Potential Energy

Tough New Fuel Economy Standards

Obama's new standards could require a gas tax to get consumers to buy more efficient cars.

Kevin Bullis 05/19/2009

  • 9 Comments

Today President Obama announced a new plan for increasing fuel economy standards. It will speed up an earlier plan established by Congress that would have required vehicles to have an average fuel economy of 35 miles per gallon by 2020. The new plan will require a slightly higher standard of 35.5 miles per gallon, and the standard must be met much earlier, by 2016.

In his announcement, Obama said:

[I]n the next five years, we're seeking to raise fuel-economy standards to an industry average of 35.5 miles per gallon in 2016, an increase of more than eight miles per gallon per vehicle. That's an unprecedented change, exceeding the demands of Congress and meeting the most stringent requirements sought by many of the environmental advocates represented here today.

As a result, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. Just to give you a sense of magnitude, that's more oil than we imported last year from Saudi Arabia, Venezuela, Libya, and Nigeria combined.

According to the Wall Street Journal, "new passenger cars sold in the U.S. will have to meet an average mileage requirement of 39 mpg, up from 27.5 mpg currently. Light trucks would have to deliver an average of 30 mpg, compared with about 23 mpg today."

The plan doesn't give automakers much time. Only a few cars--hybrids--meet these standards today, and it can take 5 years to develop a new car. The good news is that technology exists to achieve these standards, and automakers are already planning on rolling out much of it. That includes lightweight materials, direct-injection engines paired with turbochargers, and various types of hybrids, including plug-in hybrids and electric vehicles. But ramping up production will take time. Also, convincing consumers to buy enough of the most fuel efficient cars to make up for other people buying larger cars will be difficult. Gas taxes have helped meet a similar fuel economy standard in Europe. A proposed system of government fees and rebates could also help, and might be more palatable to consumers than raising gas prices.

Here's a more in-depth analysis of the issues involved, based on an earlier Obama plan.

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devassocx

111 Comments

  • 1001 Days Ago
  • 05/20/2009

Draconian Fuel Stds...

Nice to see that in addition to bankers that the
gov't is also expert in vehicle specifications.

Cost increase estimates for a new vehicle are more than $1300. You can bet it will be much more
than that when the time comes.

Add to that the increased complexity of the vehicle which means more costly maintenance and the use of lighter, much more expensive materials and you have the recipe for a continually stressed auto industry.

And the very poor, those who barely now can afford an old used car will be forced to pay more for their fuel...I fail to see any social justice there. I suppose you could rip off those who are further up the economic ladder and subsidize those lower down but is that what America has come to? Has it's free enterprize system become a government mandated wealth transfer system?

If you love your post office, the social security
and medicare programs then you will love this
latest government intrusion.

Score:
Government: 1
Car Companies: 0
Public: 0

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RD

212 Comments

  • 1001 Days Ago
  • 05/20/2009

Missing Info

What fuel is used to calculate the 35.5mpg?  If it is E10, it will become even more difficult to attain the mileage.  With ecopoliticians pushing for E85, obtaining 35.5mpg would require an equivalent 42+mpg designed for pure gasoline.  Ethanol has only 70% the energy thus it will take more fuel volume to attain the same distance.  Further, where is the discussion of reduced safety; reduced options such as AWD, heavy duty hauling, trailer capability, etc.?

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olmon

32 Comments

  • 1001 Days Ago
  • 05/20/2009

All Just Posturing--

This is all a bunch of BS - - The car manufacturers could give us 1 ton trucks that would give 35+ MPG next year using technology that was available 40 years ago.  This is all for the benefit of people that don't know anything about what technology is available & to make politicians look good while setting the public up to get raped $$$$ again.

Pratt & Whitney developed a multi-fuel engine for the Military back in the 70s that would deliver 35MPG cruising @ 60MPH in a 2 1/2 ton truck. That same engine developed 700HP on pump gas. 

That is not the only technology. A man in Oregon built and patented an automotive application of hydrostatic drive back in the early 70s that delivered approx 70MPG @ 60MPH.

There is no excuse, except greed (Big Oil), for the average FULL-SIZE car not to be getting close to 100 MPG NOW!

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dconner3905

5 Comments

  • 1000 Days Ago
  • 05/21/2009

Re: All Just Posturing--

I agree my 1983 Honda accord would have made those standards and them some.  I’d get 32 MPG city (about what 03 Accord does highway) and over 40 highway. 

See http://www.caranddriver.com/buying_guide/honda/accord/1983_honda_accord_10best_cars.

I loved that rusted out PoS.

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pkassoc

3 Comments

  • 997 Days Ago
  • 05/24/2009

Re: All Just Posturing--

delusional idiotic set of "facts"

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malexy

8 Comments

  • 1001 Days Ago
  • 05/20/2009

The authors state: "Only a few cars--hybrids--meet these standards today, and it can take 5 years to develop a new car".  While it is true that in the USA only hybrids presently meet or exceed these standards, that is not true worldwide.  For example, in Europe a number of vehicles already exceed this standard, in some cases substantially so.  Further, most of them are diesels rather than hybrids.  Further still, a number of these vehicles are sold by companies which also already sell other vehicles in the USA.

Although it does generally take up to 5 years for a "new" vehicle design to begin production, high efficiency vehicles already exist.  They need to be adapted to the USA market, but this is achievable within the specified timeframe.  These existing vehicles were themselves designed five years ago based on technologies then available.  If we enhance these vehicles with presently available technologies, studies have repeatedly demonstrated that even higher fuel efficiencies are achievable.

It is likely that these improvements will increase the vehicle costs.  This will certainly be true initially, as economies of scale evolve.  However, it is also likely that well before these standards become active in 2016, the price of fuel will once again rise to "nosebleed" levels.  While it is possible that we could once again see $4 - $5 gas in the USA by summer of 2010, it is all but certain we will see that by 2016.  Even the optimistic D. Yergin at CERA seemed to acknowledged as much in an interview on CNBC this morning.  Other forecasts indicate that much higher prices are possible within that timeframe.  Decline rates of existing oil fields are, in many cases, accelerating.  Notable is the crucial mega-giant Cantarell field in Mexico.  It is possible that within the next 3 years Mexico, our number 2 source of foreign oil after Canada may effectivelyy cease exporting oil. In addition to the accelerating decline rates of these fields, due to the recent sharp drop in oil prices, many oil development projects have been placed on hold.  This is particulalry true of oils sands projects in Canada. 

Simultaneously, sales of vehicles in developing countries are increasing.  For example, China will soon have more new car sales than the USA, if it does not already.

As a result, it is not unlikely that oil production will drop just as demand increases in the next couple of years...a recipe for a price spike.  If these developments unfold, the new fuel efficiency goals will seem to be too little and too late.  And, drilling throughout the USA won't help meaningfully.  Just as there is a substantial leadtime to bring a new vehicle to production, it takes 5 to 10 years to bring new oil fields into production.  Similarly, next generation biofuels can help, but they will not be commercially ready for at least another 2 years.  And then they need to scale up...a massive undertaking.

The technology already exists to provide us with vehicles that are far more fuel efficient than are presently available in the USA.  And, we have likely run out of time.  At this point, the costs of implementing these standards will probably pale compared to the costs of the coming fuel price spike.

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mkogrady

425 Comments

  • 1000 Days Ago
  • 05/21/2009

Mr. President - If you read MIT Review...

The good news is that technology exists to achieve MUCH more fuel savings by leveraging the nation's telecommunications networks to provide a competition to regular commuting. As stated in your speech - the US population accounts for 5% of the drivers, yet uses 25% of the gasoline. We have 150 million workers in the US - many have broadband at home and can easily (and more cheaply) be equipped with laptops and cell phones to permit a huge offset in fuel consumption.

We can -
Reduce Consumption
Reduce demands on our roads
Reduce Emissions
Reduce Military Security costs of oil

Most car buyers purchase vehicles with 60 month payment plans, yet that car - if cared for properly - will last considerably longer. I read somewhere that a typical car will last 12 to 15 years before it wears out. I also recall reading that the current "mix" of cars we have on the roads today will take another 16 years to finally be flushed out of the mix.

Americans are tapped out and won't rush out to buy new vehicles with better mileage just because the Feds raise the CAFE standard. The only way they'll be forced to upgrade is if there is an imposed fuel cost that makes current inefficient vehicles too cost prohibitive to drive. Last year gas spiked up to $4.50 a gallon and we STOPPED using cars. As a result, fuel prices dropped when Supplies increased. Then Suppliers cut back on production and gas creeped back up again (today in my neghborhood it's about $2.50/gallon).

If you impose a national Telecommuter Policy that forces 100% of the workers in the US who "can" Telecommute - then Supplies will rise again and prices will drop again. The difference is that Telecommuting can be throttled to provide a balance between the needed taxes generated by petroleum and the desired Green House Gas reduction so desired by CAFE,  and Cap and Trade policies.

A simple rollout plan might include:

Identification of all potential Telecommuters in all 50 states by year end. A secure Google Survey Tool would be helpful.

Once done - impose a mandatory 20% telework week (ie one day a week) for all targeted drivers. Those emissions that are avoided are "donated" to their respective states tally.

Year two - impose a 40% telework week and repeat

Year three - add another work day to the mix.

The overall impact of a sudden  massive Telecommuting program is neuatralized so the nation has time to adjust, Federal and State budgets have time to adjust and companies and employees learn best practices. As the petroleum industry makes adjustments to production quota's to stabliize prices, a new grouping of Teleworkers can be added to drive demand down further.

Eventually there could be such fewer vehicles on the roads that drivers who cannot telecommute would actually see their fuel consumption levels reduced simply because the roads and vehicles work more efficiently.  Regardless, as fuel supplies increase everyone will see prices drop (or should anyway)

In turn, all pork barrel spending on road expansion can redirected to other needy programs.

In the meantime, the automakers continue making their efficient vehicle programs to meet a particular targeted window as dictated by CAFE.

I have not had the time to keep up on this website and we did change presidents - so the material is outdated, but for those willing to take a look, go to:

http://digitalfuel.org

The powerpoint presentations should be of interest.

http://digitalfuel.org/Emissions.html
http://digitalfuel.org/attackplan.html

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freedomrings

1 Comment

  • 992 Days Ago
  • 05/29/2009

Some will, some won't

My 2002 VW Beetle with its turbo diesel gets 37 MPG in town, 43-50 on the highway. Last year's price spike didn't hurt me there so much. 

However, fuel surcharges on my company's daily shipments nearly broke us, and did put many other manufacturers across many industries (and some freight companies) out of business.  Trucks are going to have difficulty meeting these new standards. 

Any automotive engineer will tell you the main reason more hybrids aren't being manufactured right now are the limitations of battery technology, something that has been examined extensively on this web site.  This isn't a problem that's going to be solved overnight.

Meddling with the economy by forcing these standards are going to have dangerous consequences.  Free market solutions are best.

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Violet

1 Comment

  • 820 Days Ago
  • 11/17/2009

I doubt

I doubt that it is real people who'll benefit from this new standards. I like the examples the readers gave in the comments, and we can make the conclusion that it makes things worse for the consumers. In fact I disappointed in politics. I've read a very nice book about the democracy. Found it at the book search engine http://pdf.rapid4me.com  . Well, we think that we choose a party or a president but it is not so, because there is no choice. And now the tax payers pay.

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Bio

Kevin Bullis is Technology Review’s energy editor.

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