Bring Consumers Into the Energy Equation

By Warren Brown
Sunday, July 1, 2007

BOSTON

Congress thinks we're stupid. It wants us to believe we can solve a two-part problem by working only one part of the equation. It thinks we are too self-centered, too blind to accept the reality that we cannot continue having at yesterday's prices a diminishing, valuable commodity that increasingly is demanded by today's world.

That is why the Senate recently passed what many in the media called a "tough" law requiring automobile companies to improve the overall, new-fleet fuel economy average of their vehicles to 35 miles per gallon by 2020.

That is why the House is rushing to approve a bill of its own before we plunge full force into campaigning for the 2008 elections.

That is why both bills are absent anything -- zilch, zip, nada, nothing -- requiring American consumers to pay one cent more for the fuel they use, one cent more for the high horsepower they demand, one cent more for the avoidable urban traffic congestion that wastes tens of thousands of gallons of gasoline every day.

How many miles per gallon do we get from our cars and trucks when our engines are running, but our vehicles are going nowhere? We get zero miles per gallon. But neither the Senate nor the House bill says anything, proposes to do anything about that egregious, profligate waste.

Both supposedly deliberative bodies want us to believe they are offering comprehensive energy conservation proposals that will reduce our dependence on foreign oil, but that simultaneously will allow Americans to continue using all of the motor petroleum they want at the lowest prices in the developed world.

It makes no sense. It is a ruse. Congress, the oil companies, the automobile manufacturers and their many dealers all know it is a ruse. But all of them, with Congress at the lead, believe it is "not politically feasible" to tell us the truth. To wit: We will never, ever reduce our overall consumption of motor fossil fuels or our dependence on foreign oil simply by ratcheting up the number of miles our vehicles get per unit of oil used. That approach works only one side of the equation. The other side, the consuming side, must be addressed if we are to make any progress in weaning ourselves from oil.

In saying that all of the above-cited parties know that the lawmakers' conveniently one-sided approach to energy conservation is a ruse and that they believe it is "not politically feasible" to ask American consumers to pay or do anything more to save fuel, I do not mean to imply that all agree with that phony energy policy. There are several notable exceptions, among them Michael J. Jackson, the chief executive of AutoNation, the largest automobile retailing group in the United States; and former vice president Al Gore.

Both Jackson and Gore have called for carbon taxes, the functional equivalent of increasing federal gasoline taxes, to go along with mandated increases in federal corporate average fuel economy (CAFE) standards. The reason is simple. All anyone has to do is read CAFE language to figure it out.

CAFE applies to the average fuel economy of all new vehicles sold in the United States in a given year. Underline the word "sold." It implies that someone has to buy. It implies the existence of at least a putatively free market. It also implies something else: A given automobile company could make hundreds of thousands of cars that meet the proposed new-fleet average (for cars and light trucks) of 35 miles per gallon -- up from today's standard of 27.5 miles per gallon for cars and 22.2 miles per gallon for light trucks. But if consumers choose not to buy those higher-mileage vehicles, if they choose instead to purchase more consumptive V-6, V-8, V-10 and (for the richest among us) V-12 engines, the company selling those guzzlers would remain a CAFE outlaw.

Essentially, that is what has happened in the United States since the first CAFE law passed in 1975. Technical fuel economy has increased tremendously. Any V-8 engine manufactured today gets substantially better mileage than one produced in 1975. A big, diesel-powered Ford F250 today goes farther on a tank of fuel than an equivalent truck produced 32 years ago.

CAFE has, indeed, fixed the industrial side of the equation. But by completely ignoring the consumer side, it has done something else. It substantially has reduced the cost of driving. Thus, we have increased technical fuel efficiency plus the cheapest gasoline in the developed world yielding increased vehicle miles driven yielding increased consumer demand for more horsepower, comfort and safety to drive those vehicles longer distances yielding increased overall national fuel consumption.

The 2007 edition of "Gasoline and the American People," produced by Cambridge Energy Research Associates, puts it this way: "Americans have been driving farther -- 40 percent more than 25 years ago -- and using more gasoline in bigger, more powerful cars and other light-duty vehicles."

The only thing that has curbed America's thirst for more and more fuel is higher gasoline prices, according to the CERA report. From 1990 to 2004, the growth in America's demand for gasoline proceeded at an annual rate of 1.6 percent, the report says. But it fell to an annual growth rate of 0.3 percent when gasoline prices spiked above $3 per gallon in 1975 and grew slowly to 1 percent in 2006 when gasoline prices began to fall.

I have spoken to automotive executives representing every global car company. All of them, including those from fuel-economy leader Honda, privately say that higher fuel taxes would help to protect their multibillion-dollar investments in more fuel-efficient technologies. They won't say the same thing publicly for the same reason Congress won't do the right thing and work both sides of the energy conservation equation. "It is not politically feasible," they say.

Sitting here in the cradle of American liberty, that strikes me as a pathetically odd and morally inept excuse.

Was it politically feasible for us to declare our independence from Britain?

Was it politically feasible to end American slavery?

Was it politically feasible to enfranchise the American woman?

When did we become a nation wedded to doing only what is politically feasible?

And why is it now more politically feasible to send our sons and daughters, brothers and sisters, husband and wives to foreign soil to fight and die for oil than it is for us to place higher taxes on the stuff at home to help reduce our wanton use of it?

It's time to tell Congress that we're not stupid, not hopelessly blind or irrevocably self-centered. It's time to demand that Congress give us a real energy policy, one that addresses industry and consumers, one that demands we do what we've historically done in times of crises -- work together, sacrifice together to solve the problem.