Tuesday, June 12, 2007

Fuel effeciency standards

I think the U.S. government require automobile manufacturers to meet fuel efficiency standards. I recently read an article about policies to increase vehicle fuel economy. This article was presented by the American Council for an Energy-Efficient Economy (ACEEE).

One policy proposes raising Corporate Average Fuel Economy (CAFE) standards by 5% annually until 2012 and by 2% thereafter. They believe this could save 1.5 million barrels of oil per day (MBD) by 2010, 4.7 MBD by 2020, and 67 billion barrels of oil over the next 40 years. The ACEEE also tells us that imports of crude oil and finished petroleum products are projected to rise 66% from 1999-2020. If CAFE standards are raised the energy savings would cut that increase to 19%.

Engineering analyses show that this level of fuel economy improvement is feasible and could be achieved using conventional (non-hybrid) technologies. Also the ACEEE believes that costs of fuel economy improvements of this magnitude would not be very high. These fuel-efficient cars would cost less than an average 2010 vehicle --with no efficiency improvement-- if current price trends continue.

3 comments:

Heather Paige said...

I could not find the link to an article for this blog post...but I will respond to what is written in the post:
This seems to address the marginal benefits of increasing the CAFE standards, but what about the marginal cost? According to the article that we read on Aplia, if hybrid technologies are not being used then the cars will have to be made lighter and smaller to achieve higher fuel efficiency which can cause more fatal accidents. The cost of the vehicle monetarily is not the only cost that should be weighed here. This article seems to neglect the opportunity costs of more fuel-efficient cars.

Greg Delemeester said...

How do you suppose the typical driver will react to more fuel efficient cars? Do you think people will tend to drive more frequently and for longer distances (say, instead of taking the train or flying)? More fuel efficient cars will reduce the cost of driving, thereby increasing the demand for gasoline. Thus, though we may have more fuel efficient cars, we may find out that our consumption of gasoline may actually rise!

Penny S. Jenkins said...

I agree the government should require automobile manufacturers to meet fuel efficiency standards. However, I believe Dr. Delemeester's comment that more efficient vehicles will reduce the cost of driving, thereby increasing the demand for gasoline to be somewhat simplistic. I believe there are many opportunity costs that are being overlooked, such as our dependence on foreign fuel and the cost of protecting our overseas interests, the cost of fuel emmissions to the environment, and the cost to stockholders of major oil companies if the government was successful in dropping our MBD as reported by the ACEEE.

While I am all for fuel efficient automobiles, I'm not sure you can simply state that we will reduce our dependence of oil by sixty-seven barrels over the next forty years. I think their are many more costs involved that have not yet been fully explored.