Energy Policy:

Union of Concerned Scientists' Friedman discusses path to meeting fuel economy targets

How will Energy Secretary Steven Chu's departure from DOE affect the future of clean vehicle technology development and deployment? During today's OnPoint, David Friedman, deputy director and senior engineer of the clean vehicles program at the Union of Concerned Scientists, discusses the future of natural gas, electric vehicles and other clean vehicle technologies as the United States works to double fuel economy standards by 2025.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is David Freidman, deputy director and senior engineer at the Clean Vehicles Program at the Union of the Concerned Scientist. David, thanks for coming on the show.

David Freidman: Thank you so much for the opportunity.

Monica Trauzzi: David, there's so much happening right now in the clean vehicles and fuel space. Most recently Energy Secretary Chu revealed a workplace charging challenge that he's hoping will help sort of solve some of the infrastructure issues we see surrounding electric vehicles. How much of a help will this be and how much of a hurdle is there on EV infrastructure?

David Freidman: Well, the workplace charging challenge I think is a fantastic idea because where do we spend most of our time? It's either at home or at the office. And that, usually your vehicle just sits there doing nothing, so it's a perfect opportunity to top off your battery so that you can have that extra confidence to make sure that you can get home. I mean the reality is a lot of the issues around concern over range for battery, electric vehicles, is familiarity. People aren't used to them. They're not used to understanding that hey, I can do more than half, more than 80 percent of my daily travel with the vehicle with 50 to 100 miles. So having workplace charging gives them that extra security so that they know I'll always be able to get home. Once they get used to that, they probably won't even need it any more.

Monica Trauzzi: Chu has announced that he will be resigning as Energy Secretary. How does that change the game in terms of pushing new technologies through?

David Freidman: Well, I think the Secretary has done a great job of pointing the country forward to a longer-term vision for energy policy and for vehicle technology and that's incredibly important. We've spent too many years, every 48 years jumping from one vision to the next, and I think he's really tried to invest the country in a much longer-term vision. The good thing is, from everything that I've heard the President say, he shares that vision. So my hope is whoever takes over the Secretary of Energy spot will be able to keep that vision alive and keep electric vehicles, hybrid vehicles and even simple gas, improved conventional gasoline engines moving forward at a fast pace.

Monica Trauzzi: This administration has set very aggressive fuel economy standards, wanting to double them by 2025. Can clean vehicle technology keep pace with those standards?

David Freidman: Absolutely. I mean we already know all the technologies that are needed to roughly double fuel economy by 2025. In fact, the number of electric vehicles that would be needed to meet those standards is zero. We can meet them with conventional and hybrid technology that we know how to do today. The exciting thing is as electric vehicles accelerate into the marketplace, we could be talking about higher standards. We could be talking about 60 miles per gallon. By 2035, we could be talking 70-80 miles per gallon. There's a huge opportunity to go even farther. This was the single-biggest step ever taken by any administration to cut oil use and greenhouse gas emissions, and there is even more opportunity beyond that.

Monica Trauzzi: But you always do run up against the question of whether the auto makers want to go as far as you're suggesting in terms of implementing all these new technologies because they tend to be so expensive.

David Freidman: Well, the nice thing about this is that the auto makers really stepped up this time. When it came to these standards, the automakers said we're going to do it. We're gonna stop our history of saying we can't and now we're gonna say we can because they know they've got the technology. The beauty of this is the engineers inside the auto industry, they've been developing this technology for decades. Now it finally gets a chance to come to the showroom floors. Look, electric vehicles aren't going to save the world overnight. It's going to take time. It's going to take help, like the workplace charging initiative, and more. But if companies continue to steadily invest in that technology, consumers are going to have an amazing amount of choice.

Monica Trauzzi: Let's shift gears to natural gas. McKinsey & Co. recently reported that the U.S. could increase the number of natural gas vehicles to 10 or 20 percent by 2020. Are there adequate fuel supplies and an adequate infrastructure to support that?

David Freidman: Well, I think the first question you have to ask is where does it make the most sense to use natural gas in transportation? It doesn't make a lot of sense to burn natural gas in your car. Despite the fact that natural gas is cheaper than gasoline, with a hybrid car, a hybrid car is less expensive, very efficient. You can actually save just as much or more money buying a hybrid than going and filling up your vehicle with natural gas. Where natural gas can potentially make sense is heavy-duty vehicles, or as a source for electricity to produce electricity to recharge electric vehicles. The challenge with natural gas, I think, is going to be you've got a very profitable industry who's got a big interest in selling a lot of natural gas. And if they can make the market work, I say more power to them. What I don't think we need right now given that it's such a profitable industry, is federal help to get them there. They can get there on their own. If they can help build a successful market, great. Then it can be one of the solutions out there.

Monica Trauzzi: So do you think this is the next big investment opportunity for the industry or we're gonna see more and more private money going there?

David Freidman: Well, I think there already has been some talk about private money going to putting in infrastructure. The challenge is there aren't a lot of stations where you can fill up with natural gas today, and especially if you're going to put it in bigger vehicles across the nation, you'd need a pretty extensive network. The place to start is fleets. The simplest thing to do is install a refueling station at a centralized fleet so you don't have to build a massive infrastructure. You start by serving 50, 100 vehicles. It's a much more economical way to start and see how things go. One of the big uncertainties with natural gas is where's the price going to go? Right now it's at rock bottom, but if we start using a lot more for transportation, if we start exporting it, we could easily see the natural gas prices spike. And then all of a sudden your economics go away.

Monica Trauzzi: There's also a lot of uncertainty surrounding biofuels. Is EPA on the right track with its 2013 RFS volume requirements, and do you think that that's sort of an effective way in building the biofuels market or are they setting up the industry for failure when many believe they may not be able to hit those targets?

David Freidman: Well, the renewable fuel standard is a really important policy. Basically what it says s that the oil industry has to buy the cleanest biofuels as they're made. That's a smart step. The challenge right now is what EPA has done is they've said the real clean biofuels, the cellulosic biofuels, they're moving forward but not as fast as they expected. What they're doing now is they're substituting in food for fuel, things like sugar cane ethanol and biodiesel, to meet the difference. That's not the best choice. We should put food in our kids, fuel in our cars, keep the two separate. So I think we need to start with renewable fuel standard, but the challenge with cellulosic ethanol is the economy, frankly, went into the tank and a lot of the investment dried up for cellulosic ethanol. What we need right now is federal programs to get more capital into those companies so that they can accelerate their builds for their plants. We're starting to see new cellulosic ethanol plants go up. We've already had two built, one in my home state of Florida, and there's more breaking ground every day. But it's tough to get loans these days. So this is a great place where the government could step in, provide loans to these companies so they can get up and running. We have the natural resources to meet the entire 36-billion gallon renewable fuel standard requirement with cellulosic ethanol. That's not the challenge. It's not the resources, it's the production facilities. We need to get those off the ground.

Monica Trauzzi: All right. Lots of moving parts here, many technologies at play. Thank you for coming on the show. Good discussion.

David Freidman: Thank you so much.

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

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