Battered by depressed new car sales and waning political power in Washington, the automotive industry still has some fight left.
An industry trade group led by Detroit's Big Three urged lawmakers on the House Energy and Commerce Committee this week to oppose language in the Democrats' energy and climate bill that would force automakers to produce more flex-fuel vehicles.
"Thus far, Congress has refrained from picking technology winners; these [flex-fuel vehicles] mandate proposals do exactly the opposite," wrote Dave McCurdy, president of the Alliance of Automobile Manufacturers, a trade group representing the Detroit automakers, Toyota Motor Corp. and others. "[Flex-fuel] mandates will divert important limited resources away from the development of other advanced vehicle technologies."
The opposition is aimed at language in Chairman Henry Waxman's (D-Calif.) bill that would create an "open fuel standard," which would require automakers to produce more cars and trucks capable of running on high blends of alternative fuels, as well as a possible amendment from Rep. Eliot Engel (D-N.Y.) that would strengthen the requirements.
The existing provision, which found its way into the energy and climate effort as part of a substitute bill [pdf] introduced this week, would give the administration the ability to mandate the required percentages of flex-fuel vehicles in an automaker's fleet, assuming the needed alternative fuel and infrastructure are available.
To count as flex-fuel capable, internal combustion engines would need to be able to run on blends of E85 or M85, and diesel vehicles would need to be able to operate on biodiesel.
E85 is a fuel mixture of 85 percent ethanol by volume. M85 is a methanol fuel mixture.
Engel has voiced his displeasure with the strength of the flex-fuel language and has indicated he may introduce an amendment that would require half of new U.S. cars and trucks to be able to be flex-fuel capable starting in 2012, with the mandate jumping to 80 percent by 2015 -- regardless of fuel availability.
"I know this bill generally takes us in a direction that you and I would like to go," Engel said Monday. "I'd like to vote for this bill, but I'm not sure I can vote for this bill in its current form without strong flex-fuel language."
The alliance's letter was sent to the committee on the same day that many members of the alliance were at the White House for President Obama's announcement of new national auto standards that would mandate a dramatic acceleration in fuel economy improvements and create the first-ever national greenhouse gas emissions standard for cars and trucks (Greenwire, May 19).
"The Alliance and its eleven member companies stand ready to help solve our nation's energy problems," McCurdy wrote. "However, mandates to produce vehicles for which there is inadequate fuels or fueling infrastructure should be opposed."
The president's new auto standards are estimated to add an additional $600 to the cost of each vehicle, which is on top of the extra $700 that Americans were expected to pay under the current corporate average fuel economy, or CAFE, program.
Automakers say adding flex-fuel technology will force the price tag up an additional $100 to $300 per vehicle.
Shortage of alt fuels
The group said that because the renewable fuel standard requires 36 billion gallons of renewable fuels in the market by 2022, most Americans would not even be able to take advantage of their cars' new capabilities.
"In other words, 10 years and $20 billion in higher vehicle costs later, most drivers still will not be able to find or use alternative fuel in most of the country," McCurdy said.
E85, the most common form of flex fuel in the United States, can currently be found at an estimated 1,600 filling stations and is not available in five states, according to DOE. The department estimates there are currently less than 8 million flex-fuel vehicles on the nation's roadways.
Supporters of flex-fuel mandates argue that the technology is relatively inexpensive to add to fleet offerings and that an increase in the number of flex-fuel vehicles on the road will create the market incentives necessary to spur growth of alternative fuel production and distribution, helping to break the nation's dependence on foreign oil.
Legislation similar to Engel's has been introduced by a host of bipartisan lawmakers, including Sens. Chuck Grassley (R-Iowa) and Joe Lieberman (I-Conn.), and former Sen. Ken Salazar (D-Colo.), who now serves as secretary of the Interior Department.
Despite the flex-fuel mandate, the energy and climate effort has a handful of perks for the ailing industry.
It would double a $25 billion DOE loan program to help carmakers and parts suppliers produce more fuel-efficient cars and trucks, would create a "cash for clunkers" program to pay Americans to scrap their old vehicles and buy new fuel-efficient ones, and would give the industry free allowances -- starting at 3 percent of the allocations, before being slowly phased out -- in exchange for making more advanced cars and trucks, such as all-electric and hybrid vehicles.
Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500