60 MPG by 2025? Consumer, Enviro Groups Urge 70% Hike in CAFE Standard
By John O'Dell September 2, 2010
As the Obama Administration readies for the next round of federal fuel economy rule making, an influential consumer group is urging that automakers be required to meet a 60 mpg fleet average for light cars and trucks beginning in 2025.
That would represent a 71 percent increase from the present Corporate Average Fuel Economy - or CAFE - standards that require a 35 mpg fleet average by 2016.
The proposal, launched today in a report issued by the Consumer Federation of America and backed by the National Resources Defense Council, is sure to elicit howls of protest from automakers and others who see the idea of requiring the auto industry to pull consumers into ecological car shopping as misguided.
Supporters of using fuel economy regulations to require manufacture of increasingly more efficient cars and trucks say that the auto industry's history is one of avoiding improved fuel economy in favor of building bigger, heavier - thus less efficient- and more profitable vehicles that don't require enormous investment in new technologies.
But Jeremy Anwyl, Edmunds' chief executive, says decades of sales data and consumer research show that "its just not clear that the market is there to support smaller cars or more expensive technologies."
Requiring vehicle to be built to achieve predetermined fuel economy standards "without ensuring there was demand for those vehicles is one of the reasons Detroit got into the mess of relying on large SUVs,' Anwyl said. "They provided the profits that made up for the losses automakers were taking on small cars."
The CFA report argues that the increased cost of a 60 mpg fleet average for light vehicles - estimated about about $2,600 for passenger cars and $3,200 for light trucks - will be erased by fuel savings.
If gasoline in 2025 is the inflation-adjusted equivalent of $3.50 a gallon today, and the average auto loan is for five years at 7 percent interest, the consumer group argues, consumers would save money in the first year of ownership of a 60 mpg vehicle and would save an averageof $1,000 over the life of a five-year loan.
Benefits beyond consumer savings, the federation says, are the reductions in oil use and in greenhouse gas emissions that would accompany 60 mpg vehicles.
"Moving the standard to 60 mpg will add hundreds of billions of consumer savings and reduced greenhouse gas emissions by hundreds of millions" of tons, said CFA research director Mark Cooper.
The report assumes - not unreasonably - that continued advances in fuel efficiency technology will make it possible for automakers to meet the 60 mpg goal.
A report by the Environmental Protection Agency and National Highway Traffic Safety Administration prepared for the last round of CAFE adjustments used an estimate of when maximum usage of available fuel efficiency technologies would be achieved to suggest that the auto industry could produce 45 mpg vehicles by 2016.
The CFA report goes on to say that the so-called technology exhaustion limit "is not fixed" and "should advance over time as the cost of technologies declines, the automakers become more adept at incorporating new technologies and technologies move from the research and development phase into the deployment phase."
The report uses that assumption to extrapolate the EPA/NHTSA technology exhaustion point to 2030, by which time, it says, the industry should be capable of building 90 mpg vehicles after having hit 60 mpg by 2020.
Roland Hwang, transportation program director for the Natural Resources Defense Council, said the CFA proposal would represent wins for consumers, the environment, national energy security and the auto industry.
"Without stronger standards," he wrote in a blog posting, "the U.S. auto industry risk[s] losing ground to the fast-rising Chinese auto industry," which is supported by a government policy calling for China to become the world leader in alternative fuel and electric-drive vehicles.
Hwang cites a University of Michigan fuel efficiency specialist's report, prepared for the Energy Foundation and issued Wednesday, that says the technology potential exists to enable the auto industry to achieve average fuel economy of 74 mpg without relying on electric-drive vehicles.
We're all for better fuel economy - the more the merrier - and for most anything that hastens the introduction of private passenger vehicles that don't use any petroleum at all.
But we also see the monthly sales numbers and share the concern of those who insist that, left to their own devices, Americans aren't going to flock to fuel efficiency that costs more as long as fuel prices remain low.
If the Obama Administration - or any other - really wanted to push development of 60 mpg cars and trucks, a revenue-neutral national petroleum fuels tax that set a floor of at least $4.00 a gallon would see consumers boycotting gas guzzlers and pounding on automakers' doors to demand vehicles that delivered fuel economy we now can only dream of.
It also would automatically ensure that those who wanted to continue using less-efficient vehicles would be paying for their share of the environmental and other damages their fuel consumption would wreak. If not completely offset by income tax reductions, higher fuel taxes also could create a sufficiently large pool of funds so that provisions could be made to ease the fuel-cost burden on the poor.John O'Dell, Senior Editor
LEAVE A COMMENT