, retail
cost/payback and any other applicable advanced technologies. Estimates
of the costs, fuel savings effectiveness, availability, and
applicability of technologies were done for each individual vehicle
class category (e.g., segment).
---------------------------------------------------------------------------

    \834\ Id.
---------------------------------------------------------------------------

    Selection of FE/GHG technologies, engines, vehicles, drive-cycles,
etc. for the simulation modeling at SwRI was done in coordination with
EPA, which had complimentary HD research programs involving vehicle
road testing and engine dynamometer testing that informed the
simulation efforts. The SwRI analysis relied on a technology list that
was developed from recent NAS HD vehicle fuel consumption reports as
well as an extensive literature review. Four base engines and four
vehicles spanning the class 2b to class 8 vehicle segments were
selected for simulation. Experimental data was available from other
projects for all of the vehicles and engines simulated, and full use of
experimental data was made to calibrate the models before additional
technologies were evaluated.
    SwRI used a vehicle simulation tool developed in-house to model
vehicle performance over a range of drive cycles. The commercial
software GT-POWER (Gamma Technologies, Inc.) was used to model engine
performance, fuel consumption, and CO2 emissions over the
full speed-load range. Results of the agency-sponsored simulation
modeling at SwRI will be issued in peer-reviewed research reports.
(f) How has GEM been modified by EPA?
    In its report, the NAS Committee focused many of its
recommendations on EPA's GEM. The Committee concentrated on what
features could be incorporated into GEM in order to improve the model's
ability to provide outputs representative of real-world use.
    More specifically, the Committee found that GEM output was
unaffected by the actual use of a smaller or larger engine in the same
subcategory because the engine map used by GEM is predefined.\835\ The
NAS Committee recommended that the agencies should assess whether a
single steady-state speed-torque map is sufficient for GEM accuracy in
engine efficiency prediction.\836\ EPA has evaluated this question and
is modifying GEM to allow for different maps as an input.
---------------------------------------------------------------------------

    \835\ Id. at 37.
    \836\ Id., Recommendation 3.8.
---------------------------------------------------------------------------

    Additionally, the Committee emphasized that a certification test
must be highly accurate and repeatable. It stated that the need to
account for the close interaction of the engine with other components,
including the aftertreatment subsystem and transmission.\837\ NAS
recommended that the agencies allow powertrain testing for
certification.\838\ As described in Section II, the agencies are doing
so in conjunction with GEM. See the proposed provisions in 40 CFR
1037.550, which further discusses powertrain testing and certification.
---------------------------------------------------------------------------

    \837\ Id. at 14.
    \838\ Id, Recommendation 1.6.
---------------------------------------------------------------------------

    More generally, the NAS Committee recommended revising GEM to
reflect the benefit of integrating an engines, aftertreatment, and
transmissions and to cover as large a fraction of over-the-road tractor
operation as possible without becoming overly cumbersome.\839\ As
described in Section II and in Chapter 4 of the draft RIA, the agencies
believe the proposed revisions to GEM reflect this.
---------------------------------------------------------------------------

    \839\ Id. at 37, Recommendations 3.10, 3.11.
---------------------------------------------------------------------------

(g) What have the agencies done to validate GEM testing?
    The NAS Committee expressed concern over GEM's ability to translate

to real world reductions in fuel consumption and GHG emissions. In
particular, the Committee found that GEM's current certification
procedures have limited unbound variables that can be user-specified
and do not allow for synergy between components.\840\ Moreover, the NAS
Committee found that GEM does not allow for the operation of components
in the most efficient way or efficiency that could be gained by the
operation of a component at a higher relative load, concluding that
vehicle designs that are optimized for the conditions of the simulation
might not be optimized in real world operation.\841\ The Committee
recommended that NHTSA conduct a real world evaluation to validate GEM
inputs with the fuel consumption outputs.\842\ Additionally, it
recommended that EPA and NHTSA should assess whether a steady-state
torque map is sufficient for GEM accuracy in engine efficiency
prediction.\843\
---------------------------------------------------------------------------

    \840\ Id. at 11.
    \841\ Id.
    \842\ Id., Recommendation 1.2.
    \843\ Id. at 37, Recommendation 3.8.
---------------------------------------------------------------------------

    Recently, EPA and NHTSA sponsored a technical workshop at the
Southwest Research Institute (SwRI). At this workshop, SwRI presented a
multi-year research effort sponsored by EPA to validate GEM. The
development version of GEM incorporates several engine, transmission,
driveline, and vehicle technologies being considered to meet FE and GHG
standards for MD/HD vehicles. GEM (including the steady-state fuel map
approach) was validated by the agencies against over 130 test cases
(multiple runs) of different size vehicles. See Section II of this
notice and Chapter 4 of the draft RIA for further information about
this validation work.
(h) Has NHTSA considered non-vehicular strategies to reduce fuel
consumption?
    In examining the broader picture of reducing fuel consumption, the
NAS Committee found that there are opportunities to reduce fuel
consumption in ways that that exceed NHTSA's statutory authority.\844\
The Committee recommended that NHTSA work with and encourage EPA, DOE,
and FHWA to reduce fuel consumption and GHG emissions by exploring non-
vehicle approaches.\845\
---------------------------------------------------------------------------

    \844\ Id. at 15.
    \845\ Id., Recommendation 1.9.
---------------------------------------------------------------------------

    NHTSA is jointly releasing this rulemaking with EPA, and has
involved EPA as a co-drafter throughout the development of these rules.
NHTSA has also worked with DOE, and has been in touch with FHWA about
medium- and heavy duty fuel efficiency. While the majority of NHTSA's
work with these agencies has been vehicle-related, NHTSA supports
research and development on nonvehicle methods to reduce fuel
consumption.
(2) NAS Findings and Recommendations With Which the Phase 2 Standards
Are Significantly Inconsistent and Why the Agencies Chose a Different
Course
(a) Should the agencies propose separate standards for natural gas
vehicles?
    The NAS Committee found that natural gas is a viable option to
reduce fuel consumption and can also contribute to a reduction in GHG
emissions, ``unless additional findings of methane leakage alter this
vision.'' \846\ It noted that natural gas engines are well-developed
and are ready for use for medium- and heavy-duty vehicles, including
Class 8 trucks. The Committee stated that while the load-specific
CO2 emissions from natural gas engines are less than a
comparable diesel engine, that benefit is partially negated by lower
engine efficiency and methane emissions.\847\ The NAS Committee
recommended that NHTSA and EPA develop a separate standard for natural
gas vehicles, similar to that in diesel- and gasoline-fueled
engines.\848\ We interpret this to mean standards that require natural
gas-fueled engines to achieve similar thermal efficiency to diesel- and
gasoline-fueled engines; in other words more stringent standards than
would apply under a continuation of the Phase 1 approach. Further, the
Committee recommended the agencies do this without disrupting
commercial transportation business models, though the Committee did not
provide specific recommendations for how to achieve this goal.\849\ It
recommended that GEM certification tools need to include natural gas
engine maps to accurately quantify the emissions and fuel economy of
natural gas vehicles. The Committee also requested that EPA and NHTSA
assemble a best estimate of well-to-tank GHG emissions to be used for
developing future rulemakings.\850\
---------------------------------------------------------------------------

    \846\ Id. at 65.
    \847\ Id.
    \848\ Id. at 65, Recommendation 5.2.
    \849\ Id. at 65, Recommendation 5.3.
    \850\ Id. at 65, Recommendation 5.1.
---------------------------------------------------------------------------

    The agencies closely evaluated the recommendation for NHTSA and EPA
to develop a separate natural gas standard for HD vehicles. The
agencies are not proposing a separate standard for natural gas engines
or for natural gas powered vehicles for the Phase 2 program primarily,
because the current market share is still at or below one percent of
the total heavy-duty fleet and we do not project a significant increase
in natural gas use during the Phase 2 timeframe. Given its current
status, we do not want to inhibit the adoption of this potentially
promising alternative fuel through more stringent standards. Other
reasons to hold back on potentially establishing separate natural gas
fuel standards at this time include the fact that there is uncertainty
in the quantification of methane emissions, both upstream emissions as
well as potential leakage on a vehicle, particularly the LNG vehicle
boil-off emissions, which makes it very difficult to perform a rigorous
analysis regarding the potential impacts of a separate natural gas
standard; the industry itself is in the process of developing its
technology and as it matures there is potential for self-correction to
address methane leaks in recognition of environmental concerns that
might affect its status as a potential green alternative fuel.
    With regard to well-to-tank or upstream emissions, the medium- and
heavy-duty fuel efficiency program focuses on the tailpipe emissions of
these vehicles for multiple reasons, including test measurement
capabilities and the use of simulated output tools calibrated to test
lab measurements. The agencies continue to evaluate the potential
impacts and the benefits of a holistic approach for incorporating well-
to-tank emissions into future rulemakings.
    As data comes available a better estimate can be made on the
emissions impact from any potential regulations. The agencies will
closely monitor developments in natural gas adoption over the course of
the rulemaking timeframe and determine if additional action may be
necessary to prevent methane emissions increases. See Section XI of
this preamble for additional discussion regarding the treatment of
natural gas fuel, engines and vehicles in this proposal, as well as for
a detailed discussion of lifecycle emissions.
(b) How are the agencies handling uniformity and accuracy regarding
tire rolling resistance characteristics?
    The NAS Committee expressed concern about the process by which
rolling resistance values are established.\851\ Specifically, the
Committee noted that the process for

determining tire rolling resistance is new and variability is not as
well known. The Committee recommended that the agencies implement a
mechanism for obtaining accurate tire rolling resistance factors,
including establishing a tire alignment laboratory.852 853
Additionally, the Committee recommended that this data be available in
the through the Uniform Tire Quality Grading system.\854\
---------------------------------------------------------------------------

    \851\ Id. at 35-36.
    \852\ Id. at 36, Recommendation 3.4, 6.6 p 84.
    \853\ Id. at 84, Recommendation 6.6.
    \854\ Id. at 36, Recommendation 3.4.
---------------------------------------------------------------------------

    In Phase 1, the agencies received comments from stakeholders
highlighting a need to develop a reference lab and alignment tires for
the HD sector. The agencies noted the lab-to-lab comparison conducted
in the Phase 1 EPA tire test program. The agencies reviewed the rolling
resistance data from the tires that were tested at both the STL and
Smithers laboratories to assess inter-laboratory and test machine
variability. The agencies conducted statistical analysis of the data to
gain better understanding of lab-to-lab correlation and developed an
adjustment factor for data measured at each of the test labs. Based on
these results, the agencies believe the lab-to-lab variation for the
STL and Smithers laboratories would have very small effect on measured
rolling resistance values. Based on the test data, the agencies judge
that it is reasonable to continue the HD Phase 2 program with current
levels of variability, and consider the use of either Smithers or STL
laboratories to be acceptable for determining the tire rolling
resistance value in Phase 2. Note that the agencies have not made
similar findings for other laboratories. However, we welcome comment on
the need to establish a reference machine for the HD sector and
interest from tire testing facilities to commit to developing a
reference machine.
    In the final rule for the Phase 1 program, the agencies stated that
compliance values submitted to the agencies should be derived using the
ISO 28580 test method for drive tires and steer tires planned for
fitment to the vehicle being certified.\855\ The agencies believe that
following a defined, standardized test procedure will provide levels of
consistency in submitted compliance values. The agencies conducted
substantive testing to develop the final tire Crr standards in the
Phase 1 rule at two different testing laboratories for comparison to
test for variability. The agencies concluded that although laboratory-
to-laboratory and test machine-to-test machine measurement variability
exists, the level observed is not excessive relative to the
distribution of absolute measured Crr performance values and relative
to the proposed standards. Based on this, the agencies concluded that
the test protocol and the proposed standards are reasonable for this
program.
---------------------------------------------------------------------------

    \855\ 76 FR 57182-57185.
---------------------------------------------------------------------------

    The agencies are considering publishing the tire Crr levels from
fuel efficiency and GHG emission program compliance data. Because
compliance data are submitted by vehicle manufacturers rather than
directly from the tire manufacturers or agency directed testing they
could vary for a given tire model among vehicle manufacturer
submissions, or lag when tires are redesigned. Based on considerations
such as this, the agencies are not proposing to establish a public
database for heavy-duty vehicle tire rolling resistance information at
this time.
(c) Have the agencies considered industry standards for medium- and
heavy-duty Tire Pressure Systems (TPS)?
    The NAS Committee found that tire pressure monitoring systems and
automatic tire inflation systems are being adopted by fleets at an
increasing rate.\856\ However, the Committee noted that there are no
standards for performance, display, and system validation. The
Committee recommended that NHTSA issue a white paper to clarify the
minimum performance needed from these systems from a safety
perspective.\857\ This recommendation addresses the effects of tire
pressure systems on vehicle safety. Because the recommendation for a
white paper relates to safety, and is not directed at fuel efficiency
or GHG emissions effects, the agencies are not responding to the NAS
recommendation in this proposal.
---------------------------------------------------------------------------

    \856\ Phase 2 First Report at 84.
    \857\ Id., Recommendation 6.4.
---------------------------------------------------------------------------

    Nevertheless, the agencies note that automatic tire inflation
systems can improve fuel efficiency and greenhouse gas emissions (see
Preamble Section III/draft RIA Chapter 2) by maintaining tire pressure
close to the tire pressure specification. The agencies are proposing to
recognize automatic tire inflation systems as a technology that
improves fuel efficiency for tractors, trailers and vocational vehicles
in the GEM vehicle compliance model.
(d) Will NHTSA survey private fleets or leverage government fleets to
gather information for the Phase 2 rulemaking?
    In its report, the NAS Committee found that there are many
additional methods by which NHTSA could gather fleet information to
inform the Phase 2 rulemaking. The Committee recommended that NHTSA
gather data from private fleets, and work with the General Services
Administration or United States Postal Service to evaluate the fleet of
vehicles they possess.858 859
---------------------------------------------------------------------------

    \858\ Id. at 43, Recommendation 4.2, 4.3, and 4.4.
    \859\ Id. at 11, Recommendation 1.3.
---------------------------------------------------------------------------

    NHTSA understands that additional fleet information could be
helpful for purposes of formulating medium- and heavy-duty fuel
efficiency standards. Due to the length of time necessary to capture
useful, relevant data from fleets, NHTSA was unable to conduct public
or private fleet studies to inform this rulemaking. NHTSA will take
these recommendations under advisement to inform the agency in the
future. For the time being, the agencies have utilized data from FHWA,
EPA's SmartWay program, Polk, and other sources of fleet information.
(e) GEM Inputs and Outputs
    The NAS Committee found that GEM Version 2.0.1 is not compatible
with automated order entry systems of OEMs.\860\ It recommended that
the GEM programmers configure GEM to be compatible with existing OEM
order entry systems \861\ and provide a more useful output that
includes graphs and other presentation methods.\862\ However, EPA
believes these recommendations are beyond the scope of this rulemaking.
---------------------------------------------------------------------------

    \860\ Id. at 35.
    \861\ Id., Recommendation 3.2.
    \862\ Id., Recommendation 3.3.
---------------------------------------------------------------------------

(f) OEM-Specific Code
    The NAS committee stated models should be capable of simulating
real-world component behavior, and should not be oversimplified.\863\
It recommended allowing OEMs to substitute OEM-specific models or code
for the fixed models in the current GEM, including substituting a power
pack (the engine, aftertreatment, transmission).\864\ However, as
described in Section II, we are not proposing to allow this for a
number of reasons. NAS explained that its goal was to reflect real-
world operation accurately. We believe the powertrain test option could
be used to achieve this goal.
---------------------------------------------------------------------------

    \863\ Id. at 37.
    \864\ Id., Recommendation 3.7.

---------------------------------------------------------------------------

(3) NAS Findings and Recommendations With Which the Phase 2 Standards
Are Less-Significantly Inconsistent
(a) What are the agencies doing with respect to fuel specifications for
natural gas?
    The Committee found that natural gas provides a potential long-term
price advantage backed by an abundant supply.\865\ In addition to its
other natural gas (NG)-specific recommendations, the Committee
recommended government and the private sector should support further
technical improvements in engine efficiency and operating costs,
reduction of storage costs, and emission controls (as is done for
diesel engines).\866\ Further, it recommended that NHTSA and EPA should
also evaluate the need for and benefits and costs of an in-use NG fuel
specification for motor vehicle use.
---------------------------------------------------------------------------

    \865\ Id. at 65.
    \866\ Id., Recommendation 5.4.
---------------------------------------------------------------------------

    The agencies recognize the value in evaluating an in-use NG fuel
specification for motor vehicle use. EPA has developed and promulgated
fuel specifications for other motor vehicle fuel types, both for test
fuels and for in-use fuels. Such fuel specifications established by EPA
usually complement fuel specifications established by third party
organizations such as ASTM.
    EPA has established fuel specifications for natural gas used as
test fuels for emissions testing,\867\ but has not adopted
specifications for in-use natural gas used as a motor vehicle or off-
highway fuel. However, states have set natural gas quality limits on
the natural gas sold within the state, and natural gas pipelines have
established specifications for the natural gas either for their own
purposes or to ensure that the natural gas being transported by its
pipeline will be usable within the states to which the pipeline
transports the natural gas. These specifications would apply to natural
gas used as a motor vehicle fuel.
---------------------------------------------------------------------------

    \867\ EPA set natural gas test fuel quality for light-duty and
heavy-duty engines in 1994 (40 CFR 86.113-94 and 86.1313-94,
respectively), and for nonroad engines in 2002 (40 CFR 1065.715).
---------------------------------------------------------------------------

    EPA may consider establishing in-use specifications for natural gas
used as a motor vehicle or off-highway fuel in the future. However,
because natural gas use within the transportation sector is currently
so small (less than 1 percent of total natural gas demand and less than
1 percent of heavy-duty fuel demand), its use for transportation would
not have a separate fuel supply system, and it would not make sense
that such a small user segment should dictate fuel quality for the
overall fuel supply. Like other potential regulations that EPA might
consider, EPA will consider establishing fuel quality regulations on
natural gas if and when its use increases as a fuel for the
transportation sector.
(b) Have the agencies considered low rolling resistance standards for
all new tires?
    With regard to low rolling resistance tires, the NAS Committee
found that 70 percent of new tires sold in 2012 were for replacement of
existing tires.\868\ It found that although most new tractors and
trailers come equipped with SmartWay verified tires, only 42 percent of
replacement tires are SmartWay verified.\869\ The Committee recommended
that NHTSA and EPA evaluate rolling resistance of new tires, especially
those sold as replacements.\870\ It recommended that NHTSA adopt a
regulation establishing a low rolling resistance standard for all new
tires designed for tractor and trailer use.\871\
---------------------------------------------------------------------------

    \868\ Id. at 84.
    \869\ Id.
    \870\ Id., Recommendation 6.5.
    \871\ Id.
---------------------------------------------------------------------------

    The agencies are proposing to include low rolling resistance tires
as a technology that may be used for compliance for fuel efficiency and
GHG standards. The agencies conducted tire rolling resistance testing
and considered confidential business information data provided by
several tire manufacturers, which is discussed in Preamble Sections
III, IV, and V and draft RIA Chapter 2. The agencies have focused our
resources and attention to develop standards for new vehicles and
engines. NHTSA has not conducted work to consider a rolling resistance
performance standard for replacement tires at this time and will take
the Committee's recommendation under advisement.
(c) Have the agencies considered a protocol for measuring and reporting
the coefficient of rolling resistance to aid in consumer selection?
    The Committee recommended that the agencies consider establishing a
protocol for measuring and reporting the coefficient of rolling
resistance to aid in consumer selection, similar to passenger car
tires.\872\ At this time, the agencies are taking the Committee's
recommendation under advisement.
---------------------------------------------------------------------------

    \872\ Id. at 14, Recommendation 1.8.
---------------------------------------------------------------------------

(d) What other revisions are the agencies making to GEM?
    Consistent with the NAS Committee's recommendations, the agencies
are proposing to make the following revisions to GEM, as also detailed
Preamble Section II:
    Allowing manufacturers to input parameters related to engines,
transmissions, and axles

 Basing GEM on a steady-state fuel map
 Allowing separate fuel maps for alternative fuels
 Including real-world road grade to highway cycles
 Use of wind-average drag coefficients for aerodynamic inputs

However, the agencies are not making other changes recommended by NAS.
We are not making the user interface changes recommended by the
Committee on behalf of manufacturers. Our recent discussions with
manufacturers indicate that they have adopted ordering systems that are
consistent with the current interface. We are also not revising GEM to
allow manufacturers to input their own shift strategies. Instead, we
are proposing a powertrain test option that would serve the same
purpose.
    The NAS Committee also recommended that we broaden GEM to allow for
additional duty-cycles and actual vehicle weights. We believe that such
changes would not significantly improve the overall program, but would
add significant complexity.
(e) Vehicle Weight and Payload in GEM
    The NAS Committee recommended that NHTSA evaluate the load specific
fuel consumption (LSFC) at more than one payload to ensure there is not
an undesirable acute sensitivity to payload by a particular truck power
train and to reflect the fact that some states allow vehicles to
operate with gross combination vehicle weight ratings well in excess of
the values adopted for the simulation. NAS also recommended that GEM
allow manufacturers to input actual vehicle weights.\873\
---------------------------------------------------------------------------

    \873\ Id. at 9, Recommendation 1.1.
---------------------------------------------------------------------------

    As described in Section III, the agencies are proposing to modify
GEM to allow heavy-haul vehicles to be certified separately, to reflect
their unique weight and payload attributes. However, are not proposing
to allow for other payloads or weights to minimize complexity during
the compliance process.

(f) Is NHTSA conducting any campaigns related to fuel efficient driving
behaviors?
    In the NAS Committee's Phase 1 report,\874\ the Committee concluded
that fuel saving opportunities exist if drivers are educated about fuel
efficient driving techniques.\875\ The Phase 2 reiterated this finding,
and recommended NHTSA encourage and incentivize the dissemination of
information related to the relationship between driver behavior and
fuel savings.\876\
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    \874\ Committee to Assess Fuel Economy Technologies for Medium-
and Heavy-Duty Vehicles; National Research Council; Transportation
Research Board (2010). ``Technologies and Approaches to Reducing the
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' (``NAS
Report''), at page 9. Washington, DC, The National Academies Press.
Contract DTNH22-08-H-00222. Available electronically from the
National Academy Press Web site at http://www.nap.edu/catalog.php?record.id=12845 (last accessed September 10, 2014.)
    \875\ Id. at 177.
    \876\ Phase 2 First Report at 14, Recommendation 1.8.
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    Based on NHTSA's understanding of the medium- and heavy-duty
segments, a large portion of the vehicles are driven professionally.
Professional drivers operate these vehicles as independent drivers and
in trucking fleets. In some instances, particularly larger fleet
operations, management will track and encourage driver fuel efficiency.
It is not uncommon for professional drivers across all types of
trucking operations to undergo private fuel efficiency training. For
these reasons, NHTSA has not yet undertaken dissemination of
information related to the relationship between driver behavior and
fuel savings.

XIII. Amendments to Phase 1 Standards

    The agencies are proposing revisions to the regulatory text
specifying test procedures and compliance provisions used for Phase 1.
For the most part, these amendments would apply exclusively to the
Phase 2 rules. In a few limited instances, the agencies are proposing
to apply some of these changes to Phase 1. These limited changes to the
Phase 1 program are largely conforming amendments, and are described
below, along with other proposed minor changes to the Phase 1
compliance program. We note, however, that we are not reopening the
Phase 1 rules in a general sense, nor are we requesting comment on the
stringency of the Phase 1 standards or other fundamental aspects of the
Phase 1 program.

A. EPA Amendments

(1) Pickups and Vans
    EPA is proposing to relocate the GHG standards and other regulatory
provisions for chassis-certified HD pickups and vans in the Code of
Federal Regulations from 40 CFR 1037.104 to 40 CFR 86.1819-14.
Accordingly, NHTSA will modify any of EPA's references in 49 CFR parts
523 and 535 to accommodate the migration. EPA is making this change
largely to address ambiguities regarding the application of additional
provisions from 40 CFR part 86, subpart S, for these vehicles. The
approach in 40 CFR 1037.104 was to state that all of 40 CFR part 86,
subpart S, applies except as specified in 40 CFR 1037.104; however, the
recent standards adopted for light-duty vehicles and light-duty trucks
included several changes to 40 CFR part 86, subpart S, that should not
apply for chassis-certified HD pickups and vans. Based on our
experience implementing the Phase 1 program, we believe it is
appropriate to include the GHG standards for chassis-certified HD
pickups and vans in the same part as light-duty vehicles (40 CFR part
86, subpart S). All other certification requirements for these heavy-
duty vehicles--criteria exhaust standards, evaporative and refueling
standards, provisions for onboard diagnostics, and the range of
certification and compliance provisions--are in that subpart. We note
that we have not experienced the same challenges for other heavy-duty
vehicles, and are therefore not proposing to relocate the other
provisions of 40 CFR part 1037.
    This migration has highlighted a few areas where we need to clarify
how the regulations apply for chassis-certified HD pickups and vans. In
particular, EPA is proposing to make the following changes:

 Clarify that the GHG standards apply at high-altitude
conditions
 State that fleet-average calculation of carbon-related exhaust
emissions (CREE) is not required for chassis-certified HD pickups and
vans
 Clarify that requirements related to model types and
production-weighted average calculation apply on any passenger
automobiles and light trucks
 State that the credit and debit provisions of 40 CFR 86.1865-
12(k)(5) do not apply for chassis-certified HD pickups and vans
Clarify that the Temporary Lead Time Allowance Alternative Standards in
40 CFR 86.1865-12(k)(7) do not apply for chassis-certified HD pickups
and vans
 State that the early credit provisions of 40 CFR 86.1866-12,
86.1867-12, 86.1868-12, 86.1869-12, 86.1870-12, and 86.1871-12 do not
apply for chassis-certified HD pickups and vans
(2) Heavy-Duty Engines
    As described in Section II, EPA is proposing to revise the approach
to classifying gaseous-fuel engines with respect to both GHG and
criteria emission standards. This does not affect the vehicle-based
standards that apply under 40 CFR part 1037. The general approach would
be to continue to divide these engines into spark-ignition and
compression-ignition categories, but we propose to always apply the
compression-ignition standards to gaseous-fuel engines that qualify as
medium heavy-duty or heavy heavy-duty engines. Currently, any gaseous-
fuel engine derived from a gasoline engine would be subject to the
spark-ignition standards no matter the weight class of the vehicle. As
described in Section II, EPA now believes this approach does not
reflect the reality that gaseous-fuel engines used in Class 6, 7, or 8
vehicles compete with diesel engines rather than gasoline engines. Such
engines compete directly with diesel engines, and we believe they
should be required to meet the same emission standards. Because all
current gaseous-fuel engines for these large vehicles are already being
certified to the compression-ignition engine standards we can propose
to also apply this approach to engines subject to the HD GHG Phase 1
standards without adverse impacts on any manufacturers.
    EPA is also proposing to revise the regulation to spell out how to
apply enforcement liability for a situation in which the engine
manufacturer uses deficit credits for one or more model years. Simply
put, any time an engine manufacturer is allowed to carry a deficit to
the next year, all enforcement liability for the engines that generated
the deficit are extended for another year. These provisions are the
same as what we have already adopted for heavy-duty vehicles subject to
GHG standards under 40 CFR part 1037.
(3) Evaporative Emission Testing for LNG Vehicles
    Heavy-duty vehicles fueled by natural gas have for many years been
subject to evaporative emission standards and test procedures. While
fuel systems containing gasoline require extensive design features to
handle vented fuel, fuel systems containing natural gas generally
prevent evaporative losses by remaining sealed. In the case of
compressed natural gas, there is a

voluntary consensus standard, ANSI NGV1-2006, that is designed to
ensure that there are no leaks or losses during a refueling event.
Since compressed natural gas systems remain sealed indefinitely once
the refueling event is complete, we understand that complying with the
ANSI refueling standard is sufficient to demonstrate that the vehicle
also complies with all applicable evaporative emission standards. The
Light-Duty Tier 3 final rule included provisions to clarify that
compressed natural gas systems meeting the applicable ANSI standard are
deemed to comply with EPA's evaporative emission standards.
    Systems using liquefied natural gas (LNG) behave similarly, except
that the cryogenically stored fuel needs to be vented to prevent an
over-pressure situation if the vehicle is not used for an extended
time, as described in Section XI. Such vehicles are currently subject
to evaporative emission standards and test procedures, though there are
some substantial questions about how one can best apply the procedures
to these systems; not all of the instructions about preconditioning the
vehicle are straightforward for cryogenic fuel systems with no
evaporative canister. EPA is interested in pursuing an approach that is
similar to what applies for compressed natural gas systems, which would
need some additional attention to address boil-off emissions. There are
two voluntary consensus standards that specify recommended practices to
lengthen the time before boil-off starts to occur for LNG systems. SAE
J2343 specifies a minimum five-day hold time and NFPA 52 specifies a
minimum three-day hold time. EPA is proposing to require that
manufacturers of LNG vehicles meet the SAE J2343 standard as a means of
demonstrating compliance with the evaporative emission standards.
    While the hold-time requirements of SAE J2343 and NFPA 52 are
clear, there appears to be very little description of the procedure to
determine how much time passes between a refueling event and initial
venting. To ensure that all manufacturers are subject to the same set
of requirements, we are proposing to include a minimal set of
specifications corresponding to the demonstration under SAE J2343. In
particular, EPA proposes to specify that the vehicle must remain parked
throughout the measurement procedure, ambient temperatures must remain
between 20 and 30 [deg]C, the refueling event must follow conventional
procedures corresponding to the vehicle's hardware, and no
stabilization step is allowed after the refueling event.
    The proposed rules provides for relying on compliance with SAE
J2343 as a means of demonstrating compliance with evaporative emission
standards immediately upon completion of the final rule. EPA is
proposing to make this mandatory for vehicles produced on or after
January 1, 2020.
    EPA requests comment on all aspects of the proposed provisions for
LNG vehicles.
(4) Compliance and Other General Provisions
    EPA proposes the following changes that apply broadly for different
types of vehicles or engines:
     Add a requirement for vehicle manufacturers that sell
incomplete vehicles to secondary vehicle manufacturers to provide
emission-related assembly instructions to ensure that the completed
vehicle will be in a certified configuration.
     Specify parameters for determining a vehicle's curb
weight, consistent with current practice for vehicles certified under
40 CFR part 86, subpart S.
     Revise the recordkeeping requirement to specify a uniform
eight-year retention period for all data supporting an application for
certification. The provision allowing for one-year retention for
``routine data'' is no longer necessary now that data collection is all
recorded in electronic format. EPA is also clarifying that the eight-
year retention period is calculated relative to the latest associated
application for certification, not from the date the data were
generated.
     Change the rounding for analytically derived
CO2 emission rates and target values from the nearest 0.1 g/
mile to the nearest 1 g/mile.
     Clarify that manufacturers may not amend an application
for certification after the end of the model year, other than to revise
maintenance instructions or family emission limits, as allowed under
the regulations. Remove the general recordkeeping provisions from 40
CFR 1037.735 that are already described in 40 CFR 1037.825.
     Require a different equation with a ratio of 0.8330 in 40
CFR 1037.521(f) when full yaw sweep measurements are used to determine
wind averaged drag correction to establish an equivalent method to the
equation using 6 degree measurements (note that this cite
is proposed to be redesignated as 40 CFR 1037.525(d)). This proposed
change would not impact stringency because manufacturers are already
subject to compliance using both methods--full yaw sweep and 6 degree measurements. In addition, this Phase 1 flexibility was
not used in setting the level of the Phase 1 standards.
     Clarify how EPA would conduct selective enforcement audits
(SEAs) for engines (in 40 CFR 1036.301) and vehicles (in 40 CFR
1037.301) with respect to GHG emissions.

B. Other Compliance Provisions for NHTSA

(1) Standards and Credit Alignment
    In Phase 1, the agencies intended GHG and fuel consumption
standards for segments of the National Program to be in alignment so
that manufacturers would not be required to build vehicles to meet in
equivalent standards. Despite the intent, NHTSA and EPA have identified
several scenarios where credits and compliance to both sets of
standards are not aligned. This misalignment can have various impacts
on compliance with the National Program.
    For example, a manufacturer of tractors could have two vehicle
families that with same number of vehicles but with opposite and equal
compliance margins with standards. In this scenario, the first family
would over-comply with the GHG standard while the second family would
under-comply with the GHG standard by the same amount of grams
CO2/ton-mile. In calculating credits, the manufacturer would
have a net of zero GHG credits and exactly meet compliance; however,
based on conversions and rounding of the standard and performance
results that manufacturer could end up earning credits or having a
credit deficit under NHTSA's fuel efficiency program.
    In order to correct this misalignment, NHTSA is proposing to amend
the existing fuel consumption standards and the method for calculating
performance values for all compliance categories by increasing the
significant digits in these conversion values. Increasing the
significant digits in these values will result in more precise
alignment when converting from GHG consumption standards to fuel
consumption standards.
    The rounding approach differs for heavy-duty pickup trucks and vans
set apart from other vehicle and engine compliance categories. Heavy
Duty Pickup Trucks and Vans (HD PUV) use the same approach for
calculating standards and performance values as the LD CAFE and GHG
programs. As such, NHTSA proposes to increase the required significant
values for each components used in these calculations. More
specifically, NHTSA proposes to increase the number of decimal places
for sub-configuration target standards,

the sub-configuration fuel consumptions, the fleet average target
standard and the fleet average fuel consumption values from two fixed
values and increases them by one additional significant digit. The
regulation currently specifies rounding to these values nearest 0.01
and under the proposed approach the values would be rounded to the
nearest 0.001.
    NHTSA is also proposing to modify the c and d target coefficients
used for deriving HD PUV target standards. These values are directly
convertible from the EPA a and b target coefficients, respectively.
Currently, the c target coefficient contains six decimal places and the
d target coefficient contains two decimal places. Each coefficient
would be increased by one decimal--meaning the c target coefficient
would have seven decimal places, with the last four being significant
digits--and the d target coefficient would be increased to three
decimal places, with there being a total of four significant digits.
The modifications to the rounding and level of precision of these six
values will not entirely eliminate the misalignment of the credits
being calculated for EPA and NHTSA but will reduce it to an
insignificant variance.
    For other compliance categories, a similar approach can be used to
address the misalignment of calculated credits as it pertains to
vocational vehicles, tractors, and heavy duty engines. NHTSA proposes
to increase the number of significant digits by increasing the decimal
places contained in the standards and the FEL for the vocational
vehicle and tractor segments and the FCL for the engine segments to
four decimal places. Currently, the vocational vehicle and tractor
standards and FELs contain one decimal place while engines standards
and FELs contain two decimal places. The standards will be identified
directly in the regulation while the FEL and FCL will be a calculated
value rounded to the nearest 0.0001.
    The modifications to the rounding and level of precision of these
values should eliminate the misalignment of the credits being
calculated.
    These changes are planned for implementation retroactively starting
for the model year 2013 standard. However, because the stringency of
the Phase 1 fuel consumption standards may be adversely impacted for
certain manufacturers who have already developed engineering plans
considering previous credit balance, we propose to seek comments on
whether optional compliance should be allowed.
(2) Off-Road Exclusion Petition Process for Tractors and Vocational
Vehicles
    In the Phase 1 final rule, the agencies added provisions for
certain types of vocational tractors and vocational vehicles that
operate off-road to be exempt from standards, although standards would
still apply to the engines installed in these vehicles. An exemption
was warranted because these vehicles operate in a manner essentially
making them incompatible with fuel saving and emission reduction
technologies, such as performing work in an off-road environment, being
speed restricted, or having off-road components or other features
making them incompatible for roadways. For the Phase 1 program, off-
road vehicle manufacturers meeting the exemption provisions are
required to provide EPA and NHTSA, through the EPA database, a report
within 90 days after the end of each model year identifying its off-
road vehicles. The report must provide a description of each excluded