Environmental and Energy Study Institute

July 2007

• House Energy Package Sidesteps CAFE, Offers Incentives for Plug-In Hybrids
• Debate Over New York City's Congestion Pricing Plan Continues
• Illinois Introduces "Green Rewards"Rebate Program for Hybrid and Alt-Fuel Vehicles
• Ford and Southern California Edison Team Up to Test PHEVs
• Studies Emphasize GHG and Air Quality Benefits of Plug-in Hybrids
• General Motors Debuts Malibu Hybrid
• Swedish Government Supports Volvo Buses' Hybrid Development
• U.S. EPA's 2010 Emissions Certification Awarded to Cummins Westport
• Will Increases to Fuel Economy Standards Generate Jobs for the U.S. Economy?
• Biofuel Consumption throughout Europe Up 78 Percent
• Submit Your Clean Transportation Story

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House Energy Package Sidesteps CAFE, Offers Incentives for Plug-In Hybrids

Leaders of the House of Representatives recently held a press event to discuss the package of energy legislation that is headed for consideration on the full House floor, after appropriations measures conclude. The House bill is scheduled for floor action on Friday, August 3rd.

This energy package, however, is void of fuel efficiency standards. House Energy and Commerce Committee Chairman John Dingell (D-MI) addressed the issue by assuring CAFE standards will reappear in the climate change and global warming legislation the committee is planning to introduce in September. The energy legislation do however, include provisions to promote plug-in hybrid electric vehicles (PHEVs) and related components.

The element of the energy package supporting PHEVs and electric transportation:

• Establishes a loan guarantee program for the construction of advanced battery manufacturing facilities.

• Amends the language in the Energy Policy Act of 2005 that provides manufacturing conversion grants for hybrid-electric vehicles to include plug-in hybrids and components.

• Establishes a program to provide grants on a cost-shared basis to State governments, local governments, metropolitan transportation authorities, air pollution control districts, private or nonprofit entities or combinations thereof, to carry out projects to encourage the use of plug-in electric drive vehicles or other emerging electric vehicle technologies.

• Provides incentives for federal and state fleets for medium- and heavy-duty hybrids.

• Amends the Energy Policy Act of 1992 to include a number of forms of electric drive vehicles, including plug-in hybrids, for the allocation of credits.

Amendments adopted during the committee’s June 27th and 28th mark-up sessions include:

• Establishing a 5,000-vehicle PHEV conversion pilot program that would involve 5 cities with 1,000 conversions per city.

• Establishing a revolving loan program for qualified electric transportation projects, which includes ship-side or shore-side electrification; truck-stop electrification; electric truck refrigeration units; battery-powered APUs for trucks; electric airport ground support equipment; electric or dual-mode electric freight rail; any distribution upgrades required to supply electricity to the projects; and any ancillary infrastructure.

• Authorizing grants to owners of electric drive transportation technology to use off-peak electricity or to have the load managed by the utility.

• Establishing a market assessment program for electric-drive transportation technologies.

• Establishing a program to determine how to integrate PHEVs into the transmission grid, to develop systems and processes to allow plug-ins to function as emergency back-up power sources for consumers.

• Ordering a study from the DOT, DOE and other agencies on the benefits of and barriers to the widespread use of city electric cars (higher speed than neighborhood electric vehicles, lower speed than passenger vehicles) and which may be battery electric, fuel-cell electric or plug-in hybrids.

• Specifically including hydraulic hybrids in the vehicle mix.

The House Energy and Commerce Committee had initially considered a CAFE proposal that would have mandated an increase in fuel economy to 36 mpg by model year 2021 for passenger vehicles and 30 mpg after model year 2024 for light-duty trucks. The proposal would have also blocked states from setting standards for the reduction of greenhouse gases from automobiles.

Opposed unanimously during the mark-up sessions, the proposal was dropped even despite Rep. Joe Barton's (R-TX) introduction of an amendment that would have established fuel economy standards of 35 mpg for cars and 27.5 mpg for trucks, both by 2022, for vehicles that run on blends of renewable fuel and gasoline and diesel.

This amendment was also rejected by a straight party-line vote which leaves the current energy package, at least for now according to Dingell, without a CAFE agreement.

Debate Over New York City’s Congestion Pricing Plan Continues

On July 16th, the New York State Legislature declined to take up New York City Mayor Michael Bloomberg’s plan to charge a fee to drivers entering the busiest parts of Manhattan. The congestion pricing plan, contentious since Bloomberg began pushing it as part of his PLANYC 2030 sustainability plan for the city, had been lobbied and backed by an extensive publicity campaign aimed at pressuring lawmakers to approve the initiative so that the city could seek upward of $500 million in federal aid to help implement it.

Bloomberg would not comment publicly following the legislature’s inadequate support of the plan but released a statement saying, “The failure of the State Assembly to act in time on a deadline imposed by the federal Government is a terrible setback for clean air and to our critical commitment to fight climate change. While business as usual in Albany may be an impediment to congestion pricing at this time, we can still work to make a difference for the future of our City and create a greener, greater New York.”

In response, Assembly Speaker Sheldon Silver, with the backing of Governor Eliot Spitzer and Majority Leader Joseph Bruno, proposed sending the issue to a study commission that would also consider other ways to reduce traffic, giving the Legislature until next March to act. The proposal authorizes the city to take the first steps toward a three-year pilot project for congestion pricing, such as investing in technology. It also calls for the creation of a commission, a framework for openly hammering out specifics over the next year, allowing legislators ample opportunity to answer questions.

The agreement also accelerates the capital plan for the Metropolitan Transit Authority, the agency responsible for mass transit investment, so that decisions about congestion pricing and new transit investment occur in parallel. The commission will include representation from the Mayor, the Governor, the City Council, the State Assembly and Senate.

Until a new version of the congestion pricing plan is developed, which will then have to get the green light from the city council and go before the legislature again in March 2008, Bloomberg has vowed, “This Administration will continue to work with the more than 140 civic, business, environmental and labor organizations that support our plan to make progress, and we will continue to press for real solutions, not interminable study groups whose only real purpose is to avoid accountability and results."

Illinois Introduces “Green Rewards” Rebate Program for Hybrid and Alt-Fuel Vehicles

Illinois recently announced its new Green Rewards program which will issue $1,000 rebates to state residents who purchase hybrid or all-electric vehicles after July 15, 2007.

The state allocated $2 million to the program which means 2,000 rebates will be honored. The program offers the largest state rebate for hybrids in the nation. Buyers must receive financing from one of the 44 approved financing institutions and buy a car from an approved list to receive the reward.

“For every dollar that is spent on the program, drivers will save $5 on fuel over the life of their vehicle. That’s a deal government should make every day of the week,” said Illinois State Treasurer Alexi Giannoulias.

The Green Rewards program encourages emissions and fuel cost reductions as well as reduced dependence on foreign oil.

Alternative fuel vehicles that qualify for the program are hybrid electric, compressed natural gas vehicles, hydrogen fuel cell and battery-electric vehicles.

Hybrids vehicle models eligible for the rebate include:

• Ford Escape (2WD and 4WD)
• Mercury Mariner (2WD and 4WD)
• GMC Sierra (2WD and 4WD)
• Chevy Silverado (2WD and 4WD)
• Saturn Aura Greenline
• Saturn Vue Greenline
• Honda Insight CVT
• Honda Accord
• Honda Civic
• Nissan Altima
• Toyota Prius
• Toyota Highlander (2WD and 4WD)
• Lexus Rx400h (2WD and 4WD)
• Toyota Camry
• Lexus GS 450h
• Mazda Tribute (2WD and 4WD)

To read more about the Green Rewards program, please visit the website of the Illinois State Treasurer: http://www.treasurer.il.gov/CultivateIllinois/GreenRewards.aspx

Ford and Southern California Edison Team Up to Test PHEVs

Ford Motor Company and Edison International have announced that Ford and Edison subsidiary Southern California Edison will partner in a multi-year, multimillion dollar project to test rechargeable hybrid vehicles (PHEVs) and ultimately hasten their commercialization.

The California utility, which serves 13 million people in 11 central, coastal and southern California counties outside Los Angeles, will receive twenty Escape hybrid SUVs. After collecting data relevant to how consumers (chosen by the utility) use the vehicles, Ford will convert the Escapes to plug-in hybrids with lithium-ion battery packs, then return them to the utility for durability, range and impact on the power grid comparison testing.

Ford will initially work exclusively with Southern California Edison to develop the testing procedures and define its initial demonstration fleet. As Ford’s plug-in hybrid program grows, the automaker will look for broader participation as it develops a business model not just for Southern California, but potentially nationwide. The utility company has worked for more than 20 years with all major automakers and will continue seeking alliances between the two industries that advance plug-in hybrid technology.

The first PHEV conversion is scheduled to be completed by the end of 2007, with all twenty Escapes converted by 2009. Both Ford and Edison are actively seeking project participation from state and federal government agencies including the Electric Power Research Institute (EPRI), the U.S. Department of Energy (DOE), the California Energy Commission and the South Coast Air Quality Management District.

Many automakers have plug-in hybrids similar to Ford's experimental vehicles, but mass production has been stymied by costs and battery technology that limit the vehicles' range. Manufacturers are racing to bring the technology to market as consumers seek alternatives to traditional engines and high gasoline prices.

John Bryson, chairman of Edison International, parent company of Southern California Edison, said the collaboration will allow Ford and the utility to better see how technology that has been tested in the laboratory works in the real world. He said plug-in hybrids have the potential to put the power grid to better use, for example, by charging vehicles during overnight hours when electricity demand is lower.

To see an analysis of the Ford/SCE proposal completed by the California Cars Initiative (CalCars), see: http://www.calcars.org/calcars-news/789.html

Studies Emphasize GHG and Air Quality Benefits of Plug-in Hybrids

Two recent studies by the Natural Resources Defense Council (NRDC) and the Electric Power Research Institute (EPRI) reveal that widespread use of plug-in hybrid electric vehicles (PHEVs) could considerably reduce greenhouse gas emissions (GHG) throughout the United States as well as potentially provide improvements in ambient air quality in many areas of the country.

Prevalent use of PHEVs could prevent more than 450 million metric tons of GHG emissions annually in 2050— equivalent to removing 82.5 million passenger cars from the road. The reports also forecast that cumulative GHG emissions reductions between 2010 and 2050 could achieve 10.3 billion metric tons with valid scenarios for the development of a lower-carbon electrical infrastructure and PHEV marketplace penetration.

Major findings of the studies conclude that:

• In most regions of the United States, PHEVs result in small but significant improvements in ambient air quality and reduction in deposition of various pollutants such as acids, nutrients and mercury.

• On a population weighted basis, the improvements in ambient air quality are small but numerically significant for most of the country.

• The emissions of gaseous criteria pollutants (NOx and SO2) are constrained nationally by regulatory caps. As a result, changes in total emissions of these pollutants due to PHEVs reflect slight differences in allowance banking during the study’s time horizon.

• Considering the electric and transportation sector together, total emissions of VOC, NOx and SO2 from the electric sector and transportation sector decrease due to PHEVs. Ozone levels decreased for most regions, but increased in some local areas. When assuming a minimum detection limit of 0.25 parts per billion, modeling estimates that 61% of the population would see decreased ozone levels and 1% of the population would see increased ozone levels.

• Mercury emissions increase by 2.4% with increased generation needs to meet PHEV charging loads. The study assumes that mercury is constrained by a cap-and-trade program, with the option for using banked allowances, proposed by EPA during the execution of the study. The electric sector modeling indicates that utilities take advantage of the banking provision to realize early reductions in mercury that result in greater mercury emissions at the end of the study timeframe (2030).

• Primary emissions of particulate matter (PM) increase by 10% with the use of PHEVs due primarily to the large growth in coal generation assumed in the study. In most regions, particulate matter concentrations decrease due to significant reductions in VOC and NOx emissions from the transportation sector leading to less secondary PM.

Combining models of the U.S. electric system and transportation sector with atmospheric air quality models to account for the future evolution of both sectors in technological advances, electricity load growth and capacity expansion, the analyses are the first of their kind.

A copy of the reports can be viewed on the EPRI website. Please visit, http://www.epri-reports.org/

General Motors Debuts Malibu Hybrid

GM recently introduced its new 2008 Chevrolet Malibu Hybrid. Powered by the GM Hybrid System, the Malibu hybrid delivers a U.S. Environmental Protection Agency (EPA) rating of 24 mpg city and 32 mpg highway, for a combined 27 mpg. The system runs on a 36-volt electric motor/generator mated to GM Powertrain’s 2.4L Ecotec VVT four-cylinder engine and Hydra-Matic 4T45 four-speed transmission.

At 27mpg, the new hybrid Malibu gets a 2-mile bonus over its 2008 4-cylinder Malibu counterpart. It also provides other fuel and energy saving mechanisms such as engine shut-off at idle; fuel cut-off during deceleration; and the capability to capture electrical energy through regenerative braking. In addition to increased fuel economy, the Malibu Hybrid provides accessories such as climate control even while the vehicle is stopped.

Production of the Chevrolet Malibu Hybrid is set to begin in October of 2008.

Swedish Government Supports Volvo Buses’ Hybrid Development

Volvo Buses has been granted subsidies from the Swedish Energy Authority (SEA) for its continued work on developing hybrid technology for two of its heavy-duty models.

The company’s I-SAM (Integrated Starter, Alternator, Motor) parallel hybrid system supports regenerative braking; electric launch and assist; electrification of power steering, air compressor and air conditioning; and idle avoidance. The electric motor is used when starting off and for acceleration to about 12 mph. At higher speeds, the diesel engine engages and takes over while simultaneously recharging the electric motor’s batteries. When the brakes are applied, the braking energy is harnessed to recharge the batteries. Electric power is utilized when the vehicle is at a standstill, in slow-moving traffic queues and during loading and unloading.

While Volvo hopes to offer its first hybrid buses in a few years, the subsidies from SEA are the only way, at least at this point, they can be made commercially viable. Edward Jobson, Environmental Manager at Volvo Buses says the innovative hybrid technology is expected to reduce fuel consumption by 35 percent in new bus models.

The Volvo Company has already received $1.4 million from SEA for the development and testing of hybrid technology and is also developing similar hybrid technology for construction equipment such as wheel loaders, in which the fuel savings can be up to 50%.

U.S. EPA’s 2010 Emissions Certification Awarded to Cummins Westport

Cummins Westport Inc. (CWI), a leading provider of high-performance alternative fuel engines for the global market, received a U.S. Environmental Protection Agency (EPA) 2010 emissions certification for its 2007 ISL G natural gas engine. The engine currently meets 2010 emission standards of 0.2 g/bhp-hr oxides of nitrogen (NOx) and 0.01 g/bhp-hr particulate matter (PM)—surpassing the three year phase-in period. The engine will also offer increased thermal efficiency compared to the CWI Plus engine.

Cummins Westport was awarded $690,000 in funding for the heavy-duty ISL G natural gas engine development program back in 2005. The award came from California’s South Coast Air Quality Management District (SCAQMD).

The engine uses cooled exhaust gas recirculation (EGR) and a passive three-way catalyst to bring emissions down to EPA standards. Cummins has already received 500 orders for the engine from various transit authorities.

For more information about CWI’s ISL G natural gas engine, visit: http://www.cumminswestport.com/products/islg.php

Will Increases to Fuel Economy Standards Generate Jobs for the U.S. Economy?

A recent analysis by the Union of Concerned Scientists (UCS) suggests that increasing the average fuel economy of new light duty vehicles to 35mpg by 2018 would not only save consumers $61 billion at the pump, but add 241,000 new jobs to the U.S. economy in year 2020, including 23,900 in the auto industry.

The study concludes that nearly $24 billion of the fuel savings would become new revenue for automakers in 2020—paying for technology upgrades as well as contributing to some profits. The remaining $37 billion saved on gasoline expenses during that year could then be spent by consumers in numerous other ways.

According to David Friedman, author of the study and research director of the Clean Vehicles Program for UCS, “Putting technology to work means putting people to work, whether it’s in the computer industry or the auto industry. A 35 mpg standard also means billions of dollars helping to create more U.S. jobs, not lining the pockets of the oil industry and their overseas suppliers.”

Diverting money from the oil industry into other productive areas of the economy could, says UCS findings, create 82,900 new jobs in the service industry, 44,400 jobs in the retail trade industry, 33,100 jobs in finance, insurance and real estate industries; and 17,800 jobs in manufacturing industries outside of the auto industry.

Oil and associated industries, on the other hand, could expect job forecasts to drop by 21,000, though these jobs would likely be shifted to such sectors as agriculture, construction, transportation, utilities, and government, yielding a net increase of 241,000 new jobs.

UCS used a macroeconomic model utilizing industry-specific data to analyze job impacts on 528 different economic sectors. Findings reveal that the greatest job increases will occur in states that use the most gasoline and have a substantial industrial base. Seven states will add at least 10,000 jobs in 2020: California 32,500; Texas 14,700; Florida 14,300; New York 13,100; Michigan 11,000; Ohio 10,500; and Illinois 10,300 jobs.

To estimate the costs and savings resulting from an increase in fuel economy to 35 mpg by 2018, UCS used a modified version of the LEAP (Long range Energy Alternatives Planning system) modeling tool, whose methodology is based on a comprehensive accounting of how energy is consumed, converted and produced in a given region or economy, as well as its own cost/performance analysis.

Key assumptions in the study include:

• A mileage rebound of 10 percent;
• A vehicle price elasticity of one;
• A real discount rate of five percent;
• An average gasoline price of $2.55 per gallon;
• An average 15-year, 170,000-mile vehicle lifetime;
• A discount factor of about 0.8 to convert federal test fuel economy values to real-world values; and

• Combined vehicle and upstream emissions of 11.1 kg/gallon of gasoline (24.5 pounds per gallon of gasoline).

The analysis considered additional factors like both direct and indirect investments generated by technology improvements and the re-spending of fuel cost savings. It also provided a national industry-by-industry breakdown of job impacts for the years 2020 and 2030.

Using gasoline consumption data and prices in each state, UCS allocated their national impacts along with state employment projections for each industry from the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA).

The UCS study concludes that the increase in fuel economy would cut oil consumption by 1.6 million barrels per day and reduce greenhouse gas emissions by more than 260 million metric tons, equivalent to taking nearly 40 million of today's average cars and trucks off the road in 2020.

The study is timely as the House of Representatives begins debate over a package of energy legislation that could include a bill introduced by Rep. Ed Markey (D-MA) and Rep. Todd Platts (R-PA) that aims to increase fuel economy standards by 4 percent per year and to 35 mpg by 2018.

To view or download the Union of Concerned Scientists report, please visit:
http://www.ucsusa.org/news/press_release/raising-fuel-economy-0045.html

Biofuel Consumption throughout Europe Up 78 Percent

According to the Biofuels Barometer, a publication of the renewable industry consortium EurObserv’ER, consumption of transportation biofuels rose 78 percent in the 25-member European Union from 2005 to 2006. The increase bumps the total share of biofuel use from 1 to 1.8 percent among all transportation fuels.

Biodiesel now represents 71.6 percent of the energy content of biofuels used for transportation purposes, outpacing bioethanol (which accounts for 16.3 percent) and other biofuels, such as pure vegetable oil, which accounts for 11.7 percent of total biofuel consumption.

The use of biodiesel grew 71.4 percent between 2005 and 2006, compared to bioethanol which grew 57.5 percent. The use of other biofuels increased 3.4 percent in the same period.

Leading biofuel consumption among European Union members in 2006, Germany used upward of 2.8 million tons of biodiesel according to the Ministry of the Environment’s statistical division, AGEEE Stat. Germany’s consumption of crude vegetable oil amounted to 0.71 million tons and is the only country in the E.U. to consider the vegetable oil a legal, full-fledged biofuel source.

France was the second largest consumer of biofuels in 2006. The Ministry of Industry reported a 62.7 percent climb in biofuel consumption. Following suit throughout the E.U., biodiesel represented 78 percent of biofuel use and bioethanol comprised 22 percent.

Submit Your Clean Transportation Story!

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Send this information to Jan Mueller at jmueller [at] eesi.org or call 202-662-1893. More information can be mailed to 122 C St., NW, Suite 630, Washington, DC 20001.

The Environmental and Energy Study Institute is a non-profit organization established in 1984 by a bipartisan, bicameral group of members of Congress to provide timely information on energy and environmental policy issues to policymakers and stakeholders and develop innovative policy solutions that set us on a cleaner, more secure and sustainable energy path . EESI's valuable work in energy, climate change, agriculture, transportation and smart growth is made possible through financial support from people like you.

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