The Environmental Protection Agency and Department of Transportation recently gave notice of upcoming joint rulemaking to establish 2017 and later model year light duty vehicle greenhouse gas emissions and CAFE standards. Though President Obama had previously announced an increase to an average fleet fuel efficiency standard of 35.5 mpg by 2016 in May 2009, the new standards aim to increase fleet fuel efficiency even higher – between 3% to 6% annually from 2017 to 2025. This annual increase would result in a fleet average of between 47 mpg to 62 mpg by 2025.

If the most ambitious standard went forward (6% increase per year), the US could save up to 1.3 billion barrels of oil—more than two times as much oil as the US currently imports from Saudi Arabia each year. The higher standard would also save up to 580 million tons of carbon dioxide emissions, equivalent to the annual emissions of 153 coal-fired power plants. Interestingly, only the 6% path (i.e. the possible future envisioned by the EPA with an annual 6% increase in fuel efficiency) depends on increased usage of electric cars, increased usage of hybrid vehicles, or other battery-dependent cars. With other nations—namely Japan, Germany, and China—heavily investing in hybrid vehicles, using a 3-5% increase in fuel millage could prove detrimental in American car sales in the future. Without the policy incentive for innovation, will American manufacturers be able to compete in an increasingly competitive market?

However, this increase in fuel standards will cost consumers. The EPA estimates that the per-vehicle cost increase for a 2025 vehicle will be between $770 (with a 3% annual increase) to $3,500 (with a 6% annual increase). However, they estimate that the improved fuel efficiency of the vehicles will lead to a relatively quick payback period to owners from savings on gasoline, between 1.4 and 4.2 years. While these costs and time periods may seem discouraging, a poll by the Natural Resources Defense Council showed that 83% supported a 60 mpg fuel efficiency standard that cost $3000 with a payback period of four years.

It’s still too early to tell what will eventually make its way into law. This is, after all, only a notice of upcoming rulemaking. Next in the process is issuing a supplemental Notice of Intent in November, which will include an updated analysis of possible future standards. Before then, however, the EPA and Department of Transportation will be accepting comments—either in support of the new fuel standards or against. If you’d like to make your voice heard, submit any comments (making sure you identify your comments in regards to Docket ID No. EPA-HQ-OAR-0799 and/or NHTSA-2010-0131) by:

EPA:

Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, AttentionDocket ID No. EPA-HQ-OAR-2010-0799.

NHTSA (National Highway Traffic Safety Administration):

Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue, SE, Washington, DC 20590.

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