A perfect storm

It’s a wild time in the auto industry. On the one hand (judging by the recent round of auto shows), it’s business as usual. On the other, the whole culture of carmaking is reaching what some environmentalists are calling a "tipping point," a perfect storm of factors that will change the industry in myriad ways, probably forever.

Let’s look at two of these. Last week, Oregon’s governor an-nounced that the state will administratively adopt California’s "clean car" rules, becoming the 10th state (plus Canada) to make that commitment. Since the clean-car states are scattered around the country, on the east and west coasts, it makes it difficult for automakers to continue producing – and delivering – two versions of every model.

"With Washington, Oregon and Canada signing up for clean cars, we are now approaching the tipping point where automakers will need to make all of their cars clean vehicles," says Dan Becker of the Sierra Club.

The first phase of the California clean-car rules regulate tailpipe pollution, and they made the industry mad enough to sue. But the second phase is even tougher, because the so-called "Pavley" regulations (named after California assemblywoman Fran Pavley) are aimed at reducing global-warming emissions. To comply, the manufacturers actually have to improve fuel efficiency. No wonder they immediately called their lawyers.

The California rules won’t by themselves kill off SUVs. Consumers are doing it themselves because of high gas prices. "On the large truck side, we’re seeing what would appear to be some fatigue," Pete Langlois, automotive analyst with Ernst & Young, told the Detroit News. The newspaper added, "Analysts now question [GM’s] assertions that a slew of new large SUVs and pickups coming out next year will solve its problems." The love affair with big SUVs, another analyst added, is "waning."

But it’s actually worse than that because the prices are not going to magically improve, as they did after the gas crises of the early 1970s.

As author James Howard Kunstler points out in Orion magazine, the nation’s entire supply of crude oil left in the ground is 28 billion barrels, enough to supply only four years of U.S. consumption. Two-thirds of the 20 million barrels we use every day is imported, largely from countries either volatile or deeply hostile to the United States (including Saudi Arabia, Venezuela and Nigeria). The Saudis already are producing near their capacity, and the world is expected to reach the peak of global production as early as next year. After that, prices can only go up.

Kunstler marvels that, despite this unshakable reality, the auto industry acts like nothing’s wrong. He said after a visit to the New York auto show, "They apparently aim to stick with the program of the now-ubiquitous low-mileage SUV war wagons as far ahead as anyone can see … There was remarkably little recognition that the … motoring world stands at the threshold of a new era characterized by the end of cheap fuel."

The automakers need to get real about downsizing their SUVs. Junking the whole category is too much to ask. The 35-mpg Ford Escape hybrid is a start, as are such novel entries as the Scion xB and the Honda Element. I’m driving one of the latter right now, and while the Element’s 21/24 mpg fuel economy could be improved, it’s a low-emission (EPA Tier 2, Bin 5) vehicle. Without being very large, it’s also one of the most practical and versatile SUVs on the road. The seats can be folded into a bed, or attached to the side walls to create a large storage area. C’mon now, what makes more sense for your family in 2005: an Element or an Excursion?