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[Senate Hearing 112-38]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 112-38
 
                     ADVANCED VEHICLE TECHNOLOGIES

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   TO

  RECEIVE TESTIMONY ON POLICIES TO REDUCE OIL CONSUMPTION THROUGH THE 
 PROMOTION OF ADVANCED VEHICLE TECHNOLOGIES AND ACCELERATED DEPLOYMENT 
      OF ELECTRIC-DRIVE VEHICLES, AS PROPOSED IN S. 734 AND S. 948

                               __________

                              MAY 19, 2011

                       Printed for the use of the
               Committee on Energy and Natural Resources

                  U.S. GOVERNMENT PRINTING OFFICE
67-290                    WASHINGTON : 2011
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            RAND PAUL, Kentucky
MARK UDALL, Colorado                 DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire        ROB PORTMAN, Ohio
AL FRANKEN, Minnesota                JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Alexander, Hon. Lamar, U.S. Senator From Tennessee...............     5
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Crane, David, President and CEO, NRG Energy, Inc., Princeton, NJ.    36
Cullen, Genevieve, Vice President, Electric Drive Transportation 
  Association....................................................    23
Davis, Patrick, Program Director, Vehicle Technologies Program, 
  Office of Energy Efficiency and Renewable Energy, Department of 
  Energy.........................................................     9
Ghasemi, Seifi, Chairman and CEO, Rockwood Holdings, Inc., 
  Member, Electrification Coalition, Princeton, NJ...............    14
Merkley, Hon. Jeff, U.S. Senator From Oregon.....................     3
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Stabenow, Hon. Debbie, U.S. Senator From Michigan................     7
Van Amburg, Bill, Senior Vice President, CALSTART, Pasadena, CA..    28

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    53

                              Appendix II

Additional material submitted for the record.....................    69

                     ADVANCED VEHICLE TECHNOLOGIES

                              ----------                              

                         THURSDAY, MAY 19, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:01 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. OK. I think we'll go ahead and get started. 
Senator Murkowski is delayed just a few minutes, but asked us 
to start without her. She will be here shortly.
    Thank you all for coming to testify today. Give us your 
thoughts on 2 important bills: S. 734 and S. 948. These are 
both bills aimed at accelerating the development and deployment 
of advanced vehicle technologies.
    The topics that we're discussing today have been a high 
priority for the committee for some time. These bills are 
constructive steps forward in dealing with our energy security, 
economic security and ultimately our competitiveness 
internationally. So I commend the authors of the legislation.
    I'm sure there will be plenty of debate about the causes 
and short term fixes for high prices of gasoline at the pump. I 
think the case has been settled for some time that now that the 
economic and national security costs of our current reliance on 
oil are unacceptable. I don't think there's any real debate 
that the only way we're going to substantially affect that cost 
to our economy and to many of ourselves, our consumers, is to 
reduce the amount of oil we use in transportation.
    This means both increasing the efficiency of traditional 
combustion engines and increasing alternatives for powering 
vehicles. They're promising technologies today in alternative 
fuels, in increasing energy efficiency and in light weight 
materials. But because they are new and produced on smaller 
scales they are not yet seen as widely commercially available 
and viable. Other technologies remain in even earlier stages, 
need more research and development before they're commercially 
ready.
    These bills that we're discussing today will focus on both 
of these areas. Senator Stabenow's bill will provide a useful 
structure to do the research and development programs at the 
Department of Energy as well as providing tools to effectively 
partner with industry to quickly bring advances to the 
commercial marketplace. It also brings more focus to the 
important medium and heavy duty vehicle segment. This is an 
area where substantial fuel savings opportunities exist.
    Senators Merkley and Alexander joined together in a bill. 
They had Senator Dorgan, who is on this committee in the last 
Congress, also joined with them in the previous Congress with 
the bill, providing for a targeted approach to overcoming 
initial barriers to widespread deployment of light duty 
vehicles powered by electricity. The benefits replacing some 
portion of oil use with domestically generated and 
comparatively cheap electricity are obvious. This likely 
accounts for the strong vote that their legislation received in 
this committee in the last Congress. I believe the vote here in 
our committee was 19 to 4 in reporting that legislation.
    So once again this is a very timely topic. We look forward 
to getting people's updated views on the issues.
    Senator Murkowski has just arrived. Let me call on her for 
any opening comments she has. Then we'll call on our 3 
colleagues to give us their views.
    But, Senator Murkowski.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. Good morning. 
Good morning to Senator Alexander, Senator Merkley. Senator 
Stabenow, I also want to thank you for your hard work on this 
legislation that we have before us today.
    Earlier in the week we considered several bills that are 
designed to increase domestic energy production. Now we're 
going to be looking at the other side of the equation with a 
few of the goals, the bills, that we are putting before us that 
look to reduce demand. In my mind those are both going to be 
necessary goals for the foreseeable future. Both supply and 
demand matter and the policies that we can consider here in 
this committee, I think should reflect that.
    As I've said a number of times, this is an exciting time to 
be working on vehicle legislation. I think that the automobile 
industry is once again entering a period that will be marked by 
tremendous strides in innovation. Advanced technologies are 
already allowing us to use fuel more efficiently. With the 
prices at the pump hovering or above $4 a gallon, that's 
something that we can all appreciate.
    For the first time in a long time it also appears that the 
internal combustion engine is facing some real competition. 
That's a fine thing. Electric vehicles are perhaps the most 
promising of several technologies that could, over time, 
dramatically reduce our Nation's oil consumption. I think every 
member of our committee would agree that electric vehicles have 
great potential. We want to see them transform the industry.
    Mr. Chairman, as you've noted, both of the bills on today's 
agenda were considered and reported by our committee last 
Congress. While I hope we're able to overcome some of the 
issues and come to a bipartisan consensus on a path forward. I 
do have some concerns, perhaps some greater than others that 
will need to be resolved before I can offer my full support.
    Of course, the cost is at the top of my concern list. On 
Monday, the Federal Government hit its debt ceiling of $14.3 
trillion. Given the huge amount of work that it will take to 
balance the budget we need to be careful as authorizers to make 
sure that everything that we pass is well justified. One of the 
best ways to ensure that our work keeps moving through the 
legislative process will be to make sure that it's fully paid 
for whether by repealing old authorizations or applying some of 
the revenues from new energy production.
    But beyond cost, we also need to consider the design of 
each of these policies.
    With respect to the Promoting Electric Vehicles Act, I 
believe that a national plan is quite relevant. I also believe 
that deployment communities have considerable merit. But I 
think we need to be careful. Just a handful of communities will 
be selected and public money could very well crowd out the 
private investments that are now being made. I've got some 
questions about the number of communities that should be 
created, the funding limits for those communities and the 
technologies that should be eligible for deployment with them.
    With respect to the Advanced Vehicle Technology Act, I 
certainly appreciate the desire to streamline the current 
tangle of authorities for the Vehicles Technology program. 
While I agree that one umbrella authority would be an 
improvement I do have some concerns about the size of the 
umbrella that this bill envisions. There's a role for the 
Federal Government to pay in vehicle research. But it is 
entirely possible to expand that role too far, especially as 
we're dealing with our debt and deficits.
    Mr. Chairman, I look forward to the hearing this morning as 
we learn more. To work with you to advance responsible policies 
that reduce our Nation's fuel consumption.
    Thank you.
    The Chairman. Thank you very much. Why don't we hear from 
our colleagues in the order that they appeared here.
    Senator Alexander, did you want to go first? Do you want 
Senator Merkley to go first?
    Senator Alexander. Let Senator Merkley go first.
    The Chairman. Senator Merkley, why don't you go ahead? 
We'll hear from you 2 and then from Senator Stabenow.

         STATEMENT OF HON. JEFF MERKLEY, U.S. SENATOR 
                          FROM OREGON

    Senator Merkley. Thank you, Chairman Bingaman and Ranking 
Member Murkowski and members of the committee. I appreciate the 
opportunity to testify before you in partnership with my 
colleague, Senator Alexander on a topic both of us feel is very 
important to the future of our Nation. It addresses one of the 
biggest issues that faces America, namely America's addiction 
to imported oil.
    We're the largest consumer of oil in the world. We depend 
on foreign countries like Saudi Arabia and Venezuela for more 
than 50 percent of that oil. Many of these countries share 
neither our security interests nor our values.
    Transportation is the circulatory system of our economy. 
Without it, we can't survive. Yet, with 95 percent of 
transportation powered by oil we have a system in which 
instability in the Middle East or natural disasters far from 
our shores or even market manipulation can cause a heart attack 
in the American economy. Heart attacks in the economy are not 
good.
    We need to take charge of our economic health, our economic 
future which means breaking our addiction to foreign oil. Since 
cars consume one-third of our oil, powering cars by electricity 
is a powerful strategy toward that end. A number of reasons why 
investing in electric vehicles is good.
    First, they promote fuel efficiency. It's a surprise to 
many that burning fuels create electricity and delivering that 
electricity to cars is more efficient than actually burning the 
fuel in individual cars. So we get more bang for our energy 
buck.
    Second, electric fuels promote fuel diversity. Since 
electricity for cars can be generated from a diverse set of 
fuels including coal, nuclear, natural gas, hydroelectricity, 
wind, geothermal, solar and so forth.
    Third, because of that diversity, the price of electricity 
has low volatility insulating America from the type of gasoline 
price spikes that we're currently experiencing.
    Fourth, electric vehicles eliminate pollution from the 
tailpipe. Our fleet today emits pollutants that lead to asthma 
and contribute to global warming. Electric vehicles are clean, 
as electricity they use. Fortunately that electricity is 
getting cleaner.
    Fifth, the fuels that provide us with electricity will come 
right here from America creating jobs at home. 99.99 percent of 
the fuels we use to create electricity are here in America. We 
import .01 percent from Canada.
    By meeting our transportation energy needs from domestic 
fuels we reduce economic and security risks. We reduce our 
trade deficit. Half of our trade deficit comes from importing 
oil. When we replace imported oil with red, white and blue 
American made energy, we create jobs here at home.
    Sixth, the battery capacity of an electric vehicle fleet is 
a positive in that it can eventually create the capacity to 
even out electricity demand. For example, in some parts of the 
country cars can take advantage of surplus nuclear energy at 
night, base load energy. In other parts of our Nation, car 
batteries can help absorb surplus supply of wind energy.
    So let me turn to the design of the bill. Three main 
concepts.
    First is to prove the concept of electric vehicle 
deployment in targeted deployment communities. It accomplishes 
this by providing competitive grants to communities to 
accelerate investments in electric vehicle infrastructure 
including charging stations, code updates, work force training 
and so forth. In this sense it's really taking on the chicken 
and the egg problem.
    Communities are reluctant to build the necessary 
infrastructure until there are enough individuals with cars. 
Individuals are reluctant to buy until the infrastructure 
exists. The goal of these deployment communities is to learn 
from the challenges in diverse areas in order to develop the 
best strategies to promote effective, cost efficient 
deployment.
    A second main goal is to expand the use of vehicles in 
fleets. Our bill provides competitive grants to companies that 
have fleets such as rental car or taxi cab companies and also 
to change the law so the Federal Government could purchase 
electric vehicles.
    Third, investing in breakthrough battery research to bring 
down the cost and improve the battery life. This type of 
research will enable us to have batteries that are more 
affordable, last longer on each charge and extend battery life 
as well as reduce electric vehicle component costs and reuse 
spent batteries. It also creates competition to reach the 
standard of a 500 mile battery and awards a prize in that 
competition.
    Now there is a significant cost as our Ranking Member 
pointed out, pegged at $3 billion over 5 years. To place that 
into context during that 5 year period we will spend 
approximately $1.5 trillion on imported oil. So this bill calls 
for us to spend $1 for every $2,000 we spend overseas out of 
our economy so that we can stop sending those dollars out of 
our economy.
    Keep them here. Keep them creating jobs here. Have those 
dollars circulating through our grocery stores, our small 
businesses, our Main Street businesses. So by spending a 
fraction of what we're popping out overseas we can greatly 
strengthen our economy. I think both of us are deeply committed 
to finding that offset that's necessary when we come to the 
point of passing this legislation.
    So in closing, for the American economy to thrive we need 
to have a smart energy policy that breaks our addiction to 
imported oil. Accelerating the deployment of electric vehicles 
is a key piece of that strategy. It will improve our national 
security. It will create jobs by spending our energy dollars 
here at home. It will improve our environment.
    Thank you.
    The Chairman. Thank you very much.
    Senator Alexander.

 STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM TENNESSEE

    Senator Alexander. Thanks, Mr. Chairman. Mr. Chairman, 
Senator Murkowski, distinguished colleagues, I appreciate the 
invitation to try to take 3 to 5 minutes to persuade you to do 
again what you did last year which is to report the Promoting 
Electric Vehicles Act to the floor. One difference is the price 
of gasoline is higher this year than it was last year. The bill 
costs less this year than it did last year.
    Last year's vote was, as the Chairman said, by bipartisan 
vote of 19 to 4. This is an appropriate role for the Federal 
Government. 8 to 15 pilot communities, battery research, short 
term, the billion dollars we saved in authorization, we saved 
by avoiding duplicating other programs.
    Finally if you believe the solution for $4 gasoline and 
high energy prices is finding more American energy and using 
less, this is the best way to use less. Electrifying half our 
cars and trucks would reduce our use of foreign oil by one-
third. Saving money on fuel and stopping the sending of 
billions of dollars overseas.
    So instead of making the speech about--with the rest of my 
time, let me tell you a story. It's the story of Ross Perot and 
how he made his money. Back in the 1960s he noticed that the 
big banks down in Dallas were locking their doors at 5 o'clock. 
They had all these big computers that they weren't using at 
night.
    So he made a deal with the banks. Sell me your unused 
computer time. Then he went to the States and made a deal with 
the States to use that cheap computer time to do all their 
data. He made a billion dollars.
    In the same way, we've got an enormous amount of unused 
electricity at night. Conservative estimate is that we have 65 
to--we have an amount of electricity that's unused at night. 
It's equal to the output of 65 to 70 nuclear power plants 
between 6 a.m. and 6 p.m. I suspect that's probably our 
greatest unused resource in the United States.
    If we were able to use that resource to plug in cars and 
trucks at night, we could electrify half our--well, 43 percent 
of our cars and trucks without building one new power plant. We 
could plug them in at night at electrify 43 percent of our cars 
and trucks without building one new power plant. Very ambitious 
goal to electrify half our cars and trucks, take a long time to 
do it. But it's the best way to reduce our use of oil.
    Another reason I think this will work is because it's easy 
for consumers and I am one. For 2 years I drove a Toyota Prius 
that had an A123 battery in it. It increased my mileage up to 
80 or 90 miles per gallon. I just plugged it in at night at 
home.
    I've now got a Nissan Leaf. I live in an apartment nearby. 
I plug it in at night. I don't even have a charger. I just plug 
it into the wall. I can drive a couple of hours every day 
without buying any gas. Plug it in at night, had no problems.
    For that reason almost every car company is now making 
electric cars. So if extra electricity is available and they're 
easy to use and car companies are making them, then why do we 
need the government to be involved? It's a good question.
    One is the urgency of the problem. Four dollar a gallon 
gasoline is killing our economy, throwing a big wet blanket 
over it. The only solution is to find more and use less and 
this is the way to use less.
    Now to my Republican colleagues.
    One, we've been saying for 3 years in our caucus, find 
more, use less. We criticize Democrats for wanting to find 
more--for wanting to use less without being serious about 
finding more. We're subject to the same criticism if all we 
want to do is find more and don't have a credible way to use 
less. This is the best way to use less oil.
    Second, a criticism is this interferes with the 
marketplace. It does that, but in a short term, in a limited 
way. Short term incentives to jump start nuclear energy, to 
jump start natural gas truck fleets, to jump start electric 
cars for 4 or 5 years, I think are appropriate given the 
urgency of the problem. If I'm here in 5 years, I'll be the 
first to say this should be the end of it. If not, I'll come 
back and argue for its repeal.
    Third, and this is my list of arguments to my Republican 
colleagues. Conservative groups across the county have said 
national security demands that we do this. Gary Bauer, 
President of American Values, Richard Land, President of the 
Ethics and Religious Liberty Commission, have endorsed our bill 
saying that national security concerns overwhelm any opposition 
to it. It's the best way to displace our use of oil.
    Finally can we afford it? It's a billion dollars cheaper. 
It is an authorization bill. Within the money we spend every 
year we should be setting priorities. This should be a 
priority.
    There's some suggestion that this committee should also 
appropriate the money. I would respectfully suggest that we're 
in a 2-year period where we have no earmarks because 
authorizers didn't like appropriators authorizing. Let's be 
consistent and say to authorizers, you shouldn't be 
appropriating. Let's just do the job of authorizing and then 
work together. Senator Merkley and I are--have pledged to each 
other that should you report it and it come to the floor we'll 
work together to try to pass it without adding to the debt 
working with the Appropriations Committee.
    So in summary, thank you for the time to address $4 
gasoline and high energy prices. We need to find more American 
energy and use less. The single best way to use less is to jump 
start electric cars and trucks.
    You approved it once before. The problem is worse than it 
was then you last approved it. The bill costs less than when 
you last approved it. It's an appropriate role for the Federal 
Government. We'll work with the appropriators if you report it 
to find a way to enact it without adding a penny to the debt.
    Thank you for your time.
    The Chairman. Thank you both very much for your strong 
advocacy for the bill that the 2 of you have introduced.
    Senator Stabenow has the other bill that we are looking at 
today. I want to give her a chance to briefly describe that 
bill before we call our panel of experts.
    If you have to go on to other business, we understand that. 
Thank you again for being here.
    Senator Stabenow.

 STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM MICHIGAN

    Senator Stabenow. Thank you, Mr. Chairman.
    First, before my colleagues leave, I just want to thank 
Senator Merkley and Senator Alexander for a thoughtful and I 
think, exciting piece of legislation to really move us forward 
on all of the issues that you talked about, but certainly 
energy independence, national security. Wwe already have, with 
the investment we made in advanced batteries last year in the 
Recovery Act, an example of what you can do with a relatively 
small amount of dollars that create an explosion of private 
investment in battery technology. Senator Alexander, you 
mentioned A123 batteries. Their first manufacturing facility is 
in Michigan and so we are proud that you are using that battery 
technology.
    But it's about jobs for us as well. That's the one thing I 
would add. This is very much about jobs. So, thank you for your 
efforts.
    Mr. Chairman, my bill and I want to thank Senator Wyden for 
co-sponsoring it, really is a partnership with this vision of 
moving us forward on electricification which I think is 
incredibly important. The Advanced Vehicle Technology Act does 
a couple of things. Both allows us to broaden.
    So we're looking at a variety of technologies which I know 
the Chairman is very interested in as well. That we are looking 
at a variety of opportunities to look at technologies that get 
us off of foreign oil but also to look at batteries in a 
broader sense. Right now we're looking at automobiles. That's 
important. That's a great first step.
    But I have seen trucks, not just service trucks, panel 
trucks like Fed Ex or UPS or others, but large trucks now that 
have the capacity to use battery technologies. Then talk about 
getting us off of foreign oil and using less gas. If we can 
take those technologies and move them to large vehicles we are 
doing even more.
    So, the bill that I've introduced which is very similar to 
the one passed last year, last September by the committee, 
looks to do that, bring all of the advanced technology 
partnerships together in one place. But broaden the way we're 
looking at it. This is enjoy--this enjoys the support of the 
Motor and Equipment Manufacturers Association, Electric Drive 
Transportation Association, Hybrid Truck User Forum, Alliance 
of Auto Manufacturers as well as a number of individual 
manufacturers, suppliers and environmental groups.
    This helps support our manufacturers and suppliers to make 
the most fuel efficient vehicles through a wide variety of 
technologies, which of course, will save consumers money at the 
gas station, reduces dependence on foreign oil and creates jobs 
which is so important for us. We are putting through S. 734. 
We're putting a framework together for vehicle research and 
development within the Department of Energy's Vehicle 
Technologies Program.
    We are improving the program to go beyond the traditional 
partnerships. As I mentioned by including suppliers because 
component parts whether it's batteries or other component parts 
that have motors, engineering parts and so on, is important. 
Including medium and heavy duty trucks and that technology is 
very important for us in terms of saving energy.
    Under the bill Department of Energy would form public/
private partnerships with companies of all sizes, with 
universities, other groups, to work on a broad range of 
innovative technologies like electric cars, hybrids, natural 
gas, advanced batteries, would look broadly at what we can do 
to jump start a number of technologies. I should finally just 
point out there is no price tag in the bill. It remains the job 
of the appropriators to decide where the funding will come 
from. We used the term such sums as are appropriated. We also 
keep the cost to a minimum by specifically directing the 
Department to avoid duplication with other agencies.
    So again, thank you Mr. Chairman. I think it's very 
important that we bring our activities together in one place 
and focus them more on ways to really get us off of foreign oil 
by great American ingenuity and technology.
    The Chairman. Thank you very much, Senator Stabenow for 
your leadership on this legislation. We appreciate your early 
and strong advocacy for what we're trying to consider today.
    Why don't we call our panel of witnesses today? Let me ask 
them to come forward. I'll introduce them at this time.
    We have Mr. Patrick Davis, who is the Program Manager with 
the Office of Vehicle Technologies in the Department of Energy.
    We have Mr. Seifi Ghasemi, who is a Board Member with the 
Electrification Coalition also, Chairman and CEO of Rockwood 
Holdings in Princeton, New Jersey. Thank you for being here.
    Ms. Genevieve Cullen is Vice President of the Electric 
Drive Transportation Association.
    Mr. Bill Van Amburg is the Senior Vice President with 
CALSTART in Pasadena, California.
    Mr. David Crane, who is President and CEO of NRG Energy in 
Princeton, New Jersey.
    So thank you all very much for being here. If each of you 
could take about 5 minutes and give us the main points you 
think we need to understand from your testimony. We will 
include your full testimony in the record as if read. So you 
don't need to go through all aspects of it. But again, we 
appreciate your being here.
    Mr. Davis, why don't we start with you and tell us the 
Department of Energy's view on these 2 bills and anything else 
you think we need to understand.

     STATEMENT OF PATRICK DAVIS, PROGRAM DIRECTOR, VEHICLE 
TECHNOLOGIES PROGRAM, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE 
                  ENERGY, DEPARTMENT OF ENERGY

    Mr. Davis. Thank you.
    Chairman Bingaman, Ranking Member Murkowski and members of 
the committee, thank you for the opportunity to discuss the 
Advanced Vehicles Technology Act and the Promoting Electric 
Vehicles Act of 2011.
    The transportation sector accounts for approximately two-
thirds of the U.S. oil consumption and contributes to one-third 
of our Nation's greenhouse gas emissions. After housing, 
transportation is the second biggest monthly expense for most 
American families. As the President said in his recent energy 
speech, ``In an economy that relies so heavily on oil rising 
prices at the pump affect everybody.'' In addition the 
President outlined a portfolio of actions which if taken 
together could cut U.S. oil imports by a third by 2025.
    The Office of Energy Efficiency and Renewable Energy's 
Vehicle Technologies Program develops and promotes energy 
efficient, environmentally friendly transportation technologies 
that will reduce petroleum consumption and lower greenhouse gas 
emissions while meeting driver's expectations of vehicle 
performance. Few technologies hold greater promise for reducing 
our dependency on oil than electric vehicles. In his 2011 State 
of the Union Address, the President spoke of his goal to have 
the United States become the first country with a million 
electric vehicles on the road by 2015. Meeting this goal will 
help the U.S. become a leader in the clean energy economy while 
capitalizing on the ingenuity of American industry.
    In 2009, the U.S. had only 2 factories manufacturing 
advanced vehicle batteries and produced less than 2 percent of 
the world's hybrid vehicle batteries. But over the next few 
years, thanks to investments from the American Recovery and 
Reinvestment Act in battery and electric drive manufacturing, 
the U.S. will be able to produce enough batteries and 
components to support 500,000 electric drive vehicles per year. 
High volume manufacturing coupled with battery technology 
advances and material cost reductions will lead to a drop in 
battery costs of approximately 50 percent by 2013 compared to 
2009 making electric vehicles accessible to more consumers.
    Making our cars and trucks more efficient is one of the 
easiest and most direct ways to limit our petroleum consumption 
and save consumers money. To help increase the fuel economy of 
the vehicle fleet DOE is investing not only in electric 
vehicles, but also in higher efficiency combustion engines, 
vehicle light weighting, ethanol and biofuel development, fuel 
cell electric vehicles, manufacturing and vehicle 
electrification deployment. The Promoting Electric Vehicles Act 
of 2011 includes several important provisions to promote near 
term deployment of electric drive vehicles which complement and 
supplement the Department's ongoing activities.
    The Department recognizes the potential benefits of 
activities such as those proposed by the National Plug in 
Electric Vehicle Deployment program including technical 
assistance, work force training and a targeted communities 
program to facilitate the rapid deployment of plug in vehicles. 
We believe that such an effort will help create models and 
facilitate the local leadership necessary for faster, easy 
adoption across the country and would be a natural extension of 
the activities undertaken through our Clean Cities Program. The 
coalitions that comprise the Clean Cities network bring 
together State and local governments, early adopter fleets, 
local utilities, infrastructure developers and other key 
stakeholders to help advance the deployment of alternative fuel 
vehicles.
    These partnerships are proven and effective resources for 
sharing information at the local level and are prime to support 
the roll out of electric drive vehicles and infrastructure. We 
believe that both the work force training as well as the 
technical assistance component of the proposed National 
Deployment Program are vital to the successful roll out of 
electric drive vehicles. Again, the Department is well 
positioned to disseminate information and provide training and 
technical assistance to communities seeking to accelerate EV 
deployment.
    As an example the Clean Cities network is working today to 
share best practices and lessons learned about permitting and 
inspection processes as well as opportunities for code official 
and first responder training. The program authorizes by the 
Advanced Vehicle Technology Act of 2011 would complement 
several of the Department's current activities focused on 
increasing vehicle energy efficiency. The Department supports 
an integrated portfolio of advanced vehicle and fuel research 
development demonstration and deployment activities. Ultimately 
Senate 734 would further support the widespread 
commercialization of advanced vehicle and fuel technologies to 
reduce U.S. oil consumption, strengthen our economy and reduce 
air pollution and greenhouse gas emissions.
    In summary, the Department's transportation portfolio will 
save consumers money, reduce our dependence on oil, reduce/
lower our environmental impact and keep America on the cutting 
edge of clean energy technologies enabling us to build a 21st 
century clean energy economy. Thank you again for the 
opportunity to discuss these issues. I welcome any questions 
you may have.
    [The prepared statement of Mr. Davis follows:]
    Prepared Statement of Patrick Davis, Program Director, Vehicle 
Technologies Program, Office of Energy Efficiency and Renewable Energy, 
                          Department of Energy
    Chairman Bingaman, Ranking Member Murkowski and Members of the 
Committee, thank you for the opportunity to discuss the Department's 
advanced vehicles technology programs. The Administration is still 
reviewing S. 734 the Advanced Vehicles Technology Act and S 948 
Promoting Electric Vehicles Act of 2011 and does not have a position on 
either bill at this time and so this statement will provide only 
general DOE comments.
    The transportation sector accounts for approximately two-thirds of 
the United States' oil consumption and contributes to one-third of the 
Nation's greenhouse gas (GHG) emissions.\1\ After housing, 
transportation is the second biggest monthly expense for most American 
families.\2\ As the President said in his recent energy speech, ``In an 
economy that relies so heavily on oil, rising prices at the pump affect 
everybody.'' Emphasizing that ``there are no quick fixes,'' the 
President outlined a portfolio of actions which, taken together, could 
cut U.S. oil imports by a third by 2025. These include programs that 
would put one million electric vehicles on the road by 2015.
---------------------------------------------------------------------------
    \1\ http://www1.eere.energy.gov/vehiclesandfuels/pdfs/
vehicles_fs.pdf
    \2\ http://www.bls.gov/news.release/cesan.nr0.htm
---------------------------------------------------------------------------
    The Office of Energy Efficiency and Renewable Energy's (EERE's) 
Vehicle Technologies Program (VTP) develops and promotes energy-
efficient, environmentally-friendly transportation technologies that 
will reduce petroleum consumption and lower GHG emissions while meeting 
drivers' expectations of vehicle performance. VTP's activities promote 
energy security, environmental, and economic benefits in both the near-
and long-term.
    Few technologies hold greater promise for reducing our dependence 
on oil than electric vehicles. In his 2011 State of the Union address, 
the President spoke of his goal to have the United States become the 
first country with a million electric vehicles on the road by 2015. 
Meeting this goal will help the United States become a leader in the 
clean energy economy, while capitalizing on the ingenuity of American 
industry. Manufacturing products needed for the clean energy economy 
will generate long term economic strength in the U.S., creating jobs 
across the country while reducing air pollution and greenhouse gas 
emissions.
    EERE investments past, present, and future are critical to 
achieving this goal. In 2009, the U.S. had only two, relatively small, 
factories manufacturing advanced vehicle batteries, and produced less 
than two percent of the world's hybrid vehicle batteries.\3\ But over 
the next few years, thanks to investments from the American Recovery 
and Reinvestment Act of 2009 (Recovery Act) in battery and electric 
drive component manufacturing, and electric drive demonstration and 
infrastructure, the U.S. will be able to produce enough batteries and 
components to support 500,000 plug-in and electric vehicles per year. 
High volume manufacturing, coupled with battery technology advances, 
design optimization, and material cost reductions, could lead to a drop 
in battery costs of 50 percent by 2013 compared to 2009, which will 
lower the cost of electric vehicles, making them accessible to more 
consumers.
---------------------------------------------------------------------------
    \3\ http://www.whitehouse.gov/sites/default/files/
blueprint_secure_energy_future.pdf
---------------------------------------------------------------------------
    Further policies and research are needed to build on the work under 
the Recovery Act. That is why the President's FY 2012 Budget proposes a 
new effort to support electric vehicle manufacturing and adoption in 
the United States through new consumer rebates, investments in R&D, and 
competitive programs to encourage communities that invest in electric 
vehicle infrastructure and regulatory streamlining. Specifically, the 
Budget proposes to: transform the existing $7500 tax credit for 
electric vehicles into a rebate that will be available to all consumers 
immediately at the point of sale; advance innovative technologies 
through new R&D investments, building on Recovery Act investments, by 
investing $588 million for vehicle technologies at DOE; and reward 
communities that invest in electric vehicle infrastructure through a 
$200 million program which provides an incentive for communities to 
invest in electric vehicle infrastructure and remove regulatory 
barriers.
general comments on s. 948, the promoting electric vehicles act of 2011
    The investments that we have made through the Recovery Act as well 
as those in the Budget align with many of the priorities that are 
reflected in the Promoting Electric Vehicles Act of 2011--though we do 
not take a position on the bill itself. Below, I will discuss some of 
the priorities included in this bill:
    One of the main elements of the Promoting Electric Vehicles Act is 
a deployment program in which communities would be chosen on a 
competitive basis to receive grants that would be used to support 
integration of electric vehicles through means such as installing 
charging infrastructure, updating building codes. The Administration is 
supportive of this concept, which is why the President's Budget 
includes $200 million to reward communities for leadership in reducing 
regulatory barriers and developing comprehensive electric 
vehiclefriendly infrastructure.
    Specifically, this funding will support a competitive program 
within the Department of Energy to help communities across the country 
become early adopters of electric vehicles through regulatory 
streamlining, infrastructure investments, vehicle fleet conversions, 
deployment of EV incentives (e.g., parking, HOV access) partnerships 
with major employers/retailers, and workforce training. The FY 2012 
Budget includes a proposal that would allow up to 30 communities across 
the country to receive grants of up to $10 million each on the basis of 
their ability to demonstrate concrete reforms and to use the funds to 
help catalyze electric vehicle deployment. This approach builds on bi-
partisan proposals and ideas including some developed by the sponsors 
of this bill.
    The Promoting Electric Vehicles Act of 2011 includes provisions to 
promote near-term deployment of plug-in electric drive vehicles, many 
of which may complement and supplement the Department's ongoing 
activities, funded both through the Recovery Act and annual 
appropriations. However, as stated previously, the Administration is 
continuing to review this extensive bill and does not have a position 
on it at this time.
    S.948 includes provisions which would support technical assistance, 
workforce training, and a targeted communities program to facilitate 
the rapid deployment of plug-in vehicles. The bill's targeted 
deployment program would offer communities of different sizes in 
various parts of the country an opportunity to execute various 
deployment approaches and develop best practices that can be shared 
nationwide to address critical questions about planning and managing 
vehicle and charging infrastructure deployment.
    The Department notes that the community selection criteria includes 
an emphasis on diversity of climate and type of electric utility. Such 
diversity in pilot programs, particularly across electricity-generation 
sources, would be crucial for estimating the environmental impacts of 
expanded adoption of plug-in electric drive vehicles.
    DOE is already examining ways to work more closely with communities 
on vehicle electrification and infrastructure deployment, particularly 
in connection with our Clean Cities Program. The coalitions that 
comprise the Clean Cities network bring together state and local 
governments, early adopter fleets, local utilities, infrastructure 
developers, and other key stakeholders in a community to advance the 
deployment of alternative fuel vehicles. These public private 
partnerships are proven and effective resources for sharing information 
at the local level and are primed to support the rollout of electric 
drive vehicles and infrastructure. Our goal is to better understand how 
the Department can support local community efforts to deploy EVs and 
infrastructure.
    To maximize the effectiveness of the targeted communities program, 
the Department would seek to coordinate this effort with related 
ongoing projects to deploy electric drive vehicles and infrastructure. 
Our Recovery Act projects for transportation electrification are 
building critical expertise through large-scale vehicle and 
infrastructure deployment, collecting data on vehicle-grid interaction 
and producing valuable lessons learned that can support and help to 
accelerate future deployments in other communities. We note that the 
deployment community selection criteria as outlined in the legislation, 
is crafted to help ensure that the selected communities stand up as 
models for deployment across the country.
    We also believe that technical assistance is vital to the 
successful rollout of any proposed national deployment program for 
electric drive vehicles. The Department is well positioned to 
disseminate information and provide training and technical assistance 
to communities seeking to accelerate EV deployment. As an example, and 
as noted earlier, the Clean Cities network is primed to share best 
practices and lessons learned about permitting and inspection 
processes, as well as other local ordinances and opportunities for code 
official and first responder training. I would like to note, however, 
that the Department plays a supporting role in the development of model 
codes and standards. In regard to this provision, we can bring value to 
the process because of our extensive experience working with code 
development organizations (CDOs) and standards development 
organizations (SDOs) to facilitate consensus around the development and 
adoption of vehicle-and infrastructure-related codes and standards. We 
are also working to enable the harmonization of codes and standards at 
an international level collaborating with the National Institute of 
Standards and Technology (NIST) and the Department of Transportation, 
as well as with the private sector. Standards and codes for electric 
vehicles must be consistent with the broader Smart Grid 
Interoperability Panel (SGIP) effort led by NIST.
    The Promoting Electric Vehicles Act includes several other 
significant provisions in addition to the National Plug-in Electric 
Drive Deployment Program; I will briefly comment on several of them 
here.

   The bill authorizes a R&D program focused on advanced 
        batteries, electric drive components, and other technologies 
        supporting the manufacture and deployment of electric drive 
        vehicles and charging infrastructure. These priorities are 
        aligned closely with ongoing activities in the Vehicle 
        Technologies Program--specifically, our Batteries and Electric 
        Drive Technology subprogram, which includes advanced battery 
        R&D and advanced power electronics and electric machines, as 
        well as our Vehicle and Systems Simulation and Testing 
        subprogram, which includes work to examine vehicle and 
        infrastructure interface issues through testing and evaluation. 
        Notably, the President's FY 2012 Budget request will 
        significantly broaden R&D investments in technologies like 
        batteries and electric drivesincluding an over 30 per cent 
        increase in support for vehicle technology R&D and a new Energy 
        Innovation Hub devoted to improving batteries and energy 
        storage for vehicles and beyond.
   The bill focuses on Federal electric vehicle upgrades. I 
        note that the Administration shares your commitment to 
        upgrading the federal fleet and is finalizing the procurement 
        of 100 electric vehicles.
   The bill also discusses partnership with the private sector 
        surrounding vehicle upgrades, an area where Administration 
        policies are strong. Specifically, we recently announced the 
        Clean Fleets partnership. This program is focused on working 
        with private sector partnerships to help them become leaders in 
        deploying advance vehicles--including electric vehicles--and 
        technical assistance is a critical component of the program. In 
        fact, DOE has developed a wide range of technical tools to help 
        partner companies to navigate the world of alternative fuels 
        and advanced vehicles. A diverse collection of cost 
        calculators, interactive maps, customizable database searches, 
        and mobile applications puts vital information and analysis at 
        fleets' finger tips. This is just one example of our activities 
        in this area--and shows how important we think it is to offer 
        technical assistance.
   We also understand and appreciate the Committee's interest 
        in a technical advisory committee focused on plug-in hybrid 
        vehicles. We place great value in independent reviews and 
        external input to our program. You may be aware that the 
        National Academy of Sciences National Research Council conducts 
        independent biennial reviews of both our lightduty and heavy-
        duty vehicle research programs.
   With respect to the new loan guarantee authorities included 
        in the bill, we are continuing to evaluate these proposals. At 
        a minimum, we would want any credit assistance to be the most 
        efficient and effective means of achieving policy goals, and 
        therefore any new authorities should comply with Federal credit 
        policies to mitigate cost and risk to the taxpayer.
     comments on s 734 the advanced vehicle technology act of 2011
    While the Administration is still reviewing S 734 and has no 
position on the bill at this time, it appears that the program 
authorized by the bill could complement several of the Department's 
current activities focused on increasing vehicle energy efficiency. The 
Vehicle Technologies Program is meeting the transportation challenge 
with an integrated portfolio of advanced vehicle and fuel research, 
development, demonstration, and deployment activities. We are 
accomplishing this work in collaboration with industry leaders, 
national laboratories, universities, state and local governments, and 
other stakeholders. S. 734 could further support the widespread 
commercialization of advanced vehicle and fuel technologies to reduce 
U.S. oil consumption, strengthen our economy, and reduce air pollution 
and greenhouse gas emissions. That being said, we suggest that the 
Director of the program be appointed by the Secretary within the Office 
of Vehicle Technologies itself to facilitate better coordination across 
activities with similar goals and work.
    Further, it also appears that Section 102 ``Sensing and 
Communications Technologies,'' would unnecessarily duplicate the 
existing research, development, and demonstration efforts of the 
Department of Transportation's National Intelligent Transportation 
Systems Program. We recommend against such duplicative Federal 
programs.
    In sum, the Department's transportation portfolio will save 
consumers money, reduce our dependence on oil, lower our environmental 
impact, and keep America on the cutting edge of clean energy 
technologies, enabling us to build a 21st century clean energy economy. 
Thank you again for the opportunity to discuss these issues, and I 
welcome any questions you may have.

    The Chairman. Thank you very much.
    Mr. Ghasemi, we're very glad to have you here. Go right 
ahead.

    STATEMENT OF SEIFI GHASEMI, CHAIRMAN AND CEO, ROCKWOOD 
 HOLDINGS, INC., MEMBER, ELECTRIFICATION COALITION, PRINCETON, 
                               NJ

    Mr. Ghasemi. Thank you, sir.
    Chairman Bingaman, Ranking Member Murkowski and members of 
the committee, I would like to thank you for giving me this 
opportunity to speak to you regarding our Nation's dangerous 
dependence on imported oil and the enormous opportunity 
presented by the electrification of transportation. While I'm 
here largely to discuss the Promoting Electric Vehicle Act of 
2011, I would first like to take a moment to thank this 
committee for its ongoing effort to improve our Nation's 
security. I would also like to specifically recognize Senator 
Stabenow's legislation for highlighting the importance of 
research and development as we adopt new technologies.
    The Promoting Electric Vehicle Act of 2011 introduced by 
Senator Jeff Merkley and Lamar Alexander, in both my view 
personally and that of the Electrification Coalition represents 
a critical step in ending the very real economic and national 
security threats posed by our dependence on imported oil.
    I am Chairman and CEO of Rockwood Holdings, a global 
chemical company that employs 9,600 men and women in 100 
facilities around the world. I was born in 1944 in the Town of 
Mashad in what is now called the Islamic Republic of Iran. I 
came to the United States in 1966 to complete my education at 
Stamford University. In 1970 I went back to Iran to teach at 
the University and work in the manufacturing sector.
    All was well until the Iranian Revolution in 1979. At that 
time I had 3 strikes against me. I had gone to school and 
worked in the United States. My wife was an American and 
Jewish. I had been a vocal opponent of the mullahs.
    Thankfully my wife and son were visiting the United States 
when the revolution occurred. I fled and met them months later. 
I was one of the very lucky ones.
    This is a very significant part of why I am here. I feel 
very passionate about the issue of our dependence on oil from 
those parts of the world. I know what oil dependence means. It 
means that the in power, oil producing nations such as Iran to 
defy U.S. Foreign Policy since they know we need their oil to 
run our transportation system.
    Oil dependence means that the enabled foreign governments 
to impose unreasonably high gasoline prices on U.S consumers 
who have no alternative but gasoline to run their cars and get 
to work. In 2008 alone, the United States sent $388 billion 
overseas to pay for imported oil, half of our National Trade 
Deficit. Department of Energy researchers have estimated that 
the economic cost of U.S. dependence on imported oil at $500 
billion just in 2008 and have added up to more than $5 trillion 
since 1970, a third of our total national debt that we are all 
so concerned about now.
    Between 2001 and 2008 the average price of gasoline 
increased from $1.46 to $3.27 costing typical households $2,115 
a year in fuel expenses. Some Americans today are paying more 
for gas than they are paying for food. It would be ideal, 
obviously, if there was a free market solution. But there is 
not free market for oil, far from it.
    Today more than 90 percent of proven conventional oil 
reserves are controlled by foreign governments whose interests 
are often at odds with ours. The fundamental reason for 
America's dependence on imported oil is the energy demand of 
the transportation sector. Transportation now accounts for 
approximately 71 percent of American oil consumption. Any 
shortage of oil will cause a massive destruction of 
transportation system threatening our national security and 
economic stability.
    But there is a solution. An electrified transportation 
sector is a viable alternative. We are not saying it's the only 
alternative. But it is a very viable alternative.
    Electricity is a diverse, domestic, stable, fundamentally 
scalable energy supply whose fuel inputs are almost completely 
free of oil. The Promoting Electric Vehicle Act of 2011 is a 
great first step toward energy independence. The act would 
create a competition for cities and towns would compete to be 
elected as deployment communities where all of the elements of 
electrified transportation system are deployed at scale. These 
communities would move electrification beyond a niche product 
into a dominant concept. When the plan is implemented it would 
accelerate the production of electric vehicles, components and 
infrastructure across the country.
    Right now my company, Rockwood, is spending more than $100 
million to expand our operations in the United States in places 
like North Carolina, Michigan and Nevada. But the fact is that 
Chinese electric vehicles will need our materials as much as 
any other countries. As an American I want those electric cars 
made in the United States.
    Let's not go the direction we have gone with personal 
computers. Designed by Americans but made overseas. A strong 
manufacturing sector is critical to a strong economy. A strong 
auto industry is critical to a strong manufacturing sector.
    The auto industry in the United States can be the world 
leader in a game changing technological leap forward by making 
the electric cars of the future. The opportunity before this 
committee and indeed before the entire Senate is tremendous. I 
truly believe that dependence on imported oil is a clear and 
present danger to the national security and economic stability 
of the United States.
    We can end our dependence on imported oil. We have the 
technology. The first step is passing the Promoting Electric 
Vehicle Act of 2011.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Ghasemi follows:]
    Prepared Statement of Seifi Ghasemi, Chairman and CEO, Rockwood 
    Holdings, Inc., Member, Electrification Coalition, Princeton, NJ
    Good morning, Chairman Bingaman, Ranking Member Murkowski, and 
members of the Committee. I would like to thank you for giving me this 
opportunity to speak to you regarding our nation's dangerous dependence 
on petroleum, and the enormous opportunities presented by the 
electrification of transportation.
    While I am here largely to discuss the Promoting Electric Vehicles 
Act of 2011, I would first like to take a moment to thank this 
committee for its ongoing efforts to improve our nation's energy 
security. I would also like to specifically recognize Senator 
Stabenow's continued dedication to electrification. As her bill today 
highlights, research and development will continue to play a critical 
role as we adopt new technologies, and we look forward to working with 
her moving forward.
    I am proud to serve as a member of the Electrification Coalition, 
an organization made up of a group of business leaders who represent 
the entire value chain of an electrified transportation sector and who 
are committed to promoting policies and actions that facilitate the 
deployment of electric vehicles on a mass scale.
    The Promoting Electric Vehicles Act of 2011, introduced by Senators 
Jeff Merkley and Lamar Alexander, in both my view personally and that 
of the Electrification Coalition, represents a critical step forward in 
our nation's effort to reach that goal, helping us toward ending the 
very real economic and national security threats posed by our 
dependence on oil.
    This is an issue I am very passionate about.
    I am Chairman and CEO of Rockwood Holdings, a global specialty 
chemicals and advanced materials company that employs 9,600 men and 
women in 100 facilities around the world.
    I came to Rockwood through a route that is probably a little 
unusual.
    I was born in 1944 in the town of Mashad in what is now called the 
Islamic Republic of Iran.
    When I was 15, I went to a special school organized and run by the 
international oil companies that, at the time, had the concession for 
the exploration, production and refining of the oil from Iran. When I 
graduated, I was offered a scholarship by the oil companies to go to 
graduate school with a condition that I would come back and work for 
them. But by then, I knew where I wanted to be: I came to the United 
States to complete my education at Stanford University.
    After I completed my education, I went to work with William Lear--
the man who developed the Lear Jet--on his project to develop and build 
a steam-powered automobile. Even back then, we were looking for better, 
safer alternatives to oil. Steam-powered cars and trucks did not turn 
out to be the route to the future, but working on them helped shape 
mine.
    In 1970, my wife--a third-generation American descendent of Russian 
Jewish immigrants--and I moved to Tehran, initially to teach at the 
university. I continued my work there in the manufacturing sector, 
working with the National Iranian Steel Industries Company to help 
develop a steel industry in Iran. It was an exciting, challenging time 
for me, my wife, and my son . . . until the Iranian Revolution in 1979.
    At that time, I already had three strikes against me. I had gone to 
school and worked in the United States. My wife was an American and 
Jewish. And I had been a vocal opponent of the mullahs.
    Thankfully, my wife and son were visiting the United States when 
the revolution occurred. I fled, and met them there months later. I was 
one of the lucky ones.
    And that is a very significant part of why I am here today.
    This is not just dollars and cents to me.
    I know what oil dependence means. I know that the mullahs are still 
in power today at least in part because the West cannot and will not 
take overt action against a major oil-producing nation. Oil dependence 
distorts American diplomacy, subverts American goals, and forces us to 
accommodate hostile, brutal governments.
    The vulnerability of global oil supply lines and infrastructure has 
driven the United States to accept the burden of securing the world's 
oil supply. Much of the infrastructure that delivers oil to the world 
market each day is exposed and vulnerable to attack in unstable regions 
of the world. According to the U.S. Department of Energy, each day more 
than 40 percent of the world's oil supplies must transit one of six 
maritime chokepoints, narrow shipping channels like the Strait of 
Hormuz between Iran and Oman. Even a failed attempt to close one of 
these strategic passages could cause global oil prices to skyrocket. A 
successful closure could bring economic catastrophe.
    To mitigate this risk, U.S. armed forces expend enormous resources 
patrolling oil transit routes and protecting chronically vulnerable 
infrastructure in hostile corners of the globe. This engagement 
benefits all nations, but comes primarily at the expense of the 
American military and ultimately the American taxpayer. A 2009 study by 
the RAND Corporation placed the cost of this defense burden at between 
$67.5 billion and $83 billion annually.
    And the threat to our economy is no less real.
    In 2008, when oil prices spiked, Americans consumed nearly 20 
million barrels of oil a day--one-fourth of the world's total. We 
imported 58 percent of the oil we consumed, leading to a U.S. trade 
deficit in crude oil and petroleum products that reached $388 billion--
56 percent of the total trade deficit. That figure fell back to $200 
billion in 2009, but jumped to $265 billion in 2010. In the first 
quarter of 2011, with near-record volatility in oil markets and high 
prices driver by turbulence in the Middle East, the United States ran 
an $84 billion deficit in petroleum trade over a three month period. In 
March, crude oil and petroleum products accounted for 65 percent of the 
monthly U.S. trade deficit, a figure which eclipsed otherwise strong 
growth in U.S. export strength.
    And the steps we usually would take to help strengthen the economy 
and create jobs in times of weakness are just as easily overcome by oil 
price volatility. The total effect of changes to the federal tax code 
from 2001 to 2008 code was a decrease in annual federal income and 
estate taxes by about $1,900 for the median household. But a typical 
household's energy costs rose more than that. In other words, every 
penny that the most Americans saved due to federal income and estate 
tax cuts over those eight years was spent on higher gasoline bills.
    At the beginning of 2001, oil prices were steady at $30 per barrel. 
Over the subsequent five years, prices steadily rose, reaching $75 per 
barrel in June of 2006. After retreating slightly, benchmark crude 
prices jumped 50 percent in 2007, from $60 per barrel in January to 
more than $90 in December. In 2008, oil prices soared rapidly, 
eventually reaching their all-time high of more than $147 per barrel on 
July 3.
    Prices only came down when demand plunged along with the global 
economy. And now, with prices at the pump once again on the rise, we 
must ask ourselves how many times we must repeat this damaging cycle? 
Many of the underlying fundamentals that pushed oil prices to record 
levels are pushing them up once again today. Oil demand continues to 
recover, both in the United States and abroad. Unrest in the Middle 
East is only driving prices up faster. Historically, crude oil costs of 
more than 4 percent of gross domestic product have occurred 
concurrently with recessions. At between 4 and 5 percent of GDP, oil 
spending is reaching dangerous levels once again. Our nascent economic 
recovery is at risk.
    It would be ideal if there was a free market solution to these 
threats. But there is no free market for oil. Far from it: today, more 
than 90 percent of proved conventional global oil reserves are held by 
national oil companies that are either fully or partially controlled by 
foreign governments whose interests are often at odds with our own. As 
long as we remain dependent on those nations, we remain vulnerable.
    At the crux of America's oil dependence is the energy demand of the 
transportation sector. Transportation accounts for approximately 71 
percent of American oil consumption. Cars and trucks are 94 percent 
reliant on oil-based fuel for their energy, with no substitutes 
immediately available in anything approaching sufficient quantities. 
Any shortage of oil will cause a massive disruption of the 
transportation system, creating significant difficulties in day-to-day 
life which will inevitably lead to chaos. Put another way, when prices 
go up, we have only two choices: drive less or pay more. This is 
unacceptable.
    A new path forward begins with a statement of fundamental fact: As 
long as our cars and trucks are powered by internal combustion engines, 
we will continue to be dependent on oil. The solution can be found in 
something that nearly every single one of you has either on your belt 
or on the table in front of you. The lithium ion batteries that power 
our cell phones and laptop computers can one day form the nucleus of an 
electrified transportation sector that is powered by a wide variety of 
domestic sources: natural gas, nuclear, coal, hydroelectric, wind, 
solar, and geothermal. No one fuel source--or producer--would be able 
to hold our transportation system and our economy hostage the way a 
single nation can disrupt the flow of petroleum today.
    Electricity represents a diverse, domestic, stable, fundamentally 
scalable energy supply whose fuel inputs are almost completely free of 
oil. It would have clear and widespread advantages over the current 
petroleum-based system:

          1) Electricity is Diverse and Domestic: Electricity is 
        generated from a diverse set of largely domestic fuels. Among 
        those fuels, the role of petroleum is negligible. In fact, just 
        1 percent of power generated in the United States in 2009 was 
        derived from petroleum. An electricity-powered transportation 
        system, therefore, is one in which an interruption of the 
        supply of one fuel can be made up for by others.
          This ability to use different fuels as a source of power 
        would increase the flexibility of an electrified light-duty 
        vehicle fleet. As our national goals and resources change over 
        time, we can shift transportation fuels without having to 
        overhaul our transportation fleet again. In short, an 
        electrified transport system would give us back the reins, 
        offering much greater control over the fuels we use to support 
        the transportation sector of our economy.
          Moreover, while oil supplies are subject to a wide range of 
        geopolitical risks, the fuels that we use to generate 
        electricity are generally sourced domestically. All renewable 
        energy is generated using domestic resources. We are a net 
        exporter of coal, which fuels about half of our electricity. 
        Although we currently import a net of approximately 11 percent 
        of the natural gas we consume, more than 80 percent of those 
        net imports were from North American sources (Canada and 
        Mexico) in 2010. And in fact, recent advancements in the 
        recovery of natural gas resources from unconventional 
        reservoirs like shale gas, coal bed methane, and tight gas 
        sands have led to wide consensus that our domestic undiscovered 
        technically recoverable reserves are well in excess of 1,000 
        trillion cubic feet. We do import a substantial portion of the 
        uranium we use for civilian nuclear power reactors. Forty-two 
        percent of those imports, however, are from Canada and 
        Australia.
          2) Electricity Prices are Stable: Electricity prices are 
        significantly less volatile than oil or gasoline prices. Over 
        the past 25 years, electricity prices have risen steadily but 
        slowly. Since 1983, the average retail price of electricity 
        delivered in the United States has risen by an average of less 
        than 2 percent per year in nominal terms, and has actually 
        fallen in real terms. Moreover, prices have risen by more than 
        5 percent per year only three times in that time period.
          This price stability, which is in sharp contrast to the price 
        volatility of oil or gasoline, exists for at least two reasons. 
        First, the retail price of electricity reflects a wide range of 
        costs, only a small portion of which arise from the underlying 
        cost of the fuel. The remaining costs are largely fixed. In 
        most instances, the cost of fuel represents a smaller 
        percentage of the overall cost of delivered electricity than 
        the cost of crude oil represents as a percentage of the cost of 
        retail gasoline. Second, although real-time electricity prices 
        are volatile (sometimes highly volatile on an hour-to-hour or 
        day-to-day basis), they are nevertheless relatively stable over 
        the medium and long term. Therefore, in setting retail rates, 
        utilities or power marketers use formulas that will allow them 
        to recover their costs, including the occasionally high real-
        time prices for electricity, but which effectively isolate the 
        retail consumer from the hour-to-hour and day-to-day volatility 
        of the real-time power markets.
          By isolating the consumer from the price volatility of the 
        underlying fuel costs, electric utilities would be providing to 
        drivers of grid-enabled vehicles (GEVs)--vehicles propelled in 
        whole or in part by electricity drawn from the grid and stored 
        onboard in a battery--the very stability that oil companies 
        cannot provide to consumers of gasoline.
          3) The Power Sector has Substantial Spare Capacity: Because 
        large-scale storage of electricity has historically been 
        impractical, the U.S. electric power sector is effectively 
        designed as an `on-demand system.' In practical terms, this has 
        meant that the system is constructed to be able to meet peak 
        demand from existing generation sources at any time. However, 
        throughout most of a 24-hour day--particularly at night--
        consumers require significantly less electricity than the 
        system is capable of delivering. Therefore, the U.S. electric 
        power sector has substantial spare capacity that could be used 
        to power electric vehicles without constructing additional 
        power generation facilities, assuming charging patterns were 
        appropriately managed.
          4) The Network of Infrastructure Already Exists: Unlike many 
        proposed alternatives to petroleum-based fuels, the nation 
        already has a ubiquitous network of electricity infrastructure. 
        No doubt, electrification will require the deployment of 
        charging infrastructure, additional functionality, and 
        increased investment in grid reliability, but the power 
        sector's infrastructural backbone--generation, transmission, 
        and distribution--is already in place.

    Based on these and other advantages, a wide array of automakers is 
beginning to introduce grid-enabled vehicles into the marketplace. 
There are important differences in drivetrain architectures, with some 
vehicles relying solely on battery power (electric vehicles, or EVs) 
and others augmented by liquid fuels as well (plug-in hybrid electric 
vehicles, or PHEVs). All told, automakers worldwide are developing 
dozens of plug-in hybrid and electric vehicles. By 2013, more than 40 
models could be available to consumers.
    From just a handful of units introduced in 2010, the industry is 
beginning to scale up. Announced North American production capacity 
will exceed 100,000 vehicles in 2012 and 350,000 by 2014. (These 
figures do not include trucks.) Additional volumes will reach the U.S. 
market from OEM plants overseas, particularly in the next two years.
    High penetration rates of GEVs could radically minimize the 
importance of oil to the United States, strengthening our economy, 
improving national security, and providing much-needed flexibility to 
our foreign policy while clearing a path toward dramatically reduced 
economy-wide emissions of greenhouse gases. No other alternative to 
petroleum can claim these widespread advantages.
    The logical next question is how we can successfully devise and 
deploy an electrified transportation system. Here's what we need to 
avoid: it has now been more than 10 years since traditional hybrids 
were first introduced in the United States. And despite government 
support and record high gas prices for part of that time, there are 
still only 1.9 million hybrids on the road in the U.S. today--out of 
approximately 250 million light-duty vehicles in the fleet.
    We cannot let electric vehicles turn into another niche product. We 
cannot allow their use to be limited to the environmentalists and 
technological enthusiasts who will buy those first waves of them. To 
make our nation's investment worthwhile--and, more importantly, to 
truly combat our oil dependence--we must put ourselves on the pathway 
toward millions, then tens of millions, and then hundreds of millions 
of electric cars and trucks.
    It is not as simple as flipping a switch. Electrification on a mass 
scale is an enormously complex undertaking. The issue is not simply one 
of putting electric cars into showrooms. At the most basic level, the 
first commercially available EVs and PHEVs will be significantly more 
expensive than their internal combustion engine counterparts. The 
existing tax credits help offset that cost, but they hardly represent a 
transformative policy framework that will give consumers the necessary 
confidence to adopt a fundamentally new technology. For electrification 
to appeal to consumers, it will truly `take a village.'
    For example, drivers will want to know that installing a charger in 
their garage will be a seamless and simple process that isn't bogged 
down by weeks of red tape. For EV drivers, they will want access to 
some amount of public charging infrastructure so that they can feel 
confident as they complete a Saturday full of errands and shopping--or 
take the family on the highway for the great American road trip.
    The proactive engagement and support of utilities will be 
absolutely critical. Smart charging will make EVs and PHEVs an asset 
for the grid, but dumb charging will make them a liability. One 
analysis by EPRI found that plugging in just one PHEV to charge at 220 
volts overloaded 36 of 53 transformers examined during peak hours and 5 
of 53 transformers during off-peak hours. We are all excited about the 
benefits of using EVs and PHEVs to fill valleys in utility load curves, 
but this will only work if consumers have the ability to receive 
information that incentivizes them to charge their cars at night. Yet, 
most public utility commissions don't encourage or allow time-of-use 
pricing.
    The bottom line is that, for this technology to succeed, the 
vehicles will need a network of support--both in terms of regulations 
and infrastructure. Without that, they will be relegated to niche 
product status. Consumers will have poor experiences, many of the 3,000 
utilities in the U.S. will play an absentee role--at best--in the 
process, and we will have invested billions of dollars in a battery 
industry that finds stronger roots in Europe (where fuel prices are 
higher) and in China (where the public imperative is already stronger). 
We have to recognize that such a network of support does not currently 
exist in most places in the U.S.
    That is where this crucial legislation comes in.
    The Promoting Electric Vehicles Act would initiate a competition in 
which specific geographic areas would vie to be selected as large-scale 
deployment communities: areas in which all of the elements of an 
electrified transportation system are deployed simultaneously and at 
scale, thereby providing a crucial first step toward moving 
electrification beyond a niche product into a dominant, compelling, and 
ubiquitous concept. These deployment communities would be selected on a 
competitive basis. The most attractive regional bids would demonstrate 
a clear path to successful integration of GEVs, including:

    --A supportive regulatory environment that facilitates concepts 
            like utility investment in upgraded physical and IT assets; 
            time-of-use pricing; and a seamless process for permitting 
            and installing level II EVSEs in residential consumer 
            garages.
    --Support and participation from a broad swath of stakeholders, 
            including state and local governments, utilities, utility 
            regulators, large local employers, universities and others.
    --A diversity of business plans, allowing innovators and 
            entrepreneurs to explore the most effective and efficient 
            models for deployment.

    In sum, successful bids should be those in which all of pieces have 
been brought together--autos, infrastructure, favorable regulatory 
environment, interested consumers--to ensure that large scale 
deployment of GEVs has the best chance of success.
    Once selected, deployment communities would be eligible for 
amplified, targeted, and temporary financial incentives for consumers, 
infrastructure providers and utilities. Upon completion of the program, 
the Secretary of Energy would be required to produce a final report 
evaluating its success, challenges and lessons learned as well as 
recommending whether to promote further deployment of electric 
vehicles. If the conclusion is that further deployment is warranted, 
the Secretary would provide recommendations on how many additional 
cities to select, updates to the selection criteria, changes to 
incentive structure, and whether other forms of energy storage should 
be included. If fully implemented, the legislation would aim to deploy 
a total of 400,000 grid-enabled electric vehicles and their 
infrastructure in the first deployment communities over a three-year 
period.
    We believe this approach is critical to avoiding the pitfalls of 
the past. These deployment communities would:

          1) Demonstrate Proof of Concept Beyond Early Adopters: A 
        deployment community approach would drive significant 
        penetration of GEVs into a limited number of auto markets, as 
        opposed to very shallow penetration in many auto markets. By 
        demonstrating the benefits of grid-enabled vehicles in a real 
        world environment, this deployment plan will make consumers, 
        policymakers and industry aware of the tremendous potential of 
        electrification of transportation.
          In general, consumers are probably unaware that GEVs have 
        evolved to the point where they can meet most individuals' 
        daily driving needs. In addition, electric drive vehicles 
        generally have faster acceleration and operate more quietly 
        than internal combustion engine vehicles. They hold out the 
        promise of offering drivers a wide range of features, based on 
        the electronic package in the vehicle, that are beyond our 
        imagination today in the same way that iPhone applications 
        would have been beyond our imagination a decade ago.
          The problem is that consumers are not aware of the 
        opportunities presented by GEVs and are not yet convinced that 
        they can operate reliably and affordably at scale. 
        Concentrating investments and other efforts in a limited number 
        of communities will accelerate the opportunity to demonstrate 
        that grid-enabled vehicles can meet drivers' needs. In 
        addition, these projects will demonstrate that a community is 
        capable of putting the infrastructure in place, operating the 
        vehicles over their lifetimes, and disposing of them after 
        their useful life has ended, all in a manner that profits the 
        participants in the value chain.
          2) Facilitate Learning by Doing: While GEVs present a great 
        opportunity, their deployment also raises a number of 
        questions. Deploying large numbers of GEVs in concentrated 
        areas will allow for the collection of information and 
        experience that is needed to successfully deploy GEVs 
        nationwide. It will help automakers learn how much consumers 
        are willing to pay up front for a car that costs less to 
        operate and has a lower total cost of ownership over its 
        lifetime. It will allow utilities and charging station 
        providers to learn when and where drivers want to charge their 
        vehicles. It will allow utilities and other aggregators to 
        learn who can best sell power to drivers and what types of rate 
        structures meet both drivers' and utilities and aggregators' 
        needs.
          Deployment communities will also help determine whether there 
        is a viable business model for public charging infrastructure. 
        It is clear that for GEVs to succeed there must be a model in 
        which each party in the value chain is able to operate 
        profitably, or in which the government determines that, as a 
        matter of public policy, certain aspects of the system should 
        be publicly supported in a manner that facilitates further 
        competition. Deploying GEVs in a series of geographic regions 
        around the country where resources can be concentrated and data 
        can be collected and studied will ultimately accelerate wide-
        scale GEV deployment. Therefore, rather than allowing the 
        market to develop scattershot across the country, it is 
        critical that the market be encouraged to develop at a 
        deliberate pace in clearly identified geographic regions in 
        which a large number of vehicles can be deployed in a 
        relatively short period of time.
          3) Drive Economies of Scale: Concentrating resources in a 
        limited number of geographic areas will allow participants in 
        the GEV value chain to take advantage of economies of scale, 
        particularly with respect to the deployment of charging 
        infrastructure. Utilities will incur fixed costs to support the 
        operation of GEVs; those costs will be more affordable if 
        spread over a greater number of vehicles. Power providers also 
        can reduce the cost of charging infrastructure through 
        economies of scale. While it is unclear how many public vehicle 
        chargers will be necessary for a GEV transportation system to 
        operate smoothly in a given community, it is clear that some 
        public charging facilities will be needed.
          Previous pilot studies demonstrate that the cost of 
        installing charging facilities can be reduced significantly 
        when groups of facilities are installed at once. Furthermore, 
        these geographic concentrations will stimulate demand for grid-
        enabled vehicles at a rate that is likely to be far greater 
        than if the vehicles are simply purchased by early adopters 
        scattered around the United States. Early on in the process, 
        this higher level of demand will simply be the result of 
        magnified consumer incentives. Subsequently, as individual 
        metropolitan areas gain exposure to GEVs and confidence 
        increases, adoption rates should be measurably expedited.

    In order to be selected, a community will need to present a 
comprehensive proposal, similar to bids to host the Olympic Games. Such 
a proposal would need to show capability and buy-in from a wide range 
of public and private players, including local governments, utilities, 
major employers, and more.
    Cities and communities throughout the nation will be eligible to 
compete for selection as a deployment community. And the bill makes it 
clear that in selecting deployment communities, DOE should seek areas 
that are diverse regionally, geographically, climactically, in terms of 
their urban and suburban composition, size, typical commuting patterns, 
and type of electric utility.
    We believe we will also see an important diversity in the business 
models that innovators and entrepreneurs will present to explore the 
most effective and efficient models for deployment. Again, the 
advantage of a competitive, market-based plan like this is that the 
best ideas have the opportunity to rise to the top.
    We believe the result of passing this legislation will be a great 
competition, a race to the top as communities fight to present the most 
fertile ground for an exciting new technological rollout. Even those 
that are not ultimately selected will have, in order to compete, taken 
steps that will ultimately make the adoption and deployment of electric 
vehicles and infrastructure more achievable within their borders.
    We've already seen cities and other localities across the country 
taking the first steps toward electrification, whether it is installing 
charging infrastructure, buying the vehicles for city fleets, or some 
combination of both and more. They see the benefits and are eager to 
take the next step. If we pass this legislation, I think we will see 
cities once again, as they have in the past, playing the role of 
experimenters and leaders in this exciting new technology.
    Incidentally, let me address a concern that others have brought up 
about this very aspect of the deployment community idea: that it overly 
concentrates resources in a small number of communities.
    I strongly disagree with this criticism.
    First, these plans do nothing that would limit or impede the 
current nationwide incentives for electric vehicles. Today, a maximum 
tax credit of $7,500 on qualified electric drive vehicles exists 
nationwide. Additional credits exist for infrastructure. This bill does 
not in any way impact the maximum vehicle tax credit available to 
consumers nationwide. What we are talking about is added incentives, 
which will spur added demand.
    Second, the benefits accrue far beyond the deployment communities 
themselves. While money will flow into these communities, they should 
more correctly be thought of as funnels through which a substantial 
portion of the funds will flow on their way elsewhere around the 
country. Much of the money that flows through deployment communities 
will end up in the towns and cities where the vehicles and charging 
infrastructure and their components are manufactured. When a factory 
reopens in a depressed area to build or support these vehicles--as 
we've already seen in places like Elkhart, Indiana and Livonia, 
Michigan--that is a real and tangible benefit for hardworking 
Americans.
    Third, if this program succeeds, it will drive down costs for 
electric vehicles for consumers throughout the nation. It will also set 
the nation on a path toward greater energy security and economic 
prosperity through sharply reduced oil dependence. This effort is about 
building a new transportation system from the ground up in a fiscally 
responsible, competitive fashion. That's good for the entire nation.
    While electrification of the light-duty, personal-use passenger 
vehicle market is the most important long-term objective for increased 
energy security, the early development of the GEV industry will benefit 
from a more diverse market. Particularly during the period from 2011 to 
2015, commercial and government vehicle fleets could represent a large 
share of the market for plug-in hybrid and fully electric vehicles. In 
fact, recent purchase announcements by a host of commercial entities--
General Electric, FedEx, Frito Lay, Hertz, Enterprise, and PG&E to name 
a few--suggest that this dynamic is already rapidly emerging.
    Commercial and government fleet operators should be well-prepared 
to address a number of the early challenges constraining adoption of 
grid-enabled vehicles. By matching the proper vehicle, battery and 
drivetrain technology to required payload requirements, drive cycles, 
and usage profiles, fleet operators can minimize upfront investment 
costs. Total investment in public and private charging infrastructure 
can also be efficient and optimized. Perhaps most importantly, grid-
enabled vehicles could appeal to a significant number of fleet 
operators in a short timeframe. In that case, fleet operators would 
account for important early demand volumes in the development of the 
large-format battery industry in addition to catalyzing the ramp-up of 
electric drivetrain component supply chains.
    Nonetheless, the supply chains for many of the grid-enabled 
vehicles that will appeal to fleet operators--particularly light-and 
medium duty trucks--are still developing, and vehicles are being 
produced annually in the tens, not the thousands. This translates into 
a high cost structure--one that will certainly come down over time as 
the industry grows. However, cost reductions could be accelerated 
through limited public policies designed to minimize risk to early 
adopters.
    Recognizing these opportunities, the Promoting Electric Vehicles 
Act offers targeted, temporary incentives to both the public and 
private sectors to encourage early fleet adoption of plug-in vehicles. 
Commercial entities that commit to purchasing significant volumes of 
GEVs would be eligible for grants to help offset upfront costs of 
vehicles and infrastructure. The bill also authorizes funds to be made 
available to federal agencies to help offset the incremental costs of 
electric drive.
    In summary, this bill recognizes a simple fact: electrification 
will not move past niche product status without careful policy 
coordination designed to overcome early obstacles. I fully understand 
that this is a challenging time for suggesting increased government 
expenditures for any project, no matter how worthwhile. However, 
certain aspects of the threat of oil dependence and the solutions 
contained in this bill make this a unique issue.
    First is the urgent national security threat posed by our 
dependence on oil. While we cannot and should not ignore costs, threats 
to national security have always occupied a unique place of priority in 
our budget considerations. And make no mistake: the dangers posed by 
our oil dependence are not theoretical. Our safety and security are 
threatened by oil dependence, and every single day that we do not act 
is another day that we remain vulnerable.
    Second is the economic cost of inaction. Department of Energy 
researchers have estimated that the economic costs of U.S. oil 
dependence were $500 billion in 2008 alone--and more than $5 trillion 
since 1970.
    And perhaps most telling: every American recession for almost four 
decades has been preceded by--or occurred concurrently with--an oil 
price spike. Simply put, you cannot have a healthy economy when energy 
prices are too high. This is something I cannot emphasize strongly 
enough: electric vehicles in general, and these proposals to deploy 
them in particular, not only can help strengthen our economy, but are 
critical to it.
    I work in a manufacturing business.
    Right now, we are spending more than $100 million to expand our 
operations in the United States, in places like North Carolina, 
Michigan, and Nevada.
    Now here is the truth: Rockwood Holdings is expanding, and will 
continue to expand wherever electric cars are made. As Chairman and 
CEO, I can tell you that Chinese EVs need the materials we supply just 
as much as any other country's automobiles. But as an American, I can 
tell you this: I want those cars made here.
    Let's not go in the same direction we have gone with personal 
computers: designed by Americans and made overseas. A strong 
manufacturing sector is critical to a strong economy, and a strong auto 
industry is critical to a strong manufacturing sector. So how can our 
auto industry revive itself, and regain the global stature it once had? 
It can be the world leader in a game-changing technological leap 
forward by making the electric cars of the future.
    The opportunity before this Committee, and indeed before the entire 
Senate, is tremendous. It may also be one of our last chances. I truly 
believe that oil dependence is a clear and present danger to the 
national security and the economic stability of the United States. We 
have made some progress in recent years, but now it is time to take the 
leap. We can end our dependence on oil once and for all, and the first 
step is passing the Promoting Electric Vehicles Act of 2011.
    Thank you again for your time and attention.

    The Chairman. Thank you very much. Appreciate your being 
here to testify.
    Ms. Cullen, go right ahead.

 STATEMENT OF GENEVIEVE CULLEN, VICE PRESIDENT, ELECTRIC DRIVE 
                   TRANSPORTATION ASSOCIATION

    Ms. Cullen. Good morning, Chairman Bingaman, Ranking Member 
Murkowski, members of the committee. I'm Genevieve Cullen, Vice 
President of the Electric Drive Transportation Association. I'm 
pleased to be here today to discuss S. 948, the Promoting 
Electric Vehicles Act and S. 734, the Advanced Vehicle 
Technology Act.
    The Electric Drive Transportation Association is the cross 
industry trade association promoting the advancement of 
electric drive technology and electrified transportation. Our 
members represent the entire value chain of electric drive 
including the leading and emerging vehicle battery and 
component manufacturers, as well as electricity providers, 
smart grid and infrastructure developers. Collectively our 
membership is building the vehicles, hybrids, plug-ins and fuel 
cells, as well as the infrastructure of an electrified fleet. 
We are investing aggressively and moving forward rapidly in 
expanding electric drive options to consumers. Plug-in 
passenger cars and trucks are already on the road and more than 
20 models of battery electric, plug in and hybrid vehicles will 
be available by 2013. Across the country collaborative efforts 
between utilities, charging infrastructure providers, 
governments and auto makers are underway. They are preparing 
communities, grids and consumers to take advantage of grid 
connected vehicles.
    In addition to the consumer interest in the arrival of grid 
fueled or plug-in vehicles. The ability of the grid to displace 
oil consumption also has significant national security and 
economic implications. The acute pain currently being felt at 
the pump, while not inconsequential, is just a recurring 
symptom of the larger problem, our dependence on foreign oil.
    We import more than half of our needs, as has been noted 
here today. Transportation accounts for 72 percent of that 
consumption. Electricity on the other hand is domestically 
produced from diverse, conventional and renewable resources.
    The energy security benefits of electric drive are 
accompanied by the economy wide benefits of growing U.S. 
technology and manufacturing leadership. Electrification of the 
fleet also has substantial documented benefits to public health 
and the environment. Still with all these potential benefits 
reaching commercial scale on a national basis is an enormous 
undertaking.
    There are 250 million light duty vehicles on the road. It 
will take about 20 years to turn the fleet over. The industry 
is working to bring multiple vehicles to market in the next 
couple of years. We, our members, are working to ensure that 
consumers in communities have the information they need to 
maximize their benefits. For national security, economic and 
environmental reasons we can and we should accelerate these 
electrification efforts with Federal policy.
    My statement for the record provides more detail, but I 
just wanted to highlight a couple elements of the bills before 
the committee.
    S. 948, the Promoting Electric Vehicles Act, takes a 
comprehensive approach to plug-in vehicle development and 
deployment. We support the establishment of a national program 
that includes planning, technical assistance and work force 
training. These programs are vitally important to achieving 
mass market penetration at a national scale in the near term.
    Support for community deployment as part of a national 
effort can help move regional markets and can help aggregate 
information on charging needs and habits, grid integration and 
successful collaborative models between public and private 
stakeholders. We support giving the Department of Energy 
flexibility in determining the size and number of communities 
with the goal of maximizing both the distribution and the 
effectiveness of the effort. We would like to continue to work 
with this committee to identify the most effective balance 
between the national and community deployment programs.
    Further as vehicle electrification includes diverse 
technology configurations that meet equally diverse 
transportation needs. We also believe it is appropriate to 
include recognition of the applicant community's efforts in 
deploying fuel cell electric vehicles in the program as the 
House counterpart bill does. We also support the bill's effort 
to promote electrification in private and Federal fleets which 
can play a significant part in moving markets and in helping 
manufacturers achieve economies of scale. However, we would 
like to see a comprehensive approach that recognizes all the 
electric drive technologies including fuel cells and hybrids 
and provides flexibility in meeting fleet needs while reducing 
oil consumption in building markets.
    S. 734, the Advanced Vehicle Technologies Act provides an 
important road map for Federal vehicle technology research and 
development. The bill would ensure that the Department of 
Energy pursues a portfolio of technologies that includes near, 
medium and long term technology development. We strongly 
support such an approach.
    Another key element of S. 34 is its recognition of the 
extraordinary potential for efficiency advances in the medium 
and heavy duty segment. Although they are 4 percent of the 
vehicles on the road, they represent 20 percent in gas and 
diesel consumption. The U.S. is a leader in medium and heavy 
duty vehicle electrification, but emerging technologies are 
expensive to develop and to deploy. Public/private investment 
can help speed the performance advances in technology cost 
reductions in this segment of the market.
    Taken together these bills can advance us toward our 
national goals of reduced dependence on foreign oil, increased 
competitiveness in the global energy technology market and a 
more sustainable transportation sector. I thank you for the 
opportunity to testify. I look forward to your questions.
    [The prepared statement of Ms. Cullen follows:]
Prepared Statement of Genevieve Cullen, Vice President, Electric Drive 
                       Transportation Association
    Good morning, Chairman Bingaman, Senator Murkowski, and members of 
the committee. I am Genevieve Cullen, Vice President of the Electric 
Drive Transportation Association. I am pleased to be here today to 
discuss S.948, the Promoting Electric Vehicles Act of 2011 and S. 734, 
the Advanced Vehicle Technology Act of 2011.
    I would also like to express our appreciation for this Committee's 
early and on-going work on alternative fuels and vehicles and your 
recognition of the importance of electric drive technologies in 
reducing dependence on foreign oil in the transportation sector.
    The Electric Drive Transportation Association (EDTA), founded in 
1989, is the cross-industry trade association promoting the advancement 
of electric drive technology and electrified transportation. EDTA 
members include the leading--and emerging--vehicle, battery and 
component manufacturers, as well as electricity providers, smart grid 
and infrastructure developers and others.
    Collectively, our membership is building the vehicles--hybrids, 
plug-ins and fuel cells--and infrastructure of an electrified fleet. 
Because electric drive can be configured in many combinations and 
applied across vehicle platforms (including cars, trucks, buses and 
even bulldozers), it is able to meet the multiple, diverse demands of 
consumers and industry while displacing imported oil with domestically 
produced electricity.
    Industry is investing aggressively and moving forward rapidly in 
expanding electric drive options to consumers. Plug-in passenger cars 
and trucks are already on the road today and more than twenty models of 
battery electric and plug-in hybrid vehicles will be available by 2013.
    Across the country, in states including Arizona, Washington, 
Oregon, California, Michigan, Tennessee and Texas, collaborative 
efforts between utilities, electricity infrastructure providers, 
governments and auto makers are underway, preparing communities and 
consumers to take advantage of grid-connected vehicle options.
    In addition to the consumer interest in the arrival of grid-fueled 
(or ``plug-in'') cars and trucks, the ability of the grid to displace 
oil consumption also has significant national security and economic 
implications. Reliance on oil, and hence the global oil market, is 
extremely costly to us as a nation. The acute pain currently being felt 
at the pump, while not inconsequential, is just a recurring symptom of 
the larger problem of our dependence on foreign oil. We import more 
than half our oil needs and transportation accounts for 72 percent of 
that consumption. Electricity, on the other hand, is domestically 
produced from diverse conventional and renewable sources.
    The energy security benefits of electric drive are accompanied by 
the economy-wide benefits of growing U.S. technology and manufacturing 
leadership--instead of spending about $380 billion a year to pay our 
foreign oil bill. At the micro-level, electricity is 1/4 to1/5 the cost 
of oil--3 cents versus 12-15 cents per mile.
    Further, electricity prices are more stable and do not exhibit the 
volatility of gas prices. It is estimated that each one dollar increase 
in the annual average price of a gallon of gasoline reduces average 
American household discretionary spending by roughly ten percent.
    Electrification of the fleet also benefits public health and the 
environment. According to an EPRI/NRDC study, plug-in vehicles, even 
charged from a national grid that is dominated by coal, will reduce 
greenhouse gas emissions by one third compared to conventional 
vehicles. Pure battery and fuel cells vehicles use no petroleum and 
have zero tailpipe emissions.
    Still, with all of these potential benefits, reaching commercial 
scale on a national basis is an enormous undertaking. There are 250 
million light duty vehicles on the road and it takes an estimated 20 
years to turn over the fleet. The industry is working to bring multiple 
vehicles to market in the next couple of years and we are working to 
ensure that consumers and communities have the information they need to 
maximize the benefits of grid-connected vehicles. For national 
security, economic and environmental reasons, we can--and we should--
accelerate these electrification efforts with federal policy.
    As set out in the EDTA Policy Action Plan, we support a 
comprehensive push toward electric drive that includes a robust public 
and private commitment to advancing technology breakthroughs with 
research and development. The Action Plan also calls for a national 
initiative to promote deployment of plug-in electric drive vehicles 
that includes support for regional deployment efforts.
    The bills before the committee today will help to advance 
electrification in the near term and ensure our technology leadership 
over the longer term. Deployment support and a consistent research and 
development policy will reinforce and expand what the market is doing, 
while creating U.S. jobs, increasing global competitiveness and 
enhancing our national security.
    My statement for the record provides more detailed comments on the 
bills, but I would like to briefly highlight some particular areas.
    S. 948, the Promoting Electric Vehicles Act of 2011, would create a 
national program that includes deployment planning on a national scale, 
technical assistance, that would include training on codes and 
standards for building and safety inspectors, best practices for 
infrastructure permitting and inspections, as well as workforce 
training for state and local government who need assistance in 
designing and implementing their deployment programs. These programs 
are vitally important to the goal of achieving mass market penetration 
at a national scale in the nearer term.
    Support for community deployment, as part of a national effort, can 
help move regional markets and can help aggregate information on 
charging needs and habits, grid integration and successful 
collaborative models between public and private stakeholders. We 
support giving the Department flexibility in determining the size and 
number of communities, with the goal of maximizing the both the 
distribution and the effectiveness of the effort. We would like to 
continue to work with the committee to identify the most effective 
balance between national and community deployment programs.
    As vehicle electrification includes a variety of technologies and 
configurations, we also believe it is appropriate to include 
recognition of the applicant communities' efforts in deploying fuel 
cell electric vehicles in the program, as in the House counterpart 
bill.
    The bill includes important provisions to promote adoption of plug 
in vehicles in private and federal fleets, which can play a significant 
part in moving markets and achieving economies of scale. However, we 
would like to see a comprehensive approach that recognizes all of the 
electric drive technologies, including fuel cells and hybrids. A 
comprehensive approach will provide flexibility for meeting fleet needs 
while reducing oil consumption and helping to build markets for 
advanced vehicles, components and infrastructure.
    S. 734, the Advanced Vehicle Technologies Act, provides an 
important roadmap for federal vehicle technology research and 
development. The bill recognizes the importance of a portfolio 
approach, not only in electric drive, but across conventional and 
alternate vehicle technologies. There are many synergies in vehicle 
systems improvements; federal research and development policies should 
maximize the over-lapping values of these developments. Advances in 
battery and energy storage technology and reductions in costs can 
benefit hybrid, plug-in and fuel cell vehicles.
    The Advanced Vehicle Technologies Act would also ensure that the 
Department of Energy maintains a portfolio of near, medium and long 
term technology development activities. We strongly support such an 
approach. Incremental advances in existing technologies can have great 
benefits for the current fleet. But, as has also been noted here today, 
a consistent and forward-looking energy research policy is also needed 
to identify the transformational technologies whose development cycles 
may be longer than industry can support alone.
    Another key element of S. 734 is its recognition of the 
extraordinary potential for advancement in the medium and heavy duty 
segment. Medium and heavy duty vehicles consume more than 52 billion 
gallons of fuel each year and are responsible for 21 percent of U.S. 
greenhouse gas emissions from transportation. Efficient hybrid and 
plug-in hybrids can increase the vehicles' efficiency by 20 to 50 
percent. Battery electric medium and heavy duty vehicles eliminate oil 
use entirely. Increased efficiency also means reduced emissions. For 
example, putting 10,000 hybrid electric trucks to work would reduce 
diesel fuel use by 7.2 million gallons per year and reduce carbon 
dioxide emissions by 83,000 tons.
    The U.S. is a leader in medium and heavy duty vehicle 
electrification but emerging technologies are expensive to develop and 
deploy. Public/private investment can help speed the performance 
advances and technology cost reductions in this segment of the market.
    Together, these bills can advance us toward our national goals of 
reduced dependence on foreign oil, a more sustainable transportation 
sector and increased competitiveness in the global energy technology 
market.
    I thank you for the opportunity to testify here today and look 
forward to your questions.
                    comments on specific provisions
                                 S. 948
TITLE I National Programs
    EDTA supports the establishment of a national program to help 
deploy plug-in electric vehicles and infrastructure. With an overall 
goal of electrification of the fleet, we recommend that the required 
planning and petroleum reduction goal-setting include all the electric 
drive technologies.
    For grid connected vehicles, EDTA supports a robust national-scale 
effort that helps communities to plan and execute transportation 
electrification.
    We support establishing national Technical Assistance and Workforce 
training programs as part of that effort. These should be of sufficient 
scale to meet national needs and national scale goals.
                          regional deployment
    It is important to establish the right synergy between the national 
program and the community deployment strategy to ensure that the 
overall effort moves us toward electrification nationally: The combined 
program should reinforce the efforts that are underway, help new ones 
begin and serve as a real time information source for the public and 
private stakeholders. We agree with the discretion provided to the 
Department to determine the appropriate number of communities and size 
of awards.
    As vehicle electrification includes a variety of technologies and 
configurations, we also believe it is appropriate to include 
recognition of the applicant communities' efforts in deploying fuel 
cell electric vehicles in the program, as in the House counterpart 
bill. Alternatively, the criteria for evaluating applications to 
communities could also recognize communities that are also planning 
for, and investing in, fuel cell vehicles and infrastructure.
                           access to capital
    EDTA supports expansion of loans and loan guarantees for fleet and 
battery purchases and infrastructure installation. Easing access to 
capital helps to build industry economies of scale, speed deployment 
and advance energy storage options for utilities and others power 
providers while minimizing federal outlay.
                             federal fleets
    S. 948 also promotes the adoption of plug-in electric drive 
vehicles in federal fleets by providing funds for purchasing vehicles 
as well as transparency and accountability for their use, which EDTA 
strongly supports. However, EDTA supports increasing the overall 
electrification of the federal fleet and we would also like to see a 
comprehensive approach that recognizes all of the electric drive 
technologies, including fuel cells and hybrids, which will provide 
flexibility for meeting fleet needs while reducing oil consumption and 
helping to build markets for advanced vehicles, components and 
infrastructure.
                         private fleets program
    Accelerating the adoption of electric drive in private fleets will 
help manufacturers achieve economies of scale while helping businesses 
reduce their fuel costs. We support the bill's proposed private fleet 
program but would like to work with you to identify the most effective 
size for eligible fleets. While it is appropriate that the program 
leverages large volume purchases by setting a 100 vehicle threshold, it 
may also be useful to provide a mechanism to allow smaller fleets to 
access this option. Including a small fleet-set aside or a purchase 
aggregation option would help smaller businesses with car and truck 
fleets to avail themselves of more efficient vehicle options.
TITLE II Research & Development
    We support S. 948's expanded commitment to research and development 
Public and private investments are essential to accelerate technology 
breakthroughs for vehicles, components, infrastructure and grid 
integration and will help us reduce dependence on foreign oil and 
enhance our ability to compete in the global advanced energy market.
    Regarding the Section 204, authorizing a National Academy of 
Sciences study on collection and preservation of data collected from 
plug-in vehicles, due to the privacy and potential record-keeping 
liabilities for multiple information stakeholders, we would suggest 
that there be an opportunity for stakeholder input in the required 
recommendation for procedures, technologies and rules relating to the 
collection, storage and preservation of such data.
TITLE III Miscellaneous
                   utility and distribution planning
    Title III establishes a utility planning process for plug-in 
electric drive vehicles under the Public Utility Regulatory Policies 
Act. As fuel and power providers, utilities need to identify demand and 
energy management and smart grid integration strategies. Protocols for 
the interaction of utilities and charging infrastructure entities will 
also need to be identified. The key is establishing the right balance 
between national standards for charging technologies and flexibility in 
business models. Our members are currently reviewing the Section 301 
federal regulatory directives to ensure that these are achieved.
                            battery disposal
    Regarding the bill's provisions prohibiting disposal of advanced 
batteries used in plug-in electric drive in landfills, we believe that 
at this time it is more appropriate to conduct a study to identify 
specific environmental risks and the best options for safe recycling 
and ultimate disposal before an outright ban is imposed on all advanced 
battery disposal. In the interim, promoting secondary uses of 
automotive batteries and advanced materials will ensure that these 
batteries remain in use beyond their automotive life and that their 
valuable components are recovered
                                 S. 734
    EDTA also strongly supports Senator Stabenow's portfolio approach 
to vehicle technologies research, development and deployment. The bill 
authorizes a comprehensive program that recognizes the increasing role 
of sensing technologies and telematics and the need for advanced 
manufacturing to accompany advanced technology. Electrification has 
enormous potential in medium and heavy duty vehicles and will be 
critical in meeting new fuel economy and emissions standards. 
Establishment of a program to advance medium and heavy duty commercial 
and transit vehicles will provide a path for greater industry and 
government cooperation in speeding the development and adoption of 
electric drive truck technologies.
    Battery recycling research and development is also important in 
establishing secondary value streams of critical components and helping 
industry meet the highest environmental standards for recycling.

    The Chairman. Thank you very much.
    Mr. Van Amburg, go right ahead.

STATEMENT OF BILL VAN AMBURG, SENIOR VICE PRESIDENT, CALSTART, 
                          PASADENA, CA

    Mr. Van Amburg. Chairman Bingaman, Ranking Member 
Murkowski, committee members and guests, thank you very much 
for this opportunity to talk about how to reduce oil use in 
transportation via advanced vehicle technologies and fuels.
    As we noted in our written testimony, the U.S. really 
stands at a very important opportune point right now in its 
history. Several of the technologies that we're really talking 
about today and would be affected by these bills represent 
areas of keen American leadership in technology. They can 
support expanded job growth, both in our manufacturing base and 
in new high tech jobs that we hope to create.
    These are jobs that would be in our traditional 
manufacturing sectors. Such as the upper Midwest, Ohio, 
Michigan, Indiana, Illinois, but as well in manufacturing in 
high tech sectors all across the United States. These efficient 
technologies also lead directly to reducing oil consumption.
    Now my organization, CALSTART, has been intimately involved 
with advanced transportation technologies since 1992 when we 
were founded, across all fuels and tech. Our mission is really 
to grow this industry with the goals of creating jobs out of 
it, reducing emissions and increasing energy security in the 
transportation sector. We work with more than 150 companies and 
agencies to achieve this, everything from the large truck and 
car OEMs and suppliers down through mid and small sized 
technology innovators bringing new technologies to the market.
    Now we've said this several times, but transportation does 
account for 70 percent, roughly, of the petroleum used in this 
country. So it's a key target. The committee is right to focus 
its efforts on this. It often is not a well recognized fact. If 
we want to move the needle on energy security, we really need 
to focus on the transportation sector.
    Now a driving force of our work and for policies that we 
would recommend is to avoid what we call silver bullet single 
solutions. To support and encourage something we call silver 
buckshot. A portfolio approach of multiple technologies and 
multiple fuels which we think is what it will take to achieve 
oil use reduction and other co-benefits that we're trying to 
achieve such as emission reductions.
    Now at its core there are really 2 strategies on the 
vehicle side, if we want to attack oil consumption, use less 
fuel to do the same work, really efficiencies such as in 
hybrids and electrics. Switch the fuel you use to alternative 
or biofuel or non-petroleum sources such as natural gas. Even 
better and we're starting to really see this capability grow 
right now is to combine these 2 strategies such as approaches 
as biofuel or natural gas hybrids that we're starting to see.
    It's also, of course, important to know that we make sure 
that policies promote change across vehicle platforms. Now we 
all know passenger cars are pretty frankly, sexy. They get a 
lot of attention. But when we really look at, as we noted from 
some of the other speakers, for our goods movement, for 
commerce in this country, trucks and buses do the bulk of the 
work and they use about a third of the fuel.
    So it's very timely. These bills do take on looking at how 
do we address bringing in the medium and heavy duty sector. It 
also happens on a per vehicle basis that it's big bang for the 
buck. These large vehicles use far more fuel on a platform 
basis than cars do. They have a tremendous opportunity for cost 
effective fuel savings, as we go forward.
    It's also an industry segment and I've spent my last 10 
years in this. That is, facing new regulatory requirements from 
EPA. It's set for greater fuel economy in this sector. 
Partnerships to assist this sector would be especially timely.
    The technologies and fuels needed to reduce oil consumption 
are just available though. That's something that really has 
changed. It's been a sea change in this country from the last 
10 years. They are ready to move forward as we outlined in our 
written comments. Certain sectors, in fact, our prime areas of 
U.S. leadership, and I would call out medium and heavy duty 
hybrid and electric vehicles as an area where the United States 
currently leads the world in that technology sector.
    Now in working with manufacturers, suppliers and fleets 
trying to look across multiple technologies and fuels, they've 
identified with us kind of the key areas that would help the 
industry to move forward.
    They believe that this would be in purchase assistance to 
these early vehicles.
    Getting deployment going when we have low volumes and high 
costs.
    Longer term partnerships on research and development 
focused on efficiency and oil consumption reduction.
    Partnerships with industry to help them shift their 
manufacturing to these new technologies.
    Now in terms of the legislation you're considering based on 
the policy drivers I've mentioned, CALSTART supports the 
Advanced Vehicle Technology Act.
    It does focus on greater efficiency as a policy outcome.
    It encourages innovation across vehicle platforms, not just 
light duty.
    It addresses a key concern which is consistent R and D.
    We believe it will drive continued job growth in areas of 
strategic advantage to the United States.
    We're also very intrigued with the Promoting Electric 
Vehicles Act.
    It is bold.
    It targets vehicle deployment across multiple vehicle types 
which is key.
    It really aligns with the Administration's goals of 
expanding Federal Government purchases of advanced and all 
fueled vehicles.
    All of which are good. We would encourage that we look at 
these bills across a portfolio approach though, not a single 
issue. Really try and build a portfolio for this Nation across 
multiple, all fuels and technology approaches.
    Again, going forward we believe good policy that 
establishes performance goals is inclusive of a range of 
technologies and fuels and targets key areas of need that help 
encourage industry growth will reduce oil consumption, enhance 
energy security and also create jobs in this country.
    Thank you very much for the time to address you today. 
Looking forward to questions.
    [The prepared statement of Mr. Van Amburg follows:]
Prepared Statement of Bill Van Amburg, Senior Vice President, CALSTART, 
                              Pasadena, CA
    CALSTART thanks the Senate Committee on Energy and Natural 
Resources, its chairman, ranking member and its members for the 
opportunity to testify and share our knowledge with you on policies to 
effectively reduce oil consumption in transportation via advanced 
vehicle technologies and fuels, including electric drive technologies.
    The United States stands at an opportune moment with these new 
transportation technologies. Several of these technologies are areas of 
U.S. leadership with significant job growth potential if they are 
expanded. They also directly reduce oil use via increased energy 
efficiency or fuel switching, providing an avenue for reducing oil 
imports, cutting operational costs for users, as well as reducing air 
emissions and improving air quality. The adoption of advanced 
technologies also importantly supports U.S. manufacturers building 
these leading-edge products here and for export to the international 
market.
    CALSTART via its national programs together with its industry, 
fleet and public partners, is working to speed the development and 
market adoption of high-efficiency, clean transportation technologies, 
such as hybrid and electric drive, and alternative and clean fuels, for 
the light (passenger car), medium and heavy-duty vehicle platforms--
cars, trucks and buses. Via specific programs, such as our national 
Hybrid and Advanced Truck Users Forum (HTUF) partnership with the U.S. 
Army, our renewable natural gas (RNG) efforts, electric vehicle 
infrastructure and biofuel projects, we have identified the key 
benefits and also barriers to progress which we welcome the chance to 
explain. There is an opportunity for smart, targeted partnerships 
between industry and government to speed the impacts--in oil reduction 
and job growth--from these new capabilities.
    Our testimony will follow this outline: A brief introduction to 
CALSTART; the Multiple Solutions Needed to Reduce Oil Use; a brief 
overview of the State of the Industry; and Gaps and Barriers. The 
legislation you are considering will be discussed as part of this 
structure.
What is CALSTART?
    CALSTART is North America's leading advanced transportation 
technologies consortium. It is a national, fuel and technology neutral, 
non-profit organization with more than 150 private industry company as 
well as public agency members. It is dedicated to expanding and 
supporting a high-tech advanced transportation industry that addresses 
energy security through reducing imported oil use while also reducing 
air emissions and creating economic opportunity. We operate across all 
fuels and technologies, and across all vehicle platform sizes, from 
two-wheeled vehicles through heavy-duty trucks. We target those 
solutions that can achieve multiple benefits.
    CALSTART serves as an unbiased, strategic broker to spur advanced 
transportation technologies, fuels, systems and the companies that make 
them. It works across four areas to expand and support this industry: 
operating technology development and demonstration programs with 
industry partners; consulting to ports, fleets and others on 
implementation of new fuels, vehicles and technologies; providing 
services to industry members to expand their capabilities; and 
supporting and guiding the creation of policies that increase the 
efficiency and reduce the emissions of U.S. transportation.
    CALSTART plays a leading national role in facilitating the 
development of advanced propulsion systems and alternative fuels. For 
example, it helped create the capability for heavy-duty hybrid drive 
systems in transit buses in program partnerships with DARPA, and now 
leads efforts in advanced commercial vehicle hybrids, fuels cells, 
hydrogen and biofuels. Founded in 1992, CALSTART is headquartered in 
California but operates nationally in its programs.
    As one example of CALSTART's work across multiple technologies and 
fuels, one of our major programs in efficiency and oil reduction is the 
Hybrid and Advanced Truck Users Forum (HTUF). HTUF is operated by 
CALSTART in a unique partnership with and under contract to the U.S. 
Army Tank-Automotive Research, Development and Engineering Center 
(TARDEC)--National Automotive Center (NAC)\1\. Its focus is to speed 
the development and deployment of dual-use (military and commercial) 
technologies to increase the efficiency of commercial and military 
vehicles.
---------------------------------------------------------------------------
    \1\ The NAC is the Army's outreach arm to the commercial 
transportation industry, and is charged with both understanding the 
capabilities of the commercial vehicle industry and working to increase 
the capabilities of the industry to build advanced vehicles and 
technologies that can support emerging Army and military needs.
---------------------------------------------------------------------------
    It initially targeted market growth in promising hybrid-electric 
and hybrid-hydraulic medium-and heavy-duty drivelines and then electric 
vehicles, and now is expanding focus on alternative fuel-hybrids. The 
goal is to build a competitive, sustainable medium-and heavy-duty 
hybrid and efficient vehicle market. By working with first-mover fleets 
and targeting their vehicle performance needs for efficiency with 
industry partners, HTUF has proven to be a highly successful program to 
jump-start the commercial hybrid, electric and efficient truck industry 
in North America. Its track record of success, and the results in terms 
of industry development and product launches, has benefited truck 
makers and suppliers as well as military planners keen on supporting a 
dual-use commercial manufacturing capability for advanced trucks. HTUF 
is credited with removing one to two years from the product development 
cycle, and now works with more than 80 national fleets representing 
more than 1-million vehicles on the road, and all major truck makers 
and system suppliers.
    Another example is in renewable natural gas (RNG), a domestic, bio-
based form of natural gas that adds additional domestic supply and can 
even further reduce emissions from clean natural gas. CALSTART 
developed first partnerships with Sweden, an early leader in the use of 
RNG for transportation, and has helped focus partnerships and funding 
on its production and use in the U.S. Each region of the nation has 
unique fuel opportunities, from waste and bio sources, that can be 
tapped to create transportation fuel. CALSTART has been active in 
working with second generation biofuel companies to assist their 
growth, as well.
    Similarly, besides work on the vehicle development side, CALSTART 
since its beginnings has been very active in electric vehicle 
infrastructure deployment and technology and built out with partners an 
initial 500 site recharging network for EVs in the mid 1990s. Today the 
organization is active in understanding with first movers the best 
strategies for new recharging site deployment at home and work site, 
and in particular the opportunities for commercial vehicle recharging.
              multiple solutions needed to reduce oil use
    To successfully increase our national energy security and reduce 
our dependence on oil, particularly imported oil, requires a suite of 
technology and policy options and approaches. While it is tempting to 
fix on attractive single solutions, CALSTART strongly believes there is 
no ``silver bullet'' able to address our national energy challenges, no 
one fuel or technology that alone can effectively reduce our petroleum 
use to the degree needed. Rather, we have followed and recommend a 
``silver buckshot'' strategy, advocating a portfolio approach to 
policy, technology development and market support decisions.
    However, it is also important to note that focus is critical when 
it comes to the long term goal of reducing our oil dependence and 
imports. In considering the bills before you and others that may be 
proposed, this committee is rightly addressing the most important 
single sector when it comes to oil use: transportation. Nearly 70 
percent of the oil used in the United States goes for transportation 
according to the U.S. Energy Information Agency. Some assume that there 
is more oil used in power production or other uses. However, that is 
not the case. Therefore, to effectively address energy security and oil 
use, we must make transportation the top focus of our national efforts.
    There are two main strategies to successfully reduce oil use in 
transportation, and both are required to be effective:

          1. Use less fuel to do the same work--in other words, 
        increase efficiency, such as with hybrid, electric drive and 
        other technologies; and
          2. Switch to non-petroleum fuels, such as natural gas and 
        bio-based fuels.

    Where these strategies can be combined, as in alternative fuel 
hybrids or other approaches, you can further increase your 
effectiveness in cutting oil use on a per vehicle basis. This is an 
area of high interest for technology and product development going 
forward and CALSTART is operating several projects around this 
combination strategy.
    At the same time, while it is critical to support technologies and 
fuels furthering these strategies, it is equally important to drive 
these strategies across all vehicle types. Partly because they achieve 
the highest visibility, passenger cars have received the bulk of the 
attention in the past when it comes to research and development 
partnership funding and in manufacturing assistance and market 
introduction. However, there is both a need and a strategic opportunity 
for greater focus on commercial vehicles--the medium-and heavy-duty 
trucks and buses that move most of the goods and provide the services 
in our country. Medium-and heavy-duty vehicles use roughly a third of 
the fuel consumed in U.S. transportation, and on a single vehicle basis 
are easily the highest fuel use vehicles on our roads. The fuel saved 
by a single truck can equal the fuel savings from ten to thirty or more 
cars. They represent a ``big bang for the buck'' opportunity for oil 
reduction that has been insufficiently addressed. However, this is not 
an argument to switch efforts from cars to trucks; rather, it is a 
request to include trucks (medium-and heavy-duty vehicles) with cars in 
all your policy decisions to increase their effectiveness.
    There is a strategic opportunity in this sector, as well, for 
economic leadership and job growth. The U.S. is currently the world 
leader in advanced efficiency technologies for trucks and buses, 
particularly in hybrid and electric drivelines, presenting a tremendous 
opportunity for job growth and even for expanded exports. A recent Duke 
University--Center on Globalization, Governance and Competitiveness 
report identifies these technologies as areas in which the United 
States has a strategic advantage as an early leader. The particular 
areas it researched were electric hybrid and hydraulic hybrid drive 
systems and the growing high tech component industry supply chain in 
the United States to produce them. Indeed, CALSTART sees a tremendous 
opportunity for export of such components and products, given U.S. 
leadership. We are currently working on a program to develop industry 
partnerships for product export opportunities in these technologies to 
China with our U.S. industry partners. We have already seen growth in 
exports of such products as advanced natural gas engine systems from 
North America.
    Additionally, UCS and CALSTART last year completed a report on the 
economic and job growth opportunities from high efficiency trucks. 
Called ``Delivering Jobs.'' it documented that 124,000 jobs can be 
created along with $24 billion in economic savings over the next two 
decades through expansion of efficiency throughout medium-and heavy-
duty vehicles.
    This is of even greater importance given the emerging regulatory 
pressure to increase efficiency from the National Highway 
Transportation Safety Administration (NHTSA) and the Environmental 
Protection Agency (EPA). They are currently in a joint rule making 
process leading to the first standards for fuel efficiency in medium-
and heavy-duty vehicles. The rules should be finalized this summer and 
go into effect as early as 2014. Policies that can support the 
industry's work to develop and produce these new technologies will be 
extremely timely and helpful.
    In view of the above observations, the Advanced Vehicle Technology 
Act (AVTA) you are considering can be of great assistance to industry 
to address both greater efficiency and the integration of non-petroleum 
fuels in vehicles. We applaud its inclusion of medium-and heavy-duty 
vehicles together with passenger cars and light trucks, as we strongly 
believe this properly acknowledges the contributions of both segments 
of transportation to oil use and its reduction. We need strategies to 
reduce oil use across all vehicles platforms, and the approaches will 
vary across vehicle sizes. It may sound trivial, but a big rig or 
refuse truck is not a car! While the high level strategies required are 
the same, as noted above, the state of technology and the effectiveness 
of different solutions will vary by size, use and type of vehicle. The 
AVTA could provide this segmented approach, because of its design, 
allowing custom strategies by vehicle type across all vehicle types.
    The proposed legislation also sends an important longer term signal 
that is critical to manufacturers and suppliers in the light, medium-
and heavy-duty vehicle industry. Research and development efforts to 
date have often suffered from on-going changes in focus and sometimes 
the selection, in our view, of single solutions rather than encouraging 
multiple solutions based on performance outcomes. They also have short 
funding horizons that do not align with the four to five year 
development cycle of technologies into products, or the longer cycle 
needed to justify investment in new technologies. A multi-year horizon 
for a partnership and development process better fits what industry has 
said would assist it to focus its investments in new efficiency and 
fuel technologies.
    By way of example, recently CALSTART completed the report, 
``Speeding High Efficiency Truck Adoption: Recommended Policies, 
Incentives and Investments.'' It was performed via research and a task 
force of industry stakeholders, including fleet vehicle users, 
manufacturers and suppliers. The findings from the report are highly 
instructive. First, they identify the top measures the industry feels 
would speed the development, production and purchase of more-efficient 
vehicles.
    The top measures identified by industry were those measures to 
assist vehicle purchase, thus encouraging greater production and 
supporting industry investment, and longer term R&D efforts, to partner 
with industry to keep the next generation of technology in the product 
``pipeline'' and moving to market. The AVTA would address one of the 
top two areas of need that industry has identified as prime barriers to 
its progress and therefore to achieving faster and greater oil 
reduction.
    Secondly, it makes a strong case that R&D and other investments and 
partnerships need to focus on results that achieve multiple benefits, 
or co-benefits. For instance, while reducing oil use is critical for 
energy security, it would be counter-productive to reduce oil use 
through policies that increase emissions and therefore reduce air 
quality, or which export jobs from the nation. The most valuable 
approaches achieve these multiple benefits. Greater efficiency and 
targeted fuel switching can meet these goals.
    The report attempts to quantify and monetize these co-benefits, in 
the form of the public value provided--in this specific case--by 
greater efficiency in vehicles (in the report, trucks and buses). There 
are significant co-benefits that can be achieved with efficiency in 
vehicles, including direct energy security savings and criteria 
emission reductions. In place of efficiency as a metric, oil reduction 
could be a metric as well, assuming emission reductions and other 
benefits are met. In the face of limited resources and increasing needs 
for reductions in oil and emissions, we likely cannot afford only 
single benefit outcomes. Driving multiple solutions that can achieve 
these multiple benefits is smart public policy and also supports 
industry competition and growth.
    It is also worth noting in this context that the Obama 
Administration has just announced its plan to form a partnership with 
private fleets to speed their purchase of advanced technology and 
alternative fuel vehicles. As part of this partnership, the President 
also made a commitment that by 2015 the federal government will 
purchase only alternative fuel, hybrid or electric vehicles for 
replacement vehicles in its fleets. This is a dramatic proposal, and 
one in principal CALSTART very much supports as it has the government 
``walking the talk'' on petroleum reduction with its own assets. If 
actually enacted, this will send a strong signal to industry as well as 
contribute useful purchase volumes to help decrease costs. In this 
regard, the Promoting Electric Vehicles Act certainly aligns with part 
of the Administration's goals and could help to support it. It will be 
important to understand potential overlaps between the legislation and 
executive branch commitments.
    This legislation also rightly encourages electric drive vehicle 
deployments across vehicle weight classes, taking advantage of the 
breakthroughs now occurring in electric trucks and buses. By also 
targeting deployments in those regions most interested in and 
supportive of the technology, it can also support regional energy 
solutions, which, as highlighted earlier in these comments, is an 
important consideration for successful U.S. energy policy.
    There is certainly pragmatism and some focus to be gained from 
legislation and approaches encouraging important segments of this 
overall portfolio, which can be centered on specific driveline 
technologies or specific fuel types. CALSTART supports many of these 
specific approaches, but strongly encourages their consideration as 
part of a larger policy strategy and portfolio. Individual solutions 
should be supported as they combine as part of a broader strategy--for 
instance, a balanced policy of both increased efficiency and increased 
fuel switching. Longer term, CALSTART strongly supports moving to 
performance-based approaches to encourage this balance, with incentives 
and R&D driven and rewarded by their ability to achieve the multiple 
outcomes (oil reduction, emission reduction, job growth) desired.
                         state of the industry
    Advanced technologies for efficiency, and effective alternative and 
bio-based fuels available for switching, are at a new threshold level 
in America: they are ready for greatly expanded deployment, support and 
use. Approaches that ten years past were still in early or 
developmental stages are more mature and increasingly cost effective, 
particularly on an operational basis when capital costs for ownership 
can be reduced at the time of purchase. The currently high cost of fuel 
is an important additional inducement to consider these technologies 
and fuels. However, the great price volatility of fuel confuses 
manufacturers and users alike in terms of when to make investments in 
vehicles with these technologies and fuels. Both the bills the 
committee is reviewing attempts to address the reality of these 
technologies and address some of their barriers.
    Higher vehicle capital costs--in the form of incremental cost 
beyond the conventional vehicle--are generally still relatively high 
because of low volume production and first or second generation 
designs. This is certainly the case with hybrid electric and hybrid 
hydraulic technology in commercial vehicles, and to a similar extent 
with natural gas and other dedicated alternative fuel vehicles, still 
in low volume early production. Hybrid technology in trucks, for 
instance, is roughly ten years behind its introduction in cars--they 
are different market segments. Additionally, there are also some 
barriers in terms of first-time costs for fueling infrastructure in the 
case of certain fuels and technology. This is true of the re-emergence 
of electric drive in passenger cars and its new emergence in all-
electric commercial trucks. It is also one of the barriers to be 
addressed with natural gas and other gaseous fuels, though growing 
business opportunities exist for private infrastructure development.
    Having observed the early market stage of these technologies and 
fuels, it is important to note their potential effectiveness. Natural 
gas has made a strong case for itself in high fuel-use medium-and 
heavy-duty bus and truck platforms, particularly in locations where 
there is sufficient fueling demand to support investing in fueling 
infrastructure. All truck makers now have natural gas models. Transit 
and school buses, refuse collection trucks and cargo haul tractors are 
examples of growing early markets for natural gas vehicles. 
Infrastructure installed for these uses can have multiple uses for 
other natural gas vehicles, including light duty cars and pickups. The 
business case for a user is the low cost of the fuel which is 
significantly under current diesel and gasoline costs. Natural gas, 
while currently certified to the same emission levels as diesel and 
gasoline, has the potential for significantly lower emissions, as well. 
Several current and potential R&D projects are aimed at the next 
generation of ultra low emission natural gas engine. Hybrid technology, 
now established in cars, is just now entering early production in 
trucks but has attracted every truck maker to the early market with 
several platforms. The first production units were hybrid electric 
designs; this year the first hybrid hydraulic systems will enter 
production. Best uses include and provide options to transit bus, 
refuse collection, as well as any type of delivery vehicle, from parcel 
and package through heavy food and beverage tractors. Hybrid technology 
is now expanding into the tractor-trailer market in heavy regional 
delivery applications. While it provides some value today in long haul 
trucks, it is not as well suited to provide reductions in that 
application currently as are other technologies, though that is likely 
to change over time. The business case is highly driven by fuel savings 
and some maintenance savings (such as brakes). All electric vehicles 
can perform exceptional roles in the light duty arena for commuting, 
urban delivery, and fixed route, return-to-base operations. Similarly, 
the medium-and heavy-duty electric truck and bus market is starting to 
grow by targeting similar applications. Ranges of 70-100 miles per day 
in delivery and shuttle operations are starting to show potentially 
strong business case benefits and are proving out their ability to 
perform the mission. The advances in energy storage during the last 
fifteen years has provided this base and will now continue to improve, 
at reduced cost, over time.
    From this plateau and these initial capabilities, the focus of 
development efforts is now on better system integration and design 
engineering to reduce manufacturing costs in most of these systems. 
There is also increased interest in designs that can, in the future, 
combine alternative fuels with greater efficiency, such as with natural 
gas hybrids. Transit bus users are exploring this potential, and there 
is interest in refuse and other higher fuel use applications. Because 
of increasing pressure to reduce emissions under new EPA ozone rules 
now under review, there is also growing interest in zero-emission 
transportation, including zero emission freight haul, particularly in 
larger urban regions with large port and distribution operations. 
CALSTART is now working to outline a multi-year project to 
commercialize zero-emission freight haul vehicles around a major 
corridor in Southern California which will have need of further 
developments in all the technologies and fuels mentioned above.
    So far, unlike what befell the U.S. automotive industry until just 
recently, the leaders in these medium-and heavy-duty technologies are 
U.S.-based manufacturers. This is a significant advantage to the 
nation. However, that leadership is not assured. More than six truck 
makers and ten system makers are now developing products in first 
applications, but the effort has not yet achieved critical mass. To 
break out, these first efforts must succeed and expand.
                           gaps and barriers
    Given these observations, CALSTART has identified with its industry 
and fleet partners the core needs for continuing momentum in 
technologies and fuels that reduce oil use, and they fall along the 
general stages of development:

   Need for consistent, targeted funding of research and 
        development in advanced vehicles systems and partnerships to 
        assist manufacturers transition to new technologies
   Need for funding partnerships with fleets and manufacturers 
        to speed pilot projects and validate performance and 
        reliability
   Need for fleet-focused purchase assistance in the early 
        market stage to speed introduction and rapidly increase 
        manufacturing volume

    In terms of R&D, the core technology development needs now are for 
improved system integration and manufacturability, reduced energy 
storage costs specific to commercial vehicle designs, efficient 
components (to enable even greater fuel economy gains in all vehicles, 
and more capable hybrid and electric vehicles), optimized and downsized 
engines, advanced combustion schemes, power generation, light-weight 
materials, and advanced control systems.
    The commercial vehicle segment has not been a high enough priority 
for funding in the past. It has also been assumed that investments made 
in passenger cars are sufficient to support commercial vehicle needs. 
The truth is, there are important differences between commercial and 
consumer--truck and car--vehicles in terms of duty cycles, system 
architectures, market needs and business cases. A portfolio of smart, 
targeted funding over a multi-year period and covering all the stages 
identified above and aimed at the needs of the commercial industry 
would have significant impacts.
    No one approach alone will provide the full solution needed. 
Similarly, no one policy approach is sufficient. We strongly encourage 
a portfolio approach to technologies and fuels, balancing the strategy 
to achieve the end goal of reduced oil use via efficiency and fuel 
switching, or their combination.
    It is important to note that assistance is needed now. The industry 
is at a critical stage and on the threshold of a successful launch. 
However, this launch can also be viewed more broadly as the first stage 
of a transformation of transportation technology. What is required is a 
commitment to a portfolio of change over a longer term to send clear 
policy signals to the end user and manufacturer. Ideally, the level of 
partnership should be commensurate with the needs and the challenge.
    Again, thank you to the committee, members and staff for the 
opportunity to provide this testimony and share the progress to date we 
have seen in advanced efficient technologies and fuels that can reduce 
oil use and emissions in cars, trucks and buses of all sizes. These 
technologies are areas of U.S. national leadership, and together with 
the other benefits, can be important for job creation, export 
opportunities and economy growth.

    The Chairman. Thank you very much.
    Mr. Crane.

STATEMENT OF DAVID CRANE, PRESIDENT AND CEO, NRG ENERGY, INC., 
                         PRINCETON, NJ

    Mr. Crane. Thank you, Chairman Bingaman and Ranking Member 
Murkowski, Senator Stabenow, Senator Franken.
    For the average American commuting in a gasoline fuel 
vehicle, $4 a gallon equates to approximately $200 a month. In 
Houston and Dallas, where our eVgo electric vehicle fueling 
package is being sold now, we offer an electric vehicle owners 
the opportunity to downsize that $200 a month to $89 a month, 
allowing an extra $111 a month or more than $1,300 a year. 
Money that can be used to build a better life.
    Above that with each electric vehicle that displaces a 
conventional vehicle we take a little step as a Nation toward 
eliminating our country's 4 decade long dependence on foreign 
oil. We take a little step toward improving the air quality in 
our cities and towns which is deteriorating from tailpipe 
emissions. We take a step toward a consumer product driven 
revolution that will foster American technology, American 
entrepreneurs and American jobs. What will be a new and 
exciting sector of the economy.
    The goal of Congress at this critical juncture in the 
electric car revolution must be to turn each such little step 
into tens of millions of little steps that collectively make a 
giant leap forward toward national energy independence. 100 
million electric vehicles, which would represent one out of 
every 3 vehicles on American roads, would eliminate our 
country's oil imports from the Middle East. This is a worthy 
objective and we applaud you for focusing on this compelling 
national opportunity.
    As you do, however, we ask you to keep in mind that the 
electric vehicle revolution, like all great consumer product 
revolutions, will be driven primarily by the private sector and 
by the American consumer. There is much that you can do to 
enhance and accelerate the EV breakthrough. So long as everyone 
recognizes that the government's role is to support and 
supplement, not super cede private sector initiative.
    So let me tell you a little bit about what the private 
sector is already doing to accelerate EV deployment. 
Significant market penetration of electric vehicles depends on 
4 things, the car, the sticker price, the cost of use and the 
convenience of use. The car and the sticker price depends upon 
the auto makers. At NRG we're taking on the cost of use and the 
convenience questions.
    Principally by attacking range anxiety, which is the single 
greatest drawback commonly associated with electric vehicle 
ownership. Our new enterprise called eVgo has begun a $25 
million program to install a network of fast chargers around 
both Houston and Dallas/Fort Worth. By next year any EV driver 
in those cities typically will never be more than 5 miles away 
from one of our convenience chargers.
    We bundle unlimited and free access to these public 
chargers with a home charger purchased and installed in the EV 
owner's garage and with all the electricity that EV owners can 
use for the flat fee of $89 a month. No matter what happens in 
the Middle East that fee is fixed for 3 years.
    It's cheap, easy, convenient and with it, the EV owner's 
range anxiety instantly becomes range confidence. I can tell 
you while it's still early days, we have gotten a very high 
percentage of EV owners in Texas signing up for our plan. We're 
working on plans to bring this eVgo network to other suitable 
locations around the country. Other companies are developing 
similar plans in other cities.
    So what is it that the government can do?
    The government can help by assisting American consumers get 
over the high initial cost of owning EVs during this period 
when manufacturers are still going through the expensive 
process of ramping up large scale production both of electric 
vehicles and of electric vehicle battery packs.
    The government can help by creating and encouraging a range 
of convenience benefits for electric vehicle owners including 
most notably, giving electric vehicles access to HOV lanes on 
the Federal highway system.
    The government can help starting right here in your 
committee by reporting out S. 948. We suggest only that you 
scrub the bill to ensure that it in no way disadvantages 
communities and companies that take early action to promote 
electric vehicle ownership. Provide electric vehicle 
infrastructure on their own initiative.
    For as we have seen in the area of mobile telephony is 
where the U.S. Government facilitates rather than frustrates 
the private sector that American jobs are created and the 
American consumer benefits. In this case from a revolutionary 
product that ultimately will make the average American's daily 
life cheaper, easier, cleaner and more fun.
    Thank you very much.
    [The prepared statement of Mr. Crane follows:]
Prepared Statement of David Crane, President and CEO, NRG Energy, Inc., 
                             Princeton, NJ
    Thank you, Chairman Bingaman. Mr. Chairman, Ranking Member 
Murkowski, and distinguished Members of the Committee, I appreciate the 
opportunity to testify before you today on the topic of one of the most 
exciting technological innovations of our era--the electric vehicle.
                              introduction
    Today America is experiencing ``deja vu, all over again''. As the 
U.S. summer driving season approaches, gasoline prices have risen above 
$4/gallon in large parts of the country and the cost of one fill up of 
a full size SUV is trending towards $100. And not only is there 
absolutely no assurance that the gasoline price increases will 
moderate, every American knows that their hard won income going into 
their gas tank is headed from there straight overseas to help less than 
friendly foreign regimes.
    With the continued instability in the oil producing regions, we all 
face the prospect that soon may come a day when the long lines and 
short tempers of the 1979 oil crisis again visit our shores and make us 
wish we could procure gasoline at any price. Back then, the U.S. 
Government responded by enacting higher CAFE standards and lower speed 
limits and by encouraging car pooling through the creation of ``HOV'' 
lanes, none of which have worked over the ensuing thirty plus years to 
curb our country's addiction to foreign oil.
    But now, for the first time, technological innovation has produced 
a solution that has the potential to break our dependence on foreign 
oil. Mass produced plug in electric vehicles, powered by batteries with 
a range double that of the distance driven by the average American 
vehicle on any given day, are coming to various markets around the 
country as we speak produced by multiple American and global car 
manufacturers and start ups and more are on the way.
    The electric vehicle revolution is happening and it will be driven, 
as it should be in the United States, by the private sector and by the 
American consumer. What the U.S. Government needs to decide is whether 
it wants to be a catalyst or a hindrance to the accelerated deployment 
of electric vehicles. Given the enormous geopolitical and balance of 
trade benefits to that will inure to the United States as a result of 
substantially reduced dependence on foreign oil, we feel strongly that 
the Government should support and supplement, but not supersede, the 
private sector's initiatives in this critical area.
                                  evgo
    Our view is that vehicle ownership in the United States is 
primarily about the car, the cost (sticker price and operating cost) 
and the convenience of ownership and use. The car and the sticker price 
depend upon the automakers. Our company, NRG Energy, aims to address 
comprehensively the cost of use and the convenience questions. We have 
established a new enterprise, called eVgo, which has announced and 
begun implementation of a plan to turn the ``range anxiety'' normally 
associated with electric vehicle ownership into ``range confidence''. 
In order to do this, we already have begun a $25 million program to 
install a network of convenience fast chargers around both the Houston 
and Dallas Fort Worth metropolitan areas.
    We bundle free and unlimited access to this ``freedom station'' 
charger network with the purchase and installation of a 220 volt ``home 
charger'' in the EV owner's garage and all the off-peak electricity the 
EV owner can `pump' into $89/month charged through the car owner's home 
electricity bill. Not only is our eVgo package exceptionally 
convenient, both from an ease of use perspective and from a billing 
perspective, it provides the opportunity for breathtaking cost savings 
to the American driver who otherwise will be averaging $150-200/month 
in gasoline bills at $4/gallon.
    Our subscription model is a very different approach from the way 
Americans are used to paying for fuel, but I can assure you that they 
get it. While it is still early days, we are pleased to report that an 
overwhelming majority of electric vehicle buyers who have received our 
eVgo sales presentation have signed up for one of our plans.
    What we have done is just the beginning. Our freedom charger 
network in Houston and DFW will be fully built out by next year. We 
also are working on plans to expand these comprehensive charging 
networks to other cities around the United States. And we are not 
alone. Other companies, some in similar lines of business as NRG, have 
announced plans and begun efforts to deploy public charging 
infrastructure.
                           role of government
    Like most new technologies, the cost of electric vehicles must come 
down in order to bring about mass adoption. But we have also learned 
through talking with our own customers and many others around the 
country, that auto buyers are becoming more and more excited about the 
value proposition of electric vehicles. Drivers have started to become 
enamored of the idea of conveniently charging their electric vehicles 
in their home overnight while sleeping, filling up their cars with fuel 
at a fraction of the cost per mile of gasoline, and the reduced 
maintenance on a car that requires no oil changes or tune-ups.
    The growth in demand and supply of electric vehicles can be 
accelerated with smart government policies designed both to enhance the 
convenience of electric vehicle ownership and to provide direct and 
indirect financial support aimed at helping consumers and businesses 
get over the initial high costs of new technologies like EVs, advanced 
batteries, and charging networks.
    Regarding convenience, there is much the Government can do at low 
to no cost. It can train. It can promote electrical standards and 
processes to expedite the installation of home and community chargers. 
It can require preferential parking allocations for EVs at Government 
facilities and can encourage the same at privately owned parking 
facilities. Most importantly, the Government can acknowledge that its 
decades-long attempt to promote car pooling has failed and it can 
declare that all HOV lanes in the interstate highway system henceforth 
are instead zero emission lanes. All of this, as I said above, the 
Government can achieve for little to no money.
    At today's hearing, we are discussing the Promoting Electric 
Vehicles Act of 2011 (S. 948). This act would authorize the funding of 
deployment communities to encourage the more rapid deployment at scale 
of electric vehicles. We think there is a very real role for deployment 
communities as envisioned in the current Senate bill provided that the 
bill is modified to reflect that the leading deployment communities, to 
a certain extent, are already being identified by private sector 
decisions, such as charger networks sufficient to provide full range 
confidence, as well as the current EV makers selection of the markets 
to which they wish to allocate their EV product.
    To our way of thinking, such communities are best thought of as 
``early deployment communities''--places that the private sector has 
identified as having most of what it takes to make it attractive to 
invest in EV infrastructure. Of course, residents of these communities 
still need the key policy drivers for EV deployment--a break on the 
initial cost of the first wave of electric vehicles.
    However, not all communities are such attractive targets--for 
example, they may be too small or have too weak a distribution grid to 
attract early private infrastructure investment. Despite this, we 
believe EV infrastructure deployment should occur across the country, 
in a variety of communities, and for that reason the deployment 
community concept as laid out in the bill is a great way to jump start 
early EV adoption in such communities.
    But we think the bill should also be clarified to ensure that any 
community in which a private entity commits to deploy a critical mass 
of charging infrastructure should also qualify for additional cost 
sharing for cars and chargers--and additional incentives for the 
community itself to deploy convenience benefits. In fact, by leveraging 
private investment, we believe this approach, in combination with the 
existing deployment community concept, can spread existing federal 
dollars over more communities in more states, and help deploy more 
electric vehicles--leading to an earlier end to our dependence on 
foreign oil.
    In closing, let me say that this is an exciting time to be in the 
electric vehicle infrastructure business. I believe electric vehicles 
represent the next great consumer revolution, much like we have seen 
with the personal computer and cell phones. Buyers around the country 
have had the chance to see these cars and test drive them. A lucky few 
now already own a Chevy Volt or a Nissan Leaf. Their response, and the 
EV ownership experience more generally, have been overwhelmingly 
positive. Government policy obviously affects the auto industry but, 
for all Americans, the car purchase decision fundamentally is consumer-
driven. At NRG, we believe electric vehicle policies like those I have 
described today actually represent something we have needed as a 
country at least since 1979--a consumer-driven energy policy for the 
United States.
    Thank you Mr. Chairman, this concludes my remarks.

    The Chairman. Thank you. Thank you all very much for your 
testimony.
    Senator Coons has to be over on the Senate Floor to give a 
speech. So I--at least I was advised of that. I wanted to give 
him a chance to ask his questions so he can take my place as 
the first questioner. Then we'll go to Senator Murkowski and 
the other members and then I'll ask my questions after the 
others have completed.
    Senator Coons.
    Senator Coons. Thank you very much, Mr. Chairman for 
accommodating my schedule. Thank you very much for convening 
this hearing on these 2 important pieces of legislation by 
Senator Stabenow and by Senator Merkley and Senator Alexander, 
who were here before.
    I'm from a State that happens to have a strong and early 
interest in the electrification of vehicles. I believe, as I 
think many of us do, that this has enormous potential for 
America's manufacturing future, for America's energy 
independence, for allowing us to retake the lead in the global 
manufacturing and delivery of cutting edge vehicles. So I'm 
strongly supportive of the Merkley/Alexander bill and hope to 
be joining them in actively supporting its adoption.
    Mr. Davis, if I might. One of my concerns is about the 
speed of the adoption of some of the critical provisions of the 
bill. In particular, deployment communities if we are to 
authorize a significant investment that will, I think, result 
in valuable learnings about what kinds of consumer issues are 
arising in the deployment of charging stations and in the 
adoption of electric vehicles, not just by 2 to 3 percent of 
the population, but more broadly by up to half.
    There are some critical learnings there. If it takes 3 to 4 
years for the Department to issue regs and do the competition 
and roll it out, it may miss a critical window. What 
reassurance can we have that the Department is prepared and 
able to rapidly act on the deployment community's concept?
    Mr. Davis. Thank you, Senator for the question.
    I think we would act very quickly as we did in the Recovery 
Act projects where a month after passage of that legislation we 
had a solicitation on the street. We had projects selected 
approximately in August of that year. So that's about 6 months 
after passage of the legislation. Then we went through the 
contracting process and most of those projects were in place 
within a year of passage.
    So we would act, hope to act, as quickly in this regard to 
implement this program.
    Senator Coons. Thank you. I think that would add a lot of 
confidence to folks who are looking to support this because I 
think early adoption speed is critical.
    Second, as we move forward in advancing battery technology 
and battery research. As Senator Stabenow referred to earlier, 
there was some key investments being made. Ms. Cullen, I'd just 
be interested in your assessment of vehicle to grid potential.
    The University of Delaware has done some fairly cutting 
edge work in this. There's an early stage deployment underway. 
I've been really struck at the capacity of a future electric 
vehicle fleet to do what a number of the panelists have 
referred to, use the excess capacity, the enormous excess 
capacity that's there. Then help with grid load balancing.
    What's your view about how promising vehicle to grid 
technology is?
    Ms. Cullen. Senator, you are right. It is a promising part 
of the grid fueled equation. At the moment we are making the 
vehicles work as vehicles.
    But the grid has enormous spare capacity. Vehicles can 
serve as an energy storage device and can maximize the 
efficiency of the grid's existing capacity. Going forward 
vehicle to grid capabilities will enable the consumer and the 
utilities to both maximize the benefit of grid fueled 
transportation and allow the energy stored in the mobile load 
in the cars to serve as load leveling as in managing variable 
sources like renewable power. Over time if we reach the mass 
penetration that we're hoping for that serve, as in fact, you 
know, a larger mobile load available to the grid.
    Senator Coons. Thank you, Ms. Cullen.
    Mr. Crane, if I might. You raised some questions about 
making sure that the bill as it comes out of committee as it 
goes to the floor, not needlessly compete with or interfere 
with private sector efforts. I just want to commend NRG for the 
eVgo deployment you're describing.
    My hope is that we will work to find a way that the match 
level and the timing and the details of the deployment 
community's portion of this bill will in fact, complement those 
places in the country where there is some early stage 
deployment. Any more detailed comments about how you'd 
accomplish that objective?
    Mr. Crane. A couple things. We've had experience in the 
past couple years dealing with the executive branch of the 
Federal Government. There's a strong strain in the Federal 
branch that if the private sector is willing to do something 
than the government shouldn't be spending money in that area.
    So what--since this bill, if passed and appropriated, you 
know, put some pretty big incentives to become a deployment 
community. You don't want the private sector to hold off 
investment hoping that, you know, that you could get that 
money. The other thing is we don't want to have to compete 
against people who are getting things for free from the Federal 
Government. Even as we speak the package we're offering in 
Houston has been duplicated in the city of Austin at a much 
lower rate because they were given a bunch of free chargers as 
part of the stimulus package.
    Of our $89 package, approximately $30 a month is actually 
to pay for the cost of the charger that goes into your home. So 
you just have to be careful about the effect, the potential for 
distortions. Having said that, we think if the deployment 
community thing is done right, it can be very effective. As 
long as early--as long as communities that go early are not 
prejudiced relative to other people who may be waiting to 
start.
    Senator Coons. Thank you for the input. Thank you to all 
the members of the committee. I am particularly grateful for 
the hard work the Electrification Coalition has done and SAFE 
has done in advocating for this. I look forward to supporting 
this bill.
    Thank you, Mr. Chairman for accommodating my schedule.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. Thank you to 
the witnesses here this morning. I have to tell you that when 
we first looked or when I first looked at the community 
deployment, I thought this is not going to work in my State. 
The range is just too great.
    I forget which one of you mentioned range anxiety. But when 
it's 365 miles from one big town to the only second other big 
town, there's a lot of anxiety along the road. But we've got a 
lot of island communities. Island communities that are powered 
by hydropower, clean energy resource that we're looking at and 
saying we could make a difference here. So again the 
technologies are exciting.
    I wanted to ask you a question, Mr. Davis, about the 
legislation that we have before us, S. 948. The proposal there 
as contrasted with the Administration's proposal. Their FY 2012 
budget request seeks to provide up to 30 communities with up to 
$10 million each to help deploy the electric vehicles under 948 
the number is going to rise 25 fold, 250 million per community.
    So we've got 2 proposals. One with $300 million in total 
funding. Another with $2 billion in total funding. Which is the 
right number to begin really moving out? Is it somewhere in 
between or can you speak? Because there's a lot of ground in 
between $300 million and $2 billion.
    Mr. Davis. Yes, I appreciate your question, Senator. Fully 
recognize the large difference between the 2. However, the 
goals of the 2 programs are similar.
    To work with cities to remove barriers to EV adoption.
    To streamline permitting.
    To put in place policy measures.
    Ultimately to help install charging infrastructures as well 
as encourage vehicle adoption.
    In the Administration's program, which was a $200 million 
total effort, we envisioned up to 30 awards up to about $10 
million each. We did envision that as a shorter term program 
than what's envisioned in the bill. We would like to get it out 
quickly and help jump start this market.
    Obviously the larger program in the bill would last longer 
term. Help us move farther down the road, if you will. Sorry 
for the driving metaphor.
    But I think ultimately the most important thing is to 
balance the roll out of vehicles with programs like this. So 
obviously our shorter term and smaller effort as proposed by 
the Administration needs to be--needs to work in concert with 
the roll out of vehicles and the numbers of vehicles as they 
roll out. Same thing with the larger program, you wouldn't want 
to pre-build infrastructure before the vehicles are there.
    So we would have to look carefully at the proposed 
introduction of those vehicles and time it with the 
implementation of the larger program.
    Senator Murkowski. Let me ask a question that is often 
asked here in this committee. That's whether it's appropriate 
that we be picking winners and losers. We're talking about 
electric vehicles here. Sometimes we don't have a very good 
track record when we try to pick who we think the winners 
should be.
    Should we consider allowing natural gas and other 
alternative fuels to at least qualify, especially if it looks 
like these fuels are going to be more cost effective or if 
perhaps electric vehicles aren't going to be available in 
sufficient quantities? I throw that out to the panel. Because I 
think it is something that we need to discuss here.
    Mr. Ghasemi.
    Mr. Ghasemi. Thank you. Our proposition here is that our 
national security and economic stability is threatened by 
imported oil. Whatever we can do to reduce imported oil, we are 
for it.
    If we can drill more and we have the reserves, do that. We 
should support that.
    If we can increase fuel efficiency so that we use less gas, 
that would be good.
    If we can use natural gas to power our heavy trucks, that's 
a good idea.
    What we are saying is that electrification of 
transportation is a technology that we have. The technologies 
in your hand or in your pocket, or in front of you in form of 
the cell phones and laptops that you have, that--a bigger 
version of that lithium ion battery will drive the car. There 
is nothing new about this.
    We have the infrastructure. Every house in this country has 
a garage. Every street has a lamp post.
    Therefore, electrification of coalition presents a very 
immediate and interesting option. That's what we are asking for 
your support. We are not asking for your support at the 
exclusion of other alternatives.
    The other alternatives are good. They have their own merit. 
I hope that there is enough money to push all of these 
programs.
    But electrification is a technology which is here and it 
can be done very quickly. I think adoption of that and the rate 
of production, you mentioned about are the cars available? The 
cars are going to be made available if the consumers demand 
them. The consumers will demand that if the infrastructure is 
there.
    Senator Murkowski. You all seem to be nodding your heads. 
So I will take that as assent.
    Mr. Van Amburg.
    Mr. Van Amburg. I would just build on that in the sense 
that I think 2 things. I firmly believe that electric drive 
technologies, hybrid, electric and others are real strategic 
opportunity for our country right now. I do think that we have 
some opportunities we do want to push forward.
    Having said that, I do think that we really do need to have 
this portfolio of approaches. So as you, as a committee, and as 
the Senate looks at these various bills that will be coming 
forward. I think it would be good to be looking at having a 
portfolio of choices that we can have.
    Whether those happen in one very large bill which is often 
very difficult to pass or a smart collection of smaller bills 
that can put together the different fuels and technology 
approaches that really are on the cusp and need to be pushed 
forward. We would certainly approve of that.
    I think down the road I would recommend that one of the 
things we should be thinking about is performance standards. I 
think having incentives of R and D based around the performance 
goals we want to achieve. Let's say it's energy security, 
petroleum reduction.
    Then allowing whatever can best achieve that to move 
forward and get incentives or support would be a wise strategy 
to look at. I think now we certainly see a couple of key 
strategic opportunities for key technologies to move forward. 
But I think long term we should be thinking about performance 
based standards.
    Senator Murkowski. Thank you. Thank you, Mr. Chairman.
    The Chairman. Senator Franken.
    Senator Franken. I think it's a great hearing. I'm just 
really glad we're having this. Thank you both to the chairman 
and the ranking member.
    Electric vehicles and hybrid electrics along with biofuels 
are going to be key to reducing our reliance on fossil fuels 
and imported oil in the future. Mr. Ghasemi, I agree with you. 
It's a national security issue.
    I'm proud to say that according to the Department of 
Energy's Clean Cities Program, St. Paul based twin cities, 
Clean Cities Coalition displaced 134 million gallons of 
gasoline, more than any other coalition from 2005 to 2009. St. 
Paul has been partnering with the Department to roll out 
electric vehicle charging stations and purchase electric 
vehicles for the city fleet which is something that government 
can do. So I think they would be well positioned to take 
advantage of the policies that we're discussing in these bills.
    I have a few questions just about the overall technology 
and the different models for charging vehicles. I'd just like 
to throw this out. I'll throw this to anybody.
    The Israeli model to me is very interesting which is 
essentially if you use propane you use your propane tank and 
then you go in and you go to the hardware store or the propane 
store and get a full tank. You hand in your empty tank and get 
a full tank. So in Israel what they're talking about is you 
drive up to the charging station, I guess. They just,
    [pop], pull out your battery and,
    [pop], and put in a charged one.
    I mean, I think it's good mainly because of the sound 
effects.
    [Laughter.]
    Senator Franken. But also it seems it would be fast and 
then the charging station would have the technology to charge. 
You wouldn't have to do that yourself at home. Although I think 
doing it at home is not such a bad idea.
    What are the strengths of that in this country and the 
shortcomings? I understand Israel is a smaller country.
    Mr. Crane. If I could--well first the fact that it's a 
smaller country is important.
    Senator Franken. That's why I mentioned it.
    [Laughter.]
    Mr. Crane. Yes. I think the second thing is that in Israel 
a large number of the cars are company cars. Apparently, I'm no 
expert on this, but Israelis are used to a uniformity of car 
choice that we think American consumers would not accept that 
people want to want them because one of the things about taking 
batteries in and out is you have to have a fairly standard 
configuration of where that battery is on the car and what it 
looks like.
    The third thing from our perspective and I should say the 
company that's doing that in Israel also wants to do things in 
the United States. So they would have a very different point of 
view, you know, from our company. But I think the third thing 
that concerns us is that the battery pack is the most expensive 
part of the electric vehicle.
    So the battery switching model requires that you have an 
inventory of spare batteries and the equivalent of service 
stations in this country. From our perspective we don't see how 
that could possibly be the most cost effective model to have to 
stockpile an inventory of what's the most expensive part of the 
car.
    Senator Franken. Yes, but presumably, you know, you'd just 
be charging it and then giving that one to the next car. I 
mean, it wouldn't be that----
    Mr. Crane. No, but I mean when you limp into a station if 
they don't have a charged battery, you know, so----
    Senator Franken. Right and you'd have to have--yes, yes.
    Mr. Crane. Yes, there needs to be a cushion, you know, in 
terms of----
    Senator Franken. OK, but you're a kind of company there 
being competition. Is anybody from a company or from a 
standpoint of not in competition?
    Ms. Cullen. Senator, I have members who are in various 
models of----
    Senator Franken. Right.
    Ms. Cullen. Charging. As Mr. Crane points out there are 
areas in which battery swapping actually is suitable. It's 
Hawaii, Israel, perhaps the island communities that Senator 
Murkowski talked about where there is a uniformity in battery 
and in cars.
    Again, as was pointed out there is a great diversity in 
cars and batteries and that cost carrying an inventory of these 
batteries is expensive. The beauty of the electrification--the 
suite of electrification technologies is there's a lot of 
different vehicles and configurations. There's a lot of ways to 
go about charging.
    If you want to be a person like Senator Alexander said, he 
doesn't even have a charger. He just uses the 120. He just, you 
know, plugs in at home. Whether you want to have a 220 charger 
to speed things up. Whether you want to charge at work and have 
that as your primary charge spot. There are lots of options 
that--
    Senator Franken. What I liked about charging at night, of 
course, is something you mentioned, which is you can do it in 
off peak hours. I think that would be a wonderful way. I know 
I'm running out--I'm out of time.
    But I think that's a wonderful aspect of this which is that 
we have this excess capacity that we could be using at night. 
That's when the wind blows more often than during the day. So 
this intermittent technology, like wind, could be of greater 
use.
    I think that's another--that's an advantage to doing it, 
obviously at home. But at the charging station they could use 
the benefit of that as well.
    Thank you. I'm out of time. But this is, you know, an 
unbelievable potential. Thank you.
    The Chairman. Senator Stabenow.
    Senator Stabenow. Thank you very much, again, Mr. Chairman 
and Ranking Member Murkowski for holding the hearing. To all of 
you, I think this is a very, very important discussion. 
Personally I believe that as whether it's from jump starting 
the economy or getting off of foreign oil or jobs. I mean, when 
you look at what we can do around energy, having a 
comprehensive energy policy, being aggressive, being focused on 
where we can save dollars, save energy. This really is the 
discussion that I think we need to be having.
    I would say just to start and I have some questions. But I 
think it's important to note that we really have moved down the 
road. I mean, we're half way down the road on advanced 
batteries and electric vehicles. I think this is important to 
note.
    I mean, we--just as we have done, I think, back starting 
maybe before but certainly 1916 with incentives on oil and gas 
exploration which made sense to be able to drive a new 
industry. We were putting incentives in. We put incentives in 
on loan guarantees or on nuclear.
    We do various things to be able to encourage technologies 
that we think are important. We did that in the Recovery Act 
with the $2 billion in batteries investments. Which have really 
exploded in terms of what we've been able to do already.
    But we've also done that in tax policy with things like up 
to 7,$500 to purchase a new vehicle. I mean, we have started 
down this road. So my interest and sense of urgency about what 
we're talking about with Senator Merkley and Senator 
Alexander's legislation is it completes that.
    So we're not leaving it half way there because it deals 
with concerns of anxiety of consumers about can I use this? Is 
it comfortable? Is it easy? It deals with the infrastructure 
and the other needs that we have.
    At the same time I think, as I said, regarding my 
legislation, it is very important that we look at everything. 
So that we're--and I think it's very compatible to do both. My 
question is, starting with Mr. Davis, talking about batteries.
    We're told that because of the investments we've already 
made, we're starting from making 2 percent of the world's 
advanced batteries and that by 2015, it will be 40 percent. If 
we can actually make that happen, that's pretty extraordinary 
in just a few years. But and a lot of that's happening in 
Michigan. I'm very proud of that.
    But can you speak about steps that the Advanced 
Technologies Program can take to work with private businesses 
to drive down costs, to really help, continue to help create 
the batteries and other ways that the Department of Energy can 
help to deploy these new technologies effectively?
    Mr. Davis. Thank you for the question, Senator. Also thank 
you for the State of Michigan and the battery manufacturing 
facilities, that are being built there and the cost share 
provided that matched the government $1.5 billion with their 
own $1.5 billion to build $3 billion in battery manufacturing. 
That is partly what is going to bring the cost down.
    But in addition to the cost reductions through high volume 
manufacturing there will be an evolution of that manufacturing 
process. In addition we're seeing great improvements in the 
laboratory that are going further reduce that cost. We think 
today we're looking at a model battery cost of about $600, $650 
per kilowatt hour just a couple--just last year we were at $800 
per kilowatt hour, the year before about $1,000 per kilowatt 
hour. We measure that cost in a peer reviewed modeling process 
that looks at the cost of today's best technology if produced 
in mass quantities.
    So we're very confident that the cost of batteries is 
coming down. We see things in the laboratory now that are going 
to lead to a battery cost in the middle of this decade of about 
$300 per kilowatt hour. Still not where you would ultimately 
want to be, but getting pretty close.
    So, as was pointed out by Mr. Crane, the battery is the 
most expensive component in electric vehicles today. It is 
critical to get that cost down. But the good news is we're on 
the right pathway to get to do so through our R and D supported 
by the Department of Energy. We have a clear pathway to get to 
a reasonable cost in the middle of the decade.
    Senator Stabenow. Thank you. Just very quickly, Mr. Van 
Amburg, when you talked about trucks, medium and heavy duty 
vehicles, could you just speak for a little bit more about the 
opportunities that exist in that area and what Department of 
Energy can do to help facilitate that?
    Mr. Van Amburg. I think it's a twofold strategy right now. 
No. 1 it is a very exciting area because I think it's been 
underserved. I think we have focused and rightly, we have 
focused on light duty. But I think we've left a big area 
underserved.
    There is this current technology area and I would say it's 
hybrid electric, hybrid hydraulic----
    Senator Stabenow. Yes.
    Mr. Van Amburg. Plug in electric and pure electric. There's 
just a range of technologies available are really world 
leadership areas. I think the 2 biggest areas we need to do 
there are we need to focus on better engineered and integration 
designs for future versions. I think the Department of Energy 
can be of tremendous help I think in the Advanced Vehicle 
Technology Act. That could be one of the target areas.
    But No. 2, I think we need to deploy vehicles. One of the 
concerns that I have right now with our growing leadership in 
advanced batteries is that we have to have the vehicles to put 
them in or we won't have the markets for this great production 
capability we now have. So I think the bills that really can 
move vehicle volumes forward are critical. I don't think that's 
been a primary areas that DOE feels is within its purview for 
the most part. They do try to sync up with it.
    I think if there can be more efforts to really push what's 
the good work out of the lab into the next step in deployment 
and linking those efforts together that would be very 
beneficial. But getting more vehicles on the road in trucks, in 
particular right now, would be critical to getting the volumes 
up and the prices down.
    Senator Stabenow. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Let me just follow up on this idea of how do we get more 
vehicles deployed. It seems to me that maybe I'll address this 
to Mr. Davis. The Federal Government is a very large purchaser 
of vehicles. Do we have an idea as to what percent of the 
vehicles the Federal Government is planning to purchase in 
2012, for example, Fiscal Year, will be electric or electric 
hybrid vehicles or vehicles even operating on natural gas, 
something other than just gasoline powered vehicles?
    Mr. Davis. Thank you for the question, sir.
    We'd be glad to follow up with the precise numbers. I'm 
going to work from memory here. The Federal fleet is about 
600,000 vehicles. We purchase about 60,000 vehicles per year.
    The good news there is with the Presidential directive 
issued earlier this year we're moving to by 2015 essentially 
having all those purchases be alternative fuel vehicles. So we 
are very rapidly moving in that direction. I don't have the 
precise number of vehicles that would be purchased in 2011 or 
2012 that meet those criteria, but be glad to follow up.
    The Chairman. Are those criteria performance based? Is that 
like Mr. Van Amburg was talking about? I mean are those--do you 
say to agencies and departments of the Federal Government 
through that directive, you know, choose something other than 
gasoline or something that gives us substantially improved 
vehicle fuel efficiency to the extent it does use gasoline?
    Mr. Davis. So the goal is by 2015 to have all those 
vehicles be alternative fuel vehicles. What are we talking 
about there? We're talking about electric vehicles. We're 
talking about vehicles that run on biofuels or natural gas or 
propane. So they are vehicles that essentially supplant 
petroleum.
    The Chairman. So a hybrid electric Prius, that I now drive, 
would not qualify.
    Mr. Davis. I'm not----
    The Chairman. Because it does use gasoline.
    Mr. Davis. I think I'd have to follow up on that.
    Senator Stabenow. I'm just going to interrupt. If it was a 
Chevy Volt, it would qualify.
    The Chairman. I see.
    Senator Stabenow. Yes.
    The Chairman. Even though it uses gasoline.
    [Laughter.]
    Mr. Davis. I'm not sure all the rules that would govern 
those purchases have been finalized yet. But we'd be glad to 
follow up and----
    The Chairman. I think it would be useful to know the extent 
to which the Federal Government is leading by example in this 
area and how it's chosen to do so.
    On the issue of local governments, you know, every city and 
town in the country has a fleet of garbage trucks. What is in 
place now to encourage and assist those communities and towns, 
cities and towns, to find alternative fueled garbage trucks 
whether they're electric or natural gas or whatever? Does 
anybody know?
    Is this something that you look at, Mr. Van Amburg or not?
    Mr. Van Amburg. We do look at it. We've had a partnership 
for the last 10 years with the U.S Army actually, the National 
Automotive Center out of Warren, Michigan, with a hybrid truck 
users forum. Now it's dealing with electric and advanced 
trucks.
    We've tried to work with the refuse industry. There's been 
a pretty good penetration actually, of natural gas vehicles 
into the refuse. Industry is about on the order of around 
17,000 or so--or actually around 3,000 refuse trucks that are 
natural gas right now.
    The Chairman. Out of how many?
    Mr. Van Amburg. The fleet is around 90,000 plus. So there's 
still a huge backlog of potential vehicles that could be----
    The Chairman. So a little over 3 percent?
    Mr. Van Amburg. Yes. Yes. So we have a long way to go in 
that area. I think some of what could be helpful is incentives 
or goals that people could set out with some assistance to 
achieve those goals in each of these sectors.
    There's opportunities in each of the vehicle sectors 
including the medium and heavy sector.
    The Chairman. Ah, yes, Mr. Davis.
    Mr. Davis. I would like to point out that are Clean Cities 
Program operates almost 100 clean city coalitions across the 
country and works with local communities to promote alternative 
fuel vehicle purchases and infrastructure. One of the things 
that has been stressed in the almost 20 years of their 
existence is natural gas vehicles and vehicles such as delivery 
trucks and refuse vehicles. As pointed out by Mr. Van Amburg, 
natural gas is particularly good choice in that area as well as 
hybridizations since refuse vehicles stop and start a lot.
    The Chairman. But I'm right, am I not, that the Clean 
Cities Program is a program to share information and provide 
technical assistance. It is not--it does not carry with it any 
financial incentives or requirements or anything like that?
    Mr. Davis. Primarily what it does is help local communities 
and share information and facilitate, but we do run an annual 
solicitations through the Clean Cities Program that help pay a 
percentage of the incremental cost of vehicles or more 
importantly in the case of natural gas, establish 
infrastructure because the infrastructure in natural gas 
fueling station can be a significant barrier to putting in 
place vehicles.
    The Chairman. OK. My time is up.
    Senator Murkowski.
    Senator Murkowski. Mr. Chairman, I'm just curious to know 
whether the garbage trucks that are run on natural gas are any 
quieter at 5:30 in the morning than the garbage trucks in my 
neighborhood which I have to believe are probably not powered 
by natural gas. But if it is that's a huge breakthrough and we 
want to encourage that.
    [Laughter.]
    Ms. Cullen. Senator, there are electric garbage trucks that 
are silent.
    Senator Murkowski. Are they? There we have it. There we 
have it.
    Mr. Davis, I want to ask you about the situation with the 
batteries and Senator Stabenow is gone now. But you were 
discussing just a moment ago about the joint venture with DOE 
and the State of Michigan and the benefits that we have seen 
there. Just this morning I was just handed this article a few 
minutes ago.
    But apparently in Energy Daily, this morning there's a 
story about what they call a corporate breakup between Johnson 
Controls and SAFT. Those 2 were working on this joint battery 
venture. They got $300 million from DOE from stimulus funds, 
another $150 million from the State of Michigan that you just 
referred to.
    But apparently there's been this breakup here. The article 
goes on to say that this is clearly a bad time for this to be 
coming about because a whole handful of other--of vehicle 
manufacturers are in line waiting for these batteries. Whether 
it's Ford's first plug in, they're scheduled to go to market 
2012. They're waiting for these batteries.
    The point of the article is it says, it's pretty unclear as 
to the impact that this breakup might have on what's going on 
with the development and deployment of the batteries. Can you 
give me an update or let me know what's happening here?
    Mr. Davis. Sure, I'd be pleased to. Thank you.
    The battery manufacturing portion of the Recovery Act 
includes 6 major battery manufacturing facilities. So we're 
talking about one here. That one is a contract with Johnson 
Controls. They're subcontractor is this joint venture between 
Johnson Controls--SAFT.
    Senator Murkowski. OK.
    Mr. Davis. So our relationship, our contractual 
relationship, is with Johnson Controls, the parent of that. The 
subcontract is with Johnson Controls-SAFT. I have talked to the 
head of Johnson Controls battery work. This should not impact 
our program at all, should not impact the building of their 
facilities which is underway right now.
    There will be some, you know, legal actions between those 
2. They're going to work out their dissolution. But we don't 
expect it to impact our project or the delivery of batteries.
    Senator Murkowski. So even though they had the contract to 
build this out and this contract is not going forward, that's 
not going to somehow or other, delay the roll out or--I mean, 
we've got a lot of Federal dollars that are on the line here 
that we want to see deployed and moving. You seem pretty 
confident this isn't going to be an issue.
    I appreciate it may just be one of 5. But again, you've got 
$300 million here from DOE. I think we'd like to know that 
that's going to actually end up in advancing these 
technologies.
    Mr. Davis. Sure. Under that contract they are building 2 
separate facilities. Johnson Controls--now of course, this just 
happened.
    Senator Murkowski. Right.
    Mr. Davis. It just happened yesterday. So we are going to 
be working with Johnson Controls to work through this process 
and ensure there's no delay. But our initial read is it 
shouldn't delay the construction of those factories.
    My understanding is that part of the reason that the 
dissolution is happening is the--as you look forward there's 
disagreement about how much investment is going to have to be 
provided by companies to keep these--this technology and these 
factories viable. So in Johnson Controls position is this is 
actually a step forward to ensure viability in the long term.
    Senator Murkowski. I'm sure DOE will be keeping a close eye 
on it.
    Mr. Ghasemi, you have spoken very clearly, very 
articulately here about our need to reduce and eliminate our 
dependence on foreign oil. I absolutely concur. I agree with 
you. We need to do more. It goes back to Senator Alexander's 
very neat bumper sticker. We need to produce more and use less.
    One of the things that concerns me is our growing reliance 
on foreign sources for our minerals. When we're talking about 
batteries as we just are here, I think we recognize that 
whether it's permanent magnets or batteries, we've got to get 
back to these raw component parts that come from the Earth. 
Unfortunately when we're talking about rare Earth minerals the 
vast majority, some 97 percent of that right now is coming from 
China.
    Do you worry as much about our increasing reliance on 
others for those very critical elements that we need to reduce 
our reliance on foreign sources of oil? I'd hate to trade our 
reliance on foreign oil for our reliance on foreign minerals. 
So I'm just curious for your perspective on that.
    Mr. Ghasemi. Thank you, Senator. That's an excellent 
question, obviously.
    I think that the difference between electric cars and 
gasoline cars when it comes to that issue is that if you have 
an electric car every morning for it to go the distance you 
don't need to put any rare Earth into it or any mineral into 
it. You just put electricity in. So making electric car battery 
is a onetime effort. Once you have it the cars can drive for 
many years.
    The second thing is that we have enough of these cars most 
of these materials can be recycled. I mean, if you had 150 
million of these cars running around and each year we were 
recycling 10 percent of them that would almost give you enough 
of these materials to make the new car. So the reliance on 
those critical materials is an issue that should be addressed.
    I think the United States needs to make sure that those 
sources are there. I'm very happy to say that a few--2 years 
ago we worked very closely with the Department of Energy to 
make sure that one of those resources which is lithium is 
properly made in the United States. So I think those efforts 
should continue.
    But the magnitude of the dependence gets significantly 
reduced if you are driving these electric cars verses gasoline 
which we need every morning.
    Senator Murkowski. I appreciate that. I thank all the 
witnesses.
    The Chairman. Senator Franken.
    Senator Franken. Just 2 real quick questions.
    One, we're talking, Mr. Van Amburg, you talked about silver 
buckshot. There's one piece of the buckshot that I didn't hear 
about today and it was hydrogen. Does anyone have--and I notice 
that the Administration in their budget request reduced the 
request for funding for hydrogen.
    Where are we on hydrogen because it, you know, I've been 
driven in hydrogen vehicle that was fabulous.
    Mr. Davis. Thank you, Senator. I should note that in the 
State of Minnesota one of the major leaders in this areas, 3M, 
is helping push the technology forward. DOE has funded hydrogen 
for some years and fuel cell technology and happy to report 
that the cost of fuel cell technology has decreased rapidly, 
approximately 80 percent since 2002. Right now we're at about 
$51 per kilowatt with our ultimate goal to get to about $30 per 
kilowatt to be competitive with current technology.
    We do recognize that our strategy is to sustain a balanced 
research and development portfolio with an emphasis on nearer 
term technologies such as batteries and electric drive. The 
fuel cell program is still robustly supported and looking at 
nearer term applications such as stationary fuel cells and a 
fork lift as an early market opportunities to get fuel cell 
manufacturing ramping up to the point where it could more 
readily enter the vehicle market.
    Mr. Van Amburg. Senator, if I could just add to that. I 
think Pat rightly identifies where some of the key first 
markets really are looking to be in fuel cells. But there is 
another one and that interestingly is the transit bus 
marketplace.
    A transit bus is often because of their platform size and 
the fact that they're out in the middle of cities and get seen 
a lot and the emissions are pretty critical, are early leaders 
in technology. They led in natural gas. They led in hybrid.
    We've been working on a national program with the FTA, the 
Federal Transit Administration on this. What we're seeing, as 
what Pat said, not only the costs come down on the fuel cells. 
But the life cycle lengthen out because you really need it to 
be much longer than it is.
    We're seeing 6,000 to 10,000 hours now which really starts 
to get us into some interesting useful lives in a transit bus 
platform. But it's also using a fuel cell that's more similar 
to a stationary fuel cell in size so the cost points don't have 
to come down quite as much as you would in a car. So we're 
thinking transit bus operations may be another place where 
we'll see fuel cells in the nearer term.
    Senator Franken. Miss Cullen.
    Ms. Cullen. If I may, the Electric Drive Transportation, as 
I pointed out, we represent the whole spectrum of electric 
drive technologies, which includes fuel cells because that's 
what a fuel cell creates is electricity. So hydrogen powered 
fuel cells are very much within the gambit of the technologies 
that we're promoting. My members in the automotive and in the 
medium and heavy duty side are very much pushing forward on 
fuel cell vehicle applications.
    They've made substantial investments on their own and 
worked with the Department of Energy. They're hoping that the 
Department of Energy will continue its commitment to those 
technologies. They are pushing toward, as you're probably 
aware, rolling out automotive in the light duty segment in the 
2015 timeframe.
    Senator Franken. Thank you. One last and it may sound like 
a small concern, but I think there's concern among the blind 
community about electric vehicles and that they don't make 
sound. We're talking about the garbage truck at 5 in the 
morning or whatever.
    Is there--what is the consideration there for pedestrians 
and, I mean, most of us hear before we step off a curb. We hear 
the thing coming. What kind of considerations are being made 
there?
    Ms. Cullen. The automotive industry is working closely with 
NTSA and they are communicating with each other on establishing 
a uniform set of sounds, a safety standard. For instance on 
creating a signal to those who need it without--while 
maintaining the lower noise profile of electric drive vehicles.
    Senator Franken. Right.
    Ms. Cullen. For instance the Nissan Leaf has a low speed 
sound that you can hear outside the vehicle but not inside the 
vehicle. Standardizing the sound is another consideration that 
the companies are talking about so that everyone would 
recognize it as an oncoming vehicle opposed to having a series 
of ringtones, for instance.
    Senator Franken. Right. OK. Thank you.
    The Chairman. Senator Murkowski, did you have additional 
questions?
    Senator Murkowski. I don't.
    The Chairman. Thank you all very much. I think it's been a 
useful hearing. We appreciate your excellent testimony.
    That will conclude our hearing.
    [Whereupon, at 11:42 a.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

      Responses of David Crane to Questions From Senator Bingaman
    Question 1. I'm happy to hear you've been able to design a charging 
network to provide charging for electric vehicles in the Houston and 
Dallas areas with your own funds. Obviously, it's too early to tell how 
the economics of those plans will work out. With regard to other cities 
where you might roll this out in the future, are there common features 
you'll be looking for? Are there communities that because of size, 
density, or other factors, where you don't currently see your model 
working? Do you see the government only having a role in those 
communities, or can they simply take a lesser role in communities with 
a higher commercial potential for private actors?
    Answer. We've seen very encouraging early results in Houston and 
Dallas, and our hope is to soon expand beyond Texas. There are three 
key factors we analyze initially when considering new markets: 1) 
Projected supply of electric vehicles; 2) Regulatory framework and its 
potential impact on third-party charging providers; 3) The interest of 
local utilities in working with us. Of these, projected EV supply is 
particularity important; the success of our business depends on 
generating subscription package revenues.
    When companies like ours make significant private sector investment 
in communities, there is less of a need for government support and, as 
a result, more government dollars can be sent to smaller, less dense 
communities. We believe it is crucial for the government to focus on 
cost effectiveness: deploying the most vehicles, in the most cities--
for the least number of public dollars.
    Question 2. You obviously see the potential for enough market 
penetration in electric vehicles to support your business model. What 
gives you the confidence in the market to make the substantial up-front 
investments you're currently making?
    Answer. First, we are encouraged by automakers' commitment to EVs. 
Nissan and GM have rolled out production vehicles, while Ford, BMW and 
others have models on the way. Another key driver is the significant 
private investment we've seen in EV charging infrastructure, batteries 
and other technologies--from companies like ours and others. Third, we 
see a growing weariness from consumers when it comes to high and 
volatile gasoline prices, and a general sense that shipping billions of 
dollars overseas for oil is not a good thing. EVs are gaining 
popularity as a potential remedy for these things. Finally, we see 
enormous potential for EVs to bring about the next consumer technology 
revolution--and there is real value in NRG being a first-mover in this 
area.
      Responses of David Crane to Questions From Senator Murkowski
                      tax credits vs new programs
    Question 1. As you know, the tax credit for alternative fuel 
infrastructure expires at the end of this year. If it comes down to a 
decision between creating new programs and extending existing tax 
credits, which would you consider more important?
    Answer. The existing tax credits--both for EV infrastructure and 
for EVs themselves--are important to our business. Building our public 
networks comes at significant cost. For example, each of our public 
``Freedom Stations'', containing a Level 2 and a DC charger, costs well 
over $100,000 installed. As we build out our networks in early years, 
defraying these costs through the infrastructure tax credit is 
extremely important. That said, we do see a cost-effective ``Deployment 
Community'' playing a very important role in bolstering EV readiness in 
typical cities across the country, and especially in smaller, less 
dense communities.
                                  evgo
    Question 2. Please summarize the scale of investments that NRG is 
making in Dallas and Houston. How many customers will those programs be 
able to accommodate?
    Answer. Our initial investment in Houston will be around $10 
million, and we plan to exceed that number in Dallas. Every EV charging 
package we sell today includes a Level 2 home charger installed at no 
up-front cost to our customer. This robust home charging network 
combined with the 50 Freedom Stations we plan to install in Houston and 
the 70 planned for installation in Dallas-Forth Worth will accommodate 
more than the projected number of EV buyers in each city in coming 
years.
                                 texas
    Question 3. NRG chose two cities in Texas to launch its eVgo 
program. Can you describe any competitive advantages those cities, and 
potentially the state of Texas itself, hold for the deployment of 
electric vehicles? What made NRG choose cities in Texas over 
communities in other states?
    Answer. NRG has a large presence in Texas today, including our 
retail businesses Reliant Energy and Green Mountain Energy. As a state, 
Texas has long prided itself on welcoming new ideas and clearing 
regulatory hurdles to realize these new ideas. Texas also has a 
competitive retail electricity market, which enables us to work with a 
variety of energy retailers, to offer eVgo to a variety of customers. 
In addition, Houston has a robust electric distribution system that can 
accommodate significant EV penetration. For all these reasons, Houston 
has proven to be a great launch pad for eVgo. The city, one of the 
country's energy hubs, has a robust car culture and an intense focus on 
public and private sector innovation.
                         nonfinancial benefits
    Question 4. In your testimony you mentioned there are several 
policies that the government could enact at very little cost, including 
convenience measures such as zero emission lanes and preferred parking 
spots. Please describe the impact you believe those policies could have 
on electric vehicle sales and deployment.
    Answer. Convenience benefits excite consumers, and that is very 
important to us because the success of our business depends on the 
sales of charging packages to actual EV buyers. A recent Accenture 
consumer survey on EVs confirmed that benefits like priority parking 
and zero emissions lanes are potentially large consumer catalysts in 
the decision to buy an EV. Americans spend a lot of time in their cars, 
and EVs represent a new and exciting way to drive. If we can add 
further conveniences to the EV driving experience like those mentioned 
above, we will add even greater momentum to the overall EV movement.
                 community deployment program (s. 948)
    Question 5. How can a community deployment program for electric 
vehicles be structured to ensure that public money does not crowd out 
private investment? Do you believe S. 948 strikes an appropriate 
balance?
    Answer. When companies like ours make significant private sector 
investment in communities, more government dollars can be sent to 
smaller, less dense communities. We believe it is crucial for the 
government to focus on cost effectiveness: deploying the most vehicles, 
in the most cities--for the least number of public dollars. We believe 
that S.948 could this crucial role, with certain changes to the bill to 
ensure cost effectiveness and to make sure the procedural requirements 
for a successful application do not prevent or inhibit private 
investment in publicly available charging equipment.
                 community deployment program (s. 948)
    Question 6. In your testimony, you introduced the concept of 
``early deployment communities'' and recognized that significant 
private investment is already being made in some communities to 
facilitate the deployment of electric vehicles. Please expand on this 
concept, and any advantages it may offer.
    Answer. The key to the early Deployment Community concept--to any 
Deployment Community concept--is that taxpayer dollars need not be 
spent to duplicate charging infrastructure investments being made by 
the private sector. For example, if significant private charging 
equipment investment has already been made in a community, it would not 
make sense to require that community to start over from square one--
e.g., by building a wide ranging stakeholder group to support 
investment in charging equipment--in order to qualify for federal 
benefits. If such a community can show that is has the proper 
investments, agreements, and plans in place, its citizens and in 
certain cases businesses, should qualify for convenience benefits, and 
additional incentives to buy EVs and install charging equipment.
                                 ______
                                 
    Responses of Bill Van Amburg to Questions From Senator Bingaman
    Question 1. You make a strong case for increased focus on medium 
and heavy-duty trucks for research and development, as Senator 
Stabenow's bill outlines. Arguably, existing R&D authority as well as 
such programs on the deployment side such as Clean Cities should be 
sufficient to allow the Department to address this need. In your view, 
what's the main value of the structure laid out in S.734?
    Answer. The structure laid out in S.734 has several very valuable 
elements, not least of which is the specific recognition of medium and 
heavy-duty vehicles as a targeted area of R&D. S.734 provides and 
providing a suggested allocation of resource for this segment that 
matches its fuel use impact. In the past, medium-and heavy-duty 
vehicles have not received commensurate support in Department budgets, 
normally funded--if at all--to significantly lower levels than light-
duty passenger cars. Indeed, many of the specific heavier vehicle 
programs were funded via Congressionally-directed projects. Even the 
Department's 21st Century Truck Program (21CTP) often lagged for 
insufficient resources, as noted in the National Academy of Sciences 
report. Again, this is not an argument against light-duty vehicle 
investments, but is an argument for balanced investments that include 
the larger and higher fuel use commercial vehicle platforms. U.S. firms 
are now world leaders in several important technology categories for 
commercial vehicles (hybrid and electric technology in particular, to a 
great degree thanks to programmatic support and focus from the 
Department of Defense), in contrast with other technology areas that 
are dominated by companies outside of the U.S. This is important from a 
job creation and retention perspective, and there is a strategic 
opportunity to maintain our leadership through consistent and focused 
R&D co-funding with industry.
    Another important design element of S.734 is its language opening 
up Department program considerations to a broader array of firms, 
especially medium-and heavy-duty vehicle component and system suppliers 
and technology developers. Original Equipment Manufacturers (OEMs) are 
vital players and have always been included at the center of Department 
programs, but spurring innovative new technology requires tacit 
inclusion of the supply and developer segment. These companies have 
been arguably under-served, yet they are increasingly where innovation 
and new technology originates and where early support, in particular 
R&D, needs to focus resources. This approach matches what is a 
concurrent trend in the automotive and truck industry to increasingly 
``push down'' technology and system development from OEM to Tier 1 and 
other suppliers. The current and successful ARPA-E program has shown a 
strong model for assessing and targeting technology innovators at the 
early stage of development. Previously, the DARPA Advanced Vehicle 
Program of the mid 1990s stood out for its portfolio approach to 
technology development, funding innovative technology developers in a 
fast-track approach to drive power system and alternative fuel 
development and demonstration. Heavy-duty hybrid drivelines were a 
significant and notable outcome of these efforts. In the national 
Hybrid Truck Users Forum (HTUF) program which CALSTART operates in 
partnership with and under contract to the U.S. Army TARDEC-National 
Automotive Center (NAC), the focus has been to move from R&D to broader 
deployment and validation stages, which is another under-served but 
critical stage in vehicle commercialization. Yet even at this stage, a 
continued focus on the supplier segment, together with the OEMs, is 
vital for successful pre-production and production launches. New 
technology commercialization benefits from and requires greater 
inclusion of the industrial segments most active in developing 
innovative designs and systems. S.734 recognizes this and includes the 
``wiring instructions'' in its language that encourages it. It also 
encourages the Department to connect its programs more explicitly with 
other complementary programs which operate at different stages of the 
commercialization process. This echoes another observation of the 
National Academy of Sciences review of the 21CTP. This could assist 
with a more seamless and connected national approach to driving 
innovation, from R&D to validation and demonstration through early 
deployment.
    One final area of design in S.734 that we believe would be of 
crucial importance is its longer timeline and consistent focus on 
developing higher efficiency technologies. We have researched the key 
barriers to faster and more effective advanced vehicle development and 
deployment with OEMs, suppliers and vehicles end-users, and their 
responses have been unambiguous. They can most benefit from three areas 
of support: 1) End-user purchase assistance (such as vouchers or tax 
credits) to speed early production vehicle deployments; 2) Consistent 
and multi-year R&D and validation funding partnerships; and 3) 
Assistance to shift manufacturing capabilities to new technologies. 
S.734 addresses the issue of consistent and longer term R&D 
partnerships.
    The Department has tried to address this on its own but resources 
have varied considerably year by year and the focus has shifted across 
various technology and fuel solutions making longer term investments by 
industry more difficult. More consistent long term investment signals 
would give industry greater confidence in their own investment 
decisions and would better leverage any public funding. S.734 does not 
pick a specific technology or fuel solution, but instead targets 
outcomes: greater efficiency. In essence, it is outlining a performance 
standard against which R&D decisions can be measured, without 
specifying the specific fuel or technology to achieve it. We believe 
this can open up and spur innovation. Those technologies of high 
interest, such as electric drive systems, would benefit under such a 
design, but so would other innovative approaches such as hydraulic 
hybrids, alternative combustion cycle engines, active aerodynamics and 
other technology.
    Moreover, the longer program horizon would set this goal in place 
over multiple years, rather than just a single year or program 
solicitation. It would send a signal that for half a decade at least, 
greater fuel efficiency was the driving force of Department R&D efforts 
across all vehicle platforms. Given the new, first-time fuel efficiency 
regulations being placed upon medium-and heavy-duty vehicles, and the 
expanded fuel efficiency requirements for light-duty cars and pick-ups, 
the timing and timeline of such an R&D effort could not be more 
opportune.
    The Chairman is right to observe that existing authority likely 
exists for the Department to proceed in the manner outlined above but 
funding allocations have not matched this model, in particular for 
medium-and heavy-duty vehicles. S.734 would provide strong 
Congressional wiring instructions for the Department in funding 
allocations and program focus for spurring greater efficiency in 
vehicles.
    Question 2. I'm interested in the programs you've seen to aid in 
the deployment of heavy-duty fleet vehicles such as buses and refuse 
trucks. Beyond research and development are there gaps remaining in the 
federal programs that we could help fill in order to allow more 
deployment of alternative fuel vehicles in this segment?
    Answer. The single biggest gap at the federal level is assistance 
that directly spurs the purchase of early production (low-volume) 
advanced, efficient and alternative fuel vehicles. The U.S. would 
greatly benefit from more consistent R&D funding, as noted in question 
one, but we have generally done a better job at the R&D level than at 
the deployment level. From a commercialization perspective, it is the 
equivalent of leaving the race when the finish line is in sight. 
Indeed, the U.S. has been a world innovator in several technology 
categories but often does not reap the benefit of its inventions when 
it comes to production and manufacturing because it does not 
consistently help new technology ``cross the chasm'' from demonstration 
to deployment. This has a social cost in terms of lost jobs and 
manufacturing.
    This is particularly an issue with new vehicle technologies, which 
often face a steep cost premium in early low volume production because 
of limited production scale, supply chain costs and initial engineering 
designs. Limited, short term assistance at the right time in these 
markets could have a huge benefit in moving U.S. technology more 
effectively from prototype to product.
    This is a major issue in the medium-and heavy-duty vehicle arena 
even more so than light-duty. For instance, while there is a $7500 tax 
credit for electric passenger cars at the federal level, there is no 
equivalent for what are the first hybrid and electric trucks and buses. 
Given that a truck or bus can use ten to thirty times or more fuel than 
a car, targeted federal assistance could also have huge fuel efficiency 
leverage and outcomes for the same amount of funding. For instance, a 
hybrid refuse truck would likely reduce its fuel burn by 20-30 percent, 
cutting petroleum use by well over a thousand to two thousand gallons 
per year per vehicle. A passenger car rarely even uses 500 gallons 
total. Again, this is not an argument against light-duty incentives at 
all; it is an argument for balanced and commensurate assistance aimed 
at policy outcomes. Indeed, there is currently no federal level 
deployment assistance, including no tax credits, for medium-and heavy-
duty hybrid, electric or natural gas vehicles.
    The most successful current program to change purchase decisions 
and spur advanced vehicle purchase and deployment is a state program, 
operated by the California Air Resources Board (ARB). Known as the 
Hybrid Truck and Bus Voucher Incentive Program (HVIP), the program is 
designed as a point-of-sale purchase voucher for medium-and heavy-duty 
hybrid (all types, electric and hydraulic) and electric trucks. These 
trucks are in their initial early production, low volume stage. HVIP 
voucher amounts have been set at roughly half of the incremental cost 
of these vehicles--the level fleets and manufacturers agreed was 
sufficient to cover the extra costs not yet paid for by the fuel saving 
benefits of the trucks. HVIP is slated to last roughly 4-5 years and is 
in its second year; to date this single state program has spurred 
nearly 1,000 hybrid and electric truck purchases and deployments in 
fleet use. The California Energy Commission recently built on HVIP's 
success by adding funds to HVIP to better assist electric trucks, and 
then crafted a separate but equivalent program for natural gas and 
propane truck purchases. The design is the same: to reduce the upfront 
cost of early production vehicles sufficiently to spur fleet purchase.
    Illinois' EPA office operates another interesting program called 
the Illinois Clean Diesel Program. While not as targeted as HVIP, it 
does greatly streamline the grant funding process for the Diesel 
Emission Reduction Act (DERA). Fleets and manufacturers alike agree 
that long form, proposal-based grant programs are costly for them to 
pursue, delay timing on purchases and have little to no certainty of 
outcome. They are useful, but not as effective at deployment as would 
be desired. In contrast, the Illinois Clean Diesel program is notable 
for streamlining the process by establishing set funding amounts 
available for different technology options fleets can chose, and then a 
first-come first-served short application form to qualify. This greatly 
reduces fleet proposal writing and quantification effort, and allows 
them to focus on procurement decisions.
    It is worth noting that in the heavy transit bus world there is an 
existing structure in place to assist with alternative fuel and 
advanced bus purchase. Under the Federal Transit Administration (FTA) 
formulas, the federal government pays for 80 percent of new bus 
purchase costs with local agencies paying 20 percent. This formula has 
encouraged agencies to increase their purchase of natural gas and 
hybrid transit buses because it has the effect of reducing the 
incremental cost impact to them. There is no such support for school 
buses or smaller privately run shuttle or circulator buses, however. 
These were some of the successful operating examples noted in a recent 
study ``Speeding High Efficiency Truck Adoption: Recommend Policies, 
Incentives and Investments'', CALSTART 2011 (http://calstart.org/
Libraries/Publications/Speeding_High-
Efficiency_Truck_Adoption.sflb.ashx). Highlighting the success of these 
examples, and based on research and data from fleets and industry, the 
report then recommended that the ideal structure for spurring faster 
deployment of high efficiency trucks and buses would be a performance-
based purchase voucher at the federal level. In essence, the voucher 
would provide a purchase incentive to a range of solutions that 
achieved different levels of fuel efficiency improvement (above any 
levels required by regulation). In the report, a draft voucher 
framework was proposed that would be partly based on the early market 
incremental costs and partly on the ``co-benefits'' achieved through 
greater efficiency. For instance, beyond the direct fuel savings to 
fleets, a more efficient truck through its operation has petroleum 
reduction and energy security benefits to the nation, in addition to 
emission reduction benefits. These were factored into the voucher 
levels to reflect the higher benefits provided by reducing fuel use in 
the highest fuel using vehicles. A potential high efficiency voucher 
based on these parameters is illustrated below, as cited in the 
report:*
---------------------------------------------------------------------------
    * Graphic has been retained in committee files.
---------------------------------------------------------------------------
    This voucher uses fuel efficiency as the metric. Petroleum 
reduction could also be used as a metric, in which case emission 
reduction benefits would need to be ensured in to qualify.
    Such a voucher could be managed through existing federal programs 
but would require a change in approach for those programs. For example, 
Clean Cities could serve as a logical channel for expanding deployment 
via purchase vouchers. However, the program would need to be both 
better funded, and then operated--at least in part--as a disperser of 
vouchers to qualified purchasers, rather than as occasional source of 
grant fund solicitations. This change actually could serve to greatly 
strengthen and better utilize the Clean Cities structure and role in 
deployments.
    The downside of Clean Cities is that it does not reach the entire 
nation; though it does touch most of the regions with impacted air 
quality. Alternately the Department's national solicitations that do 
focus on deployment could do so in the form of a performance-based 
purchase voucher.
    Another possible approach would be to authorize a voucher structure 
via the national Energy Efficiency and Conservation Block Grant 
program, which currently is partly allocated to each state by formula. 
Some of the block grant funds could be dedicated or allocated 
specifically to vehicle deployment using a voucher formula, with 
disbursement authority left to the state.
    A third structure could be to add additional descriptive language 
for the use of Congestion Mitigation and Air Quality (CMAQ) funds 
emphasizing that they may be used for advanced and alternative fuel 
vehicles, and suggesting a performance-based voucher as an effective 
tool for streamlined success. CMAQ funds can be used for clean vehicle 
deployments, but this is not widely used or understood by the receiving 
agencies. Such language could clarify and encourage the practice.
    Finally, a structure like the Diesel Emission Reduction Act could 
be augmented with a directive that some of the funds be used for 
streamlined deployment. DERA funds have been popular but focus mostly 
on retrofit kits and involve complicated long-form proposals be 
submitted. A simplified voucher approach could be a useful addition to 
the program and could be administered by each region, allowing regional 
differences to be reflected. Having noted this, DERA funding is 
currently zeroed out in the Administration budget. EPA's SmartWay 
program is an example of an existing program that programmatically 
could administer such a streamlined voucher, though additional funding 
would be required.
                                 ______
                                 
    Responses of Genevieve Cullen to Questions From Senator Bingaman
    Question 1. Critics of this approach might argue that powering 
vehicles from the grid requires too many changes in behavior from the 
consumer so it is unlikely these vehicles will be able move beyond 
niche markets. Can you give us any insights from the manufacturers in 
your coalition on how they see electric vehicles moving to mass-market 
status?
    Answer. Increased electrification of the vehicle fleet is already 
occurring, but the speed of adoption is variable, based on 
technological advances, reduced market hurdles for vehicles and 
infrastructure, and consumer education about grid-connected vehicles 
and their benefits.
    Announced production plans, as assembled in the Department of 
Energy status report issued in February of this year, show aggressive 
production schedules for the manufacturers included in the survey. The 
report illustrates that leading vehicle manufacturers (not all leading 
manufacturers were included in the tally) already have plans for 
cumulative U.S. production capacity of more than 1.2 million electric 
vehicles by 2015.
    EDTA member companies have announced varying production targets and 
have plans for (or are already) rolling out vehicles in initial markets 
to be followed by national expansion. While their plans differ, they 
share an ambitious commitment to achieving electric vehicle adoption on 
a national scale. The right national policy initiatives can help speed 
the fulfillment of that goal.
    Demand has been rightly noted as an essential component of 
commercial-scale adoption in the near term. Grid-connected 
transportation options provide consumers with savings on fuel and 
maintenance, freedom from price-volatility and the opportunity to 
reduce oil use and emissions. But consumers need to understand how 
these benefits apply to them and how these vehicles fit their driving 
needs.
    While ``plugging-in'' is a new practice for fueling, it is not new 
to consumers who now routinely come home and recharge their phones, 
laptops and iPods--or seek out an outlet at a coffee shop or airport 
when travelling. Daily and opportunistic charging is increasingly 
integral to the way we live and work.
    Multiple market analyses show that consumers want electric 
alternatives in transportation, either because electricity is cheaper 
than gas, is cleaner than gas, is a domestic fuel that they can access 
at home or because electric drive has great performance. Often, 
consumers realize it's all of the above.
    However, consumer education is clearly needed. Buyers need 
credible, accessible information to identify the best configuration for 
their driving needs and their options for recharging.
    It is expected that most drivers would do the vast majority of 
charging at home. Their workplace would be second. While plug-in hybrid 
electric vehicles (PHEVs) will have longer absolute range without 
charging, drivers with pure battery electric vehicles (BEVs) and those 
who want to extend the battery-only propulsion of their PHEVs will want 
accessible and convenient public charging options, in parking garages 
and retail stores, for instance.
    EDTA is engaging in a national consumer education effort through 
our website GoElectricDrive.com and with coordinated efforts with our 
members in roll out markets and service territories. There are also 
numerous independent initiatives being undertaken by electric 
utilities, local governments and public interest organizations.
    As part of a national electrification effort, information sharing 
and coordination across these initiatives will help reduce the costs of 
assembling and disseminating important information about vehicle and 
charging choices, performance, safety and costs. Coordinated education 
efforts also leverage research and readiness efforts that have already 
been completed.
    Question 2. In your written testimony, you pointed to the need for 
access to capital in order to achieve economies of scale. Obviously, 
the members of your association are in very capital-intensive 
industries. Can you talk at all about why the existing programs at the 
Department of Energy, such as the Advanced Technology Vehicles 
Manufacturing Program and the Loan Guarantee Program, are unable to 
meet the need?
    Answer. The Advanced Technology Vehicles Manufacturing Program 
(ATVM) and the Loan Guarantee Program are both important programs that 
help reduce the cost of capital and leverage private sector investment 
in advanced vehicle manufacturing. The programs are already building 
U.S. manufacturing while contributing to job growth in the advanced 
energy sector. And because the loans are repaid with interest, 
taxpayers get a return on their investment while the national return on 
investment includes jobs and increased competitiveness in the global 
advanced energy market.
    The scope of these successful programs could, however, be expanded 
to recognize other advanced vehicle opportunities. For example, the 
ATVM program is limited to light duty vehicles. Medium and heavy duty 
vehicles and related component manufacturing in the U.S. would grow 
with access to the program.
    Support for fleet purchases is also a worthwhile expansion as 
first-cost hurdles are even more challenging in large purchases. Beyond 
the benefit to the fleet buyer, those large purchases also help to 
build the market for new technologies and speed achievement of 
economies of scale that will bring costs down.
   Responses of Genevieve Cullen to Questions From Senator Murkowski
                      tax credits vs new programs
    Question 1. As you know, the tax credit for alternative fuel 
infrastructure expires at the end of this year. If it comes down to a 
decision between creating new programs and extending existing tax 
credits, which would you consider more important?
    Answer. Recognizing that sobering economic realities require tough 
choices, we believe that reducing our dependence on foreign oil must be 
among our priorities. To achieve that major goal, there is no single 
silver bullet policy. Changing the way we transport people and goods 
will require a comprehensive approach. Such an approach should include 
incentives to reduce market hurdles, such as the critically important 
tax credit for alternative fuel infrastructure that will help consumers 
and businesses install recharging equipment for plug-in vehicles.
    A comprehensive approach should also reinforce deployment efforts 
that cities and regions around the country are making--or planning to--
make. By leveraging individual, business and local and state government 
interest and investments, a comprehensive electric drive policy will 
accelerate adoption of the technology and help us achieve a more secure 
country, a stronger economy and a cleaner environment.
                 community deployment program (s. 948)
    Question 2. In your written testimony, you note that you would like 
to ``continue working'' with the committee to strike the right balance 
between national and community-oriented deployment programs. Can you 
provide further thoughts on what type of changes, if any, you'd seek to 
this bill?
    Answer. Our goal is national-scale deployment of electric drive 
vehicles and infrastructure. In establishing national programs for 
technical assistance and workforce training alongside concentrated 
community efforts, we would like to ensure that one effort does not 
supplant the other. While we have not, as an organization, identified 
the exact proportions of the complementary efforts, we would like to 
see the national program on a scale that meets the national 
opportunity, and we would like to see the deployment efforts be 
sufficiently numerous to reinforce the national effort while serving as 
area-specific deployment models.
                               house bill
    Question 3. To the extent possible, please summarize EDTA's views 
on H.R. 1685, the Electric Drive Vehicle Deployment Act.
    Answer. EDTA has not taken an official position on H.R. 1685. 
Directionally, our goal is national-scale deployment of electric drive 
vehicles and infrastructure. In establishing national programs for 
technical assistance and workforce training alongside concentrated 
community efforts, we would like to ensure that one effort does not 
supplant the other. While we have not as an organization identified the 
exact proportions of the complementary efforts, directionally we would 
like to see the national program be on a scale to meet the national 
opportunity and the deployment efforts be sufficiently numerous to 
reinforce the national effort while serving as area-specific deployment 
models.
     Response of Genevieve Cullen to Question From Senator Stabenow
    Question 1. Ms. Cullen, as you note in your testimony, my Advanced 
Vehicle Technology Act (S.734) would ensure that the Department of 
Energy is working with industry on a wide range of technologies such as 
electric vehicles, hybrids, medium and heavy-duty trucks, fuel cells, 
batteries and other technologies. Can you please describe the benefits 
of such an approach and what steps the Department of Energy can take to 
offer a level playing field for all advanced vehicle technologies
    Answer. A portfolio approach to vehicle technologies is important 
because the transportation sector is both large and diverse. A research 
and development policy should look at all of the options that can meet 
the needs of the sector, and the programs should reflect the varying 
stages of development, deployment challenges and petroleum displacing 
potential of the portfolio's technologies.
    For instance, electrification is a continuum of technologies. The 
U.S. will need efficient hybrids, zero-petroleum battery electric and 
fuel cell vehicles for different applications and for meeting petroleum 
and emissions reduction goals
    The Department of Energy should operate under a consistent, long-
term framework that ensures continuity in their efforts across the 
portfolio and allows the Department to pursue near, medium and long 
term solutions.
                                 ______
                                 
     Responses of Seifi Ghasemi to Questions From Senator Bingaman
    Question 1. As you may know, we've been working on a number of 
proposals to help accelerate the deployment of advanced technologies in 
the United States. We've heard testimony in the past that our 
competitors, such as China, are moving aggressively to provide market 
support and insure low-cost capital is available for these new 
technologies. Based on your experience with an international company, 
how do you assess the current position of the United States in terms of 
competitiveness in these growing markets?
    Answer. As a general matter, the United States is at a competitive 
disadvantage to European nations, Japan and China with respect to the 
deployment of advanced electric drive vehicle technology, particularly 
with respect to vehicle adoption in the short-to medium-term. Although 
there are several challenges that plug-in vehicles must overcome to 
become mainstream products, the threshold challenge may be their 
substantial up-front cost premium, a premium that is unlikely to be 
recovered over the vehicle's life based on current vehicle costs, in 
the absence of any government incentives.
    Plug-in vehicles typically are more expensive than gasoline 
vehicles, primarily due to the cost of their batteries. That additional 
cost is offset by lower fuel and maintenance costs. Because gasoline 
costs are substantially higher in Europe than in the United States, 
cars that operate on electricity have a comparative advantage in Europe 
over the United States. Moreover, smaller electric cars that travel 
shorter ranges may be more consistent with the typical European car 
than the typical American car, easing the consumer transition from a 
gasoline to an electric drive vehicle. At the same time, if Europeans 
drive fewer miles overall than Americans, that could increase the 
payback period of the vehicle, perhaps dampening demand somewhat.
    Electric drive vehicles may also be at an additional comparative 
advantage in Europe because they are needed to meet European greenhouse 
gas (GHG) emission requirements. Europe's regulation of GHG emissions 
is more stringent that the United States' approach. In order to meet 
their regulatory obligations, European automakers are looking 
increasingly at alternative fuels. Electricity offer the greatest 
opportunity for GHG emission reduction for vehicles, suggesting greater 
interest in electric drive vehicles to help meet emissions 
requirements.
    China also appears to be at a comparative advantage to the United 
States with respect to the deployment of electric drive technology, 
however, for different reasons. Chinese leaders have identified vehicle 
electrification as a high strategic priority, viewing domestic 
deployment of GEVs as a relatively straightforward energy security 
strategy. As the Chinese economy has grown rapidly, oil consumption has 
outpaced production, requiring an increase in imports. Between January 
2004 and September 2009, Chinese oil imports grew by 80 percent.
    Growing Chinese oil demand has been driven by the transportation 
sector. In 2007, the International Energy Agency (IEA) forecast that 
annual light-duty vehicle sales in China would surpass those of the 
United States in 2016, but did so in 2009. Total light-duty vehicles 
sales in China were 13 million compared to 10.4 million in the United 
States, and this growth is forecast to continue for decades. In 2008, 
there were 65 million registered vehicles in China, a figure forecast 
to rise to 150 million in 2020 and nearly 230 million by 2030.
    The impact of this growth in vehicle ownership will depend heavily 
on technology. Based on existing technology and policies, the IEA 
forecasts that roughly two-thirds of global oil demand growth will 
occur in China and India in coming decades, with nearly one-third of 
all growth occurring in the Chinese transport sector. If electric drive 
technologies are deployed in high concentrations, the growth in Chinese 
oil demand clearly could be curbed, and imports could be reduced from 
their current baseline forecasts.
    Chinese leadership also is dealing with consequences of urban 
pollution. Many cities are highly polluted and adding hundreds of 
millions of cars to the nation's fleet will exacerbate this problem. 
Therefore, China has also identified electrification as a critical 
environmental sustainability measure that will support economic growth 
with cleaner transportation services.
    Perhaps most importantly, China has identified electric vehicle 
manufacturing as a strategic industry that will allow it to maintain 
its global manufacturing dominance. Chinese automotive production in 
China in 2009 was 13.6 million vehicles making China the largest auto 
producing nation in the world. Production is expected to reach 30 
million vehicles by 2030. While this growth is significant, the bulk of 
this production currently feeds domestic demand. Due to the significant 
technological and scale advantages that the established global 
automotive manufacturers have in internal combustion engines, it is 
also unlikely that Chinese automakers will be able to organically 
establish a strong global presence.
    Electric drive vehicles, however, will introduce a value chain 
shift that could favor China from both a technological and from a 
supply chain perspective. As a major supplier of lithium batteries for 
cell phones, China has established the production capability and value 
chain to cost-effectively produce lithium batteries in scale. China 
also is advantaged in electric motors due, in part, to its position in 
rare earth materials production. Rare earth materials, specifically 
neodymium, contribute approximately 30 percent of the material cost of 
permanent magnet motors, one of the key motor types used in electric 
propulsion systems.
    China has supported its electrification strategy with credible, 
long-term public support. In 2009, the central government began an 
initiative to develop sufficient electric vehicle infrastructure for 
large scale deployment in about 20 cities. Wuhan, a city of more than 9 
million people, is the lead city in the project. It is working with 
Nissan to develop the infrastructure, and the automaker will provide 
the city with 600 EVs at no cost. This will be followed with 
infrastructure investments over the succeeding four years in the cities 
of Shanghai, Beijing, Shenzhen, and several other cities ranging in 
size from 1 to more than 10 million people. The government's initial 
goal was to have installed capacity to produce 500,000 grid-enabled 
vehicles by 2011.
    These initiatives are naturally supported by government funding. 
Ten billion yuan ($1.5 billion) has been set aside to nurture research 
and development. The government is also offering a 60,000 yuan ($8,800) 
per-vehicle incentive for EVs and a 500,000 yuan ($73,000) incentive on 
bus purchases. China has provided battery and GEV companies with 
generous low-interest loans from state banks and has a multi-year 
technology development program on which it spent over $160 million 
between 2006 and 2008. State Grid, the largest state-owned utility, is 
planning the construction of charging infrastructure.
    Despite the aggressiveness of China's approach to EVs, it still 
faces many of the same challenges that EVs face elsewhere. Consumer 
acceptance is still a large unknown. The costs of ownership will have 
to come down significantly as government subsidies and incentives 
disappear. Even when the total cost of ownership becomes favorable for 
EVs, the up-front vehicle cost will still be significantly higher than 
conventional vehicles and the payback period is longer than most 
consumers or commercial fleet owners are willing to accept. A vehicle 
financing market, virtually non-existent in China, could help overcome 
this challenge, as could a market for used automotive grade batteries. 
Notwithstanding these challenges, there is no doubt that China is 
making a substantial effort to make EVs work in an effort to become 
world leaders in this technology.
    The comparative advantage that plug-in vehicles have in Europe as a 
result of fuel prices and in China by virtue of the government's 
commitment to their success is one that poses meaningful risks to the 
United States. The automobile manufacturing value chain is worth 
hundreds of billions of dollars to the United States economy each year. 
We do not want plug-in vehicle technology that was developed in the 
United States to be exported and manufactured abroad, further eroding 
the United States' manufacturing base and exporting U.S. jobs.
    That concern can be seen, for instance, in the global development 
of the advanced battery industry. The battery is likely to be the 
single the most expensive component in most plug-in vehicles. In fact, 
over the life cycle cost of owning and operating a plug-in vehicle, 
much of the value that currently is captured by gasoline suppliers and 
the gasoline supply chain will be captured by the battery manufacturers 
and their supply chain. We should all prefer to see as much of that 
value as possible stay in the United States and support American jobs. 
Without proper support, however, that may not occur. As the Department 
of Energy data depicted in the accompanying chartzzzz8 shows, most of 
the global production of advanced batteries takes place in Asia, with 
growth in China and Korea eroding Japan's dominance in this market. In 
the absence of U.S. government assistance, this trend might continue, 
foretelling the continued decline of the automotive sector in the 
United States with all of its attendant consequences.
---------------------------------------------------------------------------
    * Chart has been retained in committee files.
---------------------------------------------------------------------------
    We believe that in the very long run, electrification of light-duty 
vehicles may be nearly inevitable because electricity is more secure, 
stable, reliable and cleaner than petroleum. If we do not take the 
steps necessary to accelerate that transformation beyond what might 
occur in the absence of government incentives, other nations will make 
that transformation first, capturing much of the value created by the 
new transportation economy. Government incentives are needed, 
therefore, to accelerate the transformation in the United States and 
promote our competitiveness in this market for decades to come.
    Question 2. The capital intensity of both the manufacturing and 
supporting infrastructure for electric vehicles seems like it would be 
daunting for new entrants. Yet, that's where much of the early 
technological innovation is usually introduced. Can the grant programs 
envisioned in this bill be sufficient to entice entrepreneurs as you 
describe in your testimony?
    Answer. We believe that the grant programs envisioned in the 
Promoting Electric Vehicles Act will be sufficient to entice 
entrepreneurs to participate in the plug-in vehicle market. First, many 
of the companies that are involved in the plug-in vehicle value chain 
already are relatively small and/or new companies, and possess the 
entrepreneurial character I described in my testimony. New companies 
have been established to develop and market electric vehicle supply 
equipment (chargers), software to support the vehicle charging process, 
vehicle batteries, and vehicles themselves. In fact, there may be more 
startup companies developing plug-in vehicles than any other category 
of alternative vehicles in recent decades. Even when existing companies 
are entering this space, they often are doing so through their non-
traditional business units.
    Second, we believe that the deployment community approach 
facilitates the entrance of entrepreneurs into this market. There are 
several challenges to the wide-scale adoption of plug-in vehicles where 
government incentives can help overcome crucial obstacles. The nature 
and character of those obstacles, however, may vary from community to 
community. By focusing some portion of the government's overall 
commitment to plug-in vehicles in a limited number of communities 
through a flexible grant program, it is possible to narrowly tailor the 
use of the funds to address specific problems in the participating 
communities. Reducing the size of the challenges to ones faced by 
particular communities may allow smaller companies without the 
resources of larger established companies to compete and provide their 
solution. This approach not only creates opportunities for smaller 
entrepreneurial companies that may have solutions to the challenges 
faced by a particular community, but also will help ensure that the 
government earns the greatest payback on its investment in plug-in 
vehicles.
                                 ______
                                 
     Responses of Patrick Davis to Questions From Senator Bingaman
    Question 1. With regard to deployment communities for electric 
vehicles; the Administration's approach appears to contemplate 
distributing smaller grants to a greater number of communities, than is 
contemplated in S. 948. Has the Department been able to gather any 
information on the needs of various communities in order put in place 
the various pieces of infrastructure that will be needed? How can we be 
certain that the grants are the right size to have the desired effect?
    Answer. While the proposed competitive community grant program, by 
itself, would not be enough to achieve the President's goal of putting 
one million electric vehicles on the road by 2015, it would help to 
achieve this ambitious goal by providing an incentive for communities 
to invest in infrastructure, complementing investments that have 
already been made under the Recovery Act Transportation Electrification 
demonstration program. Moreover, the grants through this program, 
modeled after ``Race to the Top,'' would leverage benefits beyond their 
immediate monetary value by rewarding communities that can demonstrate 
a broader plan to facilitate EV readiness through steps like 
streamlining codes and regulations to make it easier to install 
infrastructure. The Department has examined various ways to implement 
the proposed program, considering options for the potential number of 
communities and amount of funding per award, among other factors. 
Although there would be a cap on the amount of funds available for an 
individual award, communities will be able to propose funding amounts 
that they believe will meet their needs and allow them to implement the 
programs proposed in their applications. In addition, to help inform 
decision-making, the Department has obtained input from various 
stakeholders over the last year. For example, in July 2010, Clean 
Cities hosted the Plug-In Vehicle and Infrastructure Community 
Readiness Workshop, which provided both an opportunity for the 
Department to hear from local communities about their needs as well as 
a forum for technology deployment experts to share best practices and 
lessons learned. While the Department does not share the details of its 
solicitation plans with potential applicants, the Clean Cities network, 
which includes more than 80 locally-based coalitions, is an important 
resource for understanding community experiences with vehicle and 
infrastructure deployment and is helpful for identifying ways in which 
the Department can support local efforts.
    Question 2. In your comments on S. 734 you mention that the section 
on ``Sensing and Communications Technologies'' appears to be 
duplicative of a Department of Transportation program. Does DOE 
currently conduct research in this area within the Vehicle Technology 
Program? Is the language in S. 734 on ``coordination and 
nonduplication'' requiring the Secretary to ensure activities do not 
duplicate programs in other research agencies ineffective to deal with 
this?
    Answer. The Department's Vehicle Technologies Program does not 
currently conduct vehicle-tovehicle sensing and communications 
technology research, but in accordance with non-duplication provisions 
in S. 734, would work closely with the Department of Transportation to 
leverage and complement, rather than duplicate, their ongoing research 
activities with regard to vehicle-to-vehicle and vehicle-to-
infrastructure communications.
    Question 3. You spoke a bit about advances in fuel economy 
technology in such things as electric drive that can make a big 
difference in coming years. Can you speak a bit more about the 
opportunities with existing technologies like turbo or super charging? 
What are the emissions and fuel economy opportunities there?
    Answer. Engine downsizing and technologies such as turbo charging 
can increase fuel economy by 7.5% or more.\1\ The auto industry is 
relying, in part, on these technologies to meet corporate average fuel 
economy (CAFE) standards through 2016, while simultaneously meeting 
applicable emissions standards. Both turbocharging and supercharging 
enable engine downsizing and higher efficiency by compressing air 
entering the cylinders, thereby increasing power produced from a given 
engine displacement. In case of turbocharging, additional benefit is 
utilization of waste heat energy of the engine exhaust for the 
compression of intake air. We envision the future CAFE regulations to 
necessitate broader introduction of these technologies. R&D 
opportunities in this area include cost reduction through novel high 
strength, high temperature materials and innovative bearing 
technologies, improving modeling capabilities for high speed gas flows, 
as well as development of designs suitable for very small air charging 
devices. It is important to note that air charging devices for 
turbocharging and supercharging represent just one of many technologies 
that will allow continuing improvements in the fuel efficiency of 
internal combustion engines. Others include new combustion regimes, 
advanced fuel injection systems, novel propulsion materials, advanced 
sensors and control algorithms, and reduction in friction and parasitic 
losses.
---------------------------------------------------------------------------
    \1\ See http://www.fueleconorny.gov/feetech_engine_more.shtml
---------------------------------------------------------------------------
     Responses of Patrick Davis to Questions From Senator Murkowski
             community deployment program funding (s. 948)
    Question 1. Please state the administration's views on the most 
appropriate funding levels, per community and overall, for a one-year, 
three-year, or five-year deployment program.
    Answer. The Administration has proposed a $200 million competitive 
community grant program, which would support up to 30 awards of up to 
$10 million each. The Department views this as a nearer-term effort 
that, if funds are appropriated, it would execute quickly, with 
projects of 1--3 years in length.
                    additional technologies (s. 948)
    Question 2. Please state the administration's views on whether 
alternative fuel vehicles aside from electric vehicles should be 
eligible for the targeted community deployment program.
    Answer. The Administration is committed to taking bold steps to 
make the transportation sector more energy efficient. These efforts 
include the historic investments in advanced vehicle and fuel 
technologies, public transit, and high speed rail under the Recovery 
Act, as well as the ambitious new fuel economy standards put into place 
for cars and trucks--which will raise average fuel economy to 35.5 
miles per gallon by 2016, and save 1.8 billion barrels of oil over the 
lifetime of the vehicles covered. The Administration is also taking 
steps to encourage the use of biofuels. The Department continues to 
support programs such as the Clean Cities Initiative that cover a broad 
portfolio of petroleum reduction strategies.
    These actions are already helping to lower transportation costs by 
reducing our dependence on oil, provide more transportation choices to 
the American people, and revitalize the U.S. manufacturing sector. But 
we need a sustained effort, and focusing on electric drive vehicles 
offers an opportunity to quickly reduce our dependence on petroleum, 
which is why the President set an ambitious goal that by 2015 we would 
have 1 million electric vehicles on the road, becoming the world's 
leader in advance vehicle technologies. To help reach this goal, the 
Administration supports a number of steps to speed up the adoption of 
electric vehicles, including more effective tax credits for consumers, 
research and development, and a new competitive grant program to 
support communities that create an environment for widespread adoption 
of these advanced vehicles in the near term.
    With new electric drive vehicles beginning to enter the market, and 
with auto manufacturers announcing new roll outs over the next couple 
of years, now is the right time to support local community efforts to 
overcome critical barriers to successful market introduction and 
initial growth. The competitive community grant program would support 
highly-leveraged projects to deploy an early electric vehicle charging 
infrastructure, appropriately streamline permitting processes, and 
implement innovative incentive programs that facilitate market growth 
and catalyze private-sector investment.
                  current vtp funding request (s. 734)
    Question 3. The Department requested $588 million for the Vehicle 
Technologies Program for Fiscal Year 2012. How is that funding split 
between light duty and heavier vehicle classes? How is it split between 
various technologies and research areas?
    Answer. With the President's fiscal year (FY) 2012 budget request 
of $588 million, the Vehicle Technologies Program plans to continue its 
support of a broad range of advanced vehicle technologies including 
electric drive, advanced combustion, fuels, and materials technologies 
that are applicable to light-, medium-, and heavy-duty vehicles (see 
table below for split among research areas). Of the total requested 
amount, $200 million would support a new competitive grant program to 
help communities accelerate the deployment of electric vehicles, with a 
focus on efforts related to electric charging infrastructure. The 
remaining $388 million would support work related to light-, medium-, 
and heavy-duty vehicles, as well as work that cross-cuts vehicle 
classes, including enabling technologies and outreach, deployment, and 
analysis activities. The precise division of FY 2012 funds for work 
supporting different vehicle classes will depend on the selection of 
projects under a recently-closed FY 2011 solicitation and new 
solicitations planned for FY 2012. The program's best estimate at this 
time, however, is that approximately $290 million would support work 
related to light-duty vehicle technologies, approximately $46 million 
would support work related to medium-and heavy-duty technologies, and 
approximately $250 million (including the $200 million for the 
competitive community grant program referenced above) would support 
activities that do not easily align with a particular vehicle class. It 
is important to note that the program's support for light-duty vehicle 
technologies generally reflects their significant contribution to 
highway transportation use, compared to other vehicle classes: light-
duty vehicles account for 76% and heavy trucks account for 19% of U.S. 
highway transportation energy use (buses and medium trucks account for 
the remaining 5%).

   VEHICLE TECHNOLOGIES PROGRAM FY 2012 CONGRESSIONAL  BUDGET REQUEST
------------------------------------------------------------------------
                   Activity                      FY 2012 Request ($000)
------------------------------------------------------------------------
Batteries and Electric Drive                        $188,000
------------------------------------------------------------------------
Vehicle and Systems Simulation and Testing          $58,000
------------------------------------------------------------------------
Advanced Combustion Engine R&D                      $49,000
------------------------------------------------------------------------
Materials Technologies                              $38,000
------------------------------------------------------------------------
Fuels Technologies                                  $18,503
------------------------------------------------------------------------
Outreach, Deployment, and Analysis                  $236,500
------------------------------------------------------------------------
TOTAL                                               $588,003
------------------------------------------------------------------------

                 vehicle technologies program (s. 734)
    Question 4. Please provide the committee with a list or table 
showing federal appropriations to the Vehicle Technologies Program over 
the past ten years.
    Answer. The following table outlines federal appropriations to the 
Vehicle Technologies Program over the past ten years:

                                   VEHICLE TECHNOLOGIES (DOLLARS IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------
  FY 2001     FY 2002     FY 2003     FY 2004    FY 2005    FY 2006    FY 2007    FY 2008    FY 2009    FY 2010
----------------------------------------------------------------------------------------------------------------
 195,855     190,403     185,095     177,620     171,952    186,271    183,580    208,359    235,916    304,223
----------------------------------------------------------------------------------------------------------------

                 vehicle technologies program (s. 734)
    Question 5. S. 734 would authorize work on basic research, applied 
research, development, demonstration, engineering, construction, 
manufacturing, and commercial application activities. it would also 
create several new programs. Will you compare what this bill authorizes 
and requires to the current scope of activities at DOE? How are DOE's 
resources currently split between those processes?
    Answer. Within the Department's Office of Energy Efficiency and 
Renewable Energy (EERE), the Vehicle Technologies Program (VTP) 
supports applied research, development, demonstration, and deployment. 
Approximately 90% of its current budget covers applied research, 
development, and demonstration, and approximately 10% covers deployment 
activities. The Department's Office of Science supports basic research, 
and the Advanced Research Projects Agency-Energy (ARPA-E) focuses on 
high-risk, high-payoff, early-stage applied research, which, if 
successful, is transferred to VTP or to the private sector for 
continued development. All three offices/programs coordinate very well 
with one another and staff communicate regularly. While S. 734 would 
authorize construction and manufacturing, historically, VTP has not 
been involved in the installation of manufacturing facilities. American 
Recovery and Reinvestment Act of 2009 (Recovery Act) manufacturing 
projects are the exception. The Recovery Act provided an opportunity to 
grow our nation's domestic manufacturing capacity for electric drive 
vehicle components--with Recovery Act funds, VTP awarded $1.5 billion 
to U.S.-based manufacturers to produce batteries and their components 
and to expand battery recycling capacity and $500 million to U.S.-based 
manufacturers to produce electric drive components for vehicles, 
including electric motors, power electronics, and other drivetrain 
components.
                 vehicle technologies program (s. 734)
    Question 6. Last Congress, in questions that were asked for the 
hearing record, the Department noted that it had no issue'' with this 
bill as long as it was ``intended as a supplemental authorization to 
previous authorizations.'' Please explain that statement. Does the 
Department support the consolidation of all of its existing vehicle 
technology authorities into one simpler and more straightforward 
authority?
    Answer. Generally, the Department supports the consolidation of 
existing vehicle technologies R&D authorizations for appropriations 
into a simpler and straight-forward authority. The previous bill 
covered a broad technology portfolio that included the advanced 
technologies currently addressed in the Vehicle Technologies Program, 
as well as hydrogen and fuel cell vehicle technologies currently 
addressed in the Hydrogen and Fuel Cell Technologies Program; however, 
it authorized specific funding levels that the Department believed may 
not have been alone sufficient to appropriately support activities in 
both programs. In contrast, S. 734 authorizes funding levels ``as may 
be necessary.''
     Responses of Patrick Davis to Questions From Senator Stabenow
    Question 1. The Department of Energy via the National Energy 
Technology Laboratory awarded approximately $45 million in grants to 
automotive and engine manufacturers under the Systems Level Technology 
Development, Advanced Technology Powertrains for Light-Duty Vehicles 
program. What is the status of the program including the project teams 
led by Ford, Delphi and Bosch, specifically regarding the federal funds 
already allocated, the stage of each project, the federal funds pending 
for each project, and the timeline for project completion and their 
subsequent fuel economy gains?
    Answer. The Advanced Technology Powertrains for Light-Duty Vehicles 
Program includes projects with Ford, Delphi, Bosch, and Cummins. All 
projects are well under way and making progress. The status of the 
Ford, Delphi, and Bosch projects, specifically, is as follows:

   Ford has been allocated $6,478,340 and has completed concept 
        evaluation of new engine architecture and systems, performed 
        single cylinder engine and flow reactor analyses for advanced 
        lean combustion capability, and initiated CAD design of the new 
        multi cylinder engine components and systems. The pending 
        Federal funds are $8,521,660. The project is scheduled to end 
        on 12/31/2014 with a demonstration of a 25% fuel economy 
        improvement in a mid-sized sedan using a downsized, advanced 
        gasoline turbocharged direct injection (GTDI) engine while 
        meeting Tier 2 Bin 2 emissions on the FTP-75 cycle (Federal 
        Test Procedure).
   Delphi has been allocated $4,788,205 and has completed 
        initial development work on needle bearing camshafts, electric 
        cam phasers, electric water pump, electric oil pump, cooled 
        Exhaust Gas Recirculation (EGR), thermal management, and 
        advanced valvetrain systems and has begun integration/testing 
        on a base engine. Work has also commenced with single-cylinder 
        engine testing. The pending Federal funds are $2,692,377. The 
        project is scheduled to end on 8/31/2014 with a demonstration 
        of a 35% fuel economy improvement over the base engine while 
        meeting Tier 2 Bin 2 emissions on the FTP-75 cycle.
   Bosch has been allocated $5,500,000 and has completed an 
        initial 1D engine model and installed a homogenous charge 
        compression ignition (1-ICCI) mule engine at the University of 
        Michigan. An initial prototype boosting system has been 
        designed for the test engine. The pending Federal funds are 
        $6,182,468. The project is scheduled to end on 9/29/2014 with a 
        demonstration of a 25% fuel economy improvement over the base 
        engine while meeting Tier 2 Bin 2 emissions on the FTP-75 
        cycle.

    Question 2. Mr. Davis, I noticed in your testimony that the 
Department of Energy was still reviewing my legislation, but had a 
possible concern about duplication with efforts at the Department of 
Transportation regarding sensing and communication technologies. I know 
that the Department of Transportation has been working on sensing 
technologies to promote safety, but this section is intended to 
encourage research and development of sensing technologies specifically 
interacting with the electric grid and even vehicle to vehicle 
interactions.
    I agree that we should be taking steps to avoid duplication, which 
is why I'd like to point out for you that within Section 101 of my 
legislation, page 11, there is a phrase to ensure that the Department 
of Energy does not duplicate work being done by other agencies.
    Therefore, I'd like to ask you if there are any other areas where 
you see the possibility for duplication and encourage you to work with 
me to ensure that we address those issues.
    Answer. The Department agrees that R&D of sensing technologies is 
important, especially for vehicle-to-grid applications, and the 
Department has efforts helping to establish standardized vehicle-to-
grid communications. We will work closely with the Department of 
Transportation (DOT), which is very active in this area (and in 
vehicle-to-vehicle interaction, in particular), to leverage resources 
and expertise and avoid duplication of effort. We understand that the 
Department of Transportation is conducting research related to battery 
safety that may lead to regulation and we will need to coordinate with 
DOT in that area as well. We know of no other R&D areas of obvious 
duplication and will continue to work closely with our Federal partners 
at DOT, the Environmental Protection Agency, and Department of Defense 
to ensure our programs are well-coordinated and highly-leveraged to 
make the best use of taxpayer dollars.
    Question 3a. I like the idea of helping communities coordinate to 
deploy electric vehicles and charging stations, provide technical 
assistance, and upgrade various local and state regulations. This all 
can help to spur these technologies nationwide.
    With so much interest in deploying these technologies, how will you 
determine which communities will receive this grant funding, and how 
many communities do you anticipate will eventually receive funding?
    Answer. The Department would select proposals for award using a 
robust merit review process that involves an independent panel of 
subject matter experts who carefully evaluate each proposal against the 
specific criteria published in the funding opportunity announcement. 
While the specific selection criteria have not been finalized, we 
envision factors such as the following as being important to a 
successful application:

   Does the community have credible plans to overcome 
        permitting barriers?
   Has the community engaged the right partners and key 
        stakeholders to be successful?
   Has the community proposed innovative incentives to promote 
        adoption?
   How is the community using local and private funds to highly 
        leverage the available Federal funds?
   Does the total number of charging points proposed represent 
        a very high value for the funding?

    With the amount included in the budget request, we plan to award up 
to 30 grants to strategic, local community partnerships across the 
country, with individual awards of up to $10 million each. Given auto 
manufacturers' plans to sell electric vehicles in cities across the 
country, we do not expect to focus on a limited number of geographic 
areas and instead expect to select projects based on their merit using 
criteria such as those listed above.
    Question 3b. I like the idea of helping communities coordinate to 
deploy electric vehicles and charging stations, provide technical 
assistance, and upgrade various local and state regulations. This all 
can help to spur these technologies nationwide.
    As a follow up, how will DOE work to ensure fairness for 
neighboring communities that are not chosen, but are close to 
deployment communities? Will this policy hamper development in areas 
not chosen?
    Answer. The Department would select proposals for award using a 
robust merit review process that involves an independent panel of 
subject matter experts who carefully evaluate each proposal against the 
specific criteria published in the funding opportunity announcement. 
Cities and communities would be encouraged to form strategic local/
regional partnerships and submit a single proposal. Areas that are not 
selected for funding under this competitive opportunity, however, would 
still benefit from the library of resources available through the 
Department's Clean Cities initiative. These include cost calculators 
and electric vehicle supply equipment (EVSE) mapping tools, guidebooks 
to facilitate permitting, and a host of other training and information 
resources. Another important attribute of the Clean Cities initiative 
is its unique ability to share information across its nationwide 
network of more than 80 local coalitions, as well as to neighboring 
communities. Not only would the competitive grant program provide an 
excellent opportunity to document valuable lessons learned and best 
practices that can be communicated publicly, but the areas selected 
would comprise a new network of experts to serve as models and a 
resource for other communities interested in electric drive vehicle 
deployment.
    Question 4. I support the idea of using deployment communities to 
assist with electric vehicle adoption nationwide. I also believe that 
it is important to establish the right balance between national and 
community deployment. Most vehicles remain idle at home or at work 80 
percent of the time. While it is important to upgrade the communities' 
ability to provide public charging to consumers, I also believe we 
should give incentives directly to the consumer to install charging 
stations at home. For early adopters, the majority of charging will be 
done at home.
    How do we find the right balance between incentivizing electric 
vehicle deployment within particular communities and ensuring we are 
allowing for this development nationally?
    Answer. Although the Department cannot provide funds to support 
electric drive vehicle deployment in every community across the 
country, there are programs and policies that can support any community 
interested in accelerating local market growth. For example, the 
Department would select projects for award under the competitive 
community grant program giving consideration to factors including (but 
not limited to) whether it has credible plans to overcome permitting 
barriers, whether it has engaged the right partners and key 
stakeholders needed to be successful, and whether it has proposed 
innovative incentives to promote adoption. Programs and policies to 
address these factors may be easily transferable, and communities that 
meet these criteria and are selected for funding would serve as models 
that provide important lessons learned, share their experiences, and 
communicate best practices to the benefit of communities nationwide. In 
addition, the existing tax credit of up to $7,500 for electric drive 
vehicles provides an incentive to potential users nationwide. The 
President has proposed transforming this tax credit for purchasers into 
a credit for the seller or the person financing the sale. The credit 
would be passed through to consumers, giving them the ability to 
receive the benefit of the credit at the point of sale to provide an 
even greater, up-front incentive for consumers interested in electric 
drive vehicles. These programs and policies are designed to enable 
early market success, reduce technology cost, and remove barriers such 
as onerous permitting processes--which, in turn will facilitate 
technology introduction across the country.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                                       May 9, 2011.

                            The Detroit News
              asian power embraces advanced-tech vehicles
By CHRISTINE TIERNEY
    Shanghai--During the first 80 years of the auto industry, American 
and European automakers didn't have to worry about pollution or oil 
supplies. Oil was plentiful and gas was cheap. But by the time China 
got into the car business, those concerns loomed large.
    China's huge cities already were choking in smog, and the world's 
oil reserves were expected to dwindle. Even while Chinese automakers 
were learning the basics of carmaking a few years ago, planners in 
Beijing set out to develop an electric car industry that wouldn't rely 
on oil.
    China's automakers don't seem any closer now than others to solving 
the technological challenges that have stumped the industry: how to 
pack more energy in batteries while reducing their size and cost. 
Chinese auto executives admit they have a long way to go to master the 
technology.
    But American, European and Japanese auto executives and officials 
are taking China's efforts very seriously. The Chinese government has 
set ambitious production targets and will provide close to $15 billion 
between now and 2020.
    Half the money will go toward research and development of ``new 
energy vehicles,'' a term that covers plug-in and electric cars. But 
money also will be spent on infrastructure, such as the installation of 
36,000 charging outlets in Beijing within three years, and pilot 
projects in 25 cities.
    ``Where they're ahead is at the political commitment level,'' said 
Oliver Hazimeh, a partner at PRTM, a Waltham, Mass.-based consulting 
firm, which conducted a study with the World Bank on China's electric 
car plans.
    ``The Chinese government is very strongly behind electrification, 
and they also have the raw materials,'' lithium and rare earths used to 
make components for electric cars, Hazimeh said.
    The implications for the United States and other countries are 
huge: Because of the size of its market, China is likely to influence 
standards and technological choices, and its carmakers will want to 
compete globally with plug-in and electric cars.
                       lawmakers slam incentives
    BYD Ltd., a leading Chinese automaker, aims to export electric cars 
to the United States and Europe next year.
    Already, U.S. lawmakers claim that some of China's electric car 
policies, notably its incentives, discriminate against U.S. and other 
foreign brands.
    According to China's New Energy Vehicle Development Plan, the 
government wants 1 million hybrid vehicles and 500,000 plug-in and all-
electric vehicles on China's roads by 2015. By 2020, it wants 5 million 
plug-in and electric cars in circulation, with some private analysts 
estimating the figure will be higher.
    By then, China aims to have between three and five proficient 
electric car manufacturers and two or three battery specialists.
    ``People are taking this seriously,'' said Michael Dunne, president 
of Hong Kong investment advisory firm Dunne & Co. ``What the government 
wants to happen usually happens in China, even though the road getting 
there often looks muddled.''
    The motivation driving China's strategy is geopolitical, he said. 
``It's 90 percent about energy security, and less than 10 percent about 
the environment.''
    Other countries also have set goals, emission rules and incentives 
to encourage the use of electric cars. President Barack Obama said in 
2008 he wants to see 1 million plug-in and electric cars on American 
roads by 2015. Chancellor Angela Merkel wants to have 1 million 
electric cars in Germany by 2020.
    A bill before Congress would offer grants and other incentives to 
help establish 10 electric car ``deployment communities.''
    Meanwhile, the Chinese are ready to offer as much as $15,000 in 
incentives in some cities--more than what's available to consumers in 
California. And ``they have large-scale pilot projects, much larger 
than those in other regions,'' said Hazimeh.
                       execs aware of challenges
    At the Shanghai auto show last month, Chinese automakers displayed 
a raft of electric cars--the BYD e6, a Great Wall electric SUV, the 
Chery Riich M1-EV and the BAIC C30.
    U.S., European and Japanese executives touring the show said 
Chinese production methods had improved, but didn't see any 
technological breakthroughs. Chinese auto executives are candid, too, 
about the challenges.
    At a conference in Shanghai last month, an executive with Jianghuai 
Automobile Co., a state-owned firm that has sold 585 electric cars to 
its employees and those of other state-owned firms on a trial basis, 
said it's not ready to sell electric cars to retail customers.
    ``Our technology doesn't allow us to sell to retail customers,'' 
Yan Gang, vice president of Jianghuai Automobile, told the CBU 2011 
Global Automotive Symposium. ``Retail customers are too demanding.''
    Wu Jianzhong, chairman of Zotye Holding Group, was clearly 
discomfited when asked at the conference about a Zotye-made electric 
taxi that caught fire in April in the city of Hangzhou. Wu apologized 
and said a center would be established to monitor the electric taxis. 
But he wouldn't discuss the event, pending an official inquiry.
    ``The incident caused huge damage to us,'' Hu Jiangyi, deputy sales 
director of State Grid Corp., commented later.
    Despite the mishaps, China's automakers are ramping up plans to 
produce electric cars, with most of the output slated for municipal, 
provincial and federal fleets in the next few years.
    State-owned BAIC Group, a Beijing-based manufacturer, is new to the 
electric car business but expects to produce 150,000 new energy 
vehicles by 2015, up from 3,500 this year, Deputy Chief Engineer Lin Yi 
said.
    Jianghuai Automobile, based in Hefei, hopes to be making 100,000 
new energy vehicles a year by 2015.
    But some manufacturers question how the government's funds are 
being allocated. ``Money is going to those who don't need it,'' said 
Deng Zhongyi, vice president for sales at BAK Batteries. ``Most battery 
producers are private companies, and most battery producers are pretty 
weak.''
    In China's fragmented auto industry, many firms will fall by the 
wayside in the years ahead, but a few contenders are likely to emerge, 
analysts say.
    BYD, a leading manufacturer of lithium-ion batteries, has won 
investor backing from U.S. billionaire Warren Buffett and has joined 
forces with Germany's Daimler AG to develop electric cars for the 
Chinese market.
    ``There's a favorable environment here for electric vehicles,'' 
Daimler CEO Dieter Zetsche told reporters at the Shanghai auto show.
    Given the size of China's market--more than 18 million vehicles 
were sold last year--the government's push to develop alternative 
technologies is logical, he said. ``They can't develop the way Europe 
and the United States did, with the current technology.''
                                 ______
                                 
                        Statement of NGVAMERICA
                              introduction
    NGVAmerica is pleased to offer the following written statement with 
regard to this hearing. NGVAmerica is a national organization dedicated 
to the development of a growing and sustainable market for vehicles 
powered by natural gas and biomethane. NGVAmerica represents more than 
130 member companies, including: vehicle manufacturers; natural gas 
vehicle (NGV) component manufacturers; natural gas distribution, 
transmission, and production companies; natural gas development 
organizations; environmental and non-profit advocacy organizations; 
state and local government agencies; and fleet operators.
    The purpose of the Committee's hearing on May 19, 2011 is to 
receive comments and hear testimony concerning ``policies to reduce oil 
consumption through the promotion of advanced vehicle technologies and 
accelerated deployment of electric-drive vehicles.'' The hearing 
announcement specifically references S. 734 and S. 948.
   natural gas vehicles should be a part of future energy legislation
    Today, natural gas vehicles are uniquely positioned to help the 
United States achieve a number of critical policy objectives. The 
increased use of natural gas vehicles can reduce our dependence on 
foreign oil while reducing greenhouse gas emissions and urban 
pollution. And, equally important, increased use of natural gas 
vehicles will benefit the economy by stimulating demand for domestic 
natural gas and by lowering fuel cost to businesses, fleets and 
consumers that operate natural gas vehicles. Thus, energy legislation 
that is intended to reduce reliance on oil consumption should also seek 
to promote the use of natural gas vehicles. We are pleased to see that 
S. 734, ``The Advanced Technology Vehicle Act of 2011,'' specifically 
recognizes the need to includes natural gas vehicles, compressed 
natural gas and liquefied natural gas vehicles in future federal 
research, development and demonstration activities. We agree with the 
bills focus on targeting near-term strategies as well as long-term 
strategies that will reduce transportation reliance on petroleum. And 
we agree with the focus on assisting and partnering with industry in 
the development of light and heavy duty natural gas offerings. One area 
where we would offer a recommendation for improving the bill would be 
to point out that the medium and heavy duty program called for in Title 
II should also include liquefied natural gas fueling infrastructure in 
addition to compressed natural gas fueling infrastructure. Given the 
fact that the bill specifically identifies LNG elsewhere, this omission 
appears to be unintentional.
    Another area where, in our estimation, the bill could be improved 
would be to specifically identify natural gas utilities as stakeholders 
and partners who can aid in the development of natural gas vehicles. 
The bill specifically identifies electric utilities but does apparently 
recognize a similar role for natural gas utilities.
    Prioritizing among the many technologies identified in S. 734, 
however, will be difficult. We hope that the committee and members of 
Congress will work with the Department of Energy to ensure that 
adequate funding is provided for natural gas-related activities given 
the significant near-term and long-term opportunities it presents for 
reducing petroleum reliance.
    The House of Representatives has already introduced HR 1380, a bill 
intended to promote the use of natural gas vehicles. We would urge the 
Committee Members to support the HR 1380 when it is introduced in the 
Senate. HR 1380 is discussed in greater detail below.
              an abundant and economical domestic resource
    Reliance on foreign oil exacts a high toll on the U.S. in terms of 
direct economic costs and indirect energy security costs. In the past 
three years (2008--2010), the US spent nearly $700 billion on imported 
petroleum. More recently, the tab for imported oil has been much higher 
as oil prices have once again exceeded $100 per barrel. In the coming 
decade, the EIA forecasts total expenditures for petroleum imports to 
top $3.3 trillion dollars. See EIA, 2011 Annual Energy Outlook , Table 
11 (April 2011). Our reliance on oil not only affects our trade balance 
but makes the U.S. vulnerable to price spikes and supply disruptions. 
And high oil prices results in a windfall for regimes that may not be 
friendly to the U.S. Fortunately, the U.S. has an unprecedented 
opportunity to displace petroleum with domestic natural gas. In the 
past several years, a wealth of new data has been developed 
demonstrating that the U.S. has an abundant supply of readily 
available, economically priced natural gas.
    The U.S. Energy Information Administration, the Potential Gas 
Committee and other expert bodies now estimate that we have up to a 100 
years supply of natural gas. The Potential Gas Committee's 2011 bi-
annual report indicates that the U.S. now has a total future supply of 
2,170 trillion cubic feet of natural gas. This is 89 Tcf more than 
estimated in the 2009 report. As was the case with the 2009 report, the 
2011 report includes the highest resource estimate in the Committee's 
history; PGC has now been estimating natural gas supplies for 46 years.
    Increased demand for natural gas helps to keep our economy growing 
by supporting new jobs and economic development. In 2008, U.S. 
production of 20 Tcf of natural gas supported nearly 3 million jobs 
(``The Contributions of the Natural Gas Industry to the U.S. National 
And State Economies'', IHS Global Insight 2009, p.1) Even a modest 
increase in demand for natural gas as a transportation fuel could 
create tens of thousands of jobs associated with producing natural gas.
    Natural gas also benefits our economy because it is a low cost 
energy that helps businesses grow while at the same time controlling 
costs. Natural gas is priced much lower than petroleum. The two fuels 
no longer track one another and haven't for many years. The current 
contract price for natural gas (NYMEX May delivery) is $4.377 per 
million Btu, which equates to a per-barrel of oil price of only $25.39 
at a time when oil is trading well above $100 a barrel. The difference 
in price relates to the fact that petroleum prices are set by world 
markets. An increase in demand in China or India leads to an increase 
in the cost of oil consumed here in the U.S. However, the same is not 
true for natural gas. The U.S. market for natural gas is currently 
insulated from most overseas events. Given the fact that large 
quantities of natural gas cannot be readily shipped from North America 
to other markets, the supply and demand for natural gas here in the 
U.S. set the price that U.S. consumers pay. Because of the abundant 
supply of natural gas that exists here in the U.S., natural gas prices 
relative to oil prices are expected to remain much lower in the coming 
years. In fact, the EIA estimates that differential between diesel fuel 
and natural gas for transportation could be as much as $2 per diesel 
gallon equivalent in the future.
                 translating opportunity into advantage
    How should we use this natural gas? Market price signals tell us 
that transportation fuel and vehicles are the highest valued 
application of all natural gas uses. Outside the U.S., demand for 
natural gas vehicles is growing at a rapid pace. In the last seven 
years the market for NGVs has more than tripled with a compound growth 
rate of over 17 percent per year. In fact, NGVs are the fastest growing 
alternative to petroleum vehicles in the world. In 2003, there were 
only about 2.8 million NGVs globally. Today, there are over 13.2 
million NGVs in operation worldwide. This rapid growth points to the 
fact that rapid scaling up of NGVs is possible. The International NGV 
Association forecasts that, by 2020, there will be 65 million NGVs on 
the world's roads. Unfortunately, the U.S. currently ranks fourteenth 
in the world in total number of NGVs.
    Most of the new natural gas vehicles sold outside the U.S. are 
either conversions of light-duty gasoline vehicles or are produced by 
light duty OEMs, including: Ford, GM, Toyota, Honda, Nissan, Hyundai, 
Fiat, Volkswagen and Mercedes. Fiat alone makes 14 separate NGV models, 
and more than 100,000 NGVs were sold in Italy in 2009, comprising some 
7% of the new vehicle market. Most U.S. manufacturers currently offer 
natural gas vehicles in places like Europe, South America and Asia, but 
only Honda currently offers a light duty OEM NGV product--the Honda 
Civic GX.
    For a number of reasons, including the sheer geographic size of 
America, the strategy of the US NGV industry has been to focus on high 
fuel-use fleets: trash trucks, transit buses, short-haul 18-wheelers, 
school buses, urban delivery vehicles, shuttles of all kinds, and 
taxis. Today, the U.S. only has about 120,000 NGVs. Vehicle demand has 
been growing, but slowly. However, because of the large fuel use per-
vehicle, the amount of natural gas used (and petroleum displaced) has 
been increasingly at a robust pace. NGVAmerica estimates that, last 
year, natural gas vehicles used about 43 billion cubic feet of natural 
gas. That is the equivalent of about 320 million gallons of gasoline 
that was not imported. At today's fuel prices, this represents about a 
billion dollars not spent on foreign oil.
    Fortunately, the U.S. currently leads the world in offerings of new 
medium-and heavy-duty NGVs. In the past several years, virtually all 
the major truck and bus manufacturers in the U.S. have begun offering 
factory-built NGVs. The impressive list of manufacturers includes: 
Kenworth, International/ESI, Peterbilt, Mack, American LaFrance/Condor, 
Crane Carrier, AutoCAD Truck, Capacity, Thomas Built Bus, Blue Bird 
Bus, Optima, NABI, El Dorado, New Flyer, Daimler/Orion, Freightliner, 
Gillis, Workhorse Chassis, Elgin, Allianz/Johnston, Schwarz, and Tyco.
    Manufacturers are betting that the U.S. will get serious about its 
desire to displace petroleum demand and increase the use of alternative 
fuels like natural gas. With proper government policies, like those 
proposed in S. 734, and incentives, like those proposed in HR 1380, 
sales of these trucks and use of natural gas could grow substantially 
in the coming years. NGVAmerica estimates that current fuel consumption 
of natural gas for vehicles could grow to one and a quarter trillion 
cubic feet or the equivalent of about 10 billion gallons within 15 
years. At the level of fuel prices currently projected, that would 
lower fuel costs to businesses by up to $20 billion a year and reduced 
payments for imported petroleum by more than $40 billion per year.
    NGVAmerica believes that there could be a substantial market for 
natural gas vehicles in all applications. However, the most immediate 
opportunity for displacing petroleum and increasing the use of natural 
gas as transportation fuel lies with light-, medium-and heavy-duty 
fleets--especially trucks, buses and other heavier vehicles. As noted 
above, America currently has a large selection of medium and heavy duty 
vehicles available here in the U.S. This is significant since trucks 
are the economic lifeblood of America. Everything we buy moves by 
truck. Reducing the cost of trucking reduces the cost of everything, 
benefiting businesses and consumers alike.
                      enacting meaningful policies
    Currently, NGVs cost more to buy than comparable gasoline or diesel 
powered vehicles. But they cost less to operate. The more miles a 
vehicle is driven each year, the faster the payback and the more likely 
the owners can justify the investment in NGVs. For some of the most 
fuel intensive fleets and vehicle applications, NGVs already are 
economic. However, to expand the use of NGVs and maximize NGVs' oil 
displacement potential, the first-cost or incremental cost of NGVs 
needs to be brought down rapidly. And this will only happen with large 
scale production and increased economies of scale. H.R. 1380, the New 
Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 
2011 provides the means to accelerate demand for NGVs and to help 
manufacturers achieve economies of scale and build-out much needed 
fueling infrastructure. HR 1380 would provide federal incentives for 
the production, purchase and use of natural gas vehicles and the 
expansion of the NGV fueling infrastructure.
    It is important to note that there is no free market when it comes 
to the leading transportation fuel, i.e., petroleum. It is 
significantly distorted by the cartel power of OPEC. All other 
transportation fuels and technologies are at an extra-market economic 
disadvantage. Nothing would please OPEC more than for Congress to 
assume that, left on its own, the marketplace would solve the problem 
of our addiction to foreign oil. Federal intervention to offset the 
policies of OPEC is essential.
    That is why NGVAmerica strongly supports H.R. 1380, and hopes 
similar legislation will be introduced in the Senate soon. There is 
broad bipartisan support for this bill. Although only introduced on 
April 6th, H.R. 1380 already has 186 bipartisan co-sponsors. As 
proposed, these incentives would be available for only a five year 
period. During that time and long thereafter, it would make NGVs the 
economic choice for many more fleets. This legislation would accelerate 
NGV use, which, in turn, would bring more NGV manufacturers into the 
market, increase competition and drive down the first-cost premium of 
NGVs.
    NGVs are a here-and-now technology. This fact is highlighted by the 
investments and commitments by fleets already taking place in the 
market place in the U.S. Highlighted here are some of the growing 
examples of how natural gas is helping meet the needs of fleets:

   AT&T operates more than 2,400 vehicles powered by natural 
        gas and has a goal of expanding the fleet to 8,000 by 2013;
   UPS has more than 1,100 natural gas powered vehicles, and is 
        expanding its fleet of vehicles powered by liquefied natural 
        gas. The company has said it would convert a much larger share 
        of its trucking fleet to LNG if the fueling infrastructure was 
        in place;
   The Los Angeles County Metropolitan Transportation Authority 
        earlier this year held a retirement ceremony for its last 
        diesel bus, and 2,221 of its buses are now running on 
        compressed natural gas; a number of the other smaller transit 
        agencies around the country have successfully switched their 
        entire fleet over to using natural gas. In Washington, DC, the 
        local transit authority operates nearly 500 natural gas transit 
        buses, and several feeder systems (outlying counties) also 
        operate natural gas buses.
   Ryder System Inc. is purchasing 202 heavy-duty natural gas 
        vehicles that will be used in its Southern California network;
   Waste Management, the largest refuse company in the country, 
        has more than 900 vehicles running on either compressed natural 
        gas or liquefied natural gas;
   The Dallas Area Rapid Transit system recently announced it 
        will purchases 452 natural gas powered transit buses--the 
        largest single order of natural gas transit buses currently in 
        place.

    As these fleet examples highlight, NGVs do not need technical 
breakthroughs to capitalize on the potential of natural gas as a 
transportation fuel. What is needed most is to grow demand for these 
vehicles faster. Federal leadership in leading the way and providing 
incentives will make this happen. By providing critical incentives, the 
NAT GAS Act would help jumpstart that growth. In addition, federal 
agencies can help by implementing rules that are favorable to the 
increased use of natural gas and by leading by example through the 
purchase of natural gas vehicles for their fleets. And while NGVs do 
not need technological breakthroughs to be commercial, NGVs can be 
further improved by, for example, integrating hybridization technology 
with natural gas power. Therefore, it is important that the federal 
government support research, development and demonstration programs, 
like the ones proposed in S. 734, because, as that bill notes, 
manufacturers have ``increasing limited resources'' for such 
activities. Federal assistance and public private partnerships can 
ensure that natural gas vehicles continue to improve over time, 
delivering increased performance and delivering increased fuel 
efficiency.
                               conclusion
    The U.S. has an unprecedented opportunity to displace petroleum 
with domestic natural gas. Now is the time to act to encourage the 
increased use of natural gas vehicles. We have an abundant supply of 
readily available, low-cost domestic natural gas. The fact that this 
fuel is domestic, low-cost, and clean means that America can achieve 
multiple national goals (energy security, clean air, economic security) 
all the while helping fleets and businesses to lower their costs, thus 
improving economic prosperity. Today, nearly every major truck or bus 
manufacturer in the U.S. is now offering factory-built NGV models. 
Federal policies and incentives, however, are needed to aid in the 
successful market penetration of these vehicles and to help accelerate 
their use so that the benefits of increased natural gas use can be 
realized.
                                 ______
                                 
                                           The PEW,
                                      Clean Energy Program,
                                      Washington, DC, May 18, 2011.
Hon. Honorable Jeff Bingaman,
Chairman, U.S. Senate, Committee on Energy and Natural Resources, 
        Dirksen Building, Room 304, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, U.S. Senate Committee on Energy and Natural Resources, 
        Dirksen Building, Room 304, Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski:
    In light of the Committee's May 19 hearing on policies to reduce 
oil consumption, the Clean Energy Program of the Pew Charitable Trusts 
would like to urge prompt consideration of legislation that would 
accelerate the deployment of electric drive vehicles in the United 
States. Such legislation includes Senator Stabenow's Advanced Vehicle 
Technology Act of 2011 (S. 734) and Senator Merkley and Alexander's 
Promoting Electric Vehicles Act of 2011 (S. 948), each of which would 
make great strides in weaning our nation from oil and developing clean 
and home-grown transportation alternatives.
    National policies that promote vehicle electrification are critical 
to reducing America's dependence on foreign oil, reinvigorating U.S. 
manufacturing and minimizing environmental impacts while enhancing the 
nation's competitiveness in the global clean energy economy. As the 
attached Detroit News article illustrates, rapid expansion of the 
Chinese electric car industry is of potential concern to U.S. 
executives and officials. If the United States committed to deploying 
10 million charging stations and making 25 percent of new vehicles 
electric by 2020, it would yield benefits that could help strengthen 
economic, national and environmental security far into the 21st 
century.
    In 2009, this country imported 11.7 million barrels of crude oil 
and refined petroleum products per day. At $100 a barrel, this amounts 
to sending foreign countries--some of them hostile to U.S. interests--
more than $1.1 billion to meet our daily energy needs. To ensure 
stability in the world oil markets, American troops are deployed on 
oil-security missions, costing U.S. taxpayers $67 billion to $83 
billion a year, according to the Rand Corporation. Furthermore, 
increasing domestic crude oil production--by 11 percent in the Obama 
administration--has not prevented gas prices from rising at the pump.
    Meanwhile, increasing demand for electric vehicles has resulted in 
new battery and component manufacturing facilities across the United 
States. The Department of Energy estimates that the United States will 
have the capacity to produce 40 percent of the world's advanced vehicle 
batteries by 2015, and other experts predict that battery manufacturing 
could grow to $100 billion a year by 2030. Investments in charging 
infrastructure offer significant economic opportunities as well. The 
U.S. market for supply and installation of residential charging points 
alone is expected to reach almost $1 billion by 2020.
    Electric vehicles emit far fewer greenhouse gases than conventional 
vehicles. Although power plants use various types of fuel to generate 
electricity, even plug-in hybrid electric vehicles powered by older 
coal plants emit approximately 25 percent fewer greenhouse gases 
compared with conventional vehicles. With transportation accounting for 
nearly one-third of all U.S. greenhouse gas emissions, broad adoption 
of electric vehicles will dramatically lower this sector's greenhouse 
pollution.
    To fully realize the benefits from large-scale adoption of electric 
vehicles, national policies are needed to help stimulate demand and 
ensure that electric vehicles do not encounter technical or logistical 
obstacles. The Advanced Vehicle Technology Act would call for a broad 
research and development program on advanced vehicle materials, 
technologies, and processes that can substantially reduce or eliminate 
petroleum use and emissions by passenger and commercial vehicles. The 
Promoting Electric Vehicles Act of 2011 would create short-term 
deployment communities across the country to help spur market 
penetration of electric vehicles and to serve as laboratories for 
modeling nationwide electrification. These bills embrace positive and 
significant steps towards relieving our oil dependence, and we urge 
their passage in Committee and in the full Senate.
    Thank you for your consideration. If you have any questions, please 
feel free to contact Shannon Heyck-Williams in our government relations 
department at (202) 887-8801, or [email protected].
            Sincerely,
                                           Phyllis Cuttino,
                                                          Director.
                                 ______
                                 
                                              Better Place,
                                                      May 20, 2011.
Hon. Al Franken,
309 Hart Senate Office Building, Washington, DC.
    Dear Senator Franken:
    We noted with interest your question regarding various paradigms of 
electric vehicle (EV) infrastructure deployment and charging services 
at the Senate Energy Committee's May 19th hearing on legislation to 
promote transportation electrification technologies. In particular, we 
were pleased to learn of your interest in the battery switch model 
currently being deployed by Better Place in country-wide networks for 
Israel, Denmark, and Australia, as well as commercial demonstrations in 
China and the US. The mission of Better Place is to eliminate our 
dependence on oil and the way we do that is by making cars that don't 
use oil less expensive and more convenient than ones that do.
    With that said, please allow us to clarify some things that were 
not made clear at the hearing.
    The battery-separation model pioneered by Better Place is designed 
to eliminate three major barriers to mass adoption of electric cars--
cost, convenience and range. With our service, the consumer buys the 
car--but not the battery. As a result, electric cars on the Better 
Place network are NOT premium cars--they are priced similarly to their 
gasoline equivalents. The first car on the Better Place network will be 
the Renault Fluence ZE, a five-passenger, high performance sedan that 
consumers in Israel and Denmark will be able to purchase later this 
year together with an eMobility subscription to Better Place at roughly 
the same price they would pay to own a comparable gas car.
    To address convenience and range, Better Place deploys 
infrastructure in two parts. First, charge points enable the car to be 
plugged and charged at home, at work, and at strategic public 
locations. Second, Better Place deploys a network of battery switch 
stations, which switch a depleted battery out for a full one in about 
two minutes--faster than it takes to fill a tank of gas. Better Place 
demonstrated this ``instant charge'' technology in a Tokyo taxi 
commercial scale pilot in 2010, in which the automated battery switch 
process averaged 59.1 seconds.
    The net result of the Better Place model is a guaranteed mobility 
service that can move electric vehicle adoption from a niche product to 
a mass market solution, giving consumers a vehicle ownership experience 
that is not subject to the volatility of prices at the pump. That, we 
believe, is a market-based solution that tips the market and breaks 
dependence on oil for cars in a decade or less.
    The issues raised at the hearing appeared based on perceived 
complexity and cost of battery switching. The solution is not free, but 
it is far more economical, even in the US, than sending billions of 
dollars overseas for foreign oil. Moreover, the global economics of 
electrification and the Better Place solution is sound, since there are 
two driving market forces at work today, rising oil prices and the 
declining cost of batteries. That is why Better Place has raised $700M 
from private investors, including some of the world's largest banks 
such as HSBC and Morgan Stanley.
    Our commercial networks in Israel and Denmark are slated to open at 
the end of this year, and our network in Australia will get underway in 
2012. At the same time, the Chinese government is taking aggressive 
action to become the capital of the electric car industry, and 
government and industry there are increasingly embracing the battery 
switch model. Recently, we announced an agreement with China Southern 
Grid, one of the world's largest utilities, to collaborate on EV 
charging and battery switching technology, starting with the 
metropolitan area of Guangzhou, the third largest city in China.
    With our first global headquarters in Silicon Valley, we are 
actively engaged in leading EV markets in North America (California, 
Hawaii, Toronto) to pilot and scale EV charging networks. You may want 
to speak with your colleague from Hawaii, Senator Daniel Inouye, who 
was present last month as we inaugurated a demonstration charging 
network in his state. Next year Better Place plans to launch a public-
private partnership program in the San Francisco Bay Area that will 
deploy a regional corridor of battery switch stations to serve a fleet 
of sixty zero emission taxicabs.
    Witnesses at the ENR hearing appeared to discount the applicability 
of the model beyond small countries; however, the fact of the matter is 
that there is no way to offer unlimited drive in an all-electric car 
along vast distances without switchable batteries. We have had the 
pleasure of hosting several of your Senate colleagues at our Global 
Visitor Center in Israel, as well as former Governor Tim Pawlenty, and 
we invite you to do the same.
    By visiting our home page at http://www.betterplace.com you can see 
a short video explaining our solution and showing our battery-switch 
system, called ``Drive * Switch * Go.''
    Once again, thank you for your interest in EVs in general and the 
battery switch model in particular. We hope these clarifications are 
useful to you, and we would welcome the opportunity to answer any 
questions that you or your staff may have about Better Place.
            Sincerely,
                                              Mike Granoff,
                                 Head of Oil Independence Policies.
                                 ______
                                 
    Statement of Kyle Pistor, Vice President, Government Relations, 
             National Electrical Manufacturers Association
    Chairman Bingaman and Ranking Member Murkowski and Members of the 
Committee, the National Electrical Manufacturers Association thanks you 
for allowing us the opportunity to provide testimony as the Committee 
considers S. 948, the Promoting Electric Vehicles Act of 2011, 
introduced by Senators Merkley and Alexander.
    NEMA is the trade association of choice for the electrical 
manufacturing industry. Founded in 1926 and headquartered near 
Washington, D.C., its approximately 450 member companies manufacture 
products used in the generation, transmission and distribution, 
control, and end-use of electricity. My comments are submitted on 
behalf of the member companies of the NEMA Electric Vehicle Supply 
Equipment and Systems (EVSES) Section which manufacture products or 
assemblies installed for the purpose of safely delivering and managing 
electrical energy between an electric vehicle and an electrical source.
    NEMA is committed to the integration of EVs into our transportation 
economy. We applaud the leadership demonstrated by Senator Merkley and 
Senator Alexander in crafting a bill that takes a major step forward in 
preparing our infrastructure for the deployment of electric vehicles.
    Rapid deployment of electric vehicles requires robust market 
penetration of charging infrastructure--at home, at the office, and on 
the road, from coast to coast.
    EVSES put the consumer in control of their recharging needs. With 
various payment methods, voluntary interaction with the electric grid, 
and the ability to charge the vehicle when power is at its cheapest, 
EVSES makes owning and operating an electric vehicle cost-effective, 
safe, and convenient.
    NEMA supports many provisions in S. 948. Investment in deployment 
programs will help to identify the challenges facing EV adoption and 
best practices for overcoming these challenges. When shared with other 
communities across the country, our national approach to incorporation 
of EV and EVSE will be much more informed. NEMA also supports programs 
designed to assist both the federal government and private sector in 
upgrading their fleets to electric vehicles. Fleets often lead the way 
in adopting new technologies and in this case, have the most to gain in 
terms of energy savings. Reducing barriers to adoption is important.
    We recognize that in addition to this Committee, other committees 
of jurisdiction will have an important role to play a successful 
legislative strategy, and we hope this Committee will work closely with 
them. NEMA supports a multi-year extension and expansion of the Section 
30C Alternative Fuel Vehicle Refueling Property tax credit, currently 
set to expire in 2011.
    Because safety is paramount, NEMA believes this credit should 
expressly allow all necessary electrical equipment, infrastructure, and 
installation costs that are necessary to deliver power to charge the 
electric vehicle. Further, NEMA is committed to the proposition that 
installation of EVSES and related equipment be done in compliance with 
the National Electrical Code.
    Because the rollout of EVs requires a robust infrastructure 
strategy, we are pleased to offer our support of these provisions in 
the Promoting Electric Vehicles Act.
    Thank you for the opportunity to provide this testimony.
                                 ______
                                 
 Statement of Shane Karr, Vice President, Federal Government Affairs, 
                the Alliance of Automobile Manufacturers
    The Alliance of Automobile Manufacturers (Alliance) appreciates the 
opportunity to express our views on S. 734, the Advanced Vehicle 
Technology Act of 2011, and S. 948, the Promoting Electric Vehicles Act 
of 2011. The Alliance is a trade association of twelve car and light 
truck manufacturers including BMW Group, Chrysler Group LLC, Ford Motor 
Company, General Motors Company, Jaguar Land Rover, Mazda, Mercedes-
Benz, Mitsubishi Motors, Porsche Cars, Toyota Motors, Volkswagen Group 
and Volvo Cars. Auto manufacturing is a cornerstone of the U.S. 
economy, supporting 8 million private-sector jobs, $500 billion in 
annual compensation, and $70 billion in personal income tax revenues. 
Together, Alliance members account for nearly 80 percent of annual 
motor vehicle sales in the U.S.
    We commend the sponsors of S.734 and S.948 for their leadership in 
promoting the successful deployment of advanced technology vehicles. 
Automakers are fully engaged in development of vehicles and advanced 
technologies to help reduce gasoline consumption and emissions, 
including greenhouse gas (GHG) emissions. There is no silver bullet or 
single technology that will solve this nation's energy and 
environmental challenges. Meeting the diverse and complex requirements 
of the transportation sector will only be possible through a portfolio 
of advanced powertrain technologies. We'd like to take this opportunity 
to provide general feedback on both S.734 and S.948.
            s. 734: advanced vehicle technology act of 2011
    Even in the face of the worst economic circumstances in decades, 
automobile manufacturers have worked hard to maintain our research and 
development efforts on a broad portfolio of advanced vehicle 
technologies. We are pleased that S. 734 recognizes the critical 
importance of ongoing research to develop and commercialize next 
generation technologies. As you know, the Department of Energy's 
Vehicle Technologies Program, enables the Department to partner with 
automobile and truck makers, suppliers, academia and the national labs 
to carry out a broad array of advanced technology vehicle and component 
part research and development programs. S. 734 reauthorizes and updates 
the program, emphasizing the need and opportunity for automakers and 
suppliers to partner with DOE to develop and implement technologies for 
more fuel efficient vehicles. The research, development, deployment, 
and commercial applications projects promoted by this legislation will 
help accelerate the production of the next generation of vehicle 
technologies, which in turn will help reduce our nation's dependence of 
foreign oil and cut greenhouse gas emissions. The Alliance appreciates 
Senator Stabenow's efforts to promote jobs in the auto sector and speed 
the production of advanced vehicle technologies.
            s. 948: promoting electric vehicles act of 2011
    We agree with the vision of the bill's authors that strong federal 
involvement is needed to help make communities across the nation ready 
for greater deployment of electric drive vehicles. Achieving widespread 
acceptance of these technologies will require aligning regulatory 
efforts; developing a supporting infrastructure; providing research and 
development; providing incentives for consumer adoption; and removing 
other market barriers. S. 948 includes provisions that contribute to 
progress on many of these fronts.
    As an industry, however, we have concerns about an approach that 
would limit investments to a handful of communities, particularly at 
such an early stage of electric vehicle deployment. Attempts to 
prejudge the market bring tremendous risks, and the problem is 
compounded by making just a few large bets, particularly so early in 
the process. Using the grant program to ``seed'' activities in as broad 
a number of communities as possible is a more appropriate and equitable 
solution for the American public--avoiding limitations on automakers' 
potential customer base for these vehicles and maximizing the chances 
of success for public investments overall--even if this means that any 
individual deployment community would receive less total funding.
    In addition, electric drive vehicles need to be developed in the 
broadest possible ways--with hybrid, battery electric, plug-in hybrid, 
and fuel cell vehicles offering unique benefits in different vehicle 
segments. For this reason, we believe this legislation should allow 
manufacturers, fuel providers, and communities the flexibility to 
invest in multiple electric drive pathways, including fuel cell 
electric vehicle and related hydrogen infrastructure, which are not 
currently included in S. 948.
    Finally, for any technology to be successful it must be consumer 
driven, and a national program that helps the consumer with the most 
pressing need, residential charging, offers the best opportunity for 
sustainable growth and deployment of electric drive vehicles. Business 
models must be developed that will allow the private sector to deploy 
charging infrastructure in the full range of residential situations 
including high rise, garden apartments, town houses. A range of 
innovative solutions to address the challenges facing both residential 
and workplace charging should be funded and we believe the most 
efficient solution is to build on the Department of Energy's existing 
programs.
    Automakers are committed to advancing electric mobility. Our member 
companies have already announced plans to launch plug-in hybrid, 
extended range hybrid, battery electric, and fuel-cell vehicles in the 
coming model years, and are hard at work developing the next generation 
of electric drive vehicles that will follow. We look forward to working 
with the Committee, Senator Merkley, and Senator Alexander to address 
the infrastructure and consumer acceptance issues that will be so 
important to the ultimate success of these vehicles, and their 
contribution to our national goals.
                               conclusion
    S. 734 and S. 948 highlight the role advanced technology 
powertrains will play in enhancing energy security and reducing GHG 
emissions. Automakers are investing and will continue to invest in 
these technologies. Their success will depend on consumer acceptance, 
affordability, and an infrastructure to support these vehicles.
    We also want to remind and encourage the Members of the Committee 
to support an approach to vehicle fuel economy requirements that 
results in a single, national fuel economy standard--one that 
recognizes and balances the challenges inherent in bringing these 
technologies into the marketplace, understanding and effectively 
accounting for the technological feasibility, safety, and economic 
practicability, including impact on U.S. jobs. Automakers are currently 
working constructively with the Environmental Protection Agency, the 
National Highway Traffic Safety Administration and the California Air 
Resources Board on a single, national program for model years (MY) 
2017-2025. This is a difficult process involving significant 
assumptions and uncertainties. It is imperative that the necessary 
analyses and studies be completed and fully evaluated prior to these 
standards being set. This will help ensure that a single, national 
program for fuel economy and GHG emission standards exists and that it 
continues to provide clarity and certainty, without pricing consumers 
out of the market or preventing them from choosing from a broad range 
of vehicles and technologies that can meet their diverse needs.
    The Alliance looks forward to working with the sponsors of these 
bills and the members of this Committee. Thank you for considering our 
views.
                                 ______
                                 
           Statement of the National Propane Gas Association
    In the past several Congresses, numerous pieces of legislation were 
introduced that would have incentivized the development, production and 
use of various alternative fuel vehicles, notably vehicles that operate 
on compressed natural gas (CNG), biofuels, ethanol, hydrogen and 
electricity. Unfortunately, in many cases this legislation neglected to 
also support propane autogas as a vehicle fuel and propane autogas 
vehicle alternatives. This makes no sense, considering that propane 
autogas is also defined in law as a clean alternative fuel.
    The National Propane Gas Association is concerned that legislation 
such as the Advanced Vehicle Technology Act of 2011, while well-
intentioned, falls short because it would fund Department of Energy 
(DOE) research and development and commercial application projects for 
hybrid, electric, hydrogen, and compressed natural gas vehicles and 
related technologies, but leaves out equally useful and relevant 
propane autogas vehicle alternatives. Passing legislation that 
incentivizes only one, or a select few, fuels places the Congress in 
the position of ``picking winners'' among alternative transportation 
fuels. Alternative fuel choices should be made by the marketplace, by 
the companies, fleets and consumers across the country who are tasked 
with making individual decisions about which alternative fuels and 
vehicles suit their needs best. The government should not intercede in 
this process.
    At the end of the day, the propane industry is seeking parity in 
government treatment of alternative fuels. In fact, we believe that, 
given a level playing field, propane autogas and autogas vehicles can 
play a lead role in addressing many of the stated objectives outlined 
in the Advanced Vehicle Technology Act of 2011, most notably improving 
United States-based vehicle technologies that reduce our dependence on 
petroleum based fuel, improving emissions, and improving consumer 
choice of vehicle technologies. Propane autogas has everything going 
for it except inclusion in this legislation:

   Propane autogas is a clean American fuel.--98.7% of U.S. 
        propane supply is produced domestically, the balance coming 
        largely from Canadian imports. 66% of propane supply is derived 
        from natural gas production. This compares very favorably to 
        the current U.S. transportation sector which is 95% reliant on 
        petroleum, 60% of which comes from overseas. Even better news 
        is that U.S. propane production from natural gas is expected to 
        increase rapidly between 2010 and 2020 (See Appendix).
   Propane autogas vehicles have a positive emissions reduction 
        profile.--Propane autogas vehicles are 19% lower in CO2 
        emissions than gasoline powered vehicles. Propane autogas 
        vehicles also produce significantly lower particulate matter, 
        carbon monoxide, nitrogen oxide and hydrocarbon emissions than 
        gasoline or diesel vehicles.
   Propane supply is abundant.--In 2010 the North American 
        market (U.S and Canada) was a net exporter of propane. This 
        trend is likely to continue as shale gas, and natural gas 
        liquids production in conjunction with shale gas, increase.
   Propane autogas vehicles are here now.--Over the past 
        several years, more and mcommercial, state and local government 
        fleets have been transitioning to propane autogas as a cost-
        effective, environmentally sensitive domestic fuel.

    Propane autogas is easily the most accessible alternative 
transportation fuel currently available in the marketplace and is the 
most popular alternative transportation fuel worldwide. Recognizing 
this market, Ford and General Motors are now producing propane autogas 
vehicle platforms and many smaller companies are now converting 
existing vehicles to run on propane autogas. With gasoline and diesel 
prices rising fast and our country's continued reliance on foreign oil 
it would be a mistake for the government to limit consumer choice in 
the alternative fuel vehicle marketplace by promoting one or more 
alternative fuels to the detriment of others.
    In sum, propane autogas is a clean, domestic and abundant fuel that 
is already displacing imported petroleum products in the American 
marketplace. The propane industry conceptually supports the goals of 
the Advanced Vehicle Technology Act of 2011. However, we strongly urge 
the Committee, when considering this legislation, to abide by the 
principle of fuel neutrality by including an equitable ``all of the 
above'' approach that includes propane autogas opportunities to federal 
alternative fuel vehicle programs.
    As an industry, we the look forward to working with the Energy and 
Natural Resources Committee, as well as our partners in the broader 
alternative fuel industry to craft smart equitable alternative fuel 
transportation solutions for the American public.
 appendix.--npga statement on the advanced vehicle technology act (s. 
                                  734)
           Propane is a Domestically Produced Energy Source.
         Domestic Propane Supply is Expected to Grow Over Time
Sources of U.S. Odorized Propane Supply
    In 2010:

   Domestic refinery and natural gas plant production of 
        propane accounted for 98.7 percent of total U.S. consumer grade 
        (odorized) propane supply, with net propane imports accounting 
        for the remaining 1.3 percent. Most of the net imports came 
        from Canada, with the remainder imported via LPG tanker ship 
        from a variety of international sources.\1\ Hence, more than 
        99% percent of U.S. odorized propane supply was produced in 
        North America.
---------------------------------------------------------------------------
    \1\ In both 2009 and 2010, excluding Canadian imports, the U.S. was 
a net propane exporter to the rest of the world
---------------------------------------------------------------------------
   From a resource perspective, about 78.5 percent of the 
        odorized propane consumed in the U.S. was sourced from 
        hydrocarbon resources (crude oil and natural gas liquids) 
        produced in the U.S. An additional 5.5 percent was sourced from 
        hydrocarbon resources (crude oil and propane from natural gas 
        liquids) produced in Canada. Hence, about 84 percent of the 
        odorized propane consumed in the U.S. in 2010 was produced from 
        North American hydrocarbon resources.

    --This percentage has been increasing for the last several years. 
            In 2007, about 75 percent of odorized propane consumed in 
            the U.S. was produced from North American hydrocarbon 
            resources.

   66 percent of the odorized propane consumed in the U.S. was 
        produced as a co-product of natural gas production, and 
        separated from the natural gas stream at gas processing 
        fractionation plants, along with ethane, butane, and other LPG 
        products. Gas processing plants separate the natural gas 
        liquids--ethane, propane, and butane--from wet gas that comes 
        from producing gas and oil wells.
   32 percent of the odorized propane consumed in the U.S. was 
        produced by U.S. crude oil refineries alongside the production 
        of gasoline and distillate fuel oil.\2\
---------------------------------------------------------------------------
    \2\ Refineries produce both propane (60%) and propylene (40%). 
Propane and propylene are both widely used in the chemical feedstock 
market. Only a very small amount of propylene is sold into the consumer 
market for niche uses such as welding; the vast majority of propylene 
is used as chemical feedstock. Natural gas plants produce almost 
entirely propane, with very little propylene.

    --We estimate that 13 percent of the odorized propane consumed in 
            the U.S was produced in U.S. refineries from oil produced 
            in the U.S, about 5 percent of the odorized propane 
            consumed in the U.S. was produced in U.S. refineries from 
            crude oil imported from Canada, and one percent from crude 
            oil imported from Mexico.
                         propane supply outlook
    The propane supply outlook is very positive. The percentage of 
odorized propane produced from North American hydrocarbons has been 
increasing for the last few years, from 75 percent in 2007 to 84 
percent in 2010. This trend is expected to continue as recent changes 
in domestic natural gas supply outlook are expected to increase the 
volume of propane produced from natural gas processing facilities.

   The propane supply outlook is primarily dependent on North 
        American natural gas and crude oil production trends. More than 
        84 percent of the odorized propane consumed in the U.S. is 
        produced from natural gas and crude oil produced in North 
        America.
   The U.S. EIA is projecting domestic crude oil production to 
        increase steadily over the next 10 years, increasing by more 
        than 10 percent between 2010 and 2020.
   ICF and most other industry experts are projecting U.S. 
        natural gas production to increase substantially in the next 10 
        years. The U.S. EIA is projecting total dry gas production to 
        increase by 10 percent between 2010 and 2020, with shale gas 
        production increasing by 71 percent. ICF is projecting higher 
        growth with U.S. natural gas production to increase by about 30 
        percent between 2010 and 2020. The growth in natural gas 
        production is expected to result in significant growth in 
        liquids production.

    --U.S. reserves of natural gas liquids have been increasing 
            steadily since 2003, with a total increase of about 37 
            percent from 2003 through 2009. Growth in 2009 alone 
            exceeded nine percent.

   Most of the growth in natural gas production will come from 
        the new shale gas resource base. Much of the shale gas resource 
        base is ``wet'' gas with a high proportion of natural gas 
        liquids.

    --ICF estimates that shale gas resources that would be economically 
            producible at $5.00 per Mcf (slightly above today's natural 
            gas prices) exceed 800 TCF, and include more than 25 
            billion barrels of natural gas liquids. These new resources 
            are roughly equivalent to the total level of existing 
            proven reserves for U.S. natural gas liquids production, 
            and are expected to result in steady growth in natural gas 
            liquids production as these resources are developed.

   On a $/Btu basis, the value of natural gas liquids currently 
        is well above the value of the natural gas itself. Given recent 
        changes in natural gas supply outlook, this disparity is 
        expected to continue.

    --As a result, the economics of natural gas exploration and 
            development have shifted in favor of ``wet'' gas with a 
            higher percentage of liquids--and a higher percentage of 
            propane.

   Production of propane from natural gas is expected to 
        increase rapidly between 2010 and 2020, leading to a 
        substantial increase in North American propane supplies 
        exported to international markets if domestic demand does not 
        increase.
   impact of potential new consumer propane demand on propane markets
   Since 2004, domestic production of propane and propylene has 
        been relatively stable, while total demand has been falling.

    --According to API, consumption of consumer grade propane has 
            fallen by about 23 percent from peak demand levels in 2000.

    --Demand for propane/propylene used as a petrochemical feedstock 
            has varied from year-to-year around the long term average.

   Since 2004, propane/propylene imports have been declining, 
        while propane/propylene exports have been increasing.

    --In 2009 and 2010, excluding Canadian imports, the U.S. was a net 
            exporter of propane/propylene.

   These trends are expected to continue in the future.

    --Continuing improvements in end-use propane efficiency due to 
            higher appliance energy standards and improved building 
            efficiency codes are likely to offset most if not all 
            growth in consumer propane demand in the next few years.
    --Propane production from natural gas is expected to grow steadily 
            as natural gas production increases, providing additional 
            propane supply for both the petrochemical and consumer 
            propane markets.

   The existing propane supply and distribution infrastructure 
        was designed for a significantly larger market than exists 
        today, and remains generally sufficient to support significant 
        growth in propane demand.

    --Regional changes in demand and supply patterns are likely to 
            require new infrastructure investment regardless of 
            potential growth in demand.

   Despite the decline in U.S. demand, propane/propylene prices 
        have remained more closely linked to the international oil 
        price and propane prices than to natural gas prices. This price 
        relationship is likely to continue regardless of foreseeable 
        increases or decreases in domestic demand for propane/
        propylene. However, as propane supply increases, propane prices 
        are likely to decline somewhat relative to gasoline and diesel 
        fuel prices.

                                    

      
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