When Transportation Secretary Mary Peters announced the first draft of new fuel economy standards last month, the increases actually appeared to exceed those mandated by recent energy bill. Of course a closer inspection of the rules indicated that they weren't all they appeared to be. Because the rules mandated fuel economy based on the footprint of an individual vehicle, there existed an incentive for carmakers to stretch the wheelbase and track of vehicles so that they wouldn't have to achieve the same efficiency as a smaller vehicle. However, the reality of the situation at gas pumps around the nation means that corporate average fuel economy standards are quickly becoming irrelevant. Although manufacturers have long wanted higher fuel prices to spur demand for more efficient vehicles, politicians have been loathe to do anything that electoral opponents could hold against them at the polls.
With gasoline now at $4/gallon (an all-time high for the US, but still ranked only 111th in the world) consumers are making up their own minds. NHTSA did its calculations for the new rules with the assumption that gas would be $2.26/gallon in 2015. This, of course, is consistent with the quality of most of the assumptions made by the current administration and totally unrealistic. At least in this case, the result of drivers moving to smaller more efficient vehicles will likely be positive. At any rate, Peters has indicated that the new rules will be re-evaluated and may be toughened. Perhaps they should just forget gas tax holidays and other silliness and just let the market take its course this time.

[Source: Detroit News]

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