Wednesday January 09
09:05 AM EST
U.S. Ends Car Plan on Gas Efficiency; Looks to Fuel Cells
By NEELA BANERJEE with
DANNY HAKIM The New York Times
The Bush administration is walking away from a project to
develop high-mileage gasoline-fueled vehicles and will support a
plan to develop hydrogen-based fuel cells.
The Bush administration is walking away from a $1.5 billion
eight- year government-subsidized project to develop high-mileage
gasoline- fueled vehicles. Instead it is throwing its support behind
a plan that the Energy Department and the auto industry have devised
to develop hydrogen-based fuel cells to power the cars of the
future, administration and industry officials said yesterday.
The new effort, to be announced in Detroit today by Energy
Secretary Spencer Abraham, aims at the eventual replacement of the
internal combustion engine. Fuel cells use stored hydrogen and
oxygen from the air to create electricity, and the only emission
from engines they power is water vapor.
Environmentalists and some energy experts favor the research. But
critics said that the new program would let Washington and Detroit
focus on vague, long-term aims while avoiding the more difficult
task of improving the mileage of existing cars and sport utility
vehicles in the short term. Experts say that commercial production
of cars with fuel- cell engines is 10 to 20 years away.
With hearings scheduled in the Senate next month on a Democratic
alternative to President Bush's energy program, it has been unclear
how either party will address fuel economy standards, which are
equally unpopular with carmakers and organized labor.
Yesterday, an administration official speaking on the condition
of anonymity said that the Transportation Department would offer a
proposal later this year on tightening those standards. But he added
that since any changes would be years in the making, the fuel-cell
project could make them "a nonissue."
The original program, begun in 1993, aimed to develop affordable
cars that got 80 miles to a gallon of gasoline. Vice President Al
Gore, its most vocal backer in the Clinton administration, likened
the project, known as the Partnership for a New Generation of
Vehicles, to the Apollo space program in its technological
complexity. In addition to about $1.5 billion in government
subsidies, the Big Three automakers General Motors, Ford Motor and
DaimlerChrysler together spent about $1 billion a year on related
The carmakers all developed prototype vehicles that got at least
70 miles a gallon, and the project nurtured advances in aerodynamics
and lighter composite materials now used in auto manufacturing.
But none of the Big Three came close to commercial production of
an 80-mile-a-gallon car. The average fuel economy of cars and trucks
for sale in the United States has, meanwhile, steadily dropped, so
that this year's fleet with its growing proportion of sport utility
vehicles gets the worst gas mileage in 21 years, according to the
The new program, called Freedom Car, will not require the
automakers to produce a fuel-cell powered vehicle, according to the
Energy Department. Energy experts expressed concern yesterday that
without such clear targets, it too would do little to alleviate the
country's growing dependence on oil.
"I think fuel cells are a useful long- term goal," said Steven
Nadel, executive director of the American Council for an Energy
Efficient Economy, a research and advocacy group in Washington. "But
the big problem I have is that the Bush administration proposal
doesn't seem to address anything for the next 10 years. There's a
lot of technology that can go into cars in 2006 or 2007."
The new initiative was disclosed yesterday by The Detroit News.
The administration said it would not discuss its proposed spending
on the project until President Bush's 2003 budget proposal was
released in February, but the program it replaces was to receive
$127 million in federal funds this year.
Although gasoline prices are now low, the conflict in Afghanistan
has thrown a spotlight once more on America's enormous appetite for
fuel and has renewed calls for reducing American dependence on
foreign oil. The United States, with only 5 percent of the world's
population, consumes 25 percent of its oil, mostly in the form of
Mr. Abraham, in remarks prepared for delivery today at the North
American International Auto Show in Detroit, said the new project
was "rooted in President Bush's call, issued last May in our
National Energy Plan, to reduce American reliance on foreign oil."
He added, "The eventual goal of this research are technologies that
aim to solve many of the problems associated with our nation's
reliance on petroleum to power our cars and trucks."
While the Clinton administration program focused on developing
high- mileage family sedans vehicles that fell out of favor with
consumers as the research progressed Mr. Abraham said the new
project would give automakers the flexibility to use the fuel-cell
engines in a range of vehicles.
"We should be developing energy- efficient components that can be
adapted for use in several models throughout our fleet," he
The stocks of several companies that are developing fuel cells
surged yesterday on news of the administration initiative. Shares in
Ballard Power Systems, probably the best known of these companies,
jumped 15 percent, to $34.96. FuelCell Energy rose 22 percent, to
$21.85; Plug Power was up 39 percent, to close at $12.04.
The Big Three automakers are expected to introduce so-called
hybrid vehicles, using gasoline-electric engines, by 2004. Toyota
and Honda which did not share in the Clinton-era program's subsidies
already have hybrids getting at least 40 miles a gallon.
The auto industry has steadily resisted government-mandated
increases in fuel economy, with some carmakers arguing that such
requirements would divert investment from fuel-cell research.
Government standards, unchanged for more than a decade, require each
automaker's cars to average 27.5 miles a gallon and light trucks
including pickups, minivans and sport utility vehicles to average
20.7 miles a gallon.
Kara Saul Rinaldi, the deputy policy director for the Alliance to
Save Energy, a bipartisan advocacy group in Washington, said that
she welcomed the investment in fuel cells but hoped the
administration would explore improvements in fuel-economy standards.
"We're looking at long-term technology when we haven't made the
first step," she said. "Raising fuel-economy standards is the first