Accuracy in Fuel Economy Standards Act
H.R.6643/S.3403
The Bush administration, Newt Gingrich, and other Big Oil allies are attempting to take advantage of high gas prices to press for new drilling in U.S. wildlife and coastal areas. Yet the government’s own Energy Information Administration says these new oil resources will take decades to develop and will save, at the most, pennies-per-gallon. In fact, the number of new offshore drilling permits has tripled while the Bush administration has been in office, yet we’re also paying triple what we were in 2001. Just in the past two years, U.S. domestic production has increased at four times the rate of consumption, yet prices still skyrocketed.
The United States’ best near-term solution to addressing high gas prices is simple—make more vehicles that go farther on a gallon of gas. Congress took a historic step in that direction in 2007, mandating an increase in Corporate Average Fuel Economy (CAFE) standards to a minimum of 35 miles-per-gallon by 2020.
But, just as the Bush administration and its allies trumpet the horn of increased oil exploration, it is working to undermine the efficacy of the new fuel economy rules. The National Highway Traffic Safety Administration (NHTSA), the part of the Department of Transportation (DOT) responsible for implementing CAFE, released a draft rule that made completely unrealistic assumptions.
First, the administration’s gas price projections are outrageously low—they project that gasoline will cost $2.25-$2.60 through 2020. The DOT can only require fuel economy improvements if they pay for themselves through fuel savings. Therefore, this gas price fantasy amounts to a loophole that will allow automakers to shave three to four miles per gallon off of their requirements, costing U.S. drivers billions of dollars at the pump.
Indeed, according to the Bush administration’s own analysis, if the DOT used a more realistic gas price in their recently released proposal for fuel economy standards, the new fuel economy technology could save consumers enough fuel to equal about a $1 per gallon discount at the pump. (The more realistic price case is still below today’s prices, only reaching $3.63 a gallon in 2030.) Even the head of the Energy Information Administration (EIA), whose agency publishes the projections, recommended that the DOT use the more realistic prices.
Not only do the oil savings from fuel economy dwarf potential domestic oil resources, but fuel economy should also be our first choice because savings from reduced gasoline use go directly to consumers, rather than to oil companies. Fuel economy has the added advantage of avoiding the environmental consequences of a continued addiction to oil. Indeed, if accurate gas prices are used, the new requirements would further reduce global warming pollution equivalent to taking about 10 million cars off the road.
Any debate over oil drilling is simply playing politics as compared to the real value of fuel economy—value that is being diminished by President Bush and his allies pushing for more drilling even after the president once boldly stating that we are a nation that is “addicted to oil.” Congress must stand up for its historic accomplishment and ensure CAFE helps to bring consumers the most efficient options in cars, pickups, minivans, and SUVs in the shortest possible time. The Accuracy in Fuel Economy Standards Act (H.R.6643/S.3403) would require the DOT to use more realistic gas price estimates.
