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Fuel Economy: Going Farther on a Gallon of Gas
What's
Happening Now
Squandered
Opportunities
History
The United States is
the world's largest consumer of oil, with two-thirds of that
oil going to fuel the transportation sector. Our thirst
for oil has far-reaching implications, ranging from compromising our
energy security to polluting the air we breathe and contributing to
global warming. The simplest, most cost-effective way to reduce the
United States' consumption of oil is to increase the fuel economy of
motor vehicles. Improving the fuel economy of passenger vehicles to
an average of 40 mpg would reduce our dependence on foreign oil, cut
global warming emissions and save consumers thousands of dollars
annually at the gas pump. Detroit has the technology to accomplish
this while maintaining the power, safety, and performance that
consumers demand.
What's Happening Now
On April 1,
2003, the National Highway Traffic Safety Administration (NHTSA)
announced it would increase the fuel economy of SUVs and other light
trucks. This rule increases the Corporate Average Fuel Economy
(CAFE) standards for light trucks by 1.5 mpg. Under the new rule,
the current standard of 20.7 mpg will increase to 21.0 mpg for model
year (MY) 2005, 21.6 mpg for MY 2006, and 22.2 mpg for MY 2007.
Close analysis reveals that when taking into account the many
loopholes the auto industry currently enjoys, the oil savings from
the proposal will be negligible. In fact, this increase in fuel
economy is less aggressive than what the automakers have said they
would do voluntarily by 2005. (See
UCS press release)
Squandered
Opportunities
In August 2001, the House
of Representatives passed the House Energy Bill that included an
amendment offered by Richard Burr (R-NC) to save 5 billion gallons
of gasoline from light trucks by 2010. This is the equivalent of
raising the fuel economy of light trucks (i.e., SUVs, pickups, and
minivans) by less than 1 mile per gallon, and amounts to saving only
one day's worth of oil per year.
In March 2002, Senators
John Kerry (D-MA) and John McCain (R-AZ) introduced an amendment to
the Senate Energy Bill that would have increased fuel economy
standards for cars and light trucks to 36 mpg by 2015. Instead of
taking this meaningful step to require the industry to produce cars
and trucks that can go farther on a gallon of gas, the Senate
overwhelmingly chose to support an amendment conceived by Senators
Levin (D-MI) and Bond (R-MO) that punted the issue to NHTSA and
added loopholes that would actually increase oil use. The Levin-Bond
amendment was passed by 62 votes, effectively killing the
Kerry-McCain amendment. If Kerry-McCain had been enacted, we could
be saving 2 million barrels a day--almost as much oil as we
currently import from the Persian Gulf--by 2020. The Senate then
displayed convoluted logic by first passing the decision on fuel
economy standards to NHTSA and then voting for an amendment that
permanently exempts pickup trucks from the agency's future
rulemakings.
The House and Senate
energy bills were then "conferenced" in the Energy Conference
Committee, which is made up of members of both the House and Senate,
to reconcile any differences into one bill. In September 2002, the
Levin-Bond amendment and the pickup truck exemption were removed
from the conference energy bill. A version of the Burr amendment
that calls for a less than 1 mpg increase in fuel economy by 2012,
plus an additional requirement for the National Academy of Sciences
(NAS) to study fuel economy further, remained in the conference
bill. The 107th Congress adjourned in November 2002 without passing
a final energy bill. As of April 10, 2003, hearings by the 108th
Congress on the new energy bill were under way.
History
The US Congress established CAFE standards
in 1975, largely in response to the oil embargo of 1973. Gasoline
prices skyrocketed and the United States was caught flat on its
feet. Cars and light trucks were heavy and inefficient, with cars
averaging 13.5 mpg and trucks averaging 11.6 mpg. Congress
established a phase-in of new fuel economy standards that brought
cars up to 27.5 mpg, but delegated the responsibility of setting
standards for light trucks, now set at 20.7 mpg, to the Department
of Transportation (DOT).
Light Truck Loophole
At the time that Congress passed the CAFE
law, light trucks were allowed to meet a lower fuel economy standard
because they constituted only 20 percent of the vehicle market and
were used primarily as work vehicles. Today, light trucks comprise
nearly 50 percent of the new-vehicle market, and are primarily used
as passenger cars. In 2001, the average fuel economy of new vehicles
sold was at its lowest point since 1980. The proliferation of SUVs
takes advantage of a loophole that allows what are essentially
passenger cars to comply with the lower light truck standards,
driving up the use of oil.
The Bryan-Gorton
Bill
In 1990, Senators Richard Bryan and Slade
Gorton tried to reverse the downward trend in fuel economy by
sponsoring a bill to raise fuel economy standards for both cars and
light trucks over 10 years. The bill called for a 40 percent
increase in CAFE standards. Had this bill become law, today’s cars
would average 40 mpg and light trucks 29 mpg. The United States
would save 1 million barrels of oil a day (mbd) in 2003, on its way
to saving 3 mbd.
Instead, the average fuel economy of new vehicles is at a 21-year
low.
Fuel Economy Standards
Frozen
Starting with fiscal year 1996, members of
the House of Representatives inserted a rider on the Department of
Transportation appropriations bill, in effect freezing CAFE
standards at their current levels. The "CAFE freeze rider" prevented
the DOT from even studying the need and technological feasibility of
new CAFE standards. In 1999, Senators Slade Gorton (R-WA), Dianne
Feinstein (D-CA), and Richard Bryan (D-NV) sponsored a sense of the
Senate resolution opposing the House-based rider, which 40 senators
supported. These same senators sponsored a similar resolution
opposing the freeze rider on the 2001 DOT funding bill. Just before
the vote, however, senators representing the auto industry agreed to
break the freeze on studying fuel economy. Congress ordered a study
by the NAS to determine the effectiveness of the CAFE program and
make recommendations for moving forward with new standards.
NAS Fuel Economy
Report--Fuel Economy Standards Would
Reduce Oil
Dependence
Issued in July 2001, the NAS fuel economy
report concludes that the current standards save 2.8 mbd. Looking
forward, the NAS fuel economy report indicates that, using existing
technology, the passenger vehicle fleet could reach an average of
nearly 40 mpg. The report also finds that the auto industry could
meet higher fuel economy standards while maintaining auto safety,
and that new fuel economy standards could cost-effectively reduce
our dependence on oil, improve the nation’s terms of trade, and
reduce global warming pollution from passenger
vehicles.
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