Cheap Gas Spurs SUV Sales and Puts U.S. Climate Goals at Risk
by David Shepardson and Paul Lienert (Reuters) Surging demand for trucks and SUVs fueled by cheap gasoline is holding back improvements in U.S. fuel economy and greenhouse gas emissions, a government report due out on Wednesday is expected to show.
The disconnect between consumer demand for larger, less efficient vehicles and the Obama administration’s climate goals sets up a clash between the auto industry and federal regulators.
Mark Rosekind, who heads the National Highway Traffic Safety Administration, said in a Reuters interview last week the administration will consider automakers’ arguments that the shift away from cars makes it harder to hit the 2025 fleet average fuel economy target of 54.5 miles (87.7 km) per gallon.
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Consumers are responding to signals from gas pumps, where a combination of relatively low taxes – federal gasoline taxes have not gone up since 1993 – and oil unleashed by hydraulic fracturing or fracking have pushed U.S. gasoline prices to an average of just over $2 a gallon – the lowest level in six years.
In November, fuel efficiency of vehicles purchased fell sharply to 25 mpg – down 0.8 mpg from a peak in August 2014, said University of Michigan researcher Michael Sivak, who tracks fuel efficiency.
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Federal regulators and California are working on a report, due in mid-2016, that will set the terms of bargaining with automakers over whether efficiency standards for a final 2022-2025 period should be eased, stay the same or made tougher.
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“There is a huge gap looming between government projections and consumer purchases of highly fuel-efficient vehicles,” said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers – the trade association representing major automakers. READ MORE and MORE (Bloomberg)
