On Friday, the Environmental Protection Agency finally proposed a new set of regulations — known as Tier 3 Vehicle Standards. The rules would reduce the amount of sulfur present in gasoline before our cars burn it. It brings the rest of the country in line with the environmental standards that have regulated California’s automobile industry for years.

Cutting back on the use of sulfur in gasoline by two thirds will have indirect environmental and public health benefits. While sulfur dioxide is not itself a greenhouse gas, reducing the amount of sulfur in gasoline will increase the efficiency of catalytic converters, reducing emissions and gasoline consumption. (Video explanation of how catalytic converters pull pollutants out of engine exhaust before it hits the air.)

When catalytic converters aren’t doing their jobs well, then they are emitting more pollutants like smog, nitrogen oxides, volatile organic compounds, particulate matter, and carbon monoxide. As the EPA puts it:

“The proposed gasoline sulfur standard would make emission control systems more effective for both existing and new vehicles, and would enable more stringent vehicle emissions standards. Removing sulfur allows the vehicle’s catalyst to work more efficiently. Lower sulfur gasoline also facilitates the development of some lower-cost technologies to improve fuel economy and reduce greenhouse gas (GHG) emissions, which reduces gasoline consumption and saves consumers money.”

The proposed Tier 3 regulations go into effect in 2017, at the same time the auto-industry will have to be in compliance with the EPA’s newer, higher emissions standards.

Health advocates immediately applauded the new regulations as well. The American Lung Association issued a release applauding the health benefits of reducing the amount of smog-causing pollutants released by car emissions. These rules are expected to achieve the same environmental impact as removing some 33 million cars from the road.

The Obama administration also had a key ally in their push for stricter regulations: car manufacturers. For years, automakers had to navigate the disparity between California’s tougher requirements and the more relaxed federal laws, leading to costly changes in the way companies like Ford and General Motors built their cars that would be sold in the nation’s largest state.

It is also a significant victory given the strength of the opposition. Predictably, the oil and gas industry had their well-funded lobbyists urging the White House to at least delay the new standards, touting cost estimates that the industry warned would be passed down to the consumer at the pump. The EPA estimates that the new regulations will cost less than a penny per gallon, and add approximately $150 to the total price of a new car, or less than half of one percent of the average cost of a new vehicle.

The American Petroleum Institute also said that refiners would emit more carbon pollution in getting sulfur out of gasoline. The bottom line is that the EPA says methane and nitrogen oxide benefits from implementing the new rule outweigh any increases in refinery emissions. In fact, within a few decades the net greenhouse gas benefit will be a reduction equivalent to about two coal power plants.

The McLaren P1: 663 pounds of torque on a hybrid engine

Yesterday, EPA released a new report that showed major fuel efficiency gains in American vehicles.

EPA’s annual report that tracks the fuel economy of vehicles sold in the United States is signaling a significant 1.4 mile per gallon (mpg) increase for 2012 cars and trucks – along with a continued decrease in carbon pollution.

The expected 1.4 mpg improvement in 2012 is based on sales estimates provided to EPA by automakers. EPA’s projections show a reduction in carbon dioxide emissions to 374 grams per mile and an increase in average fuel economy to 23.8 mpg. If achieved, these would be among the largest annual improvements since EPA began reporting on fuel economy. These improvements would more than make up for a slight 0.2 mpg decrease in 2011 that resulted primarily from earthquake and tsunami-related disruptions to vehicle manufacturing in Japan. From 2007 to 2012, EPA estimates that CO2 emissions have decreased by 13 percent and fuel economy values have increased by 16 percent.

The report goes on to estimate that from 2007 to 2012, fuel economy increased 16 percent, with a 13 percent decline in carbon dioxide emissions. As Gina McCarthy put it, this saves money at the pump, reduces GhG emissions, and cleans the air.

We can expect the Obama Administration’s National Clean Car Program standards to double increase fuel economy by 2025, saving Americans $1.7 trillion dollars on gasoline. By the end of the program, this works out to $8,000 in savings per vehicle, and 2 million fewer barrels of oil every day.

Last year’s report only included data from vehicles power by gasoline or diesel, while this year’s report has a section on alternative fuels: electric, plug-in hybrid electric, and compressed natural gas. The report also includes corrected estimates following the probe into inflated fuel economy numbers from some automakers.

Some pertinent highlights from the executive summary:

CO2 emission rates and fuel economy values reflect a very favorable multi-year trend, beginning with model year (MY) 2005.

The U.S. personal vehicle market is diversifying, and consumers now have a much broader range of vehicle choices with respect to fuel economy/CO2 emissions performance and powertrain technology. The number of SUV, pickup, minivan, and van models that have combined EPA label values of 20 mpg or more have increased by 71%, from 38 in 2007 to 65 in 2012.

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After a difficult first year in 2011, during which Chevrolet sold a mere 7,671 Volts, sales of the vehicle shot up to a respectable 23,461 car sales for 2012 — driven largely by consumer demand reacting to high gas prices. According to the Washington Post (hat tip to Treehugger) that surge looks likely to continue: General Motors will be upping 2013′s production to 36,000 units.

Able to run on electrical or gasoline power, the Volt — along with other hybrids, electric vehicles, and fuel-efficient cars — has helped boost job growth in the automotive sector in the face of a sluggish economy. This happened despite a storm of right-wing contempt for fuel-efficient automobile technology over the last few years, which focused largely on the Volt as a symbol of President Obama’s (largely successful) attempts to give the American automotive industry a chance to retool itself and get back on its feet.

Since then, overall hybrid sales increased 50 percent in 2012 from the previous model year, sales of plug-in electric vehicles tripled, and GM itself captured 7 percent of the hybrid market — up 2 percent from the year before. And now the company is looking to bulk up its Volt production by 20 percent:

General Motors Co. is planning to build as many as 36,000 Chevrolet Volts and other plug-in hybrids for worldwide delivery this year, 20 percent more than in 2012, two people familiar with the effort said.

GM is planning to build 1,500 to 3,000 of the fuel- efficient vehicles a month, said the people, who didn’t want to be identified because the target isn’t public. GM sold about 30,000 Volt and similar Opel Ampera cars globally in 2012, said Jim Cain, a company spokesman, who declined to give a target for this year.

Chief Executive Officer Dan Akerson has struggled to compete against more successful alternative-power vehicles such as Toyota Motor Corp.’s Prius. The CEO originally touted the Volt’s gasoline-and-electric system as the technology of the future and forecast global Volt sales of 60,000 in 2012, before settling for half that amount.

The 36,000 target is “probably a doable number,” Jim Hall, principal of consultancy 2953 Analytics, said. “It will have a full calendar year in Europe” and GM will probably sell more this year now that the Volt is eligible for the car-pool lane in California, he said.

Admittedly, these numbers remain behind GM’s previous hoped-for targets. It still lags Toyota, which boosted its hybrid sales 70 percent in 2012 over the previous model year, dominating the market with 892,519 sales of its various Prius hybrid models worldwide. The Prius starts at $24,200 — and a subcompact Prius model sells for $19,080 — which undercuts GM’s $39,145 four-seat Volt.

So good news for electric and hybrid cars as a whole, and thus for fuel efficiency and the environment. But less so for the Volt itself.

Still, the Chevy Volt has several factors going in its favor. It was selected as 2011′s North American Car of the Year — with 92 percent of those surveyed telling Consumer Reports they would buy open again. Meanwhile, fuel standards are set to require 54.5 miles per gallon by 2025, technological moves on the horizon promise to make the car’s lithium ion battery technology lighter and more efficient, and there’s every reason to think high gas prices are here to stay.

Last week, Mitt Romney unveiled a plan for “energy independence” by 2020, a proposal analysts called unrealistic, in part because he would roll back the same initiatives responsible for lowering U.S. foreign oil consumption.

Today, the Obama Administration is set to announce new rules that boost fuel efficiency to 54.5 miles per gallon by 2025, which would save 3 million barrels of oil per day, 2 billion metric tons of carbon pollution, and create 570,000 jobs by 2030.

Romney not only opposes these new rules, but he would undo existing standards requiring new cars reach an average of 35.5 MPG by 2016, the first improvement the fuel economy standards stalled for two decades. Last fall, Romney said he “would get the EPA out of its effort to manage carbon dioxide emissions from automobiles and trucks.” This spring, Romney blasted fuel economy standards again:

ROMNEY: In my view, the industry got in trouble because the UAW asked for too much, management gave too much and made other mistakes, and the government CAFE [Corporate Average Fuel Economy] standards hurt domestic automakers and provided a benefit to some of the foreign automakers.

The truth is the complete reverse, since higher mileage standards have prompted U.S. automakers to become competitive with efficient foreign cars, while reducing U.S. oil consumption by 2 million barrels per day by 2025. Romney’s own plan for “energy independence” uses Citigroup research based off the assumption that “‘the United States will continue with strict fuel economy standards that will lower its oil demand.” We’ll get even closer to that goal with 54.5 MPG standards.

These standards have helped revive the auto industry. Automotive News reported that new fuel-efficient vehicles are the key drivers of the 2012 increase in sales:

“The changeover to high-mpg models, in all segments is the key market driver this year. Dealers say it has been the release valve on pent-up demand as fuel prices soared.”

In addition, the new standards reduced U.S. gasoline consumption this year. The Energy Information Administration cites the improvements in fuel efficiency as one of these reasons, noting the standards “help reduce gasoline consumption, as more efficient vehicles use less fuel for each mile driven.”

Both the existing and proposed improvements in fuel economy have the support of domestic and nearly all foreign auto companies, the United Auto Workers, states, and other stakeholders.

Romney once supported fuel efficiency, by adopting California standards setting limits on carbon pollution from vehicles as Massachusetts governor. In 2002, he proposed tax breaks for fuel efficient cars and an excise tax for gas-guzzlers.

A few years later, Romney blasted achievable 35 MPG by 2016 standards as an “anvil” weighing down the industry. But since the auto industry bridge loans, and measures like CAFE standards, automakers have bounced back, with fuel efficient cars as a major driver of the 2012 increase in sales. The industry has created 139,000 jobs since 2009, with its strongest sales in the last quarter.

But Romney’s administration would allow our domestic auto industry to once again fall behind its competitors in the rest of the world. It would leave drivers vulnerable to oil and gasoline price spikes. And it would increase our demand for foreign oil imports. The only winners would be big oil companies and members of the OPEC oil cartel.

by Daniel J. Weiss and Jackie Weidman

The Obama administration is about to promulgate fuel-economy and carbon-pollution limits for 2017 to 2025 model cars. These essential standards will reduce oil use, save families money from lower gasoline purchases, create jobs, and reduce emissions responsible for climate change.

Under these new standards U.S. companies will produce vehicles that employ modern fuel-saving technologies and ensure that their cars remain competitive with foreign models during future oil and gasoline price shocks. Recent events reemphasize the importance of reducing dependence on oil with its volatile price. Gasoline prices are rising again due to supply concerns related to sanctions on Iranian oil. In addition, the anticipation of economic growth that increases demand could enable speculators to bid up oil prices^.

The new fuel-economy standards are one of several actions the Obama administration has taken to revive and strengthen the U.S. auto industry. The most prominent, of course, was the bridge loans granted to General Motors and Chrysler in March 2009 that enabled them to remain in business long enough to restructure, begin to innovate again, and return back to profitability.

One of the bailout stipulations was that the companies had to develop aggressive plans to return to viability by reducing costs and investing in energy-efficient cars. Both companies agreed to move toward a more fuel-efficient fleet. In a March 2009 press statement President Barack Obama described the bailout as a restructuring process that would create “a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future.”

Because credit markets were frozen and the two companies were teetering on bankruptcy, no private lender would have come to their rescue. Rep. Fred Upton (R-MI) noted that:

There was no one that could have picked up those pieces other than the federal government.

In a just-published book, The New New Deal, Time magazine reporter Michael Grunwald concluded that the auto-assistance program saved GM and Chrysler and prevented these two companies from dragging down the rest of the U.S. industry, particularly suppliers. He determined that:

His [Obama’s] overhaul of the auto industry would become a stunning success, minimizing taxpayer losses, avoiding erasure of countless jobs, and restoring the Big Three [Ford, GM, and Chrysler] to profitability.

In addition to the successful bridge loans there are five other major Obama administration policies that helped the auto industry and the nation by creating jobs, reducing oil use, saving families money, and cutting pollution:

• Fuel-economy and carbon-pollution standards for 2012 to 2016 model cars sparked job growth in automobile manufacturing and increased automobile sales.
• Fuel-economy and carbon-pollution standards for 2017 to 2025 model cars will double their fuel economy and reduce oil use by 2 million barrels per day.
• The Recovery Act invested in fuel-efficient vehicle research and development to spur job growth and increase international competitiveness.
• Federal loans helped convert factories to the production of fuel-efficient vehicles.
• The “Cash for Clunkers” program increased vehicle efficiency and helped save the auto industry by jump starting demand during the depths of the Great Recession.

We review these below.

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by Mindy Lubber, via Ceres

Any day now, the Obama Administration will adopt the latest mileage targets for passenger cars and trucks sold in America: an average 54.5 miles per gallon (mpg) by the year 2025.

U.S. automakers are not just sitting around waiting for the official announcement, nor are they waiting 13 years to start delivering gas-sipping vehicles. Under the previously adopted 2012-2016 standards, they are already offering buyers a wider selection of more fuel-efficient vehicles than ever before.

Automakers and suppliers recognize that better fuel economy equals better sales, better profits and more jobs. Their recent hires and investments reflect this:

• Ford is accelerating development of its hybrid and electric vehicles by bringing the design and production of key components in-house, a $135 million investment.
• Ford has already doubled the size of its team working on forward-looking energy technologies – over 1,000 engineers and technicians – and plans to double size of that team again by 2015.
• Honda plans to hire 300 more workers next year at its Greensburg, Ind., plant, which is slated to start producing the Civic Hybrid.
• Volkswagen is adding a third shift at its Chattanooga, Tenn., plant, to boost production of its fuel-efficient Passat.
• Continental, a supplier of fuel-efficient turbo chargers to Ford’s 2014 Focus, is steadily pursuing electrification technologies and sees them as a “long-term investment.”

These represent just a handful of examples of how a shift toward efficiency and advanced technology is driving job creation, investment and innovation across the country.

Top consumer experts back the standards, saying not only that American drivers will benefit financially from more fuel-efficient cars, but also that they want and will buy these higher mileage cars, trucks and SUVs. When July sales numbers were released earlier this month, car company executives observed that consumers paid close attention to the fuel economy of vehicles they purchased. “Fuel economy continues to be a top consumer purchase driver across our lineup,” Ken Czubay, Ford’s head of sales and marketing in the U.S., told the New York Times.

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by Roland Hwang, via NRDC’s Switchboard

A review of the latest government jobs data reveals an indisputable fact: the U.S. auto industry is making a remarkable recovery. While not the only reason as our new report demonstrates, there is also little doubt that higher fuel efficiency is playing a critical role in the auto industry’s revitalization.

Since June 2009, when the auto industry hit bottom, the U.S. auto industry has grown by 236,600 jobs.  Manufacturing of motor vehicles and parts has grown by 165,100 jobs, or 26.4 percent, easily outpacing the recovery of the economy as a whole (see Chart 1 below).  Recovery is so strong in three largest auto states, Michigan, Ohio, and Indiana, that auto jobs directly accounts for an astounding 38 percent of the total jobs added in those states, or 66,300 jobs, since the auto industry hit bottom in June 2009 (see Chart 2 below).

Vehicle sales are up greatly year-over-year (see chart 3 below), and it is sales of fuel efficient vehicles that are driving overall sales growth as consumers rank fuel efficiency as their top priority in seeking a new vehicle.  In fact, the first half of 2012 set an all-time fuel efficiency record for new passenger vehicles sold in the U.S. at 23.8 mpg (see chart 4 below).

But unlike other periods of high fuel prices, consumers aren’t forced to purchase smaller vehicles to get higher fuel economy. Mainstream passenger sedans are getting to be more efficient than ever before as automakers compete to claim the “most efficient” title for that segment, and consumers and autoworkers win every time.

The fuel economy imperative is powering investments and job growth in the three largest auto states, Michigan, Ohio, and Indiana (see chart 4 below).  As mentioned above, 66,300 jobs have been added since the auto industry hit bottom in June 2009.

Automakers and suppliers are adding shifts to keep up with demand for the popular Chevy Cruze in Ohio and gearing up to build hot-selling hybrids in Indiana. Meanwhile, Michiganders are building Chevy Volts and Sonics while the state becomes a hotbed of electric vehicle and battery technology innovation.

In addition, there are many more indirect jobs the industry also supports that are creating opportunities for workers, companies and communities. Auto industry economists estimate that there are about four additional jobs created for each auto manufacturing job added, a calculation that is well-dramatized by a Bloomberg News report about how building the new fuel-efficient Dodge Dart is revitalizing a city in Illinois. When first, second and third shifts are added to produce vehicles or parts at a manufacturing plant, the benefits reverberate throughout the local community in jobs, local tax revenues, and indirect economic activity. Read more

Everyone’s looking for a solution to high gas prices. Well, here’s a novel concept: we could just use less fuel.

According to a new analysis from the Natural Resources Defense Council, increasing our average vehicle fleet efficiency to 54.5 miles per gallon would save consumers $68 billion per year after 2030 when new mileage standards have been fully met.

By bumping up the fuel efficiency of our nation’s vehicles to that target, NRDC estimates that the amount of oil saved per day in 2030 would equal today’s combined imports from Saudi Arabia and Iraq. The emissions reductions would also be substantial — cutting enough carbon dioxide to equal the shut-down of 76 coal-fired power plants.

Last July, the White House announced a plan to increase fuel efficiency from 21 mpg today to 54.5 mpg by 2025. The targets, which would spur new manufacturing activity in America’s auto sector, had strong support from labor unions and most major auto manufacturers. Over the life of the program, the cumulative savings would be more than a trillion and a half dollars, according to the Obama Administration.

To date, these fuel efficiency standards are one of the most credible policy solutions to addressing high gas prices.

The “drill baby drill” crowd falsely believes that more fossil fuel extraction is the answer. But as numerous analyses have pointed out, including one from the Associated Press, more domestic drilling simply does not correlate with lower prices at the pump.

Excessive speculation is also a key target for many lawmakers. While some economists say speculation in the oil markets has raised oil prices by 15% in the last decade, any short term efforts to crack down on the problem don’t really address the real issue: Investors believe that oil prices will continue to go up, largely because of booming global demand, finite supply, and continued conflict around the world.

Alternatives to petroleum like electric vehicles and advanced biofuels are extraordinarily important and will be a major piece of the solution. However, these two sectors are facing a number of financial, technical and consumer-demand challenges, making the extent of their role still uncertain.

Increasing fuel efficiency standards is a proven, tangible solution that can help us reduce petroleum use and help save consumers money. Although such targets may increase the cost of a vehicle by as much as $2,000, NRDC estimates that the savings in gas use would be as high as $6,400 — netting consumers roughly $4,400 over the lifetime of a vehicle.

And Americans say they’d make the investment. Last year, Consumer Reports issued a poll showing that 58% of Americans were willing to pay more up front for an increase in fuel efficiency. Around the same time last year, the Consumer Federation of America released a survey showing that three quarters of Americans supported an increase in fuel economy standards, with a 65% wanting aggressive targets of 60 mpg by 2025.

With manufacturers, labor unions, and consumers all throwing their support behind fuel efficiency, this should be a policy solution that our nation’s policymakers should be able to agree on.