Rising prices at the pump could accomplish what Washington can't
At first blush, the news that new federal fuel standards are being proposed sounds positive. But details of the proposal reveal that Detroit's Big Three automakers will not be making dramatic changes to their fleets, particularly the popular light truck class, which includes SUVs, minivans and pickup trucks.
The new standards would boost SUV and pickup mileage by 8 percent, to about 24 mpg, by 2011, according to the Detroit News. The new rules would, however, continue the practice of exempting the heaviest, and least-fuel-efficient vehicles such as Hummers, Ford Excursions and Chevrolet Suburbans.
The Sierra Club, not surprisingly unenthused about the new mileage standards, points out that over three years, from 2008 to 2011, the estimated saving of 10 billion gallons of gasoline amounts to the fuel consumed in the U.S. today over just 11 or 12 days - not significant in reducing the U.S. dependence on foreign sources of oil.
Given the spiraling cost of petroleum, which has more than doubled since 2003 to over $65 a barrel, and the strategic, economic and military threats associated with continued U.S. dependence on foreign oil, much more must be done.
The powerful auto industry lobby has, with bipartisan support, successfully beaten back previous attempts to mandate significant increases to the mileage standards for cars and trucks. The existing mileage standards, which were created in response to the gas crisis of the 1970s and have remained virtually unchanged since the mid-1980s, will not change much with the latest proposals from the Bush administration.
But where federal bureaucracy and politics have failed, gasoline priced at $3 a gallon or higher might succeed.
With prices at the pump well over $2.50 a gallon, and no expectations of falling significantly, market forces - consumers - could force Detroit to change. Automakers can resist political pressure to increase fuel efficiency of their cars and trucks, but consumers' preferences is something that cannot be resisted, if they want to stay in business.
At $3 a gallon or perhaps something higher, Americans will begin looking for some alternative to get them from point A to point B in comfort, convenience and safety. Spending $45 or $50 to fill up the average car's gas tank will cause hardships for many Americans, but it will also provide powerful incentives for the development of alternatives.
One clear path to that new future has already been blazed by Europe, where consumers have responded to high government taxes on fuel by buying cars and trucks that get 20 percent to 40 percent better mileage than their U.S. counterparts. The European solution is not magic or a technology incapable of crossing the Atlantic Ocean. The European solution is diesel fuel.
Today, more than 52 percent of all new vehicles sold in Europe are powered by diesel engines. European's have beat the U.S. in shifting to high-mileage diesel cars partly because of high fuel prices, but also because Europe was ahead of the U.S. in making the shift to cleaner, low-sulfur diesel fuel, which when combined with modern diesel technology, produces pollution equal to or less than gasoline engines.
Another approach to increasing fuel efficiency on American highways is found in the hybrid technologies that marry gasoline engines with electric motors to boost miles-per-gallon figures. The increasingly popular hybrid technology, if combined with state-of-the-art diesel engines, could increase the average vehicle's fuel efficiency by more than 50 percent - far more than any federal government regulation. IN addition, diesel engines' torque and performance is particularly suited to SUVs, minivans and small trucks. In Europe, diesels also dominate the high-performance, luxury category of cars.
Some commentators and policy makers have suggested an increased federal gasoline tax would drive consumers to demand more fuel efficient cars and trucks, while at the same time reducing U.S. financial support for and dependence regimes in the Middle East and elsewhere that are hostile to American interests. Pressing for such a tax would, however, be political poison because it would cause short-term financial hardships on low- and middle-income Americans and also would go against the corporate interests of automakers and oil companies.
But the shift to higher-mileage cars might be coming anyway, driven by market forces instead of government mandate. An increase in the federal gas tax would accelerate the arrival of the shift, but with rapidly increasing gasoline prices, consumers might already be nearing the point where they demand higher mileage vehicles.
The increasing global demand for oil posed by the economic emergence of China and India - where several billion people will soon be yearning to join the modern world, including using power-consuming appliances and gasoline powered cars and trucks - will only further accelerate the shift to new technologies, including diesel, and biodiesel, a clean, renewable fuel that also supports U.S. agriculture.