 |
|
« How to Optimize Asset Performance | Main | Extending Customer Research Beyond Arm's Length »
December 4, 2007
Will the Auto Industry Surrender to Energy Efficiency?
Congress has agreed to raise fuel-economy standards by 40 percent for cars and light trucks by 2020. Environmental groups have hailed the deal as historic, because it would be the first time Congress has taken significant action on fuel efficiency since the mid-1980s. The latest version of the measure, if it becomes law, will force radically severe changes on all aspects of the American car companies.
Congressional negotiators reached a deal late last week on energy legislation that would force American automakers to improve the fuel efficiency of their cars and light trucks by 40 percent by 2020. In a key concession to Detroit automakers, the deal sets separate standards for cars and light trucks — a major departure from Senate-passed legislation that sets unified standards across the board.
While some lawmakers have described the move as a historic step toward cutting United States oil consumption and curbing global warming, others are grumbling about the bill because it lacks strong incentives to boost U.S. use of renewable fuels like ethanol.
Gasoline demand accounts for about 45 percent of the almost 21 million barrels of oil consumed in the U.S. daily. As such, many energy experts see boosting vehicle fuel requirements as the biggest way to reduce U.S. oil imports.
The new rules would require the U.S. to set mileage standards for each type of vehicle to meet a national average of 35 miles per gallon, Bloomberg News notes: "In exchange for a higher benchmark than automakers had wanted, the industry would continue to get credit for making vehicles that run on alternate fuels such as gasoline blended with ethanol."
This latest proposal is similar to a measure that was passed in the summer by the Senate but was bitterly opposed by the auto companies, who argued they did not have the technology or the financial resources to reach that goal. Throughout most of this year, many industry leaders argued that such a plan was too aggressive and warned of serious consequences for automakers, suppliers, workers, dealers and consumers.
Nonetheless, industry has made its concessions.
The automotive companies gave up their long-held opposition to fuel-economy increases not long before the Senate version was passed, but they proposed a markedly weaker alternative. In recent weeks, the chief executives of General Motors, Ford Motor Co. and Chrysler visited Capitol Hill in an effort to fend off a stronger measure. Clearly, the compromise announced on Friday shows those efforts had little effect.
Automotive News reports:
Faced with almost certain defeat on fuel economy in Congress, automakers and their allies have decided to join proponents of sharply higher standards and declare victory. The industry issued statements over the weekend in favor of a 35-mpg fleet-wide national average by 2020 — about 40 percent higher than today. The statements followed announcements Friday night by top congressional Democrats vowing to soon pass an energy bill containing a 35-mpg standard.
The bill is also expected to include requirements to use more renewable fuels like ethanol, which is now made from corn, but there appear to be significant differences between the House and Senate over the size of the increase.
According to a draft of the energy bill obtained by Reuters, the legislation would require 20.5 billion gallons of renewable fuels like ethanol to be mixed with U.S. motor fuel supplies by 2015, with 5.5 billion gallons of that coming from non-food sources like cellulosic ethanol.
Al Hubbard, the director of the National Economic Council, has warned that the bill could face a veto if several provisions aren't made. President Bush's chief economic advisor said the bill appeared to fall short of Bush's target of 35 billion gallons of fuel from alternative sources by 2017. Moreover, the administration opposes any attempt to raise taxes as part of an energy bill, as well as standards requiring electric utilities to generate specific amounts of energy from renewable sources by 2020.
The standards set by the corporate average fuel economy (CAFE) program require that automakers achieve 27.5 mpg for passenger cars — a figure that has not changed since 1985 — and 22.2 mpg for light trucks, including minivans, sport utility vehicles and pickups.
The average fuel efficiency of U.S. cars and trucks sold in the 2006 model year "showed no improvement" from the prior year at 25.4 mpg, as "increased sales of fuel-thirsty cars offset slightly more efficient trucks," according to the first new data in two years, from the National Highway Traffic Safety Administration earlier this year. The NHTSA report estimated automakers' progress toward meeting the standards set by the corporate average fuel economy (CAFE) program of 27.5 mpg for passenger cars and 21.6 mpg for pickups, vans and SUVs.
Based on estimates from mid-model year sales in 2006, the report said automakers were on track to average 25.4 mpg across all vehicles sold, the same as in the 2005 model year.
"The latest version of the measure, if it becomes law, will force wrenching changes on the American car companies, from design studios to new-car showrooms to executive suites," The New York Times says.
Then again, even if the bill becomes law, will the fuel-economy improvement it calls for be great enough to prevent some increase in American fuel consumption because of the expected growth in the number of cars on the road and miles traveled?
Earlier: Toyota to Supplant GM as World's Top Automaker? It's Happening It's Happened
References
Trackback Pings
TrackBack URL for this entry:
http://news.thomasnet.com/mt41/mt-tb.cgi/1314
|
Advertisement
|
Comment
10 CommentsThe cry for the use of alternative fuels has its problems and in its self creates more problems than it solves if the comments of the following diverse segemnt of the scientific community is to be believed.
[These comments are from a newsletter "Daily Wealth" Friday, Nov. 30 that looks at ethanol from a cold, investment point of view]
The article calls it a Heartland Boondoggle... these sources are quoted, "expert at the UN.."a crime aganist humanity"...Organization for Economic Cooperation & Developement OECD report in Sept. says it " offers a cure worse than the disease"... October 2007 report from the National Research Council says "harm to water quality from ethanol could be considerable and water supply problems at regional and local levels will rise"....Spring 2007 report from the EPA says "increase in corn based ethanol use will cause a rise in ozone levels, especially in midwestern states"....Nobel Prize winner in Chemistry Paul Crutzen..."feels it may exacerbate climate change". Lastly, and it is almost laughable that his comment strikes such a
sure note..Fidel Castro comments.."using a food crop for fuel is a sinister idea". Ethanol is a feel good, non-solution to our oil import problems. We need to take long looks at other consumers of oil and oil based products. The airline industry would be a likely place to start. The sky is full of fuel guzzling, pollution planes traveling the same routes and in many instances flying at less than capacity in the hunt for revenue. I am normally a person who feels the free market will regulate itself, but when practice shows it cannot and the national interest is in harms way, regulation must step in. The motor carrier industry causes the same suffering with short haul 1,2, and 3 day points "guaranteed" wheather the shuttle trucks are full or not.
More fuel efficient vehicles and alternate engine configuration systems hold the best hope. Ethanol is a short fix to the economy...construction is happy, farmers are happy and the result is problems to vast to imagine.
December 4, 2007 5:39 PM"Legislation that would FORCE American automakers".... The word FORCE says it all. Force actually means at the point of a GUN. The government has no right to force any legal and moral business to do anything. This action by the governemnt is against life, liberty, property and the pursuit of happiness of all of our citizens and their businesses. What is needed is a trend to completely embrace lassiez-faire capitalism because it is the only moral political/economic system that protects individual rights and on which the principles United States of America were founded.
This proposed action by Congress is a very omnious trend by our government which is learching toward fascism and it needs to be stopped at once. And the automakers ought to be embarassed and deeply ashamed in giving up their (our) rights.
December 4, 2007 5:58 PMRobert..a knee jerk feel good, wrap in the flag responce to a problem that has far reaching consequences that may indeed hamper the rights that you and I hold dear. Citizens have certain rights in our form of government, but we fail to realize and do not like to recognize a right, not so clearly stated as the ones you mention. That right is the right to be secure and protected and the responsibility of government to insure protections so that we can enjoy these wonderful rights.
I am sure you find little objection to laws forcing food producers to offer uncontaminated product fit for consumption; laws forcing drugs to be safe for the purpose they were intended; laws protecting us from unjust acts by banks and lenders; acts requiring industry to market products [autos included] that are inheritantly safe to operate. Why would you object to a broad mandate to manufacture a product that would be less harmful to the environment we all must live in? Why would you object to an effort to make the country stronger, so it can protect our way of life we all so cherish, by reducing imports from countries that wish us harm?
If you will only recall, if you have lived long enough to recall, that the US auto industry in the 1950's said seat belts would be difficult to engineer and be cost prohibitive; later fuel mandates would be impossible to attain; they did it though. Later, air bags would not work, be impossible to effectively engineer into vehicles and again, old saw, cost prohibitive. Now they spout the number of bags in their vehicles in TV ads.
In short, you have an industry that has done little that was not mandated except for sheet metal change, in design safety and fuel economy unless the government stepped in or in a few cases the Japan producers forced them to it. That is the kind of industry that our government is required to provide us, as citizens, some measure of standards we can count on, just as it has in the food, drug and other industries.
Unroll yourself from the flag, realize that with each right comes a responsibility and some of those responsibilities fall to government as well as to individuals.
December 5, 2007 8:48 AMJohn, it is not a matter of wrapping myself in our flag. It is a matter of basic principles which are derived from philosophy. Political principles derive from ethical principles which are derived from the principles of metaphysis and epistemology.
You over look or brush aside the proper functions of a moral government, which are ONLY three. To protect its citizens from foreign aggression (by our Military), to protect our citizens from criminals (by our Police forces and courts), and to adjuciate disputes between disagreeing parties(by our courts). That is it.
The free market will do the rest and do it superbly as it did in the nineteenth century when America industrialized with little interference from government.
Only free minds and free markets are compatible.
December 5, 2007 5:35 PMRobert:
Society and governments fail from within, not from without. You severely limit the responsibilities of government to protect when you limit it to aggression from a foreign source. It has equal, and probably more directly has responsibility to protect us from those things within where we have little choice in selection and yet even lesser choice in informed decision making by the nature of the product offered.
The government you advocate comes from the "isics" and "oloyies" that are layed out by the thinkers, few of whom have done anything but "write the book". At some point the realities of actual living take place...yes the courts can and do take on a drug provider who violates law and in your world, adjuicates a complaint, but will that "moral settlement" save the life(s) already lost?
Is it not better to prohibit the behavior that led to the problem by actions of duely elected representatives of the group who are governed, rather than on a case by case basis within the court system. The success of our development in the 1800's with little interference by the government (IF one buys that as fact) led directly to the recognition that growth without level playing field controls in an expanding population was not the panacea of metaphysics, it was shear anarchy wherein the common individuals had little recourse, less choice, and the golden rule was "them with the gold ruled". Suggest you recall the robber barons whose business dealings made them a class of royalty, untouchable, with the attitude that, if you don't like what I offer, do without!
Philosophy and the political principals you propose are indeed wonderful, but they are not a government of absolute law, they are what I believe those who proposed them initially expected them to be; a mere basis for behavior, for conduct, a road map so to speak, but certainly not the road itself! It provides a pattern of thought and does not dictate a course of action. Reality of the moment creates the course of action and that course of action in a constitutional republic such as ours is developed by our elected representatives acting collectively in our behalf. If we do not agree, within the next regular cycle of elections of those representatives, we remove them. It seems as though it is workable, at least it has been for well over 200 years.
Metaphysics is the thoughts of men...good government is of LAWS not of MEN and survives with the consent of the governed.
December 6, 2007 9:14 AMI disagree with most of your statements.
To get an objective perspective on the ideas we have been discussing and disagreeing about, I suggest you read the brilliant new book by Dr. Andrew Bernstein, "The Capitalist Manifesto".
December 6, 2007 9:20 PMRobert: Is it not fortunate that we have a place to disagree? It seems that we can agree to disagree.
I read a very short review of Dr. Bernstein's book and an even shorter bio. of his professional experience. We have a PHD in philosphy who has taught at seven or eight colleges and universities, writes newpaper op-ed
columns and hosts radio talk shows. Impressive as that may seem in the realm of educated discourse, I am reminded of a bit of practical philosphy that has proven itself true over time... it may or may not apply to the good Dr., but:
"Those who CAN DO, those who CAN'T TEACH".
After spending six years in a university, I found that I learned twice more about the practicalities of the business/industrial world and have government interfaces with it, in my next six years. Just food for thought...I've enjoyed considering your points of view and their origins.
December 7, 2007 1:18 PMJohn, I disagree.
You slap dedicated, professional, highly skilled, great teachers (as in Dr. Bernstein's case) in the face with a bromide. Yes, there are bad teachers who do try to escape from the real world and embrace the world of the ivory tower who cripple those minds who sincerely want to learn. Dr. Bernstein is not in this category or class nor, are numerous other great teachers.
Teaching is doing work, and great teaching is essential for any learner as long as the ideas and skills being taught apply to grasping the facts of reality.
Instead of reading a review of Dr. Bernstein's Capitalist Manifesto, why not take the risk of actually reading what the man's arguments are for lassiez-faire capitalism?
You don't even have to pay for a copy. Just check it out from your local library. If you don't read Dr. Bernstein's Capitalist Manifesto, I can only conclude that you are evading the necessity of examining a brilliantly constructed argument based on the facts of reality and are avoiding critical independent thinking.
December 7, 2007 6:09 PMRobert:
Please tell me what work your Dr. has done that has directly created job opportunity for others and wealth for the community as a whole, not just himself and perhaps the universities where he has been employed {and there are several, seems he can't hold a job} and I'll lend credence to his thoughts. Other than that, they are just thoughts.
I have high regard for educators, just not much in general for the social science hacks. (And as an aside, science is a label they have chosen and has no basis in the scientific process.) A great number of fine educators move beyond "book learning" and provide opportunities for students at the 4-year level and in graduate studies to move into the real world and at minimum experience the difference in work and school. Many in these university-provided processes are fortunate enough to be involved in work that becomes part of successes that make an industry grow, provide jobs and tax income to government [so universities can function] and make the world truely a better place.
I see your good Dr.'s narrow view of the real world...if it is indeed as you have presented it in your comments, a result of the "publish or perish" atmosphere that the social sciences teachers live in. A pure capitalistic society would not survive in the real world with any greater success than did the pure collective and/or communisitic societies of China & the USSR. Our constitutional republic, democratic in nature, but not purely so, seems to be the better form of government for an educated population. Recent events clearly show it is not the best for every population mix. Self government and capitalism does not work where there is no capital and no wealth held by consumers and a basically uneducated population.
Your conclusion of my evading reading the book has nothing to do with the arguements of the author...it is based on your assessment of it as "brilliant and based on facts of reality"...but I do applaud the right of critical independent thinking...but that in itself does not make it correct. My not spending time reading it is based on your how it has affected your thought process as exemplified in your comments on Dec 4, 5:58PM...how totally
removed from the real world and the needs of society...quote "government has no right to force any legal and moral business to do anything".
One, WHO DECIDES WHAT IS MORAL? If there is no right to control any business can you imagine gun producers selling mentally disturbed and teenagers in an open fashion. Can you imagine drug manufacturers selling medications not clinically tested? Can you imagine being unable to determine if that which you by is domestic or foreign, having no recourse if it failed initally? What protection would workers harmed in the workplace have without compensation laws and the right to organize for their mutual benefit? What safety net would exist for those temporarily out of work? What protection would exist to prevent unjust firings?
These are just a few examples of protections to the governed by their government. All of these protections were FORCED in your world of thought. If this is what you derived from this "brilliantly constructed arguement", it frankly isn't worth my time; nor the time of anyone else who lives in the world of reality. Being respectful to you, I must assume it is what the book proposes...you're the one who read it and thought it correct enough to quote.
December 10, 2007 11:18 AMI think we are now living in an interesting times. Nice to hear that the Congress are making ways to improve fuel-economy standards most especially to car enthusiasts. Btw, how about the oil demands?
January 23, 2009 9:06 PM
