Bipartisan groups in the House and Senate today introduced their own versions of bills designed to reduce the consumption of oil through the promotion of fuel-efficient vehicles, including plug-in hybrids, and alternative fuels, primarily ethanol. (Earlier post.)
The Vehicle and Fuel Choices for American Security Act, introduced by Senators Evan Bayh (D-IN), Joe Lieberman (D-CT), Sam Brownback (R-KS), Lindsey Graham (R-SC), Ken Salazar (D-CO), Norm Coleman (R-MN) and Jeff Sessions (R-AL), mandates a reduction in oil consumption of 2.5 million barrels per day by 2016, 7 million barrels per day by 2026 and 10 million barrels per day by 2031.
The Senate bill sets targets for manufacturers to produce flexible fuel vehicles (FFV), alternative fueled vehicles, hybrids, plug-in hybrids, fuel cell vehicles or other qualified vehicles that meet a performance standard of 175% of average fleet fuel economy—starting at 10% in 2012 and rising to 50% in 2016. After 2016 at least 10% of the 50% requirement must be met by hybrids, advanced diesels, plug-in hybrids and other non-FFV vehicles.
The bill also requires the Secretary of Energy to issue regulations for federal and state fleets covered by the Energy Policy Act of 1992 to reduce petroleum consumption by 30% from a 1999 baseline by FY2016. It requires 30% of federal fleet requirement (22.5%-25% of the total fleet requirement) to be met by advanced diesels, hybrids or plug-in hybrids in 2016. Allows electric drive technology vehicles (hybrids) to qualify under the Federal Fleet requirements of EPAct.
To support the development of more fuel efficient vehicles, the bill:
Provides retooling tax credits for manufacturers and suppliers of advanced diesels and hybrids (Nearly identical to Levin-Bayh amendment to the energy bill);
Creates a tire efficiency program for tires used on light duty vehicles;
Creates a fuel economy testing program and the implementation of efficiency standards for heavy duty vehicles (trucks, buses, etc);
Lifts the per manufacturer cap on consumer tax credits for the purchase of hybrids and advanced diesels;
Provides a tax credit for large private fleets for purchasing more efficient vehicles for their fleets;
Creates an R&D program for electric drive transportation and light-weight materials;
Encourages local educational agencies to develop a policy to reduce the incidence of school bus idling; and
Closes the SUV tax loophole which adversely encourages small businesses to purchase SUVs over other vehicles.
On the issue of fuels, the bill:
Increases the ethanol infrastructure tax credit to 50%;
Uses CAFE penalties to fund DOE ethanol infrastructure grants program;
Changes the authorization for production incentives for cellulosic ethanol to $200 million for five years;
Sets an additional near-term benchmark for the use of cellulosic ethanol as part of the renewable fuels standard included in the 2005 Energy Policy Act; and
Creates a grant program to encourage new mass transit facilities and to build commercial developments around them.
The bill also provides funding for public education.
The House version of the bill, the Fuel Choices for American Security Act, introduced by Congressmen Eliot Engel (D-NY) and Jack Kingston (R-GA), has a slightly different timetable on oil reduction, seeking a 2.5 million barrel per day drop by 2015 and 5 million barrels per day by 2025.
Further detail on the House bill to come.