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The New York Times editorialized the new energy bill approved by Congress contains "the first significant improvement in automobile mileage standards in more than 30 years" and that’s right on the money. Although the energy bill could have been a lot better (provisions that would have removed tax breaks for oil companies and required utilities to produce electricity with renewable sources were dropped), it’s still cause for celebration.
The new Corporate Average Fuel Economy (CAFE) standard is a 35-mile-per-gallon national fleet average by 2020. A worthwhile provision introduced by Rep. Ed Markey (D-Mass.) calling for a four-percent annual CAFE increase after 2020 was dropped, but by then we’ll be expecting 75 mpg cars.
Of course, the industry, which fought CAFE to a standstill for three decades, isn’t happy. The Competitive Enterprise Institute echoed one of the automakers’ favorite lines when it claimed CAFE would "cost lives" (because hapless consumers will be thrust into dangerous small cars). Although some automakers grudgingly went along with the bill as the best they could expect from Congress, it didn’t stop them from issuing dire predictions about what it would do. Predictably, General Motors’ Bob Lutz told Autoweek it would add $5,000 to $6,000 to the cost of a new car. This is an odd notion, since the bill will force the companies to produce more economy cars, which are cheaper.
Lutz said CAFE would force "massive restructuring of the product plan," which is, frankly, a good idea. If GM dumps the majority of its SUVs it will end up stronger. Not able to adjust his thinking in that way, Lutz moaned, "There is no way that we’re going to get pickups and sport utilities to anywhere close to 35 mpg." What he means are "full-sized" pickups and SUVs, but those will be history anyway as peak oil and global warming close in. With $3.50 gas, the public’s already abandoned them.
Lutz and his ilk need to take a close look at Toyota, whose product line doesn’t need massive restructuring. If anything, the company will probably benefit from the new law. The auto buff magazines take the consistent position automakers know best. Here’s a typical comment on Car and Driver’s online forum: "The government needs to stay out of it … not getting involved with every little thing … They need to go back to arguing about illegal immigrants and stay out of the auto industry."
Every little thing! This is a 40-percent improvement in the fuel economy of the average car and truck and making it law will cut our oil consumption by 1.1 million barrels a day.
Speaking of SUVs, I’m driving a Nissan Pathfinder SE (handy in the recent snowstorm) this week. This is the latest iteration of a very popular SUV, one that successfully proved Tokyo could steal away market share in the mid- and even full-sized SUV market. It out-Detroited Detroit, as it were. The fact I find it too big, too heavy and too rough on the road is proof positive it hits the big SUV sweet spot. Good point: a third row of seats. Bad point: 12/18 mpg. So it guzzles just like an American SUV and it has no future under the new CAFE law.
