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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.

Resources:

Comments

Andrey

Planck:

Nixon and Carter did not have anything in their sleeves at the time but more drilling. Now we have tons of new technologies.

I got a question. Pres. Bush calls for 35 B gallons of renewable and ALTERNATIVE fuels. Does CNG, LNG, CTL, GTL fuels, including methanol and DME from NG, and PT synthetic fuels from coal count as “alternatives”?

Mad Max

Cervus, indeed Ford and GM do produce small cars in Europe and in Asia, and make a profit by doing just that.

Making a profit by producing the same sort of cars in the USA may be difficult, but surely is not impossible.

Mad Max

ddashner,

the point is not to raise taxes, is to raise taxes ON FUEL. This measure can be offset by a reduction of some other tax (you choose the most unpopular) so that the average taxpayer breaks even.

sebastian

anrnie in CA told the same 20 in 10 stuff 1,5 weeks ago...

seb

arnie^^

Van

The solution to our addiction to foreign oil is simple and obvious, but the American people are unwilling to demand the solution. In this thread, not one poster has stepped up to the plate and mentioned the elephant in the room. Not one.

People will buy more fuel efficient cars AND drive them less, if fuel pricing was structured to provide an incentive for conservation.

For example, we in America "burn" about 2 gallons a day per licenced driver. That works out to be about 60 gallons a month. If the fuel retailers(or states or feds) issued a "Fuel (Gas) Card" which had to be used to authorize pump disbursement, then individual fuel consumption could be tracted. If a person had used less than 60 gallons in the last 30 days, the price would be market price. If and when the "cardholder's" comsuption went over 60 gallons, then a surcharge, say 50 cents per gallon, kicks in. The revenue from this tax would be used to provide purchase tax breaks for high mileage vehicles such as Plug-in Hybrids and Clean Diesels.

We use this method of pricing structure to conserve Electricity and Water, but not fuel. Instead we continue to advocate "solutions" that have not worked for more than 30 years. Amazing and sad!

John  Ard

Van:
That's an interesting soltion, but how would these cards be distributed? Maybe with the purchase of a vehicle? If such a system were implemented it would need a higher limit for vehicles listed for work use. The contractor I work for goes through much more than 60 gallons per month per vehicle just getting to the jobsites everyday.

wintermane

Im saying every time you see a small car splat you increase the size of your next car;/ Its an obvious responce to an obvious risk.

tripp

Come to colorado wintermane. When it snows there are always rollovers on the highways, some of which look pretty nasty. They're always trucks and SUVS. In fact, a disproportionate number of the abandoned vehicles in a snow storm are SUVs. The fact that SUVs are deathtraps in a rollover accident doesn't seem to deter people from buying them. Quite the opposite. The majority of vehicles here are SUVs.

JMartin

Bush grabs an existing headline and touts it as his policy (al la Put a Man on Mars, following the Mars rover success).

20 in 10 is not a policy, just a slogan for political position. The market is way ahead of Bush on this. It is one of the few slogans he has hit on that may prove successful, simply because we are moving fast, with or without the Government. (Unlike the "Hydrogen Economy" which was likewise a play on publicity the Auto Industry was already putting out before Bush ever smoked Hydrogen.)

pete

To me this smells more like a plan put in place to prevent the democratically controlled congress and senate to put tougher measures into legislation. Especially this part:

"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."

peter

Regarding small car safety. In 2002 33% of all traffic fatalities were caused by rollowers according to the National Highway Transportation Safety Administration. So enjoy your death trap SUV.

Engineer-Poet

Cervus:

The US automakers are gaming the system for CAFE numbers, not real economy.  Raising real economy by putting a hybrid drivetrain in a Tahoe or Expedition would require a battery twice or more the size and expense of a Prius.  Faking it by spending $100 on a flex-fuel sensor to exploit the E85 loophole yields far more CAFE bang for the buck, and the idiotic American consumer keeps buying them.

We need someone with patriot cred who will stand up and say that guzzling gas is giving aid and comfort to the enemy; it is treason, pure and simple.

"Pace cars" and whatnot lead to huge backups and dangerous braking waves.  You'd have to be insane to propose such a thing; how much blood for oil, indeed?

antigravity

in ten years time what will the price of oil be, 50$ a barrel 100$ or 150$ my guess is it will be over 100$ if you can find somewhere to sell it to you
if people cant see or dont want to see this hard luck, in the next few years millions of fools will buy SUVs hummers ect, people like this will get everything they deserve
it is the rising cost of oil which will cut comsumption
people will change, only when they have no other choice

wintermane

We drive sedans so no we dont face rolovers:)

Its just AROUND HERE with all the heavy haulers small cars are just too deadly to daily commute. Truckers dont see you and there simply are too many uncontrolable disasters.

In fact every member of my family has been in an accident involving a semi. Every one of us. On several of those accidetans the police officer told us that if not for the car being as large as it was we would have died before paramedics got to us.

Oh and on suvs.In general unless its a midsized syv and low to the ground to boot you should not drive an suv unless you have driven a truck and understand how to handle them in accidents. Because no matter what its csalled most suvs and quite a few minivans are trucks. Abd suffer from the top heavy design.

Mad Max

tripp,

if SUVs are really dangerous, let insurance companies to persuade drivers to switch to other model by means of higher premiums. After all, they should be able to assess risks.

Van

John Ard, the "Gas Card" would be issued to a licensed driver, and would not be tied to any particular vehicle.
When it is inserted in the card slot at the pump, the display would show the gallons used in the last 60 days, such that folks would become aware of their individual consuption.

There would be no need to special exclusions, because the well connected would simply carve out exceptions for driving to work or taking the kids to school, and on and on. Just as today, when fuel costs go up, the cost is passed along in the price of the service or product, so business expenses would not need to be excluded.

As I said, the solution is obvious, it is the will that is lacking. We want to burn as much gas as we can afford to burn, that is the short and sweet of it. Drive down the freeway and notice that most vehicles are SUV's with one person aboard. We are wasting fuel big time, and paying for it with the coin of the realm, the blood of our sons. I believe it will take another attack here in the USA for us to do what is necessary to cut the funding of the terrorists.

Engineer-Poet

Van, if you think re-writing the software of all pumps with credit-card readers is a simple, cheap or quick thing (and what for the pumps which don't?), you're dreaming.

Thomas Pedersen

ddashner wrote:

It amazes me that nearly all the proposed "solutions" here are to raise taxes. More and higher taxes aren't the solution to all our problems, they are problems in themselves. Give the public quality fuel efficient cars and they will buy them.

But the problem is that quality fuel efficient cars are expensive! Otherwise they would be selling them.

The current low fuel price (compared to 6 $/gal in Europe) is that it favours spending little on engine technology and a lot cupholders and bulk.

For cars to be fuel efficient, the cost of the drivetrain has to take a greater share of the total cost of the car, which leads to smaller cars (not from SUV to subcompacts, but maybe one size smaller). This is percieved as a sacrifice of quality of life, which most people are unvilling to make. Myself included, even though I am a GCC reader...

A fuel tax (at least 1 $/gal) would shift the tradeoff between engine technology and car size towards smaller cars (which in itself increases gas mileage) with more efficient engine, PHEVs, etc.

I realize I am pointing out the obvious, but I felt it needed to be stressed that more economical cars will be more expensive for a given vehicle size.

This is why I believe a fuel tax is the easiest way of changing behaviour.

Engineer-Poet

I spent several thousand dollars to achieve a 50% increase in fuel economy.  I got a pretty good towing capacity along with it, though.

To get another 50% would require going from ~40 MPG to ~60 MPG.  A PHEV would certainly do it, and a few thousand seems to be what it would cost.  When it comes time to replace this car (another 7-8 years and 200,000 miles at the rate I go through them) I hope to have second and third generation PHEV's to choose from.

Van

Hi Engineer-Poet, I can remember when the pumps did not have card readers, so altering them is a smaller step. And while many stations do not have pump located cardreaders, all the stations have card readers inside at the attendant location where pump use is authorized.

As I said, because solution is simple and obvious, the reason why we have not done it already is not technological, but behavioral, we are not ready to do what it takes.

Engineer-Poet

No, the simple and obvious solution is a straight fuel tax matched by other tax reductions or straight subsidies.  It requires no changes in infrastructure, just a change in forms and software which changes every year anyway.

tom deplume

If we had stuck with the decreasing oil import limits plan of Carter we would have stopped importing oil long ago. Unfortunately we would have multiplied the use of coal via CTL.

wintermane

If we completely went from an income tax to a sales tax then that would indeed get more people who drive large cars for no reason to drive smaller cars. But it wqould litteraly have to be a total comnversion frpm income to sales taxes and yes gop is very much for that.

What we wont go for is a new tax on top of income tazes and everything else. This would have to replace the old corrupt system with a new corrupt system;/

Van

Hi E-P, raising the price on the folks who use little gas is not the solution. We do not conserve water or electricity using that method. That is the failed "solution" offered 30 years ago and repeatedly since.

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