GENEVA -- Forget all the hype about diesels, Robert Lutz advises.
U.S. clean-air standards that take effect this year will nullify the advantages everyone thinks the engines will bring to the U.S. market, the General Motors vice chairman and product czar said in an interview at the Geneva auto show.
"We would like diesels," Lutz said. "We think diesels are a major part of the solution for better fuel economy and cleaner emissions.
"But Europe has been very intelligent in setting (emissions) standards at a level where diesels are still feasible. In the U.S., we've done the opposite. Starting in '05, we enter a tier of standards so severe that even the cleanest of European diesels with the technology known today are not going to pass."
Diesels account for upward of 40 percent of all new-vehicle sales in Europe, where fuel prices of $4 a gallon and above dictate the need for highly fuel-efficient vehicles. Reflecting their huge investment in the technology, European auto executives (and many journalists) have been loudly pushing diesels as a clean-air and fuel-efficient cure-all for the American market.
The new U.S. emissions rules, known as Tier 2, will be phased in this fall through the 2009 model year. They sharply reduce allowable limits of smog-causing oxides of nitrogen, hydrocarbons and particulates, the sooty particles that long have been associated with diesel engines.
Under today's rules, a light-duty diesel vehicle is allowed to emit about 1 gram per mile of oxides of nitrogen. Under Tier 2, that limit would be slashed to 0.20 gram per mile for an individual vehicle, but the manufacturer's entire fleet still would have to average 0.07 gram per mile.
A separate set of rules accompanying Tier 2 drastically cuts the amount of sulfur permitted in diesel fuel from about 500 parts per million now to 15 ppm, beginning in 2006. That, in theory, should simplify the auto industry's task of reducing emissions through engineering.
But even working with cleaner fuel, Lutz said, the industry will not be able to meet Tier 2 tailpipe standards without expensive exhaust add-ons, such as particulate traps.
"Even if achieved, we estimate the fixes would add $2,000 to $3,000 in cost per vehicle in (exhaust treatment), plus some significant loss of improved fuel economy that the diesel is supposed to give you," Lutz said.
Car buyers already must pay more for a diesel than for a comparable-output gasoline engine, but the upfront premium is offset over time by the engine's better fuel efficiency.
Without the benefit of lower fuel bills, Lutz said, "At some point, you have to ask yourself if it's worth it" to try to push diesels into the U.S. vehicle mix.
Fuel price incentive
Reiterating a theme he and other GM executives have raised, Lutz said the best way to curb U.S. energy consumption would be to raise gasoline prices to European levels of about $4 per gallon over the next several years.
Although that obviously would wreck the market for large trucks - the industry's profit cow - Lutz said, "If we're really serious about fuel economy and cleaner emissions, the only way we're going to get there is to use the tax mechanism to curb demand.
"If your kids are eating too much candy, you take their allowance away.
"If you want people to eat less, you raise the price of food. Instead, what the government is trying to do with CAFE is fight national obesity by making the clothing industry manufacture only small sizes."
Lutz said higher fuel taxes would provide many benefits other than fuel economy.
"Those additional tax revenues could do a lot of good for American society in the form of better schools, roads and health care," he said.
"But instead of enjoying those benefits, we price gasoline far below international levels and put the auto industry at war with its customers through CAFE.
"The truth is, we don't know how to get the kind of fuel-economy increases that some people call for through CAFE. There is no technology available to get it."
Higher gasoline taxes have virtually zero support in Washington, and a spokesman for GM's office there said company lobbyists are not working on any proposals to raise them.
In budget-balancing legislation passed by Congress in 1993, then-President Clinton proposed a modest increase in the federal gasoline tax of 4.3 cents per gallon.
But even that small increase became a hot issue in congressional elections the following year. It was blamed, at least in part, for costing some vulnerable Democrats their seats and helping Republicans win control of the House of Representatives for the first time in 40 years.
Even now, with budget deficits rising again, President Bush is pressing for a variety of tax cuts, not increases. c
Staff Reporter Harry Stoffer in Washington contributed to this report