2008 Ford Escape Hybrid Credit: Ford Motor Company

Ford Motor Company has just released its plan for surviving in the current lousy economy--the report is part of an effort this week by the Big Three automakers to get massive loans from the government. They were rebuffed last month when they came to Washington begging for money and apparently not looking apologetic enough as they climbed into their private jets. This time at least two of the executives reportedly drove to Washington.

At the heart of the plan is the use of "advanced" technology to make cars with better fuel economy, including several hybrids and an electric van. From the report: "Half of our Ford, Lincoln and Mercury light duty nameplates qualify by 2010 as 'Advanced Technology Vehicles' under the Energy Independence and Security Act [EISA]."

So, is this a big deal?

Here's what an advanced technology vehicle is, according to EISA:

(1) ADVANCED TECHNOLOGY VEHICLE- The term `advanced technology vehicle' means a light duty vehicle that meets--

(A) the Bin 5 Tier II emission standard established in regulations issued by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act (42 U.S.C. 7521(i)), or a lower-numbered Bin emission standard;

(B) any new emission standard in effect for fine particulate matter prescribed by the Administrator under that Act (42 U.S.C. 7401 et seq.); and

(C) at least 125 percent of the average base year combined fuel economy for vehicles with substantially similar attributes.

The first two have to do with non-carbon dioxide emissions, things such as particulates and other emissions that lead to smog. Bin 5 Tier II is the middle-of-the-road level of emissions under relatively new, strict emissions standards. Car companies haven't had trouble meeting these requirements, according to an EPA report. Being able to meet these standards in the future isn't that impressive.

Having fuel economy 25 percent higher than other similar vehicles is more impressive. How is Ford doing this? Next year the company will sell many of its cars with "Ecoboost" engines. These use direct-injection and turbo-charging to extract more power from engines, allowing the company to use smaller, more efficient engines. (For a related technology being considered by Ford, see "The Incredible Shrinking Engine.") The technology can improve fuel economy by 20 percent. The company is also doing smaller things, like using electric power steering pumps and 6-speed transmissions, which can improve efficiency by a few percentage points. It's also adding two more hybrids to the two it already has (the Escape and Mariner).

None of this is earth-shattering stuff--it's basically adapting existing technologies in smart ways. But it's good to see Ford is actually doing it. More cutting edge is the company's plan to sell plug-in hybrids and electric vehicles, starting with an electric van in 2010 and an electric sedan in 2011. More details will follow as Ford releases them, probably just before the North American International Auto Show in Detroit next month.

I was happy to see an article attempting to help readers understand hybrids and plug-in hybrids in the widely read magazine Condé Nast Traveler last week. These vehicles have the potential to dramatically reduce petroleum consumption, but of course the only way they'll catch on is if people know about them.

I wasn't as happy after I read the article.

No, today's hybrids cannot drive 30 miles on electricity alone. They're designed to go only a couple of miles before the gasoline engine kicks on.

No, we do not need a new kind of battery to make plug-in hybrids work. Kits exist today for converting conventional hybrids into plug-in hybrids (it can be done in about two hours). The major automakers have higher standards for plug-in batteries, but GM engineers say that they already have the batteries they need. The challenge now is incorporating them into big battery packs. But that's been done before with other batteries, and GM engineers say that they'll have the new packs ready for testing this year. By 2010, GM aims to have the packs in production vehicles. (See "Electric Cars 2.0.")

And no, plug-in hybrids won't cause blackouts. There's plenty of excess electricity capacity at night, when most people will be plugging them in. Indeed, eventually plug-in hybrids could be used to prevent blackouts. (See "How Plug-in Hybrids Will Save the Grid.")

But here's the biggest problem with the article. It defines a plug-in hybrid as "a hybrid you have to recharge just like an electric car." This is exactly wrong, and it is just what automakers are concerned that people will think. One reason people haven't adopted electric cars is because their limited range and long charging times make long trips difficult. (One electric-car champion boasted to me that he takes road trips all the time in his electric car. But he has to hunt down RV parks and take two-hour breaks along the way for recharging.) The whole point of a plug-in hybrid is to get around this problem.

Plugging in a plug-in hybrid is strictly optional. If you plug it in to recharge the battery, you can drive to work and back using electricity alone, which will save you money and reduce carbon emissions. (See "Plug-in Hybrids Get Green Grades.") You can also make the first miles of a road trip using electricity alone. But if you prefer not to plug it in, or if an outlet isn't handy, the car simply runs on gasoline. Indeed, a plug-in hybrid can get much better range than a conventional gasoline car because it uses gasoline more efficiently. GM's Volt plug-in is to have a 600-mile range using gasoline, with 40 miles more if you happen to plug it in.

Although biofuels continue to have strong political support, they may not be a smart way to address global warming or wean countries off of oil. A new report from the Organisation for Economic Co-operation and Development (OECD), a respected international group with 30 member countries, including the United States, warns that increased use of biofuels will cause high food prices, won't do much to offset petroleum consumption, and is an extremely expensive way to reduce carbon-dioxide emissions.

The idea that as farmers grow more crops destined to become fuel, rather than food, food prices will increase, isn't new. The report adds that biofuels aren't worth the cost. For various reasons, biofuels will only account for 13 percent of liquid fuels by 2050, doing little to offset petroleum consumption. What's more, there are cheaper ways to reduce carbon-dioxide emissions. To achieve one ton of carbon-dioxide reductions costs more than $500 in subsidies in the Unites States. In contrast, a businessperson wishing to offset carbon emissions from airline flights can do so for less than $15 a ton. (Such offsets use efficiency measures, reforestation, and various renewable sources of energy to reduce carbon emissions.)

What, then, should be done about carbon-dioxide emissions from vehicles? Private offset programs will probably only take us so far. More-efficient gasoline and diesel cars, as well as electric vehicles and plug-in hybrids, can help. (See "Electric Vehicles 2.0.") Biofuels can still play a role, but government investment should focus on research on second-generation biofuels (for example, ethanol from grass and agricultural waste), since these could have a far greater impact on carbon emissions than, say, the ethanol from corn grain produced today. Ultimately, instead of mandating the use of biofuels--or any particular technology, for that matter--the government should instead put a price on carbon-dioxide emissions, and let the market sort out the best strategy.