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Washington: Media Reports; Senate Testimony; Dept of Energy's Karsner Press Conference

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  • Felix Kramer
    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
    Message 1 of 1 , Jan 31, 2007
      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 at
      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 to

      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, 2007

      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 PM

      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.

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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