New Fuel Standards Are Poised to Advance


Wall Street Journal – December 1, 2007

An important step has been taken in a new bill to increase the required fuel mileage per gallon required for US cars.  Late Friday evening a deal was struck with the major players in the House which should lead to passage in the House.

The new CAFE standard (Corporate Average Fuel Economy) will increase 40% and must be attained by 2020. It should reduce the amount of CO2 produced by autos slightly as well as slightly reduce the dependence on foreign oil.

The estimated cost increase to the consumer should be about $1400 and save the consumer about $200 in gas costs.  Frankly, I never believe these estimates as they tend to be worse than global climate models in their accuracy.

The Senate approved a similar level for CAFE earlier so it is likely that the House and Senate can come to agreement on this.

…wide-ranging energy bill expected to move through the House next week and would raise mileage standards to 35 miles a gallon by 2020….

The emerging deal will ensure auto makers have some added flexibility to meet the higher target, and will specifically provide for separate treatment for cars and light trucks, so long as the overall fleet average reaches 35 mpg.

Lawmakers also agreed to extend the so-called flex-fuel credit, which encourages companies to make cars that burn ethanol and other cleaner-burning biofuels.

The proposed increase in fuel economy-standards would be about 40% higher than current levels. According to the Department of Energy, which has run computer models of a similar increase, it would have both costs and benefits for consumers. The price of the average new car would rise by about $1,400 in 10 years, but because of declining demand for fuel, the annual expense of gasoline should drop by about $200 or more a year.

A recent Bush administration estimate put the auto industry’s cost of complying with 4% annual mileage increases between 2010 and 2017 at more than $100 billion. Detroit’s auto makers would bear the bulk, about $85 billion.

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2 thoughts on “New Fuel Standards Are Poised to Advance”

  1. Dr. J says:

    There are so many loopholes in these CAFE standards you could and will drive a large SUV or truck through them. Of greater concern is the Lieberman-Warner climate legislation lurching it’s way through the EPW committee. That one warrants watching, but with several hundred amendments lined up to be introduced to it, it will be a dog’s breakfast before it is done.

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