[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Proposed Rules]
[Pages 51281-51289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21078]
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DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket No. EERE-2010-BT-NOA-0028]
RIN 1904-AC24
Energy Conservation Program for Consumer Products and Certain
Commercial and Industrial Equipment: Statement of Policy for Adopting
Full-Fuel-Cycle Analyses Into Energy Conservation Standards Program
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Statement of Policy.
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SUMMARY: In its effort to adopt several National Academy of Sciences
(the Academy) recommendations, the U.S. Department of Energy (DOE)
intends to modify the methods it uses to estimate the likely impacts of
energy
[[Page 51282]]
conservation standards for covered products on energy use and emissions
and will work to expand the energy use and emissions information made
available to consumers. Specifically, DOE intends to use full-fuel-
cycle (FFC) measures of energy use and emissions, rather than the
primary (or site) energy measures it currently uses. Additionally, DOE
intends to work collaboratively with the Federal Trade Commission (FTC)
to make readily available to consumers information on the FFC energy
and greenhouse gas (GHG) emissions of specific products to enable
consumers to make cross-class comparisons of product energy use and
emissions.
ADDRESSES: The docket is available for review at http://www.regulations.gov, including the Federal Register notice of proposed
policy, the public meeting attendee list and transcript, all comments
received, and other supporting documents/materials. All documents in
the docket are listed in the http://www.regulations.gov index. However,
not all documents listed in the index may be publicly available, such
as information that is exempt from public disclosure.
A link to the docket Web page can be found at: http://www1.eere.energy.gov/buildings/appliance_standards/full_fuel_cycle_analyses.html. The regulations.gov Web page will contain simple
instructions on how to access all documents, including public comments,
in the docket.
FOR FURTHER INFORMATION CONTACT:
Mr. Anthoney Pavelich, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies, EE-21, 1000
Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202)
287-1846. E-mail: [email protected].
Ms. Ami Grace-Tardy, U.S. Department of Energy, Office of the General
Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-
0121. Telephone: (202) 586-5709. E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
I. Summary of the Policy
II. Background
III. General Discussion and Discussion of Comments
A. Considering FFC Energy and Emission Impacts of Prospective
Efficiency Standards
B. Using FFC Energy Efficiency Metrics in DOE's Assessment of
Energy Conservation Standards Impacts
C. Estimated Impacts From Expansion of Considered GHG Emissions
D. Methodology for Estimating FFC Energy and Emission Impacts
E. Consumer Information on FFC Impacts of Specific Covered
Products
IV. Procedural Issues and Regulatory Review
A. Review Under the National Environmental Policy Act of 1969
B. Review Under the Information Quality Bulletin for Peer Review
V. Approval of the Office of the Assistant Secretary
I. Summary of the Policy
In its August 2010 Notice of Proposed Policy (referred to herein as
``Notice'' or ``NOPP'') (75 FR 51423), the U.S. Department of Energy
(DOE) proposed to use full-fuel-cycle (FFC) measures of energy use and
greenhouse gas (GHG) and other emissions in the national impact
analyses and environmental assessments included in rulemakings for
future energy conservation standards (referred to herein as ``energy
conservation standards'' or ``energy efficiency levels''). DOE stated
that using the FFC measure in these analyses will provide more complete
information about the total energy use and GHG emissions associated
with a specific energy efficiency level than the primary (or site)
energy measures currently used by DOE. DOE also indicated that
utilizing the FFC measure for environmental assessments and national
impact analyses would not require alteration of the measures used to
determine the energy efficiency of covered products (referred to herein
as ``appliances and equipment'' or just ``appliances'') because the
Energy Policy and Conservation Act (EPCA), as amended, requires that
such measures be based solely on the energy consumed at the point of
use. (42 U.S.C. 6291(4)-(6), 6311(3)-(4), (18)) However, the Notice
stated that using the FFC measure in lieu of primary energy in
environmental assessments and national impact analyses could affect the
alternative standard levels that DOE considers before choosing an
energy efficiency level in the future. A policy change to consider FFC
impacts would increase the energy and emission reductions estimated to
result from energy efficiency levels. This shift would, consequently,
increase some of the estimated benefits of such standards.
The NOPP also proposed that DOE would significantly improve upon
the Federal Trade Commission's (FTC) existing online databases of
appliance site energy use and efficiency ratings by including FFC
energy use and emissions data. DOE's Notice indicated that the improved
databases could provide tools to enable users to easily compare a
product's energy use, emissions, and costs to similar products,
including products that are in different classes, have different
features or use different fuels. DOE solicited public comment on
whether such an online service would likely benefit consumers and, if
so, the most effective way to present this information. DOE also
solicited comments on the merits of providing GHG emissions and other
product-specific comparative data on Energy Guide labels.
After consideration of the comments received on its NOPP, DOE has
decided to use FFC measures of energy use and GHG and other emissions
in the national impact analyses and environmental assessments included
in future energy conservation standards rulemakings. DOE currently uses
primary (or site) energy consumption for national impact analyses and
environmental assessments using the National Energy Modeling System
(NEMS) developed by DOE's Energy Information Administration (EIA). DOE
will continue to rely upon NEMS-based estimates of primary energy and
emission impacts, but intends to use conversion factors generated by
the DOE Argonne National Laboratory (ANL) Greenhouse Gases, Regulated
Emissions, and Energy Use in Transportation (GREET) model to convert
these estimates into estimates of FFC energy and emission impacts. DOE
also will, subject to the availability of funds, support efforts to
make readily available to consumers and other users of regulated
products information on the FFC energy use and emissions associated
with specific products, and the means to compare this energy use and
emissions to other comparable products, whether or not those other
products use the same type of energy. The following sections more
clearly state today's policy as it applies to the different issues
raised in DOE's NOPP.
II. Background
Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed
DOE to commission a study with the National Academy of Sciences (the
Academy) to examine whether the goals of energy conservation standards
are best served by measurement of energy consumed, and efficiency
improvements at, the actual point-of-use or through the use of the FFC,
beginning at the source of energy production (Pub. L. 109-58). The FFC
measure includes point-of-use energy, the energy losses associated with
generation, transmission, and distribution of electricity, and the
energy consumed in extracting, processing, and transporting or
distributing primary fuels. The study, ``Review of Site (Point-of-Use)
and Full-Fuel-Cycle Measurement Approaches to DOE/EERE Building
Appliance Energy-
[[Page 51283]]
Efficiency Standards,'' (Academy report) was completed in May 2009 and
included five recommendations. A copy of the study can be downloaded
at: http://www.nap.edu/catalog.php?record_id=12670.
The Academy's primary recommendation is that ``DOE consider moving
over time to use of a FFC measure of energy consumption for assessment
of national and environmental impact, especially levels of GHG
emissions, and to providing more comprehensive information to the
public through labels and other means such as an enhanced Web site.''
\1\ The Academy further recommended that DOE work with the FTC to
consider options for making product specific GHG emissions estimates
available to consumers. More specifically, the Academy recommended that
DOE use the FFC measure of energy consumption for the environmental
assessment and national impact analyses used in energy conservation
standards rulemakings.
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\1\ Academy Report at p. 10.
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DOE's energy conservation program for consumer products and certain
commercial and industrial equipment sets energy conservation standards
to reduce U.S. energy consumption in residential and commercial
buildings. DOE separates covered products into classes differentiated
by energy source, technology, and capacity. EPCA, as amended, requires
DOE to set energy conservation standards for covered products based on
energy consumption at the point-of-use. (42 U.S.C. 6291(4)-(6),
6311(3)-(4), (18))
The point-of-use method for measuring energy consumption considers
the use of electricity, natural gas, propane, and/or fuel oil by an
appliance at the site where the appliance is operated. DOE uses point-
of-use measures of energy consumption, usually presented in the
physical units typically used for the relevant fuel (or electricity),
for setting energy conservation standards. Before choosing an energy
conservation standard, however, DOE performs several analyses to
estimate the likely impacts of alternative standard levels. DOE impact
analyses include a: life-cycle cost analysis, manufacturer impact
analysis, national impact analysis, engineering analysis, screening
analysis, environmental assessment, utility impact assessment, and
employment impact assessment. For many years, DOE has used primary
energy measures of energy consumption and related emissions in several
of these analyses, including the national impact analysis and the
environmental assessment, to estimate the total projected energy
savings and emission impacts likely to result from the imposition of
alternative standard levels. Primary energy includes energy consumed
on-site, plus energy losses that occur in the generation, transmission,
and distribution of electricity.
Based on the results of these various analyses, DOE then proposes
(and, ultimately, adopts) the energy conservation standard that it
determines achieves the maximum energy efficiency improvement that is
technologically feasible and economically justified as required by
EPCA, as amended. (42 U.S.C. 6295(o)(2)(A) Additionally, DOE must
determine that the establishment of a new or amended energy
conservation standard will result in significant energy conservation.
(42 U.S.C. 6295(o)(3)(B))
III. General Discussion and Discussion of Comments
In response to DOE's Notice, DOE received comments from 41
entities. Comments were submitted by utilities, research facilities,
consumer representatives, non-profit organizations, farmers and others.
In the following sections, the comments received concerning this
proposed change in policy are summarized and addressed, and DOE
provides a statement of the resulting policy that it will apply in the
development of future energy efficiency rules and related activities.
There were, however, a number of comments received in response to
the Notice that are peripheral to the issues addressed in the Notice.
For example, several comments indicated that the Department should not
use estimates of the social cost of carbon in assessing the impacts of
prospective energy conservation standards and others disagreed with the
methods now used by DOE to estimate such cost. (See e.g., NRECA, Public
Comment, EERE-2010-BT-NOA-0028-0001, p. 3) These issues have been
addressed in previous rulemakings, would not be affected by today's
policy change to use FFC analyses, and were not the subject of the
Academy's report.
American Public Power Association (APPA) commented that DOE should
be noting the high degree of subjectivity involved in the monetary
benefit of reduced carbon dioxide (CO2) in the monetization
of societal benefits. (APPA, Public Comment, EERE-2010-BT-NOA-0028-
0033, p. 4) This comment on the treatment of the monetary benefits of
reduced CO2 emissions is outside the scope of the Notice and
this final Policy Statement. However, DOE notes that DOE's analysis
does identify such benefits separately in its life-cycle cost and net
present value benefit calculations.
The Edison Electric Institute (EEI) indicated that the method used
by DOE to derive estimates of primary energy inappropriately
``assigns'' a fossil fuel heat rate for electricity generated by
renewable and nuclear resources. EEI indicated that this approach
resulted in an inflated value for the national energy savings
associated with the electricity demand reductions estimated by
appliance efficiency standards analyses. (EEI, Public Comment, EERE-
2010-BT-NOA-0028-0007, p. 3) Today's policy would not modify the
methods used by DOE to calculate primary energy.
Michigan dairy farmers provided a comment concerning the final
water heater energy conservation standard. (Weiss, Public Comment,
EERE-2010-BT-NOA-0028-0009, p. 1) Comments on DOE directives made under
previous energy conservation standards rulemakings are outside the
scope of the Notice and are not addressed in this Statement of Policy.
A. Considering FFC Energy and Emission Impacts of Prospective
Efficiency Standards
In its August 2010 Notice, DOE proposed to modify the methods it
uses to estimate the likely impacts of energy conservation standards
for covered products in order to use FFC measures of energy and related
emissions in national impact analyses and environmental assessments,
rather than the primary energy measures that DOE currently uses in
these analyses. The NOPP also provided various tables with examples of
the preliminary estimates of the conversion factors that DOE would use
to shift its estimates of the primary energy savings and emission
reductions likely to result from various energy efficiency levels to
their FFC equivalents.
A few of the comments noted that existing law requires the
development of efficiency standards based on the energy consumed by an
appliance at its point-of-use (or site energy). While some commenters
questioned whether this legal constraint was appropriate, no comments
argued that DOE was not obligated by existing law to set its energy
conservation standards using metrics derived from point-of-use (or
site) energy. In a related comment, the American Council for an Energy-
Efficient Economy (ACEEE) recommended that DOE make a statement
indicating DOE's intention of keeping gas and electric appliances in
separate product classes for energy
[[Page 51284]]
conservation standards. (ACEEE, Public Comment, EERE-2010-BT-NOA-0028-
0013, p. 1) The Consumer Energy Council of America (CECA) recommended
that energy conservation standards continue to be fuel neutral, as they
indicated was directed by EPCA, as amended, and that DOE should not
identify or establish favored energy sources. (CECA, Public Comment,
EERE-2010-BT-NOA-0028-0012, p. 2)
In response, DOE is confirming that it intends to continue to set
energy conservation standards for covered products based on energy
consumption at the point-of-use, as required by EPCA, as amended. (42
U.S.C. 6291(4)-(6), 6311(3)(4), (18)) DOE is also confirming that it
will continue to consider comparable products that use different fuels
in separate classes as required by 42 U.S.C. 6295(q)(1). However, DOE
does not agree that EPCA, as amended, mandates fuel neutral energy
conservation standards. In evaluating and establishing energy
conservation standards, DOE divides covered products into classes based
on the type of energy used, their size or capacity and other features
that directly affect the product's energy use or efficiency. EPCA, as
amended, specifically provides that energy conservation standards for
different product classes can have higher or lower levels. (See 42
U.S.C. 6295(q)) DOE sets the energy conservation standard for each
product class independently based upon the maximum energy efficiency
improvement that is technologically feasible and economically
justified, and that results in significant conservation of energy for
each product class. (See 42 U.S.C. 6295(o)(2)(A)-(B) and (3)(B))
A number of comments focused on the primary issue raised by the
Notice: Should DOE consider the FFC energy and emission impacts of
prospective energy conservation standards in determining whether a
particular standard should be selected? An appliance efficiency
standard is chosen based on the results of various analyses--some of
which EPCA, as amended, directs DOE to perform and some of which DOE
performs under the discretionary provisions of EPCA. (42 U.S.C.
6295(o)(2)(B)) EPCA, as amended, does not mandate the use of point-of-
use measures in these analyses, although the ultimate energy
conservation standard chosen must be expressed as a point-of-use
measure. (42 U.S.C. 6291(4)-(6), 6311(3)-(4), (18))
Several commenters supported DOE's proposal to begin considering
the FFC energy and emission impacts of prospective energy conservation
standards. The American Gas Association (AGA) indicated their support
by stating, ``Current efficiency standards and appliance labels rely on
incomplete energy consumption and emission measurements.'' (AGA, Public
Comment, EERE-2010-BT-NOA-0028-0004, p. 1) Also in support, the
National Propane Gas Association commented that the FFC approach will
enable ``a more comprehensive analysis of total energy and
environmental impacts of energy efficiency standards.'' (NPGA, Public
Comment, EERE-2010-BT-NOA-0028-0034, p. 2)
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI)
expressed their concern that the use of FFC factors would lengthen the
rulemaking process by sidetracking discussions of important aspects of
a rulemaking, such as benefits to the consumer. (AHRI, Public Comment,
EERE-2010-BT-NOA-0028-0017, p. 3)
DOE does not believe that the incorporation of FFC energy and
emission impact analyses will substantially alter the focus of public
review and comment on DOE's energy conservation standards rulemakings.
DOE already conducts and presents the results of analyses on a broad
range of criteria other than the direct impacts of appliance efficiency
standards on the users of the covered product, as required by statute.
While new impact analyses or methods often receive considerable
attention when they are introduced, over time, public comments tend to
focus on those elements of DOE's analysis that have the greatest impact
on the identification and selection of the minimum standard level that
is ultimately adopted. DOE does not believe that the use of FFC factors
in the national impacts analysis and environmental assessment will
significantly impact the selection of the minimum standard level
adopted.
Other commenters also opposed such a change to the use of FFC
factors. CECA and EEI both stated that considering FFC impacts would
push the analysis used to set energy conservation standards beyond what
is economically feasible and technically justified. EEI also questioned
whether DOE had a sufficiently reliable basis for estimating FFC energy
and emission impacts. (CECA, Public Comment, EERE-2010-BT-NOA-0028-
0042, p. 7; EEI, Public Comment, EERE-2010-BT-NOA-0028-0007, p. 2)
Specifically, EEI commented that ``there is significant disagreement''
as to the appropriate FFC and primary energy factors for the same
energy source among different entities. (EEI, Public Comment, EERE-
2010-BT-NOA-0028-0037, pp. 5-6)
Under today's policy, DOE will continue to use EIA estimates of
primary energy and emission impacts as the basis for its impact
analyses and the GREET model will be used simply to convert these
primary energy values to their FFC equivalents. This approach avoids
making any changes to the methods long used by DOE's EIA (and by DOE's
appliance efficiency standards program) to convert energy end-use
values to primary energy values, which are the source of many of the
disagreements referenced by EEI. DOE's ANL has, in the past, compared
different life-cycle assessment methods and found that the results are
consistent with those generated by GREET when the same critical input
parameters are used. This analysis will be cited in future standards
rulemakings, as appropriate.
The statute specifically directs DOE to set appliance efficiency
standards at levels that achieve the maximum energy savings that is
technologically feasible and economically justified; DOE must also
determine that the establishment of the chosen standard will result in
significant energy conservation. (42 U.S.C. 6295(o)(2)-(3)) DOE does
not believe that the consideration of the FFC energy and emission
impacts in the national impacts analysis and environmental assessment
of a standard under consideration is in conflict with this statutory
directive. In practice, the consideration of FFC energy and emission
impacts is likely to have comparatively small effects on DOE's analysis
of the economic justification of specific alternative appliance
efficiency standards. As indicated by the illustrative tables included
in the NOPP that provided preliminary estimates of FFC conversion
factors, the estimated energy savings likely to result from efficiency
levels under consideration using the FFC method could increase by
approximately seven to fifteen percent for gas or oil-fired appliances
and two to fifteen percent for electric appliances, relative to the
estimates of primary energy savings used currently. These relative
increases were based on the ratio of FFC energy use and primary energy
use, which were estimated by the GREET model. This increase in energy
savings would not affect the estimated value or cost of the resulting
energy savings, nor the estimated net present value of consumer life-
cycle costs savings, since all energy costs savings are based on DOE
estimates of the energy costs (derived from retail energy prices) paid
directly by energy users. As a result of a change to consider FFC
impacts, there also would be a
[[Page 51285]]
comparable increase in the CO2 emission reductions and in
the estimated monetary value of such emission reductions. DOE believes
that these adjustments in the estimated energy savings and in the value
of the benefits associated with reduced CO2 emissions would
enhance, rather than distort, DOE's analyses by more fully representing
the total energy and emissions associated with the delivery of energy
to consumers.
While estimates of the additional energy use and emissions
resulting from the FFC methodology will add some new uncertainties to
DOE's impact analyses, these new uncertainties are small relative to
the total additional energy and emission impacts being estimated and
are comparable to the uncertainties associated with previous DOE
analyses. Since FFC-based estimates will more fully reflect the total
energy and emission reductions associated with the imposition of energy
conservation standards and are not significantly less reliable than
current methods, DOE has concluded that such estimates should be used
in future impact analyses.
Policy Statement: In the national impacts analyses and
environmental assessments of future energy conservation standards
rulemakings, DOE intends to include impact estimates based on FFC
energy and emissions, rather than the previous practice of estimating
such impacts based on the likely effects on primary energy and
emissions.
B. Using FFC Energy Efficiency Metrics in DOE's Assessment of Energy
Conservation Standards Impacts
In the NOPP, DOE proposed to use FFC measures of energy use and
related emissions in the national impact analyses and environmental
assessments included in future energy conservation standards
rulemakings, but did not propose to create or use extended site or FFC
measures of energy efficiency in its rules or regulatory impact
analyses.
For rulemakings for covered products for which there is a choice of
fuel, AGA noted the Academy's third recommendation that ``efficiency
ratings should be calculated using the extended site (source) measure
of energy consumption until the Department can consider and complete a
transition to the use of a full fuel-cycle measure of consumption.''
AGA recommended that DOE make ``side-by-side comparisons of the
calculated energy savings from proposed efficiency standard for each
appliance'' as part of its analysis of the likely impacts of
prospective standards. While recognizing that DOE does not have the
statutory authority to use FFC energy efficiency metrics as the basis
for DOE conservation standards, AGA recommended that DOE create and use
such metrics as part of its analysis of the likely impacts of
prospective energy conservation standards. (AGA, Public Comment, EERE-
2010-BT-NOA-0028-0035, pp. 4-5)
DOE has the statutory authority to create and consider extended
site or FFC energy efficiency metrics as part of its analysis of the
likely impacts of prospective energy conservation standards. (See 42
U.S.C. 6295(o)(2)(B)(i)(VII)) Extended site or FFC energy efficiency
metrics would provide DOE with a rough indication of the likely energy
impacts of a shift in the market of products using different fuels
(i.e., fuel switching) that might result from the imposition of
alternative energy conservation standards under consideration. If DOE's
analysis indicated that a particular standard level under consideration
would likely lead to a shift in consumer purchases from products with
higher FFC efficiency to products with lower FFC efficiency, then DOE
decision-makers would be alerted that such a shift would likely
undercut the energy savings (and emission reductions) resulting from
that standard level.
For this reason, DOE carefully considered whether it should
establish a policy to calculate and use in future rulemakings such
extended-site or FFC efficiency metrics for appliances for which there
is a fuel choice. DOE concluded, however, that the use of extended site
or FFC energy efficiency metrics would only provide a rough indicator
of the impacts of possible fuel switching on total energy savings and
emissions and, therefore, would not enhance current DOE estimates of
the direct impacts of alternative standard levels on fuel choice,
energy savings, emissions and other factors. On the other hand, such
FFC energy efficiency metrics may prove to be a useful mechanism for
conveying complex information to consumers. The issue of consumer
information is discussed further in Section E of this notice.
Policy Statement: After careful consideration, DOE has concluded
that calculating and comparing efficiency ratings on an FFC basis is
not likely to significantly enhance the considerable information
already available on the likely impacts of prospective energy
conservation standards on total energy use, emissions and other
factors. Consequently, DOE does not intend to create or use such
metrics in the development of future appliance efficiency standards.
While DOE already accounts for the potential impacts of fuel switching
in its energy conservation standards analyses (where appropriate), it
will make the methodologies and results of fuel switching more explicit
in all rulemakings in which fuel switching might occur.
C. Estimated Impacts From Expansion of Considered GHG Emissions
As part of its rulemaking analyses, DOE currently estimates the
impacts of alternative standard levels on emissions of Carbon Dioxide
(CO2), Sulfur Dioxide (SO2), Nitrogen Oxide
(NOX) and Mercury. Of these, CO2 is the only GHG
addressed in DOE's rulemaking analyses. In the NOPP, DOE proposed to
add estimates of the impact of alternative energy conservation
standards on the emissions of two other types of GHGs, methane
(CH4) and nitrous oxide (N2O), as part of the
environmental assessments included in future rulemakings. These
estimates would be provided both as physical units of the emissions of
these gases and as CO2 equivalents of these emissions based
on their climate forcing effects (using generally accepted conversion
factors). Although not directly addressed in the Academy's report, such
emissions have a direct association with the production and use of
energy and adding reduction estimates of these gases will allow DOE to
provide a more comprehensive assessment of the impact of standards on
GHG emissions. These two gases are included in national GHG emissions
inventories worldwide and, according to the EPA, they are among the
principle GHGs that enter the atmosphere due to energy production.
Addition of reduction estimates of these gases to the environmental
assessments of future energy efficiency rulemakings could increase the
estimated impacts of alternative standard levels on CO2-
equivalent GHG emissions by approximately five to seventeen percent, as
indicated by the preliminary estimates provided in the NOPP.
Southern Company agreed in their comments that it is reasonable to
use estimates of the CO2-equivalent emissions of these two
gases in environmental assessments, stating that the addition would
provide ``useful, more complete information on the environmental
impacts of appliance use.'' They also noted ``that most leakage of
methane from natural gas comes from distribution systems, and electric
generation generally receives direct service from natural gas
transmission systems without using gas distribution systems. Therefore
the
[[Page 51286]]
methane-related global warming impact for electric generation should be
much less than the adjustment for methane leakage for direct consumer
use of natural gas, which does use natural gas distribution systems.''
(Southern, Public Comment, EERE-2010-BT-NOA-0028-0027, p. 4)
DOE notes that, for electricity generation from natural gas, the
GREET model includes methane leakage associated with gas transmission
systems, but not leakage associated with gas distribution from city
gate to households. Also, methane leakage in gas production is
accounted for in the natural gas fuel cycle in GREET.
NEEA questioned whether the flaring of natural gas and other gases
during oil production, and methane from coal mining, is included in the
FFC emissions analysis. (NEEA, Public Comment, EERE-2010-BT-NOA-0028-
0021, p. 3) The emissions from both flaring and venting of gas in oil
production are accounted for in GREET simulations. Methane released
into the atmosphere during the production of oil or gas, or during coal
mining, is also considered as an emission.
DOE did not receive any comments opposing the addition of these
gases.
Policy Statement: DOE intends to add estimates of the impacts of
alternative energy conservation standards on emissions of
CH4 and N2O, two significant GHGs, to future
environmental assessments. These impact estimates will be provided in
the physical units of these gases, as well as their CO2-
equivalent values. These values, however, will not be used to develop
estimates of the monetary value of reductions in CO2
emissions until such time as the methodology used to calculate the
social cost of carbon is explicitly modified to cover such gases.
D. Methodology for Estimating FFC Energy and Emission Impacts
DOE proposed to use the GREET model in energy conservation
standards rulemakings to convert primary energy and emission impacts,
including CH4 and N2O, to FFC energy and emission
impacts. The GREET model was originally developed in 1995 and is
routinely updated with support from several DOE programs. It includes
more than 100 fuel production pathways, including those addressed by
the FFC methodology to be used for product standards rulemakings. The
model and its technical documentation are available at the GREET Web
site (http://greet.es.anl.gov/). At present, there are more than 15,000
registered GREET users worldwide.
In the NOPP, for each alternative energy conservation standard
under consideration, DOE proposed to first estimate the primary energy
and related emission impacts by using the same methodologies and NEMS
projections that DOE's conservation standards program has traditionally
used. Second, for each alternative energy conservation standard under
consideration, DOE proposed to use the energy conversion factors that
are generated using the GREET model to convert primary energy use and
emission impacts to FFC energy use and emission impacts.
EEI asked which version of the GREET model was used to derive the
preliminary conversion values shown in Tables 1 and 2 of the Notice.
(EEI, Public Comment, EERE-2010-BT-NOA-0028-0037, p. 5) The most recent
version of the GREET model available at the time, version 1.8d, was
used to calculate the values in Tables 1 and 2. There will be a new
version of GREET released in 2011. The latest version of GREET will be
used when the FFC is calculated in future energy conservation standards
rulemakings.
Southern Company commented that DOE's proposal to use existing
methodologies and NEMS, together with conversion factors generated by
the GREET model, was a reasonable approach. (Southern, Public Comment,
EERE-2010-BT-NOA-0028-0027, p. 3) Both AGA and the Natural Gas Supply
Association (NGSA) commented in support of the GREET model, stating
that GREET provides ``an adequate modeling platform for the calculation
of energy consumption and greenhouse gas emissions data as part of the
Department's energy conservation standards program.'' (AGA, Public
Comment, EERE-2010-BT-NOA-0028-0035, p. 3; NGSA, Public Comment, EERE-
2010-BT-NOA-0028-0019, p. 2)
The American Public Gas Association (APGA) commented that it is
important that DOE use a transparent process to ensure that
stakeholders understand how the GREET model would be used to calculate
FFC energy and GHG emissions impacts as part of energy conservation
standards rulemakings. The National Association of Home Builders
expressed concern about the level of technical documentation and
verifiable data provided in the Notice. (APGA, Public Comment, EERE-
2010-BT-NOA-0028-0024, p. 5)
The methods, data and assumptions used in the GREET model were
subject to public review and comment under separate Federal and State
rulemakings. When the current GREET model, or a new version of the
model, is used in future DOE rulemakings, the methods, data and
assumptions will again be fully documented and subject to public review
and comment.
The Northwest Energy Efficiency Alliance (NEEA) commented that the
conversion factors and other GREET model estimates presented in the
Notice appeared frozen in time, yielding minimal changes for most fuels
analyzed from 2010 to 2030. (NEEA, Public Comment, EERE-2010-BT-NOA-
0028-0021, p. 1) The NEMS and GREET models both forecast or simulate
changes in energy use and emissions over time. The small changes in the
conversion factors in Tables 1 and 2 of the Notice reflect the fact
that large, long-lived capital stocks dominate the energy production
and transport sector, and change slowly over time. New facilities or
processes replace existing facilities and processes only gradually over
many decades. Retrofitting of existing facilities to alter the fuels
used or substantially reduce emissions can result in more rapid
changes, and there are efforts to continually improve the ability of
the GREET model to capture these types of changes.
Additionally, NEEA asked how to interpret the analyses as they
apply to nuclear-fueled electricity, noting that the energy returned on
energy invested (EROEI) for nuclear electricity is likely different
than the two EROEI values reflected in the current DOE ANL estimates of
the FFC factors for this source of energy. (NEEA, Public Comment, EERE-
2010-BT-NOA-0028-0021, p. 2) GREET simulations for energy input versus
output are based on fossil energy input only. This may be the reason
why the imputed EROEI from the GREET model appears higher than some
other estimates. The FFC factors are not the same as the EROEI values,
since EROEI cannot separate use of different types of energy sources,
which is necessary for FFC and GHG emission estimation. Details of the
nuclear electricity pathway used in GREET are documented in a paper
published in 2007 and posted at the GREET Web site.
EEI commented that the values in Tables 1 and 2 of the Notice are
stochastic and do not include all aspects of energy production (such as
energy used for oil drilling or to produce chemicals used in the
natural gas hydraulic fracturing process). In addition, the tables do
not show the range of values in the GREET model for different energy
production methods. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0037,
p. 5)
DOE agrees that the values generated by the GREET model reflect
industry averages that are the product of widely variable processes and
practices. DOE
[[Page 51287]]
also agrees that the values do not represent all emissions associated,
either directly or indirectly, with the production and delivery of
energy to end-users, although DOE believes that the values generated by
the GREET model will enable DOE to use estimates of energy and emission
impacts that are a close approximation of the definition of FFC
analysis recommended by the Academy. More specifically, while the
current GREET model does not include energy use and emissions of oil
exploration, it does include the impacts of upstream oil operations
(including recovery and drilling). In addition, the energy and emission
impacts of shale gas production will be added to the 2011 update of the
GREET model.
Details of the estimates used for specific technology pathways
(such as residual oil production, natural gas production, electricity
generation) are provided in the GREET model and the methods, data and
assumptions underlying these estimates are provided in the GREET
documentation, both of which are available at http://greet.es.anl.gov/.
APPA commented that the GREET model is susceptible to multiple
forms of error because of its large set of base assumptions. APPA also
stated that the model is subject to manipulation. (APPA, Public
Comment, EERE-2010-BT-NOA-0028-0033, p. 3) APPA is correct that the
GREET model, like any life-cycle assessment (LCA) model, is based on a
multitude of assumptions. The data supporting these assumptions come
from Federal and State databases, as well as data provided by industry.
The public can view the model, its assumptions, and the data. This
transparency helps produce reliable estimates of FFC impacts.
CECA commented that: ``A simple conversion factor from site energy
to full fuel cycle is not adequate. There are myriad criteria for
determining full-fuel-cycle analysis and reaching agreement on a
satisfactory procedure would likely be beyond DOE/EERE's time and
resources.'' CECA also cited environmental externalities such as those
in the European Commission's ExternE model. The ExternE model includes
not just energy costs but societal concerns such as environmental
impacts, global warming, accidents, energy security, employment
impacts, and depletion of non-renewable resources. (CECA, Public
Comment, EERE-2010-BT-NOA-0028-0012, p. 3) The State of California
developed a model for transportation fuels which defines a ``Full Fuel
Cycle Assessment'' as evaluating and comparing the full environmental
and health impacts of each step in the life-cycle of a fuel, which
include, but are not limited to, feedstock extraction, transport,
storage, fuel production, distribution, vehicle operation, refueling,
combustion, or conversion and evaporation. (California Energy
Commission, Development of the State Plan for Alternative
Transportation Fuels, AB 1007, 3/2/2007) These and other models, in
addition to GREET, are cited in the Academy's report. Other entities
had similar concerns regarding other available models. (AHRI, Public
Comment, EERE-2010-BT-NOA-0028-0017, p. 3) AHRI also noted that the
GREET model was not ``specifically designed for use in DOE efficiency
standard rulemakings.''
Today's Policy Statement addresses the energy use and associated
emissions directly used in, or emitted from, the point of primary fuel
production to the point of end-use, as specified in the recommendations
of the Academy's report. Consequently, the scope of FFC, as this term
is used in this Policy Statement, is limited. Other social and
environmental impacts, such as the indirect energy and emission impacts
associated with the manufacture of covered appliances and equipment, or
the manufacture of the equipment used in fuel production and refining,
as well as other impacts on health or the environment, are not within
the scope of the FFC estimates referenced in this Policy Statement.
In its evaluation of alternative transportation fuels under AB
1007, the California Energy Commission uses GREET and a fuel-cycle
definition that is very similar to the FFC approach proposed for use in
the development of DOE energy conservation standards.
DOE acknowledges that the GREET model was not specifically designed
to generate the factors necessary to convert the primary energy and
emission values now used in DOE's energy conservation standards impact
analyses into FFC values. DOE is not aware of any model that was
specifically designed for this purpose. Nevertheless, DOE has concluded
that the GREET model can be appropriately used for this purpose and
that the resulting values will be sufficiently reliable to
significantly improve the usefulness of the resulting energy and
emission impact estimates. The GREET model has been previously used to
support certain Federal and State regulatory actions on GHG emissions
(such as the EPA's Renewable Fuel Standard development and California's
low-carbon fuel standard development) and Federal vehicle fuel
efficiency labeling by EPA and DOE. It has already been subject to
considerable public review and comment. For these reasons, DOE
concludes that GREET is the best model to use for the purposes of
today's Policy Statement.
Policy Statement: In future energy conservation standards
rulemakings, DOE intends to calculate FFC energy and emission impacts
by applying conversion factors generated by the GREET model to the NEMS
projections currently used by DOE. When DOE uses the GREET factors in a
rulemaking, the factors will be subject to public review and comment.
These factors will be used to convert the primary energy and emission
values generated by methodologies that have been traditionally used by
DOE in its appliance efficiency standards rulemakings to their FFC
equivalents. The GREET model will also be used to generate estimates of
the FFC emissions of methane and nitrous oxides.
From time to time, DOE will review alternative approaches to
estimating these factors and may decide to use a model other than GREET
to estimate the FFC energy and emission impacts in any particular
future appliance efficiency standards rulemaking. For example, DOE is
aware that a future version of the NEMS model may provide the detail
necessary to estimate FFC energy and emission impacts. Whether DOE uses
the GREET model or another model identified in the future, the model
and FFC energy and emission impacts will be subject to public review
and comments within an energy conservation standards rulemaking.
E. Consumer Information on FFC Impacts of Specific Covered Products
The Academy recommended that DOE work with the FTC to initiate a
project to consider the merits of providing consumers with information
about FFC energy use and GHG emissions of individual appliances so that
the public can make more informed purchasing decisions. In particular,
the Academy recommended that DOE and FTC should initiate a project to
consider the merits of adding to the Energy Guide label an indicator of
how an appliance's total energy consumption might affect levels of GHG
emissions.\2\ The FTC has statutory authority over Energy Guide labels.
---------------------------------------------------------------------------
\2\ Academy report at p. 12.
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DOE indicated in its NOPP that the FTC maintains online databases
of the site energy use and efficiency ratings of appliances currently
on the market. These databases do not, however, include FFC energy use
or any energy cost or emissions-related data. While it is possible to
compare the site energy
[[Page 51288]]
use and efficiency ratings of different products using these databases,
such comparisons are often difficult, especially if they involve
products that have different features. Furthermore, comparing products
that use different fuels is often not feasible because of differences
in the measures of energy use or efficiency of products that use
different fuels.
In response to the Academy's recommendations, DOE proposed to
significantly improve upon the FTC's existing on-line databases by
making FFC energy use and emissions data (and possibly annual energy
cost data) available to the public. The improved databases could enable
users to easily compare a product's energy use, associated emissions,
and costs to similar products, including products that are in different
classes because they have different features or use different fuels.
Additional energy, emissions, and cost data could be included by
updating FTC's online database with the emissions factors developed
with the GREET model and estimated annual energy use and/or energy cost
data reported by manufacturers on appliance Energy Guide labels. This
proposed action was also supported by comments from the Natural
Resources Defense Council. (NRDC, Public Comment, EERE-2010-BT-NOA-
0028-0030, p. 2)
Regarding the Energy Guide label, DOE stated in the NOPP that it is
not clear to DOE that including additional label disclosures, such as
the GHG emissions indicator mentioned by the Academy, would be valuable
to customers unless they could easily compare the GHG emissions
associated with one product to other comparable products or other
common energy uses. DOE indicated in its proposal that because the GHG
emissions associated with a particular class of products using the same
fuel would be directly proportional to that class of products'
estimated annual energy costs, simply comparing an individual product
to products of the same class using the same fuel would add little
useful information to the label. DOE also stated that providing
comparisons to the energy use, costs or emissions associated with other
comparable products with different features or that use different fuels
on the Energy Guide label may increase the complexity of the label,
making the label more difficult to understand and decreasing the
utility of the basic annual operating cost information already on the
label.
AGA supported the inclusion of emissions information on Energy
Guide labels to allow customers to better understand the emissions
implications of their appliance choices. AGA commented that ``any
concerns regarding the complexity and utility of any particular Energy
Guide label can and should be addressed in a rulemaking proceeding by
the FTC to revise the labels. The potential that some labels may be
perceived by some users as less than clear should not be a basis for
denying consumers the emissions information they need to make
environmentally sound appliance choices.'' (AGA, Public Comment, EERE-
2010-BT-NOA-0028-0004, pp. 3-4)
DOE will make available to the FTC the FFC energy and emission
factors that it generates for use in rulemakings. DOE still has some
concerns that using these factors to provide FFC information to
consumers via the Energy Guide Label is likely to increase the
complexity of the label and, therefore, may decrease its effectiveness.
However, DOE believes that other means of providing this information to
consumers could be as or more effective.
The Institute for Policy Integrity disagreed with DOE's concerns
about adding GHG emissions to the Energy Guide labels. The Institute
pointed out that other labels are far more complex, which indicates
that consumers are accustomed to relatively complex labels, and
encouraged DOE to work with the FTC on label modifications. (Institute,
Public Comment, EERE-2010-BT-NOA-0028-0032, pp. 5-6)
In contrast, EEI commented that providing consumers with accurate
product-specific GHG emissions data associated with electricity use
would likely be extremely complex because each utility has its own
distinct GHG emission mix. As a result, national or even regional
average data can be very misleading. If product-specific GHG emissions
data was made available, EEI, along with others, indicated that it
supported the use of a website providing such information as opposed to
including the information on Energy Guide labels. (EEI, Public Comment,
EERE-2010-BT-NOA-0028-0007, p. 3)
EEI and CECA Solutions commented that DOE's proposal to provide
customers with energy use and emissions data back to the point of
extraction of fossil fuels would lead consumers to incorrectly believe
that they will save more energy than is the case and could harm the
ability of consumers to make smart purchasing decisions. (EEI, Public
Comment, EERE-2010-BT-NOA-0028-0007, p. 2; CECA, Public Comment, EERE-
2010-BT-NOA-0028-0012, p. 2)
Similarly, NRECA stated that consumers will not accurately
understand the amount of energy being utilized by their appliances and
providing this information would burden manufacturers, possibly
resulting in higher costs for the consumer. (NRECA, Public Comment,
EERE-2010-BT-NOA-0028-0002, p. 3)
In response, DOE emphasizes that it is not proposing to provide
consumers with information that might lead them to conclude that the
benefits associated with the reduction of FFC energy or emissions would
be reflected in additional consumer cost savings. DOE does not believe
that providing consumers with information about the FFC impacts of
appliances on GHG emissions would mislead consumers about the actual
energy use of their appliances, nor that providing such information
would place a significant new cost on manufacturers that would increase
product costs. However, DOE agrees that providing this type of
information in a meaningful way, given the large regional variations in
the electric sector, may well be difficult.
NRECA went on to comment that ``the analysis and cost effectiveness
of the efficiency standard must be based upon costs and savings that
the customers experience.'' They indicated that they believe that
``placing source energy consumption on a label for the customer is
misleading at best, and very confusing. Customers could choose the
``highest'' efficiency unit on the label but find their utility bills
increasing because the appliance would not be operating on the most
efficient energy source at the site.'' (NRECA, Public Comment, EERE-
2010-BT-NOA-0028-0002, p. 3)
DOE agrees that energy conservation standards should continue to be
based, in large part, on the costs and savings that user's experience.
However, EPCA, as amended, and other laws direct DOE to consider a
range of other factors as well, including the energy resource and
environmental impacts of alternative standard levels. While ongoing
changes in the electric sector sometimes may make this type of analysis
complex and less certain, DOE believes that such analyses are
nevertheless possible and, ultimately, useful to government decision-
makers and many consumers. Regarding the information made available to
consumers, DOE agrees that information on energy costs and life-cycle
costs should continue to be emphasized. However, DOE also believes that
consumers should be given ready access to better information on the
energy resource and environmental impacts of their appliance choices.
DOE believes that this objective can be achieved, at least in part,
through web-
[[Page 51289]]
based information tools, although DOE will also work collaboratively
with the FTC to determine if changes to Energy Guide labeling
requirements would be beneficial to consumers.
DOE agrees with NEEA's comment that the difference between primary
energy use estimates and FFC energy use estimates is relatively small.
(NEEA, Public Comment, EERE-2010-BT-NOA-0028-0021, p. 2) However, to
date, consumers have not had ready access to information on either the
primary or FFC energy and emission impacts of products. Making such
information available in a manner that would enable consumers to make
cross-fuel and cross-class comparisons of comparable products could
provide consumers with significant new information.
The Consumer's Union commented that the Energy Guide labels must
increase consumer awareness of GHG emissions to effectively educate
consumers and engage them in energy and climate change policy. Such
labels should ``address regional variation of electricity fuel mixes
and provide consumers guidance on how to interpret the data given their
region or particular utility.'' (Consumers, Public Comment, EERE-2010-
BT-NOA-0028-0028, p. 5) DOE agrees that consumers should be given ready
access to better information on the energy resource and environmental
impacts of their appliance choices and how to provide this information
in a meaningful way will be a significant issue for DOE and the FTC to
consider.
Policy Statement: Subject to the availability of funds, DOE will
work with other Federal agencies to make readily available to consumers
improved information on the energy use, life-cycle cost and associated
emissions of comparable products, even if those products use different
forms of energy. Consumers should be able to easily identify the likely
energy use, life-cycle costs and associated emissions of individual
products (based on their local energy costs and utility system
characteristics), but should also be able to compare those attributes
to a range of other products providing similar utility. In developing
betters ways of conveying such information to consumers, DOE will
explore the possible role of common efficiency metrics for products
using different fuels or energy, and will, as appropriate, solicit
further public review and comment on the mechanisms developed to make
available this information to consumers.
Any updates to Energy Guide labels will be promulgated by the FTC,
which has statutory authority over Energy Guide labels.
IV. Procedural Issues and Regulatory Review
A. Review Under the National Environmental Policy Act of 1969
DOE has determined that this Policy Statement falls into a class of
actions that are categorically excluded from review under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and DOE's
implementing regulations at 10 CFR part 1021. Specifically, this Policy
Statement describes methods for data analysis and how DOE plans to
incorporate such data analysis into future energy conservation
standards. For this reason, and because the Policy Statement does not
establish an energy conservation standard or take any action that might
have an impact on the environment, it is covered by the Categorical
Exclusion A9 under 10 CFR part 1021, subpart D. Accordingly, neither an
environmental assessment nor an environmental impact statement is
required.
B. Review Under the Information Quality Bulletin for Peer Review
In consultation with the Office of Science and Technology Policy
(OSTP), OMB issued on December 16, 2004, its ``Final Information
Quality Bulletin for Peer Review'' (the Bulletin). 70 FR 2664 (Jan. 14,
2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal government, including influential
scientific information related to agency regulatory actions. The
purpose of the Bulletin is to enhance the quality and credibility of
the government's scientific information. Under the Bulletin, the
Academy recommendations and GREET model are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
that the agency reasonably can determine will have or does have a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667 (Jan. 14, 2005). The Academy
recommendations have been peer reviewed pursuant to section II.2 of the
Bulletin. The GREET model, which is in the public domain, has been
reviewed through its development and applications over the past 16
years.
V. Approval of the Office of the Assistant Secretary
The Assistant Secretary of DOE's Office of Energy Efficiency and
Renewable Energy has approved publication of this final policy.
Issued in Washington, DC, on August 10, 2011.
Roland J. Risser,
Program Manager, Building Technologies Program, Energy Efficiency and
Renewable Energy.
[FR Doc. 2011-21078 Filed 8-17-11; 8:45 am]
BILLING CODE 6450-01-P