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We CAN Drive 54.5

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regulation, fuel economy
On Tuesday, the Obama Administration made it official: The U.S. will require America’s auto fleets to average 54.5 mpg by 2025. Although the environmental community is generally performing handsprings over that (and only the auto dealers are scowling), there’s still some controversy over continuing loopholes that the industry can drive a lot of trucks through. Now we’re in a comment period, so be sure and say what you think.

The good news is that the industry, long stuck in idle on improving mileage, will be seriously stretched to achieve the goal. There’s not much doubt the targets can be achieved, and it doesn’t necessarily mean the roads will be full of electric cars. Challenged to innovate, the auto companies have been sharply improving both gasoline and diesel engines, using off-the-shelf technologies such as start-stop, cylinder deactivation, small-engine turbocharging, direct injection and widespread hybridization, including diesel hybrids.

The Peugeot 3008 Hybrid4: 62 mpg in the European cycle. Who says we can't reach 54.5 mpg without electric cars? (Peugeot  photo)Obama, said to be pleased that he’s gotten the EPA and Department of Transportation to work together, is making much of the potential benefits: $1.7 trillion saved at the pump (and $8,000 per vehicle) by 2025, oil dependence slashed by 12 billion barrels (and 2.2 million barrels per day) by 2025. That could offset 25 percent of our current imports. Greenhouse gas reduction: six billion metric tons over the course of the program.

So the greens are applauding:
  • “These standards will help consumers save money at the gas pump, cut pollution and reduce the nation’s dependence on foreign oil,” says Shannon Baker-Branstetter, policy counsel for Consumers Union. A CU poll indicates that 80 percent of respondents approve of the 54.5 mpg standard;
  • “As a third-generation auto dealer, all I can say is it’s about time,” says Adam Lee, chairman of Lee Auto Malls;
  • “We’ve long said—and demonstrated with unbiased research—that higher mileage standards are a huge win for our society,” said CERES President Mindy Lubber;
  • “American cars and trucks are, once again, poised to lead the world in technological advances that will benefit us all,” according to Environmental Defense Fund President Fred Krupp.

But hark, there are also voices of dissent, on both sides of the aisle. The National Automobile Dealers Association (NADA) doesn’t like 54.5 because, “This regulation gambles that millions of consumers will be able to afford thousands more for generally smaller, more expensive vehicles that may not meet their needs.”

That view is echoed by Edmunds.com CEO Jeremy Anwyl, who asks, “Are we moving too far too fast? The risk is that the proposed standards take us down the same path as the 1970s when a wave of safety, environmental and fuel efficiency regulations resulted in a generation of market-unworthy vehicles.” The Auto Alliance, representing 12 automakers, wants changes that don’t favor electric vehicles. “During the comment period, we hope the Obama Administration is open to continuing discussions on technology-neutral, real-world fuel economy gains,” it said.

The Tesla Model S: 300-mile range. Who says we can't have our electrics, and really good range, too? (Tesla photo)And then there are the loopholes, which leave some stalwart greens supporting the standards but cautious about how the automakers will put them into practice. “By taking advantage of loopholes they lobbied to get, automakers can evade the spirit of the rules,” says Dan Becker, director of the Safe Climate Campaign at the Center for Auto Safety. Becker points out that the industry got $80 billion from us taxpayers, and owes us clean cars.

The loopholes a) allow pickups and SUVs to make slower gains (3.5 percent better fuel economy in 2017 to 2021, versus five percent for cars); and b) encourage automakers to make their cars larger, so they fit into more leniently regulated categories. Becker told me, “There’s a perverse incentive for companies to add size to vehicles that are already big enough.” The industry has a history here: By adding four-wheel-drive and a few styling cues, it managed to get car-type vehicles like the Chevy HHR, Chrysler PT Cruiser and Subaru Outback classified as trucks—thus meeting lower mpg standards.

David Friedman of the Union of Concerned Scientists is singing out of the same hymnal as Becker. He told me, “”The industry is going to take advantage of flexibility mechanisms that will allow them to do less. I hope I’m wrong, because we’d all be better off if I am. But the auto companies are experts at meeting the letter and not the spirit of the law.”

For its part, the EPA is denying that loopholes even exist. Gina McCarthy, an assistant EPA administrator, told me during a conference call announcing the rules, “There are no loopholes in this rule, and none will get in during the comment period.” I don’t mean to disparage McCarthy here, because she was one of the EPA officials (along with Margo Oge, director of the office of transportation and air quality) who pushed hardest to keep the standards strong. But there are loopholes here.

But let’s end on a positive note. On the same day of the EPA/NHTSA announcement, California came out with its own clean car standards, which aim to have battery cars, fuel cell and plug-in hybrids amount to 15 percent of all vehicle sales in the state by 2025. Between 2018 and 2025, that could mean 1.4 million clean cars hitting the roads.

The 54.5 mpg announcement was made against the backdrop of the Los Angeles Auto Show, which was awash in clean electric cars. Even as they grumble, automakers are proving they can meet—and probably exceed—54.5 mpg. Friedman put it best: “There’s no doubt that this is an incredible day for the future of the automobile. I have a two-year-old, and he’ll have his driver’s license in 2025, the year the strongest standards go into effect. So he’ll be driving a gas car that gets 50 mpg or an electric. That’s incredibly exciting.”
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