Obama Makes Push For Fuel Efficiency

Sen. Barack Obama (D-Ill.), with Detroit Mayor Kwame Kilpatrick, said that
Sen. Barack Obama (D-Ill.), with Detroit Mayor Kwame Kilpatrick, said that "the auto industry is on a path that is unacceptable and unsustainable." (By Carlos Osorio -- Associated Press)
By Steven Mufson
Washington Post Staff Writer
Tuesday, May 8, 2007

Sen. Barack Obama (D-Ill.) yesterday proposed federal assistance to help U.S. automakers cover the cost of their retired workers' health benefits if the companies invest in technology to improve their vehicles' fuel efficiency.

In a speech at the Detroit Economic Club, the Democratic presidential candidate offered a plan to ease the pain of U.S. automakers even as he reiterated support for higher fuel-efficiency standards.

Carmakers have complained that they cannot afford those standards, but Obama said yesterday that "the auto industry is on a path that is unacceptable and unsustainable -- for their business, for their workers and for America."

Obama proposed that the government pay for 10 percent of domestic automakers' health-care costs for retired workers through 2017 if the firms plow half the savings into equipment for making more efficient cars and trucks. Obama's campaign estimates that this would cost taxpayers roughly $7 billion over the next 10 years.

In addition, Obama proposed tax incentives for retooling auto assembly plants and the extension of tax credits for hybrid vehicles beyond the current 60,000-cars-per-manufacturer limit. His campaign put the 10-year cost of his plan at $20 billion and said it would be covered by auctioning greenhouse gas permits under a cap-and-trade program that Obama also supports.

But Obama's speech was also noteworthy for what he left out: any mention of his support for coal-to-liquids technology that has incensed environmentalists, and any mention of energy "independence" that oil experts say is unrealistic.

Yesterday, Obama talked about coal in general terms. "We'll . . . need to find a way to use coal -- America's most abundant fossil fuel -- without adding harmful greenhouse gases to the environment," he said.

Like many lawmakers, Obama has been tripping over the line between energy security and climate security. Earlier this year, he joined with another coal-state lawmaker, Sen. Jim Bunning (R-Ky.), to sponsor a measure that would promote plants that turn coal into liquid fuel that could be used in cars and trucks. This would reduce U.S. dependence on imports of foreign petroleum -- and help Obama's state, where coal reserves are said to contain more energy than the oil reserves of Saudi Arabia.

But for those worried about climate change, coal-to-liquids is a red flag. In addition to whatever environmental damage is caused by mining the coal, the coal-to-liquids process would produce nearly twice as much carbon dioxide as petroleum-based fuels, according to the Natural Resources Defense Council, which says it would be "clearly at odds with our need to reduce global warming emissions."

An amendment promoting coal-to-liquids plants was defeated in the Senate Energy and Natural Resources Committee last week, though Obama and Bunning could still introduce it on the Senate floor. Their Coal-to-Liquid Fuel Promotion Act of 2007 would give federal loans for the planning and permitting of coal-to-liquids plants, federal guarantees for construction loans, and tax credits.

Environmentalists, who have given Obama high ratings in the past based on his voting record, have urged him to abandon that position.

"Senator Obama right now is balancing two tensions," said Cathy Duvall, national political director of the Sierra Club. "First off, he is a senator from Illinois, whose job it is to represent . . . one of the biggest coal-producing states in the country. On the other hand, he's also a presidential candidate and needs to demonstrate the leadership needed to move our entire country in the direction to tackle tough questions like energy independence and global warming."

Taking a page from California state policy, Obama introduced legislation yesterday that would mandate a reduction of 10 percent in the carbon content of vehicle fuels by 2020. That reduction would probably be met by higher use of corn and cellulosic ethanol.

© 2007 The Washington Post Company