| April 18, 2008 |  |
New Report Says Major Gains Possible Under Fuel Economy Law
Proper Implementation Could Mean A 50+ MPG Fleet Average By 2030, According To UCS Analysis
WASHINGTON (April 18, 2008) -- The federal agency writing regulations for vehicle fuel economy standards could lay the groundwork for a new vehicle fleetwide average of more than 50 miles per gallon by 2030, according to a new report from the Union of Concerned Scientists (UCS). The regulations mark the first phase of implementing new standards passed by Congress in the energy bill last December.
"After years of delay, we can't afford to waste this opportunity to cut our dependence on oil, curb global warming pollution, and save consumers money at the pump," said report author Jim Kliesch, a senior engineer at UCS. "Congress set a floor of a 35-mile-per-gallon fleetwide average by 2020, but gave a green light to stronger standards as long as they're feasible and cost effective. Our analysis shows that existing technology will get us well beyond a 35-mpg fleet average."
The energy bill requires the Department of Transportation's National Highway Traffic Safety Administration (NHTSA) to set fuel economy standards so the fleet average reaches at least 35 mpg in 2020, and requires NHTSA to make consistent progress towards that minimum starting in 2011. Additionally, by law, NHTSA must further strengthen the standards if it determines that higher, "maximum feasible" fuel economy levels are achievable. NHTSA is expected to release proposed car and light truck fuel economy standards for model years 2011 to 2015 as early as next week.
Historically, NHTSA has used cost-benefit analyses to assess maximum feasible fuel economy levels, though in doing so, it incorporated flawed assumptions resulting in erroneous findings. In a fuel economy rulemaking released in 2006, for example, the agency assumed gasoline costs that significantly underestimated consumer savings, Kliesch pointed out. Further, it placed a monetary value of reduced global warming pollution at zero, suggesting that there are no economic benefits to avoiding the worst consequences of climate change. In November 2007, the Ninth Circuit Court of Appeals ruled that NHTSA's approach was arbitrary and capricious, and ordered the agency to revisit the standards.
According to UCS's report, NHTSA could set cost-effective fleet average fuel economy standards nearing 40 mpg by 2020, a target achievable even without hybrid technology. With a modest 25 percent hybrid market share in 2020, a fleet average fuel economy of 42 mpg could be achieved, while increased sales of fuel-efficient hybrids could lift the average even higher.
"NHTSA should reject past automaker 'can't do' arguments. It's time to tap into existing technology and address the fact that prices are rising at the pump, our country is becoming more oil-dependent, and global warming's effects are only getting worse," Kliesch said.
In what represents the first comprehensive review of a number of government, academic and nonprofit institution studies on fuel economy technology, UCS conducted cost-benefit analyses to determine realistic ranges for a potential fuel economy rule. The studies UCS examined ranged from reports by the National Academy of Sciences to UCS itself. The chief differences among the studies include varying assumptions about hybrid technology and the use of high-strength, lightweight materials.
When calculating the benefits of fuel economy standards, the UCS report assumed a $2.61 per gallon price for gasoline, the average price over the past three years. Previous NHTSA analyses used overly conservative Energy Information Administration gasoline price forecasts of $1.96 per gallon to $2.16 per gallon through 2030. This week the average price of regular gasoline surpassed $3.40 across the country, and experts are predicting prices as high as $4 per gallon this summer.
The UCS report also calculated the benefit of reducing global warming pollution and increasing oil security. It used a carbon price of approximately $41 per ton of CO2, equivalent to $0.49 per gallon, and a conservative estimate for the benefit of increasing oil security of $0.35 per gallon. Both figures are in 2006 dollars. (For more on carbon and oil security pricing, see page 24 of the report.)
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
