It was a classic “American Graffiti” moment. A Corvette had stopped at the light next to Martin Eberhard’s new Tesla Roadster. The Corvette driver wanted a race. Jim Woolsey, former CIA director in the Clinton administration, was at the wheel of the Tesla, taking a test drive. He asked Eberhard, Tesla Motors’ CEO, what to do, and got the answer he wanted. “Take him,” said Eberhard.
When the light turned green, Woolsey floored it. With a near-silent whoosh, the all-electric Tesla, capable of going from zero to 60 in four seconds, left the Corvette driver with one question when he caught up at the next light: “What is that?” Woolsey, focused on the national-security risk from our increasing dependence on imported oil, sees the all-electric, rechargeable Tesla as part of a future that replaces oil with electricity and biofuels. Such a shift would also lead to dramatic reductions in greenhouse-gas emissions.
That future also includes plug-in hybrid electric vehicles (PHEVs), which Toyota, General Motors, Ford and others say they will soon produce. A regular gas-electric hybrid, such as the Prius, can get up to 50 miles per gallon. A PHEV, with a larger battery that can be recharged at night, will get over 100 mpg. And if gasoline in a PHEV is supplemented with Northwest biodiesel, the miles per gasoline gallon jump even higher.
Earlier this year, the Brookings Institution reported: “To reduce oil dependence, nothing would do more good more quickly than making cars that could connect to the electric grid.” Add an extension cord and the infrastructure is already in place for PHEVs. In most states there is significant unused generating capacity to recharge cars overnight. Electric utilities could become the gas stations of the future.
Overcoming technical and consumer barriers
Three main reasons are given for why this future is not here now. The first is battery cost and performance. But, batteries have improved markedly, evolving from lead acid to nickel metal hydride used in the Prius, and now to advanced lithium-ion batteries. Two manufacturers just announced major improvements in lithium-ion technologies designed specifically for plug-in hybrid vehicles.
The second factor is consumer acceptance. Will the car-buying public trade size and performance for energy independence and the environment? Although the Prius is the top-selling car in the Northwest, skeptics say families who need larger vehicles or drivers who want size for safety and horsepower for speed won’t buy PHEVs.
This is what makes the Tesla so interesting. According to Tesla’s Eberhard, “It’s about proving that plug-in technology can work, that electric cars do not have to be frumpy and dull.” Americans may soon be able to have size and speed, and still be green. The Tesla costs over $90,000. But, as Eberhard told a U.S. Senate committee, “Almost any new technology has high cost before it can be optimized, and this is no less true for electric cars.” Tesla plans a family car for $50,000 in 2009, followed by a third model that “will be more affordable still,” according to Eberhard.
Professor Andy Frank, the “father of plug-in vehicles,” turned a GM Suburban into a plug-in hybrid that travels 60 miles on a charge and accelerates up hills like they are not even there. GM will make a hybrid Tahoe this year that improves gas mileage by 25 percent. A plug-in version could save families even more.
Washington, D.C., inertia
The third major reason the future is not here yet is inertia in Washington, D.C. There is strong bipartisan recognition that addiction to oil is undermining national security, increasing our trade deficit and adding greenhouse gases. Each week brings new reminders of the security risk from our reliance on oil from civil unrest in oil-rich Nigeria to threats from Venezuela’s Hugo Chávez and Iran’s Mahmoud Ahmadinejad. And, as Woolsey points out, since most of the world’s oil comes from the Middle East, we are financing both sides of the war on terror at the gas pump.
World demand for oil is increasing, largely due to China, India and other emerging economies. With oil supplies lagging, the world price of oil has skyrocketed. Four years ago, oil was $25 a barrel; it is now over $60. If we’re serious about reducing greenhouse gases, the single best place to start is to stop burning oil in our vehicles.
During the 1973 Arab oil embargo, sharp discord characterized the debate over the Alaska pipeline construction between environmentalists and national-security conservatives like Sen. Henry “Scoop” Jackson. By contrast, today’s “end our addiction to oil” coalition includes what Woolsey affectionately calls “tree huggers, do-gooders, sodbusters and cheap hawks.”
But, despite the broad consensus and statements of urgency, much needs to be done.
We need immediate action in three areas to accelerate and integrate new transportation technology: federal and state agency fleet purchases to create a dependable market and to drive costs down; regional demonstration projects to work out how to make the power grid and our transportation system more efficient; and, legislation to remove roadblocks and create incentives. In short, we need to jump-start to a clean, secure energy future.
Federal and state agency fleet purchases
Federal and state governments are some of the biggest markets for vehicles, and their purchasing power can help jump-start PHEVs. King County Executive Ron Sims used Metro bus-buying power to start GM on a path to produce hybrid buses. Similarly, replacement vehicles for federal and state agency fleets could be the best way to kick off PHEV sales, providing a stable and reliable initial market that would start to drive costs down.
On Jan. 24, President Bush issued an executive order that requires federal agencies to purchase plug-in vehicles “when commercially available” and with comparable life-cycle costs to standard vehicles. But, the best way to ensure these vehicles are commercially available in the first place is to start with federal fleet orders, which will drive down costs. The Boeing 707 was launched with the first order from the federal government. Commercial sales soon took off and Boeing went on to dominate the jet age.
Another strategy is to define the life-cycle costs to include a concept that Jon Wellinghoff, a member of the Federal Energy Regulatory Commission, has called the “cash-back hybrid.” By intelligently connecting federal fleet vehicles when parked, plug-in hybrids can supply backup services, including voltage support and peak power, to the power system. The “cash-back” payments could help make PHEVs less expensive overall than standard vehicles.
Congress and the administration can put federal buying power into high gear to send the same signal as Metro bus hybrid orders sent to GM: Make these vehicles now; there are buyers for them.
Regional demonstration projects
Exactly how would plug-ins be recharged? How can utilities avoid new peak demands? Should drivers plug in at work or at park-and-rides? How would a “cash-back hybrid” really work? Can the existing transportation system be improved with the technology inherent in PHEVs? Could traffic congestion relief be part of a PHEV rollout?
These questions and others need to be addressed sooner rather than later. Regional demonstration projects can provide answers and formulate standards to make the best of this new technology.
The Northwest is well-suited for a regional pilot project. New state legislation provides some funds for a plug-in project that could help leverage federal funding from FERC and the U.S. Departments of Energy and Transportation. The Northwest has two Department of Energy national research laboratories and a history of cooperation on energy issues. Energy Northwest’s board, representing over 20 utilities, unanimously supports a Northwest pilot project. There is strong regional political leadership.
Creating incentives and removing barriers through legislation
Some predict that Congress will do little more than protect the corn-ethanol lobby, the coal-fuel lobby and Detroit. Pending legislation to increase gas mileage has loopholes big enough for a diesel truck. Gal Luft, who spoke at the Cascadia Conference at Microsoft in May, recently said: “The only green that they are serious about in Congress right now is the one with Ben Franklin’s picture on it.”
But there is a chance that effective legislation could pass this year. A broad bipartisan congressional coalition is pressing to add ideas from the DRIVE Act (Dependence Reduction through Innovations in Vehicles and Energy). Sen. Maria Cantwell, D-Wash., is working to include electric transportation and plug-in hybrid pilot projects and to identify and remove barriers. U.S. Reps. Jay Inlsee, D-Bainbridge Island, and Dave Reichert, R-Auburn, have joined on a bill that would provide for regional plug-in hybrid demonstration projects, intending one in the Northwest.
At the Cascadia-Microsoft conference, Cantwell and Sen. Orrin Hatch, R-Utah, said they’re working with Sen. Barack Obama, D-Ill., on legislation with incentives for consumers, automakers and utilities to accelerate the day when plug-in hybrid vehicles would roll into auto showrooms. There are encouraging signs that the administration and Congress will make such legislation a bipartisan priority. It cannot happen soon enough.
We need the acceleration now of a Tesla in Washington, D.C. We have the opportunity. As Eberhard would say: Take it.
Steve Marshall is a senior fellow at Discovery Institute’s Cascadia Center, which works on regional transportation solutions. Bruce Agnew is the center’s director. Visit www.cascadiaproject.org.