Fuel Efficiency Fires Renewed Public Debate
Vehicle mpg Arguments Turn on Consumer Safety, Costs, Choice
By James R. Healey
July 30, 2001
Fuel economy, barely an issue last year, is aboil now even though gasoline is plentiful, prices are retreating, and apparently unconcerned consumers are buying fuel-thirsty trucks with abandon.
Gas mileage concerns have returned to the center of a national debate, even though federal tallies show fuel economy improving, not worsening.
The fresh debate is spurred by the coincidence of two things: a House energy bill to be voted on next week; and a fuel-economy report expected Tuesday from a National Academy of Sciences expert panel.
The Senate asked for the NAS report last July. Automakers expect it to say that fuel economy can be boosted 20% to 30% within 5 years using relatively inexpensive technology and without compromising safety.
The House energy bill would give tax credits to consumers who buy alternative-power vehicles and would direct the National Highway Traffic Safety Administration (NHTSA) to save motorists 5 billion gallons of gasoline from 2004-2010.
You have a lot at stake in the debate over how far your car or truck should go on a gallon of gas. The result could cost you, offer fewer choices and erode safety. In return, your next car, sport-utility vehicle, minivan or pickup could get better fuel economy.
The issues tangling the discussion:
*Safety. One way to improve fuel economy is to make vehicles lighter, which also usually means smaller. That can be deadly. "When my kids were coming of age, I made sure they had big cars to drive. It's physics. When a large car meets a small car in an accident, the large car wins," says Bill Lovejoy, General Motors group vice president in charge of sales and service.
A 1999 USA TODAY analysis of data from the federal government and the Insurance Institute for Highway Safety (IIHS) showed that since corporate average fuel economy (CAFE) standards were announced in 1975, approximately 46,000 people died in crashes who would have survived if CAFE hadn't encouraged smaller, lighter cars.
CAFE requires that all new cars an automaker sells, on average, hit at least 27.5 miles per gallon. The truck average, for pickups, SUVs and minivans is 20.7 mpg.
The NAS fuel-economy panel asked the auto industry's trade group, the Alliance of Automobile Manufacturers: "Can you improve fuel economy without compromising safety?" says Gloria Bergquist, vice president at the trade group, which represents 13 automakers accounting for about 90% of new vehicle sales in the USA. "We answered that weight and size are correlated obviously, and that there have been many studies that said weight and size are related to safety. We pointed out that even NHTSA has said, 'Any government action that may cause significant reductions in vehicle size and weight raises a particularly serious safety issue,' " she says, citing a 1993 entry in the Federal Register.
Environmentalists want to unhook the issue from CAFE. "What affects safety is design, not weight. It's misleading to say that if we make vehicles lighter, we're going to make them less safe," says Union of Concerned Scientists senior analyst David Friedman. Aluminum and high-strength steel can cut weight and keep robustness, he says, albeit at higher costs.
"Reductions in vehicle weight will be necessary to dramatically increase vehicle fuel economy," acknowledges a report Wednesday from the American Council for an Energy-Efficient Economy (ACEEE). But that's not a death sentence if automakers "use new technologies to reduce vehicle weight while maintaining vehicle size to protect occupant safety."
IIHS, a trade organization for auto insurers, says otherwise. "Bigger and heavier vehicles are better: Two important characteristics influencing crash outcome are vehicle size and weight, which are strongly related. The smaller, lighter vehicles in each class generally have higher death rates," says an IIHS fatality summary last August.
The undercurrent of the ongoing debate is "what are we going to do about SUVs," says IIHS President Brian O'Neill. And that's worrisome: "If fuel economy requirements are made tougher for SUVs, we're back to where we were with cars (in the 1970s and '80s). If Ford and General Motors and the others want to keep selling the large, profitable SUVs, they have to subsidize the sales of smaller SUVs. "If that happens we'll have more deaths. We'll be encouraging people to get into the smaller, rollover-prone SUVs. It'll be a rehash" of CAFE-related car deaths, he says.
Small SUVs, such as Honda CR-V, Toyota RAV4, Jeep Wrangler and Ford Escape, account for 1.3% of vehicles on the road, says R. L. Polk & Co., which tracks vehicle registrations. But they're involved in an increasingly outsize portion of traffic deaths, according to NHTSA data: 5.1% in 1997, 5.8% in '98 and 6.6% in '99, the latest year for which figures are available.
Pay on front end, or later
* Cost. The Union of Concerned Scientists wants you to spend $1,700 more per car, perhaps $2,000 more for an SUV, for technology that would deliver an average 40 mpg by 2012. Friedman says poorer consumers wouldn't be disadvantaged: "When you realistically look at it, those folks are in the used car market. They'll pay less than $1,700 or $2,000, because the vehicle's been on the market a few years, and they'll get most of the savings." He estimates $5,000 in fuel savings over a 15-year vehicle life.
The consumer cost of fuel economy improvements is about a wash, says environmental policy expert Charles Kolstad, Professor, Bren School of Environmental Science & Management and the Department of Economics at UC Santa Barbara. Spend more for high-tech, high-mpg vehicle and save on fuel costs, or spend less for a low-tech, low-mpg car and pay more for fuel, he says.
The 1992 report he helped write -- "Automotive Fuel Economy: How Far Should We Go?" -- warns about setting "overly stringent fuel economy requirements. . . . If consumers do not like the design changes that are made to increase fuel economy, the cost is lost sales and profits to the manufacturers could be substantial, even if fuel savings outweigh the retail price increase to the consumer. . . . Policymakers should be wary of pushing fuel economy too far."
* Choice. The original CAFE standards of the 1970s put smaller, less-powerful cars on the market. That is largely what turned consumers toward light trucks and their more lenient fuel-economy standards. No longer able to get big sedans with V-8 engines, for instance, some buyers found the space and power they wanted in SUVs and pickups. Unable to find roomy, full-size station wagons, families turned to minivans.
"Yes, a 4-cylinder engine would improve fuel economy. But consumers choose 6- or 8-cylinder engines when given a choice. We have more than 50 models that get 30 miles per gallon or more -- and they're not our most popular," Bergquist says.
* What's reasonable mpg? "We need to be aiming for an increase of 10 to 15 mpg" for light trucks says Therese Langer, transportation program director for the ACEEE. She says the House bill, which directs NHTSA to save 5 billion gallons of gas, is equal to boosting average light-truck fuel economy less than 1 mpg. ACEEE favored a provision eliminated from the bill that would have required a 40 mpg average for cars and trucks combined. UCS also liked 40 mpg.
Automakers think the current number (24.7 mpg) is pretty good, considering Americans' love for SUVs that get 12-14 mpg . And they note that switching to diesel engines could boost fuel, necessary to keep diesels from emitting potentially toxic pollution, isn't available or likely to become so.
Who makes the call?
* Is mpg the government's business? Absolutely, environmentalists say. Your right to drive shouldn't trump my right to avoid smog and my great-grandkids' right to have fuel left for their use.
Absolutely not, free-marketers say. "We are in danger of forgetting that there is a basic moral dimension to mobility, to being able to go where we want, when we want," says Julie DeFalco, regulatory policy expert for the Competitive Enterprise Institute. She notes that impinging on personal mobility is not a new idea: "The Duke of Wellington, 150 years ago, opposed the growth of railroads because they would 'only encourage the common people to move about needlessly.'"
"Look what happened when the government started telling us how much water we could have in our toilet as a way to save water. Now, there isn't enough water to flush. You need to flush two or three times and wind up using more water," says GM's Lovejoy, illustrating that regulations, though well-intentioned, often have unintended and contrary consequences.
"Why does the government need to stick its nose into this? Why won't people just make the right decision?" asks Kolstad, rhetorically. His answer: Because there's not enough financial incentive to lure buyers to fuel-efficient vehicles. "There is a role for someone to step in and nudge people toward fuel economy."
Not on your life, counters Bob Crandall of the Brookings Institute, author of benchmark studies of the consumer cost of federal regulation. "I can't imagine any excuse for CAFE. There is always a better choice . . . than mandating" fuel economy.
Berquist says any government effort could be impotent: "Whether we meet, exceed or fail at CAFE is based on what consumer buy."