Note: This is a guest post from Phyllis Cuttino, director of Pew’s Clean Energy Program.
In his 2007 State of the Union Address, President George W. Bush declared that America was addicted to oil. He was not alone in this view, because presidents, national security experts, economists and others have asserted the same.
Dependence on foreign oil requires our military to protect oil shipping routes, forces us to deal with regimes that may not share our national security interests and has cost the U.S. economy more than $5 trillion on expenditures for foreign oil and related GDP reductions since the 1970s, according to Oak Ridge National Laboratory. One way to reduce this dependence is to deploy vehicles that are powered in other ways. Developing and producing advanced-technology vehicles will help the United States maintain leadership in the global clean energy race and enhance its national security.
The transportation sector accounts for 70 percent of petroleum consumed in the United States and provides significant opportunities to reduce our dependence on foreign oil. Close attention has been paid to the progress of plug-in electric vehicles (PEVs), including hybrid electric vehicles, in the United States, and we believe the future remains bright despite some challenges endemic with any emerging technology.
More than 1,270 electric drive vehicles are sold daily in the United States, according to the Electric Drive Transportation Association. Worldwide, the number of vehicles is expected to increase from 700 million to more than 2 billion by 2050, and the annual global market for advanced batteries could reach $100 billion by 2030, according to Pike Research, a leading market research firm that provides in-depth analysis of global clean energy technology markets.
Currently, the United States leads in PEV manufacture and deployment: The Chevrolet Volt and Nissan Leaf are produced and sold domestically, and the United States has higher sales of electric drive vehicles than other nations, according to Bloomberg New Energy Finance. But if America wants to seize the opportunity presented by this growing market, it must do more.
Pew’s research indicates that for the United States to compete effectively in the rapidly expanding clean energy sector and reduce dependence on foreign oil, we must adopt national policies that will spur private investment in technologies such as PEVs. In the growing domestic PEV sector, cities, states, utilities and manufacturers are working together to develop local policies to spur greater adoption of plug-in vehicles and charging infrastructure. But national policies are needed to support the development of local markets and provide incentives for consumers to purchase these vehicles. As with airplanes and semiconductors, federal policy should also lead by example through expanded procurement activities such as adding electric vehicles to the fleet of government cars.
Public investment in clean energy research and development, especially advanced batteries and related components, is necessary to ensure that American entrepreneurs continue to turn out the best technologies in this growing sector. Countries such as China, Japan, France, and Korea are dedicating billions to advances in battery technologies in order to lower PEV costs over the long term and take the lead in manufacturing. They are also using incentives to spur private-sector innovation and create consumer demand.
Under President Bush, temporary purchase incentives were adopted, and the current administration continued to expand opportunities for PEV deployment at the federal, state and local levels. Both administrations saw promise and invested in developing advanced battery technologies. These targeted public investments in battery technology development helped secure additional private sector investment in the projects as well.
Policy matters. With fierce competition from abroad now is not the time for America to relinquish its lead in advanced battery innovation and the manufacture of electric vehicles. Simply put, the United States should continue to support electric vehicle and technology innovation, because the economic and national security benefits of cleaner vehicles powered by affordable domestic electricity-rather than foreign oil-are too significant to ignore.