Sec. 703: Alternative Compliance and Flexibility
Expands compliance options under EPAct by allowing fleets to
choose a more flexible petroleum reduction path. Under the new path, fleets that
reduce petroleum use by at least as much as if all AFVs that they otherwise
would be required to purchase under EPAct used alternative fuel 100 percent of
time would be permitted to opt-out of EPAct AFV acquisition programs. To comply with this new option, fleet
operators cannot simply reduce the number of vehicles in their fleet. They can, however, purchase smaller
vehicles, more petroleum efficient vehicles and alternative fuel vehicles. This provision was originally
proposed by the NGVC and its member companies. The original conference report would
have reduced the reduction target by any waivers that already had been
granted. The NGVC opposed that
reduction. The final bill does not
include that reduction.
Sec. 704: Review of EPAct of 1992 Programs
Requires DOE to report to Congress within 180 days of
enactment of the provision on the effect of EPAct’s AFV programs, incentives,
etc. DOE is to measure benefits in
terms of increased vehicles and fuels, as well as the cost of compliance. DOE shall make recommendations on
changes to EPAct. Issues that DOE
must address include the:
- number of AFVs acquired by covered
fleets
- amount of AF used in AFVs acquired under
EPAct
- amount of petroleum
displaced
- cost of compliance (including benefits of
using AF & AFVs), and
- existence of obstacles to increased use of
alternative fuels and biodiesel blends.
This provision was originally proposed by the NGVC and its
member companies.
Sec 706: Joint Flexible Fuel/Hybrid Vehicle Commercialization
Initiative
Establishes a research program to advance the
commercialization of hybrid/flex-fuel vehicles and plug-in hybrid/flex-fuel
vehicles. Flex-fuel is not defined
in the legislation. The NGVC is
working to include report language that accompanies the legislation to clarify
that bi-fuel NGVs are flex-fuel vehicles for the purpose of this program. The legislation authorizes $3 million
for FY2006, $7 million for FY20078, $10 million for FY2008 and $20 million for
FY2009.
Sec. 707: EPAct Emergency Vehicle Exemption
Exempts from EPAct coverage “vehicles directly used in the
emergency repair of transmission lines and in the restoration of electricity
service following power outages, as determined by the [DOE] Secretary.”
Sec. 721-723: Advanced Vehicles Pilot Demonstration
Program
Establishes a competitive grant program to fund up to 30
geographically dispersed advanced vehicle demonstration projects. The goal of the program, which will be
administered by Clean Cities, is to reduce emissions, displace fossil fuel,
promote advanced technology vehicles and promote sustainable transportation
options. Grant recipients will be
limited to state and local government agencies and MPOs. No project can receive more than $15
million. Grant monies can be use to
pay for:
- AFVs (including
neighborhood electric vehicles)
- Hybrid vehicles (only
medium and heavy-duty vehicles)
- Fuel cell vehicles
- Ultra-low sulfur
heavy-duty diesel vehicles
- Acquisition and
installation of fueling infrastructure
- Operation and
maintenance of vehicles, infrastructure and equipment
The legislation
authorizes $200 million for the program.
The NGVC assisted in the development of this
proposal.
Sec. 741: Clean School Bus
Program
Establishes a
program to provide grants to school districts and related organizations for the
replacement, repower or retrofit of school buses. The program will have the following
characteristics:
EPA is directed to
“achieve an appropriate balance” between spending for replacement buses versus
retrofitting existing buses.
For replacements,
grantees may receive the following for the purchase of alt fuel and “clean
diesel” school buses:
·
50 percent of
the cost of the new bus if they meet tight emission standards,
namely:
-
For MY2005 and
2006, 1.8 grams NOx plus NMHC and 0.01 PM
-
For MY2007,
2008 and 2009, 0.2 NOx plus NMHC and 0.01 PM (the 2010 EPA emission
standards)
·
25 percent of
the cost of the new bus if they meet less strict emission standards,
namely:
-
For MY2005 and
2006, 2.5 grams NOx plus NMHC and 0.01 PM (which is the minimum standard for
diesel engines)
-
For MY2007,
2008 and 2009, “regulatory requirements” by EPA. This is assumed to mean the phase-in
requirement to 2010 which is 1.8 grams NOx plus NMHC and 0.01 PM.
No state can receive
more than 10 percent of the monies made available each
year.
The legislation
authorizes $55 million for FY2006, $55 million for FY 2007 and “such sums as are
necessary” for fiscal years 2008-2010.
This provision originally was proposed by the NGVC, its member
companies and a large coalition of clean school bus supporters.
Sec. 742: Diesel Truck Retrofit and Fleet Modernization Program
Establishes a grant program for states to fund fleet
modernization programs, with preference to be given to ports and other major
hauling operations. Preference also
will be given to proposals that “will achieve the greatest reductions in
emissions” and “involve the use of EPA or CARB verified emission control
technologies.” The NGVC believes
that alt fuel technologies qualify and will work to clarify this during the
implementation process. The
legislation authorizes $20 million for FY2006; $35 million for FY2007; $45
million for FY2008; and “such sums as are necessary for fiscal years 2009 and
2010.”
Establishes a new cost-shared public/private program to
develop and demonstrate technologies that increase fuel economy; reduce
emissions and lower costs of operations for railroads. Natural gas engines are
eligible under the program.
Legislation authorizes: $15 million for FY2006; $20 million for FY2007;
and $30 million for FY2008.
Sec. 752: Mobile Emissions Reductions Trading and Crediting
Requires EPA to submit a report to Congress within 180 days
of enactment on the trading of mobile source emission reduction credits with
owners and operators of stationary source emission sources to meet emission
offset requirements within a non-attainment area. This provision was originally
proposed by the NGVC and its member companies.
Sec. 759: Fuel Economy Incentive Requirements
Requires automobile manufacturers to put a label on all
dual-fuel (bi-fuel and flex-fuel) vehicles to inform owners that the vehicle can
be operated on an alternative fuel.
Applies to all autos manufactured after September 1, 2006.
Sec. 772: Extension of Maximum Fuel Economy Increase for AFVs
Extends the CAFE credits received by automakers for producing
dedicated, bi-fuel and flex-fuel vehicles.
Sec. 781-2: Federal and State Procurement of Fuel Cell
Vehicles and Hydrogen Energy Systems
Requires the head of any federal agency that uses a
light-duty or heavy-duty fleet vehicle to lease or purchase fuel cell vehicles
and hydrogen energy systems where appropriate beginning January 1, 2010. “Hydrogen Energy Systems” is not
defined. HCNG vehicles may fall
under this category. Legislation
authorizes $15 million in FY 2008; $25 million in FY2009; $65 million in FY2010;
and “such sums as are necessary for each of fiscal years 2011 through 2015.”
Sec. 791-797: Diesel Emission Reductions
Establishes a program to make
grants and loans available to State and local government agencies and non-profit
organizations for reducing emissions from diesel engines. The program focuses on
replacing/retrofitting engines in non-attainment areas and would require that at
least 50 percent of the federal program funds be used on public fleets. EPA or CARB certified or verified
technologies qualify. NGV repowers
and replacements will be eligible.
Legislation authorizes $200 million per year for FY 2006 through
2010.
Sec 1421-1424: Set America Free: United States Commission
On North American Energy Freedom
Establishes a United
States commission to make recommendations for a coordinated and comprehensive
North American energy policy that will achieve energy self-sufficiency by 2025
within the three contiguous North American nation areas of Canada, Mexico, and
the United States.
Sec. 1818: Natural Gas Supply
Shortage Report
Requires the DOE Secretary to study and develop
recommendations for achieving a balance between natural gas supply and demand
to, in part, facilitate the attainment of national ambient air quality standards
under the Clean Air Act. In
performing the study, the Secretary is directed to develop scenarios for decreasing natural gas demand
and increasing natural gas supplies that compare the relative economic and
environmental impacts of Federal policies that encourage or require the use of
natural gas to meet air quality, carbon dioxide emission reduction, or security
goals.
Sec. 1823: Alternative Fuels
Reports
Requires the DOE
Secretary to carry out a study on the
potential for biodiesel and hythane to become major, sustainable, alternative
fuels. The hythane report shall provide a detailed assessment of potential
hythane markets and the research and development activities that are necessary
to facilitate the commercialization of hythane as a competitive, environmentally
friendly transportation fuel.
Sec. 1831: Review Of Energy Policy Act Of
1992 Programs
Requires the DOE
Secretary to carry out a study to
determine the effect that titles III, IV, and V of the Energy Policy Act of 1992
have had on (1) the development of alternative fueled vehicle technology; (2)
the availability of that technology in the market; and (3) the cost of
alternative fuel vehicles.
THE FOLLOWING NGV-RELATED PROVISIONS ARE
INCLUDED IN HIGHWAY BILL (H.R. 3):
Sec. 1113: Volumetric Excise Tax
Credit for Alternative Fuels
Provides an excise
tax credit (referred to as VEETC) to the seller of CNG or LNG. This credit is different than the fuel
credit that had been included in previous versions of the CLEAR ACT. The credit is 50-cent per
gasoline-gallon-equivalent for CNG and 50-cents per liquid gallon for LNG
for the sale of CNG and LNG for use as a motor vehicle fuel. It begins on October 1, 2006 (delayed
for budget reasons) and expires on September 30, 2009. Partially offsetting the value of the
excise tax credit, however, is an increase in the motor fuels excise tax rate
for both CNG and LNG. The CNG rate
would increase from 4.3 cents per gge to 18.3 cents. The LNG rate would increase from 11.9
cents to 24.3 cents on a LNG gallon basis.
The increased tax rate will go into effect on October 1, 2006. Under this approach, CNG and LNG will
pay the same rate of tax into the Highway Trust Fund as all other transportation
fuels, but then CNG and LNG would receive an excise tax credit paid out of the
general fund. The credit will be
paid to eligible recipients on a regular basis without regard to the actual
amount of excise tax paid. Propane,
hydrogen and some minor fuels also are eligible for this
credit.
Sec. 5310. Incentives For The
Installation Of Alternative Fuel Refueling Stations
This is the same as Sec.
1342 of the Energy Bill (above) except that the credit is 50 percent (rather
than 30 percent) of the cost of alternative fuel refueling equipment. It is assumed that the Energy Bill
limits will prevail.
Sec. 1606. Use Of High Occupancy
Vehicle Lanes
Permits states to allow petroleum hybrids in HOV lanes with
only one passenger. This provision
was not supported by NGVC.
Sec. 1611: Addition Of Particulate
Matter Areas To CMAQ
Extends CMAQ eligibility to areas that are not in attainment
(or are in maintenance) for PM2.5 in addition to ozone and CO.
Sec. 1612: Addition To CMAQ-Eligible
Projects
Adds biodiesel to the list of eligible fuels and certified
and verified diesel retrofit technologies to list of eligible technologies for
coverage under the CMAQ program.
The eligible diesel retrofit technologies would include natural gas
repowers.
Sec. 1622. Clean
School Bus Program
This is the same as Sec.
741 of the Energy Bill (above) except that it includes funding for non-petroleum
fuels (including biodiesel) as an equal part of the program (along with bus
replacements and retrofits).
It
is assumed that the Energy Bill structure will prevail.
The following are provisions in the Energy Bill (H.R. 6)
that are directed at promoting fuel cell vehicles, hybrid vehicles and non-NGV
alt fuel vehicles:
Sec 711: Hybrid Vehicles
Directs the Secretary of DOE to “accelerate efforts toward
the improvement” of hybrid vehicle and related technologies. No additional money is authorized.
Establishes a program to provide grants to domestic
automakers to “encourage domestic production and sales of efficient hybrid and
diesel vehicles.” The original
House version would have authorized $300 million per year for FY2006-15. The conference version simply authorizes
“such sums as may be necessary for each of the fiscal years 2006 through
2015.”
Sec. 731: Fuel Cell Transit Bus Demonstration
Establishes a “transit bus demonstration program to make
competitive, merit-based awards for five-year projects to demonstrate not more
than 25 fuel cell transit buses (and necessary infrastructure) in five
geographically dispersed localities.”
The legislation authorized $10 million per year for FY2006-10.
Sec. 743: Fuel Cell School Buses
Establishes a cooperative agreement program with
private-sector fuel cell bus developers and local government for the development
of fuel cell school buses.
Legislation requires a report that evaluates the process of converting
natural gas infrastructure to accommodate fuel cell powered school buses. Legislation authorizes $25 million over
the period FY2006 through 2009.
Sec 754: Diesel Fueled Vehicles
Directs the Secretary of DOE to ”accelerate efforts to
improve diesel combustion and after-treatment technologies for use in diesel
fueled motor vehicles.” No
additional monies are authorized.
Sec. 757: Biodiesel Engine Testing Program
Establishes a biodiesel engine-testing program to determine
the impacts of biodiesel use in advanced diesel engines with low sulfur diesel
fuel, including “the impact of biodiesel on emission warranty, in-use liability,
and anti-tampering provisions.”
Legislation authorizes: $5 million per year for FY 2006 through 2010.
Sec. 1826: Fuel Cell And Hydrogen Technology
Study
Requires the DOE
Secretary to carry out a study of fuel
cell technologies that provides a budget roadmap for the development of fuel
cell technologies and the transition from petroleum to hydrogen in a significant
percentage of the vehicles sold by 2020.
The following are provisions of interest to the NGV
industry that were included in either the Senate- or House-passed Energy Bills
but were NOT included in the final Energy Bill approved by
Congress:
HOV Exemption (House)
Would have allowed states to permit petroleum hybrids in HOV
lanes with only one passenger. This provision was not supported by NGVC.
Expanded Fuel Use Credits under EPAct (Senate)
Would have significantly loosened the EPAct requirements by
giving one EPAct vehicle credit for every 450 gallons of biodiesel used by a
covered fleet. This would have
eliminated the current 50 percent cap on use of biodiesel credits, would have
eliminated the limitation to earn biodiesel credits in only MD and HD vehicles
and would have given multiple credits to users of alt fuels (versus only one
credit for AFV purchase in place today).
This provision was actively opposed by NGVC since it would have
eviscerated the EPAct program.
Lease Condensates as an Alt Fuel (House)
Would have amended
EPAct to include lease condensates in the definition of alternative fuel and
replacement fuel. Also would have
allocated credits to EPAct fleets for using lease condensates in blends of 50
percent or more in vehicles more than 8500 lbs. Each 1,125 gallons of lease condensate
would have used earned one AFV credit.
This provision was not supported by NGVC.
Hybrid Retrofit and Electric Conversion Systems
(House)
Would have established a competitive grant program for hybrid
retrofit and electric conversion systems.
Procurement of AFVs by Non-EPAct Federal Fleets
(Senate)
Would have required
federal government fleets not currently covered by EPAct to only acquire AFVs
when acquiring passenger cars. This
provision was supported by the NGVC.
Procurement of
Hybrid Light-Duty Trucks (Senate)
Would have required federal government fleets not currently
covered by EPAct to only acquire hybrid trucks when acquiring light duty trucks.
B20 as Alt Fuel (Senate)
Would have defined a motor vehicle that operates on B20 or
fuel blends containing bio-derived hydrocarbons produced from agriculture and
animal waste to be an AFV for purposes of several new programs. This provision was actively opposed by
the NGVC since defining a vehicle that operates on B20 as an AFV would have made
all diesel vehicles AFVs -- even if operated on petroleum diesel.
