Saturday, March 29, 2008

Wondering Why Gas Is So Expensive?

The "Energy Policy Conservation Act," (EPCA) was enacted into law in 1975 during Gerald Ford's administration. The act established the Corporate Average Fuel Economy (CAFE) standards for passenger cars and light trucks.

Jimmy Carter advanced a plan in 1981 that called for fuel efficiency standards to reach 48 mpg by 1995.

In an interesting footnote to history - in 1981 the auto industry said it could meet a 30 mpg fuel economy by 1985, but the Federal Government as of today (23 years later) has only mandated 27.5 mpg.

The Reagan Administration withdrew the plan put forth by Carter and in 1986 rolled the standard back to 26 mpg.

There were no improvements in the CAFE standards under the first Bush Administration or the Clinton Administration, and the Bush/Cheney Administration has done nothing to raise the standards for cars, although there have been some minor improvements in the standards for small trucks (see attached data from the Department of Transportation for details).

In 2002, Senators John Kerry, and John McCain offered a plan that called for fuel economy standards for cars and light trucks, beginning with model year 2005, to reach a combined average fuel economy standard of at least 36 miles per gallon by 2015 (recall that Jimmy Carter's plan was for 48 miles per gallon by 1995). The Kerry McCain plan was never implemented, and the federally mandated average fleet efficiency levels in new vehicles are the same as they were in 1985.

Since a variety of administrations and Congresses have been unwilling to address this, the market will take care of it, and it will be painful for working class Americans.

The price of oil may decline as American demand subsides because people can't afford to drive, but there's no guarantee as China, India and other developing nations compete for global oil. Working people who can afford to buy newer more fuel efficient vehicles will do that. Working people who can't buy a more fuel efficient vehicle will have to decide what their priorities are and that could become quite painful.

Reference: Spinning Wheels - Our Continual Refusal to Raise CAFE Standards


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From the article by Robert F. Kennedy Junior Better Gas Mileage, Greater Security -
"According to a recent report by Amory Lovins of the Rocky Mountain Institute, if the United States had continued to conserve oil at the rate it did in the period from 1976 to 1985, it would no longer have needed Persian Gulf oil after 1985. Had we continued this wise course, we might not have had to fight the Persian Gulf war, and we would have insulated ourselves from price shocks in the international oil market. Fuel efficiency is a sound national energy policy, economic policy and foreign policy all wrapped into one. Every increase of one mile per gallon in auto fuel efficiency yields more oil than is in two Arctic National Wildlife Refuges. An improvement right now of 2.7 miles per gallon would eliminate our need for all Persian Gulf oil!"



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Some CAFE details from the Department of Transportation -

  • For what years and at what levels have the passenger car CAFE standards been set?
"To meet the goal of doubling the 1974 passenger car fuel economy average by 1985 (to 27.5 mpg), Congress set fuel economy standards for some of the intervening years. Passenger car standards were established for MY 1978 (18 mpg); MY 1979 (19 mpg); MY 1980 (20 mpg); and for MY 1985 and thereafter (27.5 mpg). Congress left the level of 1981-84 standards to the Department to establish administratively. Subsequently, standards of 22, 24, 26, and 27 mpg were established. For the post-1985 period, Congress provided for the continued application of the 27.5 mpg standard for passenger cars, but gave the Department the authority to set higher or lower standards. From MY 1986 through 1989, the passenger car standards were lowered. Thereafter, in MY 1990, the passenger car standard was amended to 27.5 mpg, which it has remained at this level."

  • For what years and at what levels have the light truck CAFE standards been set?
"Congress did not specify a target for the improvement of light truck fuel economy. Instead, it provided that light truck standards be set at the maximum feasible level for model year 1979 and each model year thereafter. Unlike for the passenger car fleet, there is no default standard established for light trucks. NHTSA must set the standard for each model future model year. Light truck fuel economy standards have been established by NHTSA for MY 1979 through MY 2007."

"Light truck fuel economy requirements were first established for MY 1979 (17.2 mpg for 2-wheel drive models; 15.8 mpg for 4-wheel drive). Standards for MY 1979 light trucks were established for vehicles with a gross vehicle weight rating (GVWR) of 6,000 pounds or less. Standards for MY 1980 and beyond are for light trucks with a GVWR of 8,500 pounds or less. The light truck standard progressively increased from MY 1979 to 20.7 mpg and 19.1 mpg, respectively, by MY 1991. From MY 1982 through 1991, manufacturers were allowed to comply by either combining 2- and 4-wheel drive fleets or calculating their fuel economy separately. In MY 1992, the 2- and 4-wheel drive fleet distinction was eliminated, and fleets were required to meet a standard of 20.2 mpg. The standard progressively increased until 1996, when the Appropriations prohibition froze the requirement at 20.7 mpg. The freeze was lifted by Congress on December 18, 2001. On March 31, 2003, NHTSA issued new light truck standards, setting a standard of 21.0 mpg for MY 2005, 21.6 mpg for MY 2006, and 22.2 mpg for MY 2007."