Budget offers automakers less than they hoped for on alternative fuels

David Shepardson / Detroit News Washington Bureau | WASHINGTON -- President Bush's $2.9 trillion federal budget proposal, released today, fully funds the final year of a $1.2 billion hydrogen fuel cell research program.

But as expected, the plan offers automakers less than they hoped on plug-in hybrid battery research.

Bush proposed spending $309 million on hydrogen fuel cells, up from $289 million in fiscal 2007, which ends Sept. 30. Automakers already have begun lobbying for the Bush Administration and Congress to support further research funding after the $1.2 billion program expires next year.

But the automakers were less successful on battery money; they had requested $500 million over five years following Bush's meeting in November with the CEOs of the Big Three. Bush's proposal raises battery funding to $81 million -- up from $31 million last year. Last month, the Energy Department said it is issuing $17 million in plug-in hybrid battery grants, part of that pool of money.

Automakers and experts are worried that Japanese automakers and battery firms are outpacing domestic manufacturers and will get plug-in hybrids to the market first. Both General Motors Corp. and Ford Motor Co. have shown off plug-in hybrid concept cars: the Chevy Volt and the Hy-Series Hybrid Ford Edge.

"Major producers in Japan, and more recently Korea, have opened a significant gap between them and other parts of the world in advanced-battery manufacturing expertise," said Menahem Anderman, president of California-based Advanced Automotive Batteries. The U.S. government should consider "addressing this significant gap in high-volume lithium-ion manufacturing expertise between U.S. developers and their Japanese and Korean counterparts."

For a year, DaimlerChrysler has had a test fleet of plug-in hybrid electric vehicles on the roads. Between now and the first quarter of 2008 more than 20 Dodge Sprinter PHEVs will be placed into service as part of the program.

More money for ethanol research

Bush also wants to dramatically increase the use of alternative fuels, especially ethanol, and increase the required fuel efficiency of automobiles by an average of four percent annually beginning in 2009 for passenger cars -- a move that would cost the Big Three automakers billions.

The proposal boosts funding for ethanol research to $179 million, a smaller raise than the $59 million increase last year to $150 million.

The budget also redirects $175 million into traffic congestion research, including a "broad demonstration of some form of congestion pricing, commuter transit services, commitments from employers to expand work schedule flexibility, and faster deployment of real time traffic information." Bush wants to reduce gasoline usage by 20 percent by 2017, in part by slowing the amount of fuel wasted sitting in traffic.

In 2003, drivers in the 85 most congested areas -- including Metro Detroit -- experienced 3.7 billion hours of travel delays and burned 2.3 billion gallons of wasted fuel at a cost of $63 billion.

Transportation Secretary Mary Peters said that the administration is using the program "to fight back against the traffic that is choking our major roads."

"If we don't act today, our economy will be facing a standstill in the future," she said.

Part of Bush's anti-congestion proposal is a $25 million "Corridors of the Future" program

Semifinalists include I-95 between Florida and Maine; I-15 in southern California and Nevada; I-80/94 and I-90 linking Illinois, Indiana, and Michigan; I-5 in California, Washington and Oregon; I-70 from Missouri to Ohio; I-69 from Texas to Michigan; I-80 in Nevada and California; and I-10 from California to Florida. Revised applications are due in May and up to five corridors will be selected.