Fuel economy standards program need retooling

WASHINGTON – Although the federal program that sets fuel economy standards for cars and light-duty trucks has helped reduce U.S. dependence on imported oil and lower emissions of greenhouse gases, changes to the program could further cut the nation’s petroleum dependence and provide more flexibility to carmakers.

That’s according to a new report from the National Academies’ National Research Council.

Will take compromises. “There are pros and cons to tightening fuel economy standards, involving a range of trade-offs,” said Paul Portney, committee chair and president of Resources for the Future in Washington.

“However, no matter what Congress decides regarding specific fuel economy targets, our committee is adamant that changes should be made to shore up deficiencies in the program.”

What should change. The committee recommended a slate of improvements, ranging from the adoption of tradable fuel economy credits, to the elimination of the “two-fleet” rule that currently sets standards separately for domestic fleets and imports.

Known as the Corporate Average Fuel Economy (CAFE) standards, the program dictates the average miles per gallon that passenger cars and light-duty trucks sold in the United States must attain.

Established by the Energy Policy and Conservation Act in 1975, the standards were designed largely to reduce U.S. dependence on foreign oil. Each year, automakers are required to achieve an average of 27.5 mpg for their fleet of new passenger cars, and 20.7 mpg for their fleet of new light-duty trucks.

Light-duty trucks initially represented pickups and cargo vans, but now include minivans and sport utility vehicles.

Standards outdated. The CAFE program has had some unintended consequences, the committee said. As consumers have begun buying more and more minivans, SUVs, and pickup trucks, the overall average fuel economy of new vehicles has dropped because the larger, heavier vehicles have less stringent standards to meet than passenger cars.

In 2001, sales of minivans, SUVs, and pickups are expected to exceed sales of passenger cars for the first time ever.

Technology exists. Some technologies already in existence today could significantly reduce fuel consumption of new cars over the next 15 years, with light-duty trucks having the greatest potential reductions.

These technologies, which would increase the purchase price of new cars and trucks, include engine advances that reduce friction, such as variable valve timing, and more efficient powertrains, such as five-speed automatic transmissions.

However, it could take decades before new, more fuel-efficient vehicles have replaced the 200 million cars currently on the road.

What needs fixing. The committee said that to correct structural flaws in the CAFE program, policy-makers should:

* Adopt tradable fuel economy credits – Current CAFE guidelines allow an automaker to accumulate fuel economy credits if its fleet of cars or trucks exceeds the standard. These credits can be bankrolled and used to offset future CAFE deficits.

This system should be expanded so that credits can be sold to other automakers or bought from the government to bring their fleets into compliance.

* Consider switching to attribute-based standards – Instead of setting fuel economy standards on the basis of whether a vehicle is a car or a truck, standards could be matched with certain attributes, such as vehicle weight.

For example, vehicles under 4,000 pounds, which would include most cars and some light-duty trucks, could be required to meet fuel economy standards that depend on their weight.

If such an approach were adopted, manufacturers would be encouraged to decrease the weight of heavier vehicles and perhaps even increase the weight of their lightest vehicles. The size disparity among vehicles on the road would be diminished and safety enhanced.

* Eliminate the two-fleet rule – CAFE standards require that the average fuel efficiency for domestic and imported fleets be calculated separately, with domestic fleets being defined as models that are made with at least 75 percent domestic parts.

The committee said the global marketplace has rendered these designations obsolete and found no evidence that U.S. autoworker jobs were affected positively or negatively by this system, which was the initial reason for the distinction.

* Eliminate dual-fuel vehicle credits – CAFE provides fuel economy credits to dual-fuel vehicles, which can burn ethanol as well as gasoline.

Because automakers can use these credits to compensate for their less efficient vehicles, the committee determined that the credits have had a negative effect on overall fuel economy.

* Pursue government-industry research and development – The government should continue funding research and development of new fuel-efficiency technologies in cooperation with the automotive industry.

* * *

Fuel economy vs. safety

WASHINGTON – To improve a car’s fuel economy, one of two things must happen: The efficiency of the powertrain must be increased through new technologies, or the amount of work required by the engine to move the car must be lowered, usually by lessening wind resistance or by reducing the car’s size and weight.

Is smaller as safe? But one risk of downsizing is that smaller cars involved in crashes with larger vehicles tend to have higher numbers of fatalities.

The committee estimated that the downsizing of automobiles in the 1970s and 1980s – whether a result of CAFE standards or other market-driven needs – may have contributed an additional 1,300 to 2,600 fatalities in 1993.

Controversial. However, this area is quite controversial among analysts and the National Research Council report includes a dissenting opinion written by two committee members.

They believe that the relationship between fuel economy and safety is not yet fully understood, and a reduction in vehicle weight need not adversely affect safety.

The committee feels more analysis in this area is warranted and calls on the National Highway Traffic Safety Administration to conduct further research.Fuel economy vs. safety.