In Detroit, White House hopeful Barack Obama on Monday issued his energy plans, embracing some policies already in place in California....
For Obama proposal and California Gov. Arnold Schwarzenegger statement, click below for details...
from the Obama campaign....
Full text below followed by information on key facts in the speech
Obama Lays Out Plan to Reduce Our Dependence on Foreign Oil;
Fight the Causes of Global Climate Change
During Speech at Detroit Economic Club, Obama Rolls Out Three Part Plan to
Change the Cars we Drive and the Fuels we Use
Detroit, MI- During a speech at the Detroit Economic Club, Barack Obama
today proposed a plan today to change the cars we drive and the fuels we use
in order to reduce our dependence on foreign oil and fight the cause of
global climate change. By 2020, Obama's plan will cut our oil consumption
by 2.5 million barrels of oil per day; take 50 million cars' worth of
pollution off the road; saved more than $50 billion at the gas pump; and
help the auto industry save millions of jobs and regain its competitive
footing in the world.
Barack Obama's plan focuses on three key components:
1. Fuel Economy Standards: Despite tremendous technological innovation
in the auto industry, Corporate Average Fuel Economy (CAFE) standards for
cars have been held hostage to ideological battles in Washington for 20
years. Barack Obama introduced a bold new plan, bringing together long-time
opponents to gradually increase fuel economy standards while protecting the
financial future of domestic automakers. Obama's plan would establish a
target of four percent increase each year - unless the National Highway
Traffic Safety Administration proves the increase is technologically
unachievable, hurts safety, or is not cost-effective. If the target is met
for ten years, Obama's plan will save 1.3 million barrels of oil per day and
20 billion gallons of gasoline per year.
2. Help for Consumers: Under current law, tax credits are available for
consumers who buy hybrids-but only if they buy one of the first 60,000
ultra-efficient vehicles produced by a given manufacturer. Barack Obama
would lift the 60,000-per-manufacturer cap on buyer tax credits to allow
more Americans to buy ultra-efficient vehicles.
3. Help for Manufacturers: U.S. automakers are facing retiree health
costs that add $1,500 to the cost of every GM car. They are struggling to
afford investments in hybrid technology. Obama would encourage automakers
to make fuel-efficient hybrid vehicles by helping the companies shoulder the
health care costs of their retirees. Domestic automakers will get health
care assistance in exchange for investing 50 percent of the savings into
technology to produce more fuel-efficient vehicles. In addition, Obama
would provide automakers with generous tax incentives for retooling assembly
Full Text As Prepared for Delivery:
America is a country that hasn't come easily. In our brief history, we have
been tested by revolution and slavery, war and depression, and great
movements for social, civil, and equal rights.
We have emerged from each challenge stronger, more prosperous,
and ever closer to the ideals of liberty and opportunity that lay at the
heart of the American experiment.
And yet, the price of our progress has always been borne by the struggle and
sacrifice of our people - by leaders who have asked ordinary Americans to do
extraordinary things; and by generations of men and women who've had the
courage to answer that call.
It was the greatest of all generations that took up this charge in the days
after the attack on Pearl Harbor. Almost overnight, they were asked to
transform a peacetime economy that was still climbing out from the depths of
depression into an Arsenal of Democracy that could wage war across three
continents. If you weren't heading overseas, you were heading into the
factories - factories that had to be immediately retooled and reorganized to
produce the world's greatest fighting machine.
Many doubted whether this could be achieved in time, or even at all.
President Franklin Roosevelt's own advisors told him that his goals for
wartime production were unrealistic and impossible to meet. But the
President simply waved them off, saying, believe me, "the production people
can do it if they really try."
And so the nation turned here, to Detroit, with the hope that the Motor City
could lead the way in using its assembly lines to mass produce arms instead
of automobiles. At first, the industry was skeptical about whether this was
technologically possible or even profitable in the long run. But after
repeated assurances from Roosevelt and some help from the federal
government, the arsenal began to churn.
In an astonishingly short period of time, the auto industry and its workers
became one of the nation's most important contributors to the war effort,
manufacturing more planes, tanks, bombs and weapons than the world had ever
seen. The New York Times declared that the automakers had achieved a
"production miracle," and it labeled Detroit "the Miraculous City."
It was a miracle that was distinctly American - the idea that in
the face of impossible odds, people who love their country can rise to meet
its greatest challenges.
It's the kind of American miracle we need today.
At the dawn of the twenty-first century, the country that faced
down the tyranny of fascism and communism is now called to challenge the
tyranny of oil. For the very resource that has fueled our way of life over
the last hundred years now threatens to destroy it if our generation does
not act now and act boldly.
We know what the dangers are here. We know that our oil
addiction is jeopardizing our national security - that we fuel our energy
needs by sending $800 million a day to countries that include some of the
most despotic, volatile regimes in the world. We know that oil money funds
everything from the madrassas that plant the seeds of terror in young minds
to the Sunni insurgents that attack our troops in Iraq. It corrupts budding
democracies, and gives dictators from Venezuela to Iran the power to freely
defy and threaten the international community. It even presents a target
for Osama bin Laden, who has told al Qaeda to, "focus your operations on
oil, especially in Iraq and the Gulf area, since this will cause [the
Americans] to die off on their own."
We know that our oil dependency is jeopardizing our planet as
well - that the fossil fuels we burn are setting off a chain of dangerous
weather patterns that could condemn future generations to global
catastrophe. We see the effects of global climate change in our communities
and around the world in record drought, famine, and forest fires.
Hurricanes and typhoons are growing in intensity, and rapidly melting ice
sheets in Antarctica and Greenland could raise global sea levels high enough
to swallow up large portions of every coastal city and town.
And this city knows better than any what our oil addiction is
doing to our economy. We are held hostage to the spot oil market - forced
to watch our fortunes rise and fall with the changing price of every barrel.
Gas prices have risen to record levels, and could hit $4 a gallon in some
cities this summer. Here in Detroit, three giants of American industry are
hemorrhaging jobs and profits as foreign competitors answer the rising
global demand for fuel-efficient cars.
America simply cannot continue on this path. The need to drastically change
our energy policy is no longer a debatable proposition. It is not a
question of whether, but how; not a question of if, but when. For the sake
of our security, our economy, our jobs and our planet, the age of oil must
end in our time.
This is a challenge that has not been solved for a lack of
talking. Every single President since Richard Nixon has spoken in soaring
rhetoric about the need to reduce America's energy dependence, and many have
offered plans and policies to do so.
And yet, every year, that dependence keeps on growing. Good ideas are
crushed under the weight of typical Washington politics. Politicians are
afraid to ask the oil and auto industries to do their part, and those
industries hire armies of lobbyists to make sure it stays that way.
Autoworkers, understandably fearful of losing jobs, and wise to the tendency
of having to pay the price of management's mistakes, join in the resistance
to change. The rest of us whip ourselves into a frenzy whenever gas prices
skyrocket or a crisis like Katrina takes oil off the market, but once the
headlines recede, so does our motivation to act.
There's a reason for this.
A clean, secure energy future will take another American miracle. It will
require a historic effort on the scale of what we saw in those factories
during World War II. It will require tough choices by our government,
sacrifice from our businesses, innovation from our brightest minds, and the
sustained commitment of the American people.
It will also take leadership willing to turn the page on the can't-do,
won't-do, won't-even try politics of the past. Leadership willing to face
down the doubters and the cynics and simply say, "Believe me, we can do it
if we really try."
I will be that kind of President - a President who believes again in America
that can. A President who believes that when it comes to energy, the
challenge may be great and the road may be long, but the time to act is now;
who knows that we have the technology, we have the resources, and we are at
a rare moment of growing consensus among Democrats and Republicans, unions
and CEOs, evangelical Christians and military experts who understand that
this must be our generation's next great task.
A comprehensive energy plan will require bold action on many fronts. To
fully combat global climate change, we'll need a stringent cap on all carbon
emissions and the creation of a global market that would make the
development of low-carbon technologies profitable and create thousands of
new jobs. We'll also need to find a way to use coal - America's most
abundant fossil fuel - without adding harmful greenhouse gases to the
I have already endorsed a cap-and-trade system that would achieve real
near-term reductions in greenhouse gas emissions and return America to a
position of leadership so that we can secure an effective and equitable
global solution to this crisis. It would invest substantial revenue
generated by auctioning off emissions credits into the development of carbon
sequestration, advanced biofuels, and energy efficiency.
We'll also need new ideas on energy efficiency and the ability to harness
renewable sources of energy, because there is absolutely no reason we
shouldn't be able to get at least 20% of our energy from clean and renewable
sources by 2020.
I will be laying out more detailed proposals on each of these
areas in the months to come. But here in Detroit, I want to focus on a few
proposals that would drastically reduce our oil dependence and our carbon
emissions by focusing on two of their major causes - the cars we drive and
the fuels we use. By 2020, these proposals would save us 2.5 million
barrels of oil per day - the equivalent of ending all oil imports from the
Middle East and removing 50 million cars' worth of pollution off the road.
It starts with our cars - because if we truly hope to end the
tyranny of oil, the nation must once again turn to Detroit for another great
I know these are difficult times for automakers, and I know that
not all of the industry's problems are of its own making.
But we have to be honest about how we arrived at this point.
For years, while foreign competitors were investing in more fuel-efficient
technology for their vehicles, American automakers were spending their time
investing in bigger, faster cars. And whenever an attempt was made to raise
our fuel efficiency standards, the auto companies would lobby furiously
against it, spending millions to prevent the very reform that could've saved
their industry. Even as they've shed thousands of jobs and billions in
profits over the last few years, they've continued to reward failure with
lucrative bonuses for CEOs.
The consequences of these choices are now clear. While our fuel
standards haven't moved from 27.5 miles per gallon in two decades, both
China and Japan have surpassed us, with Japanese cars now getting an average
of 45 miles to the gallon. And as the global demand for fuel-efficient and
hybrid cars have skyrocketed, it's foreign competitors who are filling the
orders. Just the other week, we learned that for the first time since 1931,
Toyota has surpassed General Motors as the world's best-selling automaker.
At the dawn of the Internet Age, it was famously said that there
are two kinds of businesses - those that use email and those that will.
Today, there are two kinds of car companies - those that mass produce
fuel-efficient cars and those that will.
The American auto industry can no longer afford to be one of
those that will. What's more, America can't afford it. When the auto
industry accounts for one in ten American jobs, we all have a stake in
saving those jobs. When our economy, our security, and the safety of our
planet depend on our ability to make cleaner, more fuel-efficient cars,
every American has a responsibility to make sure that happens.
Automakers still refuse to make the transition to fuel-efficient
production because they say it's too expensive at a time when they're losing
profits and struggling under the weight of massive health care costs.
This time, they're actually right. The auto industry's refusal to act for
so long has left it mired in a predicament for which there is no easy way
But expensive is no longer an excuse for inaction. The auto industry is on
a path that is unacceptable and unsustainable - for their business, for
their workers, and for America. And America must take action to make it
That's why my first proposal will require automakers to meet higher fuel
standards and produce more fuel-efficient cars while providing them the
flexibility and assistance to do it.
This is a proposal that's already brought together Republicans and
Democrats, those who've long-advocated increases in our fuel standards, and
those who have opposed those increases for years. It enjoys the support of
corporate leaders like Fred Smith of Federal Express who understand that our
economy is at risk if we fail to act and military leaders like General P.X.
Kelley who know all to well the human cost of our nation's addiction to oil.
It's a proposal that answers the concerns that many have previously had with
raising fuel standards - that it's too expensive, or unsafe, or not
achievable. And it's an approach that asks our government, our businesses,
and our people to invest in a secure energy future - that recognizes we can
make great cars and protect American jobs if we transform the auto industry
so that our autoworkers can compete with world once more.
It begins by gradually raising our fuel economy standards by four percent -
approximately one mile per gallon - each year. The National Academy of
Sciences has already determined that we can begin to achieve this rate of
improvement today, using existing technology and without changing a
vehicle's weight or performance. And so the only way that automakers can
avoid meeting this goal is if the National Highway Traffic and Safety
Administration can prove that the increase is not safe, not cost-effective,
or not technologically possible.
This proposal provides additional flexibility to manufacturers as well.
Currently, domestic automakers are disadvantaged by the requirement that
their fleets have to meet the same overall fuel standard as foreign
manufacturers even though U.S. companies sell a much broader array of
vehicles. My approach would establish different fuel standards for
different types of cars. This reform will level the playing field by
requiring all car makers to achieve a similar rate of progress regardless of
their vehicle mix. It will also allow manufacturers to get credit if they
increase the fuel-efficiency in one particular car beyond what the fuel
economy standards require.
We also know that, absent some assistance, the significant costs associated
with retooling parts and assembly plants could be prohibitive for companies
that are already struggling and shedding workers. Our goal is not to
destroy the industry, but to help bring it into the 21st century. So if the
auto industry is prepared to step up to its responsibilities, we should be
prepared to help.
That's why my proposal would provide generous tax incentives to help
automakers upgrade their existing plants in order to accommodate the demands
of producing more fuel-efficient vehicles.
This approach would also strike a bargain with the auto industry on one of
the biggest costs they face. We've heard for years that the spiraling cost
of health care for retired autoworkers constrains manufacturers from
investing in more fuel-efficient technology. We all know the statistic -
health care costs currently account for $1,500 of every GM Car. So here's
the deal. We'll help to partially defray those health care costs, but only
if the manufacturers are willing to invest the savings right back into the
production of more fuel-efficient cars and trucks.
Finally, we should make it easier for the American people to buy more
fuel-efficient cars by providing more tax credits to more consumers for the
purchase of hybrid and ultra-efficient vehicles. But we should also realize
that the more choices we have as consumers, the more responsibility we have
to buy these cars - to realize that a few hundred extra dollars for a hybrid
is the price we pay as citizens committed to a cause bigger than ourselves.
For too long, we've been either too afraid to ask our automakers to meet
higher fuel standards or unwilling to help them do it. But the truth is, if
we hope for another miracle out of Detroit, we have to do both. We must
demand that they revamp their production, we must assist that transition,
and we must make the choice to buy these cars when we have the option. All
of us have a responsibility here, and all of us are required to act.
Now it's not enough to only build cars that use less oil - we also have to
start moving away from that dirty, dwindling fossil fuel altogether. That's
why my second proposal will create a market for clean-burning, home-grown
biofuels like ethanol that can replace the oil we use and begin to slow the
damage caused by global climate change.
The potential for biofuels in this country is vast. Farmers who grow them
know that. Entrepreneurs and fueling station owners who want to sell them
know that. Scientists and environmentalists who study the atmosphere know
It's time we produced, sold, and used biofuels all across America - it's
time we made them as commonly available as gasoline is now.
I've already done some of this work in the U.S. Senate by helping to provide
tax credits to those who want to sell a mix of ethanol and gasoline known as
E85 at their fueling stations. And since it only costs $100 per vehicle to
install a flexible-fuel tank that can run on biofuels, I've also proposed
that we help pay for this transition.
Government should lead the way here. I showed up at this event in a
government vehicle that does not have a flexible-fuel tank. When I'm
President, I will make sure that every vehicle purchased by the federal
Of course, to truly overcome the lack of a biofuel
infrastructure in this country, we need to create a market for the
production of more biofuels.
Like the auto industry, the oil industry has generally been resistant to
making the transition from petroleum to biofuels - with some even trying to
block the installation of E85 pumps at fueling stations.
To overcome this resistance and create this infrastructure, I've introduced
a proposal known as a National Low-Carbon Fuel Standard, based on the one
introduced by Governor Arnold Schwarzenegger in California just a few months
ago. Like raising our fuel-efficiency standards, this approach
simultaneously reduces our dependence on oil and reduces greenhouse gas
The idea behind the standard is simple.
Beginning in 2010, we will require petroleum makers to reduce the carbon
content of their fuel mix one percent per year by selling more clean,
alternative fuels in its place. This proposal will spur greater production
and availability of renewable fuels like cellulosic ethanol and biodiesel,
and it will even create an incentive for the production of more
flexible-fuel and plug-in hybrid vehicles that can use these clean fuels or
charge up with renewable electricity.
This approach will also allow the market, not the government, to determine
which fuels are used by fuel distributors to meet the standard. It's
gradual, so it gives these companies time to meet the requirements. And if
you're a fuel producer that's having trouble meeting the standard, it allows
you to pay for a credit from a company that is.
The low-carbon fuel standard also provides a greater incentive for private
sector investment in the cleanest biofuels possible. Corn-based ethanol has
led the way here, and now we need to expand the universe of biofuels to
include cellulosic ethanol made from switchgrass or forest waste that can
reduce our carbon footprint even further.
In the end, the two major proposals I outlined today - higher
fuel-efficiency standards and a National Low-Carbon Fuel Standard - will not
end our oil dependence entirely.
But the transformation of the cars we drive and the fuels we use
would be the most ambitious energy project in decades, with results that
would last for generations to come: 2.5 million fewer barrels of oil per
day; 50 million cars' worth of pollution off the road by 2020. The direct
consumer savings at the pump in that year would be over $50 billion, not to
mention the great economic benefits of a rejuvenated and fiercely
competitive domestic auto industry.
Some will say that the goals are too large; that the ask is too
great; and that the political reality is too difficult for this to work.
To that I'd say that we've heard it all before, and we still
believe we can do it if we really try. Because that's who we are as
Americans. Because that's who we've always been.
In the days and months after September 11th, Americans were
waiting to be called to something larger than themselves. Just like their
parents and grandparents of the Greatest Generation, so many of us were
willing to serve and defend our country - not only on the fields of war, but
on the homefront too.
This is our generation's chance to answer that call. Meeting
the challenge posed by our oil dependence won't require us to build the
massive war machine that Franklin Roosevelt called for so many years ago,
but it will require the same sense of shared sacrifice and responsibility
from all of us - not just the auto industry and its workers here in Detroit,
but oil companies in Texas, power plants from New Jersey to California,
legislators in Washington, and consumers in every American city and town.
It's time for all of us to head back into the factories and universities; to
the boardrooms and the halls of Congress so we can roll up our sleeves and
find a way to get this done. I am ready and willing to lead us there as
your next President, and I hope you are willing to join me in the journey
toward that next great American miracle. Thank you.
BARACK OBAMA: A NEW AMERICAN MIRACLE
Barack Obama is proposing a plan to change the cars we drive and the fuels
we use to reduce our dependence on foreign oil and fight the causes of
global climate change. By 2020, Obama's plan will have cut our oil
consumption by 2.5 million barrels of oil per day; take 50 million cars'
worth of pollution off the road; saved more than $50 billion at the gas
pump; and helped the auto industry save millions of jobs and regain its
competitive footing in the world
GLOBAL CLIMATE CHANGE AND OUR DEPENDENCE ON FOREIGN OIL
"The very resource that has fueled our way of life over the last 100 years
now threatens to destroy it if our generation does not act now and act
Our nation is confronted by two major challenges -global climate change and
our dependence on foreign oil - both of which stem from our use of fossil
fuels for energy.
* America's 20-million-barrel-a-day oil habit costs our economy $800
million a day, and $300 billion annually. Every single hour we spend $18
million on foreign oil.
* America's oil consumption increased by over 20 percent between 1992
and 2005. Our energy-related carbon dioxide emissions increased by more than
15 percent between 1993 and 2005.
* The vast majority of scientists agree that global warming is real,
is happening now and is the result of human activities. The number of
Category 4 and 5 hurricanes has almost doubled in the last 30 years.
Glaciers are melting faster; trees are blooming earlier; oceans are becoming
more acidic; people are dying in heat waves; and species are migrating or
becoming extinct. Scientists predict that climate change could bring famine
and drought to some of the poorest places in the world.
One of the greatest opportunities to simultaneously combat global warming
and oil dependence comes in the transportation sector.
1. THE CARS WE DRIVE
"Today, there are two kinds of car companies - those that mass produce
fuel-efficient cars and those that will. The American auto industry can no
longer afford to be one of those that will. What's more, America can't
afford it. When the auto industry accounts for one in ten American jobs, we
all have a stake in saving those jobs. When our economy, our security, and
the safety of our planet depend on our ability to make cleaner, more
fuel-efficient cars, every American has a responsibility to make sure that
A. Fuel Economy Standards
In response to the OPEC oil embargo in the 1970s, Congress enacted Corporate
Average Fuel Economy (CAFE) standards.
* CAFE raised the average gas mileage of cars and trucks
from just over 14 miles per gallon (mpg) in 1976 to 27.5 mpg for cars and
20.7 mpg for trucks by 1985.
* By enacting these standards, the country saves
approximately 80 billion gallons of gas each year, making it the most
successful energy-saving measure ever adopted.
Unfortunately, CAFE standards have remained frozen for 20 years.
* Standards for cars have remained at 27.5 mpg since
1985. The standard for trucks has only increased by 2 mpg to 22.2 mpg for
* The auto industry has developed numerous innovations,
which allowed fuel economy standards to rise to 45 mpg in Japan.
* In Washington, there has been a logjam between those
who want Congress to mandate specific CAFE increases, and those who want to
cede the choice to the National Highway Traffic Safety Administration
(NHTSA), even though the agency has been unable to overcome institutional
and political obstacles for 20 years.
Barack Obama introduced a bold new plan that brought Republicans and
Democrats, CAFE supporters and long-time opponents together in support of
legislation that would gradually increase fuel economy standards and offer
what the New York Times editorial page called "real as opposed to
hypothetical results." Obama's innovative approach would gradually
increase CAFE standards while protecting the financial future of domestic
* A New Approach. Establish a targeted 4 percent increase
each year in CAFE standards - a rate that the National Academy of Sciences
has determined is possible without changes in vehicle weight or performance
- unless the experts at NHTSA justify a deviation in that rate by proving
that the increase is technologically unachievable, cannot maintain overall
fleet safety, or is not cost-effective.
* Flexibility for Manufacturers. Provide fairness and
flexibility to domestic auto makers by establishing different standards for
different types of cars. Currently manufacturers have to meet broad
standards over their whole fleet of cars. Obama's plan provides further
flexibility by giving NHTSA the authority to allow companies to earn credit
for improving fuel efficiency beyond the CAFE standard in one type of car,
and using those credits to meet goals for other vehicle models.
* Real Results. If the 4 percent per year target is met for
ten years after the continuous provision improvements go into effect,
Obama's plan will save 1.3 million barrels of oil per day and 20 billion
gallons of gasoline per year. If gasoline is just $2.50 per gallon,
consumers will save over $50 billion per year at the pump by 2020.
B. Help for Consumers
Under current law, tax credits of up to $3,150 are available for consumers
who buy hybrid vehicles -- but only if they buy one of the first 60,000
ultra-efficient vehicles produced by a given manufacturer. This irrational
rule reduces both consumer incentives to buy efficient vehicles and
manufacturer incentives to make them on a massive scale. Toyota reached the
60,000 mark in the summer of 2006.
* Help for Consumers. -Barack Obama would lift the
60,000-per-manufacturer cap on buyer tax credits to allow more Americans to
buy ultra-efficient vehicles.
C. Help for Car Makers
Wide scale deployment of hybrid and advanced fuel efficient vehicles could
further slash our dependence on overseas oil. But, as the demand for
fuel-efficient cars increases globally, foreign manufacturers are filling
the orders by increasing production of hybrid cars.
* In March 2007, Americans bought 34,636 hybrid cars. Of those, 83
percent were Toyotas, 9 percent were Hondas, and only 7 percent were built
by Ford or Mercury.
* In just March of 2007, Toyota sold more than 19,000 of its hybrid
Prius models. That is more than the sales volume of entire brands like
* The United States is the largest market for hybrid vehicles.
The U.S. automotive industry is facing record losses and is struggling to
afford the investments to adapt to hybrid technology. The Big Three
automakers argue that their retiree health care costs hurt their ability to
invest and compete.
* Retiree health costs totaled about $6.2 billion in 2006. Health
care costs account for $1,500 of every GM car.
The auto industry must invest in more fuel-efficient cars if it hopes to
compete with foreign competition and thrive in the future - but knowing the
challenges U.S. automakers face, the federal government has a role in
helping them do it.
* Help for Manufacturers. To help American automakers meet
these important new goals, Barack Obama would offer them the choice between
the following two benefits:
* Retiree health care relief. Participating
automakers would receive federal financial assistance to cover 10 percent of
their annual legacy health care costs through 2017. Automakers would be
required to invest at least 50 percent of these savings into manufacturing
fuel efficient cars in the United States
* Generous tax incentives for retooling parts
and assembly plants.
The proposal addresses a complex problem in a way that strengthens the
American economy and avoids giving automakers a no-strings-attached bailout.
Autoworkers could get the health care they had been promised, the auto
industry would be back on a competitive footing, and our reliance on foreign
oil would be reduced.
2. The fuel WE USE.
"Now It's not enough to only build cars that use less oil - we also have to
start moving away from that dirty, dwindling fossil fuel altogether. . . .
it's time we produced, sold, and used biofuels all across America - it's
time we made them as commonly available as gasoline is now."
Transportation accounts for 60 percent of U.S. oil consumption and one-third
of U.S. global warming pollution. We need to use less fuel, and of the fuel
we do use, we need to emit less carbon.
One important way to use oil more efficiently is for the nation to
transition towards fuels that emit less carbon dioxide. In January 2007,
California Governor Schwarzenegger issued an executive order to establish a
low carbon fuel standard for transportation fuels sold in California. Under
the California standard, the carbon intensity of California's passenger
vehicle fuels would be reduced by 10 percent by 2020.
Barack Obama has proposed the creation of a National Low Carbon Fuel
Standard (NLCFS) that would:
* Set a National Standard for Low Carbon Fuels. The
lifecycle greenhouse gas emissions of the pool of passenger vehicle fuels
sold in the U.S. would be reduced by 5 percent in 2015 and 10 percent in
* Let the Market Work. The market, rather than the
government, would determine which fuels are used by fuel distributors and
blenders to meet the NLCFS.
* Because biofuels generally have lower lifecycle greenhouse gas
emissions than gasoline, the NLCFS in effect would spur greater production
of renewable fuels, such as corn and cellulosic ethanol, and biodiesel made
from plant oils such as soybeans.
* The NLCFS will create a market incentive for greater research and
investment into developing cleaner, less carbon-intensive fuels. The NLCFS
will also create an incentive for the production of more flexible-fuel
vehicles that can run on ethanol and more plug-in hybrid vehicles that run
* The Obama plan also includes a clean transportation fuel standard,
which requires fuel blenders to use minimum amounts of Clean Fuels (50
percent lower lifecycle greenhouse gas emissions than gasoline) and
Ultra-Clean Fuels (75% lower greenhouse gas emissions). This requirement
signals to investors that there will be a market for advanced fuels, but
still allows significant leeway for fuel blenders to choose the optimal mix
of fuels to meet their overall greenhouse gas emissions targets.
* The Obama proposal includes a banking and credit trading mechanism to
allow providers of cleaner-burning fuel to trade allowances to other
producers or bank allowances against future carbon reductions.
* Real Results: Reduced Emissions. According to one
estimate, the NLCFS would reduce annual greenhouse gas emissions by about
180 million metric tons in 2020 compared to 2007 levels. This is the
equivalent of taking over 30 million cars off the road in 2020. If enacted
in conjunction with Obama's proposal to raise fuel efficiency standards, the
NLCFS would reduce emissions by about 530 million metric tons of greenhouse
gases in 2020, the equivalent of taking over 50 million cars off the road.
* Real Results: Reduced Gasoline Consumption. By making
greater use of home-grown, renewable fuels, the NLCFS could reduce the
annual consumption of gasoline by about 30 billion gallons in 2020.
Governor Schwarzenegger Applauds Senator Obama for Proposing National
Legislation Modeled after California’s Low Carbon Fuel Standard
Governor Schwarzenegger issued the following statement today regarding
legislation introduced by Senator Barack Obama (D-Illinois) to establish a
national version of California’s Low Carbon Fuel Standard:
“I applaud Senator Obama for introducing legislation to establish a national
version of California's groundbreaking Low Carbon Fuel Standard. By adopting
our approach of employing enforceable standards and market competition to
reduce greenhouse gas emissions, Senator Obama's legislation, like the
bi-partisan legislation proposed by California Senator Dianne Feinstein, can
dramatically increase investment in low carbon fuels at the same time it
effectively fights climate change, expands consumer choice and rewards
“Climate protection, energy security and economic well-being are not
partisan issues, and I hope members of Congress on both sides of the aisle
will support and help pass this important legislation.”
California's Low Carbon Fuel Standard was introduced by Governor
Schwarzenegger in January to reduce the greenhouse gas content of
transportation fuels. By 2020 the standard will reduce the carbon intensity
of California's passenger vehicle fuels by at least 10 percent and is
expected to more than triple the size of California's renewable fuels
market, displace 20% of California's gasoline consumption with lower carbon
fuels, and put more than 7 million alternative fuel or hybrid vehicles on
its roads without any new government spending. In January the European
Commission announced its intention to enact a standard modeled on
California's LCFS. On May 18, the Governor and an EU official will make
keynote addresses to the International Low Carbon Fuels Symposium to be held
at Lawrence Berkeley National Laboratory.
The Governor first called for a national LCFS in February when he was joined
by presidential candidate Senator John McCain (R-Arizona). In March,
Senators Dianne Feinstein (D-California), Susan Collins (R-Maine) and
Olympia Snowe (R-Maine) introduced a measure to implement a national LCFS.
Today Senator Obama (D-Illinois) introduced legislation proposing that
California's plan be enacted nationally. According to Senator Obama's
office, a national low carbon fuel standard modeled on California's targets
would reduce national greenhouse gas emissions by over 250 million tons in
2020, the equivalent of taking about 32 million cars off the road.