60 mpg means $100 billion in pockets of drivers

The American taxpayer bailed out Wall Street and U.S. automakers. Now the Administration has an opportunity to see some return on our investment.

Strengthening fuel economy and pollution standards to the equivalent of 60-mpg standard by 2025 for new vehicles will be good for consumers, good for jobs, and, of course, good for the environment.  Stronger standards will cut our oil consumption by 44 billion gallons by 2030, put $100 billion back into the pockets of drivers, and stem the flow of cash being sent overseas to import oil from the Middle East.

One of the best things about stronger standards is that it would not cost taxpayers one red cent. In fact, it would help stimulate the economy by making U.S. automakers more competitive and help retain and grow high quality manufacturing jobs in this country.

The potential for households to cut their fuel bills is enormous. According to a new 50-state consumer savings analysis by the NRDC and the Union of Concerned Scientists, with strong standards the U.S. would save over a $100 billion in 2030, even after considering the extra costs of the fuel-efficient technologies. Extra money in the hands of consumers means Americans will have more money to spend on goods and services delivered by American companies, creating more American jobs. Strong standards mean more money will be invested in the auto industry to manufacture hybrids and electric vehicles and less money will be spent to import oil from overseas.

Consumer spending is the largest economic driver there is.  In 2010, the U.S. will spend an estimated $180 billon on importing oil, increasingly from dangerous and hostile areas of the world. Our analysis also shows the average American family would save $748 annually at the pump in 2030 even after considering the extra cost of the fuel-efficiency technologies. In particular, California families would save $848 a year, Michigan families – $644, and Arkansas families – $778. Savings for each state can be found in our fact sheet.

And by becoming less dependent on oil, Americans will be more protected from the wrenching effects of volatile fuel prices. Oil price spikes, like the one in 2008, have preceded ten of the last eleven recessions.  As oil grows more scarce and global demand increases, this price volatility is only going to get worse.

Beyond the economic impacts, high-ranking military leaders are calling our oil habit a serious national security threat, in part because some of our petro dollars go to nations that don’t like us, and inevitably end up in the hands of terrorists. We are effectively funding both sides of the war on terror.

Vets coming home from Iraq and Afghanistan  get it. They have put their lives on the line so we can fill up our tanks. Surely we can do better by them.

Last week, I blogged about a national survey that showed a majority – 74% – of Americans want 60 mpg cars. The only thing standing between American consumers and the fleet of their dreams is the auto industry. 60 mpg standard by 2025 is clearly technologically feasible – foreign automakers are already well on their way to producing these vehicles.

In 2005, I gave a speech in Detroit to auto executives which can be paraphrased as “fuel economy matters”. I argued that without embracing fuel economy, U.S. automakers were just one oil spike away from bankruptcy. Less than four short years later, my prediction proved to be right.

For the sake of our economy, security and environment, we should all hope that the U.S. auto industry embrace 60 mpg by 2025 and accelerate the production of cleaner, more fuel-efficient vehicles now. If the industry does not, the American taxpayer could very well be faced with funding another and bigger bailout in the future.