House Energy Committee Shoots Down Increases in Fuel Efficiency
14 April 2005
During its deliberations on the provisions of the Energy Policy Act of 2005, The House Energy and Commerce Committee yesterday rejected a proposal to increase average fuel efficiency (CAFE standard) 20% by 2014. That proposal would have raised the CAFE standard for cars from the current 27.5 mpg to 33 mpg.
Opposition to the proposal was bi-partisan; the measure failed by a vote of 36–10.
As it currently exists, there is no language in the House Bill requiring any improvement in fuel efficiency standards—only a tepid proposal for the “study” of the issue. (Title VII, Sub-title E, Sec. 774).
The committee also rejected by a vote of 39–12 another proposal to reduce national oil consumption by 1 million barrels per day from the projected levels by 2013. (That proposal was even very careful to specify no mandated increase in CAFE standards.)
Separately, the EIA released an analysis of the impact of the package of energy proposals the National Commission on Energy Policy (NCEP) issued last December. The privately-funded commission is a group of energy experts, company executives and government officials from both political parties.
Although NCEP did not specify a specific increase in CAFE standards among its recommendations, the EIA based its analysis on a 36% increase by 2015.
The current CAFE standard is 27.5 mpg for cars and 21.0 mpg for light trucks. A 36% increase results in efficiency levels of 37.5 mpg for cars and 30.3 mpg for light trucks by 2015. When considered alone without any other policies, the increase in CAFE standards would, according to the EIA:
Reduce petroleum consumption by 0.61 million barrels per day (2.5%) in 2015 and by 1.61 million barrels per day (5.8 percent) in 2025 from the reference case.
Lower the projected import share of petroleum products supplied falls from 62.4 percent to 61.6 percent in 2015 and from 68.4 percent to 67.1 percent in 2025.
Reduce CO2 emissions by 79 million metric tons (1.1%) in 2015 and 242 million metric tons (2.8% in 2025.
Result in an increase in the average price of new light-duty vehicles of about $1,400 in 2015 and $1,200 in 2025 (2003 dollars).
The entire NCEP policy package would cost the average American household about $78 annually through 2025, according to the analysis, while also addressing greenhouse gases linked to climate change.
In other committee activity yesterday, the House Resources Committee voted to allow oil companies to drill in ANWR. As noted here earlier (post), the EIA also calculated that in the mean case, oil production from ANWR would peak at around 870,000 barrels per day in 2024.
So, looked at another way, the 36% increase in fuel economy standards would reduce consumption by some 1.61 million barrels per day in 2025. Drilling in ANWR could produce 870,000 barrels per day by 2024.
Between the two, which policy approach seems to make more sense?
The submissions from the different House committees will roll up into the House’s final energy bill, to be considered soon. Whatever results from the House vote will still have to be reconciled with the different energy legislation in the Senate that is still being written. The Senate Energy and Natural Resources Committee is expected to vote on its chamber’s bill next month.
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