[Federal Register Volume 61, Number 173 (Thursday, September 5, 1996)]
[Proposed Rules]
[Pages 46756-46759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22536]
[[Page 46756]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration (NHTSA)
49 CFR Part 531
[Docket No. 96-085; Notice 1]
Passenger Automobile Average Fuel Economy Standards; Proposed
Decision To Grant Exemption
ACTION: Proposed decision.
-----------------------------------------------------------------------
SUMMARY: This proposed decision responds to a petition filed by Rolls-
Royce Motors, Ltd. (Rolls-Royce) requesting that it be exempted from
the generally applicable average fuel economy standard of 27.5 miles
per gallon (mpg) for model years 1998 and 1999 and that a lower
alternative standard be established. In this document, NHTSA proposes
that the requested exemption be granted and that an alternative
standard of 16.3 mpg be established for MYs 1998 and 1999 for Rolls-
Royce.
DATES: Comments on this proposed decision must be received on or before
October 21, 1996.
ADDRESSES: Comments on this proposal must refer to the docket number
and notice number in the heading of this notice and be submitted,
preferably in ten copies, to: Docket Section, Room 5109, National
Highway Traffic Safety Administration, 400 Seventh Street, S.W.,
Washington, DC 20590. Docket hours are 9:30 a.m. to 4 p.m., Monday
through Friday.
FOR FURTHER INFORMATION CONTACT: The following persons at the National
Highway Traffic Safety Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590:
For non-legal issues: Mr. P.L. Moore, Motor Vehicle Requirements
Division, Office of Market Incentives, National Highway Traffic Safety
Administration, 400 Seventh Street SW, Washington, DC 20590, (202) 366-
5222.
For legal issues: Otto Matheke, Office of the Chief Counsel, NCC-
20, telephone (202) 366-5253, facsimile (202) 366-3820.
SUPPLEMENTARY INFORMATION:
Statutory Background
Pursuant to 49 U.S.C. section 32902(d), NHTSA may exempt a low
volume manufacturer of passenger automobiles from the generally
applicable average fuel economy standards if NHTSA concludes that those
standards are more stringent than the maximum feasible average fuel
economy for that manufacturer and if NHTSA establishes an alternative
standard for that manufacturer at its maximum feasible level. Under the
statute, a low volume manufacturer is one that manufactured (worldwide)
fewer than 10,000 passenger automobiles in the second model year before
the model year for which the exemption is sought (the affected model
year) and that will manufacture fewer than 10,000 passenger automobiles
in the affected model year. In determining the maximum feasible average
fuel economy, the agency is required under 49 U.S.C. 32902(f) to
consider:
(1) Technological feasibility;
(2) Economic practicability;
(3) The effect of other Federal motor vehicle standards on fuel
economy, and
(4) The need of the United States to conserve energy.
Section 32902(d)(2) permits NHTSA to establish alternative average
fuel economy standards applicable to exempted low volume manufacturers
in one of three ways: (1) A separate standard for each exempted
manufacturer; (2) a separate average fuel economy standard applicable
to each class of exempted automobiles (classes would be based on
design, size, price, or other factors); or (3) a single standard for
all exempted manufacturers.
Background Information on Rolls-Royce
Rolls-Royce is a small company concentrating wholly on the
production of high quality, prestigious cars. Rolls-Royce markets cars
under the Bentley and Rolls-Royce nameplates and currently seeks an
exemption for both Bentley and Rolls-Royce cars. The annual production
rate for these cars is less than 2,500 automobiles, of which one-third
are sold in the United States. The corporate philosophy concentrates on
this limited production as the only way to maintain their reputation
for producing what is widely perceived as the best car in the world. It
believes that its customers will continue to demand substantial cars,
craftsman-built, using traditional materials and equipped to the
highest standards. Rolls-Royce operates as an independent unit within
the Vickers group of companies and is required to generate its own
financial resources. The limited financial resources of this small
company and its market position preclude Rolls-Royce from improving
fuel economy by any means involving significant changes to the basic
concept of a Rolls-Royce car.
Fuel economy improvements are particularly difficult in the short
run. Rolls-Royce traditionally manufactures its own engine and bodies
and is a very low volume manufacturer. Because of this integration of
component manufacturing and low volume, model changes are much less
frequent than with larger manufacturers. Rolls-Royce may manufacture a
body shell for fifteen years before making a major change. The
opportunities for improving fuel economy through changing the model mix
are also quite limited as Rolls-Royce manufactures only one basic model
in different configurations and all have similarly low fuel economy.
Rolls-Royce's ability to make long term fuel economy improvements
is also very limited. Any change in the basic concept of its cars to
reduce size or downgrade the specifications would not, according to the
petitioner, be acceptable to its customers.
Nevertheless, Rolls-Royce states that it is making every effort to
achieve the lowest possible fuel consumption consistent with meeting
emission, safety, and other standards while maintaining customer
expectations of its product. In the 18-year period from 1978, when
Federal fuel economy standards were introduced, Rolls-Royce has
achieved fuel economy improvements by substituting lighter weight
components and tuning its powertrain while leaving basic features of
the vehicles unchanged.
Rolls-Royce states that technical innovation and switching to
lighter weight materials should result in worthwhile improvements in
its vehicles. The company believes that it has been conscious of the
need for weight saving for many years, and since the introduction of
the Silver Shadow, has made many parts of aluminum. These include the
engine block and cylinder heads, transmission and axle casings, doors,
hood and deck lid.
In addition to discussing opportunities for weight reduction,
Rolls-Royce also included in its petition discussions of improving its
fuel economy through mix shifts, engine improvements, and drive train
and transmission improvements.
Rolls-Royce's Petition
On December 15, 1995, Rolls-Royce petitioned NHTSA for an exemption
from the average fuel economy standards for vehicles to be manufactured
by Rolls-Royce in model years (MYs) 1998 and 1999. The petition also
requested an alternative standard be established, not to exceed 16.3
mpg, for each model year, 1998 and 1999. A number of petitions have
been filed by Rolls-Royce covering all model years from 1978. The last
was submitted in November 1994, which resulted in Rolls-Royce being
granted an exemption
[[Page 46757]]
from the generally applicable fuel economy standard for MY 1997.
Methodology Used to Project Maximum Feasible Average Fuel Economy Level
for Rolls-Royce
Baseline Fuel Economy
To project the level of fuel economy which could be achieved by
Rolls-Royce in MYs 1998 and 1999, the agency considered whether there
were technical or other improvements that would be feasible for these
Rolls-Royce vehicles, whether or not the company currently plans to
incorporate such improvements in those vehicles. The agency reviewed
the technological feasibility of any changes and their economic
practicability.
NHTSA interprets ``technological feasibility'' as meaning that
technology which would be available to Rolls-Royce for use on its MYs
1998 and 1999 automobiles, and which would improve the fuel economy of
those automobiles. The areas examined for technologically feasible
improvements were weight reduction, engine improvements, and drive line
improvements.
The agency interprets ``economic practicability'' as meaning the
financial capability of the manufacturer to improve its average fuel
economy by incorporating technologically feasible changes to its MYs
1998 and 1999 automobiles. In assessing that capability, the agency has
always considered market demand since it is an implicit part of the
concept of economic practicability. Consumers need not purchase what
they do not want.
In accordance with the concerns of economic practicability, NHTSA
has considered only those improvements which would be compatible with
the basic design concepts of Rolls-Royce automobiles. NHTSA assumes
that Rolls-Royce will continue to produce a five-passenger luxury car.
Hence, design changes that would make the cars unsuitable for five
adult passengers with luggage or would remove items traditionally
offered on luxury cars, such as air conditioning, automatic
transmission, power steering, and power windows, were not examined.
Such changes to the basic design could be economically impracticable
since they might well significantly reduce the demand for these
automobiles, thereby reducing sales and causing significant economic
injury to the low volume manufacturer.
Mix Shift
Rolls-Royce has little opportunity for improving fuel economy by
changing the model mix since it makes only one basic model in various
configurations, all with similarly low fuel economy. The differences in
fuel economy values among the different models available in MYs 1998
and 1999 will likewise be small. For the 1998 and 1999 model years,
Rolls-Royce and Bentley cars will fall into five fuel economy
configurations, three from the naturally aspirated engine family and
two from the turbocharged engine family. The differences in fuel
economy values between the different models are small, and the models
with the lower projected fuel economies have significantly lower
projected volumes. The Rolls-Royce model mix is essentially fixed by
the market demand, and variations in sales percentages between the
models would produce negligible improvement in CAFE.
Weight Reduction
Rolls-Royce is conscious of the need to improve automotive fuel
economy of its passenger vehicles. For MYs 1998 and 1999, aerodynamic
improvements to the basic Rolls-Royce platform are expected to yield
some fuel economy benefits. However, Rolls Royce, being a small
manufacturer of prestigious automobiles, cannot afford to change the
design of its cars by downsizing since its customers desire traditional
size cars.
Engine and Drivetrain Improvements
Rolls Royce has a tradition of attempting to reconcile improved
fuel economy with its limited technical resources and a need for
powerplants suitable for large heavy cars. Past developmental
activities include test and evaluation of various technologies applied
to the Rolls-Royce engine. These included the Texaco Controlled
Combustion system, the Honda Compound Vortex Controlled Combustion
system, diesel engines, cylinder disablement, increased engine
displacement (to reduce NOX emissions and permit timing for
improved fuel economy), the May ``Fireball'' combustion chamber, and
overall downsizing of the engine and car incorporating all new features
including bodyshell, engine, transmission, and suspension. Each of
these approaches was discarded in turn as failing to provide a feasible
option for simultaneously meeting fuel economy and emission
requirements, and exacting customer expectations.
For MYs 1998 and 1999, Rolls-Royce intends to implement several
engine and drivetrain improvements. Changes to the induction and
exhaust systems will produce greater efficiency. Other planned
improvements will lower friction losses and further enhance fuel
economy. Modified transmission shift patterns and torque converter
characteristics will also result in improved economy. However, because
of the nature of Rolls Royce automobiles and the need to retain large
displacement engines, the fuel economy gains expected will not be
large.
Effect of Other Motor Vehicle Standards
The Rolls-Royce petition cites several emission and safety
standards as having a significant impact on its ability to improve fuel
economy. As with other low volume manufacturers, the demands of meeting
these standards place a strain on Rolls Royce's relatively limited
technical resources.
Calfiornia emission regulations for the 1998 model year will
require Rolls Royce and Bentley cars to meet new ``enhanced''
evaporative emission standards for all models. Meeting these new
requirements will require substantial revisions to the fuel and
emission control systems along with the introduction of an onboard
diagnostic leak detection system, increasing vehicle weight and
reducing fuel economy. Rolls Royce also contends that changes to the
Federal Emission Test Procedures for the 1998 model year will also have
a negative impact on fuel economy, particularly for the heavier models.
The Rolls Royce petition also claims that compliance with safety
standards will impair its ability to improve fuel economy. In
particular, Rolls Royce indicates that compliance with FMVSS 208
(Occupant Crash Protection) continues to impose fuel economy costs by
forcing some models to move into a higher test weight class. Rolls
Royce also contends in its petition that 49 CFR Part 581 (energy
absorbing bumpers) and FMVSS 214 (side intrusion beam in doors) will
also have fuel economy impacts for the 1998 and 1999 model years.
Rolls-Royce is a small company, and engineering resources are limited,
and priority must be given to meeting mandatory standards to remain in
the marketplace. Conflict often exists between the priority of meeting
standards and the need to remain competitive.
The Need of the United States To Conserve Energy
The agency recognizes there is a need to conserve energy, to
promote energy security, and to improve balance of payments. However,
as stated above, NHTSA has tentatively determined that it is not
technologically feasible or economically practicable for Rolls-Royce to
achieve an average fuel economy in MYs 1998 and 1999 above
[[Page 46758]]
16.3 mpg. Granting an exemption to Rolls-Royce and setting an
alternative standard at that level would result in only a negligible
increase in fuel consumption and would not affect the need of the
United States to conserve energy. In fact, there would not be any
increase since Rolls-Royce cannot attain those generally applicable
standards. Nevertheless, for illustrative purposes the agency estimates
that the additional fuel consumed by operating the MYs 1998 and 1999
fleet of Rolls-Royce vehicles over their operating lifetime at the
company's projected CAFE of 16.3 mpg (compared to an hypothetical 27.5
mpg fleet) is 115,959 barrels of fuel. This averages about 15.9 bbls.
of fuel per day over the 20-year period that these cars will be an
active part of the fleet. Obviously, this is insignificant compared to
the daily fuel used by the entire motor vehicle fleet which amounts to
some 4.8 million bbls. per day for passenger cars in the U.S. in 1994.
Maximum Feasible Average Fuel Economy for Rolls-Royce
This agency has tentatively concluded that it would not be
technologically feasible and economically practicable for Rolls-Royce
to improve the fuel economy of its MYs 1998 and 1999 automobiles above
an average of 16.3 mpg, that compliance with other Federal automobile
standards would not adversely affect achievable fuel economy beyond the
amount already factored into Rolls-Royce's projections, and that the
national effort to conserve energy would not be affected by granting
the requested exemption and establishing an alternative standard.
Consequently, the agency tentatively concludes that the maximum
feasible average fuel economy for Rolls-Royce in MYs 1998 and 1999 is
16.3 mpg.
Proposed Level and Type of Alternative Standard
The agency proposes to exempt Rolls-Royce from the generally
applicable standard of 27.5 mpg and to establish an alternative
standard for Rolls-Royce for MYs 1998 and 1999 at its maximum feasible
average fuel economy of 16.3 mpg. NHTSA tentatively concludes that it
would be appropriate to establish a separate standard for Rolls-Royce
for the following reasons. The agency has already established (60 FR
47877) an alternate standard of 17.0 mpg for MedNet, Inc. for MYs 1996,
1997, and 1998. Therefore, the agency cannot use the second (class
standards) or third (single standard for all exempted manufacturers)
approaches for MY 1998. The agency also anticipates that it will
receive petitions from other manufacturers seeking alternate standards
for MY 1999. NHTSA tentatively concludes that the use of class
standards or a single standard for all manufacturers would not provide
sufficient flexibility for those manufacturers the agency anticipates
will be filing petitions for MY 1999. Given the limited resources of
these small manufacturers and their relative lack of ability to make
significant changes to their product lines over the short term, the
agency believes that establishing alternative standards for individual
manufacturers is the most appropriate course of action for the 1999
model year. Accordingly, NHTSA is proposing that an alternate standard
be established for Rolls Royce in MY 1999.
Regulatory Impact Analyses
NHTSA has analyzed this proposal and determined that neither
Executive Order 12866 nor the Department of Transportation's regulatory
policies and procedures apply. Under Executive Order 12866, the
proposal would not establish a ``rule,'' which is defined in the
Executive Order as ``an agency statement of general applicability and
future effect.'' The proposed exemption is not generally applicable,
since it would apply only to Rolls-Royce, Inc., as discussed in this
notice. Under DOT regulatory policies and procedures, the proposed
exemption would not be a ``significant regulation.'' If the Executive
Order and the Departmental policies and procedures were applicable, the
agency would have determined that this proposed action is neither major
nor significant. The principal impact of this proposal is that the
exempted company would not be required to pay civil penalties if its
maximum feasible average fuel economy were achieved, and purchasers of
those vehicles would not have to bear the burden of those civil
penalties in the form of higher prices. Since this proposal sets an
alternative standard at the level determined to be Rolls-Royce's
maximum feasible level for MYs 1998 and 1999, no fuel would be saved by
establishing a higher alternative standard. NHTSA finds that, because
of the minuscule size of the Rolls-Royce fleet, incremental usage of
gasoline by Rolls-Royce's customers would not affect the United
States's need to conserve gasoline. There would not be any impacts for
the public at large.
The agency has also considered the environmental implications of
this proposed exemption in accordance with the National Environmental
Policy Act and determined that this proposed exemption, if adopted,
would not significantly affect the human environment. Regardless of the
fuel economy of the exempted vehicles, they must pass the emissions
standards which measure the amount of emissions per mile traveled.
Thus, the quality of the air is not affected by the proposed exemption
and alternative standard. Further, since the exempted passenger
automobiles cannot achieve better fuel economy than is proposed herein,
granting this proposed exemption would not affect the amount of fuel
used.
Interested persons are invited to submit comments on the proposed
decision. It is requested but not required that 10 copies be submitted.
Comments must not exceed 15 pages in length (49 CFR 553.21).
Necessary attachments may be appended to these submissions without
regard to the 15 page limit. This limitation is intended to encourage
commenters to detail their primary arguments in a concise fashion.
If a commenter wishes to submit certain information under a claim
of confidentiality, three copies of the complete submission, including
purportedly confidential business information, should be submitted to
the Chief Counsel, NHTSA, at the street address given above, and seven
copies from which the purportedly confidential business information has
been deleted, should be submitted to the Docket Section. A request for
confidentiality should be accompanied by a cover letter setting forth
the information specified in the agency's confidential business
information regulation. 49 CFR part 512.
All comments received before the close of business on the comment
closing indicated above for the proposal will be considered, and will
be available for examination in the docket at the above address both
before and after that date. To the extent possible, comments filed
after the closing date will also be considered. Comments received too
late for consideration in regard to the final rule will be considered
as suggestions for further rulemaking action. Comments on the proposal
will be available for inspection in the docket. NHTSA will continue to
file relevant information as it becomes available in the docket after
the closing date, and it is recommended that interested persons
continue to examine the docket for new material.
Those persons desiring to be notified upon receipt of their
comments in the rules docket should enclose a self-addressed, stamped
postcard in the envelope with their comments. Upon receiving the
comments, the docket supervisor will return the postcard by mail.
[[Page 46759]]
List of Subjects in 49 CFR Part 531
Energy conservation, Gasoline, Imports, Motor vehicles.
In consideration of the foregoing, 49 CFR part 531 would be amended
as follows:
PART 531--[AMENDED]
1. The authority citation for part 531 continues to read as
follows:
Authority: 49 U.S.C. 32902, delegation of authority at 49 CFR
1.50.
2. In 49 CFR 531.5, the introductory text of paragraph (b) is
republished and paragraph (b)(2) is revised to read as follows:
Sec. 531.5 Fuel economy standards.
* * * * *
(b) The following manufacturers shall comply with the standards
indicated below for the specified model years:
* * * * *
(2) Rolls-Royce Motors, Inc.
------------------------------------------------------------------------
Average
fuel
economy
Model year standard
(miles per
gallon)
------------------------------------------------------------------------
1978....................................................... 10.7
1979....................................................... 10.8
1980....................................................... 11.1
1981....................................................... 10.7
1982....................................................... 10.6
1983....................................................... 9.9
1984....................................................... 10.0
1985....................................................... 10.0
1986....................................................... 11.0
1987....................................................... 11.2
1988....................................................... 11.2
1989....................................................... 11.2
1990....................................................... 12.7
1991....................................................... 12.7
1992....................................................... 13.8
1993....................................................... 13.8
1994....................................................... 13.8
1995....................................................... 14.6
1996....................................................... 14.6
1997....................................................... 15.1
1998....................................................... 16.3
1999....................................................... 16.3
------------------------------------------------------------------------
* * * * *
[Docket No. 96-085; N.1]
Issued on: August 29, 1996.
Patricia Breslin,
Acting Associate Administrator for Safety Performance Standards.
[FR Doc. 96-22536 Filed 9-4-96; 8:45 am]
BILLING CODE 4910-59-P
