Bush’s Energy Plans from the State of the Union Speech

Martin Eberhard, CEO of Tesla Motors, provides a summary of Bush’s energy initiatives from the State of the Union speech on January 23, 2007. Also included are some of his thoughts on the issues.

Link: Tesla Motors – the Tesla blog

  • The need for a stable supply of energy that is not dependent on foreign oil from hostile regimes or terrorists
  • The need to diversify America’s energy supply, mentioning (in order) clean coal, wind and solar power, and “clean safe nucular energy”
  • The need for research to develop batteries for plug-in and hybrid vehicles
  • The desire to invest in new methods for creating ethanol, specifically wood chips, grass, and agricultural waste
  • A commitment to reduce gasoline usage in the United States by 20 percent in the next 10 years, allowing us to reduce our imports from the Middle East by three quarters
  • More specifically, reforming the CAFE (Corporate Average Fuel Economy) rules for cars, and reducing gas consumption by 8.5 billion gallons by 2017
  • Stepping up domestic oil production
  • Doubling the strategic petroleum reserve

Obviously, I agree that we need to diversify our energy supply. One of the foremost principles that led me to found Tesla Motors was that (as General Motors Chief Executive Rick Wagoner noted in his opening remarks at the LA Auto Show), electric cars move our choice of energy source upstream from the vehicle, making them the ultimate multi-fuel vehicles: You can power them with clean (or dirty) coal; wind or solar power; clean, safe (or otherwise) nuclear energy; or even good ol’ oil.

The bit about research into batteries for plug-in or hybrid vehicles was quite interesting to me. On the one hand, I was blown away that he actually acknowledged the existence of plug-in vehicles – the EV is not as dead as Chris Paine suggested :) . On the other hand, this sounds a lot like a response to Rick Wagoner’s request for $500 million for battery research, especially when you remember his opening comments about more enterprise rather than more government.

We can bicker all day about whether Big Government can ever do anything efficiently, but the track record for Big American Auto’s battery progress through the U.S. Advanced Battery Consortium is abysmal. In all the years of its existence, this consortium has produced, well, nothing. No batteries for American electric cars. No batteries for American hybrids. No batteries that GM could put into its hyped-up Volt. Nothing at all to help the USA become a leader in battery technology. Zip. (oh, they did recently funnel $15 million into A123, so I expect the folks over there are big fans of this consortium.)

So as much as I would dearly love a similar research grant for Tesla Motors, I am not enthusiastic about government spending on battery research. Much better would be incentives that encourage consumers to buy an electric car. (Imagine if you got a $25,000 tax credit for buying an EV for your “business,” like you can for a Hummer!) This would drive the right behavior throughout the industry, and would spur development.

Moving on to ethanol. I was struck by the glaring absence of any mention of corn-based ethanol. Holy smokes! Did the good people over at Archer Daniels Midland forget to make their political contributions this year? Instead, the President focused on new feedstocks for ethanol, all of the Cellulosic variety. I am still pretty skeptical about this as a serious fuel source, but it seems a lot better than using food for fuel! (Note two recent news articles: on January 16 this year, the Wall Street Journal ran an article called “Ethanol Could Fuel Rise in Corn,” wherein they explicitly discussed the “food-versus-fuel” issue, and NPR ran a story on January 22 discussing the sudden 50 percent hike in the price of tortillas in Mexico, blamed at least in part on U.S. ethanol production from corn.)