U.S. to announce new fuel standards
Jeremy Hobson: Well believe it or not, Washington is working on some other stuff right now. In fact, the Obama administration has just reached a deal with the automakers. It'll set the fuel efficiency standard at 54.5 miles per gallon on average by the year 2025. That's just two miles per gallon less than the standard President Obama initially wanted, but automakers thought would be too tough to meet.
From the Marketplace Sustainability Desk, Eve Troeh reports on what a difference a couple miles make.
Eve Troeh: When President Obama set 56 miles per gallon as the bar to reach, automakers cried: Impossible -- it'll ruin us! Environmentalists said: Reach higher -- go 60!
But Justin Hyde at the automotive website Jalopnik says, whatever number's announced tomorrow, it won't mean what you think it does.
Justin Hyde: The fuel economy rule that comes out of the government is one of the most misleading numbers that any agency produces.
He says the government's not saying you'll be able to drive 54 miles on one gallon of gas -- more like 40 miles. The fuel efficiency number gets hiked up with credits and loopholes for things like new LED headlights. Each company, and each kind of car -- Hummers to Leafs -- gets separate consideration.
Hyde: And that's the behind-the-scenes fight that took so long to iron out.
Overall, starting in 2017, cars have to boost miles per gallon by at least 5 percent a year. Trucks and SUVs get graded on a lower curve. Hyde says that's seen as a win for Detroit.
Hyde: The automakers who sell more cars than trucks -- such as the Japanese automakers -- are going to face a tougher time with some of this.
Automakers have to innovate pretty fast to meet the new standards. Scott Doggett at the car-buying site Edmunds.com says that's expensive, with no guarantee for sales.
Scott Doggett: Instead of putting the burden on automakers to produce vehicles that consumers may not want because of the price point, it makes better sense to raise the cost of the fuel itself.
Yep, you heard him: a gas tax. He says that's a faster route to using less oil.
I'm Eve Troeh for Marketplace.