Thursday, March 15, 2007

Auto Companies Views On Climate Change & Energy Security

Mar 14: The House Energy and Commerce Committee, Subcommittee on Energy and Air Quality, Chaired by Rick Boucher (D-VA), held a hearing on Climate Change and Energy Security: Perspectives from the Automobile Industry.

In an opening statement Chairman Boucher indicated, "Our goal is to produce this year legislation that has economy -wide application. Each sector of the economy will make a greenhouse gas control contribution. Applying this broad measure to the transportation sector poses special challenges. Unlike some other industries, auto manufacturers are subject to a pre-existing regulatory program, CAFÉ, which is designed to promote fuel economy, but which also has a limiting effect on greenhouse gas emissions, notably the emission of carbon dioxide. Much thought must be devoted to an effective means of integrating the existing CAFÉ regulatory program into the new regulatory structure which will specifically target greenhouse gases."

Boucher also provided insight into the likely scheduling of climate change legislation, saying, "I also want to say a word this afternoon about our schedule for drafting a greenhouse gas control program. Earlier this year, the Speaker assured me that we would have the time the committee needs to produce a carefully constructed bill. That early assurance was reconfirmed this week by the Speaker's office's statement that climate change legislation will not be part of the July floor agenda. It is my intention to continue our hearing process through the early spring and then begin the bill drafting process with the goal of having the comprehensive climate change bill on the House floor late this year. House passage this year would provide ample time for a conference."

Witnesses testifying at the hearing included: Ron Gettelfinger, President, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America; Rick Wagoner, Chairman and Chief Executive OfficerGeneral Motors Corporation; Jim Press, President and Chief Operating Officer, Toyota Motor North America; Alan R. Mulally, President and Chief Executive Officer, Ford Motor Company; and Thomas W. LaSorda, Chief Executive Officer and President, Chrysler Group of DaimlerChrysler.

As an example of testimony, Rick Wagoner GM testified that the subjects of climate change and energy security are "critical issues that are at the forefront of GM’s business planning." Wagoner said, "Since 2001, a series of geopolitical, natural, and economic realities have combined to drive home the fact that we face an increasingly uncertain energy future on a global basis. For the global auto industry, this means that we must as a business necessity develop alternative sources of propulsion, based on diverse sources of energy, in order to meet the world’s growing demand for our products... We are fully prepared to discuss all of these issues, including carbon constraints on the U.S. economy. However, before we discuss any alternatives, we believe we must first begin with a frank evaluation of the Corporate Average Fuel Economy program (CAFE)... CAFE has been particularly damaging to the domestic, full line manufacturers...

"...we urge Congress to resist the temptation to set some arbitrary level of future CAFE performance and instead let National Highway Traffic Safety Administration (NHTSA) set the appropriate targets... recent legislative proposals to increase CAFE requirements by 4% per year or more would be extraordinarily expensive and technically challenging to implement—all with little to show for actually reducing oil consumption or emissions.... The best opportunity for addressing all of these issues [reducing gasoline consumption, oil imports and CO2 emissions] over the next decade is through increased use of bio-fuels. And, the bio-fuel with the greatest potential to displace petroleum-based fuels in the U.S. is ethanol."

Access the hearing website for links to all testimony and an archive webcast (
click here). Access various media reports on the hearing (click here). [*Climate, *Energy]