President Obama Unveils New Fuel Economy Standards

[Raptor22]

New fuel economy standards are a significant increase, but gentler than those proposed by the Bush administration

Yesterday, President Barack Obama's new plan for raising fuel economy standards leaked to the press. This mark the first time in over two decades that the standard has been raised for passenger cars.

The new standards call for passenger cars to meet a 30.2 mpg average by 2011, which represents a 2 mpg increase. Trucks will have to meet a 24.1 mpg average. The changes are President Obama's first steps towards fulfilling his promise of 4 percent annual increases until 2022. President Obama wants the fleet of cars and trucks sold nationwide to reach a 40 mpg average by 2022.

The new standards are gentler on the struggling auto industry than those President Bush had proposed in 2007. The Bush administration passed the 2007 Energy Law which will require automakers to reach a 35 mpg average fuel economy by 2020, a 40 percent increase over the current standard of about 25 mpg. President Bush wanted to front-load much of this change, proposing the standards in 2011 be raised to a combined 27.8 mpg -- 31.2 mpg for passenger cars and 25 mpg for small trucks.

Such a plan would have cost the auto industry an estimated $50B USD in sales, as they would be forced to stop selling certain SUV models and make other changes. With President Obama taking a personal commitment to trying to right the course of the troubled domestic auto industry, he wanted a set of increases that would not sink the already flooding ship.

The administration had relatively little time to prepare the new rules -- just a couple months -- as the rules are to be announced formally April 1 in order to give the automakers sufficient time to change their vehicle lineup plans.

In the longer term, the Environmental Protection Agency is reportedly working closely with the transportation department to draft a comprehensive set of standards increases through the 2015 model year. The administration officials are planning to possibly adopt more aggressive increases in years to come. One challenge is to make sure that the national standards are close to the average state standards.

President Obama recently urged the EPA to reconsider the Bush administration ruling that California could not have its own higher set of standards for fuel economy and greenhouse gas emissions. If the decision is overturned, thirteen other states plus the District of Columbia are planning on adopting the standard. This puts pressure on the Obama administration to adopt the standard on the national level, as automakers have complained about having to deal with state specific standards, saying it makes it too expensive and difficult to be successful.

While President Obama is leading off a decade-long program of efficiency increases with a gentler first increase than his predecessor suggested, he is also opening the door for states to adopt higher standards. Ultimately, the decision boils down largely to economics, as additional expenses on the domestic automakers will simply be placed on the taxpayers in the form of loans, unless the government decides to let them go bankrupt. Either way, the administration believes is preferable to adopt less severe increases now and push the more intensive increases when the industry returns to success.

This is gonna be great for the recovery of the auto industry, at least Ford has their hybrids and eco-boost. They could always import the TDCIs also...

http://www.dailytech.com/President+Obama+Unveils+New+Fuel+Economy+Standards/article14697.htm

 

[CowboyBilly9Mile]

This is gonna be great for the recovery of the auto industry, at least Ford has their hybrids and eco-boost. They could always import the TDCIs also...

The last time the gov't forced the auto industry into mandated mileage requirements (CAFE), the automakers responded in the most convenient manner possible........by removing cubic inches from under the hood and stuffing 3.08 axle ratios in the rear. People quickly discovered that 4,000lb+ cars didn't do well with 70's era v6's, other than mileage. The oriental cars on the other hand, already had small engines and less weight, and responded accordingly. However, this also respond accordingly when they got in a wreck . We'll see how history unfolds on this go around.

 

[89frankenford]

and how did they want the american auto industry to turn itself around? i really think they don't want car companies in this country anymore. i really do. why do we have to live off of other countries when we are perfectly capable of making everything we have in this country...dont get me wrong i would love a truck that gets 25mpg's but i REALLY think this is the WORST time to even think about handing this rule out right now

 

[john112deere]

dont get me wrong i would love a truck that gets 25mpg's

I've got one.

Ford can build 'em...but most people don't wanna buy 'em.



If by some miracle this works...what are they going to do about all their lost gas-tax revenue?

 

[CowboyBilly9Mile]

............. why do we have to live off of other countries when we are perfectly capable of making everything we have in this country..........

Maybe it's because the US gov't likes bringing other countries up at the expense of bring this country down. There just could be an agenda for all this ya know.........

*It's wrong, very wrong IMO.

 

[O'Rattlecan]

I've got one.

Ford can build 'em...but most people don't wanna buy 'em.



If by some miracle this works...what are they going to do about all their lost gas-tax revenue?

California is always a good 10 years ahead of destroying themselves in front of the rest of the country. They found that they lost revenue so they just raised taxes some more, being nothing but a net loss for the consumer.

Ryan

 

[TexasNomad]

Maybe Korea will do the US a favor and drop a few Taepodong's on California's capital

 

[Raptor22]

Maybe Korea will do the US a favor and drop a few Taepodong's on California's capital

Not even Nomad, thats like 12 miles from me....

 

[LEB Ben]

This is dicronculous...I see this as cutting the legs out from what makes America so great...are we loud, over sized and obnoxious...sure...but I don't think we, the US, should be at the forefront of emissions and whatnot to help prevent global pollution. I feel like EPA standards is throwing a ton of money at a band aid fix...I mean seriously, we can only become so efficient. So what happens when we hit that cap?????? Then it was all just a waste of money and now we'll have to find something else to blame for pollution.

 

[polarbear]

I have mixed feelings here. On the one hand, we really don't need .gov to remind us what type of fuel efficiency we need to be buying. On the other hand, the Domestic Auto Industries dependence on larger vehicles (and their refusal to get serious about making competitive smaller rigs) damned near destroyed them last year.

Here's something to think about- in the short term, gas is relatively cheap. In the longer term, I don't see that continuing. The only thing keeping fuel prices down is this biz azz worldwide recession. Does anyone really expect us to stay in this recession forever though?

 

[john112deere]

On the other hand, the Domestic Auto Industries dependence on larger vehicles (and their refusal to get serious about making competitive smaller rigs) damned near destroyed them last year.?

I would argue their dependence on those big, thirsty trucks is in significant part due to the LAST time the feds stuck their big fat fingers into the fuel efficiency market, and wrote legislation with loopholes big enough to drive a Tahoe through...

 

[polarbear]

I would argue their dependence on those big, thirsty trucks is in significant part due to the LAST time the feds stuck their big fat fingers into the fuel efficiency market, and wrote legislation with loopholes big enough to drive a Tahoe through...

That's very true Ian, although the biggest holes were put there courtesy of the IRS.

Here's my gripe. The Chevy Malibu is a great car, and it sells well. The question is, though- what took GM so long? Toyota and Honda have been building that car for over two decades, fer chrissakes! Better yet, GM's been building competitive cars in that size class for decades- In Europe.

The fact of the matter is, they really weren't interested- or enthusiastic- about designing and marketing cars that were competitive with the Civic/Corolla/Camry/Accord until recently. Meanwhile, the other guys are pretty well entrenched in those (very popular) segments. Gonna be a tough nut to crack.

 

[Raptor22]

That's very true Ian, although the biggest holes were put there courtesy of the IRS.

Here's my gripe. The Chevy Malibu is a great car, and it sells well. The question is, though- what took GM so long? Toyota and Honda have been building that car for over two decades, fer chrissakes! Better yet, GM's been building competitive cars in that size class for decades- In Europe.

The fact of the matter is, they really weren't interested- or enthusiastic- about designing and marketing cars that were competitive with the Civic/Corolla/Camry/Accord until recently. Meanwhile, the other guys are pretty well entrenched in those (very popular) segments. Gonna be a tough nut to crack.

Ford is barely getting there with the Fusion and new Taurus (after not following up the old Taurus), and the world Focus and Fiesta should bring competition to the Japs. Chevrolet has very competent sedans in the Malibu and Impala but the Cobalt kinda sucks (except for the SS...hehe). Mopar still hasnt come up with a competent marketable passenger car since the K-cars that Iacocca designed... Neon was a moderate success and so was the cab forward cars but none of them could rival the Japanese.

The Europeans and the Australians get all of the awesome cars but all we get is dumbed down crap...

 

[89frankenford]

Ford is barely getting there with the Fusion and new Taurus (after not following up the old Taurus), and the world Focus and Fiesta should bring competition to the Japs. Chevrolet has very competent sedans in the Malibu and Impala but the Cobalt kinda sucks (except for the SS...hehe). Mopar still hasnt come up with a competent marketable passenger car since the K-cars that Iacocca designed... Neon was a moderate success and so was the cab forward cars but none of them could rival the Japanese.

The Europeans and the Australians get all of the awesome cars but all we get is dumbed down crap...

part of that is because of the emissions and fuel economy standards our country has...

 

[Raptor22]

part of that is because of the emissions and fuel economy standards our country has...

That may be true for the Australian cars (400HP 4L (same engine family as 300) twin turbo I6 Falcon anyone?) but the diesels in Europe are easily capable of 50MPG plus, and meet the stringent EU emissions requirements. Its stupid....

 

[LEB Ben]

Here's something to think about- in the short term, gas is relatively cheap. In the longer term, I don't see that continuing. The only thing keeping fuel prices down is this biz azz worldwide recession. Does anyone really expect us to stay in this recession forever though?

Ernie...I have the same feeling...but to be honest I don't know why...like I said it's a feeling. So do mind explaining why gas prices will/have to increase as the economy recovers? I mean hell, we had great gas prices through the 90's and the economy was booming...And besides a few little blips on the radar, it appears gas prices stay relatively stable in regards to historical prices when adjusted for inflation.

 

[polarbear]

part of that is because of the emissions and fuel economy standards our country has...

European safety/smog standards are actually more stingent than ours. The only exception was for diesels, but that changes this year.

Ernie...I have the same feeling...but to be honest I don't know why...like I said it's a feeling. So do mind explaining why gas prices will/have to increase as the economy recovers? I mean hell, we had great gas prices through the 90's and the economy was booming...And besides a few little blips on the radar, it appears gas prices stay relatively stable in regards to historical prices when adjusted for inflation.

Sure Ben- gas prices aren't driven by domestic demand. Diesel prices rocketed last year because refineries were able to sell our (now low-sulphur) clean diesel in Europe. China, India, and the developing world will be the demand drivers for oil/gas in the next few decades. Fuel prices are low now because worldwide demand is down. When that picks up, our prices will increase.

Second issue on the table is the strength of the US dollar. As we keep printing money like heck-won't-have-it, I suspect the LT value of the dollar will go down. Since we import the majority of our oil, guess what impact that will have on prices at the pump?

 

[LEB Ben]

Sure Ben- gas prices aren't driven by domestic demand. Diesel prices rocketed last year because refineries were able to sell our (now low-sulphur) clean diesel in Europe. China, India, and the developing world will be the demand drivers for oil/gas in the next few decades. Fuel prices are low now because worldwide demand is down. When that picks up, our prices will increase.

Second issue on the table is the strength of the US dollar. As we keep printing money like heck-won't-have-it, I suspect the LT value of the dollar will go down. Since we import the majority of our oil, guess what impact that will have on prices at the pump?

Thanks PB...so scenario one is basically because gasoline/diesel goes to the highest bidder. And scenario two...well I guess that was a duh-huh I didn't think about.