Alternative Fuels

GAO discussed other countries' use of alternative motor fuels, focusing on: (1) Brazil's, Canada's, and New Zealand's programs to encourage such fuel usage; and (2) the Department of Energy's (DOE) progress in implementing the Alternative Motor Fuels Act of 1988. GAO noted that: (1) despite Brazil's difficulties with poor alternative-fueled vehicle performance and an inadequate fuel supply, about 30 percent of its passenger vehicles exclusively operated on ethanol; (2) in 1981, Canada began converting gasoline fuel to propane, encouraging the use of natural gas, providing conversion grants, and installing alternative-fueling stations; (3) currently, there are about 27,000 natural gas powered vehicles in Canada; (4) New Zealand initiated its alternative fuel program in 1979 to reduce its dependence on imported oil, but reduced such incentives in 1985 because of government-wide austerity efforts; (5) currently, there are about 105,000 converted vehicles operating in New Zealand; (6) factors affecting consumers' acceptance of alternative fuel include price, convenience, and reliability; and (7) in each country, the fuel industry played a role in ensuring vehicle quality, providing fueling infrastructure, and establishing marketing approaches. GAO also noted that: (1) auto manufacturers have not provided DOE with the quantity, type, and size of alternative-fueled vehicles solicited because of technological readiness problems and market uncertainties; and (2) DOE experienced higher than expected costs for procuring such vehicles.