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State of the Union Preview: Twenty in Ten

Among the many policy initiatives President Bush will propose in his 2007 State of the Union Address tonight is the goal of reducing US gasoline usage by 20% in the next 10 years—“Twenty in Ten”—through a program that includes increasing the required use of renewable and alternative fuels and increasing fuel-efficiency standards for cars. The plan would result in reducing oil consumption by 10% in 2017, or 2 million barrels per day.

The White House released a compilation of all the policy initiatives today prior to the actual speech tonight.

To achieve the Twenty in Ten goal, the President will propose the following:

A 35 Billion Gallon Renewable Fuel Standard by 2017. This is nearly five times the 7.5 billion gallons by 2012 currently set by the existing Renewable Fuels Standard in law. Achieving the 35 billion gallon mark in 2017 would displace 15% of projected annual gasoline use.

The new proposal increases the scope of the current RFS, expanding it to an Alternative Fuel Standard (AFS) which includes sources such as corn ethanol, cellulosic ethanol, biodiesel, methanol, butanol, hydrogen, and other alternative fuels.

The EPA Administrator and the Secretaries of Agriculture and Energy will have authority to waive or modify the standard if they deem it necessary, and the new fuel standard will include an automatic “safety valve” to protect against unforeseen increases in the prices of alternative fuels or their feedstocks.

The increased and expanded fuel standard creates a tremendous incentive for research, development, and private investment into alternatives to oil, according to the Administration, and will encourage needed advances in crop yields, optimization of crops and cellulosic materials as fuel feedstock, and cost reduction in the production of cellulosic ethanol and other alternative fuels.

The 2008 Presidential budget provides $179 million for the President’s Biofuels Initiative, an increase of $29 million (19%) compared to the 2007 budget. The Biofuels Initiative aims to accelerate cost reduction and commercial development of cellulosic ethanol, which can be made from abundant biomass materials, including agricultural waste and forest residues, and from dedicated energy crops such as switchgrass.

Reforming Corporate Average Fuel Economy (CAFE) Standards for Cars and Extending the Current Light Truck Rule. The Whitehouse suggests that the result would be a reduction in projected annual gasoline use by up to 8.5 billion gallons in 2017—a further 5% reduction.

Achieving that level of reduction assumes that on average, fuel efficiency standards for both light trucks and passenger cars are increased 4% per year, beginning in Model Year 2010 for cars and Model Year 2012 for light trucks.

The Secretary of Transportation will determine the actual standard and fuel savings in a flexible rulemaking process, according to the Administration. The President will insist that Congress not legislate a specific numeric fuel economy standard, but leave that to the Secretary of Transportation.

Congress reformed the CAFE rules for light-trucks in 2006 (earlier post), but left the rules for cars untouched. The reformed CAFE rules for light-trucks establishes individual targets for automakers based on a combination of different targets based on vehicle footprints and the composition of the automakers’s new car fleets. The President is asking Congress to authorize the Secretary of Transportation to apply the same kind of attribute-based method to passenger cars.

The proposal also would allow automakers to buy and sell CAFE credits.

Reducing Congestion, Commute Times and Associated Fuel Consumption. In 2003, drivers in America’s 85 most congested urban areas experienced 3.7 billion hours of travel delay and wasted 2.3 billion gallons of fuel, costing a total of $63 billion.

The 2008 Budget redirects DOT funds to a new $175 million highway congestion initiative for the demonstration of ideas to address this problem including: congestion pricing, commuter transit services, commitments from employers to expand work schedule flexibility, and faster deployment of real-time traffic information.

Stepping Up Domestic Oil Production. The President will call for Congressional action to authorize oil and gas exploration in the Arctic National Wildlife Refuge, to develop legislation to encourage investments in refinery capacity, and to encourage all parties to resolve remaining issues regarding the Alaska Natural Gas Pipeline.

Doubling The Current Capacity Of The Strategic Petroleum Reserve. The President will propose doubling the current capacity of the Strategic Petroleum Reserve (SPR) to 1.5 billion barrels by 2027. Doubling the SPR will provide approximately 97 days of net oil import protection, enhancing America’s ability to respond to potential oil disruptions.

The SPR currently contains 691 million barrels. Due to increased consumption, this represents only 55 days of net oil imports. In 1985, the SPR, with 493 million barrels of oil, represented 118 days of net oil imports.

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Comments

Engineer-Poet

Raising the price of something folks use little of doesn't exactly hit them hard, does it?  And you can always cut their taxes by enough to make all but the most wasteful poor folks come out ahead.  As I keep saying, 140 billion gallons is about 700 gallons per adult.  An extra $2/gallon is roughly equal to the employee's FICA/Medicare taxes on the first $20,000/year of wages.  The working poor who don't own cars could just pocket the money.

You said that the gas tax as a conservation incentive has "failed" (despite it working spectacularly in Europe and Britain), even though you admitted it has never been tried in the USA ("offered repeatedly", but never adopted).  This is more than slightly ironic.

CAFE standards are the failure.  They led to explosions in miles driven and urban sprawl, while fuel consumption continued to rise.  I suspect that whatever you're still pushing, history has already proven it a failure right here.

wintermane

A gas tax wont work now becaue we are on the edge of replacing gas;/

A switch from income to sales tax WOULD do the trick.. well income to vat tax realy. secialy if certain things had larger vat taxes.
The factal problem tho is alot of govenors know thier states DEPEND on tourism from other states... Alot of cties are completely dependant on travelers from overseas and the us. You can imagine what would happen to say disneyland or ;as vagas or new york if the gas prices doubled...

And if the domestic car makers had to make a dash to smaller cars.. they would do it by shuttering ameican plants and expanding mexican and chinese plants. They have already demonstracted as much.

And would tucking becomes more spendy andall food and everything else more endy even before the vat...

Ad who would be exempt? farms? schoopl buss fleets.. mass transit? gov cars? fat ass buricrats? that wierd guy down the street who never leaves his home yet owns more stuff then god ad doesnt mail order it....

And how many decades AFTER climate change has destriyed civilizarion will the burcrats be fighthing over who gets what?

I personaly think the fastest way that things will change is when mother nature beats the sheep out of us and KILLS a bis ass load of us.

Engineer-Poet

What do you mean, "a gas tax won't work now becaue we are on the edge of replacing gas"?  That is the most nonsensical thing I've seen from you in weeks (and you post some doozies).

If we're almost in a position to replace gas, now is exactly the right time to tax it.  Start the process a little earlier and give it a nice, firm push forward.

Van

Hi E-P, the attempt to raise prices by an across the board tax, recall the BTU tax?, or the 50 cents a gallon tax?, has been tried repeatedly. Rather than tear down the tried and true method of conservation used for water and electricity, why not address the failure to adopt your strategy for the past 30 years.

Taxes on vehicles (the ol gas guzzer tax) or the vehicle based CAFE standards have failed, and I believe were doomed to failure from the get go.

Lets create a pricing structure that encourages conservation, rather than suggest one that disproportionally affects those least able to further reduce their consumption. They are alreadly driving old small cars as few miles as possible. Let's go after all the SUV's that is where the fat in our consumption is.

wintermane

Because no politico will waste that much p9olitical clout to get a gas tax going knowing it will generate revenue only for a few years and likely only from the poor.
They will suggest it but they wont fight for it.

ANDthe main moneybank of gas taxes is still roadworks and they are already working on a shft to other forms of tax to replace gas tax because gas usage is going to go down.

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