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U.S. Secretary of Transportation Ray LaHood introduces new fuel economy labels for auto vehicles at the Department of Transportation May 25, 2011 in Washington, DC. The new labels will provide more fuel efficiency information, including estimated annual fuel costs, savings, and information on vehicles' environmental impact.

Alex Wong

As the Harper government's clean energy policy is to simply say "me too" to whatever the U.S. decides, it's worth paying attention to what's going on in Washington at the moment.

In May, 2009, the Obama administration set nationwide standards for the 2012-16 model years that will require fleet-wide fuel efficiency to 34.1 mpg (6.89 litres/100 km) by 2016. Canada followed along. The U.S. administration will propose new fuel efficiency and auto pollution standards this September, with key decisions being made this summer. That has prompted a push by U.S. environmental groups and a number of senators to lobby for a 62-mpg (3.79 L/100 km) requirement by 2025. The administration is considering annual increases in fuel-efficiency ranging from 3 to 6 per cent between 2017 and 2025, which at the top would hit 62 mpg by the period's end.

Lots of "experts" have said these targets would build so much cost into the average vehicle that consumers would revolt and auto industry sales would collapse. Not surprisingly, the Alliance of Automobile Manufacturers - the trade group that represents General Motors, Ford, Chrysler, Toyota and eight others -agrees with the "experts." The alliance pointed out last week that 1.7 million U.S. jobs come from the auto industry and said that ordering 62 mpg in 2025 would reduce sales by 14 per cent - and that could lead to a loss of almost a quarter-million jobs.

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Daniel Becker, director of the Safe Climate Campaign, said, "It is sad but typical that auto makers are trotting out the same tired excuses for not making efficient vehicles to meet the needs of American facing high gas prices."

The current measure will cost the auto industry (and eventually consumers) more than $50-billion over five years. Fuel- and weight-saving technology built into 62 mpg cars would add up to $3,500 per vehicle in costs but the Obama administration says it would save $3,000 per vehicle in gas over the life of the vehicles and save 1.8 billion barrels of fuel over the life of the vehicles.

Miles per gallon is one measure of reducing gasoline, but a better one is "miles per gallon of what." If your vehicle is using ethanol, bio-diesel, hydrogen, natural gas or electricity, you're doing more to reduce gasoline dependency than squeezing a few more miles out of the old stuff. Moving straight to E85 is the simplest way to get cleaner air with less oil, but the old "food for fuel" argument always stands in the way.

That's why it's encouraging to see some significant Canadian companies making the leap to cellulosic ethanol. I've written about Enerkem of Sherbrooke, Que., which has begun construction of a waste-to-biofuels plant in Edmonton. The aim is to produce clean-burning ethanol for cars and trucks from garbage that would otherwise be going to the dump. We should know if it works in a year or two.

And now Canada's largest ethanol producer, Greenfield Ethanol, which produces the stuff almost exclusively from corn, is taking a stab at cellulosic, too. It announced last week that, along with partners, it has set up a new company called G2BioChem - which will focus on commercializing cellulosic ethanol. It plans to begin construction of a demo plant this summer in Chatham, Ont., to use agricultural and forestry waste for ethanol production. The company is aiming for production of cellulosic ethanol at a cost of about 50 or 60 cents a litre but that will be a few years away.

But G2 says that after thousands of trials, it has a process down that doesn't use corn kernels at all but rather corn cobs and stalks, energy crops like sorghum and miscanthus, as well as wood chips and biomass from poplars.

Smart money is investing in second-generation ethanol, so don't get too hung up on "miles per gallon" of gasoline. Bio-based liquid fuels are likely to play a much bigger role in the solution.

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Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 11:30 a.m. on CTV.

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