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New U.S. Fuel Economy Standards Too Weak to be Effective

"Anemic" Standards Could Undermine U.S. Auto Industry


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Environmentalists may think the Bush administration hasn’t gone far enough to increase fuel economy, but no one questions the importance of addressing the problem, and imposing higher standards for light trucks is a good place to start. The U.S. Department of Energy estimates that gasoline consumption accounts for almost half of the U.S. demand for oil. And as Kathy Gill, About Guide to U.S. Politics and Current Events, reports, “light trucks accounted for only one-in-10 vehicles sold in 1979 (9.8% share of total fleet). Today, ‘light trucks’ account for half of all vehicles sold in the United States (50.1 percent of total fleet in 2003) and are primarily ‘passenger cars’ rather than commercial work vehicles.”

New Fuel Economy Standards Don’t Go Far Enough
"While any increase in CAFE standards is positive because it will save oil," said Kateri Callahan, president of the Alliance to Save Energy, "this new standard takes baby steps when we need to be making large leaps toward lower prices, energy independence, and cleaner air."

In a statement responding to the DOT announcement, the Alliance to Save Energy pointed out another problem with the way the new standards are structured over the first few years:

“During the 2008 to 2011 transition period, each automaker will have the option of complying with the current CAFE structure or the new "reformed" system. This means each company could, each year, opt for whichever system yields the weaker standard. Under the current CAFE structure, the new rule increases the light truck fuel economy standard from 22.2 mpg for model year 2007 to 22.5 miles per gallon for model year 2008, 23.1 mpg for MY 2009, and 23.5 mpg for MY 2010.

“Under the new "reformed" structure, the standard for each manufacturer will be based on the mix of vehicle sizes it sells. Rather than establishing six size categories, each with its own fuel economy target, as proposed last August, the new rule sets fuel economy targets as a continuous function of vehicle size. Those targets are then averaged over the mix of vehicles sold by each manufacturer to set an overall fleet-wide average standard for that company each year.

“Starting in model year 2011, all manufacturers would be required to comply with the new ‘reformed’ CAFE structure.” Meanwhile, the DOT is giving automakers the option of conforming to the letter of the law while violating its spirit.

According to the American Council for an Energy-Efficient Economy (ACEEE), the new rule could easily undermine whatever fuel savings it might otherwise have achieved by allowing unlimited sales of larger, lower-mileage trucks that are not subject to the light-truck standards. In other words, automakers will be allowed to sell an unlimited number of full-size trucks without offsetting them with sales of more fuel-efficient trucks, as was required under the previous CAFE standards.

"Under this new system, the MPG gains are not assured for a manufacturer's truck fleet,” said Steven Nadel, ACEEE executive director. “A shift in the vehicle mix can cause oil savings to evaporate."

New DOT Fuel Standards May Undermine U.S. Automakers
But environmental leaders are quick to point out that the new standards are not all good news for automakers, either.

According to the Natural Resources Defense Council, the “anemic new fuel economy standards” announced by the Bush administration “will do more harm than good for the U.S. auto industry and tens of thousands of people whose jobs hang in the balance.”

"The Big Three automakers are in trouble today precisely because management bet the farm on gas guzzlers,” Hwang said. “When oil prices soared, the bottom fell out of their market and sent thousands of workers out the factory gates. Those prices aren't coming down soon. In fact most experts say that they will go higher.

"The administration is calling for baby steps at a time when the country needs bold action,” Hwang continued. “By setting the bar low once again, the administration is setting the industry up for a continuing disaster. Engineering better fuel economy performance is the key to survival in today's intensely competitive auto market.”

Daniel Becker, Director of the Sierra Club's Global Warming program, agrees.

"Higher fuel economy and good jobs come from using better technology," Becker said. "By failing to require Detroit to make significantly cleaner, more efficient vehicles to compete with Toyota, the Bush administration is giving the Big Three enough rope to hang themselves."

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