Industry reactions to House passage of CAFE bill
With yesterday's passage of the Energy Independence and Security Act of 2007 by the U.S. House of Representatives, the issue of how efficient vehicles in America will become in the future is back in the news. As we just talked about, the future of the bill as passed is uncertain, but this hasn't stopped groups in the auto industry from releasing statements on the bill. SUVOA stands for Standing Up for SUV, Pickup and Van Owners of America (the bold letters indicate how the group gets its name. I think they should just be called the worst acronym creators ever). The group "is a non-profit consumer organization dedicated to supporting the rights and serving the interests of more than 80 million SUV, Pickup and Van Owners of America. Founded in 1999, SUVOA strives to ensure balanced media reporting of light truck issues and represents our supporters by educating federal and state policymakers." SUVOA issued a statement that supports the truck/car distinction in deciding CAFE averages and the 35 mpg CAFE standard as the least bad option. The statement (the whole thing is available after the jump) says that for "many" large vehicle drivers, these behemoths are the "only vehicles that meet their family, work or leisure needs." AutoblogGreen readers just had a good discussion on the idea that we need these huge vehicles, and lets just say I'm still skeptical of 80 percent of the people who say they just couldn't survive without driving something larger than a mid-size pickup.
Ford also released a statement on the passage of the Energy Independence and Security Act of 2007, calling the bill "an important step towards increasing the national fuel economy standard" and saying the House version with the truck/car categories is much better than the bill the Senate was discussing in June. Ford says the distinction "provides flexibility to manufacturers and encourages the production of flex fuel vehicles."
If you see any other related statements worth noting, send us a tip or add it to the comments.
[Source: SUVOA, Ford]
CAFE: Consumers Need to See the Fine Print on Total Costs
The following is being issued by SUVOA:
We support the 35-mile per gallon CAFE provisions within the just-passed House Energy Bill. SUVOA supports this "compromise" on vehicle fuel economy standards only because compared to other proposals it would be the least expensive for consumers.
Throughout the Congressional deliberations we backed strong increases in fuel economy and use of alternate fuels to reduce the nation's dependency on imported oil. We also advocated different standards for passenger cars and light trucks, recognizing the workload differences between the two.
However, forcing a 40 percent increase in fuel economy requirements can't be done without a lot of give and take. More precisely, giving up and taking away.
No one wants better fuel economy more than those who drive light trucks - SUVs, pickups, vans and minivans. They already are paying the most at the pump, but for many these are the only vehicles that meet their family, work or leisure needs.
But there will be no fuel economy free lunch. If an increase of this magnitude were easy or cheap any one of the world's profit-driven auto manufacturers would have already produced an affordable full-sized gas-sipper. It can be done, but the vehicles would cost far more than consumers would save at the gas pump (hybrids, for example are still less than 3% of sales and most owners do not realize a net dollar savings.)
As these challenging fuel economy standards phase in, consumers will pay thousands of dollars more for new vehicles. Many will be priced out of the new vehicle market altogether, and even those who can afford the purchase may never own the vehicle long enough to recoup the price hike through savings at the gas pump. Also, there may be far fewer full-size light truck choices and many may not have the power, torque and/or four-wheel drive that many consumers need.
Unfortunately the only conversation occurring is that there will be savings at the gas pump. There's no discussion about the myriad other costs, including lifestyle and personal safety compromises that are certain to result as vehicle size and capacity shrink.
STATEMENT: FORD COMMENT ON HOUSE ENERGY BILL
The following is a statement from Ford Motor Company on the passage of the Energy Independence and Security Act of 2007 by the House of Representatives:
WASHINGTON, D.C., Dec. 6, 2007 -- "The House energy bill is an important step towards increasing the national fuel economy standard. It accomplishes our shared goal of reducing the nation's dependence on foreign oil and emissions of greenhouse gases.
While the new standards are aggressive, Ford is committed to providing our customers with the fuel efficient, clean, safe, high quality products they want and value.
It is a substantial improvement over the Senate energy bill passed in June, because it maintains the separation of cars and trucks, provides flexibility to manufacturers and encourages the production of flex fuel vehicles."
Reader Comments (Page 1 of 1)
Domenick 10:53AM (12/07/2007)
SUVOA! lolz.... Considering this "consumer organization" was created by public relation companies on behalf of the"Big Three" they could come up with a better name.
http://www.sourcewatch.org/index.php?title=Sport_Utility_Vehicle_(SUV)_Owners_of_America
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rgseidl 11:34AM (12/07/2007)
There is something aficionados of muscle cars, SUVs and pick-up trucks could reasonably lobby for.
In addition to the explicit 35mpg CAFE target, there is an underlying assumption regarding the average annual mileage of the fleet, e.g. 15000 miles. Combine the two numbers and you obtain the average number of gallons consumed by an average vehicle in an average year (or alternatively, it total CO2 emissions). Think of this as the annual fuel budget, i.e. 15000 mpa/35 mpg = ~343 gpa.
Now, introduce the notion of an "Alternate COmpliance Option" (ACO2), in which the burden of conservation shifts from the manufacturer to the consumer. It would be up to the manufacturers to decide which vehicles their dealers are permitted to sell under this option.
If one is, this will be marked irrevocably in its title, even if it is exported and later re-imported. The vehicle will not be counted as part of the fleet against which the manufacturer's CAFE compliance is computed. The purchase will also be exempt from any gas guzzler tax that would otherwise have applied.
Instead, that particular vehicle's annual mileage will be limited based on the fuel budget described above and, the official combined MPG figure for that model, e.g. 343 gpa * 17.5 mpg = ~7500 mpa.
If you exceed the annual mileage limit for a vehicle purchased under ACO2, you'll be subject to a surcharge on your next vehicle license fee - e.g. $50 processing fee plus $0.01/mile over. Miles under the limit would be carried forward via a voucher from DMV, increasing the distance permitted in the following year.
The notion here is that driving a vehicle certified at 17.5mpg just 7500 miles a year is no worse than driving 15000 miles in one that is certified at 35mpg. The ACO2 may not work for everybody, but it should be good enough for those whose gas guzzler is anyhow a second vehicle they only use occasionally.
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BlackbirdHighway 12:41PM (12/07/2007)
Wow, reading about SUVOA makes me want to start a group for SUV owners who want higher mileage.
I was amused reading about their countering of the "What would Jesus drive?" campaign. To me, the answer is clear; a pickup truck. All the carpenters I've ever known drive either a pickup truck or a utility van.
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Emil 2:17PM (12/07/2007)
I would agree with rhe suggestion of Rqseidl.
I also would improve it: there are millions of FFV in the US whose owners use regular petrol,rather than E85.
So someone who exeeds 434 gpa, will have to show ( by showing receipts ) that he used E85 - and will not be charged 0.01$ per mile
Also if today 43% of petrol sold in USA is E10 or E85 - I don't see any reason, why isn't it possible to require ALL the petrol be at least E10 by 2012.
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Troy 2:37PM (12/07/2007)
I think, at least in the USA, that if a consumer wants to buy a vehicle that gets less than 35 mpg, there shouldn't be a fine or fee as punishment.
The market is consumer driven, so if everyone buys vehicles that get a higher MPG, the market solves the problem without the government collecting more taxes.
If auto companies could produce a 3 ton SUV that gets over 35 MPG, they would be selling it because people would want to buy that product. You already see some Hybrid SUV and crossovers on the market.
This new bill will increase taxes and make energy more expensive. Expensive energy makes everything (food, computers, applicances, clothes, etc.) more expensive.
If you just want to make energy expensive and force people to use less (economic depression and slower world economy) then you should use price controls for force the price of oil to an artifical price-point of $100 - $200 a barrel.
Even if gasoline is $5 a gallon, there will still be people who have to drive an SUV, only it will be less than there are today.
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rgseidl 5:25PM (12/07/2007)
@ Emil -
proving that you actually ever filled up on E85 would be a bureaucratic nightmare. FFVs currently get a break on CAFE because they make E85 use possible, beyond that it's up to the ethanol industry to produce something that makes both economic and environmental sense. In any case, my proposal related only to new vehicles, not those already on the road.
The problem with nationwide mandatory blending is that the traditional oil companies have no business interest in selling someone else's product instead of their own and, they have the lobbying power in Washington to fend off any attempts at forcing them to do so.
@ Troy -
rich philanthropists aside, the average consumer simply will not voluntarily spend his or her hard-earned cash on something that benefits primarily society as a whole. You've got to look beyond what people save at the pump to total cost of ownership. At $3 per gallon and 500 gallons per year, a 20% gain in fuel economy translates to $300 per year. If the up-front premium for making that possible is more than $1000, the ROI horizon will be too distant for most consumers to consider it.
After all, oil prices are at an historic high right now because virtually all of the OECD economies plus those of major emerging markets are all growing robustly at the same time, whereas investment in new oil production capacity has lagged. That is an unusual constellation for an industry historically prone to booms and busts, so it's by no means certain that oil prices will still be at or above $100 a barrel for several years running.
In other words, if politicians decide that it is the nation's best interests wrt energy security and/or climate protection that motor fuel should be conserved, leaving it up to the market unfortunately isn't going to work. Consumers need to be certain there will be no free riders if they do their bit for the common good.
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Owain Ozymandias Buck 8:29AM (12/10/2007)
Regarding WWJD--as I heard it put one time, we all know Jesus was a Ford man, because the bible says everywhere he went, he walked! ;)
But seriously, a fuel tax--or better yet, the increase of market fuel prices--is the only thing that will solve this. More efficient vehicles will appear when large enough segments of the market want them. They'll appear like magic.
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