By on August 3, 2018

The Trump administration’s ongoing endeavor to replace existing fuel economy mandates with something easier on automakers is a hot topic, but the issue has more angles than a rhombicosidodecahedron. One that took a backseat during much of our coverage is where the oil industry fits into all of this. We figured it was pretty obvious because, every time we heard the word “rollback,” our minds automatically added the cash register sound effect.

Car manufacturers aggressively lobbied for more lax corporate average fuel economy (CAFE) standards since Donald Trump took office. But so has the oil industry; it just wasn’t doing so quite as openly. So what exactly does the federal government’s fuel economy rollback mean for Big Oil? Don’t act as if you didn’t already know.

Cha-ching

However, an onomatopoeia is insufficient in understanding the full scope of the issue. Let’s dive back into the EPA and NHTSA’s joint proposal, because it talks about oil extensively.

On page 21, the document states “the global petroleum market has shifted dramatically with the United States taking advantage of its own oil supplies through technological advances that allow for cost-effective extraction of shale oil. The U.S. is now the world’s largest oil producer and expected to become a net petroleum exporter in the next decade.”

It goes on to explain that lower fuel prices contributed to consumers moving into crossovers, sport utility vehicles, and pickup trucks much faster than anticipated at the time of the last efficiency rulemaking — when gas prices were much higher than they are today. Consumer preference was a large part of the the administration’s decision to rollback fuel economy mandates. We’ve repeatedly said that this shift in shopping habits has effectively put practical efficiency averages in the United States at 25 mpg since 2014, despite automakers continuing to build frugal vehicles.

The United States’ role as an oil exporter also evolved as the rest of the world became grew hungrier for it. During the 1970s, the U.S. consumed roughly one-third of the world’s oil, and had to import most of it. Today, it’s a very different story, and there is less danger of another foreign gas crisis. That being the case, domestic oil companies are very keen to ensure Americans keep using their product.

Bloomberg reports that representatives from the American Fuel and Petrochemical Manufacturers, an oil refining trade group, and executives from numerous member companies urged White House officials to ease the standards during a meeting in June. But oil industry leaders have supported the move for a while, with some admitting to lobbying government officials earlier this year — including Marathon Petroleum Co., Koch Companies Public Sector LLC, and Andeavor.

American Fuel and Petrochemical Manufacturers also issued a release this week praising the administration for delivering a plan “that reflects market realities, industry progress and consumer preferences.”

“We come from a free-market perspective, where we believe consumers should have a choice in their vehicles, and they can weigh all the appropriate factors — be it size, horsepower, utility, or fuel economy,’” said Derrick Morgan, senior vice president of the industry group. “We trust individual consumers to make the right decisions; we don’t think Washington or Sacramento should be making all those determinations.”

In terms of volume, government estimates show capping CAFE at 2020 levels yielding an additional 500,000 barrels of U.S. oil demand per day by the early 2030s. That’s about 3 percent more than previous projections. It also means automakers only have to meet fleet-wide averages of 37 miles per gallon, instead of preexisting rules that placed the average closer to 50 mpg.

If you’re wondering why the long-term oil demand estimates aren’t higher after accounting for the proposed rollback, most conservative projections presume consumers still won’t purchase extremely economical vehicles if fuel remains affordable.

These are, of course, estimates. If small, super-efficient vehicles suddenly became fashionable, it could be a very different situation. But that’s not currently the case, so projections don’t factor that as a possibility.

Either way, lowering the mandated efficiency averages is good for oil producers, and some have taken umbrage with that. “It is oil above all,” said Democratic Senator Ed Markey. “Freezing the standards would cost American drivers an additional $20 billion in 2025 alone on higher gas spending. That’s money transferred right out of consumers’ pockets into big oil coffers.”

Meanwhile, an analysis by Rhodium Group suggests the proposed changes could cost consumers an additional $193 billion to $236 billion, cumulatively, between now and 2035. Environmentalist groups spent the week denouncing the proposal as irresponsible while California prepped for a legal battle to keep to the Clean Air Act waiver allowing it to set its own limits — which ultimately affects the rest of the nation.

Again, while we can’t assure the public spending will be as high as claimed, it is safe to say the administration’s fueling proposal benefits the oil industry in a very meaningful way. But it’s only one piece of the puzzle, as leaving the standards under the Obama-era rulings would likewise reshape most automotive fleets and force companies to adopt smaller powerplants and alternative sources of energy — increasing development costs on products the average American might not want.

Meanwhile, the rollback may mean you get to keep your V8s a little longer. But there are costs associated with it, too. Neither route is without its share of pitfalls, so it’s no wonder why everyone’s up in arms.

 

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65 Comments on “Let’s Not Forget Where the Fuel Economy Rollback Leaves Oil Companies...”


  • avatar
    stingray65

    How can idiots such as Markey get elected to anything higher than dog catcher. Freezing standards won’t cost consumers a penny they don’t want to spend, because they can still buy a Volt, Leaf, or Yaris if they desire. Any extra fuel spending by F-150 or Corvette buyers is purely by their own choice, unlike CAFE regulations that force everyone to pay a higher price for their vehicles. As for money going into the coffers of “big oil” – what a terrible thing for those oil company shareholders (including pension funds and and charitable endowments) to get some extra dividends that they will pay taxes on, and what a terrible thing for those oil rig workers, oil truck drivers, and refinery workers to earn high wages that they will pay income taxes on, and the oil companies themselves will pay taxes on. Much better if we have more Tesla’s that make cars that aren’t profitable and don’t pay any taxes, and solar and wind companies that get huge subsidies, aren’t profitable, and don’t pay any taxes.

    • 0 avatar
      TwoBelugas

      How nice of Markey(D) of Mass. to suddenly worry about cost to the public. He must be floored if he hears about that 7500 federal and 1000 state subsidies paid to the wealthy Mass’ fat cats to buy Teslas.

      /s

    • 0 avatar
      TW5

      The crazy part is that CAFE 2025 will give Markey et al much less federal gasoline tax revenue to waste. When has a politician ever advocated for this outcome? Even Republicans cut taxes to raise revenue.

      Anyone in DC who is pushing CAFE 2025 is on the take elsewhere. They are either getting campaign money and kickbacks to push CAFE and/or they are personally invested to benefit from a corrupt deal after CAFE standards are implemented. They never allow themselves to have less money and power after legislation goes through.

    • 0 avatar
      Erikstrawn

      “Freezing standards won’t cost consumers a penny they don’t want to spend, because they can still buy a Volt, Leaf, or Yaris if they desire.”

      About ten years ago my wife and I were looking to replace her Chevy Lumina. She needed a mid-sized car and wanted a V6. She was making a long commute, so we looked for a 2000-2005 mid-sized car with decent fuel mileage. When we started looking we realized that just about everything with a V6 from that era got 19 mpg. In 2007, when gas prices shot upwards, gas mileage magically went to 25 mpg for the same cars with the same engines. I love the free market, but sometimes manufacturers need a push.

      We did finally find an ’00 Honda Accord V6 rated at 25mpg, but there wasn’t much else out there on the market.

      • 0 avatar
        stingray65

        Erik – you do realize that your example does not support CAFE? Gas prices shot up and the market responded with higher MPG mid-size cars, which probably added some expensive technology (i.e. 6-8 speed automatics instead of 4-5 speed, direct injection instead of port, etc.) that customers were not willing to pay extra for until fuel prices got higher. Yet even before that time, you could still easily find cars that would get 25+ mpg if you were willing to downsize on power or vehicle size.

  • avatar
    IBx1

    Oh no, oil companies selling oil in the future at the same rate they are today, how cruel a world we inhabit.

  • avatar
    ernest

    I think it’s really taking folks a long time to adjust to the new realities of the oil business.

    1. Peak oil? Nah, just another example of what happens when you let environmental “experts” forecast the future.

    2. Mideast caused oil shortage/price spike? Not for us. And that dynamic changes the entire mid-east political spectrum.

    3. Who expected the US to be the world’s largest oil producer?

    I could go on, but you get the idea.

    • 0 avatar
      stingray65

      The problem for the environmentalists is that for years they said we needed to move to renewables because oil and gas were going to run out in 10 years (i.e. Jimmy Carter 1979). Unfortunately for them, we keep finding the stuff and keep getting better at extracting and refining it, so they shift to the need to move to renewables because we will boil to death from climate change in 10 years (i.e. Al Gore in 1991, 1993, 1995, 1997, 1999, etc.). So far those predictions are also not proving true – in fact global temperatures have dropped the past couple of year wiping out most of the recorded warming from the last century. What disaster can they come up with next?

      • 0 avatar
        MrIcky

        This just isn’t true per NASA. https://data.giss.nasa.gov/gistemp/graphs/.

        • 0 avatar
          Fred

          on the same page see the chart for
          Annual Mean Temperature Change for Land and for Ocean clearly the temp for land and ocean has risen for the last 100+ years

        • 0 avatar
          stingray65

          Surface temperatures are not accurate due to Urban Heat Soak Effects and poor quality temperature reporting in much of the world.

          https://www.manhattancontrarian.com/blog/2018-7-12-why-climate-change-seems-to-have-faded-from-the-news

          • 0 avatar
            golden2husky

            SR65 – Instead of posting links from websites that are openly hostile to any form of government involvement, why not try to find some that are politically agnostic? I would never post to you climate change data from, say, Environmental Defense even though their data is spot on and backed by reams of science. You would be, rightly so, skeptical from the start. Instead, I would tap into the data supplied by 97% of the world’s climatologists who have enough data to prove that man has influenced the climate. Enough with the brain dead denial. That ship has sailed…If you wanted to argue just what the outcome of rising CO2 means, well there is plenty of room for that…

          • 0 avatar
            stingray65

            Golden Husky – all the government websites are corrupted by climate scare money. They doctor the data to show warming because if they don’t there is no need to fund their research, which is why the skeptics are almost always retired professors and scientists that no longer need to feed from government funded troughs. The Manhattan Contrarian has been a very good site for publicizing research that occasionally gets through the pro-warming biases of the journals and funding agencies such as the following:

            https://www.manhattancontrarian.com/blog/2016/9/19/what-exactly-is-the-science-underlying-climate-alarmism

            https://www.manhattancontrarian.com/?offset=1517871704378&tag=Energy+and+the+Environment

          • 0 avatar
            MrIcky

            @SR65 — a quote from that NASA website:

            “GISS Homogenization (Urban Adjustment)
            One of the improvements — introduced in 1998 — was the implementation of a method to address the problem of urban warming: The urban and peri-urban (i.e., other than rural) stations are adjusted so that their long-term trend matches that of the mean of neighboring rural stations. Urban stations without nearby rural stations are dropped. This preserves local short-term variability without affecting long term trends. Originally, the classification of stations was based on population size near that station; the current analysis uses satellite-observed night lights to determine which stations are located in urban and peri-urban areas.”

            I’m not a greenie, I just enjoy accuracy in conversations. I don’t believe a lot of websites on this type of topic because I believe they spin data. I am convinced that NASA is just putting up the data they get without embellishment.

      • 0 avatar
        starbird2005

        Er no, its more that we’re pumping so much carbon dioxide into the atmosphere its having a serious effect on the climate. We’re already 1 degree Celsius above where we should be because of fossil fuels, and its only going to get worse. This year for example, will be the new normal by 2060, and that’s not pleasant.

    • 0 avatar
      ernest

      Forbes doesn’t agree with you.

      https://www.forbes.com/sites/michaellynch/2018/06/29/what-ever-happened-to-peak-oil/#188a4836731a

      • 0 avatar
        stingray65

        Big 3 – you know nothing about anything – I don’t see you citing any counter-material, but then again comic books are probably not going to be very persuasive. There was an academic journal called Peak Oil published until 2012 – when they gave up because of rapidly increasing global oil reserves.

      • 0 avatar
        ernest

        https://www.forbes.com/sites/judeclemente/2018/07/29/u-s-crude-oil-production-and-exports-soar-to-record-highs/#44e510dc7793

        Always be careful about claiming you’re the smartest guy in the room, especially when someone else researches through gold-standard sources.

        Did I mention my daughter’s an Engineer in the Energy biz? (electric, not oil btw. But they keep tabs.)

      • 0 avatar
        stingray65

        Big 3 – how dense are you? The oil industry does not get any government subsidies and pays huge taxes. The articles you see about oil industry subsidies are almost entirely things such as government programs that help pay the electricity bills of the poor, or the tax break farmers get on their tractor fuel, and depreciation allowances for depleted oil fields, which are similar to what every other industry gets. The only energy sector that actually pays net taxes is the carbon-based sector, so if you want to get rid of energy subsidies it will be your precious renewables that shut down overnight.

        https://www.forbes.com/sites/gradsoflife/2018/07/31/the-drive-to-succeed-meeting-the-demand-for-modern-auto-technicians/#3f5c1ac56f5f

  • avatar
    TW5

    I appreciate the exposition into the oil biz, but this editorial is a bit off the mark.

    The oil supermajors, excluding the state-owned oil supermajors, rarely own the reserves. When we roll back CAFE, $20B doesn’t go to Exxon’s bottom line. Much of it goes to Americans with resource royalties. After that it goes to Canadians with minerals, or various governments like Saudi Arabia or Venezuela. Furthermore, the potential fuel savings from CAFE 2025 would have been given to the green energy robber barons. There was no net benefit promised to Americans other than a shrinking trade deficit, and fake promises of a more stable climate. The real goal of CAFE 2025 was to enrich various special interests via regulatory fiat, and since California was angling to attract those businesses, like Tesla, they are particularly bitter than the future isn’t aligning itself with their regulatory edicts.

    What do you think cap-and-trade is all about? The godfather of externalities economics said never to try it, but how many billions and billions do you think those transactions are worth to a state economy? I wonder why Obama wanted cap-and-trade on the Chicago Mercantile Exchange? Green energy = neo robber barons.

    If you want to get angry at the oil industry, look no further than their attempt to raise gasoline octane ratings. The gasoline price increase goes directly into the pockets of the petrochemical companies who own the refineries and the chemical divisions that manufacture additives. Raising minimum octane was the oil industry’s attempt to screw the average consumer by “saving the planet”. It was basically a gasoline excise tax that would have gone directly to their shareholders. Sick.

    Rolling back CAFE 2025 is saving everyone who dares to imagine a future with vehicles other than a Prius or a pickup. If you want to be outraged at the benefactors, you have to look at other legislative initiatives or business practices.

    • 0 avatar
      MrIcky

      RE: Octane ratings- my understanding was that it’s car companies who want to raise octane ratings. Not the oil companies. As I understand it – engineering for either mileage or horsepower (maybe both) is easier with higher octane.

      Engineers would love to be able to reliably get 95 octane because that can get you nearly a 10% bump in compression without predetonation over the 87-89 Regular swill you get now.

      • 0 avatar
        TW5

        @ MrIcky

        The suggestion was for 95 MON, which is 91-ish AKI, depending on RON performance. Manufacturers have built vehicles requiring this fuel on many occasions. They don’t need new rules.

        The direct beneficiary of eliminating the lowest tier of gasoline would be the refiners, and that is certainly the genesis of the policy change. The purpose of having the automotive manufacturers push the agenda is that it give the oil companies more leverage during negotiations.

        • 0 avatar
          MrIcky

          @TW5, you are in error:

          “We believe a higher efficiency gasoline solution with a higher Research Octane Number (RON) is very important to achieving this. USCAR research shows that 95 RON makes sense from the viewpoints of both refiners and fuel retailers.”

          This is from David Filipe VP of Ford Powertrain Engineering.

          Read more: https://autoweek.com/article/car-news/battle-octane-95-might-be-new-standard#ixzz5NPhRPOpx

    • 0 avatar
      TW5

      @ Big3 Beancounter

      Actually, it is a 99% thing. I once closed a deal where a convict got a 7-figure check plus overriding royalties for otherwise worthless plot of scrub brush. We literally had to send a broker to the prison to acquire signatures. A public records search in many rural counties will show how many 99%’ers are getting paid for subterranean minerals, and many times its enough to save the house or put their grandkids through state university.

      Upstream is lucrative business, but Big Oil is just one of many benefactors. Big Oil’s reliable returns are in downstream and chemical because low gasoline prices mean more gallons refined.

      • 0 avatar
        mcs

        @TW5: I made my fortune in the late 90’s by following my father’s advice, taking my dot com money, and buying up mineral rights in places like Lea County NM. Lots of small 99%’ers selling for some quick cash. I have to give my dad the credit for all the research and work getting me to pull out of the tech bubble in time.

        Right now, that money is the engine driving other things, including battery technology investments. One of the most promising battery technologies is solid polymer electrolyte which is made from petroleum products. Kind of a twist on oil. Instead of burning it, we’ll be using it in batteries. So, there is still a market for it even in a battery-driven world of EVs. I think that’s one of the reasons some oil companies are starting to warm up to the idea of EVs in addition to realizing they can make money on charging.

        http://ionicmaterials.com/the-solution/

        • 0 avatar
          TW5

          @ mcs

          Oil companies are hedging. The end game they prefer is one in which they control renewable fuels, preferably drop-ins, like biogasoline and biodiesel. We could be blending petrogasoline and biogasoline right now, and achieving ecological/economic/natsec goals in the process, but it doesn’t meet with DC’s tribal desire to transfer wealth from one group of rich people to another, while enriching themselves in the process.

          The alternative energy industry is built on an unstable political foundation, and the people who’ve fostered its creation are losing influence. Invest with care.

    • 0 avatar
      golden2husky

      TW5 – why the hate on cap and trade? Environmental issues are not usually just local. If a really clean power plant can sell its “credits” to a dirtier plant, the overall emissions spewed into the atmosphere will meet the requirement at a lower cost than forcing the dirty plant to upgrade or be replaced. A market based solution. A win across the board.

      I won’t argue about the mileage standards because that system is fundamentally flawed. If I was in charge the first thing that would go is the footprint standard – a gift to the big 3.

      • 0 avatar
        TW5

        @ golden2husky

        Because the godfather of externalities economics (Pigou) said cap-and-trade should not be used to synthesize market forces in the externalities industry. It will introduce more problems than it solves. It also introduces perverse incentives. If pollution is bad, why are we paying people to pollute less than others? Should we pay drug dealers because they aren’t murderers? Carbon taxes do not have this glitch. Everyone pays for polluting. I don’t think we need a tax on human exhalation, but carbon tax is superior to cap-and-trade. Unfortunately for wall street, carbon taxes can’t be traded :*(

        Cap-and-trade is a corrupt, dysfunctional regime. It’s bad enough that the founding father of externalities economics went out of his way to argue against cap-and-trade before it was ever proposed. Cap-and-trade exists in public lexicon because it’s worth billions in annual profits to the investment banks, and they won’t let it die. It’s name should never be spoken by the public as a result.

  • avatar
    Tennessee_Speed

    Ed Markey: “Freezing the standards would cost American drivers an additional $20 billion in 2025 alone on higher gas spending”.
    Well Ed the only problem with your logic is that you’re forgetting about the dramatic cost increase of advanced emissions technologies the auto mfgs would need to include in our forthcoming cars. As auto emissions are reduced the compliance costs go up exponentially, but Ed sitting in his confortable senate office is probably not too concerned about these costs.
    Actually the oil majors shouldn’t be the ones discussing the emissions issue; it’s the auto mfgs that have their feet to the fire.

    • 0 avatar
      dejal1

      Piston Slap: Earth Dreams of Carbon Buildup? from earlier today.

      Which if extrapolated on a grand scale will suck up a lot of that $20B. Not just in cost, also in the consumers time.

    • 0 avatar
      stingray65

      Except that CO2 emissions are directly a result of fuel economy, so they are directly related as long as the idiots at the EPA consider CO2 plant food a pollutant.

  • avatar
    TW5

    We are not even close to being a net exporter of oil. CAFE 2025 is a non-tariff trade barrier for oil exporting nations like Canada. You’re against non-tariff trade barriers, right?

  • avatar

    I am committing suicide or moving to Canada. Did not decide yet which one is better for environment. People let’s stop the Big Oil!

  • avatar
    golden2husky

    …“We come from a free-market perspective, where we believe consumers should have a choice in their vehicles, and they can weigh all the appropriate factors — be it size, horsepower, utility, or fuel economy,’” said Derrick Morgan, senior vice president of the industry group. “We trust individual consumers to make the right decisions; we don’t think Washington or Sacramento should be making all those determinations.”…

    Of course that is what they say. They are on the winning side of this. Had they been affected negatively the Koch criminals would be opening their war chest to fund the fight against it.

    • 0 avatar
      ernest

      So basically you’re saying the same Organization that runs the California DMV can go ahead and decide what size/type of car you drive?

      • 0 avatar
        golden2husky

        Nope. That’s the idea of an average economy standard. There is room for those vehicles that use more fuel, just at there is room for those who use notably less. The problem is that CAFE, while well intended, is fundamentally flawed in its execution. I would abandon it and institute a revenue-neutral registration surcharge/credit. Fall below the accepted average and a cost is added to your registration. Go above and you get a check. By selecting a reasonable standard, you would coerce automakers to get under the cap for a registration “penalty” by trying their best to make the grade.

        I won’t lie – I have a 6.2 liter V8 sitting in the garage, but I commute in a non-Prius hybrid. So, I’d likely have a bit of a penalty on one hand and a credit in the other…

  • avatar
    arthurk45

    This whole topic is a nonsensical issue. By 2030, not one single auto manufacturer will be building a gas powered car. Get real, prople, only battery prices prevents a total takeover by electric cars and batteries are getting cheaper every day.

    • 0 avatar
      TW5

      And we are going to replace 142 billion gallons of gasoline with what? A battery is an energy storage device. Are you going to run 142 billion gallons of gasoline through an electric power plant and call it progress?

      Petrochemicals are not going anywhere.

      • 0 avatar
        TW5

        @ Big3 Beancounter

        We’re not going to increase solar production 60 fold in 12 years. We probably can’t even expand solar fast enough to keep pace with the increase in energy demand. Petrochemicals are going to be here a while.

        And if you want to use the sun, biofuels and biomass are the way. We already produce about 8 times as much bio energy as solar.

        • 0 avatar
          mcs

          “Are you going to run 142 billion gallons of gasoline through an electric power plant and call it progress?”

          That would be progress since electric motors are more efficient than ICE. Then, then renewables could replace the fossil fuel generators gradually without having to change the vehicle fleet.

          Typically, the petrochemical used for electrical generation is natural gas and it’s a lot cleaner and more efficient expended through an electric motor than most gasoline-powered ICEs. You can get even more efficiency using grid storage systems.

          In Massachusetts, solar installations on homes are getting to be common and utilities are starting to construct solar farms. My local utility has built one and is starting the other. I have the option if I want for a solar installation at home and will probably do it.

          That being said, I’m an oil investor and don’t plan to get out anytime soon. Plenty of uses for oil. Ironically, the most promising new battery tech, solid state, uses polymers (from oil) that allows them to be mass produced through an extrusion process. It’s a much cleaner use for oil, but it still means we’ll need oil in cars. Just not as much.

        • 0 avatar
          TW5

          @ mcs

          I’m not sure we have enough natural gas to replace petroleum. We’d need to increase production by about 75%-80% to make it work. That means fracking and aggressive exploration. Not many EV people are on board. I suppose we could sell all of our oil for natural gas, but it would wreck the market and be counterproductive.

          Photovoltaic solar is a waste of time on a macro scale. It’s cool for “unplugging” yourself from the grid, but it’s expensive and inefficient. Thermal is better, but it still has issues and Mass is not the place for either. Plants are best. Despite the inherent inefficiencies in photosynthesis, plants sequester carbon and reproduce naturally (near-zero manufacturing cost). They also perform hydrolysis, which is the key to unlocking hydrogen power, and some energy crops can be irrigated with salt water.

          We should be spending more of our money on plants, not on solar equipment that will be sitting in landfills for 1000 years. If plant-based biofuels continue to expand we will need ICE’s for quite a long time, unless someone develops a fuel cell. If Congress invested more time in working with legitimate energy companies, rather than grifting for their friends, relatives, and powerful constituents, we’d probably be close to drop-in biofuels. Why are we still blending our gasoline with ethanol? Switch to biogasoline. Prices will go up. Consumption will go down. Net carbon emissions will decline. Why haven’t we done it? Because Congress can’t figure out how to profit from it. The players are too big to control and it doesn’t involve raising taxes.

        • 0 avatar
          TW5

          @ Big3 Beancounter

          When we sent astronauts to the moon, we didn’t expand the production of rockets by 60 fold. We improved their power and technical efficiency. The correct analogy is “We put a dozen men on the moon, why not create a permanent moon base by 2030 for a company of Space Marines?” The question answers itself. It is an expensive, irrelevant mission.

          Regarding oil subsidies, there are none. The “subsidies” are primarily accelerated or theoretical cost recovery mechanisms. Real estate developers receive the same benefits, though they are more closely tied to cost basis. The feds are not really giving subsidies to the oil companies, and oil companies are not paying negative effective income tax rates, like Tesla, for instance.

    • 0 avatar
      ernest

      @tararthurk45 That’s an interesting perspective. Can I ask how you arrived at that?

  • avatar
    Big Al from Oz

    Big3,
    I have to agree with you.

    The othe laugh in the article is the comment of more choice to the consumer. The choice is limited to what the industry wants to control. This seems less innovation and progess.

    I say do away with CAFE and turn to the UNECE vehicle regs. This leaves plenty of scope to allow for V8s, whilst building vehicles of an exportable standard.

    Oh, you set fuel tax to modify vehicles purchasing if or when needed.

    This will save the US billions every year and creating a more competitive and progressive vehicle market.

  • avatar
    HotPotato

    This just in: oil companies prefer selling more oil!

    If the Feds succeed in both rolling back the standard and rescinding states rights to set their own standards, there are other ways states could work to reduce consumption if that remained a policy goal for them. For example, raise the state gas tax, coupled with a refundable state income tax credit set at a level that would leave the average Joe driving the average car held harmless, while providing a net financial benefit to those driving something more efficient and a net cost to those driving something less efficient.

    Whether citizens would be financially sophisticated enough to understand and respond to those signals is another question though. For example, many working poor people don’t file taxes because they assume they’d have to pay a bill, when in fact they’d be refunded back more taxes than they paid. Many middle class people don’t claim deductions because it’s confusing even though they could pay a lot less in taxes in exchange for an extra hour filling out forms. (Whereas rich people can get away with tax activity that’s pretty obviously out of bounds just by having their accountant draft a “tax opinion letter” that signals to the IRS “this SOB is going to waste more of your money in court than you could recover in taxes, so just let them get away with it.” But I digress.)

    In Europe they have a much simpler market signal: gas is seriously expensive, but the minimum wage is seriously high. So you CAN afford gas, but you can clearly see that you’d rather NOT burn more of it than you have to. That’s a more sensible approach than CAFE this and state by state that, but it can’t work unless the whole country, or at the very least whole regions of the country, can agree to do it together, and the whole country seemingly can’t agree that the sky is blue, so fat chance.

    • 0 avatar
      TW5

      Do you have any idea how much it costs for wealthy individuals to engage in private letter correspondence or rulings with the IRS? The things people make up about our tax system are beyond comprehension at times. Rich people haven’t been able to get away without paying taxes since the 1960s, when we implemented alternative minimum tax to stop wealthy people from abusing tax shelters. Back then the IRS found 155 millionaires who managed to escape taxation.

      Tax shelters were more or less eliminated with IRC 1987 and IRC 1986, but they kept AMT because they discovered it was stealthily raising taxes on the middle class, which is Congress’ favorite past time.

      Anyway, you’re right about states implementing other programs, and they should. Raising gasoline tax is not wise. It’s a political hand grenade and it competes with federal gasoline excise tax. Gas guzzler tax is smarter. It’s avoidable, and it’s much easier to build a majority coalition behind it.

  • avatar
    tylanner

    Thank god this is all temporary and the car manufacturers have to know this too…

    Take advantage of this fleeting negligence at your own peril…or you might end up like Ford.

    • 0 avatar
      DenverMike

      Right! So when the pendulum swings the other way, that’s temporary too.

      But since you bring up Ford, doesn’t it seem they had the inside “word”?

      It’s all playing right into their hands. Either way, CAFE fines are still $55 per mpg in violation. Even if 2025 CAFE went through, that’s just about $1,100 CAFE fine per F-series truck, if 20 mpg over the limit.

      Drop in the bucket.

      Don’t expect CAFE fines to grow either, since they’re in the sweet spot. Not too high to pay, still billions in income per year, nearly a billion from F-series alone, again, if 2025 CAFE happened.

      This hasn’t been about “emissions’ or the environment for a long time. CARB wants a piece of the pie and they’re getting to be more like the mafia than The Mafia.

  • avatar
    ernest

    @Big3 Beancounter

    Just another example. Any “discussion” with you deloves into a “I’m right because I know everything, and you’re wrong!” And it’s everyone- not just me. Newsflash- I bet there are some very educated, well read, and well informed individuals that frequent this board. I’m pretty sure you aren’t one of them.

  • avatar
    stingray65

    Anybody that thinks CAFE is required to save the planet needs to read this:

    https://www.manhattancontrarian.com/blog/2018-8-4-good-riddance-to-obamas-cafe-standards

  • avatar
    megaphone

    Let me state my opinion in a different way then I have previously. I always take fuel consumption into account when I buy a car because I think it is the morally right thing to . I’ll never buy a pickup because I don’t like driving anything large (too difficult to use in a city)and because I have nothing larger to carry than my briefcase. I recycle and I personally think it is a worthy goal to use less oil. I don’t want to dictate to anyone else what they should do but in democracy (yeah I know it’s actually a republic) you don’t always get your way. If you don’t like the law on fuel standards then try to change it through the democratic process.

    • 0 avatar
      stingray65

      Let me see if I understand your position. You support the 2016 election results that put climate skeptic Donald Trump in the White House, and you are angry that Democrats in California are trying to use the courts to overturn the will of the voters when it comes to CAFE, illegal immigration, etc.?

      • 0 avatar
        starbird2005

        If we’re talking about the will of the people (and this is digressing from the topic) a reminder that Hillary Clinton got 3 million more voters than Trump, and its thanks to voter suppression tactics by the GOP and gerrymandering that the GOP currently hold all the levers of power. For example, because of gerrymandering the democrats have to breach 57% of the vote to get a majority in the House, while for republicans its significantly less.

        Now back to the topic at hand. The vast majority of people in the US want the country to tackle climate change and had no problem with the CAFE standards.

        Its also been notable that no one has brought up the other aspect related to this: simply because the US is willing to go back on fuel standards, no one else is. Hence the most likely scenario from weakening the fuel standards is making the US motor industry uncompetitive with exports.

        • 0 avatar
          stingray65

          Starbird – show me the evidence that the vast majority of the country wants to tackle climate change and have tough CAFE standards – and make sure the polls you might utilize have informed respondents how many trillions of dollars this will actually cost. Hard to believe such viewpoints exist when the 8 out of the top 10 selling vehicles are pickups, SUVs, and largish sedans, EVs only sell where they are heavily subsidized, and attempts to raise fuel taxes are always very unpopular with the voters.

          And your viewpoint on economics is also interesting. We should force the US automakers to make unpopular and unprofitable vehicles using expensive American labor so they can better export them?

          In fact you seem to be consistently misinformed about everything. Yes crooked Hillary did win the popular vote – mostly due to California and NY, but Trump didn’t campaign in those “can’t win” states so the only votes that were suppressed were Republicans who figured it wasn’t worth voting in those states. Add in a few million illegal and double-voting by Democrats (i.e. recounts in Democrat districts in Detroit found more votes than actual registered voters), and you have the reasons for crooked Hillary’s vote win, but of course it is the electoral college that elects the President and Hillary lost very soundly on that basis.

          • 0 avatar
            starbird2005

            stingray65, in case you didn’t know, China is GM’s biggest market, more than it is in the US, so if they want to compete internationally, they have to meet international standards.

            Here’s a link saying that most American’s want the feds to tackle climate change, and its from October 2017, so before all the disasters we’re having this year.

            https://www.scientificamerican.com/article/most-americans-want-climate-change-policies/

            As soon you said Crooked Hillary then I realized that no matter how much evidence I could provide, nothing is probably going to change your mind. Please do try and watch channels other than Fox News, like PBS or listen to NPR. You might learn something.

        • 0 avatar
          MrIcky

          @Starbird – regarding the article you quoted as evidence that the vast majority of the country wants to tackle climate change…it’s important that you mention the FULL title of the article:

          Most Americans Want Climate Change Policies ***But in a new poll, half say they would not pay more on their electric bill to help lower emissions***

          So as always, “the people” don’t really want what they say they want because it comes with a cost in either cash or lifestyle.

        • 0 avatar
          Art Vandelay

          In the 1996 World series, the Braves s ored more runs than the Yankees yet lost the series in 6 games. Just saying.

      • 0 avatar
        megaphone

        I acknowledge that the American people made a terrible mistake in 2016 and would urge everyone to vote Democratic in 2018 midterms. And no I would never deny anyone their right to resort t6o our court system.

        I really don’t wish to argue with you. Life is too short. But it could be that you wish to deny climate change because it doesn’t fit in with your already preconceived political agenda. I would be happy to change my mind when the scientific consensus tells me I’m wrong, not an opinion piece from a political blog.

      • 0 avatar
        megaphone

        I acknowledge that the American people made a terrible mistake in 2016 and would urge everyone to vote Democratic in 2018 midterms. And no I would never deny anyone their right to resort to our court system.

        • 0 avatar
          stingray65

          So you really don’t believe in election results unless the party/candidate you want wins. And by the way – science is not about consensus – it is about hypothesis confirmation with careful empirical study – and the mainstream climate models haven’t predicted the flat temperatures of the last 20 years despite rapidly increasing greenhouse gas emissions globally.

          • 0 avatar
            megaphone

            There is really no point an arguing with you. If the scientific community came to a different conclusion in a few years I’d happily change my mind on climate change. I doubt you would ever be capable of changing yours.

            But the real reason we just shouldn’t talk is that we will never agree on even the facts much less the solutions. And online exchanges are usually a waste of time. In tried earlier to post a very reasoned statement about why I buy fuel efficient cars and you try to twist it to score meaningless points. Cheers!

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