God: as in “acts of God” such as hurricanes Katrina and Rita that expose the fragile state of domestic oil refinement capability. Guns: as in the undue influence many fear our dependence on Middle Eastern oil wields over foreign policy (by providing an economic base for terrorism and resulting in the need for military interventions). Growth: as in the dramatic growth of the economies of China and India that is driving up global demand for oil. Greens: as in the pressures to reduce emissions, and respond to the issue of climate change.

Ultimately, an effective response to all of the above boils down to this: Use less oil. More cleanly and efficiently burn the petroleum-based fuels we do use. Find alternatives. And do it all without adversely affecting the economy.

Clearly, the federal government, and not just the auto industry, has a leading role to play in achieving those goals.

After briefly noting progress being made on long-term development of fuel cell technology and hydrogen infrastructure via the private-public partnerships, LaSorda focused on near-term solutions, and focused on three primary technology platforms: hybrids, diesels, and biofuels.

Crediting Toyota, Honda and Ford for taking the lead in bringing hybrids to the US market, LaSorda noted the co-development of the two-mode full hybrid architecture with GM and BMW, and stated again that Chrysler will introduce a hybrid version of the Durango in the 2008 model year.

He then moved on to spend most of his remaining remarks on the topic of diesels and biofuels, including noting the recent BLUETEC announcements (earlier post).

In 2005, about two-thirds of the Chrysler and Jeep vehicles that we sold in Europe were diesel powered. If Chrysler Group’s diesel mix in the US were the same as it is in Europe, our CAFE would improve by three miles per gallon!

[...] While diesel technology alone can make big strides toward helping us meet our national energy, environment, and security objectives, when you add biodiesel and other biofuels, it gets really interesting.

We think biofuels are a win-win proposition. Biofuels represent a huge opportunity to reduce our consumption of conventional petroleum-based fuel (and our dependence on foreign oil). Biofuels reduce lifecycle CO2 (greenhouse gas) emissions, because the plants from which they’re derived absorb carbon dioxide from the atmosphere during growth. Biofuels reduce tailpipe emissions of particulates, carbon monoxide and hydrocarbons compared with conventional diesel fuel. And biofuels support the American agricultural economy.

On the ethanol side, LaSorda noted that Chrysler’s current product plan calls for about 25% of total production by 2008 to be flexible-fuel vehicles (capable of burning either gasoline or E85).

Back here at home, our current product plan commits us to producing, by the 2008 model year, just under 500,000 flexible fuel vehicles annually for our U.S. fleet. That’s roughly 25 percent of our production. If all of them were operated on E-85 instead of gasoline, it would save 250 million gallons of petroleum per year—roughly the amount of oil we import from Libya each year.

Oil companies can re-invent themselves, too—much as the automotive industry has in recent years. Investing in the growing biodiesel and flex fuel infrastructure would be a smart move for oil companies—both for their own growth, and for our country’s energy independence.