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One reason is that the National Highway Traffic Safety Administration underestimates the price of gas. (http://www.popsci.com/cars/article/2008-07/why-cant-our-cars-get-better-mileage)

http://www.cleanmpg.com/photos/data/501/Refueling_at_the_pump.jpgDawn Stover - Popular Science - July 3, 2008

“Pain at the pump” could change everything.

Popsci missed that CAFÉ’ standards are based on pre-1985 unadjusted EPA city/highway FE tests vastly overstating the average drivers FE capabilities of whatever they own and drive. And of course how foolishly the general public drives today :( -- Ed.

In April, the U.S. Secretary of Transportation proposed new CAFE (corporate average fuel economy) standards that would increase the average efficiency of passenger cars and light trucks by 4.5 percent per year from 2011 to 2015. A lot of people wondered why the federal government wasn't aiming higher.

One reason became clear when the National Highway Traffic Safety Administration (NHTSA) released its Draft Environmental Impact Statement for the new standards last week. Buried in the 414-page report is a "sensitivity analysis" of the economic costs and benefits that would result from raising fuel economy standards. For this analysis, NHTSA relied on a "high-case" gasoline price of $3.37 per gallon for the years 2011-2015, and a "low-case" scenario of $2.04 per gallon. These prices came from the U.S. Energy Information Administration's "Annual Energy Outlook 2008 Early Release." … http://www.popsci.com/cars/article/2008-07/why-cant-our-cars-get-better-mileage

As I've said, the marketplace is overtaking government CAFE standards. Demand for fuel efficiency has and will increase dramatically as the hit to consumers' finances that high gasoline prices has caused sinks in. CAFE standards no longer matter. Sell us fuel efficient vehicles, or have vehicles gather dust on dealer lots.

Harry

Hi All,

I watched the congrestional comittee meeting where the NTHSA guy presented his estimates of the monetary impact, and benefits. He was reamed relentlessly over his use of the EIA estimates of fuel prices. He actually used the mid-case estimate, which if I remember correctly was $2.67.

His only defense was the EIA estimates were for the price of gas from the issue of the report, out to 2014 when the full implementation of the new CAFE limits would be complete, and the EIA were the experts on this, not him. It was something like a 14 billion cost for the car industry, and a 50 billion benefit for the nation. You could probably double that benefit, based on the new price of gasoline right now, and what industry experts expect it go to by 2014. Seems like he could have estimated with a range of prices, starting with the low-case, and going to twice the mid-case.

The Michigan women represetative seemed especially out of touch. Her worry was that they were loosing jobs now. When the reality is the only way to get those jobs back is value for money - fuel economy savings more over the life of the vehicle, than the cost of the technology improvements. Seems like Honda, Toyota and Ford are the only ones providing that today.

PNGV seems to have been conviently forgotten on Capitol Hill too.

Agreed - the market place will make a mockery of this debate.

Look closely at the change in sales volumes over the last 8 months - 30 HWY MPG (EPA) is now considered the minimum threshold of 'decent' by the public.

Agreed - the market place will make a mockery of this debate.

Look closely at the change in sales volumes over the last 8 months - 30 HWY MPG (EPA) is now considered the minimum threshold of 'decent' by the public.

As I've said, the marketplace is overtaking government CAFE standards. Demand for fuel efficiency has and will increase dramatically as the hit to consumers' finances that high gasoline prices has caused sinks in. CAFE standards no longer matter. Sell us fuel efficient vehicles, or have vehicles gather dust on dealer lots.

Harry

I agree that market forces are doing a lot in the short term, but I have to have skepticism as to their effect in the long term. If gas prices take a short term drop (even to $3/gallon which was unthinkable just a few years ago), enough people will have thought that the storm was weathered that it will at least somewhat go back to business as usual.

Moreover, one of the reasons that standards exist is to create a baseline. Having high standards, even if they are trumped by outside influences, show that as a society and a group of people, we value whatever is being held to such standards.

Part of the reason this latest gas crisis is hitting so hard is that there weren't meaningful standards in place since the previous gas crisis (there were standards, but they were full of exploitable loopholes). There was an example in living memory, yet we were ill-equipped to handle a repeat, why was that?

Ultimately, automakers are fighting truly higher mileage with everything they have despite record high gas prices. This tells me that they need a little forcing and that the baseline created by CAFE and other standards does need to be raised.

I'm not discounting the power of market forces, but standards are not as irrelevant as you think.

I think this sums things up quite well, http://www.salon.com/comics/tomo/2008/06/03/tomo/index.html

These particular standards will be irrelevant. If they had been set ten or twenty years earlier, they would have been very relevant!