On Monday, Secretary Chu from the Department of Energy unveiled the latest recipients of our stimulus cash. Last year, grants went to a slew of green initiatives, from alternative fuel vehicles and wind farms to smart grid implementations and biomass projects. This week, fuel efficiency is in the spotlight.
A total of nine projects received $187 million in funding, which is modest compared to past awards. The biggest winners were those working on a so-called Super Truck program. This entails developing Class 8 long-haul freight trucks that can run 50% more efficiently. Class 8 trucks consume 80% of the country's diesel fuel, so they're a natural place to funnel some efficiency R&D.
The $115 million in Super Truck funding was split fairly evenly between engine expert Cummins (NYSE:CMI), Daimler AG (DAI) subsidiary Daimler Trucks (the largest heavy-duty truck manufacturer in North America), and truck/engine/parts manufacturer Navistar (NYSE:NAV).
Navistar -- which also competes with the likes of Oshkosh (NYSE:OSK) and PACCAR (NASDAQ:PCAR) in the realm of military vehicles -- is partly tasked with improving truck and trailer aerodynamics. The company's International ProStar line is the Class 8 leader in both fuel efficiency and aerodynamics, so the company is a natural choice for the grant. Navistar says the broad adoption of the technologies that it and its fellow recipients are tackling could save 100 million gallons of fuel per day, and reduce vehicle emissions by 20% by 2030.
Is 100 million gallons per day a serious amount of fuel savings? You bet your big rig it is. At its peak in 2007 (or so ExxonMobil (NYSE:XOM) has argued), U.S. gasoline consumption touched 391 million gallons per day. On-highway diesel consumption ran at around 109 million gallons per day the same year. So not only is Navistar talking about a 20% reduction in emissions, but a 20% reduction in fuel consumption as well.
I'm very happy to see energy efficiency, the 'fifth fuel', getting serious government support. The return on investment is likely to be one of the best we will see out of any stimulus-funded endeavor.