U.S. Legislative News

NAFA Urges Congress to Extend Key Alternative Fuel Tax Credits

The federal tax credits for biodiesel, natural gas, and propane expired at the end of 2017. On February 9, 2018, President Trump signed a bipartisan deal that retroactively extended the following energy tax incentives supported by NAFA. Notably, the extensions only apply to 2017. Additional Congressional action will be needed to extend the tax benefits for 2018.

• $0.50 per gallon alternative fuel tax credit for compressed natural gas, liquefied natural gas, propane autogas and other alternative transportation fuels
• $1.00 per gallon tax credit for biodiesel
• 30 percent alternative fuel infrastructure tax credit

In a letter sent to the Senate Finance Committee and the House Ways and Means Committee in late August, NAFA urged Committee leaders to restore and maintain the above incentives through 2022. In its letter, NAFA emphasized the role these incentives play in a company or government agency’s vehicle and fuel purchasing decisions. The credits, NAFA explained, help to make the business case for biodiesel and alternative fuels.

 EPA and NHTSA at Odds During Drafting of Auto Regulations

In August, the U.S. Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) announced a proposal to ease vehicle fuel economy and emissions standards put in place during the Obama Administration. Internal documents released earlier this month showed EPA officials repeatedly questioned the assumptions in NHTSA’s draft of the plan submitted for White House review in late May regarding claims that the proposal would save lives and money.

The Trump Administration says the changes will save roughly 1,000 lives per year. Most of the projected safety-related benefits are tied to assumptions that Americans would drive less as they spend more on fuel and replace their existing cars with newer, safer models that are more affordable since they would not need costly efficiency technology.

The “proposed standards are detrimental to safety, rather than beneficial,” EPA staff wrote in a June 18 memo. The EPA asserted that freezing fuel economy standards would actually lead to an increase in traffic fatalities and boost the overall fatality rate, citing its own analysis, conducted after the agency said it corrected “erroneous and otherwise problematic elements” in a Transportation Department model.

The EPA also said NHTSA’s model over-estimated the number of older, less-safe cars that would remain on the road if drivers didn’t buy new cars due to higher prices caused by the Obama-era standards, effectively inflating projected traffic deaths. NHTSA countered that EPA’s corrections assumed the size of U.S. vehicle fleet and the number of miles driven would remain constant, rather than changing because of the fuel economy standards – an outcome the agency said: “would be much more reasonable to expect.”

EPA’s analysis further showed it would take nearly a third as long as NHTSA estimated for consumers to recoup higher vehicle costs under the Obama standards by spending less money on fuel. Simon Mui, a senior scientist at the Natural Resources Defense Council, a group that opposes the change to the fuel standards, calculates that under the Obama rule, by 2025 the average vehicle would go through roughly 401 gallons of gasoline to drive a typical distance of 15,000 miles in one year. Under the Trump proposal, that would increase to about 507 gallons. Assuming a gasoline price of $3 per gallon, that would result in an increased annual fuel expenditure of about $318. The Trump Administration says that expenditure would be offset by reductions of several thousand dollars in the cost of new vehicles.

The disagreements between the agencies were revealed in hundreds of pages of correspondence, analysis, and drafts from an interagency review of the plan led by the White House Office of Information and Regulatory Affairs, filed in a government docket on August 14. The documents do not reveal how these disputes were resolved. 

Senators Urge EPA to Boost Biodiesel

On August 23, a bipartisan group of 39 senators sent a letter urging the U.S. Environmental Protection Agency (EPA) to increase volume obligations for biomass-based diesel and advanced biofuel, and ensure any small refinery exemptions are accounted for in its final rule setting renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS). The EPA’s June 2018 proposal would raise the biomass-based diesel volume for 2020 to 2.43 billion gallons and increase the advanced biofuel volume for 2019 to 4.88 billion gallons.

“While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states,” the senators wrote. “We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program’s ability to drive growth. Increasing biomass-based diesel and advancing biofuel volumes would encourage investment in capacity and new fuel development.”

For more than a decade, the RFS program has compelled refiners to use renewable fuel, with the EPA required to set the precise annual quotas. The new proposal issued in July keeps the EPA on track to finalize renewable fuel quotas by November 30, a deadline under federal law.

 

FMCSA Seeks Public Comment on Revising Current Hours-of-Service Regulations

On August 23, the U.S. Federal Motor Carrier Safety Administration (FMCSA) announced that it is seeking public comment on revising four specific areas of current hours-of-service (HOS) regulations, which limit the operating hours of commercial truck drivers. According to FMCSA, the Advanced Notice of Proposed Rulemaking (ANPRM), “responds to widespread Congressional, industry, and citizen concerns and seeks feedback from the public to determine if HOS revisions may alleviate unnecessary burdens placed on drivers while maintaining safety on our nation’s highways and roads.” 

The four specific areas under consideration for revision are:

• Expanding the current 100 air-mile “short-haul” exemption from 12 hours on-duty to 14 hours on-duty, in order to be consistent with the rules for long-haul truck drivers
• Extending the current 14-hour on-duty limitation by up to two hours when a truck driver encounters adverse driving conditions
• Revising the current mandatory 30-minute break for truck drivers after eight hours of continuous driving
• Reinstating the option for splitting up the required 10-hour off-duty rest break for drivers operating trucks that are equipped with a sleeper-berth compartment

FMCSA will accept public comments through September 24, 2018.