Wednesday, 14 March 2007
Big four automakers address U.S. Congress over fuel economy concerns
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The issue of increasing car and truck fuel economy standards was under serious consideration today in Congress, as leaders from Chrysler, Ford, General Motors and Toyota addressed the House Energy and Commerce Subcommittee on Energy and Air Quality regarding the impact of automakers on climate change and energy security. Three out of the four executives – excluding GM Chairman Rick Wagoner – voiced support for moderate increases in Corporate Average Fuel Economy (CAFE) standards to degrees that remain cost effective for auto manufacturers. Wagoner emphasized the need for alternative fuel solutions alongside the other execs, but did not specifically acknowledge the feasibility of higher MPG standards.
While Toyota’s North American President Jim Press extolled the Japanese manufacturer’s commitment to the “elimination of waste” and “service to society,” currently highlighted by Toyota’s Hybrid Synergy Drive system, the American CEOs – Wagoner, Ford’s Alan Mulally and Chrysler’s Tom LaSorda – aggressively pushed the increased usage of flexible-fuel vehicles that run on E85 ethanol/gasoline blends. The car company executives were all keen to point out that the automotive industry is only part of the culprit responsible for climate change and energy security concerns, and that a larger effort across various industries is required to address effectively the issues of carbon dioxide output and gasoline consumption. Ron Gettelfinger, President of the United Auto Workers union, was also present.
Analysis: One issue that Representative Rick Boucher, a Democrat from Virginia and Chairman of the Subcommittee on Energy and Air Quality, brought up was the possibility of a “cap and trade” emissions law that awards credits to low-emissions manufacturers and allows them to sell or trade those credits to higher-emissions companies. Carbon dioxide output is tied directly to fuel consumption, and a cap and trade program would not only penalize manufacturers who do not meet the standards, but also benefit those who do in that the compliant companies could market their credits.
The executives did not express confidence in such programs, citing that cleaner companies could invest in better technology from the capital earned by selling credits, thus operating with an unfair advantage. Mulally postulated that a system allowing trading among several industries might function better in the interest of direct competition. Massachusetts Democrat Ed Markey argued fervently on the past effectiveness of CAFE standards, challenging the automakers who do not view them as the current solution. Markey is advocating mandatory four-percent annual increases in fuel economy beginning in September of 2009 for cars and September 2011 for trucks.
Currently the CAFE standard for cars is 27.5 mpg, a level that hasn’t been adjusted since 1990. By 2011, truck standards will be 24.1 mpg, gradually increasing from the currently mandated 20.7 mpg.
Source: Committee on Energy and Commerce and The Detroit News
Image: Subcommittee on Energy and Air Quality live video feed [Rick Wagoner pictured]
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