FOR RELEASE: MARCH 26, 1993
FTC PROPOSES CERTIFICATION, POSTING REQUIREMENTS FOR ALTERNATIVE AUTOMOTIVE FUELS AND DIESEL FUEL
The Federal Trade Commission today announced that it is seeking public comment on four options for establishing certi- fication and posting requirements for alternative liquid automo- tive fuels, including methanol and ethanol. At the same time, the Commission seeks comment on a proposal to require the automo- tive fuel industry to certify and post on fuel pumps the cetane rating of diesel fuel. Cetane rating is a measure of the igni- tion quality of diesel fuel. The proposed regulations would amend the Commission's Octane Rule, which requires the octane rating of gasoline to be certified throughout the distribution chain and then posted in bright yellow stickers on gas pumps. The Commission's action is in response to a directive in the Energy Policy Act of 1992, which establishes a comprehensive energy policy that includes programs to encourage the development of alternative fuels and vehicles that use them. Under the Act, the FTC is required to amend its Octane Rule by July 21, 1993, to establish certification and posting requirements for all liquid automotive fuels, including liquid alternative fuels, and, if the FTC finds it appropriate, for diesel fuels.
The Commission seeks comment on four options for establish- ing certification and posting requirements for at least the following six alternative liquid-automotive fuels: methanol; denatured ethanol; M-85 (a mixture of 85 percent methanol and 15 percent gasoline); E-85 (a mixture of 85 percent denatured ethanol and 15 percent gasoline); liquefied propane gas (LPG); and liquefied natural gas (LNG). The Commission seeks comment on
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which of the four ratings, combination of ratings, or ratings not yet proposed would be appropriate.
Option 1 would require the octane rating to be certified and posted for these fuels. This option would assign an appropriate octane rating to each alternative liquid fuel, and require that rating to be certified throughout the distribution chain and posted at the pump. According to the Commission, however, octane ratings are not expected to vary greatly within specific classes of alternative liquid fuels, and there is no established method for determining their octane ratings. Also, the octane ratings of the alternative fuels are higher than the octane ratings of gasoline. Among several questions, the Commission asked whether it should require the posting and certification of octane ratings for alternative fuels and whether this proposal is likely to lead consumers into the erroneous perception that high octane in all fuels, including gasoline, will result in more overall benefits to their vehicles.
Option 2 could help consumers to compare the same types of alternative liquid fuels by requiring the certification and posting of the following fuel composition ratings:
-- the range of hydrocarbon content (which relates to the cold start capability of alcohol fuels) for methanol, ethanol, M-85 methanol and E-85 ethanol;
-- the minimum propane content for LPG; and
-- the minimum methane content for LNG.
With regard to this option, the Commission seeks comment on the advantages and disadvantages of the proposed disclosures.
Option 3 would require the posting of labels that would compare the alternative fuel to gasoline in terms of the approxi- mate mileage one would obtain by using an equivalent volume of each fuel. The labels would be based on the heating value, or energy content, of the alternative fuels and gasoline. The Commission seeks comment on whether there is agreement about the heating values of alternative liquid fuels, as well as on two alternative label formats for this option.
Option 4 would establish descriptors for alternative liquid fuels based on specifications proposed by the California Air Resources Board. This option would require certification and posting of the identity of the fuels using these descriptors and minimum specifications for each fuel. It would assure consumers that they are purchasing a product that meets certain content requirements. The FTC asked for comment on what specifications should be adopted now and whether it should adopt interim speci- fications for the fuels until industry-wide specifications are developed.
The proposal also seeks comment on whether to extend the Octane Rule's certification and posting requirements to cover the marketing of diesel fuel for vehicular use. Under the proposal, refiners would have to determine the cetane rating of diesel fuel and, along with distributors, would have to certify the rating through the chain of distribution to the retail level. Retailers would be required to post the cetane rating using yellow labels on diesel pumps that are similar to the ones used for posting octane ratings of gasoline. The proposal also would extend various recordkeeping requirements to refiners, distributors and retailers of diesel fuel.
Finally, the Commission seeks public comment on the costs and benefits of the existing Octane Rule, as part of the agency's 10-year regulatory-review plan.
The proposed regulations, questions for commenters, and the request for comments on the Octane Rule are published in today's Federal Register. Comments will be accepted for 30 days, until April 26, and should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580. Requests for a public hearing on the proposed amendments should be sent to the same address by April 16.
Copies of the Federal Register notices are available from the FTC's Public Reference Branch, Room 130, same address as above; 202-326-2222; TTY for the hearing impaired 1-866-653-4261.
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MEDIA CONTACT: Howard Shapiro, Office of Public Affairs 202-326-2176
STAFF CONTACT: Neil Blickman (202-326-3038) or James Mills (202-326-3035), Bureau of Consumer Protection
(FTC Matter No. R811005)