Protecting Consumers from Pain at the Gas Pump
60 MPG by 2025 Gives Consumers the Best Protection Against Rising Gas Prices
The recent spike in oil prices and the ongoing turmoil in the Middle East are vivid reminders of America’s continued dependence on oil. The continued global economic recovery will only add pressure to rising oil prices.
While options for short-term relief from high pump prices are limited, we can protect ourselves from future oil price spikes by cutting the country’s reliance on oil by building clean, fuel-efficient vehicles that protect consumers at the gas pump.
Setting strong vehicle fuel efficiency and greenhouse gas standards through 2025 offer the best protection against rising gas prices while helping to reduce our dependence on oil, increase our energy security, and address climate change.
Strong Clean Car Standards Protect Consumers
Spiking gas prices hit Americans directly in pocket book. New cars today average 26 miles per gallon (mpg) on government tests (21 mpg on the road) and will consume 7,000 gallons of fuel over their life.
A clean car standard that delivered 60 miles per gallon on government tests (about 42 mpg on road) would save vehicle owners $7,500 over the life of the vehicle at a gas price of $3.50 per gallon, even after paying for the additional cost of the cleaner vehicle. That’s the equivalent of a gasoline price cut of more than a $1.00 per gallon compared to a vehicle with today’s fuel economy.
If gas prices rise to $5 per gallon, a clean car standard of 60 mpg would deliver net savings of about $12,000, the equivalent of a gasoline price cut of at least $1.70 per gallon compared to a vehicle with today's fuel economy.
Savings as Soon as You Drive Off the Lot
You may have heard before, “you need to spend money to save money” and it’s true that making our cars reach 60 miles per gallon will increase the price of a vehicle. However, the fuel savings vastly outweigh the additional costs. At $3.50 per gallon, consumers would recoup their investment in about 4 years.
For many consumers, the savings can happen as soon as they drive off the lot. Consumers commonly take out a loan to finance their vehicle purchase rather than paying the full price of the vehicle up front.
Buying a vehicle meeting a 60 mpg standard would increase a car buyer’s monthly payment compared to today’s average new vehicle, but the monthly fuel savings would more than offset the additional cost. After the loan is paid, all of those extra fuel savings will go right in to the consumer’s pocket.
Drilling Doesn’t Cut It – and Isn’t a Short-Term Fix
Some in Congress and industry are using the recent increase in gasoline prices to call for more domestic oil drilling. That is neither a short-term solution nor real relief for consumers struggling at the gas pump. For example, analysis by the Energy Information Agency says that expanded US off-shore drilling in the outer continental shelf would only reduce gas prices by about 3 cents per gallon 20 years from now. The United States cannot drill its way to energy independence.
We consume nearly 25 percent of the world’s petroleum, yet hold less than 3 percent of the proven reserves. The only way to cut our dependence on foreign oil producers is to significantly cut our need for oil by increasing fuel efficiency, expanding low-carbon fuels, and providing other transportation options.
It is Time to Break Our Dependence on Oil
Americans deserve real solutions to protect them from volatile oil prices. With oil prices now at $100 per barrel, about $1 billion leaves our economy every day to pay for petroleum imports. That money should be invested in the United States, producing clean, fuel-efficient vehicles and the good paying jobs that go with them.
Strong standards that raise fleet-wide fuel efficiency to 60 miles per gallon by 2025 are a wise investment and offer the greatest savings for consumers.
Currently, the Obama administration is developing the next phase of fuel efficiency and greenhouse gas standards covering new vehicles sold in model years 2017-2025. Both the Environmental Protection Agency and Department of Transportation have noted that he technology exists to raise standards to 60 miles per gallon by 2025.
Setting strong greenhouse gas and fuel efficiency standards can build on the important first steps taken earlier this year by the administration to finalize standards raising fleetwide fuel efficiency to nearly 35 mpg and cutting emissions to 250 grams-per-mile of CO2-e by model year 2016. This first phase of the standards will deliver critical oil and greenhouse gas savings and relief at the pump.
They represent the most significant increase in fuel efficiency in nearly three decades as well as the first-ever greenhouse gas standards for vehicles. In order to continue insulating consumers from rising gas prices and freeing America from its oil dependence, we must set standards to 60 mpg and 143 grams per mile C02-e by 2025.
Please download the fact sheet for reference information (PDF).
