There is no magic wand that will bring down the price of gasoline, which has once again crossed the $4 mark in California. But there is a long-term solution that will inoculate us from higher costs in the future.
The Obama administration can't do much to lower the price of a gallon of gas, but it is on the cusp of a crucial decision that could help consumers come out ahead because they would need less gas.
Officials are quietly working on just how steeply to require the auto industry to cut emissions and increase mileage in the next generation of cars, SUVs and pickups. Their decision, coming as early as May, could require dramatically cleaner vehicles that would cut carbon dioxide emissions by as much as 6% a year and average 62 miles per gallon. The new rules would be phased in from 2017 to 2025.
Obviously, using less gas is good for the environment. It means less carbon dioxide pollution and smog. It also boosts our energy security — a big deal, given the uncertainty of oil supplies from troubled regions and often unsavory players — and saves us money at the pump. That beats sending our dollars overseas.
The auto industry argues that it is already making clean cars and that having to meet steeper emissions cuts would raise prices. It is lobbying to hold the cut to 3%.
How much is at stake? If we do what the automakers want, US consumers would use 217 million more barrels of oil in 2025 than at 6% — and send $16 billion more per year to foreign oil producers.
To be sure, there are other proposals being kicked around to provide relief at the pump. But they won't do much.
Tap the Strategic Petroleum Reserve to increase the supply of gasoline? That's a Band-Aid at best. It won't have any effect on long-term prices or supplies.
Increase domestic oil production by opening up more offshore drilling operations? That won't work either: Projects would take years to come on stream and would only increase our oil addiction, the heart of the problem. As for the environment, wasn't it only a year ago that BP's Gulf of Mexico disaster brought home once again how risky offshore drilling can be?
Rather than drill more oil out of the gulf, we should extract it from Detroit — through more efficient cars. California's 2002 Pavley law, the nation's first regulating greenhouse gas emissions from vehicle tailpipes, was a start in that direction and has set the nation on a course toward lower auto emissions. President Obama built on the law in 2009, unveiling new tailpipe standards under the Clean Air Act that will cut emissions 5% a year by 2016.
But that's only a piece of what's needed. Looking ahead to the 2017-25 standards, the administration is weighing the cost of technology needed to achieve a range of emissions reductions against the benefits of reduced energy use, a cleaner environment and, of course, a smaller gasoline bill. Its analysis found the greatest overall savings occurred when emissions are reduced by 6% a year.
A study conducted by the Environmental Protection Agency and the National Highway Traffic Safety Administration found that savings on gasoline would more than make up for the cost of the technology that delivers better mileage and lower emissions, with the break-even point for consumers coming at four years after purchasing a more efficient car. Indeed, investing $3,500 in technology per vehicle would produce $9,700 in gasoline savings over the car's life, the study found.
This is auto mechanics, not rocket science. Automakers have the ability today to deliver more efficient vehicles by utilizing such existing technologies as high-strength lightweight steel, advanced transmissions and fuel-sipping engines in conventionally powered vehicles. And they can also offer more hybrids and electric vehicles.
Some automakers even acknowledge that they can hit the higher efficiency target. Just listen to Jim Colon, Toyota's vice president for product communications.
“Toyota will be prepared to meet” whatever standards the administration sets, he said this year at the Washington Auto Show. “If it's 62 miles a gallon, we'll be able to achieve that.”
Even GM — a famous innovation laggard despite its plug-in Chevy Volt — says that it can join the race.
What automakers need is the prod of stringent standards, not the cushion of another bailout.
Of course, some in Congress and the auto industry are lobbying for weak standards or none at all. They would show us cars with tailfins and whitewalls — with extra floor mats thrown in — and cede the market to companies selling high-mileage, low-emission cars. That's a proven route to bankruptcy.
How often does the president get to solve three problems at once? By cutting emissions 6% annually, he also slashes our oil addiction and saves consumers billions at the pump.
That's a deal for the history books.
Copyright © 2011, Los Angeles Times
© 2011 McClatchy-Tribune Information Services
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