by Joseph Szczesny

(2007-05-07)

"We know that our oil addiction is jeopardizing our national security, that we fuel our energy needs by sending $800 million a day to countries that include some of the most despotic, volatile regimes in the world.

"We know that oil money funds everything from the madrassas that plant the seeds of terror in young minds to the Sunni insurgents that attack our troops in Iraq," Obama said in a speech that offered by turns, tougher fuel economy regulations and more incentives to automakers for fuel efficiency.

"We know that our oil dependency is jeopardizing our planet as well that fossil fuels we burn are setting off a chain of dangerous weather patterns that could condemn future generations to global catastrophe," said Obama.

"At the dawn of the 21st century, the country that faced down the tyranny of fascism and communism is now called to challenge the tyranny of oil," he said.

Obama also used one of Detroit's most famous platforms to take a swipe at the Motor City's top executives, saying lobbyists from the oil and auto industry have systematically blocked progress for the better part of two decades. As a consequence, Japanese companies, particularly Toyota, now lead in fuel efficiency, he said.

"Whenever an attempt was made to raise our fuel efficiency standards, the auto companies would lobby furiously against it, spending millions to prevent the very reform that could've saved their industry," Obama added.

"Autoworkers understandably fearful of losing jobs, and wise to the tendency of having to pay the price of management's mistakes, join in the resistance to change," he added.

Obama said a comprehensive energy plan, like the one he would implement if elected President, will require action on several fronts. "I am by no means only focused on transportation. Every body is going to have to participate and every body is going to have to chip in," he said.

The U.S. should set goal of obtaining 20 percent of its energy from clean, renewable sources by 2020 and should adopt stringent caps on greenhouse gas emissions, he said. The Bush administration has resisted any and all effort to impose any kind of caps on greenhouse gas emissions.

"We have the resources and we are at a rare moment of growing consensus among Democrats and Republicans, unions and CEOS, evangelical Christians and military experts who understand that this must be our generation's next great task," he said.

On fuel efficiency, Obama said he favor raising fuel economy standards by four percent annually, or approximately one mile per gallon per year. The proposal is similar to the one already proposed by the Bush administration, which has already drawing fire from Association of Automotive Manufacturers, whose membership includes both American and Asian carmakers.

"The National Academy of Sciences has already determined that we can begin to achieve this rate of improvement today, using existing technology and without changing a vehicle's weight or performance," noted Obama, who also noted it has been endorsed by a coalition of corporate and military leaders.

Obama, however, said he favored setting different fuel-economy standards for different vehicles, something the environmentalists have generally opposed, and proposed offering U.S. automakers help with their healthcare costs if they agree to speed up the introduction of fuel-efficient technology.

"If the auto industry is prepared to step up to its responsibilities, we should be prepared to help," he said. "That's why my proposal would provide generous tax incentives to help automakers upgrade their existing plants in order to accommodate the demands of producing more fuel-efficient vehicles," he said.

Obama told reporters after the speech he does not favor the using a carbon tax to drive down the use of oil and the release of greenhouse gas emissions.

"I think in theory a carbon tax is an elegant solution. But in practice it's more complicated," he said. "It's a legislative solution that can overshoot or undershoot its requirements and you would always have politics. As a practical matter I don't think it would work," he said.

Carbon taxes have been widely proposed, particularly in Europe, as one solution to fighting threat of global warming because they would directly penalize the users of carbon fuel.

Fritz Henderson, GM's chief financial officer, said last week it was clear that that regulatory environment around vehicles was shifting and automakers had to prepare for the change as they prepared product lines for the future.


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