Snap Fact #266 - Obama Administration to Finalize New 54.5 Gasoline Mileage Standard; Romney Vows to Rescind the Standard if Elected President!

Post date: Aug 04, 2012 10:33:58 PM

Snap Fact #266

Obama Administration to Finalize New 54.5 Gasoline Mileage Standard; Romney Vows to Rescind the Standard if Elected President!

New fuel efficiency (gasoline mileage) standards of 54.5 miles per gallon are set to be finalized by the Obama administration this summer with full non-partisan support. The new standards were recently sent to the Office of Management and Budget for final review. The new gas mileage standard is built on gas-mileage boosts mandated by the Bush administration. 

The history since then has been lax enforcement. Finally "our addiction" to oil is now being addressed in earnest by the Obama Administration. The standards will require a 5 percent annual increase in car fuel economy from the 2017 model year through the 2025 model year, starting with the previous 35.5 mpg target for 2016 and rising to the ultimate goal of 54.5 MPGs.

The administration’s focused mission is cutting the nation’s dependence on oil. It is reckoned that this program, over its life is expected to save an estimated 12 billion barrels of oil. That amounts to nearly four years’ worth of consumption by light-duty vehicles at current levels. 

The impact for consumers is that the program should save an estimated $1.7 trillion dollars in real fuel costs over the life of their vehicles. By 2025, the standards are projected to save families an estimated $8,200 in fuel savings over the lifetime of a new vehicle, compared to vehicles in the 2010 model year. While most vehicles will have to meet the 54.5 mpg standard by 2025, full-sized pickups and some SUVs would be exempt from the 2017 model year through the 2019 model year beyond which they will get their own standard. The reason is that the commercial consumers that purchase such vehicles require their strength, durability and towing capacity.

When President Obama announced plans for further mileage improvements, auto executives stood with him in support. The 54.5 mpg standard has been endorsed by a wide slice of society, including the State of California, unions --- e.g. the United Auto Workers (UAW), national security leaders and consumer groups, business organizations, public health advocates, national environmental organizations, and institutional investors.

In the deal that auto executives struck with the Obama Administration as they embraced the new fuel-efficiency standards, auto makers would be able to build uniform engines for the country, rather than different engines for California and 13 other states that have opted to follow California's strict fuel-efficiency standard. Uniformity in engines would save the auto industry money. Automakers know that this goal is also good for business; otherwise, they wouldn’t have signed on. They know that better gas mileage drives sales, especially in these times of high and volatile prices at the pump. Improving fuel efficiency is also an essential part of reducing our nation’s dependence on foreign oil, since about two-thirds of imported oil goes to transportation. The 54.5 mpg standard would save us 2.2 million barrels of oil every day by 2025 — half of what we import from OPEC daily. 

Presumptive GOP Candidate Willard Mitt Romney has back-tracked on a statement in a 2008 CNN interview that higher fuel-economy standards and hybrid cars will help reduce oil dependence. In a February 2012 radio interview, Romney said that higher fuel-economy standards are “disadvantageous for domestic manufacturers.” Note that this is the same Mitt Romney who had the good judgment to recommend that the Auto Companies to go belly up.

Poll after poll shows that Americans want vehicles that go farther on a gallon of gas. Kelley Blue Book’s latest consumer survey found that 66 percent of people in the market for a new car say gas mileage is a key factor in their decision of what to buy. Last year American expenditures on gasoline set a record, averaging $2850 per car. For many drivers, the costs of gasoline over the life a vehicle exceeds the cost of the car itself. With this in mind, why would Governor Romney want to rescind the 54.5 gas mileage standard if elected? 

This stated Romney policy flies in the face of populist logic. Just about everyone agrees that gas price should be held in check or reduced – even Newt Gingrich. What purpose would it serve to fight for this obviously losing position? Could it be because his campaign is running against anything done or desired by the Obama administration? Even putting the economics aside, doesn't Romney, and his handlers, understand that burning less oil also means less pollution, which means a healthier population, lower medical costs and fewer workdays and school days lost?