WASHINGTON – The U.S. auto industry could see a big boost if the Senate moves forward with a bill to increase incentives for manufacturers and suppliers to develop and produce alternative-fuel vehicles.
The bill,which was discussed Thursday at a hearing of the Senate Energy and Natural Resources Committee,would extend a loan program for manufacturers and suppliers,provide funding for states to build an infrastructure for alterative fuels and create job-training programs for those involved in the manufacture of both the vehicles and infrastructure.
The incentives,which would cost more than $200 million per year,would be funded by an estimated $1.2 billion sale of oil from the Strategic Petroleum Reserve,a supply of crude oil that the government keeps as a buffer against supply interruptions.
The Alternative Fuel Vehicles Competitiveness and Energy Security Act of 2011 has the support of the majority of auto manufacturers,including General Motors,Ford,Chrysler and Volkswagen.
The bill would extend the Department of Energy’s Advanced Technology Vehicle Manufacturing loan program,set to expire in 2012,to 2016.
Manufacturers and suppliers would be eligible for up to $25 billion in ATVM loans.
A spokeswoman for Nissan,which received an ATVM loan from DOE to help develop its all-electric Leaf,said it supports any initiatives that further the development of alterative fuels and alternative-fuel vehicles.
The bill would also eliminate the requirement that the government expand the oil reserve to 1 billion barrels of oil,a 25 percent increase from the current level.
Bridget Coyne,deputy press secretary for Sen. Ron Wyden,D-Ore.,who co-sponsored the legislation along with Sen. Debbie Stabenow D-Mich.,said expanding the oil reserve to the current required level will cost the government $35 billion at today’s oil prices.
Instead,the bill would require the U.S. to keep an average 90-day supply of oil,or approximately 717 million barrels,which is slightly lower than the 727 million barrels now in the reserve.
The bill isn’t without its detractors.
Sen. Lisa Murkowski,R-Alaska,took issue with the plan to sell part of the oil reserve to fund the program. Instead,Murkowski said the government should increase domestic oil production and use the royalties from those projects to fund alternative-fuel vehicles.
Murkowski questioned the DOE’s slow pace in approving ATVM loans – only five have been approved over two years.
Jonathan Silver,executive director of DOE’s Loan Program Office,defended the office’s progress and said the companies are at least partly at fault.
“When business plans change,and fundamental elements of a particular proposal change,we need to reset in terms of the analysis and commence again,which is a time consuming exercise,” Silver said.
Because of the automotive industry’s support of this bill,Wyden said the plan is the key to promoting alternative fuel vehicles in the United States.
“The car companies of this country … have said that what Sen. Stabenow and I are proposing is a winning policy for the future,” Wyden said.
Reach reporter Kevin Heim at [email protected] or 202-326-9861
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