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In 2010 Senator Carl Levin Agreed with The Auto Channel's Call for Mandated End to Gasoline

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U.S. Senator Carl Levin (file photo)

DETROIT - October 13, 2010: Speaking at the Business of Plugging In conference in Detroit today, U.S. Senator Carl Levin (Michigan) echoed many of the same proposals put forth more than two years ago by The Auto Channel in their white paper position "No New Gasoline Powered Vehicles...." Most notable was Levin's call for a federal mandate that eliminates gasoline as an engine fuel used in America.

Levin further agreed with The Auto Channel when he acknowledged that a robust alternative fuel and energy industry is the country's way out of the current economic depression.

To read the complete report "NO NEW GASOLINE-POWERED VEHICLES IN THE U.S. BY 2014...Can It Be Done?" CLICK HERE.

The following are the senator’s remarks, as prepared for delivery:

Good afternoon, and thanks for inviting me to talk about a subject that’s close to my heart.

The work that you do is tightly entwined with what happens in Washington and other capitals around the world. If those of us who work in politics make the right decisions, we can make that work easier and expand its impact. If we mess up, we could squander much of the progress you’ve made, stand in the way of future progress, and dampen your ability to improve the world as much as we all believe you can, and as much as we need to.

So, I’d like to talk about the intersection of public policy and the electric vehicle. I want to begin by praising some good things that government and the private sector are doing together to get the transportation sector plugged in. And then I want to have a conversation about some potential next steps that I believe are necessary to increase the pace of progress.

Let’s start with a metaphor. We sit at the intersection of three powerful streams that are combining into one mighty river. In this unusual confluence three powerful drivers of public policy are pushing us in the same direction. Driver number one is the challenge of climate change. Driver number two is the national security challenges of our fossil fuel-based energy economy. And driver number three is the economic challenge of maintaining a robust manufacturing sector. The powerful river they combine to form is flowing, rapidly, toward a future dominated by electric vehicles.

There are boulders and rapids along the way. If we navigate correctly, we can get to that electric- vehicle future with greater certainty and speed. But there are also plenty of places where we can founder on the rocks.

Let me talk briefly about each of the three policy drivers – the tributaries of our mighty river – and how they combine.

The first, as I said, is climate change. Let’s be clear: It is real. It is an urgent problem. Either we deal with it now, or our children and grandchildren have to deal with it later, when the remedies will be much more difficult, much more expensive, and much less effective.

Next is national security. There is also no question that our need for imported oil from unstable parts of the world, and the dependence of our military on fossil fuels, make our nation less safe. We got a vivid demonstration of this recently in Pakistan. Attacks on fuel convoys that supply our troops in Afghanistan showed just how much oil has become the lifeblood of our military, and how dependence on it is a huge vulnerability. As chairman of the Senate Armed Services Committee – and simply as an American citizen – I see the necessity of reducing that dependence for the sake of our national security.

And the third policy driver is our need for a thriving manufacturing sector. To our detriment, more and more of the economic activity in our country has been directed at creating paper wealth – the kind of wealth that evaporated pretty quickly when the financial crisis hit. For too long we’ve paid far too little attention to manufacturing. Meanwhile, our competitors in places like China and Korea were pursuing policies that promoted manufacturing at our expense, with the result being the loss of millions of jobs.

None of these factors are especially new. Each has been building up for a long time. But for too long, we have been reluctant to acknowledge them and take steps to deal with them. We’ve stood on the riverbank, watching the river flow by.

Why? Two impediments held us back.

The first was an ideological opposition to federal government support for manufacturing. For decades, any suggestion that government ought to act as a partner with manufacturers was labeled “industrial policy,” and that label was the kiss of death. While our government refused to partner with American manufacturers, our competitors were establishing partnerships and making investments to position their manufacturers for the future.

The second impediment is the ability of oil exporting nations to play us like a yo-yo. Some of you, like me, were around in the 1970s, when we had some very clear signals that our heavy reliance on foreign oil was not sustainable. We actually began to make progress. Then OPEC dropped the price of oil, and our independence effort withered. Oil ministers from these nations made it clear that they would keep the price of oil at a low enough level so that alternative energy sources wouldn’t make economic sense. And that distracted us from the fact that ending our dependence on imported oil is in our long-term economic interest, beyond the need to end it for environmental and security reasons.

But we have, I believe, now begun to clear our eyes. We are no longer shackled by an ideological aversion to “industrial policy.” The administration understands that our manufacturers aren’t competing with foreign companies, but with foreign countries that support their manufacturers.

Our long-overdue understanding of what our companies are up against in a global economy is demonstrated in the area of electric vehicles. The American Recovery and Reinvestment Act – the stimulus bill – included a $2 billion investment in advanced vehicle batteries and electric components. Thanks to that funding, an industry that barely existed in the United States a couple of years ago now has more than a dozen factories open or under construction to make advanced batteries and other electric-vehicle components, employing thousands of American workers. The Recovery Act also expanded the tax incentives available for buyers of plug-in hybrids, recharging equipment for plug-in hybrids, and battery electric vehicles.

And we’re even beginning to overcome the distractions of the oil-price yo-yo we’ve been subjected to for decades. Now, you will not convince many Americans that the price of oil is low. But the factors we talked about earlier, that oncoming river that is rushing to a new future, means our country is more focused on the long term than before. A recent poll by the Pew Center found that, when Americans are asked whether our highest energy priority ought to be keeping prices low or protecting the environment, the environment wins by 19 percentage points. And in April, a poll of those who have paid the highest price for our oil dependence – veterans of the wars in Iraq and Afghanistan – found that 79 percent of those veterans believe that ending that dependence is important to our national security.

So these three policy streams are so strong that we are no longer allowing ideological constraints or short-term price incentives to cloud our view.

But. Yes, there is a “but.”

We are pointed in the right direction now, but this is not some placid river. We have to remain focused if we’re to navigate our way around a host of challenges.

One of the major challenges we face is moving electric vehicles from a niche market to an affordable alternative for most American families. We know that the early generations of these vehicles are not likely to be affordable to the average family. I mentioned earlier the tax incentives contained in the Recovery Act for plug- in hybrids. The Act gives a tax credit of up to $7,500 for plug-in hybrids. Such credits can close the affordability gap and give consumers a powerful reason to choose an advanced vehicle.

But the affordability gap remains significant, even with the tax credits. And there’s another problem. The $7,500 credit applies to only the first 200,000 sales from each manufacturer and then will phase out.

That creates an uncertainty that is hampering our ability to move electric vehicles into the mainstream. Manufacturers will be less certain they will have buyers for these advanced vehicles if the credits come with expiration dates.

We have taken some other steps to stimulate the market for alternative-energy vehicles. As early as 1992, Congress passed laws mandating that federal vehicle fleets contain a certain percentage of alternative-fuel cars and trucks. Other federal laws and executive orders followed. But each of these mandates has lacked teeth. Federal agencies are able to opt out or waive the mandates, by citing uncompetitive costs or a lack of available alternative fuels. Again, we’re pointed in the right direction but failing to move with real urgency.

The one set of rules with real teeth is CAFE fuel economy standards. But here, we’re rowing against the current. Until its restructuring in 2007, CAFE was an example of U.S. policy working against, not with, U.S. manufacturers. Its provisions discriminated against U.S.-made vehicles of the same efficiency as imports. Even with the worst of those discriminatory provisions now removed, CAFE forces auto manufacturers to focus on incremental improvements rather than dramatic leaps forward. CAFE is a row boat, when what we need is a high- tech whitewater raft, something to carry us with confidence toward our ultimate goal – affordable alternatives to the internal-combustion engine.

So what do we do? First, I think we need to end the uncertainty over tax incentives. Manufacturers need to know that there will be a market tomorrow for the products they are investing in today.

Second, we need to rethink the whole regulatory approach toward achieving advanced-technology vehicles. We should explore the possibility of requiring by a certain time, perhaps 15 years down the road, that the entirety of certain classes of vehicles be made up of plug-in hybrids, all- electric vehicles, fuel-cell vehicles or other alternatives to oil. We would need to include in any such proposal a strong government partnership, investing in research and development and in the infrastructure necessary to support these vehicles.

I know the idea of such a mandate would be controversial. Thinking it through and avoiding unintended consequences would be difficult. But the incremental gains of our current approach are achieved at great cost, in terms of resources and policy struggles. We should at least consider removing those high costs, along with the EPA- NHTSA-California regulatory regimes that has produced them, and putting in their place a longer-term approach that gets us to a better result.

None of this would be easy. But the rush of events surely justifies a fresh approach. Too much of our effort is now aimed at short-term goals – a few percentage points of fuel economy improvement each year. I believe we should try to end this incremental approach, which squanders opportunities to do more for our economy, more for our environment and more for our national security. Our goal should be nothing short of making electric vehicles affordable and attractive to every American family. That is where the roaring river can take us.

Thanks for inviting me to think a bit out loud with you. Good luck, not just for a successful conference, but in navigating the whitewater ahead.