(Reuters) – President Barack Obama on Wednesday will set a goal to reduce the amount of oil the United States imports by one third in a little more than a decade, according to White House officials.

The announcement comes as rising oil prices and the Japanese nuclear disaster bring U.S. energy policy to the forefront for the American public.

Here are some of the top energy issues the Obama administration faces:

Gasoline Prices
Consumers are paying about 29 percent more for gasoline than they were a year ago, with the average price now $3.60 per gallon due to political unrest in the Middle East.

If gasoline prices keep rising, Obama could decide to draw crude from U.S. emergency reserves, a move that could have an immediate impact on gasoline prices.

The U.S. futures regulator is also under pressure to rein in speculation in energy markets, although it’s an open question whether proposed limits on trades by funds and other large players would affect prices.

Biofuels
White House officials said corn ethanol has significantly reduced U.S. oil dependence, but advanced biofuels will need to play a bigger role. Obama will set a goal of breaking ground on at least four commercial-scale cellulosic or advanced biofuel plants in the next two years.

Government incentives and mandates have so far failed to kick-start development of fuels made from non-food plant materials like switchgrass and wood chips.

Last year, the government slashed the amount of cellulosic ethanol mandated by law because targets were far beyond reach for the industry, which cannot yet produce the fuel at competitive prices.

Oil and Gas Drilling
With gasoline prices on the rise, the Obama administration faces intense pressure from Republicans to expand domestic oil and gas production.

While the White House says it remains committed to safely developing U.S. oil and gas after the BP oil spill, Republicans have complained the administration has moved too slowly to resume offshore drilling.

With summer driving season approaching and oil prices above $100 a gallon, the pressure to produce more domestic fuel will likely only increase.

Clean Energy Standard
Development of renewable energy sources, such as wind and solar power, has always been a top priority for the Obama administration.

With the White House’s original plan of a comprehensive energy and climate change bill no longer viable, the administration has set a goal for the United States to get 80 percent of its power from so-called “clean” energy sources by 2035.

The mandate, which needs approval from Congress, would include renewable sources like wind and solar, as well as traditional forms of energy with low carbon emissions, such as nuclear power.

Keystone Oil Sands Pipeline
On the one hand a pipeline to bring crude from Canada’s oil sands could go a long way in making America’s energy future more secure. Canada is one of the top U.S. allies and the proposed $7 billion Keystone XL line that would bring oil from Alberta to Texas refineries could help cut reliance on the Middle East.

But crude from the oil sands takes more energy to produce, resulting in more emissions than average petroleum used in the United States. U.S. farmers have also complained the pipeline’s expected route goes over a fragile aquifer.

This month the State Department ordered an additional environmental review and said that it expected to make a final decision on a permit by the end of the year. TransCanada Corp, which hopes to build and operate the line, hopes the line will be in service in 2013.

Natural Gas
The United States is undergoing a natural gas boom thanks to expanded fracking, or hydraulic fracturing. This has helped lower gas prices and could prompt conversion of gasoline-fueled vehicles to run on natural gas. It could also push utilities to close old coal plants and open natural gas ones.

Obama is trying to push cities and companies to convert bus and vehicle fleets to run on natural gas. This could benefit shale gas producers such as Range Resources Corp Chesapeake Energy Corp and Anadarko Petroleum Corp.

But the gas revolution could be dampened by complaints from communities that fracking pollutes water supplies. Chemicals used in fracking and radiation and heavy metals brought up by the process have all been blamed for polluting water.

The Environmental Protection Administration is working a study on the effects of fracking, which involves injecting chemicals, water and sand deep underground to break rock and unleash gas.

Nuclear
Obama has made nuclear power a key part of his pitch to get bipartisan support for investment in “clean energy,” asking for $36 billion in federal loan guarantees to help finance new reactors like the ones planned by Southern Co in Georgia.

The administration has confirmed it still supports expansion of nuclear power, but the push may be less politically attractive in the wake of the Japanese nuclear disaster, and the subsequent slip in U.S. public support for the option.

Energy Secretary Steven Chu has urged more research and investment in a new type of reactor — the small modular reactor — which he says is a safe long-term alternative.

Article by Ayesha Rascoe, Roberta Rampton and Timothy Gardner; edited by Sofina Mirza-Reid; appearing courtesy Reuters.

Related posts:

• The White House Goes Solar
• White House To Host Clean Energy Manufacturing Forum
• Van Jones Answers Questions on Green Jobs & Energy Efficiency
• Fox News Tries to Link Obama to Carter via White House Solar Panels
• Three Strikes! Why Cap-and-Trade is Dead for 2009

Electric cars are finally coming to market in the U.S., but what is the future potential for this much-touted technology? A good way to find out would be to launch demonstration projects in selected U.S. cities to determine if, given incentives and the proper infrastructure, the public will truly embrace plug-in vehicles.

As instability in the Middle East pushes oil prices past $100 per barrel and gasoline prices toward $4 a gallon in the U.S., the need to find better ways to fuel our vehicles has never been more urgent. Some advocates see electric cars as the most promising solution and are urging policymakers to ensure their widespread use through federal subsidies or regulation, such as a requirement that all automakers offer a certain percentage of plug-in vehicles in their fleets. Skeptics argue that electric cars are too expensive, that taxpayer money should not be used to stimulate the purchase of luxury goods, and that market forces alone should determine the future of electric cars.

We believe that the right policy lies between these positions and that there is a clear path to test whether electric vehicles can be viable on a mass scale. The U.S. Department of Energy — in partnership with automakers, car dealers, electric utilities, universities, and local governments — should coordinate a national demonstration program of 500,000 to 1,000,000 electric vehicles in 10 to 20 designated communities from coast to coast. That was the chief recommendation of a recent in-depth study, in which we participated, that was conducted by a group of national experts on electric vehicles. These experts said that by concentrating the many pieces needed to create a viable market for electric vehicles — a variety of cars and trucks for lease and sale, a robust network of charging stations, state and local policies to make home recharging easy — these demonstration projects would give the country a clear sense of whether electric vehicles will play a significant role in the nation’s transportation future.

At first glance, the market outlook for electric vehicles seems bright; when compared on an energy-equivalent basis, electricity prices are 60 to 80 percent lower than gasoline prices. Yet the future of electric vehicles is far from assured. Will the high price of batteries come down sufficiently as economies of scale kick in? Will oil prices fall again as new reserves and drilling technologies are discovered, as has happened with natural gas? Will other technologies — such as hybrid cars or vehicles powered by natural gas, ethanol, or hydrogen — win the competition against electric cars?

Such questions may not be answered in the near future, but a well-planned national demonstration program for electric vehicles can help determine the promise, limitations, and costs of this technology. And once the demonstration is over and the facts gathered and disseminated, electric cars should be forced to compete in a technology-neutral marketplace where other promising alternatives are also considered.

How would a comprehensive EV demonstration program work?

The goal of the projects is to push the number of electric cars and EV infrastructure toward a tipping point.

The most cost-effective demonstration would stimulate sales or leasing of electric cars in a limited number of designated communities that have a range of weather patterns, commuting norms, electric utility systems, and mass transit policies. Nissan and GM currently are concentrating some of their early marketing for electric vehicles in selected states, including California, New Jersey, North Carolina, Tennessee, and Texas. Given the current state of battery technology, demonstration projects should focus on commuter cars and delivery vehicles in urban areas because these vehicles typically make round trips within the range of a single charge.

The goal of the demonstration projects is to increase the number of electric cars and electric vehicle infrastructure in a community toward a tipping point. To reach that point, government and the private sector must take several key steps: municipalities and electric utilities should begin to modernize their practices, such as streamlining the permitting process for setting up home rechargers and implementing time-of-day pricing of electricity so recharging occurs primarily at night; more businesses to supply recharging stations for homes, workplaces, and shopping malls must be launched; and the development of a competent service and repair system for electric vehicles must emerge. Perhaps most importantly, as the infrastructure for electric vehicles grows, initial owners can be better assured that they will be able to re-sell their vehicles in the used-car market.

Without government leadership, no single company has adequate incentive to coordinate all of the stakeholders and agencies to bring a meaningful demonstration to fruition. The creation of 10 to 20 demonstration sites would not involve appropriating new public funds, but rather reallocating and focusing already-authorized government funding. If the demonstration sites are created in the near future, the results of this preliminary leap into the world of electric vehicles should be clear by 2020.

Incentives for electric cars may be spread too thinly, without a focus on a smaller number of communities.

By electric cars, we refer to plug-in vehicles that make use of the electric grid for all or most of their energy. The Nissan Leaf and GM Volt, both now for sale, are generating significant consumer interest, at least among the “early adopter” community. The Leaf uses no gasoline whatsoever but has a range of only 70 to 100 miles before it must be recharged. The Volt, with a small back-up gasoline engine, can travel 375 miles before it must be recharged or refueled, and is sometimes classified as a plug-in hybrid. However, the lithium-ion batteries in both of these vehicles are heavy and expensive. While the real cost of batteries is declining, an electric car today still costs $10,000 to $20,000 more than a similar-sized gasoline car.

Congress, the Obama administration, and regulators in California and Washington, D.C. have already enacted numerous policies to support the production, sale, and use of electric vehicles. These include a generous federal tax credit — up to $7,500 — with some states adding up to $5,000 more in purchase incentives. The federal economic stimulus package is subsidizing recharging stations in various cities around the country, including Chicago and Baltimore. Federal loans and grants are available to manufacturers throughout the supply chain, from makers of lithium-ion cells to selected firms that assemble electric cars. California has mandated that each large vehicle manufacturer offer a small number of “zero-emission” vehicles by 2016, and some states and communities are offering HOV lane access and special parking benefits to users of electric vehicles.

So there is no shortage of political interest in electric cars. But current policies have two key shortcomings. The first is that incentives for electric vehicles may be spread too thinly around the country. The second is that no coordinated plan exists for evaluating the de facto demonstration that is now underway. Key data — who chooses to buy the vehicles, how the vehicles are driven, where they are recharged, and how utilities adjust their billing systems — is not being collected. Without rigorous evaluation, it will be impossible to learn from the successes — and failures — of an electric vehicle rollout.

A technology may die after a successful pilot, before barriers to mass commercialization can be overcome.

As a nation, we do not need to use more taxpayer dollars to persuade technological enthusiasts and green consumers that they should buy an electric car. Tens of thousands of them will purchase a Leaf or Volt, despite the high price and a shortage of public recharging stations. But for sales of electric cars to achieve critical mass in any single community, the sales must expand to fleet buyers and mainstream retail purchasers. In the absence of government incentives, these buyers are unlikely to be convinced that the benefits of electric cars justify changing their driving behavior and paying a high sticker price. So instead of expending more public money in all communities, the existing public commitments need to be concentrated in a few.

But why should taxpayers support a national demonstration of an expensive, emerging technology? Part of the answer is the demonstrated failure of markets to address the persistent problems of oil insecurity and climate change. Yet even if the price of gasoline were raised high enough to account for these concerns, emerging technologies (such as the electric car) would still be disadvantaged compared to mature technologies because of imperfections in the process of innovation in the auto industry. This is in part due to imperfections in patent laws in the auto sector, which allow one manufacturer’s innovation to be easily copied by others, thus discouraging companies to be the first to invest in new technologies like electric drive systems.

In addition, once an innovative technology is invented and pilot-tested on a small number of vehicles, manufacturers and their suppliers face a “valley of death” in the commercialization process. Even a promising technology may die after a successful pilot, before the barriers to mass commercialization can be overcome. Someone needs to spend significant resources to educate the public about electric vehicles, change the permitting practices of municipalities, coordinate with local utilities to ensure uninterrupted electricity supplies, and create an entirely new supply chain — including servicing and disposal — for electric vehicles.

For sure, most automakers will offer a few plug-in vehicles to satisfy California regulators and achieve good publicity. But without some temporary government support — consumer tax credits, loan guarantees for automakers, and research and development funding — to reduce the risks of high-volume production, no manufacturer has adequate incentive to be the innovator who takes the big risk of mass producing electric cars.

A national demonstration program, coupled with community information programs, can reduce the risk to manufacturers and suppliers of making high-volume production commitments. The demonstration will also let the public see how this technology operates in the real world — its benefits, costs, and complications. Once the demonstration is over, all public subsidy of electric vehicles — except for basic R&D into new battery chemistries — should be terminated.

It is too early to tell if electric cars will be a key piece of the technology portfolio that addresses the global problems of energy insecurity and climate change. The technology has potential. Now it is the responsibility of policymakers to nurture and test that potential to give it a fair chance in the marketplace.

Article by John D. Graham and Natalie Messer, appearing courtesy Yale Environment 360.

Related posts:

• Smaller, Cheaper, Greener: Renault’s New Plan For Electric Vehicles
• EVs as Popular as iPhones?
• Why Are Investors Bearish on Clean Energy?
• Jim Woolsey: Energy Security, Renewables and Salt
• Analysts Say Battery Prices Are Key to Lower Electric Vehicle Prices

Last month Thomas L. Friedman wrote in the New York Times an interesting op ed on why America should tax more gasoline. This occurs as the United States is the least forceful OECD country regarding gas tax. US drivers pay on average less than ten euro cents of tax per litre when their German, British, Italian, Turkish or French counterparts pay as much as 60 to 70 cents per litre. Even Australia does better with more than 20 cents per litre.

The situation varies from State to State with Alaska only taxing 26.4 cents per gallon of gasoline while California taxing up to 63.9 cents per gallon. Federal authorities already tax 18.4 cents per gallon for gasoline and 24.4 cents for diesel.

Since the United States’ addiction to oil is widely documented and recognized as a threat by both sides of the political spectrum, why shouldn’t it tax oil more to curb the consumption?

This could effectively stimulate efficiency, decrease the amount of oil the country consumes each day and also help to curb greenhouse gas emissions. One dollar per gallon would bring $140 billion to the Federal government each year. One dollar per gallon would amount to 39 euro cents per litre. Even with such a tax, the United States would keep on taxing less heavily gas than most OECD countries.

As Friedman notes in his article :

Such a tax would make our economy healthier by reducing the deficit, by stimulating the renewable energy industry, by strengthening the dollar through shrinking oil imports and by helping to shift the burden of health care away from business to government so our companies can compete better globally.

Such a tax would make our population healthier by expanding health care and reducing emissions. Such a tax would make our national-security healthier by shrinking our dependence on oil from countries that have drawn a bull’s-eye on our backs and by increasing our leverage over petro-dictators, like those in Iran, Russia and Venezuela, through shrinking their oil incomes.

Instead of spending the money on national debt or healthcare, my belief is that the US should spend it on advancing and advocating cleantech, cutting its fossil fuels consumption and stopping to rely so massively on oil imports. It would also prepare itself for higher oil prices and peak oil.

Here are some projects that could benefit from such a tax and decrease oil consumption and exports:

• electric cars research, promotion and incentivesenergy efficiency and smart grid

• road infrastructure

• renewables (research, promotion and incentives)

• nuclear

• high speed rail and mass transit

• any project unrelated to energy

With 15 cents per gallon  each project would bring around $9 billion per year. No doubt that with all this money many things could be achieved.

To exemplify, here are some calculations using the figures given in Sustainable energy – without the hot air:

With $90 billion collected during a decade America could build approximately 45 GW of nuclear capacity or 70 GW of offshore wind.

As for high speed rail, this sum would multiply by ten the amount already allocated by President Obama. With all this money the country could get its ten high speed rail corridors and could even go way beyond.

Of course, if one dollar per gallon was too much, America could enact a fifty cents tax. The duration of the projects would however double.

China recently unveiled massive projects for high speed rail, nuclear power and hydroelectricity. Even if the Chinese government is not all too ready to cut its emissions, it is fully aware how relying on dirty coal and foreign oil could slow down the country’s rapid economic growth. Could the US just do the same ?

[photo credit: Flickr]

Related posts:

• China is World Leader In Clean-Tech Investments, Report Says
• The Energy of Entrepreneurs
• Is the Electric Car’s Tax-Free Ride Coming to an End?
• Two Recommended Green Tech Events in San Francisco
• Confidence Picks Up in Clean Tech Funding: Report

In recent years a greater emphasis on MPG during car shopping has emerged. Between fluctuating gasoline prices, a broader selection of hybrid vehicles, and the promise of plug-ins and battery electric vehicles, and mandated increases in CAFE standards, fuel economy is becoming an important vehicle characteristic for many consumers.

Makers of ICEs are looking to accentuate the efficiency of many of their “traditional” models to meet federal requirements and better compete with hybrid vehicles. This includes the addition of a turbocharger, which enables manufacturers to use smaller engines while increasing fuel economy by up to 20 percent. Turbochargers reduce emissions as they burn exhaust gas as fuel, and also provide additional power for acceleration.

Honeywell, which makes turbocharger equipment, put out a study claiming that 80 percent of consumers who understood a turbocharger’s impact on fuel economy would be interested in buying a turbocharged vehicle.

Honeywell’s press release adds “According to the Department of Transportation, nine out of the ten most popular vehicles purchased in the recent ‘Cash for Clunkers’ program were equipped with smaller and more fuel-efficient versions of conventional technology engines.”

This overall trend towards the importance of fuel economy when designing vehicles is significant not only for its immediate impact on emissions, but also because it forces everyone — both hybrid and conventional automakers — to continue to up the ante. Hopefully the 35.5 mpg requirement for vehicle fleets by 2016 will be a floor upon which automakers will seek to distinguish themselves.

“Fuel economy as a feature” has a growing audience that auto manufacturers (such as with the Ford Focus) are tapping into. This affinity for higher MPG ratings — and therefore the desire to buy hybrids — is similar to the desire for other vehicle features, such as the imposing size of the Hummer, the power to do 160 mph, or the roar of the Harley. It does not have to be grounded in economics or reality, it just has to be something people want.

Over the years much analysis has been written about how hybrids don’t make economic sense because the added cost may not be offset by fuel savings. Just like turbochargers, the economics don’t have to add up to a fast payback, and that will carry over to plug-in hybrids as well. For some middle aged couple with kids off to college, the hybrid plate is just as important as the Porsche, Jaguar or Maserati name is for another type of consumer.

For those who believe in the importance of reducing emissions, oil imports and trips to the gas station, diesel vehicles should have equal mindshare even though they have been eschewed by American buyers. As an example of luxury meets diesel turbocharging, there’s the new BlueEFFICIENCY Diesel SUVs from Mercedes. Europe has always been way ahead of the U.S. in embracing diesels, but that may slowly be changing.

Appearing courtesy of Matter Network.

[photo credit: Flickr]

Related posts:

• Major Fuel Economy Boost Envisioned by Obama Administration
• U.S. Government, California Merge Timelines for Auto Standards
• Focus on Fuel Economy Would Boost Profits for U.S. Car Makers
• New Gas-Powered Mazda Will Get More than 70 Miles Per Gallon
• New Fuel Economy Standard Agreed to by White House, Automakers