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May 6, 2011 

The Truth about Rising Gasoline Prices

As the national average gasoline price approaches $4 a gallon, there have been a growing number of proposals for what the best step is – fuel efficiency, domestic drilling, or some other method – to provide relief at the pump. To resolve some of the confusion, here are some facts about gas prices the Union of Concerned Scientists believes you should know.

Expanding domestic drilling will not lead to energy independence.

The United States cannot drill its way to energy independence. We consume nearly 25 percent of the world’s petroleum, yet hold less than 2 percent of the proven reserves. The only way to cut U.S. dependence on foreign oil producers is to significantly cut our need for oil by increasing fuel efficiency, increasing our reliance on low-carbon fuels, and providing other transportation options.

Domestic oil drilling is not a short-term solution; it will not lower gas prices.

Some are using the recent increase in gasoline prices to call for more domestic oil drilling. That is not a viable short-term solution; nor would it provide relief for consumers struggling to pay for gasoline. An analysis by the Energy Information Administration (EIA) found that expanded offshore drilling in the outer continental shelf would not have any impact for the next decade, and would only reduce gas prices by about 3 cents per gallon in 2030.

Fuel efficiency is the best way to save oil.

Fuel efficiency remains one of the most effective methods for reducing U.S. oil consumption. Congress enacted the first Corporate Average Fuel Economy (CAFE) standards in 1975 in response to the Organization of Petroleum Exporting Countries (OPEC) oil embargo. In 10 years, the program succeeded in nearly doubling the fuel efficiency of new cars, making it the most successful oil savings policy Congress ever enacted. After several years of delays, which have cost billions of barrels of oil in potential savings, fuel efficiency is once again on the table. The Obama administration is now setting new standards through model year 2025.

Ignoring fuel efficiency for the past two decades is costing billions today.

Despite the success of CAFE standards in cutting America’s oil dependence, the auto industry convinced its allies in Congress to include riders on the annual Department of Transportation (DOT) appropriations bills in the 1990s that blocked the agency from setting new fuel efficiency standards. This led to a long-term stagnation in new vehicle fuel efficiency for nearly 20 years. By preventing the DOT from setting fuel efficiency standards, the average fuel efficiency of new vehicles sold in model year 2007 was lower than new vehicles sold in 1987. Because of those delays, drivers will spend an estimated $45 billion more on transportation this year alone.

60 miles per gallon (mpg) is within our grasp.

This fall, the administration plans to introduce new efficiency standards covering light-duty vehicles sold in model years 2017 to 2025 that could reduce new vehicle global warming pollution by as much as 6 percent per year -- a level equivalent to approximately 143 grams per mile and a CAFE average of about 60 miles per gallon (mpg) by 2025. This announcement builds on a first round of standards finalized last year that was supported by a wide range of stakeholders, including the auto industry, labor groups and the environmental community. The first round of standards, which apply to new vehicles built between 2012 and 2016, requires a new vehicle average of 34.1 mpg in model year 2016.

60 mpg will save drivers money.

A fuel efficiency of 60 mpg would save vehicle owners nearly $9,000 over the life of the vehicle at a gas price of $4.00 per gallon after factoring in the cost of the vehicle’s more fuel-efficient fuel technology. That’s the equivalent of a gasoline price cut of $1.30 per gallon compared to a vehicle with today’s fuel efficient technology. If gas prices rise to $5 per gallon, the clean car standards would deliver net savings of more than $11,500 over the life of the vehicle, the equivalent of a gasoline price cut of $1.70 per gallon compared to a vehicle with today's fuel efficiency.

Increasing fuel efficiency is key to addressing global warming.

Cars and light trucks are major sources of global warming pollution. Every gallon of gas burned is responsible for about 25 pounds of heat-trapping carbon dioxide (CO2), the main pollutant causing climate change. Boosting fuel economy, along with improved air conditioners and low-carbon fuels, could reduce new vehicle global warming emissions by 6 percent annually, which would avoid 3.3 billion metric tons of global warming pollution cumulatively between 2017 and 2025—equivalent to taking all of today’s cars and light trucks off the road for more than two years.

Increasing fuel efficiency, reducing pollution creates jobs.

The Obama administration created a national program to increase new vehicle fuel efficiency to about 34 miles per gallon by 2016 and set the first national global warming pollution standards for new vehicles. An analysis of a similar proposal shows that this first round of standards will create more than 200,000 net new jobs by 2020 across the country, including 20,000 in the auto industry alone. The second phase of standards would continue to generate new jobs in U.S. manufacturing and boost overall economic growth.

Fuel economy secures our energy future.

With oil prices now more than $100 per barrel, about $1 billion leaves our economy every day to pay for petroleum imports—equivalent to more than 50 percent of the U.S. trade deficit. By making our vehicles cleaner and more efficient, we can lower U.S. dependence on oil, create new jobs, and cut pollution – all at the same time.

Undermining the Environmental Protection Agency's (EPA's) ability to create vehicle emissions standards raises costs, increases oil dependence.

There have been some proposals in Congress in recent months that would strip the EPA’s authority to protect public health by implementing global warming pollution standards. For example, Rep. Fred Upton (R-Mich.), whose broader legislation to strip EPA authority to regulate global warming emissions also would jeopardize standards for new vehicles, claims his bill would lower gas prices. PolitiFact declared that claim to be false.  In fact, a UCS analysis concluded that blocking the standards would force the nation as a whole to spend as much as $100 billion more on transportation in 2030 alone. The bill also would increase U.S. oil dependence by as much as 2.4 million barrels per day—50 percent more than we currently imports from the Middle East.

Learn More.

For more information on fuel efficiency and clean car technology please visit UCS’s Clean Car Standards Resource Center.

 

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.

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