HybridBlog

Recess Rantings from the Automakers

Well, the automakers are trying to work their scare-tactic magic again, this time claiming that if the more-than-reasonable 35 miles-per-gallon fuel economy standard by 2020 passed in the Senate Energy Bill becomes law, they will close down SUV plants.  This would be like trying to get back at someone who egged your house by burning it to the ground so they couldn’t egg it again.  Here’s our view on the latest histrionics coming from Detroit:

U.S. Automakers Misleading the Public about Benefits of Stronger Fuel Economy Standards, Science Group Says

August 16--Detroit Three Holds Rally in Chicago to Protest Proposed Fuel Economy Bill; Second Rally Slated for August 22 U.S. automakers will host a rally today in Chicago to protest a proposed federal fuel economy standard. Sponsored by General Motors, Ford, and Chrysler, the rally is part of an industry campaign to pressure a panel of U.S. lawmakers tasked with resolving differences between Senate and House energy bills to weaken the standard. The automakers plan another rally in St. Louis on August 22.

The standard in question would set a 35 mile-per-gallon (mpg) fleetwide average target for 2020. If fully implemented, the standard would save American drivers billions of dollars at the pump, cut hundreds of millions of tons of global warming pollution, and generate tens of thousands of new jobs, according to the Union of Concerned Scientists (UCS). The auto industry is backing a feeble proposal sponsored by Reps. Baron Hill (D-Ind.) and Lee Terry (R-Neb.) that would save approximately 180 million barrels of oil in 2020, which is what we currently consume in about nine days. This approach is significantly weaker than the president's goal of saving 8.5 billion gallons of gasoline in 2017 through fuel economy improvements of 4 percent per year.

"U.S. automakers are continuing to mislead the public about the very real benefits of a strong federal fuel economy standard and the fact that they have the technology to meet it," said David Friedman, research director in UCS's Clean Vehicle Program. "The National Academy of Sciences says existing and emerging conventional technology can boost the fuel economy of all vehicles, from two-seaters to four-by-fours. Detroit can produce 34-mile-per-gallon SUVs, 37-mile-per-gallon minivans and 41-mile-per-gallon family cars. Our own research shows that the auto companies can do even better than that."

According to a recent UCS analysis, fully implementing the 35 mpg target would:

•  save drivers $25 billion at the pump in 2020, above and beyond the cost of the technology (at the 2006 average gas price of $2.55, in 2005 dollars)

•  generate 22,300 jobs in the auto industry and a total of 170,800 new jobs nationwide in 2020 (for the UCS analysis, go to: www.ucsusa.org/clean_vehicles/fuel_economy/fuel-economy-jobs-and-consumer-savings.html)

•  cut 206 million metric tons of global warming pollution in 2020 alone—equivalent to taking more than 30 million of today's average cars and trucks off the road

•  save 1.2 million barrels of oil per day—equivalent to the amount of oil the United States now imports from Saudi Arabia daily

"U.S. automakers have a long history of whining that they can't improve their products," said Friedman. "Their claims about the Senate proposal are just a reprise of their claims that adding seatbelts, airbags, and catalytic converters would bankrupt their industry. Meanwhile they are being outpaced on their home turf by foreign competitors that are producing more fuel efficient cars."

A recent analysis from Lehman Brothers based on the actual language of the Senate bill showed that a 35 mpg standard with a size-based approach, which would set different targets for different vehicle sizes - from small cars to big trucks - would have no effect on sales of big pickups and SUVs. The analysis showed that these large vehicles would have to only improve fuel economy by 25 percent to preserve existing sales under the new standard. The National Academy of Sciences indicated that those vehicles could more than double that improvement with existing and emerging technologies.

"It is reprehensible that Detroit auto executives are threatening their workers by telling them they may have to close down plants," Friedman said. "It would be a very dumb business decision to shut down an SUV plant instead of investing in existing technology. Why would a company turn over the market for millions of vehicles to its competitors when it has the technology to upgrade its plants to make vehicles that get better fuel economy? If they need help making the investments they should be negotiating for tax credits, not working to undermine our national energy security."

Regardless of the auto industry's Astroturf campaign to weaken proposed federal fuel economy standards, many lawmakers recognize that tightening standards not only will save Americans money, cut pollution and create jobs, it will strengthen national security, according to Eli Hopson, a UCS spokesperson.

"The good news is that the Senate and the House Democratic leadership have rejected the industry's scare tactics and are committed to including strong CAFE standards in the bill when it goes to the president's desk," said Hopson. "Without increased fuel economy standards, the bill would not reduce our energy dependence or bolster national security."

Posted by: ScottN

Washington Insider—Energy Bill Recap

Hi folks, Eli Hopson here with a little recap now that we Washington representatives have a little time to breathe after the tumult of the Energy Bill.  Nothing in D.C. ever seems to be as straightforward or simple as it should be, a fact I am reminded of as many of my friends ask me about what’s going on with the House version of the Energy Bill.  They are puzzled as to how a Democratic majority in the House has just passed a bill without even considering fuel economy standards. 

Am I disappointed?  Frustrated? They ask.  Well, yes, it would have been nice to have a decisive vote on the floor of the House and settle the issue.  But because we succeeded in passing increased fuel economy as part of the Senate energy bill, the issue is still very much on the table when the House-Senate conference committee meets after Labor Day.  And House leadership, both Majority Leader Steny Hoyer (D-MD) and Speaker of the House Nancy Pelosi (D-CA), have stated their strong support for increasing fuel economy standards.  So by the time this bill is ready to be signed by the president, it should have an increase for fuel economy standards—and with a bit more hard work, a meaningful one—which will help it live up to its energy independence billing.

What is clear at the end of the day is that this is not a victory for the foot-dragging automakers, who were pushing a much weaker alternative to the Markey (D-MA)–Platts (R-PA) bill we support that would lock in the Senate’s 35 mpg standard.  Although their cosponsor list has been growing, mostly with the names of long-time CAFE opponents, they did not have the votes to pass their bill.  While it may not seem like much on the surface, this actually represents a major sea-change in the House.  For the past two decades, the House has been the trusted ally of the automakers to prevent any efforts to strengthen fuel economy standards.  The fact that the Auto Alliance was working to pass a bill that increased fuel economy standards, albeit quite marginally, with House Democratic leadership ready to accept the stronger Senate position, is indeed a major change for the good.

So where do we go from here?  The next step in “how a bill becomes a law” is the conference committee, a fairly obtuse process, where differences between the two legislative bodies are ironed out, and sometimes new pieces randomly find their way in.  We will be working to include the strongest fuel economy increase possible, ideally along the lines of Mr. Markey’s bill.   None of this will happen in August as Congress has headed home to rest up, meet with their constituents, and escape the D.C. swelter (105 degree heat index today—yeesh).  But with oil at more than $75 a barrel, I’m sure they’ll be hearing plenty about gas prices from the voters, and we’ll be here with a solution when they get back.

And while I work on vehicles issues, I would be remiss to not point out the fact that we had a major victory on the energy side.  The House, for the first time in its history, passed a renewable electricity standard (RES) that requires utilities to obtain at least 15 percent of their power from a combination of energy efficiency and renewable sources such as wind, solar, and biomass by 2020.  You can read more about this accomplishment here.  As Scott mentioned in the last blog, those folks really pushing for plugin hybrid development should be especially happy about the RES (and working to ensure its inclusion in the final energy bill, as the Senate did not include it). The cleaner the electricity grid is, the more benefits we would see from vehicles powered by it.

Enjoy the rest of your summer, as no doubt things will be hopping again come September.

Posted by: Eli

D-day on the Energy Bill

As early as today, the House will vote on their version of the Energy Bill (the official number is H.R. 3220).  This bill still has two very large items missing – a Renewable Electricity Standard (RES) that would increase the amount of power coming from cleaner, renewable sources (something that should be of import to everyone who would like to see the commercialization of plugin hybrids), and any mention of fuel economy (of import to anyone who cares about, well, cars).

As I mentioned in our latest Driving Change Network newsletter, House Energy and Commerce Committee chairman John Dingell (D-MI) continues to be a key fly in the fuel economy ointment, refusing to allow the committee to put strong standards into the bill and attempting to delay any action by the House until autumn. But if Congressman Dingell wants to help out his buddies in the auto industry, his best bet would be to stop listening to them.

There has been a veritable avalanche of data over the past few weeks that absolutely demolishes the key automaker arguments:

• 35 mile per gallon (mpg) fuel economy standards will cost American jobs? Sorry, the reverse happens to be true. Our recently updated report shows that 241,000 jobs would be created in the United States through stronger standards, with a net creation of over 20,000 new jobs in the auto industry alone.
• 35 mpg fuel economy standards will bankrupt the Big 3 automakers? Oops, they actually work to the Big 3’s financial advantage. Dr. Walter McManus, economist and former employee of JD Powers and General Motors produced this recent evaluation showing that under a standard of 35 mpg, General Motors, Ford Motor Corporation, and Chrysler Corp. stand to make $14.4 billion by 2017—at least $6 billion more than the competition.
• 35 mpg fuel economy standards are not supported by the constituents in many areas of the country? Uh, can you say almost 90 percent public support, with 84 percent support in Congressman Dingell’s own district? A poll commissioned by the Pew Campaign for Fuel Efficiency showed that public support for increased fuel efficiency standards in Ohio, Tennessee, Kentucky, Pennsylvania, North Carolina, and Florida hovered between 88 and 90 percent, and a specific poll in Dingell’s district was still a whopping 84 percent. Can you say consensus?
• Supporters of the auto industry are offering compromises? No, a cop-out is not a compromise. Feeble proposals from Representatives Baron Hill (D-IN), Lee Terry (R-NE), Joe Barton (R-TX), Roy Blunt (R-MO), and Dennis Hastert (R-IL) will do very little. If you look at the bottom chart of this UCS fact sheet comparing the different plans, you can see that the oil and climate savings would be negligible compared to the 35 mpg plan.

The time has come for the House to put corporate interests aside and vote for what we need.  If you agree, go tell your representative.

Posted by: ScottN