Senate proposes 35 mpg on all vehicles

The U.S. Senate has proposed legislation that would require automakers to increase fuel economy standards to 35 miles per gallon on all cars and light trucks nationwide by the year 2020. The bill also requires an improvement in fuel economy by 4 percent each year after for the next 10 years.

The proposal by Commerce, Science, and Transportation Chairman Daniel Inouye (D-Hawaii) and Vice Chairman Ted Stevens (R-Alaska) would create, for the first time, fuel economy standards for medium and heavy-duty trucks. It would also give the National Highway Traffic Safety Administration (NHTSA) flexibility to configure the CAFE program to achieve high fuel standards while "ensuring the stability of the automotive industry." The domestic auto industry has been anything but stable recently amid elevated fuel prices, making this political wiggle room an expected place for negotiations.

This bill is aimed at reducing the impact of global warming and U.S. oil dependencies on foreign countries. The committee still supports researching alternative fuels, but Inouye says it is possible to enhance current fuel technologies and not limit consumer choice in automobiles.

"This is a good step in the right direction," says Consumer Reports' Auto Test Senior Director David Champion. "However, the increased cost of gas will likely move the market for more fuel-efficient vehicles quicker than this legislation."

The "Big 3" car manufacturers may be the hardest hit by this proposed bill, because most of their top sellers are SUVs and pickups, whereas import brands tend to build more cars. The Alliance of Automobile Manufacturers trade group--representing DaimlerChrysler, Ford, GM, Toyota, and others--has been outspoken in their criticism of this move, with a spokesperson Gloria Bergquist quoted at detnews.com as calling the goals "unattainable."

Currently, there are different mpg standards for cars and trucks. The standard car mpg is 27.5 and for light trucks it's at 22.2 mpg. This week, the average national gas price is $3.05, according to the Energy Information Administration.

For more information on fuel-efficient vehicles and alternative fuels, see our fuel economy guide.  And for the latest national, and regional, gasoline price averages, monitor the Gas Prices category in the Cars blog.

--Liza Barth   

Comments

[Mike Hammock]

Yet again, I find myself wishing that Consumer Reports would at least talk to an economist before taking a policy position. A fuel economy standard is a terrible way to reduce the negative externalities associated with driving, compared to the alternatives.

1) CAFE does nothing to deter driving, since it does not increase the cost of driving an additional mile--in fact, it encourages driving by reducing the cost of driving an additional mile.
2) CAFE does nothing to reduce pollution and congestion externalities created by older cars, which remain on the road for quite some time.
2) A higher gasoline tax, on the other hand, encourages carpooling, combining trips, use of public transportation, and less driving overall. It may also encourage people to switch to more fuel efficient cars, but that is a side effect--the direct effect is to reduce gasoline consumption. A higher gasoline tax even encourages people with older cars to drive differently.

Economists threw out those old command-and-control-style regulations years ago, in favor of incentive-based regulation. When will Consumer Reports begin talking to people who really know something about the economics of regulation?

[Adi]

So, the solution is to punish the people and give even more money to the govt to mismanage? I don't think so. I do agree that higher fuel prices will indeed solve the problem faster than any regulation will and perhaps the market will indeed achieve this all on its own.

[Mike Hammock]

Adi, you do realize that imposing higher fuel efficiency on cars means "punishing people" too, right? Either they suffer from smaller cars, or more expensive technology, or worse performance. Free fuel efficiency is not a choice that is available to us. The question is, what policy will provide the biggest bang for the buck? It's not the CAFE standard.

If you like, we could use the gasoline tax to displace payroll taxes (which are regressive, anyway). That's an idea Al Gore has been pushing, incidentally.

In any case, a gas tax works to reduce fuel usage by raising the price of gasoline, which both Adi and David Champion apparently like. Why is it good for higher gas prices to encourage reduced gasoline use, but bad for higher gas prices caused by gasoline taxes to reduce gasoline use?

[Horst H. Balthes]

All of you are missing the point. Most cars in Europe already achieve that goal. The secret?
"Diesel." Why are North-Americans so brainwashed and blindfolded by theirs Governments and Multi-Lobbies, that they can't see it? Decreasing the dependency on rrude-oil starts with Diesel as it can be made out of anything but crude-oil. America awake: knock knock! anybody there? Well, maybe not. The so called stringend emission control regulations were just made up to avoid Diesels from becoming popular, #1 by the governments who fear less oil taxes as a result.
#2 by the oil multies who fear less usage and alternatives to cut into their phenomenal profits.
#3 by the north-american automotive industry to overcome their own inability to build and offer such engines.
Europe has 75% Diesel cars on it's roads and since it started shifting that way, the enviroment has become rather cleaner then more dirty. Remember: Using half or less the fuel will produce half or less pollution.
So, don't keep getting brainwashed by your industry that all these Gas Guzzlers they produce are the solution. Look at "Diesel"
not at the Nort-American ones as they cannot manage to build an efficient one. Look at European or Japanese ones as they are the answer as of today. Gas - electric hybrids are a lough as they still require a substantial amount of crude oil to operate. President Bushes Ethanol campaign is plain silly as it disrupts the already imbalanced globel food production, and would therefore result in more starvation. I strongly advice: Throw you preoccupations away and think about it! HB

[cars]

it is definitely a good step towards the right direction for vehicle owners out there. in this way not only the fuel economy becomes stable, but even the vehicle economy as well.

[Mike Hammock]

Horst H Balthes, Diesel is indeed a great deal dirtier than gasoline:
http://www.lungusa.org/site/pp.asp?c=dvLUK9O0E&b=36089

Diesel can be and is made out of crude oil. Of course, biodiesel can be made from other sources as well, although it is hard to imagine them scaling large enough to displace gasoline and oil-derived diesel altogether.

Air pollution is indeed getting better in Europe and the U.S., for a variety of reasons, including stricter emissions regulations and higher fuel prices, as well as technological progress. Also, ethanol is a bit of a scam, as it is only doing well due to subsidies. Ethanol would otherwise likely be too costly to use as fuel in any significant quantity.

Tax each fuel in accordance to the pollution damage it creates, and let the market sort out the best response. We'll get pollution reduction at the lowest cost.

[Adrian W]

Mike Hammock, With all due respect, your Diesel pollution analysis is out of date. The article is from 2000, and it is based on OLD diesel, not the new diesel that US laws require with 97% less sulfur (500ppm vs 15ppm). See Quote "Over 40 chemicals in diesel exhaust are considered toxic air contaminants by the State of California." This article bases diesel tech on dirty diesel back in years pre 2000.

http://www.terradaily.com/reports/New_US_fuel_standards_give_hope_to_diesel_industry.html

But you are correct that Diesel cannot displace Gas for a fuel in USA given supply, but hey, a 20% decrease in old/bad gasoline cars switching to new diesel vehicles would make a tremendous impact.

PS, My pet peve is a 5.7L Hemis in a 2 door coupe.

[Mike Hammock]

Adrian W, you're right that the new diesel standard is much cleaner, but that's not relevant to the point I was addressing. Horst H. Balthes argued that the new standards were created to prevent diesel from being popular not because diesels are (or rather, were) dirty. I was pointing out that diesels were, in fact, much dirtier than conventional gasoline engines, hence the new, tighter standards.

Also, I wasn't arguing that diesel in general cannot make a dent in our overall fuel consumption; I was referring to biodiesel only. Biodiesel plus petroleum-based diesel could reduce gasoline consumption significantly.