[Federal Register: August 8, 2008 (Volume 73, Number 154)]
[Notices]
[Page 46350-46352]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08au08-112]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
[Docket No. FTA-2008-0024]
Notice of Buy America Waiver for the National Fuel Cell Bus
Technology Development Program
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Notice of Buy America waiver.
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SUMMARY: On May 22, 2008, the Federal Transit Administration (FTA)
published a Notice of Proposed Buy America Waiver for the National Fuel
Cell Bus Technology Development Program (Fuel Cell Bus Program). After
careful review of comments, FTA has decided to waive its Buy America
requirements for projects funded under the Fuel Cell Bus Program. This
Notice sets forth FTA's justification and response to comments.
FOR FURTHER INFORMATION CONTACT: For program questions please contact
Christina Gikakis at (202) 366-2637 or christina.gikakis@dot.gov. For
legal questions please contact Jayme L. Blakesley at (202) 366-0304 or
jayme.blakesley@dot.gov.
SUPPLEMENTARY INFORMATION: This Notice sets forth the Federal Transit
Administration's (FTA) justification for waiving its Buy America
requirements for projects funded under the National Fuel Cell Bus
Technology Development Program (Fuel Cell Bus Program).
The National Fuel Cell Bus Technology Development Program
Section 3046 of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Public Law
109-59, instructed FTA ``to establish a national fuel cell bus
technology program [Fuel Cell Bus Program] to facilitate the
development of commercially viable fuel cell bus technology and related
infrastructure.''
By notice dated April 14, 2006, FTA solicited applications to the
Fuel Cell Bus Program and restated the statutory criteria for
evaluating applications. These criteria included the ability of the
project ``to contribute significantly to furthering fuel cell
technology as it relates to transit bus operations, including hydrogen
production, energy storage, fuel cell technologies, vehicle systems
integration, and power electronics technology,'' and to advance
``different fuel cell technologies, including hydrogen-fueled and
methanol-powered liquid-fueled fuel cell technologies, that may be
viable for public transportation systems.'' 71 FR 19612 (April 14,
2006).
FTA selected three consortia to participate in the Fuel Cell Bus
Program: the Center for Transportation and the Environment in Atlanta,
the Northeast Advanced Vehicle Consortium in Boston, and Westart/
CALSTART in Pasadena. These consortia will manage fourteen projects. Of
these, eight are development and demonstration projects, two are
component technology development, and four support analysis, outreach
and coordination.
The Fuel Cell Bus Program seeks to develop commercially viable fuel
cell buses by demonstrating that buses powered by fuel cell technology
can achieve several technical targets, including a four to six year
(20,000 to 30,000 hour) fuel cell durability, a cost of less than five
times that of an equivalent diesel, greater than 90% reliability, twice
the fuel efficiency of a comparable bus, emissions below the 2010
Environmental Protection Agency standards and vehicle performance
comparable to a diesel bus.
Public Interest Waiver
The purpose of this notice is to articulate FTA's justification for
waiving its Buy America requirements for all projects funded under the
Fuel Cell Bus Program.
With certain exceptions, FTA's ``Buy America'' requirements prevent
FTA from obligating an amount that may be appropriated to carry out its
program for a project unless ``the steel, iron, and manufactured goods
used in the project are produced in the United States.'' 49 U.S.C.
5323(j)(1). One such exception is if applying the Buy America
requirements ``would be inconsistent with the public interest.'' 49
U.S.C. 5323(j)(2)(A). After considering all appropriate factors on a
case-by-case basis, 49 CFR 661.7(b), if FTA determines that the
conditions exist to grant a public interest waiver, FTA will issue a
detailed written statement justifying why the waiver is in the public
interest, and will publish this justification in the Federal Register,
providing the public with a reasonable time for notice and comment of
not more than seven calendar days. 49 CFR 661.7(b).
Justification
Because the U.S. market for fuel cell bus technology and related
infrastructure is not fully developed, participants in the Fuel Cell
Bus Program asked FTA to waive its Buy America requirements for
projects funded under the Fuel Cell Bus Program. According to one
participant, ``[a] successful Fuel Cell transit bus must meet and be
consistent with the public transit market's ability to incorporate and
afford such technology on a mass scale. * * * At this stage of
technology development more engineering data is necessary to accurately
specify a fuel cell for a competitive bid. [Requiring participants to
comply with FTA's Buy America requirements] would significantly delay
the development effort, would be extremely expensive, and would result
in a huge set back to the overall development of Fuel Cell technology.
[Allowing participants to use all available technology, regardless of
origin,] is the fastest, soundest method to perfect the technology,
assure future competition, and hasten the advent of fuel cell buses in
transit.''
In order to develop commercially viable fuel cell buses, FTA's Fuel
Cell Bus Program must examine all current technologies. But at this
time, because fuel cell technologies for transit are still in the
developmental and technical validation phase, it is impossible to
determine which configurations are most likely to reach
commercialization. As development continues, the industry will require
objective demonstrations and evaluations of different bus propulsion
systems. Permitting participants to use foreign and domestic suppliers
will allow FTA to evaluate which technologies are closest to successful
deployment. If certain
[[Page 46351]]
technologies are omitted from the program because they are of foreign
origin, it will severely affect FTA's ability to fully analyze fuel
cell bus technology.
There are several benefits to waiving FTA's Buy America
requirements on a program-wide basis. FTA selected projects to include
all significant technologies within a centrally managed program. By
granting a waiver for the entire program, FTA can decrease the start-up
time for individual projects. Otherwise, each project would have to
apply for waivers on a case-by-case basis. This is impractical in a
research setting. Research projects often encounter unexpected problems
that require changes to the scope of work. The continued development of
Fuel Cell technology will result in more choices for FTA grantees and
better, more environmentally friendly, buses for the riding public.
Successful demonstrations through the Fuel Cell Bus Program will
increase awareness of fuel cell technology and foster a domestic
industry by identifying and mitigating barriers and uncertainties in
the market. A limited waiver to support research and development will
increase and improve domestic technical expertise. Moreover, a fully
inclusive public interest waiver will allow Fuel Cell Bus Program
participants to collaborate to achieve the program goals in an
appropriate timeframe. By reducing risk and expanding expertise, the
Fuel Cell Bus Program will improve the availability of capital for a
self-sustaining domestic fuel cell industry.
Summary of Comments
On May 22, 2008, pursuant to 49 CFR 661.7(b), FTA published a
detailed written statement in the Federal Register at 73 FR 29841. This
notice stated why FTA proposed to waive its Buy America requirements
for projects funded under the Fuel Cell Bus Program and allowed
interested parties a reasonable time to comment on the proposed waiver.
By an overwhelming margin, the commenters supported waiving FTA's
Buy America requirements. Of the nine parties that submitted comments,
six favor and only one opposes waiving FTA's Buy America requirements.
The remaining two comments were ambiguous. One expressed interest in
working with FTA but did not state its position on waiving FTA's Buy
America requirements. The other stated the commenter's intent to submit
comments at a later date (this intent was not realized as this party
has not submitted comments to date). The following is a summary of the
comments received.
1. GE Global Research stated, ``[t]his program is supporting
leading-edge research that requires sourcing partners from around the
world to satisfy the challenging requirements set forth in the
program.''
2. The Northeast Advanced Vehicle Consortium commented, ``[t]he
very nature of the research * * * requires that participating
corporations are granted access to the most appropriate and advanced
technologies in, what is in the United States, a nascent industry.
Several of the participating business [sic], all experts in fuel-cell
transportation research and development, have determined that procuring
the best possible technologies will at times require them to acquire
parts from foreign sources if they are to develop internationally
competitive transportation products. * * * any delay in this critical
development program [is] a lost opportunity to satisfy America's
transportation needs for the twenty-first century.''
3. Alameda-Contra Costa Transit District (AC Transit), an entity
that has been developing fuel cell bus technology and supporting
hydrogen fueling infrastructure since 1999, expressed its support of
FTA's recommendation to waive the Buy America requirements for projects
funded under the Fuel Cell Bus Program, stating that ``FTA staff has
made a convincing case for a sound and reasonable process to expedite
the research and development efforts in support of the deployment of
fuel cell technology in the United States.'' According to AC Transit,
demonstrating ``overall vehicle reliability and durability under real-
world, heavy-duty operating conditions'' will open up ``a new
generation of technology * * * that not only can deliver significant
benefits in air quality, noise reduction, and carbon emissions
reductions, but will serve to help diversify our nation's fuel supply
towards the goal of energy independence.''
4. Nuvera Fuel Cells, a U.S.-based company that utilizes
international cooperation for the fuel cell engine that will be used in
the Fuel Cell Bus Program, supports a waiver, stating that ``[t]his
waiver is important to ensure timely access to the latest engine
technology.''
5. UTC Power, a United Technologies Company based in South Windsor,
Connecticut, supports waiving FTA's Buy America requirements because
(1) ``the waiver will facilitate timely achievement of the Fuel Cell
Bus Program objectives''; (2) ``validation of the commercial viability
of fuel cell buses will stimulate and further expand the U.S. fuel cell
industry''; and (3) ``the scope of the waiver is limited solely to the
Fuel Cell Bus Program.''
6. Santa Clara Valley Transportation Authority supports FTA's
proposal ``so that [fuel cell bus] technology can develop beyond the
present developmental/technical validation phase.''
7. Delphi Corporation submitted comments but did not state whether
it favored or disfavored waving FTA's Buy America requirements for
projects funded under the Fuel Cell Bus Program. Delphi believes that
its ``U.S.-developed fuel cell technology is applicable to heavy duty
vehicle applications,'' and ``look[s] forward to any current or future
opportunities to work with the FTA on assessing, developing,
demonstrating and commercializing solid oxide fuel cell systems in
public transit applications.''
8. Air Products and Chemicals, Inc. (Air Products) submitted
comments opposed to waiving FTA's Buy America requirements. According
to Air Products, ``domestic sourcing difficulty does not apply to
hydrogen fueling infrastructure and hydrogen'' because ``the two
largest merchant hydrogen producers in the world are United States
companies. The production capacity of these two firms can easily fuel 1
million personal vehicles or 30,000 buses.''
9. North American Bus Industries (NABI) submitted a comment stating
that it ``intends to provide comments on the captioned matter within
the next seven to ten days.'' To date, FTA has not received comments
from NABI.
Response to Comments
While it is not the intent of FTA to support or fund foreign
suppliers of fueling infrastructure, FTA does feel that restricting the
selected projects to U.S. suppliers would limit the ability of the
managing consortia to select and demonstrate a range of innovative
technologies.
FTA agrees with Air Products that the Nation would be poorly served
by a research program that contributes to the transfer of market
leadership or Intellectual Property (IP) to foreign interests in the
market for hydrogen infrastructure. FTA has determined that the
infrastructure components of the Fuel Cell Bus Program are very small
relative to the national hydrogen infrastructure markets, and appear to
involve predominantly U.S. suppliers of infrastructure. Furthermore,
some demonstration sites have not finalized plans for fueling
infrastructure. Requiring project managers to apply for individual
waivers as these decisions are finalized will significantly delay
[[Page 46352]]
project implementation. It would also restrict the flexibility of the
sites to quickly change project partners and cost share, which is
important in research programs to respond to unforeseen problems.
Therefore, FTA feels there is no risk that this research program
will contribute to the transfer of market leadership from a U.S. to a
foreign entity in the national market for hydrogen infrastructure.
In regard to IP, FTA fully appreciates the importance of IP in
highly competitive industries. FTA has no interest in facilitating the
transfer of IP from U.S. firms to foreign entities. FTA assures all
concerned that, within the Fuel Cell Bus Program, all IP developed or
retained by U.S. interests will remain under the control of those
interests. There is no additional risk that IP belonging to U.S.
interests will be unwittingly transferred to outside entities. Foreign
companies participating in the National Fuel Cell Bus Program are
required to agree to standardized data collection. Objective
evaluations of the bus demonstration programs are a major component of
the program and will provide U.S. companies non-proprietary performance
data and analysis of all fueling infrastructure used in the program.
FTA recognizes that U.S. companies have significant experience
developing and operating hydrogen fueling stations. However, though
hydrogen production has advanced further than fuel cell technology, FTA
determines it is still beneficial to examine all available and
developing technologies. In cases where infrastructure funding is a
major component of the project, it is focused on novel applications,
not on replicating or competing with efforts where U.S. companies have
already proven to be capable leaders.
In conclusion, FTA's review of the selection process and industry
comments relating to the Fuel Cell Bus Program support our judgment
that the transit industry and American public at large will best be
served by a fuel cell bus research program not bound by Buy America
requirements.
Waiver
Therefore, after carefully considering all comments, and for the
reasons stated in its justification above, FTA hereby waives its Buy
America requirements for all projects funded through its Fuel Cell Bus
Program. Quick and successful deployment of fuel cell bus technology
and infrastructure is in the public interest. Fuel cell technology will
benefit the environment by lessening carbon emissions and decreasing
the use of petroleum and other fossil fuels. Allowing foreign
technologies will allow the project teams to focus on commercial
viability instead of having to make fundamental advances independent of
existing technology. Ultimately, this will lead to increased domestic
demand for fuel cell bus technology and infrastructure, resulting in a
sustainable U.S. market.
Issued this 31st day of July, 2008.
Severn E.S. Miller,
Chief Counsel.
[FR Doc. E8-18313 Filed 8-7-08; 8:45 am]
BILLING CODE 4910-57-P
Public Interest waiver for projects funded under the National Fuel Cell Bus Technology Development Program
August 8, 2008