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Obama's promise of a green federal fleet by 2012 may be out of reach

As a candidate, Barack Obama boldly vowed that he would pioneer a green revolution, and that in 10 years, the United States would eliminate the need for oil from the entire Middle East and Venezuela.

And, he said, the federal government would lead by example.

Obama promised that by 2012, half the cars purchased by the federal government would be plug-in hybrids or all electric. And he advanced that goal by getting $300 million in the stimulus bill he recently signed.

While it demonstrates his commitment to a cause, securing money for his plug-in car pledge has also shown just how lofty, and some would say unrealistic, a goal Obama set.

The commercial market isn't ready to produce large volumes of plug-in cars and now that the federal government is creating a demand for them, even some advocates of greater fuel efficiency are wondering if this is what the government should be doing.

"It's not clear to me that politicians are the right ones to decide what the technical solution should be before the public has made any kind of commitment to solve the problem," said John DeCicco, a senior fellow of automotive strategies for the Environmental Defense Fund.

It's a fact noted by the House and Senate authors of the stimulus, who said in a joint statement that they "remain hopeful" that plug-in hybrid electric vehicles will be commercially available in time to tap into the $300 million in the stimulus plan.

More importantly, converting the federal fleet is in part symbolic, and part of a much larger plan to stoke the commercial market for plug-in hybrids.

According to calculations by Plug In America, a nonprofit that advocates for plug-in cars, the stimulus plan includes as much as much as $12.5 billion for plug-in hybrids and all-electric cars through tax incentives, grants to automakers, hybrid car rebates and advanced battery manufacturing, a key ingredient in the success of plug-in hybrids.

While Obama argues that buying more plug-in hybrids for the federal fleet makes economic sense — saving the government money over time and creating manufacturing jobs — Obama also is banking that it will "set a standard" for private industry to match and lend credibility among a public that has been wary and largely uninterested in plug-in hybrids.

All of which has sparked discussion in energy circles about the role government ought to play in trying to create, or at least encourage, a marketplace into being.

The federal government, Obama said in an address to Congress on Tuesday, is committed to the goal of a "retooled, re-imagined" auto industry, one in which the United States is a leader in manufacturing green cars.

That's what makes DeCicco wary.

Five or 10 years ago, DeCicco said, an ambitious president like Obama might have been trying to ignite a commercial market for cars with hydrogen fuel cells or maybe an expanded use of ethanol. The point, he said, is that Obama may just be latching on to the latest trendy technology.

A technology that may or may not be viable in the mass market. Plug-in hybrids don't have any commercial traction, he said. The battery technology isn't good enough yet, and may never be.

"Maybe they'll work," DeCicco said, "maybe they won't."

In his address to Congress, Obama said he "rejects the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity."

"In the midst of civil war," Obama said, "we laid railroad tracks from one coast to another that spurred commerce and industry. From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle class in history. And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.

"In each case, government didn't supplant private enterprise; it catalyzed private enterprise. It created the conditions for thousands of entrepreneurs and new businesses to adapt and to thrive."

Jay Friedland, legislative director for Plug In America, says the stimulus provides a down payment on Obama's commitment to more fuel efficient vehicles.

"This creates a big carrot in front of the automakers to get it done," Friedland said.

But if Obama is going to reach his goals for the federal fleet, the auto industry is going to have to play some serious catchup.

Toyota plans to offer a plug-in version of its Prius for fleet sales this year, said David Sedgwick, editor of Automotive News. And the Chevy Volt isn't scheduled to hit the market until late 2010. Other automakers have said they plan to offer plug-in hybrids or all-electric cars, but whether those will be available soon enough to tap into the stimulus money remains a big question mark.

"Here's the problem: The Volt could cost as much as 40 grand," Sedgwick said. "Do the math. You could spend a lot of money on the Chevy Volt and not get to half (the federal fleet)."

Here is the math: $300 million would only get you 7,500 cars at $40,000 each. In 2008, the General Services Administration purchased 22,827 new passenger vehicles. So that's way short of funding half the new purchases, as Obama promised.

Sedgwick is skeptical that Obama can achieve the goal given the uncertainties. "You're buying a pig in a poke," he said. "No one is selling plug-in hybrids right now. No one has announced their prices yet."

If Obama is to reach his goals — both for the federal fleet and for the plug-in hybrid and electric car industry as a whole—Friedland says, it's going to take a lot more federal dollars in future budgets. But the stimulus package is certainly a start toward that, and so we rated the promise In the Works.

Campaign Promise 469: Require federal fleet to be half hybrids or electrical cars

Toward that end, President Obama secured $300 million in the stimulus law for purchasing plug-in hybrids, and also included an array of tax incentives to individuals and to industry to spark the commercial market into producing more such vehicles. The challenge for Obama in keeping this promise will be that right now nobody manufactures plug-in hybrids, and although some models are on the way, it's not clear that the battery technology has advanced enough to make these cars commercially viable. But, there's money devoted to reaching that goal, so we rate it In the Works.

Obama's promise of a green federal fleet by 2012 may be out of reach 02/25/09 [Last modified: Wednesday, February 25, 2009 11:20pm]
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