Majority Statement

• Daniel K. Inouye

  Senator
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  Majority Statement

  Daniel K. Inouye

              Today’s witnesses have been invited to comment on S. 357, the Ten-in-Ten Fuel Economy Act, a bill to improve the Corporate Average Fuel Economy program, that I introduced earlier this session with Senators Feinstein and Snowe as well as five other members of the Committee.

   

              A number of other Senators on the Committee also have introduced or cosponsored legislation to improve CAFE standards, including the Vice Chairman.  I have asked the witnesses to be prepared to discuss those bills as well.

   

              Increasing CAFE standards is both a national security and ecological imperative.  The issue is not simply that the United States is dependent on foreign oil imports, but that it imports a substantial portion of these imports from areas that are politically unstable and could become hostile to America overnight.  It is in our national security interest that Congress take practical steps now to reduce our dependence on foreign oil.

   

              In addition, car exhaust is a major contributor to global warming.  By increasing fuel efficiency, we can decrease the amount of carbon dioxide released into the atmosphere and slow the harm to the planet.

   

              I believe that everyone here shares the dual desire of improving our environment and strengthening our national security through decreasing our dependence on oil. 

   

              I look forward to hearing from our expert panel about the best way to achieve these goals.

   

  ###

Minority Statement

• Ted Stevens

  Senator
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  Minority Statement

  Ted Stevens

  Thank you Mr. Chairman for having this hearing today, I think it is important and I look forward to hearing our colleagues so I will be very short. 

   

  The issue of fuel economy of our cars and light trucks is significant as our country faces an increasing energy crisis.  I think since September 11^th, the need for us to reduce our dependence on foreign oil increases.  I’m not going to talk about ANWR today so you can forget about that, for a while that is. 

   

  As the Chairman said, I introduced legislation in January to address conservation and reduction in green house gas emissions.  As the impacts of global change are more evident in Alaska than anywhere in the country, this bill would provide authority to the Department of Transportation to reform the passenger car fleet fuel economy program and set an aggressive target for the passenger car fleet by 2017.

   

  Since then I have worked, with the Chairman and the staff, to try and develop an approach that would not only answer our national security interest in reducing our dependence on foreign oil sources, but also an approach that will avoid unintended consequences that would adversely affect the domestic auto industry and consumer choice.  It’s my hope that I will be able to join the Chairman in introducing this bill. I still am worried about how to deal with light trucks; these are extremely important to the West and particularly important to my state, so I want to continue to work with my good friend on that portion of the bill.  But I do hope today’s hearing will help in advancing the Committees progress.

Opening Remarks

• The Honorable Debbie Stabenow

  United States Senator

  Michigan

• The Honorable Carl Levin

  United States Senator

  Michigan

• The Honorable Dianne Feinstein

  United States Senator

  California

Testimony

• Mr. Alan Reuther

  Legislative Director, International Union

  United Auto Workers
  Download Testimony (51.57 KB)

• Mr. David Friedman

  Research Director, Clean Vehicles Program

  Union of Concerned Scientists
  Read statement

  Testimony

  Mr. David Friedman

  STATEMENT OF:

  THE UNION OF CONCERNED SCIENTISTS

   

  BEFORE THE:

  SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

   

  BY

  DAVID FRIEDMAN, RESEARCH DIRECTOR AND SENIOR ENGINEER

   

  MAY 3, 2007

   

  Mr. Chairman and Members of the Committee, I appreciate the opportunity to testify before you today.

   

  I appreciate the opportunity because our country is faced with a critical decision, the same decision faced by this committee.  Are we going to continue to increase our addiction to oil?

   

  There are many important ways to ask the same question:

  ·        Are we going to continue to weigh down our economy by paying to import 60 percent of our oil at more than $60 per barrel?

  ·        Are we going to continue to produce more global warming pollution from our cars and trucks than the entire economy of India?

  ·        And are we going to continue to leave consumers with no solutions to $3.00 per gallon gasoline prices?

   

  We have been asking these questions for 30 years, and, for a long time, it seemed like we were having the same debate over and over again, but the facts have now moved beyond the old debate.

   

   

  FACT: There is nothing arbitrary about relying on research from our nation’s top scientists and engineers in setting fuel economy standards.  By relying on Congressionally requested research from the National Academies of Science and research from MIT, Porsche Engineering, the American Council for and Energy Efficient Economy, and the Union of Concerned Scientists, Congress can set science-based fuel economy standards of at least 35 mpg for the fleet of new cars and trucks over the next ten years, or about a 4% per year increase in fuel economy.  Analysis of the NAS data shows that a 37 mpg fleet is possible using existing technology.  Our own analysis shows that we could top 40 mpg.

   

  There is no reason to leave the standard setting task to the National Highway and Traffic Safety Administration (NHTSA) which has a very poor record when it comes to increasing standards.

   

  The Ten-in-Ten bill would:

  ·        Cut our oil dependence by 2.1 million barrels per day in 2025—almost as much as we currently import from the Middle East.

  ·        Save consumers over $40 billion dollars in 2025, even if gasoline is only $2.00 per gallon.

  ·        Reduce global warming pollution by more than 350 million metric tons of carbon dioxide equivalent—an 18% reduction that is equivalent to taking about 50 million of today’s typical cars and trucks off the road.

   

   

  FACT: Pickups are protected under the reformed fuel economy standards and farmers and small businesses will get the performance they need while saving thousands of dollars.  The administration is asking for the ability to use vehicle size when setting fuel economy targets—a size-based system completely changes the way you should look at CAFE.  Automakers would not have to sell more small vehicles to offset sales of large vehicles.  ALL vehicles will have to use better technology to improve fuel economy, not just big vehicles.

   

  The chart below is an example of how a sized-based standard fulfilling the 35 mpg fleetwide requirement would treat different vehicle classes.

   

  Combining a fleetwide fuel economy standard of 35 mpg with the president’s request to use size-based standards means that large pickups would only have to reach about 28 mpg—they will NOT have to hit the fleetwide 35 mpg average.  Instead, all vehicles will have to improve fuel economy, including compact cars which would have to reach about 40 mpg.

   

  With existing technology, the NAS showed that full-size pickups could reach 29.5 mpg.  Our analysis shows that a pickup achieving 28 mpg would save its owners over $6,000 on gasoline during the life of the vehicle.  The pickup would have the same power, performance, size and safety it has today, and would cost an additional $1,500.  However, the added fuel economy technology would pay for itself in less than two years with gasoline at $2.50 per gallon.  Higher fuel economy standards will help farmers and small businesses who rely on trucks as much or even more than the average consumer.

   

   

  FACT: Automakers that concentrate on the pickup market won’t have to compete on fuel economy with automakers that focus more on cars—the old competitiveness arguments are effectively eliminated.  The 35 mpg goal applies only to the aggregate fleet of new cars and trucks sold by all automakers.  NHTSA will be able to set separate fuel economy targets for different classes, so a company that focuses more on cars, like Volkswagen, would have to reach 39 mpg, while GM, which is spread out more across different size classes, would only have to reach 34 mpg.  The new system requires all automakers to invest in fuel economy, addressing automaker complaints that they are currently being treated unfairly if they sell more large vehicles.

   

  This also means that the light truck loophole, and its problematic impacts, can be eliminated because the new size-based system provides automakers with added flexibility around larger vehicles.

   

   

  FACT: Increasing fuel economy will boost Big 3 profits and create more jobs in the US.  A 2006 study from the University of Michigan shows that Detroit’s Big Three could increase profits by $1.3 billion in 2010 if they invest in fuel economy, even if gasoline costs only $2 per gallon.  However, if they follow a business-as-usual approach their lost profits could be as large as $3.6 billion if gasoline costs $3.10 a gallon.

   

  There is a real opportunity here.  If existing technologies are used to reach a 40 mpg fleet in ten years, we found that these investments would lead to 161,000 more jobs throughout the country.  In the automotive sector, projected jobs would grow by 40,800.  These new jobs would be created because of investments in new technologies by the automakers and because consumers would shift spending away from gasoline to more productive parts of the economy.

   

   

  FACT: Adding a fleetwide goal to size-based standards addresses the key Achilles heel of that system.  Size-based standards alone can create an incentive to make vehicles bigger to avoid meeting tougher standards, even if consumers are not pushing for bigger vehicles.  This would allow automakers to push down America’s fuel economy and increase our oil dependence.  A fleetwide goal eliminates that incentive by requiring all automakers to add technology if they push up the size of the fleet.  On the other hand, if consumers do demand bigger vehicles on their own, they can get them under this system.  All vehicles, whether large or small, will just have to add more of the existing technology.

   

   

  FACT: Fuel economy standards are the only policy currently under consideration that will cut consumer spending at the pump.  A 35 mpg fuel economy standard is equivalent to cutting today’s $3 per gallon gasoline price by 65 cents, even after paying for the improved technology.  That represents a 22% cut in summer gas prices.

   

  Gasoline savings would pay for the added cost of fuel economy technology ($1,100) in about 2 years.  After that, the average consumer would save $3,400 more on gasoline over the remaining life of the vehicle.  Looking at it another way, assuming you are the typical person and you take out a loan on the car, your monthly gasoline costs will go down more than your monthly loan payments will increase to pay for the added fuel economy technology, so you will begin saving money on the first day you own the car.

   

   

  FACT: Fuel economy standards work.  If we still had the same fuel economy we did in the early 1970’s, we would be using an additional 80 billion gallons of gasoline on top of the 140 billion gallons we will use this year.  That would represent an increase in oil demand by 5.2 million barrels of oil per day, or a 25 percent increase in our oil addiction.  At last year’s average price for regular gasoline, about $2.50 per gallon, that represents $200 billion dollars saved.  That number could have been much better, however, if fuel economy standards had not remained essentially unchanged for the past two decades.

   

   

  FACT: These standards can be met by putting existing efficiency technology to work; we don’t even need hybrids, though they certainly can contribute.

   

   

  FACT: These standards can be met while maintaining or improving highway safety.  Major reports from researchers at Oakridge National Labs, Lawrence Berkeley National Labs, the University of Michigan, and DRI demonstrate that fuel economy is not linked with increased fatalities, large vehicles do not have lower fatality rates when compared to smaller vehicles, and increased weight is actually associated with increased fatalities.

   

   

  FACT: A 35 mpg fleet can keep the performance we have now.  Today, you can buy a family car that goes from 0 to 60 mph as fast as a late 1960’s Mustang or Porsche 911.  Using technology to increase fuel economy will allow us to keep that performance but focus new technology applications on the crisis at hand: oil addiction, climate change and high gas prices.

   

   

  FACT: Consumers are trying to buy cleaner and more efficient vehicles, but they don’t have many choices.  The higher fuel economy version of America’s top selling car, the Toyota Camry outsells the lower fuel economy version by nearly four to one.  But even that vehicle does not break the 30 mpg barrier for EPA combined fuel economy.  The auto industry’s version of a 30 mpg vehicle is a compact car, leaving millions of Americans who need minivans, family cars and SUVs with no option.

   

   

  FACT: Americans have moved beyond the old debate.

  ·        A recent New York Times poll showed that over 90 percent of Americans support requiring automakers to make more efficient cars.

  ·        The same holds true for people living at the center of the auto industry—a majority of Michiganders favor higher fuel economy standards for cars and trucks, with some supporting increases to 40 miles per gallon or more, and many would pay hundreds of dollars extra for more-efficient vehicles, according to the latest Detroit Free Press-Local 4 Michigan Poll.

  ·        Pickup drivers also want higher fuel economy.  A yet to be released poll by the Mellman Group shows that 84% of American pickup truck owners support a mandatory increase in the fuel efficiency of cars, SUVs, and trucks—even when it was made clear that they would have to pay more up front to save money on gasoline.  These findings held across party lines and were even stronger among owners who live in rural areas than those who live in cities.

   

   

  It is time for Congress to move beyond the old debate too.

   

  Americans are ready to do their part, they want to buy more patriotic cars and trucks that cut oil dependence, reduce global warming and save them money.  What Americans need is leadership from you.  Requiring higher fuel economy standards will ensure consumers can have the choice to buy the higher fuel economy cars and trucks that the National Academies say are possible—a 29.5 mpg pickup, a 34 mpg SUV, a 37 mpg minivan, and a 41 mpg family car.  These standards should be size-based, but should put in place steps to eliminate or counteract any loopholes.

   

  Nobody is claiming that fuel economy standards are a silver bullet.  We will also have to tap into low carbon renewable fuels and ask consumers to take responsibility for the number of miles they drive.  Nobody should be allowed to shirk their patriotic responsibility to cut our oil addiction and address the high costs climate change will have on our economy.  But a good dose of common sense fuel economy policy and good engineering can deliver the cars and trucks this country needs to help tackle these critical problems.

   

  For further information, I have attached my recent testimony before this committee for additional details on these important issues.  I have also attached a fact sheet on the Ten-in-Ten bill, the National Academies report, and the fuel economy potential both for the country and for trucks.  I hope you find these helpful.

• Admiral Dennis Blair USN (Retired)

  Omar Bradley Chair of Strategic Leadership, Army War College and Dickinson College

  Former Commander-in-Chief, United States Pacific Command
  Read statement

  Testimony

  Admiral Dennis Blair USN (Retired)

  Testimony of Admiral Dennis Blair, USN (Ret.)

  before the U.S. Senate Committee on Commerce, Science and Transportation

  Hearing on Fuel-Economy Legislation

  3 May 2007

   

  I would like to thank the Committee for the opportunity to discuss fuel-economy legislation from the perspective of national security. I speak to you on behalf of the Energy Security Leadership Council (Council), a non-partisan group that brings together twenty business executives and retired senior military officers who are concerned about the perilous state of U.S. and global energy security. We are led by Frederick W. Smith, Chairman, President and CEO of FedEx, and General P.X. Kelley (Ret.), the 28th Commandant of the United States Marine Corps. And we are united in the belief that oil dependence severely threatens the economic and national security of the United States.

   

  On December 13, 2006, the Council unveiled a set of Recommendations to the Nation on Reducing U.S. Oil Dependence. This report outlines a comprehensive energy security strategy. It replaces the false hope of domestic energy independence with strategies for better managing the reality of global energy interdependence. The suggested initiatives are aggressive while being balanced and credible. Where the market cannot be expected to provide solutions, government has been asked to apply workable standards capable of spurring the needed private-sector responses. The members of the Council have pledged to continue working until these policy recommendations are enacted into law.

   

  During the last few months, the Council has collaborated with Senator Byron Dorgan and Senator Larry Craig to design legislation that incorporates the central elements of the Recommendations. This collaboration has given rise to the “Security and Fuel Efficiency Energy Act of 2007 (SAFE Energy Act),” which was formally introduced on March 14. Senators Dorgan and Craig recently introduced just the fuel economy sections of this bill as the “Fuel Efficiency Energy Act of 2007.” I want to commend Senators Dorgan and Craig for their leadership and commitment.

   

  I also want to thank Chairman Inouye and Vice Chairman Stevens along with Senators Feinstein, Snowe, and all others who have recognized that increased transportation fuel efficiency is a vital national security imperative. Our nation consumes more than 20 million barrels of oil per day (mbd), more than 60% of it imported. Nearly 70 percent of our oil consumption goes to fuel the transportation sector. Transportation relies on oil for 97 percent of delivered energy with almost no substitutes available. By any measure that I know of, such extraordinary dependence is inconsistent with national security.

   

  The Council’s approach tackles oil dependence through many policies, but none of these is more crucial than reformed and strengthened vehicle fuel economy standards. Standards are necessary because there is no free market for oil. Oil prices may be a function of supply and demand, but the oil market is well removed from the free-market ideal. As much as 90% of all oil and gas reserves are held by national oil companies (NOCs) that are either partially or fully controlled by governments, not public companies operating in the free market. Moreover, the market is highly cartelized, with one group – OPEC – setting prices and supply based on a variety of pressures including political concerns. The marketplace alone will also not act preemptively to mitigate the enormous damage that would be inflicted by a serious and sudden price increase. Thus, government must apply workable standards capable of spurring private-sector responses.

   

  Under the Council’s proposal, the fleet of new passenger cars and light trucks sold in the United States each year will have to get 4% more miles per gallon than the fleet of cars and light trucks sold the year before. The same will be true of commercial trucks, which have never previously been subject to fuel efficiency standards. The proposal gives the National Highway Traffic Safety Administration (NHTSA) the discretion to require different percentage increases for different classes of vehicles in pursuit of 4-percent annual fuel-economy improvement for the entire new vehicle fleet.

   

  These measures will help us reduce the oil intensity of this country. Oil intensity—the amount of oil needed to generate a dollar of GDP—has been cut in half since the oil shock of the1970s. The result is a U.S. economy that still sees steady growth despite high oil prices such as those experienced over the last few years. Unfortunately, progress in further lowering oil intensity has slowed noticeably in the last decade. We must do better.  

   

  Four percent is not an arbitrarily chosen number. It is right in line with the historical annual gains that were achieved when the nation last committed itself to fuel economy. It is also perfectly consistent with scientifically-validated forecasts of cost-effective future fuel economy improvements.  Between 1975 and 1985, the miles-per-gallon (mpg) performance of passenger cars in the U.S. increased 5.5% per year. The figures for light trucks rose 4.2% per year over the same period.

   

  In its 2002 study of CAFE, the National Academy of Sciences (NAS) concluded that the fuel economy of large U.S. passenger cars could be cost-effectively raised by as much 27 percent within a decade using available and emerging technologies. For the largest light trucks, the potential improvement was 42 percent. The implied potential fuel economy for the entire fleet given the existing mix of vehicles was 30.3 mpg, more than 25 percent above the current figures. Significantly, these improvements were premised on the use of existing and emerging technologies without altering the average weight, size-mix, or performance of the fleet. The 2002 study was conducted on the basis of gasoline prices of $1.50 per gallon. One of the principal authors of the 2002 study, Dr. David L. Greene of Oak Ridge National Laboratory, has incorporated today’s higher fuel prices into the NAS model while holding technology assumptions constant. A retail gasoline price of $2.50 per gallon raises the expected cost-effective fuel economy of the entire fleet to 33.9 mpg. Even these projections may be too pessimistic in light of accelerating technological progress. Indeed, since diesels and hybrids did not figure in the cost curves utilized for the 2002 study, but are now viewed as promising candidates for large-scale introduction in the U.S. marketplace, Dr. Greene is optimistic that current fuel-economy levels can be raised by as much as 50 percent—even after applying the same weight and performance constraints used in the 2002 study.

   

  The new standards are designed to be very flexible. For instance, pickup trucks may not be able to obtain the same fuel-economy levels as SUVs or minivans, but the ESLC proposal does not require them to do so. To reiterate, NHTSA will have the discretion to require different percentage increases for different classes of vehicles in pursuit of 4-percent annual fuel-economy improvement for the entire new vehicle fleet. Vehicle classes will be determined by key attributes, and under this approach it would be perfectly justifiable to hold primarily freight-hauling vehicles to a lesser fuel-economy standard than would be applied to vehicles designed first and foremost for transporting passengers. By assessing multiple attributes, NHTSA can constructively classify vehicles to maximize fuel economy while tailoring the standards so that pick-ups will not be forced to compete with sedans that are roughly as long and as wide. 

   

  Flexibility is further ensured by “off-ramps” that may be employed if NHSTA finds 4-percent improvement in a given year to be technically infeasible, unsafe, or not cost-effective. These are not loopholes, since expert opinion and data will be required to invoke them. But, together, the 4-percent annual improvement standard and the off-ramps give credit to American ingenuity and technological prowess while protecting business from unachievable or value-destroying mandates.

   

  Finally, the proposed legislation contains a variety of consumer and manufacturing tax credits that will help car-makers and car-buyers adjust to greater fuel economy.

   

  Overall, this approach aims for two highly desirable outcomes: improved energy security and a competitive domestic automotive industry. To improve energy security, America needs to get millions of fuel efficient cars on the road. But we will not have a secure source of these vehicles without public policies that expedite the needed transition of U.S.-based manufacturing capacity. In order to level the playing field and enable domestic manufacturers to effectively compete in the growing market for advanced-technology vehicles, we support tax incentives for the retooling of domestic automobile parts and manufacturing facilities.

   

  Let me say that I recognize and respect the historical contribution that car companies like GM and Ford have made to our defense. More than half a million GMC "Deuce and a half" trucks gave U.S forces in World War II unmatched logistical support. Ford’s Willow Run plant by itself produced nearly 9,000 B-24 bombers that provided the U.S. Army Air Corps with much of its strategic punch. I am asking these companies to continue this legacy of service to the nation by embracing the mission of improved fuel economy.

   

  Having outlined the fuel-economy legislation we support, I’d like to devote the rest of my time to describing why improvement is so necessary. I will do this from a military vantage point, since this is where my expertise and knowledge are concentrated. Put simply:  the increasing U.S. dependence on oil imported from underdeveloped volatile regions of the world is putting a strain on our military forces and it is assigning them expensive missions for which they're really the wrong instrument of national power.

   

  This problem is best understood by looking at the Persian Gulf which is home to the five countries with the greatest proven conventional petroleum reserves.  When I first joined the Navy in '68, the entire U.S. military presence in that part of the world was a one star Navy admiral and two destroyers that would deploy to hold simple exercises with Gulf countries. As I recall gas at that time ran 30 to 40 cents a gallon for my Austin Healey 3000, and the Persian Gulf was a rare duty station for members of the armed forces.

   

  In the late 1970s two serious threats to Persian Gulf oil were identified by the Carter Administration, which became seized by the issue. The first was a potential Soviet invasion from the north into the oil regions around the Gulf, a concern heightened by the Soviet occupation of Afghanistan. The second was an aggressive and fundamentalist Iran, which was led by a regime that had permitted and then exploited the takeover of the American Embassy in Tehran. In response, the department of defense created the Rapid Deployment Joint Task Force, the RDJTF, a planning headquarters and contingency force that could quickly deploy to the Gulf to defeat a major land invasion.  In 1983 as part of its general military build up against the Soviet Union, the Reagan administration upgraded this task force to a regional command like the European Command and the Pacific Command, where I served and where I ultimately commanded. So this Central Command had full time responsibility for U.S. interests in the region.

   

  Every commander of the Central Command, which was what the new organization was called, has had the mission of ensuring the security of oil from the Persian Gulf since that time. In response to the 1987 attacks on tankers by Iran and Iraq as part of their war, the United States gave Kuwaiti tankers U.S. registry and provided naval escorts for them as well as for tankers of allied nations. So, by 1990 America had a functioning military command structure, had deployed major forces to the Gulf both for exercises and for combat operations, and had established a military commitment to oil security.  The military component of American security policy in the Gulf region had greatly increased, and—as we saw—it crowded out diplomacy, reliance on the market, and more indirect instruments of national power.

   

  U.S. security policy in the Gulf since then has been in the headlines, familiar to everyone, and dominated by the use of major military force: operations Desert Shield and Desert Storm in 1991; during the course of the 1990s the maintenance of Air Force and Navy air wings in the Gulf on a full time basis to enforce no-fly zones in the north and the south of Iraq; an Army brigade full time in Kuwait; periodic bombings of Iraq during that period. And then following 9/11, the intervention in Afghanistan and invasion and occupation of Iraq. For those of us in the armed forces the operations in this region of the world are expensive and tactically problematic.

   

  As a general rule, the use of large scale military force in volatile regions of underdeveloped countries is difficult to do right, has major unintended consequences and rarely turns out to be quick, effective, controlled and short lived. The Persian Gulf is just about on the other side of the world from the United States. It takes more than 3 ships in the U.S. Navy to keep one ship on station: one there, one going, one coming. Pretty much the same ratio holds for airplanes and, as we're learning in Iraq, for soldiers and Marines.  You just got back, you're there or you're getting ready to go again. A major military presence in the Gulf region raises local resentments and dangers that work against what we're trying to achieve. This is not just a post-9/11 phenomenon. It was true well before 9/11 in terms of the effect of major U.S. military forces staged or spending large amounts of time in the Gulf region. So after all this major military effort, what's the bottom line?  Gas is pushing $3 a gallon, we're extending the tours of soldiers in the Gulf region to 15 months, and we’re more subject to events in the Persian Gulf than we ever were in the past.

   

  Now, why has American security policy developed in this way? The fast pace of operations in the region has given little pause for reflecting on overall trends and effectiveness. American forces have been engaged in the Middle East since the tanker wars of 1987, and events have seemed to demand increasing our military force, not reducing it. But driving this engagement is America’s ever growing dependence on overseas petroleum. This dependence has influenced successive administrations to strengthen military engagement rather than to search for other means—perhaps politically more difficult but in the long run more cost-effective means—for boosting energy security.

   

  This expensive and somewhat clumsy model is shaping our energy security approach in other regions of the world outside the Gulf. Consider Central Asia, home to an increasing share of the world's oil and natural gas reserves in the future. Already we see recourse to some of the early chapters to the same play book we followed in the Persian Gulf 20 and 30 years ago.

   

  In conclusion, let me tie things back to the policy objectives of the Committee:  improved security will require greater conservation as well as increased production of petroleum and alternatives here at home.  Put another way, improved vehicle fuel economy will increase our military flexibility and our overall national security, not just our energy security. We'll be less susceptible to being whip-sawed by events in the Persian Gulf, Central Asia and West Africa. We will not have to be on a hair-trigger for major military involvements in these regions with their great expense and all the difficulties of successful mission execution and withdrawal of forces. And we will be in position to break the cycle of increasing oil dependence followed by increased deployments of major U.S. forces into volatile and underdeveloped regions where they are often poorly matched to the mission of oil security.

   

  So let me conclude by encouraging you to support amendments that ensure an aggressive but flexible approach for increasing the fuel economy of the entire U.S. transportation fleet. In keeping with the Council’s fuel-economy proposal as it is embodied in the SAFE Energy Act and the Fuel Efficiency Energy Act of 2007, future fuel-economy provisions should: 

   

  (1) require 4% annual increases in vehicle fuel economy,

   

  (2) be applied to all on-road vehicles, including medium and heavy trucks, and

   

  (3) contain “off-ramps” that will protect consumers and manufacturers by relaxing the 4% annual increases if they prove to be too costly, unsafe, or technically infeasible. These are not loopholes, since expert opinion and data will be required to invoke them.

   

  The Council is committed to working with you in true bipartisan fashion to achieve these goals. Our nation deserves no less.

   

   

   

• Mr. Michael J. Stanton

  President and Chief Executive Officer

  Association of International Automobile Manufacturers
  Download Testimony (100.84 KB)

• Vice Admiral Dennis McGinn Retired
  Read statement

  Testimony

  Vice Admiral Dennis McGinn Retired

  Statement of Vice Admiral Dennis McGinn, USN, Retired

  Senate Commerce Committee

  Hearing on CAFE legislation

  Washington, DC, May 3, 2007

   

  Mr. Chairman, Members of the Committee, Ladies and Gentlemen, it is an honor to appear before you today to discuss the critically important need for tough fuel economy standards based on the imperatives of national security, energy independence and climate change. Thank you for the opportunity to share my views which are based on over thirty-five years of service to the Nation in the United States Navy and as a senior executive presently involved on a daily basis with the science and technology of energy, transportation and the environment.

   

  The rationale and urgency for holding this important hearing was clearly underscored by the world’s leading scientists earlier this month in their warning to the world that we have a short window of time to begin reducing our global warming emissions if we are to avert the worst impacts. 

   

  Today, I’d like to talk about the national security impacts of our oil dependency right now, and not just in ten years.

   

  Our continued dependence on oil constitutes a clear and present danger to our national security — economically, militarily and diplomatically.

   

  ·        Data from the Energy Information Administration indicates that we imported about 60 percent of our oil and other petroleum products in 2006.  Last year alone, our net imports were more than 12 million barrels per day.

   

  ·        The United States consumes 25 percent of the world’s annual petroleum production and depends on oil to supply 97 percent of its transportation fuels.

   

  ·        Yet the U.S. holds only 3 percent of the world’s oil reserves, while two-thirds of reserves are situated in that core of global instability, the Persian Gulf.   Even if we tapped every last drop of oil in our soils and waters, we could not produce enough to meet U.S. oil demand.  

   

  • As a key leader of the global economic community, we must rely on foreign energy sources, with many of them in hostile, unstable regions, to provide us with our economic lifeblood and quality of life. 

   

  • Our burgeoning demand for oil weakens U.S. diplomatic leverage around the globe, burdens our armed forces and leaves the U.S. economy vulnerable to unpredictable price spikes and an ever growing trade imbalance. Taken together, these dynamics create a daunting national security challenge that must be met immediately.

   

   

  U.S. oil dependency weakens U.S. leverage, undermines foreign policy and leaves us vulnerable to unstable or hostile regimes.

   

  • According to a new Rice University study, 77 percent of the world’s 1.148 trillion barrels of proven reserves are in the hands of the national companies; 14 of the top 20 oil-producing companies are state-controlled.[i]

   

  • With oil at $60 a barrel, $500,000 a minute is flowing out of our country, increasing our trade deficit, creating huge opportunity costs and, most significantly, putting money into the hands of some regimes that are hostile to our interests.

   

  • Last year Iran's supreme leader, Ayatollah Ali Khomeini warned that "if the Americans make a wrong move toward Iran, the shipment of energy will definitely face danger and the Americans would not be able to protect energy supply in the region." [ii]

   

  • In the southern hemisphere, we seem to be on a collision course with Venezuela’s President Huge Chavez over access to some of the most coveted energy resources outside the Middle East.  Chavez represents a direct threat to the advances of democracy and free markets in our Hemisphere. The false promises of his populist appeal in Latin America have been compared with the pan-Arabism of Col. Muammar el-Qaddafi of Libya two decades ago. [iii]

   

  • Terrorist networks have openly called for, planned and carried out attacks on the global oil infrastructure because they know oil is the economic lifeblood of the U.S. and the world’s economy. Just last week, a major oil infrastructure attack plan was disrupted in Saudi Arabia at the eleventh hour. Had it been successful, the adverse consequences would have been severe, global and immediate.

   

  • By enriching the coffers of fundamentalist regimes with our gasoline purchases, we are inadvertently financing, but directly enabling, the spread of a flawed and deadly brand of Islam which is tilting key regions in a more intolerant and dangerous direction.  [iv]

   

  U.S. oil dependency burdens our military forces and exacts a huge price tag in protecting sea-lanes, military bases of operations and maintaining continuous high level of forward presence

   

  • Our fine men and women in the Armed Forces serve our nation with honor, protecting American interests throughout the globe. The major focus of their activities for nearly thirty years has centered in the Middle East, a region from which so much of the instability, strife, root causes of terrorism and Persian Gulf oil flow.

   

  • The October, 2000 terrorist attack on the USS Cole, while on a refueling stop in Yemen, was a tragic reminder of the convergence of oil, instability, terrorism, and the need for ever vigilant presence by American servicemen and women who are forward deployed.

   

  • Recent energy-market disruptions and increasing awareness of the vulnerability and insecurity of supplies world-wide have added urgency to the U.S. military's efforts to curb its use of oil and other fuels. [v] 

   

  • One study estimates that in peacetime the “true” cost of oil in a given year is $800 billion dollars, assuming 2004 oil prices.

   

  • Retired Air Force General Charles Wald estimates that if the true cost of military security were incorporated into the price of gasoline, we would be paying between $6.50 and $7 a gallon.

   

   

  The economic impact of our oil dependency threatens national security

   

  • We lose $25 billion from our economy every month, and oil imports now account for nearly a third of our Nation’s trade deficit. Our economy is exposed on a daily basis to oil price shocks and supply disruptions. Regardless of how they are caused, by global market dynamics, natural disasters, terrorist attacks, or politically motivated oil embargoes, the trends of our growing oil demand in a “business as usual” mode will make those price shocks much more frequent, deeply felt and longer lasting.

   

  • Every event overseas – Iran’s capture of British soldiers, Nigeria rebels warn of attacks on oil industry – causes our stock market to roil.   Just last week, oil prices surged causing stocks to tumble in response to political turmoil and possible election fraud in Nigeria underscoring our daily vulnerability resulting from oil dependency.[vi]

   

  • There are nightmare scenarios – much more than conjecture at this point – that are already having an impact on our economy. The Wall Street Journal recently wrote about oil traders’ concern over an obstruction of oil traffic through the Persian Gulf. Under the scenario, Iran, in a bid to preempt or respond to U.S. military action, closes the Strait of Hormuz, the Persian Gulf chokepoint through which 20 percent of the world's oil supply passes. The consequence would be swift: by most experts' reckoning, oil prices would soar to $100 a barrel and even higher, potentially plunging the world economy into a depression. [vii]

   

  §      A Wall Street Journal survey of economists found strong support for government intervention in the transition away from fossil fuels. When asked to pick the greater geopolitical threat to the economy, by nearly a 3-to-1 margin the economists chose a disruption in crude oil supplies caused by tensions in the Mideast over the impact on spending and confidence that could follow a major terrorist attack. [viii] 

   

  Our oil consumption puts money in pocket of terrorists

   

  • Former Republic National Committee Director of Communications Clifford D. May wrote, “Every time we fill the tanks of our cars with gasoline we put money in the pockets of terrorists intent on killing Americans.” [ix]

   

   

   

   

   

   

  There is great urgency to reverse our dependence on oil

   

  The urgency is two-fold. As a result of our increasing oil consumption: 1) Our dependency on unfriendly regimes is increasing not decreasing; 2) The impacts of global warming emissions, if not swiftly and significantly reduced, will have profoundly negative national security impacts.

   

  The world oil supply is tightening as demand surges leaving little elasticity in a very volatile market and creating increased U.S. reliance on the Middle East.

   

  • Energy analysts expect global oil-demand growth to surge this year to an additional 1.39 million barrels a day from growth of 800,000 bpd in 2006, according to a new Reuters’ poll.  OPEC’s biggest producer, Saudi Arabia, may be incapable of raising its production any time soon. [x]

   

  • Government data shows U.S. crude and gasoline stockpiles are much lower than analysts had forecast. [xi]

   

  • Oil analysts say that the market has not fully recognized the constraints on oil supply in Venezuela, Iran and Kazakhstan. Other factors favoring higher prices: rapidly rising demand in China and India, and the location of much of the world’s oil reserves in politically volatile and unstable countries.  [xii]

   

  • Mexico’s oilfield Cantarell -- one of the largest offshore oil fields ever found -- is dying, losing a staggering one-fifth of its production, with daily output falling to 1.6 million barrels from two million within the last year. Cantarell, which currently produces one of every 50 barrels of oil on the world market, is fading so fast analysts believe Mexico may become an oil importer in eight years. [xiii]

   

  • The continued deterioration of the world's second-biggest field by output puts pressure on prices on the global oil market, where supplies are barely keeping up with growing demand as it is. Our growing dependence would leave the U.S. even more dependent on Middle Eastern supplies -- and that much more vulnerable to political tumult in that region. [xiv]

   

  • Some predict we will reach peak of oil production within a few years, others say peak oil won’t arrive until 2030 or later.  In either case, our demand is going in the opposite direction while oil is getting harder and more expensive to extract.

   

  • OPEC, which added Angola as its newest member this year, will likely see its clout reinforced in coming years as it is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today.  [xv]

   

   

   

   

   

  The threat of climate change is a national security matter

   

  Climate change acts as a threat multiplier for instability in some of the most volatile regions of the world. 

   

  • According to top retired military leaders in a recent report from the Center for Naval Analysis, global warming poses a "serious threat to America's national security", acting as a "threat multiplier for instability" in some of the world's most volatile regions, adding tension to stable regions, worsening terrorism and likely dragging the U.S. into fights over water and other resource shortages. On the simplest level, it has the potential to create sustained natural and humanitarian disasters on a scale far beyond those we see today. The consequences will likely foster political instability where societal demands exceed the capacity of governments to cope. [xvi]

   

  • Climate change is different from traditional military threats, according to C.N.A. report author Vice Admiral Richard H. Truly because it is not like “some hot spot we’re trying to handle.” “It’s going to happen to every country and every person in the whole world at the same time.” [xvii]

   

  • Not only will global warming disrupt the environment, but its effects will shift the world's balance of power and money.[xviii]

   

  • Drought and scant water have already fueled civil conflicts in global hot spots like Afghanistan, Nepal and Sudan, according to several new studies.  The evidence is fairly clear that sharp downward deviations from normal rainfall in fragile societies elevate the risk of major conflict, according to experts at Columbia University.[xix]

   

  • The world’s leading scientific panel on climate change -- including more than 200 scientists and officials from more than 120 countries and the U.S. -- released its most detailed portrait on the impacts of human induced climate change, predicting widening droughts in southern Europe and the Middle East, sub-Saharan Africa, the American Southwest and Mexico, and flooding that could imperil low-lying islands and the crowded river deltas of southern Asia. [xx]  

   

  • Without action to curb carbon emissions, man's livable habitat will shrink starkly, said Stephen Schneider, a Stanford scientist and IPCC report author. "Don't be poor in a hot country, don't live in hurricane alley, watch out about being on the coasts or in the Arctic, and it's a bad idea to be on high mountains with glaciers melting." "We can fix this," by investing a small part of the world's economic growth rate, said Schneider. "It's trillions of dollars, but it's a very trivial thing." [xxi]

   

  • James Hansen, a pioneering climate researcher at NASA's Goddard Institute and at Columbia University, says, "If human beings follow a business-as-usual course, continuing to exploit fossil fuel resources without reducing carbon emissions or capturing and sequestering them before they warm the atmosphere, the eventual effects on climate and life may be comparable to those at the time of mass extinctions.” [xxii]

   

  Ignoring global warming undermines U.S. international leadership and influence

   

  • The United States will emit about 20 percent more greenhouse gases by 2020 than it did in 2000, according to a draft report that the Bush administration was scheduled to submit to the United Nations a year ago.  [xxiii]

   

  • Recently the U.N. Security Council held its first-ever discussion of the link between climate change and international conflict.  An overwhelming majority of nations voiced grave concerns about climate change and many urged stricter worldwide controls on greenhouse gases. [xxiv]

   

  • The harmful effects of global warming on daily life are already showing up, and within a couple of decades hundreds of millions of people will not have enough water, according to the authoritative IPCC. “Things are happening and happening faster than we expected,” said Patricia Romero Lankao of the National Center for Atmospheric Research, a report co-author. [xxv]

   

   

  Climate change, national security, and energy dependence are an interrelated set of global challenges. As President Bush noted in his 2007 State of the Union speech, dependence on foreign oil leaves us more vulnerable to hos­tile regimes and terrorists, and clean domestic energy alternatives help us confront the serious challenge of global climate change. Because the issues are linked, solutions to one affect the other. Technologies that improve energy efficiency also reduce carbon intensity and carbon emissions. [xxvi]

   

  Without swift and serious legislative action and investment, the U.S. will continue barreling headlong toward the catastrophic national security, economic and human suffering effects of climate change.

   

  As retired Marin Corps General Anthony C. Zinni, former commander of U.S. Central Command said “ The intensity of global temperature change can be mitigated somewhat if the U.S. begins leading the way in reducing global carbon emissions.” He concluded “We will pay now to reduce greenhouse gas emissions today…or we will pay the price later in military terms and that will involve human lives.”  [xxvii]

   

   

  Key principles for reducing oil dependence and greenhouse gas emissions

   

  First and foremost, the size and speed of the solution must match the size and speed of the problem.

   

  We must solve our oil dependency problem within the context of global warming – to do otherwise would be at the risk of our national security.

   

  The solution must include both market and mandates.  We cannot do one without the other

   

  Key players in the global market are already responding to their perception of regulation certainty.  The right kind of regulations can create certainty and spur the market to a much more stable and productive future.  Leading international businesses, investors and industry sectors recognize this fact and are asking for market certainty through an effective, long-term cap on emissions.

   

  • ConocoPhillips recently became the first U.S.-based oil company to join ten of the nation’s largest companies, including GE, DuPont and Duke Energy, to call for mandatory cuts in global warming emissions.  Such action likely means higher costs for these companies, but they fear the Administration’s failure to engage will leave them with a hodgepodge of state and foreign restrictions. [xxviii]

   

  The solution must include fuel economy standards for vehicles.

   

  • Vehicles are the source of 20 percent of U.S. greenhouse gas emissions and directly account for more than 40 percent of our oil dependency.

   

  • By mid-century, the world's vehicle population is expected to reach 2 billion, almost triple the current figure. To limit global vehicle emissions to 50 percent more than today's levels, the average fuel economy of cars and trucks on the road would have to rise to about 60 mpg in 50 years or less, according to calculations by the Carbon Mitigation Initiative at Princeton University, a research effort funded in part by Ford. Because it takes a decade or two for new technology to make it into every car on the road, all new vehicles within 35 years or less would need to reach 60 mpg.[xxix] 

   

  • Yet, as a new report from National Highway Traffic Safety Administration (NHTSA) reveals, the average fuel efficiency of U.S. cars and trucks sold in the 2006 model year showed no improvement from the year before at 25.4 mpg.[xxx]

   

   

  Corporate Average Fuel Economy Standards (CAFE) work.

   

  • After Congress set fuel economy standards for vehicles in 1975, our dependence on oil imports decreased very quickly from 46 percent in 1977 to 27 percent in 1985, even though the price of oil fell in 1981. 

   

  • Ten years of CAFE saved the U.S. billions in oil and money. Without standards that forced automakers to increase fuel economy from the 1975 level to today’s 25 mpg, we would be using an additional 80 billion gallons of gasoline on top of the 140 billion gallons we will use this year.  That would represent an increase in oil demand by 5.2 million barrels of oil per day, or a 25 percent increase in our oil addiction.  At today’s average price for regular gasoline, about $2.75 per gallon, that represents $220 billion dollars saved. 

   

  • Even today, these standards continue to save nearly 3 million barrels of oil per day, according to the National Academies of Sciences. Since 1985, however, fuel economy has been stagnant and our imports have grown. 

   

  • IF CAFE hadn’t stalled after 1985, the U.S. would have saved additional billions more in oil and dollars, especially in light of tremendous advances in technology available to improve fuel economy.

   

  • The United States is falling behind other nations pushing for better fuel economy as concerns mount over global warming.  Even China, oft touted as the reason why the U.S. shouldn’t act, has tougher fuel economy standards.[xxxi]

   

   

  Voluntary action does not work

   

  • Automakers did not meet voluntary agreements to reduce greenhouse gas emissions in Europe.  As a result, the European Commission in Brussels is moving to mandate automakers to limit carbon-dioxide emission to an average of 130 grams per kilometer for all new cars by 2012. [xxxii]

   

  Detroit plays a critical role in reducing U.S. dependency on oil.

   

  • James Hansen of NASA's Goddard Institute and at Columbia University, says that the biggest obstacles to avoiding greater climate disaster are utility plants and motor vehicles that inefficiently use too much fuel. "Automakers oppose efficiency standards and prominently advertise their heaviest and most powerful vehicles, which yield the greatest short-term profits," according to Hansen.[xxxiii] 
  • A recent draft report from the Environmental Protection Agency (EPA) finds that the U.S. transportation sector accounts for about a third of greenhouse gas emissions and is the fastest growing major source of greenhouse gases, according to a recent [xxxiv]

   

  • The automotive industry is in a period of unprecedented technology development but up to now, domestic automakers have used technology advances to nearly double power and increase weight by twenty-five percent instead of increasing fuel economy. [xxxv]

   

  • Americans do not have to sacrifice safety, comfort or utility in their vehicles in order to achieve much greater fuel economy. The technology advances that have been used for power and weight can now be directed to fuel economy.  Data in the 2002 report by the National Academies of Sciences on CAFE indicate that the technology exists to reach 37 mpg in a fleet of the same make-up as the NAS analyzed, even ignoring hybrids and cleaner diesels. [xxxvi]

   

  • Paul Portney, chair of the NAS committee, noted that, “It might be possible to meet more stringent fuel economy standards at lower costs than the committee foresaw.” [xxxvii]

   

  Detroit’s future competitiveness requires a more fuel-efficient fleet

  • Toyota just unseated GM as the world’s number one automaker, shattering several sales records, as domestic automakers continue to lose sales and market share due to an over-reliance on fuel-inefficient cars and trucks, continuing the trend of the last two years.[xxxviii]

   

  • Dr. Walter McManus, a former GM market analyst now at the University of Michigan, reported recently that if U.S. automakers increased their vehicle fuel efficiency to accommodate increasingly conservation-minded customers, they could collectively increase profitability by $2 billion in model year 2010. Following their current plans, Dr. McManus concluded, they are projected to lose $3.6 billion that year. [xxxix]

   

  The American people, and Michigan citizens, specifically, want the government to take action to reduce greenhouse gas emissions and increase fuel economy.

   

  • A new Gallup poll shows overwhelming support to strengthen government restrictions on greenhouse gas emissions and to spend more taxpayer money to develop alternative energy sources, with 79 percent supporting higher auto emissions standards. [xl] 

   

  • The latest Detroit Free Press-Local 4 Michigan Poll shows a majority of Michigan citizens favor higher fuel economy standards for cars and trucks, with some supporting increases to 40 miles per gallon or more. Many would pay hundreds of dollars extra for more efficient vehicles. When asked how much they would be willing to pay for an 8- m.p.g improvement in fuel economy for vehicles similar to what they drive now, 47 percent said they would pay $1,000 to $2,000 more, and 20 percent said $500 to $700. [xli]

   

  • Forty-six percent of today’s car shoppers say the feds ought to force automakers to meet higher fuel economy standards, according to Kelly Blue Book Marketing Research.[xlii]
  • There is "a significant shift in public attitudes toward the environment and global warming [with] fully 83 percent of Americans now saying global warming is a 'serious' problem, up from 70 percent in 2004," reports the Yale Center for Environmental Law and Policy.[xliii]

  Policy Recommendations

   

  We can no longer afford any aspect of energy policy that undermines our national security by funneling billions of dollars to our enemies around the world, and continues to increase emissions of heat trapping gases that cause global warming.  Our oil dependence and global warming problem require immediate and comprehensive action from Congress in order to address both challenges together.

   

  Scientists warn that we have only a short window for action to prevent catastrophic global warming.  Delay -- as many recent economic studies reveal in sharp relief -- would make emissions reduction more difficult and more costly than action now.

   

  One of the most important steps Congress can take NOW to avert the worst consequences is to substantially raise fuel economy standards.

   

  In the immediate term, I urge the Congress to raise vehicle fuel economy standards to at least 35 miles per gallon by 2018 – the level recommended by the National Academies of Sciences and consistent with the President’s proposal of 4 percent per year improvement.

   

  By making this level of improvement binding, rather than leaving it up to this or future administrations, we could save as much oil as we currently import from the Persian Gulf, benefiting our economy and our long-term strategic interests.

   

  Congress should follow key steps to realize substantial oil savings and emission reduction benefits from available vehicle technology:

   

  1.      Require at least 35 mile per gallon fuel economy for cars and light trucks by 2018, and regular rate of improvement thereafter.

  2.      Give the administration flexibility to restructure the standard, but do not leave goal-setting up to the administration. The only way to ensure guaranteed oil savings is for Congress to direct the Department of Transportation and NHTSA to raise standards to a certain level.

  3.      Provide consumers and/or automakers with economic incentives to invest in technology for increasing fleet wide fuel economy.

   

  Current congressional proposals will have significant impact on our oil dependency.

   

  As the chart below shows, a 4 percent per year increase in vehicle efficiency will produce significant savings and will make real progress in reducing our dependency on imported oil.

   

   

   

   

   

   

   

  As next chart shows, while a 4 percent per year path would still leave us 7 years behind Australia, 9 years behind China, and more than 15 years behind the European Union, the 4 percent per year path would cut oil dependence, slow global warming, and save American consumers billions at the pump.

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  Conclusion

   

  Our actions as Americans cannot stop with these measures. As noted earlier – THE SIZE AND SPEED OF THE SOLUTION MUST MATCH THE SIZE AND SPEED OF THE PROBLEM.

   

  Throughout our history, Americans have successfully met critical challenges in both war and peace.  Building a new, clean energy economy has become one of the great challenges of our time.  Together we can move our Nation toward clean and secure energy supplies with policies that promote energy efficiency and the greatly increased the use of renewable energy.  As we have in our Nation’s past struggles, dedicated and concerned Americans from every part of the country want to play a key role in decisively winning the energy and environmental victory.

   

  How will the actions on CAFE by this Congress be viewed in ten or twenty years? Will we be able to look back and say that a bold, comprehensive and enlightened mandate produced substantial oil savings, increased our national security, helped our economy and significantly reduced carbon emissions?

   

  We have ten years to change course in significant ways. Our Nation’s security depends on the swift, serious and thoughtful response of you, our elected leaders in Congress.

   

  Thank you.

   

   

   

  Endnotes

  
  

  ---

  [i] KRAUSS, CLIFFORD and SIMON ROMERO.  “In Venezuela, a Showdown Looms Over Oil.” New York Times (Apr. 10, 2007).

  [ii] FARIVAR, MASOOD and IAN TALLEY. “Crisis Sparks Oil-Supply Fear/U.K.-Iran Standoff /Has Traders Pricing /In Risks of a Disruption.” Wall Street Journal (Apr. 2, 2007).

  [iii] KRAUSS, CLIFFORD and SIMON ROMERO.  “In Venezuela, a Showdown Looms Over Oil.” New York Times (Apr. 10, 2007).

  [iv] Friedman, Thomas.  “The Power of Green.” The New York Times (April 15, 2007)

  [v] FARIVAR, MASOOD. “Military Seeks Oil Savings/Rising Demand, Supply Risks/Spur Conservation Move.” Wall Street Journal (Jan. 9, 2007).

  [vi] McKay, Peter. “Dow 13000 Takes Detour” Wall Street Journal (April 24, 2007) Wall Street Journal Roundup “Observers Call Election in Nigeria Deeply Flawed” Wall Street Journal (April 23, 2007)  

  [vii] FARIVAR, MASOOD and IAN TALLEY. “Crisis Sparks Oil-Supply Fear/U.K.-Iran Standoff /Has Traders Pricing /In Risks of a Disruption.” Wall Street Journal (Apr. 2, 2007).

  [viii] IZZO, PHIL.  “Is It Time for a New Tax on Energy? /Economists Say Government Should Foster/Alternatives – But Not How Bush Proposes.”  Wall Street Journal (Feb. 9, 2007)

  [ix] May, Clifford D. “Diversity Can Pave the Road Toward Energy Security.” Scripps Howard News Service (Jan. 25, 2007).

  [x] Gongloff, Mark.  “Oil Demand Growth to Double; Can OPEC Meet It?”  Wall Street Journal (Mar. 8, 2007).

  [xi] CHAMBERS, Matt.  “Crude, Gasoline Prices Surge/Decline in Imports/Helps Cut Reserves; 'Temporary Blip'?” New York Times (Mar. 8, 2007).

  [xii] Bruner, Jon.  “Stock Focus/Sliding Back Into Oil.” Forbes (Feb. 2, 2007).

  [xiii] LUHNOW, David. “Mexico Tries to Save?A Big, Fading Oil Field/Cantarell's Drop-Off/Faster Than Expected;/Turning to Technology.” Wall Street Journal (April 5, 2007).

  [xiv] Ibid.

  [xv] MOUAWAD, Jad. “Oil Innovations Pump New Life Into Old Wells.”  New York Times (March 5, 2007).

    [xvi] CNA Report on “National Security and the Threat of Climate Change” http://securityandclimate.cna.org/report/National%20Security%20and%20the%20Threat%20of%20Climate%20Change.pdf  (April 16, 2007).

  [xvii] “Military on Climate Change” Washington Post (April 15, 2007).

  [xviii] Informed Reader column  “How Global Warming Will Play With Investors” Wall Street Journal (March 9, 2007).

  [xix]Revkin, Andrew “Global Warming Called Security Threat.” New York Times (April 15, 2007) http://www.ciesin.columbia.edu/pdf/waterconflict.pdf .

  [xx] http://www.ipcc.ch/SPM6avr07.pdf  KANTER, James and ANDREW C. REVKIN. “Scientists Detail Climate Changes, Poles to Tropics.”  New York Times (April 7, 2007).  Jolis, Anne and Alex MacDonald. “U.N. Panel Reaches Agreement?On Climate-Change Report.”  Wall Street Journal (Apr. 6, 2007).

  [xxi] MAX, ARTHUR.  “Climate report: Poor will suffer most.”  Associated Press (April 6, 2007).

  [xxii] Brown, Peter and Harry Stoffer. “The heat is on/How global warming is closing in on the U.S. auto industry.” Automotive News (February 7, 2007).

  [xxiii] Revkin, Andrew, “U.S. Predicting Steady Increase for Emissions.”  New York Times (March 3, 2007).

  [xxiv] New York Times “Global Warming and Security”  (April 20, 2007)

  [xxv] Associated Press Editorial Reprint. “Top Scientists Warn of Water Shortages and Disease Linked to Global Warming.” New York Times (March 12, 2007).

  [xxvi] CNA Report on “National Security and the Threat of Climate Change” http://securityandclimate.cna.org/report/National%20Security%20and%20the%20Threat%20of%20Climate%20Change.pdf (April 16, 2007).

  [xxvii]  Washington Post “Military on Climate Change” (April 15, 2007).

  [xxviii] Ball, Jeff  “Conoco Calls for Emissions Cap” Wall Street Journal (April 11, 2007); Murray, Alan. “Bush Health-Care Plan?Finds Business Backers.”  Wall Street Journal (January 24, 2007);  BARRINGER, FELICITY. “A Coalition for Firm Limit on Emissions.” New York Times (January 19, 2007).

  [xxix] Brown, Peter and Harry Stoffer. “The heat is on/How global warming is closing in on the U.S. auto industry.” Automotive News (February 7, 2007).

  [xxx] Hyde, Justin.  “U.S. Cars Show No Fuel Efficiency Gains” Detroit Free Press (April 24, 2007) .

  [xxxi] Freeman, Sholnn.  “Democrats Plan to Press Automakers on Fuel Efficiency.”  Washington Post (March 10, 2007).

  [xxxii] Hutton, Ray. “Emissions row divides carmakers/Europe’s motor industry can’t decide how to deal with tough new limits on carbon emissions.”  Sunday Times (March 18, 2007).

  [xxxiii] Brown, Peter and Harry Stoffer. “The heat is on/How global warming is closing in on the U.S. auto industry.” Automotive News (February 7, 2007).

  [xxxiv] http://epa.gov/climatechange/emissions/usinventoryreport07.html

  [xxxv] EPA Fuel Economy Trends Report, 2006

  [xxxvi] NRC, 2002

  [xxxvii] Portney, Paul. (February 9, 2005)

  [xxxviii] Chozick, Amy “GM Slips into Toyota’s Rearview Mirror.” Wall Street Journal (April 25, 2007) ;Terlep, Sharon. “Big 3 Sales Sink” Detroit News (April 4, 2007).

  [xxxix] (http://www.osat.umich.edu/research/economic/FuelEconStrat.pdf)

  [xl] Saad, Lydia. “Most Americans Back Curbs on Auto Emissions, Other Environmental Proposals/Solid majority opposes drilling for oil in Alaskan wilderness.” Gallup News (April 5, 2007).

  [xli] HYDE, JUSTIN. “MICHIGAN POLL/Most favor tougher auto mileage rules, but not at Detroit's expense.” Detroit Free Press (March 20, 2007).

  [xlii] PR Newswire. “More Than Half of Vehicle Shoppers Still Affected by Gas Prices.”  Kelley Blue Book Market Research (October 26, 2007).

  [xliii] http://www.yale.edu/envirocenter/yale_epoll2007_pr.pdf

• The Honorable David McCurdy

  President

  Alliance of Automobile Manufacturers
  Download Testimony (91.82 KB)