The Ergosphere
Friday, November 07, 2008

Efficiency standards: No public comment?

This is the season of bailouts.  A great many people did foolish things with other people's money, and now Congress is putting the US taxpayer on the hook for it.

The $700 billion bailout of Wall Street is the biggest of these, but far from the only one.  With Congress handing out fiat money, the auto companies have also begged for and been granted a $25 billion slice of the pie.  The only thing left to be determined was the terms under which they could qualify.  Those terms have now been set, and they don't look good.

Granting money to do what's already been done better

The oxymoronic Interim Final Rule sets out the following standards (table format borrowed from Green Car Congress):
Baseline fuel economy eligibility by vehicle class
Vehicle class 2005 FE average Baseline
(2005 FE x 125%)
Two-seater 25.3 31.6
Two-seater performance 22.2 27.8
Minicompact sedan 29.3 36.7
Minicompact performance sedan 22.4 28.0
Sedan 22.4 28.0
Subcompact sedan 29.6 37.0
Subcompact performance sedan 22.8 28.5
Compact sedan 33.8 42.2
Compact performance sedan 23.6 29.5
Mid-size sedan 29.4 36.7
Mid-size performance sedan 23.1 28.9
Large sedan 26.2 32.7
Small wagon 32.7 40.8
Mid-size and large wagons 26.7 33.4
Small and standard pickup 19.7 24.6
Minivan 24.3 30.4
Passenger van 19.0 23.8
Cargo van 24.2 30.2
SUV 21.8 27.2

These figures are ridiculously low.  They do not even come up to the standards of vehicles available today.  My 2004 Passat TDI, which is either a medium sedan or a large sedan under the rules, has achieved better than 38 MPG in mixed driving despite its antiquated 5-speed automatic transmission.  Achieving 32.7 MPG requires no R&D whatsoever, just building cars with an emphasis on efficiency.  What kind of advance does it take to put a 4-cylinder engine into a vehicle?  Is there any mystery about Atkinson cycles, or dashboard displays with economy feedback?

Over in the GCC thread, commenter Will S opines "And with Prius already achieving 48 mpg overall, the 35 mpg CAFE 2020 "target" is a joke. Is [sic] should be closer to 75 mpg..."  I could not agree more.

And the public frozen out

Which is why the lack of public comment on this rule is so troubling.  The comments from auto manufacturers and suppliers stand alone; the public, whose money is involved and whose available choices are being determined and limited by this process, has had no opportunity to be heard.

This is wrong, and should be changed immediately.  Whatever my reservations about the policies of an Obama administration, I have reason to expect that this is likely to get better.

At this point they could make the rules 100 mpg tomorrow, and it wouldn't make any difference. At least 2 of the Detroit 3 will be liquidated during the next year. If the Feds want cars to built in the US, they may have to cut the survivor some slack.
That's one way of looking at it, but I don't share that view.  Here's why:

Oil dependency is a direct threat to the US (and world) economy.  The spike in oil prices sent Europe and Japan into recession before the credit bubble popped, causing the US to follow.  Detroit's love for big guzzlers makes the USA both the most vulnerable to high oil prices and (through demand pull) one of the biggest causes of same.  We are currently "enjoying", if that's the right word, a short period of lower oil prices caused by recession-induced slack between demand and supply.  This will not last in a post-peak world, especially with the recession cutting investment in new oil supply.  If this problem calls for going to a WWII-like footing (and I think it does), slack is the last thing Detroit can be allowed; we have already waited far too long, and cannot afford any delay.

It might be worth working some deal with Commuter Cars to build the Tango at one or a few car plants (and maybe the same with the Aptera).  That would put people to work and get rid of the oil-dependency problem.
Why fool around with efficiency standards? Set a gradually increasing gas tax and let the chips fall where they may. This has the added advantage of providing funds for public transit. Higher gas taxes work.
I'm hoping that gas taxes are politically possible.  I've been arguing for them literally since 1991, because the failure of CAFE was so obvious even then.  But whether or not we can tax gas to the point where it changes people's driving and purchasing behavior, IMO efficiency standards have their place.

The people least sensitive to fuel prices are, not surprisingly, the rich.  This is a problem for vehicle technology, because the things developed for the luxury segment tend to filter down to more price-sensitive vehicles over time.

Well, who's most able to afford cutting-edge gimmicks like direct-injection engines, turbocompounding and PHEV?  The rich!  Efficiency standards should be aimed at the luxury segment to require such vehicles to achieve a certain efficiency on liquid fuel or run a minimum distance on electricity to qualify for sale.  This would have several salutary effects:

1.  It would get luxury carmakers to buy efficiency technologies.  For instance, the AC 150 controller has been available for years, but has only been adopted by Tesla.  More sales would mean quicker advances in the technology.
2.  It would start incorporation of new battery technologies into the vehicles whose buyers can afford it.
3.  The inevitable improvements and ancillary benefits (engine-off A/C, auxiliary power, emergency power for a house, silky smooth throttle response) would make an obviously superior car and make such technologies instantly attractive to all customers.
North American standards are likely a bugaboo too. Europeans have been dealing with higher-priced gasoline for years : I tend to think protectionism is the reason they aren't allowed in.
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