Corporate CEOs want tougher fuel economy standards

The Energy Security Leadership Council is a group of corporate executives and military leaders committed to helping the United States reduce its dependence on foreign sources of energy. On Wednesday they called on the Congress and White House to start raising fuel economy standards by four percent per year. The current 27.5 mpg corporate average fuel economy standard has been stagnant for almost two decades. Chief executives of companies such as Fedex, UPS and Dow among others along with several retired military officers all want our dependence on oil to end.

They want standards for cars similar to the ones implemented last year for trucks that make that would set thresholds based on vehicle size, rather than a minimum that all vehicles had to meet. Although these business leaders have a clear business incentive for supporting these standards, since increasing demand for oil drives up the price and raises their costs, this approach is of dubious value. Unless the targets for larger vehicles are set at a high enough level that real improvements are actually forced, vehicles might just grow into larger size classes where they can meet the requirements.

There is also no guarantee that consumers will actually buy the smaller, more efficient vehicles and the net effect of this kind of rule might be negligible. The only thing that has ever actually moved more drivers into more efficient vehicles is higher fuel prices. The current approach, where all vehicles have to meet a standard, forces all vehicles to become more efficient. One other thing that absolutely must be changed is to eliminate the artificial distinction between domestic and import fleets. The only thing this did is force car-makers to play games with parts content, like Ford using more imported parts in the Crown Victoria, so that it would be classed as an import and get averaged with the Ford Festiva.

[Source: Detroit Free Press]