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Executive Summary
Legislation to increase Corporate Average Fuel Economy (CAFE) standards for cars
and trucks was included in the Senate energy bill (H.R. 6) that was passed in
June of this year, marking the first time in over thirty years that either House
of Congress has passed an increase in CAFE standards. The Senate CAFE would
raise gas mileage standards for cars and trucks
from 27.5 miles per gallon (mpg) and 22.2 mpg respectively to 35 mpg by 2020.
This would save Massachusetts consumers $519 million dollars at the pump in
2020, reduce oil consumption by 24,324 barrels per day in 2020 and having global
warming emissions equivalent to taking 294,230 cars off the road in
2020.
Nationwide the savings would be even more significant. In 2020, the
Senate fuel economy legislation would reduce our national oil consumption by 1.2
million barrels per day, save consumers $26.5 billion dollars and have the
global warming emissions reductions equivalent to taking 14 million cars off
the road. Increasing CAFE standards is one of the biggest steps we can take to
reduce our dependence on foreign oil, improve our national security and move us
on the path towards a new, clean, energy future.
Driving Towards a New
Energy Future
America is Too Dependent on Oil The United States is too
dependent on oil. This dependence threatens our national security, environment
and pocketbooks. Holding only two percent of the world’s oil reserves, the
U.S.
consumes a quarter of the world’s petroleum.
Our heavy reliance
on oil to fuel transportation vehicles takes a heavy toll on the
environment. Emissions from cars are a major source of air pollution like
smog and ozone and are a leading source of global warming pollution. Consumers
pay for our inefficient vehicles with increased prices at the pump. Gasoline
prices have been steadily on the rise for the last five years. In 2003, a
gallon of regular gasoline averaged $1.56; today the average is almost twice as
high, rising to $3.11. In the last twenty years there has been a dramatic shift
in the American vehicle fleet towards larger less efficient vehicles. Today,
sports utility vehicles (SUVs) and light trucks account for almost half of all
light duty vehicle sales.
Despite the development of new technologies
like hybrids, the average fuel economy of both cars and SUVs has stagnated.
Congress and the Bush administration, however, have failed to
increase
federal fuel economy standards (except for a minor increase in light truck fuel
economy). For model year 2007 new cars and light trucks average just 20.2 miles
per gallon (mpg), the same as model year 2006, and five percent below the model
year 1987 peak of 22.1 mpg (Figure A).
A Proven Success
In response to
the Arab oil embargo of the early 1970s, Congress implemented the first miles
per gallon standards in 1975 to protect consumers from high gasoline prices and
supply vulnerability resulting from U.S. dependence on foreign oil. The drafters
of the successful oil savings law recognized that the only way to reduce
dependence on foreign oil was to reduce oil demand, requiring cars and light
trucks to nearly double miles per gallon averages to 27.5 and 22.2 mpg,
respectively by 1990. As a result, cars today use 2.8 million barrels of oil per
day less than they would have under the old fuel economy standards and have
significantly reduced global warming emissions.
Unfortunately Congress has not updated the standards since 1975. Increased
fuel efficiency is achievable now, with existing technology. A 2002 National
Academy of Sciences (NAS) report concluded that automakers could use existing
technology to increase the fuel economy of their fleets to 37 mpg over the next
decade while improving safety and maintaining performance.
The NAS study was conducted when gasoline prices were significantly lower
and without considering hybrid technology, so it is likely that they would find
that even further gains are
possible. The Union of Concerned Scientists has
shown that we can achieve 40 mpg within ten years.
If every vehicle
simply achieved the same fuel economy as the most efficient vehicle in its size
class they would go 48 percent farther on a gallon of gasoline. This would be
equivalent to an average of 44 mpg today.
Once a leader in new
technology, the United States now sees itself being outpaced by others. The fuel
economy standard for the European Union and Japan is 40 mpg today, while
China’s
mandate will be above 35 mpg by 2009.
The Senate
Solution
For two decades CAFE standards have remained unchanged as Congress
and Presidential administrations were blocked from raising standards by the auto
industry and their allies. At the same time American auto manufacturing jobs
continue to decline and American auto share is reduced because foreign
manufacturers make the fuel efficient vehicles that American consumers want.
With gas prices skyrocketing, our national security compromised by
our
dependence on foreign oil and increased concern about global warming, it
has become apparent that an updated fuel emission standard is needed more now
than ever. For example, former CAFE opponent, Senator Barbara Mikulski (DMd)
said on the Senate floor: "And now, after 20 years, I firmly do believe it is
time for a change."10 The Senate agreed, passing an energy bill that included
CAFE provisions that mandate that we achieve 35 mpg fleetwide by
2020.
Findings
As shown in Table 1, assuming that the mandate in
the Senate CAFE legislation is achieved and that each states’ gasoline usage
remains constant as a percentage of national use, we found that the Senate CAFE
legislation would save Massachusetts consumers $519 million dollars at the
pump in 2020, reduce oil consumption by 24,324 barrels per day in 2020 and would
have reductions in greenhouse gas emissions equivalent to taking 294,230 cars
off the road.
Nationwide the savings would be even more significant. The Senate bill
would reduce our national energy consumption by 1.2 million barrels per day in
2020, save consumers $26.5 billion dollars and reduce the global warming
pollution by the equivalent of taking 14 million cars off the road. Increasing
CAFE standards is one of the biggest steps we can take to reducing our
dependence on foreign oil, improving our national security and moving us on the
path towards a new, clean, energy future.
The ten states that will have
the largest consumer savings if the Senate CAFE legislation are adopted are:
California, Texas, Florida, New York, Illinois, Ohio, Michigan, Pennsylvania,
Georgia and North Carolina. California alone would save over $3 billion in 2020
under the Senate plan.
Congress should act now to pass an energy bill
that includes the Senate CAFE legislation along with a strong renewable
electricity standard, and efficiency provisions to save consumers money, reduce
our dependence on foreign oil and make a down payment on the fight against
globally warming.
Methodology
Oil Savings
The Union of
Concerned Scientists (UCS) estimates that we would save 1.2 million barrels of
oil each day in 2020 if the CAFE provisions in the Senate energy bill are
enacted.11 This report
assumed that each state’s gasoline use would remain
constant as a percentage of national use, as determined from gasoline use data
for 2005 from the U.S. Department of Transportation’s Federal Highway
Administration.
Consumer Savings
Each barrel of oil contains 42
gallons, which yields 19.7 gallons of gasoline. To calculate the consumer
savings by state, we multiplied each state’s oil savings (in barrels per day) by
19.7 to determine the gallons of gasoline saved per day. We then multiplied that
by 365 days a year to determine annual oil savings in gallons. We took the
current price of gasoline for each state as reported by the American Automobile
Association (AAA) on November 14th, 2007 and multiplied it by the state’s annual
gasoline savings in gallons.
Greenhouse Gas Reductions
The Energy
Information Administration (EIA) assumes that consuming one gallon of gasoline
releases 19.56 pounds of carbon dioxide into the atmosphere Driving Towards a
New Energy Future directly from the tailpipe. We multiplied the estimated oil
savings (in gallons) by 19.56 pounds per gallon to determine the carbon dioxide
tailpipe emission reductions. We divided by 2000 to get the tailpipe emission
reductions in tons.
Emissions Equivalency Reductions
EPA estimates
that the average passenger car on the road in 2000 emitted 11,450 pounds of
carbon dioxide annually. To determine the emissions equivalency, we divided the
estimated
carbon savings in pounds by 11,450 pounds per car.
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