Fuel economy standards. For light-duty vehicles, the bill mandates an average fuel economy for new cars and light trucks (up to 10,000 lbs) of 35 mpg US by 2020.  The Department of Transportation (through the National Highway Traffic Safety Administration, NHTSA) would establish average fuel economy standards in each model year beginning with model year 2011 to achieve the 35 mpg target. For model years 2021 through 2030, the average fuel economy will need to increase at least 4% over the level of the prior year (rounded to the nearest 1/10 mile per gallon).

That structure would result in 2030 light-duty new vehicle fleet economy of approximately 52 mpg (4.5 liters/100km)—slightly more than doubling the 2006 average of 25.4 mpg (combined cars and trucks).

I know that the auto industry is still wavering on this issue.  I met with the CEOs of the big three automakers last week, and here is what I told them:  The debate on raising CAFE standards should be over. It will happen.

—Senator Harry Reid (D-NV), Majority Leader

For medium- and heavy-duty trucks, NHTSA would first establish baseline fuel economy standards, then increase those standards by 4% per year over the previous year.

The legislation allows NHTSA to develop the standards using a vehicle attribute system and to express the standards in the form of a mathematical function. The Secretary of Transportation has the discretion to lower the rate of improvement of the fuel economy standard for passenger cars and light, medium and heavy duty trucks, if analysis leads to the conclusion that the cost-effectiveness and maximum feasible level of improvement is less than 4% for that model year.

NHTSA would also have to initiate a rulemaking in 2010 to issue standards to mitigate the difference in weight and size between the largest and smallest vehicles, and to improve bumper height compatibility between vehicles.

The legislation also mandates a National Academy of Sciences (NAS) study to update the 2002 NAS fuel economy technology study from 2002 and to evaluate how the technologies could be integrated to meet the reformed fuel economy attribute system.  The study is to be commissioned as soon as feasible, and the NAS must report its findings with 18 months of the study being commissioned.  The study will be updated every five years.

The proposed legislation also enables the establishment of a fuel economy credit trading program to allow manufacturers whose automobiles exceed the average fuel economy standards to earn credits to be sold to manufacturers whose automobiles fail to achieve the prescribed standards.  Automakers may carry forward earned fuel economy credits for 5 years as opposed to the 3 years as currently permitted.

Biofuels. The bill establishes a renewable fuels standard of 36 billion gallons per year by 2022. The standard includes a requirement for advanced biofuels, which does not include ethanol derived from corn starch, to meet 60% of the total renewable fuel requirement by 2022.  The bill includes incentives for advanced biofuels, including cellulosic ethanol, such as grants for infrastructure development, and financial support for research and development.

The bill provides funding for the development of alternative fuel infrastructure and pilot production programs, and at least 11 bioenergy research centers.

It also calls for a study into the feasibility of using ethanol-gasoline blends of up to 40% (E40) and the feasibility of ethanol pipelines.

Among the other provisions of the bill is the call for a study evaluating current methods for lifecycle analysis (LCA) of fuels and recommending a method for performing a simplified, streamlined LCA of the fossil and renewable carbon content of biofuels.

High Efficiency Vehicles, Advanced Batteries, and Energy Storage. Among the initiatives in this section of the bill is an immediate R&D program focused on lightweight materials such as steel alloys, fiberglass, and carbon composites) to enable weight reduction in vehicles to improve fuel efficiency without compromising safety, and to reduce the cost of those materials.

The bill establishes an incentive program for the manufacture of advanced technology vehicles—vehicles that meet Tier 2 Bin 5 or better emissions standards, at that achieved at least 125% of the average base year fuel economy, calculated on an energy-equivalent basis, for vehicles of a substantially similar footprint.

For energy storage, the bill directs the Department of Energy to establish a research, development, and demonstration program to support the ability of the United States to remain globally competitive in energy storage systems for motor transportation and electricity transmission and distribution.

The $500-million basic research program is to include materials design; materials synthesis and characterization; electrolytes, including bioelectrolytes; surface and interface dynamics; and modeling and simulation. The $800-million applied research program is to include ultracapacitors; flywheels; batteries; compressed air energy systems; power conditioning electronics; and manufacturing technologies for energy storage systems.

The DOE is to establish through competitive bids 4 energy storage research centers to translate basic research into applied technologies. This is envisioned to be a $1-billion program.

The bill also directs the DOE to establish a competitive program to provide grants for demonstrations of electric drive vehicles.

This section of the bill also sets a US goal for gasoline reduction from projected levels by 20% by calendar year 2017; 35% by calendar year 2025; and by 45% by calendar year 2030. 

Carbon Capture & Storage Research, Development, and Demonstration. The bill amends the  the Energy Policy Act of 2005 to focus on demonstration of CCS technologies, not just research and development. It calls for: the promotion of regional carbon sequestration partnerships to conduct geologic sequestration tests involving carbon dioxide in a variety of geological settings;  at least seven initial large-volume sequestration tests for geological containment of carbon dioxide; conduct a national assessment of geologic storage capacity; and implementation a new large-scale commercial carbon capture demonstration program.

Energy Efficiency. The bill sets new efficiency standards for new incandescent and fluorescent light, for heating and cooling and water-using products, residential boilers and home appliances. It also requires all general purpose replacement lighting in Federal buildings to be Energy Star products.

Each Federal agency will need to achieve at least a 20% reduction in consumption of petroleum by 2015, and increase alternative fuel consumption by 10% annually. All Federal buildings will need to reduce energy consumption by 30% by 2015. The Federal government will have to obtain not less than 15% of its electricity from renewable resources. 

Resources:

• S.1419

• Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards (NAS, 2002)