By Julie Candler
May/June 2009
When a reporter asks California Governor Arnold Schwarzenegger what energy source he advocates for cars of the future, he dodges the question. “I believe the market will decide whether it’s hydrogen, electric or hybrid. Or whatever,” he tells the press at SAE International, the 2009 World Congress of the Society of Automotive Engineers.
The question dominates conversations about “Racing to Green Mobility,” the theme chosen for the auto experts gathering in late April at Detroit’s Cobo Center.
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Though he wouldn’t commit, California’s powerfully fit ex-film star agreed something should be done about our energy problem. “We should not be at the mercy of the Middle East,” he adds. Detroit’s troubles, he believes, have been caused by the lack of a national energy policy.
An example of a major consumer’s dilemma under today’s lack of policy was cited for Schwarzenegger. His informant was Paul Skalny, director of the U.S. Army Tank Automotive Research, Development and Engineering Center in Warren, Mich. He showed the California governor what a 2008 spike in gas prices cost the U.S. Army. A $10-per-barrel raise, he explained, increased the Department of Defense’s fuel bill by $1.3 billion for the year, to a total of $18 billion. Skalny also participated in an SAE panel on “How Will Fuel Price Trends Influence the Technology Mix?”
Schwarzenegger recommends programs such as one in which the government would issue cash vouchers to owners who exchange their old gas guzzlers for new fuel-efficient products from U.S. automakers. He also praises California’s system of refueling stations for battery-operated vehicles. “At refueling stations for electric cars, you drive up and switch the battery.”
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Many energy solutions suggested at the World Congress add up to an encouraging list of possibilities for producing a more efficient nation that would no longer be held hostage by the Middle East. Some proposed measures require the participation of the U.S. government. In fact, the need for a government policy on automotive powertrains seemed to dominate auto engineers’ talk.
“It’s bad if the average consumer doesn’t have any idea where policy will go,” says Jerry Bricker, former vice president, Omiron Automotive Electronics. Speaking to Corp! following participation on a panel on “Selling in a Downturn,” Bricker says, “There are way too many variables for a car buyer to consider.”
Bricker adds, “I believe that when the industry comes back, it will come back aggressively and strongly. We are near the bottom.”
His fellow panelist, Daniel M. Hancock of GM, also argues on behalf of a uniform energy policy. “We feel we would be more efficient if we had one set of criteria. It’s not happening,” says Hancock, vice president for global engineering at GM Powertrain. He suggests a policy that could help the energy problem: “The government could control fuel consumption through taxation on the displacement of an engine.”
A speaker on the same panel, Marcos V. Forgioni told Corp! that Brazil is no longer dependent on imported oil, thanks to an energy policy that’s working. Forgioni, who is director of export sales for VW Truck & Bus Brazil, says the nation made its energy policy work by increasing local availability of oil and turning to electrification for overall power needs.
Meanwhile, the U.S. auto industry has to meet new Corporate Average Fuel Economy (CAFE) standards issued recently by the U.S. government. To do that, predicts John B. Heywood, director of the Sloan Auto Lab at Massachusetts Institute of Technology, the U.S. fleet of vehicles will have to be 60 percent turbodiesel by 2050. At a panel on “Green Mobility,” he adds that vehicles will be lower weight, with limited acceleration.
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An energy policy recommended by Robert Cervero, speaking on the same panel, is that of Stockholm, Sweden. An urban planner and professor in the department of city and regional planning at the University of California-Berkeley Cervero says Stockholm “is one of the few cities where vehicle miles travelled has declined because public transport is more available. They are working to be carbon-free by 2050, through use of alternate fuel vehicles.”
The same panelist cites another effective energy policy: cutting the number of cars. He reports that the city of Zurich, Switzerland was lauded for encouraging the shedding of car ownership. Despite a high income level, the city has an excellent car-sharing program where people can choose to rent when they need a car, instead of becoming owners. Says Cervero: “It’s easier to get rid of pollution rather than people out of cars. You also need sustainable cities and conservation through resourceful urban planning.”
At a panel forecasting the global economic/policy climate that automotive executives need to know, Richard Goetz emphasizes the need for U.S. government participation in policy. He quotes Schwarzenegger: “I would like to drive an electric car, but I’m not going to get one unless the infrastructure is there.” It won’t be there without government cooperation, says Goetz.
“Creative chaos” is what we’re going to go through in the next 20 years as we seek energy solutions. That’s the prediction of Goetz, international practice group leader at the law firm Dykema. “Despite the chaos, we will find ways to solve our energy problems. Electricity is one of them, but we will find other ways, too.”
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On the same panel, Michelle Krebs, editor of Edmunds’ AutoObserver, emphasizes the need for government guidance on energy. “We need some kind of structure that will encourage consumers to buy smaller, fuel-efficient cars,” says Krebs. She cites oil price fluctuations that produced a $7,000 price range in 2008 on the fuel-efficient Toyota Prius hybrid. Meanwhile, she predicts, “by 2020 gas engines will still be dominant.”
“Things will change when gas gets to $4 a gallon,” predicts fellow panelist David Hemmings, CEO of PRA Global Business Development.
“The Big 3 I think have lost the opportunity to move ahead on energy,” says Hemmings. He predicts tougher competition from the auto industry in India than from China. “The difference between China and India,” he says, “is that China’s progress will be slow because it is a dictatorship. With total democracy in India, they will have greater ability to move forward through innovation.”
In the U.S., diesel engines won’t be a solution without government help to promote the technology, according to Johannes-Joerg Rueger, senior vice president of diesel engineering for Robert Bosch LLC.
Despite claims otherwise, electric vehicles won’t become a major solution to the nation’s energy problem, according to many SAE experts. Some predict electrics will make up 3 to 4 percent of the future market, while hybrids and diesels will occupy large market segments.
Many attendees at the 2009 SAE World Congress thought it was more subdued and quieter than in previous years. At the same time, they were impressed by the technological developments displayed, although not always by the Big 3.
The Big 3 is defended, however, by Gov. Schwarzenegger. “You will see,” he says, “that if Detroit goes in a direction, competitors will follow. It will be good for the environment, for the economy and for job creation.”
A happy ending to our energy dilemma was forecast by David Hemmings: “Innovation and self-reliance will dig us out of what we are in.”
But not until we arrive at a workable energy policy.
