As the CEOs of Detroit’s Big Three automakers pleaded for a $25 billion bailout from Congress this week, conservatives have been looking for an easy culprit to blame for the auto industry’s seeming collapse. First it was the unions. Now conservatives have turned their attention to the modest fuel economy (CAFE) standards — fleetwide average of 35 miles per gallon by 2020 — imposed in last year’s Energy Independence and Security Act. Last night on Fox News, former Massachusetts governor Mitt Romney echoed other conservatives in pointing the finger at the fuel economy changes:
— MITT ROMNEY: Well, government did [cause a lot of this]. There’s no question but that the CAFE standards have put an unusual burden on the domestic automobile manufacturers. And our energy policies as a country continue to put burdens on domestic manufacturers. That’s just — that’s reality. [11/19/08]
— WILLIAM KRISTOL: Well, one problem with the auto industry is we have been telling them how to operate an awful lot, you know, in terms of CAFE standards and other things, probably which should not have been most — may have been the most — not the most intelligent way to help that industry. [11/16/08]
— SEAN HANNITY: They [the government] — you know, between the unions, between trade policy, safety standards, CAFE standards, you know, economy, fuel economy standards, they’re forcing these auto companies to be in a position where they’re not as competitive. [11/14/08]
Last year’s stonewalling attempts by the auto industry notwithstanding, improving fuel economy is not difficult for the Big Three. As the Sierra Club explained in 2006, “The technology exists today to make all new vehicles average 40 miles per gallon within ten years.” A 2002 report by the Board on Energy and Environmental Systems of the National Research Council found that technologies existed then that “would significantly reduce fuel consumption within 15 years” — technologies that manufacturers were “already offering or introducing” in overseas markets.
What’s more, those existing technologies would hardly bankrupt the auto industry. NPR reported that technologies to raise fuel-efficiency “to around 33 mpg across the fleet pay for themselves within three to four years.” Indeed, Tom Cole of the Center for Automotive Research, said that with only about $1,000 worth of changes, “a conventional, gas-powered car could go 25 percent farther on a single gallon of gas.” The Union of Concerned Scientists designed its own highly efficient SUV comparable to the Ford Explorer that doubled its fuel economy (from 17 mpg to 30 mpg). The lifetime fuel savings paid back the additional technology cost of $2,560 in less than three years.
The auto industry’s problems have far more to do with the lack of universal health care in America than they do with fuel economy requirements. For General Motors, health care costs add $1,525 to the price of every car that leaves the lot; the company estimates that it spent $5.2 billion on health care benefits in 2004, more than it paid for steel.