Trump administration undercuts the case for fuel economy
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News Mexico
  • Automotive News China
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • Self-driving cars might make people sick to their stomachs
      Going Hollywood
      Q&A with Chris Bangle
      A penny for your thoughts
    • GM launches 'Vehicle Locate' app
      Audi expanding regions where drivers can 'ride the green wave'
      Former Intel exec to lead Mich. mobility center
      Who wants VW's MEB architecture?
    • Dealerships owned by ex-NFL stars face collapse, litigation
      Want a luxury car? Try a Kia
      Costly lesson of tortuous legal battle: Get it in writing
      Denny Hecker: A changed man?
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Leading Woman Network
    • PACE Awards
    • CES
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Is Honda's U.K. plant closure the beginning of a Japanese Brexit?
      Tesla introduces 'Dog Mode' to keep pets cool inside the car
      A GM investment in Rivian would send the wrong messages
      Bad policy, worse political strategy on auto tariffs
    • Dealers need to be ready for anything
      EVs will come with economic cost
      Spend money on sales, not stores
      Put it on your bucket list
    • Feb. 15, 2019: EV startup gets Amazon, GM interest
      Jan. 4, 2019 | Bumpy road ahead for Detroit’s automakers and suppliers?
    • Bad policy, worse political strategy on auto tariffs
      Elaine Chao: A speedier path for innovation
      Industry initiatives seek to ease tech shortage, but challenges remain
      Drivers for ride-hailing services can be a prime source of fixed ops profits
    • NADA can help fight stair step incentives
      Let dealers invest in innovation, not renovations
      Hackett's vision for Ford is still a blur
      The last temptation of Elon Musk
    • Customer-centric approach set Tesla apart
      Cadillac falls short on marketing, luxury
      Thank you, Sting, for Oshawa efforts
      Deeper issues in tech shortage
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
  • EVENTS & AWARDS
    • Events
    • Awards
    • COMING SOON: Leading Women Dallas
    • World Congress
    • Retail Forum: NADA
    • Canada Congress
    • Marketing 360: L.A.
    • Europe Congress
    • Fixed Ops Journal Forum
    • Retail Forum: Chicago
    • Leading Women Conference Detroit
    • 100 Leading Woman
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealership To Work For
    • PACE Awards
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • +MORE
    • Webinars
    • Leading Women Network
    • Custom Features
    • Classifieds
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • Ally: Do It Right
    • Guide To Economic Development
MENU
Breadcrumb
  1. Home
  2. Blogs
August 23, 2018 01:00 AM

Trump administration hacks away at the case for fuel economy

Eric Kulisch
Eric Kulisch covers automotive regulation, policy and logistics for Automotive News.
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    BLOOMBERG
    Chevron Corp.'s Jack/St. Malo deepwater oil platform in the Gulf of Mexico off the coast of Louisiana on May 18. Since 2008, domestic oil production has more than doubled to more than 14.2 million barrels a day thanks to technological advances in horizontal drilling and fracking that enable producers to extract oil embedded in shale rock formations.
    Photo

    Eric Kulisch is a Washington D.C. staff reporter for Automotive News.

    WASHINGTON -- Energy conservation is so last century. Cheap oil is here to stay. So why worry about fuel economy?

    That's a key subtext running through the Trump administration's recent proposal to weaken targets established under President Barack Obama for 2022-25 model-year passenger vehicles, flatlining them at the 2020 level.

    Environmentalists, polluted California and the Obama EPA touted smog and greenhouse gas reductions as a prime reason for doubling fleet efficiency targets to about 47 mpg. Under the Trump plan, the target would drop to 37 mpg under test conditions -- less in real-world driving.

    But the Environmental Policy and Conservation Act of 1975 that directed the Department of Transportation to establish fuel economy standards was mostly intended to address the U.S.'s growing dependence on imported oil, as domestic fields dried up. The environment is only one factor policymakers are supposed to consider -- consumer cost, national balance of payments and foreign policy are others -- in setting the standards. The Department of Energy was subsequently created to coordinate energy policy across government.

    Now, the DOE is providing cover for NHTSA, the DOT arm responsible for fuel economy standards, to argue that domestic oil reserves are so plentiful that conserving energy is no longer a top priority.

    Circumstances have flipped in the past 40 years, the DOE says in a July 9 memo included in the public docket for the corporate average fuel economy standards.

    Since 2008, domestic oil production has more than doubled to more than 14.2 million barrels a day thanks to technological advances in horizontal drilling and fracking that enable producers to extract oil embedded in shale rock formations. Net oil imports have fallen from more than 60 percent of oil consumed in 2005 to 16 percent today.

    Also, petroleum accounts for only 1 percent of total electricity generation -- compared with 15 percent in the 1970s -- and the U.S. economy is less susceptible to supply disruptions and severe price swings. The U.S. is now the world's largest oil producer and is expected to become a net petroleum exporter in the next decade.

    The DOE's Energy Information Administration maintains that fuel savings diminish with every incremental improvement in fuel economy. Most of the reduction in fuel consumption comes from improvements at low end of the scale. A vehicle that achieves 20 mpg over 15,000 miles per year would annually save 250 gallons of gasoline, vs. one getting 15 mpg. But trading in a vehicle with a 30 mpg rating for one that gets 40 mpg would save only 125 gallons.

    The CAFE proposal says the value of those gallons saved may be enough to offset the cost of fuel-saving technology if fuel prices are high, but the EIA projects low fuel prices through 2050.

    The Trump administration's own analysis indicates that under its plan, the U.S. will consume 500,000 extra barrels of oil per day -- about 2 to 3 percent of projected consumption -- by the early 2030s.

    Automakers pushed for rule changes that would provide some compliance flexibility, but the Trump administration's proposal and its intent to prevent California from maintaining stricter rules is so aggressive that automakers could lose the certainty and consistency in regulation that they sought in agreeing to stricter rules in the first place.

    To many observers, the only big winner from looser restrictions is Big Oil.

    The oil industry wasn't publicly involved in the debate over whether to review and revise the Obama-era standards, but Bloomberg recently reported that major oil industry players quietly lobbied the White House to ease the standards.

    In addition to eliminating incentives for improved fuel economy, the administration is trying to undermine the argument for fuel efficiency targets by arguing that highly efficient vehicles effectively kill people: Their higher cost would force owners to hold onto older, less safe vehicles, their thinking goes.

    Thus by chipping away at the case for higher fuel economy, the Trump administration is betting that consumers won't be so interested in protecting the environment to object to its proposal. Sales data may ultimately prove them right, if the courts don't intervene first.

    It will be interesting to see in the coming months whether the auto industry follows through on the rhetoric of key leaders who profess the need to address climate change. Will they keep carrying the torch for higher fuel standards, regardless of the government's lower bar, or yield to what their customers want?

    And on that note, will they also oppose the EPA's new proposal to loosen regulation of coal-fired power plants and keep them in operation longer? After all, if they don't, all those "clean," electric vehicles they're planning would end up being powered by coal.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Digital Edition
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Thumbnail
    Read the issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Now

    Get access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that's vital to your business.

    Subscribe
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our Mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Leading Woman Network
        • PACE Awards
        • CES
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • COMING SOON: Leading Women Dallas
        • World Congress
        • Retail Forum: NADA
        • Canada Congress
        • Marketing 360: L.A.
        • Europe Congress
        • Fixed Ops Journal Forum
        • Retail Forum: Chicago
        • Leading Women Conference Detroit
      • Awards
        • 100 Leading Woman
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealership To Work For
        • PACE Awards
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • +MORE
      • Webinars
      • Leading Women Network
      • Custom Features
        • Ally: Do It Right
        • Guide To Economic Development
      • Classifieds
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit