Mileage Standards: Not the Way to Energy Independence
After the terrorist attacks of September 11, 2001, then-President George W. Bush enjoyed sky-high approval ratings. A short time later, his popularity began to slip when he rallied the country to invade first Afghanistan then Iraq. At the end of his two-term reign, Iraq was relatively stable with a functioning government and there was talk of planning to bring most of our troops home. And Bush's ratings were at historic lows.
I won't list all the circumstances, from biased reporting to poor policy decisions, which caused Bush's popularity to plummet. Most Pajamas Media visitors have their own complete list and all of us can rewrite history. But there is one opportunity that the Bush administration let slip through its fingers: an intelligent energy policy.
Consider this scenario. What if President Bush had explained that along with trying to get control of terrorism, the free flow of oil in the Middle East was important to world security. What's more, our country's dependence on imported oil was putting our own security at risk. To correct the problem, Bush could have asked the American people to do their part to conserve as much energy as possible. And if that included a modest tax on gasoline to encourage better habits, using all the revenue for transportation, I would be fine with that.
Today, we still don't have an energy policy that makes sense. T. Boone Pickens wants us to convert our vehicles to natural gas and fill up at his CNG stations while he builds wind farms to generate electricity. Midwest agribusiness would grow corn and other food stocks to make ethanol. People in coal country insist that their black energy source can be as green as Kermit, and residents of Nevada want nothing to do with storing nuclear waste.
Although we haven't had a coherent energy policy for decades, more than a few of us worry that the policies of the Obama administration will only please ardent environmentalists. If you're not in that camp, fasten your seatbelt. President Obama has set the tone by appointing Lisa Jackson to head EPA. Jackson is a proponent of allowing states to set their own carbon standards, an idea that would treat every automaker to compliance chaos. After sure confirmation by the Boxer-chaired Environment and Public Works Committee, Jackson will report to Ray LaHood, the newly appointed transportation secretary and retiring Republican congressman from Peoria who supports public transportation.
A Democratic controlled Congress has already replaced the moderate John Dingel with activist Henry Waxman to head the powerful House Energy Committee. And should anyone doubt President Obama's support for his choices, he's picked Clinton's activist and ex-EPA chief Carol Browner as assistant to the president for Energy and Climate Change. Will these new bureaucrats commute to work in Suburbans? Just wondering.
During a briefing to reporters before the Los Angeles Auto Show, experts gathered by the Foundation for American Communications opined that the Obama administration might urge a 50-MPG EPA standard, a major escalation from the looming 35-MPG rule. Just to put things in perspective, 35-MPG is slightly higher than Europe's current fleet average. That means that cars like Honda's Accord would be giants and full-size SUVs would be history.
The energy law that was enacted in December 2007, requires standards for 2009 vehicles of 27.5 mpg for cars and 23.1 mpg for trucks. Then the standards would move upward to the goal of 35 mpg in 2020, a number that is 40 percent higher than today's specification. And the Bush administration's Department of Transportation had proposed a rule to push fuel economy up 25 percent by 2011 to 2015 model years, a goal that would cost the industry $47 billion according to a report in Automotive News. Although a final rule was promised by the end of 2008, the Bush administration had punted that decision to the Obama team and a date of April 1, 2009 (appropriately Fools Day), became the new target.
That gives Team Obama enough time to: a) scale back the standards to help the same industry to which we just lent money or b) increase the standards even higher to save our planet that much faster. For context, a new vehicle and/or entirely new powertrain takes at least three years or more to develop. Federal law requires the National Highway Traffic and Safety Administration (NHTSA) to give automakers at least 18 months to comply with new economy standards. In the meantime, the car companies face not only impractical deadlines but also uncertain standards.
When you talk to most ordinary people who don't have a pooch in this fight, they are puzzled about why the automakers don't quickly embrace high fuel economy standards. After all, Toyota's Prius is considered mid-size by the EPA and the 2009 model delivers 48-city and 45-highway fuel economy according to the current published guide. And Toyota's 2010 model that was unveiled at the North American International Auto Show this month promises 50 mpg. What's more, there are "plug-in" Prius sedans running around with graphics plastered on the doors that boast 100 mpg + economy. So what's the big deal?
The problem is simply that hybrid sedans aren't the solution for every need. From soccer mom duties to towing to that all-American virtue "personal choice", small, fuel-stingy cars aren't for everyone. And as far as those 100 mpg + claims plastered on the sides of a plug-in-modified Prius, that's no more than hyperbole. No one has offered a standard EPA test to verify the claim. Consumer Reports is the most forthright, publishing a review of its plug-in Prius, after spending $10,875 for the conversion. The result was 56 mpg in their city cycle and 75 mpg on the highway after a full charge. Apparently, a long downhill drive or creeping around town is required for a plug-in Prius to attain triple-digit fuel economy.
Regulating fuel consumption through mileage standards has also created an uneven playing field for automakers. High volume producers, including Detroit's three, have to be cautious about exceeding the limits to avoid fines, while competitors that import only their premium vehicles simply pay the levy since there's plenty of profit to absorb it.
That's what's wrong about the whole idea of regulating fuel economy. It's a lot like fighting obesity by requiring clothing manufacturers to make only slender sizes. If consuming less petroleum is a worthy goal, make the price of that product high enough to discourage vivacious consumption. Look at what happened when oil prices recently spiked to above $4 per gallon. Guess what would happen if they remained higher than even $2.
Meanwhile, the politicians who are busy designing EPA economy standards have their drivers keeping their big black SUVs warm or cool so they don't have to suffer too much discomfort. Apparently, distress is a phenomenon for you and I and the world's automakers to endure.