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Mandated Mischief: Obama’s 54.5 MPG Standard
Pajamas Media ^ | 7/28/2011 | Marlo Lewis

Posted on 07/30/2011 6:10:10 AM PDT by IbJensen

President Obama today announced a deal with 13 automakers to boost new-car fuel economy standards from 35.5 mpg in 2016 to 54.5 mpg in 2025. Obama claimed the new standards will save Americans $1.7 trillion over the lifetime of vehicles and $8,000 per vehicle by 2025.

But you’ve got to wonder, if the fuel-saving technologies requisite to meet the new standards are such a great bargain, why do we need a law forcing automakers to adopt them? After all, auto companies are in business to make money, they compete for customers, and there’s not a consumer alive who enjoys pain at the pump.

What we can likely expect from the new fuel economy standards is more costly vehicles that impose net losses on consumers, lighter vehicles that provide less protection in collisions, and a less competitive auto industry.

The U.S. government’s 40-year-old corporate average fuel economy (CAFE) program is a case study in unintended consequences. During its first 25 years, CAFE boosted domestic sales of Japanese and European imports, which typically had a 50% higher mpg rating than American automobiles in 1975. Partly as a consequence of CAFE, the U.S. market share of foreign-designed vehicles increased from 18% in 1975 to 29% in 1980 and 41% in 2000 (National Research Council, p.15). Few members of Congress anticipated or desired such disastrous results when they created the CAFE program in 1975.

There are two main ways to increase a car’s fuel economy: (1) downsize the vehicle and (2) add new technology. Adding new technology raises new car prices, “forcing some consumers, especially those with low incomes, to hold on longer to their old cars,” observes my colleague Sam Kazman. In general, old cars are more polluting than comparable newer vehicles. In any event, lawmakers did not think they were voting to keep clunkers on the road when they created CAFE.

In addition, Kazman notes, CAFE “restricts consumer choice, since manufacturers are forced to pay more attention to what the law requires rather than to what consumers want.” Indeed, CAFE destroyed the market for what once was America’s most popular family car — the large station wagon. Automakers could not comply with CAFE and produce millions of large, low-mpg station wagons. In 1975, how many members of Congress knowingly voted to kill the family car?

A related unintended consequence was the much-derided SUV boom of the 1990s. No longer able to purchase big wagons, consumers started buying trucks with car-like body designs. Fuel economy zealots decried what they called the “SUV loophole” in the CAFE rules. But to millions of consumers, the supposed loophole was an escape hatch. The caption of a New Yorker cartoon on bureaucratic myopia should be required reading on Capitol Hill: “These regulations will fundamentally change how we get around them.”

Last and certainly not least, CAFE kills. This is hard for some folks to swallow, but it’s a matter of physics. Fuel economy regulation restricts the sale of larger, heavier vehicles. Such vehicles get fewer miles to the gallon than similarly equipped smaller vehicles, but they provide more protection in collisions. Heavier vehicles have more mass to absorb collision forces, and larger vehicles provide more space between the occupant and the point of impact.

A 2002 National Research Council study (p. 26) estimates that in a typical year (1993), CAFE contributed to 1,300-2,600 additional auto fatalities and ten times as many serious injuries.

We’re often assured that the reformed CAFE program established via the 2007 Energy Independence and Security Act (EISA) fixed the problem (often by the same folks who denied there was a trade-off between fuel economy and safety under the original CAFE program). However, even under the reformed program, which supposedly constrains down-sizing in favor of technological innovation, EPA and the National Highway Traffic Safety Administration (NHTSA) estimate that achieving fuel economy standards of 47 to 62 mpg will require weight reductions of 15% to 30% (Interim Joint Technical Report, p. 3-8).

Automakers will undoubtedly incorporate new technology to meet the 54.5 mpg standard. Nonetheless, Kazman explains, “No matter what fuel-saving technologies we put into the car of the future, adding weight to the car will both lower its fuel efficiency and increase its safety.” Inevitably, fuel economy standards prevent people from buying all the vehicle safety they’re willing to pay for.

Why did automakers agree to the deal? “Government Motors” has to be careful about defying a White House that props them up financially. Auto companies also feared ending up with something even worse: a 62 mpg standard enforced via a “patchwork” of state-by-state fuel economy regimes spearheaded by the California Air Resources Board (CARB).

Auto industry analyst Henry Payne notes another reason: “We’ll agree to anything that’s 15 years out,” a highly-placed auto industry insider told me today about the fairy tale 54.5 mpg-by-2025 mandate for America’s auto fleet that Barack Obama and Big Auto execs finally — officially — announced Friday in Washington.

The rule has no grounding in reality. An engineering rule of thumb is that gas engine efficiency improves by 1.5 percent a year (a gain that, in the cheap gas U.S. market, has traditionally gone to power upgrades rather than mpg improvements). The EPA’s rule will mandate that light trucks gain 3.5 percent a year and cars, 5 percent. Really.

Environmental groups claim there’s no problem because automakers could comply even with a 56 mpg standard just by selling lots of hybrids. But according to the Center for Automotive Research (CAR), the market share for hybrids would have to increase from less than 3% in 2011 to 76% by 2025 — almost eight times higher than the projected market share. And mass reductions of at least 15% would also be required, reducing vehicle safety in crashes.

CAR estimates that a 56 mpg standard would impose on consumers a net loss (sticker price increase minus fuel savings) of $2,858 over five years if gasoline prices average $3.50/gallon. The 62 mpg that CARB, green groups, and (very likely) Obama preferred would impose a net loss of $6,525. Without regulatory coercion limiting our options, most consumers would avoid this “bargain.”

Fuel economy standards compel automakers to please government planners rather than satisfy consumers. That’s a recipe for an auto industry with lower sales, reduced profits, and fewer jobs.

Team Obama and their green allies undoubtedly think it is great fun to gamble with other people’s assets and livelihoods, even if it means imposing safety risks on motorists. If we were living under a constitution of liberty, that sort of mischief would not be allowed.

TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Government
KEYWORDS: carfuelstandards; communism; destroyingusa; evilregime; obozo
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To: BobL

Looks like “Willie Green” just can’t catch a break!

21 posted on 07/30/2011 7:12:38 AM PDT by PSYCHO-FREEP (Always Remember You're Unique.......(Just Like everyone Else.))
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To: not2worry
Who is going to be able to buy these new cars? The USA will be looking like postcards from Cuba soon

What makes you think that isn't another salient part of "the big plan"?

22 posted on 07/30/2011 7:23:13 AM PDT by trebb ("If a man will not work, he should not eat" From 2 Thes 3)
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To: IbJensen

It gives the village idiot something to convince his deluded followers that we don’t need to drill here now. After all we’re looking at 50+ mpg for automobiles and pickup trucks.

If the EPA was corraled and we were allowed to import more of the diesels from Europe we could get close to 50 mpg now.

23 posted on 07/30/2011 7:41:32 AM PDT by meatloaf
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To: IbJensen

what arrogance.

who can predict what technologies and life will be like that far in the future?

24 posted on 07/30/2011 8:00:21 AM PDT by ken21 (dem + rino progressives -- destroying america for 150 years.)
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To: Cannoneer

A Modest Proposal - short and oh, so sweet - Get rid of all socialists - Problem Solved!

25 posted on 07/30/2011 8:01:06 AM PDT by I am Richard Brandon
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To: Cannoneer
That's an interesting thought. I disagree with you mainly because your timing is off . . . the U.S. railroad industry was already in decline by the late 1950s. This was due mainly to a combination of excessive government regulation and poor market conditions for railroads related to population dispersion in the post-WW2 era (it was simply impossible for the railroad industry to serve an increasingly suburban population in a practical way).

The U.S. railroad industry was saved through deregulation in the early 1980s, and what you see now is an industry that is far more cost-efficient than ever before -- carrying more freight on a consolidated system where unprofitable lines have been abandoned or sold.

26 posted on 07/30/2011 8:02:54 AM PDT by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: CharlyFord

It’s like the minimum wage. Go ahead and raise it to $50/hr. Leftists that run the nation and economy know what they’re doing, but hope you won’t notice with the forest fire raging.

27 posted on 07/30/2011 8:03:39 AM PDT by IbJensen (An armed man is a citizen. An unarmed man is a subject.)
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To: BobL
I think one of the problems Obama and the Democrats have with America is that white families are still having way too many kids. But if you force them to drive 2-seaters, that problem goes away.

Don't worry, gay marriage will destroy what little is left of the nuclear family.

28 posted on 07/30/2011 8:04:59 AM PDT by Erik Latranyi
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To: IbJensen

They more or less have to sign whatever President Zippy demands. But they know by 2025 it won’t matter what they signed in 2011.

In 2025 either Zippy will be gone or the US will be gone.

And no matter what Zippy demands, what can actually be produced will be still be dictated by the immutable natural laws of mechanics, physics and thermodynamics, not by Zippy’s socialist night dreams.

29 posted on 07/30/2011 8:09:02 AM PDT by Iron Munro (The more effeminate & debauched the people, the more they are fitted for a tyrannical government.)
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To: IbJensen

Good lesson!

Free trade does not move manufacturing overseas....regulations move manufacturing overseas.

Right now, it is feasible to build cars in the US and sell them for a profit.....despite unions.

Now that the gov’t is requiring increased technology to achieve higher fuel economy, companies will have trouble selling as many cars because they will cost more. Consumers will keep their old cars longer.

So what will happen?

All those joint auto ventures in China will be used to ship cars back to the US!

Yes, this is how it away at profits or make domestic companies sell fewer vehicles and they will look to recover those profits in other ways. Since they cannot get the UAW to lower wages or introduce more automation, they will turn to other countries.

30 posted on 07/30/2011 8:10:31 AM PDT by Erik Latranyi
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To: IbJensen

Obama and his band of faggy apparatchiks never worked in a real job making things. (I have) They have no idea what it takes to do this and run this kind of business. Nuke the EPA. Fire every last blood sucking leech.

Those who can’t do, govern. Or at least seek to. These useless eaters seek to rule the producers of America. They oppress our oil, gas and energy producers. They oppress our farmers in California by denying irrigation water. They drive our manufacturing overseas via OSHA and EPA regulations

Rick Perry is conservative enough to reverse all this. I don’t need an unelectable super-conservative. Just one who will drive Bammy Boy and Moochelle out of the White House. Who will boot commissar Lisa Jackson out of the EPA

31 posted on 07/30/2011 8:27:39 AM PDT by dennisw (NZT -- works better if you're already smart)
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To: IbJensen
yeah... but it's hard to get two people into it let alone a family of four

32 posted on 07/30/2011 8:37:23 AM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: IbJensen

33 posted on 07/30/2011 8:38:07 AM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: hoosierham
If you simply make nothing but tiny two-seaters like the former Geo 3-cylinder hatchback

I had a geo metro with a 5-speed stick shift, and never did reach 50 mpg....and I could hardly pull the hills in W.Virginia.
34 posted on 07/30/2011 8:55:23 AM PDT by stylin19a
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To: Cannoneer

BTW what existing or conceivable vehicle that gets 54.5 MPG would anyone buy for more than short commutes? Oh that’s right we need to be herded into urban areas so we can utilized the wonderful mass transit systems that exist in say; Orlando, Tampa, Toledo?

Meet the VW Jetta

Fords doing it with the festiva 60+ MPG. But YOU can’t have one (and neither can I)

35 posted on 07/30/2011 8:59:18 AM PDT by cableguymn
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To: Cannoneer

Here’s how a vehicle could probably achieve that MPG standard.

Rip out the airbags or at least make them miraculously light, rip out the power windows, make the air conditioning nearly microscopic, give them all ceramic, cro-moly, carbon fiber, titanium or magnesium alloy manual gearboxes and make the thing as sleek as a bullet and about the size of an old Geo Metro (Which I currently drive).

I personally like high MPG vehicles because I’m on a fixed income and they pay for themselves in convenience and job searches. I also think giving the average suburban or rural American driver a big vehicle with an automatic transmission is like giving a kid matches and dynamite because driving is often a necessity in those areas rather than a convenience like it is in the city and people tend to feel as though it’s their right to drive like an inconsiderate jerk rather than figuring out that the roads are for the public to use.

A lot of urban people share my opinion about rural and suburban drivers and I think Obama’s pandering to his urban base. In short, he’s so far left that he’d push his agenda over practicality. A Geo-Sized vehicle cannot haul a motorcycle, a bed or hell, even a snowboard or a BMX. I’ve literally had trouble hauling my BMX to the bike shop in my Geo. So in short, people who enjoy outdoor activities would either have to rent a truck or put it on the train to one of the pre-planned nature reservations our government has wonderfully provided for us..

Yeah, I’m about to turn 30 years old and I still BMX :D

36 posted on 07/30/2011 9:01:41 AM PDT by NorthStarStateConservative (In 2008, the USA became the UNN: The United States of Nauru)
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To: meatloaf
If the EPA was corraled and we were allowed to import more of the diesels from Europe we could get close to 50 mpg now.

Yep, pretty much. I'd prefer to see those engines built here,though, rather than imported from VW or PSA Peugeot Citroën.

37 posted on 07/30/2011 9:58:20 AM PDT by Charles Martel (Endeavor to persevere...)
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To: stylin19a
I never said the cars would be good cars that did what people needed!Nor is the EPA rating likely to be achieved in real driving.

The whole idea of government setting performance without regard to the laws of physics is a major problem.

That is why we have toilets that don't flush,paper too thin to keep your fingers clean, and lights too dim to see the first two didn't wwork!

38 posted on 07/30/2011 11:53:33 AM PDT by hoosierham (Waddaya mean Freedom isn't free ?;will you take a credit card?)
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To: cableguymn
Maybe when Obama is out of office someone can change the mandate to 54.5 kilometers per gallon.

I was looking at a recent issue of Consumer Reports and they weren't too pleased with the latest VW Jettas--thought they had been changed for the worse (cheaper materials).

39 posted on 07/30/2011 6:55:17 PM PDT by Verginius Rufus
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