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DOE Calls on Auto Industry to ‘Fix’ U.S. Energy Outlook

The U.S. needs to get public policy on energy right – and pretty quickly, a government official says.

Special Coverage

SAE World Congress

DETROIT – A high-ranking Department of Energy official gives automotive engineers a pat on the back and a gentle push from behind at a panel discussion on the state of renewable fuels here at the SAE World Congress.

John F. Mizroch, principal deputy assistant secretary-Office of Energy Efficiency and Renewable Energy, lays out the daunting picture ahead for world energy demand and calls on the auto industry to lead America away from its dependency on imported oil.

Mizroch points out the U.S. currently accounts for 25% of the world’s vehicles and oil use, but just 5% of its population. Only eight countries control 80% of the world’s oil supply, he says.

“If I was drawing up a plan for the growth of the transportation industry, I don’t believe that would be the ideal scenario,” he says. “America has done too good a job showing what (a vehicle industry) can do for economic growth – and other countries now want that.”

Mizroch cites the sudden expansion of China’s new-vehicle market, which swelled 24% last year to 9 million units and reportedly is up 21% in first-quarter 2008. Over the next nine or 10 years, the U.S. and China will combine for 300 million vehicle sales, he says, presenting a “difficult competition for fuel supply.”

The solution will be in providing multiple transportation options, from fuel-cell and battery-powered vehicles to biofuels, the DOE official says.

To that end, the DOE has earmarked $1 billion to assist in the development of second-generation cellulosic ethanol, with private industry expected to match that level of funding. “We’ll spend more than any other country on cellulosic ethanol in the next few years,” Mizroch says.

The government program comes in response to President Bush’s mandate for 36 billion gallons (136 billion L) of biofuels to be produced annually beginning 2017, equaling about 15% of the U.S.’s fuel supply. Twenty billion gallons (76 billion L) of that is targeted as advanced biofuels, including at least 16 billion gallons (61 billion L) of cellulosic ethanol.

Mizroch says the DOE goal is for cellulosic ethanol to be a cost-effective alternative by 2012.

The shift away from oil dependency “only will work if the public and private sector work together,” Mizroch says.

He says three things are needed to solve the future energy dilemma: vehicle technology, financing for product development and infrastructure and public policy. The technology development is well under way, and the financing will be available if the right public policy is in place, he says.

“We need to get that right – and pretty quickly,” Mizroch notes.

Dale A. Gardner, associate director-renewable fuels science and technology at the National Renewable Energy Laboratory, an operation Mizroch oversees, says “no one will go to jail” if the 36 billion-gallon target signed into law by President Bush is missed.

“But if we begin to fall behind as we get closer to that deadline, we’ll get more carrots in the form of incentives or sticks in the form of penalties from the federal government, and that’s what we want to avoid,” he says.

Gardner says his operation is eying a cut in the cost of cellulosic ethanol from about $2.35 per gallon (3.8 L) today to $1.31 (excluding taxes) by 2012.

In addition to cost, infrastructure issues will need to be solved if ethanol is to proliferate, he notes.

Currently, only about 1,200 of the 160,000-180,000 service stations nationwide pump E85. “We need to have 60,000 pumps,” he says.

More vehicles must be E85-compatible, as well. Currently, about 6 million cars and trucks on U.S. roads can take the fuel, “but hardly anyone actually uses it, because of the lack of pumps available,” Gardner says. “We will need to have 100 million E85-compatible vehicles to get to the 20 billion-gallon target.”

A midterm step is being investigated in which all vehicles could be designed to run on E15 or E20, he adds. Currently, most cars and trucks on U.S. roads are capable of operating on E10. Gardner’s group is conducting a test program involving USCAR, the Detroit Three’s technology consortium and others that will put 150 E20 vehicles on the road by midyear.

“The auto industry has much to be proud of (in technology development),” Mizroch tells engineers gathered here. “Now we need to take your talent and creativity and make breakthroughs. We have to make cars differently in the future.

“I don’t think we have a choice (but to solve the coming energy crisis),” he adds. “And this is the industry that needs to help fix the situation we’re in.”

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