After the National Highway Traffic Safety Administration announced its proposed new Corporate Average Fuel Economy rules last spring there was a public comment period to be followed by revisions before finalizing the regulations. There were certainly some negative comments related to the footprint-based standards but the other aspect that came in for criticism was the cost benefit analysis. In a seemingly surprising move, even the Environmental Protection Agency filed a comment opposing the draft regulation. The energy bill that was enacted last December required NHTSA to set the standards based in part on what was technically and financially feasible. NHTSA set the mileage requirements based on the assumption that gasoline would cost an average of $2.42 in 2016. Given where gas prices are today that seems like a serious under-estimation. Even the EPA that declined to approve a waiver for California's CO2 regulations felt that NHTSA used too low a price estimate in its analysis. If a higher price was assumed it would make a higher standard more feasible.

[Source: Detroit News]

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