Pluses and Minuses of the Fuel Economy Title of the Senate Energy Bill

    Title V of the Democratic substitute for H.R. 6, the energy bill, is fuel economy legislation. It is a recently altered version of S. 357, which was itself significantly marked up by the Senate Commerce Committee. As with any compromise, it has its pluses and minuses, which are charted below.

PLUS

MINUS

 

Removes a significant barrier to raising CAFE for cars. An outdated and unconstitutional legislative veto provision has kept the National Highway Traffic Safety Administration’s (NHTSA) authority to raise CAFE for cars mired in uncertainty. Eliminating this obstacle is essential for raising CAFE standards.

Mandates a compatibility standard. The rise of bigger and heavier SUVs and light trucks has created a problem of vehicle mismatch in crashes, so that in frontal collisions between a car and SUV, the car driver is 4.3 times more likely to die than the SUV driver, and SUVs are also more than twice as lethal as cars in side-impact crashes with cars. A compatibility standard will save lives while also adding pressure on automakers to improve vehicle design in ways that will also improve fuel economy.

Preserves state and federal role in reducing greenhouse gas emissions. The bill clarifies that the states and the federal government have the power to reduce vehicle emissions of greenhouse gases that cause global warming.

Creates a consumer information program on fuel economy. The bill helps consumers to choose vehicles with the best fuel economy performance by creating a rating system for vehicles that meet and exceed CAFE standards.

Covers gas-guzzling medium- and heavy-duty trucks. The bill calls on NHTSA to study the best way to approach CAFE for MDTs and HDTs and then to set a baseline CAFE standard with regular annual increases thereafter.

What about the Levin-Stabenow substitute?

The Pryor-Levin-Stabenow “alternative” is one minus after another.   Its targets of 36 mpg for cars by 2022 and 30 mpg for trucks by 2025 are quite simply a joke.  Moreover, even if an administration set a standard higher than the amendment’s targets, oil savings would be undermined by the extension and expansion of the flex fuel loophole, to give automakers 1.2 mpg credit for producing “flex fuel” vehicles capable of running on E-85, even though FFVs are driven on E-85 less than 1% of the time. NHTSA, meanwhile, has yet to collect over $300 million in CAFE fines avoided by Ford for marketing two FFV models that never actually worked on E-85. This amendment extends that loophole.

 

 

No guaranteed oil savings. The bill calls upon NHTSA to set standards leading to 35 mpg for the combined car and truck fleet by 2020, but it gives the agency “off-ramps,” or excuses not to reach 35 mpg.

Not enough, not soon enough. We could and should expect much better than 35 mpg 13 years from now. Automakers have improved fuel efficiency by 30% in the last 20 years, but they have devoted those gains to weight, performance, and luxury add-ons instead of fuel economy. If all vehicles caught up with best-in-class CAFE performers, cars would achieve nearly 37 mpg, while trucks would average 27 mpg.

Allows NHTSA to replace simple fair standard with complex size-based scheme. A sliding-scale scheme incentivizes manufacturers to up-size vehicles to qualify for less stringent standards. This incentive jeopardizes safety, as upsizing may lead to more aggressive vehicles. It also presents the risk that oil savings from increased CAFE standards will erode or even evaporate.  Manufacturers under the sliding scale system essentially set their own standards by adjusting their product plans and fleet mix.

Takes a huge step backward by adding cost-benefit analysis into the fuel economy law. One “off-ramp” from the 35 mpg target and future CAFE increases is if NHTSA can prove that an increase is not “cost-effective,” defined as a cost-benefit test. Cost-benefit analysis has been used and abused for decades by industry to weaken regulatory standards. It is an arbitrary game that has been rigged to bias policymaking in industry’s favor, to the detriment of consumers, public health, safety, and the environment.

Creates a new loophole for “work trucks.” What might be gained from CAFE for MDTs and HDTs could be eroded by the exemption for “work trucks” up to 10,000 pounds.