The Long Drive To Increase Fuel Efficiency and Reduce Greenhouse Gas Emissions

The TakeAway: The Obama Administration proposes to increase Corporate Average Fuel Economy (CAFE) standards—perhaps to 62 miles per gallon by 2025.

Despite Washington’s political gridlock, with cap and trade and climate change legislation on indefinite holds, late last week the Obama Administration took another giant step toward oil independence after decades of delay.  On Thursday, the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) issued a joint “Notice of Intent” and “Technical Assessment Report” to increase Corporate Average Fuel Economy (CAFE) standards and reduce greenhouse gas (GHG) emissions per standards contained in the Clean Air Act.  The proposals could more than double the fuel economy goals for cars and light trucks – from 27.5 miles per gallon since 1990, to as high as 62 mpg by 2025.

The joint Notice (now headed for publication in the Federal Register) paves the way toward future fuel economy and greenhouse gas (GHG) emissions regulations for light duty vehicles assembled for model year 2017 and beyond.  Final proposals for the new fuel economy regulations are scheduled to appear in mid-2011, with final rules issued in 2012.  (Separate gas mileage rules for heavy-duty trucks are expected in November.)

On Friday, governors from nine of the 14 states with cleaner car standards signed a letter to President Obama endorsing provisions of the joint Notice and urging a joint EPA/NHTSA (National Highway Traffic Safety Administration) standard of 60 mpg by 2025—a goal that many environmental advocacy groups also support.  This would greatly decrease transportation fuel costs and GHG emissions, while reducing dependence on foreign oil.  Among the economic multiplier effects for domestically produced fuel-efficient cars:  a reduction in the trade and balance of payments deficits due to vastly lowered imported oil costs.  In 2008, Americans spent over $1 billion a day on foreign oil, money that we could use here at home.  Indeed, this rulemaking could generate fifty percent savings, while pumping needed resources back into our economy and helping to reduce the national debt.

In response to the directive President Obama issued on May 21 of this year, the EPA and DOT hammered out a two-phase approach to increasing CAFE standards.  The first phase – based on an agreement reached in April between the federal government and domestic automakers – requires manufacturers to boost fuel efficiency to 35.5 miles per gallon by model year 2016.  The second phase, announced last week, covers model years 2017 through 2025.

First adopted in 1975 to fight the OPEC-triggered oil price shock of late 1973, CAFE standards provide the major means for improving average gas mileage for cars in the US (Europe and Japan have their own sets of rules, with higher standards).  Although proposals contained in the joint Notice won’t take effect for seven years, publishing them now enables public review and comment while providing automakers sufficient time to gear up and meet the new requirements.

The joint Notice states that the requirements incrementally increase fuel economy standards in the range of 3 to 6 percent per year between 2017 and 2025.  This translates into a fleet standard of between 47 to 62 mpg by 2025—a final determination made during the rulemaking phase.  Safe Climate Campaign founding director Dan Becker said a 6 percent per year goal is well within the auto industry’s reach, given the existing rules.  “This is auto mechanics, not rocket science,” he said. “They know how to do this.  They know how to do this in other countries.”

Public hearings for proposed fuel standards for new vehicles beginning with 2012 model year are slated for October 14^th, according to the EPA.  In addition, the agency proposes an updated auto labeling effort that will provide new information to consumers about the fuel economy and consumption, fuel costs, and environmental impacts (tailpipe emissions) associated with the operation of new cars and light-duty trucks.  The updated label also applies to advanced technology vehicles, including electric vehicles and plug-in hybrid electric vehicles, poised to enter the US market.

“In the past, government and industry were at odds,” the nine governors – representing New York, Maine, Maryland, Massachusetts, New Mexico, Oregon, Pennsylvania, Vermont, and Washington – wrote the President.  “But we are glad to say that the carmakers are supporting clean car standards because they know that Americans will increasingly demand these cleaner cars.  Today, there are fewer and fewer parties on the other side of this issue.”