President Obama, flanked by executives from major automobile manufacturers announced a new fuel economy standard today. The compromise took most observers by surprise. It wasn’t signed of on until late Thursday night.
The new standard will reduce average fuel economy for cars and trucks to 54.5 MPG by 2025. It is currently 27.3 MPG. Fuel economy is already scheduled to rise to 35.5 MPG by 2016. The new agreement will increase it 5% annually after that until 2025. Light trucks would be required to increase less 3.5% a year.
The American Council for an Energy-Efficient Economy, (ACEEE) pointed out, however, that actual mileage achieved by cars and light trucks in the 2020s will be much lower than the published CAFE standards, which are based on laboratory tests rather than real road performance. Nevertheless, it will be far better than the current situation.
This is a first for the industry to willingly accept higher fuel standards. “We share the administration’s goal of achieving major advances in clean, fuel-efficient vehicles,” said Jim Lentz of Toyota. “Obviously, there is still a great deal of uncertainty as to how the market will respond and what vehicle technologies consumers will embrace, which is why we are rolling out and testing a range of alternative fuel options.”
The White House said the new rules have won the backing of automakers representing 90 percent of vehicles sold in the United States.
More fuel efficient vehicles will reduce demand for Middle Eastern Oil, reduce pollution
While the world was watching the debt ceiling debate, Obama and the auto manufacturers were putting together this deal which will reduce our dependence on imported oil. According to MSNBC.com, the transportation program director for ACEEE, Theresa Langer said “This is a major step in reducing our oil dependence and consumers’ vulnerability to high gasoline costs. By 2030, this round of standards could save more oil than we currently import from Saudi Arabia and Iraq, combined.”
When fully implemented and the old fleet is retired by 2030, the new fuel efficient vehicles will guzzle about half the gasoline as today’s fleet. This is equal the amount of oil we import from the Middle East. This, along with accelerated domestic drilling now underway and renewable energy initiatives for bio fuels, solar, and wind, we could become nearly independent of foreign oil in 15 years. This would be a boost to our balance of trades and to our economy. It will also take pressure off gas prices which have hurt consumers and the economy. Oil companies are not smiling.
It will also reduce the greenhouse gas emitting hydrocarbons by 50% as well. This will go a long way toward helping the U.S. do its share in reducing greenhouse gases that cause climate change. Our economy has lost billions of dollars this year alone from floods, fires, and tornados caused in part by climate change.
The President estimated that this standard will save the owner of a car an average of $8,000 over the lifetime of the vehicle. This will more than off set the extra cost the fuel efficiency will add to the vehicle. There will be new American jobs created to design and build the parts and technology required to reach this efficiency.
The White House figures are based on gas prices rising a modest 13 percent from 2015 to 2025 and vehicles being driven an average 15,000 a year. Of course, if cars are driven more than 15,000 miles a year, or if gasoline rises more than 13%, the savings would also be greater. Gasoline has risen over 50% in the last year for example.
The announced standards can still be messed with during the rule making process. Oil companies and those who stand to lose the money consumers save could try and force changes. A notice of proposed rulemaking will be published by the end of September, opening up a public comment period, federal officials said. After that, they will become final.
As with the energy efficient light bulbs and the tough greenhouse gas standards enacted by California and other states, the GOP controlled Congress may try and legislate these new standards out of existence. The oil companies bought the GOP members of Congress and many of the Democrats, so they are always available to do big oil’s bidding. But for now, it is a consumer victory.
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