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Washington: Media Reports; Senate Testimony; Dept of Energy's Karsner Press Conference
Jan 31, 2007 (From the CalCars-News archive)
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Today's Washington roundup 1. Comments about and links to yesterday's Senate testimony. 2/3. An Energy Washington Week "insider" newsletter and a Detroit News report on trends in Washington for automakers and PHEVs. 4. A Washington Post story where Assistant Secretary of Energy Andy Karsner announces a $14M research grant program for PHEVs and says, "I also want to point out that concepts, prototypes and limited production vehicles are not enough to address the problems we have....We need millions of cars on the road,"

The US Senate Committee on Energy and Resources held a Full Committee Hearing on "Transportation Sector Fuel Efficiency" on Tuesday, January 30, 2007. "The purpose of this hearing is to receive testimony on transportation sector fuel efficiency, including challenges to and incentives for increased oil savings through technological innovation including plug-in hybrids."

Speakers are listed below; links to their testimony at­public/­index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=1604. The first three are most relevant. But the three speakers, while very frankly acknowledging the growing public pressure to move quicker on PHEVs, emphasized how far away PHEVs are. Menahem Anderman's review of battery technology concluded, "In the longer term-perhaps in about 10 years-accelerated progress may gradually close the gap between the targeted battery requirements for plug-in HEV and the state and cost of battery technology, thus facilitating the introduction of plug-in hybrid vehicles." It was unfortunate that PHEV experts and advocates were not included in this hearing (we're spread too thin and don't have enough people in Washington DC!).

Elizabeth Lowery - Vice President, Public Policy for Energy and The Environment: General Motors Corporation John German - Manager, Environmental and Energy Analyses: Product Regulatory Office: American Honda Motor Company, Inc. Dr. Menahem Anderman - President, Advanced Automotive Batteries William Logue - Executive Vice President, FedEx Express Dr. Walter McManus - President: Automotive Analysis Division, University of Michigan, Transportation Research Institute Dr. David Greene, National Transportation Research Center, Oakridge National Laboratory

Energy Washington Week
January 30, 2007
Funding Hurdles May Stifle White House Plug-In Hybrid Push
by John Siciliano

President Bush may be hinting at a recast of the hydrogen fuel-cell vehicle program with a new push for advanced hybrid-electric vehicles with plug-in capabilities, based on public remarks made following his Jan. 23 State of the Union address. But congressional sources point out his rhetoric falls short of funding such a move, even as some lawmakers call for a sizable uptick in funding geared to advance the development of the more interim vehicle technology.

The president's Jan. 23 State of the Union speech presented a reinvigorated look at biofuels to displace America's use of petroleum-based fuels over the next decade, but did not mention plug-in hybrid-electric vehicles (PHEVs). In subsequent remarks he later touted plug-in hybrids as the near-term solution to developing hydrogen-powered cars.

On Capitol Hill, a coalition of 17 senators have called upon DOE to increase funding to boost the novel PHEV platform's development and lend government support of the technology. PHEVs are attracting considerable widespread attention, including from the electric utility sector, with FERC Commissioner Jon Wellinghoff attending an event before the president's address marking the year anniversary of a grassroots initiative to press for the development and commercialization of the novel vehicle technology.

Although increased attention is being paid to the technology, it is not sure how much support the president will lend PHEV in the 2008 budget. The White House says hybrid funding will be higher than last year's budget request but would not elaborate. Hydrogen and fuel-cell vehicle R&D still comprise the lion's share of the current 2006 budget, an allocation that critics said was to the detriment of other vehicle programs, including advanced battery development. The earmarks attached to the hydrogen initiative, alone, were enough to place other DOE programs in jeopardy, these critics warned. This has given lawmakers increased impetus to lobby DOE to secure the necessary funding for PHEVs.

Sen. Evan Bayh (D-IN) sent a letter to DOE Secretary Samuel Bodman in December to ask for a minimum of $90 million in funding increases for PHEVs to be included in the department's FY-08 budget request. DOE's FY-07 budget for its advanced battery program was supposed to receive a near 30-percent increase to help move ahead the promise of PHEVs, according to DOE's Undersecretary David Garman in past testimony before Congress. But with a majority of budget bills not making it to conference, and a proposed continued resolution keeping funding levels stagnant, proponents of federal advanced energy programs are concerned that hard-sought budget increases could be in jeopardy.

The 2006 budget request from DOE's Energy Efficiency and Renewable Energy (EERE) division neared $49 million for hybrid vehicle technologies, but was appropriated only $43 million. The fuel cell development funding requests, alone -- not including the hydrogen technologies program -- were well over double that amount. The FY-07 budget request attempted a boost the hybrid development program to $50 million, while hydrogen climbed to nearly $200 million, not including earmarks, according to EERE. If DOE takes Sen. Bayh's request seriously, the monies slated for hybrids would near almost the entire FY-06 budget request for EERE's Vehicle Technologies program, which includes hybrid development as well as the FreedomCar program, according to budget documents. Still, when compared to the funds slated for hydrogen and biofuels research and biomass, the competition may be too steep.

President Bush, nevertheless, seemed to admonish his once-hailed hydrogen initiative in favor of a push for advanced battery technology and plug-in hybrid-electric vehicles (PHEVs) on Jan. 24 -- in his first public remarks following his State of the Union speech the night before -- according to a speech on energy policy given at chemical giant DuPont's Wilmington, DE headquarters.

Bush referred to the prospect of hydrogen fuel cell vehicles as "still a dream," calling for an interim solution favoring hybrid-electric technology and PHEVs. "Your children may very well likely be driving in automobiles powered by hydrogen, ... but something has got to happen in the interim," he said.

The president continued by injecting an almost unheard of level of critical appraisal coming from the White House on hydrogen -- a revered fixture of past energy initiatives. He cast the hydrogen initiative as mainly a research endeavor to determine "whether or not we can power automobiles by hydrogen," rather than a push to develop the next generation of clean-burning fuel cell vehicles, as it is usually described.

"We can't wait, for economic reasons or national security reasons, for hydrogen to kick in. In other words, it's still a dream," Bush said. "And so we're pushing . . . interesting technologies," he stated. "One of these days you're going to plug your car into your garage, and you're going to be able to drive the first 20 miles on electricity, and your car is not going to have to look like a golf cart," he said in remarks. He hailed the technology as imminent, near-term, and gaining wider acceptance than ever by consumers." American automobile companies, as well as foreign automobile companies competing for market share here in the United States, understand that's where the consumer mentality is evolving," he said. The technology is coming, he said, "and we're spending money to encourage that kind of technology."

A White House fact sheet provided after the speech said the president's FY-08 budget request for the Advanced Energy Initiative would rise by 53 percent over FY-07 levels. The initiative would slate funds for PHEVs and advanced batteries, but alongside other big ticket items in support of global nuclear initiatives and biofuels. The White House said the total budget request amount would be $2.7 billion. The president also called for federal vehicle fleets to incorporate PHEVs when commercially available, according to the fact sheet. [CalCars Note: This may refer to­stateoftheunion/­2007/­initiatives/­energy.html.]

Big 3's call for U.S. aid gets cool reception Carmakers want cash for alternative fuel research, not efficiency mandates. Detroit News Wednesday, January 31, 2007­apps/­pbcs.dll/­article?AID=/­20070131/­BIZ/­701310335/­1003/­METRO

CAPTION: GM showed off the plug-in Chevrolet Volt concept, being unveiled here by Vice Chairman Bob Lutz at the 2007 auto show, in a heated tent outside a Senate hearing room Tuesday. Inside, GM exec Beth Lowery called on the government to help pay for such technology.

WASHINGTON -- The opening round of congressional hearings this year on global warming and alternative fuels showed one fact is clear: The climate for automakers on Capitol Hill is becoming increasingly unforgiving.

While General Motors Corp. asked Congress on Tuesday to dramatically increase federal support for the development of advanced powertrain technologies, it faced skepticism from lawmakers clamoring for tougher fuel economy mandates.

Momentum is building in Washington to force automakers to markedly improve the fuel efficiency of their vehicles -- a requirement that could cost them billions of dollars by forcing them to produce smaller cars and more hybrids, or even drop out of some market segments.

President Bush proposed in his State of the Union address that automakers improve the efficiency of vehicles an average of 4 percent per year beginning in 2009 for passenger cars and 2011 for light trucks. Bush wants to cut gas consumption 20 percent by 2017.

The costs involved would be huge considering that modest light truck standards issued in March requiring fuel efficiency improvements of just 1.2 percent per year will cost the Big Three automakers an estimated $6.2 billion. Nearly all the foreign and domestic automakers have called the Bush proposal very aggressive.

Several proposals in Congress would go even further, mandating a specific yearly increase, while the Bush proposal leaves the final increase to the National Highway Traffic Safety Administration, which would set the new figure with input from automakers.

Rough road expected

A Senate hearing Tuesday on fuel economy standards and another on climate change underscored the rough road Detroit automakers face in trying to beat back tough new mandates.

At the center of the debate is the growing consensus that global warming is not only a real threat, but also is poised to become a major issue in upcoming elections.

Environmentalists and many others want the Big Three to take a greater role in reducing tailpipe emissions linked to global warming. U.S. vehicles consume one of every nine gallons of gas used on the planet and account for 6 percent of greenhouse gas emissions.

U.S. Sen. Gordon Smith, R-Ore., wondered whether Detroit's automakers would be slashing jobs and losing market share had Congress forced them to improve fuel efficiency standards years ago. Passenger cars' fuel efficiency rules haven't changed since 1985.

"Are there autoworkers in Detroit who would be employed today if we had done this?" he asked at a Senate Energy and Natural Resources Committee hearing. "Maybe we need to help you help yourselves. It surely seems to me that we're not helping you by backing off from pushing you."

Beth Lowery, GM vice president for energy and environment, told the panel that research into new technology is the answer. She argued the government should fund a major effort to boost research and development in battery technology and support manufacturing of advanced batteries.

She also said government should expand funding of hydrogen and fuel cells, purchase more government vehicles that can run on alternative fuels and expand infrastructure of alternative fuels.

"Well-crafted tax incentives can accelerate adoption of new technologies and strengthen domestic manufacturing," she said.

Advances in battery technology are critical to making plug-in hybrid concepts like the Chevy Volt a reality. She said it will take several years "to see if the battery technology will occur that will let us bring to market a plug-in hybrid."

U.S. Sen. Robert Menendez, D-N.J., suggested if GM wants help, it should do its part by improving fuel efficiency. "I think this is a shared responsibility," he said.

Several panelists expressed worry that the U.S. auto industry was falling behind on battery research. Japan provides 60 percent of the world's lithium-ion batteries, and South Korea and China share most of the rest, said Menahem Anderman, president of California-based Advanced Automotive Batteries.

Also on Capitol Hill on Tuesday, the Senate Environment and Public Works Committee held a hearing on global climate change to gauge senators' positions. Several called for automakers to do more.

U.S. Rep. Joe Knollenberg, R-Bloomfield Township, spoke out for Detroit's automakers.

"There are many smart ways to reduce our dependence on foreign oil and curb the emissions of greenhouse gases. We don't have to kill auto jobs to save the polar bears or wean ourselves from Saudi oil," Knollenberg said.

U.S. Sens. Carl Levin and Debbie Stabenow -- both Michigan Democrats -- in testimony at the Senate hearings opposed new fuel economy mandates.

"There is a faster way to achieve our goal," Stabenow said, embracing the tax proposals suggested by GM. Said Levin: "We can make leaps in hydrogen use, in hybrid use, including plug-in hybrids, and biofuels, if we focus on the leap-ahead technologies, and give the incentives to manufacturers to move to those technologies."

New fuel economy mandates are "a peanut in the scheme of things" and "highly discriminatory against American vehicles and American workers," Levin said.

U.S. Sen. Barbara Boxer, D-Calif., who chairs the Environment and Public Works Committee, noted dryly to Levin that "you could have stayed away (from the hearing). This is not a happy issue for you back home, I know that."

At the Energy and Natural Resources Committee hearing, the senators praised Honda Motor Co.

John German, manager of environmental and energy analysis for Honda, said "we have a culture of being the technology leader."

GM, Ford Motor Co. and DaimlerChrysler AG were disappointed their request for $500 million in federal funds over five years for research into advanced batteries was not mentioned during the State of the Union. It is not likely to be part of the president's budget request set to be unveiled Monday.

Ford used federal grants

Energy Department grants -- to the tune of about $44 million -- funded just over half of Ford's plug-in hydrogen fuel cell vehicle unveiled last week in Washington.

Next week, U.S. Energy Secretary Samuel Bodman is to testify in front of the House Energy and Commerce Committee on the president's proposal to dramatically increase fuel standards.

Scheduled to testify next month is former Vice President Al Gore, a leading advocate of reducing greenhouse gas emissions.

You can reach David Shepardson at (202) 662-8735 or dshepardson@....

GM's proposals Beth Lowery, GM's vice president for energy and environment, is set to testify today before the Senate Energy and Natural Resources Committee. According to a draft of her remarks obtained by The Detroit News, Lowery was to propose that: # The federal government fund a major effort to increase research and development of battery technology. Similar efforts and funding should be expanded for the development of hydrogen power and fuel cells. # Biofuels production and infrastructure should be expanded. Government should continue incentives for the manufacture of biofuel-capable flex fuel vehicles; increases in biofuels production; increases for R&D into cellulosic ethanol; and increased support for broad-based infrastructure conversion. # Federal government purchasing should set the example. The government should continue to purchase flex fuel vehicles; demand maximum utilization of E-85 in the government flex fuel fleets; use federal fueling to stimulate publicly accessible pumps; provide funding to permit purchase of electric, plug-in and fuel cell vehicles into federal fleets as soon as technology is available. # There should be further incentives for advanced automotive technology to be adopted by large numbers of consumers. Income tax credits should be focused on technologies that have the greatest potential to actually reduce petroleum consumption and provide support for manufacturers/suppliers to build/convert facilities that provide advanced technologies. Source: General Motors Corp.

Energy Dept. Grants $17M for Hybrid Vehicle Technology By Sholnn Freeman, Washington Post Staff Writer Tuesday, January 23, 2007; 4:06 PM­wp-dyn/­content/­article/­2007/­01/­23/­AR2007012300870.html

The U.S. Department of Energy announced today $17 million in grants to support the development of battery technology for plug-in hybrid vehicles and ethanol, two areas in the energy debate where officials in Washington and Detroit are closely aligned.

The money will be offered as two separate solicitation grants, one for $14 million for the plug-in technology and another $3 million for ethanol. The money for battery development aims to improve the technology's performance. The $3 million grants will support engineering advances to improve the E85 flex-fuel blend.

Alexander Karsner, the Energy department's assistant secretary for energy efficiency and renewable energy, made the announcement at the press preview day of the Washington Auto Show. He used high-tech cars from General Motors Corp., Ford Motor Co. and DaimlerChrysler AG as his backdrop.

Detroit auto makers have asked the Bush administration for hundreds of millions of dollars to help kick off hybrid cars. They say they need government support to complete research and development into lithium-ion battery technology, a crucial component in bringing the cars to the market. Detroit auto executives, who are building millions of ethanol capable vehicles, have also pressed the government to encourage a significant expansion of ethanol fueling stations. President Bush will call for mandatory increases in the supply of renewable fuels during his State of the Union address tonight.

Officials from foreign automakers are stepping up complaints that U.S. government policy is unfairly backing ethanol and plug-ins at the expense of diesels and traditional gas-electric hybrids, such as the Prius from Toyota Motor Corp. Toyota is pushing for the continuation of federal incentives for the cars. Diesel-engine makers and the European automakers such as BWM AG and DaimlerChrysler AG are asking for more federal support for diesel technology.

Dieter Zetsche, chairman of DaimlerChrysler, said vehicles powered by diesel engines get 20 percent to 30 percent greater fuel economy over gas-powered cars and cut emissions of the global warming gas carbon dioxide by 20 percent. In Europe, where diesels make up about half of the market in many countries, the fuel economy average is 36 miles per gallon, compared with 24 in the United States.

"Why is there such a disparity? Aren't we the same companies in Europe that we are in the U.S., with access to similar technologies?" Zetsche said in remarks at the show.

Zetsche said the difference was the European approach to energy policy, which has involved some "tough choices," including highly taxed gasoline and incentives for diesel fuel.

Like a lot of other automakers, Zetsche stopped short of endorsing a "European level of taxes" or any huge government mandates in the area of energy efficiency or global warming. "We are a free market in the U.S.," he said. "The consumer should rule."

Karsner of the Energy Department said in his remarks that major automakers will have to push much harder into new technology to reduce dependence on foreign sources of fuel.

After acknowledging the vehicles parked around him, Karsner said, "I also want to point out that concepts, prototypes and limited production vehicles are not enough to address the problems we have."

He said that advanced technology should be sold to mainstream consumers, rather than to those who buy only luxury vehicles. "We need millions of cars on the road," he said.

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