Businessweek Archives

Why Fuel Efficiency Is Conking Out On The Hill


Top of the News

WHY FUEL EFFICIENCY IS CONKING OUT ON THE HILL

When President Bush unveiled his national energy strategy in February, environmentalists and Democrats blasted the White House for focusing on oil production and virtually ignoring energy conservation. Even sympathetic Republicans acknowledged that without more emphasis on energy savings, the President's proposals stood little chance of survival on Capitol Hill.

But the bipartisan energy legislation now wending its way through the Senate reflects little of that noble concern. Despite the war in the Persian Gulf, fought in large part to defend oil supplies, it appears that Washington will do precious little to encourage U. S. consumers to conserve energy.

The measure emerging from the Senate Energy Committee is expected to contain provisions to boost energy production, including a faster licensing process for nuclear power plants, streamlined approvals for natural gas pipelines, and opening Alaska's Arctic National Wildlife Refuge to oil and gas exploration. But when the debate turned to increasing the fuel efficiency of cars, lawmakers balked. The committee, after squabbling over how high to set gas-mileage standards, decided to set none at all. Instead, they'll leave it up to Transportation Secretary Samuel K. Skinner to decide--and he opposes current calls to tighten fuel economy standards sharply.

Why the big fizzle? A key reason is the drive Detroit and foreign carmakers launched to counter efforts to raise the so-called corporate average fuel economy (CAFE) standards, which now require auto makers' fleets to average 27.5 miles per gallon. The campaign, which enlisted farmers, recreational-vehicle users, and senior citizens, helped squelch the move within the committee to boost standards. But the absence of conservation measures could doom the energy legislation. "Without CAFE numbers, we can't pass the bill on the Senate floor," says Energy Committee Chairman J. Bennett Johnston (D-La.). Separate legislation sponsored by Senator Richard H. Bryan (D-Nev.), which would increase fuel efficiency by 40% by 2001, to around 40 mpg, may yet squeak by the Senate. But it faces trouble in the House and is likely to be vetoed by President Bush.

LAND YACHTS. As officials in Washington spin their wheels over energy legislation, Americans are becoming less energy-efficient when they hit the road, where passenger vehicles account for a quarter of all oil consumption. In the past three years, average fuel efficiency has declined 4%, according to the Environmental Protection Agency. That's mostly because consumers find gas prices less and less fearsome. With the inflation-adjusted price of unleaded gas only a bit more than half what it was a decade ago, they're buying larger, heavier highway cruisers with more horsepower. The average weight of new cars has risen 6%, and horsepower has jumped 10% since 1988, the EPA says. Laments Bryan: "We're moving away from the goal rather than toward it."

Detroit argues that it can't meet stiffer mileage targets. It already has switched to radial tires, improved fuel-management systems, and built lighter, more aerodynamic cars. These measures helped boost the General Motors Corp. fleet's mileage from 12 mpg in 1974 to 27.1 mpg in 1990. But now the company says it has run out of easy ways to yield big efficiency increases with existing technology. "In Europe, the price of gas is $3 or $4 a gallon," notes William H. Noack, GM's director of communications in Washington. "If we had the technology, don't you think we would have it in use over there?"

The auto industry and its supporters also have raised the specter of more fatalities if cars get much smaller to meet tough new standards. They say that smaller cars are far more dangerous in collisions. Indeed, Skinner once dubbed the Bryan bill "the national highway death act."

DIFFERENT STROKES. The industry's critics aren't convinced, though. They say they heard the same litany when CAFE standards were introduced in 1975. Despite much grousing from Detroit, fuel efficiency has doubled since then. And without startling new technology, GM's tiny Geo Metro gets more than 50 mpg, while Honda Motor Corp. is planning to come out with a 1992 model that would exceed 60 mpg.

Technologies now under development, such as more sophisticated two-stroke engines, which need less fuel to do the same job as current four-stroke models, may eventually allow substantial efficiency gains in normal-size cars. The congressional Office of Technology Assessment concluded in a recent study that the Bryan bill's mileage standards could be met without shrinking cars significantly, but doing so by 2001 would cause a lot of disruption to the auto industry.

Carmakers seem to have dodged the bullet this time. But there's always the chance of another spike in oil prices. That virtually assures another run at Detroit and its foreign rivals not too far down the road. So maybe they had best keep their lobbying rigs warmed up.Peter Hong in Washington, with James B. Treece in Detroit


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus