[Joint House and Senate Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 109-345
ALTERNATIVE AUTOMOTIVE TECHNOLOGIES AND ENERGY EFFICIENCY
=======================================================================
HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
JULY 28, 2005
__________
Printed for the use of the Joint Economic Committee
JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
HOUSE OF REPRESENTATIVES SENATE
Jim Saxton, New Jersey, Chairman Robert F. Bennett, Utah, Vice
Paul Ryan, Wisconsin Chairman
Phil English, Pennsylvania Sam Brownback, Kansas
Ron Paul, Texas John Sununu, New Hampshire
Kevin Brady, Texas Jim DeMint, South Carolina
Thaddeus G. McCotter, Michigan Jeff Sessions, Alabama
Carolyn B. Maloney, New York John Cornyn, Texas
Maurice D. Hinchet, New York Jack Reed, Rhode Island
Loretta Sanchez, California Edward M. Kennedy, Massachusetts
Elijah E. Cummings, Maryland Paul S. Sarbanes, Maryland
Jeff Bingaman, New Mexico
Christopher J. Frenze, Executive Director
Chad Stone, Minority Staff Director
U.S. GOVERNMENT PRINTING OFFICE
24-915 PDF WASHINGTON : 2006
______________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
C O N T E N T S
----------
Opening Statement of Members
Statement of Hon. Jim Saxton, Chairman, a U.S. Representative
from the State of New Jersey................................... 1
Statement of Hon. Carolyn B. Maloney, a U.S. Representative from
the State of New York.......................................... 2
Statement of Hon. Thaddeus G. McCotter, a U.S. Representative
from the State of Michigan..................................... 13
Statement of Hon. Maurice D. Hinchey, a U.S. Representative from
the State of New York.......................................... 15
Witnesses
Statement of Hon. David K. Garman, Under Secretary of Energy,
U.S. Department................................................ 4
Statement of Joe Loper, Vice President, Alliance to Save Energy.. 19
Statement of Tom Stricker, National Manager, Technical and
Regulatory Affairs, Toyota Motor North America, Inc............ 22
Statement of Mary Ann Wright, Director, Sustainable Mobility
Technologies and Hybrid and Fuel Cell Vehicle Programs, Ford
Motor Company.................................................. 25
Statement of Mark Chernoby, Vice President, Advanced Vehicle
Engineering, DaimlerChrysler Corporation....................... 27
Submissions for the Record
Prepared statement of Representative Jim Saxton, Chairman........ 37
Prepared statement of Representative Carolyn B. Maloney.......... 37
Prepared statement of David K. Garman............................ 38
Responses to questions from:
Hon. Jim Saxton, Chairman................................ 63
Hon. Maurice D. Hinchey.................................. 63
Prepared statement of Joe Loper.................................. 45
Prepared statement of Tom Stricker............................... 49
Prepared statement of Mary Ann Wright............................ 53
Response to question from Mr. Hinchey........................ 61
Prepared statement of Mark Chernoby.............................. 54
ALTERNATIVE AUTOMOTIVE TECHNOLOGIES AND ENERGY EFFICIENCY
----------
THURSDAY, JULY 28, 2005
Congress of the United States,
Joint Economic Committee,
Washington, DC
The Committee met, pursuant to call, at 10:00 a.m., in room
2226, Rayburn House Office Building, Hon. Jim Saxton (Chairman
of the Committee) presiding.
Present: Representatives Saxton, McCotter, Maloney,
Hinchey, and Cummings.
Staff Present: Chris Frenze, Ted Boll, Chad Stone, Colleen
Healy, and John Kachtik.
OPENING STATEMENT OF HON. JIM SAXTON, CHAIRMAN,
A U.S. REPRESENTATIVE FROM NEW JERSEY
Representative Saxton. Good morning. I am pleased to
welcome Under Secretary Garman and the other expert witnesses
before the Committee this morning.
With oil prices in the neighborhood of $60 per barrel, it
is not surprising that there is increased interest in fuel
efficiency and alternative ways of powering cars and trucks.
Increased demand for oil, especially from Asia, combined with
the restrictive practices of the OPEC cartel, have together
created a situation where oil prices have spiked in recent
months. With OPEC members only last December complaining about
an ``overproduction'' of oil, it is abundantly clear that we
cannot depend on them to be reliable suppliers of petroleum.
Unfortunately, according to many experts, OPEC has elevated oil
prices and they may be with us for quite some extended period
of time.
It is interesting to point out that while OPEC members have
70 percent of the oil reserves, they produce only a total of 40
percent of our needs. Gasoline accounts for about 45 percent of
American oil consumption each day, so it is appropriate to
consider the long-term potential of alternative automotive
technologies that would reduce our dependency on foreign oil.
The purpose of this hearing is to explore these
alternatives and examine which of them seem to be the most
feasible over the short, medium and long terms. Greater
efficiency in internal combustion engines, using methods such
as shutting off half the cylinders when maximum power is not
needed, is already being realized. Flexible fuel vehicles,
capable of burning a mixture of gasoline and up to 85 percent
alcohol are already in production. Recently I have introduced
legislation to enhance tax incentives for the purchase of
flexible fuel vehicles. U.S. auto companies already make
millions of flexible fuel vehicles that are only slightly more
expensive to produce than cars that run on conventional
engines.
The market for hybrid vehicles is also expanding far beyond
small economy cars and this promises additional savings. Small
hybrid cars demonstrated the feasibility of this technology,
and it is now being applied to mid-sized passenger cars, as
well as to SUVs. As a matter of fact, the Department of Defense
has even manufactured a tank with a hybrid engine. There are
some exciting new refinements of hybrid technology that could
produce significant increases in fuel efficiency. Perhaps the
future hybrid and electric vehicles could even be recharged
using the existing power grid.
None of these technologies alone is likely to reduce our
oil consumption significantly over the short run. But over the
next decade or two, they could make a real difference and
synergies between them offer the potential for further gains.
For example, improved efficiencies of the internal combustion
engine could be combined with hybrid and other technologies to
maximize fuel savings.
Over the long run, the high price of oil is likely to
create incentives for other technology breakthroughs that will
produce even more dramatic savings. Hydrogen fuel cells offer
one promising technology for the long term. Since power can be
most efficiently generated in power plants, there are those who
argue that a transition to hydrogen fuel cell or electric
vehicles offers the most promising technologies for coming
decades.
In any event, continued Federal Government and industry
support for research and development, and the vision of
entrepreneurs and inventors, are needed to ensure the
advancements in technology that will enable us to eventually
increase our energy security.
[The prepared statement of Representative Jim Saxton
appears in the Submissions for the Record on page 37.]
I turn now to Mrs. Maloney.
OPENING STATEMENT OF HON. CAROLYN B. MALONEY,
A U.S. REPRESENTATIVE FROM NEW YORK
Representative Maloney. Thank you very much, and thank you,
Chairman Saxton, and welcome, Mr. Garman. The question of what
role alternative automotive technologies will play in our
energy future is an extremely important one, and I hope we will
be able to learn things from this hearing that can inform our
future policy choices.
We are heavily reliant on oil to power our cars and fuel
our lifestyle and 58 percent of the oil we consume is imported,
often from politically volatile regions of the world. Promoting
conservation, raising efficiency standards and supporting
research and development can all play an important role in
overcoming our dependence on oil and reducing our reliance on
imports.
Today more than two-thirds of the oil consumed in the
United States is used for transportation, mostly for cars and
light trucks. Increasing fuel efficiency would lower pressures
on oil prices, enhance our national security, curb air
pollution and reduce the emission of greenhouse gases, which
cause global warming. Clearly, alternative fuel and automotive
technologies are needed to help achieve these goals, but we
cannot overlook the importance of other approaches.
CAFE standards, the Corporate Average Fuel Economy
standards, for cars have remained static for 2 decades and the
average vehicle fuel economy has actually declined since the
late 1980s when sales of SUVs begin to climb. Car manufacturers
could increase the average fuel economy from today's 27.5 miles
per gallon to 46 miles per gallon just by implementing existing
technologies, according to a recent MIT report. This would
reduce our dependence on foreign oil by three-fourths and cut
greenhouse gas emissions by nearly a third.
The auto industry is pursuing a variety of advanced vehicle
technologies, such as hybrid vehicles, fuel cells and hydrogen
fuel. While hybrid vehicles have received a great deal of
attention, they still make up only 1 percent of the 17 million
vehicles sold in the United States each year. However, some
hybrids don't contribute much to energy efficiency, as car
companies are building more high end, high-performance
vehicles.
Congress needs to be careful about which technologies it
subsidizes. We should make sure that we are not prematurely
committing to any particular technology and neglecting other
potentially beneficial approaches. We also should make sure
that tax incentives are well targeted to achieving their
objectives, rather than simply subsidizing behavior that would
have taken place anyway. It doesn't make much sense to give a
tax break when manufacturers are wait-listing customers for
certain models. The demand is already there. The cars are not.
My sister-in-law had to wait 3 years to get a hybrid car.
There is a waiting list for them. People want them. The auto
industry is not developing or putting them out for sale fast
enough.
I will be interested to learn more about whether the
President's initiative to promote hydrogen fuel and fuel cells
has realistic goals or is just science fiction. Right now there
is a danger that hydrogen and hydrogen fuel cells may never be
commercialized because they are so expensive and this
initiative may draw funding away from near-term technologies
such as hybrids.
I have more questions, but I will stop here, because we
have a panel--two panels, as I understand it. I hope that they
will be able to provide us with more information on the
intriguing technological possibilities that lie before us.
So I look forward to getting more solid information, and I
thank you for calling this hearing.
[The prepared statement of Representative Carolyn B.
Maloney appears in the Submissions for the Record on page 37.]
Representative Saxton. Thank you very much. We are going to
hear first from Under Secretary of Energy, the Honorable David
K. Garman, from the Energy Department. Then we are going to
turn to three important representatives of industry who are
knowledgeable about the technology that we have been fortunate
to have developed, which goes to the issues that Mrs. Maloney
and I have just been talking about.
I would just like to make one other short comment. I
recently had the opportunity to read something that was written
in 1999 by the People's Liberation Army representatives of
China. It was titled ``Unrestricted Warfare,'' and it talks
about the long-range strategies of some of our foes overseas,
in this case of course China. The notion of unrestricted
warfare relates to the national security of our country, and
essentially what it talked about was strategies that some of
our foes could use to accomplish goals which perhaps
traditionally have been accomplished through military means,
such as information technology, and other various means that
our foes could use to affect our economy and, therefore,
disadvantage us. It is pretty clear to me that unrestricted
warfare is not as new as we might think it is by reading what
the Chinese write.
As a matter of fact, over the last several decades, OPEC
has used a strategy to disadvantage our economy. Today some
OPEC members produce oil at about $1.50 a barrel. Think of
that. We are paying $60 a barrel. That is primarily, from my
point of view, because of underproduction by OPEC countries who
produce about 40 percent of what we need. They could be
producing much more than that inasmuch as they control about 70
percent of the oil reserves that exist in the world. So it
would behoove us as a society to become energy independent, so
that we don't have to rely on those who are underproducing
petroleum.
So, Mr. Garman, thank you for being with us here today. To
me this is an extremely important subject and one that through
government and through industry we need to move on to rectify
this problem that we find ourselves in.
STATEMENT OF HON. DAVID K. GARMAN, UNDER SECRETARY OF ENERGY,
U.S. DEPARTMENT OF ENERGY
Mr. Garman. Thank you, and understanding that my full
statement will be inserted into the record, I will summarize
briefly.
Representative Saxton. Without objection.
Mr. Garman. The global economy consumes roughly 80 million
barrels a day and 20 million barrels are consumed in the United
States each day. Therefore, any impact that we might have in
making our country less reliant on oil has implications not
only for the United States and our balance of trade and our
security and our foreign oil dependence, but for the world.
Here in the United States, transportation accounts for two-
thirds of our daily oil use, and most of that is due to the 230
million cars and light trucks on the road. President Bush laid
out a vision in his 2003 State of the Union Address that ``the
first car driven by a child born today could be powered by
hydrogen and pollution free.''
Since that time, we have established an aggressive research
program to overcome the cost and technology obstacles to
affordable, practical hydrogen fuel cell vehicles. These
obstacles include the challenges of hydrogen production,
distribution and storage, including storage aboard the vehicle.
We are also working to lower fuel cell costs while
improving durability and performance, and we are doing so in
partnership with the private sector. Some have characterized
our efforts towards hydrogen fuel cell vehicles as an
abandonment of other automotive technology work. This is not
the case. Allow me to explain.
The hydrogen fuel cell vehicle of 2020 shares many of the
same components of the hybrid vehicles of today, electric
drive, power electronics, advanced lightweight materials, and
even the batteries that are crucial systems in hybrid vehicles
are also likely to play important roles in the fuel cell
vehicles of the future. Therefore, we have very robust programs
to advance hybrid systems, energy storage, power electronics
and advanced materials that are making technological
contributions to the hybrid gasoline vehicles of 2010 as well
as the hydrogen fuel cell vehicles of 2020.
In addition to the work on technologies that I have
mentioned, we are also doing a great deal of work on advanced
combustion engines and fuels, including light duty diesels that
will never find their way into a hydrogen fuel cell vehicle. It
is important to note that these component technologies can be
brought together in different ways to meet consumer demands
while reducing petroleum use.
As an example, our work on batteries, electric drive, power
electronics, renewable fuels and advanced internal combustion
engines contribute to the potential of plug-in hybrid vehicles
that could conceivably use a high percentage of blended
renewable fuels if consumer tastes and markets take us in that
direction. In other words, our portfolio will advance component
technologies that can make significant contributions in the
near term, mid-term and long-term.
How successful can we be with our portfolio of automotive
technologies? Some insights can be gained by two different
scenarios outlined by the National Academy of Sciences 2004
report on the hydrogen economy.
The chart that I have here illustrates these two scenarios
against business as usual in this chart, which is identified as
case A. In the business as usual case, as projected by DOE, oil
use in light duty personal vehicles roughly doubles by 2050.
Case B in the chart assumes that hybrids will be
successful, but that fuel cell vehicles will not. In this
venue, the oil savings in 2025 are 3 million barrels a day
rising to 6 million barrels a day in 2050. While oil use for
light duty transportation levels in the near term, it will
resume its rise after 2035 or so.
Case C in that chart illustrates why we believe getting to
hydrogen is so important over the long term. Based on what we
know today, this approach has the greatest potential to drive
oil use in personal transportation to zero. Of course, we don't
intend these scenarios to be predictions of the future, but
rather a way to think about what we can and should do to reduce
our dependence on foreign oil.
Finally, Mr. Chairman, let me stress the importance of
partnership, not only with the automotive companies represented
here today, but with the energy providers of today and the
future. One of the most important accomplishments of this
administration has been the creation of the FreedomCAR and Fuel
partnership comprised of major automotive manufacturers, as
well as the energy providers of today's fuels and tomorrow's
hydrogen. Vehicle technologies, fuels and refueling
infrastructure cannot be developed in isolation from one
another, which is a reality that we are fully cognizant of.
With that, Mr. Chairman, I would be pleased to stop and
answer any questions that you or this Committee may have either
today or in the future.
[The prepared statement together with chart entitled
``???'' of Hon. David K. Garman appear in the Submissions for
the Record on page 38.]
Representative Saxton. Well, thank you very much, Mr.
Garman, for your statement. I am interested in your chart. I
notice that you are fairly optimistic, over the long-term, of
finding other means of power that we can use for our
transportation needs. Regarding the hybrid technology that
exists today, would you say that it is a mature type of
technology or is it something that we need to continue to
develop?
Mr. Garman. We need to continue to improve the technology,
just to cite an example. The type of battery used in today's
hybrid is a nickel hydride battery. We can improve performance
of hybrid vehicles if we are successful in moving to a more
expensive but lighter weight technology, a lithium ion battery
that on an energy-to-weight ratio could both reduce the weight
of the vehicle but provide a lot more energy and contribution
to the drive.
There are a couple of issues we have to overcome. Chief
among them is cost. Lithium ion batteries are still
comparatively expensive compared to nickel hydride batteries.
We have a technology program in partnership which is focused on
bringing down the cost and improving the performance of that
battery. That, again, is one of those examples of a technology
that would not only be used in a hybrid vehicle, but could
conceivably be used in a fuel cell vehicle in the future.
Representative Saxton. Now, you have also made reference to
the longer term here with regard to hybrid electric and fuel
cell vehicles kicking in, perhaps, a decade from now?
Mr. Garman. Our expectation--of course, hybrid electric
vehicles are in the market today, and I have been privileged to
buy a couple of them myself. I think they work terrific, and I
think they will get better.
Mrs. Maloney raises a very important question about the
trade-offs inherent. Hybrid technology can be used not only to
improve fuel economy, but to improve performance. It will be
interesting to see how consumer demands will evolve and what
manufacturers will be offering in this regard.
But over the longer term, we see the transition to hydrogen
fuel-cell vehicles as very, very important, because that is the
only thing that reverses and ends our dependence on petroleum
for light duty transportation. We envision that if we are
successful in overcoming the technology targets as we
understand them today, we could get to a commercialization
decision in 2015.
Let me point out that I think that nearly every attempt we
have made in the past at pushing alternative fuel vehicles on
the public have not been successful. We will be successful when
we are able to offer a vehicle that consumers want to buy and
drive. That is something that we are keeping very much in mind
as we go ahead.
There has to be a business case to offer these vehicles. We
have to overcome the technology obstacles, and we are hoping
that around 2015 a commercialization decision can be made by
industry where they say we have the technology and the
technology is at a cost where we can make the business case for
both the vehicles and the infrastructure in the marketplace.
Because these can be very exciting vehicles that consumers will
want to buy and drive. If we are successful that the technology
and business case can be made, one would hope that government
incentives to push the technologies in the marketplace will not
be as expensive as they might otherwise be.
Representative Saxton. Mr. Garman, I think this is a great
goal for the long term. Let us talk short term for just a
moment. It is my understanding that there is a technology
available that is generally referred to as flexible fuel,
vehicles which combine a mixture of gasoline and alcohol or
gasoline.
We generally talk about alcohol that is made from organic
material. I noted you don't show the use of flexible fuel
vehicles, at least on your chart. I am wondering if there is a
reason for that. It seems to me that if technology is available
today, there are some things that we need to do perhaps to make
it feasible to use it in terms of supplying, creating a supply
line for fuel for flexible fuel vehicles. Could you talk about
that a little bit?
Mr. Garman. Sure, absolutely. First of all, I think it is
important to make the observation that manufacturers are
offering in the marketplace today literally hundreds of
thousands of flex fuel vehicles. Those are available. Some
consumers are buying them without even knowing it. They are out
there. I believe that every manufacturer produces them and some
of the manufacturers can talk to the specific models and
numbers.
The interesting question is, is the fuel available for
those flex fuel vehicles. Most flexible fuel vehicles, I can
tell you, that are driven and used in the Federal Government,
where we have requirements for purchases of flexible fuel
vehicles, many of them are not being fueled with renewable
fuels, which is the goal after all. Part of that is being
addressed, we believe, in the energy bill that will come before
the House, I believe, today in the conference report with an
increased mandate in the production of ethanol. Ethanol is, of
course, the component, the E85, or 85 percent ethanol fuel
blend that flexible fuel vehicles use. So part of it is not
only having the vehicles available, but having the fuel
available.
As you pointed out in your statement, the manufacturers are
getting quite good at lowering the cost differential between a
flexible fuel vehicle and a conventional vehicle. In fact, some
of the manufacturers are actually getting to the point where
instead of using a sensor in the vehicle to determine when
flexible fuel is being used, they are actually using computer
algorithms so that no hardware is actually needed and they can
basically offer a flexible fuel vehicle at no additional cost.
That is, I think, an important breakthrough.
But we also have to get more fuel in the market, and that
gets us to the limits of ethanol and corn-based ethanol and how
much corn-based ethanol can we make. There is a mandate in the
energy bill which helps. It would bring us from about 4 gallons
a year to 7.5 gallons a year in 2012. But compare that with the
reality that we use about 135 gallons of gasoline each year. So
it will still be a relatively small amount. If we want to move
beyond corn-based ethanol to actually produce a lot more
ethanol than we can from corn, we have to develop a
breakthrough in what we call cellulosic ethanol, ethanol that
is made from agricultural residues, clippings, certain kinds of
organic wastes, a wider variety of feedstock than what we use
to make ethanol today.
Unfortunately, our cost of producing that ethanol today is
around $2.75 a gallon. We think we could make a lot of it,
perhaps up to 60 million--I am sorry, billion gallons a year,
which would make an appreciable impact on our oil dependency.
But no one is going to buy it at that price. That is untaxed.
So we have to do a better job and continue to work. We at the
Department are spending on the order of about $70 million a
year just on this problem of producing more cellulosic ethanol
so that we can fuel increasing numbers of flexible fuel
vehicles that are coming into the market.
Representative Saxton. I notice that you refrained from
mentioning the actual names on the vehicles that they consider
flex fuel vehicles.
Mr. Garman. Only because I was afraid of leaving some out.
Representative Saxton. I understand. One of the reasons we
have public hearings though is to let the public know what
actually exists. So I would like to try to do that a little bit
with regard to some of the vehicles that are available today.
I notice that we have representatives from DaimlerChrysler
here today. We have representatives from Ford Motor Company. We
have representatives from Toyota here today. I know that there
are also General Motors vehicles that are considered flex fuel
vehicles.
Let us just run down the list of some of these, because
they are going to be very familiar and the public is going to
be surprised when they hear, for example, that a Ford Taurus is
a flex fuel vehicle.
Mr. Garman. That is right.
Representative Saxton. And that a Chevrolet Suburban is a
flex fuel vehicle, or in some cases are.
Could you please just list common-day cars that people
drive that are flex fuel vehicles?
Mr. Garman. The Dodge Sebring. A complete list can be found
on the website, fueleconomy.org that is maintained by the
Department of Energy----
Representative Saxton. You are still being too careful.
Mr. Garman. That is because, again, Ford, Chevrolet,
DaimlerChrysler, most of the major motor companies offer a wide
variety of flex fuel vehicles in a number of different classes.
I would almost be at the point of guaranteeing that almost any
type of car that you want to buy has a flexible fuel offering
in that class. There are that many vehicles out there.
Representative Saxton. Every day, if we went out on
Independence Avenue and stood there and watched cars go by,
what percentage of them would be capable of burning flexible
fuels?
Mr. Garman. I would have to provide that for the record. I
can tell you that I came to this hearing in a flex fuel
vehicle. They are out there. They are numerous. As I said, some
consumers are actually driving them without knowing it.
[The information requested appears in the Submissions for
the Record on page 63.]
Representative Saxton. Is a Sable a flex fuel vehicle?
Mr. Garman. I believe it is, but I would have to check my
website to be sure.
Representative Saxton. Yes, all right. I just want to make
this point for my friends on the panel here and for the public
that flex fuel vehicles are out there. And you can burn up to
85 percent alcohol, mixed with gasoline, in those cars.
Now, you talked about our energy bill that is going to
require, mandate the production at a certain level. That
doesn't go to solve the whole problem from what I understand
it. It has to be delivered, it has to be pumped. It has to be
available to put in the car, the flex fuel vehicle, and a
distribution system is another part of the problem, isn't it?
Would you talk about that a little bit?
Mr. Garman. That is correct. I think it is fair to say that
if you were a consumer with a flexible fuel vehicle--I know
there is a station in Lanham, Maryland. I know there is a
station at the Pentagon. I know there is a station at the Navy
Yard, but I am hard pressed to think of many more stations that
are offering E85 in this immediate area. That is one of the
problems.
Representative Saxton. E85 is?
Mr. Garman. Eighty-five percent ethanol.
Representative Saxton. Eighty-five percent ethanol and----
Mr. Garman. 15 percent gasoline.
Representative Saxton [continuing]. Fifteen percent
gasoline.
Mr. Garman. Correct.
Representative Saxton. You have to have special pumps as
part of the distribution system, right?
Mr. Garman. Not a special pump but a dedicated tank.
Representative Saxton. Because it has to be cleaner?
Mr. Garman. Right, ethanol and alcohol have an affinity for
water. So it is a little bit more difficult to move it through
a conventional petroleum pipeline than certain other kinds of
petroleum products that don't have that affinity for water.
Representative Saxton. For economic reasons, I suspect,
gasoline filling stations have been reluctant to convert and
dedicate a pump to E85, right?
Mr. Garman. Many have, yes. It is an added investment
without an assurance that that supply of ethanol is going to be
there for them.
Representative Saxton. I am going to say that I have spent
a fair amount of time working on this in the last couple of
months. In fact, Joni Zielinski, sitting in the back of the
room, my staffer, has done great yeoman's work in making me
able to ask the questions that I have asked today.
We have actually introduced some legislation which does a
number of things. It recognizes that flexible fuel vehicles are
available. It also recognizes that we are neither producing nor
able to distribute E85 to the extent that we could to make it a
viable fuel today.
So our legislation provides a tax deduction of up to
$100,000, which currently exists, and it says within 5 years--
now, this is Draconian, but it gets people's attention--within
5 years any filling station with, I believe it is 8 pumps or
more, would have to dedicate one of them to E85, and the
government would be willing to help pay for that with this tax
deduction situation.
So I hope we can make your chart look even more optimistic
than it is in the short term by taking advantage of technology
that already exists that we are not able to use because we are
not able to produce ethanol to the extent that we should or
distribute it in an efficient way. We really need to get on
that, and that will help us bridge these new technologies that
you are talking about. At least that is my opinion.
Mrs. Maloney, it is your turn.
Representative Maloney. Thank you for calling the hearing,
I feel we are becoming--that becoming more fuel independent as
a nation is a top priority of our economic strategy as a
nation. I will take a serious look at your bill. I just have
one question of the Chairman. Who gets the 100,000 deduction?
Is it the filling station or the car producer? Who gets the
deduction?
Representative Saxton. In this case it is the filling
station owner.
Representative Maloney. I will take a look at it. Thank you
for being here and talking to us about this really important
issue. You mentioned the President's vision that he spoke about
in his address in 2003 to move to hydrogen fuel engines and
pollution free.
My question is where did this vision come from? Was this
something that was plucked out of the air, was it pure vision
or was it based on solid research, that this was the area we
should be focusing on and going to? Are we now scrambling to
just put flesh and bones on that vision, or how developed was
it with the scientific community behind it?
Mr. Garman. I can tell you, as someone who is intimately
involved with the development of this initiative, this was not
one of those ideas that was thought up on the way to the podium
at the State of the Union Address. This was undergirded with
analytical work in my office and in other places, that preceded
the State of the Union by more than a year.
Representative Maloney. How would you respond to some of
the critics of the President's hydrogen initiative who suggest
that its real purpose was to divert attention and forestall
efforts to raise CAFE standards? I cite, really, and I would
like to put in the record an article that appeared today on EPA
Holds Back Report on Car Fuel Efficiency.
Holding back the report itself is newsworthy, but the
contents of it showed that the loopholes--and I am quoting from
it directly--in the American fuel economy regulations have
allowed auto makers to produce cars and trucks that are
significantly less fuel efficient on average than they were in
the late 1980s.
In other words, we are going in the wrong direction. Your
comment on--I mean, these are not--these are criticisms that
have been well published, editorialized and so forth, that it
was really to forestall raising CAFE standards.
Mr. Garman. Sure, let me make a couple of points. First of
all, this administration did increase CAFE standards on light
trucks. We did so--it was the first increase in CAFE standards
since the 1996 model year, and it was the largest increase in
CAFE standards in 20 years. So the Administration has increased
CAFE standards on light trucks.
Representative Maloney. Yet the report says that--let us
take trucks out of it. Cars, that the cars are now less fuel
efficient on average than they were in the late 1980s. That is
an astonishing report coming out of our government, EPA.
Mr. Garman. Yet, they are meeting the legislated statutory
cafe standard for automobiles, which if memory serves is 27----
Representative Maloney. That is the point. The point is the
legislative statute has allowed loopholes and has not upheld
higher fuel efficiency standards. That is what it is saying.
I just would like to ask some questions about the hybrid
cars. As I mentioned earlier, my sister-in-law has a hybrid
car. She says she sold 10 of them just from people coming up
and asking her about her hybrid car finding out it is fuel
efficient and really as citizens wanting to be a part of
conserving our energy.
She tells me that there is a waiting list. I am not going
to tell you the company. It is an American company. There is a
3-year waiting list just to get one of these cars. If this is
the stated policy, the Chairman supports it, that most
Americans should get hybrid cars, then why can't we get them
produced and out on the market?
Other people tell me that the foreign countries are
producing these hybrid cars. A lot of Americans are buying from
the foreign country--foreign cars because they can't get them
from the American manufacturers. My question is why aren't we
moving with full speed, instead of cars that consume more and
more gasoline, moving towards the hybrids.
I have had this conversation with Mr. Dingell, who is very
supportive of the American automobile industry. Why aren't they
moving to produce these hybrid cars at a faster rate? The
foreign industries are just going to undercut us because the
American people want it. They will even pay more. They will pay
even substantially more to get a hybrid car.
Mr. Garman. I would make the following points. First of
all, we are very much encouraging the purchase of hybrid
vehicles. The President, in 2001----
Representative Maloney. Everyone is encouraging them. Why
are they not producing them?
Mr. Garman [continuing]. Offered a tax incentive for the
purchase of hybrid vehicles. The question as to why aren't
manufacturers producing more of them or offering more of them
is a question I respectfully submit you might want to ask the
manufacturers, and you have that opportunity in a minute.
Representative Maloney. I am sure we will hear from the
other panel, but I am sure you have discussions with them every
day. I would like your own perspective.
Mr. Garman. My only perception is that hybrid vehicles are
relatively new. Folks are figuring out the market. Is this an--
and very few numbers have actually been bought. The question
is, who has been buying the vehicles? Are they just early
technology adopters who just like the hybrid vehicle concept or
are they everyday Americans who are making a direct economic
choice? Is this a flash in the pan, or is this going to be a
sustained demand for this new technology?
Most hybrid vehicles, the extra additional cost for the
components in the hybrid vehicles, cannot be repaid with gas
savings over the normal 5-year ownership of the vehicle. So
some will say that the purchase of a hybrid vehicle is not an
economically rational choice for a consumer. Yet consumers are
buying them anyway. I think the manufacturers are trying to
understand the market and look at the market and trying to--of
course, they are only successful if they meet consumer tastes
and demands.
If this consumer taste and demand is something that is real
and sustained, I am certain that the manufacturers--not only
from foreign-based auto companies but U.S.-based auto
companies--will fill that demand if that demand is real and
sustained. We want to help, as you do, because there is a
public benefit.
Representative Maloney. People that I know that are buying
them are making an environmental choice. They want our country
to be more energy independent. They will pay more money to be
part of that. But what I am hearing is they cannot even buy
them. They are not even out there for them to buy.
I would like to ask, what was the process for deciding that
hydrogen vehicles should get the attention, and how does that
affect the ability to fund other worthwhile investments in
achieving greater energy efficiency? I think this is really
important. I think we all share the goal of moving to greater
energy efficiency.
In fact, many of my constituents are concerned that maybe
we are in Iraq--now that they find out we are not finding
weapons of mass destruction--for the reason--I don't believe
it--but for oil. There is a huge concern about the American
public, and I hear it every day from my constituents.
Why aren't we moving more, like we are with the ethanol, as
the Chairman said, to be more energy efficient? But how does
that--in other words, how does the trade-off between hydrogen
vehicles and having the money and the technology and the
research dollars to go after other windmills of efficiency or
other ways we could approach it?
Mr. Garman. Thank you for that question. That is a great
question. The first part of it, why hydrogen, is answered in
the following way. As you look at that chart, hydrogen is the
only method that we foresee that over the long term actually
gets personal transportation out of the oil business, out of
the geopolitical implications of oil, out of the environmental
impact of oil, over the long term.
Hydrogen is a common fuel that can be produced from a
variety of domestic resources we have right here in the United
States. You can make hydrogen from wind power, you can make
hydrogen from solar power, you can make it from nuclear power.
You can make it from natural gas. You can make it from coal if
you sequester the carbon dioxide.
We have lots of choices of making carbon-free hydrogen for
a common fuel. That kind of flexibility we don't have with any
other fuel. So that is the short answer to why hydrogen. It was
the only thing that could get us completely off of oil, and it
was something that gave us the flexibility to make that fuel a
variety of different ways.
Now as to the question--which I take the question to mean,
are we putting all of our eggs in the hydrogen basket? Are we
spending too much on hydrogen to the detriment of other
technologies that can make a contribution in the near term? I
would argue that the answer is no. Based on the President's
budget submissions in the last 3 fiscal years, you have seen
our requests for funding for some of the nearer-term
technologies, hybrid vehicles, batteries, energy storage, power
electronics, some of these things that can advance internal
combustion, some of these things that can make contributions in
the near term have been going up, not down.
So we haven't been stealing the dollars from the near term
to pay for the long term. Our dollars focused on the oil
problem. Vehicle technologies R&D have been on an upward trend,
not a downward trend. So that is how I would respond.
Representative Maloney. Thank you. There are many other
panelists with questions. Thank you.
Mr. Garman. Thank you.
Representative Saxton. Thank you, Mrs. Maloney.
Mr. McCotter.
STATEMENT OF HON. THADDEUS G. McCOTTER,
A U.S. REPRESENTATIVE FROM MICHIGAN
Representative McCotter. Thank you, Mr. Chairman. I get
asked the Iraq question too. Our reliance on foreign fuels, has
that driven us to Iraq? Are we there to go take Iraq's oil? The
response that I generally find helpful is the fact that if we
were there to steal it we wouldn't be paying for it. So I don't
think we are there for the oil itself. We would have taken it
by now.
Secondly, I come from Detroit. I am graced to have the
champion of the auto industry, Congressman Dingell, as my
neighbor to the South. One of the things that I think he and I
agree on is that the auto industry is not in the robust health
that it was in earlier days. A lot of that has to do with the
erosion of the North American market for the Big Three.
One of the problems that led to that is it made some
missteps in the marketplace. So we have to go back to the
concept that while we may think that it would be nice for the
Big Three to drive market demand, the reality in a free
marketplace is that supply follows demand. While we may have a
new development where people are making decisions on cars no
longer on a cost-benefit basis but being able to have the
economic luxury of adding something like an environmental
consideration or a political consideration to their purchase of
a vehicle, it is very difficult for the Big Three at this point
in time to increase production and guess wrong again. That
would not only cut into profits, that would cut into the number
of jobs, which are becoming more and more scarce within our
manufacturing industry every day.
So my question would be--as we hear about 2015 and others,
we hear about the past attempts to use incentives and perhaps
the new rationale people are using to buy cars as a result of
some of the incentives the legislation has put before consumers
to look at alternative fuels.
My question is, is it not so much of a forest that we miss
it? One of the greatest market demands we are going to have,
and continue to have, to drive the demand for these alternative
fuels is staring us in the face every time we fill up our gas
tank.
The Unocal situation shows the national security interest
of oil to the United States, but it also shows its scarcity. It
shows that India, China and other developing nations are going
to continue to put a continued strain on our oil supply even in
the best situations of international comity.
At this point in time, given the rising demands in the
newly developing world and the prospect that the unstable
situation in the Middle East will continue, what is the
likelihood that the time line of having to make this decision
on the Big Three's part or on our part as the government is
going to be hastened?
Mr. Garman. That is a very complicated question.
Representative McCotter. That is what I get paid to do. I
don't have to answer them. I just ask them.
Mr. Garman. Oil analysts have many different answers to
this question. There is one prevailing point of view held by
thinkers such as Matt Simmons and others that we are at a point
of reaching scarcity in recoverable hydrocarbons that even a
tiny underperformance of a Saudi field, where, as the Chairman
has pointed out, this production, excess production capacity
exists, could have serious implications for the market, prices
could rise. Yes, folks could be looking around more quickly
than they otherwise would for alternatives.
There is another point of view held by the Department of
Energy's own Energy Information Administration which is an
independent statistical agency that is not beholden to the
political leadership. They take the view that there is lots of
oil and that there will be on the order of 3 trillion barrels
producible between now and 2025 and that this is not a problem.
I don't know where the truth is.
I think that if I did, if I could predict the future with
certainty, I would just suggest I might not be in this job, I
would be somewhere else. But I don't think anyone can predict
the future with certainty. So I look at it as our job at the
Department of Energy to partner with the private sector to give
us options, a wide variety of technology options that can be
brought into play when market circumstances warrant and when
consumers are asking for it.
Your point is extremely well taken that--and if my reading
of recent market trends and purchases of vehicles is correct,
consumers are responding to the price signal that they are
getting at the pump and are looking to buy more fuel efficient
vehicles, not necessarily because they are early technology
adopters or not because they are driven by their environmental
point of view, but because their pocketbook says it is the
smart thing to do. So your point is extremely well taken.
Representative McCotter. Well, that is my concern because I
don't think Representative Maloney's constituents have an
aberration, an ephemeral aberration. And I think that this is
going to continue, and that the gas prices are going to stay at
a relatively high level and continue to climb. Because you want
to talk 2025--that to me is not a long time, I still won't even
be eligible for Social Security at that point, if it is there.
So my concern is that we don't want to be, as a government,
doing anything that is, A, going to hinder the American
producers of cars from being able to meet that demand, because
there could be a spike in that or a very sharp rise in the
demand for these cars that we cannot meet, that the fuel cannot
meet.
Even with the scenario of 2025--and I assumed that most of
the people who came up with that analysis at the Department
probably take the Metro to work. At the end of the day, I don't
see the demand for oil going down. So even assume target
traffic 2025, I can see the demand going up, up, up, up.
I can also foresee the time when political currents will
break in and cause problems with the market analysis that
people have. My favorite example is when FDR slapped an oil
embargo on the Japanese that was designed to bring them to
their knees. That brought them to Pearl Harbor.
So over time, I don't know how the cost of gas is ever
going to get back down necessarily to where it was. If there is
a continued steeper rise or a precipitous spike at some point,
the demand for these cars is going to shoot through the roof,
and we will not have the ability to meet that demand, and that
is going to be a grave concern. But thank you.
Representative Saxton. Thank you, Mr. McCotter.
Mr. Hinchey.
STATEMENT OF HON. MAURICE D. HINCHEY,
A U.S. REPRESENTATIVE FROM NEW YORK
Representative Hinchey. Thank you very much, Mr. Chairman,
and I thank you for holding this hearing. It is a fascinating
subject. We appreciate the opportunity to take part in it.
I think my colleague makes some very good points and your
argument, not your argument, but the argument of others about
the fact that there is plenty of oil in the world flies, of
course, in the face of the market forces because we see a
demand going up and the price going up very, very rapidly.
I think he is absolutely right about increasing demand and
we can see that particularly in places like China. And I
understand that where you have 1 billion people in each of
those countries, demand is going to go up and consequently the
price of the product will go through the roof. But what
troubles me, frankly, is we are not doing an awful lot to deal
with it in this country.
We have abandoned all of our energy conservation policies
which were put in place in the second half of the decade of the
1970s. We abandoned them in 1981 and we essentially haven't
done anything to try to bring them back or to try to deal with
the problem in an intelligent way since then. The issue of
ethanol is fascinating.
Can you tell me, Mr. Garman, how much oil or other fossil
fuels it would require to produce a gallon of ethanol?
Mr. Garman. I can. I recently had a report from the Argonne
National Laboratory that said--and I will, of course, provide
the complete information for the record--but as memory serves,
and this is contrary to a recently publicized report from a
Cornell researcher, but that the Argonne study found that
ethanol yielded more energy than the fossil fuel inputs
required to produce it. That for every million BTUs of ethanol
produced, 750,000, roughly, BTUs, of fossil energy was used to
produce it. So it is a winner. Ethanol is a winner, is the
short answer.
And the information that I will be happy to provide for the
Committee will show you the various studies that have been done
over the years and the various energy balance points that those
studies came to. We find that most of the studies that are done
find that ethanol is a winner.
A researcher from Cornell finds that it is not a winner,
and it all depends on the assumptions used in driving the study
and some of this information is contained in the information
that I will provide to the Committee.
[The information requested appears in the Submissions for
the Record on page 63.]
Representative Hinchey. That is an Argonne study. Could you
tell us a little bit more about it now so that we could pick it
up quickly?
Mr. Garman. Sure. Argonne National Lab looked at all the
primary fossil fuel inputs that go into making a bushel of corn
and transporting that corn. I am including the fertilizer
inputs to the soil, the tractor in the planting, the harvesting
of that corn, carrying that corn to the plant, producing the
ethanol--the entire, if you will, value chain of the ethanol
production.
Representative Hinchey. No, I understand what you are
saying, but that is the first I have heard that. Because every
study I have seen, including the one from Cornell, shows that
it takes about a third more--and some studies have shown even
more than that--a third more of fossil fuels or other energy to
produce a gallon of ethanol.
A recent release from the Department of Energy shows that a
gallon of ethanol contains only about two-thirds of the energy
that a gallon of gasoline does.
So if the other studies--not the Argonne study, but I will
look at that very carefully--but if all the other studies that
have come out on this, including the Cornell study, are right--
and your recent revelation about the fact that ethanol contains
only about two-thirds of the energy of a gallon of gasoline,
then it seems that we are putting our money in the wrong place.
I don't think at this stage you can responsibly say it is a
winner, because the information is at best conflicting.
Mr. Garman. Actually, believe me, Congressman, you and I
have a great history on the Appropriations Committee. I don't
mean to be argumentative.
Representative Hinchey. I do.
Mr. Garman. The information that I will provide the
Committee will show that the bulk of the studies, not the
minority of the studies, but the majority of the studies show
that ethanol is a winner, not a loser, in terms of energy
balance.
Representative Hinchey. Thanks. I am very interested in
this. It is critical because so much attention is being paid to
that. Now so much money has been put into the energy bill which
we will be dealing with later tonight on the floor of the
House, into ethanol, and I want to look at that study before
that bill comes up for a vote tonight.
Mr. Garman. We will get it to you this afternoon.
Representative Hinchey. The issue of CAFE standards is also
very critical. We had a dramatic increase--not dramatic but a
significant increase in CAFE standards back in the 1970s, which
proved to be very efficient in reducing the amount of gasoline
that is used for transportation. As I understand it, about 70
percent of the gasoline that we use in this country is used for
transportation, cars, automobiles and other forms of
transportation.
Those CAFE standards reduced the gasoline usage very, very
substantially, but we haven't done anything on it since then.
But you just made the point a few moments ago that CAFE
standards for light trucks, including SUVs, have gone up from
20.7 to 22.2 by the year 2007.
So 2 years from now, we will increase the CAFE standards
for light trucks and SUVs by 1.5 miles per gallon, which is an
increase. I don't want to denigrate it, but it is an awful lot
less than we could be doing and should be doing.
If we were serious about trying to reduce our dependence on
foreign oil, we would be doing an awful lot more than that.
Sixty percent of the oil that we use in this country now is
imported, but that number is going to significantly increase in
the years ahead.
This is one of the basic elements of national security,
which is not being addressed in that context. I just wish that
the administration and this Congress would focus their
attention on this issue much more than we have.
Mr. Garman. I would--the National Highway Transportation
Safety Administration, which promulgates corporate average fuel
economy standards, in my understanding, is planning to shortly
put out for public comment their new CAFE standard proposal for
light trucks commencing in the year 2008 for public comment. We
will be able to see what they are proposing and how they are
looking to increase and improve the efficiency of the light
truck market.
Mr. Garman. We think the light truck market is key,
because, frankly, we didn't have light trucks in this country
outside of a very small number used in farms and light industry
until CAFE standards were adopted. Folks used station wagons.
And ironic-
ally----
Representative Hinchey. I think you need to be very careful
about that, establishing a causal relationship between the
purchase of pickup trucks and the establishment of CAFE
standards puts you on a very weak footing.
Mr. Garman. I will say, and I would agree that that
correlation does not necessarily mean causation. You are
absolutely right, Congressman. But nevertheless, the sport
utility vehicle market did not exist. And somebody with a
family of five, such as mine, have a tougher time looking for
the right kind of car, you know--I don't have a lot of station
wagons to choose from. Thankfully, some more are now coming
into the marketplace that aren't light trucks. And if you
look--I guess my point, the interesting point is most of the
petroleum use in the light-duty transportation sector has come
from light trucks. SUVs, vans, cars are relatively flat. And if
we can, if we can do something about the light truck sector,
then that would be substantial. And that is why we have been
focused on the light truck sector for corporate average fuel
economic ruling.
Representative Hinchey. Well, raising it by a gallon and a
half in the next 2 years, after the next 2 years, is
unquestionably a step in the right direction. But it is an
awful small baby step in the right direction.
Let me ask you a question about buses and mass transit,
because this is something that I think is very important, it
gives us an opportunity to do something constructive.
We have been looking at this and we see that over 1,000
heavy duty urban transit buses have been sold in the United
States and Canada as of July of this month. And there is a
movement going on towards hybrid propulsion to power these
vehicles that are used in metropolitan areas. And our
information is that we could see an awful lot of reduction in
fuel consumption through the use of these vehicles if these
statistics are correct.
Is there anything within the Energy Department now that is
focusing attention on mass transit, on these forms of hybrid
buses, for example, in urban areas and also across the country?
Mr. Garman. The heavy bus work is generally done in the
Department of Transportation. I honestly don't know the history
of that. The focus of the Department of Energy has generally
been light duty vehicles. The focus of the Department of
Transportation research and development has been heavy duty
vehicles.
I would say that the hybrid bus program that you mentioned
appears to be fabulously successful and have a terrific impact.
The early reports that I am hearing from fleets that have gone
in this direction have been very favorable, not only in terms
of fuel performance they are getting, but lower maintenance
costs, higher availability, a whole host of reasons for transit
authorities across the country to look very, very seriously at
these new bus offerings.
And I just commend the companies and others who have been
involved in bringing these to the marketplace for doing that,
because I think it can make an important contribution.
In terms of the aggregate amount of oil we use, it is
relatively small, but every bit helps, as you point out.
Representative Hinchey. Yes. And you can make a big
contribution, I think. In New York City, for example, there are
4,500 buses just operating within New York City. And if you
translate that to places like Los Angeles and Chicago and other
places across the country, that number goes up significantly.
So I am very happy to hear you say that.
Mr. Garman. And one other point for everyone's benefit, not
only is there a fuel economy benefit, but, of course, an air
quality benefit as well.
Representative Hinchey. Yes. Absolutely, I thank you very
much, sir.
Representative Saxton. Thank you and we are going to move
to our next panel. And on the way there, I am just going to
emphasize something that my friend, Mr. Hinchey, said. He
talked a little bit about the national security implications of
this petroleum situation. I am not an expert on these matters.
But I am told that OPEC countries are sitting on 70 percent of
the oil reserves that exist in the world, and that non-OPEC
countries are therefore sitting on 30 percent of the reserve.
I would make the case that through an intentional process,
the OPEC countries today, with 70 percent of the oil reserves,
are producing 40 percent of what the world uses, and non-OPEC
countries, with 30 percent of the reserves produce 60 percent
of what the world uses. This is a very troubling set of
statistics because it appears that our friends in the OPEC
countries who obviously think differently than we do on a
number of issues have artificially controlled the price of
petroleum and are one of the root causes of where we find
ourselves--along with demand, the growth in the economies in
places like China, which also has certainly contributed.
But when we see the countries that control 70 percent of
the oil reserves producing 40 percent of what we use, this to
me, is a big red flag that has been run up the flag pole and we
need to be very conscious of this, and we need to take steps to
mitigate this and to become energy independent.
Representative Hinchey. Thank you for that conclusion, Mr.
Chairman. We should perhaps stop holding hands with the King of
Saudi Arabia.
Representative Saxton. I would suggest you may be right.
And unfortunately, we are wedded to him by petroleum at this
point. So this is an important subject.
Mr. Garman, thank you very much for being with us. We
really appreciate your attendance and the information that you
have brought us this morning. And we look forward to working
with you on this subject as we move forward.
Mr. Garman. Thank you, Mr. Chairman.
Representative Saxton. We are now going to move on to our
second panel. I would like to welcome Mark Chernoby, who is the
vice-president of Advanced Vehicle Engineering at
DaimlerChrysler corporation; Mary Ann Wright, director of
Sustainable Mobility Technologies and Hybrid Programs from Ford
Motor Company; and Tom Stricker, national manager of Technology
and Regulatory Affairs, Toyota Motor company of North America.
Representative Saxton. Also, Mr. Loper, you're from----
Mr. Loper. I am from the Alliance to Save Energy and I will
give more introduction.
Representative Saxton. Very good. We will start with you
then, Mr. Loper, if that is all right. And we will go from left
to right across and then we will have questions for you.
STATEMENT OF JOE LOPER, VICE PRESIDENT,
ALLIANCE TO SAVE ENERGY
Mr. Loper. Thank you Mr. Chairman. I am Joe Loper, vice
president of the Alliance to Save Energy. I appreciate the
opportunity to speak with you today. The Alliance to Save
Energy is a bipartisan, nonprofit coalition of more than 90
business government and consumer leaders. Our mission is to
promote energy efficiency worldwide to achieve a healthier
economy, a cleaner environment, and greater energy security.
We were founded in 1977 by Senators Charles Percy and
Hubert Humphrey, and currently enjoy the leadership of Senator
Byron Dorgan as Chairman, amongst many other distinguished
Members of the Congress.
Attached for the record are lists of the Alliance's board
of directors and its associate members. For the last 4 years,
Congress and the President and groups like ours have spent
innumerable hours trying to agree on ways to address the
Nation's dependency on oil and its adverse impacts on climate
and air and water quality. There has been much discussion about
how to ease the burdens on States and cities trying to meet
Clean Air Act requirements and who is going to pay for leaks
from underground storage tanks.
Congress has even debated several measures to reduce
greenhouse gas emissions. Meanwhile we have watched oil prices
climb from $30 to $60 per barrel, as oil supplies get rocked
almost daily by events that are largely out of our control.
These range from Venezuelan uprisings to hurricanes in the gulf
of Mexico, to the growing demand for oil in China.
With less than 2 percent of the proven oil reserves within
our borders, we have limited control over our oil supplies and
prices. We can, however, control our demand for oil. That makes
this hearing particularly important. Given that the
transportation sector accounts for two thirds of U.S. oil use
and that passenger cars and light trucks consume 40 percent of
that oil use, it is critical that we address vehicle fuel use.
We applaud the efforts of Congress to address the Nation's
energy challenges in the current conference energy bill. The
tax incentives for hybrid and advanced diesel vehicles, along
with technology, research and demonstration programs are
certainly useful. However, we cannot pretend to think that the
bill before Congress will have any significant impact on U.S.
petroleum use.
In fact, when it came to addressing energy use in vehicles,
Congress flat out missed the onramp. Most, if not all, of the
oil savings in the conference energy bill will be cancelled out
by the increased energy use resulting from extension of the
corporate average fuel economy credit for dual-fuel vehicles.
This provision, as many of you are familiar with, will allow
vehicle manufacturers to take credit for vehicles that are
capable of, but almost never do, run on alternative fuels.
As Mr. Garman noted earlier, many consumers are buying
alternative fuel vehicles without even knowing it. And if a
large percentage of the vehicles are already capable--alt-fuel
capable--then one has to ask the question whether we need
government incentives to encourage more. It seems to us that
incentives to develop the infrastructure, as proposed in the
Chairman's bill, would make far more sense.
There is no shortage of technologies to improve vehicle
fuel efficiency. Many of these technologies are already in the
vehicles, in fact. And other technologies are being pulled off
the shelf and increasingly deployed in new vehicles. They
include variable cylinder management, hybrid drive trains,
regenerative braking, and a host of other technologies that I
won't inventory today.
These are not pie-in-the-sky technologies. They are not
expensive gimmicks, but rather, they are technologies that are
here now. On the horizon we have plug-in hybrids and hybrid and
fuel cell vehicles which have also been mentioned.
But while advanced technologies have been incorporated into
vehicles and will continue to be deployed in vehicles, we are
not getting more miles per gallon as a result. In fact, the
average fuel economy in miles per gallon of model year 2004
vehicles is 6 percent lower than in the 1987 to 1988 model
years. Instead of getting better fuel economy, we are getting
more towing capacity, we are getting more acceleration, we are
getting more weight, we are getting more space.
For example, America's best selling truck, the Ford F-150,
claims almost 5 tons of towing capacity. That is enough
capacity to pull a 36-foot horse trailer with 4 horses in it.
The average passenger car sold today has about 185 horsepower,
which is 40 percent more than a car sold 15 years ago. It is
the same horsepower as a large Caterpillar bulldozer.
This decade looks like it could displace the 1960s as the
decade of the muscle car. According to the classic car and
vintage automobile registry, more than half of the fastest
production car models offered since the 1960s have been offered
since the year 2000. In other words, the number of production
hot rods offered in the last 5 years exceeds the number offered
in the last 4 decades.
Vehicle fuel economy is a huge reservoir of low-cost energy
waiting to be tapped. According to EPA estimates, if automakers
had applied the technology gains made since 1987 to improving
fuel economy, average fuel economy would be 20 percent higher.
If the Nation had taken this path, we could be consuming
between 1 and 2 million barrels per day less than we are. That
is equivalent to the more optimistic estimates of the resources
from the Arctic National Wildlife Refuge.
For the last 20 years, the Nation's oil policy has, in
effect, been made in America's car showrooms. It is time for
the Federal Government to provide more guidance in the vehicle
marketplace. There are many policies that could be employed to
ensure that at least a position of these advances get used to
improve fuel economy. These policies are familiar, in fact,
perhaps too familiar.
Between 1975 and 1985, fuel economy standards were used to
help achieve a 70-percent improvement in new vehicle fuel
economy. Since the mid-1980s, CAFE standards have been
unchanged due to political pressure. The current standard of
27.5 miles per gallon for cars, for passenger cars, has been in
place since 1985. The current 21-miles-per-gallon standard for
light trucks is only 0.5 miles a gallon above the 1987
standard. To the extent that fuel economy standards are based
on fuel economy levels that were achievable 2 decades ago,
their effectiveness is seriously undermined.
There are some loopholes that also need to be addressed
with the CAFE standards. Old testing methods for one: EIA
estimates that the actual fuel economy of vehicles is about 20
percent lower than the CAFE standard test result suggests. In
other words, a 27.5 miles-per-gallon CAFE standard is really
equivalent to a 22 miles-per-gallon standard. Fuel economy
testing methods should be revised to better reflect real world
driving.
Fuel economy standards allow vehicles classified as trucks
to meet less stringent standards than are imposed on passenger
cars. When this loophole was created, less than 1 quarter of
light duty vehicles sold were classified as trucks. Now, fully
half the vehicles sold receive this special designation. Most
of these trucks are sport utility vehicles and minivans that
are primarily, if not exclusively, used for transporting
passengers. As noted earlier by Mr. Garman, it is easier to put
station wagons on truck chasses than to increase fuel economy
under the current regime. This needs to be fixed.
Vehicle manufacturers, as I noted earlier, receive credit
against their fuel economy requirements for sales of dual fuel
vehicles that can run on either ethanol or gasoline. We would
argue that this should be terminated, at least modified, to
require that the vehicles are actually using the alternative
fuels for which they are getting the credit.
Finally, large vehicles up to 10,000 pounds should be
subject to the labeling and CAFE standards.
Representative Saxton. Mr. Loper, I am sorry. I have been
informed that we are going to have a series of votes around 12
o'clock. And when we have a series of votes, it can take up to
an hour, so I am going to ask you if you could summarize your
statement so that we can move on to the other witnesses.
Mr. Loper. To summarize, Government and industry have made
great strides in developing technologies that can improve the
fuel efficiency of the transportation sector. Many of these
technologies are not, however, being widely used to improve the
fuel economy of today's vehicle fleet, instead they are being
used to increase overall vehicle acceleration and power and
size.
Without government policy interventions, the next 20 years
could be just like the last with fuel economy being sacrificed
to increase acceleration, horsepower, weight and size. By
widely using the tax code and increasing and reforming CAFE
standards, we could begin to see improvements in the fuel
economy of vehicles.
Despite the arguments of the auto industry, these policies
would not deny consumer choice. These policies would simply
change the relative price of various vehicle amenities. They
would make increased fuel economy less expensive and would make
hot rods and large tow vehicles more expensive. They would make
people think about how much car or truck they really need. They
would encourage manufacturers to make more vehicles with better
fuel economy available to consumers, and then market them.
Improving fuel economy is not a technical challenge. The
technologies are here. Rather, it is a matter of political
priority and will. With the Nation continuing to rely on
imported oil from volatile regions of the world and concerns
about the impact of oil use on the environment quality and
climate, it is increasingly imperative that our Nation
translate more of our technical advances into improvements in
fuel economy. I appreciate the opportunity to speak with you.
Representative Saxton. Thank you, Mr. Loper.
[The prepared statement of Mr. Loper appears in the
Submissions for the Record on page 45.]
Representative Saxton. Mr. Stricker.
STATEMENT OF TOM STRICKER, NATIONAL MANAGER, TECHNICAL AND
REGULATORY AFFAIRS, TOYOTA MOTOR NORTH AMERICA, INC.
Mr. Stricker. Good morning and thank you for the
opportunity to be here today.
Representative Saxton. If I may just reiterate this, we
probably have about an hour to finish up here or maybe a little
bit less. So if you could summarize your statements in 5
minutes or so, we would appreciate it.
Mr. Stricker. Certainly. I will submit the full statement
for the record.
My statement today was going to address fuel cell vehicles,
diesel vehicles and hybrid vehicles. I will just quickly
summarize a couple of comments on fuel cells and diesel
vehicles, and then I will spend the 5 minutes on hybrid
vehicles.
On the fuel cell side, obviously the vehicles offer great
promise, as Mr. Garman mentioned, for eliminating the vehicle
from the environmental equation, assuming that hydrogen can be
made in a clean way. There are a lot of challenges, still, to
the marketability of hydrogen. In fact, the biggest challenge
we see on the vehicle side is the storage of hydrogen on the
vehicle to improve the range of the vehicle.
There are infrastructure issues as well in terms of
establishing the infrastructure and producing hydrogen in a
clean way, as I said.
On the diesel side of the technology equation, of course,
diesels are very popular in Europe right now but we see some
uncertainty, in just how extensively light diesel vehicles will
penetrate the U.S. market. Market demand is not really clear to
us right now. The fuel price advantage and tax policies that
exist in Europe aren't present here for diesel fuel. And really
the big challenge for diesel in the U.S. market is meeting
EPA's tier 2 emissions standards for 2007 and beyond.
As you know, Toyota is aggressively pursuing hybrid
technology because we feel it can provide increased fuel
economy, reduce fuel consumption, cleaner emissions and improve
vehicle performance without changes in refueling
infrastructure.
Hybrids combine an internal combustion engine with an
electric motor and a battery. There are several types of hybrid
systems that are out there, and their differences are important
in terms of their costs and benefits.
Toyota's Hybrid Synergy Drive that we market here in the
United States, is what is called a full or strong hybrid. The
advantage of that type of system is that the vehicle can
operate on the battery alone, electric motor alone, or the
internal combustion or combinations of the two power sources.
The ability to operate on the electric motor only is the key to
achieving the significant fuel economy improvements.
In addition, braking energy is captured and reused to
recharge the battery and, of course, the vehicles never need to
be plugged in. It is amazing how many people still don't know
that.
Representative Saxton. Would you say that again? I didn't
quite get that.
Mr. Stricker. The hybrid vehicles don't need to be plugged
in. On our system, the battery is recharged while braking,
called regenerative braking, and also we use the gasoline
engine at times to recharge the battery. So no plug in is
required. And a lot of people don't understand that about
hybrids. They still think there is a little yellow cord that
they have to plug into the wall.
Since we first introduced the Prius in Japan in 1997, we
have made substantial improvements. The first generation was a
subcompact car rated at about 42 miles per gallon that met low-
emission vehicle requirements. Acceleration from 0 to 60 was
about 14.5 seconds. With each subsequent generation of Prius,
we have increased size, performance and fuel economy while
lowering emissions. The current Prius is a mid-sized sedan with
an EPA rated fuel economy of 55 miles per gallon and goes from
0 to 60 in about 10.5 seconds. Compared to the average mid-
sized car, Prius saves about 350 gallons of gasoline per year.
Today's Prius meets Tier 2 bin 3 levels, making it about 50
percent cleaner for smog forming emissions than the tier 2 bin
5 level, which is what the average new car will be required to
meet in 2007.
The major reason that we focused on hybrids rather than
diesel for the U.S. market is that we achieve the fuel savings,
plus there really isn't any question about whether you can meet
the emission standards or even exceed the current emission
standards.
And the market has begun to react. The sales of 2005 alone
equaled the total sales for the previous 4 years. However, it
was mentioned earlier today despite this relative success, the
hybrid vehicles still make up only about 1 percent of the
annual vehicle sales in the country.
Earlier this year, we announced two new hybrids. In April
we launched the Lexus RX400h SUV, and in June, the Toyota
Highlander Hybrid.
The Lexus RX400h is an all wheel drive system, so it
combines the gasoline engine with a front motor and a rear
motor. And the result is a V-6 SUV that gets superior fuel
economy. It gets the same fuel economy as the average compact
car. Yet it has the acceleration and performance of competing
V-8s. We estimate the RX400h saves about 350 to 400 gallons per
year of fuel compared to comparable luxury SUVs.
And further, it is certified to the tier 2 bin 3 level as
well, just like the Prius.
The Highlander Hybrid is available in two- or four-wheel
drive, and basically has similar environmental performance.
We envision a day when consumers will be able to choose
from a hybrid power train option just like they currently
select between a 4 cylinder, or 8 cylinder conventional engine.
With that in mind, we have recently announced the upcoming
production of two additional models, the Lexus GS450h, which is
a luxury Sedan and the Toyota Camry. And the Camry will be our
first hybrid produced here in the United States at our
Georgetown, Kentucky plant. We expect these vehicles, as well,
to have superior fuel economy performance.
And the final point I want to make about hybrids, and I
think Mr. Garman mentioned as well, concerns its applicability
in the future to a wide range of power trains, including fuel
cells. Some view hybrids as a temporary measure that is going
to be replaced eventually by fuel cells. We view the hybrid
technology as an integral part of the future fuel cell vehicle.
The only fundamental difference right now between our hybrid
system and our fuel cell hybrid vehicle, the FCHV is that the
gasoline engine is simply replaced by the fuel cell stack, a
slight oversimplification, but essentially that is the only
difference.
The hybrid portion of the system remains effectively
unchanged. So the battery improvements and technology
development and control systems improvements and our experience
in the production phase of these components, and cost
reductions that we are able to achieve will all be applicable
directly to fuel cells in the future as we see it.
So in summary, we view hybrids as a core technology as we
pursue more sustainable transportation. The reality is that
various types of power trains and fuels are likely going to be
needed to address the energy issues that we are here to discuss
and public health concerns. Which technology is eventually
going to win out, and when they win out, depends really on our
being able to develop a product that meets consumer
expectations at a reasonable cost compared to the other
alternatives that are going to be out there. This concludes my
remarks. Thank you.
Representative Saxton. Thank you very much, sir.
[The prepared statement of Mr. Stricker appears in the
Submissions for the Record on page 49.]
Representative Saxton. Ms. Wright.
STATEMENT OF MARY ANN WRIGHT, DIRECTOR, SUSTAINABLE MOBILITY
TECHNOLOGIES AND HYBRID AND FUEL CELL
VEHICLE PROGRAMS, FORD MOTOR COMPANY
Ms. Wright. Thank you. My name is Mary Ann Wright. I am
with Ford Motor Company, and thanks for including me in the
hearing today. Energy security and rising fuel prices are
significant issues facing our Nation. Industry, Government and
consumers all have important roles to play in addressing our
Nation's long-term energy needs. We, as industry, should
continue to invest in the development of energy efficient
technologies that provide cost-effective solutions for our
customers. And government needs to take steps to bring advanced
technologies to market more quickly and cost effectively
through customer incentives. Ford is committed to improving
vehicle fuel economy by developing a portfolio of fuel
efficient advanced technology vehicles.
Product solutions to improve fuel economy must result in
vehicles that customers can afford and they are willing to
purchase because they want to drive them. We know that when
consumers consider purchasing a vehicle, they are concerned
with affordability, quality, reliability, styling, safety and
appearance. So from our perspective, we can't compromise on any
of those important attributes.
Our vision for the 21st century is to provide
transportation that is affordable in every sense of the word,
socially, environmentally, as well as economically for business
sustainability. In other words, sustainable transportation. And
we need to do that by offering innovative technology that makes
a difference for our customers and the world in which they live
in, and it is not just the right thing to do. It is smart
business for us.
As a result, we are doing substantial development work with
renewable fuels and four advanced powertrain technologies,
including gasoline electric hybrids, clean diesels, hydrogen-
powered internal combustion engines and hydrogen fuel cell
vehicles.
We do believe that renewable fuels will play an
increasingly important role in addressing U.S. energy security
and energy diversity. All of our gasoline vehicles are capable
of operating on blends, including up to 10 percent renewable
ethanol. In addition, Ford has produced approximately a million
and a half flex fuel vehicles capable of operating up to 85
percent ethanol. Overall, the industry has seen about 5 million
vehicles.
Now, in our Ford fleet today, the Taurus, the Explorer and
the Mountaineer are flex fuel vehicles. Next year, the vehicles
that will be offered as flex fuels are the F-150, the Crown Vic
and the Grand Marquis. I think--although the number of E-85
vehicles continue to grow, there is less than 300 of these
fueling stations in the country. We are working with the
various States that are major ethanol producers, such as
Illinois. And we are working to increase consumer awareness
that these alternatives do exist out there.
We are also at the leading edge of hybrid vehicle
development. Ford Escape Hybrid and Mercury Mariner hybrid are
great examples, our hybrid SUVs can do virtually anything that
the regular gas Escape Mariners SUVs can do, but with
approximately 75 percent better fuel economy in city. And I
also want to tell you that it only produces one pound of smog
forming pollutants over 15,000 miles of driving. And I am also
very proud to say that we have over 139 patents that my
engineers and scientists developed in creating the Escape
Hybrid, which I want everybody to recognize was engineered here
in the United States and is the only full hybrid SUV produced
here in the United States in our Kansas City assembly plant.
Additionally, over the next 3 years, we are going to have
three other hybrids joining our fleet of vehicles. We will
include the Mazda Tribute, and then we will be taking our next
generation technology and putting that into our new Ford Focus
and Mercury Milan. And again, we are emphasizing in-sourcing
and bringing in house this technical capability.
Much of what we have learned in developing these hybrids
will help us as we explore other advanced technologies.
Nevertheless, the key challenge facing hybrids is incremental
costs, both in terms of the higher prices for the components as
well as the engineer expenses associated with it. And that
needs to be overcome for the technology to transition into what
I call mainstream product viability.
We are also working on advance light duty diesels. Today's
clean diesels offer exceptional driveablity and can improve
fuel economy by 20 to 25 percent. All you have to do is go over
to Europe and look under the hood of about half the vehicles
over there and it is demonstrated. I think, as we said today,
in the interest of time, I think the key challenges ahead of us
are the incremental costs and the infrastructure associated
with the clean fuel and the after treatment.
We are also working on what we think is the next step on
the road to sustainable transportation, and that is hydrogen
powered internal combustion engines. We are a leader in this
technology. And we do think that it is a bridge to the
development of a hydrogen infrastructure, and ultimately the
fuel cell vehicles. We recently announced that we are
developing hydrogen powered E-450 shuttle buses that we are
going to be putting into demonstration fleets across North
America. We have a fleet that will be down in Orlando at the
airport, and we also have a fleet out in California as well as
working with the Dallas Airport Authority.
And what this will do for us is, as we are maturing the
fuel cell technology itself, allows us to focus on things like
infrastructure development, as well as one of our key technical
challenges, and that is fuel range.
Further down the road, hydrogen-powered fuel cells appear
to be another promising technology for delivering sustainable
transportation. Hydrogen can be derived from a wide range of
feed stocks to increase energy diversity, and fuel cells are
extremely efficient and produce no emissions. The Ford Focus
Fuel Cell vehicle is a state-of-the-art hybridized fuel cell
system which is being deployed right now across the United
States. We are putting a fleet in California, Southeast
Michigan, and Florida. We have a fleet already deployed in
Vancouver, Canada as well as Germany.
Fuel cells are promising but there is also a lot of vehicle
and infrastructure challenges that must be addressed before
they can reach commercial viability. Frankly, that is cost,
reliability, and feed stocks.
We also need to ensure that we get the appropriate
infrastructure developed.
Solutions will require technological breakthroughs and the
concerted efforts of Government, the auto industry and energy
providers.
In conclusion, our objective is simple. We need to give
consumers more of what they want, which is performance
driveablity, affordability, utility and a cleaner environment.
Advanced vehicle technologies can increase fuel efficiency
without sacrificing these attributes.
We support policies that promote research and development
of advanced technologies in the development of renewable fuel
sources. In addition, market-based consumer incentives need to
be a key element of a coordinated strategy, effectively address
stable transportation and energy security. Consumer tax credits
for advanced vehicles will help consumers overcome initial cost
premiums associated with early market introductions, bringing
more energy efficient vehicles into the marketplace more
affordably and at higher volumes. Ford Motor Company believes
that the current U.S. energy bill contains many important
policies and incentives to address our Nation's energy needs,
and we encourage Congress to pass this legislation. Thank you.
[The prepared statement of Mary Ann Wright appears in the
Submissions for the Record on page 53.]
Representative Saxton. Mr. Chernoby.
STATEMENT OF MARK CHERNOBY, VICE PRESIDENT,
ADVANCED VEHICLE ENGINEERING, DAIMLERCHRYSLER
CORPORATION
Mr. Chernoby. Thank you, Mr. Chairman, and distinguished
Members of the Committee. I want to thank you for the
opportunity to appear today. I am going to be as brief as I can
because I know we are time limited and try not to be
repetitive.
At DaimlerChrysler we agree with many of the points of view
that my colleagues have made this morning. It is interesting to
note while oil prices are high and we take a look at the
overall metrics of the auto industry and the economy actually
total vehicle sales in June are up 2 percent. Market share of
trucks is actually slightly higher than the prior year. So, to
us, that doesn't mean that we can sit on our laurels and not
work on these advanced technologies. In fact, just the
opposite.
DaimlerChrysler is absolutely focused on creating and then
supplying a very broad portfolio of technologies because in the
end, what matters is market penetration. If we don't have
market penetration of both the vehicle and then the fuels in
the vehicle, we will not see the benefits to the environment
nor will we see the reduction in oil consumption in this
country. So we absolutely must succeed, and DaimlerChrysler,
like my peers have said, will not pick which technology will
win. The consumer is going to do it. So we are definitely
focused on continuous improvement of IC engines as the Chairman
mentioned, things like cylinder deactivation, in our 5.7 liter
HEMI, have provided millions and millions of gallons of fuel
savings already in the marketplace today, not tomorrow. We are
focused on light-duty diesels. We think they have an
exceptional place in the market. Again, it is going to be
providing the highest value to the consumer.
Hybrids provide tremendous value to the customer who drives
in city environments. Unfortunately on the highway, at high
speeds, a hybrid can be nothing more than hauling around an
extra 400 or 500 pounds in the vehicle with very little
benefit. This is the place where we think diesel or cylinder
deactivation technologies provide an excellent benefit to the
consumer. So we are focused on providing a range of
technologies in all these areas. Hybrids as well.
DaimlerChrysler has announced a joint program with General
Motors. We think we have come up with a program that will allow
us to get scale of volume, and as Ms. Wright mentioned, a lot
of this is about component costs. We have to get a cost-
effective system out there. We believe that the program we have
done with General Motors will help us get this scale of volume
and reduce costs so we can have a viable business case.
As the Under Secretary mentioned, we must have a business
case to remain a viable entity and it is all about coming to
the market at the right time at the right scale of volume to
make that happen.
DaimlerChrysler is also very focused on collaborative
efforts on fuel, things like biodiesel we think is an excellent
example of another alternative fuel. We talked about renewable
fuels earlier and FFE, we think ethanol is also an excellent
alternative for the customer. And that is why we built more
than a million and a half ethanol vehicles out there for the
customer to consider. These vehicles are on the road today.
But as was mentioned, unfortunately the fueling
infrastructure is not there for these vehicles to actually
realize the benefits to the environment or reductions in oil
consumption.
And then finally, I want to mention one more technology. We
cannot forget about things other than the propulsion system. We
must remember the weight of the vehicles, advance materials are
a very important part of our pre-competitive research that we
do jointly with the government through the Department of
Energy. If we can drop vehicle weight, and implement
technologies which enable aerodynamics, we will also realize
incremental benefits, because in the end, I don't think there
is going to be any one answer that is going to fix this
problem. It is going to be a lot of little things that will add
up.
In closing, DaimlerChrysler is also very focused on the
longer-term approach with hydrogen fuel cells. We spent more
than a billion dollars in R&D on this effort. We have the
largest worldwide fleet out there in three different
continents. And then we participate very strongly in the
Department of Energy's efforts, both in the demonstration
program and in the pre-competitive research. Because in the
long run, we do agree that this is probably the key technology
that is going to break the entire subject loose 20, 30 years
from now.
With that I want to thank the Committee for allowing us to
speak today. And we must continue to work together to support
the joint programs of government, academia and industry to
ensure that we tap the best resources this country has to offer
to find the answers to these difficult questions. Thank you.
[The prepared statement of Mark Chernoby appears in the
Submissions for the Record on page 54.]
Representative Saxton. Thank you all very much.
My other job here is to be a member of the Armed Services
Committee and it is really encouraging to see the kinds of
advancement in technology that you have each talked about. And
on the Armed Services Committee last week, or perhaps earlier
this week, we were trying to solve a problem that has to do
with the security of our Marines. And I was made aware that
there is a weapons systems which has been designed and
prototyped called the Thunderbolt, which is a 40,000-pound
tracked vehicle that is driven by a hybrid electric engine. And
I was actually shocked to find that out, because I didn't know
that that kind of technology actually exists. And that engine
will drive that vehicle for 600 miles with 140 gallons of
diesel, and it will go 60 miles per hour.
I learned this because we are going to try to produce this
system for an armored vehicle for our Marines. And when I found
out that that technology actually exists today, I was
surprised, and of course, heartened that there is a future
going down this road. So I am really taken with what I have
learned here in the last few months about the technologies that
have been developed both in this country and overseas.
And as I look at the chart--I wonder if we could get that
chart back up. Thank you.
As I look at the chart, and, going forward, it is very
encouraging to see that as was noted earlier, maybe by 2025, or
thereabouts, 2030, we would begin to see that we really have a
significant potential for dropoff in our dependence on
petroleum.
But in the short term, these technologies apparently are
not expected, at least by the Department of Energy, to be
players in a major way that will reduce our dependence on
foreign oil. And as I mentioned earlier, we do have some
technology which Ms. Wright spent some time talking about, and
Mr. Loper mentioned it also, although in a not so positive way.
Flex fuel vehicles, which represent a technology that is
available today, which could make a significant difference if,
as Mr. Loper suggested, and as my bill suggest, we had an
infrastructure to deliver--to deliver this fuel with alcohol
and I am wondering what is your take on this?
Mr. Stricker, you, and Ms. Wright and Mr. Chernoby, you all
talked about hybrid vehicles and fuel cell vehicles as being
the answer in the future. We have some immediate needs. How can
we solve this problem with the immediate need given the fact
that we have technology available today that could, if managed
correctly, I believe, solve the problem short term? Or at least
help solve the problem short term?
Mr. Stricker. I would make two points in response to the
question. I wasn't able to see this chart when I was sitting
down, so this is the first time I have glanced at it. But one
point I would note is the hybrid vehicle case there is not
insignificant, and it is fairly near term. So I think from our
view, while hybrids are just now starting to penetrate the
market, it depends on your definition of ``near term.'' I think
we see it as a very viable technology that can, as that chart
reflects, provide some significant reductions in petroleum.
On the issue of flex-fueled vehicles, in particular, Toyota
does not currently make flex fuel vehicles here in the United
States and you wouldn't see one out there on Independence
Avenue driving by. The problem, as your legislation apparently
tries to address, is the availability of the fuel. We don't see
a real need, per se, right now or benefit to adding the extra
cost to the vehicles and putting a whole bunch of vehicles out
there when there really isn't any fuel, so I think we would be
interested in looking more closely at your bill to see how that
might spur some of the fuel to actually get out there.
Representative Saxton. What is the cost during the
manufacturing process to build a car or a vehicle that can burn
E-85?
Mr. Stricker. My colleagues will have to answer that
because we don't currently make that.
Representative Saxton. Before you get to that question,
what are the prospects, short term, in the next, say, 5 years
of making a difference with flex fuel cars?
Mr. Chernoby. From a DaimlerChrysler perspective, I would
respond to a couple of your statements. I don't know the exact
number of the cost, but essentially it is the difference in the
E-85 flex fuel vehicle, that was mentioned earlier it is a
question that number one, sensing the field, whether they use a
sensor or software. And the other thing is you have to change
some materials to handle the more corrosive nature of the fuel
and throughout the fuel system and into the engine.
But the bottom line to think about is those changes and
those technologies are things we can buy at high volume today.
We could do it now. We can turn the spigot on at greater
numbers than we are doing today. And the costs are a minimum of
a decimal point, if not more than a decimal point different
than the hybrid technology.
Even if we wanted to crank up if the demand was there in
the market at a cost where we could recover in a business case,
even if you wanted to crank it up by multiple volumes today,
you couldn't because the component supply base is not there. It
takes time for infrastructure and industry to build up the
capability to build technologies and volume and that is where
the FFE and the ethanol example is an interesting one, because
those technologies at high volume, I think, could be reached in
a much faster than time if we wanted to build more vehicles
than we are building today and at a much higher value quotient
than we can with the hybrid technology as it stands today.
Now obviously, those costs can change in the future as the
scale of volume of the hybrid components increases.
Ms. Wright. I agree, I am not going to repeat everything he
said. It is primarily in the fuel system. I actually did the
2000 Taurus flex fuel so I lived through that. And Ford is very
committed to the flex fuel market. We will be producing the F-
150s, the Crown Vics and Grand Marquis in significant
quantities. I think the key is providing awareness to customers
that this is out there and what the benefits are.
The infrastructure, we all understand what the issues are
there. I think Mark is absolutely right and that is that, in
addition to not having frankly an onshore capable supply base
to help boost the economic and the technical viability, we also
have a skillset shortfall here in the United States. My group
is growing exponentially as we continue to develop more hybrids
and more of our advanced technologies. I am struggling, quiet
frankly, to get the skillsets that I need to fill the technical
positions. It is a real dilemma that we have here.
The business case cannot be ignored. And one of the things
that we are very--one of my top priorities frankly is working
with our domestic supply base to help develop that capability
so that I can leverage them as well as the universities to help
fill these gaps so that we can get these to a more commodity-
like alternative.
Representative Saxton. You are talking now about hybrids?
Ms. Wright. Hybrids, and frankly all of our advanced
technologies. I think someone, I don't know if it was Mr.
Garman or it was perhaps you who had talked about the
components of these technologies that frankly go across the
whole span of the technologies, power electronics, control
architecture, advanced propulsion, those are consistent whether
you are talking about hybrid electrics, fuel cells or hydrogen
internal combustion engines. And there are skillsets that we
need to build all of those alternatives.
Representative Saxton. So we all agree that short-term
technology exists to make a real difference through flex fuels,
however, the supply of flex--of ethanol is a huge problem.
Producing and delivering it are two separate problems, right?
Ms. Wright. Right.
Representative Saxton. Mr. Hinchey.
Representative Hinchey. Mr. Chairman, thanks, thank you all
for the presentation. They were very, very interesting. Let me
just ask you a very simple and direct question first off. What
is the energy industry's position with regard to increasing
CAFE standards? Mr. Stricker, do you want to start?
Mr. Stricker. Well, I can speak to Toyota's position. I
won't speak for the entire industry. I am not here to represent
the whole industry today.
Toyota has always exceeded the CAFE standards for both
passenger cars and light trucks. There was mention earlier
today about the growing market share of light duty trucks, and
that is the reality that we are facing today and that is one of
the reasons that Toyota has gone into the SUV market with
hybrids to try to get the technology out there in the truck
sector so that there are real options out there in order to
improve fuel economy on those vehicles. And it has been
mentioned several times, even, I think by the Members of the
Committee, that trucks are really where the focus needs to be.
Our passenger car CAFE today is, of course, in two separate
fleets. There is an import fleet and a domestic fleet, the way
the legislation and regulations are set up. But our CAFE stands
at about 33, 34 miles a gallon compared to 27.5-miles-per-
gallon standard. And the industry, as a whole, does fairly well
on passenger car CAFE. But the issue does seem to be light
trucks. And that is one of the reasons that we are trying to
get the hybrid technology out there and have it be an option
and tool that is available.
Ms. Wright. I am going to be quite candid with you. I am
Ford's top engineer for all the advanced technologies and the
strategies, so I am not the CAFE expert, and I am frankly not
prepared to provide our perspective on that. But we can follow
up in writing.
[The information requested from Mr. Hinchey appears in the
Submissions for the Record on page 61.]
Representative Hinchey. Thank you.
Mr. Chernoby. And unfortunately, I am going to have to
ditto Ms. Wright. I am the vice president of vehicle
engineering. I am not on the regulatory side. So certainly we
can provide input.
Representative Hinchey. Mr. Chernoby, DaimlerChrysler is
doing a lot of work with hybrid buses, and as you pointed out
in your testimony, this is an area where the hybrids really
make sense, in your urban areas.
Can you give us a little update on where you think this is
going and what DaimlerChrysler is doing to move this forward,
to put more of these vehicles in cities across the country?
Mr. Chernoby. As you know, DaimlerChrysler is very much a
worldwide leader in terms of heavy fleet vehicles, and buses
are no exception. Like you said, we think it is just a fabulous
application, it is absolutely stop-and-go driving so there is
tremendous amounts of energy that can be captured and stored
back in the electrical system.
DaimlerChrysler is doing everything we can to make that
technology available at volume quantities and in every one of
the buses we built, but we are not going to stop there. We have
actually got many, many buses running around the world, and
like Ms. Wright and Mr. Stricker said, many of the same
components can be applied to the hydrogen fuel cell vehicle as
well.
And that is what we have done. We actually have hydrogen
fuel cell buses running in many sectors over the world, and we
think that is the next step answer even above the hybrids, but
certainly the technology is there. We are ready to put the
product out there for the market. It is a matter of supply and
demand.
Representative Hinchey. What is the market? How are you
dealing with mayors and city councils in places across the
country where these kinds of buses would make sense to them?
Mr. Chernoby. I am not involved in those discussions. I
can't speak to that piece of it. But in certain areas
certainly, the market has responded. But I think typically it
has been due to a specific government focus and initiative in a
local area. But I will certainly follow up and I will get you a
response of what we are doing from a government perspective.
Representative Hinchey. And you're looking at it from a
international point of view, global point of view as well?
Mr. Chernoby. Absolutely.
Representative Hinchey. Mrs. Wright, the Ford Motor Company
has been very active for many decades in the European market
and the European market has been much more conducive early on
because of taxes and the price of fuel for vehicles that have
higher fuel economy. Isn't the Opel a Ford product?
Ms. Wright. GM.
Representative Hinchey. But am I wrong that you have been
very active, Ford Motor Company, very active in the European
economy?
Ms. Wright. We are a very significant player in Europe and
very significant players in the diesel market, yes.
Representative Hinchey. Is there any transformation of the
technology that has been successful over there, the cars that
work over there that get much better fuel mileage than ours do
over here? Any transfer of that technology back?
Ms. Wright. I think it actually works both ways in answer
to your question, yes, if you take a look at the diesels and
the really terrific work that is going on over in Europe and we
are planning on, you know, migrating it over to the United
States.
I think, quite frankly, we have a public perception, not
just Ford, as an industry we have a public perception issue to
overcome relative to the reputation of diesels from 25 years
ago. They were dirty and smelly and poor starting and poor
performing. Well, anymore, most people who get into a diesel
wouldn't even know that they were in a diesel. Extremely
efficient, extremely good on carbon dioxide emissions.
Representative Hinchey. And the noise is down too.
Ms. Wright. Oh, you can't even tell. So yes, that
technology transfer is taking place.
Now, conversely, I have global responsibility for all our
advanced technologies that I am, my group is working with all
of our global brands, not only address the issues that are
taking place here in the United States, but as well as the
pressures that frankly are coming hard and fast over in Europe
as well.
Representative Hinchey. Thank you very much.
Mr. Stricker, the issue that you talked about in the Lexus
which is an interesting SUV, and you are presenting this as an
SUV that has all the qualities of that kind of vehicle, but
gets a lot more in gas mileage. Can you talk a little bit about
that?
Mr. Stricker. Sure, I would love to.
The RX400h is a Lexus, mid-sized SUV. It has a combined EPA
fuel economy rating of about 28 miles per gallon, which, as
mentioned in my prepared remarks, is about the average for a
compact car today. It is an all-wheel drive system. One of the
advantages of the all-wheel drive system aside from some
performance enhancements and traction improvements, is the
ability to recapture additional braking energy.
With a front-wheel drive or a rear-wheel drive system, you
only have two wheels with which you can capture braking energy.
But with an all wheel drive system, you can capture energy from
all four wheels improving the efficiency of the product. The 0
to 60 time is just about 7.3 seconds, which is on par with a
lot of the competing luxury SUVs.
Representative Hinchey. And it makes sense out on the open
road as well?
Mr. Stricker. Yes, the comment earlier with respect to
hybrids and city operation, our hybrid system performs better
on fuel economy in the city than on the highway. You can just
look at the EPA ratings and see that. There is a lot more
starting and stopping in city operation. Although, the system
does use electric motor power during highway type operation.
The other interesting point is, I am not really sure what is
city and highway anymore when it comes to the real world. I
live in an area out in Howard County, and I drive 35 miles to
work each day and it is amazing if I can get over about 35 mile
per hour, and I am on I-95 or the BW Parkway, so it is really
hard to say what is city and highway anymore.
It is that way up and down the whole east coast, it is that
way pretty much up two thirds of California as well. We think
the technology obviously provides terrific benefits, clean
emissions, and we are heading in that direction as quickly as
we can.
Representative Hinchey. You almost have to get out into
those red States to really experience it.
Well, thanks very much.
Mr. Loper, you made some comments on the energy bill, and
our Chairman here is a leader in this regard, and as you heard
him express himself today, he is very interested in producing
legislation trying to deal with this problem from an immediate
point of view.
The energy bill just started on the floor about 10 minutes
ago, and frankly, I think it would have been a great bill and
very progressive had it been introduced in about 1955, but I
think it has a long way to go in trying to meet the demands of
today.
So would you comment a little bit for us, Mr. Loper, on
what are the things we ought to be doing now to improve energy
efficiency particularly in transportation?
Mr. Loper. Well, as I suggested in my remarks, I think we
are already doing a lot of things to increase efficiency. The
problem is it is not being translated into fuel economy. And I
am a little bit--I find this kind of graph, at least suspect.
Hybrid vehicles have enormous potential and we are fully
supportive of the technology and their deployment. But if the
hybrid technology is used to bring Thunderbolt armored vehicles
in and put them on America's highways like the GM's Hummer,
then you are not going to get the fuel economy gains that are
being predicted here.
We have gone out and tried to look for new policies, magic
bullets that would help us crack this nut, and quite honestly,
we come back to the same very familiar policies that we are all
aware of and can't quite seem to get to. The National Academy
of Sciences in 2001 said that you could get CAFE to 30 miles
per gallon combined fuel economy for trucks and cars and cost
effectively for consumers. When they did that study, gasoline
prices were $1.30. They are well over that now--at my local
pump they were $2.44 this morning; and so the economics of high
fuel economy vehicles has improved. The industry needs to bring
more of them to market. They need to market those technologies
as well.
One of the other speakers mentioned the HEMI technology as
a fuel-saving technology. I am a racing enthusiast and I watch
the Speed Channel. The advertisements on the Speed Channel are
not for HEMI trucks that get good fuel economy, they are for
HEMI trucks that will beat you off the line. And I think that
is sending the wrong message to American consumers and that
Congress can help communicate a different message.
Representative Hinchey. Certainly is reminiscent of the
1950s.
Mr. Loper. Yes. The good old days.
Representative Hinchey. Or 1960s.
Representative Saxton. I just have one further question.
Mr. Chernoby, in your statement you mentioned that there was a
technology called two mode hybrid, and I understand that that
involves having two electric engines in a transmission rather
than one engine in an engine bay.
Would you talk a little bit about this? I think I
understand most of what was said this morning, but this was
new.
Mr. Chernoby. Try to make it in the simplest terms.
Basically the two motors and where they are placed within the
drive line with the transmission. Again, the joint program with
General Motors what it allows you to do is not only use hybrids
in the context of the systems that are there in the market
today, but also use those motors in conjunction with each other
to actually shift the operation of the gasoline engine in
higher speed highway environments, and virtually all operating
conditions to a much more efficient operating condition. The
analogy would be somewhat similar to what you might do with a
continuously variable transmission. In other words, actually
shift the engine to a different RPM level where that engine
runs more efficiently and then use those two motors to assist
in making that happen.
Representative Saxton. And so what are the advantages here,
greater fuel efficiency?
Mr. Chernoby. Absolutely yes, the engine is basically
operating in a more efficient condition in addition to all the
traditional hybrid operations that you get out of a hybrid.
Representative Saxton. Mrs. Wright, you look like you are
dying to say something.
Ms. Wright. No.
Mr. Stricker. I would just add, Mr. Chairman, that the
Toyota Hybrid Synergy System is not architecturally exactly the
same, of course, but it utilizes a generator to vary the
gasoline engine speed to accomplish that effect of a
continuously variable transmission as well.
Basically there is certain speeds and loads at which the
gasoline engine is most efficient. And if you can force the
gasoline engine to operate in the most efficient range, then
that obviously improves the efficiency over all of the system.
So you can use a second motor or generator to vary the speed of
the gasoline engine to where it is most optimal.
Representative Saxton. All right. Well, thank you all for
being here, thank you for your interest and your hard work on
what is obviously a tremendously important set of issues. We
appreciate you sharing this information with us here this
morning. And hopefully we will find some ways to work together
in the future to effect these efficiencies that you talked
about today. Thank you very much.
[Whereupon, at 11:58 a.m., the hearing was adjourned.]
Submissions for the Record
=======================================================================
Prepared Statement of Hon. Jim Saxton, Chairman, a U.S. Representative
from New Jersey
I am pleased to welcome Under Secretary Garman and the other expert
witnesses before the Committee this morning.
With oil prices in the neighborhood of $60 per barrel, it is not
surprising that there is increased interest in fuel efficiency and
alternative ways of powering cars and trucks. Increased demand for oil,
especially from Asia, combined with the restrictive practices of the
OPEC cartel, have together created a situation where oil prices have
spiked in recent months. With OPEC members only last December
complaining about an ``over-production'' of oil, it is abundantly clear
that we cannot depend on them to be reliable suppliers of petroleum.
Unfortunately, according to many experts, OPEC and elevated oil prices
may be with us for an extended period of time.
Gasoline accounts for about 45 percent of American oil consumption
each day, so it is appropriate to consider the long-term potential of
alternative automotive technologies that would reduce our dependency on
oil. The purpose of this hearing is to explore these alternatives and
examine which of them seem to be most feasible over the short, medium,
and long terms. Greater efficiency in internal combustion engines,
using methods such as shutting off half of the cylinders when maximum
power is not needed, is already being realized.
Flexible fuel vehicles capable of running on a mixture of gasoline
and up to 85 percent alcohol are also already in production. Recently I
have introduced legislation to enhance tax incentives for the purchase
of flexible fuel vehicles. U.S. auto companies already make millions of
flexible fuel vehicles that are only slightly more expensive to produce
than cars with conventional engines.
The market for hybrid vehicles is also expanding far beyond small
economy cars and promises additional savings. Small hybrid cars
demonstrated the feasibility of this technology, and it is now being
applied to mid-sized passenger cars as well as to SUVs. There are some
exciting new refinements of hybrid technology that could produce
significant increases in fuel efficiency. Perhaps in the future hybrid
or electric vehicles could even be recharged using the existing power
grid.
None of these technologies alone is likely to reduce our oil
consumption significantly in the short run. But over the next decade,
they could make a real difference, and synergies between them offer the
potential for further gains. For example, improved efficiencies of the
internal combustion engine could be combined with hybrid and other
technologies to maximize fuel savings.
Over the long run, the high price of oil is likely to create
incentives for other technological breakthroughs that will be more
dramatic. Hydrogen fuel cells offer one promising technology for the
long term. Since power can be most efficiently generated in power
plants, there are those who argue that a transition to hydrogen fuel
cell or electric vehicles offers the most promise in coming decades.
In any event, continued Federal Government and industry support for
research and development, and the vision of entrepreneurs and
inventors, are needed to ensure that advancements in technology will
enable us to eventually increase our energy security.
__________
Prepared Statement of Hon. Carolyn B. Maloney, a U.S. Representative
from New York
Thank you, Chairman Saxton. The question of what role alternative
automotive technologies will play in our energy future is an important
one, and I hope we will be able to learn things from this hearing that
can inform our future policy choices.
We are heavily reliant on oil to power our cars and fuel our
lifestyle, and 58 percent of the oil we consume is imported, often from
politically volatile regions of the world. Promoting conservation,
raising efficiency standards, and supporting R&D can all play an
important role in overcoming our dependence on oil and reducing our
reliance on imports.
Today, more than two-thirds of the oil consumed in the United
States is used for transportation, mostly for cars and light trucks.
Increasing fuel efficiency would lower pressures on oil prices, enhance
our national security, curb air pollution, and reduce the emission of
greenhouse gases, which cause global warming. Clearly, alternative fuel
and automotive technologies are needed to help achieve these goals, but
we cannot overlook the importance of other approaches.
Corporate Average Fuel Economy (CAFE) standards for cars have
remained static for two decades and average vehicle fuel economy has
actually declined since the late 1980s when sales of SUVs began to
climb. Car manufacturers could increase the average fuel economy from
today's 27.5 miles per gallon to 46 miles per gallon just by
implementing existing technologies, according to a recent MIT report.
This would reduce our dependence on foreign oil by three-fourths and
cut greenhouse gas emissions by nearly a third.
The auto industry is pursuing a variety of advanced vehicle
technologies, such as hybrid vehicles, fuel cells, and hydrogen fuel.
While hybrid vehicles have received a lot of attention, they still make
up only about 1 percent of the 17 million vehicles sold in the United
States each year. However, some hybrids don't contribute much to energy
efficiency, as car companies are building more high-end, high-
performance vehicles.
Congress needs to be careful about which technologies it
subsidizes. We should make sure that we are not prematurely committing
to any particular technology and neglecting other potentially
beneficial approaches. We also should make sure that tax incentives are
well targeted to achieving their objectives, rather than simply
subsidizing behavior that would have taken place anyway. It doesn't
make much sense to give a tax break when manufacturers are wait-listing
consumers for certain models--the demand is already there, the cars are
not.
I will be interested to learn more about whether the President's
initiative to promote hydrogen fuel and fuel cells has realistic goals
or is just science fiction. Right now, there is a danger that hydrogen
fuel and fuel cells may never be commercialized because they are so
expensive, and this initiative may draw funding away from near-term
technologies such as hybrids.
I have many more questions, but I will stop here because we have a
panel of witnesses that I hope will be able to provide some answers, or
at least provide us with more information about the intriguing
technological possibilities that lie before us. Getting solid and
reliable information is the first step toward developing sound policy.
I don't think any of us believe that the current energy bill is the
last word on energy policy, and much remains to be done to meet the
challenges that lie before us.
Mr. Chairman, I look forward to hearing the testimony of our
witnesses today.
__________
Statement of Hon. David K. Garman, Under Secretary for Energy, Science,
and Environment, U.S. Department of Energy
Mr. Chairman and Members of the Committee, I appreciate the
opportunity to appear before you today to discuss the role of the
Department of Energy (DOE or Department) in the development of advanced
technologies for energy efficient vehicles.
Recently, President Bush spoke on energy policy and economic
security at the Calvert Cliffs nuclear power plant and said that to
make this country less dependent on foreign sources of oil, we need the
following things: (1) to encourage conservation with the help of new
technology; (2) to diversify our energy supply by increasing the use of
alternative and renewable sources like ethanol and biodiesel; and (3)
to develop a hydrogen-powered automobile over the next decade or two.
The President envisioned that a child born today would be ``able to
take a driver's test in a hydrogen-powered automobile that has zero
emissions, and at the same time will make us less dependent on
hydrocarbons which we have to import from foreign countries.''
THE PETROLEUM CHALLENGE
The President's remarks make clear the petroleum challenge that
faces this country. The world is not running out of oil, at least not
yet, but worldwide demand is increasing faster than production and
prices are rising. Unless we reduce our dependence on foreign oil we
risk that our energy economic security will be compromised.
The most urgent need is to address our transportation sector, which
consumes two-thirds of all U.S. oil and is still growing. Petroleum
imports already supply more than 57 percent of U.S. domestic needs, and
those imports are projected to increase to more than 68 percent by 2025
under a business-as-usual scenario. Because petroleum-based liquid
fuels, like gasoline and diesel, have a high energy density and are
easily transported, they are ideal for transportation. The Department
of Energy is committed to finding suitable alternatives, and developing
the technologies that will use today's oil more efficiently.
At the G8 Summit earlier this month, the President reiterated his
policy of promoting technological innovation, like the development of
hydrogen and fuel cell technologies, to address climate change, reduce
air pollution, and improve energy security in the United States and
throughout the world. The Department's research and development (R&D)
in advanced vehicle technologies, such as hybrid electric vehicles,
will help improve energy efficiency and reduce petroleum consumption in
the near to mid-term. But, for the long term, we ultimately need a
substitute to replace petroleum. Hydrogen and fuel cells, when
combined, have the potential to end petroleum dependence and provide
carbon-free, pollution-free power for transportation.
Thus, our strategy for passenger vehicles has two components. For
long-term energy independence, the Department is aggressively
implementing the President's vision of working with industry to develop
hydrogen-powered fuel cell vehicles. Hydrogen can be produced from a
number of different feedstocks, and this supply diversity can help
improve the Nation's energy security. Through the President's Hydrogen
Fuel Initiative, research is being conducted step by step to eliminate
the cost and technical barriers that need to be overcome before these
vehicles can be widely available. Our near and mid-term strategy is to
develop the component and infrastructure technologies necessary to
enable significant improvements to the energy efficiency of the full
range of affordable cars and light trucks. Such technologies as those
used by hybrid electric vehicles can limit growth or begin to reduce
our dependence on foreign oil right now, while also advancing some of
the same technologies that will eventually be needed for fuel cells.
These are described more fully in a document I am leaving with the
Committee.
We are also working on technologies that will increase the energy
efficiency of commercial vehicles, which due to their high performance
needs, are unlikely to run on hydrogen. While the majority of
commercial vehicles are powered by diesel engines, which have a higher
efficiency than gasoline engines, there remains room for considerable
efficiency improvements. Fuel cells could also play a role with
commercial vehicles by saving fuel and reducing emissions from engine
idling.
PARTNERSHIPS
Partnering with industry creates a common understanding of
technical capabilities and barriers, which increases the likelihood
that industry will pick up DOE's energy-saving technologies and that
Federal research will target industry needs. To address the passenger
vehicle market, we joined with the three domestic auto manufacturers
and five energy companies to establish the FreedomCAR and Fuel
Partnership. To address the commercial vehicle sector, we have the 21st
Century Truck Partnership in which the Department teams with 3 other
Federal agencies and 15 industry partners representing vehicle and
component manufacturers, truck and bus manufacturers, and hybrid
vehicle powertrain suppliers.
We also partner internationally through the International Energy
Agency (IEA) on research for motor fuels, internal combustion engines,
advanced materials, and hybrid propulsion systems. Our hydrogen vision
is now shared around the world. The International Partnership for the
Hydrogen Economy (IPHE) was established in 2003 and currently includes
16 nations and the European Commission. The IPHE partners represent
more than 85 percent of the world's gross domestic product and two-
thirds of the world's energy consumption and greenhouse gas emissions.
The Partnership leverages limited resources by bringing together the
world's best intellectual skills and talents to coordinate
multinational Research Development and Demonstration (RD&D) programs
that advance the transition to a global hydrogen economy.
Two DOE programs under the Office of Energy Efficiency and
Renewable Energy (EERE) are leading the Department's R&D efforts for
advanced vehicle technologies. The Hydrogen Program has the challenging
task of fulfilling the President's vision of transforming our
transportation system from dependence on petroleum fuels to a future
with sustainable, pollution-free vehicles. The FreedomCAR and Vehicle
Technologies Program is meeting the mid-term challenges of efficiency
and alternative fuels for developing the best technology options for
reducing the petroleum consumption of light duty vehicles over the next
20 years. Progress in such areas as advanced internal combustion
engines and emission control systems, lightweight materials, power
electronics and motor development, high-power energy battery
development, and alternative fuels will also contribute to fuel cell
hybrids. Together, these two DOE programs provide a continuum of
technologies that will revolutionize the way we drive.
FREEDOMCAR AND VEHICLE TECHNOLOGIES (OFCVT) PROGRAM
The following descriptions sample the range of technologies the
Department is developing that will enable Americans to use less
petroleum, reduce the impact on our environment, and still retain our
mobility and freedom of choice when we purchase our vehicles.
Hybrid Systems technologies combining an internal combustion engine
and a battery-powered electric motor can potentially reduce vehicle
fuel use by 40 percent or more. Without building entire vehicles, we
conduct our research in a vehicle systems context that enables us to
determine the impact that improving a component has on overall energy
efficiency. When I was at Argonne National Laboratory, I saw first hand
how their Powertrain Systems Analysis Toolkit (PSAT) model, winner of a
prestigious 2004 R&D 100 Award, is used in conjunction with their
Hardware-
In-the-Loop test facilities to validate vehicle components in a system,
either virtually or with real devices.
Energy Storage technologies, especially batteries, are critical
enabling technologies for the development of advanced, fuel-efficient,
hybrid vehicles and ultimately fuel cell vehicles. Our energy storage
research aims to overcome such technical barriers as cost, weight,
performance, life, and abuse tolerance that the Department and the
automotive industry have identified. DOE's technical research teams and
battery manufacturers are collectively addressing these barriers.
Advancements we have made in batteries and electric drive motors,
originally developed for battery-powered electric vehicles, have led to
worldwide stimulation of hybrid vehicle technology. Every hybrid
vehicle sold in the United States today, including those by foreign
manufacturers, contains elements of battery technology licensed from
one of our battery research partners. Other governments in both Europe
and Asia have followed our example, creating partnerships with industry
and supporting research in this area.
Power Electronics are at the heart of advanced technology vehicles.
Advanced hybrid vehicles and fuel cell vehicles will require
unprecedented improvements in both power electronics and electric drive
motors. These new technologies must be compatible with high-volume
manufacturing; must ensure high reliability, efficiency, and
ruggedness; and must simultaneously reduce cost, weight, and volume. Of
these challenges, cost is the greatest. Key components for hybrid
vehicles (with either fuel cell or advanced combustion engines as the
prime mover) include motors, inverters/converters, sensors, control
systems, and other interface electronics.
Advanced materials are needed for structural components as well as
powertrain components. The use of lightweight, high-performance
materials will contribute to the development of vehicles that provide
better fuel economy, yet are comparable in size, comfort, and safety to
today's vehicles. The development of propulsion materials and enabling
technologies will help reduce costs while improving the durability,
efficiency, and performance of advanced internal combustion, diesel,
hybrid, and fuel-cell powered vehicles.
Because a 10-percent reduction in weight can save as much as 6
percent in fuel consumption, our materials research goal is to enable
vehicle weight reductions of as much as 50 percent by 2010 compared to
the weight of 2002 vehicles. Carbon-fiber reinforced composites are an
excellent candidate for these applications, but they are currently
prohibitively expensive. To reduce these costs, we are developing a
microwave-assisted plasma (MAP) manufacturing technique which indicates
a potential savings of 40 percent in direct production costs and an 18
percent reduction in the final carbon fiber cost because of faster
processing speed, reduced processing energy demand, and a higher degree
of product quality control. Other efforts focus on developing the new
processes needed to recycle advanced materials.
Advanced Combustion Engines have the potential to contribute over
40 percent to the total efficiency improvements possible for both
passenger and commercial vehicles. The most promising approach to
reduce petroleum consumption in the mid-term (10-20 years) is the
introduction of high efficiency internal combustion engines in
conventional and hybrid vehicles. Our goals are to improve the
efficiency of internal combustion engines for passenger applications
and commercial vehicles while meeting cost, durability, and emissions
constraints. Accelerated research on advanced combustion regimes,
including homogeneous charge compression ignition (HCCI) and other
modes of low-temperature combustion, is aimed at realizing this
potential and making a major contribution to improving the U.S. energy
security, environment, and economy.
In parallel with fuels development, Advanced Combustion Engine
research has made significant strides in the development of enabling
technology to bring more efficient clean combustion engines into the
market. Christina Vujovich, Vice President of Environmental Policy and
Product Strategy of Cummins Engine Company, recently commented
publicly,
``We have achieved some impressive technology advances to
meet the initial engine efficiency and emissions deliverables
of the program. . . . The Department of Energy provided an
invaluable level of cooperation throughout the program. It
demonstrates just how much can be achieved when Federal
agencies and industry work together toward a common goal in the
best interest of the Nation's environment and energy
security.''
Fuels Technology supports research on advanced petroleum and non-
petroleum-based fuels and fuel blends to enable extremely high
efficiency and the displacement of significant quantities of petroleum
fuels. This work is coordinated with our EERE Biomass Program, which is
developing technology to convert biomass (plant-derived material) to
valuable fuels, chemicals, materials, and power.
The DOE-managed Advanced Petroleum Based Fuels--Diesel Emissions
Control Project (APBF-DEC) has provided crucial data supporting the
U.S. Environmental Protection Agency rulemaking that is leading to the
nationwide introduction of low-sulfur fuel.
HYDROGEN PROGRAM
The Department's Hydrogen Program is developing advanced
technologies for producing, delivering, and storing hydrogen, for
affordable and reliable fuel cells, and for infrastructure technologies
that will support the widespread introduction of hydrogen-powered
vehicles. The use of hydrogen will get to the root causes of oil
dependency, criteria pollutants and greenhouse gas emissions.
Since the President launched the Hydrogen Fuel Initiative in 2003,
we have made significant progress. The Department has developed a
comprehensive technology development plan, the Hydrogen Posture Plan,
fully integrating the hydrogen research of the Offices of Energy
Efficiency and Renewable Energy; Science; Fossil Energy; and Nuclear
Energy, Science, and Technology. This plan identifies technologies,
strategies, and interim milestones to enable a 2015 industry
commercialization decision on the viability of hydrogen and fuel cell
technologies. Each Office has, in turn, developed a detailed research
plan which outlines how the high-level milestones will be supported.
Ongoing research has already led to important technical advances.
As highlighted by Secretary Bodman in earlier Congressional testimony,
I am pleased to report that our fuel cell activities achieved an
important technology cost goal this past year--the high-volume cost of
automotive fuel cells was reduced from $275 per kilowatt to $200 per
kilowatt. This was achieved by using innovative processes developed by
national labs and fuel cell developers for depositing platinum
catalyst. This accomplishment is a major step toward the Program's goal
of reducing the cost of transportation fuel cell power systems to $45
per kilowatt by 2010.
In hydrogen production, we have demonstrated our ability to produce
hydrogen at a cost of $3.60 per gallon of gasoline equivalent at an
integrated fueling station that generates both electricity and
hydrogen. This is down from about $5.00 per gallon of gasoline
equivalent prior to the Initiative.
In the short term, the use of more efficient technologies, such as
hybrid vehicles, will mitigate increases in greenhouse gas emissions.
In the long term, hydrogen produced from renewables, nuclear, or coal
with carbon sequestration can eliminate oil dependency, significantly
reduce vehicular criteria air pollutants, and help stop and reverse the
growth in greenhouse gas emissions.
I will now briefly describe the activities of the Department to
support the President's Hydrogen Fuel Initiative, which addresses both
the development needed for the hydrogen infrastructure and for fuel
cell technology.
Hydrogen Production: The overall goal is to produce hydrogen in a
way that is carbon neutral. To address energy security and
environmental needs, an array of feedstocks and technologies such as
solar, wind, and biomass, nuclear, and fossil fuels (with
sequestration) are being examined for hydrogen production. The research
focus for the transition to a hydrogen infrastructure is on distributed
reforming of natural gas and renewable liquid fuels, and on
electrolysis, to meet initial lower volume hydrogen needs with the
least capital investment. Renewable feedstocks and energy sources are
being investigated for the long term, with more emphasis on centralized
options to take advantage of economies of scale when an adequate
hydrogen delivery infrastructure is in place.
Hydrogen Delivery: Hydrogen must be transported from the point of
production to the point of use, including storing and dispensing at
fueling stations. Due to its relatively low volumetric energy density,
delivery can be one of the significant cost and energy inefficiencies
associated with using hydrogen as an energy carrier. There are three
primary options for hydrogen delivery. One option is to deliver
hydrogen as a gas in pipelines or high-pressure tube trailers. A second
option is to liquefy it and deliver it in cryogenic tank trucks.
Gaseous and liquid truck deliveries are used today, but there is only a
very limited hydrogen pipeline infrastructure. A third option is to use
carriers such as natural gas, methanol, ethanol, or other liquids
derived from renewable biomass, that can be transported to the point of
end use and reformed to hydrogen. Further R&D is required for each of
these options so that we can reduce cost, improve reliability, and
determine the best approach. Carriers are the focus for the nearer
term; pipelines and other options are being researched for the longer
term.
Hydrogen Storage is a critical enabling technology for the
advancement of hydrogen and fuel cell power technologies for
transportation, stationary, and portable applications. The Department
is focused on the research and development of on-board vehicular
hydrogen storage systems that will allow for a driving range of greater
than 300 miles without compromising passenger or cargo space.
Development targets include compressed hydrogen tanks for near-term
storage of hydrogen. However, the Program emphasizes R&D on advanced
materials such as metal hydrides, chemical hydrides, and carbon-based
materials to allow low-pressure hydrogen storage options in the long-
term. As progress is made on solid-state or liquid-based materials,
other issues such as vehicle refueling, thermal management or byproduct
reclamation will need to be addressed.
Codes and Standards will be necessary in the implementation of the
hydrogen economy. Our DOE codes and standards activity will facilitate
their development, and support publicly available research that will be
necessary to develop a scientific and technical basis for such codes
and standards. DOE is working with the Department of Transportation
(DOT) in support of their regulatory role in vehicle safety standards,
hydrogen pipelines, and global technical regulations. The DOE and the
DOT are working closely together in the International Partnership for
the Hydrogen Economy to promote uniform global hydrogen technology
codes and standards.
Safety is of paramount importance. The development of codes and
standards is critical to ensuring the safety of hydrogen production and
delivery processes, as well as hydrogen storage technologies for both
transportation and stationary applications. Like other fuels in use
today, hydrogen can be used safely with appropriate handling and
systems design. Because of the smaller size of the molecule and the
greater buoyancy of the gas, hydrogen requires storage and handling
techniques that are different than those traditionally employed. The
aim of our program is to ensure the safe use of hydrogen, and to
understand, communicate and provide training on the safety hazards
related to the use of hydrogen as a fuel. DOE is working with the DOT
as well as other agencies, such as the Environmental Protection Agency,
the National Institute of Standards and Technology, and the Department
of Agriculture to promote and ensure the development of safe hydrogen
and fuel cell technologies.
Education is critical to the successful introduction of any new
technology. DOE's hydrogen education effort focuses on providing
information and training, with a focus on safety, to the specific
target audiences involved in the transition to a hydrogen economy,
including first responders, code officials, State and local government
representatives, and local communities where near-term hydrogen
demonstration projects are located. Over the long-term, the program
also seeks to raise public awareness and foster the development of
university and other education programs that will ensure the next
generation of scientists, engineers, and technicians needed to develop
and sustain the hydrogen economy.
Fuel Cells have the potential to replace the internal combustion
engine in passenger vehicles because they are energy efficient, clean
and fuel flexible. Hydrogen or any hydrogen-rich fuel can be used by
this emerging technology. For transportation applications the focus is
on direct hydrogen fuel cells, in which hydrogen is stored on board and
is supplied by a hydrogen generation, delivery, and fueling
infrastructure. Fuel cell R&D activities address key barriers,
including cost and reliability, to fuel cell systems for transportation
applications. Activities support the development of individual
component technology critical to systems integration, as well as
systems-level modeling activities that guide R&D activities, benchmark
systems progress, and explore alternate systems configurations on a
cost-effective basis.
Polymer electrolyte membrane fuel cell cost projections at high-
volume (500,000 units per year) have been reduced from $275 per
kilowatt in 2002 to $200 per kilowatt in 2005. Performance improvements
are based on progress in areas such as electrocatalyst design and
materials, which reduce expensive platinum content; gas diffusion layer
design, which reduces materials content; and advanced low-cost
membranes. Changes in operating conditions have reduced the size of the
fuel cell stack, resulting in lower raw materials costs. Manufacturing
advances include molded bipolar plates manufactured by a net-shape
molding process and economies of scale for membrane manufacturing.
These advances set the stage for meeting the $45 per-kilowatt target
for 2010.
Technology Validation is conducted on components under real-world
operating conditions in integrated systems to quantify the performance
and reliability, document any problem areas, and provide valuable
information to researchers to help refine and direct future R&D
activities.
An example of a project that ties all of the R&D activities
together and validates the status of hydrogen and fuel cell
technologies is the National Hydrogen Learning Demonstration. The
National Hydrogen Learning Demonstration is the first effort of its
kind to bring together, at a national level, major automobile and
energy companies in a hydrogen infrastructure and vehicle demonstration
project. The project will help DOE focus its research and development
efforts, provide insight into vehicle and infrastructure interface
issues and help address codes, standards and safety issues. We have
partnered with four industry teams to work on projects that would
assess the status of hydrogen infrastructure and fuel cell technology,
in parallel, against time-phased, performance-based targets.
This Learning Demonstration will collect data both on the open road
and in controlled testing environments. Field validation of hydrogen-
powered fuel cell vehicles in controlled vehicle fleets in both hot and
cold climates will provide valuable information. Infrastructure
validation also includes hydrogen production, storage and delivery
processes, and hydrogen refueling station technologies. Each of these
teams is sharing at least 50 percent of the project cost, which is
estimated to be about $350 million between fiscal year 2004 and fiscal
year 2009, with the government share subject to appropriation.
Information from this demonstration will help DOE focus its R&D efforts
on fuel cells and hydrogen production and provide valuable information
to industry to make a 2015 commercialization decision. With a positive
commercialization decision and a successful research program, it is not
unreasonable to think we could see the beginning of mass-market fuel
cell vehicle penetration by 2020.
BIOMASS PROGRAM
The Department's Biomass Program is the major EERE renewable effort
that addresses the development of alternative liquid transportation
fuels, namely ethanol and biodiesel. The development of these fuels has
a direct bearing on our Nation's ability to reduce imported oil because
they can be directly blended into gasoline and diesel fuels. The
current domestic industry has the production capacity of about four
billion gallons with capacity for almost another billion gallons under
construction. Provisions in the conference version of the Energy Bill
could provide an incentive to increase this supply to 7.5 billion
gallons by 2012.
While the domestic renewable fuels industry has been growing at a
rapid pace, there is little doubt that this industry will have a
brighter future if R&D at USDA and DOE is successful. A recent report
jointly conducted by the two departments indicates that over one
billion tons of biomass could one day be sustainably produced from
various biomass sources and meet at least 30 percent of today's U.S.
transportation demand. In the longer term, when this renewable supply
is coupled with advancements projected by the EERE vehicle and hydrogen
technologies, a carbon neutral and renewable transportation suite of
technologies could greatly reduce our dependence on imported oil.
Recent breakthroughs and accomplishments in ethanol and bio-based
products include technologies developed by the National Renewable
Energy Laboratory, working with two of the major world industrial
enzyme manufacturing companies. In 2004, these public private
partnerships won a prestigious R&D 100 Award (shared by the three
entities) for developing an innovative, lower cost method for
transforming biomass into sugars that could then be fermented to
produce ethanol and other chemicals. Before this breakthrough, this
conversion step was considered a showstopper for biomass biological
conversion.
More recently, there has been a stepped-up interest in combining
the forces of DOE's Office of Science with EERE's Biomass Program to
address research barriers facing biomass to ethanol technologies. It is
believed that some of the fundamental tools and understanding being
considered and developed by the Office of Science can be more directly
targeted to the EERE Biomass Program and industry. This synergism could
greatly reduce the time needed to make ethanol more economically
competitive. The two DOE Offices are currently planning a joint
workshop and a joint solicitation to occur before the end of the
calendar year.
Biomass represents a bridge to the hydrogen economy. Ethanol and
methanol from biomass are both potential hydrogen carriers that can
also be used in fuel cells or can directly replace gasoline. Recently,
DOE and USDA signed a Memorandum of Understanding aimed at developing
more cost-effective ways to produce hydrogen from biomass resources.
Transitioning to hydrogen technologies in the agriculture industry and
in rural communities is important for a number of reasons: hydrogen
could be produced from renewable, farm-based biomass; agricultural
vehicles could be fueled by hydrogen; and hydrogen fuel cell technology
could potentially provide power for rural communities and remote farm
and forest sites.
SUGARS PLATFORM R&D
The Sugars Platform involves the breakdown of biomass into raw
component sugars that can be fermented to produce a range of chemical
and biological processes. The research target for the mid-term is to
reduce the cost of sugars from 15 cents per pound in 2003 to 10 cents
in 2012. The corn refining industry, which currently includes wet and
dry mills, is an example of a sugars-based industry that produces
ethanol and other chemicals, as well as food and fiber. Ongoing
research tasks in the Sugars Platform include feedstock conditioning,
pretreatment, enzyme biomass degradation, process integration, and
targeted fundamental research.
THERMOCHEMICAL PLATFORM R&D
The Thermochemical Platform's current emphasis is on converting
non-fermentable biomass such as lignin to intermediate products such as
synthesis gas. These intermediates can be used directly as raw energy,
or may be further refined to produce fuels and products that are
interchangeable with existing commercial commodities such as oils,
gasoline, synthetic natural gas, and high purity hydrogen. Current R&D
is focused on synthesis gas clean-up making it suitable for the
production of high-valued mixed alcohols.
PRODUCTS R&D
The area of bio-based products represents a major market
opportunity for domestically grown biomass resources. The Products R&D
utilize the outputs from the Sugars and Thermochemical Platforms to
develop higher valued products. The Products focus is on platform
chemicals that can be converted to a multitude of high-valued products.
As an example of success, industrial partners have had a breakthrough
in developing a novel microbial process that can convert corn sugars to
a chemical intermediate. When fully commercialized, the industrial
biotech process will convert dextrose derived from corn to a chemical
intermediate known as 3 hydroxypropionic acid (3HP), one of the top
chemical intermediates identified by the Biomass Program. The chemicals
that can be produced from 3HP include acrylic acid, acrylamide, and 1,3
propanediol. Acrylic acid and its derivatives are used to create a wide
range of polymer-based consumer and industrial products such as
adhesives, paints, polishes, protective coatings, and sealants. The new
process will use agricultural feedstocks instead of petroleum to
produce 3HP.
INTEGRATED BIOREFINERIES
An integrated biorefinery is the ultimate deployment strategy of
the Biomass Program. A biorefinery embodies a facility that uses
biomass to make a range of fuels, combined heat and power, chemicals,
and materials in order to maximize the value of biomass. Much like an
oil refinery, the biorefinery has the flexibility to make adjustments
to the quantities of the various products that it makes, depending on
fluctuating market conditions. The barriers to an integrated
biorefinery are largely addressed through the other R&D areas. However,
certain barriers are specific to the integrated biorefinery such as the
challenge of feedstock-to-product process integration and the
financial, engineering, and marketing risks inherent in scaling up
first-of-a-kind, pioneer technology. In fiscal year 2002, the Biomass
Program awarded six major biorefinery development projects to industry
partnerships (minimum 50 percent cost-share).
When achievement of technical targets justifies industrial-scale
demonstrations (again, with a minimum 50 percent cost share), the
Biomass Program will conduct a competitive solicitation in order to:
(1) complete technology development necessary for start-up
demonstration of an integrated biorefinery; and (2) help U.S. industry
establish the first large-scale sugars-based biorefinery based on
cellulosic agricultural residues by 2010.
BENEFITS TO THE NATION
In conclusion, I believe that the Department of Energy is
maintaining a balanced portfolio of near-term and long-term options to
decrease oil consumption today, and to launch our Nation into a bold
new energy future. Gasoline and diesel-hybrid electric vehicles are the
most promising technology options over the next two decades, and
hydrogen-powered vehicles offer the best potential to achieve long-term
energy independence through use of diverse, domestic feedstocks. The
Department's plan is ambitious but allows time to overcome the
significant technical and economic challenges.
I continue to be excited by the Department's programs in advanced
automotive technology and look forward to the security, economic, and
environmental benefits that will accrue to our Nation as progress is
made. Emissions reduction comes hand-in-hand with putting more
efficient vehicles on the road. We estimate that the cumulative savings
in oil by 2030 from several aspects of our research, assuming complete
technical success, could be almost 20 billion barrels compared to a
``business-as-usual'' scenario. That's about a trillion dollars at $50
a barrel, or more at today's prices. Staying at the forefront of
vehicle R&D can help keep the United States as the world's leader in
vehicle production, provide future exports, protect U.S. jobs, and
improve our national energy security.
Mr. Chairman, I look forward to working with you and the Members of
this Committee as we pursue our mission of providing for the Nation's
energy future by reducing our dependence on foreign oil. I would be
pleased to answer any questions you may have.
__________
Prepared Statement of Joe Loper, Vice President,
Alliance to Save Energy
The Alliance to Save Energy is a bipartisan, nonprofit coalition of
more than 90 business, government, environmental and consumer leaders
whose mission is to promote energy efficiency worldwide to achieve a
healthier economy, a cleaner environment, and greater energy security.
The Alliance, founded in 1977 by Senators Charles Percy and Hubert
Humphrey, currently enjoys the leadership of Senator Byron Dorgan as
Chairman; Washington Gas Chairman and CEO, James DeGraffenreidt, Jr. as
Co-Chairman; and Representatives Ralph Hall, Zach Wamp and Ed Markey
and Senators Bingaman, Collins and Jeffords as its Vice-Chairs.
Attached for the record are a list of the Alliance's Board of Directors
and its Associate members.
INTRODUCTION
For the last 4 years, Congress and the President have spent
innumerable hours trying to agree on ways to address the nation's
dependency on oil and its adverse impacts on climate, and air and water
quality. There has been much discussion about how we might ease the
burdens on states and cities trying to meet Clean Air Act requirements
and who is going to pay for leaks from underground gasoline storage
tanks. We have debated measures to reduce greenhouse gas emissions.
Meanwhile, we've watched oil prices climb from $30 to $60 per barrel as
oil supplies get rocked almost daily by events that are largely out of
our control--Venezuelan uprisings and increased animosity toward U.S.
government policies, threatened takeovers of Nigerian oil fields,
hurricanes in the Gulf of Mexico.
While we have limited control on oil supplies and prices, we can
control our own demand for oil. That makes this hearing particularly
important. Given that the transportation sector accounts for two-thirds
of U.S. oil use and that passenger cars and light trucks consume 40
percent of that oil use, it is critical that we address vehicle fuel
use.
We applaud the efforts of Congress to address the Nation's energy
challenges in the current conference energy bill. The tax incentives
for hybrid and advanced diesel vehicles, along with technology research
and demonstration programs are certainly useful. However, we cannot
pretend to think that the bill before Congress will have any
significant impact on U.S. petroleum use.
THE ENERGY BILL
This week the House and Senate will be voting on the conference
energy bill. This bill contains many provisions to encourage energy
efficiency improvements in buildings and appliances. We applaud
Congressional actions to get inefficient air conditioners, clothes
washers, ceiling fans and lighting equipment out of the marketplace. We
applaud the tax incentives for more efficient homes, buildings and
equipment, and those that encourage the production of high-efficiency
appliances.
We applaud the tax incentives for hybrid and advanced learn burn
technology vehicles. We support funding authorizations for a variety of
advanced transportation technology programs that could improve the
efficiency of the transportation sector, including programs to
encourage railroad efficiency, idle reduction technologies for heavy
trucks, and ultra-efficient energy technology for air crafts.
The energy efficiency policies in the energy bill could reduce
overall projected energy use by between 1 and 2 percent by 2020. It is
important to note, however, that the bill is, in large part, an
ambitious to-do list at this point. To achieve these savings, Federal
agencies, appropriators, states and local governments, and others will
need to fully fund, implement and participate in these programs.
When it came to addressing energy use in vehicles, Congress flat
out missed the on-ramp. Most, if not all, of the oil savings in the
conference energy bill will be canceled out by the increased energy use
resulting from extension of the Corporate Average Fuel Economy (CAFE)
credit for dual fuel vehicles. This provision allows vehicle
manufacturers to take credit for vehicles that are capable of, but
almost never do, run on alternative fuels. Optimistically, we would
like to think that the energy bill could reduce oil use in 2020 by
about 100,000 barrels per day--about 0.5 percent of anticipated oil use
or between 1 and 2 days of consumption. Realistically, the overall
impact on petroleum consumption will probably be a fraction of that
amount.
EFFICIENCY TECHNOLOGIES ARE HERE TODAY
There is no shortage of technologies to improve vehicle fuel
efficiency. Many of these technologies are already in vehicles,
including electronic controls and ignition, light weight materials,
improved engine designs. Other technologies are now being pulled off
``the shelf '' and increasingly deployed in new vehicles. They include
(for example):
Variable Cylinder Management--turns off cylinders when not
in use.
Advanced Drag Reduction--further reduces vehicle air
resistance.
Variable Valve Timing and Lift--optimizes the timing of
air intake into the cylinder with the spark ignition.
Reductions in Engine Friction--using more efficient
designs, bearings and coatings that reduce resistance between moving
parts.
Hybrid Drive Trains--internal combustion engine combined
with electric motor and regenerative braking.
These are not pie in the sky technologies or expensive gimmicks,
but rather technologies that are here now. Other major technology
advances appear to be on the horizon, such as plug-in hybrids and fuel
cell electric vehicles.
efficiency technologies are not being used to improve fuel economy
While advanced technologies have been, and continue to be, deployed
in new cars and trucks, we're not getting more miles per gallon (mpg)
as a result. In fact, the average fuel economy (ie., mpg) of model year
2004 vehicles is 6 percent lower than in the 1987-88 model years.
Instead of getting better fuel economy, we are getting more towing
capacity, more acceleration, more weight, and more space. For example,
America's best-selling truck--the Ford F-150--claims almost 5 tons of
towing capacity. That's enough capacity to pull a 36-foot horse trailer
with 4 horses inside it. In most states, that is one-eighth of the
total legal weight (including truck and cargo) of a semi-hauler.
Our average car is a real workhorse too. The average passenger car
sold today has about 185 horsepower--40 percent more than a car sold 15
years ago. To put this in perspective, a typical passenger car sold
today has the engine capacity to raise 185 soccer moms, along with 370
children, 10 stories into the air in 1 minute. It's about the same
horsepower as a large (60,000 pound) bulldozer.
And this decade looks like it could displace the 1960's as the
``Decade of the Muscle Car.'' According to the Classic Car and Vintage
Automobile registry, more than half of the fastest production car
models offered since the 1960's were offered in model years 2000 or
since. The number of muscle cars offered in the last 5 model years
exceeds the number of muscle cars in the 1960's, 1970's, 1980's and
1990's combined.
Vehicle fuel economy is a huge reservoir of low-cost energy waiting
to be tapped. According to EPA estimates, if automakers had applied the
technology gains since 1987 to improving fuel economy, average fuel
economy would be 20 percent higher. If the Nation had taken this path,
we could be consuming between one and two million barrels per day less
than we are--that's about equivalent to the more optimistic EIA
projections of oil output from the Arctic National Wildlife Refuge
(ANWR).
POLICIES TO INCREASE FUEL ECONOMY
For the last 20 years, the Nation's oil policy has in effect been
made in America's car showrooms. It is time for the Federal Government
to provide more guidance in the vehicle marketplace. There are many
policies that could be employed to ensure at least a portion of these
advances gets used to improve fuel economy. A few of them are discussed
here.
Increase and Reform Corporate Average Fuel Economy Standards
Today's supply disruptions are of similar magnitude to the 1970's
as OPEC exercised its market power to raise prices. Back then,
America's response was to take serious measures to encourage
improvements in automobile fuel economy. Between 1975 and 1985, fuel
economy standards were used to help achieve a 70 percent improvement in
new vehicle fuel economy. According to the National Academy of
Sciences, CAFE standards are still saving 2.8 million barrels per day.
Since the mid-1980's, CAFE standards have been largely unchanged
due to political pressure from the automobile industry. The current
standard of 27.5 miles per gallon (mpg) for automobiles has been in
place since 1985. The current 21 mpg standard for light trucks is only
0.5 mpg above the 1987 standard (it is now set to rise to 22.2 mpg by
2007). To the extent that fuel economy standards reflect fuel economy
levels achievable two decades ago seriously undermine their
effectiveness.
Old testing methods, a loophole for ``trucks'', and other loopholes
have further undermined the effectiveness of existing CAFE standards.
EIA estimates that the actual fuel economy of vehicles is about 20
percent lower than the CAFE standard test results suggest. In other
words, the 27.5 mpg standard for cars is really a 22 mpg standard and
the 21 mpg truck standard is really a 17 mpg standard. Fuel economy
testing methods should be revised to better reflect real-world driving.
Fuel economy standards allow vehicles classified as trucks to meet
less stringent standards than are imposed on passenger cars. When this
loophole was created, less than one-quarter of light duty vehicles sold
were classified as trucks. Now, fully half of vehicles sold receive
this special designation. Most of these trucks are sport utility
vehicles and minivans primarily, if not exclusively, used for
transporting passengers. The ``passenger car'' category should be
redefined to include SUVs and minivans.
Vehicle manufacturers receive credit against their fuel economy
requirements for sales of ``dual-fuel'' vehicles that can run on either
ethanol or gasoline. This credit has encouraged manufacturers to put
millions of dual fuel vehicles on the road. The problem is that they
are fueled almost exclusively with gasoline. As noted above, the new
conference energy bill extends this credit for at least 5 more years.
This credit should be terminated or modified to require actual use of
the alternative fuel.
Finally, vehicles up to 10,000 pounds should be subjected to
labeling and standards. CAFE standards and labeling requirements apply
only to vehicles up to 8,500 pounds gross vehicle weight. Manufacturers
are selling more and more of these super-large SUVs and pickup trucks,
such as GM Hummers and Ford Excursions. The weight limit should be
raised to include these heavier vehicles.
TAX INCENTIVES
Tax deductions and credits can help steer buyers toward vehicles
with higher fuel economy. There is currently a $2,000 Federal tax
deduction for purchase of a hybrid vehicle (the deduction will be
reduced to $500 in 2006). Importantly, the current deduction does not
take into account the vehicle's fuel economy. The buyer of a hybrid
vehicle gets a tax deduction regardless of whether the vehicle achieves
a small or significant fuel economy improvement.
The energy bill conference report improves on the current Federal
incentive, providing tax incentives for hybrid, advanced diesel, fuel
cell and alternative fuel vehicles in varying weight classes. The new
tax incentives for hybrid vehicle passenger cars and light trucks would
be based on two factors: fuel economy improvements over a baseline and
lifetime fuel savings. This tax incentive approach can assist in
assuring that the hybrids that achieve better fuel economy are
receiving the highest level of credit.
In sum, if the policy objective of these tax incentives is to
encourage adoption of energy-saving technologies, the tax incentives
should ideally be based on fuel economy, not just technologies.
GAS GUZZLER TAXES
The Gas Guzzler Tax was established as a result of the Energy Tax
Act of 1978. The Act established a tax on the sale of new model year
vehicles whose fuel economy fails to meet certain statutory levels.
Currently, the gas guzzler tax applies only to passenger cars with fuel
economies below 22.5 mpg. The maximum rate is $7,700, which is applied
to cars that achieve a fuel economy value of less than 12.5 mpg. To
further discourage purchase of inefficient vehicles, the gas guzzler
tax could be revised to (1) increase the amount of the tax; (2) apply
the gas guzzler tax to trucks; and/or (3) increase the mpg value so
that more vehicles are captured within the tax structure (e.g., instead
of starting the tax at 22.5 mpg, the tax could apply to vehicles that
achieve an unadjusted mpg of 24.5 mpg).
FEEBATES
A national ``feebate'' would impose a fee or rebate on new vehicles
based on the expected lifetime fuel use of the vehicle. The feebate
could be revenue neutral or not, depending on where the ``set-point''
is established; purchasers of vehicles above the set-point (with poor
fuel economy) would pay a fee and purchasers of vehicles below the set
point (with better fuel economy) would receive a rebate.
Many variations of feebates have been suggested and discussed. The
simplest would use a single gallon-per-mile (GPM) rate--say $500 per
0.01 GPM--and a single set-point for all passenger cars and light
trucks.\1\ Oak Ridge National Laboratory estimates savings from a $500
per GPM revenue-neutral (approximately) feebate would increase car fuel
economy to 31.8 mgp (13 percent) and light truck fuel economy to 26 mpg
(25 percent) after about 6 years. A $1,000/0.01 GPM feebate would
increase car fuel economy to 35.2 mpg (25 percent) and light truck fuel
economy to 29.2 (40 percent) after 6 years.
---------------------------------------------------------------------------
\1\ Most economists prefer feebates based on gallons-per-mile (GPM)
since this equates to gallons of fuel used by the vehicle. MPG, on the
other hand, is not by itself a sufficient parameter to measure
efficiency since it is inherently higher for smaller cars and lower for
larger vehicles. For example, an increase in a large truck's fuel
economy from 10 MPG (equal to 0.1 GPM) to 12 MPG (0.083) would be
rewarded the same as a small car improvement from 40 MPG (0.025) to 80
MPG (0.0125). By contrast, a feebate based on MPG would give 20 times
more incentive to the small car with a 40 MPG improvement than the
large truck with only a 2 MPG improvement. But over the life of the
vehicles, the savings from the 2-MPG improvement in the truck will be
far greater than the savings from the small car.
---------------------------------------------------------------------------
SUMMARY AND CONCLUSION
Government and industry have made great strides in developing
technologies that can improve the fuel efficiency of the transportation
sector (e.g., lightweight materials, variable valve transmissions,
electric motors and controllers, low-rolling resistance tires, etc.)
Many of these technologies are not, however, being widely used to
improve the fuel economy of today's vehicle fleet; instead, they are
being used to increase overall vehicle acceleration, power and size.
Without government policy intervention, the next 20 years could be just
like the last, with fuel economy being sacrificed to increased
acceleration, horsepower, weight and size.
By wisely using the tax code and increasing and reforming CAFE
standards, we could begin to see improvements in the fuel economy of
vehicles. Despite the arguments of the auto industry, these policies
would not deny consumer choice. These policies would simply change the
relative price of various vehicle amenities. They would make increased
fuel economy less expensive. They would make hot rods and large tow
vehicles more expensive. They would make people think about how much
car or truck they really need. They would encourage manufacturers to
make more vehicles with better fuel economy available to consumers, and
then market them.
In sum, improving fuel economy is not a technical challenge--the
technologies are here. Rather it is a matter of political priority and
will. With the Nation continuing to rely on imported oil from volatile
regions of the world, and concerns about the impacts of our oil use on
environmental quality and climate, it is increasingly imperative that
our Nation translate more of our advancements in vehicle technologies
into improvements in fuel economy.
Prepared Statement of Tom Stricker, National Manager,
Technical & Regulatory Affairs, Toyota Motor North America, Inc.
Good morning. My name is Tom Stricker, and I am National Manager of
Technical & Regulatory Affairs for Toyota Motor North America. I want
to thank Chairman Saxton and the Committee for the opportunity to be
here today.
Toyota is a company that has undergone a lot of change over the
years, especially here in the United States. We have been fortunate to
evolve from solely an importer of small economy vehicles to a local
producer offering vehicles in virtually every market segment. However,
one thing that has not changed is our concern for the environment and
our pursuit of advanced environmental technology. Our company's Guiding
Principles and Earth Charter serve as the fundamental management policy
for all our operations. These principles reflect Toyota's commitment to
providing clean, safe and innovative products, while respecting the
environment and culture of the local communities in which we operate.
In the interest of time, I will focus my remarks on hybrids,
diesels and fuel cells. To begin, let me state the obvious: if we want
to eliminate reliance on petroleum, then we must develop alternative
energy sources to power vehicles or dramatically reduce the energy used
by current vehicles. Hydrogen fuel cells are an attractive long-term
option because they can dramatically reduce the automobile's
environmental footprint--provided the hydrogen can be produced in a
clean and efficient way.
Toyota began investing in fuel cell research and development in
1992. Our latest vehicle--the Fuel Cell Hybrid Vehicle or FCHV--has a
range of up to 180 miles and a top speed of 96 miles per hour. Fuel is
supplied in the form of high-pressure gaseous hydrogen. We currently
have 12 vehicles in operation here in the United States and another 11
in Japan. As it's name implies, the FCHV utilizes hybrid technology to
achieve even greater efficiency than a typical fuel cell. I will discus
hybrid technology more in a few minutes.
Key challenges remain before fuel cells can enter the mainstream
market. Some of these challenges, such as fuel cell stack efficiency
improvements, system reliability, and so forth, can be solved--in
time--through engineering. On the other hand, more fundamental
scientific breakthroughs are needed to address on-board hydrogen
storage--the critical factor in determining vehicle driving range.
While Toyota and many others are working hard to find breakthroughs, no
clear solution is in sight.
Even if automakers eventually develop a product that meets customer
expectations at reasonable cost, significant challenges remain on
fueling and infrastructure. As automakers, there is only so much we can
do in this area. Energy suppliers and governments must take the lead--
in collaboration with the auto industry--in order to solve these
issues.
Because they do offer such promise, Toyota is working hard to
develop fuel cells, but we are not certain exactly when the scientific,
engineering and production challenges will be solved. We expect to see
expanded fleet use by the end of this decade and perhaps limited
commercial introduction in the next decade. But as with any technology,
whether and how quickly the market accepts fuel cells will depend on
our being able to meet customer expectations at a reasonable cost
compared to other available alternatives. And as I will describe, those
alternatives are improving as well.
One alternative that has garnered a lot of attention recently is
diesel engines. No doubt, diesels have advanced rapidly over the past
decade by using high-pressure common rail fuel injection,
turbocharging, and other advances. And because diesels have higher
thermal efficiency than gasoline engines they use less fuel energy per
mile. In Europe, diesels now account for about half of new vehicle
sales. But, there are several key differences between the United States
and European markets.
First, fuel prices in Europe are much higher and tax policies
provide a significant price advantage for diesel fuel, while in the
U.S. diesel is more expensive than unleaded regular and in some areas
more expensive than unleaded premium. In addition, diesel fuel quality,
such as cetane level and aromatics content, is better in Europe.
Second, and more importantly, European diesel emission standards
are less stringent than gasoline emission standards. In the United
States, both diesel and gasoline vehicles are required to meet the same
standards. Further, the U.S. standards are more stringent overall
compared to Europe. The result is that diesels in Europe do not require
the same level of emissions control technology and associated costs
that diesels in the United States would require.
But, whether diesels can meet U.S. emission standards remains to be
seen. For example, a Corolla-sized vehicle equipped with Toyota's
advanced D-CAT diesel catalyst designed for Europe appears to meet EPA
Tier 2 Bin 5 emission levels when new. Tier 2 Bin 5 is the level the
average new car and truck must meet in 2007. However, our analysis
indicates catalyst performance degrades over time, even with ultra-low
sulfur diesel fuel, causing emissions to more than double from the U.S.
Tier 2 Bin 5 level to the Tier 2 Bin 7 level after 125,000 miles of
operation. Besides meeting the basic emission standards, vehicles must
also meet requirements under various conditions such as high-altitude,
high speed, and cold temperature. These present additional cost and
technical challenges.
Given the added cost of emission-control hardware, the lack of
diesel fuel price advantage, uncertain customer demand for diesels
and--most of all--the challenge of meeting emission standards, the
prospect for widespread use of diesels in the United States remains
unclear. One thing that is clear--we should not tradeoff public health
for energy savings, especially when hybrid technology offers the
potential to accomplish both.
As you know Toyota is aggressively pursuing hybrid technology
because it can provide increased fuel economy, reduced fuel
consumption, cleaner emissions and improved vehicle performance without
changes in the fueling infrastructure. Hybrids combine an internal
combustion engine with an electric motor and battery. There are several
types of hybrids and their differences are important in terms of cost,
performance and environmental benefit. The Toyota Hybrid Synergy Drive
(HSD) that we market in the United States is a ``full'' or ``strong''
hybrid meaning that power is supplied by either the electric motor, the
gasoline engine, or a combination of the two. The ability to operate
solely on the electric motor is a unique feature of a full hybrid
system and is key to achieving exceptional fuel economy. In addition,
braking energy is captured and used to recharge the battery--and they
never need to be plugged in.
Since we first introduced the Toyota Prius in Japan in late 1997,
we have made substantial improvements. The first-generation Prius was a
subcompact car EPA-rated at about 42 miles per gallon that met Low
Emission Vehicle requirements. Acceleration from 0-60 miles per hour
was an unspectacular 14.5 seconds. With each subsequent generation, we
have increased the size, performance and fuel economy while lowering
tailpipe emissions. The current Prius is a mid-size sedan with an EPA-
rated fuel economy of 55 miles per gallon--and it goes from 0-60 in
just over 10 seconds. Compared to the average mid-size car, Prius saves
about 350 gallons of gasoline per year. Today's Prius meets Tier 2 Bin
3 emission levels--making it about 50 percent cleaner for smog-forming
emissions than the Tier 2 Bin 5 level. A major reason Toyota has
focused on gasoline hybrids rather than diesel for the U.S. market is
that hybrids provide fuel savings benefits plus there is no question
about meeting and even exceeding existing U.S. emissions standards.
And the market has begun to react--sales in 2005 alone equaled the
total sales for the previous 4 years. However, despite the relative
success, total hybrid sales in the United States still represent just
over 1 percent of new vehicle sales.
Earlier this year we introduced two new hybrids. In April we
launched the Lexus RX400h SUV--followed in June by the Toyota
Highlander Hybrid SUV.
The all-wheel-drive Lexus RX400h combines a 208 horsepower V-6
engine with front and rear electric motors to produce an overall peak
of 268 horsepower. The result is a V-6 SUV with acceleration on par
with competing V-8 models, yet with an EPA-rated combined fuel economy
of 28 miles per gallon--about the same as the average compact car. The
RX400h saves about 350-450 gallons of gasoline per year compared to
comparable luxury SUV's. Further, it is certified to Tier 2 Bin 3
emission standards just like Prius. The Toyota Highlander Hybrid is
available in either 2 or 4 wheel drive and has similar environmental
performance.
We envision a day when consumers can choose a hybrid powertrain
option on any vehicle just like they currently choose between 4-
cylinder, 6-cylinder and 8-cylinder conventional engines. To that end,
we recently announced the upcoming introduction of two new models--the
Lexus GS450h luxury sports sedan and the Toyota Camry Hybrid, which
will be our first hybrid produced here in the United States--at our
Georgetown, KY plant. We expect both of these vehicles to deliver
superior fuel economy and improved performance.
The final point I want to make about hybrid technology concerns its
applicability to a wide range of future powertrains, including fuel
cells. Some view hybrids as a temporary measure to be replaced
eventually by fuel cells. We view hybrids as an integral part of the
future fuel cell. The only fundamental difference between our current
gasoline hybrid system and our FCHV system is that the fuel cell stack
replaces the gasoline engine. The hybrid portion of the system remains
effectively unchanged. So the battery and control system improvements,
production experience and cost reductions we are able to achieve with
gasoline hybrids will have direct applicability in the future when fuel
cells emerge.
In summary, we view hybrids as a core technology as we pursue
sustainable transportation. The reality is that various types of
powertrains and fuels are likely to be needed to address energy issues
and public health concerns. Which technologies eventually win-out will
depend on meeting customer expectations at a reasonable cost and on
local market and regulatory conditions.
This concludes my remarks. Thank you for your attention.
[GRAPHIC] [TIFF OMITTED] T4915.001
Prepared Statement of Mary Ann Wright, Director, Sustainable Mobility
Technologies and Hybrid and Fuel Cell Vehicle Programs, Ford Motor
Company
Members of the Joint Committee:
Thank you for allowing me to address the Committee on this
important issue. My name is Mary Ann Wright and I am the Director of
Sustainable Mobility Technologies and Hybrid and Fuel Cell Vehicle
Programs at Ford Motor Company.
Energy security and rising fuel prices are significant issues
facing our nation. I appreciate the opportunity to share with you Ford
Motor Company's views on the most promising, advanced vehicle
technologies.
Industry, government and consumers all have important roles to play
in addressing our nation's long-term energy needs. Industry should
continue to invest in the development of energy-efficient technologies
that provide cost-effective solutions for our customers. And,
government needs to take steps to bring advanced technologies to market
more-quickly and cost-effectively through customer incentives.
Ford is committed to improving vehicle fuel economy by developing a
portfolio of fuel-efficient advanced technology vehicles. Product
solutions to improve fuel economy must result in vehicles that
customers can afford and are willing to purchase. We know that when
customers consider purchasing a vehicle, they are concerned with
vehicle affordability, quality, reliability, performance, safety,
appearance, comfort and utility. From our perspective, no one factor
can be ignored in the highly competitive U.S. marketplace.
At Ford we're committed to developing better ideas and innovative
solutions, and we are investing significant resources to develop
advanced vehicle technologies. Henry Ford's vision was to provide
affordable transportation for the world. Ford Motor Company's vision
for the 21st century is to provide transportation that is affordable in
every sense of the word--socially and environmentally, as well as
economically. In other words, ``sustainable transportation.'' Offering
innovative technology that makes a difference for our customers and the
world in which they live is not just the right thing to do--it's smart
business.
As a result, we're doing substantial development work with
renewable fuels and four advanced powertrain technologies, including
gasoline-electric hybrids, clean diesels, hydrogen-powered internal
combustion engines and hydrogen fuel cell vehicles. I'll briefly cover
some of our efforts and accomplishments in each of these areas.
We believe that renewable fuels will play an increasingly important
role in addressing U.S. energy security and energy diversity. All of
our gasoline vehicles are capable of operating on blends including up
to 10 percent renewable ethanol. In addition, Ford Motor Company has
produced approximately 1.5 million Flexible Fuel Vehicles capable of
operating on up to 85 percent ethanol. Overall, the U.S. auto industry
has produced over 5 million FFVs. Although the number of E85 vehicles
continues to grow, there are only approximately 300 E85 fueling
stations in the United States. As U.S. gasoline prices rise, the price
of E85 has made it an increasingly attractive option to consumers. We
continue to encourage a renewed focus on Federal policies and
incentives that accelerate E85 infrastructure development to support
flex fuel vehicles.
We are also at the leading-edge of hybrid vehicle development--the
Ford Escape Hybrid and Mercury Mariner Hybrid are great examples. Our
hybrid SUVs can do virtually anything that our regular Escape or
Mariner SUVs can, but with approximately 75 percent better fuel economy
in city driving. But it isn't just a sensible solution or a new
technology that led to 56 U.S. patents for Ford, with an additional 83
U.S. patents pending, these are hot new products creating a lot of
market buzz and the Escape Hybrid was recently named North American
Truck of the Year.
Over the next 3 years, we'll have three other hybrids joining the
Escape and Mariner--the Ford Fusion, the Mercury Milan, and the Mazda
Tribute. Much of what we've learned in developing these hybrids will
help us as we explore other advanced technologies. Nevertheless, a key
challenge facing hybrids is the incremental costs--both in terms of
higher prices for components and engineering investments--that must be
overcome for this technology to transition from niche markets to high-
volume applications.
Ford is also working on advanced light duty diesel engines. Today's
clean diesels offer exceptional driveability and can improve fuel
economy by 20-25 percent. This technology is already prevalent in many
markets around the world--nearly half of the new vehicles sold in
Europe are advanced diesels and Ford continues to accelerate our
introduction of diesel applications in these markets. There are,
however, many hurdles that inhibit wide-scale introduction of this
technology in the United States. We are working to overcome the
technical challenges of meeting the extremely stringent Federal and
California tailpipe emissions standards. Remaining issues include fuel
quality, customer acceptance and retail fuel availability.
We are also working on what we think is the next step on the road
to sustainable transportation--hydrogen-powered internal combustion
engines. Ford is a leader in this technology. We think it's a bridge to
the development of a hydrogen infrastructure and, ultimately, fuel cell
vehicles. Ford recently announced that we will develop hydrogen powered
E450 shuttle buses for fleet demonstrations in North America starting
next year. Ford is also working on applying this engine technology to
stationary power generators and airport ground support vehicles to
further accelerate the technology and fueling infrastructure
development.
Further down the road, hydrogen powered fuel cells appear to be
another promising technology for delivering sustainable transportation.
Hydrogen can be derived from a wide range of feedstocks to increase
energy diversity, and fuel cells are extremely energy efficient and
produce no emissions. Our Ford Focus Fuel Cell vehicle is a state-of-
the-art hybridized fuel cell system. We have already placed a small
fleet of these vehicles in Vancouver and are working with the U.S.
Department of Energy and our program partner BP to deliver vehicles and
fueling in California, Florida and Michigan in the near future.
Fuel cells are promising, but there are also tremendous vehicle and
infrastructure challenges that must be addressed before they can reach
commercial viability. Solutions will require technological
breakthroughs and the concerted efforts of government, the auto
industry and energy providers.
In conclusion, our objective is simple . . . give consumers more of
what they want which is performance, drivability, affordability,
utility and a cleaner environment. Advanced vehicle technologies can
increase vehicle fuel efficiency without sacrificing these other
attributes. We support policies that promote research and development
of advanced technologies and the development of renewable fuel sources.
In addition, market-based consumer incentives need to be a key element
of a coordinated strategy to effectively address sustainable
transportation and energy security. Consumer tax credits for advanced
vehicles will help consumers overcome initial costs premiums associated
with early market introductions; bringing more energy efficient
vehicles into the marketplace more-affordably and in higher-volumes.
Ford Motor Company believes that the current U.S. Energy Bill
contains many important policies and incentives to address our nation's
energy needs and we encourage Congress to pass this legislation.
Thank you again for the opportunity to address the Committee.
__________
Prepared Statement of Mark Chernoby, Vice President, Advanced Vehicle
Engineering, DAimlerChrysler Corporation
Mr. Chairman and distinguished Members of the Joint Economic
Committee, I want to thank you for the opportunity to appear before you
today.
I am coming before you today to describe DaimlerChrysler's efforts
in developing and implementing alternative technologies for powering
automobiles and what we are doing in advanced technologies with respect
to the hydrogen economy.
PETROLEUM PRICES REMAIN HIGH
Crude oil prices remain very high, especially in contrast to the
lows reached in 1998 and 1999. They are still considerably lower than
the peak in real oil prices which was reached in the early eighties.
The monthly average price for June was $57 per barrel and in July oil
prices have closed above $60 on several days. While most analysts think
prices have probably peaked, prices are expected to remain above $50
per barrel for some time. While the consensus outlook for oil prices
has continued to move higher, most economists still expect prices to
decline steadily from the current price of $57 per barrel. The
consensus is for oil to decline to less than $50 per barrel next year
and with additional declines in the following years.
current oil prices have limited impact on consumers
Despite oil prices consistently much higher than predicted,
economic growth has slowed only moderately. The economy and the auto
industry seem to be weathering very high oil prices much better than
expected. Though it is a near certainty that the economy will slow in
the face of both expensive oil and continued central bank rate
increases, the slowing appears to be gradual and modest so far. Total
vehicles sales through June are about 2 percent above the comparable
period in 2004. In addition, the market share of trucks is slightly
higher then in the prior year. Based on the sales data for 2005,
consumers do not seem to be altering their purchasing preference due to
more expensive oil.
While the economic effects of high oil prices have not had as
dramatic effect as originally anticipated, DaimlerChrysler is focused
on in improving automobile energy efficiency in short-term and long-
term and is pursuing a broad portfolio of alternatives.
IMPROVING ENERGY EFFICIENCY VIA ALTERNATIVE AND ADVANCED PROPULSION
RELATED TECHNOLOGIES
DaimlerChrysler is engaged in a broad range of advanced propulsion
technologies. Fuel cell vehicles are a long term focus of this
technology portfolio, which also includes efficient gasoline engines,
advanced diesels, and hybrid powertrain systems. (See Figure 1:
DaimlerChrysler's Advanced Propulsion Technologies)
DaimlerChrysler is focused on providing the market with the ability
to select the advanced propulsion technology that best fits the needs
of the individual customer. Each of the short term technologies
optimizes its benefit to the consumer in specific drive cycles, hence
its value to the customer.
DaimlerChrysler has developed and implemented technologies that
improve the efficiency of the current gasoline propulsion system. We
must continue to enhance the gasoline combustion propulsion system
since it will be the dominant choice in the market for many years to
come. We offer the Multi-Displacement System (MDS) available in the
HEMI in seven Chrysler Group vehicles. MDS seamlessly alternates
between smooth, high fuel economy four-cylinder mode when less power is
needed and V-8 mode when more power from the 5.7L HEMI engine is in
demand. The system yields up to 20 percent improved fuel economy.
We are also working on further development of gasoline direct-
injection which considerably enhances fuel economy by closely
monitoring fuel atomization.
While enhancements to existing internal combustion engine (ICE)
technology offer opportunities for improvements in fuel economy in the
short to mid-term, these improvements to ICEs must be accompanied by
continuous improvements to the fuels on which they run. Thus, the
availability of sulfur-free gasoline and diesel fuels, with other
properties tightly controlled is a critical enabler for significant
improvements in fuel economy.
DaimlerChrysler offers four different diesel powertrains in the
United States, not including heavy trucks. Advanced diesel technology
offers up to 30 percent better fuel economy and 20 percent less
CO2 emissions when compared to equivalent gasoline engines.
While the fuel economy advantages of some vehicle propulsion
technologies, such as hybrids may be limited to, or accentuated in a
single mode of driving, an advantage of the diesel engine is that it
offers significant fuel economy improvements under all driving
conditions. Advanced diesel is a technology that is available today and
can help reduce our nation's dependency on foreign oil. According to a
J. D. Power and Associates study, light duty diesels are expected to
grow from a 3 percent market share in 2004 to 7.5 percent in 2012.
Designing more engines to run on Biodiesel is a current objective
at DaimlerChrysler. Biodiesel fuel reduces emissions of diesel
vehicles, including carbon dioxide, and lowers petroleum consumption.
Each Jeep Liberty Common Rail Diesel (CRD) built by DaimlerChrysler is
delivered to customers with B5 biodiesel fuel. Nationwide use of B2
fuel (2 percent biodiesel) would replace 742 million gallons of
gasoline per year, according to the National Biodiesel Board.
DaimlerChrysler is also investigating the potential use of B20 fuel.
While alternative, renewable fuels such as ethanol or biodiesel
offer an attractive opportunity to reduce petroleum dependence, we do
not see these fuels completely replacing petroleum in the foreseeable
future. Rather, alternative fuels should be seen as pieces in the
puzzle which represents the reduction of petroleum dependence. The role
of renewable ethanol and biodiesel, and ultimately, renewable hydrogen,
should be considered in the context of improved efficiency of
conventional gasoline and diesel powertrains, hybrids, and fuel cells.
Innovative public policy aimed at reductions in vehicle miles traveled
(VMT) can also be part of this equation. DaimlerChrysler has set itself
the goal of systematically promoting the development, testing and
market launch of renewable fuels.
Rising gasoline prices in the United States have increased the
interest in Flexible Fuel Vehicles (FFVs). Chrysler Group has sold
nearly 1.5 million FFVs capable of running on E85 (85 percent ethanol),
gasoline or a mixture of the two. In total, over 4 million FFVs have
been produced by the U.S. auto industry. Internal estimates have
calculated that if the current fleet of over 4 million FFVs on the road
today was operated on E-85 made from corn using the current
fermentation and distillation processes, CO2 emissions would
be reduced by 10 million tons/yr and gasoline use would be reduced by
130 thousand barrels per day. Shifting to a new process of ethanol
production from herbaceous biomass would result in essentially the same
petroleum reduction, but CO2 emissions would be reduced by
over 22 million tons/yr. However, there currently is only minimal
infrastructure to support vehicles capable of running alcohol based
fuels (ethanol and methanol) and the cost for alcohol based fuels is
higher than gasoline on an energy equivalency basis. (See Figure 2:
Energy and Cost Comparison of Fuels)
DaimlerChrysler and GM have recently combined efforts to develop a
two-mode hybrid drive system that surpasses the efficiency of today's
hybrids. The partnership will cut development and system costs while
giving customers an affordable hybrid alternative that improves fuel
economy. The first use of the system by DaimlerChrysler will be in
early 2008 with the Dodge Durango.
We are also looking at market niches where alternate technologies
can have an impact in reducing our dependence on gasoline for
transportation. One such opportunity is the Neighborhood Electric
Vehicle (NEV), all-electric, battery-powered vehicles for use in
reduced-speed on- and off-road settings. Some 30,000 DaimlerChrysler
GEM electric vehicles are in use around the country, mostly for short
trips--the kind of trip in which gas-powered vehicles produce most of
their emissions.
In addition to the propulsion related activities underway,
mentioned above, DaimlerChrysler sees opportunities in using advanced
materials as a way to reduce vehicle mass and therefore improve vehicle
efficiency. Materials currently being investigated for new or increased
vehicular application include: advanced high strength steel, aluminum,
composites, titanium, magnesium, and improved alloys for casting. With
each of these materials comes the challenge of new joining methods and
technologies as well as compatibility with other materials.
CONSUMER RESPONSE POTENTIAL FOR ADVANCED AND ALTERNATIVE PROPULSION
TECHNOLOGIES
Consumers are rational and will purchase vehicles embodying
advanced fuel saving technologies when the purchase makes economic
sense. This implies that the added cost of the technology must be less
than the net present value of the fuel savings. In this regard, both
higher fuel prices and higher tax subsidies for advance technology
vehicles make such vehicles more attractive to consumers.
longer term advanced technologies--daimlerchrysler's efforts to advance
THE ``HYDROGEN ECONOMY''
DaimlerChrysler has been working on fuel cell technology for
transportation utilizing hydrogen for over 10 years. We have invested
over $1 Billion in R&D and have developed multiple generations of
varying types of vehicles, including five generations of passenger cars
(NECAR1, 2, 3, and 4, and the F-Cell). Of all manufacturers, we have
the largest worldwide fleet of fuel cell cars and buses (more than 100
vehicles) participating in several international demonstration projects
in the United States, Europe, and Asia. (See Figure 3: DaimlerChrysler
Fuel Cell History)
As a member of the United States Council for Automotive Research
(USCAR), DaimlerChrysler is a partner in the Department of Energy's
(DOE) FreedomCAR and Fuel Partnership along with General Motors and
Ford Motor Company, and BP America, ChevronTexaco Corporation,
ConocoPhillips, Exxon Mobil Corporation, and Shell Hydrogen. The recent
addition of these five major energy providers has strengthened the
Partnership considerably, by providing expertise to solve the
infrastructure challenges. DaimlerChrysler has also been working with
the DOE since 1993 on advanced automotive technology research. We
support the initiative as members on technical teams related to
advanced automotive technology, including:
Energy Storage
Light Weight Materials
Advanced Combustion
Hydrogen Storage
Fuel Cell
Codes & Standards
Electrical and Electronics
Vehicle Systems Analysis
Through these tech teams, we help develop priorities based on
future needs and manage a portfolio of research projects directed at a
set of research goals and objectives.
We also are one of four recipients to participate in the DOE
Hydrogen Learning Demonstration Project. By the end of 2005, we will
have 30 vehicles located in three ecosystems (Southern California,
Northern California, and Southeastern Michigan) and were the first OEM
to provide valuable technical data to the DOE. (See Figure 4: DOE
Hydrogen Fleet & Infrastructure Demonstration & Validation Project)
The current technology is being evaluated in several fleet
demonstration projects around the world. The largest is the DOE's
program in the United States. These programs include a few hundred
vehicles worldwide and several hydrogen fueling stations.
DaimlerChrysler projects that the hydrogen fueled vehicle
technologies will evolve in discreet phases driven be the following
cadence of events:
Breakthrough in basic research
Bench/laboratory development
``On road'' testing and development
Parallel manufacturing process development
Technological breakthroughs are required in hydrogen storage and
fuel cell technology (focused on cost & durability). DaimlerChrysler
shares a commitment with our partners in the FreedomCAR and Fuel
Partnership effort to achieve these gains. It is a challenge to predict
a definitive timeline for technological discovery. The vehicle fleet
could grow to tens of thousands if significant shifts occur in the
infrastructure and value to the consumer. The infrastructure must
expand to a much larger scale beyond local support. This will be
critical to support the freedom to travel that consumers will demand
when we move from a market dominated by local ``fleet'' customers to
the average consumer.
High volume commercialization will require a highly distributed
infrastructure capable of delivering cost competitive hydrogen and fuel
cell powered vehicles that can compete with other fuel efficient
technologies. It is likely that this will require continued government
policy support for vehicle and fuel. Additionally, transitioning the
manufacturing sector and supply base will require large investments in
both time and resources. Along with DOE and the Department of Commerce,
DaimlerChrysler is participating in identifying and addressing the most
significant issues associated with this transition.
In addition to the technology challenges identified above, the cost
challenges are significant barriers. To realize large scale market
penetration, we will have to approach the value that customers enjoy
with current propulsion technologies.
Even with a viable vehicle, the hydrogen economy will not become a
reality without a highly distributed infrastructure. Our energy
partners in the FreedomCAR and Fuel effort are committed to the
research and technology development required to realize this goal.
Industry and government will need to work together to develop an
implementation plan with financial viability for all entities.
Due to the enormity of the transition to a hydrogen economy,
DaimlerChrysler actively participates in the FreedomCAR and Fuel
Partnership. The research required to solve the technical challenges of
the hydrogen economy is universally viewed as ``high risk'' by
industry. The enabling, pre-competitive research sponsored by DOE
through the FreedomCAR and Fuel Partnership is very important to the
industry and is focused on overcoming the aforementioned challenges.
These challenges can not be solved by any one company, industry or
country. As a global company we also support DOE's participation in the
IPHE and other activities around the world to address these challenges.
THE PATH TO THE FUTURE--ADVANTAGES OF DEVELOPING ADVANCED VEHICLE
TECHNOLOGIES FOR MORE TRADITIONAL PROPULSION SYSTEMS
As stated earlier, DaimlerChrysler is working on a broad portfolio
of technologies to improve the efficiency and environmental impact of
transportation. In the short-term we continue to improve the internal
combustion engine (ICE). In the mid-term we are developing hybrid
vehicles utilizing electric drive systems, integrated power modules and
advanced batteries. In the long term fuel cell vehicles with on-board
hydrogen storage from a national hydrogen infrastructure will emerge.
The current portfolio of R&D within the DOE's FreedomCAR and Fuel
Initiative is focused on the long term hydrogen vision, but many of the
technologies are useful and will mature in the shorter term as
transition technologies. Cost effective, light-weight materials can be
applied to vehicles in the short term to improve fuel efficiency
regardless of the propulsion technology. Advanced energy storage and
motors will benefit both hybrid and fuel cell vehicles. Novel
approaches to hydrogen storage are uniquely required by hydrogen fueled
vehicles, but can support stationary and portable applications in the
industrial and consumer markets.
It is important to advance and mature many of the aspects of the
technology as early as possible. There are many challenges and
breakthroughs needed to realize the President's vision of a ``Hydrogen
Economy''. (See Figure 5: Technology Relationship Strategy)
[GRAPHIC] [TIFF OMITTED] T4915.002
[GRAPHIC] [TIFF OMITTED] T4915.003
[GRAPHIC] [TIFF OMITTED] T4915.004
[GRAPHIC] [TIFF OMITTED] T4915.005
[GRAPHIC] [TIFF OMITTED] T4915.006
Responses by David K. Garman to Hon. Jim Saxton, Chairman,
House Joint Economic Committee
According to the National Ethanol Vehicle Coalition, there are 6.75
million flexible fuel vehicles on the road in the United States. That
is approximately 3.2 percent of the 209,624,000 light duty trucks and
cars in 2002. Five manufacturers currently supply 24 different models
to the U.S. market.
______
Response by David K. Garman to Hon. Maurice D. Hinchey,
U.S. Representative
A number of studies have recently been conducted which address the
question of how much energy is needed to produce a gallon of ethanol.
Calculations of the energy inputs required for ethanol production and
distribution include energy used throughout the process: the energy
expended to grow and harvest the corn, transport the corn to the
ethanol plant, convert the corn to ethanol and other products, and
transport the ethanol to refueling stations. Agricultural inputs
include the energy used to produce and transport fertilizers and
pesticides, the fuel used in tractors and other farm equipment, and the
energy needed for irrigation.
A commonly used metric for evaluating ethanol production is the
fossil energy balance, which is the ratio of the energy out (the energy
in a gallon of ethanol) to the fossil energy inputs (the fossil energy
used to produce the gallon of ethanol). A 2004 study by the U.S.
Department of Agriculture (USDA) (Ref. 1) concluded that approximately
600,000 Btus of fossil energy are used to produce about one million
Btus of corn ethanol, resulting in a 1.67 fossil energy balance. A 2005
study led by General Motors (Ref. 2) used the Argonne National
Laboratory (ANL) Greenhouse Gases, Regulated Emissions, and Energy Use
in Transportation (GREET)) model to calculate fossil fuel inputs to
produce or transport ethanol. The GREET model estimated that roughly
760,000 Btus of fossil energy are used to produce about one million
Btus of corn ethanol. The fossil energy balance is 1.32.
The report (Ref. 3) by Professors David Pimentel (Cornell
University) and Tad Patzek (University of California) estimated that
roughly 1.2 million Btus of fossil energy are used to produce about one
million Btus of corn ethanol. The energy balance for the Cornell report
is 0.833. The differences between the Cornell energy balance and the
USDA and ANL energy balances are due primarily, but not entirely, to
different assumptions for energy inputs. Energy consumption in
agriculture and ethanol production has decreased significantly over the
past 15 years. Professor Pimentel uses energy consumption data that are
less updated than the data used in the USDA and ANL studies. In
addition, the Cornell study also included several energy input
categories not included in the USDA and ANL studies--the energy used to
manufacture farm equipment and construct the ethanol plant, and the
caloric energy consumed by workers.
By comparison, accounting for the energy expended for oil
extraction and gasoline refining, roughly 1.238 million Btus of fossil
energy are needed to produce 1 million Btus of gasoline. Comparing the
gasoline energy balance to the USDA and ANL corn ethanol energy
balances, the fossil energy requirements for corn ethanol are about 48
and 60 percent, respectively, of those of gasoline. Most of the fossil
energy inputs for corn ethanol are natural gas and coal. The GREET
model estimates that approximately 90,000 Btus of petroleum are used to
produce one million Btus of corn ethanol. That is, about 90 percent
less petroleum is used to produce a Btu of ethanol than a Btu of
gasoline.
With the exception of the 2005 Cornell study and previous Cornell
studies, nearly all studies conducted from 1994 on show positive energy
balances for corn ethanol. A 2005 presentation by Dr. Michael Wang of
ANL (Ref. 4) discussed some of the key differences in assumptions used
in the ANL and Cornell studies. Driven by economics, ethanol plant
operators have cut down on energy consumption and their plants are
significantly more efficient than a dozen years ago.
Ethanol plants also produce animal feed products from the corn
feedstock, and some of the energy inputs should be allocated to these
co-products. The most common ways for calculating co-product credits
are the displacement and energy methodologies. For the displacement
methodology, the co-product credit is based on the energy used to
produce the comparable animal feed product being substituted for
(displaced). For the energy methodology, the energy used to produce the
ethanol and co-products are accounted for separately. The Cornell study
estimated a lower co-product credit for the animal feed than the USDA
and ANL studies, another cause of the difference in results between the
Cornell studies and the other studies.
References
1. Shapouri, H., et al, The 2001 Net Energy Balance of Corn-
Ethanol, USDA, 2004.
2. Brinkman, N., Wang, M., Weber, T., and Darlington, T., Well-to-
Wheels Analysis of Advanced Fuel/Vehicle Systems--A North American
Study of Energy Use, Greenhouse Gas Emissions, and Criteria Pollutant
Emissions, General Motors Corp. Report, May 2005.
3. Pimentel, D. and Patzek, T., Ethanol Production Using Corn,
Switchgrass, and Wood; Biodiesel Production Using Soybean and
Sunflower, Natural Resources Research, Vol. 14, No. 1, March 2005,
Pages 65-76.
4. Wang, M., The Debate on Energy and Greenhouse Gas Emissions
Impacts of Fuel Ethanol, Argonne National Laboratory, August 3, 2005.
[GRAPHIC] [TIFF OMITTED] T4915.007
[GRAPHIC] [TIFF OMITTED] T4915.008
[GRAPHIC] [TIFF OMITTED] T4915.009
[GRAPHIC] [TIFF OMITTED] T4915.010
[GRAPHIC] [TIFF OMITTED] T4915.011
[GRAPHIC] [TIFF OMITTED] T4915.012
[GRAPHIC] [TIFF OMITTED] T4915.013
[GRAPHIC] [TIFF OMITTED] T4915.014
[GRAPHIC] [TIFF OMITTED] T4915.015
[GRAPHIC] [TIFF OMITTED] T4915.016
[GRAPHIC] [TIFF OMITTED] T4915.017
[GRAPHIC] [TIFF OMITTED] T4915.018
[GRAPHIC] [TIFF OMITTED] T4915.019
[GRAPHIC] [TIFF OMITTED] T4915.020
[GRAPHIC] [TIFF OMITTED] T4915.021
[GRAPHIC] [TIFF OMITTED] T4915.022
[GRAPHIC] [TIFF OMITTED] T4915.023
[GRAPHIC] [TIFF OMITTED] T4915.024
[GRAPHIC] [TIFF OMITTED] T4915.025
[GRAPHIC] [TIFF OMITTED] T4915.026
[GRAPHIC] [TIFF OMITTED] T4915.027
[GRAPHIC] [TIFF OMITTED] T4915.028
[GRAPHIC] [TIFF OMITTED] T4915.029
[GRAPHIC] [TIFF OMITTED] T4915.030
[GRAPHIC] [TIFF OMITTED] T4915.031
[GRAPHIC] [TIFF OMITTED] T4915.032
[GRAPHIC] [TIFF OMITTED] T4915.033
[GRAPHIC] [TIFF OMITTED] T4915.034
[GRAPHIC] [TIFF OMITTED] T4915.035
[GRAPHIC] [TIFF OMITTED] T4915.036
[GRAPHIC] [TIFF OMITTED] T4915.037
[GRAPHIC] [TIFF OMITTED] T4915.038
[GRAPHIC] [TIFF OMITTED] T4915.039
[GRAPHIC] [TIFF OMITTED] T4915.040
[GRAPHIC] [TIFF OMITTED] T4915.041
[GRAPHIC] [TIFF OMITTED] T4915.042
[GRAPHIC] [TIFF OMITTED] T4915.043
[GRAPHIC] [TIFF OMITTED] T4915.044
[GRAPHIC] [TIFF OMITTED] T4915.045
[GRAPHIC] [TIFF OMITTED] T4915.046
[GRAPHIC] [TIFF OMITTED] T4915.047
[GRAPHIC] [TIFF OMITTED] T4915.048
[GRAPHIC] [TIFF OMITTED] T4915.049
[GRAPHIC] [TIFF OMITTED] T4915.050
[GRAPHIC] [TIFF OMITTED] T4915.051
[GRAPHIC] [TIFF OMITTED] T4915.052
[GRAPHIC] [TIFF OMITTED] T4915.053
[GRAPHIC] [TIFF OMITTED] T4915.054
[GRAPHIC] [TIFF OMITTED] T4915.055
[GRAPHIC] [TIFF OMITTED] T4915.056
[GRAPHIC] [TIFF OMITTED] T4915.057
[GRAPHIC] [TIFF OMITTED] T4915.058
[GRAPHIC] [TIFF OMITTED] T4915.059
[GRAPHIC] [TIFF OMITTED] T4915.060
[GRAPHIC] [TIFF OMITTED] T4915.061
[GRAPHIC] [TIFF OMITTED] T4915.062
[GRAPHIC] [TIFF OMITTED] T4915.063
[GRAPHIC] [TIFF OMITTED] T4915.064
[GRAPHIC] [TIFF OMITTED] T4915.065
[GRAPHIC] [TIFF OMITTED] T4915.066
[GRAPHIC] [TIFF OMITTED] T4915.067
[GRAPHIC] [TIFF OMITTED] T4915.066
[GRAPHIC] [TIFF OMITTED] T4915.068
[GRAPHIC] [TIFF OMITTED] T4915.069
[GRAPHIC] [TIFF OMITTED] T4915.070
[GRAPHIC] [TIFF OMITTED] T4915.071
[GRAPHIC] [TIFF OMITTED] T4915.072
[GRAPHIC] [TIFF OMITTED] T4915.073
[GRAPHIC] [TIFF OMITTED] T4915.074
[GRAPHIC] [TIFF OMITTED] T4915.075
[GRAPHIC] [TIFF OMITTED] T4915.076
[GRAPHIC] [TIFF OMITTED] T4915.077
[GRAPHIC] [TIFF OMITTED] T4915.078
[GRAPHIC] [TIFF OMITTED] T4915.079
[GRAPHIC] [TIFF OMITTED] T4915.080
[GRAPHIC] [TIFF OMITTED] T4915.081
[GRAPHIC] [TIFF OMITTED] T4915.082
[GRAPHIC] [TIFF OMITTED] T4915.084
[GRAPHIC] [TIFF OMITTED] T4915.085
[GRAPHIC] [TIFF OMITTED] T4915.086
[GRAPHIC] [TIFF OMITTED] T4915.087
[GRAPHIC] [TIFF OMITTED] T4915.088
[GRAPHIC] [TIFF OMITTED] T4915.089
[GRAPHIC] [TIFF OMITTED] T4915.090
[GRAPHIC] [TIFF OMITTED] T4915.091
[GRAPHIC] [TIFF OMITTED] T4915.092
[GRAPHIC] [TIFF OMITTED] T4915.093
[GRAPHIC] [TIFF OMITTED] T4915.094
[GRAPHIC] [TIFF OMITTED] T4915.095
[GRAPHIC] [TIFF OMITTED] T4915.096
[GRAPHIC] [TIFF OMITTED] T4915.097
[GRAPHIC] [TIFF OMITTED] T4915.098
[GRAPHIC] [TIFF OMITTED] T4915.099
[GRAPHIC] [TIFF OMITTED] T4915.100
[GRAPHIC] [TIFF OMITTED] T4915.101
[GRAPHIC] [TIFF OMITTED] T4915.102
[GRAPHIC] [TIFF OMITTED] T4915.103
[GRAPHIC] [TIFF OMITTED] T4915.104
[GRAPHIC] [TIFF OMITTED] T4915.105
[GRAPHIC] [TIFF OMITTED] T4915.106
[GRAPHIC] [TIFF OMITTED] T4915.107
[GRAPHIC] [TIFF OMITTED] T4915.108
[GRAPHIC] [TIFF OMITTED] T4915.109
[GRAPHIC] [TIFF OMITTED] T4915.110
[GRAPHIC] [TIFF OMITTED] T4915.111
[GRAPHIC] [TIFF OMITTED] T4915.112
[GRAPHIC] [TIFF OMITTED] T4915.113
[GRAPHIC] [TIFF OMITTED] T4915.114
[GRAPHIC] [TIFF OMITTED] T4915.115
[GRAPHIC] [TIFF OMITTED] T4915.116
[GRAPHIC] [TIFF OMITTED] T4915.117
[GRAPHIC] [TIFF OMITTED] T4915.118
[GRAPHIC] [TIFF OMITTED] T4915.119
[GRAPHIC] [TIFF OMITTED] T4915.120
[GRAPHIC] [TIFF OMITTED] T4915.121
[GRAPHIC] [TIFF OMITTED] T4915.122
[GRAPHIC] [TIFF OMITTED] T4915.123
[GRAPHIC] [TIFF OMITTED] T4915.124
[GRAPHIC] [TIFF OMITTED] T4915.125
[GRAPHIC] [TIFF OMITTED] T4915.126
[GRAPHIC] [TIFF OMITTED] T4915.127
[GRAPHIC] [TIFF OMITTED] T4915.128
[GRAPHIC] [TIFF OMITTED] T4915.129
[GRAPHIC] [TIFF OMITTED] T4915.130
[GRAPHIC] [TIFF OMITTED] T4915.131
[GRAPHIC] [TIFF OMITTED] T4915.132
[GRAPHIC] [TIFF OMITTED] T4915.133
[GRAPHIC] [TIFF OMITTED] T4915.134
[GRAPHIC] [TIFF OMITTED] T4915.135
[GRAPHIC] [TIFF OMITTED] T4915.136
[GRAPHIC] [TIFF OMITTED] T4915.137
[GRAPHIC] [TIFF OMITTED] T4915.138
[GRAPHIC] [TIFF OMITTED] T4915.139
[GRAPHIC] [TIFF OMITTED] T4915.140
[GRAPHIC] [TIFF OMITTED] T4915.141
[GRAPHIC] [TIFF OMITTED] T4915.142
[GRAPHIC] [TIFF OMITTED] T4915.143
[GRAPHIC] [TIFF OMITTED] T4915.144
[GRAPHIC] [TIFF OMITTED] T4915.145
[GRAPHIC] [TIFF OMITTED] T4915.146
[GRAPHIC] [TIFF OMITTED] T4915.147
[GRAPHIC] [TIFF OMITTED] T4915.148
[GRAPHIC] [TIFF OMITTED] T4915.149
[GRAPHIC] [TIFF OMITTED] T4915.150
[GRAPHIC] [TIFF OMITTED] T4915.151
[GRAPHIC] [TIFF OMITTED] T4915.152
[GRAPHIC] [TIFF OMITTED] T4915.153
[GRAPHIC] [TIFF OMITTED] T4915.154
[GRAPHIC] [TIFF OMITTED] T4915.155
[GRAPHIC] [TIFF OMITTED] T4915.156
[GRAPHIC] [TIFF OMITTED] T4915.157
[GRAPHIC] [TIFF OMITTED] T4915.158
[GRAPHIC] [TIFF OMITTED] T4915.159
[GRAPHIC] [TIFF OMITTED] T4915.160
[GRAPHIC] [TIFF OMITTED] T4915.161
[GRAPHIC] [TIFF OMITTED] T4915.162
[GRAPHIC] [TIFF OMITTED] T4915.163
[GRAPHIC] [TIFF OMITTED] T4915.164
[GRAPHIC] [TIFF OMITTED] T4915.165
[GRAPHIC] [TIFF OMITTED] T4915.166
[GRAPHIC] [TIFF OMITTED] T4915.167
[GRAPHIC] [TIFF OMITTED] T4915.168
[GRAPHIC] [TIFF OMITTED] T4915.169
[GRAPHIC] [TIFF OMITTED] T4915.170
[GRAPHIC] [TIFF OMITTED] T4915.171
[GRAPHIC] [TIFF OMITTED] T4915.172
[GRAPHIC] [TIFF OMITTED] T4915.173
[GRAPHIC] [TIFF OMITTED] T4915.174
[GRAPHIC] [TIFF OMITTED] T4915.175
[GRAPHIC] [TIFF OMITTED] T4915.176
[GRAPHIC] [TIFF OMITTED] T4915.177
[GRAPHIC] [TIFF OMITTED] T4915.178
[GRAPHIC] [TIFF OMITTED] T4915.179
[GRAPHIC] [TIFF OMITTED] T4915.180
[GRAPHIC] [TIFF OMITTED] T4915.181
[GRAPHIC] [TIFF OMITTED] T4915.182
[GRAPHIC] [TIFF OMITTED] T4915.183
[GRAPHIC] [TIFF OMITTED] T4915.184
[GRAPHIC] [TIFF OMITTED] T4915.185
[GRAPHIC] [TIFF OMITTED] T4915.186
[GRAPHIC] [TIFF OMITTED] T4915.187
[GRAPHIC] [TIFF OMITTED] T4915.188
[GRAPHIC] [TIFF OMITTED] T4915.189
[GRAPHIC] [TIFF OMITTED] T4915.190
[GRAPHIC] [TIFF OMITTED] T4915.191
[GRAPHIC] [TIFF OMITTED] T4915.192
[GRAPHIC] [TIFF OMITTED] T4915.193
[GRAPHIC] [TIFF OMITTED] T4915.194
[GRAPHIC] [TIFF OMITTED] T4915.195
[GRAPHIC] [TIFF OMITTED] T4915.196
[GRAPHIC] [TIFF OMITTED] T4915.197
[GRAPHIC] [TIFF OMITTED] T4915.198
[GRAPHIC] [TIFF OMITTED] T4915.199
[GRAPHIC] [TIFF OMITTED] T4915.200
[GRAPHIC] [TIFF OMITTED] T4915.201
[GRAPHIC] [TIFF OMITTED] T4915.202
[GRAPHIC] [TIFF OMITTED] T4915.203
[GRAPHIC] [TIFF OMITTED] T4915.204
[GRAPHIC] [TIFF OMITTED] T4915.205
[GRAPHIC] [TIFF OMITTED] T4915.206
[GRAPHIC] [TIFF OMITTED] T4915.207
[GRAPHIC] [TIFF OMITTED] T4915.208
[GRAPHIC] [TIFF OMITTED] T4915.209
[GRAPHIC] [TIFF OMITTED] T4915.210
[GRAPHIC] [TIFF OMITTED] T4915.211
[GRAPHIC] [TIFF OMITTED] T4915.212
[GRAPHIC] [TIFF OMITTED] T4915.213
[GRAPHIC] [TIFF OMITTED] T4915.214
[GRAPHIC] [TIFF OMITTED] T4915.215
[GRAPHIC] [TIFF OMITTED] T4915.216
[GRAPHIC] [TIFF OMITTED] T4915.217
[GRAPHIC] [TIFF OMITTED] T4915.218
[GRAPHIC] [TIFF OMITTED] T4915.219
[GRAPHIC] [TIFF OMITTED] T4915.220
[GRAPHIC] [TIFF OMITTED] T4915.221
[GRAPHIC] [TIFF OMITTED] T4915.222
[GRAPHIC] [TIFF OMITTED] T4915.223
[GRAPHIC] [TIFF OMITTED] T4915.224
[GRAPHIC] [TIFF OMITTED] T4915.225
[GRAPHIC] [TIFF OMITTED] T4915.226
[GRAPHIC] [TIFF OMITTED] T4915.227
[GRAPHIC] [TIFF OMITTED] T4915.228
[GRAPHIC] [TIFF OMITTED] T4915.229
[GRAPHIC] [TIFF OMITTED] T4915.230
[GRAPHIC] [TIFF OMITTED] T4915.231
[GRAPHIC] [TIFF OMITTED] T4915.232
[GRAPHIC] [TIFF OMITTED] T4915.233
[GRAPHIC] [TIFF OMITTED] T4915.234
[GRAPHIC] [TIFF OMITTED] T4915.235
[GRAPHIC] [TIFF OMITTED] T4915.236
[GRAPHIC] [TIFF OMITTED] T4915.237
[GRAPHIC] [TIFF OMITTED] T4915.238
[GRAPHIC] [TIFF OMITTED] T4915.239
[GRAPHIC] [TIFF OMITTED] T4915.240
[GRAPHIC] [TIFF OMITTED] T4915.241
[GRAPHIC] [TIFF OMITTED] T4915.242
[GRAPHIC] [TIFF OMITTED] T4915.243
[GRAPHIC] [TIFF OMITTED] T4915.244
[GRAPHIC] [TIFF OMITTED] T4915.245
[GRAPHIC] [TIFF OMITTED] T4915.246
[GRAPHIC] [TIFF OMITTED] T4915.247
[GRAPHIC] [TIFF OMITTED] T4915.248
[GRAPHIC] [TIFF OMITTED] T4915.249
[GRAPHIC] [TIFF OMITTED] T4915.250
[GRAPHIC] [TIFF OMITTED] T4915.251
[GRAPHIC] [TIFF OMITTED] T4915.252
[GRAPHIC] [TIFF OMITTED] T4915.253
[GRAPHIC] [TIFF OMITTED] T4915.254
[GRAPHIC] [TIFF OMITTED] T4915.255
[GRAPHIC] [TIFF OMITTED] T4915.256
[GRAPHIC] [TIFF OMITTED] T4915.257
[GRAPHIC] [TIFF OMITTED] T4915.258
[GRAPHIC] [TIFF OMITTED] T4915.259
[GRAPHIC] [TIFF OMITTED] T4915.260
[GRAPHIC] [TIFF OMITTED] T4915.261
[GRAPHIC] [TIFF OMITTED] T4915.262
[GRAPHIC] [TIFF OMITTED] T4915.263
[GRAPHIC] [TIFF OMITTED] T4915.264
[GRAPHIC] [TIFF OMITTED] T4915.265
[GRAPHIC] [TIFF OMITTED] T4915.266
[GRAPHIC] [TIFF OMITTED] T4915.267
[GRAPHIC] [TIFF OMITTED] T4915.268
[GRAPHIC] [TIFF OMITTED] T4915.269
[GRAPHIC] [TIFF OMITTED] T4915.270
[GRAPHIC] [TIFF OMITTED] T4915.271
[GRAPHIC] [TIFF OMITTED] T4915.272
[GRAPHIC] [TIFF OMITTED] T4915.273
[GRAPHIC] [TIFF OMITTED] T4915.274
[GRAPHIC] [TIFF OMITTED] T4915.275
[GRAPHIC] [TIFF OMITTED] T4915.276
[GRAPHIC] [TIFF OMITTED] T4915.277
[GRAPHIC] [TIFF OMITTED] T4915.278
[GRAPHIC] [TIFF OMITTED] T4915.279
[GRAPHIC] [TIFF OMITTED] T4915.280