MPG On the Rise
Before you pass judgment on the current Congress’ ability to get anything substantial done, a brand new energy bill has cleared both the Senate and House, and is likely to be signed by President Bush. I know it’s too early for April Fool’s, so you’ve got to trust me when I say that not since the 1970s has such a ground-breaking energy bill passed under the pen of the President of the United States. In December of 2007, Congress passed the Energy Independence and Security Act, designed to increase fuel economy requirements, promote production of non-fossil fuels such as ethanol, and require more efficient energy ratings for appliances and lighting. And it appears to have the President’s approval, if not the entire GOP.
The focal point of the EISA mandates a 40% increase in fuel economy standards, from an industry average of 25 mpg today to 35 mpg by 2020. It also mandates a marked increase in ethanol production, from 6 billion gallons a year today to 36 billion by 2022, with two-thirds of that ethanol coming eventually from non-corn based sources such as switchgrass and wood chips. Â
Of course the auto industry and its Republican supporters hate the bill, claiming it will increase car prices and limit vehicle selection, due to the necessary redevelopment of powertrain technology, hybrid engines, and use of costlier lighter-weight materials such as aluminum and carbon fiber. What they fail to see is that America’s adoration of the heavier and least fuel-efficient SUVs and pickup trucks was primarily manufactured by the auto industry and marketing agencies themselves, and not by any great need for such vehicles. Unless you require a pickup for work or live in a rocky, roadless desert, families (the biggest buyers of SUVs) can haul around groceries and soccer players just as easily in smaller, more fuel efficient crossovers and wagons.
The steel industry also fears a drop in profits as manufacturers move to other material sources, even though high-strength tensile steel is experiencing increased demand, because it is less expensive than aluminum (though not as lightweight). Both the car and steel makers claim that aluminum and carbon-fiber are less sturdy and safe, and that it will cost too much to invest in research into a strong, yet lightweight material.
Democrats hail the bill as an important step towards energy independence, even while they express regret that a Republican filibuster forced them to drop certain measures such as eliminating tax breaks for the big oil companies and mandating incentives to develop solar and wind power. The EISA is expected to reduce oil demand by four million barrels a day, saving the average consumer $700-$1000 a year by 2030. Republican detractors say it is not economically feasible in the long-run and that the ethanol mandate will increase corn prices and force farmers to become more corn-focused, thereby disrupting the food supply. They don’t appear to have a comment on the economic feasibility of a never-ending war for oil (hello, Iraq) or giant tax breaks for the richest oil companies (that’s you, Exxon).
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