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Big Week for Fuel Economy
5/11/07

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The last seven days have been big for the fuel economy debate on Capitol Hill.  As you know the Fuel Economy Reform Act, H.R. 1506, hit the House about a month back, and its cosponsor list has climbed to 124 to date.  The real action has been in the Senate, however, where the Ten-In-Ten Fuel Economy Act, S. 357, went up for consideration in front of the Senate Commerce Committee.  As introduced, this practical bill would increase the average fuel economy of our cars, pickups, minivans, and SUVs approximately 10 miles per gallon over 10 years (to 35 miles per gallon by 2019).

Last week, the committee held an informational hearing on the bill before considering it directly.  Our very own research director David Friedman was asked to testify, and as you can see from his testimony, he tried to move the debate past the usual lines by focusing on what can be done, and what’s at stake if we do not act.

Unfortunately, it seems a bit difficult for some to shed the past.  For example, Senator Tom Carper (D-DE) and Auto Alliance head Dave McCurdy both carted out the old claim that automakers can only make hybrids at a financial loss to show how fiscally unfeasible increased fuel economy is.  This is wrong in not one, but two different ways.  First, it’s factually incorrect.  Toyota has said on countless occasions that they have made a profit on every hybrid since the ’04 Prius.  Indeed, they now see hybrids as a key part of their future profit plans.

Facts aside, this is just a red herring, as automakers don’t need to invest in hybrids in order to make significant strides on fuel economy.   We noted this some time ago when GM introduced the Green Line Vue.  While it’s not a hybrid, it is a solid improvement in conventional technologies that, if applied throughout the Vue fleet, would make more of an oil savings and emissions impact than the current fleet of Escape/Mariner hybrids.  So there’s more than one way to make improvements in fuel economy work, and every automaker has the technologies to do so sitting on their shelves.

Our program assistant Lindsay Vidal was also at the hearing last week, and here’s what she had to report:

The well-attended hearing provided a great opportunity to revisit the decades-old auto industry rhetoric against strengthening Corporate Average Fuel Economy (CAFE) standards.  It also gave us a glimpse of the Alliance of Automobile Manufacturers not-so-new direction.

As expected, the auto industry panelists said they prefered economy-wide policies and touted their own investment in advanced technologies, and as always bashed increased CAFE standards as financially ruinous. Yet, as noted by national security expert vice admiral Dennis McGinn (Ret.) and UCS research director David Friedman, strengthening CAFE standards is a critical and necessary first step to motivate a reluctant auto industry to invest in advanced technologies. Economy-wide climate policies and introduction of small numbers of advanced technology vehicles will not guarantee the energy security benefits and global warming pollution reductions from the automotive fleet.

Indeed, the auto industry remains reluctant to change.  Even Alliance of Automobile Manufacturers president Dave McCurdy, who many hoped would usher in a new era of leadership at the organization, reiterated the standard auto industry arguments and “can’t do” attitude.  Hopefully, Mr. McCurdy will read some of the nearly 13,500 letters our activists sent him urging reconciliation and cooperation between the auto industry and environmental/science communities on important vehicle issues.

And so with all this, the committee worked through S. 357 on Tuesday the 8th.  What came out was, to be honest, not the most desirable result.  While the basic target of 35 mpg did remain, a number of loopholes were inserted that ended up making this weaker than the initial bill, and the targets are weaker than the Bush Administration goal of reducing gasoline use by 8.5 billion gallons in 2017.  If the automakers drag their feet and succeed in delaying the implementation of the targets, the bill as passed could turn it into a status quo proposal. 

Chairman Inouye announced at the hearing that this bill will move to the Senate floor, most likely in June, where those who want to see this bill strengthened will try and plug some of the holes.  Here’s what Senator John Kerry (D-MA) had to say in his statement:

Now that this proposal to increase CAFE standards will go to the floor, it will be an essential part of the energy debate.  I will fight to improve the bill on the floor and to guarantee improvements of at least 31 mpg by 2015 and 35mpg by 2020.  While fuel efficiency technologies have greatly improved over the years, the fuel economy of the nation’s passenger fleet has not.  Since America’s second oil crisis in 1980, our oil imports have increased from 37 to 56 percent, but our passenger fleet averages 25 mpg, the same average in 1981.

We’re with Senator Kerry and others in the Senate who will be working to ensure a strong fuel economy bill advances, and so are the American people.  Heck, as this piece by pollster Mark Mellman points out, rural truck drivers—the supposed backbone of anti-fuel economy sentiment in America—get it.  Hopefully as the summer driving season hits, finally Congress will get it too.

Posted by: ScottN 5/11/07

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