Senate CAFE Legislative Proposals — June 2007
Two proposals for increasing automakers' corporate average fuel
economy (CAFE) requirements are currently under discussion in the
Senate. These proposals differ substantially in the oil savings
reductions they offer. The oil savings potential of each proposal
relative to a business-as-usual baseline is shown in Table 1 below.
Table 1. Annual Oil Savings Potential of Proposed Legislation
(million barrels per day)
| |
2015
|
2020
|
2025
|
2030
|
| Senate
Energy Bill |
0
– 0.3
|
0
– 1.1
|
0
– 2.4
|
0
– 3.8
|
| Levin
amendment |
-0.02
|
0.3
|
0.9
|
1.5
|
Legislative Summaries
- The underlying energy bill (S.AMDT.1502 to H.R.6) calls for
a target fuel economy standard of 35 MPG by 2020, with a 4% per
year increase in subsequent years. In this bill, the setting of
actual standards is left to the discretion of the Department of
Transportation for all years, and thus oil savings associated
with this policy are uncertain. The bill includes mandates for
auto manufacturers to greatly increase their production of flexible-fuel
vehicles.
- Senators Levin, Pryor, Bond, Voinovich, Stabenow and McCaskill
have offered an amendment that calls for a passenger car target
of 36 MPG by 2022 and light truck target of 30 MPG by 2025, with
lower fuel economy targets in certain early years. This amendment
does not allow for "off-ramps," ensuring that some savings
will be achieved, yet the savings from the Levin proposal are
much lower than those of the Senate energy bill; as Figure 1 shows,
the difference in potential savings reaches 2.3 million barrels
per day in 2030.
The amendment also extends the "flex-fuel vehicle loophole"
in current CAFE law through 2020. This loophole allows manufacturers
to take credit toward fuel economy requirements for manufacturing
vehicles that can run on ethanol, but rarely do. This, in effect,
allows manufacturers to meet a lower fuel economy standard. The
Levin amendment's extension of the flex-fuel vehicle loophole
significantly lowers its oil savings potential. In conjunction
with the weaker targets and timeline, this proposal offers less
than half of the savings potential offered by the Senate energy
bill.
Figure 1.
Projected U.S. Oil Consumption Associated with Senate CAFE Proposals
Note:
Dotted lines reflect maximum oil savings; actual savings could be
considerably smaller.
The Levin amendment also mandates aggressive production of "advanced
vehicle technologies," a category that it defines as hybrids,
diesels, fuel cell vehicles, electric vehicles, and flex-fuel vehicles.
Because flex-fuel vehicles are by far the lowest-cost of these options
to automakers, this policy in effect allows automakers to take fuel
economy credits for technologies whose production is mandated.
For more information
contact:
Therese Langer, Program Director
Shruti Vaidyanathan, Research Assistant
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