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Old 06-11-2002, 08:36   #1 (permalink)
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Bush administration's FreedomCAR program: Real pollution-free solution or tax waste?

By HARRY STOFFER
Automotive News

WASHINGTON -- The Bush administration promised that its taxpayer-supported automotive research would be a revolutionary break from the past.

But it is delivering something else: a makeover of a 1990s concept that spent $1.5 billion and produced few tangible results.

The Bush program, called FreedomCAR, was unveiled with much fanfare early this year as the way to develop pollution-free, petroleum-free fuel cell vehicles. The administration said FreedomCAR would replace the Clinton administration's Partnership for a New Generation of Vehicles, which it viewed as a failure.

But FreedomCAR is proving to be more like the partnership than different from it. The similarities have been revealed in administration budget documents, in interviews conducted by Automotive News and in the administration's own testimony to Congress.

While there may be advantages to continuity in research, the administration and the automakers are in danger of repeating the partnership history. If they do, hundreds of millions of dollars of taxpayer money will be spent on research that delivers little breakthrough technology to the marketplace.

Critics say the program would provide cover to the industry and to officeholders, enabling them to say they are doing something about the automobile's thirst for imported oil and its impact on the environment. Meanwhile, critics say, the tough, politically costly decisions about fuel economy are put off.

FreedomCAR also raises new questions. Chief among them is why more research money is going toward vehicle hardware than toward finding ways to produce and deliver hydrogen. Private industry already is spending billions on fuel cell development, but fuel availability is acknowledged to be the main obstacle to widespread fuel cell use.

An undercurrent to the developments is the rapid evolution of Bush administration positions, rooted as much in politics as in science.

The administration came to office 17 months ago calling the Clinton-era partnership misguided, unaccountable and bloated. A year later it proposed to spend about the same amount of money with the same industry partners - the Big 3 and their suppliers - and to do similar research at the same laboratories.

"It does look suspiciously like PNGV," said Erich Pica, director of the Green Scissors Campaign for the environmental group Friends of the Earth.

The campaign, supported by nearly 20 environmental and other public interest organizations, including such mainstream outfits as the National Audubon Society and Concord Coalition, identifies programs that members say not only waste money but also harm the environment.

The partnership made the list - even though it was a signature program of former Vice President Al Gore, who had broad support in the environmental community.

The partnership goal was to develop technology that would make mid-sized family sedans capable of 80 mpg by 2004. But the Green Scissors Campaign reasoned that PNGV was both a form of corporate welfare and a threat to the environment because its existence impeded other efforts, such as increasing corporate average fuel economy standards.

The campaign isn't passing judgment on FreedomCAR just yet, but Pica said its lack of guidelines and benchmarks to measure success is not a good sign. And if officials should start to cite it as a reason not to raise fuel economy standards, "We would have to question it," he added.

Actually, some in the industry have begun to make the argument that having to meet higher CAFE standards could deter them from bigger, more promising FreedomCAR goals.

Administration enthusiasm for partnership-like research on fuel cells has several explanations.

For one, automakers, particularly General Motors, began last year to tout the promise of the hydrogen economy. The automakers continue to have the ear of Energy Secretary Spencer Abraham, formerly Republican U.S. senator from Michigan. For another, the Sept. 11 attacks and renewed strife in the Middle East created fresh concern in government about U.S. reliance on imported oil.

In a closed-door meeting last fall, Abraham told department staff to think big, and FreedomCAR, which stands for a program of "cooperative automotive research," was born.

Abraham, at the Detroit auto show in January, touted FreedomCAR as a break from the past and "a new approach to powering the cars of the future." He said it would lead to hydrogen fuel cell vehicles, free of petroleum and pollution.

"The gas guzzler will be a thing of the past," he said to applause from elected officials and industry partners, led by Big 3 executives.

In the somewhat drabber arenas of Washington bureaucracy, Abraham's deputies have taken pains to assure federal lawmakers, interest groups and others that the administration is not abandoning other ongoing research begun under the partnership.

They say work will continue on gasoline- or diesel-electric hybrid powertrains, on combustion technology and on lightweight vehicle materials - all featured in the partnership - but there will be some increased attention for fuel cells.

"What you are going to see is a kind of shifting of the portfolio," Assistant Energy Secretary David Garman said in an interview. "Like any good investor would have the appropriate balance between cash, bonds and equities, what you're seeing is the distribution changed around a little. There will still be a diversified portfolio.

"Some have left the impression that because we did spell out that hydrogen and fuel cell vision that that meant we were going to stop work on batteries, stop work on hybrids and stop work on materials. That's just not the case," Garman said.

Budget numbers reveal even more clearly how the shift from the partnership to FreedomCAR is more subtle than revolutionary. (See box at top of this page.)

Garman defended the mix but said more money likely will be directed toward the fuel problems in coming years. "We need to get a little smarter before we start committing large amounts of infrastructure dollars or demonstration dollars," he said.

Interest groups will try to make sure he doesn't forget. Said DaimlerChrysler Vice President Thomas Moore, "The most important unresolved issue with fuel cell vehicles is not the fuel cell. It's the fuel."

Meanwhile, Congress appears ready, even eager, to provide the $150 million for fiscal 2003 that the Bush administration wants for FreedomCAR.

When senators voted in March to kill a proposed 50 percent tightening of fuel economy standards, they added to the comprehensive energy bill that they were considering an authorization for $225 million a year for FreedomCAR. That bill is headed for a House-Senate conference committee, and its fate is uncertain.

Garman also defended continued funding for research on gasoline- or diesel-electric hybrid technology, even though hybrids are on sale and more are coming. He said much can be done to improve hybrids, especially in power electronics. As a plus, some lessons learned on hybrids can be applied to fuel cells, he said.

Again, while such strategies may represent prudent continuity, it also means that taxpayer money, above and beyond the more than $1.5 billion spent in the past decade, will keep flowing to the same automotive research, guided by the Big 3, that has recorded some novel advances but no dramatic breakthroughs for production vehicles.

Each of the Big 3 is planning at least one hybrid-powered vehicle, but none of the powertrain technology unveiled is a clear result of partnership research. Ford Motor Co. has agreed to commercialize a hydraulic hybrid developed by the EPA with partnership funds but outside mainstream partnership research. Its likely use is in larger commercial vehicles.

In the meantime, the primary partnership goal of 80-mpg family sedans was dropped unceremoniously.

Consumer advocate Ralph Nader, a longtime critic of cozy government-industry relations, last month offered this eulogy to the partnership:

"There is no clean engine out of that program. There is no prototype clean engine. There is nothing but promises, promises, promises.

"But the genius of the deal was that in return for becoming a partner with Uncle Sam the auto companies got de facto immunity from antitrust prosecution and they got de facto exemption from fuel efficiency regulation increases," he said.

Noting the presence in the marketplace of gasoline-electric hybrids from Toyota and Honda, who were not members of the partnership, Nader added:

"When Republicans talk about the need to get rid of welfare because it reduces the incentive for mothers and others to work, you can apply that to corporations - that the more welfare corporations get from our tax dollars, the more it reduces their incentive to innovate."

Defenders of the Big 3 and the partnership insist the picture is hardly so black and white. They note that the Japanese government long has provided research help and other forms of support to its automobile industry.

Not unexpectedly, Big 3 executives are unabashed supporters of the partnership's replacement even though their companies claim to be well on the way toward putting fuel cell vehicles on the road.

DaimlerChrysler, for one, says it is spending more than $1.4 billion between 2001 and 2004 on fuel cell r&d and expects to sell limited numbers of its first fuel cell vehicles in 2004. Yet it insists federal help is needed.

Dieter Zetsche, CEO of the Chrysler group, said in an interview, "You only can push the technology by really pushing for the market and not staying in the labs forever, but there is a lot of basic research to be done, especially regarding the infrastructure, and therefore I think the FreedomCAR initiative is just wonderful."

Even among environmental groups there is guarded support for FreedomCAR, despite its similarity to the partnership and its checkered past.

Seth Dunn, a researcher at Worldwatch Institute who has studied fuel cells and the promise of the hydrogen economy, said government involvement is vital in the early development of any major technology.

Yet he has doubts about FreedomCAR. He said it, like the partnership, is flawed in that it lacks targets and has no requirement that industry produce vehicles with the technology that may be developed. He said automakers no doubt would have bowed out if such a requirement had been made

He warned, "Ten years from now people may be asking, 'What happened to FreedomCAR? Why didn't it go anywhere?'"
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