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NY Governor Calls for 25% Reduction in Oil Consumption Over 10 Years

9 August 2006

In a speech on Monday to the National Press Club, New York Governor George Pataki called for a national policy to be implemented over the next 10 years to replace 25% of current US oil consumption—the equivalent of oil imported today from OPEC nations—through greater efficiency, greater domestic production, and greater use of petroleum alternatives.

The plan calls for a new system of incentives to reduce US reliance on petroleum by reducing each vehicle’s reliance on petroleum.

How do we do that? We begin with what is by far the largest contributing factor to that oil dependency: transportation. Transportation accounts for 70% of US petroleum consumption. And that percentage continues to grow.

Why? Because in the US, the vehicles we rely on to move our people and goods are 97% dependent on just one type of fuel: petroleum. Talk about putting all your eggs in one barrel.

It is time for us as a nation to commit to a determined effort to diversify our energy supply, achieve greater energy-efficiency across the board, and build our national strength and global competitiveness through greater energy self-reliance.

—Governor Pataki

Pataki outlined the three main components of his plan:

  • New Incentives to Promote Increased Efficiency and Greater Use of Non-petroleum Fuels. A key component of the proposal is a new tax incentive that would offer a sliding scale of tax credits that increase as a car’s reliance on petroleum decreases.

    Under this initiative, automakers would have a greater incentive to manufacture vehicles that are more energy efficient, achieve higher fuel mileage, or are capable of running on alternative fuels. The greater the amount of petroleum saved, the higher the tax break.

    By raising the average fuel economy of all cars on the road in the U.S. from about 21 miles per gallon to 34 miles per gallon of petroleum, the nation could reduce oil consumption by approximately 5.5 million barrels a day, according to Pataki.

  • Bolstering the Production of Non-petroleum Fuels. The Governor is proposing five initiatives to move non-petroleum fuels and alternative vehicle technologies from the periphery to the mainstream, providing consumers with a choice of fueling options.

    • Creating a national Center for Excellence for Alternative Fuels and Vehicle Technologies to leverage private R&D efforts with the best minds of American academia and foundations to develop the next generation of petroleum alternatives and energy-efficiency breakthroughs;

    • Reducing upfront costs and risks of building bio-refineries and other alternative fuel production facilities by allowing companies to immediately expense their capital investments in these projects;

    • Providing transportation fuel producers with a meaningful federal production tax credit for renewable fuels and clean petroleum alternatives;

    • Further reducing the risk to developers by significantly expanding the federal loan guarantee program to help finance alternative fuel plants; and

    • Leveraging the federal government’s huge purchasing power by moving all federal vehicles and offices to petroleum alternatives within the next 10 years.

  • Expanding the Fueling Infrastructure to Make Petroleum Alternatives Readily Available. Pataki is calling for immediate federal legislation to exempt renewable fuels from exclusivity agreements between fuel distributors and retail service stations. These contracts prohibit retail stations from obtaining or selling any brands of fuel from a source other than those offered by their main distributor. Since most major petroleum distributors do not currently offer E85 or other renewable fuels, retail stations are contractually prohibited from selling these fuels.

    The Governor is also proposing a zero-interest loan program for service stations to eliminate upfront capital costs of installing new alternative fuel pumps or converting gas or diesel pumps to dispense renewable fuels. These loans would supplement the existing $30,000 federal tax credit available to retail stations for these infrastructure upgrades.

Last week, the Governor and Senate Majority Leader Joseph L. Bruno announced plans for a new $10-million State program to convert 600 hybrids vehicles in the State fleet to plug-in hybrids and for the construction of a state-of-the-art alternative fuel research laboratory at the Saratoga Technology + Energy Park (STEP). (Earlier post.)

Other initiatives pushed by the Governor are: the elimination of all State taxes on alternative fuels; a renewable fuel production tax credit that will provide tax savings of up to $2.5 million annually; the state-wide prohibition of exclusivity agreements; significant tax savings for clean energy businesses that locate in the State; $20 million for the development of a pilot cellulosic ethanol plant; a $10 million grant program to assist private fueling stations install renewable fuel pumps; $5 million to promote the use of advanced vehicle technologies such as lightweight materials, batteries and others; and $5 million to demonstrate the use of hydrogen and convert existing internal combustion engines to operate on hydrogen.

New York is also implementing a state Renewable Portfolio Standard (RPS) that will increase the percentage of renewable-generated electricity used in New York State to 25% by 2013. The Governor also issued Executive Orders that require state agencies, departments, and authorities to reduce the energy use at their facilities by 35% relative to 1990 levels and purchase increasing levels of electricity from renewable sources (at least 10% by 2005, and 20% by 2013).

By 2010, the State will require that all non-emergency vehicles purchase for the State fleet be alternative fuel vehicles. Currently, more than 80% of the State’s non-emergency vehicles operate on alternative fuels or are hybrid electric. Last year, the Governor directed state agencies to phase-in the use of renewable heating and transportation fuels, helping to stimulate new energy markets for an indigenous, renewable fuel supply.

Governor Pataki also initiated the effort to create the Regional Greenhouse Gas Initiative (RGGI), an agreement signed in December 2005 by seven Northeast states to combat global climate change through a mandatory cap-and-trade program for carbon dioxide emissions from power plants. Maryland also recently joined this program as well.

Resources:

  • Remarks of Governor George E. Pataki, National Press Club Luncheon, Washington DC, 07 August 2006

August 9, 2006 in Fuel Efficiency, Fuels, Hybrids, Plug-ins, Policy | Permalink | Comments (31) | TrackBack (1)

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Comments

New York has really been at the forefront of oil reduction. The irony, of course, is that NY uses less oil per person than any other state in the union. How do they do that? A few tricks:
* Lotsa folks live in NYC, and don't own cars or don't drive them much.
* Lotsa folks who commute into NYC take the train from CT, NY, or NJ.
* Lotsa folks who drive into NYC are from NJ or CT, and are buying their gas in their home states where prices are lower than NYC prices.

Net result: New York uses less than half the gallons-gasoline-per-person as Wyoming.

If Gov. Pataki really wants to make a dent in US fuel consumption - which IMHO is a highly commendable goal - he should focus exclusively on demand reduction and leave the private sector to figure out alternative fuel production. Investors are falling over themselves to get in on that market anyhow.

If he wants light duty vehicles to average 34 MPG (approx. 7 l/100km or 166 g CO2/km), he needs to not only reward those that choose high-MPG vehicles but also lean on the wallets of those that prefer low-MPG designs in spite of the root causes of 9/11. Unfortunately, state governors probably cannot point blank refuse to issue vehicle licenses to gas guzzlers altogether.

There are several alternatives, though. Raising local gasoline taxes is arguably the most foolproof but does require the co-operation of neighboring states to avoid excessive gasoline tourism. This applies especially to NYC. A city-access toll (cp. London's congestion charge) would work, if it were offest by reductions in state income taxes for those who live or work there. The toll charged for the FasTrak lane could be based on the vehicle's official EPA MPG rating.

Another, simpler, option is to base the vehicle license fee on that rating. This would only affect vehicles licensed in NY state, though. Several European countries (Switzerland, Austria, Czech Republic) work around the free rider problem by instead requiring by law all light duty vehicles on their freeways - regardless of provenance - to sport a vignette (aka decal) on the windshield. Get caught without one and you pay a hefty fine. The locals purchase the year-round version, tourists can buy temporary stickers valid for 8-15 days at gas stations. The price of the annual vignettes does not currently depend on vehicle fuel economy, but there is no fundamental reason why it could not.

Btw, alternative fuels actually do nothing to reduce overall demand for hydrocarbons - on the contrary. However, biofuels do have the advantage of further reducing the CO2 footprint, especially when he military and homeland security overheads of securing access to oil are taken into consideration. That does make them worthwhile in their own right, though only marginally so in the case of corn ethanol. Cellulosic butanol would be preferable by far, but the technology is not yet ready.


This should be very easy for NY to do considering that 35% of the population(the baby boomers) will retire and move to Florida in the next ten years.

JUST saw this on the MV web site...

Effective July 15, 2006, new car dealerships will be responsible for collecting a 0.4% surcharge on the sale of new passenger vehicles, light trucks, SUVs, or vans for which either of the following conditions appy:

The gross sales/lease price of the new vehicle is $45,000 or greater, before trade-in, manufacturers rebates, or additional handicapped driver adaptive equipment
The new vehicle has an average EPA mile/gallon (city and highway) rating of less than 19

JUST saw this on the NJ MV web site...

Effective July 15, 2006, new car dealerships will be responsible for collecting a 0.4% surcharge on the sale of new passenger vehicles, light trucks, SUVs, or vans for which either of the following conditions appy:

The gross sales/lease price of the new vehicle is $45,000 or greater, before trade-in, manufacturers rebates, or additional handicapped driver adaptive equipment
The new vehicle has an average EPA mile/gallon (city and highway) rating of less than 19

It is interesting to see that Pataki focuses not only on demand part of the equation, but on supply part too. If he wants to promote domestic alternative and traditional fuel production – it is their money, and they do not overstep their authority like they are doing by trying to regulate CO2 emission.

Rafael:
NYC already has hefty bridges/tunnels tolls, and sky-high parking fees. No amount of additional tolls or taxes will matter, especially considering that NY is world financial capital and sizable portion of it population have enough money not to care about any additional gas taxes (to some extend it could be said about London). The reason why most of the people in NY prefer not to use cars is very simple: the city is so huge and traffic is so crowded, that it is way FASTER to use transportation means above or below street level away from traffic lights. My opinion is that improving of subway system is way more beneficial then squeezing car traffic.

What really would be beneficial is finally stop to block and begin to promote hybrid taxis, Prius or Camry based. Advantages of such vehicles in taxi fleets have been already proved, and could be especially beneficial for NYC with antiquated junk they use as taxis.

As for your notion for roots of September 11, it is very dangerous delusion trying to blame somebody else but Islamic fundamentalists for this tragedy. Like trying to find what Jewish did wrong to get the Holocaust.

Why is everyone focusing on NY? This is a call for a national policy.

Andrey -

in now way, shape or from did I accuse the Jews of being responsible for 9/11. That inference is totally baseless and nothing if not outrageous.

My comment was shorthand for the fact that Islamist terrorism did not arise in a vacuum but rather, represents a desparate and horrific response to decades of Western foreign policy in the Middle East.

In the 1980s, the US twisted Saudi Arabia's arm to deliver 50% of the funding plus tens of thousands of its sons to fight a very dirty guerilla war against the Soviets in Afghanistan, managed by the CIA by way of then-fundamentalist Pakistan against the Soviets in Afghanistan. When the Soviets were forced to retreat, the US ended its financial support for the Mujaheddin in short order, abandoning them to the devastation they had wrought. Saudi Arabia refused to let its veterans return, so they formed al-Qaeda instead. Unsurprisingly, they have an axe to grind.

Of course, the US has for many decades propped up the house of al-Saud and other Arab cleptocrats in spite of their egregious human rights violations. Indeed, the 1991 war to "liberate" Kuwait was fought expressly to re-instate the old regime with mere lip service given to the notion of democracy. Simply put, US administrations of both parties have wanted to keep the world's oil flowing at low cost. The Persian Gulf (incl Iraq) is the only place in the world where crude oil is still so easily produced that it is economical to maintain substantial excess production capacity.

Among other creature comforts, plentiful cheap oil allowed US citizens to live tens of miles from their places of work and commute there in vehicles that offered everything but fuel economy. Of course, Europeans, Japanese and other Westerners also enjoy far greater freedoms and higher standards of living than the vast majority of Arabs do.

Nevertheless, and regardless of whether you agree with them or not, the increasingly radicalized Arab masses apparently perceive the US as the root cause of their plight, even if the proximate cause is their own government - which they are not permitted to critizise. Indeed, Arab potentates have long manipulated their own media to deflect blame away from themselves.

Does any of this absolve the 19 terrorists of 9/11 of personal responsibility for their heinous crimes? No, absolutely not! But it does illustrate that the attack - or something like it - has been brewing for decades. Sadly, more are likely to follow, regardless of whether Bin Laden is ever caught.

The locations symbolizing the effort to maintain the global pecking order are perceived to be Washington, DC and New York city, specifically Wall Street. The targets were not accidental, it's just that the twin towers were an easier and more spectacular target than the NYSE. If al-Qaeda or some other Islamist terorist organization manages to strike in the US again, chances are it will pick a similar symbol of (as THEY see it) US oppression, be it political, military, economic or cultural.

This is why reducing demand for crude oil everywhere in the Western world - but especially in the US - is critical to defusing the dangerous political tension with the Arab world in the long term. Only when we no longer depend on the Persian Gulf for our own freedoms can we afford to challenge the repressive regimes there. If China decides to prop them up regardless (cp. Iran), the focus of Islamist hatred will eventually shift to that country.

Therefore, I welcome Gov. Pataki's initiative, even if it took five years to formulate. If NY and CA "get it", there is at least a chance that the rest of the US will follow at some point - no doubt kicking and screaming all the way to the bowser.

If the oil shale tech an Isreali company developed comes to fruition, will we accept it and kill off all renewable fuel programs designed to replace fossil energy?

I see a coming confrontation with Iran this year (or 2008, both election years), and we might need the extra production to hedge against a collapse of oil production in the Persian Gulf. If the US Fed. govt. decides to go for a crash course production setup, long term ramifications to the environment are not encouraging. Americans (and the rest of the world) may get comfortable with cheap, abundant syncrude from oil shale (predominantly US sourced). That will have consequences as to all those renewable energy programs up and running right now. Many of these programs are existing because of high/rising energy prices. If oil shale derived energy becomes available in OPEC like quantites, we could see the return to ~$30 barrel oil/~$1.50 ga/gasoline.

Rafael:
I understand your position. And I totally disagree with it. You are trying to find external reasons for rise of modern Islamic fundamentalism. I believe that the reasons lie inside of their society, which refuses to modernize itself according to demands of modern civilization.

There is no question that West totally underestimate the magnitude of disruption and turmoil which this problem could produce. Hence numerous mistakes of containment policy, some of which you described.

Oil independence, at first for N. America, then Europe and Japan/Korea, is the most important step which should be done. In that respect I too welcome bold step of Gov. Pataki.

P.S.
Rafael, please read my previous post again. As you put it, “in no way, shape, or form” I accused you for blaming September 11 on Jews. It was merely analogy: some people are trying to find what European Jews did wrong which lead to Holocaust. Some people are trying to find what Western democracies did wrong which lead to rise of Islamic terrorism.

I would like to see a scatter plot showing the public price of gasoline vs. fleet fuel economy for the top 20 PPP per capita countries in the world. Any guesses on the correlation coefficient of such a graph?

I agree with a point Andrey made before, which is that an improved public transit infrastructure can encourage commuters to leave their cars in favor of transit, reducing oil consumption. Beyond more buses and trains, we should also re-think typical modern zoning and planning models, which make life without a car too difficult. While NYC is hardly a suburban dystopia, there are many upstate communities which could use a bit of urban-core redevelopment.

If Gov. Pataki wants to promote alternatives to petroleum, having EV chargers at all city taxi stands and turnpike rest areas would be a good start.  Just about all of those have plenty of power, but no wires for the last hundred feet.

One phrase, carpool. Automated, networked (blackberry, cell phones, WiFi, etc), and flexible system of garages, pickup pts, express bus stops, express and HOV lanes, and rail/subways will do this. It could even be profitable, or self supporting, for the operators.

"Why is everyone focusing on NY? This is a call for a national policy."
I agree. All the states that have toll roads should increase their base toll rates to extremely high values and then reduce them as an exponential function of official EPA mileage ratings. Simple.

Bob -

one of the problems with extremely high tolls on some roads only is that traffic gets displaced to non-toll roads that were never designed to take the strain. This is happening in Germany, where heavy-duty trucks are thundering through once-quiet villages to avoid TollCollect charges. Similar problems exist in France, Italy, Spain etc. Beyond a certain level, you have to apply charges to the entire road network, e.g. via higher fuel taxes or vehicle license fees.

Andrey -

thank you for your thoughtful replies. I did indeed misinterpret your initial post to some extent, my apologies for that. However, I do think it is useful to analyze the root causes of catastrophes like 9/11 even if it is clear a priori who is to blame for them. This is because bitter experience ahs taught us Europeans that statistically, the likelihood of someone somewhere resorting to violent protest is much higher if there is a high level of anger and frustration among a large population. The terrorists are merely the tip of an iceberg of discontent.

Your point about the need for the Islamic world to reform itself internally is well taken. Unfortunately, that is not going to happen anytime soon, for the following historical reasons:

Early on, there been four competing schools of Sunni thought, or fiqh, with different interpretations of the hadith, a set of collected annotations to the Quran. In the 13th century, the Mongols of the Wihte Horde devastated the cities of Persia and Mesopotamia before themselves converting to Islam to more easily subjugate their new subjects. At the same time, they declared the "gates of the ijtihad" closed, essentially curtailing all philosophical discussion among Sunnis and suppressing it among the Shia, who maintain a quasi-heriditary clerical hierarchy.

The official Sunni doctrine was (and still is) that every possible interpretation of the Quran had already been presented - the faithful would have to seek salvation in following the Prophet's ways to the best of their ability, rather than in progressive thought and innovation. This is why political opposition to the status quo often takes the form of even more devout, even more fundamentalist forms of Islamic faith (cp. Islamic Brotherhood/Hamas, Taliban/al-Qaeda etc.)

Far ahead of the Christian world in the Middle Ages in all fields of scholarship, the Islamic world fell behind intellectually after the Reformation and especially, after the Enlightenment. In particular, the self-imposed aversion to the industrial revolution led to the slow demise of the Ottoman empire in the 19th century, followed by colonial rule by Britain and France, respectively.

The last redoubt of liberal Islam, al-Andalus in Spain, eventually fell to the Reyes Catolicos in the late 15th century. Many Arabs, especially those in the Western Maghreb, still consider this the paradise lost.

In most of Islam, spiritual and secular philosophy are tightly interwoven. When the Sunni Ottomans wrested control from the Mongols and observed the religious wars that were roiling Europe, they decided to continue the suppression of theological debate and strictly apply Sharia law. Even in modern-day secular Turkey, the government strictly enforces the teaching of Sunni Islam in spite of opposition from the liberal Shia Alevi sect as well as Christians and other faiths.

Other regimes are of course even less tolerant of religious or political plurality. This is why the notion of a re-opening of the gates of the ijtihad (cp. freedom of the press)is not going to happen in those countries as long as they are in power - which will be until the West can make do without their oil.

There are forward thinkers among Muslims in the US and Europe, but as the Theo van Gogh murder in the Netherlands illustrated, it remains extremely dangerous to challenge to established orthodoxy even in the relative safety of Western societies.

http://www.challenging-islam.org/articles/islamicreformation.htm

Separately, here's a comparison of per-capita CO2 emissions by country. US citizens emit 2-3 times as much as those of other Western countries. Against this backdrop, the 25% reduction in fuel consumption Gov. Pataki is calling for looks like a good first step.

http://www.nationmaster.com/graph/env_co2_emi_percap-environment-co2-emissions-per-capita

" Islamist terrorism did not arise in a vacuum but rather, represents a desparate and horrific response to decades of Western foreign policy in the Middle East."

Ok, so why does Islamic Terrorism happend in India, Sudan, Kenya, Philippines, Indonesia, Thailand, etc....

That's like trial to blame the actions of the KKK on the policies of their local government.

http://www.cnn.com/2006/WORLD/meast/04/24/egypt.blasts/index.html

http://www.cnn.com/2006/WORLD/africa/07/05/somalia.world.cup.ap/index.html

http://www.indiadaily.com/editorial/11065.asp

Ok, so why does Islamic Terrorism happend in India, Sudan, Kenya, Philippines, Indonesia, Thailand, etc....

That's like trial to blame the actions of the KKK on the policies of their local government.

http://www.cnn.com/2006/WORLD/meast/04/24/egypt.blasts/index.html

http://www.cnn.com/2006/WORLD/africa/07/05/somalia.world.cup.ap/index.html

http://www.indiadaily.com/editorial/11065.asp

Enough, please. There's plenty of other places to trot out your little theories about global politics etc.

Phil -

the India/Pakistan conflict has its roots in the aftermath of the rule of the Great Moghuls but it was Great Britain that allocated overwhelmingly (Sufi) Muslim Jammu and Kashmir to India during partition simply because that's what the local Hindu raj wanted.

Sudan, like Iraq, is an artificial country whose borders were drawn by the British with scant regard for the ethnic and sectarian rifts in that territory. These turned into a 20-year civil war that was a proxy fight between the US and first the Soviets and later China over access to the country's oil reserves. Eventually, these outside powers "brokered" a ceasefire and agreement for the warring parties to share power and oil production. Darfur is happening now because the African muslims were cut out of the deal and complained - interfering would rekindle the civil war.

In Kenya and Tanzania, I am aware only of terrorist attacks by al-Qaeda against the US embassies in 1998.

In the Phillipines, the Muslim minority on the southern island of Mindanao has long tried to win freedom from the mostly Christian rest of the country, which was defined by the Spaniards and later became a US colony in all but name. The insurgency there is more secessionist than ideological in nature.

Indonesia's case is roughly analogous to that of the Arab world. Its borders were defined by the Dutch. After decolonization, the US supported a very bloody military coup and purge (~500,000 murdered) by Gen. Suharto in 1965 against Pres. Sukarno because of the latter's perceived communist allegiance. The US continued to support "its" military dictatorship for decades, also because the country was a major oil exporter. It is no accident that Indonesia's Jemaah Islamiya has very close ties to al-Qaeda.

In Thailand, muslim insurgents in the South are looking to secede and link up with Malaysia. Afaik, the conflict is mostly homegrown and geographically contained, cp. the Philippines above. Of the countries you mention, this is the only example in which Western foreign policy has played no significant role.

Btw, the US tried to and failed to intervene in Somalia to prevent a terrorist haven (cp. Afghanistan) from emerging at the entrance to the Red Sea and Suez Canal. Somalia also has undeveloped oil fields off the coast.

As for your comment about the KKK, I simply don't understand it.

Rafael, you're not merely grossly wrong, you're also grossly off-topic.  Please ramble elsewhere.

Rafael:
Wow, quite knowledge on the subject. I would disagree on some points, but generally it is not much to add or discuss. Still, no matter the reasons, roots, or causes, Islam still could be characterized by two words :suppression (women, for example) and aggression (for infidels, for example). I do not see other way from this but Reformation (both religion and civic life).
Let us and this discussion.
Sorry, guys.

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