UCS Says Auto Industry Backing Away From CAFE Commitments

Jul 2: the Union of Concerned Scientists (UCS) charge that the auto industry comments submitted yesterday asking the Bush administration to weaken fuel economy standards below levels the industry previously acknowledged it could meet are "a brazen attempt to undermine the intent of the law passed by Congress late last year." The comments were submitted to the National Highway Traffic Safety Administration (NHTSA) by the industry's main trade group, the Alliance of Automobile Manufacturers (AAM). UCS and many other organizations and states also submitted comments to the agency, urging it to strengthen standards.

Jim Kliesch, a UCS senior engineer said, "Americans are paying more than four dollars for a gallon for gas and the auto industry wants to produce more gas guzzlers. That would not only hurt consumers, it would devastate auto dealers. Dealers can't even give away gas guzzlers in a world of high gas prices. Regulators need to reject the auto industry's scare tactics and pass stronger standards based on realistic assumptions about how much better fuel economy will benefit consumers." In its comments to NHTSA, UCS noted that the agency is basing its calculations on a gas price that falls about $1.50 short of current prices. One of UCS's objections to the NHTSA draft rule is that is uses an extremely low estimate for the cost of gas, approximately $2.50 a gallon or less between 2011 and 2030 (in 2007 dollars).

UCS says that last year, the Alliance launched a "disinformation campaign" in an unsuccessful attempt to blunt Congressional support for better fuel economy standards. The Alliance's recent comments repeated many of that campaign's economic scare tactics, Kliesch said, despite the fact that the industry eventually agreed to the standards passed by Congress.

UCS cites for example, a December 1, 2007, statement, from Alliance President Dave McCurdy called the fuel economy bill "realistic and reasonable." He also said, "We believe this tough, national fuel economy bill will be good for both consumers and energy security. We support its passage."

According to UCS calculations, achieving just the minimum 35 miles-per-gallon (mpg) fleet-wide average by 2020 would bolster the auto industry and the economy. The standards would cut oil use by 1.1 million barrels a day. For consumers, that is akin to cutting the cost of gasoline at today's prices by more than a dollar per gallon. Rather than boosting oil industry profits, drivers would spend those fuel savings locally, strengthening local economies. Kliesch said further that producing fuel-efficient technologies and vehicles would generate green, domestic jobs. According to a UCS analysis, achieving a 35-mpg fleet-wide average would create 149,000 new jobs nationwide in 2020.

According to a recent UCS report, NHTSA could set cost-effective fleet average fuel economy standards approaching 40 mpg by 2020, a target achievable even without hybrid technology. With a modest 25 percent hybrid market share in 2020, a fleet average fuel economy of 42 mpg could be achieved, while increased sales of fuel-efficient hybrids could push the average even higher.

Specifically the Alliance said in part, that "The technology analyses used by NHTSA understate the costs and overestimate the benefits associated with the proposed standards. Materials provided by the Alliance raise issues about the net benefits of the proposed standards and in fact indicate that they may create net social costs. NHTSA’s proposed standards exceed the statutory “maximum feasible” criterion, especially for the earlier years of the five year period. The pace of technological development required by the proposed 4.5% growth rate of CAFE standards from MYs 2011 through 2015, year over year, are based on a 'front-loading' of the implementation of technologies, and the results go beyond what it is technologically feasible and economically practicable.

"We urge that the above concerns be taken into account. We believe this will support the conclusion that NHTSA’s average annual increase of 4.5% in CAFE standards for model years 2011-2015 is overly aggressive. The setting of future standards is a complex issue that can have detrimental effects on industry, the economy and consumer choice, if done without proper consideration of all issues. The specific “front loaded” standards proposed in the rulemaking will pose a significant challenge to the automobile industry. Our comments provide suggestions for improving the methodology and assumptions that would lead to an improved final rule."

NHTSA issued its proposed rules -- Average Fuel Economy Standards, Passenger Cars and Light Trucks; Model Years 2011-2015 -- [See WIMS 4/28/08] on May 2, 2008 [73 FR 24351-24487], with the comment deadline of July 1, 2008. The proposal indicated that, "This document proposes substantial increases in the Corporate Average Fuel Economy (CAFE) standards for passenger cars and light trucks that would enhance energy security by improving fuel economy. Since the carbon dioxide (CO2) emitted from the tailpipes of new motor vehicles is the natural by-product of the combustion of fuel, the increased standards would also address climate change by reducing tailpipe emissions of CO2. Those emissions represent 97 percent of the total greenhouse gas emissions from motor vehicles. Implementation of the new standards would dramatically add to the billions of barrels of fuel already saved since the beginning of the CAFE program in 1975."

Access a UCS release with links to extensive additional information (click here). Access a second UCS release regarding the Administrations role in the CAFE standards (click here). Access part of the extensive AAM comments (click here). Access the EPA Docket for the rulemaking with links to the proposed rules, background documents and all public comments (click here). [*Energy]