35 Miles per Gallon by 2020
Policy Solutions
The biggest single step we can take to cut America's oil dependence, curb global warming, and save money at the gas pump is to make new cars and trucks go farther on a gallon of gas. America's cars and light trucks consume more than nine million barrels of oil per day, accounting for approximately 40 percent of all U.S. oil consumption. Each gallon of gasoline burned releases 24-28 pounds of carbon dioxide - the heat-trapping gas that causes global warming - into our atmosphere. Passenger vehicles alone account for more than 20 percent of our nation's global warming pollution.
Congress passed and President Bush signed into law new Corporate Average Fuel Economy (CAFE) standards as part of the 2007 Energy Independence and Security Act (EISA). EISA directs the National Highway Traffic Safety Administration (NHTSA) to prescribe new fuel economy standards for passenger cars and non-passenger vehicles, such as minivans, SUVs and pickup trucks, reaching a fleetwide average of at least 35 mpg by 2020.
Reaching 35 mpg by 2020 will save 1.1 million barrels of oil per day, save consumers billions of dollars at the pump and significantly reduce U.S. global warming pollution. But the U.S. will see these savings only if NHTSA sets new fuel economy standards that achieve (or surpass) this goal.
NHTSA will soon begin the process of setting new fuel economy standards under EISA: We anticipate that NHTSA will issue a Notice of Proposed Rulemaking (NPRM) in the first half of 2008. NHTSA is directed to set standards for new passenger cars and light trucks beginning with model year (MY) 2011, and we expect NHTSA will take the option of setting standards for up to five years, i.e. MY 2011-2015. Because the new standards will apply to MY 2011 vehicles and the law requires at least 18 months advanced notice to automakers for new fuel economy standards, NHTSA will need to issue a final fuel economy rule no later than April 2009 to apply to MY 2011.
Fuel economy standards are set for passenger and non-passenger vehicles: : The original 1975 CAFE law dictates that a passenger automobile, or what we think of as a car, is one that primarily transports no more 10 people and does not exceed 6,000 pounds. By definition a car cannot be capable of off-road operation or contain features for off-road travel other than 4-wheel drive (examples include flat floors and removable seats). Under the current definition and interpretation of the law "non-passenger vehicles" include minivans, SUVs of all sizes, new cross-over vehicles, and pickups. It is this loose definition of non-passenger vehicles that created the "light truck loophole." Automakers understood that these vehicles would be held to lower standards, so they started making more vehicles that qualified as non-passenger vehicles even if the design and intent was primarily to transport passengers. When the original CAFE law passed, light trucks were less than 20% of the market; today they account for more than 50%.
Ideally, the new vehicle attribute-based standards will limit the benefit of exploiting the light truck loophole. Vehicles of similar size, whether a car or a cross-over vehicle, should be held to similar fuel economy standards. This new system could reduce the incentive for automakers to design vehicles to fit within the light truck category.
The energy bill did not close the light truck loophole: The new law specifically directs NHTSA to set separate standards for the fleet of cars and for "non-passenger automobiles" or light trucks, and also creates a new category labeled "work trucks." The law did not change the definitions of passenger automobile and non-passenger automobile.
A work truck is a pickup truck that is between 8,500 and 10,000 pounds gross vehicle weight and is not a medium duty passenger vehicle such as a minivan or small SUV. Examples include the F-350 and 450, Chevrolet Silverado 3500 HD, and the Dodge Ram 2500 and 3500. Work trucks do not include larger and heavier SUVs that weigh between 8,500 and 10,000 pounds.
Because the new law requires setting standards for light trucks up to 10,000 pounds, the new category of "work trucks" was created to appease concerns from the agricultural and industrial sectors that new fuel economy standards would somehow eliminate the production of heavy duty pickups upon which farmers, ranchers and trades people depend. NHTSA has been directed to set standards to achieve the maximum possible fuel economy for these vehicles along with medium and heavy duty trucks following a study by the National Academy of Sciences. However, the same technologies available to improve the fuel economy of pickups and SUVs can be deployed on "work trucks" to save owners of these vehicles money at the pump and help them reduce global warming pollution.
NHTSA will change the way it sets fuel economy standards: Under the old system, NHTSA set Corporate Average Fuel Economy (CAFE) standards for cars and light trucks by establishing one mandatory miles-per-gallon standard applicable to all manufacturers. Since 1989, each automaker had to produce a fleet of cars that averaged 27.5 mpg or risk paying a civil penalty. The original CAFE law directed NHTSA to establish standards for light trucks. As of 2008 the light truck standard is 22.5 mpg, dragging down the overall fleet-wide average to roughly 25 mpg.
The new law directs NHTSA to set standards based upon one or more "vehicle attributes related to fuel economy." For its light truck rulemaking, NHTSA set fuel economy standards based upon vehicle "footprint" (derived from multiplying a vehicles wheelbase by the track width) which manufacturers could opt to follow for MY 2011.
The law provides that NHTSA must set standards for cars and light trucks to achieve a "combined fuel economy average for model year 2020 of at least 35 miles per gallon for the total fleet of passenger and non-passenger automobiles manufactured for sale in the United States for that model year." Further the law requires "ratable" progress toward the standard. After MY 2020, the law directs NHTSA to set fuel economy at the "maximum feasible" level for each model year.
In a variation from the old system, the new law calls for NHTSA to set an average fuel economy standard for the fleet of vehicles sold each model year in the US. The fleet-wide standard means that the entire fleet of vehicles (cars and light trucks) sold in the U.S. will meet a combined average standard each MY that ultimately achieves at least 35 mpg by 2020; each manufacturer's targets will depend on their own fleet makeup. For example, a company like Hyundai that manufactures small cars would have to meet higher fuel economy standards than GM, which sells more than two million light trucks every year.
The new law permits automakers to trade CAFE credits between companies to meet the new standards.
The new CAFE law and Flex Fuel Vehicles: Automakers will continue to earn credits for producing Flex Fuel Vehicles (FFVs) that will help meet their CAFE standard. Since 1988 automakers have earned credits toward the CAFE standards for producing Flex-Fuel Vehicles - vehicles capable of running on E-85 (a mixture of 85% ethanol and 15% gasoline) as well as conventional gasoline. There are now 8 million FFVs on the road but less than 1% of ever see a drop of E-85. Automakers have predominantly produced FFV versions of their worst gas guzzlers, earning them CAFE credits while actually increasing gasoline consumption. The U.S. uses at least 80,000 more barrels of oil every day due to this loophole. The EISA, however, incrementally phases out this loophole by 2020.
The impact of Biological Diversity v. NHTSA on new fuel economy standards: The Center for Biological Diversity challenged the light truck rule NHTSA issued for MY 2008-2011. On November 15, the 9th circuit court remanded the rule back to the agency. The court found that:
- NHTSA had failed to monetize carbon emissions in order to properly account for the benefit of reducing global warming pollution from higher fuel economy standards in its cost-benefit analysis;
- The Bush administration had failed to do a full environmental impact statement for its light truck standards;
- NHTSA had not set CAFE standards for vehicles weighing between 8,500-10,000 pounds - a standard it had never set; and
- NHTSA did not close the light truck loophole when it failed to revisit its flawed passenger car/light truck distinction to more accurately reflect the intended and actual use of vehicles such as SUVs.
On the issue of the light truck/SUV loophole, the Court agreed with the plaintiff that the "SUV Loophole" is anachronistic and requires reform. The Court closely examined the record and concluded that SUVs and similarly used vehicles should be regulated as "passenger automobiles" for fuel economy purposes. Therefore NHTSA should undertake to appropriately classify vehicles for fuel economy standards to avoid further litigation on this issue.
With regard to valuing carbon dioxide pollution, NHTSA must establish a reasonable value for the benefit of reducing carbon dioxide pollution in setting proposed standards for MY 2011 and beyond. The court held that "NHTSA's decision not to monetize the benefit of carbon emissions reduction was arbitrary and capricious, and we remand to NHTSA for it to include a monetized value for the benefit in its analysis of the proper CAFE standards."
On the issue of the full environmental impact statement, NHTSA has announced plans to conduct an Environmental Impact Statement (EIS) for its new fuel economy rules that will apply to vehicles starting in 2011, the agency is appealing the portion of the 9th Circuit decision that directs it to complete an EIS for the 2008-2011 light truck standards.
TAKE ACTION: Join us in the fight to make America's vehicles go farther on a gallon of gas. As soon as NHTSA proposes new fuel economy standards you will have a chance to voice your support for raising miles per gallon standards for new cars, minivans, SUVs and pickups. Stay up-to-date on how you can make a difference by signing up for Sierra Club's email action alert, The Hotline.
The auto industry has technology today that it can deploy to make all new vehicle go farther on a gallon of gas. The faster fuel economy goes up the sooner our oil savings and pollution reductions will kick-in.
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