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Environmental Health Perspectives • VOLUME 110 | NUMBER 8 | August 2002 A 467

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W ith gas prices in the UnitedStates averaging less than bot-tled water or milk, the last

thing a typical American consumer thinksabout when buying a new car is fuel effi-ciency. Well, almost the last thing. “Wehave surveys that rank 27 attributes con-sumers look for when they purchase a newcar,” says Gregory Dana, vice president ofenvironmental affairs at the Washington,D.C.–based Alliance of AutomobileManufacturers, an industry trade group.“And gas mileage comes in second to last,just behind seating capacity.”

According to the American PetroleumInstitute, a Washington, D.C.–based tradegroup representing the oil industry, gasprices in the United States haven’t keptpace with inflation for decades. Today,American consumers pay an average of$1.42 per gallon at the pump, according tothe Energy Information Administration atthe Department of Energy.

This is among the lowest inflation-adjusted price averages ever documented inthe United States, says American PetroleumInstitute senior policy analyst RayolaDougher. On average, Americans currentlypay more than three times less for gasolinethan consumers from most other industrial-ized countries, she says. The price is aboutthe same throughout the world. But manyother countries place a high tax burden ongasoline, which drives consumers toward agreater appreciation for conservation andvehicle gas mileage.

But as long as gas is cheap, Americanshave little incentive to buy cars with bettermileage ratings. And as long as mileageranks next to last on lists of buyer concerns,U.S. automakers have little incentive toprovide fuel-efficient cars to the public.

John DeCicco, a senior fellow atEnvironmental Defense, a Washington,D.C.–based environmental group, says moti-vations for raising vehicle fuel economy noware dominated by societal issues that con-sumers often find more abstract than theprice of a tank of gas, such as security risksfrom overreliance on imported oil. Accordingto the latest figures released by the EnergyInformation Administration, the UnitedStates currently imports 52% of its oil fromoverseas. Slightly more than 65% of all oilconsumed in the United States, includingthat contributed by domestic production, isused as fuel for the transportation sector.Many studies have shown that a boost inauto fuel efficiency can save millions of bar-rels of oil a day, reducing both dependenceon foreign imports and U.S. emissions ofgreenhouse gases that cause global warming.

But these goals have little influence onbuyers in the auto market, DeCicco says,

even among those claiming to be concernedabout oil imports and the environment. “Itseems contradictory in the policy sense,” heexplains, “but not in the psychological sense.It’s possible to be concerned about globalwarming and still want to buy that sportutility vehicle [SUV].”

The Birth of CAFEIn a free-market economy like the UnitedStates, public policies fall in line with con-sumer desires. But without direct pressurefrom consumers, building a case for higherfuel economy standards that resonates withthe auto industry is difficult to do.

Mileage standards in the United Statesare set by the Corporate Average FuelEconomy (CAFE) program, which wasestablished by Congress in 1975 inresponse to the 1973 Arab oil embargo.Administered by the U.S. Department ofTransportation (DOT), CAFE directedautomakers to raise the average mileage rat-ing for cars to 27.5 miles per gallon (mpg)and for light trucks to 20.7 mpg by 1985.

In response to the law, which intro-duced heavy fines for noncompliance,automakers introduced changes to increaseefficiency, including front wheel drive andnew models of smaller, lighter cars. Expertscredit the changes with a number of benefi-cial results. A report released earlier thisyear by the National Research Council(NRC) titled Effectiveness and Impact ofCAFE Standards claims that by 1984 fueleconomy had been raised 62% without anyloss in performance, producing a net sav-ings of roughly 2.8 million barrels of oil aday by 2000. Greenhouse gas emissions—which are tied directly to fossil fuel com-bustion—were also reduced commensu-rately, an added benefit that policy makersweren’t even thinking about when the lawwas passed.

Throughout the 1970s and 1980s, thebuying public welcomed these designchanges. Still smarting from the shock ofthe first Arab oil embargo in 1973, con-sumers were pushed again toward conserva-tion by the time of a second embargo in1979–1980, a result of the Iran–Iraq War.“If you look at car advertisements fromthose days, you see that mileage ratingswere important,” Dana says.

According to David Greene, programmanager of the Transportation Energy andEnvironmental Policy Office at Oak RidgeNational Laboratory in Tennessee,American interest in auto mileage beganwaning in 1986, the year Saudi Arabiabegan increasing its domestic oil produc-tion. Previously, the Saudis and othermembers of the Organization of thePetroleum Exporting Countries (OPEC)

had deliberately kept oil prices high by con-trolling production. “But when the Saudis[still the largest oil producer on earth] real-ized this practice was threatening their mar-ket share, they got worried and dramaticallyboosted output,” he says. “That caused oilprices to crash around the world.”

The price of oil has not climbed muchsince, and OPEC’s grip on the internation-al market has declined somewhat.Meanwhile, new technologies for findingand extracting oil make the resource moreaccessible than ever. Worldwide productioncontinues to rise, defying earlier predictionsthat supplies would dwindle by the turn ofthe century. Although OPEC producers,particularly in the Persian Gulf, still retainsome market power, most economists nowagree that sustained price shocks are unlike-ly in the foreseeable future.

With the pressure of fuel price dissipat-ing, sales of smaller cars have fallen, andconsumers have welcomed the emergenceof new gas guzzlers such as SUVs and mini-vans with open arms. These vehicles—addressed by CAFE under the less restric-tive “light trucks” category—now dominatethe U.S. automobile market. One result ofthis trend is a drop in the average fuel econ-omy of the entire U.S. fleet. The currentaverage is now 20.4 mpg, the lowest level in21 years, according to the recent U.S.Environmental Protection Agency (EPA)publication Light-Duty AutomotiveTechnology and Fuel Economy Trends 1975Through 2001.

CAFE in the Current EnvironmentAs consumers stop worrying about oilprices, the challenge of strengtheningCAFE for long-range security and environ-mental reasons becomes even more diffi-cult. Even when oil prices were a concern,the auto industry fought the program,claiming it was overly intrusive and thatlighter, more fuel-efficient cars are danger-ous to drive. Industry representatives alsosuggest that efficiency gains are offset bypeople who drive more when their cars getbetter mileage (an argument countered bythe economic evidence, says DeCicco, thatmost consumers actually have little flexibili-ty in how much they need to drive).

Tightly knit coalitions of trade associa-tions, lobbyists, and congressional support-ers have successfully defeated every attemptto raise CAFE standards since the first targetdeadline was reached in 1985. Most recent-ly, a campaign orchestrated by the Allianceof Automobile Manufacturers and theCoalition for Vehicle Choice (CVC), aWashington, D.C.–based organization thatclaims to represent consumer opinions, wasinstrumental in defeating an effort by

A 468 VOLUME 110 | NUMBER 8 | August 2002 • Environmental Health Perspectives

Spheres of Influence • Debate Percolates over CAFE Standards

Senators John Kerry (D–Massachusetts) andJohn McCain (R–Arizona) to increaseCAFE standards for all cars and light trucksto 36 mpg by 2015. Staffers say such anincrease would save an estimated 2.5 millionbarrels of oil a day, roughly the amount nowimported from the Middle East.

The CVC called the proposed increasean “extreme” measure that would never besupported by its constituents. “Our mem-bers are concerned about safety,” says DianeSteed, CVC president and former head ofthe National Highway Traffic SafetyAdministration under the Reagan adminis-tration. “It’s also a choice issue. Many of ourmembers are sportsmen who worry that ifvehicles become smaller and lighter, theywon’t be able to find the models they need.”The bill was rejected on 13 March 2002 bythe Senate, and the question of raisingCAFE standards was transferred to theDOT for two more years of study.

The Problem of SafetyAutomakers have employed a variety ofmethods to achieve better gas mileage.NRC calculations indicate that roughly25% of the fuel efficiency improvementsbetween 1975 and 1984 are attributable todeweighting—building smaller cars madewith greater amounts of aluminum asopposed to cast iron and steel. (The EPA’sLight-Duty Automotive Technology and FuelEconomy Trends 1975 Through 2000 putsthis estimate at only 6%.) The rest of theefficiency improvements were the result ofvarious mechanical advancements, saysAdrian Lund, an NRC committee memberand chief operating officer of the InsuranceInstitute for Highway Safety, a nonprofitorganization specializing in assessing dam-ages from highway crashes, based inArlington, Virginia. A possible consequenceof the deweighting trend, supported bynumerous studies, is an increase in thenumber of driver fatalities. In its recentreport, the NRC suggests that vehicledeweighting “probably resulted in 1,300 to2,600 traffic fatalities in [a single year].”

Safety concerns resonate with the publicand are often portrayed as the best reasonfor rejecting CAFE by the auto industry,which insists that reducing weight is thefastest way to raise efficiency further with-out compromising performance. But safetyconcerns are not universally accepted, evenamong the NRC committee that drafted therecent report. Two committee dissenters,Greene and Maryann Keller, an automotiveindustry analyst, are quoted in the report assaying, “The level of uncertainty is [high,and] . . . the change in fatality rates due toefforts to improve fuel economy may haveactually been zero.”

John Wise, retired vice president ofMobil Research and Development Corp-oration, also on the NRC committee, saysthe safety issue was heavily debated duringcommittee deliberations. The final conclu-sion among the majority, he says, is thattraffic deaths and deweighting are probablycorrelated. But this debate obscures animportant point, he adds—namely thatgreater fuel efficiency can be achieved usingcurrently available technologies with noeffect on vehicle weight whatsoever.Suggested approaches include the use oflow-friction lubricants, variable valve tim-ing, five- and six-speed automatic transmis-sions, stop–start engines that pause on idleand restart on acceleration, and 42-volt bat-tery systems, among many others. Alter-natives such as diesel engines, electric cars,hybrids, and fuel-cell systems were not con-sidered by the NRC, because they are tooexpensive, and there are cheaper ways to getbetter fuel efficiency, says Wise. They arestill seen as “boutique” items, and overallsales are low.

Other OptionsAccording to the NRC’s calculations, a mixof available technologies such as thosedescribed above could raise the mileage of atypical midsize car from 27.1 to 32.6 mpgat a cost of $791. Estimated fuel savingsover the life span of the car were calculatedto be $1,140, indicating the technologywould eventually more than pay for itself.Even greater improvements were noted inthe light truck category. In this case,employing fuel-saving technology in a largeSUV would raise mileage by 42% at a costof $1,629. The SUV fuel savings werefound to be even greater: $2,910 over thevehicle’s life span.

The hidden catch in these estimates isthe payback time: The buyer is reimbursedfor the cost of the fuel-saving technologyover the vehicle’s life span, estimated by theNRC as 14 years. However, the NRC alsopoints out that new car buyers typicallyown a car for only 3 years. Therefore, theeconomic savings in most cases may not beperceived as significant by new car buyers.Society, however, would benefit over thelife of the car, especially if the used car mar-ket were to recognize the value of higherfuel economy.

It’s issues such as these that concern theautomobile industry. On the whole,automakers resent the imposition of a fed-eral mandate that would have them pass thecost of saving fuel on to their customers. “Amanufacturer would rather spend a fewhundred dollars on a video screen for thekids that they can turn around and sell as athousand-dollar option,” DeCicco explains.

“You can’t do that with a fuel-saving gizmoin the engine. Spending money like thisjust goes against their instincts.”

Dana does not disagree. “Fuel economyis not a high-demand option. But amongparents with kids, there’s a huge demandfor video screens—the video keeps kidsquiet. It’s just a matter of the industrymeeting consumer demand.”

The Future of CAFEAs it now stands, the CAFE program facesan uncertain future. Stakeholders acknowl-edge it’s unlikely that current standards willbe repealed, but the likelihood that they willbe strengthened anytime soon appears to benil. Throughout its history, various admin-istrations have alternatively embraced anddistanced themselves from the program,depending on the state of the economy, thestatus of the U.S. automotive industry, andthe price and availability of oil. The currentBush administration, according to DeCicco,“actually helped to pull the rug out fromunder the Kerry–McCain effort.” Thisappears to be consistent with the adminis-tration’s general distaste for federal man-dates that affect business. It’s interesting tonote that neither support nor criticism forthe proposal fell along the standard indus-try/environmental delineations. A range ofexperts—some of them environmentaladvocates—believe the standard of 36 mpgtargeted by the proposal was economicallyunfeasible and too high.

Nonetheless, stakeholders predict thatgradual improvements to fuel economy areinevitable. “This sense of inevitabilitycomes down to the fundamental nature ofthe issues in terms of oil and global warm-ing,” says DeCicco. “It’s creating pressureto which the industry must respond.” Headds, “Whether the improvements comethrough changes to CAFE or some otherform of regulation isn’t clear. For example,mandates to reduce carbon dioxide emis-sions could indirectly force higher mileageratings. I think the odds are that the indus-try will be compelled to compromise. Rightnow, they appear to be stonewalling andangling for the best deal.”

Recently, the state of Californiaannounced a bill requiring cuts in tailpipeemissions of greenhouse gases from carsand light trucks. This may force the autoindustry to make cars that consume less gasand thus emit less carbon dioxide, the prin-cipal greenhouse gas linked to global warm-ing. At press time, California governorGray Davis had indicated his intention tosign the bill, despite heavy pressure fromthe auto industry against the measure.

Charles W. Schmidt