President Obama and U.S. automakers have announced the latest phase of fuel economy standards, moving to 54.5 miles per gallon by 2025. This big win for consumers will result in a total savings of 3.5 million barrels of oil a day by 2030 compared to what we would have used before my 2007 law to increase fuel economy standards was implemented.
These fuel efficiency standards strike at the heart of the oil cartel that has held America in a stranglehold for decades -- restricting our economic growth, threatening our national security and poisoning our environment.
For families and businesses that have been punished by high gas prices at the pump, today’s announcement is welcome sign of relief and an indication that in the future America's energy policy will be driven by innovation and technology.
Getting here wasn’t easy.
It took 32 years for Congress to act again to boost car fuel economy standards and consumers paid the price. University of Michigan researchers found that in 2006 cars were only getting about three more miles to the gallon than vehicles did in 1923!
As fuel efficiency standards stagnated, oil imports tripled between 1985 and 2005, ballooning to 12.5 million barrels per day.
It was a national embarrassment. We put a man on the moon and deployed the internet, but we seemed to be relying on The Fonz as a baseline for what could be done in auto mechanics.
My legislative quest to force American automakers to move forward began in 2001, when I offered an amendment to boost Corporate Average Fuel Economy standards – CAFE for short. It was defeated. In 2003, I tried again, joining with consumer advocates to try and bring about a change and save drivers a buck. No luck. In 2005, our campaign continued but my fuel economy amendment once again failed.
Denied and defeated, but never deterred, it took the Democratic takeover of Congress to move fuel savings forward. In 2007, Speaker Nancy Pelosi championed the Energy Independence and Security Act, which included the fuel economy standards I co-authored, raising the standard for cars and trucks to at least 35 mpg by 2020 and required that the “maximum feasible” standard be set every year. The 2007 act also included provisions that required the deployment of advanced biofuels.
Add in the 2007 Supreme Court decision in Massachusetts v. the U.S. Environmental Protection Agency, which affirmed the agency’s authority to reduce greenhouse gas pollution from automobiles, and the path was paved for today’s announcement. Combined, the fuel efficiency and biofuels provisions will save 5.1 million barrels of oil per day by 2030. The United States currently imports 4.6 million barrels of oil per day from the Organization of Petroleum Exporting Countries (OPEC).
Consumer demand played its part as well.
Drivers are lining up to buy fuel efficient cars. The Chevrolet Cruze, which gets 40 miles per gallon on the highway, was the top selling vehicle in June. Prices for used compact cars are up 30 percent over where they were six months ago. Forty percent of Ford F-150s now have smaller 6 cylinder engines – up from 5 percent in 2005. Ford plans to triple their electric vehicles by 2013 and the Nissan Leaf and GM Volt are completely oversubscribed. GM just announced plans to ramp up production of the Volt to 5,000 a month starting next year.
With those sorts of sales volumes driving down costs, it will be possible to shift electric and other advanced technology vehicles from niche markets to top sellers.
But not everyone is celebrating.
Big oil is unhappy. While the rest of the economy has suffered from high gas prices, oil companies continue to post head-spinning profits. However, at 54.5 miles per gallon, the White House has indicated consumers will save $1.7 trillion at the pump over the life of the program.
So it wasn’t a surprise to see Big Oil’s cheerleaders criticizing the president’s announcement, suggesting fuel economy will force people to drive smaller, less safe cars. One simply needs to visit an auto dealership to see that is not the case. Not only has the 2007 law fostered hybrid electric deployment, it pushed automakers to find new ways to reengineer trucks, SUV’s and vans with lightweight materials and more aerodynamic designs.
Ford made their Explorer 30 percent more fuel efficient and is hiring thousands in Chicago to build it. As an added bonus, any soccer mom spending less to fill the minivan gas tank can afford to buy the whole team ice cream after the game.
OPEC is also unhappy. For decades foreign nations, including Saudi Arabia and Iran, have reaped the benefit of failed U.S. energy policy – at times siphoning nearly a billion dollars a day from U.S. consumers.
OPEC has enjoyed playing games with global oil markets, keeping prices high enough for them to make trillions while keeping the United States addicted to their product. Saudi Prince Al-Waleed bin Talal admitted as much to CNN, stating recently, "We don't want the West to go and find alternatives."
And Republican leaders in Congress are unhappy. Their “Oil Above All” agenda has failed to help consumers. Even though fuel economy is creating jobs -- 484,000 jobs could be created by the 54.5 miles per gallon standard alone according to a report by CERES -- they are continuing their efforts to stop the Environmental Protection Agency from providing consumers with miles per gallon information. The G.O.P also continues to try to gut funds for clean car and advanced battery research funds at the Department of Energy.