What’s Next for the Fuel Efficiency Standard?

The environment is back in the news this week as the new Republican majorities in the house and senate seek to undo what they can of President Obama’s environmental agenda. The most recent battleground has been around coal fired power plants. Will the fuel efficiency standard be next?

A Complicated Relationship

The trucking industry and environmental groups and government agencies have long had a strained relationship. Thanks to new technologies, large trucks continue to make gains in fuel efficiency, but some think there’s still more progress to be made.

Last year President Obama ordered the development of new fuel standards for heavy-duty trucks. These new standards were part of a larger push by the president to take executive action in the fight over climate change.

Here’s a brief recap of what the new draft rule will be requiring:

  • It would direct the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to set the next round of fuel efficiency standards for medium- and heavy-duty trucks. The fact sheet states that this would save vehicle owners and operators an estimated $50 billion in fuel costs and save 530 million barrels of oil.

  • It would require the aforementioned agencies to also partner with private-sector companies to deploy advanced vehicles and technologies. The DOT specifically would be required to provide each company with specialized resources, technical know-how and support in developing fuel efficiency and cost saving strategies.
  • It seeks to expand fuel choices for American drivers. Specifically it looks to establish an Energy Security Trust Fund. This fund would provide grants to research and development for advanced vehicle technologies. Finally, it would require investment in new infrastructure through a tax credit. These tax credits would directly support cellulosic biofuels.

This new executive action was immediately followed by a large publicity push to drum up support. In a speech Mr. Obama gave at a Safeway grocery distribution center he said that “improving gas mileage for these trucks is going to drive down our oil imports even further. That reduces carbon pollution even more, cuts down on business’ fuel costs, which should pay off in lower prices for consumers. So it’s not just a win, it’s a win-win-win. We got three wins.”

Like so many before it, this has become a polarized debate. The conversation itself has become just as complicated as the relationships between the parties.

A Complicated Debate

For obvious, reasons some car and truck manufacturers have lobbied heavily against the increase. The vehicle manufacturing industry has always sought to pursue efficiency at their own pace, without government intervention.

Conversely, the American Trucking Associations (ATA) have been advocating for better fuel efficiency standards since 2007, when they endorsed a study that requested both better fuel efficiency and electronic device governance for large trucks.

Soon after Mr. Obama’s speech, ATA president and CEO Bill Graves came out stating that “today’s announcement by President Obama is welcome news to the trucking industry. Our members have been pushing for the setting of fuel efficiency standards for some time and today mark the culmination of those efforts.”

With industry having taken sides in the debate, it was time for the other side of the political aisle to weigh in. Not soon after the president’s speech did then house majority leader Eric Canter come out blasting the plan, saying that the “result of these regulations means increased costs for businesses and families, and fewer jobs for workers. Rather than placing additional burdens on working families and small businesses, Washington should be focused on removing barriers to growth.”

The EPA, industry, and other groups have a big year ahead. Beyond fuel efficiency, a new fuel tax is also on the legislative table. Will the fuel efficiency standard survive a divided government? With the new rule set to be finally drafted by March of this year, we’ll just have to wait and see.

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