Alternative Fuel Transportation Program; P-series fuels

DEPARTMENT OF ENERGY

10 CFR Part 490

Office of Energy Efficiency and Renewable Energy

[Docket No. EE-RM-98-PURE]

RIN 1904-AA99

Alternative Fuel Transportation Program; P-series fuels

AGENCY: Department of Energy (DOE).

ACTION: Notice of proposed rulemaking and opportunity for public

comment.

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SUMMARY: In response to a petition filed by Pure Energy Corporation,

DOE proposes to amend the rules for the statutory program requiring

certain alternative fuel providers and State government fleets to

acquire an annually increasing percentage of alternative fueled

vehicles from among their purchases of new light duty vehicles. The

proposed regulatory amendments would add certain blends of

methyltetrahydrofuran, ethanol and hydrocarbons known as the P-series

fuels to the definition of ``alternative fuel.''

DATES: Written comments, eight (8) copies, must be received by DOE by

September 28, 1998.

ADDRESSES: Written comments should be addressed to: U.S. Department of

Energy, Office of Transportation Technologies, EE-34, Docket No. EE-RM-

98-PURE, 1000 Independence Avenue, SW, Washington, DC 20585, telephone

(202) 586-3012.

Copies of the Pure Energy Corporation petition for rulemaking,

analyses of the petition by national laboratories, written comments

received, technical reference materials mentioned in this notice, and

any other documents related to this rulemaking may be read and copied

at the DOE Freedom of Information Reading Room, Room 1E-190, 1000

Independence Avenue, SW, Washington, DC 20585, telephone (202) 586-

3142, between the hours of 9:00 a.m. and 4:00 p.m., Monday through

Friday, except Federal holidays. The docket file material will be filed

under EE-RM-98-PURE.

For more information concerning public participation in this

rulemaking proceeding, see section III of this notice (Public Comment

Procedures).

FOR FURTHER INFORMATION CONTACT: Kenneth R. Katz, Office of Energy

Efficiency and Renewable Energy, (EE-34), U.S. Department of Energy,

1000 Independence Avenue, S.W., Washington, D.C. 20585, (202) 586-9171.

For information concerning submission of written comments and to

obtain copies of materials referenced in this notice, contact Andi

Kasarsky, (202) 586-3012.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

A. Fuel Characteristics

Pure Energy Corporation has petitioned DOE for a rulemaking to add

its proprietary fuel products to the definition of ``alternative

fuels'' under the Alternative Fuel Transportation Program (Program)

regulations (10 CFR part 490). Pure Energy Corporation's P-series fuels

are blends of ethanol, methyltetrahydrofuran (MTHF), and pentanes plus,

with butane added for blends that would be used in severe cold-weather

conditions to meet cold start requirements. It is anticipated that both

the ethanol and the MTHF will be derived from renewable resources, such

as waste cellulosic biomass that can be derived from waste paper,

agricultural waste and urban/industrial wood waste. Pure Energy

Corporation plans to use pentanes plus that are derived from the

processing and production of natural gas, as opposed to those derived

from refining processes. Pure Energy Corporation holds the exclusive

worldwide license to manufacture and distribute the P-series fuels,

which were developed by Dr. Stephen Paul of Princeton University. The

P-series fuels were awarded Patent number 5,697,987 by the United

States Patent and Trademark Office on December 16, 1997. DOE's

evaluation of Pure Energy Corporation's petition is restricted to those

formulations covered under this patent.

To make the P-series fuels, Pure Energy Corporation will be

producing ethanol and MTHF through an integrated production process.

Pure Energy Corporation expects to utilize commercially proven

concentrated acid hydrolysis processing as its base technology for this

integrated production process. MTHF is currently produced in limited

quantities from furfural (derived from both biomass and petroleum

feedstocks) for use as a specialty chemical in consumer end products

and/or process industries.

Pure Energy Corporation has developed a thermochemical technology

to produce MTHF from cellulosic feedstocks through a levulinic acid

pathway, integrating it with an ethanol production system to achieve

technical and economic efficiencies. In this process, the

lignocellulosic feedstock is converted into both five-and six-carbon

sugars, which are then bifurcated into fermentation and thermochemical

pathways to produce ethanol and MTHF, respectively.

Pure Energy Corporation has developed several fuel formulations for

the P-series fuels. Pure Energy Corporation proposes to vary the

components of its P-series fuels to meet particular market demands. The

formulations described in Table 1 are those for which Pure Energy

Corporation, in its petition, provided specific energy and emission

data. Pure Energy Corporation claims that the volumetric percentages of

each of the components of the P-series fuels can

[[Page 40203]]

range from 10 percent to 50 percent for pentanes plus; from 15 percent

to 55 percent for MTHF; from 25 percent to 55 percent for ethanol; and

from zero to 15 percent for normal butane. However, data was not

provided to DOE for fuel formulations that incorporate the entire

blending range. Data was provided to DOE only for the three specific

formulations discussed in this notice. Table 1 provides the

compositions, by volume, of the three P-series fuel formulations which

are the subject of Pure Energy Corporation's petition for rulemaking.

Table 1

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Volume composition of the P-series fuels

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Constituent Regular Premium Cold weather

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Pentanes plus............................................. 32.5 27.5 16.0

MTHF...................................................... 32.5 17.5 26.0

Ethanol................................................... 35.0 55.0 47.0

Normal butane............................................. 0 0 11.0

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Pure Energy Corporation claims that its P-series fuels are from 60

to 100 percent non-petroleum, on an energy basis, depending on the

source of the pentanes plus and n-butane components of the blends.

Pure Energy Corporation proposes to market the P-series fuels for

flexible fuel vehicles (FFVs) originally designed to operate on E-85

(85 percent ethanol/15 percent gasoline), on gasoline, or on any blend

of those two fuels. Flexible fuel vehicles are currently available from

two major domestic auto manufacturers as mid-size sedans and minivans.

In the near future, a large number of minivans and compact pickup

trucks will be produced as flexible-fuel vehicles by these two domestic

manufacturers.

B. Patent

On December 16, 1997, the United States Patent and Trademark Office

issued U.S. Patent No. 5,697,987, titled Alternative Fuel, to Princeton

University on a new, non-petroleum substitute for gasoline called the

P-series. The abstract for this patent reads:

A spark ignition motor fuel composition consisting essentially

of: a hydrocarbon component containing one or more hydrocarbons

selected from five to eight carbon atoms straight-chained or

branched alkanes essentially free of olefins, aromatics, benzene and

sulfur, wherein the hydrocarbon component has a minimum anti-knock

index of 65 as measured by ASTM D-2699 and D-2700 and a maximum DVPE

of 15 psi as measured by ASTM D-5191; a fuel grade alcohol; and a

co-solvent for the hydrocarbon component and the fuel grade alcohol;

wherein the hydrocarbon component, the fuel grade alcohol and the

co-solvent are present in amounts selected to provide a motor fuel

with a minimum anti-knock index of 87 as measured by ASTM D2699 and

D-2700, and a maximum DVPE of 15 psi as measured by ASTM D-5191. A

method for lowering the vapor pressure of a hydrocarbon-alcohol

blend by adding a co-solvent for the hydrocarbon and the alcohol to

the blend is also disclosed.

C. Background

10 CFR part 490 sets forth the regulations that implement title V

of the Energy Policy Act 1992 (EPACT) (Public Law 102-486) which

mandates alternative fueled vehicle acquisition requirements for

certain alternative fuel providers and State government fleets. Part

490 is one of a variety of EPACT programs to promote alternative and

replacement fuels that reduce reliance on imported oil, reduce criteria

pollutant and greenhouse gas emissions, increase energy efficiency, and

help displace 10 percent and 30 percent of conventional motor fuels by

2000 and 2010, respectively.

Title III of EPACT requires Federal fleet acquisitions of

alternative fueled vehicles. Title IV includes specific authority for a

financial incentive program for States, a public information program,

and a program for certifying alternative fueled vehicle technician

training programs. In addition to the mandates for the purchase of

alternative fueled vehicles by certain alternative fuel providers and

State government fleets, title V provides for a possible similar

mandate for certain private and municipal fleets. Title VI provides for

a program to promote electric motor vehicles.

The types of vehicles that satisfy the alternative fuel provider

and State government fleet mandates in title V are determined in part

by the definition of ``alternative fuel'' in section 301(2). That

definition provides: `` `Alternative fuel' means methanol, denatured

ethanol, and other alcohols; mixtures containing 85 percent or more (or

such other percentage, but not less than 70 percent, as determined by

the Secretary, by rule, to provide for requirements relating to cold

start, safety, or vehicle functions) by volume of methanol, denatured

ethanol , and other alcohols with gasoline or other fuels; natural gas;

liquefied petroleum gas; hydrogen; coal-derived liquid fuels; fuels

(other than alcohol) derived from biological materials; electricity

(including electricity from solar energy); and any other fuel the

Secretary determines, by rule, is substantially not petroleum, and

would yield substantial energy security benefits and substantial

environmental benefits.'' [Emphasis added.] 42 U.S.C. 13211(2). The P-

series fuels do not fit within the classes of eligible fuels

specifically named in section 301(2). The emphasized phrase in the

definition of ``alternative fuel'' states the minimum procedural and

substantive requirements for adding a new fuel blend to the list of

fuels enumerated or implicitly covered by the provisions of section

301(2).

In the rulemaking to establish 10 CFR part 490, DOE concluded that

Congress deliberately omitted reformulated gasoline (RFG) from the

definition of ``alternative fuel'' in section 301(2) of the Act. The

basis for this conclusion was explained in a final rule at 61 FR 10622

(March 14, 1996). The relatively small percentage of non-petroleum

content in RFG was an important consideration in that explanation.

For reasons set forth in detail below, DOE proposes to determine

that the P-series fuels, as described by United States Patent number

5,697,987, which contain at least 60 percent non-petroleum energy

content derived from MTHF (manufactured solely from biomass feedstocks)

and ethanol, are substantially not petroleum and would yield

substantial energy security and substantial environmental benefits, and

thus should be added to the definition of ``alternative fuel'' in 10

CFR 490.2.

II. Statutory Criteria for Designating Additional Alternative Fuels

Neither section 301(2) nor any other provision of EPACT states

specifically or indicates how to measure whether a new fuel: (1) is

``substantially not petroleum'' and (2) would yield ``substantial

energy security benefits;'' and (3) would yield ``substantial

[[Page 40204]]

environmental benefits.'' Moreover, these criteria do not purport to be

exclusive, and in appropriate circumstances, DOE could consider other

criteria related to achievement of the purposes of the Program.

Legislative committee report language likewise does not identify

specifically what numbers and measures Congress viewed as defining the

minimum that would qualify as substantially not petroleum, substantial

energy security, and substantial environmental benefits. However, the

report of the House Committee on Energy and Commerce described the

pertinent language in section 301(2) as providing ``. . . the Secretary

with the opportunity to add alternative and replacement fuels that are

not now being marketed to those specifically identified in the

legislation.'' [Emphasis added.] H.R. Rep. No. 474(1), 102nd Cong., 2nd

Sess., 182, reprinted in 1992 U.S. Code Cong. & Admin. News 2005. The

word ``opportunity'' suggests that the authority to add fuels to the

definition of ``alternative fuel'' is largely discretionary.

A. Substantially Not Petroleum

Any standard dictionary or thesaurus indicates that

``substantially'' is an adverb that can be used to convey a variety of

subtly different meanings. ``Substantially'' is sometimes used as a

synonym for the word ``mainly.'' At other times, it is used as a

synonym for the words ``considerably'' or ``importantly.'' See, e.g.,

Webster's New World Thesaurus 725 (Simon & Schuster, 1985). The former

is a more narrow usage because the word ``mainly'' means the principal

and predominant portion of a whole. (Obviously, a fuel that is more

than 50 percent non-petroleum in energy equivalent terms is ``mainly''

and therefore ``substantially not petroleum.'') The latter usage is

broader because a less than principal or predominant portion of the

whole could still be large enough to be regarded as ``considerable'' or

``important.'' Whether to construe ``substantially'' narrowly or

broadly is a policy question. Since the petition does not involve fuels

that are less than 50 percent non-petroleum, in terms of energy

content, it is unnecessary to address this policy question in this

rulemaking.

Section 502(b) of the Act establishes goals for replacing the

projected consumption of motor fuel in the U.S. on an energy equivalent

basis. The goals provided by this section are that 10% of the motor

fuel consumed by 2000 and 30% of the motor fuel consumed by 2010 will

be replacement fuels. These goals are the driving force for all the

alternative and replacement fuel provisions in the Act. Because the

achievement of these goals is to be measured on an energy equivalent

basis, DOE believes that when evaluating a fuel, the determination of

whether it is ``substantially not petroleum'' should be based on an

analysis of the fuel's non-petroleum energy content, rather than a

volumetric analysis of the fuel's non-petroleum content.

Pure Energy Corporation claims that, on an energy basis, its P-

series fuels will be at least 60 percent derived, and may be 100

percent derived, from non-petroleum sources, depending on the source of

the light hydrocarbons in the blends. In its petition, the Pure Energy

Corporation provided DOE with information and analysis to substantiate

these claims, and DOE had the National Renewable Energy Laboratory

(NREL) review those data. NREL confirmed the accuracy of Pure Energy

Corporation's claim regarding the energy-based, non-petroleum content

of the P-series fuels. Table 2 summarizes the worst-case (lowest non-

petroleum) makeup of the three P-series fuel formulations, based on the

net (lower) heating value of all constituents.

Table 2

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Verified non-petroleum energy content of the P-series fuels

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Regular Premium Cold weather

Constituent (percent) (percent) (percent)

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Pentanes plus................................................... 36.2 33.3 19.1

MTHF............................................................ 37.7 22.1 32.3

Ethanol......................................................... 26.1 44.6 37.5

Normal butane................................................... 0.0 0.0 11.2

Non-petroleum................................................... 63.8 66.7 69.8

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It is evident to DOE that the MTHF (manufactured from biomass

feedstock) and the ethanol in the P-series fuels are non-petroleum.

However, it is less clear as to whether the pentanes plus component is

non-petroleum. The Department of Energy's Energy Information

Administration (EIA), in its publication Annual Energy Review 1996, 386

((DOE/EIA-0384(96)) defines ``pentanes plus'' as ``a mixture of

hydrocarbons, mostly pentanes and heavier, extracted from natural gas.

[This] includes isopentane, natural gasoline, and plant condensate.''

This same publication also defines petroleum products as including

``unfinished oils, liquefied petroleum gases, pentanes plus, aviation

gasoline, motor gasoline, naphtha-type jet fuel, kerosene-type jet

fuel, kerosene, distillate fuel oil, residual fuel oil, petrochemical

feedstocks, special naphthas, lubricants, waxes, petroleum coke,

asphalt, road oil, still gas, and miscellaneous products.'' Ibid.

However, it is unnecessary to determine whether to restrict pentanes

plus on the basis of source because the MTHF (manufactured from biomass

feedstock) and ethanol, which are present in all three fuel blends,

result in a non-petroleum energy content for the P-series formulations

of at least 63.8 percent. That percentage is the main or predominant

portion of the fuel, and even under the narrow definition of

``substantially,'' the three fuel blends are ``substantially not

petroleum.''

Because U.S. Patent number 5,697,987 does not specifically define

the composition of the P-series fuels, DOE has determined that the

fuels need to be more specifically described before they can be added

to the regulatory definition of ``alternative fuel.'' Given that the

petition shows that the P-series fuels will be at least 60 percent

derived from non-petroleum sources, DOE will be using that percentage

as a way of more narrowly defining the P-series fuels, yet allowing

some variability in the blend components and blend levels. DOE also

believes that the amount of MTHF and ethanol in the fuels will result

in a non-petroleum content of at least 60 percent for the P-series

fuels, absent any other non-petroleum component, if the MTHF is

manufactured solely from biomass feedstock. Since 60 percent represents

the main or predominant portion of the P-series fuels covered by the

petition for

[[Page 40205]]

rulemaking, DOE proposes to determine that they are ``substantially not

petroleum'' under section 301(2) of the Act.

B. Substantial Energy Security Benefits

Pure Energy Corporation claims in its petition that the P-series

fuels are 100 percent domestic and capable of displacing gasoline on

essentially a gallon-for-gallon basis. Pure Energy Corporation notes

that each gallon of the P-series fuel directly displaces 0.88 gallons

of RFG in vehicle use. Pure Energy Corporation also states that the

energy required to produce a one gallon equivalent of the fuel is

approximately 13,800 BTUs less than that required to produce one gallon

of RFG.

The petition provides information to support a claim that the

production of the P-series fuels results in a positive energy balance.

The process efficiency (BTUs produced per BTU of input) of the P-series

fuels is approximately 2.25 when the ethanol is produced from renewable

resources, such as biomass. If, however, the ethanol is produced from

corn, the process efficiency is slightly lower, with a value between

1.75 and 1.88. Although the process efficiency is slightly lower when

the ethanol is derived from corn, production of ethanol from either

feedstock represents a significant energy savings for the life cycle of

the fuel.

DOE has had NREL and Argonne National Laboratory (ANL) examine

these claims. The analyses, ``Review of Pure Energy Petition for

Alternative Fuel Status'' (NREL) and ``Assessment of Fuel-Cycle Energy

Use and Greenhouse Gas Emissions of Pure Energy's Proprietary Motor

Fuel'' (ANL) can be reviewed at DOE's Freedom of Information Reading

Room under Docket Number EE-RM-98-PURE. These analyses support Pure

Energy Corporation's claim of significant petroleum displacement,

although NREL found Pure Energy Corporation's claim of 100 percent

domestic content to be slightly high.

NREL estimated that the P-series fuels (regular grade) with

pentanes plus derived from natural gas would be 96 percent derived from

domestic resources. NREL believes that the feedstock for ethanol and

MTHF production will almost certainly be wholly domestic. NREL asserts

that the feedstock for the pentanes plus and the butane will be either

natural gas or petroleum. Because a portion of these feedstocks is

currently and will continue to be imported, it is debatable whether the

P-series fuels will ever be wholly derived from domestic resources.

However, if coal gas were used as the feedstock, the pentanes plus

would be wholly derived from domestic resources. If the pentanes plus

were derived from refining at oil import levels projected for 2015 (as

estimated by EIA), the regular grade of the P-series fuel would still

be 80 percent derived from domestic resources.

ANL estimated that the P-series fuels could reduce fossil energy

use by 49 to 57 percent, relative to RFG. ANL also estimates the P-

series fuels could reduce petroleum use by 79 to 81 percent, relative

to RFG. These estimates are affected by some key assumptions that ANL

used in its analysis. One assumption is that Pure Energy Corporation's

fuel production yield per dry ton of biomass is accurate. Another one

is that Pure Energy Corporation's assumption that the amount of steam

and electricity required in MTHF/ethanol plants is provided by

combustion of the lignin cake produced within the plants and that no

net energy input is required.

On the basis of the foregoing, DOE proposes that the P-series

fuels, as described by United States Patent number 5,697,987, which

contain at least 60 percent non-petroleum energy content derived from

MTHF (manufactured solely from biomass feedstock) and ethanol, would

yield ``substantial energy security benefits'' as that phrase is used

in section 301(2) of the Act.

C. Substantial Environmental Benefits

Pure Energy Corporation had vehicle tailpipe and evaporative

emissions tests conducted by an Environmental Protection Agency (EPA)

certified automotive test laboratory using both the current Federal

testing procedure (FTP) and the US06 test. 40 CFR part 86. The US06 is

a high acceleration, aggressive driving schedule developed by the EPA

that is often identified as a ``Supplemental FTP'' driving schedule.

The US06 driving cycle is ten minutes in duration and has a maximum

speed of 80.3 miles per hour. This cycle was developed by EPA in

conjunction with the California Air Resources Board and vehicle

manufacturers. The cycle is used by EPA to set emission standards and

control emissions associated with aggressive, high-speed driving

conditions not represented by the FTP.

Pure Energy Corporation's test vehicles, two 1997 Ford Taurus E-85

flexible-fuel vehicles, were operated on seven fuels: three P-series

fuels (regular, premium and cold weather), E-85, Federal Certification

gasoline, California Phase 2 RFG and two commercial ``street''

gasolines (a summer and a winter blend). The results were submitted to

DOE as part of Pure Energy Corporation's petition. Pure Energy

Corporation also provided an analysis of the greenhouse gas emissions

associated with the production, distribution and use of the P-series

fuels and compared them to those of gasoline and E-85.

Both the criteria pollutant emissions test results and the

greenhouse gas analysis tend to support Pure Energy Corporation's claim

of substantial environmental benefits arising from the use of the P-

series fuels. Criteria emissions from the P-series fuels were

consistently among the lowest of all test fuels, met Federal Tier 1

standards and statutorily provided Federal Tier 2 standards in every

case, and compared favorably with those from E-85. The premium P-series

fuel had better emission characteristics than the regular P-series

fuel. NREL surmised that this may be due to the increased volume of

ethanol in the premium fuel. With regard to non-methane hydrocarbons

(NMHC) and total hydrocarbons, the P-series fuels reduced emissions by

almost a third compared to Phase 2 RFG. It is worth noting that all of

the fuels tested had evaporative emissions well below the evaporative

emissions standard for Federal Tier 1. Table 3 summarizes the results

of the Federal Test Procedure emissions results (all results in grams

per mile). The numbers are averages over both cars tested and all FTP

tests performed, as presented in Pure Energy Corporation's petition.

Table 3

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Comparison of Federal test procedure emission results (gram/mile)

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Carbon Nitrogen

NMHC monoxide oxides

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Pure Regular................................................... 0.074 1.081 0.064

Pure Premium................................................... .064 1.062 .059

Phase II RFG................................................... .115 1.247 .039

[[Page 40206]]

Tier 1 standards............................................... .250 3.4 .4

Tier 2 standards............................................... .125 1.7 .2

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The Tier 2 standards that are referenced in Table 3 are the pending

standards identified by Congress in section 202(i) of the Clean Air Act

(CAA). Section 202(i) of the CAA outlines a process for assessing

whether more stringent exhaust emission reductions from light duty

vehicles and light duty trucks should be required. Congress required

EPA to report the results of this assessment. Congress identified

specific standards that EPA must consider in making this assessment,

but stated that the study should also consider other possible

standards. These standards, referred to as ``Tier 2 standards'', would

be more stringent than the standards required for light duty vehicles

and light duty trucks in the CAA beginning in model year 1994, but

could not be implemented prior to the 2004 model year.

EPA recently released a Draft Tier 2 Study and published a Notice

of Document Availability regarding this document. 63 FR 23255. This

study assesses the air quality need, technical feasibility and cost

effectiveness of more stringent standards. It is DOE's understanding

that EPA will issue the Tier 2 Report to Congress by July 31, 1998.

Following submission of this Report to Congress, EPA will, through the

rulemaking process, determine whether: there is an air quality need for

further emission reductions; the technology for meeting more stringent

emissions standards will be available; and whether obtaining further

reductions in emissions from light duty vehicles and light duty trucks

is necessary and cost effective.

As seen in Table 4, the P-series fuels had reduced emissions for

ozone-forming potential (OFP), carbon monoxide and for air toxics. With

regard to NOX emissions, indolene and Phase 2 RFG

outperformed the P-series fuels by a small margin. However, the EPA

certified test laboratory pointed out that the Taurus' engine could be

adjusted to significantly reduce NOx emissions, while only

slightly increasing CO and hydrocarbon emissions to levels well below

the standard.

The OFP is a measure of the performance of the fuel-vehicle

combination, and is calculated by multiplying the fraction of each

compound in the emissions mixture by its reactivity. The specific

reactivity is calculated by dividing the OFP by the mass of the non-

methane organic gaseous emissions, and is considered a better gauge of

the reactivity of the fuels' emissions profile. Table 4 compares the

emission results of the P-series fuels, indolene, Phase 2 RFG and

commercial ``street'' gasoline to EPA's National Ambient Air Quality

Standards (NAAQS). 40 CFR part 63. The numbers are averages over both

cars tested and all FTP and US06 tests performed, as presented in Pure

Energy Corporation's petition.

Table 4

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Comparison of emission results related to NAAQS (gram/mile)

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CO NOX OFP Spec. React.

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

FTP USO6 FTP USO6 FTP USO6 FTP USO6

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Indo............................................ 1.421 11.99 0.056 0.040 0.488 0.470 3.248 3.092

RFG II.......................................... 1.247 10.56 .039 .049 .469 .379 3.640 3.059

Street.......................................... 1.427 12.07 .095 .077 .522 .501 3.334 3.070

E85............................................. 1.218 5.15 .056 .079 .494 .087 2.410 3.633

Pure 1.......................................... 1.081 6.15 .064 .057 .305 .161 3.360 3.460

Pure 2.......................................... 1.062 6.23 .059 .081 .282 .158 2.849 3.568

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The petition stated that the total emissions resulting from the

production of the P-series fuels are 71 percent lower than those

associated with the production of one gallon of Phase 2 RFG. Of note

are the claims that emissions are reduced, relative to Phase 2 RFG, by

more than 99 percent for methane, by 85 percent for SOx, by 71 percent

for carbon dioxide and by 68 percent for nitrogen oxides.

The petition claims that the P-series fuels perform better than

Phase 2 RFG or indolene in terms of direct carbon dioxide emissions and

that the P-series fuels will result in significant reductions in carbon

dioxide emissions when considered on a life-cycle basis. If the P-

series fuels are produced from biomass, as is the desire of Pure Energy

Corporation, it is claimed that a significant percent of the carbon

emissions associated with the gasoline life-cycle will be avoided.

Specifically, it is claimed that the P-series fuels are estimated, on a

life-cycle basis, to reduce carbon dioxide emissions by at least 63

percent.

Regarding toxicity, Pure Energy Corporation claims that its P-

series fuels appear to be less hazardous to human health than

conventional gasoline. Based on the results of recently conducted

animal studies, the P-series fuels are claimed to have lower inhalation

toxicity than gasoline. It is also claimed that the P-series fuels are

not skin sensitizers and are non-mutagenic/genotoxic in bacterial

assays.

DOE had NREL assess the emissions test results and had ANL perform

an analysis of the full fuel cycle greenhouse gas emissions of the P-

series fuels. NREL confirmed that regular and premium formulations of

the P-series fuels displayed carbon monoxide, nitrogen oxides and non-

methane hydrocarbon equivalent emissions that met the Tier 1 and

statutorily provided Tier 2 standards, and that their

[[Page 40207]]

evaporative emissions were well below the Tier 1 standards.

The FTP and US06 testing included measurements of the four toxics

associated with vehicle emissions: benzene, 1,3-butadiene,

formaldehyde, and acetaldehyde. The total toxic emissions were

presented, along with the potency weighted toxics (PWT) emissions. The

PWT weighs each individual component by a factor that represents its

relative toxicity. NREL noted that the emissions of air toxics from the

P-series fuels were lower than those from all other test fuels, both in

terms of total mass emissions and in terms of their PWT. As a result,

the NREL analysis indicates that the P-series fuels hold the promise of

reduced toxics emissions.

ANL's evaluation of the full fuel cycle greenhouse gas emissions of

the P-series fuels confirmed that, over their entire production,

distribution and end-use cycle, the P-series fuels will result in

greenhouse gas emissions 45 to 50 percent below those of reformulated

gasoline. These reductions in greenhouse gas emissions are possible if

the ethanol component of the P-series fuels is made from biomass, as is

Pure Energy Corporation's intention.

On the basis of the foregoing, DOE proposes that the P-series

fuels, as described by United States Patent number 5,697,987, which

contain at least 60 percent non-petroleum energy content derived from

MTHF (manufactured solely from biomass feedstock) and ethanol, would

yield ``substantial environmental'' benefits as that phrase is used in

section 301(2) of the Act.

III. Opportunity for Public Comment

A. Participation in Rulemaking

Interested persons are invited to participate in this proposed

rulemaking by submitting written data, views, or comments with respect

to the subject set forth in this notice. Whenever applicable, full

supporting rationale, data, and detailed analyses should also be

submitted.

B. Written Comment Procedures

Written comments (8 copies) should be identified on the outside of

the envelope, and on the comments themselves, with the designation:

``P-series Fuel Rulemaking (Docket Number EE-RM-98-PURE)'' and must be

received by the date specified at the beginning of this notice. In the

event any person wishing to submit a written comment cannot provide

eight copies, alternative arrangements may be made in advance by

calling Ms. Andi Kasarsky at (202) 586-3012.

All comments received on or before the date specified at the

beginning of this notice and other relevant information will be

considered by DOE before final action is taken on the proposed rule.

All comments submitted will be available for examination in the

Rulemaking Docket File in DOE's Freedom of Information Reading Room.

Pursuant to the provisions of 10 CFR 1004.11, any person submitting

information or data that is believed to be confidential, and which may

be exempt by law from public disclosure, should submit one complete

copy, as well as two copies from which the information claimed to be

confidential has been deleted. The DOE will make its own determination

of any such claim.

C. Public Hearing

In DOE's view, today's proposed rulemaking does not involve any

significant issues of law or fact that would warrant holding a public

hearing. Moreover, Pure Energy Corporation has not requested such a

hearing, and the opportunity to file written comments should suffice

for other members of the public who want DOE to considers their views.

For these reasons, DOE has not provided for a public hearing in this

notice. Nevertheless, if members of the public request the opportunity

to make oral comments and can identify issues that would justify

scheduling a public hearing, DOE will reconsider its position on

holding such a hearing

IV. Regulatory and Procedural Requirements

A. Review Under Executive Order 12866

Today's regulatory action has been determined not to be a

``significant regulatory action'' under Executive Order 12866,

``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993).

Accordingly, this rulemaking has not been reviewed by the Office of

Information and Regulatory Affairs of the Office of Management and

Budget (OMB).

B. Review Under Executive Order 12612

Executive Order 12612, ``Federalism,'' 52 FR 41685 (October 30,

1987) requires that regulations, rules, legislation and other policy

actions be reviewed for any substantial direct effect on States, on the

relationship between the National Government and the States, or in the

distribution of power and responsibilities among various levels of

government. If there are substantial effects, the Executive Order

requires the preparation of a federalism assessment to be used in all

decisions involved in promulgating and implementing policy action. DOE

has analyzed this rulemaking in accordance with the principles and

criteria contained in Executive Order 12612, and has determined there

are no federalism implications that would warrant the preparation of a

federalism assessment. The rule proposed today would simply allow an

additional fuel to qualify as an alternative fuel for the purposes of

the Energy Policy Act of 1992. The proposed rule would not have a

substantial direct effect on States, the relationship between the

States and Federal Government, or the distribution of power and

responsibilities among various levels of government.

C. Review Under the Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires

preparation of an initial regulatory flexibility analysis for every

rule which by law must be proposed for public comment, unless the

agency certifies that the rule, if promulgated, will not have a

significant economic impact on a substantial number of small entities.

Today's proposed rule would provide an additional fuel choice for

organizations which must comply with the requirements of the

Alternative Fuel Transportation Fuel Program (10 CFR part 490). There

is no reason to anticipate any adverse impact. DOE certifies that the

proposed rule, if promulgated, will not have a significant economic

impact on a substantial number of small entities.

D. Review Under the National Environmental Policy Act

The proposed rule would identify the P-series fuels as

``alternative fuel'' as that term is defined in the Alternative

Transportation Fuels Program regulations (10 CFR 490.2) and section

301(2) of the Energy Policy Act (42 U.S.C. 13211(2)). The proposed rule

interprets statutory and regulatory definitions and would not change

the environmental effect of the Alternative Fuel Transportation Program

regulations. DOE, therefore, has determined that this proposed rule is

covered under the Categorical Exclusion in paragraph A5 to Subpart D,

10 CFR part 1021. Accordingly, neither an environmental assessment nor

an environmental impact statement is required.

E. Review Under the Paperwork Reduction Act

No new collection of information is proposed to be imposed by this

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rulemaking. Accordingly, no clearance by the Office of Management and

Budget is required under the Paperwork Reduction Act (44 U.S.C. 3501 et

seq.).

F. Review Under Executive Order 12988

With respect to the review of existing regulations and the

promulgation of new regulations, section 3(a) of Executive Order 12988,

``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on

Executive agencies the general duty to adhere to the following

requirements: (1) Eliminate drafting errors and ambiguity; (2) write

regulations to minimize litigation; and (3) provide a clear legal

standard for affected conduct rather than a general standard and

promote simplification and burden reduction. Section 3(b) of Executive

Order 12988 specifically requires that Executive agencies make every

reasonable effort to ensure that the regulation: (1) clearly specifies

the preemptive effect, if any; (2) clearly specifies any effect on

existing Federal law or regulation; (3) provides a clear legal standard

for affected conduct while promoting simplification and burden

reduction; (4) specifies the retroactive effect, if any; (5) adequately

defines key terms; and (6) addresses other important issues affecting

clarity and general draftsmanship under any guidelines issued by the

Attorney General. Section 3(c) of Executive Order 12988 requires

Executive agencies to review regulations in light of applicable

standards in section 3(a) and section 3(b) to determine whether they

are met or it is unreasonable to meet one or more of them. DOE has

completed the required review and determined that, to the extent

permitted by law, the proposed rule meets the relevant standards of

Executive Order 12988.

List of Subjects in 10 CFR Part 490

Administrative practice and procedure, Energy conservation, Fuel,

Motor vehicles.

Issued in Washington, DC, on July 13, 1998.

Dan W. Reicher,

Assistant Secretary, Energy Efficiency and Renewable Energy.

For the reasons set forth in the Preamble, Title 10, Chapter II,

Subchapter D, of the Code of Federal Regulations is proposed to be

amended as set forth below:

PART 490--ALTERNATIVE FUEL TRANSPORTATION PROGRAM

1. The authority cite for Part 490 continues to read as follows:

Authority: 42 U.S.C. 7191, 13211, 13235, 13251, 13257, 13258,

13260-3.

Sec. 490.2 [AMENDED]

2. Section 490.2, Definitions, is amended by adding in the

definition of ``Alternative Fuel,'' the phrase, ``P-series fuels as

described by United States Patent number 5,697,987, dated December 16,

1997, and containing at least 60 percent non-petroleum energy content

derived from methyltetrahydrofuran (manufactured solely from biomass

feedstock) and ethanol,'' before ``and electricity (including

electricity from solar energy).''

[FR Doc. 98-20129 Filed 7-27-98; 8:45 am]

BILLING CODE 6450-01-P