Challenges & opportunities for alternative transportation fuels and vehicles. U.S. House hearing, 2011

Preface. Congress is aware that an energy crisis looms, though they seldom acknowledge or deal with it. Here are a few excerpts from this U.S. House hearing (2011) The American energy initiative part 6: Challenges & opportunities for alternative transportation fuels and vehicles.

Michael F. Doyle, Pennsylvania. It seems like we repeat this cycle in this country decade after decade. Gasoline prices get high and there is great interest in alternative fuels and vehicles. And there is this great effort to move forward and then all of a sudden the OPEC ministers get together, or the speculators stop speculating and gasoline prices come down, and we get lulled back in this complacency that everything is okay now and we can go back to our big SUV’s and just keep putting gasoline in cars. You wonder how many times you let the board hit you in the face before you duck. How do we incentivize consumers to start driving more fuel efficient vehicles?

Admiral Dennis Blair, U.S. Navy, former director of national intelligence. At the crux of America’s oil dependence is the energy demand of the transportation sector. At roughly 14 million barrels per day, our transportation sector alone consumes more oil than any national economy in the world. Our cars and trucks are 94% reliant on oil-based fuel for their energy, with no substitutes immediately available in anything approaching sufficient quantities. The lynch pin of any plan that is serious about confronting oil dependence must be the transformation of a transportation system that today is almost entirely dependent on petroleum. Make no mistake: the dangers posed by our oil dependence are not theoretical. Our safety and security are threatened by oil dependence, and every single day that we do not act is another day that we remain vulnerable.

JAMES T. BARTIS, SENIOR POLICY RESEARCHER, RAND CORPORATION. Considering (1) the very limited production potential for fuels derived from animal fats and waste oils, (2) the highly uncertain prospects for affordable, low greenhouse-gas fuels derived from seed crops, and (3) the early development status of algae/microbe-based concepts, renewable oils do not constitute a credible, climate friendly option for meeting an appreciable fraction of civilian or military fuel needs over the next decade. Because of limited production potential, fuels derived from animal fats, waste oils, and seed oils will never have a significant role in the larger domestic commercial marketplace. For seed oils the main problem is the low oil yield per acre. 200,000 barrels per day of biodiesel is only one percent of current U.S. oil consumption. Producing this amount from seed oils would require about 10% of the total crop land under cultivation in the United States.

Animal fats and other waste oils may offer an affordable low-greenhouse-gas route to hydro-treated renewable oils. But these fats and waste oils are also traditionally used in other nonfuel applications, including animal feed additives and the manufacture of soaps, household cleaners, resins, and plastics. Because the supply of these feedstocks is limited, substitutes would need to be found for use in these other applications. These substitutes may cause additional greenhouse gas emissions. Production potential is also a clear issue with animal fats and waste oils: The available supply of these feedstocks will likely limit production to no more than 30,000 barrels per day.

Rich Kolodziej, President of NGVAmerica. While there are many options to displace gasoline in light duty vehicles, there are very few options to displace diesel in trucks and buses and other heavier vehicles. Of those options, natural gas can make the biggest impact the fastest. This is important since trucks are the economic lifeblood of America. Everything we buy moves by truck.

Alice Friedemann www.energyskeptic.com Author of Life After Fossil Fuels: A Reality Check on Alternative Energy; When Trucks Stop Running: Energy and the Future of Transportation”, Barriers to Making Algal Biofuels, & “Crunch! Whole Grain Artisan Chips and Crackers”. Women in ecology Podcasts: WGBH, Jore, Planet: Critical, Crazy Town, Collapse Chronicles, Derrick Jensen, Practical Prepping, Kunstler 253 &278, Peak Prosperity, Index of best energyskeptic posts

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House 112-45. May 5, 2011. The American energy initiative part 6: Challenges & opportunities for alternative transportation fuels and vehicles. House of Representatives. Subcommittee on energy and power of the committee on energy and commerce. 204 pages.

Excerpts:

Mr. WHITFIELD, Kentucky. The topic today is focusing on the challenges and opportunities for alternative transportation, fuels, and vehicles. With gasoline prices exceeding $4.00 a gallon in many parts of the country, it is timely that we look at alternatives to petroleum derived fuels for the transportation sector. Efforts to diversify away from reliance on oil for cars and trucks have been underway for a number of years and we know that it has been a goal of the U.S. Government to be less dependent upon foreign oil for many, many, many years. And so the purpose of today’s hearing is to provide an overview of these alternative opportunities.

Biofuels are but one of the alternative fuels in vehicles in the works. Vehicles that run on natural gas continues to make inroads especially in the heavy duty sector, propane vehicles are also seeing increased use. Progress continues on electric vehicles and even coal to liquids is another possible non-petroleum source of transportation fuel. Each alternative fuel and vehicle has its unique mix of attributes and more than one will play a constructive role it the vehicles of the future. However, as I indicated earlier there are obstacles to overcome before new fuels and vehicles and technology can take significant market share away from petroleum. Not only must the alternative fuel in the vehicles be economically and technologically up to the task, but the fueling infrastructure must also be in place. As we are learning with ethanol, we can get there but it is not always an easy path.

HENRY A. WAXMAN, CALIFORNIA. The fact is, more U.S. production is never going to be enough to appreciably reduce global oil prices or U.S. imports of foreign oil. We use 25% of the world’s oil, but we only have 2% of the world’s oil reserves. So we could double or even triple domestic production and it is simply not going to affect global oil prices all that much.

JOHN SULLIVAN, OKLAHOMA. The U.S. has enough natural gas reserves to last us more than 125 years. By diversifying our vehicle fleets, heavy duty trucks, by utilizing natural gas as a transportation fuel we can significantly reduce U.S. demand for foreign oil. In the near term, natural gas is the best present day alternative to imported oil, one that can be put in place virtually overnight.

For far too long, we have been seeing widely fluctuating gas prices here in this country due to a lack of comprehensive policies to move us away from imported oil and petroleum. And every American—and every year or two we are back in the same place exactly doing the same thing that we find ourselves doing at this moment, discussing extremely high gas prices at the pump but no closer to solving this issue, which has had such a devastating effect on the budgets of American families, both lower and middle-income families who must once again choose between putting food on the table or filling up their car in order to go to work.

Admiral Dennis Blair, U.S. Navy, former director of national intelligence.

Thank you for giving me this opportunity to speak to you regarding the very real and pressing threats posed by our dependence on petroleum. It has been clear to me for decades that our addiction to oil poses a significant national security threat, and it is one that has taken us far too long to recognize and confront. Oil dependence distorts our foreign policy, strains our military and intelligence resources, and puts our young men and women in uniform in danger.

The heart of the problem lies in the Persian Gulf, which is home to the five countries with the greatest proven conventional petroleum reserves.

When I first joined the Navy in 1968, the entire U.S. military presence in that part of the world was a one-star Navy admiral and two destroyers that would deploy to hold simple exercises with Gulf countries. The Persian Gulf was a rare duty station for members of the armed forces. Today, we have three four-star generals, a dozen three star generals and admirals, aircraft carrier battle groups, and more than 100,000 troops in the region.

How did we get in this fix?

In the late 1970s, two serious threats to Persian Gulf oil were identified by the Carter administration, which became seized by the issue. The first was a potential Soviet invasion from the north into the oil regions around the Gulf, a concern heightened by the Soviet occupation of Afghanistan. The second was an aggressive and fundamentalist Iran, which was led by a regime that had permitted and then exploited the takeover of the American Embassy in Tehran.

In response, the Department of Defense created the Rapid Deployment Joint Task Force, a planning headquarters and contingency unit that could quickly deploy to the Gulf to defeat a major land invasion. In 1983, as part of its general military build-up against the Soviet Union, the Reagan administration upgraded this task force to a regional command—like the European Command and the Pacific Command I had the honor to lead for several years. It was called Central Command. Central Command had full-time responsibility for U.S. interests in the region. So every commander of Central Command has had the mission of ensuring the security of oil from the Persian Gulf since that time.

In response to the 1987 attacks on tankers by Iran and Iraq as part of their war, the United States gave Kuwaiti tankers U.S. registry and provided naval escorts for them as well as for tankers of allied nations. By 1990, America had a functioning military command structure, had deployed major forces to the Gulf both for exercises and for combat operations, and—most importantly—had firmly established a military commitment to oil security.

U.S. security policy in the Gulf since then has been in the headlines, familiar to everyone, and dominated by the use of major military force:

Operations Desert Shield and Desert Storm in 1991 to expel the Iraqis from Kuwait
The maintenance of Air Force and Navy air wings in the Gulf on a full time basis to enforce no-fly zones in the north and the south of Iraq
The stationing of a full time Army brigade in Kuwait
Operations Enduring Freedom (Afghanistan) and Iraqi Freedom
U.S. and allied intervention in Libya

Military engagement on this scale halfway around the world is expensive in dollar terms, and even more importantly, in the lives of the casualties of our interventions there. And the extensive military deployments to the region have other negative effects. Because we need bases and other forms of support, we sometimes must support regimes whose actions and values are not consistent with ours, or that are working against us in other ways and on other issues.

Even worse, the heavy military involvement in the region has made us the target for fundamentalist violence, which we have seen in the form of attacks against our armed forces themselves and against other Americans and their property in the region, and, finally, devastating attacks against the United States itself.

It was watching this spiral of more and more military involvement with unstable and non-representative regimes in a violent and hostile region of the world that led me, after I retired from the Navy, to join the Energy Security Leadership Council. This group of business leaders and retired admirals and generals all believe that ending our dependence on imported petroleum represents the best—the only—long-term solution to the threats we face.

I was proud to serve on that council with men like Frederick W. Smith, the Chairman, President and CEO of FedEx and General P.X. Kelley, the former Commandant of the U.S. Marine Corps. During my time on the Energy Security Leadership Council, I learned more about the threats oil dependence pose to our economy and our national security.

And then I was called back into service to my country as the Director of National Intelligence, [where I] saw raw intelligence and analysis, both classified and unclassified, that convinced me that the challenge of energy security was even more pressing and more difficult than I had known previously.

I’ve already talked about the Middle East. Let me briefly review some of the other areas in which oil is located in the world. Central Asia, around the Caspian Sea, is another area of large oil and natural gas deposits that is critical to the world’s oil supply.

Access to the region is difficult, involving long pipelines that run through politically volatile areas like Georgia and Azerbaijan. The countries in the region often have at best immature governments, often authoritarian and unstable, and there is intense competition by Russia, Iran, and China, who mistrust the United States and have little interest or stake in working with us on assured access.

Military operations in these countries are as difficult and dangerous as those in the Middle East. One exercise I recall several years ago involved the longest range parachute drop that had been conducted in history, from the Eastern United States to Kazakhstan. This is not a region that will be a reliable and friendly oil production source for the United States and its friends.

You can see why my time as Director of National Intelligence confirmed even more strongly my belief that we must change our energy security path. Our enemies know that we need oil, and they are determined to exploit this strategic vulnerability.

The United States is the world’s largest oil consumer, accounting for more than 20 percent of global demand. Americans consume approximately 19 million barrels of oil each day.

At the crux of America’s oil dependence is the energy demand of the transportation sector. At roughly 14 million barrels per day, our transportation sector alone consumes more oil than any national economy in the world. Our cars and trucks are 94% reliant on oil-based fuel for their energy, with no substitutes immediately available in anything approaching sufficient quantities. The lynchpin of any plan that is serious about confronting oil dependence must be the transformation of a transportation system that today is almost entirely dependent on petroleum.

Make no mistake: the dangers posed by our oil dependence are not theoretical. Our safety and security are threatened by oil dependence, and every single day that we do not act is another day that we remain vulnerable.

Second is the economic cost of inaction. Department of Energy researchers have estimated that the economic costs of U.S. oil dependence were $500 billion in 2008 alone—and more than $5 trillion since 1970. In 2008, when oil prices peaked, the U.S. sent $388 billion—56 percent of the total trade deficit—overseas to pay to import crude oil and petroleum products. In 2010, with oil prices averaging close to $80 per barrel, the U.S. trade deficit in crude oil and refined products returned to its pre-crisis level of more than $260 billion.

And perhaps most telling: every American recession for almost four decades has been preceded by—or occurred concurrently with—an oil price spike.

JAMES T. BARTIS, SENIOR POLICY RESEARCHER, RAND CORPORATION.

Sources of diesel and jet fuel are renewable oils. These oils can be prepared from animal fats or vegetable oils obtained from seed-bearing plants. Biodiesel from soybean oil is the most well-known of this class of fuels. When treated with hydrogen, these renewable oils can be converted to hydrocarbon fuels that are suitable for both military and civilian applications.

Unfortunately the prospects for these renewable oils are dim. For seed oils the main problem is the low oil yield per acre. Consider producing 200,000 barrels per day which is only one percent of current U.S. oil consumption. Producing this amount from seed oils would require about 10 percent of the total crop land under cultivation in the United States. There are also serious issues regarding greenhouse gas emissions, production costs, and adverse effects on food prices. Taking together waste oils, animal fats, and seed oils, it is highly unlikely that domestic production can exceed 100,000 barrels per day. From a national energy policy perspective, this class of fuels will not contribute much. [My comment: yet biodiesel is the only renewable fuel that could replace diesel fuel for trucks. And when trucks run out of fuel, civilization ends.]

It is highly uncertain whether appreciable amounts of hydro-treated renewable oils can be affordably and cleanly produced within the United States or abroad. Hydro-treated renewable oils are produced by processing animal fats or vegetable oils (from seed-bearing plants such as soybeans, jatropha, or camelina) with hydrogen. Various types of algae have high oil content and are another possible source of oil for hydro-treatment [my comment: NOT TRUE. See algae and kelp/seaweed posts]. The problem lies in uncertainties regarding production potential and commercial viability, especially affordability and lifecycle greenhouse gas emissions.

With regard to feedstock vegetable oils, to keep lifecycle greenhouse gas emissions at levels lower than those of petroleum-derived fuels, these oils must be derived from crops that do not compete with food production and that minimize non-beneficial direct and indirect changes in land use. Jatropha and camelina are often mentioned as ideal plants to meet these requirements, but there exists little evidence to back these claims. Even if low-greenhouse-gas approaches can be established and verified, total fuel production is likely to be limited. Producing just 200,000 barrels per day (about 1 percent of daily U.S. petroleum consumption) would require an area equal to about 10 percent of the croplands currently under cultivation in the United States.

Considering (1) the very limited production potential for fuels derived from animal fats and waste oils, (2) the highly uncertain prospects for affordable, low greenhouse-gas fuels derived from seed crops, and (3) the early development status of algae/microbe-based concepts, renewable oils do not constitute a credible, climate friendly option for meeting an appreciable fraction of civilian or military fuel needs over the next decade. Because of limited production potential, fuels derived from animal fats, waste oils, and seed oils will never have a significant role in the larger domestic commercial marketplace

The largest deposits of oil shale in the world are located in Western Colorado and Eastern Utah. The potential yield is about triple the oil reserves of Saudi Arabia [NOT TRUE, see posts here ].

Our coal resource base is also the world’s largest. Dedicating only 15% of recoverable coal reserves to coal to liquid production would yield roughly 100 billion barrels of liquid transportation fuels, enough to sustain 3 million barrels per day for more than 90 years. Our biomass resource base is also appreciable offering to yield over 2 million barrels per day of liquid fuels. And over the longer term, advanced research and photosynthetic approaches for alternative fuels production offers the prospect of even greater levels of sustainable production.

The various options that we examined we found that the Fisher-Tropsch Method to be the most promising near term option for producing diesel, jet, and marine fuels in a clean and affordable manner. The Fisher-Tropsch Method also produces gasoline. The method can accept a variety of feedstocks including natural gas, coal, and biomass. Modern commercial plants are in operation but none are located in the United States.

The United States’ consumption of liquid fuels is about 19 million barrels per day (bpd). Meeting this demand requires importing about 10 million bpd of petroleum, mostly in the form of crude oil. In a world that consumes about 85 million bpd of petroleum products, the United States holds first place in total consumption and the magnitude of its imports.

The need is for an alternative fuel portfolio that can competitively produce millions of barrels per day in the United States. Alternative fuel advocates often use gallons per year when describing production potential. For perspective, one million barrels per day is 15.3 billion gallons per year.

In our study directed at military applications, we focused our attention on alternative fuels that could substitute for jet fuel, diesel fuel, and marine distillate fuel, since these are the major liquid fuels consumed by military aircraft, ships, ground vehicles, and associated combat support systems. These fuels are often referred to as distillate fuels to distinguish them from the more volatile and more easily ignited gasoline used in spark-ignition automobiles. As a group, distillate fuels account for over 95% of military fuel purchases, which are currently averaging about 340,000 barrels per day. Distillate fuels are also important in the civilian sector, fueling commercial transport and serving as an important home heating fuel in some parts of the United States. Current consumption of distillate fuels in the United States is about 5 million bpd. For comparison, recent gasoline demand is running at slightly below 9 million bpd.

Michael F. Doyle, Pennsylvania. It seems like we repeat this cycle in this country and here in Washington decade after decade. Gasoline prices get high and there is great interest in all these alternative fuels and vehicles. And there is this great effort to move forward and then all of a sudden the OPEC ministers get together, or the speculators stop speculating and gasoline prices come down, and we get lulled back in this complacency that everything is okay now and we can go back to our big SUV’s and just keep putting gasoline in cars. You wonder how many times you let the board hit you in the face before you duck. How do we incentivize consumers to start driving more fuel efficient vehicles?

Lucian Pugliaresi. President, Energy Policy Research Foundation, Inc (EPRINC). One of the major obstacles to rapid increases of corn ethanol into the gasoline pool is the rising cost of ethanol’s principal feedstock, corn. The Congressional debate over the deficit has highlighted concerns over the cost of ethanol subsidies, now estimated at nearly $6 billion per year. The true cost is much higher. Absent volumetric mandates and blending tax credits, the U.S. would consume approximately 400,000 barrels/day of ethanol, half the amount of ethanol consumed today.

Jeffrey Miller, National association of convenience stores. The convenience and fuel retailing industry sells 80 percent of the fuel in the Nation to 117,000 outlets. Because OSHA will not recertify any existing equipment even if it is technically compatible with a new fuel, my only legal option is to replace my dispensers. This could cost me about $20,000 per unit or roughly $80,000 to $100,000 per store depending on the number of dispensers. Further, if my underground equipment is not listed for E–15 I would have to replace that as well. Once we start breaking open concrete, my costs could easily exceed $100,000 per site. So offering E–15 could become very expensive.

Rich Kolodziej, President of NGVAmerica. We are the National Trade Association for vehicles that are powered by natural gas and biomethane. NGVs are the fastest-growing alternative fuel, alternative to petroleum in the world. In 2003, we had only about 2.8 million NGVs globally. Today we have over 13.2 million, and according to the forecast by the International NGV Association, but 2020, we are going to have 65 million vehicles on the world’s roads.

Now some of this will displace gasoline, but the majority would displace diesel. Diesel represents about a quarter of on-road petroleum use. While there are many options to displace gasoline in light duty vehicles, there are very few options to displace diesel in trucks and busses and other heavier vehicles. Of those options, natural gas can make the biggest impact the fastest. This is important since trucks are the economic lifeblood of America. Everything we buy moves by truck.

But to expand the use of NGVs and maximize NGVs oil displacement potential, we need to bring down the cost of NGVs. We have to make them more economic for more fleets. And that is going to happen through economies of scale and through a more large scale production.

That is why the industry is so excited about the bill recently introduced by Mr. Sullivan, H.R. 1380, the NAT Gas Act of 2011. That bill would provide federal incentives for the production, purchase, and use of natural gas vehicles and the expansion of NGV fueling infrastructure. That bill which was introduced on April 6 as Mr. Sullivan had mentioned already has 180 bipartisan cosponsors. It would only be in place for 5 years. It is only a 5 year program, but during that time and long thereafter this would make a big impact on the number of NGVs for which the fleets would be found and economically attractive. This is going to accelerate the NGV use in this country which in turn would bring more NGV manufacturers into the market, increase competition, and drive down that first course premium. NGVs are here and now technology. We don’t need any major technological breakthroughs. What we do need is to grow faster and the NAT Gas Act would help jumpstart that growth.

Lee Terry, Nebraska. As a supporter of biofuels and cellulosic fuels, it is frustrating because it doesn’t seem like in the five years since that bill has passed that we have made a lot of progress. I don’t see the cellulosic plants. There may be pilots out there, small pilots, but I would have expected mass production today. Why aren’t we there? What is the holdup? What is the problem here? It seems like we are spending money on research, but we are not getting there. Is it the feedstock? What is our holdup?

Ms. OGE. Based on the discussions, you know when we set the 2011 standard for the 6.6 million gallons, our team was actually was in touch with over 100 companies that had some form or another of investments on advanced biofuels. This year we talked to about 20 companies that continue to have significant investments And there are different ways to get there as far as a commercialized volume that is cost effective and can compete with fossil fuels. And it has to do with the type of feedstock. A lot of the information is company by company, plus it is confidential. We see there are two things going on. One is that companies don’t have sufficient capital investment to proceed based on the original plans that they had. And second is technology challenges that companies are finding as they are doing these pilot projects, make corrections, and then coming back to invest more and do more. So my personal view and this is completely my personal opinion is that we will be able to catch up on these volumes but it is too early to say the timeframe. And we also have to recognize when you are talking about building a plant that could cost tens or even $100 million, it takes time to build that plant. Once you have the capital to do it, you are still looking at a 24-month build schedule. So I would agree. We, like you, would like to see this grow faster. And certainly the economic downturn has hurt us, but I think we are going to start picking up pretty quickly now.

Mr. TERRY. I would hope so because I think we are losing credibility frankly the longer it takes.

David B. McKinley, West Virginia. [This reminds me of] groundhog day. We keep working in cycles [of yet] another gas increase, worry about it, and do nothing. And then we are going to do it again in a couple of years. Excuse me, [but] I thought the goal was to use less energy. I am skeptical. I don’t think there is a real hunger here for us to solve anything. We have the technology right now to deal with coal liquefaction, gas liquefaction, using natural gas vehicles, battery powered. Why don’t we just stay on the ones that we are close to achieving and finish the job instead of taking on new things and diverting, dispersing our energies so that we don’t accomplish anything?

Mr. DAVIS. I appreciate your question and I also appreciate your frustration. This is a very difficult problem to solve. We have 240 million vehicles on the road today. We only sell about 12 million per year. It takes 20 years to turn [them over].

Mr. POMPEO. Is it possible that if we had not made a political decision about where to direct money that we might be further along in finding out the next great technology?

Mr. DAVIS. I don’t believe so. The President has said there is no silver bullet. I have been working transportation area for a couple decades. If anyone knew the absolute one answer, you can believe that we would be concentrating on it.

Margo T. Oge, Director, Office of Transportation and Air Quality, Environmental Protection Agency.

Biofuels can play a very important role in reducing our dependence on foreign oil, decreasing greenhouse gas emissions, and improving the world economies. When fully implemented, biofuels required by the RFS would displace about 13.6 billion gallons of petroleum-based gasoline in diesel fuel. That is approximately 7 percent of the expected annual gasoline and diesel consumption in 2022. This will decrease all imports by $14.5 billion and provide additional energy security of $2.6 billion annually.

Unfortunately, the cellulosic industry is not developing as quickly as Congress anticipated and we have had to lower the cellulosic mandate for the 2011 timeframe in 2010.

Mr. WHITFIELD. So how many manufacturing facilities are there out there now with an advanced battery production?

Mr. DAVIS. The Recovery Act is supporting a total of 20. And that is an entire supply chain from the component level, anodes, cathodes, electrolytes, to cell production, the battery manufacturing and assembly, and even to recycling. In addition to the Recovery Act projects, there is the tax incentive of $7,500. We are bringing the cost of batteries down very quickly. We are highly confident that we are going to meet our goal in 2015—the middle of this decade—to get to $300 per kilowatt hour. There is the ATVM, the Advanced Technology Vehicle Manufacturing Loan Program, supporting manufacturers of advanced vehicles. In addition to that, the manufacturers have announced production capacities that when you look at the total production and the ramp-up rates, total over one million vehicles through 2015. Now, that is announced production capacity. It doesn’t indicate consumer acceptance or that consumers will buy those vehicles. But we are very confident that the production capacity will be there to meet that goal.

Mr. WHITFIELD. Not too long ago we heard people talking all the time about hydrogen fuel cell technology and I don’t really hear a lot about that today. What is happening on the hydrogen fuel cell technology?

Mr. DAVIS. Tthe fuel cell technology office is making great progress. They reduced the cost of fuel cell systems from about $275 per kilowatt in 2002 to $51 per kilowatt today. That is a high-volume production cost, and their ultimate goal is $30 per kilowatt. So we are getting very close to where we need to be on cost. Infrastructure and hydrogen production is—remains the most serious challenge, along with storage of hydrogen.

Mr. SULLIVAN. Mr. Davis, in your testimony you don’t make any mention of the role of natural gas vehicles—that natural gas vehicles contain our nation’s transportation portfolio. I hear Secretary Chu talk about electric vehicles all the time but he hardly every mentions natural gas vehicles. This is perplexing given the massive amounts of natural gas resources that we have in this country and the fact that natural gas vehicles help reduce all types of pollution. What is DOE’s position of the role of natural gas vehicles or what is their position on the role natural gas vehicles will play especially in the heavy duty market? Why don’t natural gas vehicles have a primary place in DOE’s strategy?

Mr. DAVIS. Actually natural gas does play an important role in our strategy. We supported natural gas vehicles and the implementation of natural gas fueling infrastructure for 17 years through our Clean Cities Program, most recently, through the Recovery Act, placing thousands of natural gas vehicles on the road along with the infrastructure that supports them. I would say that the Vehicle Technologies Program, being primarily a research organization, does struggle sometimes with the fact that natural gas is a pretty mature technology. It is really more about deployment than it is about R&D. We know how to build natural gas engines. We know how to build natural gas vehicles, and that is why we have concentrated our efforts on natural gas through the Clean Cities Program, the deployment arm of the Vehicle Technologies Program.

Mr. SULLIVAN. Well, again this year the administration’s budget request had no R&D funding for natural gas vehicles. Why does DOE always seem to be promoting alternative fuels of a distant future, stuff that is 15, 20, 50 years or more—years away from possibly being commercial to the exclusion of proven, cleaner, domestically available fuels and technologies like natural gas vehicles which could make a real difference tomorrow? Natural gas vehicle technology is readily available and widely used throughout Europe, South America, and Asia. There are over 12.5 million natural gas vehicles worldwide, and we only have 150,000 here in the United States. Can you elaborate on that?

Mr. DAVIS. In 2010 we put in place some natural gas engine development projects, and those projects are underway this year, in which we leveraged $5 million in funding for a total of over $15 million in engine development funds supporting new natural gas engines that could be used in a variety of vehicles, mainly medium-duty to heavy-duty-type vehicles. That said, once again our effort has been focused on deployment, and although you might note that in FY ’12, we don’t request any direct funds for R&D in natural gas, we continually support natural gas vehicles through the Clean Cities Program, our deployment arm, and we will continue to do so, both vehicles and infrastructure.

Mr. WHITFIELD. Mr. Davis, you mentioned in your testimony that by 2015, the goal was to have one million electric vehicles on the roads. How many electric vehicles are out there right now, or do you know?

Mr. DAVIS. A few hundred.

Mr. WHITFIELD. A few hundred. Well, you know this renewable fuel standard obviously is very important and I think it is also important that we not look through rose-colored glasses as we try to anticipate the future. I was reading an article—two articles recently. One was in the New York Times. This was the 1917 issue of the New York Times, front page and it said electric vehicles are the cars of the future. And then I read an article about a company in California called DC Green that was formed a few years ago to go out and remodel service stations to provide electrical outlets and so forth, and they are now in bankruptcy. And the Volt electric car costs $42,000. So would you elaborate a little bit on why you are as optimistic as having a million cars by 2015?

Mr. DAVIS. First let me say a million vehicles by 2015 is not the end point. It is a milestone. We want to go beyond a million vehicles to get to five million, 10 million, and even tens of millions and we are really pretty confident that that milestone is obtainable. And I would suggest that the situation today is much different than in the ’70s or any other previous time. We believe that the pieces are in place to achieve this goal. First of all, the Recovery Act, battery manufacturing facilities are in place to support the widespread production of electric drive vehicles. Two billion in batteries and electric drive component funding that was matched by industry for a total of 4 billion in manufacturing facilities that are supporting——

Pat Davis, Program Manager of the Vehicle Technologies Program at the U.S. Department of Energy.

The President recently outlined a portfolio of actions which taken together could cut U.S. oil imports by a third by 2025 and these include programs that would put one million electric vehicles on the road by 2015, increase the fuel economy of our cars and trucks, and expand biofuels market and commercialized new biofuels technologies. Making our cars and trucks more efficient is one of the easiest and most direct ways to limit our petroleum consumption and save consumers money.

In 2009, the U.S. had only two relatively small battery manufacturing facilities manufacturing advanced batteries for vehicles. Over the next few years, thanks to Recovery Act investments, the U.S. will be able to produce enough batteries and components to support 500,000 plug-in and electric vehicles per year and simultaneously create over 6,200 jobs. At the same time, DOE projects a drop in battery costs of 50 percent by 2013 compared to a 2009 baseline.

HOWARD K. GRUENSPECHT, DEPUTY ADMINISTRATOR, U.S. Energy Information Administration. Light-duty vehicles, including both passenger cars and light trucks, accounted for 63% of total transportation energy use in 2009. In that year, gasoline vehicles had an 85% market share out of 9.8 million new light-duty vehicles sold. Flex fuel vehicles that could use gasoline up to E– 85, hybrid electric, and diesel vehicles held 11%, 3%, and 2% shares, respectively.