[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



                  EXAMINING FEDERAL VEHICLE TECHNOLOGY
                   RESEARCH AND DEVELOPMENT PROGRAMS

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                              ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 24, 2009

                               __________

                           Serial No. 111-13

                               __________

     Printed for the use of the Committee on Science and Technology


     Available via the World Wide Web: http://www.science.house.gov

                                 ______






                  U.S. GOVERNMENT PRINTING OFFICE
48-005PS                  WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001




                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                   HON. BART GORDON, Tennessee, Chair
JERRY F. COSTELLO, Illinois          RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas         F. JAMES SENSENBRENNER JR., 
LYNN C. WOOLSEY, California              Wisconsin
DAVID WU, Oregon                     LAMAR S. SMITH, Texas
BRIAN BAIRD, Washington              DANA ROHRABACHER, California
BRAD MILLER, North Carolina          ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois            VERNON J. EHLERS, Michigan
GABRIELLE GIFFORDS, Arizona          FRANK D. LUCAS, Oklahoma
DONNA F. EDWARDS, Maryland           JUDY BIGGERT, Illinois
MARCIA L. FUDGE, Ohio                W. TODD AKIN, Missouri
BEN R. LUJAN, New Mexico             RANDY NEUGEBAUER, Texas
PAUL D. TONKO, New York              BOB INGLIS, South Carolina
PARKER GRIFFITH, Alabama             MICHAEL T. MCCAUL, Texas
STEVEN R. ROTHMAN, New Jersey        MARIO DIAZ-BALART, Florida
JIM MATHESON, Utah                   BRIAN P. BILBRAY, California
LINCOLN DAVIS, Tennessee             ADRIAN SMITH, Nebraska
BEN CHANDLER, Kentucky               PAUL C. BROUN, Georgia
RUSS CARNAHAN, Missouri              PETE OLSON, Texas
BARON P. HILL, Indiana
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
KATHLEEN DAHLKEMPER, Pennsylvania
ALAN GRAYSON, Florida
SUZANNE M. KOSMAS, Florida
GARY C. PETERS, Michigan
VACANCY
                                 ------                                

                 Subcommittee on Energy and Environment

                  HON. BRIAN BAIRD, Washington, Chair
JERRY F. COSTELLO, Illinois          BOB INGLIS, South Carolina
EDDIE BERNICE JOHNSON, Texas         ROSCOE G. BARTLETT, Maryland
LYNN C. WOOLSEY, California          VERNON J. EHLERS, Michigan
DANIEL LIPINSKI, Illinois            JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
DONNA F. EDWARDS, Maryland           RANDY NEUGEBAUER, Texas
BEN R. LUJAN, New Mexico             MARIO DIAZ-BALART, Florida
PAUL D. TONKO, New York                  
JIM MATHESON, Utah                       
LINCOLN DAVIS, Tennessee                 
BEN CHANDLER, Kentucky                   
BART GORDON, Tennessee               RALPH M. HALL, Texas
                  JEAN FRUCI Democratic Staff Director
            CHRIS KING Democratic Professional Staff Member
        MICHELLE DALLAFIOR Democratic Professional Staff Member
         SHIMERE WILLIAMS Democratic Professional Staff Member
      ELAINE PAULIONIS PHELEN Democratic Professional Staff Member
          ADAM ROSENBERG Democratic Professional Staff Member
          ELIZABETH STACK Republican Professional Staff Member
          TARA ROTHSCHILD Republican Professional Staff Member
                    STACEY STEEP Research Assistant













                            C O N T E N T S

                             March 24, 2009

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Brian Baird, Chair, Subcommittee on 
  Energy and Environment, Committee on Science and Technology, 
  U.S. House of Representatives..................................     6
    Written Statement............................................     7

Statement by Representative Bob Inglis, Ranking Minority Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................     8
    Written Statement............................................     8

Prepared Statement by Representative Jerry F. Costello, Member, 
  Committee on Science and Technology, U.S. House of 
  Representatives................................................     9

Prepared Statement by Representative Eddie Bernice Johnson, 
  Member, Committee on Science and Technology, U.S. House of 
  Representatives................................................     9

                               Witnesses:

Mr. Steven Chalk, Principal Deputy Assistant Secretary, Office of 
  Energy Efficiency and Renewable Energy, U.S. Department of 
  Energy
    Oral Statement...............................................    11
    Written Statement............................................    12
    Biography....................................................    16

Dr. Kathryn Clay, Director of Research, Alliance of Automobile 
  Manufacturers
    Oral Statement...............................................    17
    Written Statement............................................    18
    Biography....................................................    20

Mr. Thomas C. Baloga, Vice President of Engineering-US, BMW of 
  North America, LLC
    Oral Statement...............................................    20
    Written Statement............................................    22
    Biography....................................................    26

Dr. John H. Johnson, Presidential Professor of Mechanical 
  Engineering, Michigan Technological University
    Oral Statement...............................................    26
    Written Statement............................................    28
    Biography....................................................    33

Mr. Anthony Greszler, Vice President of Government and Industry 
  Relations, Volvo Powertrain North America
    Oral Statement...............................................    34
    Written Statement............................................    35
    Biography....................................................    37

Discussion
  DOE's Response to Recommendations..............................    38
  Funding From the Recovery Act and Private Partnerships.........    39
  Innovation and Job Creation....................................    41
  Avoiding Picking Winners and Losers............................    42
  Industry Funding Levels and Viability..........................    43
  Batteries......................................................    44
  The Relative Merits of Various Transportation Innovations......    45
  Domestic Jobs..................................................    47
  Other Promising Technologies...................................    48
  Ethanol and Fuel Efficiency Standards..........................    49
  Innovations in Fuel Efficiency.................................    51
  The Need for Flex Fuel Vehicles................................    54
  Hydrogen Fuel..................................................    56
  Funding Levels and Sources.....................................    59
  European Innovations...........................................    61
  Closing........................................................    62

              Appendix: Additional Material for the Record

Letters to Chairman Brian Baird from John Boesel, President and 
  CEO of CALSTART, dated March 23, 2009..........................    66

HTUF Partners....................................................    70

Joint Statement of CNH America LLC, Caterpillar, Inc., and Deere 
  & Company......................................................    77

 
 EXAMINING FEDERAL VEHICLE TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAMS

                              ----------                              


                        TUESDAY, MARCH 24, 2009

                  House of Representatives,
            Subcommittee on Energy and Environment,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Brian 
Baird [Chair of the Subcommittee] presiding.


                            hearing charter

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                     U.S. HOUSE OF REPRESENTATIVES

                  Examining Federal Vehicle Technology

                   Research and Development Programs

                        tuesday, march 24, 2009
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

Purpose

    On Tuesday, March 24, the Subcommittee on Energy and Environment 
will hold a hearing to receive testimony on the Department of Energy's 
(DOE) Vehicle Technologies research and development programs. Witnesses 
will discuss the role of federal research programs in light- and heavy-
duty vehicle technology development, as well as future directions for 
FreedomCAR and 21st Century Truck Partnerships at DOE, specifically, 
and proposals for programmatic changes to meet ever-changing market and 
public needs.

WITNESSES

          Mr. Steven Chalk--Principal Deputy Assistant 
        Secretary, Energy Efficiency and Renewable Energy, U.S. 
        Department of Energy

          Dr. Kathryn Clay--Director of Research, Alliance of 
        Automobile Manufacturers

          Mr. Anthony Greszler--Vice President of Government 
        and Industry Relations, Volvo Powertrain North America; Member, 
        21st Century Truck Partnership Executive Committee

          Dr. John H. Johnson--Presidential Professor of 
        Mechanical Engineering, Michigan Technological University; 
        Chair, National Academies Committee to Review the 21st Century 
        Truck Partnership

          Mr. Thomas C. Baloga--Vice President of Engineering 
        U.S., BMW of North America

BACKGROUND

    For over two decades the Department of Energy has funded a wide 
range of research activities on passenger vehicles and heavy-duty 
trucks through its Vehicle Technologies program. The program's mission 
is to ``Develop `leap frog' technologies that will provide Americans 
with greater freedom of mobility and energy security, while lowering 
costs and reducing impacts on the environment.'' Most recently DOE has 
addressed these research needs through two public-private research 
programs: The 21st Century Truck Partnership (21CTP), which conducts 
R&D through collaborations with the heavy-duty trucking industry; and 
the FreedomCAR and the Hydrogen Fuel Initiative programs which examine 
the pre-competitive, high-risk research needed to develop technologies 
that will apply to a range of affordable cars and light trucks.
    Over the last decade federal research priorities have shifted 
between passenger and heavy-duty vehicles, as well as diesel-hybrids, 
hydrogen-fueled, and battery-powered drive systems. While the programs 
have had some notable successes in transferring technologies to the 
marketplace, critics contend that previous administrations have adopted 
an inconsistent winner-take-all approach to vehicle research where one 
technology or platform receives the large bulk of funding, only to have 
funding cut before the programs can reasonably be expected to develop 
commercially viable technologies. They will argue that what is needed 
is long-term sustained funding on a broad range of areas from near-
commercial technologies to exploratory research on systems with the 
potential to revolutionize transportation in the U.S. Striking the 
appropriate research balance and strengthening the federal commitment 
in this area is especially critical at a time when both the automotive 
and trucking industries have very limited resources for research and 
development.

Light-Duty Vehicles and the FreedomCAR Partnership

    FreedomCAR has been focused primarily on R&D for hydrogen-powered 
passenger vehicles. Launched in 2003, the initiative aims to help 
industry make mass-market fuel cell and hydrogen combustion vehicles 
available at an affordable cost within 10 to 15 years. The program 
replaced the Clinton Administration initiative, the Partnership for a 
New Generation of Vehicles (PNGV), which was funded for 10 years with 
the goal of developing ultra-efficient diesel hybrid passenger vehicles 
with fuel mileage up to 80 miles per gallon. PNGV resulted in prototype 
vehicles that met the criteria, but was ultimately canceled in 2001 at 
the request of the industry partners represented as U.S. Council for 
Automotive Research (USCAR--Daimler Chrysler, Ford, and General 
Motors).
    The FreedomCAR program was then established as a collaborative 
effort between DOE, energy companies and the USCAR partners, and the 
focus was shifted to longer-term research on hydrogen vehicles. While 
simultaneously pursuing their own proprietary research, the partners 
work together to develop hydrogen technology roadmaps, determine 
technical requirements and goals, and suggest R&D priorities for the 
federal program. Efforts are divided among six technical teams: fuel 
cells, advanced combustion and emissions control, systems engineering 
and analysis, electrochemical energy storage, material, and electrical 
and electronics. Generally, the partners aim to have reliable systems 
for future fuel cell power trains with costs comparable to conventional 
internal combustion engines and automatic transmission systems. If 
successful, advances in hydrogen technologies could ultimately mean 
significant reductions in greenhouse gas emissions, reduced fuel costs 
for consumers, and greatly decreased imports of foreign oil.
    However, FreedomCAR has raised public debate over several issues 
including the proper role of the government in R&D with ultimate market 
applications, as well as the appropriate level of funding for such 
long-term research when there are more immediate needs in the vehicle 
sector. The Congressional Research Service found that some critics of 
the program believe that there are too many technical and economic 
hurdles to the development of affordable, practical hydrogen and fuel 
cell technology for automobiles, and that federal research should focus 
on more realistic goals. Proponents of hydrogen research contend that 
it will require many years of sustained funding to realize its 
potential for revolutionizing the transportation sector, and 
withdrawing support now would amount to the squandering of several 
years and billions of dollars in government and private research.
    Between 2003 and 2008 the FreedomCAR and the hydrogen related 
research at DOE saw a steady increase in funding from $184.6 million to 
$338.5 million. However, for FY09, the Bush Administration's request 
for hydrogen related research within the Vehicle Technologies program 
dropped 30 percent below the FY08 appropriation, indicating that the 
program's focus would shift towards plug-in hybrid and alternative fuel 
vehicles technologies.

Medium- to Heavy-Duty Trucks, and the 21st Century Truck Partnership at 
                    DOE

    Launched in 2000, the 21st Century Truck Partnership (21CTP) 
explores technology improvements in commercial and military trucks and 
buses. The aim of the program is to support R&D in five key areas: 
engine systems, heavy-duty hybrids, parasitic losses, idle reduction 
and safety. Other federal agencies in the 21st Century Truck 
Partnership include the Department of Defense, Department of 
Transportation, and the Environmental Protection Agency. The goal of 
21CTP is to combine federal and industry resources to develop a 
balanced portfolio of heavy-duty truck research activities, coordinate 
their research activities where appropriate, and make effective use of 
the Nation's research universities and national laboratories. In 
addition to funding specific research projects, 21CTP also serves as a 
forum for information exchange across all government and industrial 
sectors related to heavy truck research.
    Funding for the Partnership steadily increased from $45.6 million 
in FY99 to $86.6 million in FY02. However, despite the potential 
economic and environmental benefits of improvements in trucks and the 
considerable technical hurdles that remain, the 21st Century Truck 
Partnership started to see a decrease in it's funding in FY03 and hit a 
low of $29 million in FY08. Stakeholders in 21CTP contend that the Bush 
Administration's decision to shift the focus of federal research to the 
passenger vehicle market came at the expense of truck related research.
    Since 2000 there have been a number of suggestions on how to 
improve the 21CTP. In 2008, the National Academy of Sciences (NAS) at 
the request of DOE released a report entitled, ``Review of the 21st 
Century Truck Partnership.'' In this report the Academies panel 
examined the overall adequacy and balance of the program, and made 
recommendations to improve the likelihood of 21CTP meeting its goals. 
There are a variety of recommendations related to the five main 
research areas and additional recommendations on the structure and 
management of the program. The Chair of this review panel will testify 
on the panel's findings and recommendations at the hearing.
    Electric hybridization is one area of focus for 21CTP. The power 
demands on trucks are as varied as the applications, and significant 
technical hurdles remain in hybridization. There is no one-size-fits-
all solution for the entire sector. For example, through the course of 
an average drive cycle the charging and discharging of a hybrid system 
on a refuse truck, with its frequent starts and stops, dumpster 
lifting, and trash compaction, will be considerably different than that 
of a utility truck which may sit idling in one place for several hours 
in order to operate the bucket lifting boom and other equipment. 
Hybridization of long-haul tractor trailer rigs (Class 8) may prove 
even more challenging since they seldom brake during a drive cycle, 
providing few opportunities for battery systems to recharge through 
regenerative braking.
    While the total number of heavy trucks is small compared to 
passenger vehicles, their fuel consumption and emissions justifies the 
high costs of development of hybrid models and other advanced truck 
technologies. According to figures by the Oshkosh Truck Corporation 
there are approximately 90,000 refuse collection trucks in the U.S. but 
their collective fuel consumption is roughly equivalent to 2.5 million 
passenger vehicles (based on 10,000 gallons/year per truck). Estimates 
done by the Eaton Corporation show that as little as 10,000 hybrid 
electric trucks could reduce diesel fuel usage by 7.2 million gallons/
year (approx. one million barrels of oil), reduce NOX emissions by the 
amount equivalent to removing New York City's passenger cars for 25 
days, and reduce carbon dioxide emissions by 83,000 tons.
    Given the additional funding for vehicle technologies under the 
American Recovery and Investment Act, and growing public awareness of 
the need for new vehicle technologies, it is important that DOE 
programs be continually assessed for their ability to meet the changing 
needs of the transportation sector. Witnesses at the hearing will 
address both the strengths and weaknesses of the public-private 
research programs, as well as provide suggestions for how the programs 
can be enhanced to ensure the most appropriate use of taxpayer funds in 
this sector.
    Chair Baird. Well, welcome to our hearing today. I am very 
grateful for our distinguished panel of witnesses, for those in 
the audience, and my good friends and colleagues on the panel.
    This is a topic I find incredibly fascinating and 
absolutely essential to solving our energy consumption and 
global overheating and ocean acidification problems. We are 
always going to be in some fashion moving ourselves about the 
planet in vehicles, and the question is how can we do this in 
the most energy-efficient and environmentally-responsible way. 
And our panelists today can enlighten us on this.
    I will start with a brief editorial observation that maybe 
not everyone will agree with, but I find it compelling, and it 
is that some years ago the United States, I think, had made 
some important strides on energy efficient vehicles, 
particularly the Chevy Corvair, and it was a front-wheel-drive, 
high-mileage vehicle, and rather ironically it was killed by 
Ralph Nader. And the damage that did to fuel efficiency in this 
country is immeasurable, and hence the damage it did to the 
environment because we labeled small cars, fuel-efficient cars 
unsafe at any speed, and that has left a legacy of, I think, 
inefficient vehicles that has contributed to global warming and 
overheating. And hopefully we can move forward with more 
responsible efforts to change how we drive and what we drive 
and what our mileage is.
    Our hearing today deals with DOE's program, and DOE has 
supported a diverse portfolio of research in vehicle 
technologies for many years. The goal of the programs is to 
develop technologies that will maintain the freedom of mobility 
that vehicles provide while improving our energy security and 
reducing impacts on the environment. The program sponsors 
collaborative research on passenger vehicles through the 
FreedomCAR Partnership, and on heavy-duty trucks through the 
21st Century Truck Partnership.
    While these partnerships have had a number of successes, it 
is important to recognize when a shift in priorities needs to 
take place. As stewards of the taxpayers' dollars it is our 
responsibility to continually assess these programs and ensure 
that research activities are relevant to the industry's needs 
for commercially-viable technologies and appropriate to the 
government's role in exploratory research in areas that 
industry partners would not be able to pursue on their own.
    This hearing today should shed light on some of these 
confusing and sometimes conflicting priorities. Many 
stakeholders argue that the Vehicle Technology Program at DOE 
has been a victim of drastic swings in priority between 
Administrations. The Clinton Administration sought to develop 
highly-efficient diesel hybrid passenger cars along with 
technologies for cleaner and more efficient trucks. The Bush 
Administration chose to focus instead on long-term research on 
hydrogen passenger vehicles and infrastructure and to reduce 
the funding for the heavy-duty truck research. Now as the new 
Administration develops its own policies, I hope we will avoid 
again putting all our eggs in one technology basket.
    While we must be targeted in our federal R&D programs, a 
single-minded approach can ignore the importance of balancing a 
diverse portfolio with sustained funding for long-term 
research. Last year the National Academies of Science reviewed 
both the FreedomCAR and the 21st Century Truck Programs and 
made a number of recommendations for programmatic changes, some 
of which we will hear today.
    Given the recommendations of these two reports and the 
constantly changing landscape in the vehicle sector, the 
Committee is interested in hearing the witnesses' views on what 
the near-term priorities and future direction should be for the 
Vehicle Technologies Program at DOE.
    With that I look forward to working with you all in 
exploring ways in which federal programs can be improved to 
support a robust vehicle manufacturing industry and to better 
serve public needs in advanced passenger vehicles and heavy-
duty truck technology development.
    I now would recognize my distinguished colleague and friend 
from South Carolina, our Ranking Member, Mr. Inglis, for his 
opening statement.
    [The prepared statement of Chair Baird follows:]
                Prepared Statement of Chair Brian Baird
    I want to welcome Members of the Subcommittee and our distinguished 
panelists to today's hearing examining the vehicle technology research 
and development programs at the Department of Energy (DOE).
    With concerns about our over-reliance on foreign oil, the 
fluctuating costs of fuels, and the impact of the transportation sector 
on air quality and carbon emissions, it is imperative that we 
continually push the envelope in passenger and commercial vehicle 
technologies.
    DOE has supported a diverse portfolio of research in vehicle 
technologies for many years. The goal of these programs is to develop 
technologies that will maintain the freedom of mobility that vehicles 
provide, while improving our energy security and reducing their impacts 
on the environment. The program sponsors collaborative research on 
passenger vehicles through the FreedomCAR Partnership, and on heavy-
duty trucks through the 21st Century Truck Partnership.
    While these partnerships have had a number of successes, it is 
important to recognize when a shift in priorities needs to take place. 
As stewards of the taxpayers' dollars it is our responsibility to 
continually assess these programs and ensure that research activities 
are both relevant to the industry's needs for commercially-viable 
technologies, and appropriate to the government's role in exploratory 
research in areas that industry partners would not be able to pursue on 
their own. This hearing today should shed some light on these often 
confusing, and sometimes conflicting, priorities.
    Many stakeholders argue that the Vehicle Technologies program at 
DOE has been a victim of drastic swings in priority between 
Administrations. The Clinton Administration sought to develop highly 
efficient diesel hybrid passenger cars, along with technologies for 
cleaner and more efficient trucks. The Bush Administration chose to 
focus instead on longer-term research in hydrogen passenger vehicles 
and infrastructure, and to reduce the funding for heavy-duty truck 
research.
    Now, as the new administration develops its own policies, I hope 
that we will avoid again putting all of our eggs in one technology 
basket. While we must be targeted in our federal R&D programs, this 
single-minded approach ignores the importance of balancing a diverse 
portfolio with sustained funding for longer-term research.
    Last year the National Academies of Science reviewed both the 
FreedomCAR and 21st Century Truck programs, and made a number of 
recommendations for programmatic changes, some of which we will hear 
today. Given the recommendations of these two reports, and the 
constantly changing landscape in the vehicles sector, the Committee is 
interested in hearing the witnesses' views on what the near-term 
priorities and future directions should be for the Vehicle Technologies 
Program at DOE.
    With that, I look forward to working with you all in exploring ways 
in which federal programs can be improved to support a robust vehicle 
manufacturing industry and to better serve public needs in advanced 
passenger vehicle and heavy-duty truck technology development.
    I now yield to my distinguished colleague from South Carolina, our 
Ranking Member, Mr. Inglis for his opening statement.

    Mr. Inglis. Thank you, Mr. Chair.
    Transportation clearly needs innovation. The transportation 
sector is our primary consumer of oil and is the second largest 
emitter of carbon dioxide in the country. So the Federal 
Government should continue its efforts to provide vehicle 
technology research and development. Transitioning from today's 
dependence on oil to tomorrow's clean energy economy holds 
enormous potential for our economy, environment, and national 
security.
    I am particularly excited about having our friend, Thomas 
Baloga, from--Vice President of Engineering from BMW North 
America. Mr. Chair, I have got to point out that that is big 
for us in South Carolina, the fact that we have BMW there. In 
the upstate of South Carolina, BMW and the International Center 
for Automotive Research are working together to reinvent the 
car with innovation in various things like hydrogen combustion, 
battery research and development, and it is particularly 
exciting for us.
    I should also point out that were it not really for BMW 
South Carolina would not have a claim on the transportation 
innovation future. We are immensely grateful for the $6 billion 
that BMW has invested in South Carolina, 750 million of which 
is coming out of the ground right now in an expansion to 
produce, bring the production of the X-3 to Greer, South 
Carolina, along with the X-5 and the brand new X-6.
    So because we have this wonderful blessing of BMW in the 
upstate of South Carolina, we have a claim to part of the 
innovation future, and we are particularly excited about 
partnering in any way we can with the Federal Government and 
agencies and others interested in this process to find ways to 
break this addiction to oil, to truly innovate our way out of 
our current fix.
    So, thank you, again, Mr. Chair, for holding this hearing. 
I look forward to hearing our witnesses and how we can continue 
to develop and encourage the partnership between federal R&D 
support and the vehicle industry.
    [The prepared statement of Mr. Inglis follows:]
            Prepared Statement of Representative Bob Inglis
    Thank you for holding this hearing, Mr. Chairman.
    Transportation needs innovation. The transportation sector is our 
primary consumer of oil, and is the second largest emitter of carbon 
dioxide in the country. The Federal Government must continue to support 
efforts in vehicle technology research and development. Transitioning 
from today's dependence on oil to tomorrow's clean energy economy holds 
enormous potential to for our economy, environment, and national 
security.
    I'm delighted to have Mr. Thomas Baloga here this morning, Vice 
President of Engineering at BMW North America, located in the Fourth 
District of South Carolina. In the Upstate, BMW and the International 
Center for Automotive Research are working together to reinvent the car 
with innovation in hydrogen combustion and battery research and 
development.
    Meanwhile, in the present, BMW employs about 5,000 at the plant and 
its suppliers employ over 17,000 in our region. Without BMW, we 
wouldn't have a claim on the transportation innovation future in South 
Carolina, and we are immensely grateful for the $6.0 billion they have 
invested in SC--$750 million of which is coming out of the ground new 
in an expansion to produce the new X-3 alongside the X-5 and X-6.
    Thank you again for holding this hearing, Mr. Chairman. I look 
forward to hearing from our witnesses about how we can continue to 
encourage the partnership between federal R&D support and the vehicle 
industry.

    Chair Baird. Thank you, Mr. Inglis. I appreciate your good 
words, and we also have with us Mr. Tonko and Dr. Ehlers. I 
also want to acknowledge the presence of former Member of 
Congress, Dave McCurdy. Dave, good to see you again, and thank 
you for being here.
    [The prepared statement of Mr. Costello follows:]
         Prepared Statement of Representative Jerry F. Costello
    Good Morning. Thank you, Mr. Chairman, for holding today's hearing 
to discuss the role of federal research programs in light- and heavy-
duty vehicle technology development.
    As a supporter of advanced energy research and a senior Member of 
the Transportation and Infrastructure Committee, I applaud the 
Department of Energy for their far-reaching efforts to promote the 
development of new, clean, cost-efficient vehicle technologies for 
passenger cars and for medium- to heavy-duty trucks. FreedomCAR and the 
21st Century Truck Partnership are innovative public-private 
partnerships that focus on creating a roadmap for the expansion of 
hydrogen and hybrid vehicles of any size. They provide unique forums 
for the public sector and the private sector to come together, share 
ideas, and discuss emerging technologies. Many of the new vehicle 
technologies are in their earliest stages, and the long-term focus of 
these partnerships will ensure that the best new ideas move from the 
drafting board to our garages, lowering our energy costs and protecting 
our environment.
    I am interested to hear from our witnesses about the challenges and 
opportunities facing development of both light-duty vehicle and medium- 
to heavy-duty truck research. Over the past fiscal years, funding for 
vehicular research and development has favored light-duty vehicles and 
passenger cars. However, some research suggests that investment in the 
development of more efficient medium- to heavy-duty vehicles could have 
a larger impact on the environment. I support the development of new 
technologies in both fields, and I am interested to hear how the 
Department of Energy and industry representatives view the funding 
division and how the Science and Technology Committee can work with 
both industries to meet the changing needs of the transportation 
sector.
    The Obama Administration has made it clear that science and 
technological advancement will be a top priority for the United States. 
I can think of no better place to begin our renewed focus on energy 
efficiency than on our roadways and in our cars.
    I welcome our panel of witnesses, and I look forward to their 
testimony.

    [The prepared statement of Ms. Johnson follows:]
       Prepared Statement of Representative Eddie Bernice Johnson
    Good morning, Mr. Chairman and Ranking Member.
    Today's Energy Subcommittee hearing on vehicle technology research 
will be beneficial for developing forward-thinking science policy.
    As a Member of the House Committee on Transportation and 
Infrastructure, I have a keen interest in any policies affecting 
vehicles.
    My home State of Texas, the second largest state in the Union, has 
the most State highway miles in the country. There are more than 79,000 
miles of highways in Texas.
    Improvements in fuel efficiency for cars and trucks will have a 
major impact there.
    It is my hope that today's witnesses will discuss, in greater 
detail, the role of federal research programs in light- and heavy-duty 
vehicle technology development.
    The Department of Energy will play a major role in funding research 
to develop cars and trucks that are more fuel efficient.
    While market prices for oil and gas may change, one thing is 
certain: there is a limited world supply of these items.
    We, as a nation, must invest in fuel technology innovation. The 
President has signaled a strong interest in energy research.
    I thank the Chairman for inviting industry leaders to testify on 
the potential impacts of various policy scenarios.
    It is certainly our intention to help, not hinder, vehicle 
manufacturers to innovate to meet future demands.
    Heavy load-bearing trucks demand lots of power to transport freight 
across the country. I see this as a significant challenge to the truck 
industry, especially as fuel prices have been volatile.
    Considering the additional funding for vehicle technologies under 
the American Recovery and Investment Act, it is important that 
Department of Energy programs be continually assessed for their ability 
to meet the changing needs of the transportation sector.
    Mr. Chairman, support for fuel efficiency technology is support for 
a more fuel-independent nation.
    This committee has tremendous potential to blaze a trail. We must 
lead the way to incentivize innovation in vehicle research.
    Thank you, Mr. Chairman. I yield back the balance of my time.

    Chair Baird. With that I will introduce the witnesses. Your 
seating arrangement is slightly different than the order you 
will speak, and so I will introduce you in the order you will 
speak and then we will proceed.
    Mr. Steven Chalk is the Principal Deputy Assistant 
Secretary for Energy Efficiency and Renewable Energy at the 
U.S. Department of Energy. Mr. Chalk, glad you are here. I 
understand you are in some pain from a back injury, so we will 
be as accommodating as we possibly can be, and we appreciate 
very much your being with us.
    Dr. Kathryn Clay, Director of Research at the Alliance of 
Automobile Manufacturers and a former staff member for this 
committee. Dr. Clay, it is great to see you again. Thank you 
for being here.
    Dr. John Johnson is President and Professor, Presidential 
Professor of Mechanical Engineering at Michigan Technological 
University. Dr. Johnson also chaired the National Academy's 
panel reviewing the 21st Century Truck Partnership. Dr. Ehlers 
has some affection for Michigan. If he wishes to add any 
comments, I would welcome that at this point. Dr. Ehlers.
    Mr. Ehlers. Thank you, Mr. Chair. I am very pleased that 
Dr. Johnson is able to be here.
    Many people in the lower 48 don't know a great deal about 
Michigan Technological University, but it is an outstanding 
university located in the frozen north of Michigan, and I think 
that you are down to about four feet of snow now apparently. 
But it is a great advantage. After they snowshoe to the 
university in the morning, they are pretty well locked in all 
day doing research, and they have produced some really 
tremendous results there. It is an outstanding university, and 
we are very blessed to have Dr. Johnson with us today. And 
thank you for being here.
    Chair Baird. Thank you, Dr. Ehlers.
    Mr. Anthony Greszler is the Vice President of Government 
and Industry Relations at Volvo Powertrain North America. He 
also serves on the Executive Committee, the 21st Century Truck 
Partnership.
    And last but by no means least, Mr. Thomas Baloga, who is 
Vice President of Engineering for BMW, which my friend Mr. 
Inglis already acknowledged.
    As our witnesses know, you will each have five minutes for 
your spoken testimony. Your written testimony will be included 
in the record for the hearing. When you all have completed your 
spoken testimony, we will begin with questions with each Member 
having five minutes to question the panel, and, again, any 
colleagues who want to offer comments for the record, those 
will be accepted.
    We will start with Mr. Chalk. Mr. Chalk, please proceed.

   STATEMENT OF MR. STEVEN CHALK, PRINCIPAL DEPUTY ASSISTANT 
 SECRETARY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, 
                   U.S. DEPARTMENT OF ENERGY

    Mr. Chalk. Thank you, Chair Baird and Ranking Member 
Inglis, Members of the Committee. Thanks for the opportunity to 
appear before you today to discuss the Department of Energy's 
Vehicle Technologies Program activities.
    Vehicles are pivotal in meeting some of the most 
significant challenges our nation faces today: dependence on 
foreign oil and climate change. The transportation sector 
counts for more than two-thirds of our U.S. oil usage, so 
advances in transportation technology must play a major role in 
reducing our oil dependence and improving energy security.
    It is also central to combating global warming, as 
improvements in efficiency of vehicles and advances in 
alternative fuels will reduce greenhouse gas emissions.
    Additionally, vehicle technologies affect consumer 
pocketbooks. For every one percent improvement we have in fuel 
economy across the Nation's fleet, consumers can save more than 
two billion gallons of fuel annually.
    DOE's Vehicle Technology Program addresses the Nation's 
petroleum dependency on two fronts: improved efficiency of the 
vehicles we drive and through fuel substitution, including 
biofuels, electricity, and hydrogen. The Department leads a 
cooperative effort among energy companies, utilities, and 
vehicle manufacturers to develop the next generation of 
automotive technology. Our entire program is reviewed every 
other year by the National Academy, the National Research 
Foundation, who give us the recommendations. We work those into 
the program to improve the program.
    We have historically had a robust light-duty vehicle 
program and are evaluating options for innovative programs that 
recognize the growing importance of heavy-duty vehicles within 
our budget. Medium- and heavy-duty vehicles warrant increased 
attention because of their growing fuel use, and it is pivotal 
to the Nation's economy.
    The EIA projects that heavy-truck consumption is going to 
increase 23 percent between today and 2020, while overall 
transportation use is forecasted to stay relatively flat. So 
the influence of heavy-duty vehicles on oil dependence and 
greenhouse gas emissions is, therefore, likely to play a 
greater and greater role.
    So heavy-duty vehicles are essential also to the well-being 
of the business community, with 70 percent of freight tonnage 
transported by truck. So when diesel prices go up, the trucking 
industry, many businesses struggle. The additional cost is then 
passed on to the consumer, since everything we buy from 
groceries to appliances to clothing comes to the store in a 
truck.
    So, fortunately, the heavy-duty vehicle industry adapts to 
technological advances relatively quickly. While it might take 
15 years for technology to reach a maximum penetration in new 
cars and light trucks, and you mentioned front-wheel drive took 
about that long to penetrate the market, the timetable is 
closer to about three years for the heavy-duty fleet.
    So this quick adoption of technology of heavy-duty vehicle 
fleet operators means rapid opportunities for job creation, 
improved energy security, and lower carbon emissions. Some of 
the Department's successes in the light-duty vehicles can 
migrate up or over to the heavy-duty sector, such as the 
batteries we are developing, the power electronics, or 
hybridization of heavy trucks.
    In the future there is a lot of potential for light-duty, 
plug-in hybrid vehicles, or PHEVs as we might call them. They 
can stretch a passenger vehicle mileage up to over 100 miles 
per gallon on a gasoline basis and displace petroleum by 
substituting electricity from the grid for gasoline. And since 
PHEV owners might typically charge their vehicles at night, 
this would limit the impact to the electrical grid and allow 
consumers to take advantage of off-peak electricity rates. In a 
study done by the Pacific Northwest Lab showed that over or 
about 70 percent of our current light-duty vehicle fleet could 
be replaced with PHEDs without significant impact to the 
electrical grid.
    The Department's heavy-duty vehicle R&D focuses on advanced 
combustion and increased engine efficiency, including waste 
heat recovery, optimizing engines for urban and highway hybrid 
applications, encouraging the use of renewable diesel fuel, and 
reducing powertrain loses. The DOE has contributed to important 
advances in heavy-duty engine efficiency. The program had a 
goal of 42 percent or the baseline efficiency, I should say, 
was about 42 percent for heavy trucks. We had a stretch goal of 
50 percent, and two of the partners we worked with demonstrated 
over 47 percent. So I think there was some success there, 
although we do recognize the Academy's recommendation to 
demonstrate that in a full heavy-duty vehicle.
    When the NRC reviewed the partnership last year, they 
recommended that we do a more systems-designed approach, and we 
are taking that under consideration as we re-plan the program.
    The next steps towards making significant technological 
advances will be to look at the system as a whole. So in the 
heavy-duty vehicle we will look at the powertrain, the fuels, 
materials, aerodynamics, hybridization, idle reduction. All 
these capabilities must be engineered together to reach the 
most efficient vehicle energy balance.
    So during this period of economic challenge it is critical 
that we forge an even stronger R&D alliance with industry to 
develop the next generation of world class, clean, efficient 
vehicles for both personal and commercial transportation.
    So thank you again for the opportunity to appear before you 
today, and I would be happy to answer any questions that you 
all may have.
    [The prepared statement of Mr. Chalk follows:]
                   Prepared Statement of Steven Chalk
    Chairman Baird, Ranking Member Inglis, Members of the Committee, 
thank you for the opportunity to appear before you today to discuss the 
U.S. Department of Energy's (DOE) Vehicle Technologies Program 
activities. Reducing U.S. dependence on oil is one of the most 
significant ways in which our Nation can improve energy security and 
address global climate change.
    The mission of the Vehicle Technologies Program is to develop more 
energy-efficient and environmentally friendly highway transportation 
technologies for light-, medium-, and heavy-duty vehicles that meet 
emissions regulations and reduce petroleum dependence without 
sacrificing performance or passenger safety. Accomplishing the mission 
will contribute to climate change mitigation, energy and economic 
security, and enable more productive use of the Nation's total energy 
resources. The FY 2009 Omnibus Appropriations Act provides over $273 
million for the Vehicle Technologies Program, compared to $213 million 
in FY 2008.
    As the sector responsible for more than two-thirds of U.S. oil 
usage, advances in transportation technology can have a major impact on 
reducing oil dependence.\1\ Additionally, according to one study, for 
every one percent improvement in vehicle fuel efficiency across the 
Nation's fleet, consumers could save more than two billion gallons of 
fuel annually.\2\
---------------------------------------------------------------------------
    \1\ Transportation Energy Data Book Edition 27, Table 1.13.
    \2\ ``Tires and Passenger Vehicle Fuel Economy,'' NRC, http://
books.nap.edu/openbook.php?record-id=11620&page=4
---------------------------------------------------------------------------
    Our research agenda is guided by an extensive analysis, test and 
evaluation effort, as well as stakeholder involvement. Typically, 
projects undergo independent peer evaluation every year. This 
evaluation helps inform future direction and project close-out.
    The Department leads a cooperative effort among energy companies, 
utilities and vehicle manufacturers to develop the next generation of 
personal transportation. Our entire program is reviewed every other 
year by the National Academy of Sciences National Research Council 
(NRC). NRC findings are evaluated and recommendations implemented to 
improve the effort's effectiveness.
    In the area of personal transportation, the Department's Vehicle 
Technologies Program addresses the Nation's petroleum dependency on two 
fronts--improving efficiency of the vehicles we drive, and substituting 
to new fuels, including biofuels and electricity. The Program Research 
and Development (R&D) portfolio includes:

          Hybrid and Plug-in Hybrid Vehicles (PHEV)--R&D for 
        battery, electrical machines, electric motors and battery 
        systems research for hybrid, and PHEVs

          Fuels--Improved utilization of petroleum and non-
        petroleum fuels, addressing light-, medium-, and heavy-duty 
        vehicles

          Materials--Advanced material development and 
        manufacturing, e.g., carbon fiber and thermoelectric materials

          Internal Combustion Engines (ICE)--Efficiency 
        improvements for conventional ICEs

          Heavy-Duty Vehicle Systems and Components

    Development of PHEVs can provide significant improvements in fuel 
economy and petroleum displacement by using electricity from the grid 
at off-peak hours. PHEVs are similar to the current generation of 
hybrid vehicles, except that the battery is significantly larger, 
providing a range of up to 40 miles in an all-electric mode and 
allowing the battery to be charged by ``plugging in'' to a standard 
wall socket.\3\ Forty miles in an all-electric mode is more than 
adequate for the typical urban commuter, but not all U.S. drivers are 
typical; after 40 miles, the engine takes over and the vehicle operates 
similar to today's hybrids, achieving excellent fuel economy.
---------------------------------------------------------------------------
    \3\ ``PHEV Batteries,'' Transportation Technology Research and 
Development Center, Argonne National Laboratory, http://
www.transportation.anl.gov/batteries/phev-batteries.html
---------------------------------------------------------------------------
    PHEVs displace petroleum by substituting electricity from the grid 
for gasoline. A PHEV stretches a vehicle's mileage up to 100 mpg on a 
gasoline basis.\4\ Since PHEV owners would typically charge their 
vehicles at night, this would limit the impact to the electric grid and 
allow consumers to take advantage of off-peak electricity rates, in 
states where time-of-day pricing is in effect. A study by the Pacific 
Northwest National Laboratory has shown that 70 percent of the current 
vehicle fleet could be replaced with PHEVs without significant impact 
to the electric power grid.\5\
---------------------------------------------------------------------------
    \4\ ``All About Plug-In Hybrids (PHEVs),'' http://www.calcars.org/
vehicles.html
    \5\ ``U-M, PNNL study: Are plug-ins the next wave of hybrid 
vehicles?'' Pacific Northwest National Laboratory, http://www.pnl.gov/
news/release.asp?id=272
---------------------------------------------------------------------------
    A key component of the emergence of PHEVs is a new generation of 
lithium-ion batteries. The success of the lithium-ion battery is 
imperative for PHEV deployment and commercial acceptance. However, 
these batteries are still too expensive and require further 
technological improvements for widespread consumer acceptance. 
Continued development of battery and electric motor technologies will 
allow future generations of hybrids and PHEVs to compete with 
conventional ICE vehicles on a cost competitive basis.
    While the U.S. has a robust industry base in certain types of 
conventional batteries like alkaline ``flashlight'' batteries and lead-
acid ``starter'' batteries, we have very little manufacturing 
capability for new generation batteries like lithium-ion, for which 
more than 95 percent of the world's production is located in Asia.\6\ 
Because the vehicle fleet of tomorrow will include more and more 
hybrids, PHEVs, and even all-electric vehicles, there is a pressing 
need to establish the facilities to manufacture those batteries in the 
United States. The President made the first step towards doing just 
that last week when he announced the release of a $2 billion Advanced 
Battery Manufacturing solicitation funded by the American Recovery and 
Reinvestment Act (Recovery Act). The solicitation includes up to $1.5 
billion to establish battery manufacturing facilities, representing an 
important step forward for vehicle technology. Making batteries in the 
United States will facilitate the Administration's goal of putting one 
million PHEVs on the road by 2015. In addition, these battery 
manufacturing facilities can supply advanced batteries for defense 
applications, consumer electronics, power tools, utility voltage 
regulation, and truck idling mitigation.
---------------------------------------------------------------------------
    \6\ ``Sourcing Report: Lithium Batteries,'' http://
www.chinasourcingreports.com/csr/Electronic-Components/Lithium-
Batteries/p/CSRLIT/Industry-Overview.htm
---------------------------------------------------------------------------
    Along with increased battery and PHEV development, deployment of 
alternative fuels can reduce transportation oil consumption. DOE is a 
leader in facilitating the deployment of alternative fuels, including 
ethanol blends, biodiesel, hydrogen, and electricity while developing 
fuel infrastructures through partnerships with State and local 
governments, universities, and industry. The fuels effort supports R&D 
directed towards providing consumers with fuel options that are cost-
competitive, enable higher fuel economy, deliver lower emissions, and 
reduce the use of oil. One specific activity is the evaluation of the 
impact intermediate blends of ethanol, such as E15 and E20 (15 percent 
and 20 percent ethanol mixed with gasoline), have on performance, 
emissions and durability of the existing vehicle fleet and on small, 
non-road engines. While alternative fuels can reduce dependence on oil 
imports, DOE recognizes that careful analysis is needed to assess the 
effects of such fuels on emissions.
    Reducing vehicle weight and energy loss during vehicle operation 
directly improves vehicle fuel economy. The introduction of cost-
effective, high-strength materials and thermoelectric\7\ materials can 
significantly reduce vehicle weight without compromising safety while 
improving efficiency. The use of lightweight, high-performance 
materials such as carbon fiber, polymers, and metal alloys will 
contribute to the development of vehicles that provide better fuel 
economy, yet are comparable in size and comfort to today's vehicles. 
The goal is to develop and validate cost-effective high strength 
material technologies that could significantly reduce vehicle weight 
without compromising cost, performance, safety, or recyclability.
---------------------------------------------------------------------------
    \7\ ``Thermoelectric'' refers to the conversion of heat directly to 
electricity.
---------------------------------------------------------------------------
    Improved combustion technologies and optimized fuel systems can 
provide near- and mid-term fuel efficiency gains. The goal here is to 
achieve engine efficiency for passenger vehicles of 45 percent, a 
substantial increase from the current average of 30 percent.\8\ DOE's 
Vehicle Technologies Program focuses much of its effort on improving 
vehicle fuel economy while meeting increasingly stringent emissions 
standards. Achieving these goals requires a comprehensive understanding 
of relationships among fuel economy, emissions, and engine and hybrid 
system control strategies, in order to minimize the fuel economy 
penalty associated with emission controls. Researchers at universities, 
private industry and DOE's National Laboratories are working to 
identify technologies and engine control strategies that achieve the 
best combination of high fuel economy and low emissions for advanced 
diesel, gasoline, and hydrogen internal combustion engines for 
application in conventional and hybrid-electric drives.
---------------------------------------------------------------------------
    \8\ ``Summary of Fuel Economy Performance'' (Washington, DC: Annual 
Issues), National Highway Traffic Safety Administration, U.S. 
Department of Transportation, available at http://www.nhtsa.dot.gov/
portal/site/nhtsa/menuitem.43ac99aefa80569eea57529cdba046a0/
---------------------------------------------------------------------------
    In the future, we see a continuing trend toward electrification of 
vehicle drivetrains and ancillary components, as well as light-
weighting and widespread deployment of biofuels for use in the light-
duty vehicle sector.
    Highway vehicles account for 80 percent of the transportation 
sector with heavy-duty vehicles consuming approximately 25 percent of 
the fuel.\9\ Trucks and other heavy-duty vehicles are of the utmost 
importance to the business community, with 69 percent of freight 
tonnage transported by truck.\10\ When diesel prices go up, the 
trucking industry and many businesses struggle. The Energy Information 
Administration's 2008 Annual Energy Outlook (AEO) predicts that U.S. 
heavy truck fuel consumption will increase 23 percent between 2009 and 
2020.\11\
---------------------------------------------------------------------------
    \9\ Transportation Energy Data Book Edition 27, Table 2.5, page 2-
1.
    \10\ American Trucking Trends 2008-2009, p. 5.
    \11\ ``Annual Energy Outlook 2008,'' Energy Information 
Administration, Table A7.
---------------------------------------------------------------------------
    Technological advancements are adopted by the heavy-duty vehicle 
industry more quickly than the light-duty sector due to several 
factors, including the willingness to be early-adopters and the 
immediate payoff and high return on investment that the industry sees 
upon implementation. It takes approximately 15 years for a technology 
to reach maximum penetration in sales of new cars and light trucks.\12\ 
For the heavy-duty fleet, the timetable is closer to three years.\13\ 
The quick adoption of technology by heavy-duty vehicle fleet operators 
may enable more rapid realization of job creation, improved energy 
security, and carbon mitigation benefits.
---------------------------------------------------------------------------
    \12\ ``Light-Duty Automotive Technology and Fuel Economy Trends: 
1975 through 2006,'' EPA420-R-011, July 2006, p. 62.
    \13\ ``Heavy Truck Research, Development, & Demonstration: Looking 
for Return on Investment,'' 2009 SAE Government-Industry Meeting 
Presentation, U.S. DOE, slide 9.
---------------------------------------------------------------------------
    The Department leads the 21st Century Truck Partnership, a 
cooperative effort between the commercial vehicle (truck and bus) 
industry and major federal agencies to develop technologies that will 
make our nation's commercial vehicles more efficient, clean, and safe. 
Specifically, Vehicle Technologies Program R&D aims to increase engine 
efficiency, develop hybrid powertrain technologies, reduce parasitic 
and idling losses, and validate and demonstrate these technologies. As 
noted above, NRC reviews the Partnership's progress every other year 
and provides findings and recommendations which are evaluated and 
implemented to improve overall effectiveness.
    Heavy-duty vehicle R&D focuses on advanced combustion and increased 
engine efficiency, including utilizing waste heat recovery; optimizing 
engines for urban and highway hybrid applications; encouraging the use 
of renewable diesel fuel; and reducing power-train losses. One research 
goal is to develop and demonstrate an emissions-compliant engine system 
for a typical tractor trailer or ``Class 8 trucks'' with 20 percent 
greater engine system fuel efficiency by 2014. NRC recommended that DOE 
complete a demonstration of improved engine thermal efficiency. DOE 
will consider this recommendation as part of a future heavy-duty 
vehicle solicitation.
    Medium-duty trucks such as buses, delivery vehicles, and waste 
hauling trucks are important because they normally operate under city 
driving conditions and often in air quality non-attainment areas. 
Medium-duty applications are also an excellent way to transition light-
duty technology into the heavy-duty sector. R&D accomplishments in this 
area include the dual mode hybrid technology co-developed with a 
transmission manufacturer. This technology was first developed for 
hybrid transit buses, with the goal of attaining higher power density 
and lower component cost for the electric drive motor and power 
electronics. Since October 2003, more than 500 hybrid buses have been 
deployed in 44 U.S. cities, a deployment that was supported by the 
Federal Transit Administration.\14\ Converting transit bus fleets to 
hybrids in the nine largest U.S. cities would impact 18 thousand buses, 
equivalent to replacing 720 thousand conventional vehicles with hybrid 
cars.\15\ The success with hybrid transit buses has not only 
capitalized on an opportunity to penetrate the mass transit market, but 
has also opened the technology pathway for the next generation of 
commercially viable advanced heavy- and light-duty hybrid vehicles. NRC 
recommended that the potential benefits of hybrid Class 8 trucks be 
evaluated and that if benefits appeared promising, this activity should 
accelerate development of the necessary hybrid technology and 
demonstrate it in prototype vehicles.
---------------------------------------------------------------------------
    \14\ Motor & Power Electronics Development, Arthur McGrew, Allison 
Transmission, General Motors Corporation, February 8, 2007.
    \15\ Ibid.
---------------------------------------------------------------------------
    Electrification of heavy-duty vehicles and idle reduction measures 
can yield major fuel savings in the trucking industry, as truckers 
often idle their vehicles at truck stops for hours at a time to provide 
sleeper compartments with electricity for heat, air conditioning, and 
small appliances. Truck stop electrification allows truckers to operate 
necessary systems without idling the engine, reducing diesel fuel 
emissions and saving trucking companies the cost of that fuel. The 
Department's Vehicle Technologies Program has also investigated ways to 
electrify mechanical engine accessories to achieve greater efficiency 
and is developing thermoelectric devices to convert exhaust heat energy 
to electricity to provide on-board power. The NRC committee recommended 
continued R&D of the system components that will provide additional 
improvements in idle reduction and parasitic losses. DOE agrees with 
this recommendation.
    The next step toward making significant technological advancements 
will be to look at the vehicle system as a whole. In a heavy-duty 
vehicle, the powertrain, fuels, materials, aerodynamics, hybridization, 
and idle reduction capabilities must be engineered together to reach 
the most efficient vehicle energy balance.
    The goal with this systems approach is to improve Class 8 freight 
efficiency in ``ton-miles per gallon'' \16\ by 50 percent through 
accelerated R&D by industry teams led by truck manufacturers. This 
would involve developing and integrating a unique combination of 
technologies which may include engine efficiency, light-weighting, 
hybridization, and parasitic load reduction. Each of these radically 
redesigned tractor trailer systems would then be evaluated in 
controlled engineering tests followed by rigorous in-service use by 
fleet operators.
---------------------------------------------------------------------------
    \16\ Since a fully-loaded Class 8 tractor trailer combination 
weighs 80 thousand pounds, the term ``freight efficiency'' in ton-miles 
per gallon is a more accurate characterization of this vehicle's 
efficiency.
---------------------------------------------------------------------------
    The benefits of mitigating the Nation's addiction to oil through 
diverse research, development, deployment, and demonstration activities 
include energy security and greenhouse gas reduction. During this 
period of economic challenge, it is critical that we forge an even 
stronger R&D alliance with industry to develop the next generation of 
world-class clean, efficient vehicles for both personal and commercial 
transportation.
    The Department's focus on hybrid and PHEV R&D for battery, 
electrical machines, electric motors and battery systems research; 
improved utilization of petroleum and non-petroleum fuels; advanced 
material development and manufacturing; efficiency improvements for 
conventional ICEs; and heavy-duty vehicle systems and components will 
help mitigate the security, environmental and economic challenge the 
Nation faces today.
    Thank you again for the opportunity to appear before you today to 
discuss these important issues. I am happy to answer any questions.

                       Biography for Steven Chalk
    Steven Chalk is the Principal Deputy Assistant Secretary in the 
Office of Energy Efficiency and Renewable Energy (EERE) at the U.S. 
Department of Energy. In this capacity, Mr. Chalk is responsible for 
managing the programs, staff and policies of EERE and interfacing with 
constituent groups in the efficiency and renewable energy sectors.
    Mr. Chalk recently held the position of EERE's Deputy Assistant 
Secretary for Renewable Energy, where he was responsible for the 
management of the government's research, development, and 
commercialization efforts in solar, wind, geothermal, biomass, and 
hydrogen technologies. Mr. Chalk also previously managed EERE's 
Hydrogen and Fuel Cell Technologies Program, the Solar Energy 
Technologies Program and Buildings Technologies Program.
    In September 2008, Steve was honored with a Service to America 
Medal in the Science and Environment category. This award recognized 
his management of several innovative clean energy projects, as well as 
his leadership in the Federal Government's efforts to expand the use of 
renewable energy and energy efficiency, particularly in the communities 
of New Orleans and Greensburg, Kansas.
    While leading the Solar Energy Technologies Program, Mr. Chalk was 
responsible for planning and implementing the Solar America Initiative, 
which aims to make solar technologies cost competitive by 2015. In the 
building technologies area, Mr. Chalk led DOE's efforts toward net zero 
energy homes and buildings. The portfolio includes component research 
such as solid state lighting, market transformation activities such as 
EnergyStar, and appliance standards regulations. Before this, Mr. Chalk 
led the President's Hydrogen Fuel Initiative where he oversaw 
development of a five-year, $1.2 billion research investment in 
hydrogen production, delivery, storage, and fuel cells. This portfolio 
also includes hydrogen safety, codes and standards, and education 
activities.
    In his early career at DOE, Mr. Chalk managed technology 
development programs in fuel cells, diesel emissions control, and 
materials for DOE's advanced automotive technology office. Steve also 
worked in the nuclear energy field where he oversaw DOE test programs 
for tritium production. Steve started his career with the Navy 
developing propellants and explosives for conventional weapons.
    Mr. Chalk holds a Bachelor of Science in Chemical Engineering from 
the University of Maryland and a Master of Science in Mechanical 
Engineering from the George Washington University.

    Chair Baird. Dr. Clay.

 STATEMENT OF DR. KATHRYN CLAY, DIRECTOR OF RESEARCH, ALLIANCE 
                  OF AUTOMOBILE MANUFACTURERS

    Dr. Clay. Thank you. Mr. Chair, good morning. My name is 
Kathryn Clay, and I am the Director of Research for the 
Alliance of Automobile Manufacturers. The Alliance is a trade 
association made up of 11 car and light truck manufacturers, 
including BMW group, Chrysler LLC, Ford Motor Company, General 
Motors, Jaguar Land Rover, Mazda, Mercedes Benz USA, Mitsubishi 
Motors, Porsche, Toyota, and Volkswagen. On behalf of the 
member companies of the Alliance, I would like to thank you for 
giving me the opportunity to speak with you about vehicle 
technology research supported by the Department of Energy and 
for opportunities for this work to serve both public and 
industry interests in reinventing the automobile.
    Meeting our national goals of reductions in greenhouse gas 
emissions and reducing our reliance on foreign oil will require 
the development of a suite of technologies. Responding to this 
challenge, automakers are leaders in research and development 
investment. Total R&D investment by the industry was $79 
billion in 2007, up eight percent from the previous year.
    Automakers invest in a diverse array of vehicle 
technologies. There is no silver bullet or one right answer to 
what the autos of the future should look like. In the coming 
decades the vehicle fleet will likely be much more diverse 
technologically, with the growing proportions, flex fuel, clean 
diesel, fuel cell, hydrogen, internal combustion engine, hybrid 
electric, and pure electric vehicles coming into the fleet. 
Continued improvements to the efficiency of the internal 
combustion engine will also play a significant role for 
gasoline vehicles.
    I would like to begin by identifying general principles 
that should guide the Department of Energy Vehicle Technology 
Program to maximize its effectiveness and then provide 
recommendations for work on two particular technologies.
    First, the Department of Energy Program should aim to 
promote technological diversity to the maximum extent feasible, 
including the vehicle technologies I have mentioned previously. 
Second, recognizing that each alternative vehicle technology 
will depend on a well-functioning and available infrastructure. 
The Vehicle Technology Program should work collaboratively with 
other departmental divisions on alternative fuels 
infrastructure challenges.
    For example, the Transportation Electrification 
Infrastructure Program recently included in the Recovery Act 
has the potential to significantly advance vehicles like plug-
in hybrids.
    Third, the program should support work that spans the full 
range of the R&D spectrum, all the way from basic research to 
commercial deployment. Getting the balance right will be 
challenging, but no part of the spectrum can be neglected if 
new technologies are to be brought from the laboratory bench 
all the way through to the marketplace.
    Fourth, the Department should consider linkages between the 
Vehicle Technologies Program and government purchasing 
programs. Acting as early adopters, government fleets can help 
lead the way to bringing new automotive technologies to market.
    And finally, the Department should develop metrics of 
success that promote innovative, high-risk, high-reward 
research. This committee originated the legislation that 
authorized the Advanced Research Projects Agency for Energy or 
ARPA-E, and well knows the importance of emphasizing this type 
of research. There is an opportunity for the new ARPA-E to 
cross pollinate other programs and to encourage the inclusion 
of more forward-leaning research, despite sometimes lower 
certainty in their ultimate outcomes.
    Next, let me highlight two areas of critical importance: 
the ongoing Hydrogen and Fuel Cell Learning Demonstration 
Program, and the recently-established Advanced Battery 
Manufacturing Program. The Hydrogen and Fuel Cell Learning 
Demonstration Program has included 140 fuel cell vehicles and 
20 hydrogen stations and has worked with automotive and energy 
company teams including GM and Shell, Chrysler, Daymore, and 
BPE and Ford and BPE. Under this program vehicles have traveled 
nearly two million miles and the second-generation vehicles 
have achieved ranges of up to 254 miles with fuel economies 
from 43 to 58 miles per kilogram of hydrogen.
    This program has demonstrated success both in terms of 
hydrogen technology advancements and also for the learning 
demonstration model itself and should continue to receive 
support.
    Last week President Obama announced up to 1.5 billion in 
grants to establish a domestic manufacturing base for advanced 
batteries. A strong, diverse supplier base for advanced 
batteries will help all automakers move forward to bringing 
electric powertrain vehicles to market.
    It is essential that the recipients of this funding have 
the knowledge and expertise needed to establish battery 
production at scale. Opportunities for technology transfer 
through joint ventures with other manufacturers could help 
establish a domestic advanced battery manufacturing base more 
quickly. These awards also should emphasize not only the 
battery manufacturing construction but also a strong commitment 
to manufacturing R&D. Without such a strong program element, 
the manufacturing capacity that we buy with our investment will 
become outmoded soon after it enters production.
    We look forward to working with the Department of Energy, 
and we hope to continue this work to position our industry to 
be at the cutting edge of the new clean energy economy.
    Thank you.
    [The prepared statement of Dr. Clay follows:]
                   Prepared Statement of Kathryn Clay
    Good morning, my name is Kathryn Clay and I am the Director of 
Research for the Alliance of Automobile Manufacturers. The Alliance is 
a trade association made up of eleven car and light truck manufacturers 
including BMW Group, Chrysler LLC, Ford Motor Company, General Motors, 
Jaguar/Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, 
Porsche, Toyota, and Volkswagen. On behalf of the member companies of 
the Alliance I would like to thank you for giving me the opportunity to 
speak with you about vehicle technology research supported by the 
Department of Energy and opportunities for this work to serve both 
public and industry interests in reinventing the automobile.
    Meeting our national goals of reductions in greenhouse gas 
emissions and reducing our reliance on foreign oil will require the 
development of a suite of technologies. Responding to this challenge, 
automakers are leaders in research and development investment--total 
R&D investment by the industry was $79 billion in 2007, up eight 
percent from the previous year.
    Automakers invest in a diverse array of vehicle technologies. There 
is no ``silver bullet,'' or one right answer, to what the autos of the 
future should look like. In the coming decades, the vehicle fleet will 
likely be much more diverse technologically, with growing proportions 
of flex fuel, clean diesel, fuel cell, hydrogen internal combustion 
engine, hybrid electric and pure electric vehicles. Continued 
improvements to the efficiency of the internal combustion engine will 
also play a significant role.
    I would like to begin by identifying general principles that should 
guide the Department of Energy vehicles technology program to maximize 
its effectiveness, and then provide recommendations for work on two 
particular technologies.
    First, the DOE program should aim to promote technological 
diversity to the maximum extent feasible, including a wide range of 
alternative vehicle technologies.
    Second, recognizing that each alternative vehicle technology will 
depend on a well-functioning infrastructure, the vehicle technology 
program should work collaboratively with other divisions within the 
department that are addressing alternative fuels infrastructure 
challenges. For example, the transportation electrification 
infrastructure program, included in the Recovery Act at a funding level 
of up to $400 million, has the potential to significantly advance 
vehicles like plug-in hybrids.
    Third, the program should support work that spans the full range of 
the R&D spectrum, including basic research, applied research, 
manufacturing R&D, and deployment and commercialization activities. 
Getting the balance right will be challenging, but no part of the 
spectrum can be neglected if new technologies are to be brought from 
the laboratory bench all the way through to the marketplace.
    Fourth, the Department should consider linkages between the vehicle 
technologies program and government purchasing programs. Acting as 
early adopters, government fleets can help lead the way to bringing new 
automotive technology to market. The government should continue to 
purchase flex fuel vehicles; demand maximum utilization of E-85 in the 
government flex fuel fleets; use federal fueling to stimulate publicly 
accessible pumps; and provide funding technology is available.
    Finally, the Department should develop metrics of success that 
promote innovative, high-risk/high-reward research. This committee 
originated the legislation that authorized the Advanced Research 
Projects Agency for Energy (ARPA-E), and well knows the importance of 
emphasizing this type of research. The recent stimulus package included 
$400 million to set-up ARPA-E. It would be unfortunate if a newly 
created ARPA-E had the unintended effect of decreasing investment in 
high-risk research in other DOE programs like the vehicles technology 
program. There is an opportunity for the new ARPA-E to ``cross 
pollinate'' other programs and encourage the inclusion of more forward-
leaning research despite lower certainty in their outcomes.
    Next, let me highlight two specific research areas that are of 
critical importance: the ongoing hydrogen and fuel cell learning 
demonstration program, and the recently established advanced battery 
manufacturing program.
    The DOE Hydrogen and Fuel Cell Learning demonstration started in 
2004. There have been 140 fuel cell vehicles introduced into the 
program, with 119 currently operating. There are 20 hydrogen stations 
in the project, located in Northern and Southern California, Detroit 
Michigan area, Orlando Florida, the New York City area and in 
Washington DC. The automotive and energy company teams include GM and 
Shell; Chrysler, Daimler, and BP; and Ford and BP.
    Under the program, vehicles have traveled nearly two million miles 
in the project and there has been 88,000 kg of hydrogen produced or 
dispensed at the 20 hydrogen stations. The fuel cell vehicles have a 
projected durability of 1,977 hours. Testing has shown that second 
generation vehicles have a range of up to 254 miles with a fuel economy 
from 43 to 58 miles/kg. Phase two of the program is now in planning. 
This program has demonstrated success both in terms of hydrogen 
technology advancements and also for the learning demonstration model, 
and should continue to receive support.
    Last week, President Obama announced that the Department of Energy 
would begin soliciting proposals for up to $1.5 billion in grants 
included in the stimulus to establish a domestic manufacturing base for 
advanced batteries. A strong, diverse supplier base for advanced 
batteries will help all automakers move forward to bringing electric 
powertrain vehicles to market. To maximize the benefit of this funding, 
the DOE should consider the following two elements:

    First, it is essential that the recipients of this funding have the 
knowledge and experience needed to establish battery production at 
scale. Opportunities for technology transfer through joint ventures 
with other manufacturers could help establish a domestic advanced 
battery manufacturing base more quickly.
    Second, the awards should require not only the construction of a 
battery manufacturing facility, but a strong commitment to 
manufacturing R&D. An emphasis on manufacturing R&D will enable the 
nascent advanced battery manufacturing industry to be innovative and 
globally competitive. Without this as a strong program element, the 
manufacturing capacity we buy with our investment will become outmoded 
soon after it enters production.
    We look forward to working with the Department of Energy to advance 
a diverse array of vehicle technologies. In doing so, we will position 
our industry to be at the cutting edge of the new clean energy economy.

                       Biography for Kathryn Clay

Current Positions

Energy Scholar

Adjunct Professor of Physics

Director of Research, Alliance of Automobile Manufacturers

Areas of Concentration

Energy, Science Workforce & Education

Education

Ph.D. in Physics, University of Michigan, Ann Arbor

M.S. in Electrical Engineering, University of Michigan Ann Arbor

Commentary

    Dr. Kathryn Clay is the Director of Research for the Alliance of 
Automobile Manufacturers. Previously, she served as a member of the 
professional staff of the Senate Energy and Natural Resources 
Committee. While on the Committee, Dr. Clay worked to develop the 
Energy Independence and Security Act of 2007 and the Energy Policy Act 
of 2005. She was also centrally involved in the development and passage 
of legislation (the America COMPETES Act of 2007) to promote federal 
investment in science and the development of innovative technologies.
    Dr. Clay has also served in positions with the staff of the Energy 
Subcommittee of the U.S. House of Representatives Committee on Science, 
at the Massachusetts Division of Energy Resources, and as a research 
fellow in the Alternate Fuels Vehicle Division of Ford Motor Company.

    Chair Baird. Mr. Baloga.

     STATEMENT OF MR. THOMAS C. BALOGA, VICE PRESIDENT OF 
           ENGINEERING-US, BMW OF NORTH AMERICA, LLC

    Mr. Baloga. Chair Baird, Ranking Member Inglis, and Members 
of the Committee, thank you for the opportunity to provide 
testimony before your subcommittee. It is a privilege to be 
here.
    My key messages for the Subcommittee are, number one, 
please don't pick vehicle technology winners or losers yet. We 
need an effective pallet of solutions that should include an 
appropriate mix of vehicles powered by highly-efficient 
internal combustion engines, powered by batteries, and powered 
by hydrogen.
    Number two, research on batteries for vehicles is a high-
priority issue.
    Number three, funding for vehicle on-board storage of 
hydrogen should continue.
    Number four, without a developing infrastructure for 
hydrogen refueling, companies like ours are severely challenged 
to continue investments into hydrogen-powered vehicles.
    And lastly, number five, to the extent possible, please 
allow research funding support for companies like ours that 
have made huge investments in manufacturing and jobs in the 
U.S., even though our global headquarters is not located in 
America.
    The BMW group is comprised of Rolls Royce cars, BMW cars 
and motorcycles, MINI cars, and Hosmarna motorcycles, and we 
are the world's largest manufacturer of premium automobiles. In 
the United States about 8,000 people work directly for us in 
our offices, research facilities, and manufacturing plant. We 
have been a manufacturer in the USA since 1992, and our 
Spartanburg, South Carolina, plant has produced more than 
170,000 vehicles in 2008, and we exported about 70 percent of 
the total production around the world. And this makes BMW the 
largest vehicle exporter in the United States.
    In the year 2000, before many were taking CO2 
emissions seriously, BMW management conceived and implemented a 
company program called Efficient Dynamics to reduce CO2 
emissions and improve fuel economy, while at the same time 
preserving the ultimate driving machine performance our owners 
have come to expect. So far we have invested about $1 billion 
in this Efficient Dynamics Program and equipped well over one 
million vehicles worldwide with this technology.
    A main principle of Efficient Dynamics is that we develop 
and equip the entire vehicle fleet with improvements as quickly 
as possible. Rather than focus on one or two models for big 
improvements, we aim for step-by-step, fleet-wide improvements. 
Our innovations are time consuming and costly, but they deliver 
reliable benefits, and they trickle down into vehicles that 
everyone drives.
    The point I would like to make here is that BMW as a 
premium auto manufacturer, as well as other premium auto 
manufacturers, have invested heavily in technology to improve 
fuel economy and reduce CO2 and that the low-hanging 
fruit to get these improvements are gone. Research is vital to 
advance technology, and working with our suppliers and partners 
we develop systems that eventually make their way down to 
lower-priced cars and light trucks.
    While the DOE has been a very good stimulator for 
innovation as far as we are concerned, it would be helpful to 
us as a heavy investor in the U.S. to be able to apply for and 
win DOE contracts on our own. Let me give some examples of 
technology that we are working on with partners to show the 
positive effect of DOE funding.
    In a modern internal combustion engine only about one-third 
of the fossil fuel energy is used to drive the engine 
crankshaft. That means about two-thirds of the fuel's energy is 
lost by friction and heat in the exhaust and coolant. Now, 
hybrid vehicles use methods to recharge the battery when the 
vehicle is braking or coasting but not under acceleration. 
Since BMW is known as the ultimate driving machine, we are also 
focused on improving efficiency when the vehicle is 
accelerating and typically wasting significant heat energy from 
the exhaust.
    So to recover some of this exhaust heat, BMW has been 
leading a pioneering effort to bring a thermo-electric 
generator to market. Now, this system is connected to the 
vehicle exhaust and uses the difference in temperature of the 
exhaust and air to create electric current to recharge the 
battery. So the waste heat is converted into electricity, and 
this could save perhaps up to 10 percent in fuel economy.
    We also have a system called the turbo-steamer concept that 
also can extricate heat from the exhaust. This is more 
complicated and costly. However, the potential benefits are 
even greater than the thermal electric generator. So it would 
be very helpful, for example, if we could get DOE funding for 
this turbo-steamer project as well.
    When comparing the technology of hydrogen power versus 
battery power, the similarities and differences must be 
considered. A similarity, for example, is that hydrogen is an 
energy carrier just like a battery. A battery is charged to 
store energy while water is split to make energy available as 
free hydrogen. A major difference is that hydrogen refueling 
can be performed in a few minutes, while a battery fast charge 
today takes several hours. While the electric grid provides 
limited infrastructure for charging a battery-electric vehicle, 
a far greater infrastructure is needed. Likewise, there is a 
very limited hydrogen refueling infrastructure, and a far-
greater hydrogen refueling infrastructure is likewise needed.
    Today's battery electric vehicle batteries are too large, 
too heavy, too limited in range, and far too expensive. There 
can be no debate on the merits of battery research, and we 
fully support efforts by the DOE to fund battery research. But 
doing this should not lead to the complete elimination of 
hydrogen storage funding. That would be very unfortunate. We 
need both.
    BMW has partnered with U.S. companies to collaborate on 
projects involving storage of hydrogen for on-board vehicles, 
and we see hydrogen as playing an important role in the future 
as a means to become independent from fossil fuels.
    And lastly, despite our 30 years of hydrogen-powered 
vehicle experience, we have an increasingly difficult challenge 
to justify further investments in hydrogen power without 
evidence that a hydrogen infrastructure is being developed.
    And in conclusion, I would like to repeat the main points 
of my testimony. Please don't pick vehicle technology winners 
and losers yet. It is too early for that. We need a diversity. 
Research on batteries for vehicles is certainly a very high-
priority issue. Funding for on-board storage of hydrogen should 
continue, and without a developing infrastructure of hydrogen 
for refueling, we have a difficult time continuing our 
investment in hydrogen-powered vehicles. And lastly, to the 
extent possible, please allow research funding for companies 
like ours that have made investments in manufacturing and jobs 
in the U.S., even though our global headquarters is not located 
in America.
    Thank you for the opportunity to provide testimony, and I 
would be pleased to answer any questions.
    [The prepared statement of Mr. Baloga follows:]
                 Prepared Statement of Thomas C. Baloga
    Chairman Baird, Ranking Member Inglis, and Members of the 
Committee. Thank you for the opportunity to provide testimony before 
your subcommittee on near-term priorities and future directions for the 
Vehicle Technologies Program within the US Department of Energy. It is 
a privilege to be here. My name is Tom Baloga and I am the Vice 
President, Engineering-US for BMW of North America, LLC. My key 
messages for the Subcommittee are:

        1.  Please don't pick technology winners or losers yet; we need 
        an effective palette of solutions that should include an 
        appropriate mix of vehicles powered by highly efficient 
        internal combustion engines, powered by batteries, and powered 
        by hydrogen.

        2.  Research on batteries for vehicles is a high priority 
        issue.

        3.  Funding for vehicle on-board storage of hydrogen should 
        continue.

        4.  Without a developing infrastructure for hydrogen refueling, 
        companies like ours are severely challenged to continue 
        investments into hydrogen-powered vehicles.

        5.  To the extent possible, please allow research funding 
        support for companies like ours that have made investments in 
        manufacturing and jobs in the U.S. even though our global 
        headquarters is not located in America.

BMW Presence in America

    The BMW Group, comprised of Rolls Royce cars, BMW cars and 
motorcycles, MINI, and Husqvarna motorcycles, is the world's largest 
manufacturer of premium automobiles. In the United States, about 8,000 
people work directly for us in our offices, research facilities, and 
manufacturing plant. We have been a manufacturer in the USA since 1992. 
Our Spartanburg, SC plant produced more than 170,000 vehicles in 2008 
and we exported about 70 percent of the total production around the 
world. This makes BMW the largest vehicle exporter in the United 
States.
    We are investing $1 billion to further our commitment to America by 
building an all-new assembly facility and thereby expanding the 
capacity at our Spartanburg plant by 50 percent. We've doubled the size 
of our NJ Headquarters by adding a state-of-the-art Engineering Center, 
Technical Training facility, and a new home for our Eastern Region. An 
independent study reported that our plant has already provided an 
additional 23,000 jobs in the US. When you combine all this with our 
distribution and dealer network, we are directly or indirectly 
responsible for close to 50,000 jobs in America. The United States is 
our largest market, and we are very happy to play a role in creating 
new jobs here and leading the global auto industry to innovate and 
promote sustainability.

Leadership in Sustainability Technology

    Sustainability is the degree to which natural resources are 
conserved and environmental impact minimized. BMW has been a leader in 
sustainability technology for many years. This means that as a company, 
we have not only achieved continuous improvements in fleet fuel economy 
and CO2 reductions, but we have also achieved significant 
improvements to minimize our impact on the environment. For example:

          The U.S. EPA awarded BMW's plant in Spartanburg, SC 
        ``Energy Partner of the Year in 2007'' in recognition of BMW's 
        implementation of one of the most ambitious landfill gas-to-
        energy projects in North America. The Spartanburg plant pipes 
        in methane gas from a landfill ten miles away to supply about 
        two thirds of its power needs. The amount of recovered energy 
        could heat about 15,000 homes per year. Furthermore, methane is 
        a ``greenhouse gas'' and removal of this emission from the 
        landfill is a further benefit.

          The BMW Group has been named ``the world's most 
        sustainable automotive manufacturer'' for four years in a row 
        by the Dow Jones Sustainability World Index (DJSI World).

Leadership in Fuel Economy Improvement and CO2 Reduction

          In its 2007 report for 1990-2005 results entitled 
        ``Automakers' Corporate Carbon Burdens'' the Environmental 
        Defense Fund identified BMW as the company that improved its 
        U.S. average fleet fuel consumption by more than any other 
        firm, reducing CO2 emissions by 12.3 percent and 
        improving fuel economy by 14 percent.

          In its August 2008 report for EU countries entitled 
        ``Reducing CO2 Emissions from New Cars: A Study of 
        Major Car Manufacturers' Progress in 2007'' the European 
        Federation for Transport and Environment concluded that ``BMW 
        is the carmaker that made by far the greatest year-on-year 
        CO2 and fuel efficiency improvement in 2007.'' Fleet 
        CO2 was reduced by 7.3 percent.

The Five Elements of BMW EfficientDynamics

    In 2000, before many were taking CO2 emissions 
seriously, BMW management conceived and implemented a company program 
called ``EfficientDynamics'' to reduce CO2 emissions and 
improve fuel economy, while at the same time preserving the Ultimate 
Driving Machine performance our owners have come to expect. So far, we 
have invested about $1 billion in this program and equipped well over 
one million vehicles worldwide with this technology. The results of 
this EfficientDynamics program can be directly correlated to the 
industry-leading reports from EDF and the European Federation mentioned 
previously. The five elements of the BMW EfficientDynamics program are:

          Powertrain Optimization

          Energy Management with Hybridization

          Weight Reduction

          Aerodynamic Improvements

          Hydrogen Power

    The multitude of leading-edge technologies that are part of the BMW 
EfficientDynamics philosophy are as diverse as they are innovative. 
From new fuel combustion technologies to lighter construction 
materials, low-friction components and improved aerodynamics all the 
way to comprehensive and highly sophisticated energy management. 
However, the aim of each of these innovations is the same: to deliver 
maximum driving pleasure from a minimum of fuel.
    To achieve this aim, new engines have been developed: gasoline 
engines with lean-burn technology and High Precision Injection. Diesel 
engines with third-generation common rail injection and light-weight 
materials.
    An Auto Start Stop function and Brake Energy Regeneration make more 
of every drop of fuel. Improved aerodynamics--such as an innovative air 
vent control--together with tires with reduced rolling resistance and a 
range of efficiency-enhancing modifications to the drivetrain all lead 
to the same result: more dynamic performance from less fuel.
    To assist the Subcommittee with near-term priorities and future 
directions for the Vehicle Technologies Program within the U.S. DOE, I 
would like to briefly focus on Powertrain Optimization, Energy 
Management with Hybridization, and Hydrogen vs. Battery Electric Power, 
followed by a recommendation for expanding research collaboration to 
companies based outside of the USA.

Powertrain Optimization

    This past December, BMW launched two new vehicle models equipped 
with clean diesel engines. The X5 diesel built in America and the 335d 
are available in all 50 States and use the latest clean diesel engine 
technology to meet even California's stringent emission requirements. 
In a modern internal combustion engine, only about one third of the 
fossil fuel energy is used to drive the engine crankshaft. This means 
that approximately two thirds of the fuel's energy is lost via friction 
plus engine heat into the exhaust and coolant. More efficient use of 
this lost energy is a high priority at BMW; we already use 
sophisticated engine management technology and turbo charging to 
extract as much energy as possible from the burned fuel, but we just 
recently announced something new at the Geneva Auto Show.
    We will be launching a full hybrid X6 model built in the USA later 
this year so we are far along with hybrid technology. Hybrids use 
methods to recharge a battery when the vehicle is braking or coasting, 
but not under acceleration. Since BMW is known as the ``Ultimate 
Driving Machine'' we are also focused on EfficientDynamics when the 
vehicle is accelerating and typically wasting significant heat energy 
from the exhaust. To recover some of this exhaust heat, BMW has been 
leading a pioneering effort to bring a ``thermoelectric generator'' to 
market. The system is connected to the vehicle exhaust and using a 
material called Bismuth Telluride (plus other materials under 
investigation), the difference in temperature of the exhaust and 
ambient air can generate an electrical current to recharge the battery. 
We have reason to believe that under certain conditions of using this 
``Seebeck Effect'' more than 10 percent savings in fuel use could be 
realized. Waste heat is converted into electricity stored in the 
battery that relieves the normal charging system and reduces fuel 
consumption. In operation, the exhaust gas is being further cooled as 
heat energy is extracted and, as expected, the higher the exhaust 
temperature such as in acceleration, the more electricity is produced. 
We hope to be able to bring this system to market in perhaps five 
years. This research was made possible through financial support of the 
DOE which we acknowledge and appreciate. We had been working on a 
``turbo-steamer'' project to evaluate the potential for converting 
exhaust heat into steam to power a turbine and supply additional 
propulsion to the vehicle, and these concepts are mutually 
complementary. The turbo steamer concept is more complicated, but still 
worthwhile to investigate because the potential benefits in recaptured 
energy look significant and very promising.
    It's important to note that we see the internal combustion engine 
itself available for high single digit percentage increases in 
efficiency, and we continue to actively research further improvements. 
Furthermore, extraction of exhaust heat is only one of many projects in 
process for powertrain optimization.

Energy Management with Hybridization

    Hybridization means converting and storing some of the ``moving'' 
(kinetic) energy of the vehicle to electrical energy that can be used 
to charge the battery, power accessories or power the vehicle. Later 
this year, we will launch a full hybrid X6 model Sports Activity 
Vehicle built at our plant in South Carolina, then followed by a 7 
Series mild hybrid sedan. For better understanding, a ``full hybrid'' 
can operate using only battery power; a ``mild hybrid'' uses a battery 
to provide a boost to save fuel, but cannot use a battery alone for 
propulsion. These models use hybrid technology that came from a 
consortium of partners working together in Troy, Michigan. The three 
partners BMW, Daimler, and GM collaborated, on the one hand, to 
developing a common shared technology, and on the other hand, to 
develop a unique application and integration of the technology into our 
own company vehicles based on our individual philosophies and technical 
needs. The partnership worked very well, and we are grateful to our 
partners.
    Even before we launch our hybrid vehicles, BMW is using one hybrid 
principle, brake energy regeneration, to improve fuel economy and 
reduce CO2 emissions. Today's vehicles require much more 
electrical energy than older models, due to the much wider array of 
electric and electronic on-board comfort and safety systems. This 
energy is created by the alternator which converts the engine's power 
output into electricity. In conventional systems, the alternator is 
permanently driven by a belt connected to the engine. A system we call 
BMW's Brake Energy Regeneration operates differently: the alternator is 
activated only when you take your foot from the accelerator or apply 
the brake. The kinetic energy that would otherwise go to waste is now 
used efficiently, converted into electricity by the alternator and 
stored in the battery. Producing electricity in this highly efficient 
way delivers an additional advantage: when you apply the accelerator, 
the alternator is deactivated--so the full power of the engine can be 
directed to the drive wheels. Brake Energy Regeneration thus increases 
fuel efficiency while simultaneously enhancing driving dynamics. As an 
extra precaution, the Brake Energy Regeneration system monitors the 
level of battery charge and will, if necessary, continue to charge the 
battery even during acceleration to prevent a complete discharging of 
the battery.
    We have many other technologies for saving fuel and reducing 
CO2 and I would be pleased to forward this information to 
Members of the Subcommittee.

Hydrogen vs. Battery Electric Power

          Hydrogen has no carbon so hydrogen by itself will not 
        generate air pollution.

          Hydrogen can be generated using clean and sustainable 
        sources like hydro, wind, solar, and biomass sources.

          Hydrogen can be produced in this country and other 
        locations away from troubled parts of the world.

    Based on the above listed circumstances, BMW has worked to gain 
more than thirty years of experience with hydrogen powered automobiles. 
We have just completed a successful global ``Hydrogen 7'' Program in 
which 100 hydrogen powered BMW 7 Series cars were equipped to run on 
either gasoline or hydrogen. (A few cars equipped to run exclusively on 
hydrogen were also built in order to explore the state-of-the-art in 
emission reductions and exhaust measurements.)
    These ``bi-fuel'' hydrogen/gasoline cars were very successful to 
demonstrate that a hydrogen-powered internal combustion engine can 
operate today, and in the bi-fuel configuration, can help bridge the 
gap until a hydrogen refueling infrastructure is available.
    To expand on our battery powered vehicle knowledge, the BMW group 
has just launched a battery electric vehicle (BEV) program with 
approximately 500 battery electric ``MINI E'' cars. These cars are 
being deployed in the US (about 480) and in Germany to gain insight 
into this unique technology.
    When comparing the technology of hydrogen power versus battery 
power, the similarities and differences must be considered. A 
similarity is for example that hydrogen is an energy carrier just like 
a battery. A battery is charged to store energy, while water is split 
to make energy available as free hydrogen. A major difference is that 
hydrogen refueling can be performed in a few minutes, while a battery 
``fast charge'' today takes several hours.
    While the current electric grid provides a limited infrastructure 
for charging a BEV, a far greater infrastructure is needed. Likewise, 
there is a very limited hydrogen refueling infrastructure, and a far 
greater hydrogen refueling infrastructure is needed.
    While expanded infrastructures are needed, the critical challenge 
for the auto industry with both BEVs and hydrogen powered vehicles is 
in energy storage. Furthermore, an infrastructure of BEV charging 
stations and hydrogen refueling are necessary if the auto industry is 
expected to continue to invest in these technologies.
    Today's BEV batteries are too large, too heavy, too limited in 
range, and far too expensive. Our MINI E BEVs were changed from four-
seaters to two-seaters because of the battery size and weight, and the 
effective range of the vehicles is relatively good, but only equivalent 
to approximately two gallons of diesel fuel. There can be no debate on 
the merits of battery research and we fully support efforts by the DOE 
to fund battery research, but doing this with the complete elimination 
of hydrogen storage funding would be very unfortunate. BMW has 
partnered with U.S. companies to collaborate on projects involving 
storage of hydrogen for use on-board vehicles and we see hydrogen as 
playing an important role in the future as a means to become 
independent from fossil fuels.

        1.  Hydrogen powered internal combustion engine vehicles 
        consume air with nitrogen and thus are not 100 percent zero 
        emissions vehicles, but they are virtually emissions-free.

        2.  Hydrogen powered internal combustion engine vehicles 
        consume the surrounding air including methane, hydrocarbons, 
        and other pollutants and exhaust water vapor you can drink and 
        cleaner air than the air we breathe.

        3.  Hydrogen powered bi-fuel internal combustion engine 
        vehicles can provide a critical bridge solution to getting a 
        hydrogen infrastructure in place. Drivers can seamlessly select 
        between super clean hydrogen power or fossil fuels as necessary 
        to reach available gasoline or hydrogen refueling stations.

        4.  Hydrogen storage on-board is a critically important element 
        for the success of hydrogen, and it is prudent to continue to 
        invest in this technology for the future.

    Despite our thirty years plus of hydrogen-powered vehicle 
experience, we have an increasingly difficult challenge to justify 
investments in hydrogen power without evidence that a hydrogen 
infrastructure is being developed.
    Thank you for the opportunity to provide testimony to the U.S. 
House of Representatives Committee on Science and Technology, 
Subcommittee on Energy and Environment.

                     Biography for Thomas C. Baloga
    Tom is responsible for U.S. engineering involving Environmental, 
Safety, Intelligent Transportation Systems, Product Development, and 
Product Analysis activities of the BMW Group. The BMW Group includes 
BMW, MINI, and Rolls Royce.
    Prior to BMW, Tom was the owner and principal of INIT LLC, an 
innovation consulting firm, President of Britax Child Safety, Inc., 
Manager of Safety Engineering for Mercedes-Benz USA, and a Senior Test 
Engineer for Mack Trucks, Inc. He is the primary inventor on multiple 
U.S. and foreign patents.
    Tom served on the Board of Directors for Public Safety Equipment, 
Code 3, and Kustom Signals.
    Tom has degrees in Automotive Technology from The Pennsylvania 
College of Technology, and Mechanical Engineering from The Pennsylvania 
State University.

    Chair Baird. Thank you, Mr. Baloga.
    Dr. Johnson.

  STATEMENT OF DR. JOHN H. JOHNSON, PRESIDENTIAL PROFESSOR OF 
   MECHANICAL ENGINEERING, MICHIGAN TECHNOLOGICAL UNIVERSITY

    Dr. Johnson. Chair Baird and Ranking Member Inglis, my name 
is John Johnson. I am a Presidential Professor of Mechanical 
Engineering at Michigan Technological University. My expertise 
is in diesel engines, including R&D management. After 
completing my Ph.D. degree I spent two years as a first 
lieutenant in the United States Army at the Tank Automotive 
Center in Warren, Michigan, managing engine research projects. 
I then worked as a chief engineer of an applied engine research 
at International Harvester, which is now Navistar. In 1970, I 
came to Michigan Tech. I was chair of the committee that wrote 
this report in June, 2008, on the review of the 21st Century 
Truck Partnership.
    The opinions I will give today are my personal ones, 
although they draw on the findings and recommendations in the 
report. I am also a member of the Academy's Committee on Light-
Duty Fuel Economy and the Committee on Medium and Heavy-Duty 
Vehicle Fuel Economy.
    The Committee on Medium- and Heavy-Duty Fuel Economy was 
formed based on a mandate that NHTSA, under Section 108 of the 
Energy Independence and Security Act of 2007, entered into an 
agreement with the National Academies to evaluate medium- and 
heavy-duty truck fuel economy. The Academy report must be 
completed by March of 2010. The legislation under Section 102 
also mandates that NHTSA itself conduct a study on the fuel 
efficiency of commercial medium- and heavy-duty on-highway 
vehicles and work trucks, and two, mandates that NITSA then 
conduct a rule-making to implement a commercial medium- and 
heavy-duty on-highway and work truck fuel efficiency 
improvement program.
    Despite the many benefits of the partnership, including 
helping the engine industry meet the EPA 2007 particulate and 
2010. NOX standards, the program suffered from dwindling 
resources devoted to the program by DOE. Funds were about 87 
million in fiscal year 2002, and decreased to 30 million in 
fiscal year 2008. This funding pattern does not reflect the 
number of productive R&D opportunities. It also does not 
reflect the economic weight of the industry.
    In the 2002 economic census the truck transportation 
industry consisted of more than 112,698 separate 
establishments, with total revenues of 165 billion. These 
establishments employ 1,437,259 workers, who take home an 
annual payroll of 47 billion. This industry is made up of 10 
major truck manufacturers, 10 trailer manufacturers, 18 refuge 
truck and five bus manufacturers and six major engine 
suppliers, along with over 20 major supplier companies that 
supply transmissions, cooling system components, turbochargers, 
brakes, tires, electrical and electronic components, hybrid 
systems, emission after-treatment systems, and other parts.
    Because of the low-level of funding from DOE, the 21st 
Century Truck Partnership chose to focus its R&D effort on the 
Class 8, long-haul type of vehicle, which consumes 75 percent 
of the petroleum in the heavy- and medium-truck sector. It was 
forced to cancel many projects originally in the 21st Century 
Truck roadmap.
    Federal, State, and local governments and commercial 
trucking firms such as utility and delivery operations that use 
medium-duty trucks are also interested in fuel economy of their 
vehicles since it also affects their operating costs. They want 
advanced technologies such as hybrid vehicles.
    In light of the potential fuel economy regulations by NHTSA 
as required by Section 102 of the Energy Act, it is important 
that the Federal Government fund the DOE program at levels such 
as $200 million per year with $90 million per year for engine, 
emission control systems, and biodiesel fuels research. The 
program should be funded for five to ten years at this level so 
that the industry will have the technology in the 2015 to 2020 
timeframe to meet potential fuel economy regulations.
    Safety is an important part of the program with support in 
the past from DOE and DOT, with DOT providing the majority of 
the budget. As crash protection measures have not substantially 
reduced truck-related highway fatalities during the past 
decade, the main objective going forward will be to prevent 
crashes using crash avoidance technologies and in-vehicle 
communication systems. There is a need for 25 million per year 
for safety-related research, which should be designated for DOT 
by line item for the 21st Century Truck Partnership.
    The next decade needs R&D programs to decrease medium- and 
heavy-duty truck petroleum fuel consumption by the use of 
advanced diesel engine and after-treatment technologies, 
advanced truck and trailer aerodynamic designs, and low-
rolling-resistant tires. The use of hybrid systems for 
applications that have duty cycles that can reduce the fuel 
consumption, including advanced cooling systems and engine 
components that use less energy, light weighting of the 
vehicles and trailers so that more payload can be carried which 
reduces the fuel consumption in gallons per ton payload miles 
needed.
    A major effort must be carried out to develop biodiesel 
fuels that meet ASTM specifications, are energy and greenhouse 
gas efficient in the production of the bio-component, and make 
good use of the land without compromising the food supply and 
the price of the fuel.
    One of our findings on the management strategy and priority 
setting pointed out that the program operated as a virtual 
network of agencies and government labs with an unwieldy 
structure and budget process. This would be significantly 
improved if heavy-truck funds for EPA, DOE, and DOT were 
designated by line items that are directed at this program. I 
know that this is very difficult because each of these agencies 
go to different Congressional committees for their funds.
    Thank you for giving me the opportunity to discuss with you 
the 21st Century Truck Partnership, and I also think the 
partnership would benefit in the future from an external, 
independent review as was done by the National Academies in 
their review of the 21st Century Truck Partnership.
    [The prepared statement of Dr. Johnson follows:]
                 Prepared Statement of John H. Johnson
    My name is John Johnson; I am a Presidential Professor of 
Mechanical Engineering at Michigan Technological University. My 
expertise is in diesel engines, including R&D management. After 
completing my Ph.D. degree, I spent two years as a 1st Lieutenant in 
the U.S. Army at the Tank-Automotive Center in Warren, Michigan 
managing engine research projects. I then worked as Chief Engineer of 
Applied Engine Research at International Harvester which is now 
Navistar. In 1970, I came to Michigan Technological University. I have 
participated in 12 different National Academies Committees since 1980. 
I was the Chair of the Committee that wrote the report published in 
June 2008 entitled ``Review of the 21st Century Truck Partnership.'' 
The opinions I will give today are my personal ones although they draw 
on the findings and recommendations in the report. The first part of my 
testimony will give a brief review of the 21st Century Truck 
Partnership including the members of the Partnership and the approach 
used in our review--these figures came directly from the report. I am 
also a member of the Academies Committee on Light-Duty Vehicle Fuel 
Economy and the Committee on Medium- and Heavy-Duty Vehicle Fuel 
Economy.
    The Committee on Medium- and Heavy-Duty Fuel Economy was formed 
based on the mandate that the National Highway Traffic Safety 
Administration (NHTSA), an agency of the U.S. Department of 
Transportation, under Section 108 of the Energy Independence and 
Security Act (EISA) of 2007, enter into an agreement with the National 
Academies to evaluate medium- and heavy-duty truck fuel economy. The 
Academy report must be completed by March 2010. The legislation, under 
Section 102, also (1) mandates that NHTSA itself conduct a study on the 
fuel efficiency of commercial medium- and heavy-duty on highway 
vehicles and work trucks and (2) mandates that NHTSA then conduct a 
rule-making to implement a commercial medium- and heavy-duty on-highway 
and work-truck fuel efficiency improvement program.
    Figure 1 reviews some important facts about the Partnership. It 
shows the history of the program, including Federal Agency, National 
laboratory, and industrial partner participants.




    The staff members from the various committees dealing with energy 
in the House and Senate have copies of the report. I came to Congress 
in June 2008 to meet with several staff members of the Subcommittee and 
again March 5, 2009 to meet with a broader group of staff members from 
the various House and Senate committees.
    Despite the many benefits of the Partnership, including helping the 
engine industry meet the EPA 2007 particulate and 2010 NOX standards, 
the program suffered from the dwindling resources devoted to the 
program by DOE. Funds were about $87 million in FY 2002 and decreased 
to $30 million in FY 2008. This funding pattern does not reflect the 
number of productive R&D opportunities.
    It also does not reflect the economic weight of the industry. 
According to the report: In the 2002 Economic Census, ``The truck 
transportation industry consisted of more than 112,698 separate 
establishments, with total revenues of $165 billion. These 
establishments employ 1,437,259 workers, who take home an annual 
payroll of $47 billion. Truck and bus manufacturing also account for a 
significant share of national income. According to the same census, 
light-truck and utility-vehicle manufacturers have total shipments of 
$137 billion. Heavy-duty-truck manufacturing had sales of $16 billion. 
Another way to look at the trucking industry's economic contribution is 
to compare the revenue from trucks with other sectors in the 
transportation industry, in which case trucks account for about one-
fourth of the industry's total revenues.''
    This industry is made up of 10 major truck manufacturers, 10 
trailer manufacturers, 18 refuse truck and five bus manufacturers, and 
six major engine suppliers along with over 20 major supplier companies 
that supply transmissions, cooling system components, turbochargers, 
brakes, tires, electrical and electronic components, hybrid systems, 
emission after-treatment systems, and other parts.
    Because of the low level of funding from DOE, the 21st Century 
Truck Partnership chose to focus its R&D effort on the Class 8 long-
haul type of vehicle, which consumes 75 percent of the petroleum in the 
heavy- and medium-truck sector. It was forced to cancel many projects 
originally in the 21CTP roadmap, including light-weighing vehicles, 
all-electric components on vehicles, aerodynamic modeling and design, 
and low rolling resistance tires. Federal, State, and local governments 
and commercial trucking firms, such as utility and delivery operations 
that use medium-duty trucks, are also interested in the fuel economy of 
their vehicles since it also affects their operating costs--they want 
advanced technology such as hybrid vehicles.
    In light of the potential fuel economy regulations by NHTSA as 
required by Section 102 of EISA, it is important that the Federal 
Government fund the DOE program at levels such as $200 million/year 
with $90 million/year for engine, emission control systems, and 
biodiesel fuels research. The program should be funded for five to ten 
years at this level so that the industry will have the technology in 
the 2015-2020 timeframe to meet potential fuel economy regulations. 
Safety is an important part of the program with support in the past 
from DOE and DOT, with DOT providing the majority of the budget. As 
crash protection measures have not substantially reduced highway 
fatalities during the past decade, the main objective going forward 
will be to prevent crashes using crash avoidance technologies and in-
vehicle communications systems. There is need for $25 million per year 
for safety related research which should be designated for DOT by line 
item for the 21st Century Truck Partnership.
    The next decade needs R&D programs to decrease medium- and heavy-
duty truck petroleum fuel consumption by the use of advanced diesel 
engine and after-treatment technologies, advanced truck and trailer 
aerodynamic designs, and low rolling resistance tires. The use of 
hybrid systems in applications that have duty cycles that can reduce 
the fuel consumption, including advanced cooling systems and engine 
components that use less energy, light weighing of vehicles and 
trailers so that more payload can be carried which reduces the fuel 
consumption in gallons/ton of payload-miles are needed. A major effort 
must be carried out to develop biodiesel fuels that meet ASTM 
specifications, are energy and greenhouse gas efficient in the 
production of the bio component and make good use of the land without 
compromising the food supply and the price of food. It is important 
that the price differential between gasoline and diesel fuel does not 
increase more than the 60-70 cents per gallon that has existed in the 
past few years. Decreasing the truck petroleum fuel consumption with 
lower fuel consumption vehicles should help this diesel fuel market 
demand condition that now exists. More biodiesel fuel use should help 
decrease the demand for the petroleum fuel if the research program is 
aggressive.
    One of our findings on the management strategy and priority setting 
pointed out that the program operated as a virtual network of agencies 
and government labs with an unwieldy structure and budget process. This 
would be significantly improved if heavy truck funds for EPA, DOE and 
DOT were designated by line items that are directed at this program. I 
know that this is very difficult because each of these agencies go to 
different Congressional committees for their funds. Our findings and 
recommendations also stated that there is a need for an Executive that 
crosses agencies to manage this program.
    I am very supportive of a bill that commits the United States 
Government to a research program that results in the development of 
fuel efficient and safe heavy-duty trucks. The U.S. has always been a 
world leader in developing advanced trucks--the heavy-duty diesel 
engine has always been cutting edge technology in durability, 
reliability, low fuel consumption, and now in 2010 low in emissions. 
This product development and manufacturing base in the U.S. must be 
maintained if we as a country are to be strong in the global economy. 
This industrial base is also important to the military, particularly to 
the Army and Marines since diesel powered vehicles and diesel fuels are 
critical elements of our ground forces. We must maintain this base 
which will happen with an aggressive R&D program in the commercial 
sector that includes maintaining National Laboratories and Universities 
as strong components in the program.
    Thank you for giving me the opportunity to discuss with you the 
21st Century Truck Partnership Program including my personal opinions 
of what is needed to maintain the United States as a world leader. I 
also think the Partnership would benefit in the future from an 
external, independent review, as was done by the National Academies in 
their Review of the 21st Century Truck Partnership in 2007-2008.
    I would be happy to answer your questions.

                     Biography for John H. Johnson
    John H. Johnson is a presidential professor, Department of 
Mechanical Engineering-Engineering Mechanics, Michigan Technological 
University (MTU). He is a fellow of the Society of Automotive Engineers 
and the American Society of Mechanical Engineers. His experience spans 
a wide range of analysis and experimental work related to advanced 
engine concepts, emissions studies, fuel systems, and engine 
simulation. Prior to joining the MTU Department of Mechanical 
Engineering-Engineering Mechanics, he was a project engineer for U.S. 
Army Tank Automotive Center, and Chief Engineer, Applied Engine 
Research, International Harvester Co. John served as Chair of the MTU 
Mechanical Engineering-Engineering Mechanics Department from 1986-93. 
He has served on many committees related to engine technology, engine 
emissions, and health effects with the Society of Automotive Engineers, 
the National Research Council (NRC), the Combustion Institute, the 
Health Effects Institute, and the Environmental Protection Agency. He 
consults to a number of government and private sector institutions. In 
particular, he served on the NRC Committee on Fuel Economy of 
Automobiles and Light Trucks, the Committee on the Effectiveness and 
Impact of Corporate Average Fuel Economy (CAFE) Standards, the 
Committee on Advanced Automotive Technologies Plan, and was Chair, 
Committee on Review of DOE's Office of Heavy Vehicle Technologies. He 
received his Ph.D. in mechanical engineering from the University of 
Wisconsin.
    Dr. Johnson served on the SAE Board of Directors from 1982-85. He 
was the editor of seven Progress in Technology books on emissions. Over 
100 SAE papers have been authored by Dr. Johnson. He received the SAE 
Arch T. Colwell Merit Award (outstanding paper--emphasis on the 
originality of the contribution as well as the excellence of the 
presentation) in 1983 and 1994. In 1993, he and his research colleagues 
received the SAE Horning Memorial Award, which was given in recognition 
of distinguished active research in diesel emissions to the better 
mutual adaptation of fuels and engines. In 1998, he and his doctoral 
student received the SAE Myers Awards for Outstanding Student paper. 
Dr. Johnson has been a member of the SAE Engineering Activity Board-
Publications Advisory Committee (PAC) from 1975-1987 and the Chair from 
1982-87. He was a member of the SAE Technical Communications Committee, 
which replaced the PAC, from 1987 to 2004. In 1988, he received the SAE 
Forest R. McFarland Award in recognition of serving with dedication as 
Chair of the PAC. From 1990-2000 he was Editor-in-Chief of the SAE 
Transactions Editors Committee and in 2000 he received the SAE 
Certificate of Appreciation for this leadership effort.
    In 2002, the American Society of Mechanical Engineers' honored Dr. 
Johnson with the Soichiro Honda Medal. He was recognized with this 
medal for advancing the understanding of vehicle cooling problems and 
research investigations into the origin of diesel exhaust pollutants 
and their impact on human health. Dr. Johnson has authored over 200 
papers and reports and holds one patent.

    Chair Baird. Dr. Johnson, thanks for your testimony, and 
thanks for your role on producing that report. We too rarely 
thank people who devote so much time to such things, and they 
are very, very helpful to us. Thank you.
    And we understand--I am not sure we all do understand that. 
We are grateful on this committee and thank you very much. And 
sometimes they aren't even paid for travel. When the 
Transportation Commission after the last Transportation Bill 
ran out of funds, they did it on their own money.
    Mr. Greszler.

STATEMENT OF MR. ANTHONY GRESZLER, VICE PRESIDENT OF GOVERNMENT 
     AND INDUSTRY RELATIONS, VOLVO POWERTRAIN NORTH AMERICA

    Mr. Greszler. Thanks, Chair Baird, Ranking Member Inglis, 
thank you for the opportunity to appear today. I am Vice 
President for Government and Industry Relations with Volvo 
Powertrain North America in Hagerstown, Maryland, in 
Congressman Bartlett's district, and we are part of Volvo Group 
North America, which is not cars. Our divisions are truck 
divisions here include Mack Truck, Volvo Trucks, and Nissan 
Diesel truck brands here in the United States. I am speaking to 
you today on behalf of the industry representatives of the 21st 
Century Truck Partnership.
    Twenty-one CTP is uniquely structured to coordinate efforts 
to improve the efficiency, emissions, and safety of Class 3 to 
8 commercial trucks and buses. Our members include original 
equipment manufacturers, diesel engine manufacturers, major 
component suppliers, and a number of U.S. Government agencies.
    Member companies are all multi-national with major U.S.-
based research and development activities. Products from this 
group of companies consume over 30 percent of U.S. motor fuel 
and heavily influence global motor fuel consumption as well. 
Smaller suppliers can gain access to the 21 CTP Programs by 
working through any of the partner companies.
    Our objective is to assure sustainable, cost-effective 
freight transport in an environment of limited petroleum supply 
and carbon emissions constraint. This means we need technology 
development plus related infrastructure and policy enablers to 
greatly improve vehicle and freight system efficiency and to 
develop low carbon fuel sources.
    Requirements for heavy-duty vehicles are markedly different 
from light duty, and they require unique solutions. 
Furthermore, the demand for freight movement is directly tied 
to our economic growth, and it is projected to grow at two to 
two and a half percent over the next 20 years per year. In 
fact, recent DOE projections show that if light-duty fuel use 
targets are met and heavy-duty trends continue, that heavy-duty 
fuel use would actually exceed light duty by 2040. These facts 
demand a major focus on efficient freight movement combining 
strong government and industry efforts.
    Federal support for commercial truck technology during the 
past few years has focused mainly on vehicle components and 
subsystems. This has generated encouraging results in 
laboratory demonstrations; however, development should now 
focus on technology that can be effectively deployed in real 
vehicle applications. We propose a strong emphasis on design 
for vehicle integration and in-use demonstration.
    At 42 percent peak thermal efficiency, heavy-duty diesel 
engines are already the most efficient mobile energy converters 
in common use. Through joint R&D programs with the Department 
of Energy, the industry has already demonstrated a capability 
of an additional eight points of improvement in peak thermal 
efficiency in lab testing. The real challenge, however, is to 
accomplish this in a truck with the emissions, operational, and 
vehicle constraints and in a fully-representative drive cycle. 
We strongly support public and private partnership for such a 
demonstration program.
    We also need to find ways to achieve 2010, emissions at 
lower cost and with improved fuel efficiency, requiring a 
continuing focus on in-cylinder emissions and on exhaust after 
treatment.
    Hybrid powertrains can offer fuel savings in stop-and-go 
applications in the range 30 to 50 percent. However, the 
primary reasons to hybridize the Class A long-haul vehicles are 
to reduce idle time by using hybrid energy, reduce fuel use 
through electrification of components, and energy management 
during traffic-induced speed variation and in rolling terrain. 
Research and development is required to fully realize the 
potential of an integrated electric hybrid powertrain. Longer 
life and less expensive energy storage systems are required. 
Working with organizations like the Hybrid Truck Users Forum 
can accelerate technology development, and in fact, discussions 
are already underway with HTUF regarding future industry 
forums.
    At 65 miles per hour, aerodynamic drag is typically more 
than 50 percent of the total road load on a heavy truck. Heavy 
vehicle aerodynamic development has been focused on the 
tractor, where manufacturers compete vigorously on aerodynamic 
performance and fuel economy. However, enormous opportunities 
exist in improving trailer aerodynamics and further 
opportunities exist through optimization of the aero 
performance of the tractor and trailer together, offering up to 
12 percent improvement in aerodynamic losses, and further 
benefits can be realized by aerodynamic trailer treatments if 
these designs can overcome the issues of durability, costs, and 
operability.
    Cost-effective low carbon fuels and compatible engines will 
be necessary building on work already done in biofuels.
    In conclusion, the heavy-duty vehicle industry is a small 
base of companies with a huge impact on petroleum consumption 
and our economic growth. Despite this, there has been minimal 
federal investment to address these many opportunities. We 
believe that $200 million annually in federal funding is 
required to support these initiatives. The 21st Century Truck 
Partnership is the only forum in which the relevant companies 
come together, and we recommend that 21 CTP serve as the focal 
point to create a long-term vision for the future of commercial 
vehicle technology.
    Thank you.
    [The prepared statement of Mr. Greszler follows:]
                 Prepared Statement of Anthony Greszler
    Chairman Baird, Ranking Member Inglis, thank you for the 
opportunity to appear today. My name is Anthony Greszler. I am the Vice 
President for Government and Industry Relations with Volvo Powertrain 
North America in Hagerstown, Maryland, a part of Volvo Group North 
America, including Mack, Volvo, and Nissan Diesel Truck brands in the 
U.S. I am currently serving on the NAS ``Committee for a Study of 
Potential Energy Savings and Greenhouse Gas Reductions from 
Transportation'' and on the Transportation Research Board Special Task 
Force on Climate Change & Energy. I am speaking to you today on behalf 
of the industry representatives of the 21st Century Truck Partnership.

Background and Purpose

    The 21st Century Truck Program (21CTP) is uniquely structured to 
coordinate efforts to improve the efficiency, emissions, and safety of 
Class 3 to 8 commercial trucks and buses. 21CTP members include 
original equipment manufacturers, diesel engine manufacturers, major 
component suppliers and a number of U.S. Government agencies. 21CTP 
member companies are all multi-national with major U.S.-based research 
and development activities. Products from this group of companies are 
widely used and not only consume over 30 percent of the U.S. motor 
fuel, but also heavily influence global motor fuel consumption. 21CTP 
also provides a forum for small suppliers to gain access to major R&D 
programs by working through any of the partner companies.
    As heavy vehicle and component suppliers our objective is to assure 
sustainable, cost effective freight transport in an environment of 
limited petroleum supply and carbon emissions constraint. This means we 
need technology development plus related infrastructure and policy 
enablers to greatly improve vehicle and freight system efficiency while 
also developing low-carbon, non-petroleum fuel sources.
    Requirements for heavy duty vehicles are markedly different from 
light duty, and require unique solutions. Furthermore, the demand for 
freight movement is directly tied to economic growth and is projected 
to grow at two to two and a half percent for the next 20 years. Recent 
DOE projections show that, if light duty fuel use targets are met and 
heavy duty trends continue, HD fuel use will exceed LD by 2040. These 
facts demand a major focus on efficient freight movement--combining 
strong government and industry efforts--comparable to the effort on 
light duty over the past decades.

Heavy Truck Technology Development Needs

1. Vehicle Integration and Demonstration

    The small amount of federal support for commercial truck technology 
during the past few years has been focused on vehicle components and 
sub-systems. While this has generated encouraging results in laboratory 
demonstrations, the next development should focus on technology that 
can be effectively deployed in real vehicle applications. Going 
forward, we propose a strong emphasis on initial design for vehicle 
integration and final in-use demonstration which meets emissions, 
safety, and operational requirements.

2. Engine Technology

    At 42 percent peak thermal efficiency, heavy-duty diesel engines 
are already the most efficient mobile energy converters in common use. 
In addition, through joint R&D programs with the Department of Energy, 
the industry has already demonstrated the capability for an additional 
eight (8) percentage points of improvement in peak thermal efficiency 
in lab testing. The real challenge however, is to accomplish this in a 
truck within the emissions, operational, and vehicle constraints in a 
fully representative drive cycle. We strongly support public--private 
partnership for a demonstration program to support such an initiative.
    Current public-private partnership was instrumental in the 
successful launch of 2007 emissions-compliant Heavy-Duty Engines while 
maintaining fuel efficiency. Those engines are the basis for upcoming 
2010 emissions products which will deliver near zero emissions. 
Although we do not envision further tightening of criteria emissions, 
we do need to find ways to achieve 2010 emission levels at lower cost 
and with improved fuel efficiency. This requires a continuing focus on 
both in-cylinder emissions reduction and on exhaust after-treatment to 
reduce back pressure, size, weight, and cost.

3. Heavy-Duty Hybrid, Electrification & Reduced Idle Solutions

    Hybrid Powertrains can offer significant fuel savings in stop-and-
go applications. In fact, several medium- and heavy-duty ``Stop-and-
Go'' vocations have reported fuel savings in the range of 30-50 percent 
with both electric and hydraulic hybrid powertrains. The primary 
reasons to hybridize a Class 8 on-highway powertrain are three-fold: 1) 
reduced idle time through the hybrid energy storage and use of electric 
auxiliaries; 2) reduced fuel use through electrification of 
components--thereby, improving efficiency; and 3) reduced fuel usage 
during cruise through energy management with traffic induced speed 
variation and in rolling terrain. Research and development is required 
to fully realize the potential of an integrated Electric Hybrid 
Powertrain with Electrified Auxiliaries. In addition, longer life and 
less expensive energy storage systems are also required to complete 
this package. Working with industry organizations like the Hybrid Truck 
Users Forum (HTUF) can accelerate technology development, provided 
adequate funding is achieved. In fact, discussions are already underway 
with HTUF regarding future industry forums.

4. Truck and Trailer Aerodynamics

    At 65 mph, aerodynamic drag is typically more than 50 percent of 
the total road load on a heavy truck. The tractor and trailer operate 
as an aerodynamic system with strong interactions between the front 
(tractor) and rear (trailer) parts of the system. Heavy vehicle 
aerodynamic development has focused on the front of the system where 
tractor manufacturers compete vigorously on aerodynamic performance and 
fuel economy. However, enormous opportunity exists in improving trailer 
aerodynamics and further opportunity exists through optimization of the 
aero performance of the tractor and trailer together because the 
quality of the airflow delivered from the tractor to the trailer has a 
significant performance impact on trailer aerodynamic devices offering 
up to 12 percent improvement in aerodynamic losses. Further benefits of 
another 10-15 percent can be realized by aerodynamic trailer 
treatments, if the designs can overcome issues of durability, cost and 
operability.

5. Fuels

    Vehicular improvements alone will not achieve the full potential 
for fuel and greenhouse gas savings. Cost-effective changes to fuels 
and to vehicle usage need to be considered. Vehicle research and 
development will be necessary to take full advantage of some 
improvements. Investigations need to be conducted that build upon work 
already done in biofuels, natural gas, hydrogen and other alternative 
fuels. This is only possible if we: (1) Ensure that fuel standards are 
written to support optimal engine performance; (2) Ensure that fuels 
meets the appropriate standards; and (3) Provide the necessary fuel 
infrastructure.

Fuel Efficiency Assessment

    There will be a need for vehicle fuel efficiency assessment and 
accounting as we seek to minimize fuel use and CO2 
emissions. With the tremendous variation in vehicle specifications, 
this will require a fuel efficiency model accepted by industry, end-
users, and government agencies. The model should be verified by testing 
on typical vehicles while allowing for simulated results for 
variations.

In Conclusion:

    The heavy-duty vehicle industry is comprised of a small base of 
companies with a huge impact on current and future petroleum 
consumption as well as our nation's economic growth. Despite the 
critical need to deal with trucking industry challenges, there has been 
minimal federal investment to address many untapped opportunities. We 
believe that $200 million annually in federal funding is required to 
support these initiatives. The 21st Century Truck Partnership is the 
only forum in which the relevant companies come together. Given the 
significant technical challenges in developing a fully integrated truck 
that optimizes all of the aforementioned characteristics, it is 
essential that the industry has strong strategic alliances and 
significant resource support from the appropriate federal agencies. To 
accomplish these objectives, we recommend that 21CTP serve as a focal 
point to create a longer-term vision for the future of commercial 
vehicle technology.

21st Century Truck Partnership member companies

Allison Transmission, Inc.
BAE Systems
Caterpillar Inc.
Cummins Inc.
Daimler Trucks North America LLC
Detroit Diesel Corporation
Eaton Corporation
Freightliner Trucks
Mack Trucks, Inc.
Navistar, Inc.
PACCAR Inc.
Volvo Trucks North America

                     Biography for Anthony Greszler
Vice President Government and Industry Relations
Volvo Powertrain North America

Education

Case Western Reserve University, Cleveland, Ohio

BS, Mechanical Engr, 1972

MS, Mechanical Engr, 1976

Background and experience

    Mr. Greszler has been involved with diesel engine design and 
development since 1977, with experience in diesel mechanical systems, 
cooling, lubrication, performance development, emissions, controls, 
complete vehicle powertrains, and advanced concepts. He has also been 
involved with heavy-duty natural gas engines and other alternative 
fuels, particularly DME.
    From 1977-2001 he was with Cummins Engine Co. responsible for 
design and development of heavy-duty diesel engines, including two 
years in Europe on N14 and L10 engines and eight years as L10 & M11 
Chief Engineer, including on-highway and off-highway applications.
    In 2001, he became Vice President, Engineering for Volvo 
Powertrain, North America with responsibility for engine development 
for Mack Trucks and Volvo Trucks North America, including Mack ETECH, 
ASET, and E7 natural gas engine, support for Volvo D12 in North 
America, and development for future North American engines including 
U.S. 2007 and 2010 emissions. In 2005, he took responsibility for 
Advanced Engineering for Engines and Vehicle Propulsion with focus on 
diesel combustion/emissions, hybrid propulsion, advanced transmissions, 
and alternative fuels. Currently, he is focusing on CO2 
mitigation from road freight transport. Other activities include 
serving as an officer of the Engine Manufacturers Association, member-
Transportation Research Board Special Task Force on Climate Change and 
Energy, and National Academy of Science ``Committee for Potential 
Energy Savings and Green House Gas Reduction from Transportation.''
    Volvo Powertrain, a division of Volvo AB, is responsible to supply 
engine, transmission, and drivetrain components to all Volvo divisions 
including Volvo Trucks, Mack Trucks, Renault VI, Nissan Diesel, Volvo 
Construction, Volvo Penta, and Volvo Bus. Volvo Powertrain is one of 
the world's largest suppliers of 9-16 liter diesel engines.

                               Discussion

    Chair Baird. Thank you all for fascinating testimony, and a 
number of issues come to mind.
    I will recognize myself for five minutes first, and then we 
will proceed in alternative order as is our custom here.

                   DOE's Response to Recommendations

    Mr. Chalk, there is a number of--as we listen to the 
recommendations of the folks from industry, they offer a number 
of recommendations and observations. I want to ask you first, 
what are you doing to take into account, what is the agency 
doing to take into account the kind of recommendations we have 
just heard?
    And then I will reverse that a little bit and ask the 
industry, how well do you think that is working, and how can it 
be made better?
    Mr. Chalk. Thank you. A lot of the recommendations you 
heard this morning came directly from the National Research 
Council report, which the Department of Energy asked for, and 
we do this on the automotive and the truck side so that we can 
make our program better. So in general we concur with all the 
recommendations in the report.
    There is some tension in some areas. When we have a small 
amount of money to work with, you know, we do a top-down 
systems approach. That really cuts down on or possibly defrays 
some of the component-level work that we could do that is more 
the traditional role of the government to enable any long-term 
research. So we try to balance that, but we will incorporate 
the recommendation to do a system demonstration of the 50 
percent that includes, you know, the after treatment and 
penalties associated with regenerating the after treatment, if 
it is a particular filter, all the other system recommendations 
that were incorporated and try to do that demonstration and 
prove that that is, in fact, possible, which is a significant 
accomplishment of the program to go from 42 to 50 percent.
    We are also reconsidering the budget there. We have 
opportunity on the Recovery Act. DOE has discretionary funding, 
so we will re-look at the heavy duty to make sure that our 
budget is commensurate with the problems to be solved in terms 
of oil dependence and climate change, and that can be done in a 
timeframe that matters in terms of addressing those issues. And 
we have opportunity, of course, now in formulating our fiscal 
year 2010 budget to make those adjustments as well and consider 
the NRC recommendations.
    The swing has been there because as mentioned, you know, 
light-duty, highway vehicles are three times heavy duty. So we 
really focus on the lion's share of the problem so to speak, 
but as I said in my testimony, the trends are, and it has been 
mentioned here, that while light duty is flat and we can maybe 
decrease that a lot if we make good gains there, the heavy duty 
is actually increasing. So we have to look at that and see what 
gains could be made, and I think that systems analysis will 
help us do that. We will know how much more we can get out of 
thermal efficiency, the engine, how much more we can get 
aerodynamics.

         Funding From the Recovery Act and Private Partnerships

    Chair Baird. Let me--okay. Thank you.
    A couple of issues I heard that I want to make sure we have 
a chance to elaborate on, I appreciate the input. One is this 
issue of private partnership. Mr. Baloga, you mentioned it. I 
think Dr. Clay and others may have mentioned it. The ability of 
private entities--Mr. Baloga, talk to us a little bit about 
that. It sounded like you were saying you would like the 
ability, you have got some expertise in your firm, you would 
like the ability to compete for some grants. Is it your 
experience that that is precluded or basically is all the 
research being done in-house and not as collaborative as you 
would like to see it or----
    Mr. Baloga. Well, what we would like to be able to do is 
bid on contracts for cooperative research on our own. Right now 
we do that with partners, and the DOE has been very 
accommodating to different projects; however, we need to 
partner with someone who is themselves able to apply for the 
contract. And that puts limitations----
    Chair Baird. Is that because of domestic versus 
international ownership?
    Mr. Baloga. Yes.
    Chair Baird. That is the issue? Okay.
    Mr. Baloga. Yes.
    Chair Baird. And I think Mr. Inglis is going to follow up 
on that a little bit----
    Mr. Baloga. Right.
    Chair Baird.--so there is going to be a fair bit of money 
in the stimulus package, and I am going to ask each of you if 
you could invest that money, how would you invest it?
    Dr. Johnson. I will just work my way--I mean, and I am 
going to ask you to do this in, not just in the interest of 
your own industry but in the interest of the country. So if 
you--looking objectively what would you do?
    Dr. Johnson. The truck component is extremely important, 
and as I mentioned in my testimony, the industry is very 
diverse, and they are not as politically visible as the 
automotive industry or the car and light truck. And diesel 
engine technology is really important. It is the heart of the 
truck. Diesel engines are most efficient as Tony mentioned, and 
hybrids are very important, too, and I think they need further 
stimulus. There is a lot of difficulty with the batteries and 
storage as Tony talked about because of these larger vehicles, 
and they need more, different storage capacity maybe than a 
plug-in hybrid. So----
    Chair Baird. Mr. Greszler.
    Mr. Greszler. Yeah. Thank you. First of all, we strongly 
support the idea of integrating technologies. We think that is 
one of the core things that has been lacking in the previous 
programs, to make sure the whole technology package works 
together in a vehicle and meets emissions as well as the 
operational requirements in a real duty cycle. And we greatly 
appreciate the new emphasis the DOE is now placing on that.
    As far as specific technologies, there continue to be a 
need for more in-cylinder combustion work, certainly waste heat 
recovery, which Mr. Baloga mentioned, but that is--we are well 
on the way with waste heat recovery evaluations in heavy duty, 
but, again, it is difficult to integrate that into a truck with 
a cooling requirement. So we have to be careful.
    Hybridization and in particular, long-haul hybridization, 
which will be a different kind of a technology than what you 
see in light duty because it is not so much stop and go. It is 
more dealing with managing the duty cycle and the energy use in 
the vehicle, and we need different kinds of batteries, we need 
particularly high-energy capability because we have to restore 
and utilize energy at a very high rate.
    So that is one of the big factors that we deal with. So 
there are specific areas that we think make a lot of sense, 
sir. Thank you.
    Chair Baird. Dr. Clay.
    Dr. Clay. I would like to speak to the portion of the 
stimulus that recognizes the importance of science investment. 
There is tremendous funding provided in the Recovery Act for 
increases in science investment, and I think there are 
opportunities for powerful breakthroughs that we can direct 
some of that science funding to the so-called Pasteur's 
quadrant, where we are looking at use-driven science.
    So I think in this particular area with vehicle 
technologies there are tremendous opportunities and very 
exciting ways we could apply that. So potential breakthrough 
game changers that we could use that kind of science funding 
and linkages between the science and the applied energy 
programs like the Vehicle Technologies Program could include 
things like combustion research, where we would be able to use 
our tremendous user facilities at our national laboratories for 
breakthroughs in optimizing combustion research. And also 
things like the advances in material science and nanotechnology 
to revisit some of the battery technologies that the Department 
of Energy previously supported in past decades but hit 
roadblocks. And with 20 years of advances in material science 
and nanotechnology, I think it would be very exciting to use 
some of that funding to revisit those chemistries and to see if 
some of those roadblocks might not be able to be overcome.
    Chair Baird. Thank you. My time has expired now. I will 
recognize my colleague. I want to also acknowledge the presence 
of Mr. Davis, Ms. Edwards, and Ms. Woolsey who have joined us 
as well. And I see Mr. Bilbray is here and Mr. Bartlett. Dr. 
Bartlett, good to see you as well.
    Mr. Inglis.
    Mr. Inglis. Thank you, Mr. Chair.

                      Innovation and Job Creation

    Mr. Baloga, it is impressive that I learned this morning 
that 70 percent of the production from the Spartanburg facility 
is export bound. It is also tremendously impressive that there 
are 5,000 employees, about 5,000 at the Spartanburg plant, 
17,000 employees in the supplier network and the region. So it 
is consistent with what you were saying about the importance of 
not disfavoring an international company in research projects.
    Might you describe some of those impediments so that we 
could understand better what we could do to remove those 
impediments? Because obviously for South Carolina, which is now 
the number two unemployment state in the country, and the place 
where your plant is actually higher unemployment than the State 
average. Were it not for BMW we would be in a world of hurt 
more than we are hurting now.
    Mr. Baloga. Well, thank you, Mr. Inglis.
    We certainly have a lot of innovation to offer, and as a 
premium manufacturer obviously we can charge a higher price for 
technology, and that is really where breakthroughs take place. 
If you look at going all the way back in safety technology or 
emissions technology, the premium segment of the auto industry 
is where the major breakthroughs occur because of the funding 
aspect of it to pay for this technology.
    So we really have a lot to offer. If we develop it on our 
own, then we put it in our vehicles, and it eventually trickles 
down into the mainstream. Whereas by partnering with companies 
in the U.S., we are able to get DOE funding and other 
government funding contracts for this technology, and 
eventually it makes its way into production and is widespread 
throughout the industry.
    But if we could get the funding directly, we would be able 
to more quickly get this innovation into the mainstream and 
into production. What happens is there is actually a delay. We 
have to pick an appropriate partner, we have to go through the 
process, make sure the partner's correct, make sure we have all 
of the I's dotted and T's crossed. And this investment of 
resources really slows down the whole project. So if there was 
a way that we could directly bid for contracts and so forth, 
now, of course, the innovation that comes out of that is 
property of the contract, and it is available. There are no 
secrets when it is a government contract. So this information 
gets shared very quickly.
    So I would say that this: by enabling this to happen with a 
company like ours that has made a huge investment and just so 
happens to have a global headquarters outside the U.S., this 
would actually bring the technology faster to the forefront, 
bring it faster into the mainstream vehicles, and that is 
something we would like to happen.
    Mr. Inglis. You know, it is interesting. You mentioned that 
the premium vehicles have been the ones that have caused the 
breakthroughs, which makes sense. I hadn't thought about it 
until you said it, but it makes sense because there is some 
opportunity to improve and a customer who is made willing to 
pay for that improvement.
    Mr. Baloga. Exactly.
    Mr. Inglis. By analogy, something this committee is getting 
used to hearing from me is, you know, as long as the 
externalities aren't attached to the price of gasoline, it is 
the same thing. Right? I mean, if we are right on this margin 
with unrecognized externalities associated with gasoline, if 
you recognized them and attached those--internalized those 
externals, then suddenly the economics change, and everybody 
sort of becomes more of a premium manufacturer at that point 
because then you are saying, oh, this stuff is pretty 
expensive, this gasoline, when you attach the national security 
cost, for example, to it. Then suddenly all kinds of innovation 
starts becoming possible. A little bit like the premium brand. 
I hadn't really thought about that. So that is a helpful thing 
this morning.

                  Avoiding Picking Winners and Losers

    How--somebody tell me how you, how we avoid picking winners 
and losers. Anytime we fund something, we are sort of picking a 
winner. So, for example, Dr. Clay didn't like it very much, but 
the H Prize we tried to do, that was an attempt to--for us to 
fund something. It favors hydrogen over something else.
    How do you avoid doing that? Anybody got any suggestion 
about how to avoid winners and losers? Dr. Clay.
    Dr. Clay. Thank you, Congressman. I wanted to say thank you 
for mentioning the H Prize. I wanted to say, you know, the 
Alliance supports a diversity of technologies, and I think it 
is to the interest of the country and the industry to have as 
many innovative tools in the toolbox as we can to try to get 
that kind of research. And the beauty of the Prize Authority as 
a general tool is that it is able to leverage a tremendous 
amount of private investment, and it allows a breadth of 
entrance and ideas that you can't get through a formal RFP 
process.
    So I do want to say that I, you know, personally and in my 
former capacity, supported the goal of the H Prize and 
supported the idea of hydrogen technology. Our fear at the time 
was that by making it so specific to hydrogen that we might 
actually inadvertently discourage using that Prize Authority 
for other programs. I think that with the new Administration 
and the comments that Secretary Chu made before this committee, 
that that is no longer a concern, the idea of using innovative 
ideas like Prize Authority is something that will become 
internalized to the Department of Energy going forward.
    And so just hopeful that we will see a successful H Prize 
going forward.
    Mr. Inglis. And maybe later in another round we can talk 
about just how do you avoid this winners and losers thing. I 
don't know how you do it other than an elegant price signal. If 
you send a price signal through the economy, then you don't 
have to worry about picking winners and losers.
    We will come back to that, Mr. Chair.
    Chair Baird. Thank you, Mr. Inglis. I would just say I 
think based on what we know about global overheating and ocean 
acidification, I think we have to pick some losers. The losers 
are those that pollute the planet. The winners are those that 
pollute less, and we do need to pick some losers at the very 
least, and I would say fossil fuel-based consumption at some 
point has to be a loser in favor of things that don't create 
climate overheating and acidify the ocean and kill this planet.
    So Mr. Tonko.
    Mr. Tonko. Thank you.

                 Industry Funding Levels and Viability

    Ms. Clay, Dr. Clay, the investment in R&D that you cited 
was, I think, the year 2006 to '07 was an increase of eight 
percent. Can you chart that since '07, forward? Is it as strong 
an increase?
    Dr. Clay. Those--Congressman, those numbers are reported to 
the National Science Foundation that does a compilation. I 
believe the numbers for 2008, are not yet compiled.
    I think it is difficult to say given the economic downturn 
whether the industry is. I simply don't know the answer to 
whether the industry maintained that funding level. I can say 
that the industry is as committed philosophically going forward 
as to developing advanced technologies, and so given the 
availability of resources but that you will see that level or 
that level of commitment going forward from the industry.
    Mr. Tonko. And can we track it backward from '06, to '96? 
Was there a steep curve of R&D investment?
    Dr. Clay. Congressman, I am actually, I am not certain what 
the trend is. I would be happy to find out and give you that 
information.
    Mr. Tonko. It seems to me that the secret here to get an 
energy efficient vehicle, be it our cars or our trucking 
industry in sync with what consumers now want, we need to ramp 
up significantly the R&D investment.
    And I would ask is your interpretations of where the 
weakness might lie, is it with industry or government infusion 
of R&D investment?
    Dr. Clay. I think actually this ties nicely back to, 
unfortunately Congressman Inglis had to step out, but I think 
that this ties nicely back into his point about market signals. 
I think that one of the main drivers for investment in advanced 
technology is a certainty that that technology has a reasonable 
chance of competing with the entrenched technologies. So with 
the volatility of gas prices that we have seen, it is 
difficulty for investors or would-be investors in things like 
advanced biofuels or in battery technology, it is difficult for 
them to run the numbers forward and know whether their 
investments are likely to pay off with marketable vehicles.
    If we had greater certainty in gasoline prices, if we knew 
that they were to stay let us say above the $4 mark that we hit 
last summer, that would send a very strong signal to the 
investment community that the alternative fuel vehicle 
technologies would find acceptance in the marketplace.
    And so one policy option for driving technologies into the 
marketplace is to provide those strong market signals.
    Mr. Tonko. Is it just a function, though, of gasoline 
prices, or is it a function of cleaning the environment?
    Dr. Clay. Well, I believe that the way that you can get to 
that goal of cleaning the environment is by driving the market 
signals, because anything that you do to drive the market 
signals for petroleum will encourage consumers to buy more 
fuel-efficient vehicles. And so as a secondary effect you will 
inextricably be able to deliver better greenhouse gas profiles 
per mile and also other associated emissions would also go 
down.
    Mr. Tonko. It seems to me with some of the investments made 
in foreign produced, it would trigger some sort of indicator to 
the investor market. It seems like we are falling behind as an 
industry because we haven't kept pace with the sort of vehicle 
that Americans would love to purchase.

                               Batteries

    And if I could just flip to the battery discussion for both 
you and Mr. Chalk, how important is it for us to create 
diversity within that focus?
    Mr. Chalk. You say diversity within the focus. Do you mean 
within the lithium ion family?
    Mr. Tonko. Well----
    Mr. Chalk. Or----
    Mr. Tonko.--within the battery discussion itself. Should we 
put all our eggs in that one technology basket as I heard 
mention of earlier, you know, as an expression, or should we 
look at other forms of battery technology that might be more 
suitable to bigger vehicles or to the car fleets, the auto 
fleets? Should there be something beyond lithium ion that we 
look at?
    Mr. Chalk. Well, I would say yes, and we always survey the 
latest chemistries in batteries, but I would say within the 
lithium ion family there is a bunch of diverse electrolytes and 
cathodes and things like that, so it is not just, you know, one 
manufacturer will have a totally different chemistry than 
another manufacturer, even though they both may be classified 
as lithium ion. So there are lots of different types within the 
lithium ion family. In general, though, whether we are talking 
about power generation or vehicles, we have a very diverse 
portfolio that, you know, the magnitude of the problem is such 
that we have to have hydrogen and biofuels and electricity 
and--go ahead, sir.
    Mr. Tonko. If I might just ask--my time is running short. 
With the stimulus money, with the Recovery Act money, are we 
going to look beyond lithium ion? Are we going to look at 
battery technology that takes us beyond that?
    Mr. Chalk. What we are saying is the--and the President 
last week announced the $2 billion that was in the Recovery Act 
for manufacturing batteries, and basically what we are saying 
is those batteries coming off of those lines have to be 
compatible with a plug-in hybrid electric vehicle. The 
chemistries and things like that are up to the proposer if they 
can meet those requirements.
    Mr. Tonko. Dr. Clay, any comments on the battery?
    Dr. Clay. Yes. I think one important point is that when we 
speak about hybrid vehicles that the realization should be 
first that hybrid vehicles are, in fact, a suite of 
technologies themselves. So a lot of our discussion tends to 
focus on plug-in hybrids, and that is a very exciting 
technology and should receive discussion.
    There are a range, though, of possible hybrid 
configurations going from vehicles like the Toyota Prius that 
is a full hybrid but has a smaller battery pack than something 
like the GM Volt that has been announced, and then pushing 
further back you can have an even smaller battery pack where 
you have what is called a stop-start hybrid with very small 
battery that is able to reclaim preventative braking and 
deliver significant fuel economy benefits. So because there is 
a range of hybridization possible, that hybrids themselves are 
not a single technology, we need to be thinking about a range 
of battery chemistries that are suited to each of those niches 
along the way.
    And so I think if we start conceptualizing hybrids as a 
continuum, then we will naturally start looking at investments 
and battery technologies along a continuum, and that will 
naturally bring us to looking at a diversity of battery 
chemistries.
    Mr. Tonko. Okay. So can we hope that the Recovery Act 
stimulus money can accomplish that broader view?
    Mr. Chalk. We are looking at it. I would, I want to 
emphasize, though, that there is nothing that has the power 
density and the energy density of the lithium ion. So, you 
know, one point we want diversity, but we also want critical 
mass because if we are going to address these problems, we 
eventually have to build something so that we do have to down 
select and pick some winners, so to speak, and go with our best 
shot. But all the time we are looking at what is the latest 
coming out of small innovative companies or out of our national 
laboratories to see if something better is coming along that 
can meet those requirements.
    Mr. Tonko. Thank you.
    Chair Baird. Mr. Ehlers. Dr. Ehlers.

       The Relative Merits of Various Transportation Innovations

    Mr. Ehlers. Thank you, Mr. Chair, and thank the guests for 
their testimony. It is very stimulating and very useful. That 
is not always true around here, but I do appreciate it.
    The--just a couple minor comments first. I appreciate Mr. 
Greszler bringing up the issue of trailer design. I have often 
wondered why no one has worked on aerodynamic trailers. I have 
a personal interest in this. I used to drive a truck, a semi-
trailer and tractor, and it was pretty primitive back then. No 
consideration. I was pleased to see the cabs at least showing 
some improvement, but there is so much more that could be done 
there in a lot of ways.
    The--in all the discussion about batteries, first of all, 
batteries have been the problem for at least 50 years. I have a 
good friend who is a physical chemist who has been working on 
batteries for at least that long. A very, very complex issue 
and not easily resolved. It is not just a matter of saying, 
well, we are going to do some research, and we are going to 
have wonderful batteries. It is far more complex than that, and 
we should all recognize that.
    One interesting sidelight since I enjoy flying, there is a 
lot of discussion now of electric airplanes, which would be 
used only for recreational purposes, but this in itself would 
be very helpful in terms of petroleum use, air cleanliness, and 
so forth. And so there is a lot of other uses for good 
batteries than in automobiles.
    The--in terms of the hydrogen, I have been skeptical about 
that for a considerable amount of time. There--and the 
infrastructure problem as far as I can tell not being 
addressed. Every time I raise the issue everyone says, yes, 
yeah, that has to be addressed, and we will do it, but they all 
have different ideas. Absolutely, all the infrastructure 
involved is incredibly complex. You will need new means of 
carrying the fuel, transporting the fuel to distribution 
centers, getting it into the vehicles. It is not an easy 
problem at all. And I am not opposed to the use of hydrogen 
fuel cells. I think it would be wonderful, but we have immense 
problems to overcome there if we are really going to do that 
large scale. And the infrastructure, I think, is going to be 
very difficult.
    One quick comment about federal investment. Roughly a 
decade ago the Department of Energy cooperated with the three, 
the Big Three, on a research project. I don't remember the name 
of it. It was under the Clinton Administration. We were going 
to produce a vehicle that would do 100 miles on a gallon, and 
many of my colleagues were very skeptical about it and didn't 
support it. I was skeptical, but I thought, let us give it a 
try. As far as I know nothing ever came out of that, and that 
has increased my skepticism of the Federal Government working 
with the automobile companies. Can they, in fact, put aside 
their own personal interests and work in a cooperative way on 
research with the Federal Government? I don't know. I hope so, 
but the evidence hasn't been there so far.
    I appreciate Mr. Baloga's comments about the heat recovery. 
Immense amounts of heat lost, generated by automobiles, and 
anything you can do to recover that is bound to be good. And I 
certainly encourage further investigation of that. That is a 
wide-open field with lots of possibilities. And once again, not 
easy but it can be done and easier than many of the other 
alternatives.
    I don't have any particular questions, because you have 
been, all been so thorough in your comments, but I am pleased 
to see the Department of Energy taking a substantial interest 
in this issue, and I hope that we can develop good cooperative 
working relationships. The--it is just from every aspect you 
look at the environmental, the foreign policy issues of our 
dependence on oil, everywhere you look this is one of our 
biggest problems today, and we really have to address it in a 
very strong uniform fashion, and I think this hearing is 
helping us see that and also bringing out the ideas you have of 
doing that.
    So I just want to thank you very much for your comments and 
the ideas you have presented. Thank you.
    Chair Baird. Thank you, Dr. Ehlers.
    Ms. Woolsey.
    Ms. Woolsey. Thank you, Mr. Chair, and thank you to the 
witnesses.

                             Domestic Jobs

    Mr. Baloga, you in your testimony say that to any extent 
possible research funding to support companies come, go to 
global industries not located in the United States. Tell me, 
and this is in total innocence that I ask this. I have no, I 
have nothing here that is trying to set you up or anything. 
Tell me how in Great Britain with BMW, how does--how would 
those investments come to the United States? I mean, where is 
the real partnership here? I mean, is there one? How do we 
ensure that if the United States invests in partnership with 
BMW that the jobs stay in the United States? I mean, we are 
hurting for jobs, so is there, I mean, the subsidies that BMW 
gets from Europe or the European Union or from Great Britain, 
do those come to the United States? Can we bid for them over 
there?
    Mr. Baloga. Well, I guess let me answer the question like 
this.
    Ms. Woolsey. Okay.
    Mr. Baloga. The technology that is developed as a result of 
these cooperative packages and contracts makes its way into the 
hands of the American public in the way of better-performing 
vehicles on the road----
    Ms. Woolsey. I understand that, and I believe in that 
totally. I am talking about jobs. I mean, we won't have people 
that can afford to buy the cars that--if we don't have people 
working here in our country.
    Mr. Baloga. Right.
    Ms. Woolsey. So how do we keep that money, if BMW benefits, 
yes, we will benefit in the big picture. How do we keep--is 
there a way to bring, ensure that money stays in the United 
States for jobs?
    Mr. Baloga. Well, the research on the projects would be for 
the cars, the vehicles built in this country and of course, if 
the research project is for something that would be making more 
efficient manufacturing, certainly that would be directly 
resulting in jobs in the U.S., and that would be tied to our 
plant, for example, Spartanburg, that we are expanding by 50 
percent.
    The--I think to answer your question, perhaps the best way 
to go about it would be to think of it in terms of an 
investment in a company that is going to be favorable to the 
market that is being its friend. We all tend to be more 
amenable to friends. There is a saying that says, ``Keep your 
friends close and your enemies closer.'' There is a good reason 
for that, not that we want to speak about this in terms of 
friends and enemies, but when there is an investment in this 
country by our company, there is a certain closeness, a rapport 
that is established. The great people of South Carolina have 
made the success down there with the plant. That is the reason 
we stay here and expand because it has been so successful.
    So I think the success----
    Ms. Woolsey. Well, thank you. Okay. I get all that. I just 
want to make sure the jobs stay here, too, so----
    Mr. Baloga. Thank you.
    Ms. Woolsey.--I appreciate that. I do have an open question 
for anybody on the panel.

                      Other Promising Technologies

    Are there promising technologies that aren't as far along 
as plug-in hybrids and hydrogen that with a big push may be 
more promising in the long run? Any--yes, Mr. Greszler.
    Mr. Greszler. Yeah. I would say absolutely there are, and 
we mentioned one, which is waste heat recovery. There are 
multiple techniques for waste heat recovery. We looked at, we 
are looking at rank and basically steam-type cycle, which Mr. 
Baloga mentioned. We are also looking at thermal electrics. 
There are some advanced work with things like thermal 
acoustics. All of these techniques have some promise of taking 
energy used or wasted in the exhaust stream and recovering it 
to produce useful energy, for example.
    None of them are really at a point where they are truly 
effective in a vehicle, and there are a variety of reasons for 
that: efficiencies in some cases of the materials, the cooling 
system requirements, how we package it within a vehicle, the 
heat exchangers and the efficiencies all need to be worked on 
to make them truly effective.
    But there are a lot of opportunities there as far as 
something that is really not, you know, closely available but 
something that could be made available in the near future with 
the right focus.
    Ms. Woolsey. Well, should we be focusing on those 
technologies along with, I mean, you know, side by side, or do 
we have to give up--should we only be investing in the more, 
the further-along technologies and let the others come along as 
they can?
    Mr. Greszler. Personally I think we need to do some of 
both, but we certainly need to be moving technologies into 
production and into the marketplace, or we accomplish nothing. 
But if we don't keep a focus on advanced technologies that 
require more research, then we have nothing in the future. So 
somehow we have to manage both of those.
    Ms. Woolsey. Thank you very much. Thank you, Mr. Chair.
    Chair Baird. Ms. Woolsey, thank you. I very much appreciate 
your line of questioning about American jobs, because it is so 
central to all of our districts. Before you arrived Mr. Inglis 
commented, as representative of the great State of South 
Carolina, the impact of BMW. I am going to recognize him for 
about 20 seconds before I turn to Mr. Bilbray.
    Mr. Inglis. Yeah. Thank you, Mr. Chair.
    Ms. Woolsey, you might have missed earlier that BMW, a 
German company, has invested $6 billion in South Carolina, and 
the numbers I gave earlier of about 5,000 jobs in South 
Carolina, 17,000 in the region actually are low when you 
consider the U.S. The total U.S. number is apparently about 
50,000 jobs because BMW is here making and selling cars. It is 
an incredible benefit of international trade.
    Thank you.
    Chair Baird. Thank you, Mr. Inglis.
    Mr. Bilbray.
    Mr. Bilbray. Thank you, Mr. Chair, and I will also point 
out that American car manufacturers produce jobs overseas; 
Canada, Mexico, Australia, so there is no guarantees.

                 Ethanol and Fuel Efficiency Standards

    Mr. Chair, I apologize first. I want to point out, make 
sure we remember the context in which we are discussing here. 
We are talking mobile sources, and we are talking about total 
emissions in this country is 28 percent. And so as we think 
about this, we think about plug-ins. We are thinking about the 
creation of hydrogen. We also have got to remember that 35 
percent of the emissions total in this country are from one 
source, and that is electric generation.
    So we are talking about 28 today. But we have got 35 
percent out there that is going to be related to this 
addressing the 28, and remember that electric generation is the 
most clean--the biggest user of zero emission generation. They 
produce power, I think it is 22 percent of all electric 
generation is done with technology that has zero emissions.
    So I bring this up because it is important as we talk about 
the line that if we do not address that 35 percent, which 
actually historically has used the cleanest, the most zero 
emission generation, we are never going to get a climate change 
strategy that works. And so as we talk about mobile, remember, 
this is a smaller version. It is not going to be the major. We 
need to still address that, and so as we talk about plugging in 
our hybrids, when we talk about generating hydrogen, we have 
got to remember we still come back to the elephant in the 
closet, and that is the fact that if we don't go to zero 
emission generation for our electricity, everything we are 
doing in mobile is a lost leader.
    Speaking of that, and, oh, by the way, if you want to talk 
about mileage and fuel consumption, if we eliminated all of the 
obstruction that local government does with inappropriate 
traffic control, we could probably do more savings and more 
reduction. It was estimated that 95 percent of all stop signs 
could be yield signs. Stop signs are five times more polluting 
than not having any and use up more fuel. But that is for 
another hearing.
    I think the one thing I would like to say here is we talk 
about different strategies, and I guess it is Mr. Chalk, the 
issue of the CAFE standard, I have got a question here. 
Historically our CAFE standards have always been based on a 100 
percent gasoline mixture. Right?
    Mr. Chalk. With biofuels credits and things like that. Yes.
    Mr. Bilbray. Well, and I am talking about the standard 
itself. Now, do we include the reduction in mileage because of 
the 30 percent less fuel efficiency of something like alcohol 
ethanol when we are reformulating this fuel efficiency 
standards? (Because the old standards that we developed in the 
'70s and the '80s, which I strongly supported extending over a 
period of time, have we modified now what those standards are, 
considering the fact that now it is mandated that we use 10 
percent alcohol in all fuels sold in the United States, and 
thus the mileage, the practical mileage has dropped?) What are 
we using? Are we using a new formula based on the fact that 
ethanol is there, or are we still operating off the concept, at 
least the standard, of 100 percent gasoline?
    Mr. Chalk. I don't know the answer to that question. It 
is--the Department of Transportation issues the rules, you 
know. The CAFE is to increase fuel economy by 35 percent by 
2020. I don't know if they made that adjustment for what we 
would call gasoline equivalent, but that seems like the right 
thing to do.
    Mr. Bilbray. I think we darn well ought to have it 
somewhere, because we either have to understand that we can't 
increase the mileage as we are mandating that the fuel mixture 
have less energy capabilities in it, and we have got to reflect 
that, and I know it is a catch-22. I come from the Air 
Resources Board in California, and these catch-22s show up all 
the time, but here is the thing. What are we doing in 
government on this?
    Mr. Chalk. Well, I just add that there are so many other 
factors that would affect those miles per gallon rather than 
the fuel use, so it may, in the wash it may come out not to be 
a relatively minor affect, even though 10 percent of that fuel 
might have 30 percent less energy in it.
    Mr. Bilbray. And, you know, especially at a time that the 
ethanol industry is pressuring EPA to allow more fuel into the 
mixture, even though we know there are environmental and 
technical problems there.
    Mr. Chalk. Well, the renewable fuel standard would actually 
add a lot. It would add 36 billion by 2022.
    Mr. Bilbray. I am not talking about that. I am talking 
about the percentage of mandated, percentage of ethanol inside 
the gasoline we are required to buy in this country.
    Mr. Chalk. Right. But to get the 36 billion gallons we 
would have to have probably a higher blend than 10 percent to 
get there. That--the best way to get that 36 billion gallons 
out in the infrastructure would likely be by increasing the 
content of the alternative fuel in a gallon of gasoline rather 
than have pure ethanol or something like that at the pump.
    Mr. Bilbray. But it can't be ethanol unless we have a major 
modification in the vehicles themselves, because we already, we 
knew this in '92, that ethanol was going to create destruction 
of the equipment, the seals, and cause emissions problems, and 
now we can't put more ethanol in the fuel, so we have to go on 
another kind of renewable to be able to increase the standard.
    Mr. Chalk. Well, actually, we can. We know how to do it. It 
is relatively minor cost to the vehicle, less than $200 by most 
studies. We can make things compatible, and there is fuel 
flexors, there are many fuel flex vehicles out there. So it is 
an adjustment that can be made. We have the know how, the car 
companies know how to do that to go to higher blends of 
ethanol.
    Mr. Bilbray. Well, I would appreciate looking at that 
because----
    Mr. Chalk. Okay.
    Mr. Bilbray.--at ARB they are still very concerned. In 
fact, let me point out, Mr. Chair, ARB just this month came out 
with a study showing that ethanol has the air emissions benefit 
of regular gasoline. It is no more than we have had before.
    Mr. Chalk. Let me try to enlighten you a little bit on 
that. We can do it in terms of capability. The car companies 
know how to tune the engines. There is an evaporative emissions 
issue in California----
    Mr. Bilbray. Big issue.
    Mr. Chalk.--and that is really--there is not--it has to be 
re-engineered around so that when you put more and more 
ethanol, you get higher vapor pressures in a gallon of 
gasoline, you have to make sure that that evaporative emission 
is captured.
    Mr. Bilbray. Well, Mr. Chalk, why is ethanol given a dollar 
tax credit by--that other biofuels are not allowed? Why is 
ethanol specifically chosen as a winner in our tax cuts?
    Mr. Chalk. Congress has decided it. It is not a dollar. It 
may be changed, but it was 54 cents. I don't know if the latest 
Farm Bill changed it or not. I possibly could be wrong there, 
but so it is a policy, I think, driven from the farm subsidies.
    Mr. Bilbray. So in other words we have chosen a winner 
here, and that is ethanol gets a subsidy, but other biofuels 
like algae fuel does not get the same subsidy?
    Mr. Chalk. If it was turned into ethanol, it would.
    Mr. Bilbray. You know, Mr. Chair, let me just tell you 
something. That is exactly the problem. Ethanol is--I will 
still go on with the fact that it is a lost leader. We are 
putting massive amounts of money thinking some day a better 
fuel will show up. At the same time we are not giving the same 
benefits to alternatives, and that is the kind of thing of 
picking winners and losers, and obviously it is--I understand 
this when the farm lobby shows up, when people come over and 
start talking, but I think that when we talk about fuel 
efficiency and we are talking about the big picture, here is a 
place where we pick winners and losers and----
    Chair Baird. Mr. Bilbray, I----
    Mr. Bilbray.--I appreciate that, Mr. Chair.
    Chair Baird.--concur with you. I think, however, the best 
witness for this would be POGO, not our colleagues here, 
because we have seen the enemy and he is us, and I think it may 
have something, the answer to your question may have something 
to do with the primary structure of Presidential races more 
than energy efficiency.
    I would be--Mr. Davis.

                     Innovations in Fuel Efficiency

    Mr. Davis. Mr. Chair, thank you very much, and Ranking 
Member, for having this hearing this morning. I live in rural 
America. I have a Congressional District that has 10,000 square 
miles, 63 people for each square mile lives in that 
Congressional District. We have very low-income individuals. We 
are excited about the fact that maybe we can have an automobile 
that will go someplace as quick as a combustion engine, much 
cheaper, and less polluting. We hope that is in the future. We 
really want to see that happen.
    As a young fellow I bought a '77 model diesel automobile. I 
won't mention the name of it, but it got 50 miles to the gallon 
in 1977. If I am not wrong, that is about 30 some years ago. I 
doubt that you can find an automobile that is built in America 
today, and that one was, that will get 50 miles per gallon. 
What has happened?
    And so I ask that question for a reason. I know as we 
engage in lessening our carbon footprint, we have to look at 
new technology as well as old technology. I am not sure what 
happened to those automobiles, and I am not sure that one is 
still around, but I am not sure why we are not able, 30 some 
years later with all the money we have spent on being able to 
find energy efficiency automobiles, with the effort that we 
have had for many, many years to look at--as we do research on 
the South Pole and we see the carbon content continue to 
escalate, as our climate starts changing.
    Now, I have heard on this committee some folks say climate 
change is not happening. That it is just a natural phenomena, 
and that global warming is not happening. That it is just 
something that normally happens throughout the eons. It 
reminded me when I heard someone say that today there was a 
fellow that was working with Galileo, and he said, why do we 
study the stars? They all look the same to me.
    So I guess in my, not necessarily a question but a 
statement I want to make, I know as we go through this research 
of trying to find alternatives to fossil fuels or at least to 
be able if we are going to use fossil fuels to make those 
automobiles more efficient, maybe we should go back to some of 
the old technology we have already had. Maybe we ought to start 
renewing some of those.
    So my challenge to you as we spend taxpayer dollars on 
research and development, for goodness sakes let us not see 
huge vacated industrial science like some in my district that 
was an ethanol plant that is rusting down that was built in the 
late '70s and early '80s that is no longer being used. You are 
the scientists. You are the ones who are asking for the 
dollars. We are the ones who are giving you the dollars and 
demanding that you do some research, some research to give our 
planet and the American consumer and the world some relief.
    I look at Europe who has been charging over $5 a gallon for 
gasoline for the last two decades, and if the cost requires you 
to find more efficiency, obviously they have got a smaller car 
and a smaller horsepower, smaller engines, I don't know how 
much better mileage they get than we do here. When I look at 
the population in Europe and the population in America, they 
use about three-fourths as much fossil fuels as we do. Of 
course, they got a little bit harsher climate, so maybe they 
use that for heating.
    So as we engage, Dr. Clay and Dr.--Mr. Chalk, I--you folks 
are kind of overseeing these dollars, I guess, that we are kind 
of shoveling out there with a scoop, like a barn scoop. Let us 
be sure that we are getting our money's worth. If we look at 
technology and it is going to be battery driven, if it is going 
to be driven by hydrogen automobiles, whatever it may be, 
utilize America's taxpayers' dollars wisely this time.
    And I do believe that research and development makes a 
difference. My father told me 50 years ago, maybe longer than 
that, some day there will be a small pill that you will put 
inside a reactor in an automobile that will be a nuclear, a 
little nuclear energy that you can put--and it will drive you 
for the entire life of that automobile. Maybe that is possible. 
I don't know, but some folks on this committee probably 
wouldn't agree that ought to be used, or some environmental 
group may not.
    But I just think as we look at research it all needs to be 
included and not just a part of it. That is basically a comment 
from me. Help us. That is what you are here for. Asking you to 
help us is why I am here.
    Chair Baird. Anyone wish to comment on the comment?
    Mr. Chalk. Well, I would just say that we have a diversity 
of portfolios, and we are very serious about making progress in 
this area. You know, of course, we lose our grip sometimes when 
energy prices go back down, and I think history has shown that, 
and I think what we have to do is maintain the focus even 
though compared to last year when gasoline was four bucks a 
gallon and people were really worried, now that it has gone 
down a little bit, there might be a tendency to relax. We have 
got to stay focused on what we are doing and make this work.
    Chair Baird. Dr. Johnson.
    Dr. Johnson. Let me try to answer your question. The 
diesels today produce much lower emissions, significantly more, 
and there is a significant cost with these after treatment 
systems. And the people like BMW and VW, because they have 
developed diesel engines in Europe in the light duty, they are 
starting to bring them over to the United States.
    One of the problems in the last few years has been that 
diesel fuel is 60 to 70 cents a gallon more because of the 
market demand. And so the whole problem that we have been 
discussing here is the price of fuel fluctuates, and I really 
didn't come to testify about that, but I think we need a tax on 
fuel so that we get a floor of about $2 over five years, and 
then be neutral and give this tax back to individuals and back 
to industry so it is neutral, not just a tax. That will help 
drive the market, and that is what is true in Europe. They have 
a fuel tax. They have had it. They have got about 50 percent 
diesels. They have got smaller vehicles, and it is a natural 
market phenomena, and the problem with CAFE is that the market 
price of fuel goes up to $4 and then back down to $1.80 or 
$1.90, and it just changes the whole thing. And you cannot 
change the manufacturing plants and the product development 
schedules to meet that, you know, and that is really the 
problem, you know.
    Mr. Davis. I know I am imposing on the timeframe we have 
here, and I, Mr. Chair, I thank you for allowing me. I have 
also heard that through integrating into the actual structure 
of an automobile natural gas, a capacity where you could get at 
least 250, maybe 300 miles on a compressed natural gas 
capacity, if it is integrated into the system of the 
automobile. Eighty percent less carbon emissions supposedly 
with natural gas.
    Why are we not looking at that until we at least find that 
bridge, until we bridge to that next energy source, whether it 
be batteries or whether it be hydrogen or whatever it may be? 
Is there research on that now, and is that possible even to 
convert automobiles today to a natural gas system, which is 
more clean, efficient burning?
    Dr. Johnson. I am really not an expert in that, but the 
people are working on--but, again, one of the problems are that 
cars live for 15 years, diesel vehicles live for 30 years, and 
the infrastructure for the fuel and the distribution is always 
a problem. Just like the flex fuel vehicles. There just isn't 
any fuel out there that has been given a credit for the 85 
percent----
    Mr. Davis. But every home has natural gas just about and 
very easy to hook up to it, and almost every service station in 
America has a natural gas heating system. I think that is--we 
have to look at least as a bridge fuel until we get to that new 
source or whatever it may be.
    Dr. Johnson. Honda has looked at that and are looking at it 
and other companies probably will.
    Mr. Chalk. You can buy a Honda vehicle in the 170-mile 
range with natural gas.
    Chair Baird. Dr. Bartlett.
    Mr. Bartlett. Thank you very much.
    In Armed Services we don't have earmarks. We have plus-ups, 
and they are fundamentally different.
    Mr. Greszler, it has been my privilege for the past several 
years to be the proud author of a multi-year series of plus-ups 
for Volvo Powertrain, Mack Truck in my district, and I want to 
thank you very much for your aggressiveness in developing a 
really good hybrid truck for the Air Force.

                    The Need for Flex Fuel Vehicles

    There are three reasons for looking at alternatives to oil.
    One of those is the possibility that the release of the 
sequestered carbon and fossil fuels is increasing the CO2 
in the atmosphere and causing climate changes.
    A second reason for moving to these alternatives is that we 
have only two percent of the world's oil in this country. We 
use 25 percent of the world's oil, and we import about two-
thirds of what we use. That clearly, clearly presents a huge 
national security risk, and we need to move to alternatives to 
free ourselves from so much dependence on foreign oil.
    And a third reason and perhaps the best reason of all is 
that the fossil fuels and the quantities we would like to use 
just aren't going to be there in the future. For a 
prognostication of this I would suggest you do a Google search. 
It is on our website, too, but do a Google search for Rickover 
and energy speech. The father of our nuclear submarine gave 
what I think is the most insightful speech of the last century 
52 years ago the 14th day of this May, and he predicted quite 
precisely where we would be today.
    In our desire to find these alternative fuels we have 
already had two bubbles that have broken. By the way, the 
future for electricity is pretty secure. We have lots of ways 
of producing electricity, nuclear, wind, solar, microhydro, 
true geothermal tapping the molten core of the earth. There is 
no silver bullet out there for liquid fuels.
    And I look for those two bubbles, big bubbles that have 
already broken. The first was the hydrogen bubble. Finally they 
figured out hydrogen is not an energy source, and you almost 
never hear anybody talking about hydrogen today. It is a great 
candidate for a fuel cell, of course, which is always about 20 
years away.
    The second bubble that broke was the corn ethanol bubble. 
National Academy of Sciences, and we did in our office some 
back-of-the-envelope computations that came to essentially the 
same conclusion before their report, they said if we converted 
all of our corn into ethanol, every bit of it, and discounted 
for fossil fuel for which you ought to do, it is just silly to 
burn fossil fuels in another way and pretend that you are 
displacing them, that that would displace 2.4 percent of our 
gasoline. They said that we would save more gasoline if we 
tuned up our car and put air in the tires.
    So these two bubbles have now broken, and there is a third 
bubble out there with a lot of irrational exuberance attending 
it, and that is the cellulosic ethanol bubble. Well, the point 
is that we really aren't sure what the alternative fuels of the 
future are going to be.
    Mr. Chalk, doesn't it make sense that if we don't really 
know what the alternative fuels of the future are going to be 
but we know that they are going to have to be there for one of 
these three reasons, perhaps all three of the reasons I 
mentioned previously, that we ought to be developing flex fuel 
vehicles? The average cars in the fleet, what? Fifteen, 16 
years? I have no idea what the alternative fuels are going to 
be 16 years from now. Doesn't that make some sense to be 
producing these flex fuel vehicles so we will be ready no 
matter what?
    Mr. Chalk. Well, I think a little bit of the dilemma there, 
if you don't know what fuel you have got to design for, it is 
hard to make the vehicle fuel flexible if you don't know what 
the fuel is. But for what we do know we can do that. In terms 
of ethanol we can go from, you know, E-15 all the way to E-85 
with these fuel flex vehicles.
    Mr. Bartlett. Won't they burn methanol, too? Can't we make 
them to burn ethanol? I mean, methanol.
    Mr. Chalk. I think they would have to be tuned differently 
but the same technology would be suitable.
    Mr. Bartlett. Detroit said that they could make half of all 
the cars flex fuel by 2012, and 80 percent of them by 2015. Is 
this a course that you would, you could support?
    Mr. Chalk. Not commenting specifically on your proposal 
because we don't have an Administration position on it yet, but 
I would talk about a little bit the attributes as, you know, we 
have the renewable fuel standard. We have a law there on how 
much corn ethanol, for instance, is topped at 15 billion 
gallons. We have cellulosic targets, and that provides assurity 
to the market. I think what you are proposing would also 
provide assurity to the market. If there was a regulation or a 
law that said X number of fuel flexible vehicles had to be 
made, that provides a level playing field for everybody. It is 
fairly cost effective, and we are going to need it if we are 
going to increase the amount of ethanol or whatever carrier we 
use in the gallon of gasoline. We are going to need fuel flex 
vehicles.
    There are issues that we talked about with the California 
standards and very tight evaporative emissions. We have to work 
on that issue so mandating fuel flex vehicles might include 
things that have evaporative emissions like alcohols could be 
an issue.
    I would say we are testing right now. We have a blends 
testing where we are trying to see if we can go above 10 
percent in a gallon of gasoline, and the preliminary results 
are very good for most highway vehicles. There are issues with 
smaller engines that are used for lawn and gardening and things 
like that, but I think, you know, those issues can be addressed 
over time with phase-in and all.
    So having the assurity of that is what the market requires 
I think is very helpful.
    Mr. Bartlett. Mr. Chair, if you would permit me one more 
brief question.
    The renewable fuels standard anticipates a really pretty 
aggressive introduction of alternative fuels in the future, and 
we are now looking at cellulosic ethanol. About almost half of 
that billion tons that they propose to make ethanol comes from 
corn stover. The report says that 75, we can harvest 75 percent 
of the corn stover from the fields, and the Secretary of 
Energy, Dr. Chu in his testimony said that we could harvest 50 
percent of it and be sustainable. I am told by the Department 
of Agriculture that for every bushel of corn we produce in 
Iowa, three bushels of top soil go down the Mississippi River.
    Now, top soils are deep in the midwest, and it will take 
awhile, but if that is true, that is not really for the long-
term, sustainable, even with our present-day agriculture, is 
it?
    Representative Woolsey and I in the '07 Act introduced 
legislation that would require sustainability studies. I am 
enormously concerned about the sustainability. We drive along 
the road and look enviously at all of that biomass. Now, for 
sure, for a year or two we could rape the landscape and make 
some ethanol out of that, but what is the sustainability?
    Is your department going to focus on sustainability? 
Because to be realistic we really need to know what----
    Chair Baird. Mr. Bartlett, I am going to preempt the 
question because we are well over your time at this point.
    Mr. Bartlett. Oh. Thank you.
    Chair Baird. That--I share the concern profoundly, but I 
think I want--respect for other Members recognize Ms. Edwards 
at this point.
    Ms. Edwards. Thank you, Mr. Chair, and thank you to the 
panel.

                             Hydrogen Fuel

    I have some questions about hydrogen. A few years ago I was 
greatly enamored, you know, about the prospects for hydrogen. I 
had read Jeremy Rifkin's book, I was excited about that, about, 
you know, the idea that somehow we could make a huge investment 
into hydrogen technologies, and that would be the way to really 
jumpstart us in this, what he described as a new revolution, 
you know, equivalent to the revolution, the industrial 
revolution in the 19th and 20th century.
    Since that time then I think, Dr. Clay, you sort of spoke 
to this, you know, we--I don't know how much real headway we 
have made really with hydrogen. The storage problems, the 
distribution problems, safety issues, et cetera, and so it 
makes me wonder in the FreedomCAR Program whether we have 
placed so much emphasis on hydrogen at the expense of other 
technologies related to vehicles.
    Now, there might be another question, I think, about 
whether we need to make investment in hydrogen technology, 
bringing down the costs of production at fixed sites for other 
kinds of power distribution but not necessarily for vehicle 
use.
    And so I wonder if you all would be able to speak to that 
and particularly as it relates to the production. I mean, I 
think, currently now with the hydrogen production technology it 
is so reliant on fossil fuels that it makes me wonder what we 
get for it even if we are increasing the amounts of hydrogen 
that we are producing that is usable.
    Dr. Clay. Thank you. Yes, I think you are bringing up some 
really critical points, and I think there are some interesting 
parallels between your question, Congresswoman, and Congressman 
Bartlett's questions, because it goes to this issue of the 
vehicle and the fuels being seen as a unit. So we need to think 
in the systems way about the vehicles and the fuels.
    So the challenges that you cite on the vehicle side, on 
storage, et cetera, and the resources that we have invested in 
trying to overcome those technologies, even if we were to solve 
all of those problems and break through those barriers, there 
are significant challenges that remain on the infrastructure 
side, and how we actually, even if we were to bring hydrogen 
fuel cell vehicles to consumers, how those consumers would be 
able to access convenient refueling.
    This is a very parallel--we can learn something from our 
experience with flex fuel vehicles as Congressman Bartlett 
brought out, that flex fuel vehicles are now on the roadways, 
over seven million on the roadways today, but there are fewer 
than 2,000 fueling stations available where there are on the 
order of I believe 130 or 140,000 service stations for gasoline 
available. So we clearly have a long way to go on providing the 
infrastructure on the flex fuel side to make the most of that 
investment we have made in bringing flex fuel vehicles to the 
market.
    I think that that is a cautionary tale to our continued 
work on hydrogen, that as we continue to invest in hydrogen 
technologies on the vehicle side, that we need to working in 
tandem with the infrastructure side, and those two really have 
to be seen as a partnership.
    Ms. Edwards. Could I just ask you then on the production 
side in terms of the relative gain around CO2 
emissions, currently are we really making gains on decreasing 
carbon emissions with the existing technology?
    Dr. Clay. On hydrogen in particular?
    Ms. Edwards. On hydrogen in particular.
    Dr. Clay. And this came out earlier in an earlier question. 
If we talk about electrifying or electrifying transport or 
whether that is through batteries or fuel cells, which are 
still electric vehicles, we are not answering all of the 
challenges before us if we don't also think of decarbonizing 
the fuel.
    Ms. Edwards. The process.
    Dr. Clay. The process of creating that biofuel and the life 
cycle implications for greenhouse gases for biofuels and the 
life cycle implications for producing that hydrogen. So most of 
the hydrogen that is produced today is reformed from natural 
gas. But the beauty of hydrogen as an energy carrier is that 
just like electricity it is an energy carrier that can use a 
multiple number of primary fuels in its development. So right 
away you have got energy diversity because you can be doing, 
you can be using both fossil fuel sources, nuclear, renewable 
energy, et cetera to both provide the electricity for plug-in 
hybrids, but also for the electrolysis to produce the hydrogen.
    Ms. Edwards. Right. But our goal would be to reduce the use 
of the fossil fuel part of the production process, which we 
really haven't quite figured out yet.
    Dr. Clay. Exactly right. And I think we are at the 
beginning of a new era where we no longer can think about the 
transportation and electrical generation systems as separate, 
that if we think about decarbonizing, that everything that we 
do to decarbonize transportation has to be linked with our 
efforts to decarbonize electrical generation.
    Ms. Edwards. Right. Thank you, Mr. Chair.
    Chair Baird. Thank you for a very interesting line of 
questioning, and there has been a real apparent shift in DOE's 
emphasis on hydrogen, and Mr. Baloga talked about this a little 
bit.
    What I would like to do is we are approaching noon, maybe a 
couple more questions from myself and maybe Mr. Inglis if he 
wants. Can you talk a little bit, Mr. Chalk, about that shift, 
about the apparent shift from hydrogen focus, why it happened, 
what the implications are, to somewhat follow up with Ms. 
Edwards.
    Mr. Chalk. Yeah. Our hydrogen program is still robustly 
funded. There has been more emphasis on the plug-in hybrid 
electric vehicle because we feel like we can get there sooner 
with that technology and make a difference in terms of 
decreasing our dependence on oil, and obviously as Dr. Clay 
just mentioned, it depends on how you get that electricity or 
how you get that hydrogen, whether you have a net benefit.
    But I would say diversity of resources is critical, and we 
can use fossil fuels like coal if we sequester the 
CO2, and that can work, and provide----
    Chair Baird. Well, let me stay on hydrogen for a second. 
When you say it is robustly funded, give us a trend pattern in 
terms of funding levels.
    Mr. Chalk. Right now it is funded at about $146 million if 
you look at the line item, but some of our activities have 
actually moved into our vehicle area. So in a way that is mass, 
and what we have done is, from a systems standpoint, moved our 
technology validation, safety, and code standards all in our 
vehicle programs and be technology neutral so to speak. But 
that is what pays for the hydrogen demonstration.
    Chair Baird. I haven't a clue what you just said.
    Mr. Chalk. Okay. Well, the funding has been steady, and 
there has been more emphasis on the plug-in----
    Chair Baird. The funding for the hydrogen portion, and it 
sounded to me like you had a whole bunch of camouflage in there 
that I couldn't sort out. Funding for hydrogen research per se 
has been steady over time.
    Mr. Chalk. Yes, and the budget is camouflaged a little bit 
because we moved some activities, and that is what I was trying 
to explain, but in essence it has been fairly steady. It may 
have decreased a little bit but not much.
    Chair Baird. What would your signal be to Mr. Baloga or 
others who have spent a great deal of investment in hydrogen 
research and possibly developing a hydrogen car? Do you plan to 
do that? I know the Administration hasn't necessarily set its 
policy yet but----
    Mr. Chalk. Well, Mr. Baloga's technology is hydrogen 
combustion. That is fairly well known. There is some research 
we could do there, but that is essentially commercial 
technology. The real long pole in the tent has been mentioned 
and it is hydrogen storage and fuel cell costs, and with the 
investment made, we have made a lot of progress, and those 
budgets have maintained steady and actually have gone up.
    So we are maintaining the focus on the longer-term pathway 
of hydrogen, but there has been a lot more emphasis on what we 
can do in the next five years in terms of making a difference 
on imported oil, getting jobs out in the economy, and 
addressing climate change.

                       Funding Levels and Sources

    Chair Baird. I have been handed a note that Ms. Edwards has 
a question about--what I will do is just yield some time so you 
can phrase the question yourself.
    Ms. Edwards. Just very quickly, do you have an idea of the 
amount of, comparable amount of money that the European union 
has invested in hydrogen technology? Because my recollection it 
is between two to $4 billion. And so when you look at the 
investment that we have made in comparison, I mean, are we 
really getting our bang for our buck?
    Mr. Chalk. The European investment, at least government 
investment, would not be nearly that high. It would be on par 
with what we are spending. I don't have the exact numbers. I 
can get back with you on the record for that.

                         INSERT FOR THE RECORD
    The global government investment for hydrogen and fuel cell 
research, development and demonstration is estimated to be $1 billion 
annually.\1\ The Department's budget for hydrogen and fuel cell 
research in fiscal year 2009 is approximately $266 million. The 
European Commission,\2\ Germany,\3\ Norway,\4\ and the United 
Kingdom\5\ have a combined 2009 budget of approximately $157 million 
for hydrogen and fuel cell research. The European Commission plans to 
invest approximately $625 million over the next five years and Germany 
plans to invest approximately $744 million over the next eight years in 
this area. This is in comparison to the U.S. investment of $1.2 billion 
over five years during fiscal years 2004 to 2008.
---------------------------------------------------------------------------
    \1\ FuelCellToday Market Study, ``Fuel Cells: 
Commercialization,''January 2008, available at http://
www.fuelcelltoday.com/online/news/articles/2008-01/Fuel-Cell-
Commercialisation
    \2\ P. Vannson, ``EU R&D for Green Road Transport: Fuel Cells, 
Hydrogen and Vehicle Technology Programmes,'' 2009 DOE Hydrogen Program 
& Vehicle Technologies Program Annual Merit Review, May 18, 2009, 
available at http://www.hydrogen.energy.gov/pdfs/review09/
5-vannson-2009-amr.pdf
    \3\ K. Bonhoff, ``Electrification of Future Mobility--National 
Programs and Activities in Germany,'' 2009 DOE Hydrogen Program & 
Vehicle Technologies Program Annual Merit Review, May 18, 2009, 
available at http://www.hydrogen.energy.gov/pdfs/review09/
6-bonhoff-2009-amr.pdf
    \4\ S. Moller, ``Norwegian National Hydrogen Strategy,'' 11th IPHE 
ILC Meeting, March 11, 2009, available at http://iphe.net/docs/
Meetings/Norway-3-09/
Norway-H2-Strategy.pdf
    \5\ Technology Strategy Board (UK), ``Fuel Cells and Hydrogen 
Technologies: March 2009 Competition for Funding,'' available at http:/
/www.innovateuk.org/-assets/pdf/competition-documents/
fuel%20cells%20and%20hydrogen%20technologies-071008.pdf

    Chair Baird. One other question I have and then I will 
recognize Mr. Inglis.
    Mr. Greszler and Dr. Johnson, you talked about the need for 
a higher level and a sustainable level of funding, and I think 
obviously you are interested in the light and heavy-duty 
trucks, and I share your concern. If the amount of freight that 
we haul in this country, I think tends to get short-shrifted, I 
think, when we talk about a host of funding mechanisms. We tend 
to, we focus on how much the weight of the truck impacts the 
highway maintenance side, but we seem to forget that we all eat 
what comes in those trucks or use it in some other fashion.
    What about the idea of including--we were about to look. I 
serve also on the Transportation Committee, and I don't know 
off the top of my head, I perhaps should, but to what extent 
highway and transit funds fund DOE's truck and car research 
programs. And would that be a good use of federal highway 
funds.
    Mr. Greszler. I don't know the answer to how funds would 
transfer between highways and DOE. I suspect that Mr. Chalk 
could talk more about that. What I could say is that highway 
infrastructure is critical to efficient freight movement and 
particularly, unlike light-duty vehicles where you get better 
MPG with downsizing, with heavy-duty vehicles you get better 
freight efficiency. You move more freight with less fuel by 
upsizing so that the longer, heavier the trucks are, the more 
efficient we actually can be in moving freight. And to the 
extent that we can facilitate that with infrastructure, we can 
greatly improve. There are many studies showing 30, 40 percent 
improvement in freight movement efficiency with longer, heavier 
trucks that are allowed in some states today but not allowed in 
all states, for example.
    Things like truck stop electrification, smart highways 
where were can have vehicles communicating and knowing, for 
example, if there are traffic jams to be avoided or to time 
entry into a city such as to avoid a traffic jam, knowing where 
truck stops are available, smart navigation systems all can 
substantially improve the efficiency of freight movement. And 
those things do get into the highway infrastructure in a 
significant way.
    Chair Baird. The 30 to 40 percent figure is pretty 
remarkable in light of the comments earlier about some of the 
research work, trying to move from 41 percent to 47. If I get 
the numbers wrong--a small percentage, fairly technical 
research apparently, trying to move the efficiency of the 
engine, but if you just add a little bit of weight to the 
vehicle you can get a 30 percent improvement in efficiency. 
That is an interesting question that ought to be explored.
    Dr. Johnson, did you care to comment on that?
    Dr. Johnson. Well, I think that efficiency--my testimony 
talked about gallons per payload ton mile. Okay. That is why it 
does. If you can carry more payload, you reduce that, and it is 
just like trains. They are very efficient, and I don't have any 
information about the taxes and the funds, you know, between 
the highway and DOE, but it is a good idea. There needs to be 
some way to get more funds because this sector is using a lot 
of energy, and we need--and it is tough to reduce truck, the 
basic efficiency of the truck. This carrying more freight is, 
then becomes a question of safety and all kinds of other issues 
that are in the states and locally about these long, double-
bottom trucks, as we know from your committee.
    Chair Baird. You talked earlier about the need for a steady 
and predictable pricing----
    Dr. Johnson. Right.
    Chair Baird.--and I think there is a need for that. I think 
both for global overheating and ocean acidification issues but 
also you then make the incentive, economic incentive to do 
something different. I would like to see a portion of that 
possibly dedicated to what you are talking about here. It would 
make sense to me that we might want to do something like that 
and possibly in the process address some of Mr. Baloga's 
concerns as well.
    Mr. Inglis.
    Mr. Inglis. Thank you, Mr. Chair. By the way, that earlier 
reference to the elegant price signal I was talking about is 
something I am working on fast and furious is how do you, how 
do we internalize the externals associated with our use of 
fossil fuels in--for transportation needs and for electrical 
generation? If you do that, then all kinds of competing 
technologies become possible because then you got a fair fight 
between the economics of the incumbent technology, which is 
gasoline and coal, compared to the economics of the, of 
nuclear, which is a fabulous way to make electricity in my 
view, and wind and all kinds of other things. Then you are on 
a--then the market can make a decision between competitors. 
Right now one competitor, fossil fuels, are getting a freebie, 
freebie in the air, freebie in national security, and that is 
not a fair fight.
    So as a conservative I insist on accountability, and that 
means coal be accountable for all the health consequences of 
what you do, and be accountable for the CO2 
emissions. Liquid transportation fuels, be accountable for the 
national security risks we run, being dependent on regions of 
the world that really don't like us, and for all the climate 
issues associated with it.
    Then if you internalize those externals now, compare apples 
to apples and suddenly all kinds of things become possible, and 
it is back to that very helpful point for Mr. Baloga about the 
premium brands suddenly become the innovation engines.

                          European Innovations

    So but speaking of those innovation engines, Mr. Baloga, 
the many diesels that you sell in Europe, if I understand it, 
that get what, 63 miles to a gallon. Why isn't that here? There 
was a question earlier, and maybe you could elaborate on why it 
is not here, why it isn't in the U.S.
    Mr. Baloga. Well, California has the most stringent 
emission control regulations of any entity in the world. One of 
the things that enabled us to build these whole engines that 
would meet the California stringent requirements was low sulfur 
diesel fuel, which the EPA implemented and fortunately now we 
have, which allowed us to have ultra low emissions, clean 
diesels we call them, on the roads.
    The problem that we have today with the mini diesel is a 
problem of getting that particular engine as clean as necessary 
for California. Our company has a philosophy we don't sell only 
cars that meet California standards and then have dirtier cars 
for the rest of the country. We have only 50 State vehicles 
that meet California and sell them all over.
    So the answer to the question is because that engine family 
right now has to wait for the next evolution of that engine 
family that we are working on to get it as clean as necessary 
for the California requirements.
    Mr. Inglis. I wonder if it is a little bit like what the 
Chair mentioned earlier about the Corvair? I mean, it is--in 
other words, the perfect is becoming the enemy of the good 
maybe.
    Mr. Baloga. Perhaps but we have to comply with the 
requirements, and we will certainly do so.
    Mr. Inglis. Well, it is sort of--I would think that, there 
are no Californians here, but I would think--on the panel, but 
I would think that it would be an unintended consequence. It is 
sort of interesting that we are passing up an opportunity right 
now to be driving 63 mile per gallon minis that are being sold 
in Europe. We are not driving because of that. It is sort of--
--
    Mr. Baloga. Yes.
    Mr. Inglis.--an interesting, unintended consequence I would 
think.
    Mr. Baloga. Our fleet average in Europe of the BMW cars on 
the road in Europe is 158 grams per kilometer, which translated 
into mile per gallon is about 35 miles per gallon, and we 
attain that with about a 68 percent fleet of diesel cars in 
Europe. Now, of course, 68 percent or 70 percent of diesel cars 
in this country is impossible to imagine, although there are 
some good signs we are seeing that for the first time diesel 
fuel is actually less than regular gasoline in terms of cost.
    So maybe we will make some progress with diesel cars.
    Chair Baird. Would you yield, Mr. Inglis?
    Do you have a calculation on the per mile CO2 
emissions? In other words, so you are getting 67 miles to the 
gallon of diesel, but what is the net--in the end are you 
getting a greater or lesser per mile CO2 emission?
    Mr. Baloga. The CO2 is reduced. Yes, it is. The 
CO2 is reduced because although there is more carbon 
in diesel fuel, you get an inherently better, approximately 30 
percent better fuel economy. So even if----
    Chair Baird. That is my question.
    Mr. Baloga.--you get a 15 to 18 percent rise in carbon for 
the fuel, you get a 30 percent improvement in fuel economy, so 
the net is an improvement. Yes.

                                Closing

    Mr. Inglis. And Mr. Chair, your indulgence because the time 
is up. I just think it is interesting that Mr. Baloga just said 
that the next generation may be, may get you there on the mini, 
and it is just interesting to note that BMW put in an assembly 
line, I think opened in 1994, in Spartanburg, and in 2006, BMW 
closed at Thanksgiving, paid everybody through New Year's, and 
ripped out a 12-year-old assembly line to replace it with a 
brand new one. Out with the old, in with the new. I mean, that 
is the kind of insistence it seems to me that we need in public 
policy for getting there.
    You know what I mean? If you think about it, BMW likes to 
say they are an engineering company that happens to make cars. 
Well, I would just hope that Mr. Chalk takes back to the 
Department of Energy this kind of inspiration that says, get 
with it. I mean, we are in a race for the future here, and we 
need to have that kind of insistence. Just rip out a 12-year-
old assembly line. Spend hundreds, millions of dollars to make 
it better. Wow. What a concept and what an exciting inspiration 
really that I am inspired by being with and representing 
companies like that.
    So thank you, Mr. Chair.
    Chair Baird. And we are a legislative branch that happens 
to impact engineering.
    I thank our witnesses very much for your insightful 
testimony and your expertise, and I thank my colleagues on the 
panel, and with that then unless anyone has any burning desires 
that we can't take up afterwards, this hearing will stand 
adjourned. Thank you very much.
    [Whereupon, at 12:05 p.m., the Subcommittee was adjourned.]
                               Appendix:

                              ----------                              


                   Additional Material for the Record





                     21st Century Truck Partnership

                   An Industry Perspective for Future

                 Technology Development and Deployment

Background and Purpose

    The 21st Century Truck Partnership (21CTP) is uniquely structured 
to coordinate efforts to improve the efficiency, emissions, and safety 
of Class 3 to 8 commercial trucks and buses. Members include original 
equipment manufacturers and, unique to a public-private partnership, 
also includes key suppliers including heavy-duty diesel engine 
manufacturers and major component suppliers. Member companies are all 
multinational with major U.S.-based research and development activities 
as well as domestic manufacturing capabilities.
    The industry objective is to assure sustainable, cost-effective 
freight transport in an environment of limited petroleum supply and 
carbon emissions constraints. This means we need technology development 
plus related infrastructure and policy enablers to greatly improve 
vehicle and freight system efficiency and to develop low-carbon fuel 
sources.
    To carry out this objective the industry members are also joined by 
relevant federal agencies; the Department of Energy, the Department of 
Transportation, the Department of Defense and the Environmental 
Protection Agency. The Partnership has strategic alliances with the 
Engine Manufacturers Association (EMA) and the Truck Manufacturers 
Association (TMA), who serve on the industry's federal policy group, 
and the Hybrid Truck Users Forum (HTUF) with whom we share five mutual 
industry partners (Eaton, Daimler Trucks, Navistar, PACCAR, and Volvo).
    In addition, fleet customers and small suppliers gain access to 
21CTP programs by working through any of the partner companies. As a 
recent example, suppliers shared in an award given to Navistar. The 
National Laboratories also play a key role in working within 21CTP 
programs.

Technology development needs exist in several key areas:

    Requirements for heavy duty vehicles are markedly different from 
those of light duty, and unique solutions are required. Furthermore, 
the demand for freight movement is directly tied to economic growth 
which is expected to grow at two to two and a half percent for the next 
20 years. Recent DOE projections show that, if light duty fuel use 
targets are met and heavy duty trends continue, HD fuel use will exceed 
LD by 2040 (Ref. Chart 1). These facts demand a major focus on 
efficient freight movement, combining strong government and industry 
efforts.




Overarching Approach--Vehicle Integration and Demonstration

    Federal support for commercial truck technology during the past few 
years has focused on vehicle components and sub-systems. While this has 
generated encouraging results in laboratory demonstrations, it is 
essential that we now focus on technology that can be effectively 
deployed in real vehicle applications. Therefore, we propose a strong 
emphasis on initial design for vehicle integration and in-use 
demonstration. Further we propose that this demonstration program begin 
with Class 8 vehicles since they are the greatest consumers of 
petroleum among commercial trucks by virtue of the amount of work these 
vehicles accomplish, and an essential objective is to reduce our 
nation's dependence on foreign oil.





    In his testimony before the Committee on Science and Technology 
Subcommittee on Energy and Environment of the U.S. House of 
Representatives, Steven Chalk, the Principal Deputy Assistant Secretary 
of the Department of Energy Office of Energy Efficiency and Renewable 
Energy, supported this concept. We applaud this effort by the 
Department to significantly move the 21st Century Truck Program 
forward.
    To accomplish this overarching objective, research and development 
is required in the following areas:

1. Engine Technology

    At 42 percent peak thermal efficiency, heavy-duty diesel engines 
are already the most efficient mobile energy converters in common use. 
Through joint R&D programs with the Department of Energy, the industry 
has already demonstrated the capability for an additional eight (8) 
percentage points of improvement in peak thermal efficiency in lab 
testing. The real challenge however, is to accomplish this in a truck 
within the emissions, operational, and vehicle constraints in a fully 
representative drive cycle. We strongly support the public-private 
partnership for such a demonstration program.
    Engine technology opportunities include improved fuel injection at 
pressures exceeding 30,000 psi, in-cylinder combustion optimization, 
efficient intake and exhaust gas management using advanced 
turbochargers (variable geometry and multistage), superchargers, 
variable valve timing, and low temperature cooling of charge gases (air 
and recirculation). Energy losses due to engine friction, coolant/oil 
pumping, and other vehicle auxiliaries (such as air compressor or air 
conditioning) can be further minimized by using improved bearings, low-
friction lubricants, and electric drive or mechanically variable pumps. 
Additional recovery of currently wasted exhaust gas energy can be 
accomplished using turbo-compounding, secondary Rankine cycle systems 
to generate either mechanical (torque) or electrical energy, or even 
direct thermo-electric conversion. Subsystem technologies, including 
materials, controls, and durability also need to be improved for a 
practical complete system.
    Engine efficiency, over a real drive cycle, is enhanced by 
increasing the fraction of time that the engine actually runs in its 
most efficient speed and load region (the ``sweet spot'') and by 
minimizing drivetrain losses. Transmissions can be further developed to 
better maintain engine operation in the sweet spot, even as the vehicle 
load demand varies due to speed, load, terrain, and other factors. This 
effect can be further enhanced by fully integrating the engine, 
transmission, driveline, and ultimately hybrid systems. Low friction 
transmissions and rear axles may reduce vehicle energy demand by one to 
two percent. Powertrain integration work is necessary to translate the 
peak engine efficiency improvement into comparable complete vehicle 
fuel savings.
    We also need to find ways to achieve 2010 emission levels at lower 
cost and with improved fuel efficiency, requiring a continuing focus on 
both in-cylinder emissions reduction and on exhaust after-treatment.

2. Medium- and Heavy-Duty Hybrids and Reduced Idle Solutions

    Hybrid powertrains can offer significant fuel savings in stop-and-
go applications. In fact, several fleets in heavy stop and go vocations 
have reported fuel savings in the range of 30-50 percent with both 
electric and hydraulic hybrid powertrains.
    However, the bulk of Class 8 trucks are utilized in long-haul 
operations with much less cyclic duty-cycle. None-the-less, there are 
significant benefits to hybridize a Class 8 highway vehicle:

        1)  Reduced idle time utilizing the hybrid energy storage 
        system

        2)  Reduced fuel use through electrification of components

        3)  Energy management during traffic induced speed variation 
        and in rolling terrain.

    It is estimated that truck idling uses close to two billion gallons 
of fuel per year for both overnight idling and workday idling. A 
reduction in idling has obvious benefits not only in reduced fuel usage 
but also from reduced emissions. There are many idle reduction 
strategies under tests by fleets today. However, few are integrated 
into the vehicle powertrain and consequently, results are less than 
optimal. Furthermore, an integrated hybrid system could reduce 
inefficient operation of the diesel at slow speed and light load. 
Research and development is required to fully realize the potential for 
an integrated electric hybrid powertrain with electrified auxiliaries 
(fan drive, coolant pump, air compressor, air conditioning and power 
steering). In addition, longer life and less expensive energy storage 
systems (batteries, ultra capacitors and hydraulic tanks) are required 
to complete this package.

3. Truck and Trailer Aerodynamics

    Aerodynamic drag is the dominant force acting to impede the motion 
of a Class 8 tractor trailer operating on the highway. On level ground 
at 65 mph, aero drag is typically more than 50 percent of the total 
road load, thus yielding a one percent highway fuel economy improvement 
for each two percent of aero improvement.
    The tractor and trailer operate as an aerodynamic system with 
strong interactions between the front (tractor) and rear (trailer) 
parts of the system. Traditional heavy vehicle aerodynamics development 
has focused on the front part of the system where tractor manufacturers 
compete vigorously on aerodynamic development and fuel economy. 
However, enormous opportunities exist in improving trailer aerodynamics 
and further opportunity exists through optimization of the airflow 
delivered from the tractor to the trailer.
    There are two key areas of opportunity in tractor aerodynamics:

        1.  Improve sub-optimal parts of today's vehicles: chassis aero 
        (including underbody) and tractor-trailer gap (transition of 
        airflow from tractor to trailer)--five percent to ten percent 
        aero improvement possible.

        2.  Develop improved tractor shapes that are optimized with 
        aero-improved trailers, not current trailer shapes--seven 
        percent to twelve percent aero improvement possible.

    There is a broad consensus today that the greatest opportunity for 
aerodynamic improvement in the tractor trailer system is in improving 
trailer aerodynamic performance. There are a number of aerodynamic 
devices for trailers on the market today and a mounting body of 
performance data suggesting that many of these devices do, in fact, 
deliver significant aerodynamic improvement. Several individual devices 
have demonstrated on-highway fuel economy improvements of five percent 
or greater, and combinations of devices have demonstrated highway fuel 
economy improvements of 10 percent to 15 percent.
    However, none of these devices appear to be achieving high rates of 
adoption into trucking fleets today, strongly indicating that more work 
needs to be done to improve performance, durability, operation, vehicle 
integration, or economic aspects of the design, and to better 
communicate known benefits of proven devices. The expertise of the 
industry partners should be brought to bear to help understand and 
overcome the objections to the current devices.

4. Fuels

    Vehicular improvements alone will not achieve the full potential 
for petroleum and greenhouse gas savings. Cost-effective changes to 
fuels need to be considered. Low carbon fuels and compatible engines 
will be necessary, building upon work already done in biofuels.

5. Infrastructure and Logistics

    The full range of opportunities to reduce fuel use and carbon 
emissions of MD and HD trucks must also include operational issues, 
such as congestion mitigation (e.g., truck lanes, smart highways, smart 
vehicle technologies), regulatory changes (e.g., road-speed governing, 
heavier and longer vehicles), truck stops (e.g., electrification for 
idle reduction), and logistic improvements (e.g., improved or adaptive 
route planning, load management, driver training). These infrastructure 
improvements can dramatically reduce fuel consumption per vehicle and 
per freight volume-mile or ton-mile (perhaps up to 30 percent), with 
little cost to implement. However, each of these improvements will 
require a coordinated effort with vehicle manufacturers, suppliers, the 
Department of Transportation, and other agencies.
    Intelligent Transportation Systems (ITS) can contribute to 
congestion mitigation, efficiency, safety, and security for commercial 
vehicles. Traffic congestion, crash avoidance, credentialing, weighing 
and inspection processes, transportation security and other commercial 
vehicle requirements can all be improved via the effective development 
of ITS through programs like Commercial Vehicle Infrastructure 
Integration (CVII or, more recently, IntelliDrive). 21CTP is willing to 
work with DOT to explore ways by which the new IntelliDrive program 
might be patterned after the voluntary and proven EPA SmartWay program.

6. Fuel Efficiency Assessment

    With the tremendous variation in vehicle specifications and duty 
cycles, 21CTP should develop a fuel efficiency assessment method 
comprising a model, verified by testing on typical vehicles and 
accepted by industry, end-users, and government agencies. Consideration 
of both ``ton miles per gallon'' and ``cubic feet miles per gallon'' is 
necessary to cover the range of freight hauled.

7. SmartWay Program

    The trucking industry has shown great support for the voluntary EPA 
SmartWay program, generating savings of some 700 million gallons of 
diesel fuel. 21CTP supports continuing SmartWay and seeks to find ways 
to gain additional fuel savings and environmental benefits by further 
development of the program.

Resource Requirements:

    The Charter for the March 24th, 2009 hearing held by the Committee 
on Science and Technology's Subcommittee on Energy and Environment of 
the U.S. House of Representatives notes that: ``Funding for the 
Partnership steadily increased from $45.6 million in FY99 to $86.6 
million in FY02. However, despite the potential economic and 
environmental benefits of improvement in trucks and the considerable 
technical hurdles that remain, the 21st Century Truck Partnership 
started to see a decrease in its funding in FY03 and hit a low of $29 
million in FY09.''
    Dr. John H. Johnson, Presidential Professor at Michigan 
Technological University, participant in 12 different National 
Academy's Committees, the Chair of the committee that reviewed the 21st 
Century truck Partnership in 2008, and a member of the Academy's 
Committee on Light-Duty Vehicle Fuel Economy and the Committee on 
Medium- and Heavy-Duty Vehicle Fuel Economy, noted that ``. . . it is 
important that the Federal Government fund the DOE program at levels 
such as $200 million/year with $90 million/year for engine emission 
control systems and biodiesel fuels research. The program should be 
funded for five to ten years at this level so that the industry will 
have the technology in the 2015-2020 timeframe to meet potential fuel 
economy.'' Further, Dr. Johnson notes: ``. . . there is need for $25 
million per year for safety related research which should be designated 
for DOT by line item for the 21st Century Truck Partnership.''
    The Partnership agrees fully with the aforementioned 
recommendations, but also suggests strongly that there is another 
critical issue--the Federal Government must remove conditions imposed 
by the traditional contracts awarding process that impede access to 
federal research funding in today's economic times.
    Virtually all of the partners, like many other American companies, 
are suffering through dire business conditions. They, along with small 
businesses, may be critically limited from participating because of a 
50-50 cost share requirement. The Partnership thus recommends 
reconsideration of this traditional stipulation that should not apply 
in the current economy.

In Conclusion:

    The heavy-duty vehicle industry is a small base of companies with a 
huge impact on petroleum consumption and our economic growth. Despite 
this, there has been minimal federal investment to address these many 
opportunities. We believe that funding of $200 million annually in the 
Department of Energy, $25 million in the Department of Transportation, 
and $25 million in the Environmental Protection Agency is required to 
support these initiatives. The commercial vehicle industry comes 
together with governmental agencies within the 21st Century Truck 
Partnership, and we recommend that 21CTP serve as a focal point to 
create a longer-term vision for the future of commercial vehicle 
technology.

21st Century Truck Partnership Members

Allison Transmission, Inc.
BAE Systems
Caterpillar Inc.
Cummins Inc.
Daimler Trucks North America LLC
Detroit Diesel Corporation
Eaton Corporation
Mack Trucks, Inc.
Navistar, Inc.
Nova Bus
PACCAR Inc.
Volvo Trucks North America
                  Joint Statement of CNH America LLC,
                           Caterpillar, Inc.,
                          and Deere & Company
    We applaud the Subcommittee for holding this important hearing to 
examine vehicle technology research and development programs. The U.S. 
Department of Energy's (DOE) Vehicle Technologies Program (VTP) is 
designed to strengthen our nation's energy security, economic vitality, 
and environmental quality through public private partnerships. These 
public private partnerships have enhanced vehicle productivity and 
efficiency through the development and deployment of advanced 
technologies. Program activities have included research, development, 
demonstration, testing, and education.
    As successful as the VTP has been at improving productivity and 
efficiency in on-highway applications, it has not thus far supported 
advancements in the important non-road market segments of construction, 
agriculture, forestry, mining, and lawn/turf care. Overall, relatively 
scant DOE resources have been devoted to funding non-road engine and 
equipment research and development aimed at improving productivity and 
decreasing fuel consumption. We believe the creation of a new non-road 
program focused on these areas within the DOE VTP would help spur 
investments in, and the development and deployment of, new advanced 
technologies to improve total machine and job site, or `operational,' 
productivity and efficiency.
    On May 11, 2004, the U.S. Environmental Protection Agency (EPA) 
finalized a comprehensive rule to reduce emissions from non-road diesel 
engines by integrating new engine and fuel controls as a system to 
achieve significant emissions reductions. Accordingly, we have been 
required to design, produce and use non-road engines with advanced 
emission-control technologies similar to those used for new on-highway 
trucks. The new emissions standards apply to diesel engines used in 
construction, mining, industrial, agricultural, forestry, and lawn and 
turf care equipment. The standards took effect for new engines 
beginning in 2008 and will be phased in through 2015.
    Applying on-highway emissions reductions technologies to non-road 
engines, and engineering these engines into non-road equipment, is 
proving to be a significant engineering challenge, and is requiring an 
enormous investment. Complicating matters is the fact these 
technologies must be installed in equipment subject to exceptionally 
harsh operating environments where space is often very limited and 
where the installation must be done in a manner that will not interfere 
with the functionality of the equipment. This is resulting in the need 
for costly and complex equipment redesign. We and other non-road engine 
and equipment manufacturers are investing millions of dollars daily to 
meet EPA emissions standards.
    Furthermore, while global harmonization in emission standards was 
largely achieved through EPA's leadership in the Tier 4 development, 
significant lack of global alignment in non-road emission regulation 
implementation remains. As a result of different regulatory timelines 
between the U.S., Europe, and Japan for non-road emissions regulations, 
we are facing additional complexity and cost.
    The lack of alignment between these key regulated markets is 
exacerbated by the international nature of the non-road segments 
extending into far less regulated markets. This results in a grossly 
uneven playing field in the world marketplace and increases the 
complexity of manufacturing, marketing, distribution and servicing of 
products. As manufacturers compete in highly regulated markets, we must 
invest in the technology required for these markets, while our 
competitors serving less regulated markets focus their development 
spending on product features that contribute to direct customer buying 
motivations, thereby disadvantaging manufacturers serving highly 
regulated markets. Aggravating this challenge is the reality that the 
strongest growth and the greatest export opportunities lie in less 
regulated markets where competition is becoming more intense and the 
global playing field is becoming more divided.
    The research and development dollars, along with other major 
investments, being dedicated in these difficult economic times to meet 
the Tier 4 standards significantly reduces our ability to robustly fund 
the development of new breakthrough technologies that would improve 
overall non-road machine and job site productivity and efficiency. It 
is this type of machine and operational technology research and 
development that would fit well within the existing VTP.
    Diesel engines and equipment are the backbone of the American 
economy, contributing billions of dollars each year to our domestic 
growth. Their importance will surely expand, as they are an important 
tool used to accomplish the massive national efforts critical to the 
future success of our economy. Rebuilding a safe and efficient 
infrastructure upon which we can all rely; producing affordable and 
sustainable food, fiber, and fuel; and otherwise protecting and 
improving the world around us requires diesel engines and equipment. 
And, while criteria pollutant emission levels from diesel engines used 
in non-road equipment are approaching near zero levels, it is likely 
that peak thermal efficiency will not significantly exceed 50 percent 
in the next twenty years. Accordingly, there are other components 
within non-road equipment systems that can yield greater overall 
efficiency benefits in performing these critical tasks at a much better 
cost-to-benefit ratio.
    There are a number of non-road engine, machine component, and 
system areas where technology research and development through a new 
program within the VTP could yield promising results. Candidates 
include:

Engine Prime Power and Hybridization

    Absence of ram air-cooling, combustion, fuel injection, charge air 
handling, heat recovery, materials, optimized operation regimes, and 
hydraulic and electric hybrids;

Aftertreatment Systems and Control

    NOX, Particulate matter, hydrocarbons, materials, subsystems and 
integration, and alternatives to SCR;

Power Electronics

    Lightweight, reliability, durability, and control capability; 
standard for Class B voltage systems on non-road machines;

Energy Storage

    Battery and ultra-capacitor technologies that can meet requirements 
for use in non-road applications;

Prime Power Energy Transmission

    Transmission technologies for hybridization, electric drive, 
continuously variable transmission, and controls;

Fuels

    Ultra-low sulphur diesel, low carbon, alternative, biomass derived, 
and renewable fuel performance and technological compatibility;

Analytical Modeling

    Computer analysis for component and powertrain system optimization, 
application specific off-road conditions, climate and weather 
conditions;

Advanced Materials

    Recyclability, durability, and life cycle analysis;

Fluid and Thermal Management

    Friction, parasitics, advanced waste heat recovery, cooling system 
optimization, and system energy management;

Systems Integration

    Fuel efficiency, productivity, and metrics harmonization;

Automation/Autonomy

    Site/Fleet efficiencies, operator productivity, safety, 
utilization, information management, and GPS, remote sensing, and other 
telematics;

Energy Conversion

    Auxiliary power and thermoelectrics.

    In addition to research and technology development into various 
components and systems within the non-road machine, there are also 
promising opportunities to gain further efficiencies by improving the 
way these machines fit and work within the overall job/work site. There 
are numerous and significant efficiency gains to be had through further 
development of new breakthrough technologies that seek to garner 
reduced fuel consumption and minimize machine wear and tear by 
improving overall machine and operational efficiencies.
    A total systems approach to productivity and efficiency is focused 
on the integration of the machine with the operations. In the case of 
non-road machines, research and development partnerships to deliver the 
best overall machine system solution will significantly reduce fuel 
consumption, as well as improve overall job site efficiency.
    Again, thank you for holding this hearing to examine this important 
program. Although gains have been made through this program in the on-
highway market segment, there are significant opportunities in the non-
road markets. These untapped market segments would significantly 
benefit from a new non-road program within the VTP, and the goals of 
the program would be more fully realized. We look forward to working 
with the Subcommittee on this important matter.



