The hearing itself,  before the House Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending carried the catchy (if somewhat worn) title,”Volt Vehicle Fire: What did NHTSA Know and When Did They Know It?”

Not surprisingly, NHTSA took it from both sides, as Terlep reported that “GM Chief Executive Dan Akerson told a House panel on Wednesday that . . . a U.S. safety probe of the vehicle in part was politically motivated.”

At the same time, some subcommittee members “accused the agency of waiting to publicize its investigation into Volt batteries for fear of hurting Obama administration efforts to advance electric vehicles.”

Of course it can’t be both and in fact is neither.  Anyone who’s ever dealt with NHTSA knows that the staff is stocked with public-minded civil servants who take their mission — increasing safety on the nation’s highways and overseeing fuel economy standards — extremely seriously.  In this Administration, NHTSA is led by a Capitol Hill veteran, David Strickland, also widely respected on both sides of the aisle.

The truth is that NHTSA played this one straight.  They investigated reports on vehicle fires occuring hours after significant crash-related damage to the vehicle systems.  And they found?

“NHTSA closed its safety investigation last week, saying the car poses no unusual risk of fire.”  Nonetheless, GM is ”adding steel reinforcements around the car’s lithium-ion battery to prevent damage in the case of a crash. It also will add a sensor to monitor coolant levels and a bracket to the top of the coolant reservoir to prevent an overflow.”

Sounds like a smart move.  Another smart move is ensuring that the vehicle is popular in low-emissions vehicle-hungry California,“where the vehicle [previously] didn’t qualify for a state tax credit and unrestricted use in car-pool lanes. GM will soon release a version of the Volt in California that can meet California’s standards.”

It’s a little hard to understand why the first version wasn’t designed to California standards, where Prius-envy may have been leveraged into robust Volt sales.  But better late than never.  So bet on California (and national) sales to improve significantly — thus reducing oil consumption and greenhouse gas emissions at the same time.

Certified safe and California-friendly:  two key ingrediants in the recipe for increasing our energy security through vehicle electrification.

First things first.  In a fairly stunning piece, even to jaded DC insiders, former Congressman William Delahunt (D-MA) is reported to be working for the small coastal town of Hull, on Massachusetts Bay “for help in developing a wind energy project.”

The catch?  “While in Congress, he personally earmarked $1.7 million for the same energy project.”  And it gets worse, as “80 percent” of the funds his firm will receive will be “from the pot of money he created through a pair of Energy Department grants in his final term of office, records and interviews show.”

Now most former members of Congress who end up in law and lobbying firms claim they aren’t actually lobbyists but instead are “strategists.”  And the former Congressman released a statement quoted by the NYT saying:  “I have no federal lobbying relationship with any past or current client.”  That may be news to the town of Hull, who’s town manager is quoted a few paragraphs later using a textbook definition of access-lobbying:

“Obviously he’s got connections into the federal government that we don’t have . . . . We’re hoping he can open doors at the federal level that we could never open.”

So the Hull wind energy project will soon join Solyndra as grist for the argument that the federal government should not be providing incentives for clean energy technology deployment because those incentives are inevitably transformed into “crony capitalism.”  But just as Solyndra was evidence of the misuse of an innovative technology loan guarantee program for economic stimulus rather than evidence of a problem with government incentives; so too is the Hull project actually a fair indictment of earmarking rather than a fatal flaw in the concept of deployment incentives.  The solution?  Programs that provide funding only where the merits of various projects can be clearly compared using  objective metrics rather than “awarded” through either the legislative process or via an opaque administrative ”negotiation.”  Reverse auctions — where bidders commit to delivering X units of energy at Y cost to the taxpayer and only the best deals are then funded — are particularly suitable for such an objective process.

The second piece begins with the type of human interest angle that can obscure rather than teach, as (again, Massachusetts) a hilltop homeowner laments that the local utility wouldn’t run a natural gas line out to his place and he must instead rely on expensive home heating oil.  The real story, as we soon learn, is that home heating oil users are spending between double and triple what their natural gas-using counteparts do.  Some are out of luck due to location; others because they can’t afford the cost of conversion — even though savings due to lower monthly bills may pay for the investment in just a few years.

What’s the current federal policy response to this problem?  It is a well-intentioned effort to help low-income homeowners stay warm in the winter through the much-maligned Low Income Heating Assistance Program, or LIHEAP, whereby taxpayers subsidize the heating bills of qualified consumers.  Unfortunately, that neither fixes the problem nor encourages conservation, but instead simply transfers wealth to homeowners (and ultimately heating oil providers) “trapped in a cycle of spending more and more for heat . . . .”

Is there a better way?  For some, it could be the hugely popular state and local program called PACE — Property Assessed Clean Energy Bonds (see www.pacenow.org).  Designed to let homeowners invest in energy efficiency retrofits in an affordable way, at no cost to taxpayers, this program has been literally sweeping the nation during the last few years.  And if it doesn’t include switching from heating oil to natural gas as an eligible activity, it should.  That would be an obvious energy market intervention worth making.  No earmarks required.

The truth is that as the plug-in electric vehicle (PEV) industry begins to gain a foothold in the U.S. automotive market, PEVs must be viewed as a critical component of the nation’s long-term strategy to enhance energy security through reduced oil dependence.

 Oil dependence poses a real and immediate threat to the entire nation—and it exacts enormous costs in terms of national and economic security. Economically, there is a direct transfer of wealth taking place, taking capital out of the U.S. economy and driving up our trade deficit. The U.S. military is forced to secure the world’s oil supply lines and infrastructure, and this dependence compromises our foreign policy options.

 The challenges to electric vehicles noted in the WaPo resemble those of many innovative transportation technologies throughout history. It would be a tragic decision to allow temporary obstacles to deny the nation the potentially transformative benefits of leveraging electric vehicles to reduce the threat of oil dependence.   Sales of plug-in electric vehicles are off to a better start than the introduction of traditional gasoline hybrids more than a decade ago. In their first full year of availability, plug-in vehicle sales have surpassed 15,000 units in the United States. Hybrid vehicle sales totaled 9,350 in their first full year of availability, which was 2000.

 Even the near-term outlook for PEVs is more promising than critics contend. Major global automakers plan to introduce as many as 30 PEV models in the next two years, which will create much-needed demand for batteries. At the same time, mainstream U.S. companies such as FedEx, UPS, Frito-Lay, Staples, and others have placed orders for hundreds of PEVs over the past year. Early in 2011, GE announced an intended purchase of 25,000 PEVs by 2015—12,500 of which are Chevy Volt plug-in hybrids.

 According to researchers at Oak Ridge National Laboratory, U.S. oil dependence is estimated to have cost the nation more than $5 trillion in economic damage since the 1970s. This year alone, the U.S. trade deficit for crude oil and refined products will be around $300 billion. According to an estimate by the RAND Corporation, the ongoing expense of oil dependence to our military is between $67.5 billion and $83 billion annually.  A fraction of that invested in the technology that will reverse that seems like a very small bet on a very large likely return.

 To fully combat the costs of oil dependence, aggressive energy reform must include increased domestic production of hydrocarbons and improved automotive fuel-economy standards in the near term and a transition to electrification of transportation over the long term.

 Don’t be misled:  Plug-in electric vehicles are a strategic weapon to combat oil dependence. Electricity is generated from a diverse set of domestic energy sources—from nuclear and natural gas, to coal and renewables. Electricity prices are also more stable than oil prices, and there is an existing infrastructure with spare capacity already in place.  With as much as 90 percent of global oil and gas reserves held by national oil companies—many of which are in countries that share neither our values nor our goals—the global oil market is not a free market. Electrification offers the opportunity to break the oil monopoly in the transportation sector.

 It is certain that the relatively new electric vehicle industry will continue to evolve and will face obstacles, as all industries do. But the enormous costs of oil dependence, paired with the fact that there is no free market for oil, justify taxpayer support for promising technologies that reduce oil consumption while growing the economy and providing mobility.

We must always put the cost of supportive policies in context of the total cost of our oil dependence. Every technology experiences challenges, and electric vehicles are no different. But to stop, or even slow down support for an industry that has the potential to dramatically improve our economic and national security would only jeopardize the nation’s prosperity and security.  We’ve done enough of that; it’s time to support the solutions.

1.  Ana Campoy and Stephanie Simon reported on a dispute in Oklahoma over a wind farm that may interfere with oil production.  The Osage Nation owns the mineral rights to nearly 1.5 million acres in Osage County, and has since the early 1900s. The Missouri-based Wind Capital Group has leased land to set up windmills from private parties on that same real estate.  The interesting legal question is whether building a wind farm will impair access to the land needed to develop the mineral rights.  And of course the wind farm side of the dispute is pleading urgency, as financing is “contingent on a government tax credit that is only available until the end of 2012.”

Here’s the problem with that:  Those tax credits are production tax credits that only make wind economical — if at all in the face of cheap natural gas — if they are extended every year, not just once.  And even if they are extended, long-range they are doomed.  In a time of abundant fuel for electricity contrasted with extremely expensive oil, the right answer in this dispute is to shelve the wind project and produce the oil, if that’s what it takes.

2.  Bravo to the EU, and specifically the French, for seeking to ban Iranian oil imports in an “unprecedented step against the world’s third-largest oil exporter over its alleged nuclear-bomb program,” according to reporters Laurence Norman, Max Colchester, and Benoit Faucon.  While it’s great to see the French pushing this, it would be nice to hear US policy-makers lending support.

3.  Sharon Terlep reported on the NHTSA investigation into the fire risk posed by the Chevy Volt after “crash tests caued fires in two instances, a development that could be a serious setback for electric vehicles.”  On one level, this makes sense, but should we really worry about brief fires “within hours or days” after “the agency intentionally damaged the battery compartment and ruptured the coolant line”?  Sounds like a bit more than a crash risk, and more like sabotaging a machine to cause a problem.  We’ll be following this story.

4.  And finally, the WSJ editorial page took another shot at the “green jobs” ideology, pointing out that “the real employment boom is taking place in oil and gas.”  Not surprisingly, our recent explosion in domestic oil and natural gas production has been good for workers.  We’ll end on the good news:

“(O)il and gas production . . . now employs some 440,000 workers, an 80% increase, or 200,000 more jobs, since 2003.  Oil and gas jobs account for more than one in five of all net new private jobs in that period.”

On Friday, the release of a new round of White House documents added more details, whosing concerns among senior advisers earlier this year that Solyndra might erupt into a political scandal requiring the replacement of Chu and his agency team.

Well, they were right about that.  Even worse, the piece quotes a former Obama campaign energy adviser, Oregon professor Dan Carol, in a February 2011 email declaring that the Energy Department had suffered a ‘deployment failure’ and urging Obama to ‘make major leadership changes as soon as possible.’ 

The WaPo piled on Sunday with a long Outlook piece by the normally on-target Steven Mufson, entitled Before Solyndra, a history of failures.  This piece details the familiar record of ‘failure’ on the Clinch River Breeder Reactor.  The Synthetic Fuels Coporation.  The hydrogen car.  Clean coal.

That’s actually a pretty cheap shot.  There’s been no failure on either hydrogen cars – fuel cell technology has been developing pretty much on schedule.  Same with clean coal.  DOE’s R&D on that front has been very valuable.  And a list of successes could include the Prius battery, gas turbines, and horizontal drilling techniques.  Solyndra was surely a mistake, but DOE’s R&D record is strong.

The other big energy news is the Administration’s punt on the Keystone XL oil sands pipeline.  Mufson had an important piece in Saturday’s WaPo:  With the Keystone XL pipeline on hold, the giant companies tapping Canada’s oil sands will turn to Plan B – existing pipelines to the United States.

That’s exactly right, and the WaPo made emminent good sense in Sunday’s editorial:  Canada’s oil will come out of the ground, and someone somewhere will refine it and burn it. . . . (T)he world will continue to use oil, with all the dirty realities that entails.  Rejecting Keystone XL would not change that fact.  But it would help China lock up more of the world’s oil production, cost infrastructure jobs in the United States and offend a reliable ally.  More delay after three years of review is insult enough.

Well put, WaPo.

And, yes, Mr. Kaiser apparently talked about the project with White House — but never “personally lobbied” for the guarantee.  Indeed, the piece in today’s WaPo by Joe Stephens and Carol Leonnig even portrays Kaiser as pushing back on a proposal to lobby the White House:  ”I question the assumption that the WH is the path to pursue when both of your issues are with the” DOE.  This isn’t a smoking gun; it’s not even a water pistol.

The real scandal we should be paying attention to got top treatment on the WaPo editorial page and a piece in yesterday’s WSJ.  That’s our inability to constrain Iran’s ambitions to build a nuclear weapon.  The reason for that is the reason that the DOE loan guarantee program should be focused on getting us off of oil — not trying to compete with cheap natural gas for electricity.

Imagine the late great Joe Frazier being forced to box with one hand tied behind his back and you’ll have a sense of US foreign policy in this long age of oil dependence.  The WSJ lead was chilling:

The United Nations’ nuclear agency said Iran has developed technologies needed to produce nuclear weapons, a finding that puts new pressure on the Obama administration to act more forcefully against Tehran.

And the money line later in the article was depressing:

While U.S. officials say Washington will try to use the report to bring new sanctions, the Obama administration has stepped back from one potential target—sanctioning Iran’s central bank, the principal conduit for Iran’s oil sales. Administration officials have voiced fears that blacklisting the bank could significantly drive up international oil prices and hurt the U.S. economy.

That’s right.  We are so terrified of spiking oil prices that we refrain from taking action that could prevent a nuclear confrontation in the Middle East.

When economists talk about the externalities of oil consumption, they are usually referring to environmental impacts and Defense Department costs of war-fighting in oil-rich regions or expenditures made to keep sea lanes open for oil-related commerce.

It’s impossible at this time to quantify the monetary value of a foreign policy tool like sanctioning Iran’s central bank.  It will be easy to quantify the costs of a new war in the Middle East that may be the consequence of our failure to prevent Iranian nuclearization.  And that failure will have been directly related to our addiction to imported oil.

WaPo’s dynamic duo of Juliet Eilperin and Steven Mufson reported on the “Keystone pipeline battle heating up” this past Sunday.  Useful graphic shows the existing Keystone pipeline as it drops down through the plains states and over to St. Louis and quotes Canadian ambassador Gary Doer about the pending US decision on the expansion:  ”If it’s made on the merit, we’re confident.  If it’s made on the noise, it’s unpredictable.”  This project gets essentially an anti-subsidy from the US, with costs nearing $2 billion on pipe and other stored equipment sitting idle during the three-year environmental review.  That’s almost 30% of the total $7 billion project cost.  Kind of a reverse investment tax credit.  WaPo cites a worry of activists opposing the pipeline:  ”the break in an Exxon Mobil pipeline in Montana over the summer” that spilled about 42,000 gallons of product and will cost an estimated $135 million to clean up.  But of course, that’s precisely the point:  it will be cleaned up.  Anti-energy activists need to recognize that producing energy carries risks and consequences, no matter how carefully it’s done.  More efficient cars and lightbulbs will help us all use less energy, not none.

Mitt Romney, the former Governor of Massachusetts who was not at the forum yesterday, has expressed his support for expanded drilling and criticized the federal government for picking “winners and losers,” an opinion shared by Texas Governor Rick Perry and Minnesota Congresswoman  Michelle Bachmann at yesterday’s forum.  All candidates have linked decreasing regulations to ramping up oil production as the key to job and economic growth.  In mid-October, Michelle Bachmann criticized Governor Perry for copying her platform, saying “I want to thank Gov. Perry for endorsing my energy plan, that he’s coming out with today.”  Former Pennsylvania Senator Rick Santorum blasted all energy subsidies, including ethanol (a risky position in Iowa), a stance shared by Texas Congressman Ron Paul.

Former Speaker of the House Newt Gingrich stood alone in defending a government role in renewable energy production, stating “it’s legitimate to have biases for what you want.”  He supports extending longer term wind-energy tax credits on the basis that businesses can make better investment decisions.   Iowa is the country’s second largest producer of wind energy, according to the Iowa Office of Energy Independence.

While many of the candidates are quick to criticize tax credits for wind and solar, they are generally less forthcoming with positions on oil and gas industry subsidies.  Perry has asserted that government subsidies should also end for oil and natural gas.  Jon Huntsman, who was not at the Iowa debate, spoke yesterday about energy issues, pushing to “break oil’s monopoly” through promotion of alternative fuels.  Politico reports that the former Utah governor, although supporting increased domestic fossil fuel production, stated “we cannot simply drill our way to energy security; we also need to use the power of the marketplace.  This means breaking oil’s monopoly as a transportation fuel, and creating a truly level playing field for competing fuels.”  He supports eliminating every subsidy for energy companies, instead utilizing the resources for energy research.  “However,” he said, “we must not confuse pure research with politically driven industrial policy such as we saw with Solyndra.  We must have a level playing field, with the federal government setting fair rules, but investing only in basic research.”

The candidates have been largely silent on the issue of electric vehicles, with the exception of Mitt Romney, who has questioned Department of Energy’s Advanced Technology Vehicles Manufacturing program.  One program recipient, Tesla, reported yesterday that its new Model S sedan, to be built next year, has already sold out.  We await further statements from all candidates about their approach towards harnessing electric vehicles as a strategy for reducing the country’s dangerous dependence on foreign oil.

Saturday’s WSJ also noted that forecasts of colder temperatures caused natural gas futures to jump 4.2% to $3.923 per million Btus.  ”Frosty Air Heating Up Gas Futures” quoted Matt Smith at Summit Energy:  ”It’s all about the weather.”    The same article reported that US EIA found underground gas inventory up 92 billion cubic feet, “much higher than the five-year average build for the current period.”  If futures can “jump” to only $3.92 per MBtu, the news is really how astoundingly low natural gas prices will probably stay. . . .

Front page in multiple papers Saturday on White House review of all loan guarantees made by DOE under the stimulus bill.  WaPo headline:  ”White House orders audit of Energy Dept. loans: Move comes amid GOP subpoena threat in Solyndra case.”  The story that won’t die, the “review is a tacit acknowledgment that the loan program, defended by President Obama and his senior advisers for weeks, has raised enough internal concern that an outside assessment is necessary to clear the air and determine its future.”  Good luck clearing the air.  Loan guarantee program future is bleak . . . .

Front page Sunday NYT:   “A New York Village’s Debate Over Drilling Turns Personal”:  ”The debate over horizontal hydraulic fracturing . . . has become increasingly contentious across the Eastern United States, with dozens of communities passing or considering bans.”  No real news here, including the allegation that fracking opponents are also generally “antigrowth fanatics, opposing a once-a-year music festival . . . wind turbines . . .even additional Little League fields. . . . .”

And the most important piece of the weekend, Dan Yergin in Sunday’s WaPo, Outlook section.  In “Oil’s new world order,” Yergin makes the point that the global geopolitical balance of power in the oil economy is shifting.  He finds that a “new world oil map is emerging” . . .”centered not on the Middle East but on the Western Hemisphere.”  But don’t breathe a sigh of relief yet, for since “there is only one world oil market” the U.S. “will still be vulnerable to disruptions . . . .”  Darn.

“As federal stimulus dollars for investment in renewable energy begin to dry up, will the private sector rush in to fill the void?  Maybe not.”

Eilperin and Mufson (let’s call them “E&M”) build an effective case for why it is unlikely — and in doing so provide a strong rationale for questioning the original stimulus spending rationale.  Yet the piece also implies a path forward for policy-makers that makes sense for our global economic competitiveness, our domestic economy, and our energy security.

E&M provide some very useful facts:  “Venture capital investments in what the industry calls “clean tech” companies” were down some 44 percent compared to the same time last year, outpacing the overall 26 percent decline in overall US venture capital investment.

E&M are on target when they write that the future is unlikely to be rosy for VC in electricity-related clean-tech:

“Now, an abundance of cheap natural gas extracted from shale, the death of climate change legislation and fierce competition between existing renewable energy companies have combined to make venture capital investors hesitate even more.”

Fair enough.  These market forces (and lack of federal policy that internalizes some environmental costs for fossil fuels) are the same ones that make new nuclear build such a long shot.  Yet we should be celebrating the fact that we have cheap, clean natural gas available for electricity generation — while focusing our efforts on the area of need.

And what’s that?  Our continued dependence on increasingly expensive oil.  Let’s gear federal policy and private capital toward dealing with that present danger to our economy, rather than trying to make markets for expensive clean tech where good alternatives already exist.