Energy Conservation

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The transportation sector is almost completely reliant on petroleum-based fuels and consumes more of these fuels each year than the United States produces, contributing to the nation’s growing dependence on imports.

Corporate Average Fuel Economy (CAFE) standards would be more effective if government tax policy on fuels reflected the true social costs of reliance on petroleum and if manufacturers were allowed to trade fuel economy credits.	The government–industry collaboration on the Partnership for a New Generation of Vehicles program was successful in accelerating the introduction of fuel-conserving technologies, even though the program did not meet the goals for 2004 prototype vehicles established in 1993.
The replacement for the PNGV program, the FreedomCAR and Fuel Partnership program, includes government and automotive and energy companies addressing critical long run goals, particularly shifting from petroleum based fuels to hydrogen. The public investment is justified, even though the goals of the program are extremely ambitious.	Many alternative fuels and propulsion systems can improve fuel economy and reduce dependency on foreign energy sources. All face significant market and technical barriers. None can yet compete with the internal combustion engine fueled by gasoline, but R&D can help overcome these barriers.