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Thursday, November 17, 2005

House and Senate Consider 'Vehicle and Fuel Choices for American Security' Bills

Green Car Congress reported yesterday that the bipartisan groups in both the U.S. House and Senate introduced their own versions of 'Fuel Choices for American Security' Act. The bills are designed to reduce the consumption of oil through the promotion of fuel-efficient vehicles, including plug-in hybrids, and alternative fuels, primarily ethanol.

The Vehicle and Fuel Choices for American Security Act, introduced by Senators Evan Bayh (D-IN), Joe Lieberman (D-CT), Sam Brownback (R-KS), Lindsey Graham (R-SC), Ken Salazar (D-CO), Norm Coleman (R-MN) and Jeff Sessions (R-AL), mandates a reduction in oil consumption of 2.5 million barrels per day by 2016, 7 million barrels per day by 2026 and 10 million barrels per day by 2031. [I'm surprised not to see Senator Barak Obama (D-IL) on this list of sponsors] The legislation is reportedly based on the energy security blueprint proposed by the Set America Free Coalition.

The Senate version of the bill sets targets for manufacturers to produce flexible fuel vehicles (FFV), alternative fueled vehicles, hybrids, fuel cell vehicles, - and yes! finally! - plug-in hybrids, or other qualified vehicles that meet a performance standard of 175% of average fleet fuel economy—starting at 10% in 2012 and rising to 50% in 2016. After 2016 at least 10% of the 50% requirement must be met by hybrids, advanced diesels, plug-in hybrids and other non-FFV vehicles.

According to Green Car Congress, the bill also requires the Secretary of Energy to issue regulations for federal and state fleets covered by the Energy Policy Act of 1992 to reduce petroleum consumption by 30% from a 1999 baseline by Fiscal Year 2016. It requires 30% of federal fleet requirement (22.5%-25% of the total fleet requirement) to be met by advanced diesels, hybrids or plug-in hybrids in 2016. The bill also allows electric drive technology vehicles (hybrids) to qualify under the Federal Fleet requirements.

To support the development of more fuel efficient vehicles include, the Senate version of the Bill:

  • Provides retooling tax credits for manufacturers and suppliers of advanced diesels and hybrids (Nearly identical to Levin-Bayh amendment to the energy bill);

  • Creates a tire efficiency program for tires used on light duty vehicles;

  • Creates a fuel economy testing program and the implementation of efficiency standards for heavy duty vehicles (trucks, buses, etc);

  • Lifts the per manufacturer cap on consumer tax credits for the purchase of hybrids and advanced diesels;

  • Provides a tax credit for large private fleets for purchasing more efficient vehicles for their fleets;

  • Creates an R&D program for electric drive transportation and light-weight materials;

  • Encourages local educational agencies to develop a policy to reduce the incidence of school bus idling; and

  • Closes the SUV tax loophole which adversely encourages small businesses to purchase SUVs over other vehicles.

  • In order to promote the efficient use of fuels and promote the use of alternative fuels, the bill:

  • Increases the ethanol infrastructure tax credit to 50%;

  • Uses CAFE penalties to fund DOE ethanol infrastructure grants program;

  • Changes the authorization for production incentives for cellulosic ethanol to $200 million for five years;

  • Sets an additional near-term benchmark for the use of cellulosic ethanol as part of the renewable fuels standard included in the 2005 Energy Policy Act; and

  • Creates a grant program to encourage new mass transit facilities and to build commercial developments around them.

  • The bill also includes some funding for public education.

    The House version of the bill, dubbed the 'Fuel Choices for American Security' Act, is being introduced by Congressmen Eliot Engel (D-NY) and Jack Kingston (R-GA). It includes a slightly different timetable on oil reduction, seeking a 2.5 million barrel per day drop by 2015 and 5 million barrels per day by 2025. [Check Green Car Congress soon for further detail on the House bill]

  • Section-by-section breakout of Senate version of bill.

  • Green Car Congress: House and Senate Bills Target Oil Consumption, Promote Fuel Efficiency and Alt Fuels

  • Green Car Congress: House and Senate Groups to Introduce “Fuel Choices for American Security Act"

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