Obama unveils plan to expand alternative fuels infrastructure

By Kris Bevill | March 08, 2012

President Barack Obama unveiled new initiatives aimed at increasing the affordability of alternative fuel vehicles and the number of alternative fueling stations throughout the country during remarks delivered on March 7 at the Daimler Trucks North America Mt. Holly Truck Manufacturing Plant in Mt. Holly, N.C. Noting the strain of rising gas prices on consumers and pointing out that the U.S. consumes 20 percent of the world’s oil but possesses just 2 percent of the world’s oil reserves, Obama again made the case for his all-encompassing approach to energy. “If we are going to control our energy future, then we’ve got to have an all-of-the-above strategy,” he said. “We’ve got to develop every source of American energy - not just oil and gas, but wind power and solar power, nuclear power, biofuels. That’s the only solution to the challenge.”

Included in Obama’s set of proposals is a $1 billion National Community Deployment Challenge which would provide incentives for communities to install infrastructure necessary to support alternative fuel vehicles. The program would be “fuel neutral,” allowing communities to choose which alternative infrastructure is best suited for that area. The program would also provide funds to support up to five regional liquefied natural gas corridors for alternative fuel trucks. The president is also proposing to broaden the scope of a current consumer tax credit for electric vehicles—increasing the credit from $7,500 to $10,000 and expanding eligibility to include additional advanced vehicle technologies.

The ethanol industry, aided by funding support from the USDA, has been working for some time to expand the availability of its fuel through the installment of E85 and blender pumps and industry representatives commended the president for his efforts to increase the availability of alternative fuels. “The president’s plan outlined today is the kind of initiative needed to expand fueling options available to American consumers,” Bob Dinneen, president and CEO of the Renewable Fuels Association, said in a March 7 statement.  “We look forward to working with the Obama administration to implement this initiative, increase the proliferation of FFVs [flex-fuel vehicles], and build upon the work of Agriculture Secretary Tom Vilsack and the USDA to install 10,000 blender pumps across the nation.”

Tom Buis, CEO of Growth Energy, said that while his group supports the “all of the above” strategy and noted that there are many promising alternative fuels being developed, ethanol is currently the most affordable, widely available alternative to oil. “With ethanol trading at a buck a gallon less than gasoline, it only makes sense to speed more biofuels like ethanol to the marketplace to help reduce prices at the pump,” he said in a statement. “Ethanol is the only commercially viable alternative to foreign oil that we have, and we ought to be embracing policies that give consumers greater access, not less.”

In his remarks, Obama also highlighted the role of increasing fuel efficiency standards in reducing demand for transportation fuel and lessening the cost of fuel for consumers. With the support of manufacturers who produce the overwhelming majority of vehicles sold in the U.S., Obama unveiled a plan last summer which would increase Corporate Average Fuel Economy standards to 54.5 miles per gallon by 2025 for all cars, an improvement which Obama said will cut vehicle owners’ fuel costs by $8,000 per year. But in order for vehicle manufacturers to meet those stringent requirements, most engines will require higher octane fuels, according to a study recently released by auto engineering firm Ricardo Inc. The RFA, which funded the Ricardo research, stressed the critical role ethanol can play in meeting future fuel efficiency standards, noting that its high octane rating can provide boost fuel efficient engines need. “By necessity, America’s vehicle fleet in the future will feature a wide range of technologies and must include an increased reliance on flex-fuel engine technologies,” Dinneen said. “With demand for liquid, gasoline-type transportation fuels remaining high for the foreseeable future, high octane, high performing renewable fuels like ethanol can provide a clear path forward to meeting America’s desire to reduce oil consumption through improved efficiency while doing so in a cost-effective way for consumers.”