Senator Orrin Hatch (R-Utah), supported by a coalition of environmental groups, automakers, and alternative fuel associations, re-introduced to Congress for the third time the CLEAR ACT—Clean Efficient Automobiles Resulting from Advanced Car Technologies.

Is it any wonder [absent the “pathetic” lack of an energy policy] that we have dramatically increased our reliance on foreign oil, and that prices have risen to reflect this trend? What is truly disturbing to me is that the global energy supply is also being outpaced by global demand for oil.

In other words, our energy future looks bleak. If our nation is forced to rely on oil imports to meet our future energy needs, we are headed for stormy weather. Currently our transportation sector in the U.S. accounts for nearly two-thirds of all oil consumption nationwide.

The CLEAR ACT is designed to lower the cost barriers to implementing alternative fuels and advanced technologies through the use of tax incentives, most of which go directly to the consumer.

• A base credit of up to $1,000 on hybrid-electric vehicles for the amount of electric drive power along with an additional credit of up to $3,000 depending upon fuel economy performance. These credits are available for 6 years.

• A base credit of $4,000 and an incremental credit of $2,000 for battery-electric vehicles with extended range or payload capabilities.

• A base credit of up to $2,500 for dedicated alternative-fuel vehicles (CNG, LPG, LNG) with an additional $1,500 credit for vehicles certified to Super Ultra Low Emission (SULEV) standards. Flex-fuel vehicles are not eligible since they can operate on either gasoline or E85 (ethanol) and are available in the market without any incremental cost.

• A $4,000 base credit for fuel cell vehicles along with an additional credit of up to $4,000 depending on fuel economy performance. These credits are available for ten years.

• Credits for medium- and heavy-duty vehicles based on individual weight categories and amounts varying with the largest vehicles over 26,000 pounds receiving up to $40,000 for fuel cell or battery electric, $32,000 for alternative fuel, or $24,000 for hybrid applications.

• A credit of $0.50 cents for every gallon of gas equivalent of alternative fuel (such as natural gas, LNG, LPG, hydrogen, B100 and methanol) is provided to the retail distributor. This credit is available for 6 years. (Presumably it is up to the distributor to decide whether or not to reflect the credit in its end-user pricing.)

• An extension of an existing $100,000 tax deduction for 10 years and a credit for actual costs of up to $30,000 for the installation of alternative fuel sites available to the public.

All of the technologies promoted in the CLEAR ACT—whether they be battery and electric motor technologies or advances in fuel storage and alternative fuel infrastructure—lead us closer to the hydrogen fuel cell vehicle. I believe fuel cells are in our future. However, even if the widespread use of fuel cell vehicles never becomes a reality, advances in these other technologies provide a dramatic social benefit on their own.

I have heard one or two people question the need for incentives for hybrid vehicles when people are lining up to buy them. It may be true that demand for these vehicles is high in a few areas. However, these high-demand areas tend to have local or state incentives in place for the purchase of these vehicles. Where incentives are not in place, hybrid sales are minimal. This demonstrates that incentives can indeed provide a market breakthrough to consumer acceptance of alternative vehicles.

With the CLEAR ACT, we are trying to provide that breakthrough on a national scale. And the numbers show that a breakthrough is desperately needed. It may be true that hybrid sales have doubled in the last couple of years, but they still represent a minuscule 0.48 percent of cars that were sold in 2004. If we are serious about promoting hybrid vehicles in this country, we will have to aim much, much higher than that.