National Policy

The lack of real progress around transportation issues in Washington continues. The most high profile disagreement is over the federal Transportation Bill, currently on its ninth temporary extension and set to expire at the end of June. This spring, the House and Senate begin negotiating on a two-year bill. These negotiations will affect not only road-building projects, but also technology programs and policy issues that are rolled into the bill. The most likely outcome appears to be a two-year bill basically continuing business as usual, with the tough questions around revenues and how to modernize our transportation system left for another day.

The Obama Administration continues to call for bold steps to clean up our nation’s transportation sector, including a National Community Deployment Challenge for model alternative fuels communities and a $10,000 tax credit, available at the point of purchase, for EVs. Given election year politics, it is not clear what will happen with these proposals.
 
In the regulatory arena, EPA has made two recent announcements that will have an impact upon the clean transportation industry. First, the agency announced the availability of up to $20 million in grant funding for clean diesel projects through the Diesel Emission Reduction Act program. Second, EPA is moving toward allowing E15 – a blend of gasoline with 15% ethanol – into the national fuel supply.

California Policy

While gridlock and partisan bickering dominate in Washington, there are signs of progress in the State. The CEC and CARB are in the process of finalizing AB 118  for FY 2012-2013. Together, these two agencies will invest approximately $130 million over the next year in clean transportation technology development, demonstration and deployment. Among other things, they will provide incentives for advanced trucks and electric vehicles, as well as funding for alternative fuel infrastructure and in-state manufacturing.

Looking ahead, there are several bills moving through the legislature that have the potential to drive change in this sector. SB 1455 (Kehoe) calls for 26% of California’s 2022 transportation energy demand to be met by alternative fuels. AB 2405 (Blumenfield) aims to ensure that drivers of fuel cell, battery electric or CNG vehicles (as well as some plug-in hybrids) would be able to use High Occupancy Toll lanes free of charge. These and other bills affecting this sector have a long way to go to become law, but they have cleared early legislative hurdles.
 
California’s efforts to move to a cleaner transportation future got some recent help when a US Court of Appeals issued a stay overturning an injunction blocking enforcement of the State’s Low Carbon Fuel Standard (LCFS). Legal challenges to the program’s future remain, but this decision allows California to move forward with implementation of the LCFS, which requires a 10% reduction in the carbon intensity of motor fuels sold in California by 2020.

For more information, contact Jamie Hall.

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