The search for petroleum alternatives is not new. Ever since the turn of the century, when petroleum became the dominant transportation fuel, authoritative sources have warned occasionally of impending oil shortages (1, 2). When oil prices rose or oil depletion seemed imminent, interest and investments in oil shale, ethanol, coal liquids and gases, and tar sands surged; when oil prices subsided or estimated costs of alternatives escalated, interest and investments in the alternatives waned. Not until recently have several countries actually replaced substantial quantities of petroleum transportation fuels: Canada and South Africa built large production plants to produce gasoline and diesel fuel from tar sands and coal; Brazil replaced most gasoline with ethanol fuel; and New Zealand replaced almost half its gasoline with natural gas-based fuels.

FreedomCAR is the Bush administration's bid to reduce our reliance on oil. A successor to the Clinton administration's Partnership for a New Generation of Vehicles (PNGV), FreedomCAR is a research initiative designed to promote greater coordination between federal agencies and U.S. carmakers. In marked contrast to its predecessor, FreedomCAR shifts the research focus away from technologies close at hand to fuel cells, a family of products further down the road with far greater promise to reduce petroleum use and the air pollution that results from its combustion.

On September 29, 1993, President Clinton and the chief executive officers of Ford, Chrysler, and General Motors (the “Big Three”) announced the creation of what was to become known as the Partnership for a Generation of Vehicles (PNGV). The primary goal of the partnership was to develop a vehicle that achieves up to three times the fuel economy of today’s cars – about 80 miles per gallon (mpg) – with no sacrifice in performance, size, cost, emissions, or safety. The project would cost a billion dollars or more, split fifty-fifty between government and industry over a 10-year period. Engineers were to select the most promising technologies by 1997, create a concept prototype by 2000, and build a production prototype by 2004. As the first deadline approaches, PNGV shows signs of falling short of its ambitious goals. Little new funding has been devoted to the project. More important, the organization structure that seemed appropriate in 1993 – its design goals, deadlines, and funding strategies – may prove to be counterproductive. The program designed to accelerate the commercialization of revolutionary new technologies has focused instead on incremental refinement of technologies that are relatively familiar and not particularly beneficial for the environment. Major adjustments are needed in order to realize the full potential of this partnership. A reformed PNGV would be capable of efficiently directing funds toward the most promising technologies, the most aggressive companies, and the most innovative research centers. Now is the time to update the program by incorporating the lessons learned during its first few years.

Not Applicable (Magazine Excerpt)

For those concerned about energy use and greenhouse gases in the transport sector, virtually all trends are in the wrong direction -- in the US as well as in most other countries of the world:

•Transit market share continues to drop, now accounting for less than 2% of passenger travel in the US;

•vehicle use and ownership continues to set new records every year, with each licensed driver in the US now owning 1.1 vehicles and driving over 14,000 miles per year on average;

•vehicles are getting larger and heavier every year;

•fuel economy of new vehicles is worsening and is now at its lowest level in the US since the early 1980s;

•GHG emissions from transportation are increasing at 2% per year in the US and at similar or higher rates in virtually all countries with expanding economies;

•transportation accounts for an increasing share of increasing CO2 emissions virtually everywhere (increasing from 16.9% of worldwide total in 1971 to over 20% today).

These trends are disturbing, but not unchangeable. Indeed, the potential for energy saving and greenhouse gas reduction in transportation is huge. The many strategies for doing so may be clustered into three groups:

•reduce vehicle travel;

•improve conventional vehicle technology; and

•introduce advanced technologies and low-carbon fuels.

All three are important. The first, reductions in vehicle travel, are desirable for a variety of reasons, and certainly merit strong support. But in terms of GHG reductions, technology-based strategies (the 2nd and 3rd strategies) are likely to be far more effective, especially in the US and probably in all OECD countries. Very large reductions are possible with improvements in conventional vehicle technology, and even greater reductions are possible with emerging electric-drive technologies and low-carbon fuels.

The litany of motor vehicle evils is well known. Cars account for one-fourth of greenhouse-gas emissions and half of urban air pollution; they consume more oil than the nation produces at home. Efforts to solve these problems by reducing the nation's dependence on cars have failed. Mass transit now carries a smaller proportion of travelers than ever -- only about 4 percent of total passenger-miles -- and carpooling accounts for only 13 percent of work trips, down from 20 percent in 1980. Instead, policymakers are once again turning to technological solutions creating cleaner, more efficient vehicles.

Over the past five years, electric vehicle (EV) technology has emerged as the most promising alternative to the internal combustion engine. A wave of innovation has begun to build momentum for the widespread commercialization of electric-drive vehicles. These will include not only battery-powered cars, whose ultimate role may be modest, but vehicles powered by electric fuel cells or by hybridized combinations of internal combustion engines (ICEs) and electric motors.

The potential profits from EV technology are substantial. Whoever pioneers large-scale production of electric-drive vehicles will find inviting markets around the world. EV transportation is particularly suited to countries in which pollution is severe and intractable, where petroleum imports are a burden or the fuel infrastructure needed for conventional cars is not in place, where excess electricity (usually hydropower) is available in off-peak hours, or where vehicle performance is secondary to reliability and low maintenance. Indeed, the Clinton administration has selected EV technology as one of 22 critical technologies for the nation's economic revitalization.

It is almost inevitable that EVs will eventually supplant most, if not all, conventional cars. The challenge for public policy is to guide this transition wisely. The barriers to a wholesale change in the nation's transportation system (not only economic and technical barriers but also institutional and structural ones) remain high. Only strong government action can level the playing field to give EV technologies a chance. At the same time, public policy must be flexible enough to permit midcourse corrections and let the market, rather than the government, pick the winners.

Cars account for half the oil consumed in the U.S., about half the urban pollution and one fourth the greenhouse gases. They take a similar toll of resources in other industrial nations and in the cities of the developing world. As vehicle use continues to increase in the coming decade, the U.S. and other countries will have to address these issues or else face unacceptable economic, health-related and political costs. It is unlikely that oil prices will remain at their current low level or that other nations will accept a large and growing U.S. contribution to global climatic change.

Policy makers and industry have four options: reduce vehicle use, increase the efficiency and reduce the emissions of conventional gasoline-powered vehicles, switch to less noxious fuels, or find less polluting propulsion systems. The last of these – in particular the introduction of vehicles powered by electricity – is ultimately the only sustainable option. The other alternatives are attractive in theory but in practice are either impractical or offer only marginal improvements. For example, reduced vehicle use could solve congestion woes and a host of social and environmental problems, but evidence from around the world suggests that it is very difficult to make people give up their cars to any significant extent. In the U.S., mass-transit ridership and carpooling have declined since World War II. Even in western Europe, with fuel prices averaging more than $1 a liter (about $4 a gallon) and with pervasive mass transit and dense populations, cars still account for 80 percent of all passenger travel.

Neighborhood electric vehicles (NEVs) are a promising strategy for easing the growing tension between demands for greater automotive travel and calls for improved environmental quality. By reducing performance and driving range expectations, NEVs overcome the battery problem of larger electric vehicles while still serving the mobility demands of many travelers. The introduction of NEVs is likely to be slowed by a web of road and vehicle rules designed with the standard vehicle of the past in mind and by uniform vehicle size expectations on the part of consumers, government regulators, and highway suppliers. The energy and environmental benefits are potentially so large, however, and the opportunity to create more human-scale communities so promising that it would be irresponsible not to pursue NEVs in a more deliberate fashion.