After 20+ Years, Feds Raise the Bar on MPG for Cars

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If you have your eye on a 50 MPG gen-3 Prius hybrid or a 150 MPG plug-in Volt, the new CAFE standards won’t seem like much. But the Department of Transportation’s plan to require automakers’ car and truck lineups to have an average fuel efficiency of 27.3 MPG by 2011 — an increase of 2 MPG over the 2010 standard — is a significant step: This is the first increase for passenger vehicle fuel efficiency since before A Flock of Seagulls was anything but a bunch of birds.

According to Obama administration officials who spoke with the Detroit News and Associated Press late yesterday ahead of this morning’s official announcement, the new standards will require automakers’ 2011 passenger cars (rolling into showrooms in late 2010) to get an average of 30.2 MPG. Light truck fleets (including SUVs, pickups and minivans) will need an average of 24.1 MPG.

The move signals that the Obama administration intends to raise the bar on automakers, although not quite as quickly as some environmentalists had hoped and the Bush administration proposed, but delayed, implementing (27.8 MPG average for 2011). The Department of Transportation said in its announcement this morning that a multiyear fuel economy plan for post-2011 models is “already well under way.”

Auto companies — two of which have received $17.4 billion in federal loans and requested an additional $21.6 billion — have protested that the new standards will cost the industry $1.5 billion. Tighter standards are on the way: An energy law passed in 2007 mandates a minimum 35 MPG fleet average by 2020.

The 2011 efficiency uptick could save millions of gallons of fuel (up to 887 million gallons of fuel, according to the Department of Transportation). That is, if we don’t base our driving habits strictly on our budgets, as David Owen argues in this week’s New Yorker that we’re prone to do: We spend about the same amount on gas each month, but drive more if gas is cheaper or we get more miles to the gallon. As Owen explains:

If doubling the cost of gas gives drivers an environmentally valuable incentive to drive less—the recent oil-price spike pushed down consumption and vehicle miles traveled, stimulated investment in renewable energy, increased public transit ridership, and killed the Hummer—then doubling the efficiency of cars makes that incentive disappear.

Even if the gains don’t disappear entirely (let’s face it: not everyone watches their fuel spending with such precision), the call for a gas tax hike to help bolster gas-sipping vehicle sales has garnered some unlikely supporters — Ford (s F) CEO Alan Mulally and AutoNation CEO Michael Jackson, for example. “I have fuel-efficient vehicles parked at my dealerships as far as the eye can see,” Jackson told the Wall Street Journal earlier this month after Mulally called for higher gas prices. “I can’t give them away.” Mulally said he wants the government to “involve the consumer in our energy policy,” giving them a stronger financial incentive (think: $4 a gallon gasoline) to opt for smaller and more fuel-efficient cars.

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Uncle B

Americans, cautiously aware that they no longer dominate in the world and abundantly awakened to the Oil dilemma they face, have retreated into civility from their former rampant styles, and now consider commuting distances when evaluating real estate for example, and take into grave consideration availability of decent private schooling for their off-spring, in place of union-ravaged public schooling. All newer American construction uses super -insulation, to sell the product and be competitive, and in America, slowly but surely, changes are happening! Heating and cooling factors and room size will come into play, and although European standards are very unlikely, smaller more practical homes are! These paradigm shifts in the basic living style of Americans will demand practicality in the Automotive vista also, and witnessing the slow death of Oldsmobiles, Cadillacs, SUV’s Pontiac’s, and Buicks, all recent occurrences indicate that a seriousness towards costs has occurred, and The rise of the Tesla, and appearance of Aptera are significant symptoms of a basic change in the way Americans see themselves! The Prius, copied and improved by Ford and soon to meet its GM(America) competition, the “Volt” show significant interest in less “Spectacular”, “Baubles and Chrome Plated Splendor” in cars and a serious practicality in buyers, who likely are aware of “Planned Obsolescence” and the annual model change for sake of ego baiting customers into money churning, higher profiteering of past commissioned car sales folks. We shall see, Will reality overcome greed and pride in America or will the chrome plated large engined noise makers of the muscle car era return with a vengeance, and destroy the remains of a sagging economy?

will

“We spend about the same amount on gas each month, but drive more if gas is cheaper or we get more miles to the gallon”

This is just wrong. Gas is clearly much more inelastic than that. Commutes remain the same regardless of the gas price. Doubling gas prices does not make people drive half as much, the effect is much more subtle.

The effect of halving the gas price and doubling fuel efficiency may be the same. But the measure of success is less oil consumption and emissions, not fewer miles driven per se. In the latter scenario, people are driving just as much but consuming much less fuel (and polluting less)

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