Fuel Economy Reform Act

United States dependence on oil imports imposes tremendous burdens on America’s economy, foreign policy, and military.

According to the Energy Information Administration, 60 percent of the crude oil and petroleum products consumed in the United States between April 2005 and March 2006 (12,400,000 barrels per day) was imported. At a cost of $60 per barrel of oil, Americans remit an average of $500,000 per minute to other countries for petroleum, money that could have been spent creating domestic jobs and strengthening our Nation’s economy.

A significant percentage of these petroleum imports originate in countries controlled by regimes that are unstable or openly hostile to the interests of the United States. Dependence on production from these countries contributes to the volatility of domestic and global markets and the risk premium paid by American consumers.

The Energy Information Administration projects that the total petroleum demand in the United States will increase by 23 percent between 2006 and 2026, while domestic crude production is expected to decrease by 11 percent, resulting in an anticipated 28 percent increase in petroleum imports. Absent significant action, our Nation will become more vulnerable to oil price increases, more dependent upon foreign oil, and less able to pursue our national interests.

It is technically feasible to achieve oil savings of more than 2,500,000 barrels of oil per day by 2017 and 7,000,000 barrels of oil per day by 2026. This goal can be achieved by improving the gasoline efficiency of vehicles, replacing oil with cellulosic biofuels, and encouraging the use of public transit and other alternative transportation options.

Two-thirds of all domestic oil use occurs in the transportation sector, which is 97 percent reliant upon petroleum-based fuels. Passenger vehicles, including light trucks under 10,000 pounds gross vehicle weight, represent over 60 percent of the oil used in the transportation sector.

Corporate average fuel economy of all cars and trucks improved by 70 percent between 1975 and 1987. Between 1987 and 2006, fuel economy improvements have stagnated and are much worse than the vehicle fuel economy in many developed countries and some developing countries, including China.

Significant improvements in engine technology occurred between 1986 and 2006. These advances have been used to make vehicles larger and more powerful, rather than to increase fuel economy. Between 1985 and 2005, average vehicle horsepower nearly doubled, average vehicle weight increased by 25 percent, and acceleration times for new vehicles improved by 25 percent. During the same time period, average vehicle fuel economy decreased by 2 percent.

According to a 2002 fuel economy report by the National Academies of Science, improvements in automotive technology offer the opportunity to significantly increase fuel economy while maintaining vehicle size and performance and improving safety. The fleet analyzed by the Academies would be able to improve its fuel economy by 10–15 miles per gallon within 10–15 years using technologies that were commercially available in 2002.

The 2002 fuel economy study clearly states that fuel economy can be increased without negatively impacting the safety of America’s cars and trucks. Some new technologies can increase both safety and fuel economy (such as high strength materials, unibody design, lower bumpers). Design changes related to fuel economy also present opportunities to reduce the incompatibility of tall, stiff, heavy vehicles with the majority of vehicles on the road.

A 2004 report by David Greene of Oak Ridge National Labs entitled, The Effect of Fuel Economy on Automobile Safety: A Reexamination, demonstrates that fuel economy is not linked with increased fatalities. The report notes that, higher mpg is significantly correlated with fewer fatalities. In other words, a thorough analysis of data from 1966 to 2002 indicates that vehicle manufacturers can simultaneously increase fuel economy and improve vehicle safety.

A 2002 study entitled, An Analysis of Traffic Deaths by Vehicle Type and Model, by Marc Ross and Tom Wenzel from the University of Michigan, demonstrates that large vehicles do not have lower fatality rates than smaller vehicles. Ross and Wenzel analyzed Federal accident data between 1995 and 1999 and showed that the Honda Civic and Volkswagen Jetta both had lower fatality rates for the driver than the Ford Explorer, the Dodge Ram, or the Toyota 4Runner. Even the largest vehicles, such as the Chevrolet Tahoe and Suburban, had fatality rates that were no better than the Jetta or the Nissan Maxima. In other words, a well-designed compact car can be safer than a sport-utility vehicle or a pickup truck. Design, rather than weight, is the key to vehicle safety.

Significant change must occur to strengthen the economic competitiveness of the domestic auto industry. According to a recent study by the University of Michigan, a sustained gasoline price of $2.86 per gallon would lead Detroit’s Big 3 automakers’ profits to shrink by $7,000,000,000 as they absorb 75 percent of the lost vehicle sales. This would put nearly 300,000 Americans out of work.