Energy

NOPEC Testimony: America Will Become More Energy Independent If Fuel Economy Standards Stay

Fuel Economy Standards Save Consumers Money and Wean the US off of Foreign Oil

 |  Press Release

Washington D.C. — Today, Dr. Mark Cooper, a Senior Fellow at the Consumer Federation of America testified before the Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, on the NOPEC Act (No Oil Producing and Exporting Cartels Act). Following are excerpts from Dr. Cooper’s testimony:

 “In 2006, President Bush declared that America was addicted to oil.  In 2007, Congress responded by adopting the only approach that made sense—to beat an addiction you do not increase supply, you kick the habit.

That’s exactly what the Energy Independence and Security Act did, targeting gasoline consumption by rejuvenating the nation’s fuel economy standards.  With unprecedented bipartisan support (including automakers, consumers, unions, environmentalists, and other stakeholders) and federal-state collaboration, for the first time in history, the U.S. adopted standards to match all the major auto producing and driving nations in the world.

Unfortunately, by scrapping the standards and attempting to prevent the “clean cars” states, (which represent about 40% of U.S. auto sales) from establishing their own requirements, the current administration has decided to feed the oil habit rather than kick it.  The Trump/Pruitt effort will increase U.S. consumption of gasoline by trillions of gallons over the next two decades.  Only the oil companies will profit, while consumers, the economy, national security and the environment all suffer. And as gas prices increase and consumer preference for fuel efficiency increases even the automakers will suffer.

Our analysis over the year since EPA published the CAFE Model Year 2022-2025 Technical Assessment Report shows that the standards have a benefit cost ratio greater than 6-to-1, at a gasoline cost of $0.75 per gallon.  In other words, as long as gasoline stays above $0.75 per gallon, the standards are justified.

Rolling back the 2021 standards and freezing the 2022-2025 standards would do great harm to consumers, the economy and the nation, including:

  • Robbing consumers of net savings of over $4,500 per household;
  • Preventing a $150 billion reduction in operating costs;
  • Undermining $150 billion of macroeconomic growth; and,
  • Foregoing over $50 billion in environmental, health and other benefits.

There are a number of critical reasons why the standards should be maintained:

  • The cost of compliance has been below the NHTSA/EPA projections and far below inflated industry estimates.
  • The standards are well within the technological capability of the industry as analyzed by NHTSA, EPA, CARB, MIT and the National Academy of Sciences.
  • The standards are consistent with (or slightly below) other advanced industrial nations.
  • Fuel economy pays for itself in a market where it has taken on much greater importance to consumers. As a result, fuel economy sells.

Given the enormous benefit-cost ratio and the automakers ability to meet the standards, freezing or rolling them back violates the statutes that require the agencies to achieve maximum feasible energy savings and pollution reductions as well as the Executive Branch guidance that requires agencies to adopt rules that comply with the statutes and achieve maximum net benefits.”

Contact: Mark Cooper, 301-807-1623