Improved Fuel Economy Strengthens National Security, Cuts Global Warming Pollution
On May 3, 2007, David Friedman, research director of the clean vehicles program, testified before the Senate Committee on Commerce, Science and Transportation on the critical need to improve fuel economy standards for cars and trucks to address the problems of oil dependence, global warming, and the high cost of gasoline.
Summary:
Fuel economy for the U.S. car and truck fleet in 2006, 24.6 mpg, was lower than it was in 1986. The Ten-in-Ten Fuel Economy Bill (S.357) calls for an increase in vehicle fleet average fuel economy to 35 mpg by 2019, which would meet President Bush's State of the Union promise to save as much as 8.5 billion gallons of gasoline by 2017 through fuel economy. The legislation also would give President Bush the authority he has requested to set the standards based on vehicle size.
Automakers already have the technology to make cars with better fuel economy. But for the past 20 years, they have used these tools to double power and increase vehicle weight by 25 percent. With off-the-shelf technology, automakers could produce a fleet of cars that reaches more than 40 mpg over the next 10 years. More fuel-efficient vehicles would match the performance and size of vehicles on the road today and have the same or better safety.
Investing in technologies to increase fuel economy will create more domestic jobs, save consumers thousands of dollars at the pump, and both cut global warming pollution and the size of America's oil addiction.
STATEMENT OF:
THE UNION OF CONCERNED SCIENTISTS
BEFORE THE:
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
BY
DAVID FRIEDMAN, RESEARCH DIRECTOR AND SENIOR ENGINEER
MAY 3, 2007
Mr. Chairman and Members of the Committee, I appreciate the opportunity to testify before you today.
I appreciate the opportunity because our country is faced with a critical decision, the same decision faced by this committee. Are we going to continue to increase our addiction to oil?
There are many important ways to ask the same question:
- Are we going to continue to weigh down our economy by paying to import 60 percent of our oil at more than $60 per barrel?
- Are we going to continue to produce more global warming pollution from our cars and trucks than the entire economy of India?
- And are we going to continue to leave consumers with no solutions to $3.00 per gallon gasoline prices?
We have been asking these questions for 30 years, and, for a long time, it seemed like we were having the same debate over and over again, but the facts have now moved beyond the old debate.
FACT: There is nothing arbitrary about relying on research from our nation’s top scientists and engineers in setting fuel economy standards. By relying on Congressionally requested research from the National Academies of Science and research from MIT, Porsche Engineering, the American Council for and Energy Efficient Economy, and the Union of Concerned Scientists, Congress can set science-based fuel economy standards of at least 35 mpg for the fleet of new cars and trucks over the next ten years, or about a 4% per year increase in fuel economy. Analysis of the NAS data shows that a 37 mpg fleet is possible using existing technology. Our own analysis shows that we could top 40 mpg.
There is no reason to leave the standard setting task to the National Highway and Traffic Safety Administration (NHTSA) which has a very poor record when it comes to increasing standards.
The Ten-in-Ten bill would:
- Cut our oil dependence by 2.1 million barrels per day in 2025—almost as much as we currently import from the Middle East.
- Save consumers over $40 billion dollars in 2025, even if gasoline is only $2.00 per gallon.
- Reduce global warming pollution by more than 350 million metric tons of carbon dioxide equivalent—an 18% reduction that is equivalent to taking about 50 million of today’s typical cars and trucks off the road.
FACT: Pickups are protected under the reformed fuel economy standards and farmers and small businesses will get the performance they need while saving thousands of dollars. The administration is asking for the ability to use vehicle size when setting fuel economy targets—a size-based system completely changes the way you should look at CAFE. Automakers would not have to sell more small vehicles to offset sales of large vehicles. ALL vehicles will have to use better technology to improve fuel economy, not just big vehicles.
The chart below is an example of how a sized-based standard fulfilling the 35 mpg fleetwide requirement would treat different vehicle classes.
Combining a fleetwide fuel economy standard of 35 mpg with the president’s request to use size-based standards means that large pickups would only have to reach about 28 mpg—they will NOT have to hit the fleetwide 35 mpg average. Instead, all vehicles will have to improve fuel economy, including compact cars which would have to reach about 40 mpg.
With existing technology, the NAS showed that full-size pickups could reach 29.5 mpg. Our analysis shows that a pickup achieving 28 mpg would save its owners over $6,000 on gasoline during the life of the vehicle. The pickup would have the same power, performance, size and safety it has today, and would cost an additional $1,500. However, the added fuel economy technology would pay for itself in less than two years with gasoline at $2.50 per gallon. Higher fuel economy standards will help farmers and small businesses who rely on trucks as much or even more than the average consumer.
FACT: Automakers that concentrate on the pickup market won’t have to compete on fuel economy with automakers that focus more on cars—the old competitiveness arguments are effectively eliminated. The 35 mpg goal applies only to the aggregate fleet of new cars and trucks sold by all automakers. NHTSA will be able to set separate fuel economy targets for different classes, so a company that focuses more on cars, like Volkswagen, would have to reach 39 mpg, while GM, which is spread out more across different size classes, would only have to reach 34 mpg. The new system requires all automakers to invest in fuel economy, addressing automaker complaints that they are currently being treated unfairly if they sell more large vehicles.
This also means that the light truck loophole, and its problematic impacts, can be eliminated because the new size-based system provides automakers with added flexibility around larger vehicles.
FACT: Increasing fuel economy will boost Big 3 profits and create more jobs in the US. A 2006 study from the University of Michigan shows that Detroit’s Big Three could increase profits by $1.3 billion in 2010 if they invest in fuel economy, even if gasoline costs only $2 per gallon. However, if they follow a business-as-usual approach their lost profits could be as large as $3.6 billion if gasoline costs $3.10 a gallon.
There is a real opportunity here. If existing technologies are used to reach a 40 mpg fleet in ten years, we found that these investments would lead to 161,000 more jobs throughout the country. In the automotive sector, projected jobs would grow by 40,800. These new jobs would be created because of investments in new technologies by the automakers and because consumers would shift spending away from gasoline to more productive parts of the economy.
FACT: Adding a fleetwide goal to size-based standards addresses the key Achilles heel of that system. Size-based standards alone can create an incentive to make vehicles bigger to avoid meeting tougher standards, even if consumers are not pushing for bigger vehicles. This would allow automakers to push down America’s fuel economy and increase our oil dependence. A fleetwide goal eliminates that incentive by requiring all automakers to add technology if they push up the size of the fleet. On the other hand, if consumers do demand bigger vehicles on their own, they can get them under this system. All vehicles, whether large or small, will just have to add more of the existing technology.
FACT: Fuel economy standards are the only policy currently under consideration that will cut consumer spending at the pump. A 35 mpg fuel economy standard is equivalent to cutting today’s $3 per gallon gasoline price by 65 cents, even after paying for the improved technology. That represents a 22% cut in summer gas prices.
Gasoline savings would pay for the added cost of fuel economy technology ($1,100) in about 2 years. After that, the average consumer would save $3,400 more on gasoline over the remaining life of the vehicle. Looking at it another way, assuming you are the typical person and you take out a loan on the car, your monthly gasoline costs will go down more than your monthly loan payments will increase to pay for the added fuel economy technology, so you will begin saving money on the first day you own the car.
FACT: Fuel economy standards work. If we still had the same fuel economy we did in the early 1970’s, we would be using an additional 80 billion gallons of gasoline on top of the 140 billion gallons we will use this year. That would represent an increase in oil demand by 5.2 million barrels of oil per day, or a 25 percent increase in our oil addiction. At last year’s average price for regular gasoline, about $2.50 per gallon, that represents $200 billion dollars saved. That number could have been much better, however, if fuel economy standards had not remained essentially unchanged for the past two decades.
FACT: These standards can be met by putting existing efficiency technology to work; we don’t even need hybrids, though they certainly can contribute.
FACT: These standards can be met while maintaining or improving highway safety. Major reports from researchers at Oakridge National Labs, Lawrence Berkeley National Labs, the University of Michigan, and DRI demonstrate that fuel economy is not linked with increased fatalities, large vehicles do not have lower fatality rates when compared to smaller vehicles, and increased weight is actually associated with increased fatalities.
FACT: A 35 mpg fleet can keep the performance we have now. Today, you can buy a family car that goes from 0 to 60 mph as fast as a late 1960’s Mustang or Porsche 911. Using technology to increase fuel economy will allow us to keep that performance but focus new technology applications on the crisis at hand: oil addiction, climate change and high gas prices.
FACT: Consumers are trying to buy cleaner and more efficient vehicles, but they don’t have many choices. The higher fuel economy version of America’s top selling car, the Toyota Camry outsells the lower fuel economy version by nearly four to one. But even that vehicle does not break the 30 mpg barrier for EPA combined fuel economy. The auto industry’s version of a 30 mpg vehicle is a compact car, leaving millions of Americans who need minivans, family cars and SUVs with no option.
FACT: Americans have moved beyond the old debate.
- A recent New York Times poll showed that over 90 percent of Americans support requiring automakers to make more efficient cars.
- The same holds true for people living at the center of the auto industry—a majority of Michiganders favor higher fuel economy standards for cars and trucks, with some supporting increases to 40 miles per gallon or more, and many would pay hundreds of dollars extra for more-efficient vehicles, according to the latest Detroit Free Press-Local 4 Michigan Poll.
- Pickup drivers also want higher fuel economy. A yet to be released poll by the Mellman Group shows that 84% of American pickup truck owners support a mandatory increase in the fuel efficiency of cars, SUVs, and trucks—even when it was made clear that they would have to pay more up front to save money on gasoline. These findings held across party lines and were even stronger among owners who live in rural areas than those who live in cities.
It is time for Congress to move beyond the old debate too.
Americans are ready to do their part, they want to buy more patriotic cars and trucks that cut oil dependence, reduce global warming and save them money. What Americans need is leadership from you. Requiring higher fuel economy standards will ensure consumers can have the choice to buy the higher fuel economy cars and trucks that the National Academies say are possible—a 29.5 mpg pickup, a 34 mpg SUV, a 37 mpg minivan, and a 41 mpg family car. These standards should be size-based, but should put in place steps to eliminate or counteract any loopholes.
Nobody is claiming that fuel economy standards are a silver bullet. We will also have to tap into low carbon renewable fuels and ask consumers to take responsibility for the number of miles they drive. Nobody should be allowed to shirk their patriotic responsibility to cut our oil addiction and address the high costs climate change will have on our economy. But a good dose of common sense fuel economy policy and good engineering can deliver the cars and trucks this country needs to help tackle these critical problems.
For further information, I have attached my recent testimony before this committee for additional details on these important issues. I have also attached a fact sheet on the Ten-in-Ten bill, the National Academies report, and the fuel economy potential both for the country and for trucks. I hope you find these helpful.
