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Large SUV
Figure 8 shows the Hyperdrive modeled to represent a large SUV with the Gross Vehicle Weight of 8,500 lbs., the highest weight vehicle subject to CAFÉ regulations. In this configuration, the Hyperdrive replaces the mechanical 4×4 drive with an electrical component and, because of a large difference in load range, we use a two-speed automatic transmission. In Table 5, we present a comparison of performance between a conventional large SUV and one equipped with the Hyperdrive. Importantly, unlike other HEV designs that must compromise performance, with the Hyperdrive system there is no change in trailer towing capacity.
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Combined fuel economy is improved from 16 to 26 mpg, or 62 percent. Acceleration with the Hyperdrive SUV is markedly superior, accelerating from standstill to 60 mph in 7.7 seconds versus 9.6 seconds. Top speed is limited by tire rating. Gradeability meets the requirements of the auto industry in the conventional SUV. We believe that implementation of the Hyperdrive in a large SUV will meet or exceed customer expectations for performance and provide 44 percent improvement in fuel economy. Unlike other HEV designs, the Hyperdrive does not need to eliminate or greatly reduce trailer-towing capacity in order to provide the fuel consumption benefits desired.
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III. Economics
We believe that a Hyperdrive vehicle can be produced with the same as or better performance characteristics than conventional vehicles, and with improvements in fuel efficiency and emissions, without substantially increasing cost. For example, Paice Corporation believes that the Hyperdrive could cost approximately $1,700 more than the conventional powertrain that it would replace in the large SUV application. Sources of data for this estimate came from prior experience of auto industry suppliers, new components suppliers and from our own experience. To further refine our cost estimates we are currently establishing a program to build a demonstration vehicle with all of the components specifically designed for their intended use by qualified automotive suppliers.
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As an illustration of life cycle cost savings, the fuel economy benefit for the large SUV is 10 mpg. Thus, as a rough estimate, if the vehicle is driven 12,000 miles per year (average for American drivers) and has an expected life of 10 years, this fuel economy improvement will yield approximately 2,900 gallons in fuel savings.(see footnote 16)
The decision as to whether the fuel savings justify the increased manufacturing cost is, of course, not purely quantitative. Evaluation of the secondary effects, however, is not within the expertise of the Paice team.
Building a cost competitive Hyperdrive system for large vehicles became possible only after commercial introduction of high voltage power semiconductors, specifically 1,400 Volt IGBTs. This occurred in 1998, the year we started building a prototype of the Hyperdrive. In Fig. 9 we present the ''chain reaction'' of effects of high voltage power semiconductors.
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The existence of high voltage semiconductors offers the ability to make inexpensive and efficient DC/AC inverters. This in turn permits introduction of powerful traction motors. With powerful traction motors, elimination (or, in some cases, simplification) of the transmission is made possible. When using all these components, the Hyperdrive implements our new method of engine control to achieve near-maximum thermodynamic efficiency of spark-ignition engines (32–34 percent as compared to the maximum of 35 percent). There are also additional benefits of using lead-acid batteries at lower currents, such as increased operating life and lower cost.
The Hyperdrive is essentially an evolutionary improvement of the conventional gasoline (or diesel) powertrain. It uses the same component technology, but in substantially different ratios. The engine is smaller. The transmission is either eliminated or reduced. The starter motor and alternator become more powerful and larger in size and weight. The lead-acid battery is increased in size and weight. There are more powerful electronic power controllers than just existing voltage regulators: the DC/AC inverters. However, these inverters employ the same basic type of components that exist in vehicles today. The operation of all of the components is coordinated through a highly sophisticated powertrain computer controller, similar in nature to existing engine control modules from a components viewpoint. Thus, the Hyperdrive relies on very similar components very similar to those currently in use and the resulting system weight is almost identical. Altogether, this leads to total cost that is modestly greater than present powertrain configurations.
IV. Potential for Improvements in Fuel Efficiency
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Based on the fundamental principles of thermodynamic efficiency, we believe that the fuel efficiency of our powertrain represents close to the practical limit of what is technically possible in passenger vehicles. We presented modeling results for three vehicles: a) compact car, b) full-size (large) car, and c) large SUV. Using the Hyperdrive system, a compact car exhibits an increase in combined fuel economy from 31 to 45 mpg (a 45 percent improvement), a full-size car exhibits an increase from 27 to 39 mpg (a 44 percent improvement), and a large SUV exhibits an increase from 16 to 26 mpg (a 62 percent improvement). We believe that these modeling results are representative of the type of increase that all vehicles subject to CAFÉ can produce using our powertrain.
To provide a more complete picture of the improvement in fuel economy that could be expected in other classes of vehicles, we identified the relevant characteristics of all of the vehicle categories listed in Table 2 (the categories defined in the Oak Ridge Transportation Energy Data Book and currently subject to CAFÉ regulation) and designed the Hyperdrive system for a representative vehicle in each category. A summary of our modeling results showing the original fuel economy of each representative vehicle, the fuel economy that results from incorporation of the Hyperdrive system, and the percentage improvement from such incorporation is provided in Table 6.(see footnote 17) With potential fuel economy improvements of the magnitude shown here, application of Hyperdrive to a large volume of production vehicles would significantly reduce total gasoline consumption and consequently, the requirements for oil imports.
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All of the fuel economy improvements presented herein are based only on the use of the new Hyperdrive power train. Further small improvements are still possible, such as through ICE engine optimization, but such improvements will be subject to the law of diminishing returns as the Hyperdrive is operating the engine within 1–3 percent of its possible maximum thermodynamic efficiency. Furthermore, improved fuel economy from the use of lighter materials, smaller aerodynamic drag, and lower resistance tires (those potential improvements discussed by the report of the Union of Concerned Scientists) are not included in our analysis and would potentially result in additional improvements in fuel efficiency.
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Of course, any HEV can only reduce overall fuel consumption in a meaningful way if it is commercially mass-produced. As discussed above, we believe that the Hyperdrive system has the only cost effective configuration of HEV that is fully scalable and is not cost prohibitive to mass-produce. As a first step toward the mass production of a Hyperdrive vehicle, our projections for cost will have to be substantiated through a manufacturing cost analysis of actual components in an actual vehicle that exhibits the performance and fuel economy advantages described above. Once cost projections are verified in the prototype vehicle, we would expect that participating automakers will begin the process of preparing for large-scale production of vehicles with the Hyperdrive system. If a development program were to begin now, automobiles with the Hyperdrive could be commercially introduced into the U.S. market within five years. We are hopeful that this process will commence in the near future in view of the level of interest being demonstrated by several leading automakers and key component suppliers.
It should be noted that such a transition will take substantial time to complete. To begin with, it will take Paice Corporation two years to deliver a complete demonstration vehicle and two additional years for the automakers to test and evaluate the vehicle and go through the expensive process of preparing for production. Once a vehicle with the Hyperdrive system appears on the market, subject to the level of customer acceptance and commitment on the part of the automaker, it will then take a number of years for the transition of the full range of the automakers vehicle lines.
While the Hyperdrive system can deliver fuel economy improvements of roughly 50 percent across the full range of automobiles and light trucks, an additional question is in which vehicles is it most appropriate to begin implementing the Hyperdrive powertrain. We believe that the greatest fuel savings can be realized by introducing the Hyperdrive system into the SUV/light truck class of vehicles. To understand why this is the case, one must evaluate the issue of fuel efficiency under a gallons per mile analysis, as well as the traditional miles per gallon analysis.
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As illustrated by Figure 10, under a miles per gallon (MPG) analysis, introduction of Hyperdrive technology results in an increase from 31 to 45 mpg for a compact car (a 14 mpg increase) as compared to an increase from 16 to 26 mph for a large SUV (a 10 mpg increase). Thus, from a MPG standpoint, it appears that greater value is added by incorporating the Hyperdrive powertrain into a compact car.
However, under a gallons per mile (GPM) analysis, those same increases in fuel efficiency result in dramatically different amounts of gallons used over 12,000 miles (one year of driving). As Figure 10 illustrates, using the Hyperdrive system in the same compact car yields a savings of 120 gallons per 12,000 miles. Conversely, using the Hyperdrive system in the same large SUV yields a savings of 290 gallons per 12,000 miles—more than double the fuel savings from the compact car.
While other factors bear on fuel economy, we feel that it is logical to focus on the number of gallons consumed for a specific distance traveled. Moreover, it makes sense that the Hyperdrive technology will yield the greatest per vehicle fuel savings when introduced into the SUV/light truck class of vehicles, because passenger cars are already more fuel-efficient than SUVs and light trucks and, therefore, don't have as much room for improvement. Consequently, if the goal is to yield the greatest fuel savings in the categories of vehicles currently on the road, the Hyperdrive system should be introduced first in the SUV and light truck vehicle class.
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Conclusion
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The Paice Corporation has designed and developed a hybrid electric powertrain, which results in ICE fuel efficiencies in the range of 32–34 percent, approaching the limit of thermodynamic efficiency for spark-ignition engines. Current automobile ICEs operate at around 18–22 percent, so the Hyperdrive has a potential to deliver significant gains in fuel economy.
We have successfully demonstrated fuel economy improvements in a full-scale prototype of the Hyperdrive on a dynamometer and used the data derived from such tests to model three selected vehicles, a compact car, a full-size car, and a large SUV. As compared to their conventional counterparts, the vehicles powered by the Hyperdrive exhibited an increase in combined fuel economy as follows:
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The Hyperdrive is suitable for all vehicles covered by current CAFÉ regulations, and we believe that the modeling results presented are generally representative of the type of increases in fuel economy that can be realized in all vehicles subject to CAFÉ.
Regardless of the type of regulations imposed, Paice believes that national fuel consumption can only be meaningfully reduced in the long term if the auto industry can produce cars at acceptable cost that suit the needs and desires of consumers and that are at the same time highly fuel-efficient.
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Hyperdrive cars will match or better the performance of existing vehicles. They will also have conveniences and features not feasible in present day cars. Hyperdrive cars will be more heavily dependent on real-time control software and other more advanced technologies than present ones and do things we can't even imagine now, as cell phones did just a few years ago. In a truly American way, they will save gas, and they will be better products.
We are confident that the Hyperdrive can be a valuable tool in enhancing fuel economy, improving our environment, reducing our dependence on foreign oil, and acting as a technological bridge for the FreedomCAR program. We look forward to working together with the government and the auto industry in achieving these goals.
BIOGRAPHY FOR ROBERT J. TEMPLIN
Robert J. Templin, a member of the Board of Directors of Paice Corporation, has directed the development and engineering of several milestone automotive technologies, vehicles and components in a 40-year career at General Motors.
As chief engineer of GM's Cadillac Motor Car Division, he was responsible for the performance, safety and legal requirements, and customer satisfaction of over $100 billion worth of Cadillac vehicles.
He was the principal architect of GM's shift to downsized cars in the 1970s, designing and implementing the launch of the 1975 Seville.
As Technical Director of the GM Research Laboratories, he led research into various power plants, such as Stirling, gas turbine, and free piston engines, which proved the serious limitations that make them unacceptable for mass production vehicles.
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Templin was instrumental in several technical achievements that have drastically reduced vehicle pollution emissions. In 1960, he led development and implementation into full-scale production of the industry's first pollution control device, the closed crankcase ventilator. He was instrumental in GM's decision to shift to unleaded fuel in the mid-1970s, which allowed use of catalytic converters for pollution control. He also pioneered development of digital electronic fuel injection, which made significant reductions in vehicle emissions and was so successful it was used on all cars in the world within the following four years.
Early in his GM career, he was the first to demonstrate feasibility of gas turbine engines for combat vehicle propulsion, which led to development of gas turbine engines used during Operation Desert Storm.
Templin joined GM as a research engineer in 1946, working under the legendary inventor and research chief, Charles F. Kettering. When he retired from GM in 1987, he was director of advance design and process for the Buick Oldsmobile Cadillac Group. He has since served various companies as a private consultant and accepted speaking invitations at technical conferences around the world.
Templin now lives in Austin, Texas. He is a graduate of Rensselaer Polytechnic Institute and serves on the school's Science Advisory Committee. He has received the Distinguished Service Award of the Automobile Manufacturers Association, is a life member of the Society of Automotive Engineers, and a member of Tau Beta Pi and Mensa.
Discussion
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Chairman BARTLETT. Thank you all very much for your testimony. Let me turn now to my Ranking Member for her questions and comments.
Ms. WOOLSEY. Thank you very much, Mr. Chairman. I all of the sudden remembered that you weren't going to go before me. You are such a gentleman. Thank you. I have some concerns and I think any of you can respond to them as you see fit. One that Japan is getting ahead of us. Are we going to be able to catch up and not lose this kind of technology to them and let them take the economic value of hybrid cars away from the United States? That's one. The second is the amount of education that is needed to one, educate the public; two, provide a work force that can actually do what needs to be done; and three, have an education system that educates future scientists and technicians and engineers. So have at it.
Dr. MCCORMICK. Maybe I should start.
Ms. WOOLSEY. All right, Dr. McCormick.
Dr. MCCORMICK. We absolutely don't intend to lose the race with Japan.
Ms. WOOLSEY. We are losing it.
Japanese Effect on the Economic Value of Hybrid Cars in the U.S.
Dr. MCCORMICK. We work very closely. As a global company, we actually sit on something called the Kaobi Kai, which is the internal Japanese planning group that is trying to figure their role out for hydrogen and fuel cells. And I can tell you for sure that they are very aggressive about it, setting aggressive targets. And I think that they have that long history of great governmental-industry cooperation, which makes them very formidable. So I think that we have to look very seriously at it. But I think the subjects that this committee is looking at are pertinent to us not losing that, and in a real sense, I think we have the technical capability. I think we have the wherewithal to do it and in a larger sense it may be a matter of will. And I think this is something that is so fundamental to future generations and all the benefits that we re looking at that I think that this is one that we really should screw up our willpower and do it. So I think it is a matter of will and I can certainly say for GM that we have that will. We are committing a lot of resources to it.
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Ms. WOOLSEY. What will do we have to have up here?
Dr. MCCORMICK. Well, I think a couple of things. First of all, we live in an instant gratification society and we look for quick answers to things. And if you look at history of things that have changed the world, the semi-conductor, the development of the integrated circuit, Internet, those kind of things, they seem to spring on us full blown. But if you look back at it, there was usually a key government role in terms of early research and development. I think we are pretty well through that with fuel cells. But being the buyer of early prototypes through the military, other things like the Minuteman Program with the semi-conductor business or DARPA and the universities with Internet, and then I think the issue that perhaps my colleague Doug Rothwell touched on, when we did the electric vehicle in California we were amazed at the number of conflicting regulations and requirements.
You start at the local fire department and police department and you work your way out. And when we look at the issues here of hydrogen safety and regulation or the challenges that both Roger and we face as we talk about distributed generation, we need common rules here so that we can put these things—fuel cells on the grid, have the cars be able to provide electricity, that sort of thing.
So I think there's many, many things that the government can do here. And in fact, in a very real sense if the government doesn't play that role, I am afraid that the leadership will go elsewhere. So I hope I touched on a few of them. And then also, I do believe that this is the beginning of an evolution and the things that we show, you know, I am excited about autonomy and the technology that that represents. I suspect my kids and grandkids will think that looks like the Model T, and I certainly hope it does. So I also want to encourage the continued funding of really breakthrough research at our national laboratories, the Argons and the Los Alamos' and the Sandea Livermore's and all of those places that we currently work with. I think we need to continue that spirit of breakthrough stuff. This technology only exists because of the NASA programs and the Department of Energy Programs in the 1960's and 1970's. So I think we need to keep that spirit as well.
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Ms. WOOLSEY. Anybody else want to respond?
Mr. TEMPLIN. I would remind you of the tremendous incentive that exists in Japan and Europe on fuel price too. You know, our system will save a person thousands of dollars a year in fuel or a truck fleet operator several thousand dollars a year and in the U.S. the most we can promise is about $450 a year. So there is an economic step there that if we could find a way to bridge it we would be very happy.
Mr. WOOLSEY. Dr. Saillant.
Amount of Education Needed to Accomplish FreedomCAR's Goals
Dr. SAILLANT. One of the comments I'd like to make supports the question about education. First, in the industry I think the workforce can be put to work and trained very readily. We have systems in place to do that. I know working with Ford and seeing what goes on at GM and DaimlerChrysler and so forth, the kind of education that is required to bring the UAW workers forward can be very systematic and very quickly done. So I don't think we have a problem there.
I do worry when it comes to the university level to the secondary—all the way through from secondary to university level. Byron talked on a word, which I had circled on my presentation and didn't talk about, the word will and the idea of instant gratification. We have to have the will to stay the course and require that people understand that we are part of a huge global system, that we require that people who educate in engineering and science at the secondary level understand how to teach systems thinking, understand how to teach the sustainability principles that are required and build awareness in our young people coming up so they will have the will to do what is needed to do, what has to be done, because it is going to take three, four, five, six decades before it becomes a way of life.
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Ms. WOOLSEY. Okay. My time is up. Thank you, Mr. Chairman.
Chairman BARTLETT. Thank you. And we should have an opportunity for a second round of questioning certainly. And now the gentlelady from Pennsylvania who represents the little coal town in Pennsylvania in which I grew up, Export, Melissa Hart.
Estimated Timeframe for Technology Application
Ms. HART. Thank you, Mr. Chairman. We have been one of those areas that keeps getting hit with limits on particulates and so I am particularly interested in this technology. I just have a general question for the panel and it is regarding timeframe, and I know some of you are probably advancing on technologies faster than others. But we have a number of Members now who are driving these hybrid vehicles and that sort of thing. Do you think that our first step in getting these into real production is going to be a hybrid type vehicle before it can become generally accepted across the board? And as far as your technology, and I know they are a little bit different from each other, do you see them as, you know, five years, 10 years where they can actually be in the market?
Mr. TEMPLIN. I would take that. We view our system as being, you know, completely invisible. It could fit right into the existing structure or infrastructure of sales and manufacturing and so on. So the only thing that limits us is the rapidity with which we can exercise the system and get the parts and get the cars out. And I would predict, based on some other experiences I have had, just to go back to the electric starter, it was invented in 1912. It was in all the cars in the world within four years. The same with the electronic fuel injection. When something truly better comes along, it swamps the industry. So we expect that the advance hybrids would blanket the industry within four or five years after they are first introduced.
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Ms. HART. Within four or five years of when they are first introduced, and that was a couple of years ago. Right?
Mr. TEMPLIN. Well, I'm talking about our system because——
Ms. HART. Okay.
Mr. TEMPLIN [continuing]. We don't think the Japanese systems are cost effective. They are very good executions. We tip our hats to the Japanese for the jobs they have done, but their costs in their system are very high and that was where we spent a lot of our effort to get the cost out. So the people will not buy a system that is too expensive and if you have to subsidize it, that is not a very good business decision. So we think the Japanese are going to have to change the way they are doing their hybrids. We have already addressed that.
Ms. HART. And your system you believe would be close enough in cost——
Mr. TEMPLIN. Yes.
Ms. HART [continuing]. That it wouldn't dissuade people from using it?
Mr. TEMPLIN. We think in many cases it can be a wash. In some cases a few hundred dollars premium. But if you save so much money, particularly in light trucks, that it wouldn't be a tough decision for a truck operator.
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Ms. HART. Okay. Anybody else?
Dr. MCCORMICK. As an auto company, might touch on it in two ways. First of all, I think hybrids are here. They are happening. We are introducing them and they have the benefit of learning about power electronics and all of those sort of things, but they do have some shortcomings as well. They do add additional cost. And the issue, of course, you are adding that additional cost for what additional benefit to the consumer other than the fuel economy, which is important, but not necessarily the top thing that people buy for.
With respect to hydrogen in the fuel cell, I think the fuel cell is coming along at such a rate in the vehicles that we are doing and coming along in such a rate that certainly by the end of the decade, we will be ready to be introducing such vehicles. And I want to use the words very carefully because we will be doing demonstrations in probably limited sales and other things very quickly.
But when I talk about people in general, somebody that might want to drive from Washington, DC through Pennsylvania, Montana, and end up in Los Angeles or something, you have got to think about the infrastructure. There is 180,000 gas stations in the United States and we have got to start thinking about how does that propagate and how do we roll it out. And so this whole notion of a cooperation between the energy companies or companies that might replace the energy companies and the automotive companies and the government I think is absolutely critical. And I think additionally when we look at national policy and we talk to people around the world, if you think about cell phones, they happened very quickly in China. Part of the reason was they didn't have an existing infrastructure to replace. The Chinese are looking very much at coal and clean coal and natural gas to fuel their hydrogen economy, which is logical.
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And so I think that as a—we need comprehensive energy policies that emphasize our indigenous energy sources that begin to look at common standards and then do the incentivization for the small business people who own the gas stations. You tend to think about the sign in front, but in fact 60 percent of the filling stations are private entrepreneurs or private owners, small business. And obviously, if you come along and say it costs either $10,000 or $50,000 or $100,000 to put a hydrogen station there, if they are in rural Montana and they only see a car a year, that is not a very good business proposition. So there needs to be some form of incentivization so that they can make that investment and help us make the transition. So those are the kind of things I tend to think about.
Government Involvement in Technology Application
Ms. HART. You are talking about government incentives for all that.
Dr. MCCORMICK. Yes. Government involvement. Yes. Very much so.
Ms. HART. There is not enough in the Energy Bill that we passed. I know that for sure. Anyone else on that one?
Mr. LOVINS. All three of the engine hybrid cars on the U.S. market are good cars. I drive the most efficient of them and am quite impressed with it. But I think there are distinctive and decisive strategic advantages to changing more fundamentally how we design and make cars than simply changing power train, whether to the Hyperdrive or to other types of hybrids.
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The car industry is a classic over-mature industry. That is it is selling inversioned products into shrinking niches in very crowded saturated core markets with global over-capacity and consolidation. Even in a good year it doesn't make enough money to be really exciting for recruitment or investment, and in a bad year it gushes red ink very readily.
It is risk-reward profile is unattractive because it is extremely capital intensive with very long product cycle times. Now, this has been sustained for over a century, but it is really difficult to keep it going as an attractive enterprise in the world full of surprises and fluctuations. Where we are headed with Hypercar design, for example, is utterly different. It is very low capital intensity, very low fixed cost per model, higher piece cost, comparable total cost per car. But this means the break-even volume per model is very low and the product cycle time can also be low. You don't have a thousand engineers anymore spending a billion dollars to design and build over two years a football field full of about 1000 large steel dies. Instead, you need fewer than 20 die sets, which can be soft. They can be roughed in stereo lithe over the weekend. The product cycle time becomes short, the break-even volume low. You can have a diverse portfolio of models that evolves rapidly, each with very low financial risk. Therefore, the risk-reward profile of the whole business becomes much more attractive.
I would hate to see the American auto industry not be first to adopt that sort of strategically advantageous way of making cars, quite aside from all the public and customer benefits that I alluded to in our concept car illustration, because I think if we get into this game second rather than first it won't play to our strengths. It will emphasize our weaknesses in global competition.
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I think the hydrogen infrastructure problems that Dr. McCormick alludes to are real but readily resolved. Dutch Shell has said, for example, it would only take them two years to put hydrogen infrastructure based on miniature natural gas reformers into all of the German filling stations. And Sandy Thomas at H2GEN——
Ms. HART. Are they talking about the cost?
Mr. LOVINS. Well, Sandy Thomas has recently worked out that a hydrogen fueling infrastructure in the United States, based on miniature gas reformers, actually would be less capital intensive per car served than sustaining the existing gasoline fueling infrastructure. That is far from being too expensive. The hydrogen transition probably costs less than what we were about to do otherwise. This approach that I think Byron and I would very much agree about how it ought to go is summarized on slide 16 to 18 of my written testimony.
Ms. HART. Thank you. Thank you, Mr. Chairman.
Chairman BARTLETT. Thank you very much. A story is told of an ancient kingdom that got most of its food supply from a lake. And the king's counselors noted that there was a growth on the top of the lake that shaded it and the food chain was interrupted and they weren't getting any food from under this growth and they also noted that each day it doubled. And so they went to the king with their concern and they told him what they had seen and that it was doubling each day and the king asked them how large it was now. Now well, they said, it was very small. And he said, well, how much of the lake do we need to get our food supply from and they said about half of the lake. He said, well, then come and see me when the lake is half covered. Of course, tomorrow it would be completely covered.
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That story reminded me a little of where we are. In the United States, we have two percent of the known reserves of oil in the world. We use 25 percent of the world's oil, 56 percent of which we import. By the way, from our little two percent known reserves we are pumping 44 percent of our 25 percent of the world's oil, which means that we are pumping our wells a bit more than five times faster than the average well around the world. I think we drilled about four million wells in the world and I think three million of those have been drilled in this country.
A pretty good consensus that about 1000 gigabarrels of oil remain in the world. That is the known reserves. Now, there is certainly oil out there we haven't found. Pretty simple arithmetic. That 1000 gigabarrels is about 40 years at current use rates. Now, we are going to find more oil, and you can be wildly optimistic that only a five-percent probability that you're going to find it and we have a bit less oil to find at that probability level than we have found now. But certainly oil use is going to increase and maybe if you make the assumption that the increased finds of oil will about match the increased demands for oil, we have somewhere around 40 years of oil left in the world. Now, in 1970, we had peak production in this country. If it were not Prudo Bay, which produced a tiny blip, by the way, not big, that four-foot pipeline supplies 25 percent of our domestic use and it produced only a tiny blip in that continual down-curve since 1970. As a matter of a fact, I understand in 1982 we used more energy looking for oil than we will ever get from all the oil we found in 1982.
I wonder, Mr. Lovins, what needs to happen so that we that get the attention of our government and so we get the attention of our people? Time will run out. This 1000 gigabarrels is not forever. And the future, I think, may hold some real concerns for our country. The rest of the world is by and by going to recognize that one person out of 20 is using 25 percent of all the world's energy. When they want to do what we have done and industrialize so they can enjoy all of the good things that our industrial society has brought to us, they are going to recognize that we have used up much of the high-quality, readily available raw materials, including fossil fuels that would permit them to do for their population what we have done for ours. With gasoline cheaper than water, you pay more for bottled water than you do for gasoline, the incentives for a sense of urgency don't appear to be there. Mr. Lovins, what needs to happen so that both the government and our society understands that if we don't do something meaningful, we have a very uncertain energy future?
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Necessary Steps to Assure a Stable Energy Future
Mr. LOVINS. Mr. Chairman, I am particularly touched by your question because my late uncle, Herman Block, who was head of research for Universal Oil Products, devised most of the cracking catalysts that made possible like products of petroleum. And he would probably be very pleased if he were alive now to know that I am trying to make like products unnecessary, partly so that our military could have neg emissions in the Gulf. Mission unnecessary.
From 1979 to 1985 when we last paid attention to this problem, the United States grew its economy 16 percent, reduced its oil use 15 percent and reduced its Persian Gulf imports 87 percent. If we had kept doing that one more year, we would not have needed a drop of oil from the Gulf since then. That is not what happened. And by 1991, we were putting our young people in .56 mile per gallon tanks and 17 feet per gallon aircraft carriers because we had not put them in roughly 32 mile a gallon cars. If we had done that and nothing else we would not have needed any oil from the Gulf since 1985.
We can do that again in spades, but I think the oil debate is often confused by not using clear language. The problem is exactly as you described; that in America we have been pumping our oil harder and longer than anyone else or we more depleted than anyone else, so the next barrel is cheaper to buy from less depleted places in the world market than to get at home.
In a market economy, there are three and only three solutions to this problem. Here are their right names. The first is protectionism, either subsidizing domestic oil to make it look cheaper or taxing foreign oil to make it look more expensive. The House Bill recently passed, H.R. 4, takes the former view. It is contrary to market principles and free trade principles. It also distorts prices by suppressing efficient use of oil by making oil look cheaper than it really is so we don't know how much is enough.
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A second solution is trade, which our allies do. Countries like Germany and Japan don't have oil. They are just better at earning money to pay for it than we are. The third alternative, which I happen to prefer, is substitution, using oil more productively. The nega-OPEC I described again was developed in eight months for a few million dollars. It would take some more and a few more years to get really manufacturable at competitive costs, but we have a very clear path to do that and it doesn't need any breakthroughs. It does take attention, however.
When I mentioned to a senior DOE official that we had already done what he proposed to spend the next 10 or 20 years doing, his reply was, well, we better not try to help you then because we would just slow you down. And having just spent 19 months watching the technology sit on the shelf due to the collapse of the private equity markets so we are having to be much more creative in how we capitalize this small company, I don't feel that was quite the right answer for capturing the urgent public benefits that I alluded to including national security benefits.
I am very encouraged by what we have heard on this panel and many other developments from similarly creative people throughout the auto and energy industries. And I am encouraged that in Roll Dutch Shell Group scenario planning in the latest scenarios last October, one of their futures was a largely renewable one. The other one had world oil demand stagnating until 2020 and then declining because of a China-led hydrogen and advance car leapfrog. From our conversations in China and the alignment of the new leadership group coming in there, I think that is perfectly plausible and would be very good for all of us, but they are determined to leapfrog the West in this regard. And I think one has to pay very careful attention to that threat and opportunity.
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I think the kinds of Federal attention, participation and leadership that all of us on this panel have urged will help ensure that oil becomes uncompetitive even at low prices before it becomes unavailable even at high prices. And therefore, as several people, including Sheik Hemani, have lately said, ''The stone age did not end because the world ran out of stones and the oil age will not end because the world runs out of oil.''
Chairman BARTLETT. Thank you. Ms. Woolsey.
Discussion of the Merits of the Hypercar
Ms. WOOLSEY. Dr. McCormick, my next car I want to be Mr. Lovins' concept, the car we just saw. Actually, I tried to buy a hybrid. Chairman here was all over my case because I didn't. But I have great big people that drive me at home and live in—my family and my sons, etcetera. And I just didn't want a little car that they were going to ruin by getting in and out of it. But by the time I am ready to buy a new car, which in a few years, I want to buy a light vehicle. What is wrong with that? Will it happen? What is wrong with his concept? Is there anything wrong?
Dr. MCCORMICK. Well, actually I think if you will look at the drivable autonomy vehicle you will see later this year, actually rather than being computer generated you will see a real one. The basic concepts that Amory has been expounding for a number of years have been being worked on and we started doing a number of things in fact with Amery on EBI and some of those technologies came to fruition and we have been moving right forward on those things.
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So I think you will begin to that technology moving in to cars in the next 10 years no problem. And I think with respect to fuel cells, the rate of progress of the drive-by wire, the steer-by wire, the power electronics, the composite materials, all of those things, they are on course, the fuel cell, the hydrogen storage. For the Hypercar with the hydrogen storage, I do come back again to the infrastructure issue, and I think that we need to really work that. It is not that it is not doable, but we need consistent policy.
So I am believing that this vision is absolutely going to be achieved and I am very glad that you mentioned customer desires because sometimes people talk about extraordinary mile-per-gallon cars and what they really turn out to be is very small cars that don't necessarily fit a lifestyle. And when we put the EBI out in the California, there was an interesting thing happen that we priced it just like a Saturn, did a lease and made sure that people were not at risk with it at all. And it turned out, it was very interesting that the people who didn't lease it, the heads of the environmental organizations, a lot of well-heeled people that were clearly environmentalists, not one leased it. The people who leased it were the movie stars and people in Hollywood who like to go out and terrorize Porsches on one-on-one with it because it is quite a fast car. And it turned out we learned a very important lesson there and that is that people fundamentally have a lifestyle and we have to design vehicles to do that.
So where as it is perhaps easy to cast stones at SUVs, in fact over 50 percent of cars sold last year were trucks, vans or SUVs, and that is a clear, clear consumer demand and we have to deal with that. So I think the kind of materials, manufacturing processes, addition of the fuel cell in addition of hydrogen electric drive are clearly the ways that we will be able to have our cake and eat it too if you will. And I think the fundamental, and I think Amory mentioned it, is to develop that infrastructure so that we use rather than as much petroleum start replacing it with other things, hopefully indigenous fuels.
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Ms. WOOLSEY. And I think I've heard today that the large manufacturers are not going to stand in the way of this happening like they are with CAFÉ standards.
Dr. MCCORMICK. I think you would take the inverse. I think we are leading. We are asking some people to catch up with us.
Practicality of ''Feebates''
Mr. LOVINS. May I ask how you think your company might respond to accelerated scrappage feebates, because I've had some encouraging internal discussions about this. I don't want to put you on the spot, but let me just make sure we are on the same page. What I mean by that is when you buy a new car, if it is efficient, you get a rebate. If it is inefficient, you pay a fee, both on a sliding scale. Each year it is trued up so the fees pay for the rebate, so it is revenue neutral and then you had a kicker saying that the rebate for buying an efficient new car depends on the difference in efficiency between the new car you buy and the old car you scrap. You bring in a death certificate for it. We have got it off the road. Nobody will ever drive it again. This gives more space into which to sell more of the good cars that the Big Three are developing. Would this be interesting?
Dr. MCCORMICK. Well, I don't want to talk about the specifics of a particular opportunity. But I would note that part of this transition to fuel cell vehicles does depend on turnover in the fleet, and we have got a lot of vehicles that are out there 20, 30 years. It is a large part of the environmental problem in California and other places as well. So consequently, the turnover I think is very important and there are various mechanisms to deal with it, Amery.
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Mr. LOVINS. And I want actually to take the opportunity to thank GM for having graciously taken my car education in hand for a couple of years starting around 1991 when they brought me in to see the still half-clay ultra-light with a LITE concept car, still a very important milestone. It was an ultra-light carbon, non-hybrid car, and so I had very intensive discussions with GE for a couple of years before publishing the work more generally to maximize everyone's competition and exploiting it.
Where we now are is that you can have your big SUV, at least as roomy say as a Ford Explorer or a Lexus RX300, and it will weigh the same as my aluminum two-seat Honda inside hybrid. And then the next version of it will be even lighter than that. But it will be probably the safest car on the road.
Ms. WOOLSEY. Thank you. Thank you.
Chairman BARTLETT. Thank you. Let me recognize Ms. Biggert now.
Establishing a Hydrogen Infrastructure
Ms. BIGGERT. Thank you, Mr. Chairman. And I am sorry I had to step out so I missed most of the questions, so I hope I don't ask the same thing, but I am sure you will be gracious and answer it anyway. We had a field hearing on Monday that Ms. Woolsey attended in Chicago too and it was on Fuel Cells as the Key to the Future. And I think from what you have been talking about that certainly the hydrogen fuel cell seems to be moving quite rapidly. I think the concern is still cost. Everybody seems to be saying, well, we are ready to go, you know. We have got the fuel cell. We have got the capability of doing it. But it is still saying that it is so many years off. And I know you talked about help with the government, but what is going to really be the impetus that is going to say, okay, everybody is going to use this? Will it be if we—let's say we had CAFÉ standards that were put in that were so draconian that people would say, well, the only way to do this is to go to the fuel cells or who is going to be the first one to start the distribution centers or the so called hydrogen stations along the roadway or how are we going to get over, you know, so that the cost of this is comparable or even less than a regular car? Mr. McCormick, look like you have an answer for that.
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Mr. MCCORMICK. Well, that was a profound question and there's several different parts in answering it. But let me try on the very topside of it that first of all, I mentioned the matter of will. And on the cost side, recall that General Motors assembles things and manufactures a certain level, but we're supported by thousands of suppliers. The people who are supporting us in the innovation in fuel cells, only about 50 percent of them today are automotive suppliers. They come from the medical-chemical industries and many, many other places, aerospace industries.
And so consequently, when we make this massive transition we need to make it understanding that the technology is evolving and changing so rapidly that what you see is GM's fuel cell today is obsolete at six months from now. So we have to be a little bit careful not to put in rules and regulations that fundamentally freeze the technology. And so consequently, one of the things that we're working very closely with our suppliers on is to bring them through early markets with us, stationary generation and other applications where they can make hundreds and thousands before they have to make millions, and I'll give you an idea.
A fuel cell stack has got these layers of what we call bipolar plates. And there's about 200 of them in a stack and you say, well, that's cool; here is a little stack. It will power a car. But in fact, if we make a million cars that is a million bipolar plates a day from somebody.
And so consequently when you look at the statistics and quality we demand you can't go from zero to a million cars a year with this technology. So first of all, we have to recognize that we are going to bring up a supply base that we need good tax policies, as Doug talked about, for the companies as they are making their investments to put manufacturing facilities in place. And we, as the auto companies, need to make sure that we let them know what to really expect with this so they don't over-capitalize it because you can't go back to the market.
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So there is that piece and we take the responsibility on it. We take the responsibility for driving the cost and bringing our suppliers up. But before you make that investment, and it's a dilemma that we have, I am spending huge amounts of General Motors' money, noticeable on any measure in terms of General Motors' balance sheet, and at some point in time, of course, our investors and our stockholders and our leadership has to say, well, can this be real? And a car sitting in a showroom doesn't do it unless we get back to this infrastructure issue because to make it all back, we have got to return on those billions we are going to spend with volume manufacturing. And so I think that is key.
And the last thing that I would mention, and I am glad that you mentioned your meeting in Chicago, I do believe the national labs have a tremendous role to play here. Not on current generation technology, and in fact I would discourage that because we are doing it, but if I look out five or 10 years or maybe 20 years, we are just beginning to invent this technology. And so the notion of new materials—I know at Argon's Electric, Chemical Technology Division, new catalysts, maybe catalysts that are cheaper, more efficient. And so I think when I go down the list and I tend to see the Argon's and the Sandea Livermore's and the Lawrence Berkley's and the Los Alamos', those people can really bring a lot to the party because they can be looking at more aggressive things than either small industry or big industry can be doing. So I think there is a very aggressive research activity that can be carried on, which will make the real difference 10 years out, 15 years out.
Ms. BIGGERT. And Argonne is in my district so it is—I know they have been working a lot. Yes, Mr. Lovins.
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Mr. LOVINS. Two points if I may. First, traditionally when one asks automakers to make cars more efficient they would set that as a design, pursue it incrementally, and end up compromising other attributes such as size, comfort, performance, possibly safety or cost. I think we are now moving past that through more highly integrated design that starts with a clean sheet, must in the imaginative way GM did with autonomy or the way Hypercar did. And we sent out to design a car that is fundamentally better so people will buy it because it has more and better the attributes that they want just as they buy digital media instead of vinyl phonograph records. That is one makes the product so superior that it redefines market expectations.
Therefore, we would no longer need the government to intervene with various inducements to buy a car that was otherwise compromised and unattractive. It turns out that this approach of clean sheet redesign actually saves a lot more fuel than the incremental approach. So if I were phrasing as a Zen riddle like the sound of one hand clapping, I would say by not saving fuel, more fuel is saved.
Secondly, on infrastructure, there are really two keys to the hydrogen kingdom. One is to make the car ready for the hydrogen, direct onboard storage without reformers, and the other, which we have not heard much describe but Roger Saillant alluded to it, is the integration of deployment in buildings and vehicles so that each makes the other happen faster by building volume and cutting costs. And also, they have some direct interconnections, like having a home fuel cell that produces surplus hydrogen that can refuel your car. It also works the other way around.
Uses for Parked Hydrogen-Ready Cars
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If you would go to slide 16 of my written testimony, you would find one of the ways to speed up the transition is to lease hydrogen ready cars not just to fleets that come back to the barn every night so they can make their hydrogen, but also to people who work in or near buildings where fuel cells have already been installed by then for heat and power. The hydrogen appliances that run the fuel cells in the buildings are designed for peak building loads that seldom occur. So most of the time they are big enough to make extra hydrogen that can be compressed and stored at modest costs and sold to the cars parked nearby. When those cars are parked, like the car you drove to work, then they can act as little power plants on wheels of roughly 20 to 40 kilowatts sending back to the grid enough electricity and ancillary services to earn back for you much or most of the cost of owning the car. This would give us on the order of three to six terawatts of national generating capacity if everybody did it. Our total national generating capacity is now three-quarters of a terawatt.
So it doesn't take very many people doing this to address climate and other problems of our present and gradually obsoleting stock of large power plants. But I think the new value proposition to the driver and everybody else in the value chain is also important. Basically, you are taking an oversized hydrogen appliance in the building that very seldom was used to capacity and using it to better advantage by selling its surplus to cars. You are taking the expensive fuel cell stack in the car that was sitting parked 96 percent of the time and using it better to sell electricity back at the time and place where it is most valuable to the utility. And it turns out in a book I am just sending to Chris called Small is Profitable, we have been able to identify over 200 distributed benefits of this kind of decentralized generation that typically increase economic value by about tenfold. So it is a win for everybody and will bring in many important market actors from the energy sectors.
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Ms. WOOLSEY. Thank you. I think we're living in exciting times and maybe this is the DVD, which is replacing the video tapes, that we will witness this with the cars. I am sure it won't be quite as fast, but hopefully it will move along. Yes, Mr. Rothwell.
Chairman BARTLETT. Mr. Rothwell, you had a comment?
Necessary Role of Government Partnerships With the Auto Industry
Mr. ROTHWELL. I wonder if I could just—yes. I am not a scientist or an engineer, so I am going to come at this from a different perspective, which is as an economic developer. And one of the things that I learn in my profession is what you want you incent and you get it, and what you regulate typically doesn't give you what you think you want. And what I think I am concerned about as we talk about this issue is that the market is going to drive change when there is, as was said, there is a better product on the market that people will buy. People are not going to give us their sport utility vehicles for a small car that just happens to have higher fuel performance, not in the United States today, at least. I don't see that happening. And if you know anything about the economic model of the auto industry, the auto industry profit margins today are not those that—now to defend Byron here a little bit; maybe say what he can't say is he is probably spending more money from General Motors than General Motors would like to have spent because they are probably spending almost their profit margins each year on what Byron does. And from a shareholder perspective, that is something that I don't think the government understands well enough to expect the manufacturers to just do on their own through a regulatory model.
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So I guess what I would say is if it is in the government's interest to make this happen sooner, the government's going to have to be a partner more actively in seeing it happen. FreedomCAR certainly is a big step in that direction. It is the reason why the State of Michigan took state action to try to advance this further. But I don't think that the answer can simply be well, we can come up with a better regulatory model or higher CAFÉ standards and our car companies can be expected to do both. In fact, I think it is interesting, if you look at Toyota, a company that has a hybrid vehicle on the market today, there average CAFÉ measures are actually going down as they try to meet consumer demand for more SUVs and trucks. And this is the particular manufacturer that is cited often times as being, you know, environmentally enlightened. So as a Michigander, at least, I think it is important that we ground this in reality. Thank you.
Ms. BIGGERT. Mr. Templin.
Mr. TEMPLIN. Yes. I think what we have identified here is a beautiful role for the national labs rather than have them trying to design the super car and invent the super part that goes in it. The fuel cell lovers like the fuel cell. The hybrid lovers like the hybrid. But this affects the whole infrastructure. It affects the whole economy. If we do anything to raise the price of transportation it affects the price of all goods and services. It is an internal inflation. The national labs of the capability to look at this whole situation, you know. What is the best thing for the U.S. to do? And you are not going to answer this in five minutes. You are going to have to look at a lot of matrixes. But I think the emphasis on designing the product maybe is misdirected. We really need to look at all the infrastructure issues because at the moment it looks like any of the things we are proposing for renewable fuel are going to be very expensive. And therefore, they are going to be very difficult to coax people into giving up their old cars. So there is a lot of issues here that are not just product. There are other things. So that is my observation anyway.
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Ms. BIGGERT. Thank you. Thank you, Mr. Chairman.
Effects of Precious Metal Content on Fuel Cell Costs
Chairman BARTLETT. Thank you very much. Dr. Saillant, to what degree does the precious metal content of fuel cells limit the ultimate affordability of fuel cells?
Dr. SAILLANT. The same kind of question came up 30 years ago with regard to automotive catalysts. We have only begun to figure out how to reduce the precious metal loadings. At the heart of the fuel cell is a membrane, and the way we literally laminate to create an electrode determines how much precious metal is used.
Right now, early design work says that we are using way in excess of amount of precious metal loading that is required. The second is—so precious metal loading is a factor in the cost, but we have only begun to explore ways to cost reduce it out. The second is that it is a closed system. In other words, in the automobile when you're driving down the highway, you pass exhaust across the catalyst and in time you can, in fact, attrite to the side of the road palladium, platinum, ruthenium, rhodium. In an fuel cell system, it is closed, intact, and when you are done, you have got, in fact, a self-contained package with the precious metal there and all you need to do is put it through a closed loop and recycle it.
So I believe that A, the cost reduction practices on the membrane themselves to take the precious metals out have only started and there's strong indications that tremendous amounts can come out already a factor of four in the reduction of precious metals very clearly in front of us. And the second is it is a closed system and will be easily and readily recyclable.
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Mr. LOVINS. I think another key to making that happen is using direct hydrogen, not refer-made gas as the fuel because that reduces your catalyst loading by about an order of magnitude. And of course, if you make the car have a several full lower tractive load, you get that benefit too because you'd need a smaller propulsion system in proportion. That is why in our sort of design there would be less platinum in the fuel cell than is now in a catalytic converter.
Dr. MCCORMICK. I had one other comment.
Chairman BARTLETT. Yes.
Dr. MCCORMICK. And Roger being an organometallic chemist, it turns out that the experiments that were done a number of years ago and continue to go on in research labs indicate that organometallics like hemoglobin actually make a pretty good fuel cell catalyst. They are as active as platinum. They do not live in the environment that is created in the fuel cell very well. But I think this is some of the leading-edge research that I think can be done in the national labs where it is right where the leading edge of science and technology is. And when I talk about 10 or 15 years from now something that is very different that's one of those ingredients where I think we'll have tailored and grown membranes and the materials added to them in very elegant ways that we can't even perceive today.
So again, think about fuel cells today as just the starting point. Think Model T or something like that. We have got just an immense number of things that are there to be invented.
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Chairman BARTLETT. A number of years ago when the Japanese cars began to penetrate our market, I, with a lot of other Americans, had the notion that somehow it was unpatriotic to buy a not-made-here car. It didn't take me very long to figure out that the most patriotic thing that I could do is to the buy the best car on the market. And if I did that pretty soon our guys would be making the best car in the market and they needed an incentive to do that. I now drive a—our family car is a Toyota Prius. We have nearly 40,000 miles on it. It has performed flawlessly and we are very happy with it. We bought for one of our children a little, but not American made, not much is American made any more, a little Geo Metro. It's a one-cylinder—I'm sorry, one liter, three-cylinder car and it gets better mileage than the Prius, and it is a pretty good performer actually. Our son wouldn't buy it until he drove over South Mountain with it because he was going to school and he wanted to make sure he could get over the mountain. His mother and I borrowed it to go down to a place we have in West Virginia. It performed very well on mountain roads down there. Its acceleration and performance are really quite good. If you don't have anybody in the back seat, you can be very comfortable in the front seat. Thank you. And they argue that we are buying these big vehicles. You know I wonder how much our advertising is creating that market. If you stopped advertising, and most of the ads I see for cars are light trucks and SUVs, I see very few ads for other cars, so think that you are kind of creating the monster that you pretend you would like to defeat in your advertising.
You know one of the purposes of our hearing today was to determine——
Dr. MCCORMICK. Could I respond to that?
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Chairman BARTLETT. Yes, sir.
Dr. MCCORMICK. I can't let that go unchallenged.
Chairman BARTLETT. You can't.
U.S. Automobile Market
Dr. MCCORMICK. I'm sorry. We do consumer clinics across the board and those little cars you talk about, the ten most fuel efficient cars in the United States, independent of manufacturer, sell less than one percent. On the other hand, the SUVs that everybody rails about and their fellows, the vans and everything, sell about 50 percent. And so consequently, we do market clinics and we understand where the interest is and we understand where the competition is. And you are not going to spend advertising bucks on the thing that sells only one percent of the cars sold. You are going to go where the 50 percent is. So I disagree that we are creating it, and I tell you——
Chairman BARTLETT. You think you are following the market rather than creating it.
Dr. MCCORMICK. Oh, we do. And obviously if that is where the—if it is in high-powered sports cars or very fuel efficient vehicles and if that is where the consumer interest is, that is what we have got to win at. And so very definitely our advertising and our product line up always has to follow that.
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Mr. ROTHWELL. Maybe just to follow on it, I think it is interesting that the Japanese automakers are in fact following into that very American market. The Japanese automakers are the one that had the small cars. Why are they changing now into SUVs and trucks? Because they think they can make greater profit at it.
Chairman BARTLETT. You know Americans are now waiting in long lines at airports and there is not much grumbling about it because they think that is the patriotic thing to do. I just have to believe that there was enough education about what our situation is relative to the world's petroleum reserves and so forth, that Americans might very well change their appetite for cars and might very well change their driving habit. I just suspect there are very few Americans that know that we have only two percent of the known reserves while we use 25 percent of the world's oil, who know that we import 56 percent of our oil, who know that if we got into a world with the Arab world that that is a war we could not win, because if they cut off our oil, our economy would collapse.
I suspect that there are very few Americans who know this and I would think that if more of them knew it that you would have more Americans opting for smaller cars and better driving habits with the same enthusiasm that they now endure long waiting lines at the airports because they think it is the patriotic thing to do. Mr. Lovins and then Dr. Saillant.
Mr. LOVINS. I think you would also have more Americans moving even more aggressively to demand that the auto industry that serves them be even more aggressive about bringing all the best technologies to market so they can get the attributes they want without the oil use, without the climate change, without the other things that they don't want to come with their cars. And we are certainly open to licensing discussions.
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Chairman BARTLETT. Dr. Saillant, and then I have one final question. And then I want to thank all our witnesses and panel members.
Dr. SAILLANT. Okay. A number of times today I have come to this point about education. In order to make this statement have weight, I want to mention that I have managed, created, developed, and worked in 17 different countries around the world over 30 years working with Ford and Vistion. Number one, Americans are not liked outside of the United States. Significantly they are not liked. Number two, reviewed as with our value system in terms of size, how we consume, the exact things that you are talking about, Mr. Chairman, we are viewed as obscene in many, many instances. Number three, in terms of the will and what we have to do, we have to look inside ourselves and recognize that we are citizens of the United States. We are not citizens of the world. And when we don't participate in things like the Keota Protocols, when we don't take responsibility for our disproportionate appetite in consumables, we are viewed as pariahs.
And finally, I think that we can begin to change that by very persistently creating an attitude among ourselves that we need to think of ourselves as A, citizens of the world, and B, as becoming indigenous people. And by that I mean people who leave minimum or in the act of leaving a minimum imprint on the planet so that people in generations to come can have some semblance of what we are enjoying yet today in diminishing quantity. We do not teach that, and I think that is a major shortcoming in our culture. Other cultures do teach that.
Timetable for Hyperdrive
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Chairman BARTLETT. I think that if we don't teach it, somebody else may teach it to us within the school of hard knocks. I have one final question. Dr. McCormick, if the Hyperdrive car, the Hyperdrive concept is validated by Argonne Lab that is now looking at it, why shouldn't that appear in your cars next year? One of our goals of our hearing today was to determine why good ideas that come from entrepreneurs and small business had such a tough time of finding their way into government and into our major automakers. So our question is if Argonne validates that what they say is true, why shouldn't that be in your cars next year?
Dr. MCCORMICK. Well, first of all, hypotheticals are hard to answer. But let me say that we try to put as much advanced technology as we can get into our vehicles as quickly as we can. Need to recognize a couple of issues around putting new technology in vehicles as well though. We are in a highly litigious society and we're in a highly regulated business.
And so we have to go through all of the crash testing certification and all of the related issues that are society demands and quite correctly. So when you use next year, any particular thing that we put into a car has to be thoroughly validated to make sure that it doesn't stall at an intersection or have some little drop out that will leave somebody on a railroad track in some not statistically probable but possible scenario.
You look at the number of things that cause recalls and quite often it is a small number of vehicles. So we have to be very careful about that. So one-year turnarounds are probably not practical but certainly very quickly absolutely we do move this technology into cars.
Chairman BARTLETT. You mentioned our litigious society. It reminded me of the observation that if all the lawyers were laid end to end, this would probably be a better world. I want to thank you all very much for your testimony. This was really a very impressive witness panel. Thank you very much for your testimony. And if you have other suggestions or ideas, please make them available for the record because one of the questions we asked up front was what can we do as a Congress? And if you haven't adequately identified those actions that we could profitably take in the testimony and the question and answer period, please make sure that you provide that for us. Thank you all very much, and we are in adjournment.
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[Whereupon, at 11:57 a.m., the Subcommittee was adjourned.]
Appendix 1:
Additional Material for the Record
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(Footnote 16 return)
In its report ''Effectiveness and Impact of Corporate Average Fuel Economy (CAFÉ) Standards,'' the Congressionally-authorized National Academy of Sciences (NAS) CAFÉ Study Panel evaluated break-even fuel efficiency using two evaluation cases. Case 1 assumed that a vehicle is driven 15,600 miles in its first year of service, decreasing 4.5 percent for each of the remaining years of its 14-year services life. This results in total mileage of 165.000 over the vehicle's assumed 14-year life. For Case 1, the CAFÉ Study Panel also assumed a current gasoline cost of $1.50 and applied a 12 percent discount rate to render a current year present value analysis. (The panel also applied an additional discount to the reported EPA mileage (15 percent) and assumed a penalty for future vehicle weight gains (3.5 percent) ). Applying this analysis to the fuel economy improvements realized with the Hyperdrive-powered large SUV (16 mpg to 26 mpg), the present value of the fuel savings is $3,920. This compares favorably to the anticipated increase of $1,700 in system cost. (The panel also reviewed a simpler Case 2 in which fuel use over 3 years was evaluated, without discount. This case would yield savings over 3 years of $2,057, also greater than the anticipated increase in system cost.)
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The three Hyperdrive vehicles modeled and presented in section 2 above were chosen to represent the Hyperdrive system as compared to the top performing vehicles for compact and full size (large) cars and the heaviest SUV subject to CAFÉ regulation. In Table 6, the Hyperdrive was modeled to be representative of the class as a whole. As a result, the fuel economy results for the categories ''Compact Automobile,'' ''Large Automobile,'' and ''Large SUV'' in Table 6 differ somewhat as compared to the results for the three specific vehicles selected and described above in section 2.