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Fuel Efficiency

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The Internet is a perilous place where anyone can present opinions and reports on any topic without review by editors, or even self-identification. The result is a virtually endless flood of information, much of it ill-informed. A prime example is one recently relayed to me in which a fellow named Brian (no last name offered) reports that he and friends drove around Europe for two weeks in a Volkswagen that got more than 70 miles per gallon. He later learned that Ford also sells a vehicle in Europe that gets more than 70 MPG, but that neither is sold in the U.S.

When Brian returned from Europe, he conducted an investigation of sorts that led him to some interesting conclusions. First, according to Brian, the government does not permit the VWs and Fords to be sold here because they release about 10 percent more emissions per gallon of fuel than domestic vehicles. Of course, given the gain in MPG, the total emissions would be less, but Uncle Sam calculates emissions per gallon, not per mile or tank of gas.

But the clincher, according to Brian, is that our government forbids sale of these wonderfully fuel efficient vehicles because most of the funding for highway maintenance comes from the gasoline tax. The introduction of radically more fuel efficient vehicles would reduce that source of revenue. Brian earnestly believes federal bureaucrats in Washington are conspiring against more fuel efficient vehicles in order to keep gas taxes flowing.

It is true that VW and Ford offer vehicles in Europe and elsewhere that boast MPG of 70 or better, and that they are not available in the U.S. Given our national obsession with fuel efficiency, driven both by concerns about emissions and also oil consumption, it would appear to make sense for us to get these cars on the road in our own country.

But there are a couple of peculiarities about those VWs and Fords that discourage their widespread use in the U.S. For one, they are diesel powered and for a variety of reasons, U.S. consumers are resistant to diesel technology. Nearly half of the European car fleet is diesel powered compared to less than 1 percent in the U.S. The high MPG vehicles cited by Brian are small and under-powered, at least by U.S. standards. They also have standard transmissions which to most U.S. consumers are one step removed from the horse and buggy.

It all comes down to dollars and economic sense. For example, the ECOnetic diesel that Ford sells in Great Britain, that gets up to 71 MPG, would have to be redesigned to comply with U.S. and Canadian safety and environmental standards. After lengthy analysis, Ford concluded the potential market was too small for the company to recoup the $350 million it would have to invest to bring those vehicles into compliance and take them to market.

I am obliged to my friend and former colleague Bill Canis, now with the Congressional Research Service, who's August 17, 2012, analysis, "Why Some Fuel-Efficient Vehicles Are Not Sold Domestically," enabled me to decipher this riddle about Europe's fuel efficient vehicles. I would happily pass this information along to Brian if I knew how to reach him.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.

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