Fuel Gauge

The biggest challenge ever for the auto industry

Although its position as the largest single car and truck market in the world may well change over the next decade, the US still holds that position as it has done ever since cars were mass-produced. Very pertinent then that the Obama administration is poised to shortly announce the newest details of changes for fuel economy and greenhouse gas emissions for cars and light trucks. In conjunction with the Environmental Protection Agency the US Transportation Department is now working on plans that will set the guidelines for vehicles constructed in model years 2017 to 2025. While that seems a long way in the future the regulations laid out soon will dictate the direction the automakers will need to take to secure their piece of the market. More importantly the approved regulations will result in a substantial reduction in oil consumption, it’s just a pity the part of the regulations don’t mandate that a certain amount of vehicles are electric or hybrids.

This will represent a rapidly constructed series of standards as the administration only recently released the standards for 2012-2016 in May of this year. The official targets have yet to be published but an internal presidential memo in May stated that the new review must achieve:

“substantial annual progress in reducing transportation sector greenhouse gas emissions and fossil fuel consumption, strengthen the industry and enhance job creation in the United States.”

fuel-gaugeThe sad reality is because the lessons of the fuel shortage in the 1970s were never learned, both governments and the industry are playing catch-up at a rate which will be difficult to achieve. What environmental groups are urging versus what the industry feels it can achieve are very different indeed. The most recent standards look to raise the countries average fuel economy to just over 35 mpg by the year 2016. Environmental groups are lobbying to raise efficiency standards to at least 60 mpg by 2025. Considering the industry has struggled to add an extra 12 miles per gallon in the last 30 years I can’t see how they will manage to add 30 more in the next 15. However, it is what is necessary and it is what should be done. I think as we get nearer to these deadlines the reality that conventional gasoline vehicles which are not hybrids (at the very least) are coming to the end of their existence. Environmental concerns one would hope would propel these changes alone although in all likelihood a return to a five dollar gallons with no reduction in sight will impact consumers and automakers more rapidly than all the best intentions within the halls of government.

The debate will rage on all fronts in the years to come, automakers will cite technology and cost being the roadblocks that can’t be overcome. Lobbyists and a changing consumer profile will insist that we can’t inch along to fuel efficiency rates that are so far advanced from where we are now. Governments all over the world not just the US will legislate the point in the middle where the industry must go, concessions will be made along the way but playing catch-up is never easy especially when the standards were far too slack for far too long.

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