The term "alternative fuel" has been used to describe any fuel other than gasoline or diesel fuel suggested for transportation use. Today's situation resembles in many ways the beginning of the twentieth century, when buyers of early automobiles could choose among internal combustion vehicles, steam vehicles, or electric vehicles. Similar to today, the early 1900's saw great debates about which fuels were best suited for transportation uses, and the availability of fuels and the advantages and drawbacks of the vehicles dictated the choices that consumers made. As history tells us, the internal combustion engine operating on gasoline (and later diesel) was the final winner in that debate.

Alternative fuels have been used extensively in the past in transportation. As mentioned before, electric vehicles enjoyed some measure of popularity in the early 1900's, and both liquefied petroleum gas vehicles and natural gas light- and medium-duty trucks have been in use since the 1950's. The current interest in alternative fuels stems from the ability of these fuels to provide the U.S. with energy security benefits (less dependence on foreign oil for transportation energy needs) and environmental benefits. Additionally, the U.S. could see economic benefits related to reduction of the trade deficit and the production and use of domestically-produced fuels. Therefore, programs that facilitate the development of alternative fuels and alternative fuel vehicles are vital to our national interests.

Our evaluation of the AMFA CAFE credit incentive policy for dual-fuel vehicles indicates that the program has had mixed results. Key findings include:

Based on the results of this study, our preliminary conclusion is that continuation of the program should consider other actions that could improve the program and its chances for success. Specific actions by Congress or others might include any or all of the following:

(1) Examine alternatives to the current dual-fuel vehicle CAFE credit program structure, such as linking the CAFE credit to actual alternative fuel used;

(2) Develop, implement, and evaluate policies, regulations, or programs to promote the actual use of alternative fuels by consumers; and

(3) Develop, implement, and evaluate policies and programs that facilitate more rapid expansion and use of the alternative fuel infrastructure. Such policies and programs should be evaluated, taking into account the availability of alternative fuel and other potential transportation uses for each fuel.

In view of the nation's energy security interests, it is important to increase alternative fuel capability throughout the fleet. Given the mixed results of the program to date, it would be prudent for Federal agencies, Congress, industry, and other interested stakeholders to identify additional programs and authorities that could contribute to achieving greater use of alternative fuels in dual-fuel vehicles that receive the CAFE credit.


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