Utter Fuelishness

Halleluiah! The U.S. Senate's ill-conceived plan to boost Corporate Average Fuel Economy (CAFE) standards by 50% has died a well-deserved death.

Halleluiah! The U.S. Senate's ill-conceived plan to boost Corporate Average Fuel Economy (CAFE) standards by 50% has died a well-deserved death. Granted, a combined fleet fuel economy average of 36 mpg (up from 27.5 mpg for cars and 20.7 mpg for light trucks) sure sounds good in the 30-second sound bites presidents-in-waiting, I mean senators, spew on the nightly news to willing reporters. In the real world, however, these numbers ignore why their constituents buy the vehicles they do, and the culpability of the political class in this process.

When the original CAFE standards were passed, the American public was told they would reduce the United States' dependence on foreign oil by cutting fuel use. However, according to research done by the Heritage Foundation, America's dependence on foreign oil has just about doubled since the standard's introduction. Both vehicle miles traveled and the number of vehicles on the road increased despite the best efforts of Congress. Yes, a majority of those vehicles were light trucks, but the growth in this segment neatly parallels the changes in CAFE standards and the move toward smaller, more fuel efficient cars. In other words, a rational response to irrational legislation that left drivers feeling less safe. Yet it was the automakers who took the blame for the audacity of offering customers a choice.

What was never mentioned in the blather surrounding the Kerry/McCain plan was this: It wouldn't have taken full effect until 2015, and it would take another 10 to 15 years to change over the fleet to vehicles built to this standard. The most important aspect of this proposed legislation was for the politicians to be seen doing something, anything to reign in fuel use, even at the risk of repeating history and making the situation worse. In D.C. as in Hollywood, image is everything.

Let's be honest. If the bill had passed, the industry could have looked forward to 28 years of having every politician, environmentalist, doomsday zealot, and (I love the pretentiousness of this term) "consumer advocate" skewering automakers on their inability to meet these "reasonable" standards. Even trading credits earned in previous years, a centerpiece of CAFE legislation, would be denounced as "sleight of hand". At least part of the viewing audience would have listened and agreed.

Why? Because automakers aren't blameless in all of this. In recent years it has been fashionable for them to tout environmental consciousness, while selling a greater percentage of light trucks to an eager and hypocritical public. This only adds to the cynicism with which automakers are viewed, especially when the size and weight of many of these vehicles continues to rise. What compels automakers to follow this destructive path?

Part of the reason for their behavior is grandstanding. Part is "me-too" public relations. Part is trying to put your opponents in a bad light, or turn the game to one company's advantage at the expense of everyone else. Very little of it is sincere. In the short run it keeps the political heat down, while allowing the largest number of high-profit vehicles to go out the door. Over the longer term, it looks disingenuous at best, and makes OEMs an easy target for political opportunists, or editorial writers for the New York Times and Washington Post.

Unfortunately, there's little chance that market forces will be allowed to determine fleet fuel efficiency any time soon, and the ever-changing world situation will not let this subject die. Though automakers have dodged a bullet, they may not be so lucky the next time. They had better use this reprieve to gradually increase overall fuel efficiency, and stay ahead of the political curve.