Why CAFE Standards Don’t Mean Anything

Posted: September 1st, 2011 by Militant Libertarian

by Aaron Turpen, EVMeme

Back at the end of July, a lot of hubub in the automotive press said that President Obama was pushing for new, stricter, more environmentally-friendly fuel standards for the Environmental Pontification Agency’s Corporate Average Fuel Economy (CAFE).  These will be an extension of the standards set earlier this year that are effective through to 2016.

Obama’s numbers looked like this, according to the White House’s short-and-sweet (and bereft of details) announcement on the plans back in July:

It’s always fun to see government projections for “money saved.”

Both Volkswagen and Daimler were very vocal about the standards (as proposed at an official meeting with several industry insiders) and their total commitment to.. encouraging larger, less efficient vehicles. Wait.. what? 

“The proposal encourages manufacturers and customers to shift toward larger, less-efficient vehicles, defeating the goal of reduced greenhouse-gas emissions” -Tony Cervone, VW

“Mercedes-Benz, the luxury car line owned by German car and truck maker Daimler, did not back the new program, saying it “clearly favors large SUVs and pickup trucks.”

“Our customers expect a range of vehicles from which to choose so this program creates a very real disconnect between government regulation and customer demand,” the carmaker said in a statement.” –Reuters, quoting from a Mercedes-Benz (Daimler) statement.

At that time, the White House’s proposal was mostly being attacked by the usual suspects: partisan Republicans and those who never believe anything the government says (like me).  It turns out, though, that the partisans and wackos (that would be me) didn’t have the inside story like Daimler and Veedub did.

The recent release of a notice of intent (pre-publication) of the 2017-2025 CAFE standards by the EPA and National Highway Transportation Safety Administration (NHTSA) have served to clear the air and show that, indeed, those statements from automakers like Mercedes and VW hinted at the truth.  The proposed standards are now available at this link.

So, now that the hype is over and the nitty-gritty is being revealed.. what’s the skinny?

To be blunt: Obama lied, the EPA’s statements up to this point were bull pucky, and the reality is that the stated benefit of the CAFE standards (starting from their inception in 1975) is out the window.

The stated improvements in required fuel economy that were oft-repeated in the press back in July (5% improvement for light vehicles) aren’t the plan.  The real plan is improvements of 2.9% to 4.7% and that’s assuming automakers don’t exploit the numerous loopholes available to them in the regulations.

Most of these loopholes, as the VW and Daimler people said, are in favor of trucks and SUVs.  First, most of the “emissions technologies” planned to be included as improvements (which haven’t been listed individually, but EPA statements make it clear what they’ll focus on) will be for CO2 reduction.  Yep, carbon dioxide will be the primary (and almost only) emission the EPA plans to heavily target for reduction.  Don’t worry about particulates, NOx, or other things that have been proven beyond a reasonable doubt to affect both health and the atmosphere.  Nope, the plan is apparently to focus on Al Gore’s nemesis, carbon:

“..promote the early market penetration of tailpipe CO2/fuel consumption reducing technologies that are not appropriately accounted for in the current test procedure..”

The EPA also plans to heavily promote plug-in and electric vehicle technologies.  Apparently at the expense of natural gas and other non-electric options.

“To facilitate market penetration of the most advanced vehicle technologies as rapidly as possible, EPA intends to propose an incentive multiplier for all electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs) sold in MYs 2017 through 2021.”

The reality is that this just promotes incentives for cars that may or may not be marketable.  The Volt, as an example, has emerged as another over-hyped, market-less vehicle that General Motors is nevertheless intent on continuing to hinge its future upon.

The fact that vehicles utilizing clean diesel, natural gas, and other fuels are a much larger part of the market than electrics have any hope of being in the near future doesn’t seem to phase the bureaucrats at the EPA.  Not that anyone would expect them to act differently.  The disconnect between Washington and Reality being what it is.

That doesn’t even begin on the truck-chassis options that car makers will have.  These are supposedly to encourage “game changing” technologies that improve truck performance in a big way.  All they really do is give the manufacturer incentive to build one or two models with a lot of over-priced technology on them (that few will buy) and continue as usual with the rest of their fleet.

So while your neighborhood Ford dealer may not be offering much in the way of new fuel economy options on your F-150 purchase, over on that side lot he might have a “demonstration” F-150 with a lot of hooey “green” tech under the hood, but that costs $10k more than its inefficient counterpart.  This assuming you equate efficiency purely with fuel economy and/or emissions and not with over-done tech and reliability.

Further, most of these proposed improvements aren’t even to begin until 2022.  By then, of course, little “tweaks” and changes can have been made to gut this policy.  Most government agencies under the Executive Branch realize that they are probably going to be (at least publicly) totally changing their tune every 4 to 8 years anyway.

This provides the opportunity to begin to transform the most challenging category of vehicles in terms of the penetration of advanced technologies, allowing additional opportunities to successfully achieve the higher levels of truck stringencies in MY 2022-2025.

I don’t know if you’re doing the math, but we’ll be at least one president ahead by that point (two if Obama loses in 2012).  Of course, not many changes to Senate membership will have happened by then, but that’s a whole different problem there.

And, of course, what EPA proposal would be complete without throwing a bone to the corn lobby (after having forcefully taken it from the green car consumer):

EPA intends that CO2 credits for plug-in hybrid electric vehicles (PHEVs) and bi-fuel compressed natural gas (CNG) vehicles will be based on the recognition that, once a consumer has paid several thousand dollars to be able to use a fuel that is considerably cheaper than gasoline, it is very likely that the consumer will seek to use the cheaper fuel as much as possible.  Accordingly, for CO2 emissions compliance, EPA expects to use the Society of Automotive Engineers “utility factor” methodology (based on vehicle range on the alternative fuel and typical daily travel mileage) to determine the assumed percentage of operation on alternative fuel and percentage of operation on CNG for both PHEVs and bi-fuel CNG vehicles, along with the CO2 emissions test values on the alternative fuel and gasoline. EPA does not expect to extend this method to flexible fueled vehicles (FFVs) using E-85 and gasoline, since there is not a significant cost differential between an FFV and conventional gasoline vehicle and historically consumers have only fueled these vehicles with E85 a very small percentage of the time.  Therefore, treatment of E85 FFVs will continue as the MY2016 program, based on actual usage of E85 which represents a real-world reduction attributed to alternative fuels.

That pretty much speaks for itself.  The EPA just said: “Hey electric and natural gas car buyers: F U.”  Since you’re saving so much money by using cheaper fuel, we’re going to give you diddly while we still continue to throw a bunch of money at the Big Agriculture corn producers.

So all that extra money you just spent to get the greener option?  S-O-L, pal.  You should’ve bought a Flex-Fuel P.O.S. instead.

Oh, wait, there’s more.  Car manufacturers who build flex-fuel vehicles get to estimate the average E85 usage the car is likely to undergo once sold.  Despite numerous studies showing that most flex-fuel owners rarely actually use E85, there’s little doubt that GM and friends will have all types of numbers showing high usage of ethanol versus regular gasoline in order to pump up their credits with the EPA.

Oh, and one final point: government fleets and vehicles made for governmental use are exempt from CAFE standards.  Oh, how convenient.  The government’s rules rarely apply to itself.  Just ask Congress about their Social Security benefits…

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