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June 21, 2007

Senate Votes To Raise CAFE Standards Energy

The Senate has approved raising the fleet-wide fuel economy standard to 35 mpg by 2020, the first significant increase in almost twenty years. SUVs and light trucks are included. SF Chronicle:

The Senate voted Thursday to require average fuel economy of 35 miles per gallon for new cars, pickup trucks and SUVs by 2020, raising efficiency standards that have not changed significantly for nearly two decades.

The fuel economy measure was added to a broad energy bill without a roll call vote even as senators were holding a news conference announcing the compromise.

Republicans earlier blocked Democratic efforts to raise oil taxes by $29 billion and use the money to promote renewable fuels and other clean energy programs.

Democratic leaders hoped to complete the energy bill Thursday night, but senators close to the auto industry began an effort to derail the entire bill.

"We will be continuing to oppose it," said Sen. Carl Levin, D-Mich., "This is not over by any stretch."

The legislation for the first time would establish a single fuel economy standard applicable to not only cars, but also SUVs and pickups which currently have to meet less stringent requirement.

Fuel efficiency requirements would vary for different classes of vehicles based on weight and size. But manufacturers would be required to meet an overall fleetwide average of 35 mpg.

"It closes the SUV loophole," declared Sen. Dianne Feinstein, D-Calif., referring to current requirements that allow much less stringent fuel efficiency standards for SUVs and pickup trucks than for cars. "This is a victory for the American public."

The compromise, approved without floor debate, was crafted over several days behind closed doors with the aim of heading off attempts by senators sympathetic to the auto industry to press a less stringent proposal. [...]

Automakers are currently required to meet an average of 27.5 mpg for cars and 22.2 mpg for SUVs and small trucks. The car standard has not changed since 1989, though the truck requirements have been increased slightly by the Bush administration.

The measure tacked onto the energy bill would require a 35 mpg fleet average β€” including SUVs and pickup trucks β€” by 2020, and require that automakers make half of their vehicles capable of running on 85 percent ethanol fuel by 2015. [Emphasis added]

By 2020, 35 mpg is going to seem awfully wimpy. And the last thing we need is half our cars running on 85% ethanol. Still, it's good to see that momentum is building behind the principle of increased efficiency. Efficiency is the low-hanging fruit.

Posted by Jonathan at June 21, 2007 10:11 PM  del.icio.us digg NewsVine Reddit YahooMyWeb


But the data show that fuel consumption goes up whenever automobile fuel efficiency goes up. Nearly all the gains in fuel efficiency disappear once we account for the demonstrable increases in driving that such investments produce. People drive their vehicles more when increased fuel economy makes the price per mile cheaper. The number of miles driven by passenger cars and light trucks climbed 104 percent between 1975 and 2000, according to the Department of Transportation.

A 1999 USA TODAY analysis of crash data and estimates from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety found that, in the years since CAFE standards were mandated under the Energy Policy and Conservation Act of 1975, about 46,000 people have died in crashes that they would have survived if they had been traveling in bigger, heavier cars. This translates into 7,700 deaths for every mile per gallon gained by the standards.

If reducing gas consumption is the goal, an increased gasoline tax is more likely to get the job done: β€œIn contrast to a tax on gasoline, CAFE standards are an imperfect and inefficient method of signaling drivers about the true costs of the gasoline that they consume.

Congressional Budget Office (CBO) estimates that a 10 percent reduction in gasoline consumption could be achieved at a lower cost by an increase in the gasoline tax than by an increase in CAFE standards. Furthermore, an increase in the gasoline tax would reduce driving, leading to less traffic congestion and fewer accidents.

Beyond safety concerns, there is also the issue of consumer choice. A variety of smaller but more fuel-efficient models are already on the market for those who want them. In other words, there is no market failure justifying federal intervention.

Unfortunately, ailing automakers and gas suppliers simply present too soft a boogeyman, and feel-good environmental platitudes too easy a justification.

Posted by: at June 22, 2007 12:53 AM

The poster above forgot to state that she was a lobbyist for the automotive industry.

Posted by: bruce from chicago at June 22, 2007 10:17 AM

I've watched and waited for 20 years for Congress to raise the CAFE standards. I would say "thank you", but I have trouble feeling good about it, since we are now so far in the hole in so many ways. We're now lifting a finger; I guess I should be thankful for that.

And although the first poster is using some fine sleight of hand (blaming all additional driving miles on increased fuel economy, even though fuel economy didn't increase for most of the period she mentioned, and other factors like increasing urban sprawl obviously play a role) she has one thing right: We also need a gas tax hike to truly reflect the cost of petroleum. An ending of all oil exploration subsidies and hidden tax benefits would even help.

Of course, we could save millions of gallons, and thousands of lives, by reducing the highway speed limit back to 55 mph. No need for new technology, no need for retooling auto manufacturing plants, just sign the law and paint "55" on some signs, and knock 20% off our national fuel use. (Wouldn't that just about cover our Middle East imports?)

Come on, people!

Posted by: at June 22, 2007 03:35 PM

"[...] the data show that fuel consumption goes up whenever automobile fuel efficiency goes up"

Nonsense. This argument conveniently ignores the drop in crude oil prices throughout the 1980s and 90s (to a low of about $10/bbl after Prudhoe Bay and the North Sea came online) as a factor in the increase in vehicle miles traveled. Fuel efficiency is not the only factor determining how many miles are driven.

And Bruce, he or she could also work for an oil company.

Posted by: Michael at June 25, 2007 01:00 PM