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Thursday, June 07, 2007
Eric Peters :: Townhall.com Columnist
Fuel Economy Uber Alles?
by Eric Peters
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If the government decides to pass a law requiring that McDonalds sell only low-fat chicken breast wraps and diet soda, the result would be more business for Wendy's and Burger King -- and empty stores for McDonalds.

So it is with H.R. 1506, the Fuel Economy Reform Act, co-sponsored by Democratic Rep. Ed Markey and GOP Rep. Todd Platts to impose a 35-mpg fuel efficiency requirement on the auto industry.

The legislation differs from previous fuel economy standards in that it would apply to both passenger cars and "light trucks" -- a category of vehicle that includes pick-ups, SUVs and minivans -- and which has up to now been held to a separate (and less stringent) fuel economy standard of 21.5-mpg vs. 27.5-mpg for passenger cars.

As a result, Markey-Platt would disproportionately hurt American car companies, which have their profit centers in large pick-ups and SUVs -- while giving a competitive leg-up to imports, which make most of their money selling smaller, inherently more economical passenger cars.

It's much easier to tweak the design of a compact or mid-sized front-wheel-drive passenger car with a four or six-cylinder engine that already gets 32 mpg to the 35 mpg mark than it is to get a full-size, V-8 powered truck or SUV from 20-something mpg to 35 mpg. Thus, the impact of the Markey-Platts bill will hurt American car companies most where they are especially vulnerable -- at a time when they can least afford another legislative knee-capping.

GM, Ford and Chrysler have all posted alarming losses recently, even as the quality and appeal of their vehicles has been on the upswing. Hitting them with a 35-mpg fuel economy edict would have the same effect as sucker punching someone already laid low by the flu.

Of course, it's easy to wag a finger at "wasteful" pick-ups and SUVs from the halls of Congress -- and the editorial pages of big city newspapers. But the fact is many people (farmers, people with trailers to pull or large families to haul, contractors, etc.) simply need these kinds of vehicles -- and nothing else will do. You can't tow 9,000 pounds with a Camry. Sometimes, miles-per-gallon is not the sole reason for buying a vehicle.

Nor should it be.

And moreover, 35-mpg (and more) vehicles have been available for many years -- since the 1980s, in fact. But the market for these vehicles has always been limited, because to achieve high mileage, other attributes -- size, power and capability -- have to be sacrificed. Not everyone (or even many of us) want to drive around in a car the size of a Toyota Tercel. Some do, of course -- and the automakers have several models available to meet that need. But should Washington be force-feeding such cars on an unwilling marketplace?

And that, ultimately, is what the Markey-Platts bill is all about.

People already have a number of choices in the 35-mpg and more category -- including the latest generation of gas-electric hybrid SUVs, like Ford's Escape. True, it may cost them extra to get the additional 5-10 mpg -- as in the case of the hybrid Escape, which costs about $3,000 more than the standard, gas-only version of this vehicle. Or they may have to drive a smaller, less powerful/capable vehicle -- like the new class of "B-car" subcompacts, including the Honda Fit, Nissan Versa, Toyota Yaris or Chevy's Aveo.

But the point is, the options are already out there -- no legislation required.

But if the Markey-Platts bill becomes law, these options will become a mandate -- and we'll all have to pay in one form or another. The add-on cost of the necessary research and development, specialized technology (everything from advanced engine designs to hybrid systems, etc.) will be either tacked onto the price tag of larger vehicles, or spread out and hidden in higher across-the-board costs of each automaker's entire product lineup. Maybe the extra 5-10 mpg that could be realized is worth an extra grand or two in "up front" costs. But maybe not.

Shouldn't the choice be the consumer's to make?

And if the market plays its trump card and simply decides to say "thanks, but no" -- electing not to buy these more efficient but also more expensive vehicles -- it will mean reduced shareholder value and ultimately, plant closings and job losses for the auto industry. Even a relatively small decrease in demand for new vehicles -- say 5 percent or so -- could be absolutely devastating to an already shaky industry, with American brands suffering the most.

Backers of the Markey-Platts proposal seem rather cavalier about these potential repercussions. Perhaps it's easy to dismiss concerns about what could amount to as much as several thousand dollars in add-on costs per vehicle (2,3) when you're a six-figure DC lawmaker, activist or editorial writer. But for the average person in this country, that kind of money is a big deal indeed.

We all want more efficient vehicles -- but the issue's more complex than waving a legislative wand and making it so. Concern over fuel prices should not lead to ill-considered lawmaking -- or political grandstanding.

Hopefully, wiser heads will prevail.

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About The Author

Eric Peters is a senior fellow at the National Center for Public Policy Research. His work has appeared in the Wall Street Journal, Investors Business Daily, Houston Chronicle, National Review, Detroit Free Press and Detroit News.

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The USA is tearing itself apart
Whatever your point of view on this topic it seems that the USA is tearing itself apart. Led by Congress and the President: 'ill-considered lawmaking -- or political grandstanding.' says it all.

Is it a wonder we distrust any move Congress now makes?

Complex indeed
Thanks for the thoughtful article. Markey-Platts does indeed sound like a dog, like most attempts to legislate solutions.

But it is a complicated issue. Beyond free market issues, and environmental concerns, I think in today’s world petroleum consumption has to be considered a national security issue as well.

I think cost comparisons between new-technology efficient vehicles and older-technology, but more profitable vehicles would be easier to make if we repealed the tax credits that allow companies to depreciate light trucks much more quickly and advantageously than efficient cars.

I’d also point out that foreign manufacturers seem to make a profit building smaller cars, so one wonders why our manufacturers say they can’t. I think the market is already settling this issue, Markey-Platts or not.

Personally, I’m in the death-watch for an older small (Ford) wagon, and wondering how to replace it. I don’t see the “perfect” vehicle on the market. Recently I’ve settled for using our two small, efficient cars, and renting a hauling vehicle when needed. We need to do that a lot less than I had expected when I got rid of the old van. Of course, I’m not a contractor or a farmer, and I only have 2 kids.

I am self-employed, and could write off most of the cost of a new light truck/SUV as a business expense. It would be nice to have the power, the luxury, and the room. On the other hand, I have this stubborn disinclination to buy things I really don’t need even if it might be cost-neutral, and I was raised to abhor waste. Since I mostly drive myself around, why burn twice the fuel necessary? Doesn’t seem smart, responsible, or good for the country.

I’ll probably end up with a newer small (Ford) wagon, and keep renting a hauler the few times I actually need it. I probably won’t buy new until I can plug it in. Why invest in old technology?

Point is, I’ll make this decision myself, thanks, based on the options the market provides. Markey-Platts? No thanks.

Thanks again for the article—more things to think about.

Economic sense
My local newspaper ran a story about how people are saving money by buying hybrid vehicles. The first hybrid they wrote about was the Honda Civic that gets 50 mpg while the standard engine averages 35 mpg. So, lets compare how much it cost to drive 100,000 miles. For the hybrid you will use 2000 gallons of fuel and for the standard gas engine 2857 gallons. At an average cost of $3 per gallon the hybrid owner will spend $6000 while the standard gas engine owner will spend $8571 or $2571 more. However, the hybrid car according to the article cost $4500 more without taxes. So, the hybrid owner comes out on the short end by $1921. The break even point is if the AVERAGE cost of gas for the 100,000 miles is $5.25 per gallon. Also, the batteries for the hybrid only last 100,000 miles so you would have to factor that cost in too if you drive a car for more than a 100,000 miles.

fuel economy
fido Castro's best buddy,ed marky,comes up with an other socialist plan for increasing fuel economy but where did he find a republican stupid enough to go along with him? how about we increase domestic production no said marky we can't do that it makes too much sense.

h20skier
I've owned a Nissan since 1998 and it hasn't got 70,000 miles on it, yet. I'm thinking about selling it and getting a new one. With such numbers I'd wind up loosing money with a hybrid car.

Like all new developments, hybrids will drop in price if the market's allowed to work. If it becomes a mandate instead, prices will likely remain higher for a long time.

Think Diesel
Since hybrid cars still have nickle metal hydride batteries which have a shelf life and and are sensitive to the heat cycles of charging and discharging making it to 100,000 miles is doubtful unless you keep your foot on the accelerator all the time in which case you'll only get about 35 mpg anyway.
So how about flex fuel cars? Well since the cars here can use gas or E-85 that means the vehicle is not utilizing either fuel to get optimum performance and mpg. The cars computer can only do so many things and they don't address injector size, compression ratio, or cam timing and lift which means at this time it's a bit of a compromise between the two fuels.
This brings me to light duty diesels which will get 30% to 40% better fuel economy then a gas engine of the same size. Another plus is the longevity of the diesel engine. These new diesels aren't like the old ones that used to smoke up the place like they have in the past. They are equipped with particulate filters, heavy duty EGR systems and common rail injection. In fact Honda is coming out with a diesel engine that will run cleaner then a gas engine of the same size. Also the new diesels have good acceleration. In Diesel Power magazine they took two Ford F-250's, one with the 6.8 V-10 gas engine and one with the 6.4, V-8 diesel. The diesel beat the gas powered truck in all tests, towing, around town and highway, acceleration, and MPG. The gas truck averaged 10.37 mpg while the diesel got an average of 19.27 mpg. And even with a higher sticker price it's still a better deal since they hold their value longer. And even though 3/4 ton 4 wheeldrive trucks aren't really light duty you can see the advantages of the diesel.

Nareed
I have a 2000 Honda Accord with 242,000 miles. With that many miles I would have had to replace the batteries at least twice. At a cost of $2000 to $3500 for each replacement it would take a while to recoup that additional investment. So, with a $2600 "savings" for each 100,000 miles and a battery replacement of say $2700 you would never break even. I saw Honda warranties their batteries for 80,000 miles where Toyota provides a 100,000 mile warranty.

Turbo Diesel
If the diesel emissions hadn't become so restrictive this last cycle, that would be the way to go. Most don't know but I know Ford for one has a 4 door diesel Ranger pickup that gets in the 30's. People have built their own F-150's with the Cummins 4BT (4cyl version of the Dodge Cummins) and get almost 30mpg with them. Most of the diesel emissions we deal with in this country have as much to do with our fuel quality as the engines themselves. Tweak the standards so that you don't totally destroy the MPG of the turbo diesel and you will approach the economy of the hybrid gas/battery car with far greater longevity of your vehicle.

All our energy problems...
...are born and bred in Washington.The market place can do a much more efficient job at a cheaper cost than ANY politician can do.For all the politicians,newspaper editors.college intellectuals and students,and liberals with 1.7 children,I offer the following challenge:

1.BAN parking for ALL privately owned vehicles around government offices for elected reps and their office staffs.They can take public transportation to and from work.The same goes for ALL college campuses for everyone from the college president down to the janitors and especially the students.All take public transportation.Newspaper and TV stations must ban all company provided parking for their employees,from the CEO to to the janitors.Any official business can be done with company provided cars or tokens for public transportation.

Then,and only then,they can preach to the rest of us how we must live.

People will just keep what they have
I can remember when Fashion died among the women in my generation. That was the spring that Fashionistas decreed that the micro skirt and plunging neckline and boots were IN this year and "Women will be wearing thish Look." We took one look in the mirror and burst out laughing and said "No, we will keep what we have, thank you. That Just Is Not Me." The Hoochies R Us clothes are still out there, but Women are not wearing them; we just bought classics and wear them forever. The next year when Women were told that we WOULD be wearing skirts at shin level, we shook our heads and passed them by.

The same thing is happening with vehicles and gas prices and parking and so on. People just shake their heads and say "I will stay with what I have, thanks." The companies that sell the stuff the Greenies force on the manufacturers will go broke and then will go back to making what people really want to buy.

That's the market place for you.

People tend to forget
That the initial reason for the SUV boom was that Detroit (and Japan) had downsized their standard family cars to meet the previous CAFE standards. This resulted in smaller, lighter cars that were not only less crash-worthy (due to lighter structures), but also more likely to be in a collision (due to lower profiles resulting in degraded driver vision arcs). The inevitable result was a spike in traffic fatalities in the mid- 1980s. The government gurus' response was to demand even lower speed limits on four-lane highways (at one point here in OH, the Democratic governor proposed 35 MPH on I-70 clear across the state)- completly ignoring the fact that the fatalities were occuring on two-lane roads and city streets, mostly in 25 to 35 MPH zones.

The consumer response was to buy larger vehicles with better crash protection and higher driver position and, thus, better driver vision. In other words, SUVS and the similar but usually-overlooked minivans.

And traffic fatalities went down. Except when an SUV or minivan had a "conflict" with a politically-correct CAFE-compliant four-wheeler.

The response of the likes of Edward Markey & Co. was to dub the SUV an "Urban Assault Vehicle" and demand that it be banned. Since that didn't fly, he went to his fallback position; raise the CAFE standard. Again. Resulting in more expensive, less safevehicles, which will also cost more to own based on insurance costs. (And we all know about those,I assume.)

The ultimate goal is, of course, to make owning or driving a vehicle so financially impossible that we are all forced to "do the right thing"-namely, ride public transportation. Where we will only go where the government wants us to, and will be under surveillance 24/7 so they can be sure that we're acting responsibly (think; reading Time magazine as opposed to, say, the American Rifleman).

Markey, like most "social reformers", has never understood the Law of Unintended Consequences. Anymore than he understands the Second Law of Thermodynamics*.

Or maybe he thinks he can repeal both of them with an Act of Congress.

cheers

eon


*This law is applicable here, but I don't want to double the length of the post explaining why.

The broader agenda.
Consider this:

Among the leading buyers of larger, less fuel efficient, cars are people with families. They need these large vehicles to transport their family around, and buying a tiny Mini Cooper is just not an option.

By forcing these unattainably high fuel standards, it is going to drive the price of these large vehicles through the roof. The cost to make a Ford Expidition get 35 miles per gallon would be prohibitively high for most families.

This will cause many families to forfiet their vehicle, limiting the mobility, and thus the freedom, of these families. A populace without the ability to move from one place to another is easier to control -- and control is what the Democrats in congress are all about.

Now how about THAT for a conspiracy theory?

Energy and Immigration
The reasons to cut back on our consumption of oil are many, among those, dropping the price of oil and cutting into the giant surplus nefarious regimes, such as Iran's, use to bolster terrorism.

So what else can we do to cut back? Hey, lets add thirty million more Americans to buy cars, houses and, yes, gasoline. Don't you love it when our government takes the whole picture into account before shoving it down our throats?

If they really wanted to make a difference, they'd use import tarrifs to shift as much Chinese industry as possible to Mexico. Voila! Chinese demand for oil drops, the price goes down. They come down on Iran's terror actions, trying to get back in our good graces, and meanwhile, the Mexican economy prospers, allowing millions of Mexicans to stay home and change that country into a real democracy. Finally, we buy our oil from Mexico, not the Middle EAst. There, take that you idiots.

for CC Ryder
More or less on point.

Especially with a DICOR (direct-inject common-rail) turbodiesel, which can oft close-to-match a sparker.

An example is the Indian Tata Indica which uses a 1,400-cc engine.
(1) the petrol Indica produces about 78 peak-bhp
(2) the Indica-turbo which uses a turbo-DICOR produces 69 peak-bhp.

So why would a turbo-DICOR vehicle not work for US?

GOVT. = CLUELESS MORONS
One more example, in the long sad history of BAD EXAMPLES; where government inevitably screws things up by interfering in an area that should be left to the forces of a FREE MARKET to decide. When will these MORONS ever get a Clue?

Markey
Guess what state elected this socialist IDIOT

The government is so stupid
It sees vehicles that don't get "good" MPG -- by an arbitrary standard, of course -- and wants to make a law against them.

Then, of course, when the US automakers who survive in business by providing the lower-MPG (but higher-utility and -convenience) vehicles are bankrupted by the catastrophic decline of sales, the same government will moan, groan, and labor to "bail them out."

A more politically competent and cynical European government would simply add a big federal tax to lower-MPG vehicles, to both discourage their purchase and line its coffers when people bought the things anyway.

But not our marvelously Puritanical-Marxist Congressmen. No, by golly. Sin taxes for alcohol and tobacco only in the US of A, thank you very much.

On the one hand, it HAS taken a certain amount of stiff market competition and government coercion for the US auto industry to prioritize fuel-efficiency and pollution-minimizing design in its private vehicle fleets. But on the other hand, making laws to prohibit the consumer's market preferences never produces anything but trouble.

Stupid government.

Congress lacks the intelligence
Congressman Markey and Company are the typical dimwits in the House and Senate who lack the intelligence to legislatively mandate anything as complicated as fuel economy. They will only succeed in screwing things up. They have no idea of the inherent problems associated with internal combustion engines. Their knowledge is extremely limited to what some environmental lobbyist and their cherry picked experts have told them. The ability to move a 4500+ lb. vehicle plus cargo and 4+ passengers down the road 15 to 25 miles at 65 mph on a gallon of gasoline is pretty amazing. The ability to move your butt the same distance strapped to two roller skates and an air bag on an ounce of gasoline and a pencil for cargo and no passengers is much less impressive, damn scary, and felony stupid.
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