Bailout Watch 337: New York Times Calls for 40mpg by 2020
The federal bailout bucks propping-up GM and Chrysler’s bankrupt businesses come with political strings attached– that will turn into piano wire with each successive snuffle at the trough. And so it begins… Yesterday’s New York Times editorial called for higher federally mandated fuel economy standards. “[Now that Bush is history] The Obama administration now has a free hand to set its own standards that will save consumers money at the pump, reduce oil dependency and greenhouse gases, and help make the American car companies more competitive. The 2007 energy bill required new cars and trucks to meet a fleetwide average of 35 miles per gallon by 2020, a 40 percent increase over today’s average of 25 m.p.g. Congress intended this as a floor, not a ceiling, and ordered the National Highway Traffic Safety Administration to write specific regulations.” Uh-oh…
“Last May, as part of these regulations, the agency set an interim fleetwide standard of 31.6 m.p.g by 2015. This was initially praised for pushing carmakers more than halfway to the 2020 goal. The automakers have since suggested they can meet these goals without difficulty, while reputable studies have said they can do even better — at least as high as 35 m.p.g. by 2015, and 40 m.p.g. by 2020, with no changes in current technology.”
That’s a fleet-wide average, folks. Or maybe a fleet-wide average depending on a vehicle’s footprint. Factoring-in E85-capability credits [still]. And maybe extra credits for electric vehicles. Anyway, let’s connect the dots between the bailout and political goals.
“During Congressional hearings last year on the automakers’ troubles, General Motors and Ford provided production plans to show that they would make more fuel-efficient cars. The Obama administration should make such vehicles a condition of any future help. No matter what Detroit does, the new administration must set much tougher fuel-economy standards.”
Count on it.
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I must say, it's a pleasure to be in the company of such thoughtful and well spoken people (Carnotcycle, Robert Schwarts, NKB Boston) and always fun to make fun of others whose thinking is not as clear (you know who you are, closet socialists). What has not been said, however, is the detrimental effect that a higher gas tax would have on the overall economy. In the USA, where 2/3 of our economy is based on consumption, higher gas prices would mean less to spend on other goods and services. The more I have to pay at the pump the less I'm going to eat out, or buy clothes or go on a cruise. It happened only months ago that this cause and effect was in plain view and yet some morons around are calling on government mandated gas price floors. Brilliant. How many overpaid Ivy League graduates did it take to come up with this idea? All of their premises, all of them, are based on fallacies. Global warming is a myth and I'll do nothing to *combat it*. Dependence on foreign oil will never end as long as theirs is cheaper than ours. And real economic impact will always trump pie in the sky future rewards (CA's CARB is going to mandate costly retrofitting of diesel engines which they argue will save lives over the long run [won't someone please think of the children?!]) Ronald Reagan said it best: government is not the solution, government is the problem.
Don't forget that the average of 50mpg and 30mpg is not 40mpg - it is 37.5mpg. A 40mpg fleet average means that for every 50mpg Prius, an automaker would be allowed to sell one 34mpg Camry Hybrid. To be allowed to sell one 25mpg Highlander Hybrid, the automaker would have to sell one 100mpg vehicle (that does not exist yet). Current technology, including hybrids, cannot get you to a 40mpg fleet average. The cars for sale in 2020 will be carrying expensive 1st and 2nd gen technology to meet fuel economy targets yet still retain some level of utility. At those prices, car sales will suffer greatly. I guarantee that more than half the cars on the road in 2020 will be built pre-2010. And they will not be replaced with government-mandated fuel-sippers at a rate that has any measurable effect on fuel consumption or emissions. The only thing that will EVER have an impact on how much oil Americans use is the price of gas.