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Introduction of the Open Fuel Standard Act

Press Release
Washington, DC….Congressmen John Shimkus (R, Illinois-19), Eliot Engel (D, New York-17), Roscoe Bartlett (R, Maryland-6), and Steve Israel (D, New York-2) today introduced the Open Fuel Standard (OFS) Act (HR 1687), which is intended to bring fuel competition to the pump.

The OFS would require that 50 percent of new automobiles in 2014, 80 percent in 2016, and 95 percent in 2017, would be warranted to operate on non-petroleum fuels in addition to or instead of petroleum based fuels. Compliance possibilities include the full array of existing technologies – including flex fuel, natural gas, hydrogen, biodiesel, plug-in electric drive, and fuel cell – and a catch-all for new technologies. This requirement will then provide certainty to investors to produce alternative fuels and fueling stations to have a variety of pumps supplying those alternative fuels.

“My goal is for the consumer to have the choice when they pull up to the pump. A choice of fuels made from oil, coal, renewables, natural gas, waste products, and other feedstock,” Shimkus said. “The consumer can then make a choice based on price or the energy source. In addition, this is one way for our nation to move toward energy independence.”

“Our dependence on oil is fueled by demand from our transportation sector. It is by far the biggest reason we transfer $600 billion per year to hostile nations to pay for oil at ever-increasing costs. By employing the Open Fuel Standard, we can force petroleum to compete on the open market with other types of fuel. We don’t have to wait for the perfect technology. We can turn this around right now, at little to no cost, and create a safer and more prosperous America,” said Engel.

Bartlett said, “The International Energy Agency (IEA) documented that worldwide conventional crude oil production peaked in 2006-2007. As a result, Americans face the prospect of repeated oil supply shocks and ruinous price spikes. This technology neutral Open Fuel Standard legislation will give Americans options they can choose to end their personal dependence and the strategic monopoly of oil for transportation. That’s why we have come together as Republicans and Democrats to support OFS as a key step to break the cycle of pain at the pump.”

“As any driver who has recently filled up their tank knows, gas prices are simply unsustainable. In order to end big oil’s stranglehold on our economy and transportation industry, we need to phase them out. By requiring auto companies to convert their fleets to flex fuel vehicles, we will be giving consumers the choices they deserve,” added Israel.

The Big Three automobile companies have in the past stated their willingness to make 50 percent of new vehicles flex fuel by 2012. The cost of doing so is about $100 per vehicle. In Brazil the ratio of flex fuel vehicles went from zero to 70 percent in just three years.

Fact Sheet
OPEN FUEL STANDARD ACT: FUEL COMPETITION AT THE PUMP

The Open Fuel Standard Act (OFS), lead in the House by Reps. Shimkus (R-IL), Engel (D-NY), Bartlett (RMD), and Israel (D-NY), is a technology neutral bill that would ensure most new vehicles sold in the U.S. enable fuel competition starting in 2014.
• The economic and security vulnerabilities associated with petroleum dependence stem from oil’s status as a strategic commodity, which in turn stems from its virtual monopoly over transportation fuel. The purpose of OFS is to break this monopoly in order to turn oil from a strategic commodity - as salt once was, due to its virtual monopoly over food preservation - to just another commodity, as salt is today.
• Oil’s domination over transportation fuel provides the oil cartel OPEC unacceptable leverage over the global economy. OPEC holds 78% of world oil reserves and yet, due to a policy of constraining supply, produces less oil today than it did 38 years ago even as global oil consumption and non-OPEC production have doubled over the same period.
• Competition and consumer choice in the transportation fuel market would, by enabling drivers to choose to purchase a different fuel on the fly should it be less expensive on a per mile basis, serve to dampen the impact of oil price volatility, and OPEC supply manipulation, on our economy.
• A variety of existing technologies enable vehicles to run on other fuels in addition to or instead of petroleum based fuels. For example, vehicles capable of operating on gasoline as well as alcohol fuels such as ethanol and methanol, or any combination of such fuels, cost about $100 more to manufacture than gasoline only cars.
• The ratio of flex fuel vehicles in Brazil increased from zero to 70% of new cars within three years, and thus as oil prices fluctuate consumers in Brazil can choose the least expensive of a variety of fuels.
• Alcohol fuels can be made from a wide variety of domestic energy resources including natural gas, coal, agricultural waste, energy crops, and trash.

Bill Summary
• The CEOs of the Big Three auto companies have repeatedly stated their willingness to commit to making 50% of new cars flex fuel vehicles or warranted to operate on biodiesel by 2012.
• The Open Fuel Standard Act (OFS) would buttress this commitment with law, thus providing certainty for investors in a variety of alternative fuels to ramp up production and fuel station owners to install pumps.
• Specifically, OFS requires that starting in 2014, 50% of new automobiles, starting in 2016, 80% of new automobiles, and starting in 2017, 95% of new automobiles are warranted to operated on nonpetroleum fuels in addition to or instead of petroleum based fuels. Compliance possibilities include the full array of existing technologies as well as a catch-all for new technologies.

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