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.

This oversight is especially glaring when considering that the lead story on the Post’s front page that day—“Iran seeks closer ties in Latin America”—shows Iran to be engaged in aggressive diplomacy in Latin America in an effort to counter U.S. and United Nations sanctions being placed on the Iranian economy in response to the Islamic Republic’s plans to develop nuclear weapons. It is within the context of nuclear research and sanctions that Iran has recently threatened to close the Strait of Hormuz, through which more than 15 million barrels of oil travel each day. While it is important for U.S. policy makers to consider more domestic drilling and continued strong fuel economy standards when crafting future U.S. energy policy, the Post’s claim that a shift to electric vehicles will not benefit U.S. energy security enough to justify federal support seems to ignore much of the recent news coming out of the Middle East.

Several other issues from the editorial also deserve attention and we’re not the only critics of the piece.

Independence From Oil

• The editorial argues that fuel-economy innovations in clean-diesel and advanced gasoline vehicles show more promise than electric vehicles as a solution to America’s dependence on foreign oil. This statement is easy to disprove, since only 1 percent of electricity produced in the U.S. comes from petroleum. This means electric vehicles are ultimately being powered by natural gas, coal, nuclear fission, solar and wind power—which are almost entirely domestic resources.

• Due to the fungible nature of the global oil markets, any technical gains in fuel efficiency—such as a doubling of fuel-economy standards by internal-combustion (IC) engines in the coming decades—will not fundamentally change the way volatile oil markets can hurt the U.S. economy. A shift to electric vehicles, however, would both lower the amount of petroleum imported into the U.S. and negate the influence of price volatility on U.S. consumers in a way that more efficient internal-combustion engines simply cannot. It’s worth noting that every U.S. recession in the past 40 years has been associated with an oil price spike.

Consumer Availability

• The editorial criticizes the federal government’s $7,500 tax credit as a giveaway to upper income consumers, but the tax credit was created to make the cars more affordable to the general public. New technologies are inherently expensive, and early adopters are generally better off than the general population. But an examination of the past 25 years of automotive technologies shows that the development of anti-lock brakes and air bags were first available only in the most expensive luxury auto brands. Now they are standard on many inexpensive vehicles sold to first-time car buyers. The key question is how to move from early adopters to the mass market in a rapid manner. The point of the tax credit is to drive the scale of production for electric vehicles in a way that would help speed the industry toward self-sufficiency.

More Demand than Supply

• The editorial suggests that U.S. sales of electric vehicles were disappointing in 2011 but doesn’t offer readers much in the way of comparisons to measure success or failure. Total U.S. sales are expected to surpass 15,000 vehicles in 2011, and there continues to be more buyers looking to purchase electric cars than available cars. Both GM and Nissan have plans to expand production of the Volt and Leaf brands in 2012, while more than 20 additional all-electric or plug-in hybrid models will be launched this year by automakers like Toyota, Renault, BMW, Daimler and others. Electric car purchases during their first year in the market will likely be more than 50 percent higher than the first full year of hybrid car-sales, and experts suggest critics must wait until 2013 to know what the real demand for electric cars will be.

The battle is playing out in Pennsylvania as the Republican-controlled legislature considers bills that would in their current form sharply limit a community’s right to control where gas companies can operate on private property. Critics say the final bill could vastly weaken local zoning powers and give industry the upper hand in exchange for a new tax, which municipalities badly need.

Local governments argue that drilling is an industrial activity, just like that of a gas station or a cement factory, that should be subject to zoning. Dozens of towns, cities and counties across the country have enacted rules on drilling noise, lighting and the distance from homes and, in some cases, outright bans. In New York State alone, there have been at least 70 such actions.

Companies say the rush to regulate has produced an overly burdensome set of demands that is denting their potential when the economy desperately needs a lift.

Supporters of the Pennsylvania legislation argue that it would hold the industry to higher, more uniform environmental standards in addition to charging them fees.

This question of where to regulate is a critical one.  And many view local governments as only half right:  Yes, energy production is “an industrial activity” — but it’s not “just like . . . a gas station or a cement factory.”  Most commercial industrial activities can be sited in areas appropriate for the specific activity.  Energy production needs to occur where the resource is – whether that’s coal, oil, natural gas – or even wind and solar.  And energy is the lifeblood of the US economy.  Energy produced in one locale is depended on by folks living in many others.   So holding industry to high uniform environmental standards while ensuring that local fears don’t trump regional needs makes regulation of energy production at the highest practicable governmental level the right answer for our nation’s energy security.

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.”

As the committee was scrutinizing tax policy, federal subsidies, and loan guarantees, it is obvious that there are strong, but ambiguous, implications for energy policy.  The Hill reports that Democrats were seeking to end tax subsidies for oil companies.  The American Petroleum Institute pushed back strongly against this proposal, arguing that doing so would increase energy costs and eliminate jobs.  However, drilling advocates were hoping that supercommittee negotiations could open a path towards wider oil-and-gas leasing, thus the panel’s demise also holds disappointment for the industry.  Subsidies for renewable energy sources including ethanol, wind, and solar, as well as the Department of Energy’s loan guarantee program, could also be threatened in future budget negotiations.  We will be watching closely for any major energy-policy outcomes.

In other news, the Los Angeles Times published a thought provoking article detailing the process through which the new fuel economy standards were established.  The article describes a deal which was three years in the making, with the involvement of environmentalists, state regulators, auto manufacturers, and other government and industry leaders.  The outcome is quoted as the “single biggest environmental achievement in a generation, akin to the landmark 1970 clean air act.” While this may indeed be true, and it is undeniably a strong accomplishment from an environmental perspective, the article failed to describe the standards as a foreign policy and national defense achievement, of even greater importance to our long-term energy security.

An interview with SAFE President and CEO Robbie Diamond in Newxmax properly illustrates oil dependence as the security threat it is, and discusses forward-thinking solutions.  Speaking about the partisan divide between Republicans who are pro-drilling and Democrats who exclusively wish to pursue renewables, Diamond advocates an aggressive pursuit of both, as well as the electrification of ground transportation, noting that “electricity is the best way to solve American’s energy problem because of the diversity of fuel sources used to produce it — including coal, natural gas, nuclear, wind, and solar.”  Linking this solution to increased fuel economy standards, NPR published a piece yesterday about how electric vehicles can help bridge the gap between today’s engines and the proposed 54.5 miles per gallon by 2025.  Let’s hope any and all future examinations of the Department of Energy’s budget keep this solution, and the 2025 goals, in mind.

But an alternative weapon weighing a fraction of that (and costing quite a bit less, too) was unveiled this past week:  the fuel-efficient vehicle of tomorrow.

Several national security hawks, including the well-regarded Military Advisory Board supported by the Center for Naval Analysis, have for years promoted fuel efficiency has a tool to reduce our dependence on foreign oil and thereby enhance our foreign policy flexibility and increase our national security.  As Denning writes, fully implementing the new Obama Administration fuel economy standards — a doubling of mpg in new vehicles by 2025 — would have a nice and neat impact on our imports:

(A)ssuming new vehicles hit the effective 49.6 miles a gallon fuel-efficiency target by 2025 . . . demand for motor fuel would have dropped by 2.6 million barrels a day.

Here’s the kicker:  That just happens to be a bit more than  Iranian oil exports.

Now of course oil is a global commodity and courses through a global marketplace.  But wouldn’t it be nice to know that we could completely shut down Iranian oil exports at no cost to our economy?

People who invest in hybrid cars are significantly less likely to be injured in an accident because their heavy batteries make the vehicles safer than traditional cars.

Ashley Haley’s piece, Hybrid cars found to offer extra safety in crashes, credits the extra battery weight, meaning the benefit should also hold for fully electric vehicles as well.

The average hybrid is 10 percent heavier than a traditional car of the same size, and the extra heft reduces the odds of being hurt in a crash by 25 percent, the report says.

Save money, enhance our nation’s energy security, and be safer — drive an EV!

Which is good news in light of the fact that oil prices touched $100 yesterday.  Here’s the WSJ on why:

The sale of an oil pipeline running from Oklahoma to Texas upended U.S. energy markets Wednesday, sending the price of crude surging above $100 a barrel as America copes with the promise and pitfalls of its new energy boom.

Over the past two years, the U.S. has started producing so much oil that existing pipelines have been unable to move it to refineries. That has led to a glut of oil in the center of the country, keeping the price of American crude far below that of petroleum traded overseas.

The change in direction for the pipeline could also derail the controversial Keystone XL pipeline planned to run from Canada to the Gulf, although TransCanada Corp. said Wednesday it still expected approval of its project.

And it will contribute to already declining U.S. imports of foreign oil. Since they will get more domestic oil from the pipeline, Gulf Coast refineries will have less need to buy oil abroad.

“It’s hard to overestimate the significance” of reversing the pipeline, said Antoine Halff, lead industry economist at the U.S. Energy Information Administration, an arm of the Energy Department.

Oil goes up in price because the future holds promise of slightly reduced dependence on foreign oil?  Just proves the old adage that the markets hate good news.  And this is good news:

“A Seaway reversal will provide capacity to move secure, reliable supply to Texas Gulf Coast refineries, offsetting supplies of imported crude,” Enbridge CEO Patrick D. Daniel said.

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.

An article in the Financial Times today talks about the new growth being a “pendulum swing” toward American oil independence, with many analysts expecting that the U.S. will leapfrog Saudi Arabia and Russia to become the world’s largest producer of liquid hydrocarbons by the 2020s when counting both crude oil and lighter natural gas liquids such as propane and ethane, the newspaper said.

While complete energy independence for the U.S. is unlikely, the new growth offers a number of serious benefits for our ailing economy. These benefits including more job creation, the shrinking of the chronically high trade deficit and the slowing of the tens of billions of dollars in annual wealth transfers from U.S. consumers to governments who share neither our values nor our goals.

The FT also highlights a key argument made by SAFE and our partners.  While more domestic oil production and higher fuel-efficiency standards help energy security, “even if the U.S. one day imports oil only from Canada, it will still suffer when there are global supply shocks and price spikes.” This reality of the global oil market can only be remedied if the U.S. moves toward millions of vehicles that are powered not by oil, but rather through a large electrified transport sector.

The electric car is already here, and the national grid already exists, so no additional large-scale national infrastructure is needed. And with an electrified transportation system, no single fuel source or producer could hold the U.S. hostage the way an oil disruption can today. There are clear benefits for the U.S. to dramatically grow its domestic oil production in the coming decades, and it is essential to continue this domestic development. But the national and economic security threats of oil dependence will still exist even with this additional production…so acting now on long-term electrification strategies is an essential component of a lasting and durable U.S. energy security policy.