[Federal Register Volume 67, Number 65 (Thursday, April 4, 2002)]
[Rules and Regulations]
[Pages 16052-16060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8122]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 533
[Docket No. NHTSA-2001-11048]
RIN 2127-AI68
Light Truck Average Fuel Economy Standard, Model Year 2004
ACTION: Final rule.
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SUMMARY: This final rule establishes the average fuel economy standard
for light trucks manufactured in the 2004 model year. Chapter 329 of
Title 49 of the United States Code requires the issuance of this
standard. The standard for all light trucks manufactured by a
manufacturer is set at 20.7 mpg for the 2004 model year.
DATES: The amendment is effective May 6, 2002. Petitions for
reconsideration must be submitted within 30 days of publication.
ADDRESSES: Petitions for reconsideration should be submitted to:
Administrator, National Highway Traffic Safety Administration, 400
Seventh Street SW., Washington, DC 20590.
[[Page 16053]]
FOR FURTHER INFORMATION CONTACT: For non-legal issues, call Ken Katz,
Office of Planning and Consumer Programs, at (202) 366-0846, facsimile
(202) 493-2290, electronic mail [email protected]. For legal issues,
call Otto Matheke, Office of the Chief Counsel, at 202-366-5263.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Summary of Decision
III. Comments in Response to the NPRM
IV. Technological Feasibility
V. Effect of Other Federal Standards on Fuel Economy
A. Safety Standards
1. FMVSS 138
2. FMVSS 201
3. FMVSS 225
4. FMVSS 139
B. Emissions Standards
1. Tier II Requirements
2. Onboard Vapor Recovery
3. Supplemental Federal Test Procedure
4. California Air Resources Board LEV II
5. Section 177 States
VI. The Need of the Nation to Conserve Energy
VII. Economic Practicability
VIII. Determining the Maximum Feasible Average Fuel Economy Level
A. Interpretation of ``Feasible''
B. Industry-wide Considerations
C. Petroleum Consumption
D. The 2004 model year Standard
IX. Rulemaking Analyses and Notices
A. Economic Impacts
B. Environmental Impacts
C. Energy Impacts
D. Impacts on Small Entities
E. Federalism
F. The Unfunded Mandates Reform Act
G. Paperwork Reduction Act
H. Regulation Identifier Number (RIN)
I. Plain Language
J. Executive Order 13045
K. National Technology Transfer and Advancement Act
L. Department of Energy Review
I. Background
In December 1975, during the aftermath of the energy crisis created
by the oil embargo of 1973-74, Congress enacted the Energy Policy and
Conservation Act. Congress included a provision in that Act
establishing an automotive fuel economy regulatory program. That
provision added a new title, title V, ``Improving Automotive
Efficiency,'' to the Motor Vehicle Information and Cost Saving Act (the
Act). Title V provides for the establishment of average fuel economy
standards for cars and light trucks. Title V has been codified without
substantive change as Chapter 329 of Title 49 of the United States
Code.
Section 32902(a) of Chapter 329 requires the Secretary of
Transportation to issue light truck fuel economy standards for each
model year. Standards are required to be set at least 18 months prior
to the beginning of the model year. The Act provides that the fuel
economy standards are to be set at the maximum feasible average fuel
economy level. In determining maximum feasible average fuel economy
level, the Secretary is required under section 32902(f) of the Act to
consider four factors: technological feasibility; economic
practicability; the effect of other Federal motor vehicle standards on
fuel economy; and the need of the nation to conserve energy. (The
Secretary of Transportation delegated responsibility for the automotive
fuel economy program to the Administrator of NHTSA (41 FR 25015, June
22, 1976)).
From 1995 until very recently, the standards-setting process for
light truck CAFE standards was affected by restrictions imposed in the
Department of Transportation's annual Appropriations Acts. These Acts
provided that none of the funds were available to prepare, propose, or
promulgate any regulations prescribing CAFE standards in any model year
that differed from standards previously promulgated. This meant that
the agency was unable to spend any funds for the collection and
analysis of data relating to CAFE levels. During this time period, the
agency established the required light truck CAFE standards at the level
of 20.7 mpg, the level of the last light truck CAFE standard it had
previously promulgated under the usual statutory criteria. Because we
had no other course of action, we determined that issuing notices of
proposed rulemaking (NPRMs) during this time period was unnecessary and
contrary to the public interest.
On July 10, 2001, U.S. Secretary of Transportation Mineta sent a
letter to Congress requesting that the Department be allowed to begin
the rulemaking process for future CAFE standards immediately. The
restrictions ended with the enactment of the Department of
Transportation and Related Agencies Appropriations Act for FY 2002.
However, this did not take place until December 18, 2001, a time so
close to the April 1, 2002 date by which the MY 2004 light truck CAFE
standard must be issued as to preclude the agency from preparing the
customary detailed factual and analytical foundation for a CAFE
rulemaking.
On January 24, 2002, we published in the Federal Register (67 FR
3470) an NPRM to establish the MY 2004 light truck fuel economy
standard at 20.7 mpg, the level of the MY 1996-2003 standards. This
proposed standard reflected the absence of any current information or
analysis regarding the impact of any change in CAFE standards and the
capabilities of manufacturers. We nonetheless invited comments on the
maximum feasible level of average fuel economy, including comments as
to whether motor vehicle manufacturers could, with the limited leadtime
available and product plans essentially established, achieve a level
higher than 20.7 mpg in MY 2004.
We note that on February 7, 2002, we published in the Federal
Register (67 FR 5767) a request for comments relating to a variety of
issues concerning fuel economy improvements for MY 2005-2010. The
purpose of this request is to acquire detailed information to assist
the agency in developing a proposal for model years beyond 2004. In
that document, we also requested comments concerning the recent
National Academy of Sciences (NAS) study on the effectiveness and
impact of CAFE standards. Through the request for comments and other
means we anticipate preparing the customary detailed factual and
analytical foundation for establishing fuel economy standards in future
years.
In response to the January 24, 2002 NPRM concerning the MY 2004
light truck CAFE standard, the agency received comments from General
Motors (GM), Ford, DaimlerChrysler (DC), the National Automobile
Dealers Association (NADA), a number of public interest groups,
including Public Citizen, and one religious organization.
II. Summary of Decision
Based on our analysis, we are establishing an average fuel economy
standard of 20.7 mpg for MY 2004 light trucks. As we indicated in the
NPRM, we were precluded from collecting and analyzing information
regarding potential changes in fuel economy standards from 1995 to mid-
December 2001. This factor, along with the statutory requirement to
issue the 2004 model year standard not less than 18 months before the
model year begins, limited the information we were able to gather and
the analysis we were able to perform in setting the MY 2004 standard.
Additionally, we note that the relatively short leadtime for the 2004
model year precludes significant changes beyond those that
manufacturers have already planned.
In evaluating manufacturers' fuel economy capabilities for the 2004
model year, we have been largely restricted to publicly available
information, the information contained in the manufacturer comments
submitted in
[[Page 16054]]
response to the NPRM, and the information contained in comments
submitted by other interested parties. As the agency was foreclosed
until mid-December 2001 from collecting the detailed information
regarding manufacturer capabilities and product capabilities that are
required to perform an in-depth analysis of manufacturer capabilities,
future product plans, and the measures that can be implemented to
improve fuel economy that are normally examined in the process of
establishing fuel economy standards, much of our analysis is based on
the comments submitted by vehicle manufacturers. Nonetheless, we have
analyzed the information available to us and applied the four factors
we are required by statute to consider in determining the maximum
feasible fuel economy level for the 2004 model year.
III. Comments in Response to the NPRM
NHTSA received approximately 130 public comments in response to the
NPRM. Private citizens submitted the overwhelming majority of these
comments. As indicated above, Ford, GM, and DC submitted comments.
While these manufacturers produce the majority of light trucks sold in
the United States, a number of other light truck producers, including
Nissan and Toyota, did not submit comments. Similarly, smaller light
truck manufacturers, who would also be affected by the 2004 model year
standard, did not provide comments. Comments were also received from
the National Automobile Dealers Association (NADA), Public Citizen,
Frontiers of Freedom (FOF), The Small Business Survival Committee
(SBSC) and The Environmental Ministries of Southern California (EMSC).
Most of the commenters supported establishing the 2004 light truck
standard at a higher level than the 20.7 mpg level proposed in the
NPRM. Individuals submitted the majority of the comments supporting a
higher standard. Many of these individual commenters also supported
higher CAFE standards for passenger cars as well, advocated a single
standard for cars and trucks to close what was commonly referred to as
the ``SUV Loophole,'' and cited the existence of hybrid vehicles and
other technological developments as evidence that manufacturers can
achieve higher light truck CAFE levels. Some of these commenters
suggested specific CAFE levels for MY 2004, while others suggested
future levels and the timeframe for achieving these levels. Individuals
advocating an increase in the standard cited a number of reasons in
support of an increase, including environmental, energy and national
security concerns. Approximately 15 of the commenters specifically
mentioned the events of September 11th and reliance on imported
petroleum as support for increasing CAFE levels. Private individuals
who did not support an increase in the light truck fuel economy
standard indicated their belief that increases in light truck fuel
economy would result in decreased safety, reduced utility of light
vehicles, a reduced number of available light trucks, and prevent
vehicle manufacturers from providing sufficiently powerful vehicles to
serve as tow vehicles and work trucks.
Among the trade associations, public interest, and religious groups
submitting comments, three--NADA, FOF, and SBSC--agreed with the
proposed 2004 standard or advocated a lower standard. The FOF and SBSC
cited safety concerns and the economic effects of raising the standard
beyond 20.7 mpg as support for not increasing the standard. In
addition, FOF stated that Americans living in rural areas have a
particular need for sufficiently large and powerful trucks for work,
farming and recreation. NADA argued that increasing the standard would
also cause economic hardship and would conflict with consumer demand
for larger and more powerful vehicles.
Public Citizen and EMSC disagreed with the agency's proposal. EMSC
argued that small increases in fuel economy are technologically
feasible and desirable. In particular, EMSC argued that hybrid
technology used in cars could be applied to light trucks.
Public Citizen argued that the auto industry has the capacity to
sell a fleet with an average fuel economy well above the current
standard, even within the time constraints imposed by the rulemaking
process. In support of this argument, Public Citizen stated that, in
July 2000, Ford announced that it planned to improve the average fuel
economy of its SUV fleet by 25 percent by 2005. Public Citizen also
stated that General Motors and DC echoed that pledge. Assuming that the
industry was continuing to adhere to those pledges, Public Citizen
stated that manufacturers could comply with a 2004 standard above 20.7
mpg and advocated that the agency set it at 21.5 mpg or, in the
alternative, at 20.9 mpg.
Public Citizen stated that certain technological improvements could
be made that would improve fuel efficiency. Citing suggestions made by
the Union of Concerned Scientists (UCS) in its report ``Drilling in
Detroit--Tapping Automaker Ingenuity to Build Safe and Efficient
Automobiles,'' Public Citizen argued that drivetrain improvements,
reductions in parasitic losses, decreased rolling resistance and other
new technologies could be applied to improve efficiency. Even in the
short term, according to Public Citizen, small gains could be made if
optional equipment was removed from vehicles that are using
increasingly efficient engines and transmissions. In addition, although
acknowledging that NHTSA had been constrained by Congress in the past,
Public Citizen contended that the agency proposal represented an
abdication of the agency's statutory duty to set fuel economy standards
at the maximum feasible level.
The comments submitted by DC, Ford and GM all supported the
agency's proposal. DC stated it agreed that NHTSA did not, in the case
of the 2004 light truck standard, have sufficient time to collect and
analyze any new data. The company also indicated that the design and
configuration of its product line for the 2004 model year could not be
modified to add any technologies to improve fuel efficiency. In
addition, DC strongly supported extension of the dual-fuel vehicle
credit program and noted that the continuation of this program would
have an impact on the company's ability to meet the 2004 model year
standard. Finally, citing the National Academy of Sciences CAFE report,
DC stated that any modifications to the existing standard of 20.7 mpg
would have to be based on a realistic assessment of the lead time
needed by vehicle manufacturers to institute design changes to improve
fuel economy. Given what was described as an inability to accommodate
any change in the 2004 light truck fuel economy standard, DC stated
that any changes to the light truck CAFE standard would have a severe
financial impact and could cause the company to reduce product
offerings, close plants, and lay-off workers.
Ford also supported the agency's proposal, arguing that 20.7 mpg is
the maximum feasible light truck CAFE standard for the 2004 model year.
Ford concurred in NHTSA's assertion that events did not leave the
agency in a position to collect and analyze any new data. Moreover,
Ford stated that its 2004 product plans are now fixed and that it would
be impossible to add any fuel economy related technology to its 2004
vehicles. The company also stated that any increase in CAFE standards
for the 2004 model year would degrade Ford's financial health and cause
them to reduce product offerings.
[[Page 16055]]
GM also stated that it could not achieve a light truck CAFE higher
than 20.7 mpg in the 2004 model year. In fact, GM said that it projects
that the average fuel economy of its 2004 light truck fleet will be
lower than 20.7 mpg, if CAFE credits resulting from its dual fuel
vehicles are excluded. It did not, however, quantify the possible
shortfall or explain the reasons for it. As is the case with the other
manufacturers submitting comments, GM stated that its product lines and
final designs for the 2004 model year are already fixed and not
susceptible to change. GM also stated that it believed that sufficient
time did not exist for NHTSA to gather data and perform analysis
sufficient to show that a standard higher than 20.7 mpg is feasible. GM
contrasted the limited information in the record for this rulemaking
with the extensive information that NHTSA recently requested to aid it
in addressing the light truck fuel economy standards for the 2005-2010
model years. (67 FR 5767)
IV. Technological Feasibility
One of the factors that Section 32902(f) directs NHTSA to consider
in establishing fuel economy standards is the technological feasibility
of the improvements in fuel efficiency that are required for
manufacturers to meet that standard. As NHTSA has been foreclosed from
collecting detailed information regarding manufacturer capabilities, it
may only consider the potential for technological improvements in a
general fashion. As a number of commenters have indicated, there are a
number of technologies that offer promise for gains in fuel efficiency.
These include hybrid-electric drive trains, integrated starter-
generators, variable valve timing, improved combustion management,
aerodynamic improvements, reductions in friction losses, and advanced
transmissions, including continuously variable transmissions (CVT's).
In the absence of detailed information from vehicle manufacturers,
including proprietary information that is not otherwise available, the
agency is unable to determine which, if any, of these technologies are
included in future product plans and either could or would be
incorporated in 2004 model year trucks. NHTSA is aware, as Public
Citizen pointed out in its comments, that Ford and other manufacturers
pledged in 2000 to voluntarily improve SUV fuel efficiency by MY 2005.
NHTSA does not know precisely which combination of measures these
manufacturers contemplated using to meet this pledge or the degree to
which increasing consumer demand for larger, heavier, and more powerful
vehicles impacted on any assumptions that these pledges may have been
based on. None of those manufacturers discussed the status of the
pledges about SUV fuel economy in their comments. However, all of the
manufacturers responding to the NPRM indicated that the maximum level
of average fuel economy for all of their light trucks, not just their
SUVs, for the 2004 model year would be 20.7 mpg.
NHTSA does not possess the information required to analyze or
question the assertions made by Ford, DC, and GM that the maximum
average fuel economy their light truck fleets can achieve in the 2004
model year is 20.7 mpg. As already noted, NHTSA lacks detailed
information on the extent to which the manufacturers are using the
various available fuel efficiency improving technologies in their
current light truck models and the extent to which they plan to use
them in the 2004 model year. Many commenters indicated a belief that
manufacturers could achieve a higher level through the implementation
of new technologies. However, NHTSA does not have the information
necessary to determine if manufacturers can incorporate these
technologies into their MY 2004 light trucks given the short leadtime.
In fact, all the manufacturers stated that one constraint on their
ability to improve fuel economy was the lack of leadtime for
implementing improvements in fuel economy. The agency recognizes, as it
has in the past, that the leadtime necessary to design tools and test
components to implement a technological advance once the technology is
deemed to be feasible is not less than 30 to 36 months (See 59 FR
16313, April 6, 1994). This is further complicated by the long model
lives of vehicles in the light truck segment. The lack of available
leadtime before the beginning of the 2004 model year indicates that
most, if not all, potential improvements in fuel efficiency that are
not already designed into 2004 models could not now be used in these
vehicles.
Public Citizen also suggested that rather than use improvements in
fuel efficiency to decrease fuel consumption, manufacturers have taken
the opportunity to increase vehicle weight and content to boost sales
and increase profits. If, as Public Citizen suggests, short-term gains
in fuel economy could be gained by basing increases in the fuel economy
standard on the removal of optional equipment, NHTSA has not had
sufficient time or information to assess the feasibility,
practicability or effectiveness of such an approach.
V. Effect of Other Federal Standards on Fuel Economy
In determining the maximum feasible fuel economy level, the agency
must take into consideration the potential effects of other Federal
standards. The following section discusses other government
regulations, both in process and recently completed, that may have an
impact on fuel economy capability.
A. Safety Standards
1. FMVSS 138
On July 26, 2001, NHTSA published in the Federal Register (66 FR
38982) a notice of proposed rulemaking containing a proposal to require
tire pressure monitoring systems on passenger cars, multipurpose
vehicles, trucks, and buses with a gross vehicle weight rating of
10,000 pounds or less. This proposal was issued in response to a
requirement contained in the Transportation Recall Enhancement,
Accountability and Documentation Act of 2000 (TREAD). The TREAD Act
further requires that the tire pressure monitoring system requirements
take effect two years after the final rule is issued. Although NHTSA
has not yet issued this final rule, it anticipates doing so in the near
future. Therefore, the tire pressure monitoring system requirements
will apply to 2004 model year light trucks. In its Preliminary
Regulatory Evaluation for the tire pressure monitoring system
rulemaking, the agency estimated weight increases per vehicle
associated with tire pressure monitoring systems as being not more than
one pound. As this weight increase is negligible, the tire pressure
monitoring system requirements are not likely to have any CAFE impact.
We note that correct tire pressure improves a vehicle's fuel
economy. Thus, the addition of tire pressure monitoring systems will
improve real world fuel economy by warning drivers about tires that are
significantly underinflated. This will not result in a CAFE improvement
for manufacturers, however, as a vehicle's fuel economy for CAFE
purposes is determined by a detailed test procedure that includes
specifications for tire pressure.
2. FMVSS 201
On April 5, 2000, NHTSA published in the Federal Register (65 FR
17482) an NPRM proposing to modify test procedures and to extend the
upper interior impact requirements of FMVSS 201 to certain door frames
and seat belt mounting structures to passenger car, trucks,
multipurpose vehicles, and buses with a GVWR of 10,000 pounds or less.
The agency proposal specified that
[[Page 16056]]
the new requirements would become effective 180 days after publication
of a final rule. The proposed extension would require that certain
vertical surfaces on doors of vehicles with doors that close together
without an intervening pillar and vertical seat belt mounting
structures meet the same impact requirements applicable to the pillars
found on more conventional designs.
The agency has not yet issued a final rule. Comments received in
response to the NPRM suggested that the proposed effective date did not
provide sufficient leadtime for manufacturers to respond to the new
requirements. This request for additional leadtime is presently under
consideration by the agency. Although no determination has yet been
made regarding this issue, the extension of the impact requirements to
door frames and seat belt mounting structures could become effective
before or during the 2004 model year. The safety countermeasures
required to meet the upper interior impact requirements of FMVSS 201 do
not impose a significant weight penalty. The agency's estimate of the
additional weight required to meet the requirements of Standard 201
contained in the Final Economic Assessment prepared at the time of the
issuance of the final rule establishing the upper interior requirements
(60 FR 43031) estimated an increase in total vehicle weight of 2.29 to
5.59 pounds for installation of countermeasures in the entire vehicle.
As the proposed extension of these requirements to door frames and seat
belt mounting structures applies only to these discrete components
rather than the entire upper interior, the weight penalty associated
with installing countermeasures on these structures would be less than
one pound per vehicle. This added weight will have a minimal impact on
vehicle fuel economy.
3. FMVSS 225
On March 5, 1999, NHTSA published in the Federal Register (64 FR
10786) a final rule establishing a new safety standard requiring the
installation of dedicated child restraint anchorage systems in
passenger cars, multipurpose vehicles, and trucks with a GVWR of 8,500
pounds or less and buses with a GVWR of 10,000 pounds or less. On July
31, 2000, NHTSA published a response to petitions for reconsideration
of the March 5, 1999 final rule that extended the effective date of the
new anchorage requirements to September 1, 2004. Because model years
for CAFE purposes begin on October 1, these new requirements would
apply to vehicles that must meet the 2004 model year light truck fuel
economy standard. The FMVSS 225 requirements are intended to reduce
deaths and injuries to children by providing a more effective and
standardized means of attaching child restraints. The agency's Final
Economic Analysis prepared at the time of the issuance of the March 5,
1999 final rule estimated that compliance with the new child restraint
anchorage requirements would result in a weight increase of one pound
per vehicle. Accordingly, the agency determined that compliance would
have a negligible impact on vehicle fuel economy.
4. FMVSS 139
On March 5, 2002, NHTSA published in the Federal Register (67 FR
10050) a notice of proposed rulemaking containing the agency's proposal
for a new FMVSS establishing performance requirements for tires. The
agency's proposal was issued pursuant to a mandate in the TREAD Act
requiring that it issue new performance standards for tires on or
before June 1, 2002. These tire performance requirements, which would
appear in FMVSS 139 and would apply to new pneumatic tires for use on
vehicles with a gross vehicle weight rating of 10,000 pounds or less.
The agency's proposal sets forth two alternative phase-in schedules for
these new requirements. Under one of these phase-ins, tires on MY 2004
light trucks would have to meet the performance requirements of the
standard. The proposed performance requirements for tires could have an
impact on fuel economy if meeting the requirements altered the rolling
resistance of these tires. However, there is no present indication that
the proposed performance requirements will have any such impact.
Accordingly, the agency believes that this proposal would have a
minimal impact on the ability of manufacturers to comply with the 2004
light truck fuel economy standard.
B. Emissions Standards
1. Tier II Requirements
On February 10, 2000, the Environmental Protection Agency (EPA)
published in the Federal Register (65 FR 6698) a final rule
establishing new federal emissions standards for vehicles classified by
EPA as passenger cars, light trucks and larger passenger vehicles.
These new emissions standards, known as Tier 2 standards, are designed
to focus on reducing the emissions most responsible for the ozone and
particulate matter (PM) impact from these vehicles. These emissions are
nitrogen oxides (NO[X]) and non-methane organic gases (NMOG),
consisting primarily of hydrocarbons (HC) and contributing to ambient
volatile organic compounds (VOC). The program also applies the same set
of federal standards to all passenger cars, light trucks, and medium-
duty passenger vehicles. Under the Tier 2 standards, light trucks
include ``light light-duty trucks'' (or LLDTs), rated at less than 6000
pounds gross vehicle weight and ``heavy light-duty trucks'' (or HLDTs),
rated at more than 6000 pounds gross vehicle weight. For new passenger
cars and light LDTs, the Tier 2 standards phase-in beginning in 2004,
and are to be fully phased-in by 2007. During the phase-in period from
2004-2007, all passenger cars and light LDTs not certified to the
primary Tier 2 standards must meet an interim standard equivalent to
the current National Low Emission Vehicle (NLEV) standards for light
duty vehicles. In addition to establishing new emissions standards for
vehicles, the Tier 2 standards also establish standards for the sulfur
content of gasoline.
When issuing the Tier 2 standards, EPA responded to comments
regarding the impact of the Tier 2 standard and its impact on CAFE by
indicating that it believed that the Tier 2 standards would not have an
adverse effect on fuel economy. NHTSA notes that only one of the
commenters responding to the agency's proposed 2004 light truck
standard indicated that the Tier 2 standards would have any impact on
the ability to meet fuel economy standards. DC, while addressing its
strong support for continuation of the dual-fuel incentive program,
stated that the Tier 2 standards presented special challenges for
ethanol-fueled vehicles. The comments, did not, however, indicate the
nature of these challenges and the degree to which the Tier 2 standards
would impact on DC's ability to meet the proposed 2004 light truck
standard.
2. Onboard Vapor Recovery
On April 6, 1994, EPA published in the Federal Register a final
rule (59 FR 16262) controlling vehicle refueling emissions through the
use of onboard refueling vapor recovery (ORVR) vehicle-based systems.
These requirements applied to light-duty vehicles beginning in the 1998
model year, and were phased-in over three model years. The ORVR
requirements also apply to light-duty trucks with a gross vehicle
weight rating of 0-6000 lbs, beginning in model year 2001 and phasing-
in over three model years at the same rate as for light-duty vehicles.
For light-duty trucks with a gross vehicle weight rating of 6001-8500
lbs, the ORVR requirements first apply in the
[[Page 16057]]
2004 model year and phase-in over three model years at the same rate as
light-duty vehicles.
None of the commenters addressed the impact, if any, of the ORVR
requirements on compliance with CAFE. The ORVR requirements impose a
weight penalty on vehicles as they necessitate the installation of
vapor recovery canisters and associated tubing and hardware. However,
the operation of the ORVR system results in fuel vapors being made
available to the engine for combustion while the vehicle is being
operated. As these vapors provide an additional source of energy that
would otherwise be lost to the atmosphere through evaporation, the ORVR
requirements do not have a negative impact on fuel economy.
3. Supplemental Federal Test Procedure
On October 26, 1996, EPA issued a final rule (61 FR 54852) revising
the tailpipe emission portions of the Federal Test Procedure (FTP) for
light-duty vehicles (LDVs) and light-duty trucks (LDTs). The revision
created a Supplemental Federal Test Procedure (SFTP) designed to
address shortcomings with the existing FTP in the representation of
aggressive (high speed and/or high acceleration) driving behavior,
rapid speed fluctuations, driving behavior following startup, and use
of air conditioning. The SFTP also contains requirements designed to
more accurately reflect real road forces on the test dynamometer. EPA
chose to apply the SFTP requirements to trucks through a phase-in.
Light-duty trucks with a gross vehicle weight rating (GVWR) up to 6000
lbs were subject to a three-year phase-in ending in the 2002 model
year. Heavy light-duty trucks, those with a GVWR greater than 6000 lbs
but not greater than 8500 lbs, are subject to a phase-in in which 40
percent of each manufacturer's production must meet the SFTP
requirements in the 2002 model year, 80 percent in 2003, and 100
percent in the 2004 model year.
The 2004 model year represents the final phase-in year for light
trucks subject to CAFE standards. Neither Ford, GM or DC indicated in
their comments that the SFTP would have any impact on their ability to
meet the proposed 2004 standard.
4. California Air Resources Board LEV II
The State of California Low Emission Vehicle II regulations (LEV
II) will apply to passenger cars and light trucks in the 2004 model
year. The LEV II amendments restructure the light-duty truck category
so that trucks with a gross vehicle weight rating of 8,500 pounds or
lower are subject to the same low-emission vehicle standards as
passenger cars. LEV II requirements also include more stringent
emission standards for passenger car and light-duty truck LEVs and
ultra low emission vehicles (ULEVs), and establish phase-in
requirements that begin in 2004. During the initial year of the four-
year phase-in, the LEV II standards require that 25 percent of
production comply.
Comments submitted by DC indicated that company's concern that
compliance with LEV II requirements may be difficult for dual-fuel
vehicles. The company, did not, however, provide any details or data
regarding these challenges.
5. Section 177 States
The term ``Section 177 States'' refers to states that voluntarily
adopt the more stringent California emissions standards. As of November
2000, Massachusetts, New York and Maine had adopted the California Low
Emission Vehicle (LEV) program. NHTSA has not received any data showing
any impact on the 2004 light truck fuel economy capabilities as a
result of states other than California adopting the California
emissions standards.
VI. The Need of the Nation To Conserve Energy
Since the petroleum ``shocks'' of the 1970s, the inflation-adjusted
price of crude oil has generally declined. After the oil shocks of the
1970s, several events have combined to keep oil prices low, including a
diminution in the market power of OPEC due to an increase in petroleum
production from non-OPEC nations. However, there also has been a
growing dependence of the U.S. on imported petroleum since that time
period.
Based on information collected by the Energy Information
Administration (EIA) in 2001, world crude oil reserves amount to about
1,000 billion barrels, and world natural gas reserves amount to about
5,180 trillion cubic feet. Of this total, the Middle East controls
about 65 percent of the world's oil reserves and about 35 percent of
the world's natural gas reserves (the former U.S.S.R. controls another
38 percent of the world's natural gas reserves). North American
reserves of oil amount to just 5-6 percent of world reserves, and North
American reserves of natural gas amount to about 5 percent of world
reserves.
Today, the Persian Gulf region holds about two-thirds of the entire
world's known oil reserves. The U.S. imports more than 53 percent of
its petroleum--much of it coming from the Persian Gulf region. EIA's
Annual Energy Outlook 2002 estimates that this oil importation will
increase to 62 percent by the year 2020. EIA projects that Persian Gulf
producers are expected to account for more than 45 percent of worldwide
trade by 2002, for the first time since the 1980's. After 2002, the
Persian Gulf share of worldwide petroleum exports is projected to
increase gradually to almost 48 percent by 2020.
VII. Economic Practicability
The agency's traditional interpretation of the requirement to
consider ``economic practicability'' in deciding maximum feasible
average fuel economy is that the agency must set standards that are
within the financial capability of the industry, and not so stringent
as to threaten substantial economic hardship for the industry (42 FR
33537). Since GM, Ford and DC, whose production represents over 80
percent of the light truck market, did not object to the setting of the
model year 2004 light truck standard at 20.7 mpg, the agency concludes
that a standard set at that level would be economically practicable.
GM, Ford and DC indicated that they could not meet any standard
higher than 20.7 mpg without suffering economic effects. Unfortunately,
due to the unique circumstances of this rulemaking, NHTSA is not now in
a position to determine the point at which those economic effects would
amount to a substantial economic hardship. In the absence of the
information needed to make such a determination, the agency concludes
that establishing the standard above 20.7 mpg could create a risk of
such substantial hardship.
VIII. Determining the Maximum Feasible Average Fuel Economy Level
As discussed above, section 32902(f) requires that light truck fuel
economy standards be set at the maximum feasible average fuel economy
level. In making this determination, the agency must consider the four
factors of section 32902(f): technological feasibility, economic
practicability, the effect of other Federal motor vehicle standards on
fuel economy, and the need of the nation to conserve energy.
A. Interpretation of ``Feasible''
Based on definitions and judicial interpretations of similar
language in other statutes, the agency has in the past interpreted
``feasible'' to refer to whether something is capable of being done.
The agency has thus concluded in the past that a standard set at the
maximum feasible average fuel economy
[[Page 16058]]
level must: (1) be capable of being done and (2) be at the highest
level that is capable of being done, taking account of what
manufacturers are able to do in light of technological feasibility,
economic practicability, how other Federal motor vehicle standards
affect average fuel economy, and the need of the nation to conserve
energy.
B. Industry-wide Considerations
The statute does not expressly state whether the concept of
feasibility is to be determined on a manufacturer-by-manufacturer basis
or on an industry-wide basis. Legislative history may be used as an
indication of congressional intent in resolving ambiguities in
statutory language. The agency believes that the below-quoted language
provides guidance on the meaning of ``maximum feasible average fuel
economy level.'' The Conference Report to the 1975 Act (S. Rep. No. 94-
516, 94th Cong., 1st Sess. 154-55 (1975)) states:
Such determination [of maximum feasible average fuel economy
level] should take industry-wide considerations into account. For
example, a determination of maximum feasible average fuel economy
should not be keyed to the single manufacturer which might have the
most difficulty achieving a given level of average fuel economy.
Rather, the Secretary must weigh the benefits to the nation of a
higher average fuel economy standard against the difficulties of
individual manufacturers. Such difficulties, however, should be
given appropriate weight in setting the standard in light of the
small number of domestic manufacturers that currently exist and the
possible implications for the national economy and for reduced
competition association [sic] with a severe strain on any
manufacturer * * *.
It is clear from the Conference Report that Congress did not intend
that standards simply be set at the level of the least capable
manufacturer. Rather, NHTSA must take industry-wide considerations into
account in determining the maximum feasible average fuel economy level.
NHTSA has traditionally set light truck standards at a level that
can be achieved by manufacturers whose vehicles constitute a
substantial share of the market. The agency did set the MY 1982 light
truck fuel economy standards at a level which it recognized might be
above the maximum feasible fuel economy capability of Chrysler, based
on the conclusion that the energy benefits associated with the higher
standard would outweigh the harm to Chrysler. 45 FR 20871, 20876, March
31, 1980. However, as the agency noted in deciding not to set the MYs
1983-85 light truck standards above Ford's level of capability,
Chrysler had only 10-15 percent of the light truck domestic sales,
while Ford had about 35 percent. 45 FR 81593, 81599, December 11, 1980.
C. Petroleum Consumption
The potential savings associated with a 2004 light truck standard
above 20.7 mpg are highly uncertain. Assuming that a standard could be
set at 21.2 mpg, 0.5 mpg above the capability asserted by GM, Ford and
DC, these three companies, whose sales represent approximately 80
percent of all the light trucks sold in the United States, could likely
meet the level of the standard only by restricting the sales of their
larger or more powerful light trucks. If this occurred, consumers might
tend to keep their older, less-fuel-efficient light trucks in service
longer. Also, consumers might purchase larger, heavier trucks that are
not subject to CAFE standards. Therefore, the agency believes that any
additional energy savings associated with alternative higher fuel
economy standards above 20.7 mpg (the level the agency has determined
to be the capability of GM, Ford and DC) for model year 2004 would be
uncertain and speculative.
D. The 2004 Model Year Standard
Based on its analysis described above and on manufacturers'
projections contained in the comments submitted in response to the
January 24, 2002 NPRM, the agency concludes that the major domestic
manufacturers can achieve a light truck fuel economy level of 20.7 mpg.
Ford, DC and GM dominate that domestic light truck market with
approximately 80 percent of all sales. Other light truck manufacturers,
such as Nissan, Toyota, Honda, BMW and others are expected in MY 2004
to have CAFE levels both above and below Ford, DC and GM. However,
since these companies have a small market share, NHTSA concludes that
setting a standard based on their capabilities would be inconsistent
with a determination of maximum feasibility that takes industry-wide
considerations into account, as required by statute.
Under the time constraints imposed on the agency and the limited
amount of information available, NHTSA's analysis of manufacturer
capabilities has been truncated. Given these constraints, NHTSA has
concluded that it cannot determine which of the manufacturers with a
substantial share of sales is the least capable manufacturer for model
year 2004. NHTSA concludes that 20.7 mpg is the maximum feasible
standard for the 2004 model year. For the reasons discussed below, this
level balances the uncertain petroleum savings associated with a higher
standard against the relatively certain difficulties of manufacturers
facing a higher standard.
A 20.7 mpg standard will not unduly restrict consumer choice or
have adverse economic impacts on the large domestic manufacturers. The
comments of GM, DC and Ford all supported setting the 2004 model year
light truck CAFE standard at 20.7 mpg. NHTSA believes that the 20.7 mpg
standard minimizes the risk of the potentially serious adverse economic
consequences for the domestic automobile industry that could result
from a higher standard precipitously set on the basis of limited
information. The cost of avoiding this risk is, insofar as the 2004
model year is concerned, foregoing any increased petroleum savings that
might have been realized from more fuel-efficient light truck
production in that model year. The agency concludes, in view of the
statutory requirement to consider specified factors, that the
relatively small and very uncertain energy savings associated with
setting a standard above 20.7 mpg would not justify the potential harm
to the industry and the economy as a whole.
FOF and SBSC stated that NHTSA should consider the safety effects
of any decision to increase fuel economy standards. Although the agency
is not increasing the light truck fuel economy standard for 2004 above
the standard for prior years, NHTSA has recognized that CAFE standards
could adversely affect safety to the extent that they necessitate
significant reductions in car size and/or weight. This issue was
discussed at length in the agency's notice terminating rulemaking on
the MY 1990 passenger car CAFE standard (see 58 FR 6939, February 3,
1993). As recommended in the NAS report, NHTSA is currently updating
its 1997 analysis on the relationship between vehicle size and safety.
This study will be completed later this year.
Given that this final rule maintains the light truck CAFE standard
at 20.7 mpg, it will not have any impact on safety.
IX. Rulemaking Analyses and Notices
A. Economic Impacts
The Office of Management and Budget reviewed this rule under
Executive Order 12866, Regulatory Planning and Review. Although the
light truck CAFE standard for MY 2004 does not differ from the fuel
economy standards for the preceding model years, we are treating this
rule as ``economically significant'' under Executive Order 12866 and
``major'' under the Congressional Review Act, 5 U.S.C. 801 et seq., as
[[Page 16059]]
added by the Small Business Regulatory Enforcement Fairness Act of
1996. This rule is also considered significant under the Department's
regulatory policies and procedures. As noted above, the agency has been
operating under a restriction on the use of appropriations for the last
six fiscal years. The restriction has prevented the agency from
gathering and analyzing data relating to fuel economy capabilities and
the costs and benefits of improving the level of fuel economy.
Particularly since that restriction was lifted only on December 18,
2001, the agency has been unable to prepare a separate economic
analysis for this rulemaking. The agency notes, however, that the
standard it is setting for the 2004 model year will not make it
necessary for the manufacturers with a substantial share of the market
to change their product plans.
B. Environmental Impacts
We have not conducted an evaluation of the impacts of this final
rule under the National Environmental Policy Act. NHTSA is setting the
2004 model year light truck CAFE standard at the same level as the
standard applicable to the 1996 through 2003 model years. As this rule
maintains the fuel economy standard at the same level as prior years,
it does not impose change in any environmental impacts. Accordingly, no
environmental assessment is required.
C. Energy Impacts
NHTSA has not changed the level of the light truck CAFE standards
in setting the standard for the 2004 model year. This final rule, which
maintains the CAFE standard at its existing level, does not have ``a
significant adverse effect on the supply, distribution, or use of
energy,'' as defined by Executive Order 13211, Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use. At this point, therefore, this action is not a ``significant
energy action'' under Executive Order 13211 and no ``Statement of
Energy Effects'' is required.
D. Impacts on Small Entities
Pursuant to the Regulatory Flexibility Act, the agency has
considered the impact this rulemaking will have on small entities. I
certify that this action would not have a significant economic impact
on a substantial number of small entities. Therefore, a regulatory
flexibility analysis is not required for this action. Few, if any,
light truck manufacturers subject to the rule are classified as a
``small business'' under the Regulatory Flexibility Act.
The Regulatory Flexibility Act of 1980 (Public Law 96-354) requires
each agency to evaluate the potential effects of a rule on small
businesses. Establishment of a fuel economy standard for light trucks
affects motor vehicle manufacturers, few of which are small entities.
The Small Business Administration (SBA) has set size standards for
determining if a business within a specific industrial classification
is a small business. The Standard Industrial Classification code used
by the SBA for Motor Vehicles and Passenger Car Bodies (3711) defines a
small manufacturer as one having 1,000 employees or fewer.
Very few single stage manufacturers of motor vehicles within the
United States have 1,000 or fewer employees. Those that do are not
likely to have sufficient resources to design, develop, produce and
market a light truck. For this reason, we certify that this final rule
regarding the corporate average fuel economy of light trucks will not
have a significant economic impact on a substantial number of small
entities.
E. Federalism
E.O. 13132 requires NHTSA to develop an accountable process to
ensure ``meaningful and timely input by State and local officials in
the development of regulatory policies that have federalism
implications.'' E.O. 13132 defines the term ``Policies that have
federalism implications'' to include regulations that have
``substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.'' Under
E.O. 13132, NHTSA may not issue a regulation that has federalism
implication, that imposes substantial direct compliance costs, and that
is not required by statute, unless the Federal government provides the
funds necessary to pay the direct compliance costs incurred by State
and local governments, or NHTSA consults with State and local officials
early in the process of developing the proposed regulation.
This final rule will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government as specified in E.O. 13132. Thus, the
requirements of section 6 of the Executive Order do not apply to this
rule.
F. The Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (Public Law 104-4)
requires agencies to prepare a written assessment of the costs,
benefits and other effects of proposed or final rules that include a
Federal mandate likely to result in the expenditure by State, local or
tribal governments, in the aggregate, or by the private sector, of more
than $100 million annually. For the same reasons discussed in the
section above on economic impacts, the agency has been unable to
prepare a separate assessment.
G. Paperwork Reduction Act
There are no information collection requirements in this rule.
H. Regulation Identifier Number (RIN)
The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. You may
use the RIN contained in the heading at the beginning of this document
to find this action in the Unified Agenda.
I. Plain Language
Executive Order 12866 requires each agency to write all rules in
plain language. Application of the principles of plain language
includes consideration of the following questions:
--Have we organized the material to suit the public's needs?
--Are the requirements in the rule clearly stated?
--Does the rule contain technical language or jargon that is not clear?
--Would a different format (grouping and order of sections, use of
headings, paragraphing) make the rule easier to understand?
--Would more (but shorter) sections be better?
--Could we improve clarity by adding tables, lists, or diagrams?
--What else could we do to make the rule easier to understand?
If you have any responses to these questions, please forward them
to Otto Matheke, Office of Chief Counsel, National Highway Traffic
Safety Administration, 400 Seventh Street, SW., Washington, DC 20590.
J. Executive Order 13045
Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any
rule that: (1) Is determined to be economically significant as defined
under E.O. 12866, and (2) concerns an environmental, health or safety
risk that NHTSA has
[[Page 16060]]
reason to believe may have a disproportionate effect on children. If
the regulatory action meets both criteria, we must evaluate the
environmental health or safety effects of the planned rule on children,
and explain why the planned regulation is preferable to other
potentially effective and reasonably feasible alternatives considered
by us.
This rulemaking does not have a disproportionate effect on
children. The primary effect of this rulemaking is to conserve energy
resources by setting a fuel economy standard for light trucks.
K. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) requires NHTSA to evaluate and use existing voluntary
consensus standards in its regulatory activities unless doing so would
be inconsistent with applicable law (e.g., the statutory provisions
regarding NHTSA's vehicle safety authority) or otherwise impractical.
In meeting that requirement, we are required to consult with voluntary,
private sector, consensus standards bodies. Examples of organizations
generally regarded as voluntary consensus standards bodies include the
American Society for Testing and Materials (ASTM), the Society of
Automotive Engineers (SAE), and the American National Standards
Institute (ANSI). If NHTSA does not use available and potentially
applicable voluntary consensus standards, we are required by the Act to
provide Congress, through OMB, an explanation of the reasons for not
using such standards.
We are not aware of any available and potentially applicable
voluntary consensus standards, i.e., ones regarding the maximum
feasible level of corporate average fuel economy for MY 2004 light
trucks. Therefore, this rule is not based on any voluntary consensus
standards.
L. Department of Energy Review
In accordance with 49 U.S.C. Sec. 32902(j), we submitted this rule
to the Department of Energy for review. That Department did not make
any comments that we have not responded to.
List of Subjects in 49 CFR Part 533
Energy conservation, Motor vehicles.
PART 533--[AMENDED]
In consideration of the foregoing, 49 CFR part 533 is amended as
follows:
1. The authority citation for part 533 continues to read as
follows:
Authority: 15 U.S.C. 2002; delegation of authority at 49 CFR
1.50.
2. Section 533.5 is amended by revising Table IV in paragraph (a)
to read as follows:
Sec. 533.5 Requirements.
(a) * * *
Table IV
------------------------------------------------------------------------
Model Year Standard
------------------------------------------------------------------------
1996......................................................... 20.7
1997......................................................... 20.7
1998......................................................... 20.7
1999......................................................... 20.7
2000......................................................... 20.7
2001......................................................... 20.7
2002......................................................... 20.7
2003......................................................... 20.7
2004......................................................... 20.7
------------------------------------------------------------------------
* * * * *
Issued on: March 29, 2002.
Jeffrey W. Runge,
Administrator.
[FR Doc. 02-8122 Filed 4-1-02; 11:31 am]
BILLING CODE 4910-59-P