On Apr. 1—April Fools Day—in response to "one of the first major directives" of the administration of President Barack Obama, the US Department of Transportation and the Environmental Protection Agency jointly established new federal rules that set the first-ever national greenhouse gas emissions standards, claiming it will increase the fuel economy of all new passenger cars and light trucks sold in the US effective 2012-16.
The online publication 40mpg.org, created by Civil Society Institute and advocating 40 mpg as the standard fuel efficiency for all US automobiles, estimates the new rules "will get us to 35.5 mpg between 2012-16." Group officials said the new rules will drive up a car's purchase price by $1,000 by the 2016 model year. But they speculate fuel savings will allow most consumers to earn back that expense within 3 years. Although no one yet knows the efficiency and reliability of the new technology of those yet-to-be-built vehicles, DOT claims the "average buyer" of a 2016 car could save $3,000 over the life of his machine. Nationally, the covered vehicles "will conserve about 1.8 billion bbl of oil and reduce nearly a billion tons of greenhouse gas emissions" over their lifetimes, officials speculated. But no one says if they expect the average lifetime of the new vehicles to be 3 years, 10 years, more—or less.
Federal officials claim the new standards can be met with conventional technologies, but they acknowledge some manufacturers may pursue advanced fuel-saving technologies like hybrid vehicles, clean diesel engines, plug-in hybrid electric vehicles, and other alternative fuels. Canada also announced new regulations for light-duty vehicle GHG emissions "to ensure a common North American approach."
Although climate change claims have lost much public credibility in recent months, federal officials said, "Climate change is the single greatest long-term global environmental challenge. Cars, suburban utility vehicles, minivans, and pickup trucks are responsible for almost 60% of all US transportation-related greenhouse gas emissions."
Gas cars
Meanwhile, despite widespread investor interest, analysts at FBR Capital Markets & Co. in Arlington, Va., have only "modest" expectations the proposed New Alternative Transportation to Give Americans Solutions (NATGAS) Act will provide much incentive for a mass move to natural gas vehicles in the US.
The bill, which enjoys broad bipartisan support in both the House and Senate, would require 10% of new vehicles sold in the US in 2018 to be powered by natural gas. Although there is little opposition to the legislation, FBR Capital analysts said the bill could stumble because of costs to the Treasury of tax incentives. "Budget concerns and the scarcity of offsets, combined with the relative ambivalence of policy makers toward natural gas incentives, should limit the government's commitment to NATGAS vehicles in the near term," they said. "In our estimation, the expected value of the bill is less than half of the NATGAS Act's roughly $6 billion price tag."
The NATGAS Act is a portion of the so-called T. Boone Pickens plan, named for the Texas gas producer and promoter, for creating incentives for gas–fueled vehicles, focused on heavy-duty commercial vehicles and fleet vehicles. It would extend and modify existing tax credits for alternative fuels, alternative fuel vehicles, and infrastructure. It also creates a natural gas vehicle bond program.
"Revenue offsets are the bill's greatest challenge. Congressional Democrats operate under 'pay as you go' rules that require spending increases or tax cuts to be paid for with tax increases or other spending cuts," analysts said. They see "relatively few options remaining before the 2010 elections for passing tax legislation and raising significant revenue for the $6 billion NATGAS Act."
Rush to gas
Federal policy makers are ambivalent about natural gas vehicles, analysts said, with environmentalists "more focused on incentivizing transformational technologies than transitional fossil fuel incentives." They said, "We believe the administration will continue to focus its efforts…on electric vehicles and plug-in hybrid vehicles. That is not to say that there is opposition to natural gas fleet vehicle adoption, which has the benefits of both domestic production and environmental improvement. Rather, given resource scarcity, policy makers are prioritizing transformational technologies."
Moreover, they said, "Affordable natural gas is an extremely important input cost for the manufacturing sector's workers and for farmers. We continue to detect reluctance to adopt policies that could spur a 'rush to gas' and precipitate a return to high prices."
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