Senate Approves CAFE Measure

The legislative version of dumb and dumber
By Brendan Moore

12.13.2007

The auto makers just want to wake up from this nightmare that is CAFE, but that’s not happening as the bad dream continues. The Senate has approved a trimmed-down energy bill that will raise fuel economy standards for the first time since 1975. The Senate voted 86-8 to raise fuel economy standards a full 40% to 35 mpg for cars and light trucks by 2020.

It’s hard to think of a worse way than CAFE for the government to reduce gasoline consumption, but that didn’t prevent senators from hailing the legislation and themselves for passing it.

Herewith:

This bill “will begin to reverse our addiction to oil. It’s a step to fight global warming,” proclaimed Majority Leader Harry Reid of Nevada.

“This is a home run,” said Sen. Tom Carper, D-Del.

The increased efficiency by 2020 will save 1.1 million barrels of oil of a day, equal to half the oil now imported from the Persian Gulf, save consumers $22 billion at the pump, and reduce annual greenhouse gases emissions by 200 million tons, said Sen. Daniel Inouye, D-Hawaii., whose committee crafted the measure. “It demonstrates to the world that America is a leader in fighting global warming,” he said.

Sen. Carl Levin, D-Mich., a longtime protector of the auto industry that is so important to his home state, characterized the fuel economy measure as “ambitious but achievable.”

These measures, said Sen. Jeff Bingaman, D-N.M., “will eventually save more energy than all our previous energy efficiency measures combined.”

But the stupidity doesn’t stop there.

The energy legislation requires that ethanol use as a fuel for motor vehicles be increased at a quick rate to 36 billion gallons a year by 2022. About 6.5 billion gallons of ethanol are forecasted to be used as a gasoline additive this year, according to the Renewable Fuels Association, which represents ethanol producers, but most honest energy and automotive analysts are already stating that ethanol is not a good solution to the problem of using less oil.

It is expected that the bill will pass without much drama in the House and then President Bush will sign it into law.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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18 Comments

  1. How else are the car companies going to finally be forced to make cars that Americans want that get great fuel mileage? This is a great day for common sense!

  2. Common sense would dictate that you simply raise the federal gas tax if you’re the government and want people to use less gas, buy cars that get better fuel economy, stimulate alternative energy vehicles, etc. It’s very simple and very effective.

  3. The problem with an increased “gas tax” is that it only hurts those in the low-income bracket, people whose gas tanks never read more than 1/4-full. The clean and efficient cars we’re making now won’t make it under the $1000 mark for another 20 years.

    Just imagine an entire socioeconomic class of people who are unable to drive to work or take the bus because the cost is simply too prohibitive.

  4. Raise the gas tax!?!?!? Are you insane? I already pay too much for gasoline. This is the auto companies’s fault and they need to fix it. There is no reason my SUV shouldn’t be getting 35 mpg right now.

  5. At least with a gas tax increase, you are creating an immediate disincentive to consuming gas, which if I’m not mistaken is the whole point.

    Increasing MPG actually ENCOURAGES more driving.

    The correct answer is to do BOTH.

    However, the idea that you can legislate efficiency is fundamentally flawed. Car companies can’t just snap their fingers and make all their cars more fuel efficient without a trade-off somewhere. Be prepared to see a lot of cockamamie cars & trucks designed to achieve CAFE standards.

    And the push for ethanol is classic pork barrel politics, designed to benefit midwestern corn farmers. Ethanol in its current form is NOT the answer. It’s not energy nor cost efficient. But again, it’s much easier to legislate the desired result than to find the actual solution.

  6. I can go for a sizabel increase in the gas tax. I think it is the most effective way to accomplish all the goals we want around decreasing gasoline use, increasing the attractiveness of other types of energy, reducing polution, etc. But, I want a corresponding decrease in the basic income tax rate. Give me that and I am completely on board.

  7. I’ll vote a for an increase in the gas tax, too, but like clemtherube, I want it offset by a decrease in taxes somewhere else. Although I don’t agree with the ethanol-bashing in the post. True, ethanol from corn is stupid and makes no sense economically. But ethanol from celluose, etc. could definitely be very helpful.

  8. I don’t know why people that want a gas tax even bother to keep talking about it. The chances of any politician advocating a gas tax are zero. It is political suicide. Americans would rather pay the hidden tax of having their future cars be more expensive in order to meet the CAFE standards than pay at the pump. Americans want the truth hidden from them, then they’re OK with the idea.

  9. I’d rather pay at the pump if we’re going to pay more to drive around. Just my .02

  10. I pay enough taxes. You want to give the government more money, then send the Treasury a check. Gas needs to cost less not more. It already costs me too much to fill up my car. There are too many people that want to introduce socialism in this country and our freedom to drive whatever we want is being taken away from us. The government needs to do whatever they have to do make sure we have the gasoline we need to drive the cars and trucks we want to drive. I am not interested in drving some little tiny car like in Japan or Europe. That’s right, I drive an SUV and I’m proud of it and I love it. It is the perfect car for me. Socialists want the government to tell me what kind of car I can drive and they want to tax the gasoline I need to put in the car. Gas needs to go down not up. Taxes come from liberals and socialists and I don’t like either one and I’m not going to drive any small car.

  11. Like the tax money our government gets now gets used so well.

  12. Forget ethanol subsidies, I live in Iowa and it’s still a dumb idea.

    Raise the price of gasoline 50 cets a year for the next four years, and let every alternative to gasoline, whether it’s an electric car, biking to work, mass transit, diesel car, etc. compete on equal terms against the newly-expensive gasoline. Believe me, lots of people will desert gasoline.

    Offset the gasoline tax with a decrease in the basic income tax rate to make it tax-neutral. Viola! Households have the same amount of money and a huge incentive to use less gasoline. Make CAFE go away forever – it will be completely useless once gasoline is 5-6 dollars per gallon.

  13. patriotalltheway –

    It’s hard to know just where to start with someone as obtuse as you appear to be. But allow me to point out something to you: you rail against socialism, and yet you write, The government needs to do whatever they have to do make sure we have the gasoline we need to drive the cars and trucks we want to drive.

    You don’t want the government doing anything to reduce gas (and by extension, oil) consumption because that’s socialism, but you apparently feel that it’s OK for the government to step in to lower the price of gasoline so that you can keep driving around your 12 mpg SUV and not have to pay too much for a fill-up. Why is that OK? Apparently because you want it to be so. That’s why government interference is OK, because you don’t want to pay too much for the fuel you put in your-gas-swilling SUV.

    You just want to keep giving money to these countries in the Middle East that want to kill us, you want to keep polluting the earth so that everyone’s quality of life goes down, and, you also seem to want to stifle technological development here in this country since you want gasoline to remain the dominant energy source for vehicles.

    patriotalltheway, all I can reasonably conclude is that you must hate America.

  14. Face it, our political “leaders” will do anything to get elected and will do anything to avoid giving Americans any bad news. And the people in this counrty are also part of the problem: no wants to sacrifice now in order to ensure a better future and Americans seem to want their “leaders’ to lie to them as much as possible, to keep telling them not to worry about the deficit because that will be just fine if you don’t think about it, everything in Iraq will turn out fine if you just keep believing it will be so, no need for you personally to use less gas because we’ll just make the car companies make SUVs that get better fuel economy, God forbid any flag-waving American would have to give up driving their gargantuan SUV to their office every day!

    What has happened to this country, anyway? How did we get so selfish, so weak in resolve, and so heartbreakingly stupid?

  15. mr. curly, that’s pretty good.

  16. No gas tax, no gas-guzzler tax, no CAFE, no research and development for alternative energy vehicles funded by tax dollars. I want the government out, out, out of this. I don’t want them involved. We will keep using oil and the gasoline that comes from it until it starts to run out and then get a lot more expensive. The alternatives will be privately funded because it make sense to do so. If there is some chaoe in society during that period, that’s how capitalism works. Tough beans. If we have to business with people that want to hurt us, that’s tough, too. Sometimes that’s how it works out. I doubt they want to kill off their best customers because that’s a bad business tactic. If we pollute the environment, then some company will figure out a way to fix that problem, they’ll make a lot of money, we’ll all be happy again, and once again, capitalism and market forces will prevail.

    No government interference, no taxes to drive behavior! Period.

  17. adam smith, if we let the market run it’s course we will be neck-deep in our own toxins at some point. The poor and perhaps the middle-class will suffer high pollution levels for years before the people with power and money start to suffer the ill effects of too many toxins, and that hardly seems fair, does it? Or maybe that’s just “tough beans” as the capitalism bulldozer keeps chugging along.

    You say we should just keep using oil for gasoline up until the very moment the oil runs out, but such a scenario means that there will be a long period when only the rich can afford to drive. Is that just “tough” for everyone else, too?

    I guess in the world you live in, everyone that isn’t rich should just lump it. After all, if they don’t want to suffer, they should just become rich, right? They just need to get off their lazy asses and do it, right?

  18. Keep in mind that there are currently large subsidies in place for gasoline. Some of these, such as protecting key oil interests and costs of infrastructure, are difficult to quantify. These may or may not be valid when comparing with ethanol. Other subsidies, such as accelerated depreciation allowances and outright tax subsidies for big oil are clear-cut. Too bad removing these subsidies is political suicide. check out http://www.progress.org/2003/energy22.htm
    for an analysis of the external costs

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