Obama Orders Stricter Fuel Goals

[Mustard182]

Its about damn time.

WASHINGTON -- The Obama administration plans to order auto makers to increase the fuel economy of automobiles sold in the U.S. to 35.5 miles per gallon by 2016, four years faster than current federal law requires, people familiar with the matter said.

The move, part of a broader overhaul of fuel-economy rules aimed at cutting greenhouse-gas emissions, would accelerate the largest government-mandated transformation of vehicles on the American road since the late 1970s and early 1980s, when the first federal fuel-economy standards took effect.

A senior administration official said late Monday that the regulations would save 1.8 billion barrels of oil and reduce emissions of greenhouse gases by 900 million metric tons over the lifetime of the more efficient vehicles, equivalent to taking 177 million cars off the road or shutting down 194 coal-fired power plants.

By 2016, if the new rules take effect as planned, 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.

Plans to speed up tougher mileage requirements for autos sold in the U.S. should increase sales of gas-sipping cars, such as Toyota's Prius hybrid.

In practice, the new mileage rules would mean that seven years from now many more cars for sale in the U.S. would be gas-electric hybrids or subcompacts, such as the Honda Motor Co. Fit, outfitted with fuel-stingy engines. A truck capable of averaging 30 miles per gallon probably would be equipped with a gas-electric hybrid or a diesel engine. Even trucks the size of today's Ford Motor Co. Escape do not deliver that fuel economy.

The technology required to make the cars and trucks able to meet the proposed standard could add $1,300 to the average cost of making a vehicle -- a significant share of the money Detroit's auto makers are trying to save by slashing their union retiree health care costs.

Disclosure of the agreement is expected Tuesday, with executives from several large auto companies, including General Motors Corp. Chief Executive Frederick "Fritz" Henderson, as well as United Auto Workers President Ron Gettelfinger, expected to participate, people familiar with the matter said.




Auto makers tentatively have agreed to drop litigation challenging the legality of state-level curbs on tailpipe greenhouse-gas emissions, people familiar with the matter said. They appear ready to support the more aggressive timetable in exchange for the certainty of a single national fuel-economy standard, instead of a jumble of federal and state standards. The state of California also will agree to accept the proposed federal standards.

But regulatory certainty by itself doesn't bring market acceptance or technology breakthroughs. Among the risks that auto makers and dealers face is the need to produce and maintain a highly efficient fleet of hybrids, electric cars and advanced gasoline engines at prices that customers can afford.

Auto makers on Monday said they were awaiting more information on how the new standards would be applied and what assistance they may receive to meet the tighter timeline. In the past, for instance, auto makers received credits toward meeting fuel-efficiency standards even when the average efficiency of their vehicles fell short.

"If gasoline is cheap, there's going to be a huge disconnect" between the vehicles available and what consumers will want, argues AutoNation Inc. Chief Executive Mike Jackson. He has long advocated a higher federal gasoline tax to ensure that gas prices stay above $4 a gallon, the level that drove demand for small cars last summer.

Currently, the federal gas tax is 18.4 cents a gallon for gasoline and 24.4 cents per gallon of diesel. President Barack Obama has said he isn't interested in raising fuel taxes, and the senior administration official said Monday that the administration is confident that auto makers will be able to continue to offer and sell a wide range of vehicle types without having to rely on government incentives such as tax credits.

The decline in gas prices from last summer's record highs has revived demand for large sport-utility vehicles. In April, such vehicles accounted for 4.4% of all vehicles sold in the U.S., compared with 3.8% in April 2008, when fuel prices were higher. Meanwhile, compact cars -- which accounted for 22% of all vehicles sold in the U.S. in May 2008 -- made up just 16.8% of new vehicles sold last month.

"With this type of volatility, you can't effectively plan your product lineup for the next several years and hope to make money as an auto maker," said Jesse Toprak, executive director of industry analysis for Edmunds.com, a Web site that tracks auto sales. "If the government wants to be realistic, it has to come up with incentives for people to buy fuel-efficient vehicles."
Complicating matters for the administration are the financial struggles of Chrysler LLC, which is now receiving government funding under bankruptcy-court protection, and GM, which has said it could file for Chapter 11 bankruptcy at the end of May.

The costs of meeting the new standard would be high. The Transportation Department last year estimated that requiring auto makers to achieve 31.6 mpg by 2015 would cost the industry $46.7 billion, among the most expensive rule makings in U.S. history.

Dave McCurdy, president of the Alliance of Automobile Manufacturers, said on Monday, "Unless there's a huge spike in the price of gasoline...there will have to be incentives from the government" to encourage consumers to buy advanced-technology vehicles at prices that will return a profit to manufacturers.

The Obama administration's action accelerates a drive to dramatically change the size, shape and fuel consumption of American cars and trucks that started gathering steam in the final year of the Bush administration. President George W. Bush signed an energy bill in December 2007 that called for the first significant increase in passenger-car fuel economy in more than two decades.

Under the plan being considered, the Environmental Protection Agency and the Department of Transportation would work together on the rules raising fuel-economy standards and reducing greenhouse-gas emissions. It is unclear how quickly the EPA and the National Highway Traffic Safety Administration will be able to make a formal proposal for curbing emissions and boosting fuel economy.

[Chris325/325i]

the only way for carmakers to meet these standard is to make smaller, lighter and deadlier cars.

The National Academy of Sciences has linked mileage standards with about 2,000 deaths per year. The National Highway Traffic Safety Administration estimates that every 100-pound reduction in the weight of small cars increases annual traffic fatalities by as much as 715.

CAFE Obama: Proposed mileage standards would kill more Americans than Iraq War Green Hell Blog

[Rob Confidential]

"If gasoline is cheap, there's going to be a huge disconnect" between the vehicles available and what consumers will want, argues AutoNation Inc. Chief Executive Mike Jackson. He has long advocated a higher federal gasoline tax to ensure that gas prices stay above $4 a gallon, the level that drove demand for small cars last summer.

This...

Mandating fuel economy doesn't change consumer spending habits.

[Chris325/325i]

Yep exactly. The only way to do it is raise gas taxes, but nobody wants to touch that.

Mandating higher MPG will backfire, since you are reducing the cost of driving. The true saving will be around 75% of what they are predicting, at the cost of more lives lost in crashes (What happened to "No Blood for Oil?"). This could also be the last nail in the US carmakers' coffin, I think the Japanese are better at producing inexpensive high-mileage cars than the US.

[thedude]

Also lets put more pressure on auto makers who are already struggling to spend more money to design these new cars now.

[Chris325/325i]

Jeremy Clarkson on the new Honda Insight hybrid:

It’s terrible. Biblically terrible. Possibly the worst new car money can buy. It’s the first car I’ve ever considered crashing into a tree, on purpose, so I didn’t have to drive it any more.

Normally, Hondas feel as though they have been screwed together by eye surgeons. This one, however, feels as if it’s been made from steel so thin, you could read through it. And the seats, finished in pleblon, are designed specifically, it seems, to ruin your skeleton. This is hairy-shirted eco-ism at its very worst.

Jeremy Clarkson Honda Insight 1.3 IMA SE Hybrid review | Driving - Times Online

[sickmint79]

taxing oil destined to go into car fuel so that it essential creates a price floor of $100 a barrel seems ideal to me. as i ultimately think we will hit "cheap peak oil" and alternatives seem like they will be more environmentally friendly and this will track us towards energy independence and leaders in alt fuels. basically i think taxing oil to $100 = tolerable and brilliant, whereas federal mpg mandates are crappy and corn based ethanol mandates are ridiculous.

[Timmahhh]

I agree on taxing the gas instead of mandating fuel economy. Gas guzzlers will still be available, and probably still exempt from these rules if they are over a certain weight. If they are going to be driven, they would still have to pay for pricier fuel. Even with a fuel economy mandate, there will be vehicles available offering less than 35 mpg, just as there are cars under 28 and trucks under 23 now (are those really the current averages? It sure doesn't seem like it.)

[Mustard182]

Originally Posted by Chris325/325i

CAFE Obama: Proposed mileage standards would kill more Americans than Iraq War Green Hell Blog

Good thing air pollution doesn't cause lung cancer.

There is also the whole idea (fact?) that the Iraq war is because of oil. Terrorism in general is due to the generous funds from oil coming out of Saudi Arabia. When the price of oil collapses, so do oil producing countries. What do you think doomed Russia in the cold war? The same thing can happen to the middle east right now. I bet that us using less oil for the last 20 years would really have an impact on the number of American soldiers dying in Iraq today.

Originally Posted by thedude60126

Also lets put more pressure on auto makers who are already struggling to spend more money to design these new cars now.

The US auto industry can do this. US, Japan, and European manufacturers each had midsize cars with over 25 mpg in the 1980s. Regan dropped mpg standards in the 80s and that got us to where we are today. Honestly though, whats wrong with innovation? We are bailing out the auto industry anyway, why not get some real change in return.

Originally Posted by sickmint79

taxing oil destined to go into car fuel so that it essential creates a price floor of $100 a barrel seems ideal to me. as i ultimately think we will hit "cheap peak oil" and alternatives seem like they will be more environmentally friendly and this will track us towards energy independence and leaders in alt fuels. basically i think taxing oil to $100 = tolerable and brilliant, whereas federal mpg mandates are crappy and corn based ethanol mandates are ridiculous.

I hope Obama does implement a pigovian tax or at least a floor on oil prices. $100 sounds good to me.

[tannad]

Originally Posted by Mustard182

The US auto industry can do this. US, Japan, and European manufacturers each had midsize cars with over 25 mpg in the 1980s. Regan dropped mpg standards in the 80s and that got us to where we are today. Honestly though, whats wrong with innovation? We are bailing out the auto industry anyway, why not get some real change in return.

There is a price to pay for smaller cars. Smaller cars = shorter commutes which means end of suburban sprawl. The housing market and land development will pay for this. As we move closer to electric cars, is ComEd and other energy providers prepared to meet this level of consumption? Will supermarkets have plug in receptacles in the parking-lot? How are we planning on meeting this need? A bunch of windmills all over Chicagoland?

[Mustard182]

Originally Posted by tannad

There is a price to pay for smaller cars. Smaller cars = shorter commutes which means end of suburban sprawl. The housing market and land development will pay for this. As we move closer to electric cars, is ComEd and other energy providers prepared to meet this level of consumption? Will supermarkets have plug in receptacles in the parking-lot? How are we planning on meeting this need? A bunch of windmills all over Chicagoland?

I think the most obvious answer is to unify the US electrical grid. There are thousands of independent companies running varying sizes of the grid. Each electrical company builds for robustness even though they are generally running on less than 50% usage. If the grid was unified and a person from LA could get power from solar panels in Arizona or wind mills in Iowa, then our national consumption problem can be solved. I realize how much work and time that this would take, but it is not out of the question. This could be done in 15 years.

If there is demand for electric cars, companies will find ways to profit on battery recharging. I really don't think that it would be a big problem. What company wouldn't want to add a low maintenance revenue stream that increases foot traffic?

From what I have read, most energy companies do not heavily invest in renewable energy because they have no idea where the price of energy like oil will be in 3 months. If the government were to put a floor in on oil, at say $100 a barrel, then it would be easier for a CEO to invest the next 15 years worth of revenue for a renewable energy project because they know that oil is no longer cost effective. But with uncertain oil prices, there is no economic benefit to make long term investments. Hopefully once oil tops $100 a barrel again, Obama will put in a floor.

[tannad]

....or we could stop with the romantic notion that harnessing the power from water, winds and the sun would be enough to sustain our energy needs and start building more nuclear power plants.

Add another 15 years to your energy grid consolidation plan to account for budgets and politics.

There still is a disconnect between the availability of electric cars and the methods to refuel (recharge) them. I don't see a plan for that.

Plus Obama wants to create high speed rails so we can be like Europe. How do we plan on powering that? How is that cheaper than flying?

[Mustard182]

Originally Posted by tannad

....or we could stop with the romantic notion that harnessing the power from water, winds and the sun would be enough to sustain our energy needs and start building more nuclear power plants.

Add another 15 years to your energy grid consolidation plan to account for budgets and politics.

There still is a disconnect between the availability of electric cars and the methods to refuel (recharge) them. I don't see a plan for that.

Plus Obama wants to create high speed rails so we can be like Europe. How do we plan on powering that? How is that cheaper than flying?

I agree that solar and wind power is not the long term solution. Unfortunately in this country no one wants nuclear power plants in their backyard. The 30+ requests currently going through the government are mostly next to existing plants or in the same county. These plants will also take time to be built after the politicians spend years reviewing the proposals. I don't think that we will become France as far as nuclear power dependence goes. We have much more power demand that they do. Solar and wind power will help meet some of that demand while we phase out coal plants and bring in nuclear power plants.

I am sure that once the engineers perfect electric batteries, they will also find a way to recharge them. IIRC the GM Volt only has a 40 mile electric battery. The government needs to put time and money into developing the technology.

High speed rails are kind of stupid to me. I don't have a problem with the idea, but I think the money needed to actually mimic Europe would be much better spent trying to innovate renewable technology in other areas. The Eurostar is pretty sweet though.

Moving into renewable energy will no doubt be a long process, but we have to start sometime and I think that yesterday was that beginning.

[bosstones]

The problem with high capacity batteries (at least the ones I'm familiar with) is that they are EXPENSIVE and often contain hazardous materials. As such, when a battery is replaced, a dealer or waste disposal company cannot simply throw away the battery. Aside from that, they generally degrade over time thereby increasing the cost of ownership (when they do require replacement) and are also prone to environmental effects.

[Tuna]

bout time