CORPORATE FOCUS: Addicted to Oil

Gas prices are rising and the threat of global warming looms ever larger. Al Gore, what have you done to wean the United States from its oil dependency?Asked a related question in a recent debate with Bill Bradley ("We sent our armed forces to the Persian Gulf in 1991 to return a country to its owners. Now we see higher gas prices. What will you do to ensure this does not happen again?"), Gore responded:"We have an interest in being less dependent on sources of oil from a region that is, over time, vulnerable to instability. I helped to put in place a program called the Partnership for a New Generation of Vehicles, which commits the big three automakers in our country to getting new vehicles into the marketplace that have three times the efficiency of today's vehicles."It was telling that Al "Earth in the Balance" Gore would point to the relatively obscure Partnership for a New Generation of Vehicles (PNGV), the epitome of what might be called corporate welfare environmentalism.The Partnership for a New Generation of Vehicles (PNGV) is a public-private partnership between seven federal agencies, 20 federal laboratories, and the big three automakers -- General Motors, Ford and what is now Daimler Chrysler.PNGV's main long term goal is to develop a "Supercar," "an environmentally friendly car with up to triple the fuel efficiency of today's midsize cars -- without sacrificing affordability, performance or safety."It is hard to imagine an industry less in need of government support for research than the highly capitalized auto industry. Ford pulled in profits of $5.4 billion in the first three quarters of 1999. GM earned $4.8 billion over the same period. The government is supporting research that the industry could easily do on its own (and, to some extent, is doing apart from the PNGC initiative), and should be mandated to undertake to meet tougher environmental standards.How is it that the competitors in the oligopolistic auto industry are able to undertake a joint research undertaking? The PNGV program gives participants an effective exemption from antitrust laws.Defenders of such collaborative efforts love to invoke the legendary example of the Manhattan Project, but the evidence is overwhelming that innovation -- especially in the commercial sector -- is more likely to result from competition in research and development.Oligopolistic collaboration is prone to all kinds of pitfalls, from bureaucratic sloth to corrupt suppression of research -- as the auto industry's own history makes clear.In the 1960s, the Justice Department filed suit against the automakers for product fixing -- for refusing to introduce air quality enhancing technologies. Among other claims, the Justice Department alleged that the U.S. automakers and their trade association had conspired "to eliminate all competition among themselves in the research, development, manufacture and installation of motor vehicle air pollution control equipment."Now the Clinton-Gore administration has stamped its official imprimatur on the industry's preferred anti-competitive coordination of environmental research. (The administration's happy-talk calls it "pre-competitive.")Maybe today's auto industry is different than the auto industry of the 1960s. Or, maybe not.Above all, the PNGV initiative has served during the Clinton-Gore administration as a smokescreen behind which the automakers hide to protect themselves from more stringent air quality standards."Cynics think that the PNGV was simply a politically astute 10-year reprieve for the domestic auto industry from threats of higher Corporate Average Fuel Efficiency standards," writes Earth Day founder Denis Hayes in his new book, The Official Earth Day Guide to Planet Repair.Deployment of existing technologies could dramatically enhance auto fuel efficiency and reduce greenhouse gas emissions, but the automakers -- who have waged a decades-long crusade against mandatory fuel efficiency standards -- choose not to make these technologies widely available.And the PNGV program does not even require the deployment in mass production of the technologies it seeks to develop.The leading innovators in fuel efficiency have been Toyota and Honda, which do not participate in the PNGV program."By 2004, the PNGV hopes U.S. manufacturers will be able to produce a U.S. vehicle that has roughly the same characteristics as the already-on-the-market Toyota Prius," Hayes notes."Actually," Hayes writes, "the most likely 2004 PNGV vehicles will be inferior to the Prius in one important regard: they will probably use diesel instead of gasoline engines. ... Sadly and ironically, the cars produced by the decade-long, multiple-billion-dollar PNGV effort may be banned from California -- the nation's largest automobile market -- because they cause too much pollution."No such criticism is voiced by the corporate welfare environmentalists in the Clinton-Gore administration. They are eagerly planning to launch 21st-Century Truck Initiative, a public-private partnership for truck manufacturers modeled on the PNGV.Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.

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