Positive Environment News

US Auto Trends Cloud Fuel Efficiency Rules

Date: 15-Jul-08
Country: US
Author: John Crawley

A law signed last year requiring a 40 percent jump in mileage economy by 2020 looks likely to be eclipsed much sooner, as pricier fuel drives demand for thriftier vehicles and the adoption of new technologies.

Though the crisis at Detroit automakers has been growing more acute, it is not clear that the Bush administration would escalate a renewed dispute with big industry players -- possibly courting election-year trouble for political allies by pushing a tougher standard.

But a principal author of the 2007 law as well as environmental and consumer advocates view the goal as a floor that can be raised by the Transportation Department, which must devise annual targets for automakers to meet.

"Our federal government has the responsibility and the legal obligation to achieve a higher standard sooner if the science and economic analysis supports doing so," said Rep. Edward Markey, chairman of the Select Committee on Energy Independence and Global Warming.

The Massachusetts Democrat helped craft the bill mandating the long-term fleet efficiency increase to 35 miles per gallon by 2020 as a way of reducing US dependence on imported oil.

The administration intends to finalize the path to a fleet average of nearly 32 mpg for model years 2011-15 just before it leaves office in January. That average would include the performance of sport utilities and pickups, the crumbling backbone of the domestic market that for years was dominated by General Motors Corp, Ford Motor Co and Chrysler LLC.

The next administration would be responsible for charting out the final five years of the fuel savings program.

Struggling US manufacturers as well as healthier foreign ones are now deferring or altogether halting some production of low-mileage SUVs and pickups to boost output of compacts, sedans, wagons and other passenger cars.

For more efficient passenger cars, the government is proposing a standard of 35.7 mpg by 2015 -- already above the overall fleet mark of 35 mpg due five years later.

At GM, passenger cars account for 18 of its next 19 product launches, and most of those would achieve 30 mpg on the highway, the company has said. GM is also planning 20 gasoline/electric hybrids by 2020 and production of the electric Volt by 2010.

Foreign makers, like Toyota Motor Corp and Honda Motor Co Ltd, produce cars that come close to or exceed 35 mpg. Honda's top selling Civic with five-speed manual transmission gets 34 mpg on the highway, while Toyota's hybrid Prius tops out at 48 mpg in city driving.

Transportation Secretary Mary Peters calls the 40 percent goal "tremendous" and believes the five-year 2015 proposal strikes the right balance between an aggressive policy and one that is achievable -- even though big automakers have recently come out as strongly opposed.

Administration officials concede the nearer-term proposal relies on outdated product plans and estimates of gasoline prices -- which drive consumer trends -- that are well under US$3 a gallon.

Updating the plan to factor in fuel prices running above $4.10 and product plans that stress more efficient cars would create a tougher standard by 2015, experts agree.

David Friedman, research director at the Union of Concerned Scientists, said the government should "put cars and trucks on a path" to 40 mpg by 2020 and at least 50 mpg by 2030.

But carmakers argue an accelerated public appetite for efficiency, a volatile gasoline market and a drive to identify alternative fuels have strengthened arguments that market forces and consumer behavior be given more weight in determining the scale of government intervention.

"Consumers are responding by purchasing smaller vehicles and changing their driving habits. Fleet-wide fuel economy is increasing and greenhouse emissions from the auto sector are falling. The market is working," according to Dave McCurdy, president of the trade group Alliance of Automobile Manufacturers, whi

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