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Advanced diesel group's Breneman explains how proposed regulations will affect industry

Will diesel vehicles make a comeback in the United States? How will U.S. EPA's proposed fuel efficiency and vehicle emissions standards affect the advanced diesel vehicle industry? During today's OnPoint, Jeffrey Breneman, executive director of the U.S. Coalition for Advanced Diesel Cars, explains the role diesel vehicles could play in the United States as it tries to improve vehicle efficiency and increase energy independence.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is Jeff Breneman, executive director of the U.S. Coalition for Advanced Diesel Cars. Jeff, thanks for coming on the show.

Jeffrey Breneman: Thank you for having us.

Monica Trauzzi: Jeff, we're almost halfway through the 60 day comment period on EPA's proposed fuel economy and vehicle emission standards. The sense is that EPA is going to move pretty quickly on this. Do the standards that they introduced about a month ago go far enough? What's your take?

Jeffrey Breneman: Well, I think they do. They've put a lot of thought into this. Obviously, we're down the road. I think you're right, I think they will move fairly quickly. What we're focused on is the issue of real-world driving. Are they really using real-world driving as they make these calculations and look through 2016 for these regulations?

Monica Trauzzi: You've said in an op-ed piece that you wrote that the standards represent lofty aspirations. Many would argue that by 2016, thinking about things from a technological standpoint, we'll be able to achieve or we should be able to achieve greater fuel efficiency than an average of 35 miles per gallon. So why do you think that these standards are lofty?

Jeffrey Breneman: Well, this is the first time. I think it's historic that we have -- everyone came together on this agreement. So you have California, you have the EPA, you have NTSA, you have industry all kind of agreeing upfront that this is something that we can do and we can achieve. That, to me, is lofty in itself. We haven't had that kind of agreement, so let's see where we can take it. I think it's a good starting point and there is technology out there, including diesel, that can help get to those standards.

Monica Trauzzi: OK and your group is exclusively dedicated to promoting clean diesel passenger vehicles. So give us the stats on advanced clean diesel technology compared to some of the other technologies that are coming out and coming to the forefront now.

Jeffrey Breneman: Sure. Well, diesel is the technology that's available today. It's been around for long time. The technology has improved immensely over the last 10 years. So advanced diesel technology today, that's available now in the U.S. market, all 50 states, it meets California's emission standards, is 20 percent lower on CO2 than the average gasoline car, 30 percent better fuel economy, and 50 percent more power. So Americans don't have to make a choice. They can have what they desire or need in power in a vehicle and yet still have lower CO2 and better fuel economy.

Monica Trauzzi: So, does diesel then fall into the category of a long-term solution or is it sort of a short-term bridge solution until some of these other technologies come online?

Jeffrey Breneman: It is certainly one of the technologies that's available today. Clearly, in the midterm and depending on how long the advanced internal combustion engine is a solution to the U.S. market, it could be here for a long time. It's a flex-fuel vehicle. Ultimately there's a lot of research being done on biofuels, ultimately an advanced diesel engine that's very efficient can run on biofuels. So it's a great way to reduce petroleum and reduce CO2 at the same time.

Monica Trauzzi: One of the big questions surrounding diesel is whether the refiners can keep pace with a booming diesel industry.

Jeffrey Breneman: Sure.

Monica Trauzzi: Can refiners handle a switch over to diesel?

Jeffrey Breneman: Well, I don't try to tell what the refiners do and don't, that's a difficult question. But most have said even a shift about 15 to 20 percent diesel marketshare in the U.S. market wouldn't require a great deal of increase in diesel in the U.S. Obviously, a lot of diesel is used for on-highway trucks, stationary power. So an increase in the light-duty market wouldn't have a huge impact on the amount to diesel consumed.

Monica Trauzzi: So, any direct impacts that these new standards would have on your industry? I mean are there changes that need to be made?

Jeffrey Breneman: There are. The real-world driving is a significant issue. Back in 2006 EPA determined that today's consumer drives about 57 percent of their time on the highway, 43 percent in the city. CAFE currently is looking at 55 city, 45 highway. That was the standard that was developed in the 1970s. Americans driving habits have changed dramatically since the 1970s. Urban sprawl and other things have made people's commute to work longer and so we want to see that the real-world constellations are used and, unfortunately, the draft rule says we understand we need to look at real-world driving conditions, but we're not going to do it until 2017. We think it's something that should be done now because it does have implications on the types of technologies that are favored versus more technology neutral regulations.

Monica Trauzzi: So, your sense is that the Obama administration may be favoring some technologies over others?

Jeffrey Breneman: I don't think it's a matter of favoring technologies. They seem to think that they don't have the statutory authority to use 57/43 instead of 55/45. That CAFE outlines that they have to use 55/45 and until they have the statutory authority to make the change, they can't do it. I tend to disagree. I think that they have shown this is where American driving habits are and that they could do this under this existing rule. And we're going to be making the case that they should, because what it does is it's going to shift consumers into certain technologies. The regulation will favor start-stop type technologies for city driving and that's not the way Americans are driving today. So we need to have these regulations based on where American driving habits really are because that will help to consumers have more choice for what their needs are.

Monica Trauzzi: Consumers, a major factor.

Jeffrey Breneman: Absolutely.

Monica Trauzzi: Diesel vehicles have been popular in Europe for a long time. Why haven't they taken off in the U.S.? Is it an education issue?

Jeffrey Breneman: It's a lot of things. There's still a perception issue and Audi is obviously doing a very large campaign as is BMW, including the tagline that Audi is using, "Diesel is no longer a dirty word." Those types of perception issues are still real. We had a very failed experiment with diesel in the 1980s in the light-duty market and they were slow, they were smoky, they were smelly and they broke down. Today's advanced diesels are very different and I think as Americans have driven these cars they've realized they do meet their driving needs. Now that the new advanced diesels have been on the market in 2009, we're actually seeing that consumers are choosing, in a higher percentage, a diesel option if it's available than they are a hybrid option. That's pretty fascinating.

Monica Trauzzi: So, final question here, if I'm a consumer in the market for a new vehicle, what's the incentive for me to buy a diesel?

Jeffrey Breneman: Well, there's a couple things. Obviously you get the benefits of fuel economy, reduced CO2, and maybe the power that you want or need to power your vehicle, but there's also the federal tax credit. Most people don't realize that the "hybrid tax credit" that was made available a few years ago is also available to clean diesel vehicles and so you buy that vehicle, you get a federal tax credit ranging from $1300 to maybe $2000 on your tax bill.

Monica Trauzzi: OK, we'll end it there. Thank you coming on the show.

Jeffrey Breneman: You bet, thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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