Energy Policy Act of 1992:

Limited Progress in Acquiring Alternative Fuel Vehicles and Reaching Fuel Goals

RCED-00-59: Published: Feb 11, 2000. Publicly Released: Feb 11, 2000.

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James E. Wells, Jr
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Pursuant to a congressional request, GAO provided information on the progress towards achieving the goals of the Energy Policy Act's petroleum replacement programs, focusing on the: (1) progress made in acquiring alternative fuel vehicles and using alternative fuels to meet the act's fuel replacement goals; (2) impediments to using alternative fuel vehicles; and (3) measures that can be taken to address those impediments to using alternative fuel vehicles and alternative fuels to help reach the act's replacement goals.

GAO noted that: (1) since the passage of the Energy Policy Act of 1992, some progress has been made in acquiring alternative fuel vehicles and reducing the consumption of petroleum fuels in transportation; (2) the Department of Energy (DOE) estimates about 1 million alternative fuel vehicles were on the road in 1999; (3) it also estimates that, in 1998, alternative fuels used in alternative fuel vehicles replaced about 334 million gallons of gasoline; (4) about 3.9 billion gallons of alternative fuels were blended with gasoline and used in conventional vehicles in 1998; (5) in total, about 4.23 billion gallons of gasoline were replaced by alternative fuels or approximately 3.6 percent of all highway gasoline use--considerably less than the act's goal of 10 percent in 2000; (6) in a 1999 draft report required by the act for Congress, DOE concluded that the act's goals for replacing petroleum fuels with alternative fuels would not be achieved under current conditions; (7) the goals for fuel replacement are not being met principally because alternative fuel vehicles have significant economic disadvantages compared to conventional gasoline vehicles; (8) fundamental economic impediments--such as the relatively low price of gasoline, the lack of refueling stations for alternative fuels, and the additional cost to purchase these vehicles--explain much of why both mandated fleets and the general public are disinclined to acquire alternative fuel vehicles and use alternative fuels; (9) in addition, aspects of the act's approach do not directly address its goal to replace petroleum fuels; (10) the act also limits its focus to light-duty vehicles and does not include other ways to reduce petroleum consumption; (11) according to a DOE analysis, even if crude oil prices doubled from current levels of about $20 per barrel, alternative fuels' share of the market would not increase; (12) some modest increases in the use of alternative fuels or reductions in the use of gasoline could occur if limitations in the act's approach were addressed; (13) the focus of the act's mandates could shift from acquiring alternative fuel vehicles to using alternative fuels; (14) the act's scope could broaden from exclusively promoting alternative fuels to include other ways to reduce the use of petroleum fuels; and (15) the act could also target its promotion of alternative fuels to specific areas where a particular fuel might be plentiful or applications in which the fuels will make better economic sense.

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