published Wednesday, June 15th, 2011

Race for high-mpg ratings

Gasoline prices have declined a bit from the nation’s $4 a gallon level, but they’re still high. And they’re still displacing consumer spending that would otherwise be boosting the general economy and job creation.

Which raises this question: Will Americans support a more stringent national vehicle mileage standard for the cars and trucks that will be produced after 2016, or do they think it’s still tenable — over the long term —to support the production of gas guzzlers with relatively low mileage ratings vs. inevitably more expensive gasoline?

The answer should be a no-brainer. The obvious call is for sharply higher gas mileage ratings.

It’s also wise for other reasons. One is the soaring rate of gas use globally (China’s the largest rising auto market and India is a rising competitor). The other is the soaring cost of finding and extracting oil from the world’s declining reserves.

Federal and state regulators, especially in the dozen states linked to California’s itch for very high mileage fleet standards, believe the EPA should require car makers to meet fleet standards of 47-to-62 mpg beginning in 2017.

Automakers don’t agree, but not because high mpg standards aren’t needed. Rather, they argue that consumers just won’t buy cars, SUVs and light trucks built to meet that criteria.

We wonder who they are speaking for — regular consumers, or their own selfish interests in their companies’ bottom line. In this debate, it’s usually the latter: profit margins are higher on bigger vehicles. The controversy is brewing because federal agencies have already begun seeking public comments on the higher standard for 2017 and beyond. So public sentiment will be a factor in the decision.

The decision-making process has been harmonized a bit since the current mpg standards were last revised. Just a few years ago, the last Bush administration’s EPA was contesting California’s claim that it had the right to set higher fuel efficiency standards than the EPA endorsed for mileage and carbon emissions. A dozen states joined California’s battle, the EPA finally agreed to let states have a say in those standards.

Car makers endorsed the state/federal compact for obvious reasons. A uniform national standard was in their interest for efficient manufacturing and market penetration goals. So now the mileage-standard squabble is between car-makers’ gas-guzzler profits vs. the EPA and its state allies.

Americans have everything to gain in setting higher mileage standards than the auto industry wants. Financial savings on fuel costs would be tremendous, for individuals and as a nation. Better fuel efficiency will whack our trade deficit, half of which now goes to buy foreign oil. It will reduce public health costs due to lower tailpipe emissions. And it will bolster our national security — and reduce our military burden of defending and protecting our oil interests abroad.

Besides, automakers are already investing heavily in all sorts of technologies that already meet the proposed higher standards. The German car-makers’ turbo-charged clean diesels, diesel and gasoline-electric hybrids, all-electric cars and natural gas-fueled cars, are all in the race for ultra-high-mileage ratings.

Detroit’s revived car makers cannot afford to resist the trend. They made that mistake before. Their best course would be to press the pedal to the metal for ultra-high mileage vehicles, the sooner the better for all.

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nucanuck said...

Yes, we need the higher milage cars, but that misses the bigger issue of fewer cars and a changed lifestyle that must inevitably come.

With the Chinese using 3 barrels of oil each and rising, with Americans using closer to 25 barrels each, with oil production very near the maximum possible, clearly something has to give. Odds strongly favor an involuntary sharply falling rate of oil consumption in the US in our near future.

The farther you live from work and play, the bigger the coming adjustment that will be required. America is about to go on an oil diet that will mean using less and less for years to come. Buying a hybrid won't be nearly enough.

Rapidly expanding energy consumption was a big factor in the productivity and growth that America experienced in the twentieth century. Conversely, falling energy consumption in the twenty- first century will almost certainly lead to reduced or even negative growth going forward.

The economic and societal health of the country depend on our ingenuity in making this transition as smooth as possible.

June 15, 2011 at 12:56 a.m.
nucanuck said...

L4F,

You simply don't have a grasp of the facts regarding what is possible with drilling and oil production. The French oil giant, Total, just released their independent study of ALL the world's oil resourses and what we should expect. You should read it.

Electric cars won't save us from the changes that are coming to your life soon. This isn't political, not even geo-political...this is the new reality.

June 15, 2011 at 12:48 p.m.
EaTn said...

Ever since the oil crunch in the '70's, the gas consumption per person is directly related to the price at the pump. Vehicles with good mpg become popular and forces down the price per gallon, then with cheap gas folks will go back to gas hogs with poor mpg which will raise the price, and the cycle goes on.

June 15, 2011 at 2:25 p.m.
nucanuck said...

EaTn,

"This time it's different" has become almost a laughable phrase, but this time supply and cost constraints certainly seem to indicate that our oil driven growth is in the process of being reversed...permanently. That's the life that my family is preparing for and we are having a fine time doing so. My point being that attitude is the biggest part the adjustment.

June 15, 2011 at 2:49 p.m.
nucanuck said...

L4F,

Peak Oil a myth? I guess that depends on your definition. Conventional oil flow rates have been on a plateau since 2006. Syncrude and biofuels have been growing and,yes, the world is a long way from out of oil, but affordable oil is another matter.

The link you provided was pretty much useless, unscientific blather...global elitest fantasy stuff. There is plenty of non-political information out there for those who want to learn. Energy will be the number one topic for America for many a year.

June 15, 2011 at 8:10 p.m.
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