New fuel economy rules spark debate

The Obama administration’s first stab at raising mileage standards for cars and light trucks is getting mixed reviews today.

The Department of Transportation set the combined fuel economy standard for the 2011 model year at 27.3 miles per gallon. That would be an increase of two miles per gallon from the 2010 industry average for cars and light trucks, which include pickups and sport utility vehicles, according to the government. (Read the 857-page rule here.)

It’s the first step toward implementing a 2007 law aimed at raising the Corporate Average Fuel Economy standard, or CAFE, to 35 miles per gallon by the 2020 model year. It was the first increase in CAFE standards for cars since the mid-1980s.

Much of the debate over the new CAFE requirements is focused on whether California will be allowed to impose its own emissions standards on the automakers — which have the effect of creating de facto mileage standards that could prove tougher to meet than the ones coming out of Washington.

Under the Bush administration, the Environmental Protection Agency denied California its long-held option to set its own, tougher air pollution targets independent of federal regulators. The Golden State rules had already been adopted by some other states, creating what auto companies have long complained is a patchwork quilt of state and federal regulations.

With Barack Obama now in office, the EPA is moving toward restoring California’s regulatory authority in the matter, and both sides are mining the new CAFE rules for evidence to support their respective positions on the California rules.

The Alliance of Automobile Manufacturers, which represents GM, Toyota and most of the other big carmakers, called the 2011 standard “an important first step” but appealed to the federal government to provide “certainty and consistency” when it issues CAFE standards for future model years.

“We are hopeful that the Obama Administration can find ways to bridge state and federal concerns, and move all stakeholders toward an aggressive, national, fuel economy/greenhouse gas emissions program administered by the federal government,” AAM President David McCurdy said in a statement.

Translation: Please keep California off our backs.

The Union of Concerned Scientists, meanwhile, characterized the new CAFE rules as a “slight jump” from current levels and said they “should have been higher,” although the group noted approvingly the Obama administration’s moves to restore California’s ability to set its own standards.

The UCS blamed the Bush administration for setting in place “flawed methodology and data” that hamstrung regulators in setting the new standards.

“The Obama administration did damage control on the flawed approach by limiting its reach to just one model year,” Eli Hopson, who represents the UCS in Washington on clean-vehicle issues, said in a statement.

The National Automobile Dealers Assn. noted that the new federal standards are actually tougher than California’s and said that “removed the last argument for state-by-state regulation of fuel economy.”

That view is based only on the initial increase announced today, however. By the time the federal law is fully implemented in 2020, the fuel economy benchmark will be less stringent than what California is currently contemplating.

The initial increase also isn’t as aggressive as the 27.8-mpg goal proposed by then-President Bush a year ago.

“The increase in fuel economy standards announced today are a small step but definitely a step toward reducing global warming, air pollution, and petroleum dependence,” said Tim Carmichael, senior director of policy for the Coalition for Clean Air in Sacramento.

“After 25 years of inaction we definitely appreciate the increase, but we must require much better fuel economy from the auto industry soon.”

According to Environmental Protection Agency figures, none of the Big Three U.S. automakers currently meets the 2011 combined car-truck CAFE standard of 27.3 mpg. Toyota, Honda and Nissan already exceed the 2011 standard, as do most other Japanese automakers, Germany’s Volkswagen and Hyundai and Kia of Korea.

-- Martin Zimmerman

Photo: Gas prices in San Francisco. Credit: Justin Sullivan / Getty Images

Comments

[RichK]

In an article that concerns corporate average fuel economy (CAFE), I think it is important to point out those manufacturers who do not meet even TODAY's CAFE requirements, let alone those in 2011. The following manufacturers refuse to meet U.S. CAFE requirements and pay fines:

Volkswagen/Audi
Daimer
BMW
Jaguar
Land Rover
Porsche
and all the exotics (Ferrari, Lamborghini, Maserati, Lotus)

Maybe the government should consider increasing the fine structure.

[Jerry Rioux]

I agree that it would be too confusing for the auto execs to comply with two different standards. The California standards should apply to the whole country. That would solve the problem!

[Tom Tanton]

First of all, allowing CA tro impose their own standard will result in 50+ standards--not two. Remember this is a "fleet average" and each state has its own mix. Second, increaseing the efficiency through mandates like this seldom if ever result in actual reductions in fuel use--see W. Stanley Jevon's paradox---or comments in 2008 from Chair of IPCC wrt the India "nano" car.

[Alan Reynolds]

Rich K complains that many European carmakers "refuse to meet U.S. CAFE requirements and pay the fines." This is particularly true of those like Jaguar who have no subcompacts to reduce their "average" miles-per-gallon. BMW now has the Mini and Mercedes the Smart car, however. And BMW did meet the CAFE requirements last year.

The Detroit 3 don't meet the standards either, but they get bogus credits for making "flexible fuel" versions of the biggest SUVs and trucks. And, of course, the standards are much tougher on cars than SUVs, and the gas guzzler tax applies only to cars (which is absurd).

How can the government possibly fine GM and Chrysler when they fail to meet the new CAFE rules? They'd have to run to the government for subsidies to pay the fines!

CAFE standards have zero effect on what cars and trucks we choose to buy. They only affect which companies will be allowed to sell bigger and faster vehicles -- namely companies like Toyota and Hyundai that also have success in selling smaller and slower vehicles.

This policy dooms GM and Chrysler, since they can't produce competitive mini-cars on U.S. soil. And small cars and SUVs accounted for fewer than 20% of the U.S. cars and trucks sold so far this year.