Sunday, July 27, 2008

Energy and Automotive Prize Bill

A few days ago I posted on a possible bill put forth by Republicans in the House that featured various energy independence efforts. I won't get into the various non-prize aspects of the bill; many are sure to be controversial, and you can read the promotion for the bill and the Climate Progress counter-arguments from the post linked above if you want to learn about that debate.

My purpose here is just to show more details about the prize part of the bill, which it turns out did happen as Climate Progress learned ahead of time. Here's a link to the American Energy Act, a combination of a number of Republican energy bills that haven't moved ahead in isolation. This excerpt summarizes the the prize portion:

Provide a monetary prize for developing the first economically feasible, super-fuel-efficient vehicle reaching 100 miles-per-gallon, as proposed in H.R. 6384 by Rep. Rob Bishop (R-UT);

GovTrack has the text of H.R. 6384: Americans for American Energy Act of 2008. Search for "TITLE XII--TAPPING AMERICA’S INGENUITY AND CREATIVITY" for the section on prizes. Some excerpts:

(a) In General- The Secretary shall carry out a program to competitively award cash prizes in conformity with this title to advance the research, development, demonstration, and commercial application of innovative energy technologies and new energy sources.


(c) Administering the Competition- The Secretary may enter into an agreement with a private, nonprofit entity to administer the prize competitions, subject to the provisions of this title. The administering entity shall perform the following functions:


(3) Develop, in consultation with and subject to the final approval of the Secretary, criteria to select winners based upon the goal of safely and adequately storing nuclear used fuel.


(a) Awards- 40 percent of amounts in the American Energy Trust Fund shall be available without further appropriation to carry out specified provisions of this section.


(b) Treatment of Awards- Amounts received pursuant to an award under this title may not be taxed by any Federal, State, or local authority.


(c) Administration- In addition to the amounts authorized under subsection (a), there are authorized to be appropriated to the Secretary for each of fiscal years 2009 through 2020 $2,000,000 for the administrative costs of carrying out this title.



The Secretary of Energy shall establish a program to award a prize in the amount of $500,000,000 to the first automobile manufacturer incorporated in the United States to manufacture and sell in the United States 50,000 midsized sedan automobiles which operate on gasoline and can travel 100 miles per gallon.

I don't think I would have structured the Automobile Prize quite this way. I'd be worried that the program would run out of steam after the first 50,000 vehicles are sold (at $10,000 prize value per vehicle). I'd also be concerned that the big advantages of prizes, like inspiring small entrepreneurs and getting them publicity, would be irrelevant in this industrial-scale prize. Also, I'm not sure why they require that the vehicles operate on gasoline. Is that gasoline only, or are FFVs (flex-fuel vehicles that can run on gas or alcohol fuels) and/or PHEVs (plug-in hybrid electric vehicles) also encouraged?

I guess I'd rather see fifty $10,000,000 Automotive X PRIZEs than this 1 giant prize, or perhaps ten $50,000,000 scaled-up Automotive X PRIZEs, run year after year for a decade, with more incentives for both small and large players, and perhaps enough prize cash to encourage different variants (trucks, different car sizes, motorcycles, farm and industrial vehicles, etc).

Nevertheless it's an interesting proposal, and it will be informative to watch it, or variants of it, progress or fail as the political battles rage, gas prices rise, and the Progressive Automotive X PRIZE gets more press.