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Pending Fuel Economy Bills Set Slower, Less Aggressive Goals

8 June 2007

Fuel_economy1
A projection of the effect of current fuel economy bills in Congress. President Bush’s State of the Union (SOTU) goals and California’s AB1493 are included as reference points. Individual car and truck targets for S.357 are projected from stated fleet goal. Click to enlarge.

Following President Bush’s State of the Union speech in January in which he called for a 4% annual increase in the fuel efficiency of cars and light trucks through 2017, lawmakers from both parties introduced legislation in both houses of Congress implementing that goal.

Those early “4%” initiatives have since been sidelined in favor of targets that are further away and less aggressive. There are currently three bills under development or that will be coming up for floor votes during the next several weeks: two in the Senate, and one in the House.

Under current CAFE (Corporate Average Fuel Economy) laws, the standard for passenger cars is holding steady at 27.5 mpg. The standard for light trucks increased in 2005 to 21 mpg from the previous 20.7 mpg, and will increase to an expected 24 mpg in 2011 under the new Reformed CAFE rule. Because Reformed CAFE establishes different goals for different automakers, it’s difficult to specify a precise average target. (Earlier post.)

The primary Senate bill that is emerging from the Committee on Commerce, Science, and Transportation incorporates S.357, originally sponsored by Senator Dianne Feinstein (D-CA). This bill calls for combined fleet (cars and light trucks) fuel economy of 35 mpg by 2020, with a 4% annual increase thereafter. The bill sets initial milestones for 2010 of 29.5 mpg for passenger cars and 23.5 mpg for light trucks—the latter being slightly less than the expected average for 2010 under Reformed CAFE. The bill also brings back the concept of the 4% annual increase after 2020.

Automakers have deemed this proposal unworkable, and are leaning toward a more lenient proposal being developed in the House by Representatives Rick Boucher (D-VA) and John Dingell (D-MI). This House proposal mirrors an alternative bill for the Senate being developed by Michigan’s two senators, Carl Levin (D-MI) and Debbie Stabenow (D-MI).

Under the Boucher/Dingell and Levin/Stabenow plans, cars and trucks would maintain two different fuel economy standards. The standard for cars would increase to 36 mpg by 2022; the standard for trucks would increase to 30 mpg by 2025.

The Boucher/Dingell bill also bars states from implementing greenhouse gas limits on vehicles. This would preclude California and the other states adopting California regulations from acquiring the waiver from the EPA required to implement the greenhouse gas limits on new vehicles established in AB1493. (Earlier post.)

AB1493 does not establish fuel economy standards per se, only limits on total greenhouse gas emissions from the vehicle. Using the EPA’s figures for average carbon dioxide emissions resulting from gasoline (8,788 grams per gallon), we can calculate the approximate impact AB1493 would have on fuel economy.

(Because gasoline and diesel have different carbon levels, the resulting fuel economy requirements to meet a specific carbon target will vary. In other words, a 250 g/mi limit on carbon dioxide results in required gasoline fuel economy of 35 mpg, and required diesel fuel economy of 40 mpg. Here we just approximate the gasoline fuel economy values.)

California divides its light-duty vehicles into two categories: passenger cars and small trucks and SUVs (PC/LDT1); and larger trucks and SUVs (LDT2), each with a different standard. Based on the greenhouse gas emissions targets in AB1493, fuel economy for PC/LDT1 would need to increase to 42.9 mpg by 2016, while fuel economy for the LDT2 would need to increase to 26.5 mpg by 2016. That produces a very approximate (gasoline) fleet average of 35 mpg—the same fleet target as S.357, but 4 years earlier.

A Senate floor debate on the Commerce Committee bill and the Levin/Stabenow alternative is due to start next week.

The House Energy and Air Quality subcommittee (Boucher is the Chair) will consider amendments to the Boucher/Dingell bill next week, and the full committee will debate and vote on the measure the week of June 18.

June 8, 2007 in Fuel Efficiency, Policy | Permalink | Comments (41) | TrackBack (0)

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3 of the 4 congress members proposing this are from michigan...suprise suprise

The difference between CA AB1493 trucks projection and Bush SOTU trucks may be due to different classification schemes. Even then, Bush SOTU car figures are not as aggressive as they can be vs CA AB1493, considering proposed 2010 and 2011 numbers are practically on top of one another.

Well DUH! they know no matter what they do the change will likely crash the state econ and state budget and perminently lose them gargantuan amounts of union political funds... so ya they would have a reason to be fighting it;/

I expect by this time next year there will be alot fewer uaw.

So the Auto companies get Rick Boucher, from south-west Virginia, who?, to sponsor their bill to cut off California and other states' attempts to increase fuel mileage over what our president agreed to. God bless him and I do hope the people of Virginia remember he was the one who did it; remember Ricky at the next election.

The auto companies could meet this standards if they spent the money on R & D instead of lobbyists, lawyers and PR ads.

I would like to see our citizens keep driving their present cars and not buy a new one until the auto companies address the fuel and GHG concerns.

Heck the "go-slow" approach. 40MPG by 2010!

This is a perfect example of why fuel taxes/carbon tax is a better approach to reducing CO2 emmisions.

I'll have to say from this graph it sort of jumps out that the CA proposal seems to leave a loophole early on for trucks. This may have the undesired effect of pushing people that would have otherwise bought sedans into the truck category.

I think any proposal should raise mileage on all categories by the same percentage.

While I don't think there is anything wrong with having CAFE standards, their impact will be too slow and take too long to have much impact given the size of the existing fleet. Regardless, the standard should apply across the board and not be segmented between SUVs and cars. If there is a separae standard for SUVs, there is very little incentive to try to encourage people to move away from SUV into more efficient cars.

Further, none of these proposals are sufficient to reduce energy consumption from automobiles in line with the necessary percentage carbon reductions.

In addition to or in liue of CAFE standards, feebates should be instituted whereby increasingly high fees are applied to cars that fail to meet a certain standard and rebates are provided to those who buy fuel efficient cars. Further, a similar system should be used for registration fees so that existing vehicles are covered.

Gas taxes should also be raised to discourage miles driven by existing vehicles. A floor of at least five dollars per gallon on gas should be maintained so that people will realize that high gas prices are not a temporary phenomenon.

Our politicians are just going through the motions and appear to have no intention of actually doing something that will truly address the problems of peak oil and global warming. By the time these standards have any significant impact, we will already be past the tipping point.

I really wish momentum could build to kill CAFE, and any other far-future, "the check is in the mail" improvement plan.

Either put immediate penalties on consumption, through gas taxes or vehicle feebate plans or simple guzzler taxes, or do not.

At least that is honest. On the other hand CAFE is nothing more than a promise by today's politicians that someone else will work in the problem, later.

The problem with gas taxes is that after a point they stop having the desired effect. Up here we pay over a dollar a litre, routinely. Just last night I payed Tom's $5 per gallon and it hasn't cause me to drive less. Why not? Well because I've already cut my driving down to the barest minimum - I did that back when I was only paying $2 per gallon.

ai_vin, here in the US our "fleet average" mpg is 22-23. The average new car is driven 15K miles per year. The average household miles driven is 21K miles.

Sorry to swamp you with numbers (a href="http://odograph.com/?p=451">link), but do you happen to know what your corresponding figures are? I would guess that you and your nation have adjusted, yes, but with better mileage and lower miles.

Tom, if you're looking for $5/g gas to be imposed, you undoubtedly are going to be quite disappointed. That's not due to lack of action by politicians, that's simply because a vast majority of the public would not go for it at this point. Even here in a liberal state, you would have to look long and hard to find a handful of supporters of that idea.

There would be many ripple effects in the economy as well... higher food prices, lots of lost tourism dollars, etc. That would mean lots of pressure from various business sectors against such an idea.

I would normally advocate for carbon taxes as a technology neutral, market channeling rather than market regulating scheme. But in the case of the USA I can't see enough political support for anything that's going to raise the price of gas (funny people will complain about the price of gas and then cheerfully spend even larger amounts on bottled water). Without a rise in the price of gas the only way I can see for the US to improve it's fleet mpg is with CAFE (as grossly flawed as it is).

We need 40 mpg CAFE pronto. China and Europe are pretty close to that today, and US car companies do profitable business in those geographies today.

Sure the existing fleet will be unchanged, but in 7-12 years, the high CAFE cars will be the existing fleet. Any other technique can not ensure the average is improved enough. Higher gas taxes only affect some drivers. Higher CAFE affects all drivers.

Of course, we can go further to reduce GHG. We can mandate that new cars be flex-biofuel-capable. It only costs a couple hundred dollars to make a car E85 compatible. Running on B80 is a cheap tweak, too. I'm not sure if running on biobutanol even requires tweaks. The point is, by mandating this, we create a huge market for biofuels, which hastens their market maturity and availability.

I'd also like to see a floor on oil prices of $70/barrel, (current price + N must be greater than or equal to $70, where N is a variable tax). I think the market forces will "miraculously" never let the price below $70 again, but either way, the price of oil will remain high enough to bring stability to the alternative energy market.

Higher CAFE will force a autocompanies to change their business model. Instead of pushing upgrade packages that have higher horsepower, they will have to push upgrade packages that emphasize other cool extras...or they will have to charge a lot more for the low mileage option to offset the penalties they will pay.

Rhapsody is pretty much right on target as far as the political environment is concerned, IMO. You won't find any price floors for oil or gas implemented, either. At those fixed levels you would see some heavy investment in alternative sources, but they would be for CO2-heavy things like CTL. You would also hamstring domestic oil producers that have higher production costs than, say, the Saudis, which wouldn't do a thing for energy security.

The best carbon tax would be revenue neutral for the government. Collect the tax and a per capita rebate. A carbon tax would not have to be an abupt tax as long as the consumer sees the tax on the horizon when he purchases a new car.

IMHO, new vehicle purchase is the consumer behavior easiest to modify (as opposed to using public tranport, walking, carpooling, cycling or moving closer to work.)

BillY et al: I concluded the carbon tax was a good idea about 2004.

People like the sound of revenue neutral. But fairness and complication is a sure way to get nothing right.

The carbon tax is intended to influence, not dictate, the millions of decisions people make about conservation, vehicle purchases, use of public transport, AC units, and just plain driving habits. Why should another tax payer benefit from that?

Of course, someone benefits from almost any tax paid by another. But it is a bad idea to make it too obvious.

Better that any carbon tax be passed pure - nothing said about where the money goes. But I feel that way about tax reductions and other matters too. Each bill should be single topic so people can see who pays, who benefits, and why.*

*Exactly why Congress doesn't pass bills that way. The immigration bill that just failed was roughly 600 pages. No one understood everything in it. But someone understood each thing in it; a favor here, a favor there, and pretty soon you get 600 pages.

At this point with the price of gas, does it really matter. The market is taking care of the miles per gallon. The cafe standards do need to be increase just for conservation and CO2.

Do you ever really wonder who is running this country?

No new taxes for the limosine liberals, hurts the poor the most.
China will soon pass us as the top polluter and will be the top auto market in about 3 yrs.
4% improvement annually prob isn't even achievable.

I think that you can go a lot farther changing buying patterns. If a large upfront fee was required and increased annual fees for large SUVs, it would increase mileage without laws and loopholes.

Yeah screw all this minor incremental improvement. Set up simple consumption "Polluter Pays" tax system. If you drive a Hummer, fine, you pay more in pollution taxes. If are willing to drive a Prius or Civic, you pay less. Let these idiots that consume and pollute more of their fair share go right ahead if they want to foot the bill. Rather than having those of us who actaully care about the environment have to carry those who don't. Put the tax at the pump on every gallon of gas sold and funnel that tax into the next generation of cleaner technologies. Would be really nice if our kids grow up on a planet that still has birds and bugs in the sky and fish in the sea. Thanks for your consideration.

Richard,
The National Academy of Sciences says 4% is achievable with off the shelf technology.

ChillPill,
Would that it were that simple. If you put in a polluter tax, but you don't mandate better fuel economy (or very low GHG/mile, which is the same thing), the car companies will try to use the existing platforms and assembly lines for as long as possible and just pass along the costs to wealthier or power-hungry consumers.

To be maximally effective your policy has to tie as tightly as possible to the behavior you are trying to change, with no real way around it. Aggressively raising CAFE does that.

K: I am with you -- revenue nuetral carbon tax makes the most sense. If a tax does not have a designated use (preferably returned to citizens) then 2 thins happen:
1) Congress will be unable to pass a tax increase, and
2) if passed, government will become dependent on the tax revenue and begin encouraging carbon emissions to maintain or increase revenue.

I with you guys on the goals, your means are less achievable than long shots. You want to tax poor people, or SUV drivers for your sense of greenness. Not going to happen. What ever you drive Prius, civic, Escape you are polluting big time too just not as much. Try getting off your high horse and propose something better than a 1 in 1,000 chance of passing.

ie. I'm investing in the NIHM batteries, soon next gen. come up with a product that compels people to buy instead of proposing to whip them into buying.

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