Obama Finalizes US Fuel Economy Standards of 54.5 MPG

The US is now officially steering toward fuel economy standards of 54.5 mpg for model years 2017-2025 passenger cars and light trucks, nearly double what drivers get today.

The new standards will cut oil consumption by 12 billion barrels (more than 2.2 million barrels daily). And they will cut greenhouse gas (GHG) emissions from passenger cars, SUVs, minivans and pickup trucks in half by 2025, reducing them by 6 billion metric tons over the program. That is more than all of the carbon dioxide emitted by the US in 2010.

Of course, a loophole remains. The rules allow automakers to raise the fuel efficiency of light trucks – which conveniently include SUVs – much more slowly than for cars.

It’s called the SUV loophole and it’s the same loophole that led to the boom in gas-guzzling SUVs in the first place. Automakers favored building SUVs to take advantage of the weaker standards, which effectively stagnated fuel economy for 20 years.

Cars, SUVs, minivans and pickup trucks currently produce almost 60% of the transportation-related petroleum use and GHG emissions in the US.

For those that buy fuel-efficient vehicles, the new standards will save drivers more than $1.7 trillion at the gas pump, about $8,000 over the average lifetime of a vehicle.

And they will create about 150,000 jobs.

“These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” says President Obama. “This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption. By the middle of the next decade our cars will get nearly 55 miles per gallon, almost double what they get today. It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last.”

The standards were developed through a collaborative process that included the U.S. Department of Transportation (DOT), the U.S. Environmental Protection Agency (EPA) and 13 auto makers representing more than 90% of all the vehicles sold in the US. Auto unions and consumer groups were also involved.

Hard to believe, but Mitt Romney says he will overturn the rules and those in place that cover 2011-2016 model years, which mandate 35.5 mpg. Romney’s Energy Plan says its primary goal is to free the US from foreign oil within a decade, but he would reverse these rules which do exactly that.

Says Ray LaHood, the US DOT Secretary: “Simply put, this groundbreaking program will result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before all while protecting the air we breathe and giving automakers the regulatory certainty to build the cars of the future here in America. Today, automakers are seeing their more fuel-efficient vehicles climb in sales, while families already saving money under the Administration’s first fuel economy efforts will save even more in the future, making this announcement a victory for everyone.

Greg Martin, General Motors executive director for communications, told The Washington Post: Customers want higher fuel efficiency in their cars and trucks, and GM is going to give it to them. We expect the rules to be tough, but we have a strong history of innovation, and we’ll do our best to meet them.”

Notes Mike Stanton, president and CEO of industry group Global Automakers: “The new standard is aggressive and sets a high bar for automakers. This program is important to our country and our members have accepted the challenge.”

“Meeting these standards will unleash innovation in the auto industry, putting fuel-saving technology to work across all vehicle types and sizes. Automakers already have the technology to build cars, trucks, and SUVs that are less polluting and go farther on a gallon of gas. These standards will ensure more efficient engines, smarter transmissions, light-weight materials, and other clean vehicle technologies make it off the factory floor and into our driveways. It will also help put more hybrid-electric vehicles on the road and pave the way for electric-drive technology,” says the Union of Concerned Scientists.

On the Road toward Progress

What fuel economy is the average American actually getting?

Because of the rules in place through 2016, the first half of 2012 set a record for the highest-ever fuel efficiency for new US passenger vehicles, an average of 23.8 mpg.

That was an improvement of 1.1 mpg over the record 22.27 mpg that was set during the first half of 2011.

Although this achievement is obviously tiny, it comes because car manufacturers are moving toward meeting the regulations. The increased mileage is across their fleets, in both small and larger vehicles.

“Thanks to a bumper crop of fuel efficient models in the most popular segments, consumers don’t have to choose between fuel efficiency and performance,” says Alan Baum, principal of Baum & Associates. “No matter what type of vehicle you want, midsize car, minivan, SUV or pickup truck, carmakers are now upping fuel efficiency performance across the board. The new era of auto fuel efficiency is truly here.”

New Fuel Standards Drive New Jobs

Automakers are using a range of advanced technologies and innovative design approaches to meet the new standards. Those measures include advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories, and improvements in air conditioning systems.

On the road to the new standards, the American auto industry has created approximately 236,000 jobs, reports DrivingGrowth.org.

Its report offers several examples of how the fuel economy standards are aiding the US economy:

  • In Michigan, 35,200 new auto manufacturing jobs have been added since June 2009, when the auto industry hit bottom (nearly half the state’s total job gains). In Saginaw, Michigan, one automotive supplier added 650 jobs and will retain another 1,000 jobs to produce electric power steering components that replace more fuel-intensive hydraulic systems.
  • In Indiana, 19,800 new auto manufacturing jobs were added (nearly one-third the state’s total job gains). In Greensburg, Indiana, Honda is investing $40 million and will hire 300 new workers at an Indiana facility that will be the sole global producer of the fuel-efficient Honda Civic hybrid.
  • In Ohio, 11,300 new auto jobs were added (one-quarter of the state’s gains). In Warren, Ohio, GM is running three shifts employing 4,200 total workers to produce the high-mileage Chevy Cruze, which achieves 42 mpg in the EcoCruze model.

“Setting strong fuel efficiency standards means we are sending more of our energy dollars to the Midwest, not the Middle East,” says Tiffany Ingram, Midwest advocacy director for the Natural Resources Defense Council (NRDC). “Global automakers are now sourcing their most advanced, high-tech manufacturing here in the United States, creating a more sustainable and secure future for U.S. industry and U.S. workers.”

For more background on the new fuel economy standards:

 

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