Analysts Question Bush's Fuel Economy Proposal
February 4, 2007
Part of the agenda of President Bush is to reform fuel economy standards for cars. In this regard, he earlier announced his proposal to require automakers to meet new fuel efficiency standards. Bush, in his State of the Union address, proposed that the automakers improve the efficiency of the vehicles by 4 per cent annually starting in 2009 for passenger cars and 2011 for light trucks. The administration also intends to cut gas consumption by 20 per cent by 2017.
The proposal is mainly to promote the production of green cars and it is undoubtedly helpful. However, not all are convinced by the proposal. Aside from Detroit’s Big 3, other analysts in the industry also expressed their dissent. In addition, environmentalists articulated their uncertainty about Congress enacting a law to alleviate corporate average fuel economy standards.
Some automakers were disappointed because the proposed $500 million budget over 5 years to speed research into advanced batteries was not contained in President Bush's State of the Union address. Fuel efficiency can only be had if there is an adequate study behind it. The study does not simply include auto parts’ compatibility like EBC rotors; it entails every detail down to the minutest ones. Automakers also complained about the proposed 4 per cent increase in fuel efficiency. Said requirement is twice the increase that the president has implemented last March, when the administration reformed and increased corporate average fuel economy rules for light trucks, which includes sport utility vehicles.
The first proposal regarding fuel efficiency was issued in December. Bush acknowledged that his proposal is similar to the earlier proposal. "Their plan and my plan are very -- have got commonalities, and we're going to work together to get Congress to enact a comprehensive plan. I believe there's an appetite in the halls of Congress to become less dependent on oil," Bush said. The 4 per cent increase was also proposed by U.S. Sen. Barack Obama of Illinois. Obama is still firm with his stand to mandate annual increase.
It can be recalled that General Motors Corp. has earlier asked Congress to significantly increase federal support for the development of advanced powertrain technologies and the promotion of alternative fuels. The call is also anchored on the need to improve vehicles efficiency. The automaker added that the industry needs billions of dollars to make the vision a reality. Moreover, it needs considerable aid from the government and such is expected to come in the form of cash.
The so-called CAFE standards for passenger cars that require cars to run at 27.5 miles per gallon have remained unchanged for about 2 decades now. It should also be noted that Bush’s administration recently revamped the rules for light trucks that resulted to sliding mileage scale based on a vehicle’s size. Bush wanted to assign a similar measure to passenger cars.
Bush added, “The secretary of transportation would ultimately decide on fuel economy standards, but to meet the new goal fuel economy standards for cars and light trucks would have to be raised by an estimated 4 percent annually, beginning for passenger cars with the 2010 model year and for light trucks with the 2012 model year.”
“Bush’s ambitious targets for improving mileage is welcome,” said John DeCicco, a senior fellow for automotive strategies at Environmental Defense, a not-for-profit group that focuses on environmental problems. “We certainly praise him elevating the discussion about this issue. Our view is that, on the face of it, this target is a very good first step, but further action will be necessary from the White House and Congress, and they’ll have to work together to make this work. It’s not clear how vigorously both sides will pursue that goal.”
DeCicco added that without legislation to limit the use of fuels like gasoline with high carbon content. He is skeptical the Bush plan will be implemented. “Twenty years ago, similar legislation under President George H.W. Bush called for a 10 percent reduction in U.S. oil dependency by 2000 and a 30 percent reduction by 2010. Those levels were not met,” DeCicco said. “There have been lots of alternative fuel promises and promotions over the years, and in its totality all this activity has not made a measurable dent in U.S. oil consumption. So while the proposal put forward in the president’s speech was good, having piecemeal targets without an overall policy is failing the country and has been for 20 years. If these policies don’t result in a binding law, then they’ll remain rhetoric.”
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