The Problem with Raising CAFE
BY JOHN McELROY Ward's AutoWorld, Mar 1, 2002 12:00 PM

I know this isn't going to make any sense at all, so I'm going to say it twice. Raising CAFE is not going to reduce the U.S.'s dependence on oil. That's right, forcing auto makers to build more fuel-efficient cars is not going to reduce the overall amount of fuel Americans use.

Why am I so sure? Because they already tried it, and it didn't work.

Back in 1975 the U.S. Congress gave automakers 10 years to double the corporate average fuel economy of their passenger car fleets to 27.5 mpg (8.5L/100 km) from what was then about 13 mpg (18L/100 km). They did it. But in the meantime we've seen the nation's appetite for gasoline for passenger cars increase by 10 billion gallons (38 billion L) a year. Ten billion a year!

The problem, of course, is that the population of the country continued to increase. Back then there were 216 million Americans. Today there are 286 million.

And the number of vehicles increased with the population. Back then there were 133 million vehicles on the nation's roads. Today there are 215 million.

And the number of miles these people drive increased, too. Back then they drove an average of 10,000 miles (16,000 km) a year. Today it's 15,000 (24,000 km).

Why are people driving more? There are a couple of reasons, but the key one is that with better fuel economy, it's cheaper to drive a car today than it was 25 years ago. That's right, the more fuel efficient you make a car, the lower the operating cost becomes, and the more you encourage people to drive their cars. You want to encourage more people to buy sport/utility vehicles? Make them more fuel efficient!

A key flaw in the way we look at fuel economy is that it doesn't measure consumption, it measures mileage. It's such an American way of looking at things. We want to know, “How far can I go? How many miles can I travel on a gallon of fuel?” But what we're trying to achieve with CAFE is a reduction in consumption, not an increase in how far we can travel. That's why Europe measures its cars by how many liters they consume for every 100 km traveled. They want to know, “How much am I going to use?”

This is not just an interesting cultural comparison, nor an argument in semantics. The proposal now gathering bipartisan support in Congress is to raise CAFE to 37 mpg (6.4L/100 km) by 2014, a 34.5% increase from today's 27.5 mpg. But let's look at some numbers. The typical car today consumes 545 gallons of gasoline a year. It will consume 405 gallons if the new CAFE proposal goes through. That's a 25% improvement. And while that's big, it's not as big as the miles-per-gallon measurement would lead you to expect.

Plus, that assumes people will not drive more. If the average miles driven per year continues to increase at the same rate as it has in the last 25 years, it will completely erase the proposed increase in CAFE.

The challenge for the domestic auto industry is that foreign companies such as Toyota and Honda are telling Congress, “No problem, go ahead and raise CAFE, we'll happily meet it.” And they will. They already have the dinky cars and trucks in Japan that would be needed to achieve that kind of average.

And remember, it's an average. To get to a 37 mpg CAFE, you're going to need vehicles that get much, much higher fuel economy than that. Toyota and Honda would love to see GM, Ford and Chrysler forced out of their market strongholds and have to spend tens of billions of dollars to tool up new lines of small cars and trucks. Don't believe for a second that the two major Japanese auto makers are supporting new CAFE legislation for altruistic or environmental reasons. A 37-mpg CAFE will virtually hand a huge chunk of the American market over to them.

There are plenty of concerned scientists and activists running around saying that we already have the technology needed to boost fuel economy to 37 mpg. And they claim it will only add about $1,000 to the price of today's cars. Don't you believe it. If that technology was so affordable it already would be in production in Japan and Europe, where gasoline costs $4 to $5 a gallon and the payback would be virtually immediate.

And don't talk to me about hybrid electric vehicles, either. Sales of the Toyota Prius and Honda Insight have collapsed in Japan. So much for that “affordable” technology.

So that brings me to the only sure-fire method to get people to burn less fuel. Tax it. Tax it heavily. That's why they drive smaller cars fewer miles in the rest of the world.

But you will never, ever hear an American politician call for higher fuel taxes. It's the kiss of death for anyone running for office. And they know it. And that's why they'll spend all their blathering on a new CAFE program that still will see the nation burning more fuel every year.

John McElroy is editorial director of Blue Sky Productions and producer of “Autoline Detroit” for WTVS-Channel 56, Detroit.