Muckraker: Grist on Politics

Amid a flurry of votes on energy issues in the House today, the Select Committee on Energy Independence and Global Warming held a hearing on the role of automobile fuel economy as gas prices continue to increase.

“Because 70 percent of oil goes into transportation, any solutions to the oil crisis must focus on the transportation sector,” said Select Committee Chair Ed Markey (D-Mass.).

Tyler Duvall, the assistant secretary for policy at the Department of Transportation, was the first witness, testifying on behalf of the Bush administration on fuel economy standards. The 2007 energy bill called for an increase in CAFE standards to at least 35 miles per gallon by 2020. The bill authorized Duvall’s agency, in conjunction with the EPA, to set attribute-based standards for cars that meet or exceed the 35-mile-per-gallon baseline.

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The agencies conducted cost-benefit analyses that would be used to guide the fuel economy increases, and examined what’s economically feasible when it comes to the CAFE standards. The DOT’s recently released recommendations call for a 4.5 percent increase in fuel economy each year over the five-year period leading up to 2015.

Duvall argued that those standards are “tough, but achievable and necessary.” He said they will require $50 billion in investments from automakers, but they’ll save 55 billion gallons of fuel by 2015 and 521 million metric tonnes of carbon dioxide emissions over the life of an automobile.

But Markey and other members of the committee protested that the statistics used in their analysis were flawed. The analysis is based on a projection of $2.42-per-gallon gasoline in 2016, which is the mid-level prediction from the Energy Information Administration. Gas is currently topping $4.00, argued Markey, so it makes little sense to base the standards on low-end figures.

“These numbers are nothing short of absurd,” said Markey. Instead, he argued that their projections should be based on the high-end EIA figure, which puts gas cost at $3.14 in 2016. EIA administrator Guy Caruso admitted at a hearing on oil prices last week that the higher-end figures are probably more realistic.

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“There’s a lot of uncertainty, and we use what we think is the best information available now,” argued Duvall.

In response, Markey and 44 other representatives sent a letter to Department of Transportation Secretary Mary Peters today urging her agency to base their final fuel economy regulations on these higher end figures.

The pending fuel economy regulations from the Bush administration are already controversial — and they haven’t even been released yet. The White House is expected to release their Advance Notice of Proposed Rulemaking sometime this week. It’s supposed to be based on the EPA’s response to the Supreme Court ruling that greenhouse gases pose a threat to public health and the environment and therefore should be regulated. But the White House has apparently ignored the EPA’s recommendations.

According to reports, EPA officials say that the agency’s experts concluded that the country could raise automobile fuel efficiency standards to 37.7 miles per gallon by 2018 without significant economic hardship. But according to those officials, over the past week the White House has put pressure on the agency to eliminate large sections of their analysis that support stronger regulation, including their finding that regulation of automobile emissions could actually produce $500 billion to $2 trillion in economic benefits over the next 32 years.

A second panel today featured experts discussing the possibilities for electric cars as a means of weaning the country off oil. Panelist Dominique Thormann, senior vice president of Nissan North America, testified that his company plans to create a fully electric vehicle by 2010, which would be ready for mass-market sales by 2012.

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