Effect of Title XI of the Energy and Security Act of 2007 on Transportation

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Table of Contents

Introduction
Subtitle A. Department of Transportation
Subtitle B. Railroads
Subtitle C. Marine Transportation
Subtitle D. Highways
Conclusion
References

Introduction

The Act (P.L.110-140, H.R. 6) defines the ways renewable sources of energy can be used efficiently. The bill proposes to increase production and development of energy efficient renewable reserve hence reducing dependency on foreign oil (Schatt, 2007).

The law has three major provisions:

Corporate Average Fuel Economy. The law states that cars and light trucks should be having a fuel economy of 35miles per gallon. For medium and heavy trucks, a fuel economy program would also be established. The law also seeks to make sure that there is an improvement in vehicle technology through different development programs.
Renewable Fuel Standards (RFS). This law sets the standards for production of bio fuels from 9.0 billion gallons in 2008. This will to rise to 36billion liters by 2020. Of the 36billion gallons, 21billion gallons should be from cellulosic ethanol and other advanced bio fuels (Rohall & Milkie, 2007).
Appliance and Lighting Efficiency Standards. In this law standards are set for the different kind of bulbs. They include incandescent bulbs and fluorescent bulbs. The bulbs should be light and energy efficient. Efficiency standards are also set for different household appliances.

Each of the Titles of the Act is devoted to a specific aspect of the offered innovations. Particularly, Title XI touches upon energy, transportation and the infrastructure. It has four Subtitles: Subtitle A is about the requirements department of transportation in the industry; Subtitle B is devoted to railway transport; Subtitle C deals with Marine transportation; Subtitle D is devoted to highways (Sissine, 2007, p.18-19). In this paper, we will try to anticipate the impact of Title XI of The Energy Independence and Security Act of 2007 on the transportation industry. We will brief the focus of each subtitle and discuss their direct and indirect effects on operation of transportation companies.

Subtitle A. Department of Transportation

The department of transportation is going to establish the Office of Climate Change and Environment that will have several functions. Its major work will be to look for ways and strategies to implement so as to reduce the use amount of energy used in the transportation industry. It will also be charged with alleviating the effects of climate change and tackle the impact of change in climate systems of transport and infrastructure (p.18).

The DOT will be required to implement the part of the law that requires vehicles to have a fuel economy of 35miles to the gallon. Hence transport companies will be required to have vehicles that are of this standard. On the one hand, this will bring down the cost of doing business, as the companies will be using less fuel compared to what they are using. Currently the vehicle fleets are operating on a fuel economy of 20 to 24miles to the gallon. At the same time, it is impossible to omit the fact that making the fleet correspond to the new requirements will be time-, effort- and money-consuming.

While the positive effect of fuel economy will be seen after certain time passes, modernization of the fleet requires substantial spending made at once, which will affect transportation companies’ income: the cost of doing business will have to be increased. Thus, there can be expected a certain time lag between the positive and negative effects of implementation of the Subtitle A.

However, the effect will be mitigated by subsidies and credits on the development of efficient systems of transportation. The law proposes to authorize loans for purchase of more energy efficient vehicles. This loans will enable the transport companies to get better equipment and also expand there fleets. With an expansion of there fleets, this will lead to more job creation and increased profitability of the company as they will be able to reach a wider market (Rayce, 2007).

Subtitle B. Railroads

This subtitle directs the Department of Transport to coordinate with EPA in establishing of projects that would lead to development of hybrid locomotives. The trains should have an increased fuel economy, reduced emissions and lowered cost of operation. The projects are going to be utilized through grants that are going to be offered by the department of transport. The grants are also going to help in the rehabilitation, preservation, or improvement of railroad track. The tracks will be of class II and class III (Sissine, p.19).

The innovation will bring its positive effect: the transportation companies will be able to have access to new technology, as the DOT will be required to offer grants towards the development of better equipment and infrastructure. There will be creation of employment, as expertise will be required into the development of better locomotives. This will be also distributed in enhancing the railway tracks and necessary infrastructure. Despite modernization requires significant investment, this will not seriously affect cost of services, as grants will be provided. Besides, with the lapse of time, there would be a reduction in the cost of operations, as the locomotives will be hybrids hence less dependence on fuel.

Subtitle C. Marine Transportation

This Subtitle directs Department Of Transport to put in place a short sea transportation system. Short sea transportation is a commercial water transportation system that starts from a port in the United States and ends at a different port in the United States. It can also be defined as a port that originates in Canada located in the Great Lakes Saint Lawrence Seaway System, to a port in the United States. The reverse is also true for both definitions.

The Department of Transport will be offering support through its capital construction fund to set up this program. This will ease the congestion on land based transportation requirements (ibid.). Bulkier goods can be transported at ease from one port to another over the United States; this service will definitely be in demand, as many transportation companies’ clients need it, and it means that transportation companies will have additional income. The effect on cost of services will be mitigated by financial support of the DOT.

Subtitle D. Highways

The Subtitle states that the Highway Trust Fund should be distributed equitably; DOT is directed to ensure this distribution. DOT should come up with policies that ensure all road users are included in the design of new roadways or rehabilitation of the existing ones. The law will ensure the safety of the highway system for different road users (ibid.).

There are no grounds to state that Subtitle D will impact costs of transportation companies’ services.

Conclusion

Every innovation requires investment; however, every investment at first implies expenses and requires some time to begin bringing profit. The Title XI of the Energy Independence and Security Act implies significant modernizations to be fulfilled; they will take much time, efforts and financial resources, which might increase cost of transportation companies’ services. However, DOT provides special conditions of modernization: companies are offered loans, grants and subsidies, which mitigates the effect of significant spending. Despite there will be substantial initial expenses, they will be compensated in the future due to the positive impact of modernization that will give companies opportunity to save fuel and work efficiently.

References

Rayce, J. (2007). Energy dependence for the 21^st Century. New York: Wiley’s Publishers.

Rohall, D. & Milkie, A. (2007). Future Power: New York, Pearson Education Inc.

Schatt, H. (2007). Cultivation of Energy. Sydney: Ocean View Publishers.

Sissine, F. (2007). Energy Independence and Security Act of 2007: A Summary of Major Provisions. Energy.Senate.Gov. Web.

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