The road to more fuel-efficient cars is the one less taken by consumers AND automakers

By Peter Whoriskey
Washington Post Staff Writer
Thursday, September 30, 2010; AA06

As the U.S. seeks to reduce oil consumption, not all the news is bad: For years, automakers have been selling Americans cars with ever more efficient engines. In fact, a car purchased today is able to extract nearly twice as much power from a gallon of gas as its counterpart did 25 years ago.

The trouble is that over the same period, cars have become bigger and more powerful. As a result, the average mileage of the cars and light trucks on the road in the United States has barely budged since 1985.

"Automakers have been improving efficiency for years," said John DeCicco, a University of Michigan senior lecturer who studies the issue. "But those gains haven't gone into fuel economy. They've gone into giving consumers cars with greater size and muscle."

The next few weeks will mark the formal beginning of the debate over the next round of federal fuel economy standards. And as the negotiations among environmentalists, bureaucrats and the automakers get underway, a fundamental question over how best to wean the nation's drivers from oil dependency will dominate the discussion: Does the responsibility for reducing oil consumption lie with the automakers -- or with their customers, the American public?

Although the efficiency standards are imposed on automakers who are required to produce vehicles that achieve a certain level of miles per gallon, they must in turn sell them to a public often more focused on size and design than the allure of fuel economy.

"Right now, my customers will give up 5 mpg in fuel economy for a better cup holder," said Mike Jackson, the chief executive of AutoNation, the largest auto retailer in the country.

Rather than strengthening the fuel economy standards, he advocates a tax on gasoline that would make his customers value fuel economy. Because gas tax proposals have gathered only scant political support, however, for now many environmental groups and others pushing for energy security pin their hopes on further increases in fuel economy requirements.

The most recent round of standards, which were announced earlier this year, set levels expected to achieve an average of about 34 mpg by 2016 for all new cars and light trucks through annual improvements of about 4 percent.

The set of requirements now being discussed would cover new cars from 2016 through 2025, and already some environmental groups have called for a goal of 60 mpg for new cars and light trucks.

"We believe that with a mix of hybrids, electric vehicles and conventional internal combustion engines that that number is achievable," said Brendan Bell, vehicles lobbyist for the Union of Concerned Scientists, which proposed the goal with other environmental organizations.

But like some others in the industry, Jackson said that the idea of achieving 60 mpg is "detached from reality" and that one of the reasons is consumers won't tolerate the sacrifices in design and the additional costs to reach that standard.

He likened selling fuel efficient cars to selling broccoli when what everyone wants to eat is donuts.

"Only 5 percent of customers are health conscious, so the broccoli doesn't really sell," Jackson said. "Even if the government tells me that I am mandated to sell 50 percent broccoli, people aren't going to buy broccoli just because I tell them it's good for them."

Alan Crane, who has been project director for National Research Council reports on fuel economy, predicts a similar public reaction if a 60 mpg standard is set: "Technically, yes, you could come up with a fleet that achieves those standards, but I think you'd have a consumer revolt on your hands."

One of the key issues regarding any new standards is how much the technology will raise car prices. The fuel economy standards announced this year are estimated to add about $950 to the cost of a car in 2016, when they are fully implemented, but save about $4,000 in fuel costs over the life of the car, according to EPA estimates.

DeCicco, citing work done by engineers at M.I.T., suggests that the standards be set at 52 mpg. He estimates that will raise costs by $2,000. He noted that in August, Hyundai announced voluntarily that by 2025 its cars will average 50 mpg.

"If they are balancing the public's needs with the industry's needs, regulators should be pushing the industry a little bit," DeCicco said.

Gloria Bergquist, a vice president at Auto Alliance, the industry trade association, said that the organization is not opposed to ratcheting up the standards, but it is calling for greater study into what is achievable. In the past, automakers have been forced to sell small cars at a loss in order to meet their fuel economy goals.

"We felt we were caught between what the government was telling us to do and what the consumers wanted," she said.

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