Washington's Dysfunctional Fuel-Economy Surge

http://magazine.windingroad.com/windingroad/200710web/?folio=18

Quick—of the automakers in America, which has the better passenger-car fuel economy: General Motors or Nissan? Yes, it’s a trick question, because the answer is GM. In 2004, the last year for which final unadjusted fleet-average figures were published, GM’s cars gave 29.3 miles per gallon against Nissan’s 27.9 mpg. Subsequent provisional figures show Nissan edging ahead and both doing well, with their domestic fleets averaging around 30 mpg.

So, you might ask, why all the excitement about the Senate’s energy bill passed on June 21? The one that requires vehicle fleets to average 35 mpg by 2020? The one that has the industry up in arms, saying that the standard would be impossible to meet? They don’t seem all that far away.

In 2006 the domestic passenger-car industry as a whole averaged 30.0 mpg, against a mandated Corporate Average Fuel Economy standard of 27.5 mpg. They’ve made a big improvement from 28.0 mpg back in 1999. How hard could it be to get to 35 mpg in thirteen years?

Well, pretty hard, actually—unless you look for the easy ways.

For one thing the Senate, in its wisdom, set its proposed standard to cover the combined average of all light- and medium-duty vehicles weighing up to 10,000 pounds, not just cars. That’s the new upper weight limit of the CAFE rules for light trucks that were promulgated in 2006 to take effect in 2011. Now at 22.2 mpg with the fleet averaging exactly that figure last year, the truck standard will incrementally intensify to 22.5 mpg in 2008, 23.1 mpg in 2009, 23.5 mpg in 2010, and an estimated 24.0 mpg in 2011. With trucks included, observers say that the Senate bill demands a 40 percent increase in miles per gallon.

Sounds like a lot. And further improvements of 4 percent a year are mandated to follow.

Though they might be swept aside by the Senate measure, the new truck CAFE standards are worth a mention. They assign each class of vehicle an economy target in relation to its “footprint,” the ground area it occupies. Requiring all vehicles to show improvements, this means that a maker can’t meet the standard just by packing its fleet with light and flimsy pickups.

The new rules will also sweep up some of the crossover cheaters that the industry loves. Did you know the Chrysler PT Cruiser was classed as a truck? The Chrysler Pacifica, Dodge Magnum, Volvo XC70, Saturn Vue, and Subaru Outback? Letting these in as trucks means that makers can sell more ginormous, gas-guzzling sport-utility vehicles while staying within their truck-CAFE limits.

The people who make these rules have been asking since 2002 to be allowed by Congress to revise the thirty-year-old CAFE guidelines for cars so they will spread fuel-saving technologies across a maker’s ranges from the big to the small. Recommended in a major study by the National Academy of Sciences released in 2002, this policy has been implemented in the new truck rules by the Department of Transportation’s National Highway Traffic Safety Administration, which has the thankless task of administering CAFE.

I say “thankless” because fuel economy has nothing to do with NHTSA’s important and central mission of improving the safety of our vehicles. One might think that responsibility could rest with the Environmental Protection Agency, which in fact generates all the fuel-economy data that NHTSA then analyzes and administers. Or it could be lodged with the Department of Energy, which surely runs point in America’s fitful efforts to reduce its fatal dependency on imported oil.

Stuck as it is with the job, NHTSA has been manfully struggling to cope with the new environment in spite of Congress’s reluctance to allow it to modernize the CAFE rules. In fact NHTSA’s hands were tied from 1996 to 2001 by a mandated freeze on any changes at all in auto CAFE. Now of course the buzzwords are “global warming” and “greenhouse-gas reduction.” Fortunately, lower fuel consumption in vehicles translates directly into less greenhouse-gas emission.

Activity at NHTSA was energized both by George W. Bush’s State of the Union speech, which called for 34 mpg by 2017, and by 2005’s Energy Policy Act. Its Section 773 called on NHTSA to get busy on ways to reduce automobile fuel consumption by 2014, be they rule-driven or market-driven or both. In cooperation with four other alphabet-soup arms of the U.S. government, NHTSA has launched a study of these options and opportunities that is to be completed early next year.

The study is ambitious, to put it mildly. It has the aim of forecasting the “economic, environmental, safety, and energy-saving effects” of a wide range of fuel consumption-reducing strategies to 2025. Drones at auto companies have spent thousands of man-hours completing the spreadsheets of a questionnaire NHTSA launched last February that asks for excruciatingly specific detail on all product plans to 2017, including costs, prices, and forecast volumes. This is easily five years longer than any sensible car company has made firm future plans, so they will have made up lots of it.

With NHTSA and its Beltway colleagues beavering away on this study, will they have any opportunity to put their conclusions to work? Won’t the heavy-handed Senate bill preempt their worthy efforts? That’s the sixty-four-billion-dollar question. First the House of Representatives has to have its say. There, Michigan Democrat John Dingell is chairman of its Committee on Energy and Commerce, which will contribute a lot to the shape of the final measure.

Dingell has been Detroit’s man in Washington for a fantastic fifty years. He has been on his home industry’s side through all the safety, emissions, and energy wars. But until the Democrats took over both Houses in 2006, he had been out of power for twelve years. Dingell showed that he was out of step with the Senate when he said, last March, that, “We have carried fuel efficiency about as far as we can.” The senior House put the lie to that assertion with its draconian fuel-economy amendment to the energy bill, which it passed by sixty-five votes to twenty-seven.

In the House of Representatives, a bipartisan bill has been introduced that would demand 32 to 35 mpg by 2022, discriminating among vehicle types and sizes in the manner recommended by the National Academy of Sciences and NHTSA. Dingell is moving cautiously in response, bowing to the aggressive pace of House leader Nancy Pelosi. The Representatives are thought likely to wait until autumn to take further action on their version of the energy bill.

In the meantime, the auto industry gains some solace from the “off ramps” that the Senate bill provides. They allow the administrator to relax the rules in the event that either the costs, the technologies, or both are seen as too extreme. Quite rightly, some legislators are not too keen on the off ramps, however, so they may not survive in the final measure.

Earlier I mentioned the easy ways to transform the fleet toward lower fuel consumption. The one that no one has mentioned in this debate—that would have the most compelling impact on customer choice and lower fuel consumption—is a massive increase in the gasoline tax to bring pump prices more in line with those in the rest of the developed world. One dollar is too little and two dollars are probably too much; a buck fifty would be about right. That would raise the cost of a gallon close to the five-dollar level, enough to make people think seriously about fuel economy in their next vehicle purchase.

The other “easy” measure, one that would bring vast reductions in fuel use and CO2 emissions, is wholesale adoption of diesel engines. According to the National Academy of Sciences study, the potential range of improvement by dieselization is 15 to 40 percent. In fact, it’s the only mature technology that offers double-digit cuts in fuel consumption. The emissions problems of diesels have to be solved—as they can be. As the Partnership for a New Generation of Vehicles concluded, diesel engines are the way to go.

A final important step would be the adoption of a fuel-consumption measure on the European model. They use liters per 100 kilometers to give a direct measure of the volume of fuel consumed for the distance traveled. For America, the best parameter would be gallons per 1000 miles, or gptm. For example, 25 mpg would be 40 gptm and 40 mpg would be 25 gptm.

Why is this important? Because the so-called improvements in miles-per-gallon terms are illusory. Let’s take the Senate bill. In mandating a move from 25 to 35 mpg, it’s headlining a 40 percent improvement. In terms of gallons per 1000 miles, however, the move is from 40.0 to 28.6—a reduction in consumption of 28.5 percent. If we don’t work with a measure that gives a direct index of the amount of fuel used, we’ll be kidding ourselves. But then we do that a lot.

Magazine Issue: Winding Road Issue 25

Comments

Anonymous

Most cars could increase their mileage by 10% if they were Manual Transmissions!

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