December 1st, 2005

2005: A Year in Review

Looking back at this past year, the alternative fuel vehicle (AFV) and advanced technology vehicle industries have been impacted from a variety of angles. Arguably the most publicized way was from the far-reaching effects of tight oil supplies and the 2005 hurricane season. The dramatic rise in gasoline and oil prices that followed resulted in many consumers rediscovering AFV and advanced technology vehicle options, which have become more attractive and economically viable. Automobile manufacturers are rushing to meet the demands of this growing market.

The United States’ vulnerable dependency on crude oil was explored by Rich Cregar, an instructor at the National Alternative Fuels Training Consortium (NAFTC) and NAFTC eNews contributing writer. Cregar’s July eNews article, ironically titled A Perfect Storm, was written several months prior to the devastating 2005 hurricane season. In September, Cregar assessed the United States’ energy infrastructure in his September eNews story, A Perfect Storm Continues.

Another major development affecting the AFV and advanced technology vehicle field was the passage of the Energy Policy Act of 2005. Signed into law in August, the legislation promotes renewable energy resources by offering tax credits for wind, solar, and biomass energy and supports continued hydrogen technology research. Other provisions include a tax credit of up to $3,400 for owners of hybrid and fuel-efficient diesel vehicles, increasing the required amount of biofuels (primarily ethanol) to be produced in the United States, authorizing $200 million annually for clean coal initiatives, and giving tax breaks to those making energy conservation improvements to their homes. More detailed information on the bill can be found in the August eNews story, 2005 U.S. Energy Bill Has Strong Focus on Alternative Fuels.

2005 headlines

Although it was signed into law back in October 2004, the American Jobs Creation Act also has affected the AFV and advanced technology vehicle industries by offering biodiesel and ethanol tax incentives and credits. Covered fully in the NAFTC Biodiesel Overview course, the biodiesel tax incentive is structured as a federal excise tax credit, and it will lower the cost of biodiesel to consumers. The credit is described as amounting to a penny per percentage point of biodiesel blended with petroleum diesel for first-use oils, like soybean oil, and a half-penny per percentage for biodiesel made from other sources, such as recycled cooking oil. The American Jobs Creation Act of 2004 also includes the Volumetric Ethanol Excise Tax Credit (VEETC), which simplifies the taxing of ethanol and extends the current blender’s tax credit to 2010.

As the price of oil rises, consumers and automobile manufacturers have had renewed interest in AFVs and advanced technology vehicles. With the growing popularity and interest in these options come exciting innovations and developments. With about ten hybrid models currently available, this number should jump to approximately forty-four by 2012. More information on new and forthcoming hybrid vehicle technology can be found in the August eNews article, Manufacturers Pushing New Hybrid Models; the September eNews story, DaimlerChrysler, GM Partner for Hybrids; and A New Generation Hybrid Transaxle for Toyota’s Power Hybrids in the November eNews edition.

AFV technology is also quickly developing, and many more people are firm in the belief that hydrogen is the fuel of the future. Hydrogen production and storage continue to be researched. Currently under review are storage technologies such as gaseous high pressure storage, liquefied storage, and hydride storage. Additional information on these emerging techniques can be found in the August eNews article, Advances in Hydrogen Storage.

As 2006 nears and crude oil and gasoline prices remain high, AFV and advanced technology vehicles should only become more popular and available to consumers because they will be more economically viable. With the current legislation in place and ongoing research into renewable sources of energy and technology, the AFV and advanced technology vehicle field has a promising and exciting future in store over the coming year.

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