Why Trump Needs to Embrace Obama’s Fuel Rules to Make America Energy Independent

Federal Regulation, Opinions, Policy

November 30, 2016

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by Jason Bordoff (Reuters) Since the Arab Oil Embargo four decades ago, every president has promised to wean the United States off the need for foreign oil. President-elect Trump is no different, promising in his speeches and transition plans to achieve “energy independence.” His rhetoric to date has focused on ramping up U.S. oil supply — “drill, baby, drill.”

But that’s not enough. If he really wants to achieve independence, he must continue on the Obama Administration’s path of raising fuel economy standards to cut oil use.

The U.S. has slashed net petroleum imports in the past decade, from 60 percent of U.S. consumption in 2008 to just 24 percent last year. …

Less acknowledged, however, is the role of lower oil demand in curbing U.S. oil imports. …

To continue driving down oil demand, the Obama Administration hiked fuel economy standards for passenger vehicles, the first time in more than 30 years they had been raised, and established fuel economy standards for trucks for the first time. These higher fuel economy standards will reduce U.S. oil use by more than 2 million bpd by 2025 — and more beyond that, as older cars are replaced with newer, more efficient ones.

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Moreover, even if it were possible to eliminate oil imports through supply alone, reducing oil use is a smarter way to achieve independence. Prices at the pump are set in a global market whether the U.S. imports oil or not. So consumers feel the brunt of oil price shocks even if we do not import oil. Reducing the oil intensity of our economy is thus the best way to protect businesses and households from the economic pain of higher oil prices. READ MORE

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