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Plug-In Endorsements: Inauguration + Senate '09 Freeedom Act
Jan 22, 2009 (From the CalCars-News archive)
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The first moments of the new administration have confirmed our hopes that our issues would be at the center of the government's policies. And Congress is also hitting the ground running, with a new Senate bill among others. We had the privilege of being on the Mall for the speech, and attending a number of green-related events and unofficial balls. We found that the efforts of plug-in advocates and technologists is broadly appreciated, and credited by many for the strong interest in Washington. We optimistically believe President Obama is on the right track in aiming to integrate responses to many disparate problems around a green core.

NEW CONCEPTS IN INAUGURAL ADDRESS

We are delighted that an official federal publication said it as well and concisely as anyone: "Those were the first references ever to our nation's energy use, to renewable resources, and to climate change in an inauguration speech of a U.S. president."

The U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) http://www.eere.energy.gov/­ kept the embers alive during the past eight years, and was ready to go on day one. We encourage you to subscribe to its Weekly Network News, get the RSS feed, or see archives via the links at http://apps1.eere.energy.gov/­news/­enn.cfm . Here's how it reported on the first day (at http://apps1.eere.energy.gov/­news/­news_detail.cfm/­news_id=12194 find this same writeup with live links):

President Obama Calls for Greater Use of Renewable Energy

President Barack Obama was sworn in on January 20, and his inaugural address called for the expanded use of renewable energy to meet the twin challenges of energy security and climate change. Noting that "each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet," President Obama looked to the near future, saying that as a nation, the United States will "harness the sun and the winds and the soil to fuel our cars and run our factories." Those were the first references ever to our nation's energy use, to renewable resources, and to climate change in an inauguration speech of a U.S. president. President Obama later circled back to the subject of climate change, proclaiming that "with old friends and former foes, we will work tirelessly to ... roll back the specter of a warming planet." See the inaugural addresses of all the presidents, including President Obama's inaugural address, on the American Presidency Project Web site, an effort of the University of California, Santa Barbara.

As the president was being sworn in, the newly revised White House Web site went live, and it prominently features President Obama's agenda for energy and the environment. The president's "New Energy for America" plan calls for a federal investment of $150 billion over the next decade to catalyze private efforts to build a clean energy future. Specifically, the plan calls for renewable energy to supply 10% of the nation's electricity by 2012, rising to 25% by 2025. The plan also calls for deploying energy efficiency, including the weatherization of one million homes each year. It also calls for an economy-wide cap-and-trade program to achieve an 80% cut in greenhouse gas emissions by 2050. And to help meet that goal, the plan sets a target of placing one million plug-in hybrid cars on the road by 2015, along with a national standard to reduce the carbon emissions from our motor fuels. To help meet the plug-in hybrid goal, the plan calls for a new $7,000 tax credit for those who purchase advanced vehicles. See the president's New Energy for America plan on the White House Web site.


NEW SENATE FREEDOM ACT OF 2009

Senators Cantwell and Hatch, who have been such strong supporters of plug-in vehicles in the past, have come through again, with a bill to add plug-in vehicle tax incentives to the stimulus package. Notably, it includes $4,000 for conversions, support for two- and three-wheel vehicles. Senators Kerry, Alexander, Stabenow, and Bill Nelson are original co-sponsors. Below we reprint the press release and excerpts from Sen. Cantwell's Senate speech

We should note that even if this gets a House counterpart, and is included in the stimulus program, we still have lots of work to do, expanding incentives and introducing the idea of incentives for converting non-hybrid internal combustion engine vehicles. We also need to counter one newly emerging theme, found below, that talks about the urgent need for a domestic battery industry as a step to avoid "switching our dependence on imported oil to dependence on foreign battery manufacturers." There is a grain of truth in that statement. But we fear it could become another new objection point: "we can't build the cars until we can do it with domestic batteries." See our further discussion of this "Battery Worry Hype" from our December 17 posting http://www.calcars.org/­calcars-news/­1036.html

Cantwell, Hatch Push for Incentives for Plug-In Vehicles and Smart Grid Technologies in Stimulus / Introduce FREEDOM Act of 2009 to help ensure U.S. leads the world in manufacturing and adoption of plug-in vehicles

Friday, January 16,2009 http://cantwell.senate.gov/­news/­record.cfm?id=306895 and http://hatch.senate.gov/­
public/­index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=e12e9904-1b78-be3e-e073
d812ffc95561&Month=1&Year=2009


WASHINGTON, DC -- Today, Senate Finance Committee members Maria Cantwell (D-WA) and Orrin Hatch (R-UT), moved to include tax incentives for plug-in electric vehicles to the stimulus package currently being considered by Congress. These incentives would increase production and adoption of plug-in electric vehicles, which will ultimately save consumers money at the pump and help reduce our country's dependence on foreign oil. The FREEDOM Act of 2009 builds on legislation authored by Cantwell, Hatch, and Senator Barack Obama (D-IL) in 2007 that provided up to $7,500 for consumers buying new plug-in electric vehicles. This bill was enacted into law last October as part of the Energy Bill of 2007.

While those consumer incentives were a vital first step, more needs to be done to bring these game-changing class of technologies to market. The FREEDOM Act of 2009 would also help ensure the United States establishes and maintains global market leadership in plug-in electric vehicle and component production, like batteries and smart grid technologies.

"America's addiction to oil impacts not only our economy, but every household in America," said Cantwell. "We need to take advantage of new technologies to bring our cars and trucks up to speed, save consumers money, create hundreds of thousands of jobs and diversify our country off of fossil fuels. The FREEDOM Act of 2007 made important strides, but more must be done to jumpstart this transition. By including these bipartisan measures in the upcoming stimulus bill, we will be injecting capital, confidence, and construction into our economy, and fundamentally improve our nation's out of date transportation system for the first time in over a century."

Current generation plug-in electric vehicles can attain fuel efficiencies approaching 70 mpg, and most importantly for consumers, charging a plug-in hybrid at current national average electricity rates would cost the equivalent of just one dollar per gallon of gas, reducing annual fuel costs by as much as 75 percent.

The FREEDOM Act of 2009 focuses on retooling incentives and increasing consumer tax credits for plug-in vehicles.

"Senator Cantwell and I were very pleased that several of the provisions in the FREEDOM Act were signed into law during the 110th Congress," said Hatch. "We share a vision for shifting our transportation sector away from its heavy dependence on fossil fuels and toward the electric grid as a major new source of transportation fuel. I see this year's FREEDOM Act as an important second step for the U.S. in that it provides additional incentives for manufacturers of plug-in vehicles and relevant technologies, incentives for transition technologies that will get us using plug-in hybrids, and larger incentives for consumers through tax credits for purchasing plug-in vehicles. American automakers and technology companies are uniquely situated to lead the world in producing electric and plug-in hybrid vehicles. This bill will give them a shot in the arm toward that end."

The linkage of electricity, transportation, and information technologies through plug-in electrics and smart grid technologies will transform the ways consumers use energy, significantly reduce the nation's greenhouse emissions, and spur export-driven economic growth.

The FREEDOM Act of 2009 provisions include:

  • Manufacturer Investment/Retooling Incentives -- 100 percent immediate expensing of investments in production property by plug-in electric vehicle and component manufacturers through 2013. Later investments would be eligible for 50 percent expensing through 2016. Manufacturers currently without tax liabilities can access unused AMT credits.
  • Tax Relief for Car Buyers -- Doubling the number of plug-in electric vehicles eligible for existing consumer tax incentives (from 250,000 to 500,000); and extending scaled incentives for 2 and 3-wheeled vehicles and low-speed vehicles.
  • Plug-in Conversion Credits -- Tax credits of up to $4,000 for consumers who invest in equipment to convert their existing hybrids to plug-in hybrid electrics.
  • Deployment Incentives -- Modify the depreciation schedule for smart meters from seven to five years (to match other schedule for other computer equipment) and augment existing tax incentives for the installation of electric vehicle refueling stations.


EXCERPTS FROM SENATOR CANTWELL'S SPEECH. [The Library of Congress doesn't provide persistent URLs for full text, but you can search the Congressional Record at http://thomas.loc.gov/­home/­r111query.html for a key phrase and find it.]

Well, to me, there is no better idea or opportunity than ensuring this stimulus provides a bold and definitive step toward a clean energy future. Clean energy will create millions of family-supporting jobs that cannot be outsourced and can provide a secure foundation for a very prosperous future for the United States.

Investing in clean energy also reduces a lot of risk that is in the marketplace right now. Whether it be the billions of dollars we spend overseas on foreign energy, or the fuel price volatility we saw last year, or the fear of supply shock that comes on a regular basis. And obviously there is uncertainty about global warming and the crisis it might lead to here and across the world.

South Korea understands this. Last Tuesday, the country's Prime Minister announced that South Korea would invest $38 billion over the next 5 years on environmental projects to stimulate the economy and create nearly 1 million jobs. Now, $38 billion may not sound like a lot here in the United States given some of the numbers people have been throwing around lately, but $38 billion for a country with a GDP less than one-tenth of our size--that would be like the United States putting up $400 billion just to match the downpayment South Korea is investing in its clean energy future.

South Korea understands that a nation that manages to win the international race to develop clean energy technologies and industries will have a leg up in determining the energy platform and all of the other solutions that will follow. South Korea knows this because it has already been a leader in lithium-ion battery technology made for cell phones and for laptops, and now they are utilizing that knowledge base to come up with lithium-ion battery solutions for cars.

So I come to the floor today to discuss four ideas that I believe are critically important for job creation and should be part of a stimulus package when we start to put pen to paper and actually see some of these ideas before our committees next week.

First, many of my colleagues have talked about the incredible promise of plug-in electric vehicles. But substituting electricity for gasoline and diesel fuel, plug-ins can reduce political and economic exposure to oil markets and spur a broad range of economic activity. If this stimulus bill is about figuring out ways to create jobs and economic growth in both the short term and sustainable jobs in the long term, then plug-ins are a big winner.

For consumers, charging up a plug-in hybrid at our current national average electricity rates would cost on average the equivalent of $1 per gallon. Now, imagine that compared to what many people have been paying over the last year. Moreover, our current electricity grid could fuel about 70 percent of the passenger vehicles we are driving in America today. So fully utilizing the grid in this way could displace about 6.5 million barrels of oil, that is the equivalent of about 50 percent of our imported oil. That translates into hundreds of billions of dollars staying right here at home, helping our economy instead of OPEC's.

Now, how do we get there? Before we can take advantage of this opportunity, we need to seize the opportunity in the United States to build better batteries for cars. Battery technology is the principal factor limiting the potential of the electric plug-in vehicle to displace gasoline-powered vehicles. But for battery-powered vehicles to perform comparable to gasoline, batteries must become lighter, more energy dense, and recharge more quickly.

While the United States continues to lead in the research and development of lithium-ion technology batteries, it is countries such as China and Korea and Japan that are the ones that are commercializing and producing this technology.

China has over 120 companies involved in the production of lithium-ion battery technology, and their battery manufacturing industry today supports over 250,000 jobs. We have no comparable lithium-ion battery facility in the United States.

U.S. auto executives have warned that without home-grown suppliers, this country could become as dependent on Asian-made battery technology as it is today on Middle East oil. So I think now is not the time to be timid. If we do not push our Nation into making sure we lead this transformation into changing the world's transportation system, other nations will take the lead in that transition.

It reminds me of a U.S. company, Intel, that led the development of the microprocessor chip. While it is a global company today, it continues to have its latest and greatest technology developed in the United States.

About 2 years ago, Senator Hatch, President-elect Obama, and I sat down with automakers, battery manufacturers, and utilities to figure out how to jump-start this development in the domestic production of plug-in electric vehicles.

The result was a multitiered tax incentive strategy designed to accelerate the domestic development, manufacturing, and sale of a full range of plug-in electric drive vehicles. The good news is our proposal received a 93-to-2 vote in the Senate and now consumers can access tax credits of up to $7,500 for the first 250,000 plug-in made and sold in the U.S. I do believe that incentive for consumers is a vital first step to bringing this game-changing technology to the marketplace.

But we also have to make sure the U.S. also maintains global market leadership in plug-in manufacturing components. To do that, we need to make sure we are incentivizing and creating a domestic manufacturing base for plug-in vehicles. That is why yesterday Senator Hatch and I introduced legislation to continue to promote this idea. Our 100-percent expensing provision would allow private companies to build or retool factories that will put American-made plug-ins in showrooms across the United States. I would like to thank Senators Kerry, Alexander, Stabenow, and Bill Nelson for being original cosponsors of this legislation.

Manufacturing these game-changing technologies in the United States will create jobs now, and it will sustain jobs for the long term. I am not just talking about in Michigan, but all over the country. It is an investment we need now more than ever.

If what I have said so far does not sway my colleagues, I hope they will consider it will probably not be the GM Volt to be the first plug-in in our marketplace. It will not even be a modified Toyota Prius. Last month, China's BYD Auto brought the first production lithium-ion, plug-in electric car to the market. So I hope my colleagues will renew their interest in this idea and review this bill and support including these manufacturing credits in a stimulus package.

Second, I think we have a tremendous opportunity in stimulus by infusing more intelligence into America's electricity grid. A smarter grid will help ensure that those plug-ins become a stabilizing and efficient energy source rather than a burden on the grid. For example, with smart grid metering and control devices, you could allow drivers to ``fill up'' their vehicles automatically, in their garage overnight when the electricity loads and prices are lowest.

[Well-informed long section on smart grid]

I can think of nothing more simple and game-changing than a $100 billion investment in clean energy to get us on the right track, and to make us the leaders in what is likely to be the largest industry of the 21st-century, producing jobs long into the future.

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