Energy Grants Back Plug-In Cars, Ethanol

The Department of Energy announced yesterday $17 million in grants to support the development of battery technology for plug-in hybrid vehicles and ethanol, two areas in the energy debate where officials in Washington and Detroit are closely aligned.

The money will be offered as two grants, one for $14 million for the plug-in technology and the other for $3 million for ethanol. The money for battery development is intended to improve the technology's performance. The $3 million in ethanol grants will support engineering advances to improve how flex-fuel engines use the E85 blend.

Alexander Karsner, the Energy Department's assistant secretary for energy efficiency and renewable energy, made the announcement at the press preview day of the Washington Auto Show. He used high-tech cars from General Motors, Ford and DaimlerChrysler as his backdrop.

Detroit automakers have asked the Bush administration for hundreds of millions of dollars to help develop hybrid cars. They say they need government support to complete research and development into lithium-ion battery technology, a crucial component in bringing the cars to the market. Detroit auto executives, who have pledged to build millions of ethanol-capable vehicles, have also pressed the government to encourage a significant expansion of ethanol fueling stations.

President Bush announced mandatory increases in the supply of renewable fuels in his State of the Union address last night.

Foreign automakers are stepping up complaints that U.S. government policy is unfairly backing ethanol and plug-ins at the expense of diesels and traditional gas-electric hybrids, such as the Toyota Prius. Toyota is pushing to continue federal incentives for the cars. Diesel-engine makers and European automakers such as BMW and DaimlerChrysler are asking for more federal support for diesel technology.

Dieter Zetsche, chairman of DaimlerChrysler, said vehicles powered by diesel engines get 20 to 30 percent better fuel economy than gasoline-powered cars and cut by 20 percent emissions of carbon dioxide, which contribute to global warming. In Europe, where diesels make up about half of the market in many countries, the fuel economy average is 36 miles per gallon, compared with 24 in the United States.

"Why is there such a disparity? Aren't we the same companies in Europe that we are in the U.S., with access to similar technologies?" Zetsche said at the show.

Zetsche said the difference was the European approach to energy policy, which has involved some "tough choices," including highly taxed gasoline and incentives for diesel fuel.

Like a lot of other auto executives, Zetsche stopped short of endorsing European-level taxes or expensive government mandates in energy efficiency or global warming. "We are a free market in the U.S.," he said. "The consumer should rule."

Karsner of the Energy Department said in his remarks that major automakers will have to push much harder into new technology to reduce dependence on foreign sources of fuel.

After acknowledging the vehicles parked around him, Karsner said, "I also want to point out that concepts, prototypes and limited-production vehicles are not enough to address the problems we have."

He said that advanced technology should be sold to mainstream consumers, not as luxury vehicles or niches in the marketplace. "We need millions of cars on the road," he said.