The New CAFE Standards Are Good, But We'll Still Be Drinking Oil

While I commend the Obama administration and 13 automakers for boosting the Corporate Average Fuel Economy (CAFE) of cars and light-duty trucks sold in the United States to 54.5 miles per gallon by 2025, it is only a baby step toward solving our real problem: oil addiction.

Although President Obama is not the first president to recognize our oil addiction, he is the first one to set a timetable.



At the 2008 Democratic National Convention, he made a pledge at his acceptance speech: "And for the sake of our economy, our security and the future of our planet, I will set a clear goal as president: in 10 years, we will finally end our dependence on oil from the Middle East."



The solution to our oil addiction will certainly include efficiency, but that is not enough.  We actually need alternatives to oil for our transportation needs.  The use of CAFE standards is the equivalent of trying to green up our electricity generation mix by doubling the efficiency of coal and natural gas plants.  While energy plant efficiency is a step in the right direction, we also introduced policy to encourage wind, solar, geothermal and other alternatives. Today, most agree that we are on a pathway to eliminating most coal plants in the United States by 2030.



So how do we get off of oil?  How do we insist that all cars use mature domestic energy sources that have been around for decades, like natural gas, methanol, renewable electricity and others?

According to Vijay Vaitheeswaran, a co-author of "Zoom: The Global Race to Fuel the Car of the Future," a two-way grid is part of the solution.  He said in 2007 interview in BusinessWeek, "We will see a smart, sophisticated, software-rich car of the future very soon. They are going to be plugging into the wall, they're going to be getting electricity from the grid, and they're going to be feeding electricity back."



So while technology will certainly play a major role in solving our addiction, we need many entrepreneurs, not just a few, to step up to the plate.  To do so, we need a level playing field to entice them.  A good start would be to put together a plan on how we might achieve the President's target. One essential part would be to identify and remove market barriers to creating a level playing field for entrepreneurs in the personal transportation sectors:



1. The barrier of scale: With all the regulatory requirements, a new auto company cannot realistically "pilot" a new car. It realistically takes $2 billion to start a new automaker and meet regulatory requirements at scale.

2. The barrier to fuel alternatives: We lack sufficient support in the development and distribution of alternative fuels. And having cars that can be retrofitted is well within our reach. According to The Methanol Institute, "[t]oday, producing new cars with gasoline, ethanol and methanol, or 'GEM,' flexible fuel capability would cost about $100 per vehicle."
3. The barrier of vehicle-to-grid infrastructure:  We have not devised a sensible approach to promoting electricity vehicle-to-grid (V2G) infrastructure (supporting a system for electric plug-in-vehicles). This is documented in Energy Policy
 in an article entitled, "Beyond batteries: An examination of the benefits and barriers to plug-in hybrid electric vehicles (PHEVs) and a vehicle-to-grid (V2G) transition," by Benjamin K. Sovacool and Richard F. Hirsh (Volume 37, Issue 3, March 2009, pp. 1095-1103).

Most recently, China has led with widespread commercialization of methanol fuels. "Major car companies [in China] such as Geely, Chery [and] First Automobile [are] preparing for mass production of M-85/M-100 vehicles," according to Methanex Corporation, a producer and seller of methanol. 


Now other countries are playing catch-up in finding alternative fuel solutions, including the United States. The U.S. Open Fuel Standard Act of 2011 essentially says that by 2017 automakers will no longer be allowed to make cars that run only on gasoline. The bill says that by 2017, 95 percent of all cars made in the United States will be in that category.



Alternative fuels present the potential to overtake the petroleum economy -- and with more support, they may.  We need infrastructure change with economic support to create alternative fuels, so we can address serious issues like climate change.

While we are improving vehicle efficiency through CAFE standards, let's work to level the playing field for entrepreneurs so that we can reach the president's goal by 2020 and end our oil addiction soon after. Our economy will thank us.

Jigar Shah is CEO of the Carbon War Room, a nonprofit that harnesses the power of entrepreneurs to implement market-driven solutions to climate change and create a post-carbon economy.

 

Comments

[JShep]

06:41 PM on 08/07/2011

Can't find much about the details of the agreement on the web, but it appears that the first milestone is an increase from 27 mpg to 34.1 mpg by 2016. Unfortunately, the proposal allows credits for dual fuel cars that would increase a 25 mpg car to 40 mpg credit by only retrofitting ther car for dual fuels (gas & 85% ethanol). I believe that only means the typical 27 mpg car will have the fuel delivery system (gas tank & lines) upgraded and some adjustments to the on board computer. There will also be a 100 mpg equivelent given to all-electric (the Leaf). This will allow Nissan to sell 4 upgraded 27 mpg cars (dual fuel mods) to one leaf to meet the 54.5 mpg criteria.

[PaulScott]

03:47 PM on 08/06/2011

I don't agree that we have an oil addiction. We have a freedom of movement addiction. This by itself isn't a bad thing. We've grown up having the ability to more or less go where and when we please.

Our problem has been that the only energy source allowing this freedom of movement was oil. Electricity has a very minor role, albeit an important one running much of our mass transit.

Today, we have a choice of renewable electricity. With the Volt and LEAF on the market, and many more to come in the next few years, no one with a conscious should buy a new car until they can get one with a plug.

Take steps now to power your house on renewable electricity, then when the opportunity to buy a plug-in car comes, you'll be able to run your house and car on clean energy. In two steps you will have eliminated over 90% of your pollution footprint.

You will stop giving money to the oil companies. Your money will stay in your community with most of it in your pocket. Here in CA, we send over $50 billion out of our state every year. We're going to reduce that by over half before 2020. Think of the jobs those billions will generate!

There are about 10,000 Americans driving electrically right now with hundreds more every week. To a person, they all say the same thing. Best car ever! There's a reason for that. Get yours soon.

[JShep]

03:17 PM on 08/06/2011

Before we get too excited about the new CAFE standard, we need to know what MPG credit will be applied to all-electric cars. If all-electrics are rated at 100 MPG equivalent and standard cars get 27 MPG (current average), a manufacturer can sell two standard cars for every electric. If an all-electric car is rated at 300PG equivalent, then a manufacturer can sell ten standard cars for every electric. The devil is in the details.

[Moose Luck 99]

05:56 PM on 08/05/2011

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