U.S. to Raise Fuel Efficiency Standards

on Tuesday, June 28, 2011 at 12:15 PM

Fuel efficiency standards are about to go up. In September, the Obama administration will likely start pushing for a 56.2 mile per gallon target for all American auto manufacturers’ fleets (i.e., the fuel efficiency of all new models must average out to 56.2 mpg). But efficiency standards will be based on mileage during EPA testing, which,

converted for real-world driving, would translate to a window-sticker rating of about 37 mpg for combined city/highway driving. The best gasoline-electric hybrids already beat that, and some gas-only small cars are close, rated 33 or 34 mpg in city/highway driving.

The 56.2 target “is not a very heavy lift,” argues David Friedman, vehicles specialist at the Union of Concerned Scientists, which favors 62 mpg.

Factor in various air conditioner coolant-related efficiency exemptions, and the number is even lower than the 37 MPG target.

But what this target lacks in ambition it apparently makes up for in feasibility. USA Today reports that the 56.2 mpg number was formulated after consultations with the American auto industry. Considering that the U.S. government actually owns a not-insignificant percentage of the American auto industry, it would probably be irresponsible to saddle it with potentially-crippling regulations like unrealistically high MPG targets.

There’s yet another element to this as well. By all accounts, the U.S. government is desperate to unload its General Motors stock. With a presidential election coming up, the Obama administration likely realizes that there’s a political liability to selling off American taxpayer’s GM shares at a significant loss. An ambitious MPG target that significantly raises R&D and production costs would, in the short to mid term, threaten the company’s profit margins. This of course, is problematic for major GM stakeholders—the U.S. government among them. A disappointingly low MPG target might be the result of a basic conflict of interest: the government actually owns a company it is trying to regulate. Moreover, the effective regulation of that company (and the auto industry as a whole) is central to several administration goals, such as controlling carbon emissions and weaning both the country and the economy off of oil.

On the other hand, a 56.2 MPG target by 2025 isn’t nothing:

A 56.2 standard, “while not as ambitious as the level we have been advocating, is a doubling in fuel efficiency from today’s average passenger vehicle and would cut drivers’ fuel bills in half,” notes Roland Hwang of the Natural Resources Defense Council environmental group.

Conflict of interest or not, efficiency standards are at least moving in the right direction.

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