Policy Day at the Washington DC Auto Show

January 30, 2012

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by Robert Kozak (Advanced Biofuels USA) On the day before the Washington DC Auto Show opens to the public, there is an event called Policy Day. Administration officials and high ranking auto company executives give short presentations and spend time taking questions from the media. Policy Day is a good way to hear from “everyone that counts” in a short period of time. It is also informal enough that you can spend some “off-the-record” time with them as well.

Policy Day is also good exercise. The auto show uses two large halls in different buildings of the Walter Washington Convention Center. Twelve presentations are made at twelve different locations. Wear good walking shoes.

Here are some sketches on biofuels, electric cars, Administration policy, and the new “color of the year” gleaned during Policy Day.

View from the Obama Administration on Biofuels

The Administration sent three representatives: Secretary of Transportation, Ray La Hood; Assistant Secretary of Energy for Policy and International Affairs, David Sandalow; and Margo Oge, EPA Director of the Office of Transportation and Air Quality.

With 2012 being an election year all the Administration speakers focused on the same talking points. Obama saved the auto industry. Obama saved the economy by saving the auto industry. And America will be driving “zero-emission” electric cars to meet the proposed 2025 fuel economy goal of 54 mpg. The role of biofuels you might ask?

DOE Assistant Secretary David Sandalow’s presentation started with the “Obama saved the auto industry” boilerplate and segued into how the Department of Energy was critical to that success. He talked about DOE’s work with low temperature combustion and light weight materials and the jobs being created by battery factories funded with DOE grants and loans. (While he was speaking on January 26th, Ener1 Inc., a battery manufacturer that had received $118 million in DOE grants was filing for bankruptcy.) He then explained that the new cornerstone of Obama’s energy policy, cheap natural gas, which the President focused on in his State of the Union Address, was only possible because of the fracking technologies that had been developed with DOE research and funding. When his talk was finished, the word biofuel had still not been uttered.

In the Q&A session he was asked if the absence of biofuels in his presentation meant a policy change or was it an oversight? Sandalow quickly said it was an oversight, no policy had been changed and that advanced biofuels were “very important.” I hope the DOE speechwriters remember that in the future.

Natural Gas Cars are Back

Honda, always a cutting-edge company, showed they understand which way the wind is blowing in the Obama Administration.

Blue is the New Green

Many articles about the zeitgeist of the 2012 election campaign, as well as the Occupy movement, have noted that “green” isn’t IN anymore. Apparently the focus groups used by some of the automakers delivered the same message. Three manufacturers that formally touted their commitment to the environment; VW, Mazda, and Hyundai used the color Blue to describe their formerly green initiatives.

Perhaps the weirdest presentation was that of VW. Instead of focusing on the greater use of the very fuel efficient TDI diesel technology in cars like the Jetta or the Tennessee manufactured CC, the US President of VW turned the presentation over to an organization called Bikes Belong Foundation. We were then told about the wonders of cycling, most of all the ability to stop child and teenage obesity. Somehow or another VW was going to contribute to making cycling safer and that was their new Blue strategy.

Being a cynical sort I had to ask a guy wearing a VW America badge if they were going to buy a bicycle manufacturer like Trek. He made a wry smile.

The Blue Oval is Still Green

While some manufacturers would not even say the word green, the presentation at the Big Blue Oval, aka Ford Motor, was pure green. The theme of their presentation was a thank you and fond farewell to Susan Cischke, VP for Sustainability, Environment, and Safety Engineering who was retiring.

Cischke had been with Ford through the bad days and helped steer the company to its current rousing success. Without a US government bailout, in case President Obama forgot.

After the awards and thank you’s, Cischke took the crowd through Ford’s Green future. Not only did it include the expected electric and plug-in hybrids, but, by sheer numbers, it meant the Ecoboost engine. Readers of Advanced Biofuels USA know this technology gets the highest efficiency possible from light-weight small displacement internal combustion engines by applying a combination of turbocharging, direct fuel injection, variable valve and ignition timing, and computer controls.

Basically, this is an engine that would be at home in a Grand Prix racer or in a Le Mans prototype.

Ford is offering three different Ecoboost engines in everything from the F-150 pick-up to the Focus and they promise 1.5 million Ecoboost engines annually by 2013.

This is a massive sea change in what the general public thinks of as basic car engine.

Why is Ford doing this? The improved mileage needed to meet 2015 and 2025 fuel economy standards. Not only is the engine more efficient and powerful, but it is also lighter than the engine it replaces. Less weight means even a smaller engine and transmission can be used. This technology reverses the thirty year trend of heavier vehicles requiring even bigger, less efficient engines.

What does this mean for the advanced biofuel industry? The Ecoboost type engines attain their maximum efficiency at high compression ratios. To operate at high compression ratios requires high octane fuels. (Link to the article about engine design) Ethanol has an octane rating of over 102 while regular gasoline has an octane rating of 87. An E-30 mixture would meet Ecoboost engine requirements without losing mileage due to other properties.

EPA is proposing new fuel specifications this year that would apply to the new fuel economy regulations. They are referred to as “Tier 3 specifications.” Do not be surprised if you see automobile manufacturers, as well as other major players, in the near future calling for a new requirement that would include both a higher octane rating and a provision that it could be met with about 30 percent ethanol. Moving from 10 percent to 30 percent ethanol and assuring that the increase would come from non-food sustainable “total-biomass” ethanol would take advanced ethanol from being “vaporware” and turn it into a reality.

GM Runs Silent as Well as Deep

While Ford is spearheading the Ecoboost revolution and getting almost all the press, both good and bad, General Motors has been bringing their version, the Ecotec, to market in almost a stealthy manner.

GM quietly began to offer the engine as an option on the 2011 Buick Regal. It is now available in the 2012 Chevy Cruz, and by 2013 it will be offered in a number of Chevy and Buick models. By 2015 it looks like Ecotec will be as much of GM’s basic engine technology as the Ecoboost will be for Ford.

Parallel Universes

By this time on Policy Day I think you can see two different universes being presented. On one hand you have the Administration still adamant that electric cars are “zero-emissions” (Even if they are powered by coal or natural gas electricity?) and that 1 million Americans will be driving them by 2015 (Fewer than 8,000 Nissan Leafs were sold in 2011.).

On the other hand, you had some motor vehicle manufacturers saying electrics or plug-in hybrids were not in their plans to meet the 2025 fuel standards: Mazda and Hyundai; and other manufacturers focusing on advanced internal combustion engines after having spent loads of R&D money on electrics: GM and Ford.

This all came together in two presentations near the end of the day.

At the Mazda exhibit, after their spokesperson said they could meet future fuel economy standards without plug-in hybrids or electrics, a consultant with the international market research firm HIS showed some very telling graphs on sales trends.

The key points were:

1) people do not like hybrids, hybrid market share has fallen over the past three years to about 2 percent in 2011;

2) electric car sales did not meet goals anywhere worldwide in 2011 and the “1 million by 2015” goal that Obama set is going to be missed by a large margin;

3) significant fuel economy benefits are coming from people trading in large SUVs for smaller “Cross-Over” models; and

4) diesels are picking up sales in the US.

This was a clear picture of the “reality based” future.

Right after this presentation Transportation Secretary Ray La Hood assured everyone that 1 million Americans would be driving electric cars by 2015 and that battery manufacturing and the building of the smart grid needed to power the electric cars would be creating hundreds of thousands of jobs. This was a clear picture of the “political rhetoric based” future.

I thank the folks who put together Policy Day at the Washington DC Auto Show. I think I now have a much better idea on where the US automotive world is headed.

All photos by Robert Kozak.

WATCH VIDEO from NACS that contemplates how best to provide new fuels to the public; how greater mileage means fewer fill-ups and fewer trips to the inside of the convenience store.

NACS video looks at the future of fueling, giving viewers an insider’s perspective from the 2012 Washington Auto Show. “It is really where we see policy and technology meet,” said NACS Vice President of Government Relations John Eichberger. “For the convenience store industry, understanding where the auto industry is heading and how that combines with federal policy is critical to understanding what we need to plan to sell to our customers in the future.