While options for short-term relief from high gasoline prices are limited, we can protect ourselves from future oil price spikes by cutting the country’s projected oil use in half over the next 20 years — and the production of clean, fuel-efficient vehicles is a critical first step.
Setting strong vehicle fuel efficiency and global warming pollution standards through 2025 offers the best protection for consumers at the gas pump while helping to reduce oil use, increase our energy security, and address climate change.
Volatile oil prices and the ongoing turmoil in the Middle East are vivid reminders of the rising cost of America’s oil use. With added pressure from the continued global economic recovery, this commodity is unlikely to see long-term price reductions. The cars and trucks we drive every day consume nearly half the oil used in this country, and the only way to protect consumers is to cut oil use by making our vehicles more fuel efficient.
Strong clean car standards protect consumers
The average vehicle on the road today achieves just 26 miles per gallon (mpg) on government tests (approximately 21 mpg on the road) and will consume more than 8,000 gallons of fuel over its life. But we can build cleaner cars that reduce oil use and protect American consumers from spiking gas prices.
The Obama administration has proposed strengthening standards for new vehicles from 2017 through 2025, boosting average fuel efficiency to about 50 mpg on government tests (about 37 mpg on road). These standards could save a vehicle owner more than $8,000 over the life of their automobile, even after paying the additional cost of the cleaner technology.
Savings as soon as you drive off the lot
There is an old adage, “you need to spend money to save money,” and it’s true that making our cars meet a clean car standard of about 50 mpg will moderately increase the price of a vehicle. However, the fuel savings vastly outweigh the additional costs.
For many consumers, the savings will begin 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 these new clean car standards 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 (by about $40 per month, on average). Moreover, after the loan is paid off, all subsequent fuel savings will go straight into the consumer’s pocket.
Moving toward the half the oil future
The only real, long-term solution to protect Americans from volatile oil prices is to drastically reduce our oil consumption. At oil prices of $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.
The Obama administration’s proposed 2017-2025 vehicle greenhouse gas and fuel economy standards, along with recently finalized standards covering model years 2012-2016, will result in a near-doubling of the average new vehicle mpg by 2025. These standards represent, by far, the most significant increase in fuel economy in three decades. Setting strong global warming pollution and fuel efficiency standards will deliver critical oil savings, emissions reductions, and relief at the pump.
Drilling doesn’t cut it – and isn’t a short-term fix
A number of public voices have used recent run-ups in gasoline prices to call for more domestic oil drilling. Oil companies are making record profits today by drilling in ever more dangerous and sensitive areas. But drilling for increasingly dirty and expensive oil is neither a short-term solution nor the way to provide real relief for consumers struggling at the gas pump.
We consume more than 20 percent of the world’s petroleum, yet hold only 2 percent of its proven reserves. According to an analysis by the Energy Information Administration, expanded U.S. off-shore drilling in the outer continental shelf would only reduce gas prices by about 3 cents per gallon 20 years from now1. The only way to cut our costly oil use is to move forward on real solutions by increasing fuel efficiency, expanding low-carbon fuels, and providing other transportation options.
1 According to an EIA analysis of impacts from OCS drilling. http://www.eia.doe.gov/oiaf/aeo/otheranalysis/aeo_2009analysispapers/aongr.html