US Representatives Edward J. Markey (D-MA) and Todd Russell Platts (R-PA) introduced a bill, the “Accuracy in Fuel Economy Standards Act,” requiring the Department of Transportation to use “realistic and rational” gas price assumptions as it calculates the maximum feasible fuel economy standards for the coming years as required by the energy bill (EISA 2007) passed by Congress last year.
Last December, Congress passed the Energy Independence and Security Act of 2007 (EISA 2007), which contained the first mandated increase in fuel economy standards since 1975. The new law directs the National Highway Traffic Safety Administration (NHTSA) to raise fuel economy standards for both cars and light trucks to a fleet wide average of at least 35 miles per gallon in 2020, starting with model year 2011 vehicles. In each model year, NHTSA is additionally directed to require the maximum feasible fuel economy increase, even if the maximum feasible increases result in the 35 mpg standard being met earlier than 2020.
In April, NHTSA issued proposed fuel economy standards for model years 2011-15 which are projected to result in a projected fleetwide average of 31.6 mpg. (Earlier post.) However, NHTSA used EIA’s 2008 forecast for gasoline prices that range from $2.42/gallon in 2016 to $2.51/gallon in 2030.
The two Representatives say that NHTSA’s reliance on unrealistic projections have the effect of artificially lowering the calculated maximum feasible fuel economy standards. If NHTSA used the Energy Information Administration’s (EIA) higher gasoline price scenario range of $3.14/gallon in 2016 to $3.74/gallon in 2030, its own analysis showed that technology is available to cost-effectively achieve a much higher fleet-wide fuel economy of nearly 35 mpg in 2015.
On 11 June 2008, EIA Administrator Guy Caruso testified before the Select Committee and agreed that NHTSA should use EIA’s higher gas price scenario in setting fuel economy standards.