Loading in 2 Seconds...
Loading in 2 Seconds...
Should more fuel efficient vehicles be required by law? By Nicholas Luebker
The Fuel Problem • The U.S. is heavily reliant upon politically unstable foreign oil sources. • 56% of the U.S.’s fuel comes from foreign sources http://www.csmonitor.com/2005/0519/p14s01-sten.htm • Low fuel efficiencies make us more vulnerable to oil price spikes • Hurricane Katrina, over $3 a gallon • Automobiles 2nd biggest factor after industry to contributing to global warming by producing green house gases such as: CO, CO2, NO2, CH4 (methane)
Old Fuel Economy Requirements • Require an “average” fuel economy • The average mpg for a company’s entire fleet of vehicles had to be 22 mpg. • Allowed companies to make lots of little, light weight cars cars and keep selling the lucrative gas guzzling SUVs. • *Vehicles over 8500 lbs not even tested • Includes: Avalanche, Silverado, Dodge Ram, F-250 & 350, Hummer 1 & 2 • http://www.fueleconomy.gov/feg/which_tested.shtml • Aspire vs. Explorerin • Average Mpg • Aspire ~37 • 4WD Explorer ~ 15 • For every 1 Aspire sold, could sell 2.1 Explorers and still achieve an avg 22 mpg • Explorer also has double the CO2 emissions.
Why hasn’t the government required higher efficiencies for all vehicles? • For years, under standard vehicle designs, weight reductions were the main way to increase fuel economy. • Every 100 lbs removed from a vehicle improves efficiency by 1-2% • However, studies found that lighter cars were not nearly as safe. • In 1997, mathematician Charles Kahane estimated that even 100 lbs reductions in vehicles would increase the average fatalities per year by ~300 people because they were less safe. • Makes sense in basic physics model • Ironically, the government’s “average mpg” requirement increased the discrepancy between very small and light vehicles with high mpg (Aspire) and heavy SUVs but… http://www.4x4xtreme.com/4x4fotos/fotos.htm
Safety Concern Not Entirely Valid • Safety has much more to do with engineering than weight. • Stiffer design • More crumple room • Shorter engine • 2002 Honda Civic (mpg 39) designed to be light and safe, 1st to received 5 star crash test rating in all 4 categories. • 2002 Mini cooper, avg mpg ~28 • 2002 F-150, avg mpg ~15 • Crashing into same barrier at 40 mph. • http://www.bridger.us/2002/12/16/CrashTestingMINICooperVsFordF150
Will making vehicles more fuel efficient cost consumers? • Cheap Ideas: • Use lighter materials • Aluminum or high strength steel ~$1000 • Reduce Drag • Slippery car design, replace side mirrors with small video cameras ~$180 • Redesign engines • Added ability to shut off extra engine cylinders at cruising speeds ~$480 • Hybrid design • Use an electric motor to start car from idle ~$660 • Add more gears • 5 speeds are more efficient than automatics, 6 speeds would be even better. • Using a combination of these ideas can increase mileage by 30% • A 15 mpg SUV could get now get 20 mpg • *Savings of only $750 per year at $3 a gallon,but • Business Week 9/26/2005 Issue 3952, p40-41 • Saves ~ $5,000 over ten years, 17% of the original price.
Will higher prices of fuel cause people to buy more fuel efficient cars? • Ford Explorer and Expedition sales were down 25-30% earlier this year, but is it due entirely to high gas prices? • Unlikely to think about when buying a new car • Average cost of an SUV ~ $30,000 • Savings per year on fuel if bought a hybrid (Honda Insight) • Considering average miles per year ~ 15,000 • At 3 dollars a gallon, would save only $2,250 per year, less than 10% of the price • “If you can afford a $30,000 vehicle, you can afford the gas” (Petroleum Economist. London 2005. pg 1.) • Space, comfort, and horse power have value too, more tangible benefits than saving the environment. • Note: Yet over the 10 year life span of a car, total expenditure (purchase price plus fuel) • Insight costs ~$30,000 • Explorer costs ~$60,000 • Median income in 2004 ~$44,000 (www.census.gov), multiplied by 10 years, $30K only amounts to about ~14.6% of total earnings. • It is more likely that the decrease in sales is from greater competition in the SUV market.
What about increasing the gasoline tax to get people to buy more fuel efficient cars? • Would probably work, but with ill effects • Gasoline is a very inelastic commodity • Between -.11 in short run -.3 in long run. *numbers vary* (The Energy JournalOct 1993, v14, n4, p99) • i.e a 1% increase in price only decreases the amount of gasoline consumed by .11% • Vehicles are durable goods (i.e. they last a long time), not everyone can buy a new car immediately after prices go up and will suffer. • Economy is heavily reliant on low gasoline prices • Fast price increases could induce a recession. • Gradual price increases could induce inflation. • Unlikely that a large enough price hike would pass through legislation. • Slower to require higher vehicle fuel efficiencies, but easier to pass.
New Government Standards • National Highway Traffic Safety Association’s Corporate Average Fuel Economy (CAFE) separates vehicles into categories based on size (area between the wheels). • 6 different categories based on area. • Greater the area, the less stringent the standard • Decided to move away from weight categories because they felt companies would just make vehicles heavier. • Expected to be approved in April • Will take into effect on new vehicles of the 2010-2011 years. • “U.S. Secretary Mineta Unveils Plan Requiring Better GasMileage from SUVs, Pickups and Mini-vans” August 23, 2005. http://www.nhtsa.gov
How Do We Stack Up? • The U.S. is in last place of modern countries in fuel efficiency standards. • China’s fuel mileage goals are 22% tougher than the U.S. • CO2 per capita • U.S ~ 20 tons/year, was 6.6 back in 1995 (http://yosemite.epa.gov/oar/globalwarming.nsf/content/emissionsindividual.html) • Germany ~ 10 tons/year • UK ~ 9 tons/year • China ~ 2.5 tons/year
Too Little Too Late? • Will increasing fuel efficiency requirements impede global warming? • ~25% of U.S. fleet is composed of SUVs • Only about 1% of U.S. fleet turned over every year. • Change to more fuel efficient vehicles will take time, vehicles last longer than ever before. ~10 year life. • Changes aren’t required until 2011.
Overall Recap • The automotive industry’s argument that improving mileage would compromise safety is untrue. • It is a myth that it would cost consumers significantly more to increase fuel efficiency. • It is unlikely that market forces will cause the average fuel efficiency to go up on their own. • If the government tries to manipulate the market through gasoline taxes, there could be ill economic effects. • The U.S. currently has one of the worst CO2 emitted per capita in the world. • Because there is such a large fleet, it will take some time to reach.
Bibliography • “Crash Course: How U.S. Shifted Gears to Find Small Cars Can Be Safe, Too”. Wall Street Journal. New York, N.Y.: Sep 26, 2005. pg. A.1 • “Get Real”. Petroleum Economist. London: June 2005. pg. 1 • “Getting More Miles to the Gallon -Fast” Business Week 9/26/2005. Issue 3952, p40-41. • http://www.fueleconomy.gov/feg/which_tested.shtml • www.epa.gov, click global warming link • http://www.nhtsa.dot.gov/portal/site/nhtsa/menuitem.d0b5a45b55bfbe582f57529cdba046a0/ (CAFE regulations) • http://www.bridger.us/2002/12/16/CrashTestingMINICooperVsFordF150 • http://www.csmonitor.com/2005/0519/p14s01-sten.htm • “Another look at U.S. passenger vehicle use and the 'rebound' effect from improved fuel efficiency” The Energy Journal Oct 1993, v14, n4, p99(12)