The Fight Over Fuel Efficiency for 2007’s Energy Bill
Posted by Prof. Goose on November 20, 2007 - 10:00am
Topic: Demand/Consumption
Tags: 2007 energy bill, 32 mpg by 2022, 35 mpg by 2020, corporate average fuel economy, fuel economy, fuel efficiency, new energy bill, renewable electricity standard [list all tags]
This is a guest post by Lorna Li, a dedicated a Green activist, rainforest crusader, social innovator, and technology enthusiast.
Recently, a large group of auto workers and dealers have broken from the industry in order to support the 35 mpg by 2020 fuel efficiency standard that is currently being debated by Congress. This is the latest high-profile group that has joined the ranks of a broad coalition of environmental organizations, student groups, musicians, and trade associations that have been lobbying Congress to pass a strong, clean 2007 Energy Bill.
Fuel efficiency has been one of the more contentious items on the legislative agenda this year, with the House and the Senate deeply divided over the Corporate Average Fuel Economy (CAFE) Standard, a proposal that calls for auto manufacturers to increase fuel efficiency to 35 mpg for cars, SUVs, and light trucks.
The CAFE standard was, in fact, passed by the U.S. Senate in June. This is the first Congressional increase in fuel efficiency in 30 years. However, an alliance of the Big Three Auto Makers - General Motors, Ford, and Chrysler - are aggressively lobbying Congress to lower that standard to 32 mpg by 2022, stating that the higher standard is not achievable and could have deadly consequences.
The auto industry has argued for years that fuel-efficiency would compromise public safety due to the need to build smaller, lighter vehicles. However, according to Scientific American’s October 2007 article Saving Gas and Saving Lives, new engine and transmission technologies could enable manufacturers to improve fuel efficiency without significantly cutting vehicle weights.
The concern for passenger safety may be a thinly-veiled concern for maximum shareholder equity and short-term profits. Reminding us that the auto industry has, in the past, balked at implementing seat belts, airbags, and anti-lock brakes, Adam Lee, third generation auto dealer, makes this personal plea in his 3-minute video clip.
“My family has been selling American made cars since 1936. My livelihood and the livelihood of over 350 employees who work for us depend upon the success of the automobile industry. Today that strength is severely compromised by the lack of fuel-efficient cars and trucks customers want to buy. …
Without a 35 mile-per-gallon mandate, I’m afraid, global warming and our dependence on foreign oil will continue to get much worse in the long run. And, in the short run, I’m afraid I’ll be stuck with a lot full of cars that no one wants to buy or even worse: This country will no longer have an American auto industry."
35 mpg by 2020 versus 32 mpg by 2022
For a casual observer, 35 mpg by 2020 versus 32 mpg by 2022 doesn't seem like a big deal at all, until you do the math.
In their report titled Energy Bill Must Guarantee Real Oil Savings, the Union of Concerned Scientists calculated the difference between the 2 fuel efficiency proposals:
Barrels of Oil Saved Per Day:
- 500,000 Auto Lobby Proposal
- 1.2 Million Senate CAFE Compromise
Consumer Savings at the Pump:
- $11 Billion Auto Lobby Proposal
- $25 Billion Senate CAFE Compromise
Emissions Reductions
- 85mmt CO2 Auto Lobby Proposal
- 206 mmt CO2 Senate CAFE Compromise
The 35mpgby2020 group states various reasons why the higher fuel efficiency proposal must be included in the 2007 Energy Bill. They say:
- A 35mpgby2020 fuel economy boost would create 241,000 jobs in the U.S., including 23,900 in the auto industry in 2020.
- Without fuel efficiency gains, Detroit stands to lose $3.6 billion if gas prices stay high.
- According to UMTRI research, raising fuel economy fleet wide to 35mpgby2020 would boost domestic automakers' profits by $12 billion through 2018.
- The National Academy of Sciences says our automakers already have the technology to get their cars and light trucks to average 35mpgby2020 without sacrificing vehicle size, safety or horsepower.
- An increase in fuel economy standards would save American 1.2 million barrels a day which is more than we currently import from Iraq.
Fuel Efficiency and Renewable Energy Must Go Hand in Hand
Gas prices keep going up and up. Fuel efficiency and more renewable energy are the safest alternatives available that can help the United States break free from the vicious cycle of oil supply and demand. Another "Green" provision at stake in the 2007 Energy Bill debate is the Renewable Electricity Standard, which calls for 15% of U.S. electricity to be derived from renewable sources.
According to the Union of Concerned Scientists analysis of Renewable Electricity Standards, the RES provision stands to invigorate the alternative energy sector and create new, well-paid jobs in wind and solar manufacturing.
A 15% shift towards renewable sources will generate thousands of megawatts of clean electricity, which will displace reduce the consumption of natural gas, lower costs for consumers on their home heating bills and benefit industrial users, as well.
Furthermore, RES is also currently attainable - two dozen states that have already put their own Renewable Electricity Standards into place. In fact, many states have moved to establish standards of 30 percent or more—demonstrating that the 15 percent plan proposed in this bill is an achievable compromise that all states can meet.
As oil prices continue to skyrocket, fuel efficiency and renewable energy are the 2 cleanest solutions to America’s rising energy needs, that stand to free us from dependence on foreign oil, and the vicious cycle of oil supply and demand.
What you can do to support a strong, clean 2007 Energy Bill
1) Support auto industry workers by sending this letter to Congress in support of 35 mpg by 2020.
2) Support a strong, clean Energy Bill that includes both the 35 mpg CAFE standard and 15% Renewable Electricity Standard by signing this petition for a strong, clean 2007 Energy Bill.
Lorna also founded Mariri Magazine - a journal about the rainforest, and writes about online marketing for environmental and social activism on Green 2.0 Marketing. She also covers Web 2.0 startups, events and new technology on bub.blicio.us. Lorna currently supports a coalition of environmental organizations that is lobbying Congress to pass a 2007 Energy Bill that effectively addresses global warming and energy security.
http://politics.reddit.com/info/610xa/comments/
thanks for your support...
Drummer
35 mpg,I'm not impressed.I own a 1988 ford
festiva and with an ethos product I am getting
45 to 49 mpg.Mind you, this is 20 year old
technology.Laws and standards will not do it
for us,there are always loopholes.Climate change
demands that we abandon fossil fuels altogether.
Until recently I was the very happy owner of a 1993 Suzuki Swift 1.3 litre 5 speed manual transmission with only 89,000 miles on it. it ran perfect and even with the AC on (I live in Florida) at 60 mph highway speed I still got close to 40 plus mpg with it. Then a moron in a big van rear ended me at a red light. Even though the damage was not extensive the Insurance company totaled the car because the labor and parts were more than the blue book value of the car. I took the check bought a used Ford Escort sedan with a manual transmission and still get about 30 plus mpg. I gave the Suzuki to someone who needed transportation and they are still driving it. However fossil fuel powered automobiles are absolutely not the answer to our transportation needs and we all will get out of them whether we want to or not.
35 mpg, I'm not impressed. A Boeing 777 gets 60 miles/gallon/passenger.
Would it be a good thing if I could wave a magic wand and have all cars on the road get over 40 mpg ?
What would happen? I think the price of oil/gas would immediately drop, right ? I believe this would allow China and India to grow even faster. It would encourage people in the US, Australia and GB to live even further away from jobs, schools and other necessities of life. Then, as real oil supply accelerates it's decline, wouldn't we be even more in trouble than we are now ? I'm just asking.
Dinopello,
yes, and oil demand is only one layer of the problem of the automobile dominated landscape. We'd be better off if we abandon the car and the suburbs entirely. However, it will never happen since American suburbanites find this automobile dominated lifestyle so happy and satisfying ;-)
For some, currently, yes. The issue of the unsustainable, suburban, drive everywhere, for everything, all the time lifestyle - will work itself out. Just not necessarily in a good way.
Perpetuating and encouraging this unsustainable system now will only make for more people getting 'worked out'.
I simply don't see much evidence for anything changing in my neck of the woods. It's still build for cars only. The local development boom is still happening. It's like a huge wheel that got spinning fast and can't be stopped. In any case, people here haven't got the message yet.
And I don't think much will change even if the price of gas is $10. They will still drive. They will still buy trucks and SUVs. They can afford it. Why should car companies make smaller vehicles when people want bigger vehicles? I think the breaking point is far higher than most people think it is.
You are probably correct. In many places, people have no choice but to DRIVE EVERYWHERE for EVERYTHING, ALL THE TIME. Those places will suffer a big quality of life hit as prices continue to rise. Larger and larger percentages of income spent on feeding their automobile prosthesis and less on food (probably eat just as much only lower quality/variety), entertainment, education, etc.
Case in point, an article in today's local paper:
http://www.starnewsonline.com/article/20071120/NEWS/711200355/1004/news0...
Yep. But, the media does a disservice by characterizing $3 gasoline as "expensive". As Matt Simmons like to point out, at $3 a gallon gasoline is probably the cheapest liquid anything that you can buy. Cheaper than coffee at 7-eleven, cheaper than bottled water. As far as utility, I'm guessing most people put a higher value on gasoline than coffee or bottled water.
By saying that it is 'expensive' implies that it might come down in price someday. It won't (at least not without a major recession) and individuals and communities that are counting on it 'going back to normal' are going to be in a world of hurt.
Bottled water is less than 3$ a gallon. It's only if you want the bottle as well as the water that it costs so much. You can buy gasoline for 14$ a gallon if it comes in 1 gallon containers.
How much do you get back if you return the bottle?
Depends on if you will sterilise if first...
"I don't think much will change even if the price of gas is $10."
This is true for some. But others will be priced out of the suburbs at $5 gasoline. Many are at the breaking point financially.
Frankly I'm surprised that so many families continue to find the suburbs appealing. I have a typical 40 to 45 hour per week job, a house and 2 kids. We live in town- 5 blocks to work, 6 blocks to the grocery store. Farthest trip we take in a typical week is about 3 miles away for the rare trip to Lowe's or Walmart. We have a typical schedule otherwise with the kids in a few activities (dance class for my daughter, art class for my son). If you throw in haricuts, dentist and optometrist appointments, school functions, visiting family, then we really feel crunched for time. I'm lucky if my friends and I get out on my mountain bike once a month (we swear every spring that we're going to do it every week). I don't know how suburban families do all this if you throw in an additional 1 or 2 hours a day in the car. Plus the average American supposedly watches 4 or 5 hours of t.v. a day. I just don't see how this is possible.
If the price of gas is $10/gallon, we can expect the
price of oil to be around $250?
At that price, expect 'de-industrialization'!
Possible market dislocations & collapses, etc.
from The Freezing Point of Industrial Society, http://anz.theoildrum.com/node/3228#more the numbers below are peculiar. The mathematical progression is NOT a straight line function in the long run, but an exponential one of some sort once the decline begins or demand continues to rise. There is no analysis of this fact in the article by Schuant. The last increases were AT THE PLATEAU. The analysis does not assume the now evident downturn in supply will necessarily continue (see graph below). Rising demand in China and India’s growing demand are also omitted from the author’s analysis on price. The fact of the matter as it now appears is that 2007 will NOT end at $78/bbl as expected by Schuant’s extrapolation, but is likely to end closer to $90-100+/b. If we are at ‘plateau’ and demand in China (growing) and US (flat) continues pretty much the same, it seems like the logical extrapolation is to say, ‘the price of oil can be expected to go up by a third given essentially the SAME conditions, or worse if the decline in production is more significant.’ So, if things don’t get worse, 64:95 is the same proportion as ~95:142. So there’s my prediction, best case scenario for the price of a barrel of oil by the end of 2008: $142 USD. Of course, a depression would bring that number down, but otherwise it seems likely to be higher if the global economy hangs together and things stagger forward in a roughly similar way. Global warming is a factor, as is the economy, declining dollar, etc. But as soon as a serious drop in world oil production occurs (see graph) as indicated by studies such as that of Energy Watch Group (and others), then the price can be expected to begin a different trajectory. The first year of that move will immediately take us, in my estimate, above a 50% increase above the previous price (~60:90), from what have been averaging over the previous years as about 33%; then we can get a sense of a possible trajectory. It seems modest to assume the beginning of such a trajectory to be at least 75%:--that’s the minimal move, where it remains non-exponential but increases at roughly the same rate as the previous year’s jump.
So there you have the MINIMAL case, and a more explicit one, primarily based on math holding most global variables constant. Where the author of The Freezing Point of Industrial Society, mentions that Some are even fearing a rise to $250/bbl in the next two years, I have provided a rational explanation for that case, and it is a modest one requiring only the continuation of present trends of a non-exponential sort. Please check my math if so inclined and see if it holds up.
You didn't udnerstand the purpose of the article, nor read it properly.
The key point was not price, but fuel affordability. If you country is on an average income of $20,000 and fuel is $2/lt, then you're in an equivalent position to a country with an average income of $25,000 and fuel of $2.50/lt; fuel is equally affordable in each country. Where that's not true is as the article noted, in countries rich enough to absorb some high petrol prices, and countries poor enough that the price is irrelevant because all their money goes on basic subsistence.
The key point is that how much fuel we can afford is the most significant thing. So if economies decline and fuel price remains the same, its affordability decreases, and vice versa.
Whether the current decline in oil production continues or not is irrelevant to my analysis, since the important thing is fuel affordability. If demand > supply, then price rises and affordability drops; whether that's because demand has gone up or supply has gone down doesn't matter. We could in fact have supply rise, but because demand rises further, have a situation with higher prices than some alternate scenario of supply dropping, but demand rising not as much.
It's also irrelevant whether the demand comes from the US, China, or the Moon. On our current course, demand will certainly rise, and will at some point vastly exceed supply, thus dropping fuel affordability, and causing the destruction of our modern wasteful industrial economies; whether they're replaced with manual, mixed-industrial or ecotechnic economies remains to be seen.
The relation between demand and price is a funny one. If it were easy to guess the likely price from a particular level of demand, then oil companies and stockbrokers would always do very well. All we can say with certainty is that as demand rises, so too will price in a free market. If you honestly think that you can predict prices with that much certainty, then I recommend to you a career in the stock market, where you could become very wealthy.
It's also possible that in future government subsidies or taxes will affect the prices and affordability. Some governments may respond to peak oil by fuel subsidies, to lessen the economic impact and chance of recession from rapidly rising prices; other governments may respond to climate change and rapidly rising prices by instituting a carbon tax on each barrel of oil to destroy demand and/or fund non-fossil-fuel-based infrastructure. Their exact reactions are not predictable years into the future. These taxes or subsidies will of course affect the affordability of fuel.
In speaking of the price of oil being $78/bbl in 2007, I was speaking in the context of average per barrel prices in each of the preceding ten years, and thus of the average price over the year 2007.
You can say "math" as many times as you want, but it doesn't make your predictions any more likely in their precision. There are simply too many things which could be different. The US could bomb Iran tomorrow or Al Qaeda could sink an oil tanker, and the price of oil might leap to $150/bbl in a day. Or the EU could pay everyone who gives up their driver's licence 5,000 euros to do so, and the price might drop to $50/bbl.
Dinopello,
That's one reason that CAFE standards are not as effective as a gas-tax.
If you tax gas with, say, 1US$/gallon then you will see that people will use less gas and the price of gas will drop (except for the tax part). So the total increase is maybe 80 cts.
Who pays the 20 cts/gallon?
Well, Saudi Arabia does. And Venezuela.
Probably China and India will start using more. But is that really a problem? At one point, they will also have to cut back.
Who pays the 20 cts/gallon?
Well, Saudi Arabia does. And Venezuela.
The larger share of the burden burden of a sales tax is borne by the by the party with the lower elasticity.
You may believe that there is no longer any elasticity of supply, and thus the supplier will bear the entire burden of the tax, because the suppliers are producing at capacity and that the capacity can no longer be increased.
You are forgetting half of the possible variation in the supply. The supply can be decreased below capacity to maintain the price that the producers receive thus pushing the tax burden onto the consumers.
Alan,
That's true, but if the US would reduce its consumption, that would have a large impact on the market. And even KSA et al cannot hide it if they reduce output by that much.
It would risk the world asking KSA some hard questions and believe you me: As soon as this thing becomes clear, western countries will not be shy in taking measures, either political, economical or of any other kind.
KSA without the oil revenues is just a desert, you know. Even though the Arabs really like to see themselves as Nomads (*), most of them would just die without the oil money.
(*) Just like Americans would like to see themselves as Pilgrims. Nothing new here, please move on.
Gas tax in the United States? That would be the same time the GOP would declare for communism and incite the revolution. Any day now.
Gotta love the big three:
Right. So current Japan (avg 41 MPG) and Britain (Avg 39 MPG) exist in la-la land, with safety records the same or better than the USA. Anyone really believe this crap?
The Big Three make vehicles for markets with much average higher fuel economy such as the UK, but the fuel prices are nearly 100% higher. The vehicles the Big Three make in those markets are much more efficient, but forcing efficiency is a challenge when the US population can still burn gas at 15 cents a cup. Ford and GM are already moving towards integrating their European and North American operations, but making more efficient, lower profit margin vehicles for the US market is going to cost them and that is why they're fighting CAFE.
Ford's CEO Alan Mulally for example favours a tax to raise the price of gasoline over CAFE standards.
I would note Toyota is playing both sides of the fence on this.
There is not flexibility here; they cannot adapt.
"They"? Don't you mean "we"?
No, it's "they"; the problem is the auto companies. Tied to UAW contracts which make small cars unprofitable to build in the US, they have to push their product mix toward high-margin vehicles to stay in business. In a situation with cheap fuel and abundant parking, this has meant BIG. And they are still doing their best to market BIG (GM's recent ad with the popping corn kernels turning into big SUVs is a case in point; GM doesn't lose money if its customers can't afford to drive what they've bought).
You see this in the lobbying. The UAW's pet, John Dingell, has steadfastly opposed measures which would have forced the UAW to make concessions for the sake of economy. (They're happening anyway, but only because there is no alternative and no faster than required to patch the immediate crisis.)
The US driver would do just fine with a smaller and more efficient vehicle fleet. We did it before.
35 mpg will save half our fuel consumption, but the big question is: Will we be able to buy 10m barrels per day in 2025? Not! Don't forget that it takes at least 20 years to replace the fleet at 15m cars per year. There are still many cars built before 1987 that are still driving around.
Electric powered vehicles are the future. Just ask Bill Reinhart.
Hmmm.....congress looking at a 35 mpg target for 2020.....how about some 20-20 hindsight....look at what the auto manufacturers were able to accomplish after the oil shortages in the late seventies http://www.mpgomatic.com/2007/10/09/1982-a-banner-year-for-high-mpg-cars... .....the target should be 50 mpg just to get back to where we were 25 years ago....seems like congress is hell bent on wasting as much oil as we can.
I wonder what laws congress would pass if they were on the Titanic.
Probably no music played by the ship's orchestra can be in a minor key.
I own a Suzuki Cappuccino. These small sports cars were built in 90s under the Japanese Kei class regulations.
It has a 3 cylinder, twin overhead cam, 12 valve turbocharged engine. It also has all wheel disk brakes, ABS, all round independent suspension and air conditioning...... With the limiter removed it will easily do 100mph and 0-60 in about 8 secs...Apart from being great fun it does a mighty 50mpg !!!
A number of other cars were built to Kei class regs including the Subaru Vivio which was a small four seat car.
So we already have the technology and know how to build smaller much more fuel efficient cars. We just don't use it and in fact, given electronic control systems have improved dramatically since the Cappuccino came out, I would think that over 50 mpg is now easily achievable.
Light cars, small efficient engines are the answer to the 35mpg by 2020 issue and its easy to achieve.
Holy crap dude that's HOT!!
I want one!!
And I think I can speak for the rest of My Fellow Amurrikans when I say that a good number of my countrymen/women want one too!!
Before I lost my Prius (handed it in really) to the repo folks, I was able to drive it around for a couple of years, and I noticed that good aerodynamics matter. Even at speeds in the 20-30 MPH range, open windows would make the MPG plummet. At higher speeds the aero factor is much bigger of course. Right now my vehicle is a small (250cc) motorcycle and the thing's really trying hard at 50 or 60 MPH because of the horrible aerodynamics. That same engine/drivetrain with good aero would be a real performer and would improve cargo carrying ability too.
It'll be worth less than a couple of horses and a plow!
Can you sleep in it?
Sad to say the Cappuccino was never imported into N America. However, I know of at least three that have been imported recently into the USA and two into Canada. In the UK there are about 250 left and in Japan about 400. There's a fair few in Australia and New Zealand and there's now one in China.
Yes it would be easy technically to meet the requirement. Here's an advertisement for my very first car - a 1978 Mazda GLC Sport:
Note the 46 mpg - it always got more than 40.
The trick is: The car weights only 700 kg (1540 lbs) and the engine is only 660cc.
The Japanese car sales market is about 5.5 m cars/year. About 2m of them are cars with this specification (Kei cars have a max weight, length and engine displacement) You get a tax relief for this.
So about 40% of the cars sold in Japan get 50 mpg already.
These cars are available and in large volumes. We don't need to wait until 2020.
Looks like a blend between a Miata and a Z3 roadster. I think there are plenty of people in the US that would buy one. Depends on safety standards though as to whether they could just start importing these into the US.
Seems you can get one in Canada through this importer: http://www.terra2imports.ca/import-japan116424246760307.htm
The thing you have to remember is: It's all there, ready to go.
The question you have to ask is: Why is it not happening?
The north american autoworkers need to get more involved with fuel efficiency advocacy. Gas is only going to go up in price - we all know that. So, cars that are more efficient will be more desired in the marketplace. Cars that are less so will be less desireable. The EU and Japan make more efficient vehicles, so their autoworkers will keep their jobs as they will be busy making them. Less demand for American gas guzzling crap will result in more and more layoffs and bankruptcies.
This is painfully obvious stuff - econ 101 material.
The labour organisations should be screaming bloody freaking murder to build ever smaller and more efficient vehicles. They should be barking for the carmakers to build electric bikes and electric trikes. Someone will have to build them, and it makes sense for the autoworkers to do so. We're going to need a lot of them and fast: something industrialism is good at.
The automworkers and car makers need to realise they need to anticipate changes, not just react to them. The music industry crawled up its own arse, and look where they are now: dying - and all because they didn't adjust ther business to new technology and cultural envirnoments.
Same will happen to carmakers that don't get with the new programme.
Stuart Studebaker
Toronto, ON
CANADA