Consumer Federation of America Calls for LDV CAFE Standard of 60 MPG for 2025
03 September 2010
A new economic analysis in an issue brief from the Consumer Federation of America (CFA) is recommending that the Obama Administration set a fleet-wide car and light truck fuel economy standard of 60 mpg (3.92 L/100km) by 2025. The Obama Administration will release a Notice of Intent for 2017-2025 light duty fuel economy standards on 30 September.
The current CAFE standard calls for fleet fuel economy of approximately 34 mpg in 2016—a target that the CFA termed “very modest”. The CFA brief says that:“The analysis showed that it would have been economically and environmentally beneficial to set a much higher standard.”
According to the CFA brief, “Setting the Next Round of Fuel Economy Standards: Consumers Benefit at 60 miles per gallon (or More)”, the 2016 standard of 34 mpg (6.92 L/100km) falls far short than what would be in the best interest of consumers and society. The economic analysis shows that going to 38 mpg (6.19 L/100km) would have delivered additional benefits of $140 billion over the life of the vehicles covered. Moving the standard to 60 mpg will add hundreds of billions of consumer savings and reduced greenhouse gas emissions by hundreds of millions of tonnes, according to the CFA.
Previous fuel economy standards have left huge consumer savings on the table. A 60 mile per gallon standard in 2025 will capture those enormous benefits and provide important protections for American consumers.
—Setting the Next Round of Fuel Economy Standards
The new analysis examines the consumer and societal impacts of the 2016 standard, calculates the standard that achieves the maximum net economic benefit and measures the consumer and society impacts of those standards.
The decision to coordinate standard setting between California, the Environmental Protection Agency and the National Highway Traffic Safety Administration was an important step forward that required a compromise on the initial levels at which the standards were set. The procedural progress must now be followed up with substantive progress that moves the standards to much higher levels. A real victory can only be claimed when the standards are set at a level that captures the immense benefits that had been left on the table.
—report author Mark Cooper, CFA Director of Research
The report includes a consumer pocketbook analysis, which finds that for consumers purchasing 60 mpg cars and trucks the value of the gas savings will be greater than the increased cost of the loan.
The report combines estimates of technology cost from the National Academy of Sciences and MIT with the costs benefit analysis previously prepared by the Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) to derive its estimates of what is technologically feasible and economically justified.
The Energy Information Administration’s projected price of gasoline for 2025 of $3.50 (in 2010 dollars) is used. For the consumer pocketbook analysis, a five-year auto loan at 7% interest is assumed (which is the average auto loan rate for the past 20 years).
Separately, a new study by John DeCicco at the University of Michigan concluded that new fleet fuel economy could increase to (unadjusted) 52 mpg (4.52 L/100km) by 2025 and 74 mpg (3.18 L/100km) by 2035 or 41 mpg (5.74 L/100km) and 60 mpg (3.92 L/100km) (adjusted) given an aggressive focus on improving fuel economy through improvement to engines and hybrid system, and a willingness on the consumer’s part to forego increases in power. (Earlier post.)
The CFA report acknowledges that the technology cost-curves used in its analysis are long-term (2035). However, the CFA economic analysis concludes:
...the analysis in this paper focuses on standards to be set in 2025. The acceleration of a decade could be a challenge for the industry, but the technologies that underlay the cost curves are already in the vehicle fleet to some extent, or close to being in the fleet. Setting a high standard for a decade and a half in the future can push the industry to be more innovative and responsive to consumer demand, as well as national energy and environmental needs and goals. Coordinating between the three agencies with authority to set standards (CARB, EPA and NHTSA) and preserving California’s important role in maintaining momentum were important procedural steps to progress, now it is vital to move the standards to the much higher levels that the consumer pocketbook and societal cost benefit analysis support.
—Setting the Next Round of Fuel Economy Standards
Resources
I would ask those who intend to comment on this article to read another one of today's GCC articles first;
http://www.greencarcongress.com/2010/09/german-military-study-warns-of-a-potentially-drastic-peak-oil-crisis.html#more
Given the likelihood of dire social and economic problems with the peaking of global oil production, we have to learn to live with less and cast off wasteful lifestyle whims.
60 mpg by 2025 is not only achievable, I have exceeded it personally for the last 10 years with my Honda Insight. Do some prefer large pickups/SUVS? See the article linked above...
Posted by: Will S | 03 September 2010 at 08:04 AM
The Energy Information Administration’s projected price of gasoline for 2025 of $3.50 (in 2010 dollars) is used.
The EIA has chronically underestimated oil price projections - for example, from the 2001 World Energy Outlook, Figure 24, their estimates for oil prices in 2010 were;
Low: $16/bbl
Median: $21/bbl
High: $26/bbl
Using high prices for gasoline will undoubtedly show even higher savings with the higher fuel economy standards.
Posted by: Will S | 03 September 2010 at 08:32 AM
I am one of those who have accepted the concept of Peak-Oil and I am a member of ASPO, so I will not comment further on that topic.
I have a German-made station wagon type of car that gives me ~50 mpg. My friend, who just visited me a couple of minutes ago, has a Ford Focus station wagon. He gets ~60 mpg. Both cars run on diesel fuel, which is not a much appreciated choice in the USA but neither of them have hybrid drive, so there is some development potential left here. Neither of us can tow a motorhome size of a trailer, so there is some sacrifice one has to do. Not that I have ever owned a larger car or a trailer in my life... I can understand that those who are used to driving a 2.5 ton SUV would like to continue doing that but they simply have to accept a somewhat smaller car that weigh probably 50% less.
Interesting to note is also that Sweden had fuel consumption in the 80's roughly similar to the USA. It has always been highest in the EU but it is now decreasing rapidly and might be close to the EU average by 2015. We are talking about 120 g/km then or 60+ mpg diesel or ~55 mpg gasoline. This shows that it might be possible to change customer perceptions. I sincerely hope you can do the same in the USA.
Some European countries already have a fuel price of $6 to $7 per gallon but our authorities are also notoriously underestimating the price of crude oil. Surprisingly, other economic incentives than fuel price seem to be more effective. A slight cut in yearly circulation tax can motivate private persons and companies to buy smaller and more fuel-efficient cars.
Posted by: Peter_XX | 03 September 2010 at 09:34 AM
The Consumer Federation is ignoring the fact that it could get more efficient operation now by requiring a 55 mph spped limit right now. Nuclear power will eliminate most if not all of the CO2 release in the electric power sector.
Why the Consumer Federation is not calling for 1 dollar a gallon fuel is beyond me. One dollar a gallon fuel is quite possible and it will greatly improve the lot of the consumer. It can be achieved by making gasoline out of coal. Such a process will always be profitable if a tax on imported oil is placed at $35 dollars a barrel, similar to the tax on imported ethanol.
Nothing that the US can do in the near term will affect the level of CO2 in the air so why make the expense of living and the chance of finding profitable work impossible with worries and laws about CO2 levels.
The man famous for talking about CO2 levels has not restricted his life style and cut his CO2 release levels to half or more. People are part of nature and if the sea level rises because of us, it is natural. The sea level and the earths temperature already rose and sunk many times without us. What was the CO2 level in the earths atmosphere during the periods when coal was being formed in thick beds??? What was the temperature. Isotope analysys of the coal and the water in it could give the answer, but would it be an inconvenient truth. ..HG..
Posted by: Henry Gibson | 03 September 2010 at 09:37 AM
60 mpg speed limit, M85 FFVs, HEV/PHEV/EV could all have us using less oil in 2020 than we did in 2000. There could be a trend to use hybrid in higher margin vehicles and every trick in the book besides hybrid in lower margin vehicles. It is Average Fleet Economy.
Posted by: SJC | 03 September 2010 at 09:55 AM
"A common skeptic argument is that climate has changed naturally in the past, long before SUVs and coal-fired power plants, so therefore humans cannot be causing global warming now. Interestingly, the peer-reviewed research into past climate change comes to the opposite conclusion. To understand this, first you have to ask why climate has changed in the past. It doesn't happen by magic. Climate changes when it’s forced to change. When our planet suffers an energy imbalance and gains or loses heat, global temperature changes.
There are a number of different forces which can influence the Earth’s climate. When the sun gets brighter, the planet receives more energy and warms. When volcanoes erupt, they emit particles into the atmosphere which reflect sunlight, and the planet cools. When there are more greenhouse gases in the atmosphere, the planet warms. These effects are referred to as external forcings because by changing the planet's energy balance, they force climate to change.
It is obviously true that past climate change was caused by natural forcings. However, to argue that this means we can’t cause climate change is like arguing that humans can’t start bushfires because in the past they’ve happened naturally."
"Ironically, when skeptics cite past climate change, they're in fact invoking evidence for strong climate sensitivity and net positive feedback. Higher climate sensitivity means a larger climate response to CO2 forcing. Past climate change actually provides evidence that humans can affect climate now."
http://www.skepticalscience.com/climate-change-little-ice-age-medieval-warm-period.htm
http://www.skepticalscience.com/climate-change-little-ice-age-medieval-warm-period-intermediate.htm
Posted by: ai_vin | 03 September 2010 at 10:00 AM
Of all the things government need not do anymore is create bureaucracies to oversee even higher fuel economy targets.
Achieved CAFE has gone form 8-0 mpg CAFE to 33 CAFE mpg now on the way to 35.5 mpg soon. That is a quadrupuling of fuel economy from more efficiency and downsizing. Ther si only so much to wring from htat source. Much more is in the offing now from several fronts, fuel substitution, combustion efficiency and alternative Transport methods.
Unfortunately, we don't know what the most fruitful technology will be, and in such an environment it is best if the impediments are removed, and let the best answers surface.
Equally unfortunately, government bureaucracies are the deadest hand of all, stultifying everything they touch and choosing suboptimal winner and losers. Their choice of winners is often dictated by political influence, and not actually the best technology.
Posted by: ExDemo | 03 September 2010 at 01:03 PM
Stan, the government is NOT picking technologies, they are simply giving performance parameters to meet (mpg and mpge). If you can provide a government document that states a certain technology has to be used to meet that requirement (ethanol is a fuel, not a technology), provide the link.
Posted by: Will S | 03 September 2010 at 02:08 PM
You can make all the 60mpg vehicles you want, but if gas stays at current prices then consumers will still gravitate towards SUV's and pickups. Slap a $2 tax on gasoline and consumers will beg for 60mpg cars and you can use the additional tax to fund rebates for hybrids and electric vehicles.
Posted by: vrd863 | 03 September 2010 at 02:21 PM
If the CAFE standard were 60 MPG average, then the average of all vehicles sold (light trucks and cars) would be 60 MPG.
I'm all for a gas tax anyway, taking an equivalent amount off of income tax.
Posted by: Will S | 03 September 2010 at 03:56 PM
I will agree that humans can and have increased the CO2 in the air, but I will argue that since humans are a natural part of the evolution of the earth, nature meant it to happen and every thing that happens naturally is part of nature. If the high CO2 and the high water kills off all of the humans it will be much better for the remaining creatures that have the sense to move to higher ground.
The premise that the US can now do something substantial about it is totaly false. And that it should do anything about it at the cost of peoples jobs, food, and lives is criminal when it is not doing anything about the high cost of energy caused by the speculators of the world who extort money on false pretenses from all buyers.
Many people have died in the rest of the world because the US will do nothing for itself or the rest of the world about artificially inflated energy prices. It does not cost anywhere near 50 dollars on the average to get oil out of the ground and shipped to its destination.
Peak oil is also a fraud permitted by the US government and invented by the speculators. There may be a peak but not because there are no more hydrocarbons to be had. The oil shales on the Colorado plateau have much oil at a guaranteed price of $100 but not at the $1.O0 that it takes to get oil out of some wells. Coal can be made into oil at $35 or less.
The bigger truth that the US government ignores, to the detriment of the world, is that a pound of uranium can deliver as much energy as three million pounds of coal or about two million pounds of oil.
The ban on reprocessing in the US ignored this truth. The failure to build breeder reactors ignored this truth. The long fight about an effective not perfect repository for nuclear "waste" ignores this truth. The failure of the government to tell people that they are already radio-active and a little bit more or less has no proven detriment but a lot just like a lot of sun light does, ignores this truth.
The failure of the government to warn people that a move to a city of higher altitude brings more radiation as also does a trip on a plane, and then it pretends that it would be better not to ship depleted uranium to Utah when any possible exposure is less than that of flying at 30000 feet for a minute.
The most cost effective way of eliminating CO2 is to say that the mountain in Nevada will store nuclear materials and anybody that does any action to oppose this storage will be prosecuted and emprisoned. It it obviously better to store it there than in buildings spread across the country. It does not have to be stored there for millions of years or even one because it is simply not as dangerous as texting or calling while driving.
In all the comment about YUCCA mountain, the US president has not mentioned that there is already an operating super highly safe nuclear waste repository in operation after surviving all court and other challenges and can be expanded or duplicated to receive all used fuel. It is also far too expensive for the unecessary additional safety service provided.
Nuclear fuel rods can be spread very thinly on the ground a few atoms per square milimeter with adequate safety. The new uranium atoms cannot be distinguished from the many more uranium atoms already there.
After removing the idea that nuclear material storage is dangerous, then the regulations that make nuclear power far more expensive than the danger requires, can be revised and many new reactors can be built more cheaply.
The opposition to nuclear materials storage is funded by oil speculation profits that the speculators don't want to lose as they did in France.
All hearings about nuclear facilities or operations should be handled by a US judge under court rules with people restricted to known facts and not opinions. All people making comments must be sworn to tell the truth that they know and be cross examined as to their statements; no non proven assertion should be allowed to guide the formation of any rule or regulation. Nuclear reactors are more safe than chemical plants as the worst chemical plant disaster and the worst nuclear reactor disaster have proved. Does anybody who reads this site rememeber the name Bhopal and how many thousands died the first night.
Chernobyl was not even a disaster. Only a few people were killed by the steam blast, fewer than those on an oil platform. Most of the others who died were ordered into a dangerous area without adequate consideration of the dangers by their superiors who could have saved most of them by simply sending others to replace them frequently.
Save the air from CO2 and save the people of the world. Build nuclear reactors for all electric power of the country and use the coal to make gasoline. ..HG..
Posted by: Henry Gibson | 03 September 2010 at 07:35 PM
Henry
Where to start?
You say that anything humans do is natural, that there's nothing we can do anyway, that the cost of doing anything is too high, that Colorado shale conversion is $100/bbl but coal conversion is $35/bbl.
You imply that a pound of uranium can be mined as harmlessly as a pound of coal, that the government is preventing a private company from reprocessing uranium, that the word "possible" means "hopefully non-lethal," that a nuclear repository must be protected by statute but left unguarded, that a technology exists to safely spread uranium dust on the ground, that nuclear power can be generated cheaply, and that environmentalists are controlled by oil speculators.
Finally you say that Chernobyl was not a disaster, when upwards of a million people have lost their lives as a result.
See:
Annals of the New York Academy of Sciences
Chernobyl: Consequences of the Catastrophe for People and the Environment
Written by Alexey V. Yablokov (Center for Russian Environmental Policy, Moscow, Russia), Vassily B. Nesterenko, and Alexey V. Nesterenko (Institute of Radiation Safety, Minsk, Belarus). Consulting Editor Janette D. Sherman-Nevinger (Environmental Institute, Western Michigan University, Kalamazoo, Michigan).
Volume 1181, December 2009
335 Pages
To which I respond Henry: PFAWWWWWWWWWW!
JC
Posted by: JC | 04 September 2010 at 08:18 AM
Certainly doable, especially with a progressive extra fuel tax, part of which could be returned to fuel efficient vehicle owners via income tax refunds.
Questions:
1) Would politicians have the courage to do it?
2) Would the majority understand the principles?
Posted by: HarveyD | 04 September 2010 at 09:03 AM
Will S,
You wanted a simple existing example of picking winners, I give you this very same Press Release, and CARB history for a second.
In this Press Release they propose giving one identical vehicle an A+ grade and another a C grade even if the toxic emissionns are exactly the same, at SULEV II, and the second may have better mine-to-wheel efficiency or emissions.
Why else does an EV receive a A+ and a ZEV ICE hybrid receive a C? They are acknowledging right there that their pet prejudice for the EV distorts the letter grade.
For a historical example look at the California Gold Points that must be earned by automakers and can only be acheived by producing their pet preference for Fuel Cell vehicles, FCVs. Even though they concede FCVs emit the supposed worst of all GHG gases, that truly terrible H2O in the worst of all its forms as GHG gaseous vapor!
It would be great if there was truly a non discriminatory Performance Standard but they have already revealed there is NO SUCH INTENTION.
Posted by: ExDemo | 04 September 2010 at 02:00 PM
Henry Gibson,
You are quite correct in all you say from a technical basis. But you have been seduced into accepting that CO2 changes are a major problem. Georg Beck's work and Zbignieuw Jaworowski work on CO2 hydrates in ice under pressure confirm that depending on Ice core proxies instead of laboratory measurement is a Fools errand, only sufficient for Fools like Gore, Holden, and Hansen.
One is a total rich boy, cloacal cavity; Holden is a polemicist and not a scientist, and Hansen is Asstronomer and a planted Gore stooge, who is not a specialist in Meteorology or Climatology. All have been repeatedly wrong on their predictions and prophecies and have yet to issue a prediction that turned out to be valid.
Yet they comprise the main Disciples of CAGW, along with the likes of Michael Mann and the ICU ivory tower knaves of Climategate.
It is true that fission nuclear electric generation plants are capable of all you say; but you ought to look at that technology as a temporary bridge to even better technology. We need that generation of nuclear power generation plants, but it is the last generation of fission based plants.
I welcome the dawning Nuclear Renaissance, but mostly as a transition step and a method to destroy the already unraveling monopolists of OPEC, and frankly we need the power as the wind, wave, and sunpower are jokes, cul-de-sac technology, not worth of notice as genuine energy producers.
Fusion is coming; ITER is half built in Cadarache. You can think of it as a primitive pre-prototype of a commercial Fusion power station. The next step after ITER will be a real genuine Fusion power station.
We have come along way in the forty years of OPEC monopoly, and we are but a scant twenty years to the clean inexhaustible energy of the Sun on Earth. When we have harnessed it, we can make as much Oil as we want, or most anything else too. Including I might add the transmutation of high level Fission waste into non radioactive benign elements via Actinide Burning technologies, that the French are partially using, even now. Yucca is uneeded as ahihglevel repository once Reprocessing is once more on the table.
In some ways the Energy Price Interregnum has forced us to address efficiency, and cleanliness. Our auto and other transport and other industrial processes are much cleaner and more energy efficient than they might have been, without the prod of overpriced petroleum energy.
Posted by: ExDemo | 05 September 2010 at 03:30 AM
Cue the theme music from the Twilight Zone.
Posted by: ai_vin | 05 September 2010 at 07:43 AM
Stan/ExDemo wrote;
Why else does an EV receive a A+ and a ZEV ICE hybrid receive a C?
The difference between an EV and an PZEV SUV hybrid is the amount of oil they consume. See my first comment above.
Posted by: Will S | 05 September 2010 at 02:39 PM
The problem with the USA is not that it consumes oil, it is the AMOUNT of oil it consumes.
Getting from 30mpg to 60mpg will halve automotive oil consumption (!) and reduce US oil imports by more than that.
There is probably no pressing need to go further than that for at least 20 years, from a common sense point of view.
You may be able to sell 100 mpg cars to boastful green types, much the same way you sell 150 mph cars to other boastful types, but getting the USA to 60 mpg would be a very good thing.
Posted by: mahonj | 06 September 2010 at 12:15 AM
In 20 years, USA's fleet size may double once more. If we keep buying a high percentage of large heavy gas guzzlers and if we pull out of the current recession, we may consume more oil than today. We will certainly not ravel less.
Where will all this oil come from?
The majority do not want to spend more for efficient electrified vehicles and do not want to drive smaller vehicles.
Growing enough feed stocks to feed a growing fleet may not be that easy and may effect food price and availability.
Doubling oil imports could have lasting negative effects on the economy. Doubling CAFE over 15-20 years could help but farming and oil lobbies will fight it.
Posted by: HarveyD | 06 September 2010 at 03:30 PM
I see the possibility of FFV/PHEV cars. The PHEV will cost more, but not the FFV part. If you get half the mileage from methanol but get more than twice the mileage from PHEV, we are ahead of the game.
Posted by: SJC | 06 September 2010 at 07:43 PM
What ever made you think that the size of the auto US fleet would double? It is actually getting smaller per capita.
What ever made you think that the EV is fossil fuel free?
What evermade you think US Oil demand would continue to increase? It hasn't for going on the entire 21st century.
What ever made you think that the ICE would necessarily be powered by oxidising hydrocarbons obtained from petroleum? Already more than enough of such fuel is produced synthetically from renewable resources to satisfy annual demand, if or rather when, new vehicle technologies already being introduced, permeate throughout the auto fleet, as combustion efficiency, rises from 20--25% and grows to 40%; and some fuel substitution occurs via HEV, PHEV, EREV, BEV, occurs.
The choice is not either/or, it is what mix of them occurs.
Once again government bureaucrats or green jackasses, should not be picking their pet preferences. I would readily accept a Performance Standard, but that is not what happens.
Posted by: ExDemo | 10 September 2010 at 09:50 AM
Washington D.C. passed an oxygenate provision and by the time it got passed they let the oil industry choose. They chose the cheapest MTBE and it polluted ground water. Maybe favoring the best rather than the cheapest turns out to be the way to go.
Posted by: SJC | 20 September 2010 at 10:20 AM
I still asked the question why should a ZEV ICE powered PHEV receive a "C" grade and a an EV receive an "A+" grade other than honoring the pet preference of some pseudo-greenie, watermeloon?
We have already seen synthetic manufactured fuel, corn alcohol, achieve a 15% share and supply of the transport gasoline market. When hybridization and other improvements like semi-diesel efficiency improvements occur, the total US gasoline demand will plunge or rather could decline, to 15% of present demand.
IOW we would be able to supply all our hydrocarbon fuel from so-called green source sophistries, and we have yet to begin tapping cellulosic ethanols yet. So that supply percentage could grow above 15%.
So once again tell me why a ZEV PHEV hybrid using E-100 and nuclear or hydro generated electricity, ought to receive a "C" grade; and your coal burning electricity generation powered EV, should receive an "A+" ?
Just because you like one and not the other ? Or some Jackass government appointee feels that is what is best for you or me ?
Answer the question.
Posted by: ExDemo | 20 September 2010 at 10:20 PM
SJC,
The gasoline suppliers chose the cheaper additive MBTE, to lower their cost and make them marginally more competitive versus their competion. Both products are less deleterious than the tetra-ethyl lead additive. MBTE was revealed to have drawbacks, and ethanol is cheaper, now. All fuels use ethanol additive, and nobody uses MBTE anymore.
It is no conspiracy among the gasoline vendors; and certainly no conspiracy on the part of the automakers. Only a watermeloon would ascribe to such nonsense.
Posted by: ExDemo | 20 September 2010 at 10:29 PM